Labor Case Digests

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Extent and Limits of Protection of Labor
Pacific Mills, Inc. v. Zenaida Alonzo, GR No 78090, July 1991
Facts:
Zenaida was an employee of Pacific Mills as a ring frame operator from July 30, 1973 until
she was discharged by Mngt on Sept 30, 1982.
In the afternoon of Sept 22, 1982, Zenaida challenged Company Inspector Tamondong to a
fight and thereafter uttered some insulting words against the latter. She thereupon boxed
the stomach of the latter. It was alleged that the motive for the assault was Zenaida’s
resentment at hiving been reprimanded, together with other employees, two days earlier
by the latter for wasting time by engaging in Idle Chatter. Tamondong then reported the
incident to the firm’s Administrative Manager as well as the Chairman of the Brgy.
Hence, on Sept 30, 1982, Zenaida was given a Memorandum by the Company terminating
her employment as of Oct 1, 1982 on the following grounds: Poor Work, Habitual Absences
and Tardiness, Wasting Time, Insubordination and gross disrespect. However, the service
of the Memorandum was not preceded by any complaint, hearing or other formality. The
Company considered it unnecessary in view of the provision in the Company Rules and
Regulations that Fighting or attempting to inflict harm to another employee will render the
aggressor to outright dismissal.
It was only upon filing by Zenaida of Illegal Dismissal and non-payment of 13th month pay
that evidence was presented by the Company. Zenaida contended that the assault was not
punishable since it was not work-related and was instigated by Tamondong.
Labor Arbiter Ruling: The Arbiter recognized the abuse committed by Zenaida and
rejected her contention. It ruled, however, that Zenaida was entitled to relief because the
penalty imposed was harsh and sever and not commensurate with the offense and the
company failed to investigate complainant before she was dismissed. It ruled that the
proper, just and reasonable penalty is suspension of 3 months.
NLRC Ruling: Affirmed the decision of the Labor Arbiter. It, however, only limited the
award of back wages only to 3 years.
OSG: Recommended payment of separation pay equivalent to 3 years back wages but
without reinstatement and of proportionate 13th month pay.
Issue:
Is Zenaida entitled to be rewarded with reemployment?
Is Zenaida illegally dismissed?
Ruling:
First Issue
Khennete M. Abrugar A.C. 2017-2018

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No, the Court cited the case of Wenphil Corp v. NLRC stating that on the case the private
respondent, who appears to be of violent temper, caused trouble during office hours and
even defied his superiors as they tried to pacify him, should not be rewarded with
reemployment and back wages. It may encourage him to do even worse and will render a
mockery of the rules of discipline that employees are required to observe. Under the
circumstances, the dismissal of the private respondent for just cause should be maintained.
He has no right to return to his former employer.
However, on the said case the petitioner - employer must nevertheless be held to account
for failure to extend to private respondent his right to an investigation before causing his
dismissal. The rule is explicit as above discussed. The dismissal of an employee must be for
just or authorized cause and after due process (Section 1, Rule XIV, Implementing
Regulations of the Labor Code). Petitioner committed an infraction of the second
requirement. Thus, it must be imposed a sanction for its failure to give a formal notice and
conduct an investigation as required by law before dismissing respondent from
employment.
Second Issue
Yes. On the case, while it is true that Pacific Mills, Inc. had not complied with the
requirements of due process prior to removing Zenaida Alonzo from employment, it is also
true that subsequently, in the proceedings before the Labor Arbiter in which Zenaida
Alonzo had of course taken active part, it had succeeded in satisfactorily proving the
commission by Zenaida of many violations of company rules and regulations justifying
termination of her employment. Under the circumstances, it is clear that, as the Solicitor
General has pointed out, the continuance in the service of the latter is patently inimical to
her employer's interests and that, citing San Miguel Corporation v. NLRC, the law, in
protecting the rights of the laborer authorizes neither oppression nor self-destruction of
the employer. And it was oppressive and unjust in the premises to require reinstatement of
the employee.
Hence, the Court ordered Pacific Mills to pay Zenaida her 13th month pay plus
indemnification but ruled against Zenaida in so far as the reinstatement is concerned.
Caltex Inc. v. PH Labor Org., Caltex Chapter, GR No L-4758, May 30, 1953
Facts:
CIR ruled in the disputes between the Union and the Company. CIR issues an order ruling
that pending the final determination of the case; the laborers are enjoined not to stage
strike or walk out from their employment without authority from and without submitting
their grievances to the court. The Company is likewise enjoined not to lay-off, dismiss,
discharge or admit any employees or laborers in their employment during the pendency of
these cases without beforehand notifying and obtaining the authority of the court. The
controversial points involved in the petitions will be heard separately by this court at the
opportune time.

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On Feb 13 and 15, 1950, the Union presented certain demands on the Company which
became the subject of negotiations between the parties. On Mar 1, 1950, a strike was
declared by the Union. The Company submitted the matter before the Court of Industrial
Relations.
CIR Ruling on July 31, 1950:
1. The prohibition declaring a strike during the determination refers to strike over the
same or similar demands directly connected with them in the pending case;
2. The prohibition does not prohibit a strike of new demands;
3. The strike was not a violation of the order;
4. The strike was illegal not only because the purpose was trivial, unjust or unreasonable
but because there was no good purpose at all;
5. The company did not dismiss the laborers as they abandoned their work hence the
company cannot be held in contempt of court;
6. As this strike was illegal, the company is authorized to dismiss those responsible and
may rehire such of the striking employees and/or new labor force.
The Union filed a MR on Jan 31, 1951 reserving the decision of the Court in so far as it
declared the strike illegal and it authorized the Company to discharge the workers
responsible for the strike.
On the other hand, the Company filed and urgent petition praying the denial of the MR of
the Union because the said decision had become final and unappealable. The said appeal
was denied by CIR.
Issue:
Is the decision of CIR had become final and unappealable?
Is the strike held on March 1, 1950, illegal and in violation of the order of CIR?
Ruling:
First Issue
Finality of the Decision of CIR: The contention of the Company is without merit. The CIR
could entertain said MR as an application by an interested party of the reopening of a
question involved in a decision under section 17 of Commonwealth Act No. 103, as
amended.
Second Issue
No, it is clear that the strike was motivated by new demands or matters not connected with
or similar to the demands or disputes involved in this case in which the ordered of January

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2, 1948 were issued, and therefore could not have been, as correctly held by Judge Roldan,
violative of the directive against tries.
The demands of the Union, if granted, would certainly tend to improve the conditions of the
laborers and employees affected, and cannot be said to trival, much less illegal. But
whether the same are unreasonable or unjust as a matter to be decided after proper
consideration. If said demands cannot be granted for being unjust or unreasonable, the
only consequence, in the appropriate words of the CIR, should "be their rejection and not
the punishment of the workers who presented them."
To make the legality or illegality of strikes dependent solely on whether the demands of
laborers may or may not be granted, is in effect to outlaw altogether an effective means of
securing better working conditions.
ER-EE Relationship
Jose Sonza vs. ABS-CBN Broadcasting Corporation, G.R. No. 138051, June 10, 2004
Facts:
In May 1994, ABS-CBN signed an agreement with the Mel and Jay Management and
Development Corporation (MJMDC). ABS-CBN was represented by its corporate officers
while MJMDC was represented by Sonza, as President and general manager, and Tiangco as
its EVP and treasurer. Referred to in the agreement as agent, MJMDC agreed to provide
Sonza’s services exclusively to ABS-CBN as talent for radio and television. ABS-CBN agreed
to pay Sonza a monthly talent fee of P310, 000 for the first year and P317, 000 for the
second and third year.
On April 1996, Sonza wrote a letter to ABS-CBN where he irrevocably resigned in view of
the recent events concerning his program and career. After the said letter, Sonza filed with
the Department of Labor and Employment a complaint alleging that ABS-CBN did not pay
his salaries, separation pay, service incentive pay, 13th month pay, signing bonus, travel
allowance and amounts under the Employees Stock Option Plan (ESOP). ABS-CBN
contended that no employee-employer relationship existed between the parties. However,
ABS-CBN continued to remit Sonza’s monthly talent fees but opened another account for
the same purpose.
The Labor Arbiter dismissed the complaint and found that there is no employee-employer
relationship. NLRC affirmed the decision of the Labor Arbiter. CA also affirmed the decision
of NLRC.
Issue:
Is there employer-employee relationship between ABS-CBN and Jose Sonza?

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Ruling:
No, there exist no EER between ADS-CBN and Jose Sonza. The latter being an independent
contractor.
Case law has consistently held that the elements of an employee-employer relationship are
(1) selection and engagement of the employee, (2) the payment of wages, (3) the power of
dismissal and (4) the employer’s power to control the employee on the means and methods
by which the work is accomplished. The last element, the so-called "control test", is the
most important element.
Sonza’s services to co-host its television and radio programs are because of his peculiar
talents, skills and celebrity status. Independent contractors often present themselves to
possess unique skills, expertise or talent to distinguish them from ordinary employees. The
specific selection and hiring of SONZA, because of his unique skills, talent and celebrity
status not possessed by ordinary employees, is a circumstance indicative, but not
conclusive, of an independent contractual relationship. All the talent fees and benefits paid
to SONZA were the result of negotiations that led to the Agreement. For violation of any
provision of the Agreement, either party may terminate their relationship. Applying the
control test to the present case, we find that SONZA is not an employee but an independent
contractor.
The control test is the most important test our courts apply in distinguishing an employee
from an independent contractor. This test is based on the extent of control the hirer
exercises over a worker. The greater the supervision and control the hirer exercises, the
more likely the worker is deemed an employee. The converse holds true as well – the less
control the hirer exercises, the more likely the worker is considered an independent
contractor. To perform his work, SONZA only needed his skills and talent. How SONZA
delivered his lines, appeared on television, and sounded on radio were outside ABS-CBN’s
control. ABS-CBN did not instruct SONZA how to perform his job. ABS-CBN merely reserved
the right to modify the program format and airtime schedule "for more effective
programming." ABS-CBN’s sole concern was the quality of the shows and their standing in
the ratings.
Clearly, ABS-CBN did not exercise control over the means and methods of performance of
Sonza’s work. A radio broadcast specialist who works under minimal supervision is an
independent contractor. Sonza’s work as television and radio program host required
special skills and talent, which SONZA admittedly possesses.
ABS-CBN claims that there exists a prevailing practice in the broadcast and entertainment
industries to treat talents like Sonza as independent contractors. The right of labor to
security of tenure as guaranteed in the Constitution arises only if there is an employer-

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employee relationship under labor laws. Individuals with special skills, expertise or talent
enjoy the freedom to offer their services as independent contractors. The right to life and
livelihood guarantees this freedom to contract as independent contractors. The right of
labor to security of tenure cannot operate to deprive an individual, possessed with special
skills, expertise and talent, of his right to contract as an independent contractor.
Empermaco B. Abante, Jr. v. Lamadrid Bearing & Parts Corp. and Jose Lamadrid, G.R.
No. 159890, May 28, 2004
Facts:
Petitioner was a salesman of respondent company earning a commission of 3% of the total

paid up sales covering the whole area of Mindanao. Aside from selling, he was also tasked
with collection. Respondent Corporation through its president often required Abante to
report to a particular area and occasionally required him to go to Manila to attend
conferences.
Later on, bad blood ensued between the parties due to some bad accounts that Lamadrid
forced petitioner to cover. Later petitioner found out that respondent had informed his
customers not to deal with petitioner since it no longer recognized him as a commission
salesman. Petitioner filed a complaint for illegal dismissal with money claims against
respondent company and its president, Jose Lamadrid.
By way of defense, respondents countered that petitioner was not its employee but a
freelance salesman on commission basis.
Issue:
Is the petitioner, as a commission salesman, an employee of Respondent Corporation?
Held:
No, the petitioner was not an employee of the Corporation.
To determine the existence of an employee-employer relationship, we apply the four fold

test: 1) the manner of selection and engagement; (2) the payment of wages; (3) the
presence or absence of the power of dismissal; and (4) the presence or absence of the
power of control.
Applying the aforementioned test, an employer-employee relationship is notably absent in

this case. It is true that he was paid in commission yet no quota was imposed therefore a
dismal performance would not warrant a ground for dismissal. There was no specific office
hour he was required to observe. He was not designated to conduct services at a particular
area or time. He pursued his selling without interference or supervision from the company.

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The company did not prescribe the manner of selling merchandise. While he was
sometimes required to report to Manila, these were only intended to guide him. Moreover,
petitioner was free to offer his services to other companies.
Art. 280 is not a crucial factor because it only determines two kinds of employees. It doesn’t
apply where there is no employer-employee relationship. While the term commission
under Article 96 of the LC was construed as being included in the term “wage”, there is no
categorical pronouncement that the payment of commission is conclusive proof of the
existence of an employee-employer relationship.
Jo vs. NLRC, G.R. No. 121605, February 2, 2000
Facts:
Private respondent working as a barber on piece-rate basis was designated by petitioners

as caretaker of their barbershop. Private respondent’s duties as caretaker, in addition to his
being a barber, were: 1) to report to the owners of the barbershop whenever the air
condition units malfunction and/or whenever water or electric power supply was
interrupted; 2) to call the laundry woman to wash dirty linen; 3) to recommend applicants
for interview and hiring; 4) to attend to other needs of the shop. For this additional job, he
was given an honorarium equivalent to1/3 of the net income of the shop.
Private respondent left his job voluntarily because of his misunderstanding with his co-
worker and demanded separation pay and other monetary benefits. Petitioner’s contends
that respondent was not their employee but their “partner in trade” whose compensation
was based on a sharing arrangement per haircut or shaving job done.
Mejila then unilaterally demanded his separation pay and other benefits, despite his
employers’ assurance that he was not being dismissed. He then turned over the duplicate
keys of the shop (which he held as caretaker) to the cashier and took all his personal
belongings from his workplace, and found similar employment in another shop. He then
filed a complaint for illegal dismissal.
Issue:
Was there an employer-employee relationship between Jo and Barbershop?
Was Mejila dismissed from his employment?
Ruling:
First Issue

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Yes. In determining the existence of an employer-employee relationship, the following

elements are considered: 1) selection and engagement of worker; 2) power of dismissal; 3)
the payment of wages; and 4) the power to control the worker’s conduct, with the latter
assuming primacy in the overall consideration. The power of control refers to the existence
of the power and not necessarily to the actual exercise thereof. It is not essential for the
employer to actually supervise the performance of duties of the employee; it is enough that
the employer has the right to wield that power.
Second Issue
Yes, he abandoned his work. This was manifested by: His having bragged to fellow workers
his intention to quit his work in the shop; his surrender of the shop’s keys and his taking all
of his personal belongings from the said place; his failure to report for work and not giving
any valid reason for such; he acquired employment in another shop immediately, despite
reassurances that he could stay in his old place of work; and finally, his complaint for illegal
dismissal did not include a prayer for reinstatement. All of these show concurrence of the
intent to abandon his work and over acts that show his lack of interest in continuing his
work.
Filamer Christian Institute v. Court of Appeals
NOTE: This case reversed Filamer v. IAC (October 16, 1990)
Facts:
Daniel Funtecha was a working student at the Filamer Christian Institute. He was assigned
as the school janitor to clean the school 2 hours every morning. Allan Masa was the son of
the school president and at the same time he was the school’s jeepney service driver. On
October 20, 1977 at about 6:30pm, after driving the students to their homes, Masa
returned to the school to report and thereafter have to go home with the jeep so that he
could fetch the students early in the morning. Masa and Funtecha live in the same place so
they usually go home together. Funtecha had a student driver’s license so Masa let him take
the driver’s seat. While Funtecha was driving, he accidentally hit an elderly Kapunan which
led to his hospitalization for 20 days. Kapunan filed a criminal case and an independent
civil action based on Article 2180 against Funtecha.
In the independent civil action, the lower court ruled that Filamer is subsidiarily liable for
the tortious act of Funcheta and was compelled to pay for damages based on Article 2180
which provides that employers shall be liable for the damages caused by their employees
and household helpers acting within the scope of their assigned tasks. Filamer assailed the
decision and it argued that under Section 14, Rule X, Book III of the Labor Code IRR,
working scholars are excluded from the employment coverage hence there is no employer-

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employee relations between Filamer and Funcheta; that the negligent act of Funcheta was
due to negligence only attributable to him alone as it is outside his assigned task of being
the school janitor. The CA denied Filamer’s appeal but the Supreme Court agreed with
Filamer. Kapunan filed for a motion for reconsideration.
Issue:
Is Filamer subsidiarily liable?
Ruling:
Yes. This time, the SC ruled in favor of Kapunan (actually his heir’s cause by this time
Kapunan was already dead). The provisions of Section 14, Rule X, Book III of the Labor
Code IRR was only meant to provide guidelines as compliance with labor provisions on
working conditions, rest periods, and wages is concerned. This does not in any way affect
the provisions of any other laws like the civil code. The IRR cannot defeat the provisions of
the Civil Code. In other words, Rule X is merely a guide to the enforcement of the
substantive law on labor. There is a distinction hence Section 14, Rule X, Book III of the
Rules is not the decisive law in a civil suit for damages instituted by an injured person
during a vehicular accident against a working student of a school and against the school
itself.
The present case does not deal with a labor dispute on conditions of employment between
an alleged employee and an alleged employer. It invokes a claim brought by one for
damages for injury caused by the patently negligent acts of a person, against both doer-
employee and his employer. Hence, the reliance on the implementing rule on labor to
disregard the primary liability of an employer under Article 2180 of the Civil Code is
misplaced. An implementing rule on labor cannot be used by an employer as a shield to
void liability under the substantive provisions of the Civil Code.
Funtecha is an employee of Filamer. He need not have an official appointment for a driver’s
position in order that Filamer may be held responsible for his grossly negligent act, it being
sufficient that the act of driving at the time of the incident was for the benefit of Filamer
(the act of driving the jeep from the school to Masa’s house is beneficial to the school
because this enables Masa to do a timely school transportation service in the morning).
Hence, the fact that Funtecha was not the school driver or was not acting with the scope of
his janitorial duties does not relieve Filamer of the burden of rebutting the presumption
juris tantum that there was negligence on its part either in the selection of a servant or
employee, or in the supervision over him. Filamer has failed to show proof of its having
exercised the required diligence of a good father of a family over its employees Funtecha
and Allan.

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Angel Jardin v. NLRC, G.R. No. 119268, February 23, 2000
Facts:
Petitioners were drivers of private respondent’s taxicabs under the boundary system
whose earnings were regularly deducted washing fee for the taxi units. Petitioners decided
to form a labor union to protect their rights and interests on the belief that the deductions
made were illegal. Upon learning, respondent refused to let petitioners drive their taxicabs
when they reported for work. Aggrieved, petitioners filed a complaint for illegal dismissal
with the Labor Arbiter but the latter dismissed said complaint. On appeal, the NLRC
tribunal declared that petitioners are employees of private respondent. On reconsideration
however, the decision was reversed by the NLRC tribunal and held that no employer-
employee relationship between the parties exists.
Issue:
Were the petitioner taxi drivers, employees of respondent company?
Ruling:
Yes. In a number of cases decided by this Court, we ruled that the relationship between
jeepney owners/operators on one hand and jeepney drivers on the other under the
boundary system is that of employer-employee and not of lessor-lessee.
In the case of jeepney owners/operators and jeepney drivers, the former exercise
supervision and control over the latter. The management of the business is in the owner’s
hands. The owner as holder of the certificate of public convenience must see to it that the
driver follows the route prescribed by the franchising authority and the rules promulgated
as regards its operation.
Now, the fact that the drivers do not receive fixed wages but get only that in excess of the
so-called “boundary” they pay to the owner/operator is not sufficient to withdraw the
relationship between them from that of employer and employee. We have applied by
analogy the doctrine to the relationships between bus owner/operator and bus conductor,
auto-calesa owner/operator and driver, and recently between taxi owners/operators and
taxi drivers.
Hence, petitioners are undoubtedly employees of private respondent because as taxi

drivers they perform activities which are usually necessary or desirable in the usual
business or trade of their employer.
Q: A, B and C were drivers of Company Q driving the latter’s taxicabs every other day on a
24 hour work schedule under the boundary system where petitioners earn an average of
P400 daily and private respondent regularly deducts an amount for the washing of the taxi

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units. A, B and C decided to form a labor union. Later, Company Q refused to let petitioners
drive their taxicabs. A, B and C filed with the labor arbiter a complaint for ULP, illegal
dismissal, and illegal deductions. The NLRC found for A, B and C stating that dismissal must
be for just cause and after due process. Company Q's first motion for reconsideration was
denied. It filed another MR, which was then granted. Should the NLRC have granted the
second MR?
A: No. Company Q exhausted administrative remedies available to it by seeking an MR.

The rationale for allowing only one MR from the same party is to assist the parties in
obtaining an expeditious and inexpensive settlement of labor cases. The NLRC should have
recognized that the relationship between jeepney-owners and jeepney drivers under the
boundary system is that of ER-EE and not that of lessor-lessee. The fact that the drivers
do not receive fixed wages is not sufficient to withdraw the relationship from that of
ER and EE. Therefore the termination of A, B and C’s employment should have been
effectuated in accordance with law. With regard to the amount deducted for
washing, such was not illegal as such is indeed a practice in the taxi industry and is
dictated by fair play.
Charlie Jao v. BCC Products Sales Inc., G.R. No. 163700, April 18, 2012
Facts:
Petitioner maintained that respondent BCC Product Sales Inc. (BCC) and its President,
respondent Terrance Ty (Ty), employed him as comptroller starting from September 1995,
to handle the financial aspect of BCCs business. On October 19, 1995, the security guards of
BCC, acting upon the instruction of Ty, barred him from entering the premises of BCC
where he then worked.
Petitioner attempted to report to work on different occasions but the same were frustrated
because he continued to be barred from entering the premises of BCC. Hence, he filed a
complaint for illegal dismissal, reinstatement with full back wages, non-payment of wages,
damages and attorney’s fees.
Respondents countered that petitioner was not their employee but the employee of Sobien
Food Corporation (SFC), the major creditor and supplier of BCC; and that SFC had posted
him as its comptroller in BCC to oversee BCCs finances and business operations and to look
after SFCs interests or investments in BCC.
The LA dismissed the complaint for lack of ER-EE relationship. NLRC reversed the LA
decision. On appeal, the CA held that there was no ER-EE relationship existed between
petitioner BCC and the private respondent. Hence, this petition.
Issue:

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Is there an employer- employee relationship between Ty and BCC?
Held:
No. there was no ER-EE relationship between Ty and BCC.
Labor Law
In determining the presence or absence of an employer-employee relationship, the Court

has consistently looked for the following incidents, to wit: (a) the selection and engagement
of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the
employer’s power to control the employee on the means and methods by which the work is
accomplished. The last element, the so-called control test, is the most important element.
Hereunder are some of the circumstances and incidents occurring while petitioner was
supposedly employed by BCC that debunked his claim against respondents:
It can be deduced from the March 1996 affidavit of petitioner that respondents challenged
his authority to deliver some 158 checks to SFC. Considering that he contested respondents
challenge by pointing to the existing arrangements between BCC and SFC, it should be clear
that respondents did not exercise the power of control over him, because he thereby acted
for the benefit and in the interest of SFC more than of BCC.
In addition, petitioner presented no document setting forth the terms of his employment by
BCC. The failure to present such agreement on terms of employment may be
understandable and expected if he was a common or ordinary laborer who would not
jeopardize his employment by demanding such document from the employer, but may not
square well with his actual status as a highly educated professional.
Petitioners admission that he did not receive his salary for the three months of his
employment by BCC, as his complaint for illegal dismissal and non-payment of wages and
the criminal case for estafa he later filed against the respondents for non-payment of wages
indicated, further raised grave doubts about his assertion of employment by BCC. If the
assertion was true, we are puzzled how he could have remained in BCCs employ in that
period of time despite not being paid the first salary ofP20,000.00/month. Moreover, his
name did not appear in the payroll of BCC despite him having approved the payroll as
comptroller.
Lastly, the confusion about the date of his alleged illegal dismissal provides another
indicium of the insincerity of petitioners assertion of employment by BCC. In the petition
for review on certiorari, he averred that he had been barred from entering the premises of
BCC on October 19, 1995,and thus was illegally dismissed. Yet, his complaint for illegal
dismissal stated that he had been illegally dismissed on December 12, 1995 when

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respondents security guards barred him from entering the premises of BCC, causing him to
bring his complaint only on December 29, 1995, and after BCC had already filed the
criminal complaint against him. The wide gap between October 19, 1995 and December 12,
1995 cannot be dismissed as a trivial inconsistency considering that the several incidents
affecting the veracity of his assertion of employment by BCC earlier noted herein
transpired in that interval.
Lolita Lopez, v. BODEGA CITY and/or Andres C. Torres-Yap, G.R. No. 155731,
September 3, 2007
Facts:
Respondent Bodega City (Bodega City) is a corporation duly registered and existing under
and by virtue of the laws of the Republic of the Philippines, while respondent Andres C.
Torres-Yap (Yap) is its owner/ manager. Petitioner was the “lady keeper” of Bodega City
tasked with manning its ladies’ comfort room.
In a letter signed by Yap dated February 10, 1995, petitioner was made to explain why the
concessionaire agreement between her and respondents should not be terminated or
suspended in view of an incident that happened on February 3, 1995, wherein petitioner
was seen to have acted in a hostile manner against a lady customer of Bodega City who
informed the management that she saw petitioner sleeping while on duty.
Yap informed petitioner that because of the incident that happened respondents had
decided to terminate the concessionaire agreement between them.
Petitioner filed a complaint for illegal dismissal against respondents contending that she
was dismissed from her employment without cause and due process.
In their answer, respondents contended that no employer-employee relationship ever

existed between them and petitioner; that the latter’s services rendered within the
premises of Bodega City was by virtue of a concessionaire agreement she entered into with
respondents.
Labor Arbiter rendered judgment finding that petitioner was an employee of respondents
and that the latter illegally dismissed her.
NLRC SET ASIDE AND VACATED LA Decision.
Issue:
Is Lolita Lopez an employee of Bodega City?
Ruling:

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No, Lolita was not an employee of Bodega City.
In an illegal dismissal case, the onus probandi rests on the employer to prove that its
dismissal of an employee was for a valid cause. However, before a case for illegal dismissal
can prosper, an employer-employee relationship must first be established.
In filing a complaint before the Labor Arbiter for illegal dismissal based on the premise that
she was an employee of respondent, it is incumbent upon petitioner to prove the
employee-employer relationship by substantial evidence.
The NLRC and the CA found that petitioner failed to discharge this burden, and the Court
finds no cogent reason to depart from their findings.
The Court applies the four-fold test expounded in Abante v. Lamadrid Bearing and Parts
Corp., to wit:
To ascertain the existence of an employer-employee relationship, jurisprudence has

invariably applied the four-fold test, namely: (1) the manner of selection and engagement;
(2) the payment of wages; (3) the presence or absence of the power of dismissal; and (4)
the presence or absence of the power of control. Of these four, the last one is the most
important. The so-called “control test” is commonly regarded as the most crucial and
determinative indicator of the presence or absence of an employer-employee relationship.
Under the control test, an employer-employee relationship exists where the person for
whom the services are performed reserves the right to control not only the end achieved,
but also the manner and means to be used in reaching that end.
To prove the element of payment of wages, petitioner presented a petty cash voucher
showing that she received an allowance for five (5) days. The CA did not err when it held
that a solitary petty cash voucher did not prove that petitioner had been receiving salary
from respondents or that she had been respondents’ employee for 10 years.
Indeed, if petitioner was really an employee of respondents for that length of time, she
should have been able to present salary vouchers or pay slips and not just a single petty
cash voucher. The Court agrees with respondents that petitioner could have easily shown
other pieces of evidence such as a contract of employment, SSS or Medicare forms, or
certificates of withholding tax on compensation income; or she could have presented
witnesses to prove her contention that she was an employee of respondents. Petitioner
failed to do so.
Anent the element of control, petitioner’s contention that she was an employee of
respondents because she was subject to their control does not hold water.

Page 15 of 50
Petitioner failed to cite a single instance to prove that she was subject to the control of
respondents insofar as the manner in which she should perform her job as a “lady keeper”
was concerned.
It is true that petitioner was required to follow rules and regulations prescribing
appropriate conduct while within the premises of Bodega City. However, this was imposed
upon petitioner as part of the terms and conditions in the concessionaire agreement
embodied in a 1992 letter of Yap addressed to petitioner.
Petitioner does not dispute the existence of the letter; neither does she deny that
respondents offered her the subject concessionaire agreement. However, she contends that
she could not have entered into the said agreement with respondents because she did not
sign the document evidencing the same.
Petitioner is likewise estopped from denying the existence of the subject concessionaire
agreement. She should not, after enjoying the benefits of the concessionaire agreement
with respondents, be allowed to later disown the same through her allegation that she was
an employee of the respondents when the said agreement was terminated by reason of her
violation of the terms and conditions thereof.
The principle of estoppel in pais applies wherein — by one’s acts, representations or

admissions, or silence when one ought to speak out — intentionally or through culpable
negligence, induces another to believe certain facts to exist and to rightfully rely and act on
such belief, so as to be prejudiced if the former is permitted to deny the existence of those
facts.
Hence, going back to the element of control, the concessionaire agreement merely stated
that petitioner shall maintain the cleanliness of the ladies’ comfort room and observe
courtesy guidelines that would help her obtain the results they wanted to achieve. There is
nothing in the agreement which specifies the methods by which petitioner should achieve
these results.
Lastly, the Court finds that the elements of selection and engagement as well as the power
of dismissal are not present in the instant case.
It has been established that there has been no employer-employee relationship between
respondents and petitioner. Their contractual relationship was governed by the
concessionaire agreement embodied in the 1992 letter. Thus, petitioner was not dismissed
by respondents. Instead, as shown by the letter of Yap to her dated February 15, 1995,37
their contractual relationship was terminated by reason of respondents’ termination of the
subject concessionaire agreement, which was in accordance with the provisions of the
agreement in case of violation of its terms and conditions.

Page 16 of 50
South East International Rattan, Inc. v. Jesus J. Coming, G.R. No. 186621, March 12,
2014
Facts:
Petitioner South East International Rattan, Inc. (SEIRI) is a domestic corporation engaged
in the business of manufacturing and exporting furniture to various countries with
principal place of business at Paknaan, Mandaue City, while petitioner EstanislaoAgbay, as
per records, is the President and General Manager of SEIRI.
Respondent Jesus J. Coming filed a complaint for illegal dismissal, underpayment of wages,
non-payment of holiday pay, 13th month pay and service incentive leave pay, with prayer
for reinstatement, back wages, damages and attorney fees against Petitioner.
Respondent alleged that on March 17, 1984, petitioners hired him as Sizing Machine
Operator. He worked from 8:00 a.m. to 5:00 p.m. At first, his compensation was on span
class="SpellE">pakiaobasis but sometime in June 1984, it was fixed at P150.00 per day paid
to him on a weekly basis. In 1990, without any apparent reason, his employment was
interrupted as he was told by petitioners to resume work in two months time. Being an
uneducated person, respondent was persuaded by the management as well as his brother
not to complain, as otherwise petitioners might decide not to call him back for work.
Fearing such consequence, respondent accepted his fate. Nonetheless, after two months he
reported back to work upon order of management.
Despite being an employee for many years with his work performance never questioned by
petitioners, respondent was dismissed on January 1, 2002 without lawful cause. He was
told that he will be terminated because the company is not doing well financially and that
he would be called back to work only if they need his services again. Respondent waited for
almost a year but petitioners did not call him back to work. He filed the complaint before
the regional arbitration branch.
As their defense, petitioners denied having hired respondent asserting that SEIRI was
incorporated only in 1986, and that respondent actually worked for SEIRI furniture
suppliers because when the company started in 1987 it was engaged purely in buying and
exporting furniture and its business operations were suspended from the last quarter of
1989 to August 1992. They stressed that respondent was not included in the list of
employees submitted to the Social Security System (SSS). Moreover, respondent brother,
Vicente Coming, executed an affidavit8 in support of petitionersposition while Allan Mayol
and Faustino Apondarissued notarized certifications9 that respondent worked for them
instead.

Page 17 of 50
The Labor Arbiter ruled that respondent is a regular employee of SEIRI and that the
termination of his employment was illegal.
Petitioners appealed to the National Labor Relations Commission (NLRC)-Cebu City. The
NLRC set aside the decision of the LA compelling the respondent to file a petition for
certiorari under Rule 65 before the Court of Appeals. The CA ruled in favor of the
respondent and declared that there existed an employer-employee relationship between
petitioners and respondent who was dismissed without just and valid cause. Petitioners
moved for reconsideration but the same was denied. Hence, the present petition for review
on certiorari.
Issue:
Was there an employer-employee relationship between the petitioners and the

respondent?
Ruling:
The Court sustains that Decision of the Court of Appeals.
LABOR LAW: employer-employee relationship
In order to establish the existence of an employer-employee relationship, the four-fold test

is used, to wit: (1) the selection and engagement of the employee; (2) the payment of
wages; (3) the power of dismissal; and (4) the power to control the employee conduct, or
the so-called control test.
In resolving the issue of whether such relationship exists in a given case, substantial
evidence or that amount of relevant evidence, which a reasonable mind might accept, as
adequate to justify a conclusion is sufficient.
The petitioners presented the following to support their stance that respondent is not their
employee: (1) Employment Reports to the SSS from 1987 to 2002; (2) the Certifications
issued by Mayol and Apondar; (3) two affidavits of Vicente Coming; (4) payroll sheets
(1999-2000); (5) individual pay envelopes and employee earnings records (1999-2000);
(6) and affidavit of Angelina Agbay(Treasurer and Human Resources Officer).
The respondent, on the other hand, submitted the affidavit executed by Eleoterio Brigoli,
Pedro Brigoli, Napoleon Coming, EfrenComing and Gil Coming who all attested that
respondent was their co-worker at SEIRI.
The Court in Tan v. Lagrama, 436 Phil. 190, held that the fact that a worker was not
reported as an employee to the SSS is not conclusive proof of the absence of employer-
employee relationship. Otherwise, an employer would be rewarded for his failure or even

Page 18 of 50
neglect to perform his obligation. Nor does the fact that respondent name does not appear
in the payrolls and pay envelope records submitted by petitioners negate the existence of
employer-employee relationship.
As a regular employee, respondent enjoys the right to security of tenure under Article 279
of the Labor Code and may only be dismissed for just or authorized causes. Otherwise, the
dismissal becomes illegal.
Since respondent dismissal was without valid cause, he is entitled to reinstatement without
loss of seniority rights and other privileges and to his full back wages, inclusive of
allowances and other benefits of their monetary equivalent, computed from the time his
compensation was withheld from him up to the time of his actual reinstatement.
However, where reinstatement is no long feasible as an option, back wages shall be

computed from the time of the illegal termination up to the finality of the decision. As an
alternative to this, separation pay equivalent to one month salary for every year of service
should likewise be awarded in case reinstatement is not possible.
Royale Homes Marketing Corporation v. Fidel P. Alcantara, G.R. No. 195190, July 28,
2014
Rule:
Not every form of control that a hiring party imposes on the hired party is indicative of
employee-employer relationship. Rules and regulations that merely serve as guidelines
towards the achievement of a mutually desired result without dictating the means and
methods of accomplishing it do not establish employer-employee relationship.1
Not every form of control is indicative of employer-employee relationship. 1 A person who

performs work for another and is subjected to its rules, regulations, and code of ethics does
not necessarily become an employee. As long as the level of control does not interfere with
the means and methods of accomplishing the assigned tasks, the rules imposed by the
hiring party on the hired party do not amount to the labor law concept of control that is
indicative of employer-employee relationship.
Facts:
Petitioner Royale Homes appointed Respondent Alcantara as its Marketing Director for a
fixed period of one year. Royale Homes reappointed him for several consecutive years, his
last position as VP Sales.
On December 2003, Alcantara filed a Complaint for Illegal Dismissal against Royale Homes
and its corporate officers alleging that he is a regular employee of Royale Homes since he is
performing tasks that are necessary and desirable to its business; that in 2003 the

Page 19 of 50
company gave him P1.2 million for the services he rendered to it; that in the first week of
November 2003, however, the executive officers of Royale Homes told him that they were
wondering why he still had the gall to come to office and sit at his table; and that the acts of
the executive officers of Royale Homes amounted to his dismissal from work without any
valid or just cause and in gross disregard of the proper procedure for dismissing
employees.
Royale Homes, on the other hand, vehemently denied that Alcantara is its employee. It
argued that the appointment paper of Alcantara is clear that it engaged his services as an
independent sales contractor for a fixed term of one year only. He never received any
salary, 13th month pay, overtime pay or holiday pay from Royale Homes as he was paid
purely on commission basis. In addition, Royale Homes had no control on how Alcantara
would accomplish his tasks and responsibilities as he was free to solicit sales at any time
and by any manner which he may deem appropriate and necessary. He is even free to
recruit his own sales personnel to assist him in pursuance of his sales target.
Labor Arbiter: For Alcantara. Heis an employee of Royale Homes with a fixed-term
employment and that the pre-termination of his contract was against the law.
NLRC (appeal): For Petitioner company. Alcantara is an independent contractor of Royale

Homes. It based its ruling mainly on the contract which does not require Alcantara to
observe regular working hours. He was also free to adopt the selling methods he deemed
most effective and can even recruit sales agents to assist him in marketing the inventories
of Royale Homes. He was also paid on commission basis.
CA (Petition for Certiorari): For Respondent. Applying the four-fold and economic reality
tests, it held that Alcantara is an employee of Royale Homes. Royale Homes exercised some
degree of control over Alcantara since his job, is subject to company rules, regulations, and
periodic evaluations. He was also bound by the company code of ethics. Moreover, the
exclusivity clause of the contract has made Alcantara economically dependent on Royale
Homes, supporting the theory that he is an employee of said company.
Issue:
Was there an employee-employer relationship between the parties?
Ruling:
NO. Alcantara is an independent contractor.
The primary evidence of the nature of the parties’ relationship in this case is the written
contract that they signed and executed in pursuance of their mutual agreement. While the
existence of employer-employee relationship is a matter of law, the characterization made

Page 20 of 50
by the parties in their contract as to the nature of their juridical relationship cannot be
simply ignored, particularly in this case where the parties’ written contract unequivocally
states their intention at the time they entered into it. In this case, the contract, duly signed
and not disputed by the parties, conspicuously provides that "no employer-employee
relationship exists between" Royale Homes and Alcantara, as well as his sales agents. It is
clear that they did not want to be bound by employer-employee relationship at the time of
the signing of the contract.
In determining the existence of an employer-employee relationship, among the four-fold

test, the most determinative factor in ascertaining the existence of employer - employee
relationship is the "right of control test". " It is deemed to be such an important factor that
the other requisites may even be disregarded." This holds true where the issues to be
resolved is whether a person who performs work for another is the latter’s employee or is
an independent contractor. For where the person for whom the services are performed
reserves the right to control not only the end to be achieved, but also the means by which
such end is reached, employer-employee relationship is deemed to exist.
In this case, the Court agrees with Royale Homes that the rules, regulations, code of ethics,
and periodic evaluation alluded to by Alcantara do not involve control over the means and
methods by which he was to perform his job. Understandably, Royale Homes has to fix the
price, impose requirements on prospective buyers, and lay down the terms and conditions
of the sale, including the mode of payment, which the independent contractors must follow.
It is also necessary for Royale Homes to allocate its inventories among its independent
contractors, determine who has priority in selling the same, grant commission or allowance
based on predetermined criteria, and regularly monitor the result of their marketing and
sales efforts. But to the mind of this Court, these do not pertain to the means and methods
of how Alcantara was to perform and accomplish his task of soliciting sales. They do not
dictate upon him the details of how he would solicit sales or the manner as to how he
would transact business with prospective clients.
Notably, Alcantara was not required to observe definite working hours. Except for
soliciting sales, Royale Homes did not assign other tasks to him. He had full control over the
means and methods of accomplishing his tasks as he can "solicit sales at any time and by
any manner which [he may] deem appropriate and necessary." He performed his tasks on
his own account free from the control and direction of Royale Homes in all matters
connected therewith, except as to the results thereof.
Neither does the repeated hiring of Alcantara prove the existence of employer-employee
relationship. The continuous rehiring of Alcantara simply signifies the renewal of his
contract with Royale Homes, and highlights his satisfactory services warranting the
renewal of such contract. Nor does the exclusivity clause of contract establish the existence

Page 21 of 50
of the labor law concept of control. In Consulta v. Court of Appeals, it was held that
exclusivity of contract does not necessarily result in employer-employee relationship.
The element of payment of wages is also absent in this case. As provided in the contract,
Alcantara’s remunerations consist only of commission override of 0.5%, budget allocation,
sales incentive and other forms of company support. There is no proof that he received
fixed monthly salary.
This Court is, therefore, convinced that Alcantara is not an employee of Royale Homes, but
a mere independent contractor. The NLRC is, therefore, correct in concluding that the
Labor Arbiter has no jurisdiction over the case and that the same is cognizable by the
regular courts.
Applicability of the Labor Code
PNOC v. NLRC
Fact:
Sec. 66 states that “any person holding a public appointive office or position, including
active members of the AFP, and officers and employees in the government-owned or
controlled corporations, shall be considered ipso facto resigned from his office upon the
filing of his certificate of candidacy.
Pineda, while holding the position of Geothermal Construction Secretary, decided to run for
councilor of the Municipality of Kananga, Leyte. Pineda’s contention is that PNOC is not a
corporation embraced within the Civil Service.
Issue:
Whether or not an employee in a government-owned or controlled corporation without an

original charter nevertheless falls within the scope of the Sec. 66 of the Omnibus Election
Code
Ruling:
Sec. 66 applies to officers and employees in government-owned or controlled corporations,

even those organized under the general laws on incorporation and therefore not having an
original or legislative charter, and even if they do not fall under the Civil Service Law but
under the Labor Code.
Antonio P. Salenga v. Court of Appeals, G.R. Nos. 174941, February 1, 2012
Facts:

Page 22 of 50
President/Chief Executive Officer (CEO) Rufo Colayco issued an Order informing Salenga
that, pursuant to the decision of the board of directors of respondent CDC, the position of
head executive assistant – the position held by petitioner – was declared redundant. His
employment was then terminated. He then filed illegal dismissal case against CDC and
Colayco. The Labor Arbiter ruled in favor of Salenga. When the Decision was rendered, CDC
was already under the leadership of Sergio T. Naguiat. He instructed Atty. Monina C.
Pineda, manager of the Corporate and Legal Services Department and concurrent corporate
board secretary, not to appeal the Decision and to so inform the OGCC. However, two
separate appeals were filed before LA Darlucio. One from the OGCC on behalf of respondent
CDC and Rufo Colayco and the second from Rufo Colayco.
Petitioner opposed the two appeals on the grounds that both appellants had failed to
observe Rule VI, Sections 4 to 6 of the NLRC Rules of Procedure; and that appellants had
not been authorized by respondent’s board of directors to represent the corporation and,
thus, they were not the “employer” whom the Rules referred to.
Issue:
Can the NLRC entertain an appeal absent a board resolution allowing it?
Ruling:
No. The NLRC had no jurisdiction to entertain the appeal filed by Timbol-Roman and
former CDC CEO Colayco.
A corporation can only exercise its powers and transact its business through its board of
directors and through its officers and agents when authorized by a board resolution or its
bylaws. The power of a corporation to sue and be sued is exercised by the board of
directors. The physical acts of the corporation, like the signing of documents, can be
performed only by natural persons duly authorized for the purpose by corporate bylaws or
by a specific act of the board. The purpose of verification is to secure an assurance that the
allegations in the pleading are true and correct and have been filed in good faith.
Thus, absent the requisite board resolution, neither Timbol-Roman nor Atty. Mallari, who
signed the Memorandum of Appeal and Joint Affidavit of Declaration allegedly on behalf of
respondent corporation, may be considered as the “appellant” and “employer” referred to
by Rule VI, Sections 4 to 6 of the NLRC Rules of Procedure, which provides that appeal shall
be verified by appellant himself in accordance with Section 4, Rule 7 of the Rules of Court.
The OGCC failed to produce any valid authorization from the board of directors despite
petitioner Salenga’s repeated demands. And the so-called appeal was done against the
instructions of then President/CEO Naguiat not to file an appeal.
Pre-Employment, Recruitment and Placement

Page 23 of 50
People v. Panis, 142 SCRA 664, 1986
Facts:
Four informations were filed on January 9, 1981, in the Court of First Instance of Zambales
and Olongapo City alleging that Serapio Abug, private respondent herein, "without first
securing a license from the Ministry of Labor as a holder of authority to operate a fee-
charging employment agency, did then and there wilfully, unlawfully and criminally
operate a private fee-charging employment agency by charging fees and expenses (from)
and promising employment in Saudi Arabia" to four separate individuals named therein, in
violation of Article 16 in relation to Article 39 of the Labor Code.
Abug filed a motion to quash on the ground that the informations did not charge an offense
because he was accused of illegally recruiting only one person in each of the four
informations. Under the proviso in Article 13(b), he claimed, there would be illegal
recruitment only "whenever two or more persons are in any manner promised or offered
any employment for a fee."
The posture of the petitioner is that the private respondent is being prosecuted under
Article 39 in relation to Article 16 of the Labor Code; hence, Article 13(b) is not applicable.
However, as the first two cited articles penalize acts of recruitment and placement without
proper authority, which is the charge embodied in the informations, application of the
definition of recruitment and placement in Article 13(b) is unavoidable.
Issue:
Is petitioner guilty of violating Article 13(b) of P. D. 442, otherwise known as the Labor
Code?
Does the Article 13(b) of the Labor Code provide for the innocence or guilt of the private
respondent of the crime of illegal recruitment?
Ruling:
First Issue
Article 13(b) of P. D. 442, otherwise known as the Labor Code, states that, "(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."

Page 24 of 50
As we see it, the proviso was intended neither to impose a condition on the basic rule nor
to provide an exception thereto but merely to create a presumption. The presumption is
that the individual or entity is engaged in recruitment and placement whenever he or it is
dealing with two or more persons to whom, in consideration of a fee, an offer or promise of
employment is made in the course of the "canvassing, enlisting, contracting, transporting,
utilizing, hiring or procuring (of) workers."
At any rate, the interpretation here adopted should give more force to the campaign against
illegal recruitment and placement, which has victimized many Filipino workers seeking a
better life in a foreign land, and investing hard-earned savings or even borrowed funds in
pursuit of their dream, only to be awakened to the reality of a cynical deception at the
hands of their own countrymen.
Second Issue
The Supreme Court reversed the CFI’s Orders and reinstated all four information filed
against private respondent.
The Article 13(b) of the Labor Code was merely intended to create a presumption, and not
to impose a condition on the basic rule nor to provide an exception thereto.
Where a fee is collected in consideration of a promise or offer of employment to two or

more prospective workers, the individual or entity dealing with them shall be deemed to be
engaged in the act of recruitment and placement. The words "shall be deemed" create the
said presumption.
Hellenic Philippine Shipping, Inc. v. Epifanio Siete and NLRC, GR No. 84082, March 13,
1991
Facts:
Capt. Epifanio Siete was employed on May 22, 1985, as Master of M/V Houda G by Sultan
Shipping Co., Ltd., through its crewing agent, herein petitioner. He boarded the vessel on
May 24, 1985 at Cyprus, then proceeded back on June 30, 1985. On July 8, 1985, Capt.
Wilfredo Lim boarded the vessel and advised Siete that he had instructions from the
owners to take over its command. These instructions were confirmed by a telex sent by
Sultan Shipping to Siete on July 10, 1985. Neither Lim nor the telex indicated the reason for
his relief. The private respondent claims this information was also withheld from him by
the petitioner upon his repatriation to Manila.
On July 12, 1985, Siete filed a complaint against the petitioner for illegal dismissal and non-
payment of his salary and other benefits under their employment contract. On September
6, 1985, the petitioner alleged in its answer that the complainant had been dismissed

Page 25 of 50
because of his failure to complete with the instruction of Sultan Shipping to erase the
timber load line on the vessel and for his negligence in the discharge of the cargo at Tripoli
that endangered the vessel and stevedores.
The Philippine Overseas Employment Administration (POEA) dismissed the complaint,

holding that there was valid cause for Siete's removal. The NLRC reversed POEA’s decision
and found petitioner guilty of illegal dismissal, holding that the dismissal violated due
process and that the documents submitted by the petitioner were hearsay, self-serving, and
not verified.
Issue:
Was Siete illegally dismissed?
Ruling:
Siete was illegally dismissed. It was established that the private respondent was indeed not
notified of the charges against him and that no investigation was conducted to justify his
dismissal. Moreover, the petitioner has failed to prove that Siete had been instructed to
erase the timber load lines and that he had been negligent in the cargo unloading at Tripoli.
The Court notes that the reports submitted by the petitioner to prove its charges were all
prepared after the fact of Siete's dismissal and were signed by its own employees. The mere
fact that they have made such reports does not itself prove the charges, which were
investigated ex parte, if at all. It is not denied that Siete was not informed of the charges
beforehand or that he was given an opportunity to refute them. Even after his arrival in
Manila, he was kept in the dark about the reason for his dismissal. The excuse of the
petitioner that it itself did not know why he was dismissed, being only a crewing agent of
Sultan Shipping, deserves no comment.
Hence, Siete was illegally dismissed because, first, he was not accorded a fair investigation
as required by law, and second, the grounds invoked for his separation have not been
proved by the petitioner.
Wallem Philippine Shipping, Inc v. Min of Labor, GR No L-50734-37, February 20,

1981
Facts:
Private respondents were hired by petitioner sometime in May 1975 to work as seamen for
a period of ten months on board the M/V Woermann Sanaga, a Dutch vessel owned and
operated by petitioner's European principals. While their employment contracts were still
in force, private respondents were dismissed by their employer, petitioner herein, and

Page 26 of 50
were discharged from the ship on charges that they instigated the International Transport
Federation (ITF) to demand the application of worldwide ITF seamen's rates to their crew.
Private respondents were repatriated to the Philippines on October 27, 1975 and upon
their arrival in Manila, they instituted a complaint against petitioner for illegal dismissal
and recovery of wages and other benefits corresponding to the five months' unexpired
period of their shipboard employment contract.
The hearing Officer of the Secretariat found that both petioner and private respondents are
in pari delicto and to have violated their contract of employment when the latter accepted
salary rates different from their contract verified and approved by the National Seamen
Board, and when the former’s representative signed the Special Agreement. Petitioner was
ordered to pay respondents Caunca and Cabrera their respective leave pay for the period
that they have served M/V Woermann Sanaga.
The Board ruled that petitioner is liable for breach of contract when it ordered the
dismissal of private respondents and their subsequent repatriation before the expiration of
their respective employment contracts, and ordered the former to pay the latter 3 months'
salary equivalent without qualifications or deduction.
Issue:
Were the private respondents illegally dismissed?
Ruling:
Private Respondents were illegally dismissed. Private respondents should not be liable for
breach of their employment contracts for accepting salaries higher than their contracted
rates. Said respondents are not signatories to the Special Agreement, nor was there any
showing that they instigated the execution thereof. Respondents should not be blamed for
accepting higher salaries since it is but human for them to grab every opportunity which
would improve their working conditions and earning capacity.
Petitioner claims that the dismissal of private respondents was justified because the latter
threatened the ship authorities in acceeding to their demands, and this constitutes serious
misconduct as contemplated by the Labor Code. This contention is not well-taken. The
records fail to establish clearly the commission of any threat. But even if there had been
such a threat, respondents' behavior should not be censured because it is but natural for
them to employ some means of pressing their demands for petitioner, who refused to abide
with the terms of the Special Agreement, to honor and respect the same. They were only
acting in the exercise freedom of expression, and to deprive them of this is contrary to law
and public policy. There is no serious misconduct in the case at bar that would justify
respondents' dismissal.

Page 27 of 50
On the other hand, it is petitioner who is guilty of breach of contract when they dismissed
the respondents without just cause and prior to the expiration of the employment
contracts. As the records clearly show, petitioner voluntarily entered into the Special
Agreement with ITF and by virtue thereof the crew men were actually given their salary
differentials in view of the new rates. It cannot be said that it was because of respondents'
fault that petitioner made a sudden turn-about and refused to honor the special agreement.
Antonio M. Serrano v. Gallant Maritime Services, Inc., GR No. 167614, March 24, 2009
Facts:
Petitioner Antonio Serrano was hired by respondents Gallant Maritime Services, Inc. and
Marlow Navigation Co., Inc., under a POEA-approved contract of employment for 12
months, as Chief Officer, with the basic monthly salary of US$1,400, plus $700/month
overtime pay, and 7 days paid vacation leave per month.
On March 19, 1998, the date of his departure, Serrano was constrained to accept a
downgraded employment contract for the position of Second Officer with a monthly salary
of US$1,000 upon the assurance and representation of respondents that he would be Chief
Officer by the end of April 1998.
Respondents did not deliver on their promise to make Serrano Chief Officer. Hence,
Serrano refused to stay on as second Officer and was repatriated to the Philippines on May
26, 1998, serving only two (2) months and seven (7) days of his contract, leaving an
unexpired portion of nine (9) months and twenty-three (23) days.
Serrano filed with the Labor Arbiter (LA) a Complaint against respondents for constructive
dismissal and for payment of his money claims in the total amount of US$26,442.73 (based
on the computation of $2590/month from June 1998 to February 199, $413.90 for March
1998, and $1640 for March 1999) as well as moral and exemplary damages.
The LA declared the petitioner's dismissal illegal and awarded him US$8,770, representing
his salaray for three (3) months of the unexpired portion of the aforesaid contract of
employment, plus $45 for salary differential and for attorney's fees equivalent to 10% of
the total amount; however, no compensation for damages as prayed was awarded.
On appeal, the NLRC modified the LA decision and awarded Serrano $4669.50,
representing three (3) months salary at $1400/month, plus 445 salary differential and
10% for attorney's fees. This decision was based on the provision of RA 8042, which was
made into law on July 15, 1995.

Page 28 of 50
Serrano filed a Motion for Partial Reconsideration, but this time he questioned the
constitutionality of the last clause in the 5th paragraph of Section 10 of RA 8042, which
reads:
Sec. 10. Money Claims. - x x x In case of termination of overseas employment without just,
valid or authorized cause as defined by law or contract, the workers shall be entitled to the
full reimbursement of his placement fee with interest of twelve percent (12%) per annum,
plus his salaries for the unexpired portion of his employment contract or for three (3)
months for every year of the unexpired term, whichever is less.
The NLRC denied the Motion; hence, Serrano filed a Petition for Certiorari with the Court of
Appeals (CA), reiterating the constitutional challenge against the subject clause. The CA
affirmed the NLRC ruling on the reduction of the applicable salary rate, but skirted the
constitutional issue raised by herein petitioner Serrano.
Issues:
Whether or not the subject clause violates Section 10, Article III of the Constitution on non-
impairment of contracts;
Whether or not the subject clause violate Section 1, Article III of the Constitution, and
Section 18, Article II and Section 3, Article XIII on labor as a protected sector.
Ruling:
First Issue
The answer is in the negative. Petitioner's claim that the subject clause unduly interferes
with the stipulations in his contract on the term of his employment and the fixed salary
package he will receive is not tenable.
Section 10, Article III of the Constitution provides: No law impairing the obligation of
contracts shall be passed.
The prohibition is aligned with the general principle that laws newly enacted have only a
prospective operation, and cannot affect acts or contracts already perfected; however, as to
laws already in existence, their provisions are read into contracts and deemed a part
thereof. Thus, the non-impairment clause under Section 10, Article II is limited in
application to laws about to be enacted that would in any way derogate from existing acts
or contracts by enlarging, abridging or in any manner changing the intention of the parties
thereto.
As aptly observed by the OSG, the enactment of R.A. No. 8042 in 1995 preceded the
execution of the employment contract between petitioner and respondents in 1998. Hence,

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it cannot be argued that R.A. No. 8042, particularly the subject clause, impaired the
employment contract of the parties. Rather, when the parties executed their 1998
employment contract, they were deemed to have incorporated into it all the provisions of
R.A. No. 8042.
But even if the Court were to disregard the timeline, the subject clause may not be declared
unconstitutional on the ground that it impinges on the impairment clause, for the law was
enacted in the exercise of the police power of the State to regulate a business, profession or
calling, particularly the recruitment and deployment of OFWs, with the noble end in view of
ensuring respect for the dignity and well-being of OFWs wherever they may be employed.
Police power legislations adopted by the State to promote the health, morals, peace,
education, good order, safety, and general welfare of the people are generally applicable
not only to future contracts but even to those already in existence, for all private contracts
must yield to the superior and legitimate measures taken by the State to promote public
welfare.
Second Issue
The answer is in the affirmative.
Section 1, Article III of the Constitution guarantees: No person shall be deprived of life,
liberty, or property without due process of law nor shall any person be denied the equal
protection of the law.
Section 18, Article II and Section 3, Article XIII accord all members of the labor sector,
without distinction as to place of deployment, full protection of their rights and welfare.
To Filipino workers, the rights guaranteed under the foregoing constitutional provisions
translate to economic security and parity: all monetary benefits should be equally enjoyed
by workers of similar category, while all monetary obligations should be borne by them in
equal degree; none should be denied the protection of the laws which is enjoyed by, or
spared the burden imposed on, others in like circumstances.
Such rights are not absolute but subject to the inherent power of Congress to incorporate,
when it sees fit, a system of classification into its legislation; however, to be valid, the
classification must comply with these requirements: 1) it is based on substantial
distinctions; 2) it is germane to the purposes of the law; 3) it is not limited to existing
conditions only; and 4) it applies equally to all members of the class.
There are three levels of scrutiny at which the Court reviews the constitutionality of a
classification embodied in a law: a) the deferential or rational basis scrutiny in which the
challenged classification needs only be shown to be rationally related to serving a
legitimate state interest; b) the middle-tier or intermediate scrutiny in which the

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government must show that the challenged classification serves an important state interest
and that the classification is at least substantially related to serving that interest; and c)
strict judicial scrutiny in which a legislative classification which impermissibly interferes
with the exercise of a fundamental right or operates to the peculiar disadvantage of a
suspect class is presumed unconstitutional, and the burden is upon the government to
prove that the classification is necessary to achieve a compelling state interest and that it is
the least restrictive means to protect such interest.
Upon cursory reading, the subject clause appears facially neutral, for it applies to all OFWs.
However, a closer examination reveals that the subject clause has a discriminatory intent
against, and an invidious impact on, OFWs at two levels:
First, OFWs with employment contracts of less than one year vis-à-vis OFWs with
employment contracts of one year or more;
Second, among OFWs with employment contracts of more than one year; and
Third, OFWs vis-à-vis local workers with fixed-period employment;
In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-term employment who
were illegally discharged were treated alike in terms of the computation of their money
claims: they were uniformly entitled to their salaries for the entire unexpired portions of
their contracts. But with the enactment of R.A. No. 8042, specifically the adoption of the
subject clause, illegally dismissed OFWs with an unexpired portion of one year or more in
their employment contract have since been differently treated in that their money claims
are subject to a 3-month cap, whereas no such limitation is imposed on local workers with
fixed-term employment.
The Court concludes that the subject clause contains a suspect classification in that, in the
computation of the monetary benefits of fixed-term employees who are illegally
discharged, it imposes a 3-month cap on the claim of OFWs with an unexpired portion of
one year or more in their contracts, but none on the claims of other OFWs or local workers
with fixed-term employment. The subject clause singles out one classification of OFWs and
burdens it with a peculiar disadvantage.
There being a suspect classification involving a vulnerable sector protected by the

Constitution, the Court now subjects the classification to a strict judicial scrutiny, and
determines whether it serves a compelling state interest through the least restrictive
means.

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What constitutes compelling state interest is measured by the scale of rights and powers
arrayed in the Constitution and calibrated by history. It is akin to the paramount interest of
the state for which some individual liberties must give way, such as the public interest in
safeguarding health or maintaining medical standards, or in maintaining access to
information on matters of public concern.
In the present case, the Court dug deep into the records but found no compelling state
interest that the subject clause may possibly serve.
In fine, the Government has failed to discharge its burden of proving the existence of a
compelling state interest that would justify the perpetuation of the discrimination against
OFWs under the subject clause.
Assuming that, as advanced by the OSG, the purpose of the subject clause is to protect the
employment of OFWs by mitigating the solidary liability of placement agencies, such
callous and cavalier rationale will have to be rejected. There can never be a justification for
any form of government action that alleviates the burden of one sector, but imposes the
same burden on another sector, especially when the favored sector is composed of private
businesses such as placement agencies, while the disadvantaged sector is composed of
OFWs whose protection no less than the Constitution commands. The idea that private
business interest can be elevated to the level of a compelling state interest is odious.
Moreover, even if the purpose of the subject clause is to lessen the solidary liability of
placement agencies vis-a-vis their foreign principals, there are mechanisms already in
place that can be employed to achieve that purpose without infringing on the constitutional
rights of OFWs.
The POEA Rules and Regulations Governing the Recruitment and Employment of Land-
Based Overseas Workers, dated February 4, 2002, imposes administrative disciplinary
measures on erring foreign employers who default on their contractual obligations to
migrant workers and/or their Philippine agents. These disciplinary measures range from
temporary disqualification to preventive suspension. The POEA Rules and Regulations
Governing the Recruitment and Employment of Seafarers, dated May 23, 2003, contains
similar administrative disciplinary measures against erring foreign employers.
Resort to these administrative measures is undoubtedly the less restrictive means of aiding
local placement agencies in enforcing the solidary liability of their foreign principals.
Thus, the subject clause in the 5th paragraph of Section 10 of R.A. No. 8042 is violative of
the right of petitioner and other OFWs to equal protection.

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The subject clause “or for three months for every year of the unexpired term, whichever is
less” in the 5th paragraph of Section 10 of Republic Act No. 8042 is DECLARED
UNCONSTITUTIONAL
Note:
When the Court is called upon to exercise its power of judicial review of the acts of its co-
equals, such as the Congress, it does so only when these conditions obtain: (1) that there is
an actual case or controversy involving a conflict of rights susceptible of judicial
determination; (2) that the constitutional question is raised by a proper party and at the
earliest opportunity; and (3) that the constitutional question is the very lis mota of the
case, otherwise the Court will dismiss the case or decide the same on some other ground.
----
As discussed earlier, prior to R.A. No. 8042, a uniform system of computation of the
monetary awards of illegally dismissed OFWs was in place. This uniform system was
applicable even to local workers with fixed-term employment.
Article 605 of the Code of Commerce provides:
Article 605. If the contracts of the captain and members of the crew with the agent should
be for a definite period or voyage, they cannot be discharged until the fulfillment of their
contracts, except for reasons of insubordination in serious matters, robbery, theft, habitual
drunkenness, and damage caused to the vessel or to its cargo by malice or manifest or
proven negligence.
Article 605 was applied to Madrigal Shipping Company, Inc. v. Ogilvie, in which the Court
held the shipping company liable for the salaries and subsistence allowance of its illegally
dismissed employees for the entire unexpired portion of their employment contracts.
While Article 605 has remained good law up to the present, Article 299 of the Code of
Commerce was replaced by Art. 1586 of the Civil Code of 1889, to wit:
Article 1586. Field hands, mechanics, artisans, and other laborers hired for a certain time
and for a certain work cannot leave or be dismissed without sufficient cause, before the
fulfillment of the contract.
Sameer Overseas Placement Agency, Inc. v. Joy C. Cabiles, G.R. No. 170139, August 5,
2014
Facts:

Page 33 of 50
Petitioner, Sameer Overseas Placement Agency, Inc., is a recruitment and placement

agency.
Respondent Joy Cabiles was hired thus signed a one-year employment contract for a
monthly salary of NT$15,360.00. Joy was deployed to work for Taiwan Wacoal, Co. Ltd.
(Wacoal) on June 26, 1997. She alleged that in her employment contract, she agreed to
work as quality control for one year. In Taiwan, she was asked to work as a cutter.
Sameer 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$9,000.15 According to her, Wacoal deducted NT$3,000 to cover her
plane ticket to Manila.
On October 15, 1997, Joy filed a complaint for illegal dismissal with the NLRC against
petitioner and Wacoal. LA dismissed the complaint. NLRC reversed LA’s decision. CA
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 attorney’s fees
Issue:
Whether or not Cabiles was entitled to the unexpired portion of her salary due to illegal
dismissal.
Ruling:
YES. The Court held that the award of the three-month equivalent of respondent’s salary
should be increased to the amount equivalent to the unexpired term of the employment
contract.
In Serrano v. Gallant Maritime Services, Inc. and Marlow Navigation Co., Inc., this court
ruled that the clause “or for three (3) months for every year of the unexpired term,
whichever is less” is unconstitutional for violating the equal protection clause and
substantive due process.
A statute or provision which was declared unconstitutional is not a law. It “confers no

rights; it imposes no duties; it affords no protection; it creates no office; it is inoperative as
if it has not been passed at all.”
The Court said that they are aware that the clause “or for three (3) months for every year of
the unexpired term, whichever is less” was reinstated in Republic Act No. 8042 upon
promulgation of Republic Act No. 10022 in 2010.

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Ruling on the constitutional issue
In the hierarchy of laws, the Constitution is supreme. No branch or office of the government
may exercise its powers in any manner inconsistent with the Constitution, regardless of the
existence of any law that supports such exercise. The Constitution cannot be trumped by
any other law. All laws must be read in light of the Constitution. Any law that is inconsistent
with it is a nullity.
Thus, when a law or a provision of law is null because it is inconsistent with the
Constitution, the nullity cannot be cured by reincorporation or reenactment of the same or
a similar law or provision. A law or provision of law that was already declared
unconstitutional remains as such unless circumstances have so changed as to warrant a
reverse conclusion.
The Court observed that the reinstated clause, this time as provided in Republic Act. No.
10022, violates the constitutional rights to equal protection and due process.96 Petitioner
as well as the Solicitor General have failed to show any compelling change in the
circumstances that would warrant us to revisit the precedent.
The Court declared, once again, 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.
Illegal Recruitment
People v. Florencio Gasacao, GR 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, appellant’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.
In 1999, the appellants recruited and enlisted Lindy Villamor et al with a promise for
overseas employment as overseas seafarers. The appellant thereby charged the applicants
cash bonds ranging from P 10K to P 20K despite the fact that POEA Rules and Regulation
has prohibited, which amount is greater than that allowable fees prescribed by the
Secretary of Labor. However, despite the payment thereof, the appellants failed to actually
deploy the applicants.
There were 2 separate complaints for Large Scale Illegal Recruitment were filed against the
appellants.

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RTC Ruling: In the first criminal case, appellants were found guilty for the crime but the
second complaint was dismissed.
CA Ruling: CA upon appeal, affirmed the ruling of the RTC.
Appellant’s contention: He could not be held liable for illegal recruitment since he was a
mere employee of the manning agency.
Issue:
Is Gasacao liable for illegal recruitment despite that he was a mere employee of the
manning agency?
Ruling:
Yes, Gasacao is liable for illegal recruitment despite being a mere employee of the 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.”
Further, it must be noted that Gasacao 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 testimonies of the private complainants clearly established that appellant 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 appellant was a mere employee, such fact is not a shield against his
conviction for large scale illegal recruitment. In the case of People v. Cabais, we have held
that 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 the recruitment process.
On the case, evidence showed that accused-appellant was the one who informed
complainant of job prospects in Korea and the requirements for deployment. She also
received money from them as placement fees. All of the complainants testified that they
personally met the accused-appellant and transacted with her regarding the overseas job
placement offers. Complainants parted with their money, evidenced by receipts signed by

Page 36 of 50
accused Cabais and accused Forneas. Thus, accused-appellant actively participated in the
recruitment of the complainants.
Prohibition on Bonds
It was established that he promised overseas employment to five applicants, herein private
complainants. He interviewed and required them to complete and submit documents
purportedly needed for their employment. 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. 804213 which state that “SEC. 60. Prohibition on Bonds and Deposits. – In no case
shall an employment agency require any bond or cash deposit from the worker to
guarantee performance under the contract or his/her repatriation.”
Definition of Terms
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 above-enumerated
acts.
Imelda Darvin v. CA, GR No 125044, July 13, 1998
Facts:
In March, 1992, she met accused-appellant Darvin in the latter's through the introduction
of their common friends, Florencio Jake Rivera and Leonila Rivera. In said meeting,
accused-appellant allegedly convinced Toledo that by giving her P150, 000.00, the latter
can immediately leave for the United States without any appearance before the U.S.
embassy. Thus, on April 13, 1992, Toledo gave Darvin the amount of P150, 000.00, as
evidenced by a receipt stating that the "amount of P150, 000.00 was for U.S. Visa and Air
fare." After receiving the money, Darvin assured Toledo that she can leave within one week.
However, when after a week, there was no word from Darvin, Toledo went to her residence
to inquire about any development, but could not find Darvin.
Darvin allegedly promised a job in US as a nursing aide.
On May 7, 1992, Toledo filed a complaint with the Bacoor Police Station against Imelda
Darvin. Upon further investigation, a certification was issued by the POEA stating that
Imelda Darvin is neither licensed nor authorized to recruit workers for overseas
employment. Accused-appellant was then charged for Estafa and illegal recruitment by the
Office of the Provincial Prosecutor of Cavite.

Page 37 of 50
Imelda Darvin Contentions: She testified that she used to be connected with Dale Travel
Agency and that in 1992 she was assisting individuals in securing passports, visa, and
airline tickets. She came to know Toledo through Florencio Jake Rivera, Jr. and Leonila
Rivera, alleging that Toledo sought her help to secure a passport, US visa and airline tickets
to the States. She claims that she did not promise any employment in the U.S. to Toledo.
She, however, admits receiving the amount of P150, 000.00 from the latter on April 13,
1992 but contends that it was used for necessary expenses of an intended trip to the US of
Toledo and her friend, Florencio Rivera
Same: After receiving the money, she allegedly told Toledo that the papers will be released
within 45 days. She likewise testified that she was able to secure Toledo's passport on April
20, 1992 and even set up a date for an interview with the US embassy.
Same: Deny Illegal Recruitment: Accused alleged that she was not engaged in illegal
recruitment but merely acted as a travel agent in assisting individuals to secure passports
and visa.
RTC Ruling: Guilty beyond reasonable doubt for simple illegal recruitment but was
acquitted from the crime of Estafa.
CA Ruling: On appeal, CA affirmed the decision in toto.
Imelda Darvin Contentions: She contends that based on the evidence presented by the
prosecution, her guilt was not proven beyond reasonable doubt.
Issue:
Was Imelda Darvin engaged in recruitment activities, as defined under the Labor Code?
Ruling:
No, Imelda Darvin engaged in recruitment activities, as defined under the Labor Code. The
Court ratiocinated that to uphold the conviction of accused-appellant under Article 13 and
38 of the Labor Code, two elements need to be shown: (1) the person charged with the
crime must have undertaken recruitment activities; and (2) the said person does not have a
license or authority to do so.
In the case of People v. Goce, to prove that Imelda Darvin was engaged in recruitment
activities as to commit the crime of illegal recruitment, it must be shown that the accused
appellant gave private respondent the distinct impression that she had the power or ability
to send the private respondent abroad for work such that the latter was convinced to part
with her money in order to be so employed.
On the case, there was no sufficient evidence to prove that Imelda Darvin offered a job to
private respondent. It is not clear that accused gave the impression that she was capable of
providing the private respondent work abroad. What is established, however, is that the
private respondent gave Imelda Darvin P150,000.00. The claim of the accused that the
P150,000.00 was for payment of private respondent's air fare and US visa and other
expenses cannot be ignored because the receipt for the P150,000.00, which was presented

Page 38 of 50
by both parties during the trial of the case, stated that it was "for Air Fare and Visa to USA."
Had the amount been for something else in addition to air fare and visa expenses, such as
work placement abroad, the receipt should have so stated.
At best, the evidence proffered by the prosecution only goes so far as to create a suspicion
that Imelda Darvin probably perpetrated the crime charged. But suspicion alone is
insufficient, the required quantum of evidence being proof beyond reasonable doubt. When
the People's evidence fails to indubitably prove the Imelda Darvin’s authorship of the crime
of which he stands accused, then it is the Court's duty, and the accused's right, to proclaim
his innocence. Acquittal, therefore, is in order.
Note:
Article 13 of the Labor Code:
…b) any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring
workers, and includes referrals, contract services, promising or advertising for
employment locally or abroad, whether for profit or not: Provided, that any 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.
Article 38 of the Labor Code:
a) Any recruitment activities, including the prohibited practices enumerated under Article
34 of this Code, to be undertaken by non-licensees or non-holders of authority shall be
deemed illegal and punishable under Article 39 of this Code. The Ministry of Labor and
Employment or any law enforcement officer may initiate complaints under this Article.
People v. Lourdes Valenciano, GR No 180926, December 10, 2008
Facts:
1st Recruit: In May 1996, Lourdes Valenciano, claiming to be an employee of Middle East
International Manpower Resources, Inc., went with one Susie Caraeg to the house of
Agapito De Luna, and told him he could apply for a job in Taiwan. A week later, De Luna
went to Valenciano’s house, there to be told to undergo a medical examination, with the
assurance that if there were a job order abroad, he would be able to leave. He was also told
that the placement fee for his employment as a factory worker in Taiwan was PhP 70,000.
After passing the medical examination, De Luna paid Valenciano at the latter’s residence
the following amounts: PhP 20,000 on June 21, 1996; PhP 20,000 on July 12, 1996; and PhP
30,000 on August 21, 1996.
2nd Recruit: In May 1996, Valenciano visited the house of Allan De Villa, accompanied by
Euziel N. Dela Cuesta, Eusebio T. Candelaria, and De Luna, to recruit De Villa as a factory
worker in Taiwan. De Villa was also asked for PhP 70,000 as placement fee.
3rd Recruit: On May 20, 1996, Valenciano, accompanied by Rodante and Puring Caraeg,
went to the house of Dela Cuesta to recruit her for employment as a factory worker in

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Taiwan. Dela Cuesta paid Valenciano PhP 20,000 as initial payment on May 20, 1996. On
May 30, 1996, she paid Valenciano another PhP 20,000. On August 12, 1996, she paid PhP
15,000, and on August 21, 1996, she paid PhP 7,000.
4th Recruit: On May 1, 1996, Valenciano, with Rodante, Teresita, and Rommel Imperial,
went to Lian, Batangas to recruit workers for employment abroad. Candelaria applied for
a job as a factory worker in Taiwan when Valenciano went to his residence in Lian.
Valenciano asked him for an initial payment of PhP 20,000. On May 30, 1996, Candelaria
paid Valenciano PhP 20,000 when she returned to Lian. He then paid PhP 20,000 on June
24, 1996 and PhP 29,000 on July 17, 1996 at Valenciano’s residence in Manila.
Filling-up of Application Forms: After the payments were made, Valenciano brought the
prospective workers to the office of Middle East International Manpower Resources, Inc. in
Pasay City, where they were made to fill out application forms for their employment as
factory workers in Taiwan. The complainants were introduced to Romeo Marquez, alias
"Rodante Imperial," Teresita Marquez, alias "Teresita Imperial," and Rommel Marquez,
alias "Rommel Imperial," whom Valenciano made to appear as the owners of the
employment agency. She assured the prospective workers that they could leave for Taiwan
within one month from the filing of their applications.
Charge: However, during the period material, they have not yet found employment as
factory workers in Taiwan. Hence, Valenciano, Rodante, Teresita, and Rommel were
charged with the offense of illegal recruitment in large scale, as defined under Article 13(b)
of the Labor Code.
RTC Ruling: Lourdes Valenciano is found guilty beyond reasonable doubt of the offense of
illegal recruitment in large scale. The other accused remain at large.
CA Ruling: On appeal, CA affirmed the decision of the trial court finding accused-appellant
guilty of the offense charged.
Lourdes Valenciano Argument: She claims that she was an ordinary employee of Middle
East International Manpower Resources, Inc., where her other co-accused were the owners
and managers. She also denies receiving payment from the complainants; that had she
promised employment in Taiwan; this promise was made in the performance of her duties
as a clerk in the company. She denies too having knowledge of the criminal intent of her co-
accused, adding that she might even be regarded as a victim in the present case, as she was
in good faith when she made the promise.
Issue:
Will the position of Lourdes Valenciano being a mere employee of her other co-accused
relieve her from liability of the crime charged?
Ruling:

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No, Lourdes Valenciano being a mere employee of the company engaged in illegal
recruitment may be held liable as principal, together with his employer, if it is shown that
the employee actively and consciously participated in illegal recruitment.
Lourdes Valenciano actively and consciously participated in recruitment: On the case,

as testified to by the complainants, Lourdes Valenciano was among those who met and
transacted with them regarding the job placement offers. In some instances, she made the
effort to go to their houses to recruit them. She even gave assurances that they would be
able to find employment abroad and leave for Taiwan after the filing of their applications.
Lourdes Valenciano was clearly engaged in recruitment activities, notwithstanding her
gratuitous protestation that her actions were merely done in the course of her employment
as a clerk.
Good faith is not a defense: Lourdes Valenciano cannot claim to be merely following the
dictates of her employers and use good faith as a shield against criminal liability. As held in
People v. Gutierrez, appellant cannot escape liability by claiming that she was not aware
that before working for her employer in the recruitment agency, she should first be
registered with the POEA. Illegal recruitment in large scale is malum prohibitum, not malum
in se. Hence, good faith is not a defense.
Whether for profit or not: Promises or offers for a fee employment warrants
conviction for illegal recruitment: The claim of Lourdes Valenciano that she received no
payment and that the payments were handed directly over to her co-accused fails in the
face of the testimony of the complainants that accused-appellant was the one who received
the money. In spite of the receipts having been issued by her co-accused, the trial court
found that payments were directly made to accused-appellant, and this finding was upheld
by the CA. And even if it were true that no money changed hands, money is not material to
a prosecution for illegal recruitment, as the definition of "recruitment and placement" in
the Labor Code includes the phrase, "whether for profit or not." We held in People v.
Jamilosa that it was "sufficient that the accused promises or offers for a fee employment to
warrant conviction for illegal recruitment."
Same: Same: Lourdes Valenciano made representations that complainants would receive
employment abroad, and this suffices for her conviction, even if her name does not appear
on the receipts issued to complainants as evidence that payment was made.
No Authority by POEA to Recruit: On July 8, 1997 POEA, through its employee, Corazon
Aquino issued a certification providing that neither accused-appellant nor her co-accused
had authority to recruit workers for overseas employment. Another certification dated July
9, 1997 stated that accused-appellant in her personal capacity was not licensed or
authorized to recruit workers for overseas employment and that any recruitment activities
undertaken by her are illegal.
Large Scale Illegal Recruitment: Accused-appellant was convicted of Illegal Recruitment

in Large Scale, and there could be no other result. As held in Jamilosa, to prove illegal
recruitment in large scale, the prosecution is burdened to prove 3 essential elements, to
wit: (1) the person charged undertook a recruitment activity under Article 13(b) or any

Page 41 of 50
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.
Same: Elements were proven: there are four complainants: De Luna, De Villa, Dela
Cuesta, and Candelaria. The three essential elements for illegal recruitment in large scale
are present. Thus, there can be no other conclusion in this case but to uphold the conviction
of accused-appellant and apply the penalty as imposed by law.
People v. Antonio Nogra, GR No 170834, August 29, 2008
Facts:
Appellant held office at Loran International Overseas Recruitment Co., in Concepcion

Grande, Naga City. A nameplate on his table prominently displayed his name and position
as operations manager. The license of Loran also indicated appellant as the operations
manager. The POEA files also reflect his position as operations manager of Loran.
1st Recruit: In December 1996, Renato Alden went to Loran to apply for a job as hotel
worker for Saipan. Appellant promised Alden that he would leave within a period of three
to four months. After one year of waiting Alden was not able to leave.
2nd Recruit: On April 18, 1997, Teofila Lualhati applied for employment as hotel worker
for Saipan with Loran. She was promised that within 120 days or 4 months she would be
able to leave. Despite repeated follow-ups, Lualhati was unable to work in Saipan.
3rd Recruit: In April 1998, Filipina Mendoza went to Loran to apply for employment as
hotel worker. She paid the amount of P35, 000.00 as placement fee. When she was not able
to work abroad, she went to Loran and sought the return of P35, 000.00 from appellant
4th Recruit: In October 1997, Kerwin Donacao went to Loran to apply for employment as
purchaser in Saipan. After paying the placement fee, he was told to wait for two to three
months. When he was not able to leave for Saipan, he demanded the return of the
placement fee, which was not refunded.
5th Recruit: In November 1997, Annelyn Sarmiento and her husband, Oliver Sarmiento,
applied for overseas employment. For the application of Oliver Sarmiento, they submitted
his medical certificate and certification of previous employment. Oliver Sarmiento was
promised that within 1 month, he would be able to leave. Initially, Oliver Sarmiento was
told that allegedly his visa was yet to be obtained. When he was not able to leave and what
he paid was not refunded, he filed a complaint with the NBI
6th Recruit: In May 1997, Fe Zaballa applied for overseas employment in Saipan with
Loran. She was required to submit her medical certificate, original copy of her birth
certificate, NBI clearance and police clearance. She was also required to pay the amount of
P35, 000.00 as placement fee. When she could not be deployed, she sought to recover the
amount she paid, which was not returned

Page 42 of 50
Appellant Argument: Appellant started working with LORAN in October 1994. In 1995, he
was transferred to Naga City when the agency opened a branch office thereat. Although he
was designated as the Operations Manager, appellant was a mere employee of the agency.
He was receiving a monthly salary of P5, 000.00 and additional P2, 000.00 monthly meal
allowances.
RTC Ruling: Found appellant guilty beyond reasonable doubt of the crime charged.
CA Ruling: CA held that being an employee is not a valid defense since employees who
have knowledge and active participation in the recruitment activities may be criminally
liable for illegal recruitment activities, based upon this Court's ruling in People v. Chowdury
and People v. Corpuz; that appellant had knowledge of and active participation in the
recruitment activities since all the prosecution witnesses pinpointed appellant as the one
whom they initially approached regarding their plans of working overseas and he was the
one who told them about the fees they had to pay, as well as the papers that they had to
submit; that the mere fact that appellant was not issued special authority to recruit does
not exculpate him from any liability but rather strongly suggests his guilt; that appellant's
invocation of non-flight cannot be weighed in his favor since there is no established rule
that non-flight is, in every instance, an indication of innocence.
Appellant Argument: Appellant argues that the agency was under the management and
control of Orciga, and that he was a mere employee; that he could not be held personally
liable for illegal recruitment in the absence of any showing that he was validly issued
special authority to recruit workers, which was approved by the POEA; that his non-flight is
indicative of his innocence.
Issue:
Can Loran International Overseas Recruitment Co., Ltd. a duly licensed recruitment agency
be held liable for illegal recruitment?
Can a mere employee be held liable for illegal recruitment, as alleged by the appellant?
Ruling:
First Issue
Yes, under R.A. No. 8042, even a licensee or holder of authority can be held liable for illegal
recruitment, should he commit or omit to do any of the acts enumerated in Section 6.
Evidence for the prosecution showed that Loran International Overseas Recruitment Co.,
Ltd. is a duly licensed recruitment agency with authority to establish a branch office.
Section 6 of R.A. No. 8042 defined when recruitment is illegal: … it shall

likewise include the following acts, whether committed by any person,
whether a non-licensee, non-holder, licensee or holder of authority:
(l) Failure to actually deploy without valid reason as determined by the

Department of Labor and Employment; and

Page 43 of 50
(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. …
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.
Appellant was charged with illegal recruitment in large scale under Section 6 (l) and (m) of
R.A. No. 8042.
Prosecution failed to present evidence from DOLE: Section 6 (l) of R.A. No. 8042 not
violated: A thorough scrutiny of the prosecution's evidence reveals that it failed to prove
appellant's liability under Section 6 (l) of R.A. No. 8042. The law requires not only that the
failure to deploy be without valid reason "as determined by the Department of Labor and
Employment." The law envisions that there be independent evidence from the DOLE to
establish the reason for non-deployment, such as the absence of a proper job order. No
document from the DOLE was presented in the present case to establish the reason for the
accused's failure to actually deploy private complainants. Thus, appellant cannot be held
liable under Section 6 (l) of R.A. No. 8042.
Section 6 (m) of R.A. No. 8042 was violated: As to Section 6 (m) of R.A. No. 8042, the
prosecution has proven beyond reasonable doubt that private complainants made
payments to Loran, and appellant failed to reimburse the amounts paid by private
complainants when they were not deployed.
Second Issue
Yes, the penultimate paragraph of Section 6 of R.A. No. 8042 explicitly states that those
criminally liable 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 appellant's claim, the testimonies of the complaining witnesses and the
documentary evidence for the prosecution clearly established that he was not a mere
employee of Loran, but its Operations Manager. The license of Loran, the files of the POEA
and the nameplate prominently displayed on his office desk reflected his position as
Operations Manager. As such, he received private complainants' job applications; and
interviewed and informed them of the agency’s requirements prior to their deployment,
such as NBI clearance, police clearance, medical certificate, previous employment
certificate and the payment of placement fee. He was also responsible for the radio
advertisements and leaflets, which enticed complaining witnesses to apply for employment
with the agency. Clearly, as Operations Manager, he was in the forefront of the recruitment
activities.
A mere employee is not a shield against conviction for large illegal recruitment: The
defense of being a mere employee is not a shield against his conviction for large scale illegal
recruitment. In People v. Gasacao and People v. Sagayaga, the Court reiterated that an

Page 44 of 50
employee of a company or corporation engaged in illegal recruitment may be held liable as

principal by direct participation, together with its employer, if it is shown that he actively
and consciously participated in the recruitment process.
Appellant actively participated in the Recruitment: It was clearly established that

appellant dealt directly with the private complainants. He interviewed and informed them
of the documentary requirements and placement fee. He promised deployment within a
three or four month-period upon payment of the fee, but failed to deploy them and to
reimburse, upon demand, the placement fees paid.
Large Illegal Recruitment viz Economic Sabotage: Under the last paragraph of Section 6
of R.A. No. 8042, illegal recruitment shall be considered an offense involving economic
sabotage if committed in large scale, viz, committed against three or more persons
individually or as a group. In the present case, five complainants testified against
appellant’s acts of illegal recruitment, thereby rendering his acts tantamount to economic
sabotage. Under Section 7 (b) of R.A. No. 8042, the penalty of life imprisonment and a fine
of not less than P500, 000.00 nor more than P1, 000.000.00 shall be imposed if illegal
recruitment constitutes economic sabotage.
People v Fernando Manungas, GR No 91552-55, March 10, 1994
Facts:
In April of 1987, accused-appellant Fernando Manungas, Jr. went Pangasinan where he

stayed in the house of Arturo and Lilia de Vera to recruit workers for employment abroad.
During his stay, accused-appellant was able to convince complainants Wilfrey Mabalot,
Danilo Ramirez, Leonardo Estanoco and Crisanto Collado to apply as janitors in Saudi
Arabia. He told them to bring all the necessary documents for the processing of their
applications to his office in Manila.
When complainants failed to leave for Saudi Arabia, they requested Luis "Jing" Ramirez, to
verify with the POEA whether accused-appellant was licensed to recruit workers for
abroad. They subsequently learned that he was not as shown by the Certification issued by
the POEA.
Thereafter, complaints filed against accused-appellant complaints for Estafa defined under
par. 2(a), Article 315 of the Revised Penal Code and Illegal Recruitment on a Large Scale. In
due course, informations for 3 counts of Estafa and Illegal Recruitment on a Large Scale
were filed against accused-appellant before the Regional Trial Court Pangasinan.
Appellant Argument: The job order for the janitorial services was awarded to Express
Placement Agency instead of ZG Recruitment and Placement agency. Thereafter, accused-
appellant transferred complainants' application for overseas employment to Nora Cunanan
of Express Placement Agency. Accused-appellant also turned over the fees paid by the
complainants to Nora Cunanan as evidenced by the receipts issued by the latter. When
Nora Cunanan absconded with the money of the complainants, accused-appellant filed an
estafa case against Nora Cunanan after securing a Special Power of Attorney from the

Page 45 of 50
complainants to prosecute and collect their money. However, he was not able to attend the
hearing as he was arrested in connection with these cases.
Same: Mere employee: Accused-appellant maintains that he did not make false
representations to the complainants when he requited the latter for employment abroad as
he had told complainants that he is only an employee of a licensed recruitment agency in
Manila. He further claims that he was not motivated by any deceitful intentions and had not
caused any damage to the complainants because the amounts of money given to him by the
latter were actually spent for their medical tests and other documents necessary for their
overseas employment.
Issue:
Was there an illegal Recruitment?
Ruling:
Yes, the appellant committed the crime of illegal recruitment.
There is illegal recruitment when one gives the impression of his ability to send a
worker abroad: Appellant told complainants to submit to him their pictures, birth
certificates, NBI clearances and the necessary documents for the processing of their
employment in Saudi Arabia. Thereafter, appellant collected from each of the complainants
payment for the their respective passport, training fee, placement fee, medical tests and
other sundry expenses which unquestionably constitutes acts of recruitment within the
meaning of the law. Besides, there is illegal recruitment when one gives the impression of
his ability to send a worker abroad and there is evidence that appellant had represented to
the complainants that he could send them abroad as janitors in Saudi Arabia. And because
of his representation, complainants gave their hard earned money to accused-appellant in
consideration of the same representation.
Large Scale Illegal Recruitment: Thus accused-appellant is guilty of the crimes of Estafa
and Illegal Recruitment. Under Article 38 of the Labor Code, as amended, the crime of
illegal recruitment is qualified when the same is committed against 3 or more persons.
Separate Conviction of Illegal Recruitment and Estafa: A person who violates any of the
provisions under Article 13(b) and Article 34 of the Labor Code can be charged and
convicted separately of illegal recruitment and estafa [Revised Penal Code, Article 315,
2(a)] because illegal recruitment is a malum prohibitum where the criminal intent of the
accused is not necessary for a conviction while estafa is a malum in se where criminal
intent of the accused is necessary for a conviction.
People v. Mario Alzona, GR No 132029, July 30, 2004
Facts:
1st Recruit: Mario Regino Decena came to know of appellant because a friend of his,
Goring Rodil, was able to work abroad through the facilitation of appellant. Decena met
appellant at the latter’s house where appellant asked him to prepare P38, 000.00, inclusive

Page 46 of 50
of the P1, 000.00 for the passport, so he can leave within one month. Upon payment,
appellant refused to give him a receipt for the amounts he paid. Despite having paid the
total of P34, 000.00, appellant failed to send him to work in Korea and also failed to return
his money.
2nd Recruit: Leonardo Mercurio also went to appellant’s house and applied to appellant
and his wife for work abroad. Mercurio and his brother-in-law, Fernando Dela Cruz, were
accompanied by Decena who had also applied to the spouses Alzona for overseas work.
Mercurio talked mainly to appellant’s wife, Miranda, in the presence of appellant.
Same: The total fees being asked for by appellant was P38, 000.00. After receiving the P20,
000.00, appellant reminded Mercurio to pay the balance so he can depart within a week for
Korea where appellant promised him employment as a factory worker with a monthly
salary of at least $450.00. Mercurio was not able to depart by the first week of April as
promised by appellant but he continued to follow-up his application.
3rd Recruit: James Mazon had a similar experience with appellant and Miranda. After
having heard that appellant and Miranda were accepting applicants for employment
abroad, Mazon went to appellant’s residence during the first week of January, 1992.
Appellant and Miranda promised that he would be deployed to Korea where he will be
employed as a factory worker.
Same: Upon receiving such partial payment, appellant promised him that he would be
deployed within one to two months. He was never deployed to Korea and he heard from
the other private complainants who were also from Mulanay, Quezon, that appellant was
already in jail.
POEA: POEA testified that appellant was neither licensed nor authorized by the POEA to
recruit workers for overseas employment.
Defense Testimony
Defense Argument: Jeepney Driver from 7am to 9pm: Appellant merely denied that he
ever met, talked to or received money from the private complainants; nor had he been
involved in illegal recruitment. He presented the alibi that he, being a jeepney driver, was
out of their house every day from 7 o’clock in the morning to around 9 o’clock in the
evening, so private complainants could not have talked to him at his house.
Wife’s engagement to Recruitment: Appellant, however, admitted that in 1989, he found

out that his wife was engaged in recruiting workers for abroad. In fact, his wife had been
going back and forth to Korea around six times a year since 1990, to accompany people. He
stopped being a jeepney driver on July 15, 1992, because so many people were going to
their house.
Defense Daughter Testimony: Appellant’s daughter, Marites Alzona, corroborated her

father’s testimony that he is a jeepney driver and is out of their house every day from 6
o’clock in the morning to 10 o’clock in the evening, and therefore, private complainants
could not have met her father.

Page 47 of 50
Same: She admitted that she had seen private complainants talking to her mother at their
house beginning August 1991 but she was unaware as to what their purpose was for
coming to their house. She would see them at their house around four times a month, but
the last time she saw them was in July 1992. Her mother left for Korea on July 15, 1992 and
thereafter, every time private complainants would come looking for her mother, she would
be the one to talk to them. When she told them that her mother had left for Korea, private
complainants became angry.
Sister testimony on the 12 hrs driving of Appellant: Appellant’s sister, Esther Panday,
testified that she owns the jeepney being driven by appellant every day, twelve hours a day.
Such being the case, she believed appellant could not have engaged in any other sideline
such as recruiting workers for abroad.
RTC Ruling: The court finds the accused Mario Alzona GUILTY beyond reasonable doubt of
Illegal Recruitment in large scale and of 4 separate crimes of estafa.
CA Ruling: The CA affirmed the decision of the trial court with modifications as to the
penalty of the appellant.
Appellant’s Argument: Appellant points out that the testimonies of Mercurio, Dela Cruz
and Mazon showed that it was actually only Miranda who transacted with private
complainants. Therefore, argues appellant, there was no sufficient evidence to prove that
appellant was acting in confederation with his wife.
Issue:
Is Mario Alzona confederated with his wife for the illegal recruitment of the complainants?
Is he liable for the crime of estafa for allegedly defrauding complainants by

misrepresenting that they had the power, influence, agency and business to obtain
overseas employment upon payment of a placement fee?
Ruling:
First Issue
Yes, the testimonies of the four private complainants, viewed in their totality, have indeed
established that appellant and Miranda cooperated with each other in convincing private
complainants to pay them a placement fee of P38, 000.00 for employment as factory
workers in Korea, despite the absence of the required license therefor.
The testimony of complainant established the cooperation between the Sps Alzona in
the Illegal Recruitment: A scrutiny of the entirety of all four private complainants’
testimonies would show that sometimes, it would be appellant who would transact
business with private complainants and at other times, it would be appellant’s wife
Miranda. Most damning for appellant, however, is the fact that all the private complainants
categorically stated that it was appellant who received sums of money from them and
refused to issue a receipt. Such fact shows that he actively engaged in the recruitment of

Page 48 of 50
three or more workers for employment abroad despite the lack of the necessary license
from the POEA, which act constitutes the crime of illegal recruitment in large scale.
Second Issue
Yes, the very same evidence proving appellant’s commission of the crime of illegal
recruitment in large scale also established that appellant and Miranda acted with unity of
purpose in defrauding private complainants by misrepresenting that they had the power,
influence, agency and business to obtain overseas employment for private complainants
upon payment of a placement fee, which complainants did pay and deliver to appellant.
People v. Mary Rose Ondo et al, GR 101361, November 8, 1993
Facts:
1st Recruit: On January 9, 1989, Perfecta Calderon, the sister and cousin of private
complainants Frederico Calderon and Erlinda Cortez, respectively, received a call from her
sister Angelita Calderon who was in Italy. Angelita instructed her to wait for the call of
appellant regarding the recruitment of her brother Frederico and cousin Erlinda Cortez
for jobs in Italy. A few days thereafter, she received a call from appellant who asked for the
passports, pictures and birth certificates of Frederico and Erlinda so that appellant could
process the requisite documentations for their departure to Italy. Likewise, appellant also
demanded the amount of $ 5,000 as payment for the plane tickets of both applicants.
Same: At the residence of appellant, Perfecta handed over the documents and the $ 5,000
to Simeon Ortega who signed a receipt to evidence payment. Ortega then handed the
money to appellant. Before leaving appellant's residence, Perfecta inquired for the date of
departure of her brother and cousin, but was told by appellant to wait for her call. The call,
however, never came, so she demanded for the return of the money and the documents.
Only the documents were returned.
Same: Her brother and cousin though were able to leave for and are already working in
Italy through the assistance of another travel agency.
2nd Recruit: In December 1988, private complainant Fidela Engada was introduced by her
brother Wilfredo to appellant through a letter. Wilfredo Engada instructed her auntie Lucy
Engada by phone to bring complainant to appellant for the latter to process her papers for
abroad.
Same: On December 28, 1988, private complainant and Lucy Engada went to appellant's
residence where she was introduced to appellant. Private complainant manifested he
desire to go abroad through the help of appellant per her brother's recommendation.
Same: Private complainant was informed by appellant of her departure on August 18,
1989. However, private complainant was not able to depart for Italy. She then tried to see
appellant at her residence but to no avail; appellant could no longer be located.
3rd Recruit: Dulce Garcia was introduced to appellant through a letter from appellant's
friend, Lilia Gonzales. Garcia paid all the Placement Fee and submitted all documents upon

Page 49 of 50
the demand of the appellant. Garcia was latter scheduled for departure on June 6, 1989 but
Garcia was not able to depart because a day before the schedule, appellant allegedly
hospitalized hence Garcia’s flight was re-scheduled on August 8, 1989 but again Garcia was
not able to depart. Appellant promised that her flight shall be rescheduled within the same
month but she was not able to leave.
RTC Ruling: Convicted appellant for the crime of illegal recruitment.
Appellant’s Argument
She invokes the provisions of Article 192, which she alleges the court a quo failed to apply
to her benefit. Under said Article, the trial court shall suspend the sentencing and
commitment of youthful offenders and instead commit them to the custody of the
Department of Social Services and Development or to any training institution until they
shall have reached 21 years of age.
Issue:
Did Mary Rose Ondo commit acts constituting violation of the Labor Code?
Should Mary Rose be released for being a youthful offender (16 years old) on recognizance,
to the custody of his parents or other suitable person who shall be responsible for his
appearance whenever required?
Ruling:
First Issue
Yes, the evidence on record shows that the complainants positively identified appellant as
the one who recruited them for jobs in Italy as domestic helpers and who demanded
P65,000.00 from each of them as payment for the facilitation of their travel documents. It
was appellant's promise to complainants of job opportunities abroad that lured them to
part with their money.
Essential Elements of Illegal Recruitment: Illegal recruitment has two essential

elements, to wit: (1) the accused must be engaged in the recruitment and placement of
workers, whether locally or overseas and; (2) the accused has not complied with such
guidelines, rules and regulations issued by the Secretary of Labor and Employment,
particularly with respect to the securing of license or authority to recruit and deploy
workers either locally or overseas.
The elements of Illegal Recruitment are present on the case: The essential elements
are present in the case at bench. Appellant promised overseas employment to the
complainants for a fee, which the latter paid. In fact, appellant admitted that the money she
received from the complainants was in connection with the processing of their visas,
passports and plane tickets. She also admitted that she failed to make good her promise to
send them abroad.

Page 50 of 50
No License nor Authority before the POEA to recruit workers: Appellant is neither
licensed nor authorized to recruit workers for overseas employment as testified by Virginia
Santiago of the Inspection Division of the Licensing Board of the POEA.
Second Issue
No, shall not be released for being a youthful offender on recognizance, to the custody of his
parents or other suitable person who shall be responsible for his appearance whenever
required. The provision is operative only during the trial or pending the appeal of the
minor-accused.
Article 191 of P.D. 603 provides:
Care of Youthful Offender Held for Examination or Trial. — A youthful

offender held for physical and mental examination or trial or pending
appeal, if unable to furnish bail, shall be from the time of his arrest be
committed to the care of the Department of Social Services and Development
or the local rehabilitation center or a detention home in the province or city
which shall be responsible for his appearance in court whenever required:
Provided, That in the absence of any such center or agency within a
reasonable distance from the venue of the trial, the provincial, city or
municipal jail shall provide quarters for youthful offenders separate from
other detainees. The court may, in its discretion, upon recommendation of
the Department of Social Services and Development or other agency or
agencies authorized by the court, release a youthful offender on
recognizance, to the custody of his parents or other suitable person who
shall be responsible for his appearance whenever required. However, in
case of those whose cases fall under the exclusive jurisdiction of the Military
Tribunals, they may be committed at any military detention or rehabilitation
center. (Emphasis supplied)
Life imprisonment as an exception to the rule on youthful offender: Article 192

provides that it "shall not apply to a youthful offender who has once enjoyed suspension of
sentence under its provisions or to one who is convicted of an offense punishable by death
or life imprisonment." Appellant was convicted by the court a quo of illegal recruitment and
was sentenced to suffer the penalty of life imprisonment. Clearly, her case falls under the
exception provided for by the Child and Youth Welfare Code.
Large Scale Illegal Recruitment: Under Section 39 of the Labor Code, as amended, the
penalty of life imprisonment is correctly imposed where illegal recruitment is committed in
"large scale," which means that it is committed against three or more persons. In this case,
appellant victimized Erlinda Cortez, Fidela Engada, Myra Siguenza, Dulce Garcia and
Emilinda Padua.

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Page 1 of 50

Extent and Limits of Protection of Labor

Pacific Mills, Inc. v. Zenaida Alonzo, GR No 78090, July 1991

Is Zenaida entitled to be rewarded with reemployment?

Is Zenaida illegally dismissed?

Khennete M. Abrugar A.C. 2017-2018

Khennete M. Abrugar A.C. 2017-2018

CIR Ruling on July 31, 1950:

2. The prohibition does not prohibit a strike of new demands;

3. The strike was not a violation of the order;

Is the decision of CIR had become final and unappealable?

Khennete M. Abrugar A.C. 2017-2018

Is there employer-employee relationship between ABS-CBN and Jose Sonza?

Khennete M. Abrugar A.C. 2017-2018

Khennete M. Abrugar A.C. 2017-2018

Petitioner was a salesman of respondent company earning a commission of 3% of the total

Is the petitioner, as a commission salesman, an employee of Respondent Corporation?

No, the petitioner was not an employee of the Corporation.

To determine the existence of an employee-employer relationship, we apply the four fold

Applying the aforementioned test, an employer-employee relationship is notably absent in

Khennete M. Abrugar A.C. 2017-2018

Jo vs. NLRC, G.R. No. 121605, February 2, 2000

Private respondent working as a barber on piece-rate basis was designated by petitioners

Was there an employer-employee relationship between Jo and Barbershop?

Was Mejila dismissed from his employment?

Khennete M. Abrugar A.C. 2017-2018

Yes. In determining the existence of an employer-employee relationship, the following

Filamer Christian Institute v. Court of Appeals

NOTE: This case reversed Filamer v. IAC (October 16, 1990)

Khennete M. Abrugar A.C. 2017-2018

Is Filamer subsidiarily liable?

Khennete M. Abrugar A.C. 2017-2018

Angel Jardin v. NLRC, G.R. No. 119268, February 23, 2000

Were the petitioner taxi drivers, employees of respondent company?

Hence, petitioners are undoubtedly employees of private respondent because as taxi

Khennete M. Abrugar A.C. 2017-2018

A: No. Company Q exhausted administrative remedies available to it by seeking an MR.

Khennete M. Abrugar A.C. 2017-2018

Is there an employer- employee relationship between Ty and BCC?

No. there was no ER-EE relationship between Ty and BCC.

In determining the presence or absence of an employer-employee relationship, the Court

Khennete M. Abrugar A.C. 2017-2018

In their answer, respondents contended that no employer-employee relationship ever

NLRC SET ASIDE AND VACATED LA Decision.

Is Lolita Lopez an employee of Bodega City?

Khennete M. Abrugar A.C. 2017-2018

No, Lolita was not an employee of Bodega City.

To ascertain the existence of an employer-employee relationship, jurisprudence has

Khennete M. Abrugar A.C. 2017-2018

The principle of estoppel in pais applies wherein — by one’s acts, representations or

Khennete M. Abrugar A.C. 2017-2018

Khennete M. Abrugar A.C. 2017-2018

Was there an employer-employee relationship between the petitioners and the

The Court sustains that Decision of the Court of Appeals.

LABOR LAW: employer-employee relationship

In order to establish the existence of an employer-employee relationship, the four-fold test

Khennete M. Abrugar A.C. 2017-2018

However, where reinstatement is no long feasible as an option, back wages shall be

Not every form of control is indicative of employer-employee relationship. 1 A person who