Labor Law Review Cases

1)
G.R. No. 146964 August 10, 2006
ROSA C. RODOLFO, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.
CARPIO MORALES, J.:
Petitioner was charged before the Regional Trial Court (RTC) of Makati for illegal recruitment alleged
to have been committed as follows:
That in or about and during the period from August to September 1984, in Makati, Metro Manila,
Philippines, and within the jurisdiction of this Honorable Court, the said accused representing herself
to have the capacity to contract, enlist and transport Filipino workers for employment abroad, did
then and there willfully and unlawfully, for a fee, recruit and promise employment/job placement
abroad to VILLAMOR ALCANTARA, NARCISO CORPUZ, 1 NECITAS R. FERRE, GERARDO H.
TAPAWAN and JOVITO L. CAMA, without first securing the required license or authority from the
Ministry of Labor and Employment. 2
After trial on the merits, Branch 61 of the Makati RTC rendered its Judgment on the case, 3 the
decretal portion of which reads:
WHEREFORE, PREMISES ABOVE CONSIDERED, the Court finds the accused ROSA C.
RODOLFO as GUILTY of the offense of ILLEGAL RECRUITMENT and hereby sentences her [to]
a penalty of imprisonment of EIGHT YEARS and to pay the costs. 4 (Underscoring supplied)
In so imposing the penalty, the trial court took note of the fact that while the information reflected the
commission of illegal recruitment in large scale, only the complaint of the two of the five
complainants was proven.
On appeal, the Court of Appeals correctly synthesized the evidence presented by the parties as
follows:
[The evidence for the prosecution] shows that sometime in August and September 1984, accused-
appellant approached private complainants Necitas Ferre and Narciso Corpus individually
and invited them to apply for overseas employment in Dubai. The accused-appellant being their
neighbor, private complainants agreed and went to the former’s office. This office which bore the
business name "Bayside Manpower Export Specialist" was in a building situated at Bautista St.
Buendia, Makati, Metro Manila. In that office, private complainants gave certain amounts to appellant
for processing and other fees. Ferre gave P1,000.00 as processing fee (Exhibit A) and
another P4,000.00 (Exhibit B). Likewise, Corpus gave appellant P7,000.00 (Exhibit D). Appellant
then told private complainants that they were scheduled to leave for Dubai on September 8, 1984.
However, private complainants and all the other applicants were not able to depart on the said date
as their employer allegedly did not arrive. Thus, their departure was rescheduled to September 23,
but the result was the same. Suspecting that they were being hoodwinked, private complainants
demanded of appellant to return their money. Except for the refund of P1,000.00 to Ferre, appellant
was not able to return private complainants’ money. Tired of excuses, private complainants filed the
present case for illegal recruitment against the accused-appellant.
To prove that accused-appellant had no authority to recruit workers for overseas employment, the
prosecution presented Jose Valeriano, a Senior Overseas Employment Officer of the Philippine
Overseas Employment Agency (POEA), who testified that accused-appellant was neither licensed
nor authorized by the then Ministry of Labor and Employment to recruit workers for overseas
employment.
For her defense, appellant denied ever approaching private complainants to recruit them for
employment in Dubai. On the contrary, it was the private complainants who asked her help in
securing jobs abroad. As a good neighbor and friend, she brought the private complainants to the
Bayside Manpower Export Specialist agency because she knew Florante Hinahon, 5 the owner of the
said agency. While accused-appellant admitted that she received money from the private
complainants, she was quick to point out that she received the same only in trust for delivery to the
agency. She denied being part of the agency either as an owner or employee thereof. To
corroborate appellant’s testimony, Milagros Cuadra, who was also an applicant and a companion of
private complainants, testified that appellant did not recruit them. On the contrary, they were the
ones who asked help from appellant. To further bolster the defense, Eriberto C. Tabing, the
accountant and cashier of the agency, testified that appellant is not connected with the agency and
that he saw appellant received money from the applicants but she turned them over to the agency
through either Florantino Hinahon or Luzviminda Marcos. 6 (Emphasis and underscoring supplied)
In light thereof, the appellate court affirmed the judgment of the trial court but modified the penalty
imposed due to the trial court’s failure to apply the Indeterminate Sentence Law.
The appellate court thus disposed:
WHEREFORE, finding no merit in the appeal, this Court DISMISSES it and AFFIRMS the appealed
Decision EXCEPT the penalty x x x which is hereby changed to five (5) years as minimum to seven
(7) years as maximum with perpetual disqualification from engaging in the business of recruitment
and placement of workers. 7 (Underscoring supplied)
Petitioner’s Motion for Reconsideration having been denied, 8 the present petition was filed, faulting
the appellate court
x x x IN GIVING CREDENCE TO THE TESTIMONIES OF THE COMPLAINING WITNESSES,

[AND]
II
x x x IN FINDING THE PETITIONER-ACCUSED GUILTY WHEN THE PROSECUTION FAILED TO

PROVE HER GUILT BEYOND REASONABLE DOUBT. 9 (Underscoring supplied)
Petitioner bewails the failure of the trial court and the Court of Appeals to credit the testimonies of
her witnesses, her companion Milagros Cuadra, and Eriberto C. Tabing who is an accountant-
cashier of the agency.
Further, petitioner assails the trial court’s and the appellate court’s failure to consider that the
provisional receipts she issued indicated that the amounts she collected from the private
complainants were turned over to the agency through Minda Marcos and Florante Hinahon. At any
rate, she draws attention to People v. Señoron 10 wherein this Court held that the issuance or signing
of receipts for placement fees does not make a case for illegal recruitment. 11
The petition fails.
Articles 38 and 39 of the Labor Code, the legal provisions applicable when the offense charged was
committed, 12 provided:
ART. 38. Illegal Recruitment. – (a) Any recruitment activities, including the prohibited practices
enumerated under Article 34 of this Code, to be undertaken by non-licensees or non-holders of
authority shall be deemed illegal and punishable under Article 39 of this Code. x x x
Article 39. Penalties. – x x x x
(c) Any person who is neither a licensee nor a holder of authority under this Title found violating any
provision thereof or its implementing rules and regulations shall, upon conviction thereof, suffer the
penalty of imprisonment of not less than four years nor more than eight years or a fine of not less
than P20,000 nor more than P100,000 or both such imprisonment and fine, at the discretion of the
court;
x x x x (Underscoring supplied)
The elements of the offense of illegal recruitment, which must concur, are: (1) that the offender has
no valid license or authority required by law to lawfully engage in recruitment and placement of
workers; and (2) that the offender undertakes any activity within the meaning of recruitment and
placement under Article 13(b), or any prohibited practices enumerated under Article 34 of the Labor
Code. 13 If another element is present  that the accused commits the act against three or more
persons, individually or as a group, it becomes an illegal recruitment in a large scale. 14
Article 13 (b) of the Labor Code defines "recruitment and placement" as "[a]ny 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." (Underscoring supplied)
That the first element is present in the case at bar, there is no doubt. Jose Valeriano, Senior
Overseas Employment Officer of the Philippine Overseas Employment Administration, testified that
the records of the POEA do not show that petitioner is authorized to recruit workers for overseas
employment. 15 A Certification to that effect was in fact issued by Hermogenes C. Mateo, Chief of the
Licensing Division of POEA. 16
Petitioner’s disclaimer of having engaged in recruitment activities from the very start does not
persuade in light of the evidence for the prosecution. In People v. Alvarez, this Court held:
Appellant denies that she engaged in acts of recruitment and placement without first complying with
the guidelines issued by the Department of Labor and Employment. She contends that she did not
possess any license for recruitment, because she never engaged in such activity.
We are not persuaded. In weighing contradictory declarations and statements, greater weight must
be given to the positive testimonies of the prosecution witnesses than to the denial of the defendant.
Article 38 (a) clearly shows that illegal recruitment is an offense that is essentially committed by a
non-licensee or non-holder of authority. A non-licensee means any person, corporation or entity to
which the labor secretary has not issued a valid license or authority to engage in recruitment and
placement; or whose license or authority has been suspended, revoked or cancelled by the POEA or
the labor secretary. A license authorizes a person or an entity to operate a private employment
agency, while authority is given to those engaged in recruitment and placement activities.
xxxx
That appellant in this case had been neither licensed nor authorized to recruit workers for overseas
employment was certified by Veneranda C. Guerrero, officer-in-charge of the Licensing and
Regulation Office; and Ma. Salome S. Mendoza, manager of the Licensing Branch – both of the
Philippine Overseas Employment Administration. Yet, as complainants convincingly proved, she
recruited them for jobs in Taiwan. 17 (Italics in the original; underscoring supplied)
The second element is doubtless also present. The act of referral, which is included in
recruitment, 18 is "the act of passing along or forwarding of an applicant for employment after an
initial interview of a selected applicant for employment to a selected employer, placement officer or
bureau." 19 Petitioner’s admission that she brought private complainants to the agency whose owner
she knows and her acceptance of fees including those for processing betrays her guilt.
That petitioner issued provisional receipts indicating that the amounts she received from the private
complainants were turned over to Luzviminda Marcos and Florante Hinahon does not free her from
liability. For the act of recruitment may be "for profit or not." It is sufficient that the accused "promises
or offers for a fee employment" to warrant conviction for illegal recruitment. 20 As the appellate court
stated:
x x x Sec. 13(b) of P.D. 442 [The Labor Code] does not require that the recruiter receives and keeps
the placement money for himself or herself. For as long as a person who has no license to engage in
recruitment of workers for overseas employment offers for a fee an employment to two or more
persons, then he or she is guilty of illegal recruitment. 21
Parenthetically, why petitioner accepted the payment of fees from the private complainants when, in
light of her claim that she merely brought them to the agency, she could have advised them to
directly pay the same to the agency, she proferred no explanation.
On petitioner’s reliance on Señoron, 22 true, this Court held that issuance of receipts for placement
fees does not make a case for illegal recruitment. But it went on to state that it is "rather
the undertaking of recruitment activities without the necessary license or authority" that makes a
case for illegal recruitment. 23
A word on the penalty. Indeed, the trial court failed to apply the Indeterminate Sentence Law which
also applies to offenses punished by special laws.
Thus, Section 1 of Act No. 4103 (An Act to Provide for an Indeterminate Sentence and Parole for All
Persons Convicted of Certain Crimes by the Courts of the Philippine Islands; To Create A Board of
Indeterminate Sentence and to Provide Funds Therefor; and for Other Purposes) provides:
SECTION 1. Hereafter, in imposing a prison sentence for an offense punished by the Revised Penal
Code, or its amendments, the court shall sentence the accused to an indeterminate sentence the
maximum term of which shall be that which, in view of the attending circumstances, could be
properly imposed under the rules of the said Code, and the minimum which shall be within the range
of the penalty next lower to that prescribed by the Code for the offense; and if the offense is
punished by any other law, the court shall sentence the accused to an indeterminate sentence, the
maximum term of which shall not exceed the maximum fixed by said law and the minimum shall not
be less than the minimum term prescribed by the same. (As amended by Act No. 4225)
(Underscoring supplied)
While the penalty of imprisonment imposed by the appellate court is within the prescribed penalty for
the offense, its addition of "perpetual disqualification from engaging in the business of recruitment
and placement of workers" is not part thereof. Such additional penalty must thus be stricken off.
2)
G.R. Nos. L-58674-77 July 11, 1990
PEOPLE OF THE PHILIPPINES, petitioner,

vs.
HON. DOMINGO PANIS, Presiding Judge of the Court of First Instance of Zambales &
Olongapo City, Branch III and SERAPIO ABUG, respondents.
CRUZ, J:
The basic issue in this case is the correct interpretation of Article 13(b) of P.D. 442, otherwise known
as the Labor Code, reading as follows:
(b) Recruitment and placement' refers to any act of canvassing, enlisting,

contracting, transporting, hiring, or procuring workers, and includes referrals, contract
services, promising or advertising for employment, locally or abroad, whether for
profit or not: Provided, That any person or entity which, in any manner, offers or
promises for a fee employment to two or more persons shall be deemed engaged in
recruitment and placement.
Four informations were filed on January 9, 1981, in the Court of First Instance of Zambales and
Olongapo City alleging that Serapio Abug, private respondent herein, "without first securing a license
from the Ministry of Labor as a holder of authority to operate a fee-charging employment agency, did
then and there wilfully, unlawfully and criminally operate a private fee charging employment agency
by charging fees and expenses (from) and promising employment in Saudi Arabia" to four separate
individuals named therein, in violation of Article 16 in relation to Article 39 of the Labor Code.
1
Abug filed a motion to quash on the ground that the informations did not charge an offense because
he was accused of illegally recruiting only one person in each of the four informations. Under the
proviso in Article 13(b), he claimed, there would be illegal recruitment only "whenever two or more
persons are in any manner promised or offered any employment for a fee. " 2
Denied at first, the motion was reconsidered and finally granted in the Orders of the trial court dated
June 24 and September 17, 1981. The prosecution is now before us on certiorari. 3
The posture of the petitioner is that the private respondent is being prosecuted under Article 39 in
relation to Article 16 of the Labor Code; hence, Article 13(b) is not applicable. However, as the first
two cited articles penalize acts of recruitment and placement without proper authority, which is the
charge embodied in the informations, application of the definition of recruitment and placement in
Article 13(b) is unavoidable.
The view of the private respondents is that to constitute recruitment and placement, all the acts
mentioned in this article should involve dealings with two or mre persons as an indispensable
requirement. On the other hand, the petitioner argues that the requirement of two or more persons is
imposed only where the recruitment and placement consists of an offer or promise of employment to
such persons and always in consideration of a fee. The other acts mentioned in the body of the
article may involve even only one person and are not necessarily for profit.
Neither interpretation is acceptable. We fail to see why the proviso should speak only of an offer or
promise of employment if the purpose was to apply the requirement of two or more persons to all the
acts mentioned in the basic rule. For its part, the petitioner does not explain why dealings with two or
more persons are needed where the recruitment and placement consists of an offer or promise of
employment but not when it is done through "canvassing, enlisting, contracting, transporting,
utilizing, hiring or procuring (of) workers.
As we see it, the proviso was intended neither to impose a condition on the basic rule nor to provide
an exception thereto but merely to create a presumption. The presumption is that the individual or
entity is engaged in recruitment and placement whenever he or it is dealing with two or more
persons to whom, in consideration of a fee, an offer or promise of employment is made in the course
of the "canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring (of) workers. "
The number of persons dealt with is not an essential ingredient of the act of recruitment and
placement of workers. Any of the acts mentioned in the basic rule in Article 13(b) win constitute
recruitment and placement even if only one prospective worker is involved. The proviso merely lays
down a rule of evidence that where a fee is collected in consideration of a promise or offer of
employment to two or more prospective workers, the individual or entity dealing with them shall be
deemed to be engaged in the act of recruitment and placement. The words "shall be deemed" create
that presumption.
This is not unlike the presumption in article 217 of the Revised Penal Code, for example, regarding
the failure of a public officer to produce upon lawful demand funds or property entrusted to his
custody. Such failure shall be prima facie evidence that he has put them to personal use; in other
words, he shall be deemed to have malversed such funds or property. In the instant case, the word
"shall be deemed" should by the same token be given the force of a disputable presumption or
of prima facie evidence of engaging in recruitment and placement. (Klepp vs. Odin Tp., McHenry
County 40 ND N.W. 313, 314.)
It is unfortunate that we can only speculate on the meaning of the questioned provision for lack of
records of debates and deliberations that would otherwise have been available if the Labor Code
had been enacted as a statute rather than a presidential decree. The trouble with presidential
decrees is that they could be, and sometimes were, issued without previous public discussion or
consultation, the promulgator heeding only his own counsel or those of his close advisers in their
lofty pinnacle of power. The not infrequent results are rejection, intentional or not, of the interest of
the greater number and, as in the instant case, certain esoteric provisions that one cannot read
against the background facts usually reported in the legislative journals.
At any rate, the interpretation here adopted should give more force to the campaign against illegal
recruitment and placement, which has victimized many Filipino workers seeking a better life in a
foreign land, and investing hard- earned savings or even borrowed funds in pursuit of their dream,
only to be awakened to the reality of a cynical deception at the hands of theirown countrymen.
3)
G.R. No. 208686 July 1, 2015
PEOPLE OF THE PHILIPPINES, Appellee,

vs.
ALELIE TOLENTINO a.k.a. "Alelie Tolentino y Hernandez," Appellant.
DECISION
CARPIO, J.:
This is an appeal from the 29 November 2012 Decision of the Court of Appeals in CA-G.R. CR-HC
1
No. 04558, affirming the trial court's decision, finding appellant Alelie Tolentino (appellant) guilty
beyond reasonable doubt of illegal recruitment and estafa.
The Facts
Appellant was charged with illegal recruitment and five (5) counts of estafa under Article 315,
paragraph 2(a) of the Revised Penal Code. The Informations against appellant read:
CRIM. CASE NO. 02-755
The undersigned Assistant City Prosecutor accuses ALELIE TOLENTINO of the crime of Illegal
Recruitment committed as follows:
That on or about [or sometime in] the last week of August, 2001 and 1st week of November, 2001
and thereafter, in the City of Muntinlupa, Philippines and within the jurisdiction of this Honorable
Court, the above-named accused jointly with NARCISA SANTOS did then and there willfully,
unlawfully and feloniously advertise for employment, enlist, contract and promise employment to the
following persons: LEDERLE PANESA, ORLANDO LAYOSO, JIMMY LEJOS, MARCELINO LEJOS
and DONNA MAGBOO for a fee without first securing license and/or permit from the government
agency concerned.
Contrary to law. 2
The undersigned Assistant City Prosecutor accuses ALELIE TOLENTINO of the crime of Estafa
under Art. 315 Par. 2(a) of the Revised Penal Code, as amended, committed as follows:
That on or about or sometime in the first week of August 2001 and thereafter, in the City of
Muntinlupa, Philippines and within the jurisdiction of this Honorable Court, the above-named
accused, by means of deceit, fraudulent acts and false pretenses executed prior to or
simultaneously with the commission of the fraud, did [then] and there willfully, unlawfully and
feloniously defraud one LEDERLE PANESA, in the following manner: accused represented to the
said complainant that she could secure work for the said complainant at Korea and she is capable of
processing the travel visa and other documents for her travel and employment at Korea and
demanded from the said complainant to pay the amount of ₱75,000.00 as placement fee; accused
well knew that such representations were false and made only to induce complainant to part with her
money as in fact complainant gave and delivered the amount of ₱15,000.00 as partial payment to
the accused; and accused once in possession of the said amount, did then and there willfully,
unlawfully and feloniously misappropriate, misapply and convert the same to her own personal use
and benefit to the damage and prejudice of the said complainant in the amount of ₱15,000.00.
Contrary to law. 3
That on or about or sometime in the first week of November, 2001 and thereafter, in the City of
accused conspiring and confederating with NARCISA SANTOS, and both of them mutually helping
and aiding one another, by means of deceit, fraudulent acts and false pretenses executed prior to or
feloniously defraud one ORLANDO LAYOSO, in the following manner: accused represented to the
processing the travel visa and other documents for [his] travel and employment at Korea and
well knew that such representations were false and made only to induce complainant to part with
[his] money as in fact complainant gave and delivered the amount of ₱35,000.00 as partial payment
to the accused; and accused once in possession of the said amount, did then and there willfully,
Contrary to law. 4
feloniously defraud one DONNA MAGBOO, in the following manner: accused represented to the
processing the travel visa and other documents for her travel and employment at Korea and
well knew that such representations were false and made only to induce complainant to part with her
money as in fact complainant gave and delivered the amount of ₱35,000.00 as partial payment to
the accused; and accused once in possession of the said amount, did then and there willfully,
Contrary to law. 5
under Art. 315 Par. 2(a) of the Revised Penal Code, as amended, committed as follows: That on or
about or sometime in the first week of November, 2001 and thereafter, in the City of Muntinlupa,
Philippines and within the jurisdiction of this Honorable Court, the above-named accused conspiring
and confederating with NARCISA SANTOS, and both of them mutually helping and aiding one
another, by means of deceit, fraudulent acts and false pretenses executed prior to or simultaneously
with the commission of the fraud, did [then] and there willfully, unlawfully and feloniously defraud one
JIMMY LEJOS, in the following manner: accused represented to the said complainant that she could
secure work for the said complainant at Korea and she is capable of processing the travel visa and
other documents for [his] travel and employment at Korea and demanded from the said complainant
to pay the amount of ₱80,000.00 as placement fee; accused well knew that such representations
were false and made only to induce complainant to part with [his] money as in fact complainant gave
and delivered the amount of ₱35,000.00 as partial payment to the accused; and accused once in
possession of the said amount, did then and there willfully, unlawfully and feloniously
misappropriate, misapply and convert the same to her own personal use and benefit to the damage
and prejudice of the said complainant in the amount of ₱35,000.00.
Contrary to law. 6
feloniously defraud one MARCELINO LEJOS, in the following manner: accused represented to the
processing the travel visa and other documents for [his] travel and employment at Korea and
well knew that such representations were false and made only to induce complainant to part with
[his] money as in fact complainant gave and delivered the amount of ₱20,000.00 as partial payment
to the accused; and accused once in possession of the said amount, did then and there willfully,
Contrary to law. 7
Private complainants Orlando Layoso, Donna Magboo, Jimmy Lejos, and Marcelino Lejos alleged8
that sometime in the first week of November 2001, they had a meeting with appellant Alelie
Tolentino (appellant) in her office at the 3rd floor, Arevalo Building, Alabang, Muntinlupa City.
Appellant told them the procedure for overseas employment and offered them assistance to find
work abroad for a fee of ₱80,000. Appellant showed them pictures of those she allegedly helped find
work abroad and told them that they would be earning $630 monthly as factory workers in Korea.
When asked about her license to recruit overseas workers, appellant told private complainants that
she would show it to them at some other time. On 14 November 2001, private complainants again
met with appellant at her office and each of them gave appellant ₱20,000 as partial payment of the
agreed fee, which included expenses for medical examination and processing of their documents for
work in Korea. Appellant promised to secure their visas and employment contracts within three
months.
On 30 January 2002, private complainants met with appellant, who was accompanied by a certain
Narcisa Santos, at Wendy’s in Arquiza Street, Manila for signing of contract. However, the names
written on the employment contracts were not private complainants’ names. Appellant explained that
the contracts were supposedly for other applicants who sought her services but later backed out.
Appellant assured them that original contracts bearing their names would subsequently be provided.
Private complainants signed the contracts and paid ₱15,000 each as their second partial payment.
On 7 February 2002, private complainants received information that the Criminal Investigation and
Detection Group arrested appellant for illegal recruitment. When private complainants confronted
appellant at the Manila City Hall where she was held, they demanded the return of their payments
amounting to ₱35,000 each, except for Marcelino Lejos whose total payment only amounted to
₱20,000. Appellant denied the charges against her and promised them that they would get their
money back. Subsequently, private complainants were able to secure a certification from the
Philippine Overseas Employment Administration (POEA) that appellant was not licensed to recruit
workers for overseas employment.
Another complainant, Lederle Panesa, alleged that in August 2001, she met with appellant, who
offered her work in Korea for a placement fee of ₱75,000. On 7 September 2001, Panesa gave
appellant ₱15,000 as initial payment. Appellant assured Panesa that she would be leaving for Korea
on the second week of November 2001 and that the balance of the placement fee could be paid
upon her receipt of the visa. However, after said meeting, Panesa no longer heard from appellant,
which prompted Panesa to visit appellant’s office. Appellant informed Panesa that there were no job
openings in Korea at that time. Appellant offered Panesa employment in other countries such as
Malaysia and Palau, but Panesa refused the offer and demanded the return of her money.
Nevertheless, appellant was able to persuade Panesa to wait until December 2001. Appellant never
contacted Panesa thereafter. On 7 February 2002,Panesa was informed that appellant was
apprehended for illegal recruitment. Panesa proceeded to the Office of the City Prosecutor in Manila,
but failed to confront appellant. It was only then that Panesa learned about appellant not being
authorized by the POEA to recruit workers for overseas employment.
For the defense, appellant was presented as the lone witness. Appellant denied the charges against
her. She testified that she was introduced to private complainants by a certain Cezar Manonson and
that the owner of the office she is renting is her relative. Private complainants allegedly sought her
help regarding possible work in Korea and that she merely explained the procedure for overseas
employment to them. She was hesitant to help them because she does not recruit workers as she
herself was also applying for work as factory worker through Narcisa Santos. She admitted having
received money from private complainants and issuing receipts for the payments, upon instructions
from Narcisa Santos. She confirmed her signature on the petty cash vouchers she issued to private
complainants, evidencing their payments. She testified that she gave the payments to Narcisa
Santos. However, she admitted that she does not have proof that she indeed turned over the money
to Narcisa Santos.
On 9 June 2010, the trial court rendered a decision, the dispositive portion of which reads:
WHEREFORE, the Court finds accused Alelie (also known as Alelie Tolentino) guilty beyond
reasonable doubt of the offense of large scale illegal recruitment, which constitutes economic
sabotage in Criminal Case Case No. 02-755 and sentences her to life imprisonment and to pay a
fine of ₱500,000.00; and five counts of estafa under Article 315 2(a) of the Revised Penal Code, as
amended, in the following criminal cases and sentences her, as follows:
In Criminal Case No. 02-756, an indeterminate penalty of six months of arresto mayor in its
maximum to four years two months and one day of prision correccional in its maximum as the
maximum period, and to pay the private complainant the amount of ₱5,000.00 as and for moral
damages. Accused is further ordered to return the amount of ₱15,000.00 she illegally collected from
the private complainant.
In Criminal Case Nos. 02-757, 02-758 and 02-759, an indeterminate penalty [of] six months of
arresto mayor in its maximum to twelve years of prision mayor in its maximum, and to pay the
private complainants individually each in the amount of ₱15,000.00 as and for moral damages.
Accused is further ordered to return the amount of ₱35,000.00 she illegally collected each from the
private complainants.
In Criminal Case No. 02-760, an indeterminate penalty of six months of arresto mayor in its
maximum as the minimum period to six years and one day of prision mayor in its minimum as the
maximum period, and to pay the private complainant the amount of ₱8,000.00 as and for moral
damages. Accused is further ordered to return the amount of ₱20,000.00 she illegally collected from
the private complainant.
Her full period of preventive imprisonment shall be credited in her favor in accordance with Article 29
of the Revised Penal Code.
SO ORDERED. 9
The Ruling of the Court of Appeals
On appeal, the Court of Appeals affirmed the trial court’s decision. The Court of Appeals held that
the prosecution adequately proved that appellant engaged in illegal recruitment in large scale. The
Court of Appeals noted that appellant admitted that she had no authority or valid license to engage
in recruitment and placement of workers. The testimonies and the documentary evidence submitted
by the prosecution showed that appellant led complainants to believe that she had the power or
ability to send private complainants to Korea to work as factory workers and that the latter were
convinced to give their payment to appellant in order to be employed. Appellant even issued petty
cash vouchers acknowledging receipt of private complainants’ payment and she made them sign
Trainee Agreements, which were purportedly their contract with their Korean employer. Based on
the facts and evidence presented, the Court of Appeals concluded that appellant clearly engaged in
illegal recruitment activities. Appellant’s claim that it was Narcisa Santos who recruited the private
complainants and who profited from the illegal transaction was disregarded by the Court of Appeals
for lack of evidence. The Court of Appeals noted that it was appellant who dealt directly with private
complainants.
On the charge of estafa, the Court of Appeals likewise upheld appellant’s conviction for said crime.
The evidence presented to prove appellant’s liability for illegal recruitment also established her
liability for estafa. The Court of Appeals ruled that a person may be charged and convicted
separately of illegal recruitment under Republic Act No. 8042 (RA 8042) in relation to the Labor
Code, and estafa under Article 315, paragraph 2(a) of the Revised Penal Code.
Hence, this appeal.
The Court's Ruling
We find the appeal without merit. The Court of Appeals was correct in affirming the ruling of the trial
court that the appellant’s guilt of the crimes she was accused of was clearly established by the
witnesses and the evidence of the prosecution.
Illegal Recruitment in Large Scale
Article 13(b) of the Labor Code defines recruitment and placement as "any act of canvassing,
enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals,
contract services, promising or advertising for employment, locally or abroad, whether for profit or
not."
Illegal recruitment, on the other hand is defined under Article 38 of the Labor Code as follows: ART.
38. Illegal Recruitment
(a) Any recruitment activities, including the prohibited practices enumerated under Article
34of 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 Department of Labor and
Employment or any law enforcement officer may initiate complaints under this Article.
(b) Illegal recruitment when committed by a syndicate or in large scale shall be considered
an offense involving economic sabotage and shall be penalized in accordance with Article 39
hereof. Illegal recruitment is deemed committed by a syndicate if carried out by a group of
three (3) or more persons conspiring and/or confederating with one another in carrying out
any unlawful or illegal transaction, enterprise or scheme defined under the first paragraph
hereof. Illegal recruitment is deemed committed in large scale if committed against three (3)
or more persons individually or as a group.
(c) The Secretary of Labor and Employment or his duly authorized representatives shall have
the power to cause the arrest and detention of such non-licensee or non-holder of authority if
after investigation it is determined that his activities constitute a danger to national security
and public order or will lead to further exploitation of job-seekers. The Secretary shall order
the search of the office or premises and seizure of documents, paraphernalia, properties and
other implements used in illegal recruitment activities and the closure of companies,
establishments and entities found to be engaged in the recruitment of workers for overseas
employment, without having been licensed or authorized to do so. (Emphases supplied)
Illegal recruitment, as defined under Article 38 of the Labor Code, encompasses recruitment
activities for both local and overseas employment. However, illegal recruitment under this article is
limited to recruitment activities undertaken by non-licensees or non-holders of authority. Thus,
10
under the Labor Code, to constitute illegal recruitment in large scale, three elements must concur:
1. The accused undertook any recruitment activity defined under Art. 13 (b) or any prohibited
practice enumerated under Art. 34 of the Labor Code.
2. He did not have the license or the authority to lawfully engage in the recruitment and
placement of workers.
3. He committed the same against three or more persons, individually or as a group. 11
RA 8042, otherwise known as the "Migrant Workers and Overseas Filipinos Act of 1995,"
12
established a higher standard of protection and promotion of the welfare of the migrant workers, their
families and overseas Filipinos in distress. RA 8042 also broadened the concept of illegal
recruitment for overseas employment and increased the penalties, especially for Illegal Recruitment
in Large Scale and Illegal Recruitment Committed by a Syndicate, which are considered offenses
involving economic sabotage. Part II of RA 8042 defines and penalizes illegal recruitment for
13
employment abroad, whether undertaken by a non-licensee or non-holder of authority or by a

licensee or holder of authority.
Section 6 of RA 8042 provides for the definition of illegal recruitment, while Section 7 enumerates
the penalties therefor, thus:
SEC. 6. Definition. – For purposes of this Act, illegal recruitment shall mean any act of canvassing,
enlisting, contracting, transporting, utilizing, hiring, or procuring workers and includes referring,
contract services, promising or advertising for employment abroad, whether for profit or not, when
undertaken by a non-licensee or non-holder of authority contemplated under Article 13(f) of
Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines:
Provided, That any such non-licensee or non-holder who, in any manner, offers or promises for a fee
employment abroad for two or more persons shall be deemed so engaged. It shall likewise include
the following acts, whether committed by any person, whether a non-licensee, non-holder, licensee
or holder of authority:
(a) To charge or accept directly or indirectly any amount greater than that specified in the
schedule of allowable fees prescribed by the Secretary of Labor and Employment, or to
make a worker pay any amount greater than that actually received by him as a loan or
advance;
(b) To furnish or publish any false notice or information or document in relation to recruitment
or employment;
(c) To give any false notice, testimony, information or document or commit any act of
misrepresentation for the purpose of securing a license or authority under the Labor Code;
(d) To induce or attempt to induce a worker already employed to quit his employment in
order to offer him another unless the transfer is designed to liberate a worker from
oppressive terms and conditions of employment;
(e) To influence or attempt to influence any person or entity not to employ any worker who
has not applied for employment through his agency;
(f) To engage in the recruitment or placement of workers in jobs harmful to public health or
morality or to the dignity of the Republic of the Philippines;
(g) To obstruct or attempt to obstruct inspection by the Secretary of Labor and Employment
or by his duly authorized representative;
(h) To fail to submit reports on the status of employment, placement vacancies, remittance of
foreign exchange earnings, separation from jobs, departures and such other matters or
information as may be required by the Secretary of Labor and Employment;
(i) To substitute or alter to the prejudice of the worker, employment contracts approved and
verified by the Department of Labor and Employment from the time of actual signing thereof
by the parties up to and including the period of the expiration of the same without the
approval of the Department of Labor and Employment;
(j) For an officer or agent of a recruitment or placement agency to become an officer or

member of the Board of any corporation engaged in travel agency or to be engaged directly
or indirectly in the management of a travel agency;
(k) To withhold or deny travel documents from applicant workers before departure for
monetary or financial considerations other than those authorized under the Labor Code and
its implementing rules and regulations;
(l) Failure to actually deploy without valid reason as determined by the Department of Labor
and Employment; and
(m) Failure to reimburse expenses incurred by the worker in connection with his
documentation and processing for purposes of deployment, in cases where the deployment
does not actually take place without the worker’s fault. Illegal recruitment when committed by
a syndicate or in large scale shall be considered an offense involving economic sabotage.
Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more
persons conspiring or confederating with one another. It is deemed committed in large scale if
committed against three (3) or more persons individually or as a group.
The persons 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.
SEC. 7. Penalties. –
(a) Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of
not less than six (6) years and one (1) day but not more than twelve (12) years and a fine of
not less than Two hundred thousand pesos (₱200,000.00) nor more than Five hundred
thousand pesos (₱500,000.00).
(b) The penalty of life imprisonment and a fine of not less than Five hundred thousand pesos
(₱500,000.00) nor more than One million pesos (₱1,000,000.00) shall be imposed if illegal
recruitment constitutes economic sabotage as defined herein.
Provided, however, That the maximum penalty shall be imposed If the person illegally recruited is
less than eighteen (18) years of age or committed by a non-licensee or non-holder of authority.
(Emphases supplied)
Unlike illegal recruitment as defined under the Labor Code which is limited to recruitment activities
undertaken by non-licensees or non-holders of authority, under Article 6 of RA 8042, illegal
recruitment (for overseas employment) may be committed not only by non-licensees or non-holders
of authority but also by licensees or holders of authority. Article 6 enumerates thirteen acts or
practices [(a) to (m)] which constitute illegal recruitment, whether committed by any person, whether
a non-licensee, non-holder, licensee or holder of authority. Except for the last two acts [(l) and (m)]
on the list under Article 6 of RA8042, the first eleven acts or practices are also listed in Article 34 of
14
the Labor Code under the heading "Prohibited practices." Thus, under Article 34 of the Labor Code,
it is unlawful for any individual, entity, licensee or holder of authority to engage in any of the
enumerated prohibited practices, but such acts or practices do not constitute illegal recruitment
when undertaken by a licensee or holder of authority. However, under Article 38(A) of the Labor
Code, when a non-licensee or non-holder of authority undertakes such "prohibited practices," he or
she is liable for illegal recruitment. RA 8042 broadened the definition of illegal recruitment for
overseas employment by including thirteen acts or practices which now constitute as illegal
recruitment, whether committed by a non-licensee, non-holder, licensee or holder of authority.
Under RA 8042, a non-licensee or non-holder of authority commits illegal recruitment for overseas
employment in two ways: (1) by any act of canvassing, enlisting, contracting, transporting, utilizing,
hiring, or procuring workers, and includes referring, contract services, promising or advertising for
employment abroad, whether for profit or not; and (2) by undertaking any of the acts enumerated
under Section 6 of RA 8042. On the other hand, a licensee or holder of authority is also liable for
illegal recruitment for overseas employment when he or she undertakes any of the thirteen acts or
practices [(a) to (m)] listed under Section 6 of RA 8042. To constitute illegal recruitment in large
scale, the offense of illegal recruitment must be committed against three or more persons,
individually or as a group.
In this case, the prosecution sufficiently proved that appellant engaged in large-scale illegal
recruitment.
First, appellant is a non-licensee or non-holder of authority. Part of the evidence submitted by the
prosecution is a POEA Certification dated 10 March 2003, stating that appellant is not licensed by
15
the POEA to recruit workers for overseas employment. Appellant admitted that she has no valid
license or authority required by law to lawfully engage in recruitment and placement of workers.
Second, despite the absence of a license or authority to undertake recruitment activities, appellant
gave the impression that she has the power or ability to secure work for private complainants in
Korea. Private complainants Orlando Layoso, Donna Magboo, and Jimmy Lejos all testified that
appellant promised them work as factory workers in Korea and induced them to pay placement fees,
which included the expenses for medical examination and the processing of their documents for
work in Korea. Appellant even showed pictures of previous applicants, whom she allegedly helped
find work abroad. Appellant also explained to them the procedure for overseas employment and
promised them that she would secure their visas and employment contracts within three months.
The testimonies of Orlando Layoso, Donna Magboo, and Jimmy Lejos were corroborated by private
respondents Marcelino Lejos and Lederle Panesa, whose Affidavits of Complaint were adopted as
their direct testimonies.
This Court has held in several cases that an accused who represents to others that he could send
workers abroad for employment, even without the authority or license to do so, commits illegal
recruitment.16
Third, there are at least three victims in this case which makes appellant liable for large-scale illegal
recruitment.
Appellant denies that she gave private complainants the distinct impression that she had the power
or ability to send them abroad for work. She insists that she herself had been applying then as a
factory worker in Korea through Narcisa Santos, who had previously deployed her as domestic
helper in Hongkong. Although appellant admits having received payments from private complainants
and issuing receipts, she submits that she did so only upon the instructions of Narcisa Santos, to
whom she turned over the money collected from private complainants.
The Court is not swayed by appellant’s contentions. As found by the trial court and the appellate
court, it was clearly established that appellant dealt directly with the private complainants: she
explained to them the procedure for overseas employment; she charged them placement fees to
cover their medical examination and the processing of their travel documents; she issued petty cash
vouchers with her signature, acknowledging receipts of their payments; she promised the eventual
release of their visas and employment contracts; and she made them sign Trainee Agreements,
purportedly their contract with their Korean employer. Clearly, appellant, despite being a non-
licensee or non-holder of authority, engaged in recruitment activities, making her liable for illegal
recruitment.
Well-settled is the rule that the trial court, having the opportunity to observe the witnesses and their
demeanor during the trial, can best assess the credibility of the witnesses and their
testimonies. Appellant’s mere denial cannot prevail over the positive and categorical testimonies of
17
the complainants. The trial court’s findings are accorded great respect unless the trial court has
18
overlooked or misconstrued some substantial facts, which if considered might affect the result of the
case. Furthermore, factual findings of the trial court, when affirmed by the Court of Appeals, are
19
deemed binding and conclusive. 20
Thus, we affirm the finding of both the trial court and the appellate court that appellant is guilty
beyond reasonable doubt of illegal recruitment in large scale. However, we modify the penalty
imposed.
The penalty imposed by the trial court in this case for large-scale illegal recruitment, which
constitutes economic sabotage, is life imprisonment and a fine of ₱500,000. Section 7 of RA 8042
provides that the penalty of life imprisonment and a fine of not less than ₱500,000 nor more than
₱1,000,000 shall be imposed if illegal recruitment constitutes economic sabotage. Said article further
provides that the maximum penalty shall be imposed if committed by a non-licensee or non-holder of
authority. Thus, the proper penalty in this case is life imprisonment and a fine of ₱1,000,000.
Estafa
We likewise affirm appellant’s conviction for five counts of estafa under Article 315(2)(a) of the
Revised Penal Code. It is settled that a person, for the same acts, may be convicted separately for
illegal recruitment under RA 8042 (or the Labor Code), and estafa under Article 315(2)(a) of the
21
Revised Penal Code. 22
The elements of estafa are: (1) the accused defrauded another by abuse of confidence or by means
of deceit; and (2) the offended party or a third party suffered damage or prejudice capable of
pecuniary estimation. In this case, the prosecution proved beyond reasonable doubt that appellant
23
deceived private complainants into believing that she had the authority and capability to send them
to Korea for employment, despite her not being licensed by the POEA to recruit workers for
overseas employment. She even showed them pictures of past applicants whom she allegedly sent
abroad for work. She also assured them that she would be able to secure their visas and
employment contracts once they pay the placement fee. Because of the assurances given by
appellant, private complainants paid appellant a portion of the agreed placement fee, for which
appellant issued petty cash vouchers with her signature, evidencing her receipt of the payments.
24
Clearly, these acts of appellant constitute estafa punishable under Article 315 (2)(a) of the Revised
Penal Code.
The penalty for estafa depends on the amount defrauded. Article 315 of the Revised Penal Code
provides:
ART. 315. Swindling (estafa). – Any person who shall defraud another by any of the means
mentioned hereinbelow shall be punished by:
1st. The penalty of prision correccional in its maximum period to prision mayor in its minimum period,
if the amount of the fraud is over 12,000 pesos but does not exceed 22,000 pesos, and if such
amount exceeds the latter sum, the penalty provided in this paragraph shall be imposed in its
maximum period, adding one year for each additional 10,000 pesos; but the total penalty which may
be imposed shall not exceed twenty years. In such cases, and in connection with the accessory
penalties which may be imposed and for the purpose of the other provisions of this Code, the
penalty shall be termed prision mayor or reclusion temporal, as the case may be;
xxxx
Thus, when the amount of fraud is over ₱12,000 but not exceeding ₱22,000, the penalty imposed is
prision correccional in its maximum period to prision mayor in its minimum period, i.e., from 4 years,
2 months and 1 day to 8 years. Under the Indeterminate Sentence Law, the minimum term shall be
within the range of the penalty next lower to that prescribed by the Revised Penal Code, which is
prision correccional in its minimum to medium period. The time included in this penalty is from 6
months and 1 day to 4 years and 2 months.
When the amount of fraud exceeds ₱22,000, the penalty shall be imposed in its maximum period,
and adding one year for every ₱10,000 in excess of ₱22,000. But, the total penalty imposed should
not exceed 20 years. The maximum term under the Indeterminate Sentence Law is that which, in
view of the attending circumstances, could be properly imposed under the Revised Penal Code. The
range of penalty under Article 315 is composed of only two periods. To compute the maximum
period of the indeterminate sentence, the total number of years included in the two periods should
be divided into three equal portions, with each portion forming a period. Following this computation,
the minimum, medium, and maximum periods of the prescribed penalty are:
1. Minimum Period – 4 years, 2 months and 1 day to 5 years, 5 months and 10 days;
2. Medium Period – 5 years, 5 months and 11 days to 6 years, 8 months and 20 days;
3. Maximum Period – 6 years, 8 months and 21 days to 8 years.
Any incremental penalty, i.e. one year for every ₱10,000 in excess of ₱22,000, shall be added to
anywhere from6 years, 8 months and 21 days to 8 years, at the court’s discretion, provided the total
penalty does not exceed 20 years. 25
We find that the penalty imposed by the trial court, and affirmed by the appellate court, is not in
accord with the penalty prescribed. The trial court erroneously imposed the minimum period of "six
1âwphi1
months of arresto mayor in its maximum." Hence, we modify the penalty imposed on the five counts
of estafa and we delete the moral damages awarded for having no basis in law. Considering the
number of victims defrauded, we find that a minimum period of 2 years of prision correccional is
appropriate.
In Criminal Case No. 02-756, where the amount defrauded is ₱15,000, and in the absence of any
mitigating or aggravating circumstance, the maximum term shall be taken from the medium period of
the penalty prescribed (i.e. 5 years, 5 months and 11 days to 6 years, 8 months and 20 days).
Appellant should be sentenced to 2 years of prision correccional as minimum to 6 years and 1 day of
prision mayor as maximum.
In Criminal Case Nos. 02-757, 02-758, and 02-759, where the amount defrauded is ₱35,000 each,
the maximum period (anywhere from 6 years, 8 months and 21 days to 8 years) shall be imposed,
plus the incremental penalty of one year (additional 1 year imprisonment for the ₱10,000 in excess
of ₱22,000). We fix the maximum term at 7 years of prision mayor. Adding the incremental penalty of
1 year to the maximum term, appellant should be sentenced in each of these cases to 2 years of
prision correccional as minimum to 8 years of prision mayor as maximum.
In Criminal Case No. 02-760, where the amount defrauded is ₱20,000, appellant should be
sentenced to 2 years of prision correccional as minimum to 6 years and 1 day of prision mayor as
maximum.
Furthermore, appellant should indemnify private complainants for the amounts paid to her, with legal
interest at the rate of 6% per annum, from the time of demand, which shall be deemed as the same
day the Informations were filed against appellant, until the amounts are fully paid. WHEREFORE,
26
we AFFIRM WITH MODIFICATIONS the Decision dated 29 November 2012 of the Court of Appeals
in CA-G.R. CRHC No. 04558 to read as follows:
1. In Criminal Case No. 02-755, appellant Alelie Tolentino is found GUILTY beyond
reasonable doubt of illegal recruitment in large scale, constituting economic sabotage, as
defined and penalized in Section 6 and Section 7(b) of RA 8042. She is sentenced to suffer
the penalty of life imprisonment and is ordered to pay a fine of One Million Pesos
(₱1,000,000).
reasonable doubt of estafa, as defined and penalized in Article 315(2)(a) of the Revised
Penal Code. She is sentenced to suffer the indeterminate penalty of 2 years of prision
correccional as minimum to 6 years and 1 day of prision mayor as maximum. She is ordered
to indemnify private complainant Lederle Panesa in the amount of Fifteen Thousand Pesos
(₱15,000) as actual damages, with legal interest of six percent (6%) per annum from 28 June
2002, until the said amount is fully paid.
correccional as minimum to 8 years of prision mayor as maximum. She is ordered to
indemnify private complainant Orlando Layoso in the amount of Thirty Five Thousand Pesos
4. In Criminal Case No. 02-758,appellant Alelie Tolentino is found GUILTY beyond

indemnify private complainant Donna Magboo in the amount of Thirty Five Thousand Pesos
indemnify private complainant Jimmy Lejos in the amount of Thirty Five Thousand Pesos
correccional as minimum to 6 years and 1 day of prision mayor as maximum. She is ordered
to indemnify private complainant Marcelino Lejos in the amount of Twenty Thousand Pesos
SO ORDERED.
4) EMPLOYMENT OF NON RESIDENT ALIENS

GENERAL MILLING CORPORATION and EARL TIMOTHY CONE, petitioners,
vs.
HON. RUBEN D. TORRES, in his capacity as Secretary of Labor and Employment, HON.
BIENVENIDO E. LAGUESMA, in his capacity as Acting Secretary of Labor and Employment,
and BASKETBALL COACHES ASSOCIATION OF THE PHILIPPINES, respondents.
FACTS
On 1 May 1989, the National Capital Region of the Department of Labor and Employment issued
Alien Employment Permit No. M-0689-3-535 in favor of petitioner Earl Timothy Cone, a United
States citizen, as sports consultant and assistant coach for petitioner General Milling Corporation
("GMC").
On 27 December 1989, petitioners GMC and Cone entered into a contract of employment whereby
the latter undertook to coach GMC's basketball team.
On 15 January 1990, the Board of Special Inquiry of the Commission on Immigration and
Deportation approved petitioner Cone's application for a change of admission status from temporary
visitor to pre-arranged employee.
On 9 February 1990, petitioner GMC requested renewal of petitioner Cone's alien employment
permit. GMC also requested that it be allowed to employ Cone as full-fledged coach. The DOLE
Regional Director, Luna Piezas, granted the request on 15 February 1990.
On 18 February 1990, Alien Employment Permit No. M-02903-881, valid until 25 December 1990,
was issued.
Private respondent Basketball Coaches Association of the Philippines ("BCAP") appealed the
issuance of said alien employment permit to the respondent Secretary of Labor who, on 23 April
1990, issued a decision ordering cancellation of petitioner Cone's employment permit on the ground
that there was no showing that there is no person in the Philippines who is competent, able and
willing to perform the services required nor that the hiring of petitioner Cone would redound to the
national interest.
Petitioner GMC filed a Motion for Reconsideration and two (2) Supplemental Motions for
Reconsideration but said Motions were denied by Acting Secretary of Labor Bienvenido E.
Laguesma in an Order dated 8 June 1990.
Petitioners are now before the Court on a Petition for Certiorari, dated 14 June 1990, alleging that:
1. respondent Secretary of Labor gravely abused his discretion when he revoked petitioner
Cone's alien employment permit; and
2. Section 6 (c), Rule XIV, Book I of the Omnibus Rules Implementing the Labor Code is null
and void as it is in violation of the enabling law as the Labor Code does not empower
respondent Secretary to determine if the employment of an alien would redound to national
interest.
Deliberating on the present Petition for Certiorari, the Court considers that petitioners have failed to
show any grave abuse of discretion or any act without or in excess of jurisdiction on the part of
respondent Secretary of Labor in rendering his decision, dated 23 April 1990, revoking petitioner
Cone's Alien Employment Permit.
The alleged failure to notify petitioners of the appeal filed by private respondent BCAP was cured
when petitioners were allowed to file their Motion for Reconsideration before respondent Secretary
of Labor.1
Petitioner GMC's claim that hiring of a foreign coach is an employer's prerogative has no legal basis
at all. Under Article 40 of the Labor Code, an employer seeking employment of an alien must first
obtain an employment permit from the Department of Labor. Petitioner GMC's right to choose whom
to employ is, of course, limited by the statutory requirement of an alien employment permit.
Petitioners will not find solace in the equal protection clause of the Constitution. As pointed out by
the Solicitor-General, no comparison can be made between petitioner Cone and Mr. Norman Black
as the latter is "a long time resident of the country," and thus, not subject to the provisions of Article
40 of the Labor Code which apply only to "non-resident aliens." In any case, the term "non-resident
alien" and its obverse "resident alien," here must be given their technical connotation under our law
on immigration.
Neither can petitioners validly claim that implementation of respondent Secretary's decision would
amount to an impairment of the obligations of contracts. The provisions of the Labor Code and its
Implementing Rules and Regulations requiring alien employment permits were in existence long
before petitioners entered into their contract of employment. It is firmly settled that provisions of
applicable laws, especially provisions relating to matters affected with public policy, are deemed
written into contracts. Private parties cannot constitutionally contract away the otherwise applicable
2
provisions of law.
Petitioners' contention that respondent Secretary of Labor should have deferred to the findings of
Commission on Immigration and Deportation as to the necessity of employing petitioner Cone, is,
again, bereft of legal basis. The Labor Code itself specifically empowers respondent Secretary to
make a determination as to the availability of the services of a "person in the Philippines who is
competent, able and willing at the time of application to perform the services for which an alien is
desired."3
In short, the Department of Labor is the agency vested with jurisdiction to determine the question of
availability of local workers. The constitutional validity of legal provisions granting such jurisdiction
and authority and requiring proof of non-availability of local nationals able to carry out the duties of
the position involved, cannot be seriously questioned.
Petitioners apparently also question the validity of the Implementing Rules and Regulations,
specifically Section 6 (c), Rule XIV, Book I of the Implementing Rules, as imposing a condition not
found in the Labor Code itself. Section 6 (c), Rule XIV, Book I of the Implementing Rules, provides
as follows:
Section 6. Issuance of Employment Permit –– the Secretary of Labor may issue an

employment permit to the applicant based on:
a) Compliance by the applicant and his employer with the requirements of Section 2 hereof;
b) Report of the Bureau Director as to the availability or non-availability of any person in the
Philippines who is competent and willing to do the job for which the services of the applicant
are desired.
(c) His assessment as to whether or not the employment of the applicant will redound to the
national interest;
(d) Admissibility of the alien as certified by the Commission on Immigration and Deportation;
(e) The recommendation of the Board of Investments or other appropriate government

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

with the national interest;
d) To facilitate and regulate the movement of workers in conformity with the national interest;
e) To regulate the employment of aliens, including the establishment of a registration and/or

work permit system;
x x x x x x x x x
Thus, we find petitioners' arguments on the above points of constitutional law too insubstantial to
require further consideration.
1avvphi1
Petitioners have very recently manifested to this Court that public respondent Secretary of Labor has
reversed his earlier decision and has issued an Employment Permit to petitioner Cone. Petitioners
seek to withdraw their Petition for Certiorari on the ground that it has become moot and academic.
While ordinarily this Court would dismiss a petition that clearly appears to have become moot and
academic, the circumstances of this case and the nature of the questions raised by petitioners are
such that we do not feel justified in leaving those questions unanswered. 4
Moreover, assuming that an alien employment permit has in fact been issued to petitioner Cone, the
basis of the reversal by the Secretary of Labor of his earlier decision does not appear in the record.
If such reversal is based on some view of constitutional law or labor law different from those here set
out, then such employment permit, if one has been issued, would appear open to serious legal
objections.
ACCORDINGLY, the Court Resolved to DISMISS the Petition for certiorari for lack of merit. Costs
against petitioners.
5) ALIEN EMPLOYMENT PERMIT

G.R. No. 169207 March 25, 2010
WPP MARKETING COMMUNICATIONS, INC., JOHN STEEDMAN, MARK WEBSTER, and

NOMINADA LANSANG, Petitioners,
vs.
JOCELYN M. GALERA, Respondent.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 169239
JOCELYN M. GALERA, Petitioner,
vs.
WPP MARKETING COMMUNICATIONS, INC., JOHN STEEDMAN, MARK WEBSTER, and
NOMINADA LANSANG, Respondents.
The Facts
The appellate court narrated the facts as follows:
Petitioner is Jocelyn Galera (GALERA), a [sic] American citizen who was recruited from the United
States of America by private respondent John Steedman, Chairman-WPP Worldwide and Chief
Executive Officer of Mindshare, Co., a corporation based in Hong Kong, China, to work in the
Philippines for private respondent WPP Marketing Communications, Inc. (WPP), a corporation
registered and operating under the laws of Philippines. GALERA accepted the offer and she signed
an Employment Contract entitled "Confirmation of Appointment and Statement of Terms and
Conditions" (Annex B to Petition for Certiorari). The relevant portions of the contract entered into
between the parties are as follows:
Particulars:
Name : Jocelyn M. Galera
Address : 163 Mediterranean Avenue

Hayward, CA 94544
Position : Managing Director

Mindshare Philippines
Annual Salary : Peso 3,924,000
Start Date : 1 September 1999
Commencement Date : 1 September 1999

(for continuous service)
Office : Mindshare Manila

6. Housing Allowance
The Company will provide suitable housing in Manila at a maximum cost (including
management fee and other associated costs) of Peso 576,000 per annum.
7. Other benefits.
The Company will provide you with a fully maintained company car and a driver.
The Company will continue to provide medical, health, life and personal accident insurance
plans, to an amount not exceeding Peso 300,000 per annum, in accordance with the terms
of the respective plans, as provided by JWT Manila.
The Company will reimburse you and your spouse one way business class air tickets from
USA to Manila and the related shipping and relocation cost not exceeding US$5,000
supported by proper documentation. If you leave the Company within one year, you will
reimburse the Company in full for all costs of the initial relocation as described therein.
You will participate in the JWT Pension Plan under the terms of this plan, the Company
reserves the right to transfer this benefit to a Mindshare Pension Plan in the future, if so
required.
8. Holidays
You are entitled to 20 days paid holiday in addition to public holidays per calendar year to be
taken at times agreed with the Company. Carry-over of unused accrued holiday entitlement
into a new holiday year will not normally be allowed. No payment will be made for holidays
not taken. On termination of your employment, unless you have been summarily dismissed,
you will be entitled to receive payment for unused accrued holiday pay. Any holiday taken in
excess of your entitlement shall be deducted from your final salary payment.
9. Leave Due to Sickness or Injury
The maximum provision for sick leave is 15 working days per calendar year.
12. Invention/Know-How
Any discovery, invention, improvement in procedure, trademark, trade name, designs,

copyrights or get-ups made, discovered or created by you during the continuance of your
employment hereunder relating to the business of the Company shall belong to and shall be
the absolute property of the Company. If required to do so by the Company (whether during
or after the termination of your employment) you shall at the expense of the company
execute all instruments and do all things necessary to vest in ownership for all other rights,
title and interests (including any registered rights therein) in such discovery, invention,
improvement in procedure, trademark, trade name, design, copyright or get-up in the
Company (or its Nominee) absolutely and as sole beneficial owner.
14. Notice.
The first three months of your employment will be a trial period during which either you or the
Company may terminate your employment on one week’s notice. If at the end of that period,
the Company is satisfied with your performance, you will become a permanent employee.
Thereafter you will give Company and the Company will give you three months notice of
termination of employment. The above is always subject to the following: (1) the Company’s
right to terminate the contract of employment on no or short notice where you are in breach
of contract; (2) your employment will at any event cease without notice on your retirement
date when you are 60 years of age.
SIGNED JOCELYN M. GALERA 8-16-99

Date of Birth [sic] 12-25-55
Employment of GALERA with private respondent WPP became effective on September 1,

1999 solely on the instruction of the CEO and upon signing of the contract, without any further action
from the Board of Directors of private respondent WPP.
Four months had passed when private respondent WPP filed before the Bureau of Immigration an
application for petitioner GALERA to receive a working visa, wherein she was designated as Vice
President of WPP. Petitioner alleged that she was constrained to sign the application in order that
she could remain in the Philippines and retain her employment.
Then, on December 14, 2000, petitioner GALERA alleged she was verbally notified by private
respondent STEEDMAN that her services had been terminated from private respondent WPP. A
termination letter followed the next day.4
On 3 January 2001, Galera filed a complaint for illegal dismissal, holiday pay, service incentive leave
pay, 13th month pay, incentive plan, actual and moral damages, and attorney’s fees against WPP
and/or John Steedman (Steedman), Mark Webster (Webster) and Nominada Lansang (Lansang).
The case was docketed as NLRC NCR Case No. 30-01-00044-01.
The Labor Arbiter’s Ruling
In his Decision dated 31 January 2002, Labor Arbiter Edgardo M. Madriaga (Arbiter Madriaga) held
WPP, Steedman, Webster, and Lansang liable for illegal dismissal and damages. Arbiter Madriaga
stated that Galera was not only illegally dismissed but was also not accorded due process. Arbiter
Madriaga explained, thus:
[WPP] failed to observe the two-notice rule. [WPP] through respondent Steedman for a five (5)
minute meeting on December 14, 2000 where she was verbally told that as of that day, her
employment was being terminated. [WPP] did not give [Galera] an opportunity to defend herself and
explain her side. [Galera] was even prohibited from reporting for work that day and was told not to
report for work the next day as it would be awkward for her and respondent Steedman to be in the
same premises after her termination. [WPP] only served [Galera] her written notice of termination
only on 15 December 2001, one day after she was verbally apprised thereof.
The law mandates that the dismissal must be properly done otherwise, the termination is gravely
defective and may be declared unlawful as we hereby hold [Galera’s] dismissal to be illegal and
unlawful. Where there is no showing of a clear, valid and legal cause for the termination of
employment, the law considers the matter a case of illegal dismissal and the burden is on the
employer to prove that the termination was for a valid or authorized cause. The law mandates that
both the substantive and procedural aspects of due process should be observed. The facts clearly
show that respondents were remiss on both aspects. Perforce, the dismissal is void and unlawful.
xxxx
Considering the work performance and achievements of [Galera] for the year 2000, we do not find
any basis for the alleged claim of incompetence by herein respondents. Had [Galera] been really
incompetent, she would not have been able to generate enormous amounts [sic] of revenues and
business for [WPP]. She also appears to be well liked as a leader by her subordinates, who have
come forth in support of [Galera]. These facts remain undisputed by respondents.
A man’s job being a property right duly protected by our laws, an employer who deprives an
employee [of] the right to defend himself is liable for damages consistent with Article 32 of the Civil
Code. To allow an employer to terminate the employment of his worker based merely on allegations
without proof places the [employee] in an uncertain situation. The unflinching rule in illegal dismissal
cases is that the employer bears the burden of proof.
In the instant case, respondents have not been able to muster evidence to counter [Galera’s]
allegations. [Galera’s] allegations remain and stand absent proof from respondents rebutting them.
Hence, our finding of illegal dismissal against respondents who clearly have conspired in bad faith to
deprive [Galera] of her right to substantive and procedural due process. 5
The dispositive portion of Arbiter Madriaga’s decision reads as follows:
WHEREFORE, premises considered, we hereby hold herein respondents liable for illegal dismissal
and damages, and award to [Galera], by virtue of her expatriate status, the following:
a. Reinstatement without loss of seniority rights.
b. Backwages amounting to $120,000 per year at ₱50.00 to US $1 exchange rate, 13th

month pay, transportation and housing benefits.
c. Remuneration for business acquisitions amounting to Two Million Eight Hundred Fifty
Thousand Pesos (₱2,850,000.00) and Media Plowback Incentive equivalent to Three Million
Pesos (₱3,000,000.00) or a total of not less than One Hundred Thousand US Dollars
($100,000.00).
d. US Tax Protection of up to 35% coverage equivalent to Thirty Eight Thousand US Dollars

($38,000).
e. Moral damages including implied defamation and punitive damages equivalent to Two
Million Dollars (US$2,000,000.00).
f. Exemplary damages equivalent to One Million Dollars ($1,000,000.00).
g. Attorney’s fees of 10% of the total award herein.
SO ORDERED.6
The Ruling of the NLRC
The First Division of the NLRC reversed the ruling of Arbiter Madriaga. In its Decision 7 promulgated
on 19 February 2003, the NLRC stressed that Galera was WPP’s Vice-President, and therefore, a
corporate officer at the time she was removed by the Board of Directors on 14 December 2000. The
NLRC stated thus:
It matters not that her having been elected by the Board to an added position of being a member of
the Board of Directors did not take effect as her May 31, 2000 election to such added position was
conditioned to be effective upon approval by SEC of the Amended By-Laws, an approval which took
place only in February 21, 2001, i.e., after her removal on December 14, 2000. What counts is, at
the time of her removal, she continued to be WPP’s Vice-President, a corporate officer, on hold over
capacity.
Ms. Galera’s claim that she was not a corporate officer at the time of her removal because her May
31, 2000 election as Vice President for Media, under WPP’s Amended By-Laws, was subject to the
approval by the Securities and Exchange Commission and that the SEC approved the Amended By-
Laws only in February 2001. Such claim is unavailing. Even if Ms. Galera’s subsequent election as
Vice President for Media on May 31, 2000 was subject to approval by the SEC, she continued to
hold her previous position as Vice President under the December 31, 1999 election until such time
that her successor is duly elected and qualified. It is a basic principle in corporation law, which
principle is also embodied in WPP’s by-laws, that a corporate officer continues to hold his position as
such until his successor has been duly elected and qualified. When Ms. Galera was elected as Vice
President on December 31, 1999, she was supposed to have held that position until her successor
has been duly elected and qualified. The record shows that Ms. Galera was not replaced by anyone.
She continued to be Vice President of WPP with the same operational title of Managing Director for
Mindshare and continued to perform the same functions she was performing prior to her May 31,
2000 election.
In the recent case of Dily Dany Nacpil v. International Broadcasting Corp., the definition of corporate
officer for purposes of intra-corporate controversy was even broadened to include a
Comptroller/Assistant Manager who was appointed by the General Manager, and whose
appointment was later approved by the Board of Directors. In this case, the position of comptroller
was not even expressly mentioned in the By-Laws of the corporation, and yet, the Supreme Court
found him to be a corporate officer. The Court ruled that —
(since) petitioner’s appointment as comptroller required the approval and formal action of IBC’s
Board of Directors to become valid, it is clear therefore that petitioner is a corporate officer whose
dismissal may be the subject of a controversy cognizable by the SEC... Had the petitioner been an
ordinary employee, such board action would not have been required.
Such being the case, the imperatives of law require that we hold that the Arbiter below had no
jurisdiction over Galera’s case as, again, she was a corporate officer at the time of her removal.
WHEREFORE, the appeals of petitioner from the Decision of Labor Arbiter Edgardo Madriaga dated
January 31, 2002 and his Order dated March 21, 2002, respectively, are granted. The January 31,
2002 decision of the Labor Arbiter is set aside for being null and void and the temporary restraining
order we issued on April 24, 2002 is hereby made permanent. The complaint of Jocelyn Galera is
dismissed for lack of jurisdiction.
SO ORDERED.8
In its Resolution9 promulgated on 4 June 2003, the NLRC further stated:
We are fully convinced that this is indeed an intra-corporate dispute which is beyond the labor
arbiter’s jurisdiction. These consolidated cases clearly [involve] the relationship between a
corporation and its officer and is properly within the definition of an intra-corporate relationship
which, under P.D. No. 902-A, is within the jurisdiction of the SEC (now the commercial courts). Such
being the case, We are constrained to rule that the Labor Arbiter below had no jurisdiction over Ms.
Galera’s complaint for illegal dismissal.
WHEREFORE, the motion for reconsideration filed by Ms. Galera is hereby denied for lack of merit.
We reiterate our February 19, 2003 Decision setting aside the Labor Arbiter’s Decision dated
January 31, 2002 for being null and void.
SO ORDERED.10
Galera assailed the NLRC’s decision and resolution before the appellate court and raised a lone
assignment of error.
The National Labor Relations Commission acted with grave abuse of discretion amounting to lack or
excess of jurisdiction when it reversed the decision of the Labor Arbiter not on the merits but for
alleged lack of jurisdiction.11
The Decision of the Appellate Court
The appellate court reversed and set aside the decision of the NLRC. The appellate court ruled that
the NLRC’s dismissal of Galera’s appeal is not in accord with jurisprudence. A person could be
considered a "corporate officer" only if appointed as such by a corporation’s Board of Directors, or if
pursuant to the power given them by either the Articles of Incorporation or the By-Laws. 12
The appellate court explained:
A corporation, through its board of directors, could only act in the manner and within the formalities,
if any, prescribed by its charter or by the general law. If the action of the Board is ultra vires such
is motu proprio void ab initio and without legal effect whatsoever. The by-laws of a corporation are its
own private laws which substantially have the same effect as the laws of the corporation. They are,
in effect, written into the charter. In this sense, they beome part of the fundamental law of the
corporation with which the corporation and its directors and officers must comply.
Even if petitioner GALERA had been appointed by the Board of Directors on December 31, 1999,
private respondent WPP’s By-Laws provided for only one Vice-President, a position already
occupied by private respondent Webster. The same defect also stains the Board of Directors’
appointment of petitioner GALERA as a Director of the corporation, because at that time the By-
Laws provided for only five directors. In addition, the By-laws only empowered the Board of Directors
to appoint a general manager and/or assistant general manager as corporate officers in addition to a
chairman, president, vice-president and treasurer. There is no mention of a corporate officer entitled
"Managing Director."
Hence, when the Board of Directors enacted the Resolutions of December 31, 1999 and May 31,
2000, it exceeded its authority under the By-Laws and are, therefore, ultra vires. Although private
respondent WPP sought to amend these defects by filing Amended By-Laws with the Securities and
Exchange Commission, they did not validate the ultra vires resolutions because the Amended By-
Laws did not take effect until February 16, 2001, when it was approved by the SEC. Since by-laws
operate only prospectively, they could not validate the ultra vires resolutions.13
The dispositive portion of the appellate court’s decision reads:

WHEREFORE, the petition is hereby GRANTED and GIVEN DUE COURSE. The assailed Decision
of the National Labor Relations Commission is hereby REVERSED and SET ASIDE and a new one
is entered DIRECTING private respondent WPP MARKETING COMMUNICATIONS, INC. to:
1. Pay [Galera] backwages at the peso equivalent of US$120,000.00 per annum plus three
months from her summary December 14, 2000 dismissal up to March 14, 2001 because
three months notice is required under the contract, plus 13th month pay, bonuses and
general increases to which she would have been normally entitled, had she not been
dismissed and had she not been forced to stop working, including US tax protection of up to
35% coverage which she had been enjoying as an expatriate;
2. Pay x x x GALERA the peso equivalent of US$185,000.00 separation pay (1 ½ years);
3. Pay x x x GALERA any unpaid housing benefit for the 18 ½ months of her employment in
the service to the Company as an expatriate in Manila, Philippines at the rate of ₱576,000
per year; unpaid personal and accident insurance benefits for premiums at the rate of
₱300,000.00 per year; whatever cash value in the JWT Pension Plan; and thirty days paid
holiday benefit under the contract for the 1 ½ calendar years with the Company;
4. Pay x x x GALERA the reduced amount of PhP2,000,000.00 as moral damages;
5. Pay [Galera] the reduced amount of PhP1,000,000.00 as exemplary damages;
6. Pay [Galera] an amount equivalent to 10% of the judgment award as attorney’s fees;
7. Pay the cost of the suit.
SO ORDERED.14
Respondents filed a motion for reconsideration on 5 May 2005. Galera filed a motion for partial
reconsideration and/or clarification on the same date. The appellate court found no reason to revise
or reverse its previous decision and subsequently denied the motions in a Resolution promulgated
on 1 August 2005.15
The Issues
WPP, Steedman, Webster, and Lansang raised the following grounds in G.R. No. 169207:
I. The Court of Appeals seriously erred in ruling that the NLRC has jurisdiction over
[Galera’s] complaint because she was not an employee. [Galera] was a corporate officer of
WPP from the beginning of her term until her removal from office.
II. Assuming arguendo that the Court of Appeals correctly ruled that the NLRC has
jurisdiction over [Galera’s] complaint, it should have remanded the case to the Labor Arbiter
for reception of evidence on the merits of the case.
III. [Galera] is an alien, hence, can never attain a regular or permanent working status in the
Philippines.
IV. [Galera] is not entitled to recover backwages, other benefits and damages from WPP. 16
On the other hand, in G.R. No. 169239, Galera raised the following grounds in support of her
petition:
The CA decision should be consistent with Article 279 of the Labor Code and applicable
jurisprudence, that full backwages and separation pay (when in lieu of reinstatement), should be
reckoned from time of dismissal up to time of reinstatement (or payment of separation pay, in case
separation instead of reinstatement is awarded).
Accordingly, petitioner Galera should be awarded full backwages and separation pay for the period
from 14 December 2000 until the finality of judgment by the respondents, or, at the very least, up to
the promulgation date of the CA decision.
The individual respondents Steedman, Webster and Lansang must be held solidarily liable with
respondent WPP for the wanton and summary dismissal of petitioner Galera, to be consistent with
law and jurisprudence as well as the specific finding of the CA of bad faith on the part of
respondents.17
This Court ordered the consolidation of G.R. Nos. 169207 and 169239 in a resolution dated 16
January 2006.18
The Ruling of the Court
In its consolidated comment, the Office of the Solicitor General (OSG) recommended that (A) the
Decision dated 14 April 2005 of the appellate court finding (1) Galera to be a regular employee of
WPP; (2) the NLRC to have jurisdiction over the present case; and (3) WPP to have illegally
dismissed Galera, be affirmed; and (B) the case remanded to the Labor Arbiter for the computation
of the correct monetary award. Despite the OSG’s recommendations, we see that Galera’s failure to
seek an employment permit prior to her employment poses a serious problem in seeking relief
before this Court. Hence, we settle the various issues raised by the parties for the guidance of the
bench and bar.
Whether Galera is an Employee or a Corporate Officer
Galera, on the belief that she is an employee, filed her complaint before the Labor Arbiter. On the
other hand, WPP, Steedman, Webster and Lansang contend that Galera is a corporate officer;
hence, any controversy regarding her dismissal is under the jurisdiction of the Regional Trial Court.
We agree with Galera.
Corporate officers are given such character either by the Corporation Code or by the corporation’s
by-laws. Under Section 25 of the Corporation Code, the corporate officers are the president,
secretary, treasurer and such other officers as may be provided in the by-laws. 19 Other officers are
sometimes created by the charter or by-laws of a corporation, or the board of directors may be
empowered under the by-laws of a corporation to create additional offices as may be necessary.
An examination of WPP’s by-laws resulted in a finding that Galera’s appointment as a corporate

officer (Vice-President with the operational title of Managing Director of Mindshare) during a special
meeting of WPP’s Board of Directors is an appointment to a non-existent corporate office. WPP’s by-
laws provided for only one Vice-President. At the time of Galera’s appointment on 31 December
1999, WPP already had one Vice-President in the person of Webster. Galera cannot be said to be a
director of WPP also because all five directorship positions provided in the by-laws are already
occupied. Finally, WPP cannot rely on its Amended By-Laws to support its argument that Galera is a
corporate officer. The Amended By-Laws provided for more than one Vice-President and for two
additional directors. Even though WPP’s stockholders voted for the amendment on 31 May 2000, the
SEC approved the amendments only on 16 February 2001. Galera was dismissed on 14 December
2000. WPP, Steedman, Webster, and Lansang did not present any evidence that Galera’s dismissal
took effect with the action of WPP’s Board of Directors.1avvphi1
The appellate court further justified that Galera was an employee and not a corporate officer by
subjecting WPP and Galera’s relationship to the four-fold test: (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 with respect to the means and methods by which the work is to be
accomplished. The appellate court found:
x x x Sections 1 and 4 of the employment contract mandate where and how often she is to perform
her work; sections 3, 5, 6 and 7 show that wages she receives are completely controlled by x x x
WPP; and sections 10 and 11 clearly state that she is subject to the regular disciplinary procedures
of x x x WPP.
Another indicator that she was a regular employee and not a corporate officer is Section 14 of the
contract, which clearly states that she is a permanent employee — not a Vice-President or a
member of the Board of Directors.
xxxx
Another indication that the Employment Contract was one of regular employment is Section 12,
which states that the rights to any invention, discovery, improvement in procedure, trademark, or
copyright created or discovered by petitioner GALERA during her employment shall automatically
belong to private respondent WPP. Under Republic Act 8293, also known as the Intellectual
Property Code, this condition prevails if the creator of the work subject to the laws of patent or
copyright is an employee of the one entitled to the patent or copyright.
Another convincing indication that she was only a regular employee and not a corporate officer is the
disciplinary procedure under Sections 10 and 11 of the Employment Contract, which states that her
right of redress is through Mindshare’s Chief Executive Officer for the Asia-Pacific. This implies that
she was not under the disciplinary control of private respondent WPP’s Board of Directors (BOD),
which should have been the case if in fact she was a corporate officer because only the Board of
Directors could appoint and terminate such a corporate officer.
Although petitioner GALERA did sign the Alien Employment Permit from the Department of Labor
and Employment and the application for a 9(g) visa with the Bureau of Immigration – both of which
stated that she was private respondent’s WPP’ Vice President – these should not be considered
against her. Assurming arguendo that her appointment as Vice-President was a valid act, it must be
noted that these appointments occurred afater she was hired as a regular employee. After her
appointments, there was no appreciable change in her duties. 20
Whether the Labor Arbiter and the NLRC
have jurisdiction over the present case
Galera being an employee, then the Labor Arbiter and the NLRC have jurisdiction over the present
case. Article 217 of the Labor Code provides:
Jurisdiction of Labor Arbiters and the Commission. — (a) Except as otherwise provided under this
Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide x x x the
following cases involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving
wages, rates of pay, hours of work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions involving
the legality of strikes and lockouts;
6. Except claims for Employees Compensation, Social Security, Medicare and other
maternity benefits, all other claims, arising from employer-employee relations, including
those of persons in domestic or household service, involving an amount exceeding five
thousand pesos (₱5,000.00) regardless of whether accompanied with a claim for
reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided
by Labor Arbiters.
(c) Cases arising from the interpretation of collective bargaining agreements and
those arising from the interpretation or enforcement of company personnel policies
shall be disposed of by the Labor Arbiter by referring the same to the grievance
machinery and voluntary arbitration as may be provided in said agreements.
In contrast, Section 5.2 of Republic Act No. 8799, or the Securities Regulation Code, states:
The Commission’s jurisdiction over all cases enumerated under Section 5 of Presidential Decree No.
902-A is hereby transferred to the courts of general jurisdiction or the appropriate Regional Trial
Court: Provided, That the Supreme Court in the exercise of its authority may designate the Regional
Trial Court branches that shall exercise jurisdiction over these cases. The Commission shall retain
jurisdiction over pending cases involving intra-corporate disputes submitted for final resolution which
should be resolved within one year from the enactment of this Code. The Commission shall retain
jurisdiction over pending suspension of payments/rehabilitation cases filed as of 30 June 2000 until
finally disposed.
The pertinent portions of Section 5 of Presidential Decree No. 902-A, mentioned above, states:
b) Controversies arising out of intra-corporate or partnership relations, between and among

stockholders, members or associates; between any or all of them and the corporation,
partnership or association of which they are stockholders, members or associates,
respectively; and between such corporation, partnership or association and the state insofar
as it concerns their individual franchise or right to exist as such entity;
c) Controversies in the election or appointments of directors, trustees, officers or managers
of such corporations, partnerships or associations.
Whether WPP illegally dismissed Galera
WPP’s dismissal of Galera lacked both substantive and procedural due process.
Apart from Steedman’s letter dated 15 December 2000 to Galera, WPP failed to prove any just or
authorized cause for Galera’s dismissal. Steedman’s letter to Galera reads:
The operations are currently in a shamble. There is lack of leadership and confidence in your
abilities from within, our agency partners and some clients.
Most of the staff I spoke with felt they got more guidance and direction from Minda than yourself. In
your role as Managing Director, that is just not acceptable.
I believe your priorities are mismanaged. The recent situation where you felt an internal strategy
meeting was more important than a new business pitch is a good example.
You failed to lead and advise on the two new business pitches. In both cases, those involved sort
(sic) Minda’s input. As I discussed with you back in July, my directive was for you to lead and review
all business pitches. It is obvious [that] confusion existed internally right up until the day of the pitch.
The quality output is still not to an acceptable standard, which was also part of my directive that you
needed to focus on back in July.
I do not believe you understand the basic skills and industry knowledge required to run a media
special operation.21
WPP, Steedman, Webster, and Lansang, however, failed to substantiate the allegations in
Steedman’s letter. Galera, on the other hand, presented documentary evidence 22 in the form of
congratulatory letters, including one from Steedman, which contents are diametrically opposed to the
15 December 2000 letter.
The law further requires that the employer must furnish the worker sought to be dismissed with two
written notices before termination of employment can be legally effected: (1) notice which apprises
the employee of the particular acts or omissions for which his dismissal is sought; and (2) the
subsequent notice which informs the employee of the employer’s decision to dismiss him. Failure to
comply with the requirements taints the dismissal with illegality. 23 WPP’s acts clearly show that
Galera’s dismissal did not comply with the two-notice rule.
Whether Galera is entitled to the monetary award
WPP, Steedman, Webster, and Lansang argue that Galera is not entitled to backwages because
she is an alien. They further state that there is no guarantee that the Bureau of Immigration and the
Department of Labor and Employment will continue to grant favorable rulings on the applications for
a 9(g) visa and an Alien Employment Permit after the expiry of the validity of Galera’s documents on
31 December 2000. WPP’s argument is a circular argument, and assumes what it attempts to prove.
Had WPP not dismissed Galera, there is no doubt in our minds that WPP would have taken action
for the approval of documents required for Galera’s continued employment.
This is Galera’s dilemma: Galera worked in the Philippines without a proper work permit but now
wants to claim employee’s benefits under Philippine labor laws.
Employment of GALERA with private respondent WPP became effective on September 1,

1999 solely on the instruction of the CEO and upon signing of the contract, without any further action
from the Board of Directors of private respondent WPP.
Four months had passed when private respondent WPP filed before the Bureau of
Immigration an application for petitioner GALERA to receive a working visa, wherein she was
designated as Vice President of WPP. Petitioner alleged that she was constrained to sign the
application in order that she could remain in the Philippines and retain her employment. 24
The law and the rules are consistent in stating that the employment permit must be acquired prior to
employment. The Labor Code states: "Any alien seeking admission to the Philippines for
employment purposes and any domestic or foreign employer who desires to engage an alien for
employment in the Philippines shall obtain an employment permit from the Department of
Labor."25 Section 4, Rule XIV, Book 1 of the Implementing Rules and Regulations provides:
Employment permit required for entry. — No alien seeking employment, whether as a resident or
non-resident, may enter the Philippines without first securing an employment permit from the
Ministry. If an alien enters the country under a non-working visa and wishes to be employed
thereafter, he may only be allowed to be employed upon presentation of a duly approved
employment permit.
Galera cannot come to this Court with unclean hands. To grant Galera’s prayer is to sanction the
violation of the Philippine labor laws requiring aliens to secure work permits before their
employment. We hold that the status quo must prevail in the present case and we leave the parties
where they are. This ruling, however, does not bar Galera from seeking relief from other
jurisdictions.
6) VENUE, ILLEGAL RECRUITMENT
G.R. No. 209859
EILEEN P. DAVID, Petitioner
vs.
GLENDA S. MARQUEZ, Respondent
DECISION
TIJAM, J.:
This is a Petition for Review on Certiorari under Rule 45, assailing the Decision dated May 29,
1 2
2013 and Resolution dated November 6, 2013 of the Court of Appeals (CA) in CA-G.R. SP No.
3
124839, reinstating the criminal cases of Illegal Recruitment and Estafa against Petitioner Eileen
David.
The Procedural and Factual Antecedents

In a Sinumpaang Salaysay filed Lefore the Office of the City Prosecutor of Manila, Respondent
Glenda Marquez alleged, among others, that she is a resident of Sampaloc, Manila and that
sometime in March 2005, petitioner approached her in Kidapawan City and represented that she
could recruit her to work abroad. It was further alleged that petitioner demanded payment of
4
placement fees and other expenses from the respondent for the processing of the latter's
application, to which the respondent heeded. Respondent's application was, however, denied and
5
worse, the money that she put out therefor was never returned. 6
In her Counter-Affidavit and Counter Charge, petitioner averred that it was physically impossible for
her to have committed the said acts as she was in Canada at the alleged time of recruitment as
evidenced by the entries in her passport. Petitioner further averred that she was never engaged in
7
the recruitment business. The petitioner alleged that the amount deposited in her account was not
8
for her but was just coursed through her to be given to her friend in Canada who was the one
processing respondent's application, as evidenced by a certification to that effect issued by the said
friend. Further, petitioner argued before the Prosecutor that assuming arguendo that the allegations
9
of recruitment were true, the case should be filed in Kidapawan City and not in Manila. 10
On December 9, 2008, two separate Informations were filed against petitioner for Illegal Recruitment
and Estafa, respectively. The accusatory portions thereof read as follows:
Criminal Case No. 08-265539
The undersigned accuses EILEEN DA YID of a violation of Article 38 (a), P.D. No. 1412, amending
certain provision of Book I, P.D. No. 442, otherwise known as the New Labor Code of the
Philippines, in relation to Article 13 (b) and (c) of said code, as further amended by P.D. Nos. 1693,
1920, and 2018 and as further amended by'Sec. 6 (a), (1) and (m) of Republic Act 8042, committed
as follows:
That sometime in the month of March, 2005, in the City of Manila, Philippines, the said accused
representing herself to have the capacity to contract, enlist and transport Filipino workers overseas,
particularly in Canada, did then and there willfully, unlawfully, for a fee, recruit and promise
employment/job placement to GLENDA S. MARQUEZ without first having secured the required
license from the Department of Labor and Employment as required by law, and charged or accepted
directly or indirectly from said complainant the amount of Php 152,670.00 as placement/processing
fee in consideration for her overseas employment, which amount is in 'excess of or greater than that
specified in the schedule of allowable fees prescribed by the POEA, and without valid reasons failed
to actually deploy her and continuously fail to reimburse expenses incurred by her in connection with
her documentation and processing for purposes of her deployment.
Contrary to law. 11
Criminal Case No. 08-265540
The undersigned accuses EILEEN P. DAVID of the crime of Estafa, Art. 315 par. 2 (a) of the
Revised Penal Code, committed as follows:
That on or about and during the period comprised between March 8, 2005 and April 20, 2007,
inclusive, in the City of Manila, Philippines, the said accused, did then and there willfully, unlawfully,
and feloniously defraud GLENDA S. MARQUEZ in the following manner, to wit: the said accused,
by. means of false manifestations and fraudulent representations which she made to said GLENDA
S. MARQUEZ prior to and even simultaneous with the commission of the fraud, to the effect that she
had the power and capacity to recruit and employ said GLENDA S. MARQUEZ for overseas
employment in Canada as Live-in Caregiver, and could . facilitate the processing of the pertinent
papers if given the necessary amount to meet the requirements thereof, induced and succeeded in
inducing the said GLENDA S. MARQUEZ to give and deliver, as in fact she gave and delivered to
said accused the total amount of Php152,670.00, on the strength of said manifestations and
representations, said accused well knowing that the same were false and fraudulent and were made
solely to obtain, as in fact, she did obtain the said amount of Php152,670.00, which amount once in
her possession, with intent to defraud, misappropriated, misapplied, and converted to her own
personal use and benefit, to the damage and prejudice of said GLENDA S. MARQUEZ in the
aforesaid amount of Php152,670.00, Philippine Currency.
Contrary to law. 12
The Ruling of the Regional Trial Court
On December 11, 2008, warrants of arrest were issued against the petitioner.
On April 15, 2009, petitioner filed a Motion to Quash the Information in Criminal Case No. 08-
13
265540, &rguing that she was deprived of her right to seek reconsideration or reinvestigation of the
public prosecutor's resolution as she was not furnished a copy thereof. Also, petitioner argued that
14
the. City Prosecutor of Manila had no jurisdiction over the case as the alleged crime was committed
in Kidapawan City.
In an Order dated May 13, 2011 in Criminal Case No. 08-265540, the Regional Trial Court (RTC)
15
of Manila, Branch 55, denied petitioner's Motion to Quash, ruling that the ground relied upon by the
petitioner in the said motion is not one of those enumerated under Section 3[[16], Rule 117 of the
Rules of Court for quashing a complaint or infonnation. As to the jurisdictional issue, the RTC ruled
17
that it has jurisdiction to take cognizance of the case, citing Section 9 of Republic Act No. 8042 (RA
18
8042), which explicitly states that:
A criminal action arising from illegal recruitment as defined herein shall be filed with the Regional
Trial Court of the province or city where the offense was committed or where the offended party
actually resides at the time of the commission of the offense xxx. (underscoring supplied for
emphasis) 19
Since complainant is a resident of Manila, the RTC ruled that the second ground interposed by the
petitioner is devoid of merit. Thus:
20
In view of the foregoing, the Motion to Quash is hereby DENIED for lack of merit.
SO ORDERED. 21
Petitioner filed a Motion for Reconsideration22 of the said Order alleging that she just found out that
there were two Informations filed against her, one for Illegal Recruitment in Criminal Case No. 08-
265539 and another for Estafa in Criminal Case No. 08-265540. Petitioner maintained that the
23 24
alleged crimes were committed in Kidapawan City, not in Manila as alleged in the Informations.
Petitioner further alleged that there is no showing that respondent is an actual resident of Manila but
as per her Reply-Affidavit, Manila is merely her postal address. Hence, petitioner again raised a
25
jurisdictional issue in the said motion. 26
In an Order dated January 26, 2012, this time ill Criminal Cases Nos. 08-265539-40, the RTC
27
reconsidered its May 13, 2011 Order, finding that it had no jurisdiction to try the cases since the
crimes of Illegal Recruitment and Estafa were not committed in its territory but in Kidapawan City,
thus:
WHEREFORE, in the light of the foregoing, the instant Motion for Reconsideration is hereby
GRANTED. The Order of this Court dated May 13, 2011 is hereby RECONSIDERED and SET
ASIDE.
This case is ordered returned to the Office of the Clerk of Court of the Regional Trial Court for proper
disposition.
SO ORDERED. 28
On the same date, the R TC also issued an Order recalling the warrants of arrest issued against
29
the petitioner, thus:
Considering that this Court has no territorial jurisdiction over the above-entitled cases, the Order of
this Court dated December 11, 2008, pertaining to the issuance of Warrants of Arrest against herein
accused is hereby cancelled (and) set aside.
WHEREFORE, let the Warrants of Arrest issued in these cases be ordered RECALLED AND SET
ASIDE.
SO ORDERED. 30
Respondent, through the public prosecutor, then filed a Motion for Reconsideration of the said
31
Order, averring that while it appears in the Philippine Overseas .Employment Administration (POEA)
pro-forma complaint affidavit that the alleged recruitment activities took place in Kidapawan City, it
also appears in her Reply-Affidavit, that she deposited certain amounts in several banks in Manila
for the name and account of petitioner as payments for employment processing and placement
fees. Thus, part of the essential elements of Illegal Recruitment and Estafa took place in
32
Manila. Section 9 of RA 8042, above-quoted, which states that an illegal recruitment case may also
33
be filed with the RTC of the province or city where the offended party actually resides at the time of
the commission of the crime, was likewise invoked in the said motion. Respondent averred that the
34
records show that at the time of the incident up to the present, she resides in Sampaloc, Manila. 35
Petitioner filed an Opposition to the said motion. Respondent, through the public prosecutor, filed a
36
Comment thereon and a Reply was then filed by the petitioner.

37 38
In an Order dated March 16, 2012, the RTC denied respondent's motion for reconsideration, ruling
39
that as stated in respondent's Sinumpaang Salaysay, the essential elements of Illegal Recruitment

and Estafa took place in Kidapawan City and not in Manila. The allegation that several deposits for
the payment of the placement fees were made in Manila is of no moment, according to the RTC,
considering that the main transaction actually took place in Kidapawan City, which is the basis for
determining the jurisdiction of the court. Thus:
WHEREFORE, premises considered, the instant Motion for Reconsideration filed by the Prosecution
is hereby DENIED for lack of merit. The Orders of the Court both dated January 26, 2012 still stand.
SO ORDERED. 40
The Ruling of the Court of Appeals

Undaunted, respondent filed a Petition for Certiorari before the CA. In its assailed Decision, the CA
discussed, first, the issue of respondent's legal personality to file the said petition and second, the
RTC's jurisdiction over the case. 41
On the first issue, the CA ruled that while it is only the Office of the Solicitor General (OSG) that may
represent the People or the State in criminal proceedings before this Court or the CA, the private
offended party retains the right to bring a special civil action for certiorari in his/her own name in
criminal proceedings before the courts of law. The CA cited Section 1, Rule 122, which provides
42
that the right to appeal from a final judgment or order in a criminal case is granted to any party
except when the accused is placed thereby in double jeopardy. It also cited this Court's ruling that
43
the word party in the said provision must be understood to mean not only the government and the
accused, but also other persons who may be affected by the judgment rendered in the criminal
proceeding. The private complainant, having an interest in the civil aspect of the case, thus, may
44
file such action in his/her name to question the decision or action of the respondent court on
jurisdictional grounds. In line with this, the CA also ruled that there is no double jeopardy in this
45
case as the charges were dismissed upon motion of the petitioner-accused. 46
As to the issue on jurisdiction, the CA ruled that the RTC has jurisdiction over the cases of Illegal
Recruitment and Estafa, citing Section 9 of RA 8042, which provides that a criminal action arising
from illegal recruitment may be filed in the place where the offended party actually resides at the
time of the commission of the offense. According to the CA, it was established that herein
47
respondent was residing in Sampaloc, Manila at the time of the commission of the
crimes. Therefore, the two (2) Informations herein were correctly filed with the RTC of Manila,
48
pursuant to Section 9 of RA 8042. The CA disposed, thus:

49
WHEREFORE, the petition for certiorari is GRANTED. The assailed Order dated January 26, 2012

and Resolution dated March 16, 2012 of the RTC, Manila, in Criminal Case No. 08-265539
for estafa and Criminal Case No. 08-265540 for illegal recruitmen't respectively, are NULLIFIED
and SET ASIDE. The cases are REINSTATED and REMANDED to the court of origin for
appropriate proceedings.
SO ORDERED. 50
Petitioner's motion for reconsideration was denied by the CA in its Resolution dated November 6,
2013, thus:
WHEREFORE, the Motion for Reconsideration is DENIED for lack of merit.
SO ORDERED. 51
Hence, this Petition.
Petitioner argues that the CA committed a reversible error and grave abuse of discretion in declaring
that the respondent had the legal personality to assail the dismissal of the criminal cases as
respondent is not the proper party to do so. Petitioner argues that the OSG is the appellate counsel
52
of the People of the Philippines in all criminal cases and as such, the appeal in the criminal aspect
should be taken solely by the State and the private complainant is limited only to the appeal of the
civil aspect. According to the petitioner, respondent's action before the CA does not concern the
53
civil aspect of the case but the validity of the RTC's Orders.
54
On the jurisdictional issue, the petitioner maintains that the RTC of Manila has no jurisdiction over
the cases as the alleged acts constituting the crimes charged were committed in Kidapawan City
and not in Manila. 55
For her part, respondent argues that the argument as regards her legal personality in filing
the petition for certiorari before the CA reveals that petitioner misunderstood the difference between
an appeal and a special civil action for certiorari under Rule 65 of the Rules of Court. In fact,
56
respondent agrees with the petitioner that only the State, through the OSG, may file an appeal in a
criminal case. As an appeal is not available for a private complainant in a criminal case, an
57
independent action through a petition for certiorari under Rule 65, therefore, is available to the said
aggrieved party. 58
Anent the jurisdictional issue, respondent again invokes Section 9 of RA 8042 which allows the filing
of an action arising from illegal recruitment with the RTC of the complainant's residence. The 59
respondent further argues that as regards the charge of Estafa, considering that the same arose
from the illegal recruitment activities, the said provision allows the filing thereof with the court of the
same place where the Illegal Recruitment case was filed. Besides, according to the respondent,
60
since one of the essential elements of Estafa, i.e., damage or prejudice to the offended party, took
place in Manila, as the offended party resides in Manila, the R TC of Manila has jurisdiction over the
Estafa case. 61
Issues
1) Does the RTC of Manila have jurisdiction over the cases of Illegal Recruitment and
Estafa?
2) Does the respondent, on her own, have legal personality to file the petition
for certiorari before the CA?
The Court's Ruling
The issues shall be discussed ad seriatim.
The RTC of Manila has jurisdiction over the cases of Illegal Recruitment and Estafa
Indeed, venue in criminal cases is an essential element of jurisdiction. As explained by this Court in
62
the case of Foz, Jr. v. People: 63
It is a fundamental rule that for jurisdiction to be acquired by courts in criminal cases, the offense
should have been committed or any one of its essential ingredients took place within the territorial
jurisdiction of the court. Territorial jurisdiction in criminal cases is the territory where the court has
jurisdiction to take cognizance or to try the offense allegedly committed therein by the accused. Thus
it cannot take jurisdiction over a person charged with an offense allegedly committed outside of that
limited territory. Furthermore, the jurisdiction of a court over a criminal case is determined by the
allegations in the complaint or information. And once it is so shown, the court may validly take
cognizance of the case. However, if the evidence adduced during the trial show that the offense was
committed somewhere else, the court should dismiss the action for want of jurisdiction. (emphasis
64
ours)
Section 15(a), Rule 110 of the Rules of Criminal Procedure provides: SEC. 15. Place where action is
to be instituted. - a) Subject to existing laws, the criminal action shall be instituted and tried in the
court of the municipality or territory where the offense was committed or where any of its essential
ingredients occurred. (emphasis ours)
At the risk of being repetitive, Sec. 9 of RA 8042, however, fixed an alternative venue from that
provided in Section 15(a) of the Rules of Criminal Procedure, i.e., a criminal action arising from
illegal recruitment may also be filed where the offended party actually resides at the time of the
commission of the offense and that the court where the criminal action is first filed shall acquire
jurisdiction to the exclusion of other courts.
65
Despite the clear provision of the law, the RTC of Manila declared that it has no jurisdiction to try the
cases as the illegal Recruitment and Estafa were not committed in its territory but in Kidapawan
City.
66
We are, thus, one with the CA in finding that the RTC of Manila committed grave abuse of discretion
and in fact, a palpable error, in ordering the quashal of the Informations. The express provision of
the law is clear that the filing of criminal actions arising from illegal recruitment before the R TC of
the province or city where the offended party actually resides at the time of the commission of the
offense is allowed. It goes without saying that the dismissal of the case on a wrong ground, indeed,
deprived the prosecution, as well as the respondent as complainant, of their day in court.
It has been found by both the RTC and the CA that the respondent resides in Manila; hence, the
filing of the case before the RTC of Manila was proper. Thus, the trial court should have taken
cognizance of the case, and if it will eventually be shown during trial that the offense was committed
somewhere else, then the court should dismiss the action for want of jurisdiction. 67 As a matter of
fact, the R TC is not unaware of the above-cited provision which allows the filing of the said case
before the RTC of the city where the offended party resides at the time of the commission of the
offense; hence, it originally denied petitioner's Motion to Quash. This Court is, thus, baffled by the
fact that the RTC reversed itself upon the petitioner's motion for reconsideration on the same ground
that it previously invalidated.
Likewise, with the case of Estafa arising from such illegal recruitment activities, the outright dismissal
thereof due to lack of jurisdiction was not proper, considering that as per the allegations in the
Information, the same was within the jurisdiction of Manila. During the preliminary investigation of the
cases, respondent even presented evidence that some of the essential elements of the crime were
committed within Manila, such as the payment of processing and/or placement fees, considering that
these were deposited in certain banks located in Manila. Thus, it bears stressing that the trial court
68
should have proceeded to take cognizance of the case, and if during the trial it was proven that the
offense was committed somewhere else, that is the time that the trial court should dismiss the case
for want of jurisdiction. Undoubtedly, such erroneous outright dismissal of the case is a nullity for
69
want of due process. The prosecution and the respondent as the private offended party were not
given the opportunity to present and prosecute their case. Indeed, the prosecution and the private
offended party are as much entitled to due process as the accused in a criminal case. 70
The respondent has the legal personality to file a petition for certiorari under Rule 65. This
procedural issue is not novel. There is no question that, generally, the prosecution cannot appeal or
1âwphi1
bring error proceedings from a judgment rendered in favor of the defendant in a criminal case due to
the final and executory nature of a judgment of acquittal and the constitutional prohibition against
double jeopardy. Despite acquittal, however, the offended party or the accused may appeal, but
71
only with respect to the civil Aspect of the decision.

72
This Court has also entertained petitions for certiorari questioning the acquittal of the accused in, or
the dismissal of, criminal cases upon clear showing that the lower court, in acquitting the accused,
committed not merely errors of judgment but also grave abuse of discretion amounting to lack or
excess of jurisdiction or a denial of due process, thus rendering the assailed judgment void. When
73
the order of dismissal is annulled or set aside by an appellate court in an original special civil action
via certiorari, the right of the accused against double jeopardy is not violated. 74
In as early as the 1989 case of People v. Santiago, this Court has ruled that a private offended
75
party can file a special civil action for certiorari questioning the trial court's order acquitting the
accused or dismissing the case, viz. :
In such special civil action for certiorari filed under Rule 65 of the RuJes of Court, wherein it is
alleged that the trial court committed a grave abuse of discretion amounting to lack of jurisdiction or
on other jurisdictional grounds, the rules state that the petition may be filed by the person aggrieved.
In such case, the aggrieved parties are the State and the private offended party or complainant. The
complainant has an interest in the civil aspect of the case so he/she may file such special civil action
questioning the decision or action of the respondent court on jurisdictional grounds. In so doing,
complainant should not bring the action in the name of the People of Philippines. The action
may be prosecuted in the name of said complainant. (emphasis supplied)
Moreover, there have been occasions when this Court has allowed the offended party to pursue the
criminal action on his/her own behalf, as when there is a denial of due process as in this
case. Indeed, the right of offended parties to appeal or question an order of the trial court which
76
deprives them of due process has always been recognized, the only limitation being that they cannot
appeal any adverse ruling if to do so would place the accused in double jeopardy. 77
At this juncture, We also uphold the CA's finding that double jeopardy does not exist in this case.
Inasmuch as the dismissal of the charges by the RTC was done without regard to due process of
law, the same is null and void. It is as if there was no acquittal or dismissal of the case at all, and
78
the same cannot constitute a claim for double jeopardy. 79
Also, it is elementary that double jeopardy attaches only when the following elements concur: (1) the
accused is charged under a complaint or information sufficient in form and substance to sustain their
conviction; (2) the court has jurisdiction; (3) the accused has been arraigned and has pleaded; and
(4) he/she is convicted or acquitted, or the case is dismissed without his/her consent. Thus, as
80
found by the CA, double jeopardy does not attach in this case as the dismissal was granted upon
motion of the petitioner. To be sure, no fundamental right of the petitioner was violated in the filing of
the petition for certiorari before the CA by the respondent, as well as the grant thereof by the CA.
In fine, the dismissal of the cases below was patently erroneous and as such, invalid for lack of
fundamental requisite that is, due process For this reason, this Court finds the recourse of the
81
respondent to the CA proper despite it being brought on her own and not through the OSG.
Besides, such technicality cannot prevail over the more fundamental matter, which is the violation of
the right to due process resulting from the RTC's patent error. Nothing is more settled than the
principle that rules of procedure are meant to be tools to facilitate a fair and orderly conduct of
proceedings. Strict adherence thereto must not get in the way of achieving substantial justice. As
82 83
long as their purpose is sufficiently met and no violation of due process and fair play takes place, the
rules should be liberally construed. Liberal construction of the rules is the controlling principle to
84
effect substantial justice. The relaxation or suspension of procedural rules, or the exemption of a
85
case from their operation, is warranted when compelling reasons or when the purpose of justice
requires it. Thus, litigations should, as much as possible, be decided on their merits and not on
86
sheer technicalities. 87
In all, since it is established that the RTC of Manila has jurisdiction over the Illegal Recruitment and
Estafa cases, and there being no violation of the double jeopardy doctrine, the prosecution of the
case may still resume in the trial court as held by the CA.
7) CONTRACT OF EMPLOYMENT RE: OVERSEAS WORKERS
G.R. No. 167614 March 24, 2009
ANTONIO M. SERRANO, Petitioner,
vs.
Gallant MARITIME SERVICES, INC. and MARLOW NAVIGATION CO., INC., Respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
For decades, the toil of solitary migrants has helped lift entire families and communities out of
poverty. Their earnings have built houses, provided health care, equipped schools and planted the
seeds of businesses. They have woven together the world by transmitting ideas and knowledge from
country to country. They have provided the dynamic human link between cultures, societies and
economies. Yet, only recently have we begun to understand not only how much international
migration impacts development, but how smart public policies can magnify this effect.
United Nations Secretary-General Ban Ki-Moon

Global Forum on Migration and Development
Brussels, July 10, 20071
For Antonio Serrano (petitioner), a Filipino seafarer, the last clause in the 5th paragraph of Section
10, Republic Act (R.A.) No. 8042, 2 to wit:
Sec. 10. Money Claims. - x x x In case of termination of overseas employment without just, valid or
authorized cause as defined by law or contract, the workers shall be entitled to the full
reimbursement of his placement fee with interest of twelve percent (12%) per annum, plus his
salaries for the unexpired portion of his employment contract or for three (3) months for every
year of the unexpired term, whichever is less.
x x x x (Emphasis and underscoring supplied)
does not magnify the contributions of overseas Filipino workers (OFWs) to national development, but
exacerbates the hardships borne by them by unduly limiting their entitlement in case of illegal
dismissal to their lump-sum salary either for the unexpired portion of their employment contract "or
for three months for every year of the unexpired term, whichever is less" (subject clause). Petitioner
claims that the last clause violates the OFWs' constitutional rights in that it impairs the terms of their
contract, deprives them of equal protection and denies them due process.
By way of Petition for Review under Rule 45 of the Rules of Court, petitioner assails the December
8, 2004 Decision3 and April 1, 2005 Resolution4 of the Court of Appeals (CA), which applied the
subject clause, entreating this Court to declare the subject clause unconstitutional.
Petitioner was hired by Gallant Maritime Services, Inc. and Marlow Navigation Co., Ltd.
(respondents) under a Philippine Overseas Employment Administration (POEA)-approved Contract
of Employment with the following terms and conditions:
Duration of contract 12 months
Position Chief Officer
Basic monthly salary US$1,400.00
Hours of work 48.0 hours per week
Overtime US$700.00 per month
Vacation leave with pay 7.00 days per month5
On March 19, 1998, the date of his departure, petitioner was constrained to accept a downgraded
employment contract for the position of Second Officer with a monthly salary of US$1,000.00, upon
the assurance and representation of respondents that he would be made Chief Officer by the end of
April 1998.6
Respondents did not deliver on their promise to make petitioner Chief Officer. 7 Hence, petitioner
refused to stay on as Second Officer and was repatriated to the Philippines on May 26, 1998. 8
Petitioner's employment contract was for a period of 12 months or from March 19, 1998 up to March
19, 1999, but at the time of his repatriation on May 26, 1998, he had served only two (2) months and
seven (7) days of his contract, leaving an unexpired portion of nine (9) months and twenty-three (23)
days.
Petitioner filed with the Labor Arbiter (LA) a Complaint 9 against respondents for constructive
dismissal and for payment of his money claims in the total amount of US$26,442.73, broken down
as follows:
May 27/31, 1998 (5 days) incl. Leave pay US$ 413.90
June 01/30, 1998 2,590.00
July 01/31, 1998 2,590.00
August 01/31, 1998 2,590.00
Sept. 01/30, 1998 2,590.00
Oct. 01/31, 1998 2,590.00
Nov. 01/30, 1998 2,590.00

Dec. 01/31, 1998 2,590.00
Jan. 01/31, 1999 2,590.00
Feb. 01/28, 1999 2,590.00
Mar. 1/19, 1999 (19 days) incl. leave pay 1,640.00
--------------------------
--------------------------
--------------------------
--
25,382.23
Amount adjusted to chief mate's salary
(March 19/31, 1998 to April 1/30, 1998) + 1,060.5010
--------------------------
--------------------------
--------------------------
----------------
TOTAL CLAIM US$ 26,442.7311
as well as moral and exemplary damages and attorney's fees.
The LA rendered a Decision dated July 15, 1999, declaring the dismissal of petitioner illegal
and awarding him monetary benefits, to wit:
WHEREFORE, premises considered, judgment is hereby rendered declaring that the

dismissal of the complainant (petitioner) by the respondents in the above-entitled case was
illegal and the respondents are hereby ordered to pay the complainant [petitioner], jointly and
severally, in Philippine Currency, based on the rate of exchange prevailing at the time of
payment, the amount of EIGHT THOUSAND SEVEN HUNDRED SEVENTY U.S. DOLLARS
(US $8,770.00), representing the complainant’s salary for three (3) months of the
unexpired portion of the aforesaid contract of employment. 1avvphi1
The respondents are likewise ordered to pay the complainant [petitioner], jointly and
severally, in Philippine Currency, based on the rate of exchange prevailing at the time of
payment, the amount of FORTY FIVE U.S. DOLLARS (US$ 45.00), 12 representing the
complainant’s claim for a salary differential. In addition, the respondents are hereby ordered
to pay the complainant, jointly and severally, in Philippine Currency, at the exchange rate
prevailing at the time of payment, the complainant’s (petitioner's) claim for attorney’s fees
equivalent to ten percent (10%) of the total amount awarded to the aforesaid employee
under this Decision.
The claims of the complainant for moral and exemplary damages are hereby DISMISSED for
lack of merit.
All other claims are hereby DISMISSED.
SO ORDERED.13 (Emphasis supplied)
In awarding petitioner a lump-sum salary of US$8,770.00, the LA based his computation on

the salary period of three months only -- rather than the entire unexpired portion of nine
months and 23 days of petitioner's employment contract - applying the subject clause.
However, the LA applied the salary rate of US$2,590.00, consisting of petitioner's "[b]asic
salary, US$1,400.00/month + US$700.00/month, fixed overtime pay, + US$490.00/month,
vacation leave pay = US$2,590.00/compensation per month." 14
Respondents appealed15 to the National Labor Relations Commission (NLRC) to question the
finding of the LA that petitioner was illegally dismissed.
Petitioner also appealed16 to the NLRC on the sole issue that the LA erred in not applying the
ruling of the Court in Triple Integrated Services, Inc. v. National Labor Relations
Commission17 that in case of illegal dismissal, OFWs are entitled to their salaries for the
unexpired portion of their contracts.18
In a Decision dated June 15, 2000, the NLRC modified the LA Decision, to wit:
WHEREFORE, the Decision dated 15 July 1999 is MODIFIED. Respondents are hereby
ordered to pay complainant, jointly and severally, in Philippine currency, at the prevailing rate
of exchange at the time of payment the following:
1. Three (3) months salary
$1,400 x 3 US$4,200.00
2. Salary differential 45.00
US$4,245.00
3. 10% Attorney’s fees 424.50
TOTAL US$4,669.50
The other findings are affirmed.
SO ORDERED.19
The NLRC corrected the LA's computation of the lump-sum salary awarded to petitioner by reducing
the applicable salary rate from US$2,590.00 to US$1,400.00 because R.A. No. 8042 "does not
provide for the award of overtime pay, which should be proven to have been actually performed, and
for vacation leave pay."20
Petitioner filed a Motion for Partial Reconsideration, but this time he questioned the constitutionality
of the subject clause.21 The NLRC denied the motion.22
Petitioner filed a Petition for Certiorari23 with the CA, reiterating the constitutional challenge against
the subject clause.24 After initially dismissing the petition on a technicality, the CA eventually gave
due course to it, as directed by this Court in its Resolution dated August 7, 2003 which granted the
petition for certiorari, docketed as G.R. No. 151833, filed by petitioner.
In a Decision dated December 8, 2004, the CA affirmed the NLRC ruling on the reduction of the
applicable salary rate; however, the CA skirted the constitutional issue raised by petitioner. 25
His Motion for Reconsideration26 having been denied by the CA,27 petitioner brings his cause to this
Court on the following grounds:
The Court of Appeals and the labor tribunals have decided the case in a way not in accord with
applicable decision of the Supreme Court involving similar issue of granting unto the migrant worker
back wages equal to the unexpired portion of his contract of employment instead of limiting it to
three (3) months
II
In the alternative that the Court of Appeals and the Labor Tribunals were merely applying their
interpretation of Section 10 of Republic Act No. 8042, it is submitted that the Court of Appeals
gravely erred in law when it failed to discharge its judicial duty to decide questions of substance not
theretofore determined by the Honorable Supreme Court, particularly, the constitutional issues
raised by the petitioner on the constitutionality of said law, which unreasonably, unfairly and
arbitrarily limits payment of the award for back wages of overseas workers to three (3) months.
III
Even without considering the constitutional limitations [of] Sec. 10 of Republic Act No. 8042, the
Court of Appeals gravely erred in law in excluding from petitioner’s award the overtime pay and
vacation pay provided in his contract since under the contract they form part of his salary. 28
On February 26, 2008, petitioner wrote the Court to withdraw his petition as he is already old and
sickly, and he intends to make use of the monetary award for his medical treatment and
medication.29 Required to comment, counsel for petitioner filed a motion, urging the court to allow
partial execution of the undisputed monetary award and, at the same time, praying that the
constitutional question be resolved.30
Considering that the parties have filed their respective memoranda, the Court now takes up the full
merit of the petition mindful of the extreme importance of the constitutional question raised therein.
On the first and second issues
The unanimous finding of the LA, NLRC and CA that the dismissal of petitioner was illegal is not
disputed. Likewise not disputed is the salary differential of US$45.00 awarded to petitioner in all
three fora. What remains disputed is only the computation of the lump-sum salary to be awarded to
petitioner by reason of his illegal dismissal.
Applying the subject clause, the NLRC and the CA computed the lump-sum salary of petitioner at
the monthly rate of US$1,400.00 covering the period of three months out of the unexpired portion of
nine months and 23 days of his employment contract or a total of US$4,200.00.
Impugning the constitutionality of the subject clause, petitioner contends that, in addition to the
US$4,200.00 awarded by the NLRC and the CA, he is entitled to US$21,182.23 more or a total of
US$25,382.23, equivalent to his salaries for the entire nine months and 23 days left of his
employment contract, computed at the monthly rate of US$2,590.00. 31
The Arguments of Petitioner
Petitioner contends that the subject clause is unconstitutional because it unduly impairs the freedom
of OFWs to negotiate for and stipulate in their overseas employment contracts a determinate
employment period and a fixed salary package.32 It also impinges on the equal protection clause, for
it treats OFWs differently from local Filipino workers (local workers) by putting a cap on the amount
of lump-sum salary to which OFWs are entitled in case of illegal dismissal, while setting no limit to
the same monetary award for local workers when their dismissal is declared illegal; that the
disparate treatment is not reasonable as there is no substantial distinction between the two
groups;33 and that it defeats Section 18,34 Article II of the Constitution which guarantees the
protection of the rights and welfare of all Filipino workers, whether deployed locally or overseas. 35
Moreover, petitioner argues that the decisions of the CA and the labor tribunals are not in line with
existing jurisprudence on the issue of money claims of illegally dismissed OFWs. Though there are
conflicting rulings on this, petitioner urges the Court to sort them out for the guidance of affected
OFWs.36
Petitioner further underscores that the insertion of the subject clause into R.A. No. 8042 serves no
other purpose but to benefit local placement agencies. He marks the statement made by the Solicitor
General in his Memorandum, viz.:
Often, placement agencies, their liability being solidary, shoulder the payment of money claims in the
event that jurisdiction over the foreign employer is not acquired by the court or if the foreign
employer reneges on its obligation. Hence, placement agencies that are in good faith and which
fulfill their obligations are unnecessarily penalized for the acts of the foreign employer. To protect
them and to promote their continued helpful contribution in deploying Filipino migrant workers,
liability for money claims was reduced under Section 10 of R.A. No. 8042. 37 (Emphasis supplied)
Petitioner argues that in mitigating the solidary liability of placement agencies, the subject clause
sacrifices the well-being of OFWs. Not only that, the provision makes foreign employers better off
than local employers because in cases involving the illegal dismissal of employees, foreign
employers are liable for salaries covering a maximum of only three months of the unexpired
employment contract while local employers are liable for the full lump-sum salaries of their
employees. As petitioner puts it:
In terms of practical application, the local employers are not limited to the amount of backwages they
have to give their employees they have illegally dismissed, following well-entrenched and
unequivocal jurisprudence on the matter. On the other hand, foreign employers will only be limited to
giving the illegally dismissed migrant workers the maximum of three (3) months unpaid salaries
notwithstanding the unexpired term of the contract that can be more than three (3) months. 38
Lastly, petitioner claims that the subject clause violates the due process clause, for it deprives him of
the salaries and other emoluments he is entitled to under his fixed-period employment contract. 39
The Arguments of Respondents
In their Comment and Memorandum, respondents contend that the constitutional issue should not
be entertained, for this was belatedly interposed by petitioner in his appeal before the CA, and not at
the earliest opportunity, which was when he filed an appeal before the NLRC. 40
The Arguments of the Solicitor General
The Solicitor General (OSG)41 points out that as R.A. No. 8042 took effect on July 15, 1995, its
provisions could not have impaired petitioner's 1998 employment contract. Rather, R.A. No. 8042
having preceded petitioner's contract, the provisions thereof are deemed part of the minimum terms
of petitioner's employment, especially on the matter of money claims, as this was not stipulated upon
by the parties.42
Moreover, the OSG emphasizes that OFWs and local workers differ in terms of the nature of their
employment, such that their rights to monetary benefits must necessarily be treated differently. The
OSG enumerates the essential elements that distinguish OFWs from local workers: first, while local
workers perform their jobs within Philippine territory, OFWs perform their jobs for foreign employers,
over whom it is difficult for our courts to acquire jurisdiction, or against whom it is almost impossible
to enforce judgment; and second, as held in Coyoca v. National Labor Relations Commission 43 and
Millares v. National Labor Relations Commission,44 OFWs are contractual employees who can never
acquire regular employment status, unlike local workers who are or can become regular employees.
Hence, the OSG posits that there are rights and privileges exclusive to local workers, but not
available to OFWs; that these peculiarities make for a reasonable and valid basis for the
differentiated treatment under the subject clause of the money claims of OFWs who are illegally
dismissed. Thus, the provision does not violate the equal protection clause nor Section 18, Article II
of the Constitution.45
Lastly, the OSG defends the rationale behind the subject clause as a police power measure adopted
to mitigate the solidary liability of placement agencies for this "redounds to the benefit of the migrant
workers whose welfare the government seeks to promote. The survival of legitimate placement
agencies helps [assure] the government that migrant workers are properly deployed and are
employed under decent and humane conditions." 46
The Court's Ruling
The Court sustains petitioner on the first and second issues.
When the Court is called upon to exercise its power of judicial review of the acts of its co-equals,
such as the Congress, it does so only when these conditions obtain: (1) that there is an actual case
or controversy involving a conflict of rights susceptible of judicial determination; 47 (2) that the
constitutional question is raised by a proper party 48 and at the earliest opportunity;49 and (3) that the
constitutional question is the very lis mota of the case,50 otherwise the Court will dismiss the case or
decide the same on some other ground. 51
Without a doubt, there exists in this case an actual controversy directly involving petitioner who is
personally aggrieved that the labor tribunals and the CA computed his monetary award based on the
salary period of three months only as provided under the subject clause.
The constitutional challenge is also timely. It should be borne in mind that the requirement that a
constitutional issue be raised at the earliest opportunity entails the interposition of the issue in the
pleadings before a competent court, such that, if the issue is not raised in the pleadings before that
competent court, it cannot be considered at the trial and, if not considered in the trial, it cannot be
considered on appeal.52 Records disclose that the issue on the constitutionality of the subject clause
was first raised, not in petitioner's appeal with the NLRC, but in his Motion for Partial
Reconsideration with said labor tribunal, 53 and reiterated in his Petition for Certiorari before the
CA.54 Nonetheless, the issue is deemed seasonably raised because it is not the NLRC but the CA
which has the competence to resolve the constitutional issue. The NLRC is a labor tribunal that
merely performs a quasi-judicial function – its function in the present case is limited to determining
questions of fact to which the legislative policy of R.A. No. 8042 is to be applied and to resolving
such questions in accordance with the standards laid down by the law itself; 55 thus, its foremost
function is to administer and enforce R.A. No. 8042, and not to inquire into the validity of its
provisions. The CA, on the other hand, is vested with the power of judicial review or the power to
declare unconstitutional a law or a provision thereof, such as the subject clause. 56 Petitioner's
interposition of the constitutional issue before the CA was undoubtedly seasonable. The CA was
therefore remiss in failing to take up the issue in its decision.
The third condition that the constitutional issue be critical to the resolution of the case likewise
obtains because the monetary claim of petitioner to his lump-sum salary for the entire unexpired
portion of his 12-month employment contract, and not just for a period of three months, strikes at the
very core of the subject clause.
Thus, the stage is all set for the determination of the constitutionality of the subject clause.
Does the subject clause violate Section 10,

Article III of the Constitution on non-impairment
of contracts?
The answer is in the negative.
Petitioner's claim that the subject clause unduly interferes with the stipulations in his contract on the
term of his employment and the fixed salary package he will receive 57 is not tenable.
Section 10, Article III of the Constitution provides:
No law impairing the obligation of contracts shall be passed.
The prohibition is aligned with the general principle that laws newly enacted have only a prospective
operation,58 and cannot affect acts or contracts already perfected; 59 however, as to laws already in
existence, their provisions are read into contracts and deemed a part thereof. 60 Thus, the non-
impairment clause under Section 10, Article II is limited in application to laws about to be enacted
that would in any way derogate from existing acts or contracts by enlarging, abridging or in any
manner changing the intention of the parties thereto.
As aptly observed by the OSG, the enactment of R.A. No. 8042 in 1995 preceded the execution of
the employment contract between petitioner and respondents in 1998. Hence, it cannot be argued
that R.A. No. 8042, particularly the subject clause, impaired the employment contract of the parties.
Rather, when the parties executed their 1998 employment contract, they were deemed to have
incorporated into it all the provisions of R.A. No. 8042.
But even if the Court were to disregard the timeline, the subject clause may not be declared
unconstitutional on the ground that it impinges on the impairment clause, for the law was enacted in
the exercise of the police power of the State to regulate a business, profession or calling, particularly
the recruitment and deployment of OFWs, with the noble end in view of ensuring respect for the
dignity and well-being of OFWs wherever they may be employed. 61 Police power legislations adopted
by the State to promote the health, morals, peace, education, good order, safety, and general
welfare of the people are generally applicable not only to future contracts but even to those already
in existence, for all private contracts must yield to the superior and legitimate measures taken by the
State to promote public welfare.62
Does the subject clause violate Section 1,

Article III of the Constitution, and Section 18,
Article II and Section 3, Article XIII on labor
as a protected sector?
The answer is in the affirmative.
Section 1, Article III of the Constitution guarantees:
No person shall be deprived of life, liberty, or property without due process of law nor shall any
person be denied the equal protection of the law.
Section 18,63 Article II and Section 3,64 Article XIII accord all members of the labor sector, without
distinction as to place of deployment, full protection of their rights and welfare.
To Filipino workers, the rights guaranteed under the foregoing constitutional provisions translate to
economic security and parity: all monetary benefits should be equally enjoyed by workers of similar
category, while all monetary obligations should be borne by them in equal degree; none should be
denied the protection of the laws which is enjoyed by, or spared the burden imposed on, others in
like circumstances.65
Such rights are not absolute but subject to the inherent power of Congress to incorporate, when it
sees fit, a system of classification into its legislation; however, to be valid, the classification must
comply with these requirements: 1) it is based on substantial distinctions; 2) it is germane to the
purposes of the law; 3) it is not limited to existing conditions only; and 4) it applies equally to all
members of the class.66
There are three levels of scrutiny at which the Court reviews the constitutionality of a classification
embodied in a law: a) the deferential or rational basis scrutiny in which the challenged classification
needs only be shown to be rationally related to serving a legitimate state interest; 67 b) the middle-tier
or intermediate scrutiny in which the government must show that the challenged classification serves
an important state interest and that the classification is at least substantially related to serving that
interest;68 and c) strict judicial scrutiny69 in which a legislative classification which impermissibly
interferes with the exercise of a fundamental right 70 or operates to the peculiar disadvantage of a
suspect class71 is presumed unconstitutional, and the burden is upon the government to prove that
the classification is necessary to achieve a compelling state interest and that it is the least
restrictive means to protect such interest.72
Under American jurisprudence, strict judicial scrutiny is triggered by suspect classifications 73 based
on race74 or gender75 but not when the classification is drawn along income categories. 76
It is different in the Philippine setting. In Central Bank (now Bangko Sentral ng Pilipinas) Employee
Association, Inc. v. Bangko Sentral ng Pilipinas,77 the constitutionality of a provision in the charter of
the Bangko Sentral ng Pilipinas (BSP), a government financial institution (GFI), was challenged for
maintaining its rank-and-file employees under the Salary Standardization Law (SSL), even when the
rank-and-file employees of other GFIs had been exempted from the SSL by their respective
charters. Finding that the disputed provision contained a suspect classification based on salary
grade, the Court deliberately employed the standard of strict judicial scrutiny in its review of the
constitutionality of said provision. More significantly, it was in this case that the Court revealed the
broad outlines of its judicial philosophy, to wit:
Congress retains its wide discretion in providing for a valid classification, and its policies should be
accorded recognition and respect by the courts of justice except when they run afoul of the
Constitution. The deference stops where the classification violates a fundamental right,
or prejudices persons accorded special protection by the Constitution. When these violations
arise, this Court must discharge its primary role as the vanguard of constitutional guaranties, and
require a stricter and more exacting adherence to constitutional limitations. Rational basis should not
suffice.
Admittedly, the view that prejudice to persons accorded special protection by the Constitution
requires a stricter judicial scrutiny finds no support in American or English jurisprudence.
Nevertheless, these foreign decisions and authorities are not per se controlling in this jurisdiction. At
best, they are persuasive and have been used to support many of our decisions. We should not
place undue and fawning reliance upon them and regard them as indispensable mental crutches
without which we cannot come to our own decisions through the employment of our own
endowments. We live in a different ambience and must decide our own problems in the light of our
own interests and needs, and of our qualities and even idiosyncrasies as a people, and always with
our own concept of law and justice. Our laws must be construed in accordance with the intention of
our own lawmakers and such intent may be deduced from the language of each law and the context
of other local legislation related thereto. More importantly, they must be construed to serve our own
public interest which is the be-all and the end-all of all our laws. And it need not be stressed that our
public interest is distinct and different from others.
xxxx
Further, the quest for a better and more "equal" world calls for the use of equal protection as a tool
of effective judicial intervention.
Equality is one ideal which cries out for bold attention and action in the Constitution. The Preamble
proclaims "equality" as an ideal precisely in protest against crushing inequities in Philippine society.
The command to promote social justice in Article II, Section 10, in "all phases of national
development," further explicitated in Article XIII, are clear commands to the State to take affirmative
action in the direction of greater equality. x x x [T]here is thus in the Philippine Constitution no lack of
doctrinal support for a more vigorous state effort towards achieving a reasonable measure of
equality.
Our present Constitution has gone further in guaranteeing vital social and economic rights to
marginalized groups of society, including labor. Under the policy of social justice, the law bends over
backward to accommodate the interests of the working class on the humane justification that those
with less privilege in life should have more in law. And the obligation to afford protection to labor is
incumbent not only on the legislative and executive branches but also on the judiciary to translate
this pledge into a living reality. Social justice calls for the humanization of laws and the equalization
of social and economic forces by the State so that justice in its rational and objectively secular
conception may at least be approximated.
xxxx
Under most circumstances, the Court will exercise judicial restraint in deciding questions of
constitutionality, recognizing the broad discretion given to Congress in exercising its legislative
power. Judicial scrutiny would be based on the "rational basis" test, and the legislative discretion
would be given deferential treatment.
But if the challenge to the statute is premised on the denial of a fundamental right, or the
perpetuation of prejudice against persons favored by the Constitution with special
protection, judicial scrutiny ought to be more strict. A weak and watered down view would call
for the abdication of this Court’s solemn duty to strike down any law repugnant to the Constitution
and the rights it enshrines. This is true whether the actor committing the unconstitutional act is a
private person or the government itself or one of its instrumentalities. Oppressive acts will be struck
down regardless of the character or nature of the actor.
xxxx
In the case at bar, the challenged proviso operates on the basis of the salary grade or officer-
employee status. It is akin to a distinction based on economic class and status, with the higher
grades as recipients of a benefit specifically withheld from the lower grades. Officers of the BSP now
receive higher compensation packages that are competitive with the industry, while the poorer, low-
salaried employees are limited to the rates prescribed by the SSL. The implications are quite
disturbing: BSP rank-and-file employees are paid the strictly regimented rates of the SSL while
employees higher in rank - possessing higher and better education and opportunities for career
advancement - are given higher compensation packages to entice them to stay. Considering that
majority, if not all, the rank-and-file employees consist of people whose status and rank in life are
less and limited, especially in terms of job marketability, it is they - and not the officers - who have
the real economic and financial need for the adjustment . This is in accord with the policy of the
Constitution "to free the people from poverty, provide adequate social services, extend to them a
decent standard of living, and improve the quality of life for all." Any act of Congress that runs
counter to this constitutional desideratum deserves strict scrutiny by this Court before it can pass
muster. (Emphasis supplied)
Imbued with the same sense of "obligation to afford protection to labor," the Court in the present
case also employs the standard of strict judicial scrutiny, for it perceives in the subject clause a
suspect classification prejudicial to OFWs.
Upon cursory reading, the subject clause appears facially neutral, for it applies to all OFWs.
However, a closer examination reveals that the subject clause has a discriminatory intent against,
and an invidious impact on, OFWs at two levels:
First, OFWs with employment contracts of less than one year vis-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;
OFWs with employment contracts of less than one year vis-à-vis OFWs with employment
contracts of one year or more
As pointed out by petitioner,78 it was in Marsaman Manning Agency, Inc. v. National Labor Relations
Commission79 (Second Division, 1999) that the Court laid down the following rules on the application
of the periods prescribed under Section 10(5) of R.A. No. 804, to wit:
A plain reading of Sec. 10 clearly reveals that the choice of which amount to award an
illegally dismissed overseas contract worker, i.e., whether his salaries for the unexpired
portion of his employment contract or three (3) months’ salary for every year of the
unexpired term, whichever is less, comes into play only when the employment contract
concerned has a term of at least one (1) year or more. This is evident from the words "for
every year of the unexpired term" which follows the words "salaries x x x for three
months." To follow petitioners’ thinking that private respondent is entitled to three (3) months salary
only simply because it is the lesser amount is to completely disregard and overlook some words
used in the statute while giving effect to some. This is contrary to the well-established rule in legal
hermeneutics that in interpreting a statute, care should be taken that every part or word thereof be
given effect since the law-making body is presumed to know the meaning of the words employed in
the statue and to have used them advisedly. Ut res magis valeat quam pereat. 80 (Emphasis supplied)
In Marsaman, the OFW involved was illegally dismissed two months into his 10-month contract, but
was awarded his salaries for the remaining 8 months and 6 days of his contract.
Prior to Marsaman, however, there were two cases in which the Court made conflicting rulings on
Section 10(5). One was Asian Center for Career and Employment System and Services v. National
Labor Relations Commission (Second Division, October 1998), 81 which involved an OFW who was
awarded a two-year employment contract, but was dismissed after working for one year and two
months. The LA declared his dismissal illegal and awarded him SR13,600.00 as lump-sum salary
covering eight months, the unexpired portion of his contract. On appeal, the Court reduced the
award to SR3,600.00 equivalent to his three months’ salary, this being the lesser value, to wit:
Under Section 10 of R.A. No. 8042, a worker dismissed from overseas employment without just,
valid or authorized cause is entitled to his salary for the unexpired portion of his employment
contract or for three (3) months for every year of the unexpired term, whichever is less.
In the case at bar, the unexpired portion of private respondent’s employment contract is eight (8)
months. Private respondent should therefore be paid his basic salary corresponding to three (3)
months or a total of SR3,600.82
Another was Triple-Eight Integrated Services, Inc. v. National Labor Relations Commission (Third

Division, December 1998),83 which involved an OFW (therein respondent Erlinda Osdana) who was
originally granted a 12-month contract, which was deemed renewed for another 12 months. After
serving for one year and seven-and-a-half months, respondent Osdana was illegally dismissed, and
the Court awarded her salaries for the entire unexpired portion of four and one-half months of her
contract.
The Marsaman interpretation of Section 10(5) has since been adopted in the following cases:
Case Title Contract Period of Unexpired Period Applied in

Period Service Period the Computation
of the Monetary
Award
Skippers v. 6 months 2 months 4 months 4 months
Maguad84
Bahia Shipping 9 months 8 months 4 months 4 months

v. Reynaldo
Chua 85
Centennial 9 months 4 months 5 months 5 months

Transmarine v.
dela Cruz l86
Talidano v. 12 months 3 months 9 months 3 months

Falcon87
Univan v. CA 88 12 months 3 months 9 months 3 months
Oriental v. CA 89 12 months more than 2 10 months 3 months

months
PCL v. NLRC90 12 months more than 2 more or less 9 3 months

months months
Olarte v. 12 months 21 days 11 months and 9 3 months

Nayona91 days
JSS v.Ferrer92 12 months 16 days 11 months and 3 months

24 days
Pentagon v. 12 months 9 months and 2 months and 23 2 months and 23

Adelantar93 7 days days days
Phil. Employ v. 12 months 10 months 2 months Unexpired portion

Paramio, et al.94
Flourish 2 years 26 days 23 months and 4 6 months or 3

Maritime v. days months for each
Almanzor 95 year of contract
Athenna 1 year, 10 1 month 1 year, 9 months 6 months or 3

Manpower v. months and and 28 days months for each
Villanos 96 28 days year of contract
As the foregoing matrix readily shows, the subject clause classifies OFWs into two categories. The
first category includes OFWs with fixed-period employment contracts of less than one year; in case
of illegal dismissal, they are entitled to their salaries for the entire unexpired portion of their contract.
The second category consists of OFWs with fixed-period employment contracts of one year or more;
in case of illegal dismissal, they are entitled to monetary award equivalent to only 3 months of the
unexpired portion of their contracts.
The disparity in the treatment of these two groups cannot be discounted. In Skippers, the respondent
OFW worked for only 2 months out of his 6-month contract, but was awarded his salaries for the
remaining 4 months. In contrast, the respondent OFWs in Oriental and PCL who had also worked for
about 2 months out of their 12-month contracts were awarded their salaries for only 3 months of the
unexpired portion of their contracts. Even the OFWs involved in Talidano and Univan who
had worked for a longer period of 3 months out of their 12-month contracts before being illegally
dismissed were awarded their salaries for only 3 months.
To illustrate the disparity even more vividly, the Court assumes a hypothetical OFW-A with an
employment contract of 10 months at a monthly salary rate of US$1,000.00 and a hypothetical
OFW-B with an employment contract of 15 months with the same monthly salary rate of
US$1,000.00. Both commenced work on the same day and under the same employer, and were
illegally dismissed after one month of work. Under the subject clause, OFW-A will be entitled to
US$9,000.00, equivalent to his salaries for the remaining 9 months of his contract, whereas OFW-B
will be entitled to only US$3,000.00, equivalent to his salaries for 3 months of the unexpired portion
of his contract, instead of US$14,000.00 for the unexpired portion of 14 months of his contract, as
the US$3,000.00 is the lesser amount.
The disparity becomes more aggravating when the Court takes into account jurisprudence
that, prior to the effectivity of R.A. No. 8042 on July 14, 1995,97 illegally dismissed OFWs, no
matter how long the period of their employment contracts, were entitled to their salaries for the entire
unexpired portions of their contracts. The matrix below speaks for itself:
Case Title Contract Period of Unexpired Period Applied in the

Period Service Period Computation of the
Monetary Award
ATCI v. CA, et 2 years 2 months 22 months 22 months

al.98
Phil. Integrated 2 years 7 days 23 months 23 months and 23

v. NLRC99 and 23 days days
JGB v. NLC100 2 years 9 months 15 months 15 months
Agoy v. 2 years 2 months 22 months 22 months

NLRC101
EDI v. NLRC, et 2 years 5 months 19 months 19 months

al.102
Barros v. 12 months 4 months 8 months 8 months

NLRC, et al.103
Philippine 12 months 6 months 5 months and 5 months and 18 days
Transmarine v. and 22 days 18 days
Carilla104
It is plain that prior to R.A. No. 8042, all OFWs, regardless of contract periods or the unexpired
portions thereof, were treated alike in terms of the computation of their monetary benefits in case of
illegal dismissal. Their claims were subjected to a uniform rule of computation: their basic salaries
multiplied by the entire unexpired portion of their employment contracts.
The enactment of the subject clause in R.A. No. 8042 introduced a differentiated rule of computation
of the money claims of illegally dismissed OFWs based on their employment periods, in the
process singling out one category whose contracts have an unexpired portion of one year or more
and subjecting them to the peculiar disadvantage of having their monetary awards limited to their
salaries for 3 months or for the unexpired portion thereof, whichever is less, but all the while sparing
the other category from such prejudice, simply because the latter's unexpired contracts fall short of
one year.
Among OFWs With Employment Contracts of More Than One Year
Upon closer examination of the terminology employed in the subject clause, the Court now has
misgivings on the accuracy of the Marsaman interpretation.
The Court notes that the subject clause "or for three (3) months for every year of the unexpired
term, whichever is less" contains the qualifying phrases "every year" and "unexpired term." By its
ordinary meaning, the word "term" means a limited or definite extent of time. 105 Corollarily, that "every
year" is but part of an "unexpired term" is significant in many ways: first, the unexpired term must be
at least one year, for if it were any shorter, there would be no occasion for such unexpired term to be
measured by every year; and second, the original term must be more than one year, for otherwise,
whatever would be the unexpired term thereof will not reach even a year. Consequently, the more
decisive factor in the determination of when the subject clause "for three (3) months for every year of
the unexpired term, whichever is less" shall apply is not the length of the original contract period as
held in Marsaman,106 but the length of the unexpired portion of the contract period -- the subject
clause applies in cases when the unexpired portion of the contract period is at least one year, which
arithmetically requires that the original contract period be more than one year.
Viewed in that light, the subject clause creates a sub-layer of discrimination among OFWs whose
contract periods are for more than one year: those who are illegally dismissed with less than one
year left in their contracts shall be entitled to their salaries for the entire unexpired portion thereof,
while those who are illegally dismissed with one year or more remaining in their contracts shall be
covered by the subject clause, and their monetary benefits limited to their salaries for three months
only.
To concretely illustrate the application of the foregoing interpretation of the subject clause, the Court
assumes hypothetical OFW-C and OFW-D, who each have a 24-month contract at a salary rate of
US$1,000.00 per month. OFW-C is illegally dismissed on the 12th month, and OFW-D, on the 13th
month. Considering that there is at least 12 months remaining in the contract period of OFW-C, the
subject clause applies to the computation of the latter's monetary benefits. Thus, OFW-C will be
entitled, not to US$12,000,00 or the latter's total salaries for the 12 months unexpired portion of the
contract, but to the lesser amount of US$3,000.00 or the latter's salaries for 3 months out of the 12-
month unexpired term of the contract. On the other hand, OFW-D is spared from the effects of the
subject clause, for there are only 11 months left in the latter's contract period. Thus, OFW-D will be
entitled to US$11,000.00, which is equivalent to his/her total salaries for the entire 11-month
unexpired portion.
OFWs vis-à-vis Local Workers
With Fixed-Period Employment
As discussed earlier, prior to R.A. No. 8042, a uniform system of computation of the monetary
awards of illegally dismissed OFWs was in place. This uniform system was applicable even to local
workers with fixed-term employment.107
The earliest rule prescribing a uniform system of computation was actually Article 299 of the Code of
Commerce (1888),108 to wit:
Article 299. If the contracts between the merchants and their shop clerks and employees should
have been made of a fixed period, none of the contracting parties, without the consent of the other,
may withdraw from the fulfillment of said contract until the termination of the period agreed upon.
Persons violating this clause shall be subject to indemnify the loss and damage suffered, with the
exception of the provisions contained in the following articles.
In Reyes v. The Compañia Maritima, 109 the Court applied the foregoing provision to determine the
liability of a shipping company for the illegal discharge of its managers prior to the expiration of their
fixed-term employment. The Court therein held the shipping company liable for the salaries of its
managers for the remainder of their fixed-term employment.
There is a more specific rule as far as seafarers are concerned: Article 605 of the Code of
Commerce which provides:
Article 605. If the contracts of the captain and members of the crew with the agent should be for a
definite period or voyage, they cannot be discharged until the fulfillment of their contracts, except for
reasons of insubordination in serious matters, robbery, theft, habitual drunkenness, and damage
caused to the vessel or to its cargo by malice or manifest or proven negligence.
Article 605 was applied to Madrigal Shipping Company, Inc. v. Ogilvie, 110 in
which the Court held the shipping company liable for the salaries and subsistence allowance of its
illegally dismissed employees for the entire unexpired portion of their employment contracts.
While Article 605 has remained good law up to the present, 111 Article 299 of the Code of Commerce
was replaced by Art. 1586 of the Civil Code of 1889, to wit:
Article 1586. Field hands, mechanics, artisans, and other laborers hired for a certain time and for a
certain work cannot leave or be dismissed without sufficient cause, before the fulfillment of the
contract. (Emphasis supplied.)
Citing Manresa, the Court in Lemoine v. Alkan112 read the disjunctive "or" in Article 1586 as a
conjunctive "and" so as to apply the provision to local workers who are employed for a time certain
although for no particular skill. This interpretation of Article 1586 was reiterated in Garcia Palomar v.
Hotel de France Company.113 And in both Lemoine and Palomar, the Court adopted the general
principle that in actions for wrongful discharge founded on Article 1586, local workers are entitled to
recover damages to the extent of the amount stipulated to be paid to them by the terms of their
contract. On the computation of the amount of such damages, the Court in Aldaz v. Gay 114 held:
The doctrine is well-established in American jurisprudence, and nothing has been brought to our
attention to the contrary under Spanish jurisprudence, that when an employee is wrongfully
discharged it is his duty to seek other employment of the same kind in the same community, for the
purpose of reducing the damages resulting from such wrongful discharge. However, while this is the
general rule, the burden of showing that he failed to make an effort to secure other employment of a
like nature, and that other employment of a like nature was obtainable, is upon the defendant. When
an employee is wrongfully discharged under a contract of employment his prima facie damage is the
amount which he would be entitled to had he continued in such employment until the termination of
the period. (Howard vs. Daly, 61 N. Y., 362; Allen vs. Whitlark, 99 Mich., 492; Farrell vs. School
District No. 2, 98 Mich., 43.)115 (Emphasis supplied)
On August 30, 1950, the New Civil Code took effect with new provisions on fixed-term employment:
Section 2 (Obligations with a Period), Chapter 3, Title I, and Sections 2 (Contract of Labor) and 3
(Contract for a Piece of Work), Chapter 3, Title VIII, Book IV.116 Much like Article 1586 of the Civil
Code of 1889, the new provisions of the Civil Code do not expressly provide for the remedies
available to a fixed-term worker who is illegally discharged. However, it is noted that in Mackay
Radio & Telegraph Co., Inc. v. Rich,117 the Court carried over the principles on the payment of
damages underlying Article 1586 of the Civil Code of 1889 and applied the same to a case involving
the illegal discharge of a local worker whose fixed-period employment contract was entered into in
1952, when the new Civil Code was already in effect. 118
More significantly, the same principles were applied to cases involving overseas Filipino workers
whose fixed-term employment contracts were illegally terminated, such as in First Asian Trans &
Shipping Agency, Inc. v. Ople,119 involving seafarers who were illegally discharged. In Teknika Skills
and Trade Services, Inc. v. National Labor Relations Commission, 120 an OFW who was illegally
dismissed prior to the expiration of her fixed-period employment contract as a baby sitter, was
awarded salaries corresponding to the unexpired portion of her contract. The Court arrived at the
same ruling in Anderson v. National Labor Relations Commission, 121 which involved a foreman hired
in 1988 in Saudi Arabia for a fixed term of two years, but who was illegally dismissed after only nine
months on the job -- the Court awarded him salaries corresponding to 15 months, the unexpired
portion of his contract. In Asia World Recruitment, Inc. v. National Labor Relations Commission, 122 a
Filipino working as a security officer in 1989 in Angola was awarded his salaries for the remaining
period of his 12-month contract after he was wrongfully discharged. Finally, in Vinta Maritime Co.,
Inc. v. National Labor Relations Commission, 123 an OFW whose 12-month contract was illegally cut
short in the second month was declared entitled to his salaries for the remaining 10 months of his
contract.
In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-term employment who were
illegally discharged were treated alike in terms of the computation of their money claims: they were
uniformly entitled to their salaries for the entire unexpired portions of their contracts. But with the
enactment of R.A. No. 8042, specifically the adoption of the subject clause, illegally dismissed
OFWs with an unexpired portion of one year or more in their employment contract have since been
differently treated in that their money claims are subject to a 3-month cap, whereas no such
limitation is imposed on local workers with fixed-term employment.
The Court concludes that the subject clause contains a suspect classification in that, in the
computation of the monetary benefits of fixed-term employees who are illegally discharged, it
imposes a 3-month cap on the claim of OFWs with an unexpired portion of one year or more
in their contracts, but none on the claims of other OFWs or local workers with fixed-term
employment. The subject clause singles out one classification of OFWs and burdens it with a
peculiar disadvantage.
There being a suspect classification involving a vulnerable sector protected by the Constitution, the
Court now subjects the classification to a strict judicial scrutiny, and determines whether it serves a
compelling state interest through the least restrictive means.
What constitutes compelling state interest is measured by the scale of rights and powers arrayed in
the Constitution and calibrated by history.124 It is akin to the paramount interest of the state125 for
which some individual liberties must give way, such as the public interest in safeguarding health or
maintaining medical standards,126 or in maintaining access to information on matters of public
concern.127
In the present case, the Court dug deep into the records but found no compelling state interest that
the subject clause may possibly serve.
The OSG defends the subject clause as a police power measure "designed to protect the
employment of Filipino seafarers overseas x x x. By limiting the liability to three months [sic], Filipino
seafarers have better chance of getting hired by foreign employers." The limitation also protects the
interest of local placement agencies, which otherwise may be made to shoulder millions of pesos in
"termination pay."128
The OSG explained further:
Often, placement agencies, their liability being solidary, shoulder the payment of money claims in the
event that jurisdiction over the foreign employer is not acquired by the court or if the foreign
employer reneges on its obligation. Hence, placement agencies that are in good faith and which
fulfill their obligations are unnecessarily penalized for the acts of the foreign employer. To protect
them and to promote their continued helpful contribution in deploying Filipino migrant workers,
liability for money are reduced under Section 10 of RA 8042.
This measure redounds to the benefit of the migrant workers whose welfare the government seeks
to promote. The survival of legitimate placement agencies helps [assure] the government that
migrant workers are properly deployed and are employed under decent and humane
conditions.129 (Emphasis supplied)
However, nowhere in the Comment or Memorandum does the OSG cite the source of its perception
of the state interest sought to be served by the subject clause.
The OSG locates the purpose of R.A. No. 8042 in the speech of Rep. Bonifacio Gallego in
sponsorship of House Bill No. 14314 (HB 14314), from which the law originated; 130 but the speech
makes no reference to the underlying reason for the adoption of the subject clause. That is only
natural for none of the 29 provisions in HB 14314 resembles the subject clause.
On the other hand, Senate Bill No. 2077 (SB 2077) contains a provision on money claims, to wit:
Sec. 10. Money Claims. - Notwithstanding any provision of law to the contrary, the Labor Arbiters of
the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to
hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising
out of an employer-employee relationship or by virtue of the complaint, the claim arising out of an
employer-employee relationship or by virtue of any law or contract involving Filipino workers for
overseas employment including claims for actual, moral, exemplary and other forms of damages.
The liability of the principal and the recruitment/placement agency or any and all claims under this
Section shall be joint and several.
Any compromise/amicable settlement or voluntary agreement on any money claims exclusive of

damages under this Section shall not be less than fifty percent (50%) of such money
claims: Provided, That any installment payments, if applicable, to satisfy any such compromise or
voluntary settlement shall not be more than two (2) months. Any compromise/voluntary agreement in
violation of this paragraph shall be null and void.
Non-compliance with the mandatory period for resolutions of cases provided under this Section shall
subject the responsible officials to any or all of the following penalties:
(1) The salary of any such official who fails to render his decision or resolution within the
prescribed period shall be, or caused to be, withheld until the said official complies therewith;
(2) Suspension for not more than ninety (90) days; or
(3) Dismissal from the service with disqualification to hold any appointive public office for five
(5) years.
Provided, however, That the penalties herein provided shall be without prejudice to any liability
which any such official may have incurred under other existing laws or rules and regulations as a
consequence of violating the provisions of this paragraph.
But significantly, Section 10 of SB 2077 does not provide for any rule on the computation of money
claims.
A rule on the computation of money claims containing the subject clause was inserted and
eventually adopted as the 5th paragraph of Section 10 of R.A. No. 8042. The Court examined the
rationale of the subject clause in the transcripts of the "Bicameral Conference Committee
(Conference Committee) Meetings on the Magna Carta on OCWs (Disagreeing Provisions of Senate
Bill No. 2077 and House Bill No. 14314)." However, the Court finds no discernible state interest, let
alone a compelling one, that is sought to be protected or advanced by the adoption of the subject
clause.
In fine, the Government has failed to discharge its burden of proving the existence of a compelling
state interest that would justify the perpetuation of the discrimination against OFWs under the
subject clause.
Assuming that, as advanced by the OSG, the purpose of the subject clause is to protect the
employment of OFWs by mitigating the solidary liability of placement agencies, such callous and
cavalier rationale will have to be rejected. There can never be a justification for any form of
government action that alleviates the burden of one sector, but imposes the same burden on another
sector, especially when the favored sector is composed of private businesses such as placement
agencies, while the disadvantaged sector is composed of OFWs whose protection no less than the
Constitution commands. The idea that private business interest can be elevated to the level of a
compelling state interest is odious.
Moreover, even if the purpose of the subject clause is to lessen the solidary liability of placement
agencies vis-a-vis their foreign principals, there are mechanisms already in place that can be
employed to achieve that purpose without infringing on the constitutional rights of OFWs.
The POEA Rules and Regulations Governing the Recruitment and Employment of 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. 1avvphi1
Further, there would be certain misgivings if one is to approach the declaration of the
unconstitutionality of the subject clause from the lone perspective that the clause directly violates
state policy on labor under Section 3,131 Article XIII of the Constitution.
While all the provisions of the 1987 Constitution are presumed self-executing, 132 there are some
which this Court has declared not judicially enforceable, Article XIII being one,133 particularly
Section 3 thereof, the nature of which, this Court, in Agabon v. National Labor Relations
Commission,134 has described to be not self-actuating:
Thus, the constitutional mandates of protection to labor and security of tenure may be deemed as
self-executing in the sense that these are automatically acknowledged and observed without need
for any enabling legislation. However, to declare that the constitutional provisions are enough to
guarantee the full exercise of the rights embodied therein, and the realization of ideals therein
expressed, would be impractical, if not unrealistic. The espousal of such view presents the
dangerous tendency of being overbroad and exaggerated. The guarantees of "full protection to
labor" and "security of tenure", when examined in isolation, are facially unqualified, and the broadest
interpretation possible suggests a blanket shield in favor of labor against any form of removal
regardless of circumstance. This interpretation implies an unimpeachable right to continued
employment-a utopian notion, doubtless-but still hardly within the contemplation of the framers.
Subsequent legislation is still needed to define the parameters of these guaranteed rights to ensure
the protection and promotion, not only the rights of the labor sector, but of the employers' as well.
Without specific and pertinent legislation, judicial bodies will be at a loss, formulating their own
conclusion to approximate at least the aims of the Constitution.
Ultimately, therefore, Section 3 of Article XIII cannot, on its own, be a source of a positive
enforceable right to stave off the dismissal of an employee for just cause owing to the failure to
serve proper notice or hearing. As manifested by several framers of the 1987 Constitution, the
provisions on social justice require legislative enactments for their enforceability. 135 (Emphasis
added)
Thus, Section 3, Article XIII cannot be treated as a principal source of direct enforceable rights, for
the violation of which the questioned clause may be declared unconstitutional. It may unwittingly risk
opening the floodgates of litigation to every worker or union over every conceivable violation of so
broad a concept as social justice for labor.
It must be stressed that Section 3, Article XIII does not directly bestow on the working class any
actual enforceable right, but merely clothes it with the status of a sector for whom the Constitution
urges protection through executive or legislative action and judicial recognition. Its utility is best
limited to being an impetus not just for the executive and legislative departments, but for the judiciary
as well, to protect the welfare of the working class. And it was in fact consistent with that
constitutional agenda that the Court in Central Bank (now Bangko Sentral ng Pilipinas) Employee
Association, Inc. v. Bangko Sentral ng Pilipinas, penned by then Associate Justice now Chief Justice
Reynato S. Puno, formulated the judicial precept that when the challenge to a statute is premised on
the perpetuation of prejudice against persons favored by the Constitution with special protection --
such as the working class or a section thereof -- the Court may recognize the existence of a suspect
classification and subject the same to strict judicial scrutiny.
The view that the concepts of suspect classification and strict judicial scrutiny formulated in Central
Bank Employee Association exaggerate the significance of Section 3, Article XIII is a groundless
apprehension. Central Bank applied Article XIII in conjunction with the equal protection clause.
Article XIII, by itself, without the application of the equal protection clause, has no life or force of its
own as elucidated in Agabon.
Along the same line of reasoning, the Court further holds that the subject clause violates petitioner's
right to substantive due process, for it deprives him of property, consisting of monetary benefits,
without any existing valid governmental purpose. 136
The argument of the Solicitor General, that the actual purpose of the subject clause of limiting the
entitlement of OFWs to their three-month salary in case of illegal dismissal, is to give them a better
chance of getting hired by foreign employers. This is plain speculation. As earlier discussed, there is
nothing in the text of the law or the records of the deliberations leading to its enactment or the
pleadings of respondent that would indicate that there is an existing governmental purpose for the
subject clause, or even just a pretext of one.
The subject clause does not state or imply any definitive governmental purpose; and it is for that
precise reason that the clause violates not just petitioner's right to equal protection, but also her right
to substantive due process under Section 1,137 Article III of the Constitution.
The subject clause being unconstitutional, petitioner is entitled to his salaries for the entire unexpired
period of nine months and 23 days of his employment contract, pursuant to law and jurisprudence
prior to the enactment of R.A. No. 8042.
On the Third Issue
Petitioner contends that his overtime and leave pay should form part of the salary basis in the
computation of his monetary award, because these are fixed benefits that have been stipulated into
his contract.
Petitioner is mistaken.
The word salaries in Section 10(5) does not include overtime and leave pay. For seafarers like
petitioner, DOLE Department Order No. 33, series 1996, provides a Standard Employment Contract
of Seafarers, in which salary is understood as the basic wage, exclusive of overtime, leave pay and
other bonuses; whereas overtime pay is compensation for all work "performed" in excess of the
regular eight hours, and holiday pay is compensation for any work "performed" on designated rest
days and holidays.
By the foregoing definition alone, there is no basis for the automatic inclusion of overtime and
holiday pay in the computation of petitioner's monetary award, unless there is evidence that he
performed work during those periods. As the Court held in Centennial Transmarine, Inc. v. Dela
Cruz,138
However, the payment of overtime pay and leave pay should be disallowed in light of our ruling in
Cagampan v. National Labor Relations Commission, to wit:
The rendition of overtime work and the submission of sufficient proof that said was actually
performed are conditions to be satisfied before a seaman could be entitled to overtime pay which
should be computed on the basis of 30% of the basic monthly salary. In short, the contract provision
guarantees the right to overtime pay but the entitlement to such benefit must first be established.
In the same vein, the claim for the day's leave pay for the unexpired portion of the contract is
unwarranted since the same is given during the actual service of the seamen.
APPRENTICESHIP
1) G.R. No. 114337 September 29, 1995
NITTO ENTERPRISES, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and ROBERTO CAPILI, respondents.
KAPUNAN, J.:
This petition for certiorari under Rule 65 of the Rules of Court seeking to annul the
decision rendered by public respondent National Labor Relations Commission, which reversed the
1
decision of the Labor Arbiter.
Briefly, the facts of the case are as follows:
Petitioner Nitto Enterprises, a company engaged in the sale of glass and aluminum products, hired
Roberto Capili sometime in May 1990 as an apprentice machinist, molder and core maker as
evidenced by an apprenticeship agreement for a period of six (6) months from May 28, 1990 to
2
November 28, 1990 with a daily wage rate of P66.75 which was 75% of the applicable minimum
wage.
At around 1:00 p.m. of August 2, 1990, Roberto Capili who was handling a piece of glass which he
was working on, accidentally hit and injured the leg of an office secretary who was treated at a
nearby hospital.
Later that same day, after office hours, private respondent entered a workshop within the office
premises which was not his work station. There, he operated one of the power press machines
without authority and in the process injured his left thumb. Petitioner spent the amount of P1,023.04
to cover the medication of private respondent.
The following day, Roberto Capili was asked to resign in a letter which reads:
3
August
2, 1990
Wala siyang tanggap ng utos mula sa superbisor at wala siyang experiensa kung
papaano gamitin and "TOOL" sa pagbuhat ng salamin, sarili niyang desisyon ang
paggamit ng tool at may disgrasya at nadamay pa ang isang sekretarya ng
kompanya.
Sa araw ding ito limang (5) minute ang nakakalipas mula alas-singko ng hapon siya
ay pumasok sa shop na hindi naman sakop ng kanyang trabaho. Pinakialaman at
kinalikot ang makina at nadisgrasya niya ang kanyang sariling kamay.
Nakagastos ang kompanya ng mga sumusunod:
Emergency and doctor fee P715.00

Medecines (sic) and others 317.04
Bibigyan siya ng kompanya ng Siyam na araw na libreng sahod hanggang

matanggal ang tahi ng kanyang kamay.
Tatanggapin niya ang sahod niyang anim na araw, mula ika-30 ng Hulyo at ika-4 ng
Agosto, 1990.
Ang kompanya ang magbabayad ng lahat ng gastos pagtanggal ng tahi ng kanyang

kamay, pagkatapos ng siyam na araw mula ika-2 ng Agosto.
Sa lahat ng nakasulat sa itaas, hinihingi ng kompanya ang kanyang resignasyon,

kasama ng kanyang comfirmasyon at pag-ayon na ang lahat sa itaas ay totoo.
Naiintindihan ko ang lahat ng nakasulat sa itaas, at ang lahat ng ito ay aking

pagkakasala sa hindi pagsunod sa alintuntunin ng kompanya.
(Sgd.) Roberto
Capili
Roberto Capili
On August 3, 1990 private respondent executed a Quitclaim and Release in favor of petitioner for
and in consideration of the sum of P1,912.79. 4
Three days after, or on August 6, 1990, private respondent formally filed before the NLRC Arbitration
Branch, National Capital Region a complaint for illegal dismissal and payment of other monetary
benefits.
On October 9, 1991, the Labor Arbiter rendered his decision finding the termination of private
respondent as valid and dismissing the money claim for lack of merit. The dispositive portion of the
ruling reads:
WHEREFORE, premises considered, the termination is valid and for cause, and the
money claims dismissed for lack of merit.
The respondent however is ordered to pay the complainant the amount of P500.00
as financial assistance.
SO ORDERED. 5
Labor Arbiter Patricio P. Libo-on gave two reasons for ruling that the dismissal of Roberto Capilian
was valid. First, private respondent who was hired as an apprentice violated the terms of their
agreement when he acted with gross negligence resulting in the injury not only to himself but also to
his fellow worker. Second, private respondent had shown that "he does not have the proper attitude
in employment particularly the handling of machines without authority and proper training. 6
On July 26, 1993, the National Labor Relations Commission issued an order reversing the decision
of the Labor Arbiter, the dispositive portion of which reads:
WHEREFORE, the appealed decision is hereby set aside. The respondent is hereby
directed to reinstate complainant to his work last performed with backwages
computed from the time his wages were withheld up to the time he is actually
reinstated. The Arbiter of origin is hereby directed to further hear complainant's
money claims and to dispose them on the basis of law and evidence obtaining.
SO ORDERED. 7
The NLRC declared that private respondent was a regular employee of petitioner by
ruling thus:
As correctly pointed out by the complainant, we cannot understand how an

apprenticeship agreement filed with the Department of Labor only on June 7, 1990
could be validly used by the Labor Arbiter as basis to conclude that the complainant
was hired by respondent as a plain "apprentice" on May 28, 1990. Clearly, therefore,
the complainant was respondent's regular employee under Article 280 of the Labor
Code, as early as May 28,1990, who thus enjoyed the security of tenure guaranteed
in Section 3, Article XIII of our 1987 Constitution.
The complainant being for illegal dismissal (among others) it then behooves upon
respondent, pursuant to Art. 227(b) and as ruled in Edwin Gesulgon vs. NLRC, et al.
(G.R. No. 90349, March 5, 1993, 3rd Div., Feliciano, J.) to prove that the dismissal of
complainant was for a valid cause. Absent such proof, we cannot but rule that the
complainant was illegally dismissed. 8
On January 28, 1994, Labor Arbiter Libo-on called for a conference at which only private
respondent's representative was present.
On April 22, 1994, a Writ of Execution was issued, which reads:
NOW, THEREFORE, finding merit in [private respondent's] Motion for Issuance of

the Writ, you are hereby commanded to proceed to the premises of [petitioner] Nitto
Enterprises and Jovy Foster located at No. l 74 Araneta Avenue, Portero, Malabon,
Metro Manila or at any other places where their properties are located and effect the
reinstatement of herein [private respondent] to his work last performed or at the
option of the respondent by payroll reinstatement.
You are also to collect the amount of P122,690.85 representing his backwages as
called for in the dispositive portion, and turn over such amount to this Office for
proper disposition.
Petitioner filed a motion for reconsideration but the same was denied.
Hence, the instant petition — for certiorari.
The issues raised before us are the following:
WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE

OF DISCRETION IN HOLDING THAT PRIVATE RESPONDENT WAS NOT AN
APPRENTICE.
II
WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE

OF DISCRETION IN HOLDING THAT PETITIONER HAD NOT ADEQUATELY
PROVEN THE EXISTENCE OF A VALID CAUSE IN TERMINATING THE SERVICE
OF PRIVATE RESPONDENT.
We find no merit in the petition.
Petitioner assails the NLRC's finding that private respondent Roberto Capili cannot plainly be
considered an apprentice since no apprenticeship program had yet been filed and approved at the
time the agreement was executed.
Petitioner further insists that the mere signing of the apprenticeship agreement already established
an employer-apprentice relationship.
Petitioner's argument is erroneous.
The law is clear on this matter. Article 61 of the Labor Code provides:
Contents of apprenticeship agreement. — Apprenticeship agreements, including the

main rates of apprentices, shall conform to the rules issued by the Minister of Labor
and Employment. The period of apprenticeship shall not exceed six months.
Apprenticeship agreements providing for wage rates below the legal minimum wage,
which in no case shall start below 75% per cent of the applicable minimum wage,
may be entered into only in accordance with apprenticeship program duly approved
by the Minister of Labor and Employment. The Ministry shall develop standard model
programs of apprenticeship. (emphasis supplied)
In the case at bench, the apprenticeship agreement between petitioner and private respondent was
executed on May 28, 1990 allegedly employing the latter as an apprentice in the trade of "care
maker/molder." On the same date, an apprenticeship program was prepared by petitioner and
submitted to the Department of Labor and Employment. However, the apprenticeship Agreement
was filed only on June 7, 1990. Notwithstanding the absence of approval by the Department of Labor
and Employment, the apprenticeship agreement was enforced the day it was signed.
Based on the evidence before us, petitioner did not comply with the requirements of the law. It is
mandated that apprenticeship agreements entered into by the employer and apprentice shall be
entered only in accordance with the apprenticeship program duly approved by the Minister of Labor
and Employment.
Prior approval by the Department of Labor and Employment of the proposed apprenticeship program
is, therefore, a condition sine quo non before an apprenticeship agreement can be validly entered
into.
The act of filing the proposed apprenticeship program with the Department of Labor and
Employment is a preliminary step towards its final approval and does not instantaneously give rise to
an employer-apprentice relationship.
Article 57 of the Labor Code provides that the State aims to "establish a national apprenticeship
program through the participation of employers, workers and government and non-government
agencies" and "to establish apprenticeship standards for the protection of apprentices." To translate
such objectives into existence, prior approval of the DOLE to any apprenticeship program has to be
secured as a condition sine qua non before any such apprenticeship agreement can be fully
enforced. The role of the DOLE in apprenticeship programs and agreements cannot be debased.
Hence, since the apprenticeship agreement between petitioner and private respondent has no force
and effect in the absence of a valid apprenticeship program duly approved by the DOLE, private
respondent's assertion that he was hired not as an apprentice but as a delivery boy ("kargador" or
"pahinante") deserves credence. He should rightly be considered as a regular employee of petitioner
as defined by Article 280 of the Labor Code:
Art. 280. Regular and Casual Employment. — The provisions of written agreement to
the contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged
to perform activities which are usually necessary or desirable in the usual business
or trade of the employer, except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined at
the time of the engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the duration of the
season.
An employment shall be deemed to be casual if it is not covered by the preceding

paragraph: Provided, That, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered a regular
employee with respect to the activity in which he is employed and his employment
shall continue while such activity exists. (Emphasis supplied)
and pursuant to the constitutional mandate to "protect the rights of workers and promote their
welfare."9
Petitioner further argues that, there is a valid cause for the dismissal of private respondent.
There is an abundance of cases wherein the Court ruled that the twin requirements of due process,
substantive and procedural, must be complied with, before valid dismissal exists. Without which,
10
the dismissal becomes void.

The twin requirements of notice and hearing constitute the essential elements of due process. This
simply means that the employer shall afford the worker ample opportunity to be heard and to defend
himself with the assistance of his representative, if he so desires.
Ample opportunity connotes every kind of assistance that management must accord the employee to
enable him to prepare adequately for his defense including legal representation. 11
As held in the case of Pepsi-Cola Bottling Co., Inc. v. NLRC: 12
The law requires that the employer must furnish the worker sought to be dismissed
with two (2) written notices before termination of employee can be legally effected:
(1) notice which apprises the employee of the particular acts or omissions for which
his dismissal is sought; and (2) the subsequent notice which informs the employee of
the employer's decision to dismiss him (Sec. 13, BP 130; Sec. 2-6 Rule XIV, Book V,
Rules and Regulations Implementing the Labor Code as amended). Failure to
comply with the requirements taints the dismissal with illegality. This procedure is
mandatory, in the absence of which, any judgment reached by management is void
and in existent (Tingson, Jr. vs. NLRC, 185 SCRA 498 [1990]; National Service Corp.
vs. NLRC, 168 SCRA 122; Ruffy vs. NLRC. 182 SCRA 365 [1990]).
The fact is private respondent filed a case of illegal dismissal with the Labor Arbiter only three days
after he was made to sign a Quitclaim, a clear indication that such resignation was not voluntary and
deliberate.
Private respondent averred that he was actually employed by petitioner as a delivery boy ("kargador"
or "pahinante").
He further asserted that petitioner "strong-armed" him into signing the aforementioned resignation
letter and quitclaim without explaining to him the contents thereof. Petitioner made it clear to him that
anyway, he did not have a choice. 13
Petitioner cannot disguise the summary dismissal of private respondent by orchestrating the latter's
alleged resignation and subsequent execution of a Quitclaim and Release. A judicious examination
of both events belies any spontaneity on private respondent's part.
2) G.R. No. 187320 January 26, 2011
ATLANTA INDUSTRIES, INC. and/or ROBERT CHAN, Petitioners,

vs.
APRILITO R. SEBOLINO, KHIM V. COSTALES, ALVIN V. ALMOITE, and JOSEPH S.
SAGUN, Respondents.
DECISION
FACTS:
In the months of February and March 2005, complainants Aprilito R. Sebolino, Khim V. Costales,
Alvin V. Almoite, Joseph S. Sagun, Agosto D. Zaño, Domingo S. Alegria, Jr., Ronie Ramos, Edgar
Villagomez, Melvin Pedregoza, Teofanes B. Chiong, Jr., Leonardo L. dela Cruz, Arnold A.
Magalang, and Saturnino M. Mabanag filed several complaints for illegal dismissal,
regularization, underpayment, nonpayment of wages and other money claims, as well as
claims for moral and exemplary damages and attorney’s fees against the petitioners Atlanta
Industries, Inc. (Atlanta) and its President and Chief Operating Officer Robert Chan. Atlanta is
a domestic corporation engaged in the manufacture of steel pipes.
The complaints were consolidated and were raffled to Labor Arbiter Daniel Cajilig, but were later
transferred to Labor Arbiter Dominador B. Medroso, Jr.
The complainants alleged that they had attained regular status as they were allowed to work with
Atlanta for more than six (6) months from the start of a purported apprenticeship agreement between
them and the company. They claimed that they were illegally dismissed when the apprenticeship
agreement expired.
In defense, Atlanta and Chan argued that the workers were not entitled to regularization and to their
money claims because they were engaged as apprentices under a government-approved
apprenticeship program. The company offered to hire them as regular employees in the event
vacancies for regular positions occur in the section of the plant where they had trained. They also
claimed that their names did not appear in the list of employees (Master List) 5 prior to their
engagement as apprentices.
On May 24, 2005, dela Cruz, Magalang, Zaño and Chiong executed a Pagtalikod at Pagwawalang
Saysay before Labor Arbiter Cajilig.
The Compulsory Arbitration Rulings
On April 24, 2006, Labor Arbiter Medroso dismissed the complaint with respect to dela Cruz,
Magalang, Zaño and Chiong, but found the termination of service of the remaining nine to be
illegal.6 Consequently, the arbiter awarded the dismissed workers backwages, wage
differentials, holiday pay and service incentive leave pay amounting to ₱1,389,044.57 in the
aggregate.
Atlanta appealed to the National Labor Relations Commission (NLRC). In the meantime, or on
October 10, 2006, Ramos, Alegria, Villagomez, Costales and Almoite allegedly entered into a
compromise agreement with Atlanta.7 The agreement provided that except for Ramos, Atlanta
agreed to pay the workers a specified amount as settlement, and to acknowledge them at the same
time as regular employees.
On December 29, 2006,8 the NLRC rendered a decision, on appeal, modifying the ruling of the
labor arbiter, as follows: (1) withdrawing the illegal dismissal finding with respect to Sagun,
Mabanag, Sebolino and Pedregoza; (2) affirming the dismissal of the complaints of dela Cruz,
Zaño, Magalang and Chiong; (3) approving the compromise agreement entered into by
Costales, Ramos, Villagomez, Almoite and Alegria, and (4) denying all other claims.
Sebolino, Costales, Almoite and Sagun moved for the reconsideration of the decision, but the
NLRC denied the motion in its March 30, 20079 resolution. The four then sought relief from the
CA through a petition for certiorari under Rule 65 of the Rules of Court. They charged that the NLRC
committed grave abuse of discretion in: (1) failing to recognize their prior employment with Atlanta;
(2) declaring the second apprenticeship agreement valid; (3) holding that the dismissal of Sagun,
Mabanag, Sebolino and Melvin Pedregoza is legal; and (4) upholding the compromise agreement
involving Costales, Ramos, Villagomez, Almoite and Alegria.
The CA Decision
The CA granted the petition based on the following findings: 10
1. The respondents were already employees of the company before they entered into the
first and second apprenticeship agreements – Almoite and Costales were employed as
early as December 2003 and, subsequently, entered into a first apprenticeship
agreement from May 13, 2004 to October 12, 2004; before this first agreement expired,
a second apprenticeship agreement, from October 9, 2004 to March 8, 2005 was
executed. The same is true with Sebolino and Sagun, who were employed by Atlanta as
early as March 3, 2004. Sebolino entered into his first apprenticeship agreement with the
company from March 20, 2004 to August 19, 2004, and his second apprenticeship
agreement from August 20, 2004 to January 19, 2005. Sagun, on the other hand, entered
into his first agreement from May 28, 2004 to October 8, 2004, and the second agreement
from October 9, 2004 to March 8, 2005.
2. The first and second apprenticeship agreements were defective as they were
executed in violation of the law and the rules.11 The agreements did not indicate the
trade or occupation in which the apprentice would be trained; neither was the
apprenticeship program approved by the Technical Education and Skills Development
Authority (TESDA).
3. The positions occupied by the respondents – machine operator, extruder operator and
scaleman – are usually necessary and desirable in the manufacture of plastic building
materials, the company’s main business. Costales, Almoite, Sebolino and Sagun were,
therefore, regular employees whose dismissals were illegal for lack of a just or
authorized cause and notice.
4. The compromise agreement entered into by Costales and Almoite, together with
Ramos, Villagomez and Alegria, was not binding on Costales and Almoite because
they did not sign the agreement.
The petitioners themselves admitted that Costales and Almoite were initially planned to be a part of
the compromise agreement, but their employment has been regularized as early as January 11,
2006; hence, the company did not pursue their inclusion in the compromise agreement. 12
The CA faulted the NLRC for failing to appreciate the evidence regarding the respondents’
prior employment with Atlanta. The NLRC recognized the prior employment of Costales and
Almoite on Atlanta’s monthly report for December 2003 for the CPS Department/Section dated
January 6, 2004.13 This record shows that Costales and Almoite were assigned to the company’s first
shift from 7:00 a.m. to 3:00 p.m. The NLRC ignored Sebolino and Sagun’s prior employment under
the company’s Production and Work Schedule for March 7 to 12, 2005 dated March 3, 2004, 14 as
they had been Atlanta’s employees as early as March 3, 2004, with Sebolino scheduled to work on
March 7-12, 2005 at 7:00 a.m. to 7:00 p.m., while Sagun was scheduled to work for the same period
but from 7:00 p.m. to 7:00 a.m. The CA noted that Atlanta failed to challenge the authenticity of the
two documents before it and the labor authorities.
Atlanta and Chan moved for reconsideration, but the CA denied the motion in a resolution
rendered on March 25, 2009.15 Hence, the present petition.
The Petition
Atlanta seeks a reversal of the CA decision, contending that the appellate court erred in
(1) concluding that Costales, Almoite, Sebolino and Sagun were employed by Atlanta
before they were engaged as apprentices;
(2) ruling that a second apprenticeship agreement is invalid;
(3) declaring that the respondents were illegally dismissed; and
(4) disregarding the compromise agreement executed by Costales and Almoite. It submits the
following arguments:
First. The CA’s conclusion that the respondent workers were company employees before they were
engaged as apprentices was primarily based on the Monthly Report 16 and the Production and Work
Schedule for March 7-12, 2005, 17 in total disregard of the Master List18 prepared by the company
accountant, Emelita M. Bernardo. The names of Costales, Almoite, Sebolino and Sagun do not
appear as employees in the Master List which "contained the names of all the persons who
were employed by and at petitioner."19
Atlanta faults the CA for relying on the Production and Work Schedule and the Monthly Report which
were not sworn to, and in disregarding the Master List whose veracity was sworn to by Bernardo and
by Alex Go who headed the company’s accounting division. It maintains that the CA should have
given more credence to the Master List.
Second. In declaring invalid the apprenticeship agreements it entered into with the respondent
workers, the CA failed to recognize the rationale behind the law on apprenticeship. It submits
that under the law,20 apprenticeship agreements are valid, provided they do not exceed six (6)
months and the apprentices are paid the appropriate wages of at least 75% of the applicable
minimum wage.
The respondents initially executed a five-month apprenticeship program with Atlanta, at the end of
which, they "voluntarily and willingly entered into another apprenticeship agreement with the
petitioner for the training of a second skill"21 for five months; thus, the petitioners committed no
violation of the apprenticeship period laid down by the law.
Further, the apprenticeship agreements, entered into by the parties, complied with the requisites
under Article 62 of the Labor Code; the company’s authorized representative and the respondents
signed the agreements and these were ratified by the company’s apprenticeship committee. The
apprenticeship program itself was approved and certified by the TESDA.22 The CA, thus, erred
in overturning the NLRC’s finding that the apprenticeship agreements were valid.
Third. There was no illegal dismissal as the respondent workers’ tenure ended with the
expiration of the apprenticeship agreement they entered into. There was, therefore, no regular
employer-employee relationship between Atlanta and the respondent workers.
The Case for Costales, Almoite, Sebolino and Sagun
In a Comment filed on August 6, 2009, 23 Costales, Almoite, Sebolino and Sagun pray for a denial of
the petition for being procedurally defective and for lack of merit.
The respondent workers contend that the petition failed to comply with Section 4, Rule 45 of the
Rules of Court which requires that the petition be accompanied by supporting material portions of
the records. The petitioners failed to attach to the petition a copy of the Production and Work
Schedule despite their submission that the CA relied heavily on the document in finding the
respondent workers’ prior employment with Atlanta. They also did not attach a copy of the
compromise agreement purportedly executed by Costales and Almoite. For this reason, the
respondent workers submit that the petition should be dismissed.
The respondents posit that the CA committed no error in holding that they were already Atlanta’s
employees before they were engaged as apprentices, as confirmed by the company’s Production
and Work Schedule.24 They maintain that the Production and Work Schedule meets the requirement
of substantial evidence as the petitioners failed to question its authenticity. They point out that the
schedule was prepared by Rose A. Quirit and approved by Adolfo R. Lope, head of the company’s
PE/Spiral Section. They argue that it was highly unlikely that the head of a production section of the
company would prepare and assign work to the complainants if the latter had not been company
employees.
The respondent workers reiterate their mistrust of the Master List25 as evidence that they were not
employees of the company at the time they became apprentices. They label the Master List as "self-
serving, dubious and even if considered as authentic, its content contradicts a lot of petitioner’s claim
and allegations,"26 thus -
1. Aside from the fact that the Master List is not legible, it contains only the names of inactive
employees. Even those found by the NLRC to have been employed in the company (such as
Almoite, Costales and Sagun) do not appear in the list. If Costales and Almoite had been
employed with Atlanta since January 11, 2006, as the company claimed, 27 their names would
have been in the list, considering that the Master List accounts for all employees "as of May
2006" – the notation carried on top of each page of the document.
2. There were no entries of employees hired or resigned in the years 2005 and 2006 despite
the "as of May 2006" notation; several pages making up the Master List contain names of
employees for the years 1999 - 2004.
3. The fact that Atlanta presented the purported Master List instead of the payroll raised
serious doubts on the authenticity of the list.
In sum, the respondent workers posit that the presentation of the Master List revealed the "intention
of the herein petitioner[s] to perpetually hide the fact of [their] prior employment." 28
On the supposed apprenticeship agreements they entered into, Costales, Almoite, Sebolino and
Sagun refuse to accept the agreements’ validity, contending that the company’s apprenticeship
program is merely a ploy "to continually deprive [them] of their rightful wages and benefits which are
due them as regular employees."29 They submit the following "indubitable facts and ratiocinations:" 30
1. The apprenticeship agreements were submitted to TESDA only in 2005 (with dates of
receipt on "1/4/05" & "2/22/05"31 ), when the agreements were supposed to have been
executed in April or May 2004. Thus, the submission was made long after the starting date of
the workers’ apprenticeship or even beyond the agreement’s completion/termination date, in
violation of Section 23, Rule VI, Book II of the Labor Code.
2. The respondent workers were made to undergo apprenticeship for occupations different
from those allegedly approved by TESDA. TESDA approved Atlanta’s apprenticeship
program on "Plastic Molder"32 and not for extrusion molding process, engineering, pelletizing
process and mixing process.
3. The respondents were already skilled workers prior to the apprenticeship program as they
had been employed and made to work in the different job positions where they had
undergone training. Sagun and Sebolino, together with Mabanag, Pedregoza, dela Cruz,
Chiong, Magalang and Alegria were even given production assignments and work schedule
at the PE/Spiral Section from May 11, 2004 to March 23, 2005, and some of them were even
assigned to the 3:00 p.m. – 11:00 p.m. and graveyard shifts (11:00 p.m. – 7:00 a.m.) during
the period.33
4. The respondent workers were required to continue as apprentices beyond six months.
The TESDA certificate of completion indicates that the workers’ apprenticeship had been
completed after six months. Yet, they were suffered to work as apprentices beyond that
period.
Costales, Almoite, Sebolino and Sagun resolutely maintain that they were illegally dismissed, as the
reason for the termination of their employment – notice of the completion of the second
apprenticeship agreement – did not constitute either a just or authorized cause under Articles 282
and 283 of the Labor Code.
Finally, Costales and Almoite refuse to be bound by the compromise agreement 34 that Atlanta
presented to defeat the two workers’ cause of action. They claim that the supposed agreement is
invalid as against them, principally because they did not sign it.
The Court’s Ruling
The procedural issue
The respondent workers ask that the petition be dismissed outright for the petitioners’ failure to
attach to the petition a copy of the Production and Work Schedule and a copy of the compromise
agreement Costales and Almoite allegedly entered into — material portions of the record that should
accompany and support the petition, pursuant to Section 4, Rule 45 of the Rules of Court.
In Mariners Polytechnic Colleges Foundation, Inc. v. Arturo J. Garchitorena 35 where the Court
addressed essentially the same issue arising from Section 2(d), Rule 42 of the Rules of Court, 36 we
held that the phrase "of the pleadings and other material portions of the record xxx as would support
the allegation of the petition clearly contemplates the exercise of discretion on the part of the
petitioner in the selection of documents that are deemed to be relevant to the petition. The crucial
issue to consider then is whether or not the documents accompanying the petition sufficiently
supported the allegations therein." 37
As in Mariners, we find that the documents attached to the petition sufficiently support the
petitioners’ allegations. The accompanying CA decision 38 and resolution,39 as well as those of the
labor arbiter40 and the NLRC,41 referred to the parties’ position papers and even to their replies and
rejoinders. Significantly, the CA decision narrates the factual antecedents, defines the complainants’
cause of action, and cites the arguments, including the evidence the parties adduced. If any, the
defect in the petition lies in the petitioners’ failure to provide legible copies of some of the material
documents mentioned, especially several pages in the decisions of the labor arbiter and of the
NLRC. This defect, however, is not fatal as the challenged CA decision clearly summarized the labor
tribunal’s rulings. We, thus, find no procedural obstacle in resolving the petition on the merits.
The merits of the case

We find no merit in the petition. The CA committed no reversible error in nullifying the NLRC
decision42 and in affirming the labor arbiter’s ruling, 43 as it applies to Costales, Almoite, Sebolino and
Sagun. Specifically, the CA correctly ruled that the four were illegally dismissed because (1)
they were already employees when they were required to undergo apprenticeship and (2)
apprenticeship agreements were invalid.
The following considerations support the CA ruling.
First. Based on company operations at the time material to the case, Costales, Almoite,
Sebolino and Sagun were already rendering service to the company as employees before
they were made to undergo apprenticeship. The company itself recognized the respondents’
status through relevant operational records – in the case of Costales and Almoite, the CPS monthly
report for December 200344 which the NLRC relied upon and, for Sebolino and Sagun, the
production and work schedule for March 7 to 12, 2005 45 cited by the CA.
Under the CPS monthly report, Atlanta assigned Costales and Almoite to the first shift (7:00 a.m. to
3:00 p.m.) of the Section’s work. The Production and Work Schedules, in addition to the one noted
by the CA, showed that Sebolino and Sagun were scheduled on different shifts vis-à-vis the
production and work of the company’s PE/Spiral Section for the periods July 5-10, 2004; 46 October
25-31, 2004;47 November 8-14, 2004;48 November 16-22, 2004;49 January 3-9, 2005;50 January 10-15,
2005;51 March 7-12, 200552 and March 17-23, 2005.53
We stress that the CA correctly recognized the authenticity of the operational documents, for
the failure of Atlanta to raise a challenge against these documents before the labor arbiter,
the NLRC and the CA itself. The appellate court, thus, found the said documents sufficient to
establish the employment of the respondents before their engagement as apprentices.
Second. The Master List54 (of employees) that the petitioners heavily rely upon as proof of their
position that the respondents were not Atlanta’s employees, at the time they were engaged as
apprentices, is unreliable and does not inspire belief.
The list, consisting of several pages, is hardly legible. It requires extreme effort to sort out the names
of the employees listed, as well as the other data contained in the list. For this reason alone, the list
deserves little or no consideration. As the respondents also pointed out, the list itself
contradicts a lot of Atlanta’s claims and allegations, thus: it lists only the names of inactive
employees; even the names of those the NLRC found to have been employed by Atlanta, like
Costales and Almoite, and those who even Atlanta claims attained regular status on January
11, 2006,55 do not appear in the list when it was supposed to account for all employees "as of
May 6, 2006." Despite the "May 6, 2006" cut off date, the list contains no entries of employees who
were hired or who resigned in 2005 and 2006. We note that the list contains the names of
employees from 1999 to 2004.
We cannot fault the CA for ignoring the Master List even if Bernardo, its head office accountant,
swore to its correctness and authenticity.56 Its substantive unreliability gives it very minimal probative
value. Atlanta would have been better served, in terms of reliable evidence, if true copies of the
payroll (on which the list was based, among others, as Bernardo claimed in her affidavit) were
presented instead. 1âwphi1
Third. The fact that Costales, Almoite, Sebolino and Sagun were already rendering service to
the company when they were made to undergo apprenticeship (as established by the
evidence) renders the apprenticeship agreements irrelevant as far as the four are concerned.
This reality is highlighted by the CA finding that the respondents occupied positions such as
machine operator, scaleman and extruder operator - tasks that are usually necessary and
desirable in Atlanta’s usual business or trade as manufacturer of plastic building
materials.57 These tasks and their nature characterized the four as regular employees under Article
280 of the Labor Code. Thus, when they were dismissed without just or authorized cause, without
notice, and without the opportunity to be heard, their dismissal was illegal under the law. 58
Even if we recognize the company’s need to train its employees through apprenticeship, we
can only consider the first apprenticeship agreement for the purpose. With the expiration of
the first agreement and the retention of the employees, Atlanta had, to all intents and
purposes, recognized the completion of their training and their acquisition of a regular
employee status. To foist upon them the second apprenticeship agreement for a second skill
which was not even mentioned in the agreement itself,59 is a violation of the Labor Code’s
implementing rules60 and is an act manifestly unfair to the employees, to say the least. This
we cannot allow.
Fourth. The compromise agreement61 allegedly entered into by Costales and Almoite,

together with Ramos, Villagomez and Alegria, purportedly in settlement of the case before
the NLRC, is not binding on Costales and Almoite because they did not sign it. The company
itself admitted62 that while Costales and Almoite were initially intended to be a part of the agreement,
it did not pursue their inclusion "due to their regularization as early as January 11, 2006." 63

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1)

G.R. No. 146964 August 10, 2006

The appellate court thus disposed:

x x x IN GIVING CREDENCE TO THE TESTIMONIES OF THE COMPLAINING WITNESSES,

x x x IN FINDING THE PETITIONER-ACCUSED GUILTY WHEN THE PROSECUTION FAILED TO

The petition fails.

Article 39. Penalties. – x x x x

G.R. Nos. L-58674-77 July 11, 1990

PEOPLE OF THE PHILIPPINES, petitioner,

(b) Recruitment and placement' refers to any act of canvassing, enlisting,

G.R. No. 208686 July 1, 2015

PEOPLE OF THE PHILIPPINES, Appellee,

CRIM. CASE NO. 02-755

CRIM. CASE NO. 02-756

CRIM. CASE NO. 02-757

CRIM. CASE NO. 02-758

CRIM. CASE NO. 02-759

CRIM. CASE NO. 02-760

The Ruling of the Court of Appeals

The Court's Ruling

Illegal Recruitment in Large Scale

employment abroad, whether undertaken by a non-licensee or non-holder of authority or by a

(j) For an officer or agent of a recruitment or placement agency to become an officer or

deemed binding and conclusive. 20

Revised Penal Code. 22

3. Maximum Period – 6 years, 8 months and 21 days to 8 years.

4. In Criminal Case No. 02-758,appellant Alelie Tolentino is found GUILTY beyond

4) EMPLOYMENT OF NON RESIDENT ALIENS

Section 6. Issuance of Employment Permit –– the Secretary of Labor may issue an

(e) The recommendation of the Board of Investments or other appropriate government

Article 40 of the Labor Code reads as follows:

Art. 12. Statement of Objectives. –– It is the policy of the State:

c) To facilitate a free choice of available employment by persons seeking work in conformity

e) To regulate the employment of aliens, including the establishment of a registration and/or

5) ALIEN EMPLOYMENT PERMIT

WPP MARKETING COMMUNICATIONS, INC., JOHN STEEDMAN, MARK WEBSTER, and

G.R. No. 169239

The appellate court narrated the facts as follows:

Name : Jocelyn M. Galera

Address : 163 Mediterranean Avenue

Position : Managing Director

Annual Salary : Peso 3,924,000

Start Date : 1 September 1999

Commencement Date : 1 September 1999

Office : Mindshare Manila

9. Leave Due to Sickness or Injury

Any discovery, invention, improvement in procedure, trademark, trade name, designs,

SIGNED JOCELYN M. GALERA 8-16-99

Employment of GALERA with private respondent WPP became effective on September 1,

The Labor Arbiter’s Ruling

The dispositive portion of Arbiter Madriaga’s decision reads as follows:

a. Reinstatement without loss of seniority rights.

b. Backwages amounting to $120,000 per year at ₱50.00 to US $1 exchange rate, 13th

d. US Tax Protection of up to 35% coverage equivalent to Thirty Eight Thousand US Dollars

f. Exemplary damages equivalent to One Million Dollars ($1,000,000.00).

g. Attorney’s fees of 10% of the total award herein.

The Ruling of the NLRC

In its Resolution9 promulgated on 4 June 2003, the NLRC further stated:

The Decision of the Appellate Court