TodayisSaturday,July19,2014

RepublicofthePhilippines
SUPREMECOURT
Manila

ENBANC

G.R.No.167614March24,2009

ANTONIOM.SERRANO,Petitioner,
vs.
GallantMARITIMESERVICES,INC.andMARLOWNAVIGATIONCO.,INC.,Respondents.

DECISION

AUSTRIAMARTINEZ,J.:

For decades, the toil of solitary migrants has helped lift entire families and communities out of poverty. Their
earningshavebuilthouses,providedhealthcare,equippedschoolsandplantedtheseedsofbusinesses.They
havewoventogethertheworldbytransmittingideasandknowledgefromcountrytocountry.Theyhaveprovided
the dynamic human link between cultures, societies and economies. Yet, only recently have we begun to
understand not only how much international migration impacts development, but how smart public policies can
magnifythiseffect.

UnitedNationsSecretaryGeneralBanKiMoon
GlobalForumonMigrationandDevelopment
Brussels,July10,20071

ForAntonioSerrano(petitioner),aFilipinoseafarer,thelastclauseinthe5thparagraphofSection10,Republic
Act(R.A.)No.8042,2towit:

Sec.10.MoneyClaims. x x x In case of termination of overseas employment without just, valid or authorized

causeasdefinedbylaworcontract,theworkersshallbeentitledtothefullreimbursementofhisplacementfee
with interest of twelve percent (12%) per annum, plus his salaries for the unexpired portion of his employment
contractorforthree(3)monthsforeveryyearoftheunexpiredterm,whicheverisless.

xxxx(Emphasisandunderscoringsupplied)
doesnotmagnifythecontributionsofoverseasFilipinoworkers(OFWs)tonationaldevelopment,butexacerbates
the hardships borne by them by unduly limiting their entitlement in case of illegal dismissal to their lumpsum
salary either for the unexpired portion of their employment contract "or for three months for every year of the
unexpired term, whichever is less" (subject clause). Petitioner claims that the last clause violates the OFWs'
constitutional rights in that it impairs the terms of their contract, deprives them of equal protection and denies
themdueprocess.

By way of Petition for Review under Rule 45 of the Rules of Court, petitioner assails the December 8, 2004
Decision3andApril1,2005Resolution4oftheCourtofAppeals(CA),whichappliedthesubjectclause,entreating
thisCourttodeclarethesubjectclauseunconstitutional.

Petitioner was hired by Gallant Maritime Services, Inc. and Marlow Navigation Co., Ltd. (respondents) under a
Philippine Overseas Employment Administration (POEA)approved Contract of Employment with the following
termsandconditions:

Durationofcontract 12months

Position ChiefOfficer
Basicmonthlysalary US$1,400.00

Hoursofwork 48.0hoursperweek

Overtime US$700.00permonth
Vacationleavewithpay 7.00dayspermonth5

OnMarch19,1998,thedateofhisdeparture,petitionerwasconstrainedtoacceptadowngradedemployment
contract for the position of Second Officer with a monthly salary of US$1,000.00, upon the assurance and
representationofrespondentsthathewouldbemadeChiefOfficerbytheendofApril1998.6

RespondentsdidnotdeliverontheirpromisetomakepetitionerChiefOfficer.7Hence,petitionerrefusedtostay
onasSecondOfficerandwasrepatriatedtothePhilippinesonMay26,1998.8

Petitioner'semploymentcontractwasforaperiodof12monthsorfromMarch19,1998uptoMarch19,1999,
butatthetimeofhisrepatriationonMay26,1998,hehadservedonlytwo(2)monthsandseven(7)daysofhis
contract,leavinganunexpiredportionofnine(9)monthsandtwentythree(23)days.

Petitioner filed with the Labor Arbiter (LA) a Complaint9 against respondents for constructive dismissal and for
paymentofhismoneyclaimsinthetotalamountofUS$26,442.73,brokendownasfollows:

May27/31,1998(5days)incl.Leavepay US$413.90
June01/30,1998 2,590.00
July01/31,1998 2,590.00
August01/31,1998 2,590.00
Sept.01/30,1998 2,590.00
Oct.01/31,1998 2,590.00
Nov.01/30,1998 2,590.00
Dec.01/31,1998 2,590.00
Jan.01/31,1999 2,590.00
Feb.01/28,1999 2,590.00
Mar.1/19,1999(19days)incl.leavepay 1,640.00




25,382.23
Amountadjustedtochiefmate'ssalary
(March19/31,1998toApril1/30,1998)+ 1,060.5010

TOTALCLAIM US$26,442.7311

aswellasmoralandexemplarydamagesandattorney'sfees.

TheLArenderedaDecisiondatedJuly15,1999,declaringthedismissalofpetitionerillegalandawarding
himmonetarybenefits,towit:

WHEREFORE, premises considered, judgment is hereby rendered declaring that the dismissal of the
complainant(petitioner)bytherespondentsintheaboveentitledcasewasillegalandtherespondentsare
herebyorderedtopaythecomplainant[petitioner],jointlyandseverally,inPhilippineCurrency,basedon
the rate of exchange prevailing at the time of payment, the amount of EIGHT THOUSAND SEVEN
HUNDREDSEVENTYU.S.DOLLARS(US$8,770.00),representingthecomplainantssalaryforthree
(3)monthsoftheunexpiredportionoftheaforesaidcontractofemployment. 1avvphi1

Therespondentsarelikewiseorderedtopaythecomplainant[petitioner],jointlyandseverally,inPhilippine
Currency, based on the rate of exchange prevailing at the time of payment, the amount of FORTY FIVE
U.S.DOLLARS(US$45.00),12representingthecomplainantsclaimforasalarydifferential.Inaddition,the
respondentsareherebyorderedtopaythecomplainant,jointlyandseverally,inPhilippineCurrency,atthe
exchange rate prevailing at the time of payment, the complainants (petitioner's) claim for attorneys fees
equivalenttotenpercent(10%)ofthetotalamountawardedtotheaforesaidemployeeunderthisDecision.

TheclaimsofthecomplainantformoralandexemplarydamagesareherebyDISMISSEDforlackofmerit.

AllotherclaimsareherebyDISMISSED.

SOORDERED.13(Emphasissupplied)

In awarding petitioner a lumpsum salary of US$8,770.00, the LA based his computation on the salary
period of three months only rather than the entire unexpired portion of nine months and 23 days of
petitioner'semploymentcontractapplyingthesubjectclause.However,theLAappliedthesalaryrateof
US$2,590.00, consisting of petitioner's "[b]asic salary, US$1,400.00/month + US$700.00/month, fixed
overtimepay,+US$490.00/month,vacationleavepay=US$2,590.00/compensationpermonth."14

Respondentsappealed15totheNationalLaborRelationsCommission(NLRC)toquestionthefindingofthe
LAthatpetitionerwasillegallydismissed.

Petitioneralsoappealed16totheNLRConthesoleissuethattheLAerredinnotapplyingtherulingofthe
Courtin Triple Integrated Services, Inc. v. National Labor Relations Commission17 that in case of illegal
dismissal,OFWsareentitledtotheirsalariesfortheunexpiredportionoftheircontracts.18

InaDecisiondatedJune15,2000,theNLRCmodifiedtheLADecision,towit:

WHEREFORE, the Decision dated 15 July 1999 is MODIFIED. Respondents are hereby ordered to pay
complainant, jointly and severally, in Philippine currency, at the prevailing rate of exchange at the time of
paymentthefollowing:

1.Three(3)monthssalary

$1,400x3 US$4,200.00

2.Salarydifferential 45.00
US$4,245.00

3.10%Attorneysfees 424.50
 TOTAL US$4,669.50

Theotherfindingsareaffirmed.

SOORDERED.19

The NLRC corrected the LA's computation of the lumpsum salary awarded to petitioner by reducing the
applicablesalaryratefromUS$2,590.00toUS$1,400.00becauseR.A.No.8042"doesnotprovidefortheaward
ofovertimepay,whichshouldbeproventohavebeenactuallyperformed,andforvacationleavepay."20

PetitionerfiledaMotionforPartialReconsideration,butthistimehequestionedtheconstitutionalityofthesubject
clause.21TheNLRCdeniedthemotion.22

Petitioner filed a Petition for Certiorari23 with the CA, reiterating the constitutional challenge against the subject
clause.24 After initially dismissing the petition on a technicality, the CA eventually gave due course to it, as
directedbythisCourtinitsResolutiondatedAugust7,2003whichgrantedthepetitionforcertiorari,docketedas
G.R.No.151833,filedbypetitioner.

InaDecisiondatedDecember8,2004,theCAaffirmedtheNLRCrulingonthereductionoftheapplicablesalary
ratehowever,theCAskirtedtheconstitutionalissueraisedbypetitioner.25

HisMotionforReconsideration26havingbeendeniedbytheCA,27petitionerbringshiscausetothisCourtonthe
followinggrounds:

The Court of Appeals and the labor tribunals have decided the case in a way not in accord with
applicabledecisionoftheSupremeCourtinvolvingsimilarissueofgrantinguntothemigrantworker
backwagesequaltotheunexpiredportionofhiscontractofemploymentinsteadoflimitingittothree
(3)months

II

In the alternative that the Court of Appeals and the Labor Tribunals were merely applying their
interpretationofSection10ofRepublicActNo.8042,itissubmittedthattheCourtofAppealsgravely
erred in law when it failed to discharge its judicial duty to decide questions of substance not
theretoforedeterminedbytheHonorableSupremeCourt,particularly,theconstitutionalissuesraised
bythepetitionerontheconstitutionalityofsaidlaw,whichunreasonably,unfairlyandarbitrarilylimits
paymentoftheawardforbackwagesofoverseasworkerstothree(3)months.

III

Evenwithoutconsideringtheconstitutionallimitations[of]Sec.10ofRepublicActNo.8042,theCourt
 of Appeals gravely erred in law in excluding from petitioners award the overtime pay and vacation
payprovidedinhiscontractsinceunderthecontracttheyformpartofhissalary.28

OnFebruary26,2008,petitionerwrotetheCourttowithdrawhispetitionasheisalreadyoldandsickly,andhe
intendstomakeuseofthemonetaryawardforhismedicaltreatmentandmedication.29 Required to comment,
counselforpetitionerfiledamotion,urgingthecourttoallowpartialexecutionoftheundisputedmonetaryaward
and,atthesametime,prayingthattheconstitutionalquestionberesolved.30

Consideringthatthepartieshavefiledtheirrespectivememoranda,theCourtnowtakesupthefullmeritofthe
petitionmindfuloftheextremeimportanceoftheconstitutionalquestionraisedtherein.

Onthefirstandsecondissues

The unanimous finding of the LA, NLRC and CA that the dismissal of petitioner was illegal is not disputed.
LikewisenotdisputedisthesalarydifferentialofUS$45.00awardedtopetitionerinallthreefora.Whatremains
disputed is only the computation of the lumpsum salary to be awarded to petitioner by reason of his illegal
dismissal.

Applyingthesubjectclause,theNLRCandtheCAcomputedthelumpsumsalaryofpetitioneratthemonthlyrate
ofUS$1,400.00coveringtheperiodofthreemonthsoutoftheunexpiredportionofninemonthsand23daysof
hisemploymentcontractoratotalofUS$4,200.00.

Impugning the constitutionality of the subject clause, petitioner contends that, in addition to the US$4,200.00
awardedbytheNLRCandtheCA,heisentitledtoUS$21,182.23moreoratotalofUS$25,382.23,equivalentto
hissalariesfortheentireninemonthsand23daysleftofhisemploymentcontract,computedatthemonthlyrate
ofUS$2,590.00.31

TheArgumentsofPetitioner

PetitionercontendsthatthesubjectclauseisunconstitutionalbecauseitundulyimpairsthefreedomofOFWsto
negotiateforandstipulateintheiroverseasemploymentcontractsadeterminateemploymentperiodandafixed
salarypackage.32Italsoimpingesontheequalprotectionclause,forittreatsOFWsdifferentlyfromlocalFilipino
workers(localworkers)byputtingacapontheamountoflumpsumsalarytowhichOFWsareentitledincaseof
illegal dismissal, while setting no limit to the same monetary award for local workers when their dismissal is
declaredillegalthatthedisparatetreatmentisnotreasonableasthereisnosubstantialdistinctionbetweenthe
twogroups33andthatitdefeatsSection18,34ArticleIIoftheConstitutionwhichguaranteestheprotectionofthe
rightsandwelfareofallFilipinoworkers,whetherdeployedlocallyoroverseas.35

Moreover, petitioner argues that the decisions of the CA and the labor tribunals are not in line with existing
jurisprudenceontheissueofmoneyclaimsofillegallydismissedOFWs.Thoughthereareconflictingrulingson
this,petitionerurgestheCourttosortthemoutfortheguidanceofaffectedOFWs.36

PetitionerfurtherunderscoresthattheinsertionofthesubjectclauseintoR.A.No.8042servesnootherpurpose
but to benefit local placement agencies. He marks the statement made by the Solicitor General in his
Memorandum,viz.:

Often,placementagencies,theirliabilitybeingsolidary,shoulderthepaymentofmoneyclaimsintheeventthat
jurisdiction over the foreign employer is not acquired by the court or if the foreign employer reneges on its
obligation. Hence, placement agencies that are in good faith and which fulfill their obligations are unnecessarily
penalizedfortheactsoftheforeignemployer.Toprotectthemandtopromotetheircontinuedhelpfulcontribution
indeployingFilipinomigrantworkers,liabilityformoneyclaimswasreducedunderSection10ofR.A.No.8042.
37(Emphasissupplied)

Petitioner argues that in mitigating the solidary liability of placement agencies, the subject clause sacrifices the
wellbeingofOFWs.Notonlythat,theprovisionmakesforeignemployersbetteroffthanlocalemployersbecause
incasesinvolvingtheillegaldismissalofemployees,foreignemployersareliableforsalariescoveringamaximum
ofonlythreemonthsoftheunexpiredemploymentcontractwhilelocalemployersareliableforthefulllumpsum
salariesoftheiremployees.Aspetitionerputsit:

Intermsofpracticalapplication,thelocalemployersarenotlimitedtotheamountofbackwagestheyhavetogive
their employees they have illegally dismissed, following wellentrenched and unequivocal jurisprudence on the
matter.Ontheotherhand,foreignemployerswillonlybelimitedtogivingtheillegallydismissedmigrantworkers
themaximumofthree(3)monthsunpaidsalariesnotwithstandingtheunexpiredtermofthecontractthatcanbe
morethanthree(3)months.38

Lastly,petitionerclaimsthatthesubjectclauseviolatesthedueprocessclause,foritdepriveshimofthesalaries
andotheremolumentsheisentitledtounderhisfixedperiodemploymentcontract.39

TheArgumentsofRespondents

IntheirCommentandMemorandum,respondentscontendthattheconstitutionalissueshouldnotbeentertained,
for this was belatedly interposed by petitioner in his appeal before the CA, and not at the earliest opportunity,
whichwaswhenhefiledanappealbeforetheNLRC.40

TheArgumentsoftheSolicitorGeneral

TheSolicitorGeneral(OSG)41pointsoutthatasR.A.No.8042tookeffectonJuly15,1995,itsprovisionscould
not have impaired petitioner's 1998 employment contract. Rather, R.A. No. 8042 having preceded petitioner's
contract,theprovisionsthereofaredeemedpartoftheminimumtermsofpetitioner'semployment,especiallyon
thematterofmoneyclaims,asthiswasnotstipulateduponbytheparties.42

Moreover,theOSGemphasizesthatOFWsandlocalworkersdifferintermsofthenatureoftheiremployment,
such that their rights to monetary benefits must necessarily be treated differently. The OSG enumerates the
essential elements that distinguish OFWs from local workers: first, while local workers perform their jobs within
Philippine territory, OFWs perform their jobs for foreign employers, over whom it is difficult for our courts to
acquirejurisdiction,oragainstwhomitisalmostimpossibletoenforcejudgmentandsecond,asheldinCoyoca
v. National Labor Relations Commission43 and Millares v. National Labor Relations Commission,44 OFWs are
contractual employees who can never acquire regular employment status, unlike local workers who are or can
becomeregularemployees.Hence,theOSGpositsthattherearerightsandprivilegesexclusivetolocalworkers,
but not available to OFWs that these peculiarities make for a reasonable and valid basis for the differentiated
treatmentunderthesubjectclauseofthemoneyclaimsofOFWswhoareillegallydismissed.Thus,theprovision
doesnotviolatetheequalprotectionclausenorSection18,ArticleIIoftheConstitution.45

Lastly,theOSGdefendstherationalebehindthesubjectclauseasapolicepowermeasureadoptedtomitigate
thesolidaryliabilityofplacementagenciesforthis"redoundstothebenefitofthemigrantworkerswhosewelfare
thegovernmentseekstopromote.Thesurvivaloflegitimateplacementagencieshelps[assure]thegovernment
thatmigrantworkersareproperlydeployedandareemployedunderdecentandhumaneconditions."46

TheCourt'sRuling

TheCourtsustainspetitioneronthefirstandsecondissues.

When the Court is called upon to exercise its power of judicial review of the acts of its coequals, such as the
Congress,itdoessoonlywhentheseconditionsobtain:(1)thatthereisanactualcaseorcontroversyinvolvinga
conflictofrightssusceptibleofjudicialdetermination47 (2) that the constitutional question is raised by a proper
party48andattheearliestopportunity49and(3)thattheconstitutionalquestionistheverylismotaofthecase,50
otherwisetheCourtwilldismissthecaseordecidethesameonsomeotherground.51

Without a doubt, there exists in this case an actual controversy directly involving petitioner who is personally
aggrievedthatthelabortribunalsandtheCAcomputedhismonetaryawardbasedonthesalaryperiodofthree
monthsonlyasprovidedunderthesubjectclause.

The constitutional challenge is also timely. It should be borne in mind that the requirement that a constitutional
issue be raised at the earliest opportunity entails the interposition of the issue in the pleadings before a
competentcourt,suchthat,iftheissueisnotraisedinthepleadingsbeforethatcompetentcourt,itcannotbe
consideredatthetrialand,ifnotconsideredinthetrial,itcannotbeconsideredonappeal.52 Records disclose
that the issue on the constitutionality of the subject clause was first raised, not in petitioner's appeal with the
NLRC, but in his Motion for Partial Reconsideration with said labor tribunal,53 and reiterated in his Petition for
CertioraribeforetheCA.54Nonetheless,theissueisdeemedseasonablyraisedbecauseitisnottheNLRCbut
the CA which has the competence to resolve the constitutional issue. The NLRC is a labor tribunal that merely
performs a quasijudicial function its function in the present case is limited to determining questions of fact to
whichthelegislativepolicyofR.A.No.8042istobeappliedandtoresolvingsuchquestionsinaccordancewith
thestandardslaiddownbythelawitself55thus,itsforemostfunctionistoadministerandenforceR.A.No.8042,
andnottoinquireintothevalidityofitsprovisions.TheCA,ontheotherhand,isvestedwiththepowerofjudicial
review or the power to declare unconstitutional a law or a provision thereof, such as the subject clause.56
Petitioner's interposition of the constitutional issue before the CA was undoubtedly seasonable. The CA was
thereforeremissinfailingtotakeuptheissueinitsdecision.
Thethirdconditionthattheconstitutionalissuebecriticaltotheresolutionofthecaselikewiseobtainsbecause
the monetary claim of petitioner to his lumpsum salary for the entire unexpired portion of his 12month
employmentcontract,andnotjustforaperiodofthreemonths,strikesattheverycoreofthesubjectclause.

Thus,thestageisallsetforthedeterminationoftheconstitutionalityofthesubjectclause.

DoesthesubjectclauseviolateSection10,
ArticleIIIoftheConstitutiononnonimpairment
ofcontracts?

Theanswerisinthenegative.

Petitioner'sclaimthatthesubjectclauseundulyinterfereswiththestipulationsinhiscontractonthetermofhis
employmentandthefixedsalarypackagehewillreceive57isnottenable.

Section10,ArticleIIIoftheConstitutionprovides:

Nolawimpairingtheobligationofcontractsshallbepassed.

Theprohibitionisalignedwiththegeneralprinciplethatlawsnewlyenactedhaveonlyaprospectiveoperation,58
andcannotaffectactsorcontractsalreadyperfected59however,astolawsalreadyinexistence,theirprovisions
arereadintocontractsanddeemedapartthereof.60Thus,thenonimpairmentclauseunderSection10,ArticleII
islimitedinapplicationtolawsabouttobeenactedthatwouldinanywayderogatefromexistingactsorcontracts
byenlarging,abridgingorinanymannerchangingtheintentionofthepartiesthereto.

As aptly observed by the OSG, the enactment of R.A. No. 8042 in 1995 preceded the execution of the
employment contract between petitioner and respondents in 1998. Hence, it cannot be argued that R.A. No.
8042,particularlythesubjectclause,impairedtheemploymentcontractoftheparties.Rather,whentheparties
executedtheir1998employmentcontract,theyweredeemedtohaveincorporatedintoitalltheprovisionsofR.A.
No.8042.

ButeveniftheCourtweretodisregardthetimeline,thesubjectclausemaynotbedeclaredunconstitutionalon
thegroundthatitimpingesontheimpairmentclause,forthelawwasenactedintheexerciseofthepolicepower
of the State to regulate a business, profession or calling, particularly the recruitment and deployment of OFWs,
with the noble end in view of ensuring respect for the dignity and wellbeing of OFWs wherever they may be
employed.61 Police power legislations adopted by the State to promote the health, morals, peace, education,
good order, safety, and general welfare of the people are generally applicable not only to future contracts but
even to those already in existence, for all private contracts must yield to the superior and legitimate measures
takenbytheStatetopromotepublicwelfare.62

DoesthesubjectclauseviolateSection1,
ArticleIIIoftheConstitution,andSection18,
ArticleIIandSection3,ArticleXIIIonlabor
asaprotectedsector?

Theanswerisintheaffirmative.

Section1,ArticleIIIoftheConstitutionguarantees:

Nopersonshallbedeprivedoflife,liberty,orpropertywithoutdueprocessoflawnorshallanypersonbedenied
theequalprotectionofthelaw.

Section18,63ArticleIIandSection3,64ArticleXIIIaccordallmembersofthelaborsector,withoutdistinctionasto
placeofdeployment,fullprotectionoftheirrightsandwelfare.

To Filipino workers, the rights guaranteed under the foregoing constitutional provisions translate to economic
security and parity: all monetary benefits should be equally enjoyed by workers of similar category, while all
monetaryobligationsshouldbebornebytheminequaldegreenoneshouldbedeniedtheprotectionofthelaws
whichisenjoyedby,orsparedtheburdenimposedon,othersinlikecircumstances.65

Such rights are not absolute but subject to the inherent power of Congress to incorporate, when it sees fit, a
system of classification into its legislation however, to be valid, the classification must comply with these
requirements: 1) it is based on substantial distinctions 2) it is germane to the purposes of the law 3) it is not
limitedtoexistingconditionsonlyand4)itappliesequallytoallmembersoftheclass.66

TherearethreelevelsofscrutinyatwhichtheCourtreviewstheconstitutionalityofaclassificationembodiedina
law:a)thedeferentialorrationalbasisscrutinyinwhichthechallengedclassificationneedsonlybeshowntobe
rationally related to serving a legitimate state interest67 b) the middletier or intermediate scrutiny in which the
government must show that the challenged classification serves an important state interest and that the
classification is at least substantially related to serving that interest68 and c) strict judicial scrutiny69 in which a
legislative classification which impermissibly interferes with the exercise of a fundamental right70 or operates to
the peculiar disadvantage of a suspect class71 is presumed unconstitutional, and the burden is upon the
governmenttoprovethattheclassificationisnecessarytoachieveacompellingstateinterestandthatitisthe
leastrestrictivemeanstoprotectsuchinterest.72

UnderAmericanjurisprudence,strictjudicialscrutinyistriggeredbysuspectclassifications73basedonrace74or
gender75butnotwhentheclassificationisdrawnalongincomecategories.76

It is different in the Philippine setting. In Central Bank (now Bangko Sentral ng Pilipinas) Employee Association,
Inc.v.BangkoSentralngPilipinas,77 the constitutionality of a provision in the charter of the Bangko Sentral ng
Pilipinas (BSP), a government financial institution (GFI), was challenged for maintaining its rankandfile
employees under the Salary Standardization Law (SSL), even when the rankandfile employees of other GFIs
had been exempted from the SSL by their respective charters. Finding that the disputed provision contained a
suspect classification based on salary grade, the Court deliberately employed the standard of strict judicial
scrutinyinitsreviewoftheconstitutionalityofsaidprovision.Moresignificantly,itwasinthiscasethattheCourt
revealedthebroadoutlinesofitsjudicialphilosophy,towit:

Congress retains its wide discretion in providing for a valid classification, and its policies should be accorded
recognition and respect by the courts of justice except when they run afoul of the Constitution. The deference
stopswheretheclassificationviolatesafundamentalright,orprejudicespersonsaccordedspecialprotection
bytheConstitution.Whentheseviolationsarise,thisCourtmustdischargeitsprimaryroleasthevanguardof
constitutionalguaranties,andrequireastricterandmoreexactingadherencetoconstitutionallimitations.Rational
basisshouldnotsuffice.

Admittedly,theviewthatprejudicetopersonsaccordedspecialprotectionbytheConstitutionrequiresastricter
judicialscrutinyfindsnosupportinAmericanorEnglishjurisprudence.Nevertheless,theseforeigndecisionsand
authorities are not per se controlling in this jurisdiction. At best, they are persuasive and have been used to
supportmanyofourdecisions.Weshouldnotplaceundueandfawningrelianceuponthemandregardthemas
indispensable mental crutches without which we cannot come to our own decisions through the employment of
ourownendowments.Weliveinadifferentambienceandmustdecideourownproblemsinthelightofourown
interestsandneeds,andofourqualitiesandevenidiosyncrasiesasapeople,andalwayswithourownconcept
oflawandjustice.Ourlawsmustbeconstruedinaccordancewiththeintentionofourownlawmakersandsuch
intentmaybededucedfromthelanguageofeachlawandthecontextofotherlocallegislationrelatedthereto.
Moreimportantly,theymustbeconstruedtoserveourownpublicinterestwhichisthebeallandtheendallofall
ourlaws.Anditneednotbestressedthatourpublicinterestisdistinctanddifferentfromothers.

xxxx

Further,thequestforabetterandmore"equal"worldcallsfortheuseofequalprotectionasatoolofeffective
judicialintervention.

Equality is one ideal which cries out for bold attention and action in the Constitution. The Preamble proclaims
"equality" as an ideal precisely in protest against crushing inequities in Philippine society. The command to
promotesocialjusticeinArticleII,Section10,in"allphasesofnationaldevelopment,"furtherexplicitatedinArticle
XIII,areclearcommandstotheStatetotakeaffirmativeactioninthedirectionofgreaterequality.xxx[T]hereis
thusinthePhilippineConstitutionnolackofdoctrinalsupportforamorevigorousstateefforttowardsachievinga
reasonablemeasureofequality.

OurpresentConstitutionhasgonefurtheringuaranteeingvitalsocialandeconomicrightstomarginalizedgroups
of society, including labor. Under the policy of social justice, the law bends over backward to accommodate the
interestsoftheworkingclassonthehumanejustificationthatthosewithlessprivilegeinlifeshouldhavemorein
law. And the obligation to afford protection to labor is incumbent not only on the legislative and executive
branches but also on the judiciary to translate this pledge into a living reality. Social justice calls for the
humanizationoflawsandtheequalizationofsocialandeconomicforcesbytheStatesothatjusticeinitsrational
andobjectivelysecularconceptionmayatleastbeapproximated.

xxxx

Under most circumstances, the Court will exercise judicial restraint in deciding questions of constitutionality,
recognizingthebroaddiscretiongiventoCongressinexercisingitslegislativepower.Judicialscrutinywouldbe
basedonthe"rationalbasis"test,andthelegislativediscretionwouldbegivendeferentialtreatment.

But if the challenge to the statute is premised on the denial of a fundamental right, or the perpetuation of
prejudiceagainstpersonsfavoredbytheConstitutionwithspecialprotection,judicialscrutinyoughtto
bemorestrict.AweakandwatereddownviewwouldcallfortheabdicationofthisCourtssolemndutytostrike
downanylawrepugnanttotheConstitutionandtherightsitenshrines.Thisistruewhethertheactorcommitting
theunconstitutionalactisaprivatepersonorthegovernmentitselforoneofitsinstrumentalities.Oppressiveacts
willbestruckdownregardlessofthecharacterornatureoftheactor.

xxxx

Inthecaseatbar,thechallengedprovisooperatesonthebasisofthesalarygradeorofficeremployeestatus.It
is akin to a distinction based on economic class and status, with the higher grades as recipients of a benefit
specificallywithheldfromthelowergrades.OfficersoftheBSPnowreceivehighercompensationpackagesthat
arecompetitivewiththeindustry,whilethepoorer,lowsalariedemployeesarelimitedtotheratesprescribedby
theSSL.Theimplicationsarequitedisturbing:BSPrankandfileemployeesarepaidthestrictlyregimentedrates
oftheSSLwhileemployeeshigherinrankpossessinghigherandbettereducationandopportunitiesforcareer
advancementaregivenhighercompensationpackagestoenticethemtostay.Consideringthatmajority,ifnot
all,therankandfileemployeesconsistofpeoplewhosestatusandrankinlifearelessandlimited,especiallyin
termsofjobmarketability,itistheyandnottheofficerswhohavetherealeconomicandfinancialneedforthe
adjustment . This is in accord with the policy of the Constitution "to free the people from poverty, provide
adequatesocialservices,extendtothemadecentstandardofliving,andimprovethequalityoflifeforall."Any
actofCongressthatrunscountertothisconstitutionaldesideratumdeservesstrictscrutinybythisCourtbeforeit
canpassmuster.(Emphasissupplied)

Imbued with the same sense of "obligation to afford protection to labor," the Court in the present case also
employs the standard of strict judicial scrutiny, for it perceives in the subject clause a suspect classification
prejudicialtoOFWs.

Upon cursory reading, the subject clause appears facially neutral, for it applies to all OFWs. However, a closer
examinationrevealsthatthesubjectclausehasadiscriminatoryintentagainst,andaninvidiousimpacton,OFWs
attwolevels:

First,OFWswithemploymentcontractsoflessthanoneyearvisvisOFWswithemploymentcontractsof
oneyearormore

Second,amongOFWswithemploymentcontractsofmorethanoneyearand

Third,OFWsvisvislocalworkerswithfixedperiodemployment

OFWs with employment contracts of less than one year visvis OFWs with employment contracts of
oneyearormore
As pointed out by petitioner,78 it was in Marsaman Manning Agency, Inc. v. National Labor Relations
Commission79 (Second Division, 1999) that the Court laid down the following rules on the application of the
periodsprescribedunderSection10(5)ofR.A.No.804,towit:

AplainreadingofSec.10clearlyrevealsthatthechoiceofwhichamounttoawardanillegallydismissed
overseascontractworker,i.e.,whetherhissalariesfortheunexpiredportionofhisemploymentcontract
orthree(3)monthssalaryforeveryyearoftheunexpiredterm,whicheverisless,comesintoplayonly
when the employment contract concerned has a term of at least one (1) year or more. This is evident
fromthewords"foreveryyearoftheunexpiredterm"whichfollowsthewords"salariesxxxforthree
months."Tofollowpetitionersthinkingthatprivaterespondentisentitledtothree(3)monthssalaryonlysimply
because it is the lesser amount is to completely disregard and overlook some words used in the statute while
giving effect to some. This is contrary to the wellestablished rule in legal hermeneutics that in interpreting a
statute, care should be taken that every part or word thereof be given effect since the lawmaking body is
presumed to know the meaning of the words employed in the statue and to have used them advisedly. Ut res
magisvaleatquampereat.80(Emphasissupplied)

InMarsaman,theOFWinvolvedwasillegallydismissedtwomonthsintohis10monthcontract,butwasawarded
hissalariesfortheremaining8monthsand6daysofhiscontract.

PriortoMarsaman,however,thereweretwocasesinwhichtheCourtmadeconflictingrulingsonSection10(5).
OnewasAsianCenterforCareerandEmploymentSystemandServicesv.NationalLaborRelationsCommission
(SecondDivision,October1998),81whichinvolvedanOFWwhowasawardedatwoyearemploymentcontract,
butwasdismissedafterworkingforoneyearandtwomonths.TheLAdeclaredhisdismissalillegalandawarded
himSR13,600.00aslumpsumsalarycoveringeightmonths,theunexpiredportionofhiscontract.Onappeal,the
CourtreducedtheawardtoSR3,600.00equivalenttohisthreemonthssalary,thisbeingthelesservalue,towit:

Under Section 10 of R.A. No. 8042, a worker dismissed from overseas employment without just, valid or
authorized cause is entitled to his salary for the unexpired portion of his employment contract or for three (3)
monthsforeveryyearoftheunexpiredterm,whicheverisless.

Inthecaseatbar,theunexpiredportionofprivaterespondentsemploymentcontractiseight(8)months.Private
respondentshouldthereforebepaidhisbasicsalarycorrespondingtothree(3)monthsoratotalofSR3,600.82

Another was TripleEight Integrated Services, Inc. v. National Labor Relations Commission (Third Division,
December1998),83 which involved an OFW (therein respondent Erlinda Osdana) who was originally granted a
12month contract, which was deemed renewed for another 12 months. After serving for one year and seven
andahalfmonths,respondentOsdanawasillegallydismissed,andtheCourtawardedhersalariesfortheentire
unexpiredportionoffourandonehalfmonthsofhercontract.

TheMarsamaninterpretationofSection10(5)hassincebeenadoptedinthefollowingcases:

CaseTitle Contract Periodof Unexpired PeriodAppliedin

 Period Service Period theComputation
oftheMonetary
Award

Skippersv. 6months 2months 4months 4months

Maguad84

BahiaShipping 9months 8months 4months 4months

v.Reynaldo
Chua85

Centennial 9months 4months 5months 5months

Transmarinev.
delaCruzl86

Talidanov. 12months 3months 9months 3months

Falcon87

Univanv.CA 12months 3months 9months 3months

88

Orientalv.CA 12months morethan2 10months 3months

89 months

PCLv.NLRC90 12months morethan2 moreorless9 3months

months months

Olartev. 12months 21days 11monthsand9 3months

Nayona91 days

JSSv.Ferrer92 12months 16days 11monthsand 3months

24days

Pentagon v. 12months 9months 2monthsand23 2monthsand23

Adelantar93 and7days days days

Phil.Employv. 12months 10months 2months Unexpiredportion

Paramio,et
al.94

Flourish 2years 26days 23monthsand4 6monthsor3

Maritimev. days monthsforeach
Almanzor95 yearofcontract

Athenna 1year,10 1month 1year,9months 6monthsor3

 Manpowerv. monthsand and28days monthsforeach
Villanos96 28days yearofcontract

Astheforegoingmatrixreadilyshows,thesubjectclauseclassifiesOFWsintotwocategories.Thefirstcategory
includesOFWswithfixedperiodemploymentcontractsoflessthanoneyearincaseofillegaldismissal,theyare
entitledtotheirsalariesfortheentireunexpiredportionoftheircontract.ThesecondcategoryconsistsofOFWs
with fixedperiod employment contracts of one year or more in case of illegal dismissal, they are entitled to
monetaryawardequivalenttoonly3monthsoftheunexpiredportionoftheircontracts.

The disparity in the treatment of these two groups cannot be discounted. In Skippers, the respondent OFW
workedforonly2monthsoutofhis6monthcontract,butwasawardedhissalariesfortheremaining4months.In
contrast, the respondent OFWs in Oriental and PCL who had also worked for about 2 months out of their 12
monthcontractswereawardedtheirsalariesforonly3monthsoftheunexpiredportionoftheircontracts.Even
theOFWsinvolvedinTalidanoandUnivanwhohadworkedforalongerperiodof3monthsoutoftheir12month
contractsbeforebeingillegallydismissedwereawardedtheirsalariesforonly3months.

To illustrate the disparity even more vividly, the Court assumes a hypothetical OFWA with an employment
contract of 10 months at a monthly salary rate of US$1,000.00 and a hypothetical OFWB with an employment
contract of 15 months with the same monthly salary rate of US$1,000.00. Both commenced work on the same
day and under the same employer, and were illegally dismissed after one month of work. Under the subject
clause, OFWA will be entitled to US$9,000.00, equivalent to his salaries for the remaining 9 months of his
contract, whereas OFWB will be entitled to only US$3,000.00, equivalent to his salaries for 3 months of the
unexpiredportionofhiscontract,insteadofUS$14,000.00fortheunexpiredportionof14monthsofhiscontract,
astheUS$3,000.00isthelesseramount.

The disparity becomes more aggravating when the Court takes into account jurisprudence that, prior to the
effectivity of R.A. No. 8042 on July 14, 1995,97 illegally dismissed OFWs, no matter how long the period of
theiremploymentcontracts,wereentitledtotheirsalariesfortheentireunexpiredportionsoftheircontracts.The
matrixbelowspeaksforitself:

CaseTitle Contract Periodof Unexpired PeriodAppliedin

Period Service Period theComputationof
theMonetaryAward

ATCIv.CA,et 2years 2months 22months 22months

al.98

Phil.Integrated 2years 7days 23months 23monthsand23

v.NLRC99 and23days days

JGBv.NLC100 2years 9months 15months 15months

Agoyv. 2years 2months 22months 22months

 NLRC101

EDIv.NLRC, 2years 5months 19months 19months

etal.102

Barrosv. 12months 4months 8months 8months

NLRC,etal.103

Philippine 12months 6months 5months 5monthsand18days

Transmarinev. and22days and18days
Carilla104

ItisplainthatpriortoR.A.No.8042,allOFWs,regardlessofcontractperiodsortheunexpiredportionsthereof,
weretreatedalikeintermsofthecomputationoftheirmonetarybenefitsincaseofillegaldismissal.Theirclaims
weresubjectedtoauniformruleofcomputation:theirbasicsalariesmultipliedbytheentireunexpiredportionof
theiremploymentcontracts.

The enactment of the subject clause in R.A. No. 8042 introduced a differentiated rule of computation of the
moneyclaimsofillegallydismissedOFWsbasedontheiremploymentperiods,intheprocesssinglingoutone
category whose contracts have an unexpired portion of one year or more and subjecting them to the peculiar
disadvantageofhavingtheirmonetaryawardslimitedtotheirsalariesfor3monthsorfortheunexpiredportion
thereof, whichever is less, but all the while sparing the other category from such prejudice, simply because the
latter'sunexpiredcontractsfallshortofoneyear.

AmongOFWsWithEmploymentContractsofMoreThanOneYear

Uponcloserexaminationoftheterminologyemployedinthesubjectclause,theCourtnowhasmisgivingsonthe
accuracyoftheMarsamaninterpretation.

TheCourtnotesthatthesubjectclause"orforthree(3)monthsforeveryyearoftheunexpiredterm,whicheveris
less"containsthequalifyingphrases"everyyear"and"unexpiredterm."Byitsordinarymeaning,theword"term"
means a limited or definite extent of time.105 Corollarily, that "every year" is but part of an "unexpired term" is
significantinmanyways:first,theunexpiredtermmustbeatleastoneyear,forifitwereanyshorter,therewould
be no occasion for such unexpired term to be measured by every year and second, the original term must be
more than one year, for otherwise, whatever would be the unexpired term thereof will not reach even a year.
Consequently,themoredecisivefactorinthedeterminationofwhenthesubjectclause"forthree(3)monthsfor
everyyearoftheunexpiredterm,whicheverisless"shallapplyisnotthelengthoftheoriginalcontractperiodas
heldinMarsaman,106butthelengthoftheunexpiredportionofthecontractperiodthesubjectclauseappliesin
caseswhentheunexpiredportionofthecontractperiodisatleastoneyear,whicharithmeticallyrequiresthatthe
originalcontractperiodbemorethanoneyear.

Viewedinthatlight,thesubjectclausecreatesasublayerofdiscriminationamongOFWswhosecontractperiods
areformorethanoneyear:thosewhoareillegallydismissedwithlessthanoneyearleftintheircontractsshall
be entitled to their salaries for the entire unexpired portion thereof, while those who are illegally dismissed with
oneyearormoreremainingintheircontractsshallbecoveredbythesubjectclause,andtheirmonetarybenefits
limitedtotheirsalariesforthreemonthsonly.

To concretely illustrate the application of the foregoing interpretation of the subject clause, the Court assumes
hypotheticalOFWCandOFWD,whoeachhavea24monthcontractatasalaryrateofUS$1,000.00permonth.
OFWCisillegallydismissedonthe12thmonth,andOFWD,onthe13thmonth.Consideringthatthereisatleast
12monthsremaininginthecontractperiodofOFWC,thesubjectclauseappliestothecomputationofthelatter's
monetary benefits. Thus, OFWC will be entitled, not to US$12,000,00 or the latter's total salaries for the 12
months unexpired portion of the contract, but to the lesser amount of US$3,000.00 or the latter's salaries for 3
monthsoutofthe12monthunexpiredtermofthecontract.Ontheotherhand,OFWDissparedfromtheeffects
ofthesubjectclause,forthereareonly11monthsleftinthelatter'scontractperiod.Thus,OFWDwillbeentitled
toUS$11,000.00,whichisequivalenttohis/hertotalsalariesfortheentire11monthunexpiredportion.

OFWsvisvisLocalWorkers
WithFixedPeriodEmployment

Asdiscussedearlier,priortoR.A.No.8042,auniformsystemofcomputationofthemonetaryawardsofillegally
dismissed OFWs was in place. This uniform system was applicable even to local workers with fixedterm
employment.107

TheearliestruleprescribingauniformsystemofcomputationwasactuallyArticle299oftheCodeofCommerce
(1888),108towit:

Article299.Ifthecontractsbetweenthemerchantsandtheirshopclerksandemployeesshouldhavebeenmade
of a fixed period, none of the contracting parties, without the consent of the other, may withdraw from the
fulfillmentofsaidcontractuntiltheterminationoftheperiodagreedupon.

Personsviolatingthisclauseshallbesubjecttoindemnifythelossanddamagesuffered,withtheexceptionofthe
provisionscontainedinthefollowingarticles.

InReyesv.TheCompaiaMaritima,109 the Court applied the foregoing provision to determine the liability of a
shippingcompanyfortheillegaldischargeofitsmanagerspriortotheexpirationoftheirfixedtermemployment.
The Court therein held the shipping company liable for the salaries of its managers for the remainder of their
fixedtermemployment.

There is a more specific rule as far as seafarers are concerned: Article 605 of the Code of Commerce which
provides:

Article605.Ifthecontractsofthecaptainandmembersofthecrewwiththeagentshouldbeforadefiniteperiod
orvoyage,theycannotbedischargeduntilthefulfillmentoftheircontracts,exceptforreasonsofinsubordination
in serious matters, robbery, theft, habitual drunkenness, and damage caused to the vessel or to its cargo by
maliceormanifestorprovennegligence.
Article605wasappliedtoMadrigalShippingCompany,Inc.v.Ogilvie,110in

which the Court held the shipping company liable for the salaries and subsistence allowance of its illegally
dismissedemployeesfortheentireunexpiredportionoftheiremploymentcontracts.

While Article 605 has remained good law up to the present,111 Article 299 of the Code of Commerce was
replacedbyArt.1586oftheCivilCodeof1889,towit:

Article1586.Fieldhands,mechanics,artisans,andotherlaborershiredforacertaintimeandforacertainwork
cannotleaveorbedismissedwithoutsufficientcause,beforethefulfillmentofthecontract.(Emphasissupplied.)

CitingManresa,theCourtinLemoinev.Alkan112readthedisjunctive"or"inArticle1586asaconjunctive"and"
soastoapplytheprovisiontolocalworkerswhoareemployedforatimecertainalthoughfornoparticularskill.
ThisinterpretationofArticle1586wasreiteratedinGarciaPalomarv.HoteldeFranceCompany.113Andinboth
LemoineandPalomar,theCourtadoptedthegeneralprinciplethatinactionsforwrongfuldischargefoundedon
Article 1586, local workers are entitled to recover damages to the extent of the amount stipulated to be paid to
them by the terms of their contract. On the computation of the amount of such damages, the Court in Aldaz v.
Gay114held:

ThedoctrineiswellestablishedinAmericanjurisprudence,andnothinghasbeenbroughttoourattentiontothe
contraryunderSpanishjurisprudence,thatwhenanemployeeiswrongfullydischargeditishisdutytoseekother
employment of the same kind in the same community, for the purpose of reducing the damages resulting from
suchwrongfuldischarge.However,whilethisisthegeneralrule,theburdenofshowingthathefailedtomakean
efforttosecureotheremploymentofalikenature,andthatotheremploymentofalikenaturewasobtainable,is
uponthedefendant.Whenanemployeeiswrongfullydischargedunderacontractofemploymenthisprimafacie
damageistheamountwhichhewouldbeentitledtohadhecontinuedinsuchemploymentuntiltheterminationof
theperiod.(Howardvs.Daly,61N.Y.,362Allenvs.Whitlark,99Mich.,492Farrellvs.SchoolDistrictNo.2,98
Mich.,43.)115(Emphasissupplied)

On August 30, 1950, the New Civil Code took effect with new provisions on fixedterm employment: Section 2
(ObligationswithaPeriod),Chapter3,TitleI,andSections2(ContractofLabor)and3(ContractforaPieceof
Work),Chapter3,TitleVIII,BookIV.116MuchlikeArticle1586oftheCivilCodeof1889,thenewprovisionsofthe
CivilCodedonotexpresslyprovidefortheremediesavailabletoafixedtermworkerwhoisillegallydischarged.
However,itisnotedthatinMackayRadio&TelegraphCo.,Inc.v.Rich,117theCourtcarriedovertheprinciples
on the payment of damages underlying Article 1586 of the Civil Code of 1889 and applied the same to a case
involvingtheillegaldischargeofalocalworkerwhosefixedperiodemploymentcontractwasenteredintoin1952,
whenthenewCivilCodewasalreadyineffect.118

Moresignificantly,thesameprincipleswereappliedtocasesinvolvingoverseasFilipinoworkerswhosefixedterm
employmentcontractswereillegallyterminated,suchasinFirstAsianTrans&ShippingAgency,Inc.v.Ople,119
involving seafarers who were illegally discharged. In Teknika Skills and Trade Services, Inc. v. National Labor
Relations Commission,120 an OFW who was illegally dismissed prior to the expiration of her fixedperiod
employment contract as a baby sitter, was awarded salaries corresponding to the unexpired portion of her
contract. The Court arrived at the same ruling in Anderson v. National Labor Relations Commission,121 which
involved a foreman hired in 1988 in Saudi Arabia for a fixed term of two years, but who was illegally dismissed
afteronlyninemonthsonthejobtheCourtawardedhimsalariescorrespondingto15months,theunexpired
portion of his contract. In Asia World Recruitment, Inc. v. National Labor Relations Commission,122 a Filipino
workingasasecurityofficerin1989inAngolawasawardedhissalariesfortheremainingperiodofhis12month
contract after he was wrongfully discharged. Finally, in Vinta Maritime Co., Inc. v. National Labor Relations
Commission,123 an OFW whose 12month contract was illegally cut short in the second month was declared
entitledtohissalariesfortheremaining10monthsofhiscontract.

Insum,priortoR.A.No.8042,OFWsandlocalworkerswithfixedtermemploymentwhowereillegallydischarged
weretreatedalikeintermsofthecomputationoftheirmoneyclaims:theywereuniformlyentitledtotheirsalaries
for the entire unexpired portions of their contracts. But with the enactment of R.A. No. 8042, specifically the
adoption of the subject clause, illegally dismissed OFWs with an unexpired portion of one year or more in their
employmentcontracthavesincebeendifferentlytreatedinthattheirmoneyclaimsaresubjecttoa3monthcap,
whereasnosuchlimitationisimposedonlocalworkerswithfixedtermemployment.

The Court concludes that the subject clause contains a suspect classification in that, in the
computationofthemonetarybenefitsoffixedtermemployeeswhoareillegallydischarged,itimposesa
3monthcapontheclaimofOFWswithanunexpiredportionofoneyearormoreintheircontracts,but
none on the claims of other OFWs or local workers with fixedterm employment. The subject clause
singlesoutoneclassificationofOFWsandburdensitwithapeculiardisadvantage.

There being a suspect classification involving a vulnerable sector protected by the Constitution, the Court now
subjectstheclassificationtoastrictjudicialscrutiny,anddetermineswhetheritservesacompellingstateinterest
throughtheleastrestrictivemeans.

What constitutes compelling state interest is measured by the scale of rights and powers arrayed in the
Constitution and calibrated by history.124 It is akin to the paramount interest of the state125 for which some
individual liberties must give way, such as the public interest in safeguarding health or maintaining medical
standards,126orinmaintainingaccesstoinformationonmattersofpublicconcern.127

Inthepresentcase,theCourtdugdeepintotherecordsbutfoundnocompellingstateinterestthatthesubject
clausemaypossiblyserve.

TheOSGdefendsthesubjectclauseasapolicepowermeasure"designedtoprotecttheemploymentofFilipino
seafarers overseas x x x. By limiting the liability to three months [sic], Filipino seafarers have better chance of
getting hired by foreign employers." The limitation also protects the interest of local placement agencies, which
otherwisemaybemadetoshouldermillionsofpesosin"terminationpay."128

TheOSGexplainedfurther:

Often,placementagencies,theirliabilitybeingsolidary,shoulderthepaymentofmoneyclaimsintheeventthat
jurisdiction over the foreign employer is not acquired by the court or if the foreign employer reneges on its
obligation. Hence, placement agencies that are in good faith and which fulfill their obligations are unnecessarily
penalizedfortheactsoftheforeignemployer.Toprotectthemandtopromotetheircontinuedhelpfulcontribution
indeployingFilipinomigrantworkers,liabilityformoneyarereducedunderSection10ofRA8042.

Thismeasureredoundstothebenefitofthemigrantworkerswhosewelfarethegovernmentseekstopromote.
The survival of legitimate placement agencies helps [assure] the government that migrant workers are properly
deployedandareemployedunderdecentandhumaneconditions.129(Emphasissupplied)

However,nowhereintheCommentorMemorandumdoestheOSGcitethesourceofitsperceptionofthestate
interestsoughttobeservedbythesubjectclause.

TheOSGlocatesthepurposeofR.A.No.8042inthespeechofRep.BonifacioGallegoinsponsorshipofHouse
Bill No. 14314 (HB 14314), from which the law originated130 but the speech makes no reference to the
underlyingreasonfortheadoptionofthesubjectclause.Thatisonlynaturalfornoneofthe29provisionsinHB
14314resemblesthesubjectclause.

Ontheotherhand,SenateBillNo.2077(SB2077)containsaprovisiononmoneyclaims,towit:

Sec.10.MoneyClaims.Notwithstandinganyprovisionoflawtothecontrary,theLaborArbitersoftheNational
LaborRelationsCommission(NLRC)shallhavetheoriginalandexclusivejurisdictiontohearanddecide,within
ninety (90) calendar days after the filing of the complaint, the claims arising out of an employeremployee
relationshiporbyvirtueofthecomplaint,theclaimarisingoutofanemployeremployeerelationshiporbyvirtue
of any law or contract involving Filipino workers for overseas employment including claims for actual, moral,
exemplaryandotherformsofdamages.

Theliabilityoftheprincipalandtherecruitment/placementagencyoranyandallclaimsunderthisSectionshall
bejointandseveral.

Anycompromise/amicablesettlementorvoluntaryagreementonanymoneyclaimsexclusiveofdamagesunder
this Section shall not be less than fifty percent (50%) of such money claims: Provided, That any installment
payments, if applicable, to satisfy any such compromise or voluntary settlement shall not be more than two (2)
months.Anycompromise/voluntaryagreementinviolationofthisparagraphshallbenullandvoid.

NoncompliancewiththemandatoryperiodforresolutionsofcasesprovidedunderthisSectionshallsubjectthe
responsibleofficialstoanyorallofthefollowingpenalties:

(1)Thesalaryofanysuchofficialwhofailstorenderhisdecisionorresolutionwithintheprescribedperiod
shallbe,orcausedtobe,withhelduntilthesaidofficialcompliestherewith

(2)Suspensionfornotmorethanninety(90)daysor

(3)Dismissalfromtheservicewithdisqualificationtoholdanyappointivepublicofficeforfive(5)years.
Provided, however, That the penalties herein provided shall be without prejudice to any liability which any such
official may have incurred under other existing laws or rules and regulations as a consequence of violating the
provisionsofthisparagraph.

Butsignificantly,Section10ofSB2077doesnotprovideforanyruleonthecomputationofmoneyclaims.

Aruleonthecomputationofmoneyclaimscontainingthesubjectclausewasinsertedandeventuallyadoptedas
the5thparagraphofSection10ofR.A.No.8042.TheCourtexaminedtherationaleofthesubjectclauseinthe
transcripts of the "Bicameral Conference Committee (Conference Committee) Meetings on the Magna Carta on
OCWs(DisagreeingProvisionsofSenateBillNo.2077andHouseBillNo.14314)."However,theCourtfindsno
discerniblestateinterest,letaloneacompellingone,thatissoughttobeprotectedoradvancedbytheadoption
ofthesubjectclause.

Infine,theGovernmenthasfailedtodischargeitsburdenofprovingtheexistenceofacompellingstateinterest
thatwouldjustifytheperpetuationofthediscriminationagainstOFWsunderthesubjectclause.

Assumingthat,asadvancedbytheOSG,thepurposeofthesubjectclauseistoprotecttheemploymentofOFWs
by mitigating the solidary liability of placement agencies, such callous and cavalier rationale will have to be
rejected.Therecanneverbeajustificationforanyformofgovernmentactionthatalleviatestheburdenofone
sector, but imposes the same burden on another sector, especially when the favored sector is composed of
private businesses such as placement agencies, while the disadvantaged sector is composed of OFWs whose
protectionnolessthantheConstitutioncommands.Theideathatprivatebusinessinterestcanbeelevatedtothe
levelofacompellingstateinterestisodious.

Moreover,evenifthepurposeofthesubjectclauseistolessenthesolidaryliabilityofplacementagenciesvisa
vistheirforeignprincipals,therearemechanismsalreadyinplacethatcanbeemployedtoachievethatpurpose
withoutinfringingontheconstitutionalrightsofOFWs.

The POEA Rules and Regulations Governing the Recruitment and Employment of LandBased Overseas
Workers,datedFebruary4,2002,imposesadministrativedisciplinarymeasuresonerringforeignemployerswho
default on their contractual obligations to migrant workers and/or their Philippine agents. These disciplinary
measures range from temporary disqualification to preventive suspension. The POEA Rules and Regulations
Governing the Recruitment and Employment of Seafarers, dated May 23, 2003, contains similar administrative
disciplinarymeasuresagainsterringforeignemployers.

Resort to these administrative measures is undoubtedly the less restrictive means of aiding local placement
agenciesinenforcingthesolidaryliabilityoftheirforeignprincipals.

Thus,thesubjectclauseinthe5thparagraphofSection10ofR.A.No.8042isviolativeoftherightofpetitioner
andotherOFWstoequalprotection. 1avvphi1

Further, there would be certain misgivings if one is to approach the declaration of the unconstitutionality of the
subjectclausefromtheloneperspectivethattheclausedirectlyviolatesstatepolicyonlaborunderSection3,131
ArticleXIIIoftheConstitution.
Whilealltheprovisionsofthe1987Constitutionarepresumedselfexecuting,132therearesomewhichthisCourt
hasdeclarednot judicially enforceable, Article XIII being one,133 particularly Section 3 thereof, the nature of
which,thisCourt,inAgabonv.NationalLaborRelationsCommission,134hasdescribedtobenotselfactuating:

Thus,theconstitutionalmandatesofprotectiontolaborandsecurityoftenuremaybedeemedasselfexecuting
inthesensethattheseareautomaticallyacknowledgedandobservedwithoutneedforanyenablinglegislation.
However, to declare that the constitutional provisions are enough to guarantee the full exercise of the rights
embodied therein, and the realization of ideals therein expressed, would be impractical, if not unrealistic. The
espousalofsuchviewpresentsthedangeroustendencyofbeingoverbroadandexaggerated.Theguaranteesof
"full protection to labor" and "security of tenure", when examined in isolation, are facially unqualified, and the
broadestinterpretationpossiblesuggestsablanketshieldinfavoroflaboragainstanyformofremovalregardless
of circumstance. This interpretation implies an unimpeachable right to continued employmenta utopian notion,
doubtlessbutstillhardlywithinthecontemplationoftheframers.Subsequentlegislationisstillneededtodefine
theparametersoftheseguaranteedrightstoensuretheprotectionandpromotion,notonlytherightsofthelabor
sector, but of the employers' as well. Without specific and pertinent legislation, judicial bodies will be at a loss,
formulatingtheirownconclusiontoapproximateatleasttheaimsoftheConstitution.

Ultimately, therefore, Section 3 of Article XIII cannot, on its own, be a source of a positive enforceable
right to stave off the dismissal of an employee for just cause owing to the failure to serve proper notice or
hearing. As manifested by several framers of the 1987 Constitution, the provisions on social justice require
legislativeenactmentsfortheirenforceability.135(Emphasisadded)

Thus,Section3,ArticleXIIIcannotbetreatedasaprincipalsourceofdirectenforceablerights,fortheviolationof
which the questioned clause may be declared unconstitutional. It may unwittingly risk opening the floodgates of
litigation to every worker or union over every conceivable violation of so broad a concept as social justice for
labor.

It must be stressed that Section 3, Article XIII does not directly bestow on the working class any actual
enforceable right, but merely clothes it with the status of a sector for whom the Constitution urges protection
throughexecutiveorlegislativeactionandjudicialrecognition.Itsutilityisbestlimitedtobeinganimpetusnot
justfortheexecutiveandlegislativedepartments,butforthejudiciaryaswell,toprotectthewelfareoftheworking
class.And it was in fact consistent with that constitutional agenda that the Court in Central Bank (now Bangko
SentralngPilipinas)EmployeeAssociation,Inc.v.BangkoSentralngPilipinas,pennedbythenAssociateJustice
now Chief Justice Reynato S. Puno, formulated the judicial precept that when the challenge to a statute is
premisedontheperpetuationofprejudiceagainstpersonsfavoredbytheConstitutionwithspecialprotection
suchastheworkingclassorasectionthereoftheCourtmayrecognizetheexistenceofasuspectclassification
andsubjectthesametostrictjudicialscrutiny.

The view that the concepts of suspect classification and strict judicial scrutiny formulated in Central Bank
EmployeeAssociationexaggeratethesignificanceofSection3,ArticleXIIIisagroundlessapprehension.Central
Bank applied Article XIII in conjunction with the equal protection clause. Article XIII, by itself, without the
applicationoftheequalprotectionclause,hasnolifeorforceofitsownaselucidatedinAgabon.
Along the same line of reasoning, the Court further holds that the subject clause violates petitioner's right to
substantivedueprocess,foritdepriveshimofproperty,consistingofmonetarybenefits,withoutanyexistingvalid
governmentalpurpose.136

TheargumentoftheSolicitorGeneral,thattheactualpurposeofthesubjectclauseoflimitingtheentitlementof
OFWstotheirthreemonthsalaryincaseofillegaldismissal,istogivethemabetterchanceofgettinghiredby
foreign employers. This is plain speculation. As earlier discussed, there is nothing in the text of the law or the
recordsofthedeliberationsleadingtoitsenactmentorthepleadingsofrespondentthatwouldindicatethatthere
isanexistinggovernmentalpurposeforthesubjectclause,orevenjustapretextofone.

Thesubjectclausedoesnotstateorimplyanydefinitivegovernmentalpurposeanditisforthatprecisereason
thattheclauseviolatesnotjustpetitioner'srighttoequalprotection,butalsoherrighttosubstantivedueprocess
underSection1,137ArticleIIIoftheConstitution.

The subject clause being unconstitutional, petitioner is entitled to his salaries for the entire unexpired period of
ninemonthsand23daysofhisemploymentcontract,pursuanttolawandjurisprudencepriortotheenactmentof
R.A.No.8042.

OntheThirdIssue

Petitionercontendsthathisovertimeandleavepayshouldformpartofthesalarybasisinthecomputationofhis
monetaryaward,becausethesearefixedbenefitsthathavebeenstipulatedintohiscontract.

Petitionerismistaken.

ThewordsalariesinSection10(5)doesnotincludeovertimeandleavepay.Forseafarerslikepetitioner,DOLE
DepartmentOrderNo.33,series1996,providesaStandardEmploymentContractofSeafarers,inwhichsalaryis
understood as the basic wage, exclusive of overtime, leave pay and other bonuses whereas overtime pay is
compensationforallwork"performed"inexcessoftheregulareighthours,andholidaypayiscompensationfor
anywork"performed"ondesignatedrestdaysandholidays.

Bytheforegoingdefinitionalone,thereisnobasisfortheautomaticinclusionofovertimeandholidaypayinthe
computation of petitioner's monetary award, unless there is evidence that he performed work during those
periods.AstheCourtheldinCentennialTransmarine,Inc.v.DelaCruz,138

However,thepaymentofovertimepayandleavepayshouldbedisallowedinlightofourrulinginCagampanv.
NationalLaborRelationsCommission,towit:

The rendition of overtime work and the submission of sufficient proof that said was actually performed are
conditions to be satisfied before a seaman could be entitled to overtime pay which should be computed on the
basisof30%ofthebasicmonthlysalary.Inshort,thecontractprovisionguaranteestherighttoovertimepaybut
theentitlementtosuchbenefitmustfirstbeestablished.

Inthesamevein,theclaimfortheday'sleavepayfortheunexpiredportionofthecontractisunwarrantedsince
thesameisgivenduringtheactualserviceoftheseamen.

WHEREFORE, the Court GRANTS the Petition. The subject clause "or for three months for every year of the
unexpired term, whichever is less" in the 5th paragraph of Section 10 of Republic Act No. 8042 is DECLARED
UNCONSTITUTIONALandtheDecember8,2004DecisionandApril1,2005ResolutionoftheCourtofAppeals
are MODIFIED to the effect that petitioner is AWARDED his salaries for the entire unexpired portion of his
employmentcontractconsistingofninemonthsand23dayscomputedattherateofUS$1,400.00permonth.

Nocosts.

SOORDERED.

MA.ALICIAAUSTRIAMARTINEZ
AssociateJustice

WECONCUR:

REYNATOS.PUNO
ChiefJustice

LEONARDOA.QUISUMBING CONSUELOYNARESSANTIAGO
AssociateJustice AssociateJustice

ANTONIOT.CARPIO RENATOC.CORONA
AssociateJustice AssociateJustice

CONCHITACARPIOMORALES DANTEO.TINGA
AssociateJustice AssociateJustice

(Onleave)
PRESBITEROJ.VELASCO,JR.
MINITAV.CHICONAZARIO
AssociateJustice
AssociateJustice

ANTONIOEDUARDOB.NACHURA TERESITAJ.LEONARDODECASTRO
AssociateJustice AssociateJustice

(seeconcurringopinion)
DIOSDADOM.PERALTA
ARTUROD.BRION
AssociateJustice
AssociateJustice

CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above
DecisionwerereachedinconsultationbeforethecasewasassignedtothewriteroftheopinionoftheCourt.

REYNATOS.PUNO
ChiefJustice

Footnotes

1http://www.un.org/News/Press/docs/2007/sgsm11084.doc.htm.

2MigrantWorkersandOverseasFilipinosActof1995,effectiveJuly15,1995.

3 Penned by Associate Justice Andres B. Reyes, Jr. and concurred in by Associate Justices Lucas P.
BersaminandCeliaC.LibreaLeagogorollo,p.231.

4Id.at248.

5Rollo,p.57.

6Id.at58.

7Id.at59.

8Id.at48.

9Id.at55.

10 According to petitioner, this amount represents the prorated difference between the salary of
US$2,590.00permonthwhichhewassupposedtoreceiveasChiefOfficerfromMarch19,1998toApril
30, 1998 and the salary of US$1,850.00 per month which he was actually paid as Second Officer for the
sameperiod.SeeLADecision,rollo,pp.107and112.

11PositionPaper,id.at5354.

12 The LA awarded petitioner US$45.00 out of the US$1,480.00 salary differential to which petitioner is
entitledinviewofhishavingreceivedfromrespondentsUS$1,435.00asevidencedbyreceiptsmarkedas
Annexes"F","G"and"H",id.at319321.

13Id.at114.

14Rollo,pp.111112.
15Id.at124.

16Id.at115.

17G.R.No.129584,December3,1998,299SCRA608.

18AppealMemorandum,rollo,p.121.

19Id.at134.

20NLRCDecision,rollo,p.140.

21Id.at146150.

22Id.at153.

23Id.at155.

24Id.at166177.

25CADecision,id.at239241.

26Id.at242.

27Id.at248.

28Petition,rollo,p.28.

29Id.at787.

30Id.at799.

31Rollo,p.282

32MemorandumforPetitioner,id.at741742.

33Id.at746753.

34 Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of
workersandpromotetheirwelfare.
35Rollo,pp.763766.

36Petition,id.at735.

37MemorandumoftheSolicitorGeneral,rollo,p.680.

38MemorandumforPetitioner,id.at755.

39Id.at761763.

40Rollo,pp.645646and512513.

41 Alfredo L. Benipayo was Solicitor General at the time the Comment was filed. Antonio Eduardo B.
Nachura (now an Associate Justice of the Supreme Court) was Solicitor General when the Memorandum
wasfiled.

42MemorandumoftheSolicitorGeneral,id.at662665.

43G.R.No.113658,March31,1995,243SCRA190.

44G.R.No.110524,July29,2002,385SCRA306.

45MemorandumoftheSolicitorGeneral,rollo,pp.668678.

46Id.at682.

47TheProvinceofNorthCotabatov.TheGovernmentoftheRepublicofthePhilippinesPeacePanelon
AncestralDomain,G.R.No.183591October14,2008.

48AutomotiveIndustryWorkersAlliancev.Romulo,G.R.No.157509,January18,2005,449SCRA1.

49Davidv.MacapagalArroyo,G.R.No.171396,May3,2006,489SCRA160.

50Arcetav.Mangrobang,G.R.No.152895,June15,2004,432SCRA136.

51MoldexRealty,Inc.v.HousingandLandUseRegulatoryBoard,G.R.No.149719,June21,2007,525
SCRA198Marasiganv.Marasigan,G.R.No.156078,March14,2008,548SCRA409.

52Matibagv.Benipayo,G.R.No.149036,April2,2002,380SCRA49.

53Rollo,p.145.
54Id.at166.

55SmartCommunications,Inc.v.NationalTelecommunicationsCommission,G.R.No.151908,August12,
2003,408SCRA678.

56EquiAsiaPlacement,Inc.v.DepartmentofForeignAffairs,G.R.No.152214,September19,2006,502
SCRA295.

57MemorandumforPetitioner,rollo,pp.741742.

58Ortigas&Co.,Ltd.v.CourtofAppeals,G.R.No.126102,December4,2000,346SCRA748.

59Picop Resources, Inc. v. Base Metals Mineral Resources Corporation, G.R. No. 163509, December 6,
2006,510SCRA400.

60Walkerv.Whitehead,83U.S.314(1873)Woodv.Lovett,313U.S.362,370(1941)IntrataAssurance
Corporationv.RepublicofthePhilippines,G.R.No.156571,July9,2008Smart Communications, Inc. v.
CityofDavao,G.R.No.155491,September16,2008.

61Executive Secretary v. Court of Appeals, G.R. No. 131719, May 25, 2004, 429 SCRA 81, citing JMM
PromotionandManagement,Inc.v.CourtofAppeals,G.R.No.120095,August5,1996,260SCRA319.

62Ortigas&Co.,Ltd.v.CourtofAppeals,supranote58.

63 Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of
workersandpromotetheirwelfare.

64Section3,TheStateshallaffordfullprotectiontolabor,localandoverseas,organizedandunorganized,
andpromotefullemploymentandequalityofemploymentopportunitiesforall.

65 See City of Manila v. Laguio, G.R. No. 118127, April 12, 2005, 455 SCRA 308 Pimentel III v.
CommissiononElections,G.R.No.178413,March13,2008,548SCRA169.

66LeagueofCitiesofthePhilippinesv.CommissiononElections G.R. No. 176951, November 18, 2008

Beltranv.SecretaryofHealth,G.R.No.139147,November25,2005,476SCRA168.

67Association of Small Landowners in the Philippines v. Secretary of Agrarian Reform, G.R. No. 78742,
July14,1989,175SCRA343.

68LosAngelesv.AlmedaBooks,Inc.,535U.S.425(2002)Craigv.Boren,429US190(1976).

69Thereisalsothe"heightenedscrutiny"standardofreviewwhichislessdemandingthan"strictscrutiny"
but more demanding than the standard rational relation test. Heightened scrutiny has generally been
appliedtocasesthatinvolvediscriminatoryclassificationsbasedonsexorillegitimacy,suchasinPlylerv.
Doe, 457 U.S. 202, where a heightened scrutiny standard was used to invalidate a State's denial to the
childrenofillegalaliensofthefreepubliceducationthatitmadeavailabletootherresidents.

70Americav.Dale,530U.S.640(2000)ParentsInvolvedinCommunitySchoolsv.SeattleSchoolDistrict
No.1,551U.S.(2007)http://www.supremecourtus.gov/opinions/06pdf/05908.pdf.

71AdarandConstructors,Inc.v.Pea,515US230(1995).

72Grutterv.Bollinger,539US306(2003)Bernalv.Fainter,467US216(1984).

73 The concept of suspect classification first emerged in the famous footnote in the opinion of Justice
Harlan Stone in U.S. v. Carolene Products Co., 304 U.S. 144 (1938), the full text of which footnote is
reproducedbelow:

There may be narrower scope for operation of the presumption of constitutionality when legislation
appearsonitsfacetobewithinaspecificprohibitionoftheConstitution,suchasthoseofthefirstten
amendments, which are deemed equally specific when held to be embraced within the Fourteenth.
SeeStrombergv.California,283U.S.359,369370Lovellv.Griffin,303U.S.444,452.

Itisunnecessarytoconsidernowwhetherlegislationwhichrestrictsthosepoliticalprocesseswhich
canordinarilybeexpectedtobringaboutrepealofundesirablelegislationistobesubjectedtomore
exactingjudicialscrutinyunderthegeneralprohibitionsoftheFourteenthAmendmentthanaremost
othertypesoflegislation.Onrestrictionsupontherighttovote,seeNixonv.Herndon,273U.S.536
Nixon v. Condon, 286 U.S. 73 on restraints upon the dissemination of information, see Near v.
Minnesotaexrel.Olson,283U.S.697,713714,718720,722Grosjeanv.AmericanPressCo.,297
U.S. 233 Lovell v. Griffin, supra on interferences with political organizations, see Stromberg v.
California,supra,369Fiskev.Kansas,274U.S.380Whitneyv.California,274U.S.357,373378
Herndonv.Lowry,301U.S.242,andseeHolmes,J.,inGitlowv.NewYork,268U.S.652,673asto
prohibitionofpeaceableassembly,seeDeJongev.Oregon,299U.S.353,365.

Nor need we enquire whether similar considerations enter into the review of statutes directed at
particular religious, Pierce v. Society of Sisters, 268 U.S. 510, or national, Meyer v. Nebraska, 262
U.S.390Bartelsv.Iowa,262U.S.404Farringtonv.Tokushige,273U.S.284,orracialminorities,
Nixon v. Herndon, supra Nixon v. Condon, supra: whether prejudice against discrete and insular
minoritiesmaybeaspecialcondition,whichtendsseriouslytocurtailtheoperationofthosepolitical
processesordinarilytobereliedupontoprotectminorities,andwhichmaycallforacorrespondingly
moresearchingjudicialinquiry.CompareMcCullochv.Maryland,4Wheat.316,428SouthCarolina
v.BarnwellBros.,303U.S.177,184,n2,andcasescited.

74Korematsuv.UnitedStates,323U.S.214(1944)RegentsoftheUniversityofCaliforniav.Bakke,438
U.S.265(1978).
75Frontierov.Richardson,411U.S.677(1973)U.S.v.Virginia,518U.S.515(1996).

76SanAntonioIndependentSchoolDistrictv.Rodriguez,411U.S.1(1973).

77G.R.No.148208,December15,2004,446SCRA299.

78Rollo,pp.727and735.

79371Phil.827(1999).

80Id.at840841.

81G.R.No.131656,October20,1998,297SCRA727.

82Id.

83Supranote17.

84G.R.No.166363,August15,2006,498SCRA639.

85G.R.No.162195,April8,2008,550SCRA600.

86G.R.No.180719,August22,2008.

87G.R.No.172031,July14,2008,558SCRA279.

88G.R.No.157534,June18,2003(Resolution).

89G.R.No.153750,January25,2006,480SCRA100.

90G.R.No.148418,July28,2005,464SCRA314.

91G.R.No.148407,November12,2003,415SCRA720.

92G.R.No.156381,October14,2005,473SCRA120.

93G.R.No.157373,July27,2004,435SCRA342.

94G.R.No.144786,April15,2004,427SCRA732.

95G.R.No.177948,March14,2008,548SCRA712.
96G.R.No.151303,April15,2005,456SCRA313.

97AsianCenterv.NationalLaborRelationsCommission,supranote81.

98G.R.No.143949,August9,2001,362SCRA571.

99G.R.No.123354,November19,1996,264SCRA418.

100G.R.No.109390,March7,1996,254SCRA457.

101G.R.No.112096,January30,1996,252SCRA588.

102G.R.No.145587,October26,2007,537SCRA409.

103G.R.No.123901,September22,1999,315SCRA23.

104G.R.No.157975,June26,2007,525SCRA586.

105www.merriamwebster.com/dictionaryvisitedonNovember22,2008at3:09.

106SeealsoFlourish,supranote95andAthena,supranote96.

107 It is noted that both petitioner and the OSG drew comparisons between OFWs in general and local
workersingeneral.However,theCourtfindsthatthemorerelevantcomparisonisbetweenOFWswhose
employmentisnecessarilysubjecttoafixedtermandlocalworkerswhoseemploymentisalsosubjecttoa
fixedterm.
108PromulgatedonAugust6,1888byQueenMariaCristinaofSpainandextendedtothePhilippinesby
RoyalDecreeofAugust8,1888.IttookeffectonDecember1,1888.
109No.1133,March29,1904,3SCRA519.

110No.L8431,October30,1958,104SCRA748.

111 See also Wallem Philippines Shipping, Inc. v. Hon. Minister of Labor, No. L5073437, February 20,
1981,102scra835,whereMadrigalShippingCompany,Inc.v.Ogilvieiscited.

112No.L10422,January11,1916,33SCRA162.

113No.L15878,January11,1922,42SCRA660.

1147Phil.268(1907).
115SeealsoKnustv.Morse,41Phil184(1920).

116BrentSchool,Inc.v.Zamora,No.L48494,February5,1990,181SCRA702.

117No.L22608,June30,1969,28SCRA699.

118 The Labor Code itself does not contain a specific provision for local workers with fixedterm
employmentcontracts.AstheCourtobservedinBrentSchool,Inc.,theconceptoffixedtermemployment
has slowly faded away from our labor laws, such that reference to our labor laws is of limited use in
determiningthemonetarybenefitstobeawardedtofixedtermworkerswhoareillegallydismissed.

119No.L65545,July9,1986.,142SCRA542.

120G.R.No.100399,August4,1992,212SCRA132.

121G.R.No.111212,January22,1996,252SCRA116.

122G.R.No.113363,August24,1999,313SCRA1.

123G.R.No.113911,January23,1998,284SCRA656.

124SeeEstradav.Escritor,A.M.No.P021651,August4,2003,408SCRA1.

125Id.

126Roev.Wade,410U.S.113(1971)seealsoCareyv.PopulationServiceInternational, 431 U.S. 678

(1977).
127Sabiov.Gordon,G.R.Nos.174340,174318,174177,October16,2006,504SCRA704.

128Comment,rollo,p.555.

129MemorandumoftheSolicitorGeneral,id.at682683

130Id.atp.693.

131 Section 3. The State shall afford full protection to labor, local and overseas, organized and
unorganized,andpromotefullemploymentandequalityofemploymentopportunitiesforall.

Itshallguaranteetherightsofallworkerstoselforganization,collectivebargainingandnegotiations,and
peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to
securityoftenure,humaneconditionsofwork,andalivingwage.Theyshallalsoparticipateinpolicyand
 decisionmakingprocessesaffectingtheirrightsandbenefitsasmaybeprovidedbylaw.

The State shall promote the principle of shared responsibility between workers and employers and the
preferentialuseofvoluntarymodesinsettlingdisputes,includingconciliation,andshallenforcetheirmutual
compliancetherewithtofosterindustrialpeace.

TheStateshallregulatetherelationsbetweenworkersandemployers,recognizingtherightoflabortoits
justshareinthefruitsofproductionandtherightofenterprisestoreasonablereturnstoinvestments,and
toexpansionandgrowth.
132ManilaPrinceHotelv.GovernmentServiceInsuranceSystem,G.R.No.122156,February3,1997,267
SCRA408.

133Bascov.PhilippineAmusementandGamingCorporation, G.R. No. 91649, May 14, 1991, 197 SCRA

52.

134G.R.No.158693,November17,2004,442SCRA573.

135Agabonv.NationalLaborRelationsCommission,supranote134,at686.

136AssociatedCommunicationsandWirelessServices,Ltd.v.Dumlao,G.R.No.136762,November21,
2002,392SCRA269.
137Section1.Nopersonshallbedeprivedoflife,liberty,orpropertywithoutdueprocessoflaw,norshall
anypersonbedeniedtheequalprotectionofthelaws.
138 G.R. No. 180719, August 22, 2008. See also PCL Shipping Philippines, Inc. v. National Labor
RelationsCommission.G.R.No.153031,December14,2006,511SCRA44.

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