CF Sharp Crew V CA

G.R. No.
155903 September 14, 2007

C.F. SHARP CREW MANAGEMENT, INC., petitioner, vs. HON. UNDERSECRETARY JOSE M. ESPANOL, JR.,
HON. SECRETARY LEONARDO A. QUISUMBING and RIZAL INTERNATIONAL SHIPPING
SERVICES, respondents. NACHURA, J.:
FACTS: Louis Cruise Lines (LCL), a foreign corporation duly organized and existing under the laws of Cyprus,
entered into a Crewing Agreement with PAPASHIP. PAPASHIP in turn appointed private respondent Rizal International
Shipping Services (Rizal) as manning agency in the Philippines, recruiting Filipino seamen for LCLs vessel. LCL
terminated the Crewing Agreement with PAPASHIP to take effect on December 31, 1996. It then appointed
C.F. Sharp as crewing agent in the Philippines. C.F. Sharp requested for accreditation as the new manning
agency of LCL with the POEA but Rizal objected on the ground that its accreditation still existed and would only expire
on December 31, 1996.
Pending approval of the accreditation, 2 representatives of LCL arrived in the Philippines and
conducted a series of interviews for seafarers at C.F. Sharps office, that the interviews conducted were not for
selection and recruitment purposes. Rizal reported LCLs recruitment activities to the POEA. POEA representatives
conducted an inspection and found the 2 representatives at C.F. Sharp interviewing and recruiting workers for M/V
Cyprus, with scheduled deployment in January 1997. An inspection report was thereafter submitted to the POEA.
Rizal filed a complaint for illegal recruitment, cancellation or revocation of license, and blacklisting
against LCL and C.F. Sharp with the POEA. It filed a Supplemental Complaint adding violation of Section 29, LC
designating and/or appointing agents, representatives and employees, without prior approval from the POEA.
For its part, C.F. Sharp denied the allegation of Rizal but admitted that the 2 reps conducted interview for
LCL’s ex-crew members who had various complaints against Rizal. The POEA Administrator rendered a
decision and found C.F. Sharp liable for illegal recruitment and Art. 29, LC. Thus, the Administrator ordered the
suspension of petitioner’s operation or to pay a fine. C.F. Sharp elevated the case to DOLE. The Secretary of Labor
affirmed with some modifications the order of POEA Administrator. The case was elevated before the CA. In the
meantime, C.F. Sharp requested the lifting of the suspension decreed by the Secretary of Labor as it availed
the payment of fine, instead of undergoing suspension, which was granted by Deputy Administrator for
Licensing and Adjudication. C.F. Sharp was allowed to deploy seafarers for its principals.
Consequently, the CA denied C.F. Sharps petition for certiorari, holding that C.F. Sharp was already estopped
from assailing the Secretary of Labors ruling because it had manifested its option to have the cash bond posted
answer for the alternative fines imposed upon it. By paying the adjudged fines, C.F. Sharp effectively
executed the judgment, having acquiesced to, and ratified the execution of the assailed Orders of the
Secretary of Labor. It also affirmed the POEA and Secretary of Labor decision that C.F. Sharp violated Article 29, LC
and POEA Rules when it appointed Henry Desiderio as agent without prior approval from the POEA. C.F. Sharp filed a
MR but it was denied. Hence, this appeal. Petitioner claims that it was only upon approval of its application for
accreditation that the employment contracts were entered into and actual deployment of the seamen was made. C.F.
Sharp, thus, concludes that it cannot be held liable for illegal recruitment.
ISSUE: WON the petitioner is liable for Illegal Recruitment.
RULING: The Court ruled in the affirmative.
Undoubtedly, in December 1996, LCL had no approved POEA license to recruit. C.F. Sharps accreditation as
LCL’s new manning agency was still pending approval at that time. Yet the 2 reps from LCL along with C.F.
Sharp, entertained applicants for LCLs vessels, and conducted preparatory interviews. Pursuant to Article 13(b), the
conduct of preparatory interviews is a recruitment activity. The fact that C.F. Sharp did not receive any
payment during the interviews is of no moment. From the language of Article 13(b), the act of recruitment may be for
profit or not. Notably, it is the lack of the necessary license or authority, not the fact of payment, that
renders the recruitment activity of LCL unlawful.
C.F. Sharps claim that the interviews were not for selection and recruitment purposes does not impress. As
the Secretary of Labor aptly said:
This Office cannot conceive of a good reason why LCL/Savva/Tjiakouris should be interested at the
time in unearthing alleged violations committed by Rizal Shipping whose representative status as
manning agency was to be terminated in just a few weeks thereafter, spending valuable time and
money in the process. They stood to gain nothing from such taxing exercise involving several
hundreds of ex-crew members, which could be handled by government agencies like the POEA, NLRC,
SSS. The observation of the POEA Administrator that the complaints of the crewmen were filed only
after Rizal Shipping filed its complaints with the POEA merely to bolster the defense of CF
Sharp/LCL/Savva and Tjiakouris, is telling.

Upon the other hand, it was more to LCLS gain to interview, select and recruit the disembarking
crewmen previously recruited by Rizal Shipping, using CF Sharps facilities, as this would result in less
recruitment time and cost.
Indeed, it was the 2 reps that conducted the interviews, and undertook selection and hiring. However, C.F.
Sharp cannot steer clear of liability for it conspired with LCL in committing illegal recruitment activities. The
petitioner-appellant must be reminded that prior to approval of the transfer of accreditation, no recruitment or
deployment may be made by the principal by itself or through the would-be transferee manning agency, or by the
latter, as this would constitute illegal recruitment by a non-holder of authority under Sec. 6, R.A. 8042 in relation to
Article 13(b) and (f) and Article 16 of the Labor Code as amended;
xxxxx
C.F. Sharp also denies violating Article 29 of the Labor Code. It insists that Henry Desiderio was neither an employee
nor an agent of C.F. Sharp. Yet, except for its barefaced denial, no proof was adduced to substantiate it.
Desiderios name does not appear in the list of employees and officials submitted by C.F. Sharp to the
POEA. However, his name appeared as the contact person of the applicants for the position of 2 nd and 3rd assistant
engineers and machinist/fitter in C.F Sharps advertisement.
Art. 29. NON-TRANSFERABILITY OF LICENSE OR AUTHORITY
No license or authority shall be used directly or indirectly by any person other than the one in whose
favor it was issued or at any place other than that stated in the license or authority, nor may such
license or authority be transferred, conveyed or assigned to any other person or entity. Any transfer of
business address, appointment or designation of any agent or representativeincluding the
establishment of additional offices anywhere shall be subject to the prior approval of the Department
of Labor. (Emphasis ours)
Thus, Section 2(k), Rule 1, Book VI of the POEA Rules Governing Overseas Employment provides:
Section 2. Grounds for Suspension/Cancellation of License.
k. Appointing or designating agents, representatives or employees without prior approval from the
Administration.
The appointment or designation of Desiderio as an employee or agent of C.F. Sharp, without prior approval
from the POEA, warrants administrative sanction.
WHEREFORE, the petition is DISMISSED.

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G.R. No.

155903 September 14, 2007

WHEREFORE, the petition is DISMISSED.

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