ANTONIO M. SERRANO vs. Gallant MARITIME SERVICES, INC.

and MARLOW The NLRC corrected the LA's computation of the lump-sum salary awarded to petitioner by
NAVIGATION CO., INC.,  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
G.R. No. 167614               March 24, 2009 actually performed, and for vacation leave pay."

FACTS: Petitioner filed a Motion for Partial Reconsideration, but this time he questioned the
constitutionality of the subject clause. The NLRC denied the motion.
Petitioner was hired by Gallant Maritime Services, Inc. and Marlow Navigation Co., Ltd.
(respondents) under a Philippine Overseas Employment Administration (POEA)-approved PETITIONER: the last clause in the 5th paragraph of Section 10, Republic Act (R.A.) No.
Contract of Employment. 8042, to wit:

On the date of his departure, petitioner was constrained to accept a downgraded employment Sec. 10. Money Claims. - x x x In case of termination of overseas employment without just,
contract for the position of Second Officer with a monthly salary of US$1,000.00, upon the valid or authorized cause as defined by law or contract, the workers shall be entitled to the full
assurance and representation of respondents that he would be made Chief Officer by the end reimbursement of his placement fee with interest of twelve percent (12%) per annum, plus his
of April 1998. salaries for the unexpired portion of his employment contract or for three (3) months for
every year of the unexpired term, whichever is less.
Respondents did not deliver on their promise to make petitioner Chief Officer. Hence,
petitioner refused to stay on as Second Officer and was repatriated to the Philippines on May does not magnify the contributions of overseas Filipino workers (OFWs) to national
26, 1998. 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,
Petitioner's employment contract was for a period of 12 months or from March 19, 1998 up to
whichever is less" (subject clause). Petitioner claims that the last clause violates the
March 19, 1999, but at the time of his repatriation on May 26, 1998, he had served only 2
OFWs' constitutional rights in that it impairs the terms of their contract, deprives them
months and 7 days of his contract, leaving an unexpired portion of 9 months and 23 days.
of equal protection and denies them due process.
Petitioner filed with the LA a Complaint against respondents for constructive dismissal and for
Pettioner assails the the CA’s judgment, which applied the subject clause, entreating this
payment of his money, as well as moral and exemplary damages and attorney's fees.
Court to declare the subject clause unconstitutional.
LA: dismissal of petitioner illegal and awarding him monetary benefits. In awarding petitioner
The unanimous finding of the LA, NLRC and CA that the dismissal of petitioner was illegal is
a lump-sum salary of US$8,770.00, the LA based his computation on the salary period of 3
not disputed. Likewise not disputed is the salary differential of US$45.00 awarded to
months only -- rather than the entire unexpired portion of nine months and 23 days of
petitioner in all three fora. What remains disputed is only the computation of the lump-sum
petitioner's employment contract - applying the subject clause. However, the LA applied the
salary to be awarded to petitioner by reason of his illegal dismissal.
salary rate of US$2,590.00, consisting of petitioner's "basic 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." 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 9 months and 23 days of his employment contract or a total of
Respondents appealed to the NLRC to question the finding of the LA that petitioner was
US$4,200.00.
illegally dismissed.

Impugning the constitutionality of the subject clause, petitioner contends that, in addition to
Petitioner also appealed to the NLRC on the sole issue that the LA erred in not applying the
the US$4,200.00 awarded by the NLRC and the CA, he is entitled to US$21,182.23 more or a
ruling of the Court in Triple Integrated Services, Inc. v. National Labor Relations
total of US$25,382.23, equivalent to his salaries for the entire nine months and 23 days left of
Commission17 that in case of illegal dismissal, OFWs are entitled to their salaries for the
his employment contract, computed at the monthly rate of US$2,590.00.
unexpired portion of their contracts.18

The Arguments of Petitioner

NLRC: modified the LA
Petitioner contends that the subject clause is unconstitutional because it unduly impairs the The Arguments of Respondents
freedom of OFWs to negotiate for and stipulate in their overseas employment contracts a
determinate employment period and a fixed salary package. It also impinges on the equal In their Comment and Memorandum, respondents contend that the constitutional issue
protection clause, for it treats OFWs differently from local Filipino workers by putting a cap on should not be entertained, for this was belatedly interposed by petitioner in his appeal before
the amount of lump-sum salary to which OFWs are entitled in case of illegal dismissal, while the CA, and not at the earliest opportunity, which was when he filed an appeal before the
setting no limit to the same monetary award for local workers when their dismissal is declared NLRC.40
illegal; that the disparate treatment is not reasonable as there is no substantial distinction
between the two groups; and that it defeats Section 18, Article II of the Constitution which The Arguments of the Solicitor General
guarantees the protection of the rights and welfare of all Filipino workers, whether deployed
locally or overseas.
The Solicitor General (OSG) 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.
Moreover, petitioner argues that the decisions of the CA and the labor tribunals are not in line 8042 having preceded petitioner's contract, the provisions thereof are deemed part of the
with existing jurisprudence on the issue of money claims of illegally dismissed OFWs. Though minimum terms of petitioner's employment, especially on the matter of money claims, as this
there are conflicting rulings on this, petitioner urges the Court to sort them out for the was not stipulated upon by the parties.
guidance of affected OFWs.
Moreover, the OSG emphasizes that OFWs and local workers differ in terms of the nature of
Petitioner further underscores that the insertion of the subject clause into R.A. No. 8042 their employment, such that their rights to monetary benefits must necessarily be treated
serves no other purpose but to benefit local placement agencies. He marks the statement differently. The OSG enumerates the essential elements that distinguish OFWs from local
made by the Solicitor General in his Memorandum, viz.: 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,
Often, placement agencies, their liability being solidary, shoulder the payment of money or against whom it is almost impossible to enforce judgment; and second, as held in Coyoca
claims in the event that jurisdiction over the foreign employer is not acquired by the court or if v. National Labor Relations Commission and Millares v. National Labor Relations
the foreign employer reneges on its obligation. Hence, placement agencies that are in good Commission, OFWs are contractual employees who can never acquire regular employment
faith and which fulfill their obligations are unnecessarily penalized for the acts of the foreign status, unlike local workers who are or can become regular employees. Hence, the OSG
employer. To protect them and to promote their continued helpful contribution in deploying posits that there are rights and privileges exclusive to local workers, but not available to
Filipino migrant workers, liability for money claims was reduced under Section 10 of R.A. No. OFWs; that these peculiarities make for a reasonable and valid basis for the differentiated
8042.  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
Petitioner argues that in mitigating the solidary liability of placement agencies, the subject the Constitution.
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 Lastly, the OSG defends the rationale behind the subject clause as a police power measure
employees, foreign employers are liable for salaries covering a maximum of only three adopted to mitigate the solidary liability of placement agencies for this "redounds to the
months of the unexpired employment contract while local employers are liable for the full benefit of the migrant workers whose welfare the government seeks to promote. The survival
lump-sum salaries of their employees. As petitioner puts it: of legitimate placement agencies helps [assure] the government that migrant workers are
properly deployed and are employed under decent and humane conditions."
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- ISSUE:
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 W/N the subject clause is unconstitutional.
of three (3) months unpaid salaries notwithstanding the unexpired term of the contract that
can be more than three (3) months.38
HELD:
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 Does it violate Sec 10 Art III of the constitution? NO.
contract.39
Petitioner's claim that the subject clause unduly interferes with the stipulations in his contract To Filipino workers, the rights guaranteed under the foregoing constitutional provisions
on the term of his employment and the fixed salary package he will receive is not tenable. 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
Section 10, Article III of the Constitution provides: degree; none should be denied the protection of the laws which is enjoyed by, or spared the
burden imposed on, others in like circumstances.
No law impairing the obligation of contracts shall be passed.
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
The prohibition is aligned with the general principle that laws newly enacted have only a
classification must comply with these requirements: 1) it is based on substantial distinctions;
prospective operation, and cannot affect acts or contracts already perfected; however, as to
2) it is germane to the purposes of the law; 3) it is not limited to existing conditions only; and
laws already in existence, their provisions are read into contracts and deemed a part
4) it applies equally to all members of the class.
thereof. Thus, the non-impairment clause under Section 10, Article II is limited in application
to laws about to be enacted that would in any way derogate from existing acts or contracts by
enlarging, abridging or in any manner changing the intention of the parties thereto. 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
As aptly observed by the OSG, the enactment of R.A. No. 8042 in 1995 preceded the
state interest; b) the middle-tier or intermediate scrutiny in which the government must show
execution of the employment contract between petitioner and respondents in 1998. Hence, it
that the challenged classification serves an important state interest and that the classification
cannot be argued that R.A. No. 8042, particularly the subject clause, impaired the
is at least substantially related to serving that interest; and c) strict judicial scrutiny in which a
employment contract of the parties. Rather, when the parties executed their 1998
legislative classification which impermissibly interferes with the exercise of a fundamental
employment contract, they were deemed to have incorporated into it all the provisions of R.A.
right or operates to the peculiar disadvantage of a suspect class 71 is presumed
No. 8042.
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
But even if the Court were to disregard the timeline, the subject clause may not be declared means to protect such interest.
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
Under American jurisprudence, strict judicial scrutiny is triggered by suspect
calling, particularly the recruitment and deployment of OFWs, with the noble end in view of
classifications based on race or gender but not when the classification is drawn along income
ensuring respect for the dignity and well-being of OFWs wherever they may be
categories.
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 It is different in the Philippine setting. In Central Bank Employee Association, Inc. v. Bangko
contracts must yield to the superior and legitimate measures taken by the State to promote Sentral ng Pilipinas, the constitutionality of a provision in the charter of the Bangko Sentral ng
public welfare.62 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
Does it violate Section 1, Article III of the Constitution, and Section 18, Article II and Section
charters. Finding that the disputed provision contained a suspect classification based on
3, Article XIII on labor as a protected sector? YES.
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
Section 1, Article III of the Constitution guarantees: Court revealed the broad outlines of its judicial philosophy, to wit:

No person shall be deprived of life, liberty, or property without due process of law nor shall Congress retains its wide discretion in providing for a valid classification, and its policies
any person be denied the equal protection of the law. 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
Section 18, Article II and Section 3, Article XIII accord all members of the labor sector, without right, or prejudices persons accorded special protection by the Constitution. When
distinction as to place of deployment, full protection of their rights and welfare. 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 But if the challenge to the statute is premised on the denial of a fundamental right, or  the
requires a stricter judicial scrutiny finds no support in American or English jurisprudence. perpetuation of prejudice against persons favored by the Constitution with special
Nevertheless, these foreign decisions and authorities are not per se controlling in this protection, judicial scrutiny ought to be more strict. A weak and watered down view
jurisdiction. At best, they are persuasive and have been used to support many of our would call for the abdication of this Court’s solemn duty to strike down any law repugnant to
decisions. We should not place undue and fawning reliance upon them and regard them as the Constitution and the rights it enshrines. This is true whether the actor committing the
indispensable mental crutches without which we cannot come to our own decisions through unconstitutional act is a private person or the government itself or one of its instrumentalities.
the employment of our own endowments. We live in a different ambience and must decide Oppressive acts will be struck down regardless of the character or nature of the actor.
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 xxxx
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 In the case at bar, the challenged proviso operates on the basis of the salary grade or officer-
related thereto. More importantly, they must be construed to serve our own public interest employee status. It is akin to a distinction based on economic class and status, with the
which is the be-all and the end-all of all our laws. And it need not be stressed that our public higher grades as recipients of a benefit specifically withheld from the lower grades. Officers of
interest is distinct and different from others. 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
xxxx 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
Further, the quest for a better and more "equal" world calls for the use of equal protection as education and opportunities for career advancement - are given higher compensation
a tool of effective judicial intervention. 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
Equality is one ideal which cries out for bold attention and action in the Constitution. The terms of job marketability, it is they - and not the officers - who have the real economic and
Preamble proclaims "equality" as an ideal precisely in protest against crushing inequities in financial need for the adjustment . This is in accord with the policy of the Constitution "to free
Philippine society. The command to promote social justice in Article II, Section 10, in "all the people from poverty, provide adequate social services, extend to them a decent standard
phases of national development," further explicitated in Article XIII, are clear commands to of living, and improve the quality of life for all." Any act of Congress that runs counter to this
the State to take affirmative action in the direction of greater equality. x x x [T]here is thus in constitutional desideratum deserves strict scrutiny by this Court before it can pass muster.
the Philippine Constitution no lack of doctrinal support for a more vigorous state effort (Emphasis supplied)
towards achieving a reasonable measure of equality.
Imbued with the same sense of "obligation to afford protection to labor," the Court in the
Our present Constitution has gone further in guaranteeing vital social and economic rights to present case also employs the standard of strict judicial scrutiny, for it perceives in the
marginalized groups of society, including labor. Under the policy of social justice, the law subject clause a suspect classification prejudicial to OFWs.
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 Upon cursory reading, the subject clause appears facially neutral, for it applies to all OFWs.
afford protection to labor is incumbent not only on the legislative and executive branches but However, a closer examination reveals that the subject clause has a discriminatory intent
also on the judiciary to translate this pledge into a living reality. Social justice calls for the against, and an invidious impact on, OFWs at two levels:
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. First, OFWs with employment contracts of less than one year vis-à-vis OFWs with
employment contracts of one year or more;
xxxx
Second, among OFWs with employment contracts of more than one year; and
Under most circumstances, the Court will exercise judicial restraint in deciding questions of
constitutionality, recognizing the broad discretion given to Congress in exercising its Third, OFWs vis-à-vis local workers with fixed-period employment;
legislative power. Judicial scrutiny would be based on the "rational basis" test, and the
legislative discretion would be given deferential treatment. 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, it was in Marsaman Manning Agency, Inc. v. NLRC that the
Case Title Contract Period of Unexpired Period Period Applied
Court laid down the following rules on the application of the periods prescribed under Section
Period Service in the
10(5) of R.A. No. 804, to wit:
Computation of
the Monetary
A plain reading of Sec. 10 clearly reveals that the choice of which amount to award an Award
illegally dismissed overseas contract worker, i.e., whether his salaries for the
unexpired portion of his employment contract or 3 months’ salary for every year of the Skippers v. 6 months 2 months 4 months 4 months
unexpired term, whichever is less, comes into play only when the employment Maguad84
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 Bahia Shipping 9 months 8 months 4 months 4 months
for three months." To follow petitioners’ thinking that private respondent is entitled to 3 v. Reynaldo
months salary only simply because it is the lesser amount is to completely disregard and Chua 85
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 Centennial 9 months 4 months 5 months 5 months
that every part or word thereof be given effect since the law-making body is presumed to Transmarine v.
know the meaning of the words employed in the statue and to have used them advisedly. Ut dela Cruz l86
res magis valeat quam pereat.  Talidano v. 12 months 3 months 9 months 3 months
Falcon87
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. 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

Prior to Marsaman, however, there were two cases in which the Court made conflicting
months
rulings on Section 10(5). One was Asian Center for Career and Employment System and
Services v. National Labor Relations which involved an OFW who was awarded a two-year PCL v. NLRC90 12 months more than 2 more or less 9 3 months
employment contract, but was dismissed after working for one year and two months. The LA months months
declared his dismissal illegal and awarded him SR13,600.00 as lump-sum salary covering 8
months, the unexpired portion of his contract. On appeal, the Court reduced the award to Olarte v. 12 months 21 days 11 months and 9 3 months
SR3,600.00 equivalent to his 3 months’ salary, this being the lesser value, to wit: Nayona91 days

Under Section 10 of R.A. No. 8042, a worker dismissed from overseas employment without JSS v.Ferrer92 12 months 16 days 11 months and 24 3 months
just, valid or authorized cause is entitled to his salary for the unexpired portion of his days
employment contract or for three (3) months for every year of the unexpired term, whichever
Pentagon v. 12 months 9 months and 2 months and 23 2 months and
is less.
Adelantar93 7 days days 23 days

In the case at bar, the unexpired portion of private respondent’s employment contract is 8 Phil. Employ v. 12 months 10 months 2 months Unexpired
months. Private respondent should therefore be paid his basic salary corresponding to 3 Paramio, et al.94 portion
months or a total of SR3,600.
Flourish 2 years 26 days 23 months and 4 6 months or 3
Another was Triple-Eight Integrated Services, Inc. v. NLRC, which involved an OFW who was Maritime v. days months for
originally granted a 12-month contract, which was deemed renewed for another 12 months. Almanzor 95 each year of
After serving for one year and seven-and-a-half months, respondent Osdana was illegally contract
dismissed, and the Court awarded her salaries for the entire unexpired portion of 4 ½ months Athenna 1 year, 10 1 month 1 year, 9 months 6 months or 3
of her contract. Manpower v. months and and 28 days months for
Villanos 96 28 days each year of
The Marsaman  interpretation of Section 10(5) has since been adopted in the following cases:
 contract JGB v. NLC100 2 years 9 months 15 months 15 months

Agoy v. NLRC101 2 years 2 months 22 months 22 months

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 EDI v. NLRC, et 2 years 5 months 19 months 19 months
than one year; in case of illegal dismissal, they are entitled to their salaries for the entire al.102
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 Barros v. NLRC, 12 months 4 months 8 months 8 months
monetary award equivalent to only 3 months of the unexpired portion of their contracts. et al.103

Philippine 12 months 6 months and 5 months and 5 months and 18

The disparity in the treatment of these two groups cannot be discounted. In  Skippers, the Transmarine v. 22 days 18 days days
respondent OFW worked for only 2 months out of his 6-month contract, but was awarded his Carilla104
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. It is plain that prior to R.A. No. 8042, all OFWs, regardless of contract periods or the
Even the OFWs involved in Talidano  and Univan  who had  worked for a longer period of 3 unexpired portions thereof, were treated alike in terms of the computation of their monetary
months out of their 12-month contracts before being illegally dismissed were awarded their benefits in case of illegal dismissal. Their claims were subjected to a uniform rule of
salaries for only 3 months. computation: their basic salaries multiplied by the entire unexpired portion of their
employment contracts.
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 The enactment of the subject clause in R.A. No. 8042 introduced a differentiated rule of
hypothetical OFW-B with an employment contract of 15 months with the same monthly salary computation of the money claims of illegally dismissed OFWs based on their employment
rate of US$1,000.00. Both commenced work on the same day and under the same employer, periods, in the process singling out one category whose contracts have an unexpired portion
and were illegally dismissed after one month of work. Under the subject clause, OFW-A will of one year or more and subjecting them to the peculiar disadvantage of having their
be entitled to US$9,000.00, equivalent to his salaries for the remaining 9 months of his monetary awards limited to their salaries for 3 months or for the unexpired portion thereof,
contract, whereas OFW-B will be entitled to only US$3,000.00, equivalent to his salaries for 3 whichever is less, but all the while sparing the other category from such prejudice, simply
months of the unexpired portion of his contract, instead of US$14,000.00 for the unexpired because the latter's unexpired contracts fall short of one year.
portion of 14 months of his contract, as the US$3,000.00 is the lesser amount.
Among OFWs With Employment Contracts of More Than One Year
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, Upon closer examination of the terminology employed in the subject clause, the Court now
no matter how long the period of their employment contracts, were entitled to their salaries for has misgivings on the accuracy of the Marsaman interpretation.
the entire unexpired portions of their contracts. The matrix below speaks for itself:
The Court notes that the subject clause "or for three (3) months for every year of the
Case Title Contract Period of Unexpired Period Applied in unexpired term, whichever is less" contains the qualifying phrases "every year" and
Period Service Period the Computation "unexpired term." By its ordinary meaning, the word "term" means a limited or definite extent
of the Monetary of time. Corollarily, that "every year" is but part of an "unexpired term" is significant in many
Award 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,
ATCI v. CA, et 2 years 2 months 22 months 22 months the original term must be more than one year, for otherwise, whatever would be the
al.98 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
Phil. Integrated 2 years 7 days 23 months and 23 months and 23 unexpired term, whichever is less" shall apply is not the length of the original contract period
v. NLRC99 23 days days 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 There is a more specific rule as far as seafarers are concerned: Article 605 of the Code of
year. Commerce which provides:

Viewed in that light, the subject clause creates a sub-layer of discrimination among OFWs Article 605. If the contracts of the captain and members of the crew with the agent should be
whose contract periods are for more than one year: those who are illegally dismissed with for a definite period or voyage, they cannot be discharged until the fulfillment of their
less than one year left in their contracts shall be entitled to their salaries for the entire contracts, except for reasons of insubordination in serious matters, robbery, theft, habitual
unexpired portion thereof, while those who are illegally dismissed with one year or more drunkenness, and damage caused to the vessel or to its cargo by malice or manifest or
remaining in their contracts shall be covered by the subject clause, and their monetary proven negligence.
benefits limited to their salaries for three months only.
Article 605 was applied to Madrigal Shipping Company, Inc. v. Ogilvie, 110 in
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 which the Court held the shipping company liable for the salaries and subsistence allowance
salary rate of US$1,000.00 per month. OFW-C is illegally dismissed on the 12th month, and of its illegally dismissed employees for the entire unexpired portion of their employment
OFW-D, on the 13th month. Considering that there is at least 12 months remaining in the contracts.
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 While Article 605 has remained good law up to the present, 111 Article 299 of the Code of
salaries for the 12 months unexpired portion of the contract, but to the lesser amount of Commerce was replaced by Art. 1586 of the Civil Code of 1889, to wit:
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 Article 1586. Field hands, mechanics, artisans, and other laborers hired for a certain time and
US$11,000.00, which is equivalent to his/her total salaries for the entire 11-month unexpired for a certain work cannot leave or be dismissed without sufficient cause, before the fulfillment
portion. of the contract. (Emphasis supplied.)

OFWs vis-à-vis Local Workers With Fixed-Period Employment Citing Manresa, the Court in Lemoine v. Alkan 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
As discussed earlier, prior to R.A. No. 8042, a uniform system of computation of the monetary Garcia Palomar v. Hotel de France Company. 113 And in both Lemoine and Palomar, the Court
awards of illegally dismissed OFWs was in place. This uniform system was applicable even to adopted the general principle that in actions for wrongful discharge founded on Article 1586,
local workers with fixed-term employment. 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
The earliest rule prescribing a uniform system of computation was actually Article 299 of the damages, the Court in Aldaz v. Gay114 held:
Code of Commerce (1888), to wit:
The doctrine is well-established in American jurisprudence, and nothing has been brought to
Article 299. If the contracts between the merchants and their shop clerks and employees our attention to the contrary under Spanish jurisprudence, that when an employee is
should have been made of a fixed period, none of the contracting parties, without the consent wrongfully discharged it is his duty to seek other employment of the same kind in the same
of the other, may withdraw from the fulfillment of said contract until the termination of the community, for the purpose of reducing the damages resulting from such wrongful discharge.
period agreed upon. 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
Persons violating this clause shall be subject to indemnify the loss and damage suffered, with obtainable, is upon the defendant. When an employee is wrongfully discharged under a
the exception of the provisions contained in the following articles. 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,
In Reyes v. The Compañia Maritima, the Court applied the foregoing provision to determine 61 N. Y., 362; Allen vs. Whitlark, 99 Mich., 492; Farrell vs. School District No. 2, 98 Mich.,
the liability of a shipping company for the illegal discharge of its managers prior to the 43.)
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. 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 What constitutes compelling state interest is measured by the scale of rights and powers
IV.116 Much like Article 1586 of the Civil Code of 1889, the new provisions of the Civil Code do arrayed in the Constitution and calibrated by history. 124 It is akin to the paramount interest of
not expressly provide for the remedies available to a fixed-term worker who is illegally the state125 for which some individual liberties must give way, such as the public interest in
discharged. However, it is noted that in Mackay Radio & Telegraph Co., Inc. v. Rich, 117 the safeguarding health or maintaining medical standards, 126 or in maintaining access to
Court carried over the principles on the payment of damages underlying Article 1586 of the information on matters of public concern.127
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 In the present case, the Court dug deep into the records but found no compelling state
Code was already in effect.118 interest that the subject clause may possibly serve.

More significantly, the same principles were applied to cases involving overseas Filipino The OSG defends the subject clause as a police power measure "designed to protect the
workers whose fixed-term employment contracts were illegally terminated, such as in First employment of Filipino seafarers overseas x x x. By limiting the liability to three months [sic],
Asian Trans & Shipping Agency, Inc. v. Ople, 119 involving seafarers who were illegally Filipino seafarers have better chance of getting hired by foreign employers." The limitation
discharged. In Teknika Skills and Trade Services, Inc. v. National Labor Relations also protects the interest of local placement agencies, which otherwise may be made to
Commission,120 an OFW who was illegally dismissed prior to the expiration of her fixed-period shoulder millions of pesos in "termination pay."128
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 The OSG explained further:
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 Often, placement agencies, their liability being solidary, shoulder the payment of money
contract. In Asia World Recruitment, Inc. v. National Labor Relations Commission, 122 a claims in the event that jurisdiction over the foreign employer is not acquired by the court or if
Filipino working as a security officer in 1989 in Angola was awarded his salaries for the the foreign employer reneges on its obligation. Hence, placement agencies that are in good
remaining period of his 12-month contract after he was wrongfully discharged. Finally, faith and which fulfill their obligations are unnecessarily penalized for the acts of the foreign
in Vinta Maritime Co., Inc. v. National Labor Relations Commission, 123 an OFW whose 12- employer. To protect them and to promote their continued helpful contribution in deploying
month contract was illegally cut short in the second month was declared entitled to his Filipino migrant workers, liability for money are reduced under Section 10 of RA 8042.
salaries for the remaining 10 months of his contract.
This measure redounds to the benefit of the migrant workers whose welfare the government
In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-term employment who seeks to promote. The survival of legitimate placement agencies helps [assure] the
were illegally discharged were treated alike in terms of the computation of their money government that migrant workers are properly deployed and are employed under decent and
claims: they were uniformly entitled to their salaries for the entire unexpired portions of their humane conditions.129 (Emphasis supplied)
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 However, nowhere in the Comment or Memorandum does the OSG cite the source of its
employment contract have since been differently treated in that their money claims are perception of the state interest sought to be served by the subject clause.
subject to a 3-month cap, whereas no such limitation is imposed on local workers with fixed-
term employment. 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
The Court concludes that the subject clause contains a suspect classification in that, speech makes no reference to the underlying reason for the adoption of the subject clause.
in the computation of the monetary benefits of fixed-term employees who are illegally That is only natural for none of the 29 provisions in HB 14314 resembles the subject clause.
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 On the other hand, Senate Bill No. 2077 (SB 2077) contains a provision on money claims, to
workers with fixed-term employment. The subject clause singles out one classification wit:
of OFWs and burdens it with a peculiar disadvantage.
Sec. 10. Money Claims. - Notwithstanding any provision of law to the contrary, the Labor
There being a suspect classification involving a vulnerable sector protected by the Arbiters of the National Labor Relations Commission (NLRC) shall have the original and
Constitution, the Court now subjects the classification to a strict judicial scrutiny, and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the
determines whether it serves a compelling state interest through the least restrictive means. 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, Assuming that, as advanced by the OSG, the purpose of the subject clause is to protect the
moral, exemplary and other forms of damages. 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
The liability of the principal and the recruitment/placement agency or any and all claims under of government action that alleviates the burden of one sector, but imposes the same burden
this Section shall be joint and several. 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
Any compromise/amicable settlement or voluntary agreement on any money claims exclusive
can be elevated to the level of a compelling state interest is odious.
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 Moreover, even if the purpose of the subject clause is to lessen the solidary liability of
compromise/voluntary agreement in violation of this paragraph shall be null and void. 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.
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:
The POEA Rules and Regulations Governing the Recruitment and Employment of Land-
Based Overseas Workers, dated February 4, 2002, imposes administrative disciplinary
(1) The salary of any such official who fails to render his decision or resolution within
measures on erring foreign employers who default on their contractual obligations to migrant
the prescribed period shall be, or caused to be, withheld until the said official
workers and/or their Philippine agents. These disciplinary measures range from temporary
complies therewith;
disqualification to preventive suspension. The POEA Rules and Regulations Governing the
Recruitment and Employment of Seafarers, dated May 23, 2003, contains similar
(2) Suspension for not more than ninety (90) days; or administrative disciplinary measures against erring foreign employers.

(3) Dismissal from the service with disqualification to hold any appointive public office Resort to these administrative measures is undoubtedly the less restrictive means of aiding
for five (5) years. local placement agencies in enforcing the solidary liability of their foreign principals.

Provided, however, That the penalties herein provided shall be without prejudice to any Thus, the subject clause in the 5th paragraph of Section 10 of R.A. No. 8042 is violative of
liability which any such official may have incurred under other existing laws or rules and the right of petitioner and other OFWs to equal protection.1avvphi1
regulations as a consequence of violating the provisions of this paragraph.
Further, there would be certain misgivings if one is to approach the declaration of the
But significantly, Section 10 of SB 2077 does not provide for any rule on the computation of unconstitutionality of the subject clause from the lone perspective that the clause directly
money claims. violates state policy on labor under Section 3,131 Article XIII of the Constitution.

A rule on the computation of money claims containing the subject clause was inserted and While all the provisions of the 1987 Constitution are presumed self-executing, 132 there are
eventually adopted as the 5th paragraph of Section 10 of R.A. No. 8042. The Court examined some which this Court has declared not judicially enforceable, Article XIII being
the rationale of the subject clause in the transcripts of the "Bicameral Conference Committee one,133 particularly Section 3 thereof, the nature of which, this Court, in Agabon v. National
(Conference Committee) Meetings on the Magna Carta on OCWs (Disagreeing Provisions of Labor Relations Commission,134 has described to be not self-actuating:
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
Thus, the constitutional mandates of protection to labor and security of tenure may be
adoption of the subject clause.
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
In fine, the Government has failed to discharge its burden of proving the existence of a provisions are enough to guarantee the full exercise of the rights embodied therein, and the
compelling state interest that would justify the perpetuation of the discrimination against realization of ideals therein expressed, would be impractical, if not unrealistic. The espousal
OFWs under the subject clause. 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 earlier discussed, there is nothing in the text of the law or the records of the deliberations
implies an unimpeachable right to continued employment-a utopian notion, doubtless-but still leading to its enactment or the pleadings of respondent that would indicate that there is an
hardly within the contemplation of the framers. Subsequent legislation is still needed to define existing governmental purpose for the subject clause, or even just a pretext of one.
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 The subject clause does not state or imply any definitive governmental purpose; and it is for
legislation, judicial bodies will be at a loss, formulating their own conclusion to approximate at that precise reason that the clause violates not just petitioner's right to equal protection, but
least the aims of the Constitution. also her right to substantive due process under Section 1, 137 Article III of the Constitution.

Ultimately, therefore, Section 3 of Article XIII cannot, on its own, be a source of a The subject clause being unconstitutional, petitioner is entitled to his salaries for the entire
positive enforceable right  to stave off the dismissal of an employee for just cause owing to unexpired period of nine months and 23 days of his employment contract, pursuant to law
the failure to serve proper notice or hearing. As manifested by several framers of the 1987 and jurisprudence prior to the enactment of R.A. No. 8042.
Constitution, the provisions on social justice require legislative enactments for their
enforceability.135 (Emphasis added) On the Issue on overtime and leave pay

Thus, Section 3, Article XIII cannot be treated as a principal source of direct enforceable Petitioner contends that his overtime and leave pay should form part of the salary basis in the
rights, for the violation of which the questioned clause may be declared unconstitutional. It computation of his monetary award, because these are fixed benefits that have been
may unwittingly risk opening the floodgates of litigation to every worker or union over every stipulated into his contract.
conceivable violation of so broad a concept as social justice for labor.
Petitioner is mistaken.
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. The word salaries in Section 10(5) does not include overtime and leave pay. For seafarers
Its utility is best limited to being an impetus not just for the executive and legislative like petitioner, DOLE Department Order No. 33, series 1996, provides a Standard
departments, but for the judiciary as well, to protect the welfare of the working class.  And it Employment Contract of Seafarers, in which salary is understood as the basic wage,
was in fact consistent with that constitutional agenda that the Court in Central Bank (now exclusive of overtime, leave pay and other bonuses; whereas overtime pay is compensation
Bangko Sentral ng Pilipinas) Employee Association, Inc. v. Bangko Sentral ng for all work "performed" in excess of the regular eight hours, and holiday pay is compensation
Pilipinas,  penned by then Associate Justice now Chief Justice Reynato S. Puno, formulated for any work "performed" on designated rest days and holidays.
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 By the foregoing definition alone, there is no basis for the automatic inclusion of overtime and
working class or a section thereof -- the Court may recognize the existence of a suspect holiday pay in the computation of petitioner's monetary award, unless there is evidence that
classification and subject the same to strict judicial scrutiny. he performed work during those periods. As the Court held in Centennial Transmarine, Inc. v.
Dela Cruz,138
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 However, the payment of overtime pay and leave pay should be disallowed in light of our
a groundless apprehension. Central Bank applied Article XIII in conjunction with the equal ruling in Cagampan v. National Labor Relations Commission, to wit:
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. 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
Along the same line of reasoning, the Court further holds that the subject clause violates which should be computed on the basis of 30% of the basic monthly salary. In short, the
petitioner's right to substantive due process, for it deprives him of property, consisting of contract provision guarantees the right to overtime pay but the entitlement to such benefit
monetary benefits, without any existing valid governmental purpose. 136 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
The argument of the Solicitor General, that the actual purpose of the subject clause of limiting seamen.
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
WHEREFORE, the Court GRANTS the Petition. The subject clause "or for three months for P10,000.00 on December 23, 2003, and P15,000.00 on January 15, 2004, all personally received by
every year of the unexpired term, whichever is less" in the 5th paragraph of Section 10 of Abella either at the RBC office or at McDonald’s, Ermita, and evidenced by vouchers signed by Abella.
Republic Act No. 8042 is DECLARED UNCONSTITUTIONAL; and the December 8, 2004 Nothing happened to Marcelino’s application and the amounts she had paid to Abella were not returned
Decision and April 1, 2005 Resolution of the Court of Appeals are MODIFIED to the effect to her.
that petitioner is AWARDED his salaries for the entire unexpired portion of his employment
contract consisting of nine months and 23 days computed at the rate of US$1,400.00 per According to Callang, he was recruited by Danao, Abella’s agent, who brought him to the RBC office in
month. Malate, Manila. At the RBC office, Abella told Callang of the job order for laundryman in Istanbul,
Turkey with a monthly salary of $600.00 and for which the placement fee was P65,000.00. Callang paid
to Abella P10,000.00 on November 17, 2003; P10,000.00 on December 23, 2003; and P20,000.00 on
PEOPLE OF THE PHILIPPINES vs. FE ABELLA y BUHAIN January 9, 2004, for a total of P40,000.00, evidenced by a voucher signed by Abella in Callang’s
presence. The first two payments were made at the RBC office while the last payment was at
G.R. No. 195666 January 20, 2016 McDonald’s, Ermita. Callang was not deployed for employment abroad, neither was he able to recover
the amount he paid to Abella.

FACTS:
Versoza was an employee at the Licensing Division of the Philippine Overseas Employment
Administration (POEA). Versoza recounted that upon the instruction of Yolanda Paragua (Paragua),
Accused, conspiring and confederating with another whose true name, real identity and Officer-in-Charge (OIC) of the POEA Licensing Division, she verified from the database and other
present whereabouts is still unknown, and mutually helping each other, representing herself records of their office whether Abella/RBC had license to recruit workers for employment abroad.
to have the capacity to contract, enlist and transport Filipino workers for employment abroad, Versoza found out that Abella/RBC had no such license and she prepared a Certification to that effect,
for a fee, recruit and promise employment/job placement to complainants, as which was signed by OIC Paragua in her presence. In compliance with the subpoena duces
Laundrywomen/Laundrymen and Waiter in Istanbul, Turkey and Dubai, without first having tecum  issued by the RTC, Versoza personally appeared before the trial court to identify OIC Paragua’s
signature on the Certification.
secured the required license or authority from the DOLE, charged or accept directly or
indirectly from said complainants amounts which are in excess of or greater than those
specified in the schedule of allowable fees prescribed by the DOLE under Memorandum Abella anchored her defense on denial. Abella alleged that she had been working as a
Order No. 5, Series of 1985 and having failed to deploy aforesaid complainants, continuously cashier since November 11, 2004 at RBC, a travel agency registered with the Department of
fails to reimburse despite demands, the expenses they incurred in connection with the Trade and Industry. As cashier at RBC, Abella’s main duty was to receive payments from
documentation and processing for their deployment. clients for which she issued cash vouchers. Abella claimed that she did not personally meet
the clients nor did she directly receive money from them, as the clients coursed their
Complainant Miguel testified that she came to know Abella through Zeny Agpalza (Agpalza) and Lina payments through Agpalza, an RBC agent. Agpalza would then turn over the payments to
Mateo (Mateo), who informed her that Abella could help her get work abroad. Interested, Miguel met Abella, for which the latter issued cash vouchers; and Abella would subsequently hand over
Abella at the latter’s office, bearing the name Rofema Business Consultancy (RBC). During their the payments to RBC owner, Reyes. Abella disputed private complainants’ assertion and
meeting, Abella offered Miguel work as a laundrywoman in Istanbul, Turkey, with a salary of $600.00 to insisted that she did not promise private complainants employment abroad. During her re-
$700.00 but Miguel must undergo training in laundry service and pay a placement fee of P100,000.00. direct examination, Abella refuted her purported arrest and confrontation with private
Miguel, however, was able to raise and pay only P30,000.00 as placement fee on November 17, 2003 complainants. Abella maintained that she voluntarily went with Agpalza to the police
for which Abella issued a cash voucher signed by Abella herself in Miguel’s presence. Miguel also headquarters and that she and Agpalza were detained at the second floor while private
claimed that she underwent training in laundry service for five days at the Executive Technical complainants were kept at the ground floor of the police headquarters.
Consultants Trade Test and Training Center, valued at P5,000.00, which was sponsored by Abella.
Miguel was issued a certification after said training. Abella discussed with Miguel the details of the
latter’s job abroad and provided Miguel with a photocopy of their written agreement, together with the RTC: guilty, with penalty of life imp and P100,000 and to refund the sums of money
certificate evidencing registration by Abella of the business name of RBC. Until the day that Miguel gave
her testimony before the RTC, Abella, contrary to her representation and promise, was not able to CA: affirmed the RTC judgment of conviction but with the modification increasing the amount
deploy Miguel as a laundrywoman in Istanbul, Turkey, and neither did Abella return the placement fee of fine imposed to P500,000.00.
of P30,000.00 which Miguel had paid.

Complainant Marcelino narrated that she came to know Abella through Rosette Danao (Danao). Danao
ISSUE:
first recruited Marcelino to work as a domestic helper in Saipan, but later turned over Marcelino’s
application to Agpalza who was in charge of those applying for jobs in Turkey. Danao and Agpalza both W/N accused is proven guilty beyond reasonable doubt of illegal recruitment in large
referred to Abella as their Manager. Marcelino paid a total of P50,000.00 for the processing of her scale.
papers in four installments: P10,000.00 on November 24, 2003; P15,000.00 on December 3, 2003;
HELD: YES. 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
Accused: Abella contends that the prosecution failed to prove her guilt beyond reasonable unlawful or illegal transaction, enterprise or scheme defined under the first paragraph hereof.
doubt as the first element of illegal recruitment in large scale, i.e., the accused undertook a Illegal recruitment is deemed committed in large scale if committed against three (3) or more
recruitment activity under Article 13(b) of the Labor Code or any prohibited practice under persons individually or as a group.
Article 34 of the same Code, is wanting. Abella points out that: (a) it was not Abella who
enticed private complainants to apply for work overseas given that by private complainants’ Republic Act No. 8042 broadened the concept of illegal recruitment under the Labor Code
own testimonies, they learned about the job opportunities abroad not from Abella, but from and provided stiffer penalties, especially if it constitutes economic sabotage, either illegal
Agpalza, Mateo, and Danao, who were so persuasive that private complainants travelled from recruitment in large scale or illegal recruitment committed by a syndicate. Under Section 6 of
their respective provinces to Manila just to meet Abella; (b) if it were true that Abella received Republic Act No. 8042, the following acts constitute "illegal recruitment":
money from private complainants, she would have already fled after getting private
complainants’ money so as to evade arrest; and (c) the prosecution presented a mere SEC. 6. Definition. – For purposes of this Act, illegal recruitment shall mean any act of
photocopy of the handwritten agreement supposedly executed by Abella in Miguel’s favor, canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers
and considering that the contents of such agreement are in issue in this case, the RTC and includes referring, contract services, promising or advertising for employment
wrongfully accorded much weight to such evidence. 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,
To constitute illegal recruitment in large scale, three elements must concur: (a) the offender otherwise known as the Labor Code of the Philippines: Provided, That any such non-
has no valid license or authority required by law to enable him to lawfully engage in licensee or non-holder who, in any manner, offers or promises for a fee employment
recruitment placement of workers: (b) the offender undertakes any of the activities within the abroad to two or more persons shall be deemed so engaged. It shall likewise include
meaning of "recruitment and placement" under Article 13(b) of the Labor Code, or any of the the following acts, whether committed by any person, whether a non-licensee, non-
prohibited practices enumerated under Article 34 of the same Code (now Section 6 of holder, licensee or holder of authority:
Republic Act No. 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act
of 1995); and (c) the offender committed the same against three or more persons, individually (a) To charge or accept directly or indirectly any amount greater than that specified in
or as a group. 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
Article 13(b) of the Labor Code defines "recruitment and placement" as "any act of by him as a loan or advance;
canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and
includes referrals, contract services, promising or advertising for employment, locally or (b) To furnish or publish any false notice or information or document in relation to
abroad, whether for profit or not." It also provides that "any person or entity which, in any recruitment or employment;
manner, offers or promises for a fee, employment to two or more persons shall be deemed
engaged in recruitment and placement." (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
Article 38 of the same Code particularly defines "illegal recruitment" as follows: Code;

ART. 38. Illegal Recruitment. –  (a) Any recruitment activities, including the prohibited (d) To induce or attempt to induce a worker already employed to quit his employment
practices enumerated under Article 34 of this Code, to be undertaken by non-licensees or in order to offer him another unless the transfer is designed to liberate a worker from
non-holders of authority, shall be deemed illegal and punishable under Article 39 of this oppressive terms and conditions of employment;
Code. The Department of Labor and Employment or any law enforcement officer may initiate
complaints under this Article. (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;
(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 (f) To engage in the recruitment or placement of workers in jobs harmful to public
hereof. 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 witness before the RTC to authenticate the Certification as one of the documentary evidence
Employment or by his duly authorized representative; for the prosecution. A POEA certification is a public document issued by a public officer in the
performance of an official duty; hence, it is prima facie evidence of the facts therein stated
(h) To fail to submit reports on the status of employment, placement vacancies, pursuant to Section 23, Rule 132 of the Rules of Court. Public documents are entitled to a
remittance of foreign exchange earnings, separation from jobs, departures and such presumption of regularity, consequently, the burden of proof rests upon the person who
other matters or information as may be required by the Secretary of Labor and alleges the contrary. Abella does not negate the contents of the Certification but merely
Employment; argues that it has no bearing on whether or not she represented herself to the private
complainants as someone authorized to recruit for overseas 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 Second, both the RTC and the CA found that Abella had engaged in recruitment activities.
actual signing thereof by the parties up to and including the period of the expiration of The trial and appellate courts accorded weight and credence to the consistent testimonies of
the same without the approval of the Department of Labor and Employment; private complainants Miguel, Marcelino, and Callang that at separate instances, Agpalza,
Mateo, and/or Danao brought private complainants to the RBC office and introduced them to
Abella, and it was Abella herself who offered and promised private complainants jobs in
(j) For an officer or agent of a recruitment or placement agency to become an officer
Istanbul, Turkey, in consideration of placement fees. Miguel’s testimony is further supported
or member of the Board of any corporation engaged in travel agency or to be
by a handwritten agreement signed by Abella, stating in detail the terms of Miguel’s alleged
engaged directly or indirectly in the management of a travel agency;
overseas employment.
(k) To withhold or deny travel documents from applicant workers before departure for
Abella is challenging the probative value of the handwritten agreement on the ground that it is
monetary or financial considerations other than those authorized under the Labor
a mere photocopy. Abella reasons that since the contents of said agreement are in issue, the
Code and its implementing rules and regulations;
best evidence rule applies. The original of the agreement is the best evidence of Abella
making representations that she had the power to send private complainants abroad to work.
(l) Failure to actually deploy without valid reason as determined by the Department of
Labor and Employment; and
The non-presentation of the original copy of the handwritten agreement is not fatal to the
prosecution’s case. Miguel personally testified before the RTC as to the circumstances of her
(m) Failure to reimburse expenses incurred by the worker in connection with recruitment by Abella. Abella made verbal, and not only written, promises to Miguel of
his documentation and processing for purposes of deployment, in cases where employment abroad. The handwritten agreement merely substantiates Miguel’s testimony at
the deployment does not actually take place without the worker’s fault. Illegal best. In People v. Pabalan, we affirmed the sufficiency of testimonial evidence to prove
recruitment when committed by a syndicate or in large scale shall be receipt by therein accused-appellant of placement fees, even in the absence of documentary
considered an offense involving economic sabotage. evidence such as receipts issued by accused-appellant, thus:

Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) [T]he absence of receipts for some of the amounts delivered to the accused did not mean that
or more persons conspiring or confederating with one another. It is deemed committed in the appellant did not accept or receive such payments. Neither in the Statute of Frauds nor in
large scale if committed against three (3) or more persons individually or as a group.  the rules of evidence is the presentation of receipts required in order to prove the existence of
a recruitment agreement and the procurement of fees in illegal recruitment cases. Such proof
The elements of illegal recruitment in large scale are all obtaining in this case and that the may come from the testimonies of witnesses.18
prosecution had sufficiently proved that Abella is guilty of said offense.
Abella denies representing to private complainants that she was capable of deploying
First,  it is undisputed that neither Abella nor RBC was licensed as a recruitment agency. The workers to Istanbul, Turkey. Abella avows that she was a mere cashier at RBC who issued
Certification signed by OIC Paragua of the POEA Licensing Division states that "per available vouchers for payments made by clients and that she subsequently turned over such
records of this Office, Abella, in her personal capacity, and ROFEMA BUSINESS payments to Reyes, the true owner of RBC.
CONSULTANCY are not licensed by this Administration to recruit workers for overseas
employment. Any recruitment activity undertaken by the above-named person/entity is We are not swayed by Abella’s bare allegations, which conspicuously lacked any
deemed illegal." Versoza, the POEA Licensing Division employee who actually perused the corroborative evidence. If Abella was really a mere employee at RBC, then she could have
database and other records of their office, prepared the Certification for OIC Paragua’s presented basic evidence of her employment, such as appointment papers, an identification
signature, and personally witnessed OIC Paragua signing the said Certification, appeared as
card, or payslips. Also, the vouchers for the placement fees paid by private complainants
were issued and signed by Abella herself, without any indication that she issued and signed
the same on behalf of Reyes, the purported true owner of RBC. There is likewise absence of
any proof of Abella’s turnover to or Reyes’s receipt of the amounts received from private
complainants.

In contrast, the private complainants Miguel, Marcelino, and Callang were positive and
categorical in their testimonies that Abella promised them employment abroad in exchange
for their payment of placement fees. Abella herself provided Miguel with a Certification
proving Abella’s registration of the business name RBC; hence, negating Abella’s claim that
RBC is actually owned by another person, Reyes. The private complainants’ testimonies
were consistent and corroborative of one another on material points, such as the placement
fees asked of them, the nature of work available, and their employment destination, which is,
Istanbul, Turkey.

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. Abella’s mere denial cannot prevail over the positive and categorical testimonies CARMEN RITUALO y RAMOS vs. PEOPLE OF THE PHILIPPINES
of the private complainants. The findings of the trial court are accorded great respect unless
the trial court has overlooked or misconstrued some substantial facts, which, if considered, G.R. No. 178337               June 25, 2009
might affect the result of the case. Furthermore, factual findings of the trial court, when
affirmed by the Court of Appeals, are deemed binding and conclusive. FACTS:

Lastly,  it was established that there were at least three victims in this case, namely, Miguel, In 1993, Felix Biacora went to Saudi Arabia for overseas employment that was facilitated by
Marcelino, and Callang, who all testified before the RTC in support of their respective one Cynthia Libutan who worked for a recruitment agency. Several years after his return to
complaints. the country, Biacora accidentally met Libutan in Baclaran Church sometime in 2000. After
they exchanged pleasantries, the former signified to the latter his desire to seek another
Based on the foregoing, there is no doubt, as the RTC found and the Court of Appeals overseas employment. Libutan then gave Biacora the name, address and contact number of
affirmed, that Abella is guilty of illegal recruitment in large scale, which constitutes economic her friend, one Carmen Ritualo, the petitioner herein, who was able to help Libutan’s sister
sabotage under the last paragraph of Section 6 of Republic Act No. 8042. find work in Australia. Biacora thereafter called petitioner Ritualo to set up a meeting.

Section 7(b) of Republic Act No. 8042 provides that "[t]he penalty of life imprisonment and a On 1 May 2000, accompanied by his wife, Biacora went to the house of petitioner Ritualo and
fine of not less than Five hundred thousand pesos (P500,000.00) nor more than One million inquired from her whether she could help him secure overseas employment in Australia.
pesos (Pl,000,000.00) shall be imposed if illegal recruitment constitutes economic sabotage Petitioner Ritualo answered in the affirmative, and to be convincing, brought out travel
as defined herein." Hence, we sustain the penalty of life imprisonment and a fine of documents of several people she was able to "help," who were then supposedly scheduled to
P500,000.00 imposed on Abella by the Court of Appeals. leave for abroad pretty soon. Biacora was then assured that: He could leave for Australia in a
month’s time if he will give petitioner Ritualo a total amount of ₱160,000.00, and his salary
SC: affirm in toto CA’s decision would be US$700.00 per month as a farm worker.14

On the above-quoted representation on the same date, Biacora paid petitioner Ritualo the
amount of ₱40,000.00 as downpayment, with the balance to be completed before he left for
Australia. Upon receipt of the money, petitioner Ritualo issued Biacora a Cash Voucher as
evidence of said payment. To complete their transaction, Biacora left her a copy of his Bio-
data. Later, Biacora again gave petitioner Ritualo ₱20,000.00 as additional payment, making
the total amount received by the latter ₱60,000.00. Again, petitioner Ritualo issued a Cash Ritualo: narrated that it was Libutan and Biacora who asked her to introduce them to a
Voucher. certain Anita Seraspe, the person responsible for sending petitioner Ritualo’s own sister to
Australia;24 that she had no agreement with Biacora respecting the latter’s employment in
Subsequently, Biacora was informed by petitioner Ritualo that all he needed in securing an Australia; that any talk of money was made among Libutan, Biacora and Seraspe only; that
employment in Australia was his Passport and an endorsement from the Representative of she received a total of ₱80,000.00 from Biacora, but that the same was merely entrusted to
his district. Accompanied by petitioner Ritualo and one Anita Seraspe, the assistant of the her because Libutan and Biacora had just met Seraspe, 25 and that she turned over all the
former, Biacora went to the Batasan Pambansa to secure the necessary endorsement. payments to Seraspe who acknowledged receipt of the same by writing on pieces of paper
Thereafter, all three went to the Australian Embassy to apply for Biacora’s working visa. said acceptance; that she accompanied Biacora to Batasan Pambansa at his request; that
she did not earn any money out of her referral and introduction of Libutan and Biacora to
Seraspe; that even if she did not earn any money out of the subject transaction, she returned
On 1 June 2000, Biacora went to see petitioner Ritualo to follow up the date of his departure.
₱10,000.00 and ₱31,000.00, or a total of ₱41,000.00, to Biacora out of fear that the latter
Petitioner Ritualo asked from Biacora another ₱20,000.00 and told the latter to be patient. As
would file charges against her; that she tried to find Seraspe, but the latter could not be found
with the other amounts given, proof of payment was similarly issued to acknowledge receipt
at her last known address; and that she gave Biacora an additional ₱6,000.000 to obviate any
thereof.
more scandal befalling her family.26
Several dates were set for Biacora’s departure, but none pushed through and his Australian
RTC: Simple Illegal Recruitment and Estafa, defined and penalized under the Migrant
Visa application was denied by the Australian Embassy. Consequently, on 9 September
Workers and Overseas Filipino Act of 1995 and the Revised Penal Code, respectively.
2000, Biacora demanded from petitioner Ritualo the return of the ₱80,000.00. The latter
promised to pay back the money on the 13th of September 2000. None came.
Ritualo’s Motion for Reconsideration of the trial court’s decision was subsequently denied in
an Order28 dated 21 January 2005.
Thereafter, Biacora filed the subject criminal complaints against petitioner Ritualo.

In an Order29 dated 1 March 2005, the RTC granted and approved the Notice of Appeal 30 filed
On 26 May 2003, during the joint trial of the cases, petitioner Ritualo orally manifested in
by Ritualo.
open court that earnest efforts were being undertaken to settle the civil aspect thereof. Thus,
with the conformity of the accused, herein petitioner Ritualo, coupled with the latter’s express
waiver apropos the attachment of double jeopardy, the RTC ordered the provisional dismissal CA: affirmed the judgment of the RTC insofar as the conviction of Ritualo was concerned. As
of the two cases. reasoned by the Court of Appeals, "[a]s against the positive and categorical testimony of the
[Biacora], [Ritualo’s] denials cannot prevail." Particularly, the appellate court held that
Ritualo’s "acts of promising and assuring employment overseas to [Biacora] [fell] squarely
On 13 October 2003, however, the RTC ordered the revival of the cases upon the motion of
within the ambit of recruitment and placement as defined by [The Migrant Workers Act or
the prosecution, on the ground that Ritualo reneged on her undertaking as embodied in a
Republic Act No. 8042]." With respect to the charge of Estafa under the Revised Penal Code,
handwritten note entitled.
the appellate court likewise found that all the elements of said crime existed in the case at
bar, i.e., "[Ritualo] misrepresented herself to the [Biacora] as the person who could send him
In the ensuing trial, the prosecution presented two witnesses, namely, Felix Biacora, the to Australia for employment, and by reason of misrepresentations, false assurances and
victim;11 and Belen Blones, employee of the Licensing Branch of the Philippines Overseas deceit, [Biacora] was induced to part with his money in payment of placement fees, thereby
Employment Agency (POEA). Taken altogether, the evidence of the prosecution established causing him damage and prejudice."
the following facts:
The penalties imposed on Ritualo by the trial court, however, were modified by the Court of
In two Certifications dated 23 October 2000 20 and 5 November 2003,21 respectively, both Appeals on the ground that the latter erred in imposing in the Illegal Recruitment case, an
identified by Belen Blones of the Licensing Division of the POEA, it was confirmed that "per indeterminate sentence ranging from six (6) years and one (1) day, as minimum, to eight (8)
available records of [its] Office, CARMEN RITUALO, in her personal capacity is not licensed years, as maximum, and to pay a fine of ₱200,000.00," in view of the penalty prescribed
by this Administration to recruit workers for overseas employment" 22 ; and that "[a]ny under Sec. 7 of Republic Act No. 8042; and, in the Estafa case, another indeterminate
recruitment activity undertaken by [her] is deemed illegal."23 sentence ranging from six (6) months and one (1) day of prision correcional, as minimum, to
seven (7) years, eleven (11) months and eleven (11) days of prision mayor, as maximum,
To rebut the foregoing evidence presented by the prosecution, the defense presented a contrary to the wordings of Art. 315 of the Revised Penal Code.
diametrically opposed version of the facts of the present case through the sole testimony of
Ritualo.
ISSUE: (g) To obstruct or attempt to obstruct inspection by the Secretary of Labor and
Employment or by his duly authorized representative;
1) W/N the accused is guilty.
(h) To fail to submit reports on the status of employment, placement vacancies,
2) W/N, assuming arguendo that the petitioner is culpable, the CA erred in remittance of foreign exchange earnings, separation from jobs, departures and such
modifying the decision of the RTC as regards the term of sentence in the illegal other matters or information as may be required by the Secretary of Labor and
recruitment case. Employment;

HELD: (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
1) YES. The crime of Simple Illegal Recruitment is defined and penalized under Sec. 6
the same without the approval of the Department of Labor and Employment;
of Republic Act. No. 8042, which reads:

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

SEC. 6. Definition. - For purposes of this Act, illegal recruitment shall mean any act of
or member of the Board of any corporation engaged in travel agency or to be
canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers and
engaged directly or indirectly in the management of a travel agency;
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 (k) To withhold or deny travel documents from applicant workers before departure for
known as the Labor Code of the Philippines: Provided, That any such non-licensee or non- monetary or financial considerations other than those authorized under the Labor
holder who, in any manner, offers or promises for a fee employment abroad to two or more Code and its implementing rules and regulations;
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: (l) Failure to actually deploy without valid reason as determined by the Department of
Labor and Employment ; and
(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 (m) Failure to reimburse expenses incurred by the worker in connection with his
Employment, or to make a worker pay any amount greater than that actually received documentation and processing for purposes of deployment, in cases where the
by him as a loan or advance; 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
(b) To furnish or publish any false notice or information or document in relation to involving economic sabotage.
recruitment or employment;
Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3)
(c) To give any false notice, testimony, information or document or commit any act of or more persons conspiring or confederating with one another. It is deemed committed in
misrepresentation for the purpose of securing a license or authority under the Labor large scale if committed against three (3) or more persons individually or as a group.
Code;
The persons criminally liable for the above offenses are the principals, accomplices and
(d) To induce or attempt to induce a worker already employed to quit his employment accessories. In case of juridical persons, the officers having control, management or direction
in order to offer him another unless the transfer is designed to liberate a worker from of their business shall be liable.
oppressive terms and conditions of employment;
Art. 315, par. 2(a) of the Revised Penal Code, on the other hand, enumerates one of the
(e) To influence or attempt to influence any person or entity not to employ any worker modes of committing estafa, thus:
who has not applied for employment through his agency;
xxxx
(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;
2. By means of any of the following false pretenses or fraudulent acts executed prior to or convince Biacora that she (petitioner Ritualo) had, indeed, the ability and influence to make
simultaneously with the commission of the fraud: Biacora’s dream of overseas employment come true.

(a) By using fictitious name, or falsely pretending to possess power, influence, qualifications, The claim of petitioner Ritualo that it was Anita Seraspe who was really the recruiter and the
property, credit, agency, business or imaginary transactions, or by means of other similar one who profited from the subject illegal transaction holds no water. Petitioner Ritualo’s act of
deceits. receiving payment from Biacora and issuing personal receipts therefor; of personally assisting
Biacora to complete the "necessary" documents; of failing to present evidence to corroborate
Illegal recruitment is committed when two essential elements concur: her testimony despite several opportunities given her by the trial court; of petitioner Ritualo
having been positively identified as the person who transacted with Biacora and promised the
latter an overseas employment and who personally received money from Biacora, all
(1) that the offender has no valid license or authority required by law to enable him to
unhesitatingly point to petitioner Ritualo as the culprit.
lawfully engage in the recruitment and placement of workers, and

Petitioner Ritualo next tried to impress upon this Court that she received nary a centavo from
(2) that the offender undertakes any activity within the meaning of "recruitment and
the subject illegal transaction; therefore, she should not be held liable.
placement" defined under Article 13(b), or any prohibited practices enumerated under
Article 34 of the Labor Code.39
We reject this outright. In the first place, it has been abundantly shown that she really
received the monies from Biacora. Secondly, even without consideration for her services, she
Article 13(b) of the Labor Code defines recruitment and placement as:
still engaged in recruitment activities, since it was satisfactorily shown that she promised
overseas employment to Biacora. And, more importantly, Sec. 6 of Republic Act No. 8042
Any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring does not require that the illegal recruitment be done for profit.
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
Petitioner Ritualo boldly but vainly tried to inject reasonable doubt by complaining that the
manner, offers or promises for a fee employment to two or more persons shall be deemed
RTC and the Court of Appeals affirmed her conviction despite failure of the prosecution to
engaged in recruitment and placement. (Emphasis supplied.)
present other vital witness, i.e., Biacora’s wife, who accompanied her husband to the house
of petitioner Ritualo and, hence, witnessed what happened on the first meeting between the
In this case, the first element is, indeed, present. The prosecution established, through Belen latter and Biacora. Non-presentation of said witness, according to petitioner Ritualo, raises
Blones of the Licensing Branch of the POEA, who identified and confirmed the two the presumption that her testimony, if presented, would be adverse to the prosecution.
Certifications issued by the POEA Licensing Branch, that "per available records of [its]
Office, CARMEN RITUALO, in her personal capacity is not licensed by this Administration to
The prosecution is entitled to conduct its own case and to decide what witnesses to call to
recruit workers for overseas employment."40
support its charges. The defense posture that the non-presentation of the wife of Biacora
constitutes suppression of evidence favorable to petitioner Ritualo is fallacious. In fact, the
As to the second element, it must be shown that the accused gave the private complainant same line of reasoning can be used against petitioner Ritualo. If the defense felt that the
the distinct impression that he/she had the power or ability to send the private complainant testimony of Biacora’s wife would support her defense, what she could and should have done
abroad for work, such that the latter was convinced to part with his/her money in order to be was to call her (Biacora’s wife) to the stand as her own witness. One of the constitutional
employed Thus, to be engaged in illegal recruitment, it is plain that there must at least be a rights of the accused is "to have compulsory process to secure the attendance of witnesses
promise or an offer of employment from the person posing as a recruiter whether locally or and the production of evidence in his behalf." And, in the same vein, since petitioner Ritualo
abroad. In the case at bar, the second element is similarly present. As testified to by Biacora, is setting the cloak of liability on Seraspe’s shoulder, she (petitioner Ritualo) could and should
petitioner Ritualo professed to have the ability to send him overseas to be employed as a have had the former subpoenaed as well.
farm worker in Australia with a monthly salary of US$700.00. To further wet Biacora’s
appetite, petitioner Ritualo even showed him purported travel documents of other people
As held by this Court, the adverse presumption of suppression of evidence does not,
about to depart, whose overseas employment she supposedly facilitated. That petitioner
moreover, apply where the evidence suppressed is merely corroborative or cumulative in
Ritualo personally assisted Biacora in the completion of the alleged requirements, i.e.,
nature. If presented, Biacora’s wife would merely corroborate Biacora’s account which, by
securing a Letter of Request and Guarantee from the Representative of his Congressional
itself, already detailed what occurred on the day of the parties’ first meeting at the house of
District in Batangas to ensure the approval of Biacora’s application for an Australian Visa,
petitioner Ritualo. Hence, the prosecution committed no fatal error in dispensing with the
even accompanying Biacora to the Australian Embassy, all clearly point to her efforts to
testimony of Biacora’s wife.
Finally, Biacora, the private complainant in this case, did not harbor any ill motive to testify (a) By using fictitious name, or falsely pretending to possess power, influence, qualifications,
falsely against petitioner Ritualo. The latter failed to show any animosity or ill feeling on the property, credit, agency, business or imaginary transactions, or by means of other similar
part of Biacora that could have motivated him to falsely accuse her of the crimes charged. It deceits.
would be against human nature and experience for strangers to conspire and accuse another
stranger of a most serious crime just to mollify their hurt feelings. 50 Both elements of the crime were established in this case, namely, (a) petitioner Ritualo
defrauded complainant by abuse of confidence or by means of deceit; and (b) complainant
The totality of the evidence in the case at bar, when scrutinized and taken together, leads to Biacora suffered damage or prejudice capable of pecuniary estimation as a result. 54 Biacora
no other conclusion than that petitioner Ritualo engaged in recruiting and promising overseas parted with his money upon the prodding and enticement of petitioner Ritualo on the false
employment to Felix Biacora under the above-quoted Sec. 6 of Republic Act No. 8042 vis-à- pretense that she had the capacity to deploy him for employment in Australia. In the end,
vis Article 13(b) of the Labor Code. Hence, she cannot now feign ignorance of the Biacora was neither able to leave for work overseas nor did he get his money back, thus
consequences of her unlawful acts. causing him damage and prejudice. Hence, the conviction of petitioner Ritualo of the crime of
estafa should be upheld.
As to the sentence imposed upon petitioner Ritualo for the crime of simple illegal recruitment,
this Court clarifies that the penalty imposed by the CA – a sentence of 12 years imprisonment While this Court affirms the conviction of the petitioner Ritualo for estafa, we find, however,
and a fine of ₱500,000.00 - is partly incorrect, as petitioner Ritualo is a non-licensee. Under that both the trial court and the appellate court erroneously computed the penalty of the
Sec. 7(a) of Republic Act No. 8042, simple illegal recruitment is punishable by imprisonment crime. The amount of which the private complainant, Biacora, was defrauded was Eighty
of not less than six (6) years and one (1) day but not more than twelve (12) years and a fine Thousand Pesos (₱80,000.00) and not merely Sixty Six Thousand Pesos (₱66,000.00).
of not less than Two Hundred Thousand Pesos (₱200,000.00) nor more than Five Hundred
Thousand Pesos (₱500,000.00). Applying the provisions of Section 1 of the Indeterminate Under the Revised Penal Code, an accused found guilty of estafa shall be sentenced to:
Sentence law, however, the correct penalty that should have been imposed upon petitioner
Ritualo is imprisonment for the period of eight (8) years and one (1) day, as minimum, to Art. 315. Swindling (estafa). — Any person who shall defraud another by any of the means
twelve (12) years, as maximum. The imposition of a fine of ₱500,000.00 is also in order. mentioned herein below shall be punished by:

With respect to the criminal charge of estafa, this Court likewise affirms the conviction of 1st. The penalty of prision correccional in its maximum period to prision mayor in its
petitioner Ritualo for said crime. The same evidence proving petitioner Ritualo’s criminal minimum period, if the amount of the fraud is over 12,000 pesos but does not exceed
liability for illegal recruitment also established her liability for estafa. It is settled that a person 22,000 pesos, and if such amount exceeds the latter sum, the penalty provided in this
may be charged and convicted separately of illegal recruitment under Republic Act No. 8042 paragraph shall be imposed in its maximum period, adding one year for each
in relation to the Labor Code, and estafa under Art. 315, paragraph 2(a) of the Revised Penal additional 10,000 pesos; but the total penalty which may be imposed shall not exceed
Code. As this Court held in People v. Yabut : twenty years. In such cases, and in connection with the accessory penalties which
may be imposed under the provisions of this Code, the penalty shall be termed
In this jurisdiction, it is settled that a person who commits illegal recruitment may be charged and prision mayor or reclusion temporal, as the case may be.
convicted separately of illegal recruitment under the Labor Code and estafa under par. 2(a) of Art. 315
of the Revised Penal Code. The offense of illegal recruitment is malum prohibitum where the criminal
intent of the accused is not necessary for conviction, while estafa is malum in se where the criminal 2nd. The penalty of prision correccional in its minimum and medium periods, if the
intent of the accused is crucial for conviction. Conviction for offenses under the Labor Code does not amount of the fraud is over 6,000 pesos but does not exceed 12,000 pesos;
bar conviction for offenses punishable by other laws. Conversely, conviction for estafa under par. 2(a) of
Art. 315 of the Revised Penal Code does not bar a conviction for illegal recruitment under the Labor 3rd. The penalty of arresto mayor in its maximum period to prision correccional in its
Code. It follows that one’s acquittal of the crime of estafa will not necessarily result in his acquittal of the
minimum period if such amount is over 200 pesos but does not exceed 6,000 pesos;
crime of illegal recruitment in large scale, and vice versa.
and
The prosecution has proven beyond reasonable doubt that petitioner Ritualo was similarly
4th. By arresto mayor in its maximum period, if such amount does not exceed 200
guilty of estafa under Art. 315 (2)(a) of the Revised Penal Code committed --
pesos, x x x.
By means of any of the following false pretenses or fraudulent acts executed prior to or
Computing the penalty for the crime of Estafa based on the above-quoted provision, the
simultaneously with the commission of the fraud:
proper penalty to be imposed upon petitioner Ritualo is the maximum term of prision
correccional maximum to prision mayor minimum as mandated by Article 315 of the Revised
Penal Code. But considering that the amount defrauded exceeded Twenty-Two Thousand (2) In Criminal Case No. 01-0077, petitioner Carmen Ritualo is also found GUILTY
Pesos (₱22,000.00), per the same provision, the prescribed penalty is not only imposed in its beyond reasonable doubt of the crime of Estafa and sentenced to suffer an
maximum period, but there is imposed an incremental penalty of one (1) year imprisonment indeterminate prison term of four (4) years and two (2) months of prision correccional,
for every Ten Thousand Pesos (₱10,000.00) in excess of the cap of Twenty-Two Thousand as minimum, to eleven (11) years and eight (8) months and twenty-one (21) days of
Pesos (₱22,000.00).55 As this Court held in People v. Gabres,56 "[t]he fact that the amounts prision mayor, as maximum.
involved in the instant case exceed ₱22,000.00 should not be considered in the initial
determination of the indeterminate penalty; instead, the matter should be so taken as Petitioner Carmen R. Ritualo is similarly ORDERED to indemnify Felix E. Biacora the amount
analogous to modifying circumstances in the imposition of the maximum term of the full of ₱21,000.00.
indeterminate sentence."57 And with respect to the computation of the minimum term of the
indeterminate sentence, in this case, given that the penalty prescribed by law for the estafa
charge against petitioner Ritualo is prision correccional maximum to prision mayor minimum,
the penalty next lower would then be prision correccional minimum to medium per Art. 64 in
relation to Art. 65, both of the Revised Penal Code.

Preceding from the above discussion, thus, the prison term to be imposed upon petitioner
Ritualo vis-à-vis the crime of Estafa is as follows: the minimum term should be anywhere
within six (6) months and one (1) day to four (4) years and two (2) months of prision
correccional; while the maximum term of the indeterminate sentence should be within the
range of six (6) years, eight (8) months and twenty-one (21) days to eight (8) years of prision
mayor considering that the amount involved exceeds ₱22,000.00, plus an added five (5)
years, as there are five (5) increments of ₱10,000.00 over the cap of ₱22,000.00. 58
PEOPLE OF THE PHILIPPINES vs. MICHELLE DELA CRUZ
Lastly, regarding the award of indemnity due from petitioner Ritualo, both the RTC and Court
of Appeals ordered her to pay Biacora the amount of Sixty-Six Thousand Pesos G.R. No. 214500 June 28, 2017
(₱66,000.00), instead of the original amount defrauded, which is Eighty Thousand Pesos
(₱80,000.00), in view of petitioner Ritualo’s payment of Fourteen Thousand Pesos FACTS:
(₱14,000.00). A thorough scrutiny of the record of the case, however, yields the finding that
as of the date of revival of the case before the RTC, or on 13 October 2003, only the amount Appellant was charged with illegal recruitment in large scale and 3 counts of estafa under
of Twenty-One Thousand Pesos (₱21,000.00) remains unpaid. The Motion to Revive Case Article 315, paragraph 2(a) of the Revised Penal Code.
dated 2 October 2003 filed by the prosecution attached the letter-request of private
complainant Biacora, Testimony of first private complainant Armely Aguilar-Uy:

With the foregoing submission of Biacora, out of the amount of Eighty Thousand Pesos Private respondent Aguilar-Uy testified that she and appellant were introduced to each other
(₱80,000.00), only Twenty-One Thousand Pesos (₱21,000.00) remains unpaid. Accordingly, by a certain Maggie Dela Cruz. Aguilar-Uy claimed that appellant recruited her to work in
the civil liability of petitioner Ritualo is now merely Twenty-One Thousand Pesos South Korea as domestic helper. She was told that she will receive ₱50,000.00 for eight
(₱21,000.00). hours of work and an overtime pay totalling to ₱80,000.00 per month. 7 Appellant informed her
that she has twelve (12) visas with her and still needed two more persons to go to South
WHEREFORE, in view of the foregoing, the Decision of the Court of Appeals in CA-G.R. CR Korea. 8 Appellant required her to submit the requirements that will be sent to South Korea for
No. 29393 promulgated on 23 April 2007 is AFFIRMED with the following MODIFICATIONS: authentication.

(1) In Criminal Case No. 01-0076, petitioner Carmen Ritualo is found GUILTY beyond Aguilar-Uy testified that appellant asked for ₱l00,000.00 from them as payment for expenses
reasonable doubt of the crime of Simple Illegal Recruitment, and is sentenced to needed to go to South Korea. Aguilar-Uy added that considering that she is also paying for
suffer an indeterminate prison term of eight (8) years and one (1) day as minimum, to her niece, Sheryl Reformado, who also wants to work abroad, she gave appellant the total
twelve (12) years, as maximum, and to pay a fine of ₱500,000.00; and amount of ₱200,000.00.
Thereafter, Aguilar-Uy waited for their visas until January 2005, but none were given to them. abroad but nothing happened. Lavaro waited for appellant's instruction or call but when
Aguilar-Uy called up and texted appellant several times to no avail. Upon realizing that they appellant finally called her, it was only to ask her anew for money. At this time, she already
will no longer be able to get their visas, she told appellant to return their passports instead but started to doubt appellant. She later learned that appellant has also been asking money from
again appellant did not reply. Finally, when they eventually met on February 18, 2005, other people who also wants to work abroad. Lavaro also identified appellant in open court.
appellant asked her anew for additional payment of $72 to renew their visas. Aguilar-Uy
narrated that appellant gave them a stub 9 which purported to be coming from the Embassy of Meanwhile, prosecution witness, Rosalina Rosales testified that as per Certification issued by
the Republic of South Korea. However, when they presented the same to the Korean Noriel Devanadera, Director IV, Licensing and Regulation Office, POEA, appellant Dela Cruz
Embassy, they were told that all their documents were fake. Aguilar-Uy then lodged a is not authorized to recruit workers for overseas employment during the year 2005 up to the
complaint against the appellant before the Presidential Task Force Anti-Illegal Recruitment present. Rosales was the one who prepared the Certification signed by Director Devanadera.
Agency. Appellant promised them that she would pay them back but failed to do so. Aguilar-
Uy identified the appellant in open court. 10 For the defense, appellant testified that prior to her arrest, she has worked in South Korea as
an OFW for five years and three months. She alleged that private complainants, namely,
Testimony of second private complainant Sheryl Reformado: Armely Aguilar, Adona Lavaro and Sheryl Aguilar were introduced to her by a certain Alma
Palomares, the sister of her compadre Aldrin who was also an OFW in South
For her part, private complainant, Shery 1 Reformado (Reformado) essentially corroborated Korea.33 Thereafter, private complainants asked her the necessary requirements for them to
the testimonies of her aunt, Aguilar-Uy. She testified that she came to know appellant through be able to work in South Korea.
their neighbor Gemma Dimatera and her sister Maggie Dela Cruz, who were also applying for
work with appellant.11 Appellant denied that she promised private complainants any deployment abroad, specifically
in South Korea. She claimed that she just told them to secure the needed documents.
Reformado narrated that on September 20, 2004, Gemma Dimatera and Maggie Dela Cruz Appellant averred that she introduced the complainants to her agent named "Rosa," who
went to her place at Blk. 22, Lot 13, Makiling St., Mountainview Subdivision, Muzon, San assisted her in going to Korea. She also admitted that she assisted the complainants in
Jose del Monte City, Bulacan and informed her that appellant needed two more applicants to securing the original copies of ITR, employment certificate and bank certificate to get a tourist
go to South Korea as overseas workers. 12 As agreed upon per phone conversation with visa. However, after introducing the complainants to "Rosa", appellant claimed to be unaware
appellant, they met in front of the Korean Embassy located in Makati. Appellant immediately anymore as to what happened next because she went to the province as she was pregnant
asked for ₱40,000.00 from them since the working visa she had with her will expire. 13 She that time. 34
corroborated the claim of AguilarUy that on different dates, they gave appellant the total
amount of ₱200,000.00. 14 They waited for the processing of their passport and visa from When confronted with an acknowledgement receipt marked as Exh. "A", appellant declared
November 2004 up to February 2005 but none were given to them as promised. Appellant that said document represents the payment in securing the ITR and the bank certification.
gave them many alibis. They later on asked for police assistance and went to the Korean She averred that the amount of ₱40,000.00 was personally delivered to her and thereafter
Embassy so they could get their passports, but the Consul scolded her since the papers they she gave the amount to Alma Palomares. 35 She said she did not know what Alma did with the
submitted were all fake. 15 Reformado also identified appellant in open court. 16 money. She further added that private complainants filed a case against her just because she
was the one who talked to them and they could not contact Aldrin, who was still in South
Testimonv of third private complainant Adona Lavaro: Korea at that time.

Third private complainant, Adona Lavaro, testified that she was introduced to appellant by a On cross-examination, appellant testified that she facilitated for a fee the procurement of
certain Mary Anne Legaspi. She narrated that it was appellant who called her up and told her private complainants' papers like ITR, bank certificate and certificate of employment. She
that her employer, Mr. Simeon Right, was looking for a domestic helper. Lavaro testified that confirmed having received the amount of ₱40,000.00 for the facilitation of said documents.
appellant told her that she will be the one to facilitate the processing of her documents and She claimed that Madam Rosa, Alma Palomares and private complainants were the ones
assured her that she would be able to work in South Korea. 17 communicating with each other. 36

On different occasions, Lavaro testified that appellant asked her for money to be able to work Appellant likewise admitted that the documents which she produced for private complainants
in South Korea. She claimed to have given appellant the amounts of (1) ₱40,000.00 as were all fake. She recalled that her first entry to South Korea was illegal because she also
terminal fee, (2) ₱40,000.00 as processing fee; (3) $72 for the visa, (4) traveler's checks in used fake ITR, bank certificate and certificate of employment. Appellant, however, averred
the amount of US$200, and (5) ₱2,050.00 as terminal fee. Lavaro testified that she gave said that she merely referred private complainants to the person who faked all her papers but she
amounts of money to appellant because she trusted her and she really wanted to leave for has no hand in the preparation of the fake documents. 37
RTC,CA: guilty of the cime of illegal recruitment in large scale and estafa; violation of Article 3 Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3)
8 (b) of the Labor Code, as amended, in relation to Article 13 (b) and 34 of the same Code or more persons conspiring or confederating with one another. It is deemed committed in
(Illegal Recruitment in Large Scale) and hereby sentences her to suffer the penalty of life large scale if committed against three (3) or more persons individually or as a group.
imprisonment and pay a fine of ₱500,000.00. Accused is further ordered to pay complainant
Armely Aguilar-Uy the amount of ₱40,000.00 as actual or compensatory damages. Thus, in order to hold a person liable for illegal recruitment, the following elements must
concur: (1) the offender undertakes any of the activities within the meaning of "recruitment
accused Michell Dela Cruz guilty beyond reasonable doubt of the crime of Estafa under and placement" under Article l 3(b) of the Labor Code, or any of the prohibited practices
Article 315, par. 2 (a) of the Revised Penal Code and hereby sentences her to a prison term enumerated under Article 34 of the Labor Code (now Section 6 of Republic Act No. 8042) and
ranging from two (2) years, eleven (11) months and eleven (11) days of prision correccional (2) the offender has no valid license or authority required by law to enable him to lawfully
as minimum up to eight (8) years of prision mayor as maximum. engage in recruitment and placement of workers. In the case of illegal recruitment in large
scale,  as in this case, a third element is required: that the offender commits any of the acts of
Michelle Dela Cruz is hereby ACQUITTED of the crime charged for insufficiency of evidence. recruitment and placement against three or more persons, individually or as a group.
The RTC was unconvinced by the defense of alibi and denial interposed by appellant. The
trial court relied on the testimony of Rosalina Rosales of the Licensing Division of the POEA In the instant case, appellant committed the acts enumerated in Section 6 of R.A. 8042. As
who confirmed that appellant is not licensed to recruit workers for overseas employment. It testified to by Aguilar-Uy, Reformado and Lavaro, appellant gave them an impression that
likewise accorded greater weight to the testimonies of private complainants who positively she is capable of sending them to South Korea as domestic helpers. The testimonial
identified appellant as the person who recruited them for employment in South Korea and evidence presented by the prosecution clearly shows that, in consideration of a promise of
received the placement fees. overseas employment, appellant received monies from private complainants. Such acts were
accurately described in the testimonies of the prosecution witnesses.
The court a quo also found appellant guilty beyond reasonable doubt of estafa for
misrepresenting herself as having the power and capacity to recruit and place private This Court has consistently conformed to the rule that findings of the trial court on the
complainants as domestic helpers in South Korea. credibility of witnesses deserve great weight. Factual findings of the trial court and its
observation as to the testimonies of the witnesses are accorded great respect, if not
ISSUE: conclusive effect, most especially when affirmed by the Court of Appeals, as in this case. The
reason for this is that trial courts are in a better position to decide the question of credibility,
having heard the witnesses themselves and having observed first-hand their demeanor and
W/N accused is proven guilty beyond reasonable doubt.
manner of testifying under grueling examination. In the absence of palpable error or grave
abuse of discretion on the part of the trial judge, the trial court's evaluation of the credibility of
HELD: YES witnesses will not be disturbed on appeal.

Appellant avers that she cannot be held criminally liable for illegal recruitment because she merely
Moreover, private complainants' testimonies were consistent and substantially corroborate
assisted private complainants in processing their travel documents without any promise of employment.
She asserts that the prosecution failed to establish whether she actually undertook any recruitment each other on material points, such as the amount of the fees they gave to appellant, the
activity or any prohibited practice enumerated under Art. 13 (b) or Art. 34 of the Labor Code. country of destination and the nature of work. It was also established that appellant gave
private complainants the impression that she had the ability to send them to South Korea for
work in such a manner that the latter were convinced to part with their money in order to be
The crime of illegal recruitment is defined and penalized under Sections 6 and 7 of Republic
employed. Without any evidence to show that private complainants were propelled by any ill
Act (R.A.) No. 8042, or the Migrant Workers and Overseas Filipinos Act of 1995,  as follows:
motive to testify falsely against appellant, we shall accord their testimonies full faith and
credit. 
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
Meanwhile, appellant's defense that she merely referred private complainants to a certain
includes referring, contract services, promising or advertising for employment abroad,
"Madam Rosa" fails to convince as the same was unsupported by any evidence. Between the
whether for profit or not, when undertaken by a non-licensee or non-holder of authority
categorical statements of the private complainants and the bare denial of appellant, the
contemplated under Article 13 (f) of Presidential Decree No. 442, as amended, otherwise
former must perforce prevail. An affirmative testimony is far stronger than a negative
known as the Labor Code of the Philippines: Provided, That any such non-licensee or non-
testimony especially when the former comes from the mouth of a credible witness. Denial,
holder who, in any manner, offers or promises for a fee employment abroad to two or more
same as an alibi, if not substantiated by clear and convincing evidence, is negative and self-
persons shall be deemed so engaged. It shall likewise include the following acts, x xx:
serving evidence undeserving of weight in law. It is considered with suspicion and always to establish through credible testimonial evidence that the accused-appellant has engaged in
received with caution, not only because it is inherently weak and unreliable, but also because illegal recruitment, a conviction for the offense can very well be justified.
it is easily fabricated and concocted.51
PENALTY
Furthermore, we agree with the court a quo that the same pieces of evidence which establish
appellant's liability for illegal recruitment in large scale likewise confirm her culpability for The crime of illegal recruitment is penalized under Sections 6 and 7 of RA 8042, or the Migrant Workers
estafa. and Overseas Filipinos Act of 1995,  to wit:

It is well-established in jurisprudence that a person may be charged and convicted for both SEC. 7. Penalties. –
illegal recruitment and estafa. The reason therefor is not hard to discern: illegal recruitment
is malum prohibitum, while estafa is mala in se. In the first, the criminal intent of the accused (a) Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of not less than
is not necessary for conviction. In the second, such intent is imperative. Estafa under Article six (6) years and one (1) day but not more than twelve (12) years and a fine of not less than Two
315, paragraph 2(a) of the Revised Penal Code is committed by any person who defrauds hundred thousand pesos (₱200,000.00) nor more than Five hundred thousand pesos (₱500,000.00).
another by using fictitious name, or falsely pretends to possess power, influence,
qualifications, property, credit, agency, business or imaginary transactions, or by means of (b) The penalty of life imprisonment and a fine of not less than Five hundred thousand pesos
similar deceits executed prior to or simultaneously with the commission of fraud. (₱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.
The elements of estafa by means of deceit are the following: (a) that there must be a false
Provided, however, That the maximum penalty shall be imposed if the person illegally recruited is less
pretense or fraudulent representation as to his power, influence, qualifications, property,
than eighteen (18) years of age or committed by a non-licensee or non-holder of authority.
credit, agency, business or imaginary transactions; (b) that such false pretense or fraudulent
representation was made or executed prior to or simultaneously with the commission of the
As the crime was committed in large scale, it is an offense involving economic sabotage and is
fraud; (c) that the offended party relied on the false pretense, fraudulent act, or fraudulent
punishable by life imprisonment and a fine of not less than ₱500,000.00 nor more than ₱l,000,000.00.
means and was induced to part with his money or property; and (d) that, as a result thereof, The trial court, thus, aptly imposed the penalty of life imprisonment and a fine of ₱500,000.00.
the offended party suffered damage. 53
The prescribed penalty for estafa under Article 315 of the RPC, is prision correccional maximum to
In the instant case, the prosecution has established that appellant defrauded private prision mayor minimum, if the amount of the fraud is over ₱12,000.00 but does not exceed ₱22,000.00.
complainants by leading them to believe that she has the capacity to send them to South If the amount exceeds ₱22,000.00, the penalty shall be imposed in its maximum period, adding one
Korea for work as domestic helpers, even as she does not have a license or authority for the year for each additional ₱l0,000.00, provided that the total penalty shall not exceed twenty (20) years.
purpose. Such misrepresentation came before private complainants delivered various
amounts for purportedly travel expenses and visa assistance to appellant. Clearly, private Since the amount defrauded exceeded ₱22,000.00, the penalty shall be imposed in its maximum period
complainants would not have parted with their money were it not for such enticement by which is six (6) years, eight (8) months and twenty-one (21) days to eight (8) years.
appellant. As a consequence of appellant's false pretenses, the private complainants suffered
damages as the promised employment abroad never materialized and the money they paid Applying the Indeterminate Sentence Law, the minimum term shall be within the range of the penalty
were never recovered. All these representations were actually false and fraudulent and thus, next lower to that prescribed by the RPC, or anywhere within prision correccional in its minimum and
the appellant must be made liable under par. 2 (a), Article 315 of the Revised Penal Code. medium periods or six (6) months and one (1) day to four (4) years and two (2) months. Thus, in this
case, the minimum term to be imposed should be four (4) years and two (2) months of prision
correccional.
However, as to appellant's acquittal in Criminal Case Nos. 05-414 and 05-415, due to the trial
court's finding that there is "insufficient" evidence to show that payment has been made to
appellant, this Court can no longer review and pass judgment in view of the appellant's right The maximum term, on the other hand, shall be that which could be properly imposed under the rules of
the RPC, which in this case shall be six (6) years, eight (8) months and twenty-one (21) days to eight
against double jeopardy. Nevertheless, even if appellant was acquitted in these two estafa (8) years. The incremental penalty shall be added to the maximum period of the prescribed penalty,
cases, it must be clarified that she can still be convicted of illegal recruitment. This is because which is anywhere between six (6) years, eight (8) months and twenty-one (21) days to eight (8) years.
while in estafa, damage is essential, the same is not an essential element in the crime of
illegal recruitment. It is the lack of the necessary license or authority, not the fact of payment
While there were several evidence fonnally offered during trial, only Exhibit "A," 56 representing the
that renders the recruitment activity of appellant unlawful. As long as the prosecution is able receipt amounting to ₱40,000.00 received by appellant from complainant Aguilar-Uy, can be given
probative value. And considering the amount defrauded is ₱40,000.00 which is ₱l8,000.00 more than
₱22,000.00, one (1) year shall be added to six (6) years, eight (8) months and twenty-one (21) days
making the maximum term of the indeterminate sentence to seven (7) years, eight (8) months and
twenty-one (21) days.

Finally, following prevailing jurisprudence, the Court, likewise, imposes interest at the rate of six percent
(6%) per annum  on each of the amounts awarded from the date of finality of this Decision until fully
paid.

WHEREFORE, premises considered, the appeal is hereby DISMISSED. The Court of Appeals Decision

is AFFIRMED with MODIFICATION: penalty of life imprisonment, and ordered to pay a fine of
₱500,000.00; appellant Michelle Dela Cruz GUILTY beyond reasonable doubt of the crime of estafa
and sentences her to an indeterminate penalty of four (4) years and two (2) months of prision
correccional, as minimum, to seven (7) years, eight (8) months and twenty-one (21) days of prision
mayor,  as maximum.; Michelle Dela Cruz is likewise ordered to indemnify private complainant Armely
Aguilar Uy in the amount of Forty Thousand Pesos (₱40,000.00) as actual damages, with legal interest
of six percent (6%) per annum  from the finality of this decision, until the said amount is fully paid.
PEOPLE OF THE PHILIPPINES vs. MERCEDITAS MATHEUS DELOS REYES After the pre-trial, the trial ensued.

G.R. No. 198795 June 7, 2017 On January 15, 2003, Suratos went to an office in Cubao, Quezon City where she met the
accused-appellant, who promised her a job in Cyprus as a caretaker. She returned to the
In this appeal, accused-appellant Merceditas Matheus y Delos Reyes assails the March 7, accused-appellant's office a month later. The accused-appellant gave her a machine copy of
2011 Decision1 of the Court of Appeals (CA) in CA-G.R. CR. H.C. No. 03737, which affirmed her visa to prove that there was a good job waiting for her in Cyprus and that she would leave
the November 26, 2008 Joint Decision2 of the Regional Trial Court (RTC), Branch 218 of in three months upon payment. Suratos gave the accused-appellant an amount totaling to
Quezon City, in Criminal Case Nos. Q-03-119663-69, finding accused-appellant guilty beyond PhP55,000, inclusive of her passport and medical examination report. After three months,
reasonable doubt of five counts of Estafa and one count of Large Scale Illegal Recruitment Suratos became suspicious. She demanded the return of her money, but the accused-
under Republic Act (RA) No. 8042 or the Migrant Workers and Overseas Filipino Act of 1995. appellant simply told her to wait. A month later, Suratos learned that the accused-appellant
was already detained and could no longer deploy her abroad. She filed a complaint for illegal
recruitment docketed as Criminal Case No. Q-03-119663. Suratos identified the accused-
The antecedent facts are as follows:
appellant in open court as well as the entry permit and receipts she had issued her.
Accused-appellant was charged with six counts of Estafa under Article 315 (2) (a) of the
Sometime in the third week of March 2003, Alayon met the accusedappellant at the All Care
Revised Penal Code (RPC) and one count of Large Scale Illegal Recruitment under RA 8042,
Travel Agency located at 302 Escueta Bldg., Cubao, Quezon City. Accused-appellant offered
based on the affidavit-complaints made by the following: Thelma N. Suratos (Suratos);
her a job in Cyprus as a part of the laundry staff and asked her to pay the total amount of
Glenda R. Guillarte (Guillarte); Merly 0. Alayon (Alayon); Celso J. Bagay, Jr. (Bagay, Jr.);
PhP55,000, to submit her resume and transcript of records, among others, and promised to
Rogelio Duldulao (Duldulao); and Doriza P. Gloria (Gloria).
deploy her abroad by June. On April 10, 2003, Alayon initially paid PhP15,000 to the
accused-appellant. When she returned to accusedappellant's office to pay the balance, she
The identical Information for six counts of Estafa, save for the names of the complainants, the learned that accused- appellant had been picked up by the police. Alayon proceeded to the
amounts involved, and the dates of their commission, read as follows: police station and demanded from the accused-appellant the return of her money. She filed a
complaint against accused-appellant, docketed as Criminal Case No. Q-03-119665.
Crim. Case No. Q-03-1196633
During the first week of December 2012, Duldulao, through his wife's friend, was introduced
That on or about the period comprised from February 19, 2003 to February 26, 2003, in to the accused-appellant. When Duldulao mentioned that she had a sister working in Spain,
Quezon City, Philippines, the said accused conspiring together, personal circumstances have accused-appellant promised a tourist visa for him in exchange for PhP 45,000. In the first
not as yet been ascertained and mutually helping each other, did, then and there willfully, week of January 2003, he gave the accused-appellant PhP l 1,000 as partial payment for the
unlawfully and feloniously defraud THELMA SURATOS y NARAG, in the following manner, to processing of his documents. The accused-appellant only took PhP l0,000 and gave back
wit: the said accused, by means of false manifestations and fraudulent representation which PhPl,000 for him to open an account with Land Bank, Cubao branch. Upon the request of
they made to Thelma Suratos to the effect that they had the power and capacity to recruit and accused-appellant, Duldulao deposited the amount of PhP 8,000 to the BPI account of
employ Thelma Suratos for employment abroad, and could facilitate the processing of the accused-appellant. When he was required by the accused-appellant to complete the payment
pertinent papers if given the necessary amount to meet the requirements thereto, and by of PhP 45,000 for his tourist visa, Duldulao obtained a bank loan of PhP l1,000 and gave it to
means of other similar deceits, induced and succeeded in inducing said Thelma Suratos to the accused-appellant. Altogether, Duldulao paid the accused-appellant a total of PhP
give and deliver, as in fact gave and delivered to said accused the amount of P55,000.00, 29,000. When he discovered that accused-appellant was arrested in April 2003, Duldulao
Philippine Currency, on the strength of said manifestations and representations, said accused went to Camp Panopio and demanded that accusedappellant return his money but to no
well knowing that the same were false and fraudulent and were made solely to obtain, as in avail. He subsequently filed a complaint against accused-appellant, docketed as Criminal
fact they did obtain the amount of ₱55,000.00, which amount once in possession, with intent Case No. Q-03-119668.
to defraud Thelma Suratos willfully, unlawfully and feloniously misappropriated, misapplied
and converted to their own personal use and benefit, to the damage and prejudice of said Bagay, Jr. went to the office of the accused-appellant who offered him a job as a dentist in
Thelma Suratos y Narag in the aforesaid amount of ₱55,000.00 Philippine Currency. London. Accused-appellant assured him that with an initial payment of PhP30,000, he would
leave in three months. After paying the said amount, Bagay, Jr. gave the accused-appellant
That the crime described above is committed in large scale as the same was perpetrated his resume, transcript of records, diploma, passport, and I.D. pictures. Unfortunately, he was
against three (3) or more persons individually or as a group. not able to leave for London because in less than three months, Bagay, Jr. learned that
accused-appellant was detained at Camp Panopio for illegal recruitment. Despite her promise In this Court's February 6, 2012 Resolution,12 We noted the accused-appellant and the Office
to Bagay, Jr., accused-appellant failed to return the amount to him. The complaint filed by of the Solicitor General's (OSG) respective Manifestations stating in essence that they are
Bagay, Jr. against the accused-appellant was docketed as Criminal Case No. Q-03-119666. dispensing with their supplemental briefs, and thus, adopting their respective briefs which
they filed with the CA.1awp++i1
Sometime in the third week of March 2003, Guillarte went to the office of the accused-
appellant who promised her work as a hotel staff member in Cyprus. She gave accused- The Issue
appellant an amount totaling PhP 55,000 as full payment for her deployment abroad. But the
promise of deployment never materialized. Guillarte's demand for the return of her money THE COURT A QUO GRAVELY ERRED IN FINDING THE ACCUSED-APPELLANT
from the accused-appellant went unheeded. She filed a complaint against accused-appellant GUILTY BEYOND REASONABLE DOUBT OF THE CRIMES OF ILLEGAL RECRUITMENT
docketed as Criminal Case No. Q-03-119664. AND ESTAFA.13

Private complainant Doria, however, did not testify. The appeal lacks merit.

For her part, the accused-appellant admitted that she was the Overseas Marketing Director of On the one hand, accused-appellant maintains that she could not be held liable for the crimes
All Care Travel & Consultancy (Hongkong), with All Care Travel & Consultancy (Philippines) of illegal recruitment and Estafa since she never made any promise or gave the impression of
as its affiliate. She said that sometime in 1990, she was issued a professional license as an having the ability to send the complc;tinants abroad. She avers that the cash vouchers and
Electronics Communication Engineer. She left the country in 2003 and was not in the letters acknowledging receipt of complainants' payments were not signed by her, but by a
Philippines from January 2003 to February 2003. She returned to the country on June 4, certain Manzie Delos Reyes. She likewise avers that she did not engage in recruitment
2003 and left the country in the same month. She claimed that she did not know Suratos, activities as defined by law since All Care Travel & Consultancy (Philippines)is engaged in
Guillarte, Alayon, Bagay, Jr., and Gloria. Although she knew Duldulao, she did not promise visa applicatfons. She further avers that she did not know complainants Suratos, Guillarte,
him any job. She likewise claimed that she neither signed nor issued any receipt using the Alayon, and Bagay, Jr.
name "Manzie delos Reyes" in favor of the complainants. She further claimed that she was
not engaged in any recruitment and placement activities. During the pre-trial, she admitted On the other hand, the OSG counters 14 that the RTC correctly convicted the accused-
that she had no license to recruit workers for overseas employment. appellant of Large Scale Illegal Recruitment and Estafa, the prosecution having adduced
sufficient evidence to established her guilt thereof beyond reasonable doubt.
On rebuttal, prosecution witness Perla D. Sayana, Chief, Registration Division of the
Professional Regulation Commission (PRC), testified that the name of accused-appellant, Illegal Recruitment in Large Scale  –
"Merceditas Matheus" does not appear in the books of PRC's database. She issued a
certification to the effect that "Merceditas Matheus" is not a Licensed Electronics
Communication Engineer. The offense of illegal recruitment in large scale has the following elements: 15 (l} the person
charged undertook any recruitment activity as defined under Section 6 of RA 8042;  16 (2)
accused did not have the license or the authority to lawfully engage in the recruitment of
Confidential agent of the Bureau of Immigration (BOI), Rustico B. Romero, whose main task workers; and, (3) accused committed the same against three or more persons individually or
was to verify travel records, also appeared for the prosecution. He testified that based on the as a group.
BOI's database, the name "Merceditas Matheus" did not leave the country from January 31,
2003 to June 18, 2003.
These elements are obtaining in this case.
10
On November 26, 2008, the RTC rendered its Decision,   convicting accused-appellant of
the crime of large scale illegal recruitment and five counts of estafa. The complaint docketed First,  the RTC found accused-appellant to have undertaken recruitment activity when she
as Criminal Case No. Q-03- 119667 filed by Doriza P. Gloria (Gloria), however, w<;ts promised the private complainants overseas employment for a fee.1avvphi1 This factual
dismissed due to Gloria's failure to testify and the prosecution's failure to prove appellant's finding was affirmed by the CA. As consistently adhered to by this Court, the matter of
guilt for the crime of estafa. assigning values to declarations on the witness stand is best and most competently
performed by the trial judge, who had the unmatched opportunity to observe the witnesses
and to assess their credibility by the various indicia available but not reflected on the
On appeal before the CA, the CA affirmed the RTC's Decision. 11 record. 17 And when his findings have been affirmed by the CA, these are generally binding
and conclusive upon this Court. 18 As correctly pointed out by the CA:
Hence, the instant appeal.
x x x           x x x          x x x Appellant, in fact, had stipulated at pre-trial that not only did she Here, the prosecution proved beyond reasonable doubt that accused-appellant deceived
know private complainants, she also received money from them for their deployment abroad, private complainants into believing that she had the authority and capability to send them
as she even issued receipts to them. At any rate, absence of receipts cannot defeat a abroad for employment, despite her not being licensed by the POEA to recruit workers for
criminal prosecution for illegal recruitment. 19 Private complainants positively identified overseas employment.1âwphi1 Because of the assurances given by accused-appellant, the
appellant as the person who asked money from them in consideration for their deployment private complainants parted with their hard-earned money for the payment of the agreed
abroad. She impressed on complainants that she had the power or ability to send them placement fee, for which accused-appellant issued petty cash vouchers and used fictitious
abroad for employment so much so that the latter got convinced to part with their money in names evidencing her receipt of the payments. As aptly pointed out by the CA:
exchange therefor.20 Illegal recruiters need not even expressly represent themselves to the
victims as persons who have the ability to send workers abroad. It is enough that these In this case, appellant committed estafa by using fictitious names, i.e., 'Manzie Delos Reyes',
recruiters give the impression that they have the ability to enlist workers for job placement 'Manzie Matheus' in her transactions with private complainants, falsely pretending that she
abroad in order to induce the latter to tender payment of fees. 21 possessed power, influence, capacity to employ abroad or procure visas for them, making it
appear that she had made transactions to acquire their entry permits and visas, thus,
Second,  the March 1, 2004 Certification issued by the Philippine Overseas Employment successfully inducing them to part with their money, albeit, knowing full [sic] well she had no
Administration unmistakably reveals that the accused-appellant neither had a license nor authority or license to do so.27
authority to recruit workers for overseas employment. 22 Notably, instead of assailing the
certification, she admitted during the pre-trial that she did not have a license or authority to Clearly, these acts of accused-appellant constitute estafa punishable under Article 315 (2)(a)
lawfully engage in recruitment and placement of workers. 23 of the RPC.

Third, it was established that there were five complainants, i.e., Suratos, Guillarte, Alayon, It must be noted, however, that both the R TC and the CA failed to award interest on the
Bagay, Jr., and Duldulao. money judgment on the charge of five counts of estafa and one count of Illegal Recruitment in
Large Scale. Following prevailing jurisprudence, 28 the Court, therefore, imposes a legal
The CA observed that: 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.
x x x x complainants came forward and charged appellant with illegal recruitment. Appellant's
claim that she never met private complainants before was belied by her own admission at WHEREFORE, premises considered, the March 7, 2011 Decision of the Court of Appeals in
pre-trial. xxx CA-G.R. CR. H.C. No. 03737, which affirmed the November 26, 2008 Joint Decision of the
Regional Trial Court, Branch 218 of Quezon City, in Criminal Case Nos. Q-03-119663-69,
x x x xxx Private complainants' individual testimonies were so replete with details on how finding appellant Merceditas Matheus y Delos Reyes GUILTY beyond reasonable doubt of
appellant convincingly, albeit deceptively, enticed them to pay all her demands in case, how five counts of Estafa and one count of Large Scale Illegal Recruitment under R.A. No. 8042,
she provided for their fake documents, and how she manipulated their thoughts and dreams otherwise known as Migrant Workers and Overseas Filipino Act of 1995 is
for a better life, ending up in the cruel realization that she was nothing but a fraud. 24 hereby AFFIRMED with MODIFICATION.

Indeed, the existence of the offense of illegal recruitment in large scale was duly proved by
the prosecution.

Estafa under under Article 315(2)(a) of the RPC of the RPC 

We likewise affirm accused-appellant's conviction for five counts of estafa under Article
315(2)(a) of the RPC. It is settled that a person, for the same acts, may be convicted
separately of illegal recruitment under RA 8042 or the Labor Code, and estafa under Article
315 (2) (a) of the RPC.25

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.26
PEOPLE OF THE PHILIPPINES vs. DOLORES OCDEN The Informations in the five other cases for estafa contain substantially the same allegations
as the one above-quoted, except for the private complainants’ names, the date of
G.. No. 173198               June 1, 2011 commission of the offense, and the amounts defrauded.

For Our consideration is an appeal from the Decision 1 dated April 21, 2006 of the Court of All seven cases against Ocden were consolidated on July 31, 2000 and were tried jointly after
Appeals in CA-G.R. CR.-H.C. No. 00044, which affirmed with modification the Ocden pleaded not guilty.
Decision2 dated July 2, 2001 of the Regional Trial Court (RTC), Baguio City, Branch 60, in
Criminal Case No. 16315-R. The RTC found accused-appellant Dolores Ocden (Ocden) The prosecution presented three witnesses namely: Marilyn Mana-a (Mana-a) and Rizalina
guilty of illegal recruitment in large scale, as defined and penalized under Article 13(b), in Ferrer (Ferrer), complainants; and Julia Golidan (Golidan), mother of complainants Jeffries
relation to Articles 38(b), 34, and 39 of Presidential Decree No. 442, otherwise known as the and Howard Golidan.
New Labor Code of the Philippines, as amended, in Criminal Case No. 16315-R; and of the
crime of estafa under paragraph 2(a), Article 315 of the Revised Penal Code, in Criminal Mana-a testified that sometime in the second week of August 1998, she and Isabel Dao-as
Case Nos. 16316-R, 16318-R, and 16964-R. 3 The Court of Appeals affirmed Ocden’s (Dao-as) went to Ocden’s house in Baguio City to apply for work as factory workers in Italy
conviction in all four cases, but modified the penalties imposed in Criminal Case Nos. 16316- with monthly salaries of US$1,200.00. They were required by Ocden to submit their bio-data
R, 16318-R, and 16964-R, and passports, pay the placement fee of ₱70,000.00, and to undergo medical examination.

The Amended Information4 for illegal recruitment in large scale in Criminal Case No. 16315-R Upon submitting her bio-data and passport, Mana-a paid Ocden ₱500.00 for her certificate of
reads: employment and ₱20,000.00 as down payment for her placement fee. On September 8,
1998, Ocden accompanied Mana-a and 20 other applicants to Zamora Medical Clinic in
That during the period from May to December, 1998, in the City of Baguio, Philippines, and Manila for their medical examinations, for which each of the applicants paid ₱3,000.00.
within the jurisdiction of this Honorable Court, the above-named accused, did then and there Mana-a also paid to Ocden ₱22,000.00 as the second installment on her placement fee.
willfully, unlawfully and feloniously for a fee, recruit and promise employment as factory When Josephine Lawanag (Lawanag), Mana-a’s sister, withdrew her application, Lawanag’s
workers in Italy to more than three (3) persons including, but not limited to the following: ₱15,000.00 placement fee, already paid to Ocden, was credited to Mana-a. 7
JEFFRIES C. GOLIDAN, HOWARD C. GOLIDAN, KAREN M. SIMEON, JEAN S. MAXIMO,
NORMA PEDRO, MARYLYN MANA-A, RIZALINA FERRER, and MILAN DARING without Mana-a failed to complete her testimony, but the RTC considered the same as no motion to
said accused having first secured the necessary license or authority from the Department of strike the said testimony was filed.
Labor and Employment.
Ferrer narrated that she and her daughter Jennilyn were interested to work overseas. About
Ocden was originally charged with six counts of estafa in Criminal Case Nos. 16316-R, the second week of September 1998, they approached Ocden through Fely Alipio (Alipio).
16318-R, 16350-R, 16369-R, 16964-R, and 16966-R. Ocden showed Ferrer and Jennilyn a copy of a job order from Italy for factory workers who
could earn as much as $90,000.00 to $100,000.00. 8 In the first week of October 1998, Ferrer
The Information in Criminal Case No. 16316-R states: and Jennilyn decided to apply for work, so they submitted their passports and pictures to
Ocden. Ferrer also went to Manila for medical examination, for which she spent ₱3,500.00.
That sometime during the period from October to December, 1998 in the City of Baguio, Ferrer paid to Ocden on November 20, 1998 the initial amount of ₱20,000.00, and on
Philippines and within the jurisdiction of this Honorable Court, the above-named accused, did December 8, 1998 the balance of her and Jennilyn’s placement fees. All in all, Ferrer paid
then and there willfully, unlawfully and feloniously defraud JEFFRIES C. GOLIDAN, by way of Ocden ₱140,000.00, as evidenced by the receipts issued by Ocden. 9
false pretenses, which are executed prior to or simultaneous with the commission of the
fraud, as follows, to wit: the accused knowing fully well that she is not (sic) authorized job Ferrer, Jennilyn, and Alipio were supposed to be included in the first batch of workers to be
recruiter for persons intending to secure work abroad convinced said Jeffries C. Golidan and sent to Italy. Their flight was scheduled on December 10, 1998. In preparation for their flight
pretended that she could secure a job for him/her abroad, for and in consideration of the sum to Italy, the three proceeded to Manila. In Manila, they were introduced by Ocden to Erlinda
of ₱70,000.00 when in truth and in fact they could not; the said Jeffries C. Golidan deceived Ramos (Ramos). Ocden and Ramos then accompanied Ferrer, Jennilyn, and Alipio to the
and convinced by the false pretenses employed by the accused parted away the total sum airport where they took a flight to Zamboanga. Ocden explained to Ferrer, Jennilyn, and
of ₱70,000.00, in favor of the accused, to the damage and prejudice of the said Jeffries C. Alipio that they would be transported to Malaysia where their visa application for Italy would
Golidan in the aforementioned amount of SEVENTY THOUSAND PESOS (₱70,000,00), be processed.
Philippine Currency.5
Sensing that they were being fooled, Ferrer and Jennilyn decided to get a refund of their working out the release of the funds for the applicants to get to Italy. Golidan went to Ocden,
money, but Ocden was nowhere to be found. Ferrer would later learn from the Baguio office and the latter told her not to worry as her sons would already be flying to Italy because the
of the Philippine Overseas Employment Administration (POEA) that Ocden was not a same factory owner in Italy, looking for workers, undertook to shoulder the applicants’ travel
licensed recruiter. expenses. Yet, Jeffries called Golidan once more telling her that he and the other applicants
were still in Zamboanga.
Expecting a job overseas, Ferrer took a leave of absence from her work. Thus, she lost
income amounting to ₱17,700.00, equivalent to her salary for one and a half months. She Golidan went to Ocden’s residence. This time, Ocden’s husband gave Golidan ₱23,000.00
also spent ₱30,000.00 for transportation and food expenses. 10 which the latter could use to fetch the applicants, including Jeffries and Howard, who were
stranded in Zamboanga. Golidan traveled again to Manila with Mana-a and Dao-as. When
According to Golidan, the prosecution’s third witness, sometime in October 1998, she they saw each other, Golidan informed Ocden regarding the ₱23,000.00 which the latter’s
inquired from Ocden about the latter’s overseas recruitment. Ocden informed Golidan that the husband gave to her. Ocden begged Golidan to give her the money because she needed it
placement fee was ₱70,000.00 for each applicant, that the accepted applicants would be sent badly. Of the ₱23,000.00, Golidan retained ₱10,000.00, Dao-as received ₱3,000.00, and
by batches overseas, and that priority would be given to those who paid their placement fees Ocden got the rest. Jeffries was able to return to Manila on January 16, 1999. Howard and
early. On October 30, 1998, Golidan brought her sons, Jeffries and Howard, to Ocden. On five other applicants, accompanied by Ocden, also arrived in Manila five days later.
the same date, Jeffries and Howard handed over to Ocden their passports and ₱40,000.00
as down payment on their placement fees. On December 10, 1998, Jeffries and Howard paid Thereafter, Golidan and her sons went to Ocden’s residence to ask for a refund of the money
the balance of their placement fees amounting to ₱100,000.00. Ocden issued receipts for they had paid to Ocden. Ocden was able to return only ₱50,000.00. Thus, out of the total
these two payments.11 Ocden then informed Golidan that the first batch of accepted amount of ₱140,000.00 Golidan and her sons paid to Ocden, they were only able to get back
applicants had already left, and that Jeffries would be included in the second batch for the sum of ₱60,000.00. After all that had happened, Golidan and her sons went to the Baguio
deployment, while Howard in the third batch. office of the POEA, where they discovered that Ocden was not a licensed recruiter. 12

In anticipation of their deployment to Italy, Jeffries and Howard left for Manila on December The defense presented the testimony of Ocden herself.
12, 1998 and December 18, 1998, respectively. Through a telephone call, Jeffries informed
Golidan that his flight to Italy was scheduled on December 16, 1998. However, Golidan was Ocden denied recruiting private complainants and claimed that she was also an applicant for
surprised to again receive a telephone call from Jeffries saying that his flight to Italy was an overseas job in Italy, just like them. Ocden identified Ramos as the recruiter.
delayed due to insufficiency of funds, and that Ocden went back to Baguio City to look for
additional funds. When Golidan went to see Ocden, Ocden was about to leave for Manila so Ocden recounted that she met Ramos at a seminar held in St. Theresa’s Compound, Navy
she could be there in time for the scheduled flights of Jeffries and Howard. Base, Baguio City, sometime in June 1998. The seminar was arranged by Aida Comila
(Comila), Ramos’s sub-agent. The seminar was attended by about 60 applicants, including
On December 19, 1998, Golidan received another telephone call from Jeffries who was in Golidan. Ramos explained how one could apply as worker in a stuff toys factory in Italy. After
Zamboanga with the other applicants. Jeffries informed Golidan that he was stranded in the seminar, Comila introduced Ocden to Ramos. Ocden decided to apply for the overseas
Zamboanga because Ramos did not give him his passport. Ramos was the one who briefed job, so she gave her passport and pictures to Ramos. Ocden also underwent medical
the overseas job applicants in Baguio City sometime in November 1998. Jeffries instructed examination at Zamora Medical Clinic in Manila, and completely submitted the required
Golidan to ask Ocden’s help in looking for Ramos. Golidan, however, could not find Ocden in documents to Ramos in September 1998.
Baguio City.
After the seminar, many people went to Ocden’s house to inquire about the jobs available in
On December 21, 1998, Golidan, with the other applicants, Mana-a and Dao-as, went to Italy. Since most of these people did not attend the seminar, Ocden asked Ramos to conduct
Manila to meet Ocden. When Golidan asked why Jeffries was in Zamboanga, Ocden replied a seminar at Ocden’s house. Two seminars were held at Ocden’s house, one in September
that it would be easier for Jeffries and the other applicants to acquire their visas to Italy in and another in December 1998. After said seminars, Ramos designated Ocden as leader of
Zamboanga. Ocden was also able to contact Ramos, who assured Golidan that Jeffries the applicants. As such, Ocden received her co-applicants’ applications and documents;
would be able to get his passport. When Golidan went back home to Baguio City, she learned accompanied her co-applicants to Manila for medical examination because she knew the
through a telephone call from Jeffries that Howard was now likewise stranded in Zamboanga. location of Zamora Medical Clinic; and accepted placement fees in the amount of ₱70,000.00
each from Mana-a and Ferrer and from Golidan, the amount of ₱140,000.00 (for Jeffries and
By January 1999, Jeffries and Howard were still in Zamboanga. Jeffries refused to accede to Howard).
Golidan’s prodding for him and Howard to go home, saying that the recruiters were already
Ramos instructed Ocden that the applicants should each pay ₱250,000.00 and if the 4. In Criminal Case No. 16350-R, the Court finds the accused, DOLORES OCDEN,
applicants could not pay the full amount, they would have to pay the balance through salary NOT GUILTY of the crime of estafa for lack of evidence and a verdict of acquittal is
deductions once they start working in Italy. Ocden herself paid Ramos ₱50,000.00 as entered in her favor;
placement fee and executed a promissory note in Ramos’s favor for the balance, just like any
other applicant who failed to pay the full amount. Ocden went to Malaysia with Ramos’s male 5. In Criminal Case No. 16369-R, the Court finds the accused, DOLORES OCDEN,
friend but she failed to get her visa for Italy. NOT GUILTY of the crime of estafa for lack of evidence and a verdict of acquittal is
hereby entered in her favor;
Ocden denied deceiving Mana-a and Ferrer. Ocden alleged that she turned over to Ramos
the money Mana-a and Ferrer gave her, although she did not indicate in the receipts she 6. In Criminal Case No. 16964-R, the Court finds the accused, DOLORES OCDEN,
issued that she received the money for and on behalf of Ramos. GUILTY beyond reasonable doubt of the crime of estafa and sentences her to suffer
an indeterminate penalty of Four (4) years and Two (2) months of prision
Ocden pointed out that she and some of her co-applicants already filed a complaint against correccional, as minimum, up to Twelve (12) years and Nine (9) months of reclusion
Ramos before the National Bureau of Investigation (NBI) offices in Zamboanga City and temporal, as maximum, and to indemnify Rizalina Ferrer the amount of ₱70,000.00;
Manila.13 and

On July 2, 2001, the RTC rendered a Decision finding Ocden guilty beyond reasonable doubt 7. In Criminal Case No. 16966-R, the Court finds the accused, DOLORES OCDEN,
of the crimes of illegal recruitment in large scale (Criminal Case No. 16315-R) and three NOT GUILTY of the crime of estafa for insufficiency of evidence and a verdict of
counts of estafa (Criminal Case Nos. 16316-R, 16318-R, and 16964-R). The dispositive acquittal is hereby entered in her favor.
portion of said decision reads:
In the service of her sentence, the provisions of Article 70 of the Penal Code shall be
WHEREFORE, premises considered, judgment is hereby rendered as follows: observed.14

1. In Criminal Case No. 16315-R, the Court finds the accused, DOLORES OCDEN, Aggrieved by the above decision, Ocden filed with the RTC a Notice of Appeal on August 15,
GUILTY beyond reasonable doubt of the crime of Illegal Recruitment committed in 2001.15 The RTC erroneously sent the records of the cases to the Court of Appeals, which, in
large scale as defined and penalized under Article 13(b) in relation to Article 38(b), 34 turn, correctly forwarded the said records to us.
and 39 of the Labor Code as amended by P.D. Nos. 1693, 1920, 2018 and R.A.
8042. She is hereby sentenced to suffer the penalty of life imprisonment and to pay a In our Resolution16 dated May 6, 2002, we accepted the appeal and required the parties to file
fine of ₱100,000.00; their respective briefs. In the same resolution, we directed the Superintendent of the
Correctional Institute for Women to confirm Ocden’s detention thereat.
2. In Criminal Case No. 16316-R, the Court finds the accused, DOLORES OCDEN,
GUILTY beyond reasonable doubt of the crime of estafa and sentences her to suffer Ocden filed her Appellant's Brief on August 15, 2003, 17 while the People, through the Office of
an indeterminate penalty ranging from two (2) years, eleven (11) months and ten (10) the Solicitor General, filed its Appellee's Brief on January 5, 2004. 18
days of prision correccional, as minimum, up to nine (9) years and nine (9) months of
prision mayor, as maximum, and to indemnify the complainant Jeffries Golidan the Pursuant to our ruling in People v. Mateo, 19 we transferred Ocden’s appeal to the Court of
amount of ₱40,000.00; Appeals. On April 21, 2006, the appellate court promulgated its Decision, affirming Ocden’s
conviction but modifying the penalties imposed upon her for the three counts of estafa, viz:
3. In Criminal Case No. 16318-R, the Court finds the accused, DOLORES OCDEN,
GUILTY beyond reasonable doubt of the crime of estafa and sentences her to suffer [T]he trial court erred in the imposition of accused-appellant’s penalty.
an indeterminate penalty ranging from two (2) years, eleven (11) months and ten (10)
days of prision correccional, as minimum, up to nine (9) years and nine (9) months of
prision mayor, as maximum, and to indemnify Howard Golidan the amount of Pursuant to Article 315 of the RPC, the penalty for estafa is prision correccional in its
₱40,000.00; maximum period to prision mayor in its minimum period. If the amount of the fraud exceeds
₱22,000.00, the penalty provided shall be imposed in its maximum period (6 years, 8 months
and 21 days to 8 years), adding 1 year for each additional ₱10,000.00; but the total penalty
which may be imposed shall not exceed 20 years.
Criminal Case Nos. 16316-R and 16318-R involve the amount of ₱40,000.00 each. Article 13, paragraph (b) of the Labor Code defines and enumerates the acts which constitute
Considering that ₱18,000.00 is the excess amount, only 1 year should be added to the recruitment and placement:
penalty in its maximum period or 9 years. Also, in Criminal Case No. 16964-R, the amount
involved is ₱70,000.00. Thus, the excess amount is ₱48,000.00 and only 4 years should be (b) "Recruitment and placement" refers to any act of canvassing, enlisting, contracting,
added to the penalty in its maximum period. transporting, utilizing, hiring, or procuring workers, and includes referrals, contract services,
promising for advertising for employment locally or abroad, whether for profit or not: Provided,
WHEREFORE, the instant appeal is DISMISSED. The assailed Decision, dated 02 July 2001, That any person or entity which, in any manner, offers or promises for a fee employment to
of the Regional Trial Court (RTC) of Baguio City, Branch 60 is hereby AFFIRMED with the two or more persons shall be deemed engaged in recruitment and placement.
following MODIFICATIONS:
The amendments to the Labor Code introduced by Republic Act No. 8042, otherwise known
1. In Criminal Case No. 16316-R, accused-appellant is sentenced to 2 years, 11 as the Migrant Workers and Overseas Filipinos Act of 1995, broadened the concept of illegal
months, and 10 days of prision correccional, as minimum to 9 years of prision mayor, recruitment and provided stiffer penalties, especially for those that constitute economic
as maximum and to indemnify Jeffries Golidan the amount of ₱40,000.00; sabotage, i.e., illegal recruitment in large scale and illegal recruitment committed by a
syndicate. Pertinent provisions of Republic Act No. 8042 are reproduced below:
2. In Criminal Case No. 16318-R, accused-appellant is sentenced to 2 years, 11
months, and 10 days of prision correccional, as minimum to 9 years of prision mayor, SEC. 6. Definition. - For purposes of this Act, illegal recruitment shall mean any act of
as maximum and to indemnify Howard Golidan the amount of ₱40,000.00; and canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers and
includes referring, contract services, promising or advertising for employment abroad,
3. In Criminal Case No. 16964-R, accused-appellant is sentenced to 4 years and 2 whether for profit or not, when undertaken by a non-licensee or non-holder of authority
months of prision correccional, as minimum to 12 years of prision mayor, as contemplated under Article 13(f) of Presidential Decree No. 442, as amended, otherwise
maximum and to indemnify Rizalina Ferrer the amount of ₱70,000.00. 20 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 to two or more
persons shall be deemed so engaged. It shall likewise include the following acts, whether
ISSUES:
committed by any person, whether a non-licensee, non-holder, licensee or holder of
authority:
1) THE TRIAL COURT ERRED IN CONVICTING ACCUSED-APPELLANT OF
ILLEGAL RECRUITMENT COMMITTED IN LARGE SCALE ALTHOUGH THE
(a) To charge or accept directly or indirectly any amount greater than that specified in
CRIME WAS NOT PROVEN BEYOND REASONABLE DOUBT.
the schedule of allowable fees prescribed by the Secretary of Labor and
2) THE TRIAL COURT ERRED IN CONVICTING ACCUSED-APPELLANT OF Employment, or to make a worker pay any amount greater than that actually received
ESTAFA IN CRIMINAL CASES NOS. 16316-R, 16318-R AND 16[9]64-R. 21 by him as a loan or advance;

HELD: (b) To furnish or publish any false notice or information or document in relation to
recruitment or employment;
After a thorough review of the records of the case, we find nothing on record that would justify
a reversal of Ocden’s conviction. (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
Illegal recruitment in large scale Code;

Ocden contends that the prosecution failed to prove beyond reasonable doubt that she is (d) To induce or attempt to induce a worker already employed to quit his employment
guilty of the crime of illegal recruitment in large scale. Other than the bare allegations of the in order to offer him another unless the transfer is designed to liberate a worker from
prosecution witnesses, no evidence was adduced to prove that she was a non-licensee or oppressive terms and conditions of employment;
non-holder of authority to lawfully engage in the recruitment and placement of workers. No
certification attesting to this fact was formally offered in evidence by the prosecution. (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;
Ocden’s aforementioned contentions are without merit.
 (f) To engage in the recruitment or placement of workers in jobs harmful to public (12) years and a fine of Two hundred thousand pesos (₱200,000.00) nor more than
health or morality or to the dignity of the Republic of the Philippines; Five hundred thousand pesos (₱500,000.00).

(g) To obstruct or attempt to obstruct inspection by the Secretary of Labor and (b) The penalty of life imprisonment and a fine of not less than Five hundred
Employment or by his duly authorized representative; 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
(h) To fail to submit reports on the status of employment, placement vacancies, herein.
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 Provided, however, That the maximum penalty shall be imposed if the person illegally
Employment; recruited is less than eighteen (18) years of age or committed by a non-licensee or non-
holder of authority. (Emphasis ours.)
(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 It is well-settled that to prove illegal recruitment, it must be shown that appellant gave
actual signing thereof by the parties up to and including the period of the expiration of complainants the distinct impression that he had the power or ability to send complainants
the same without the approval of the Department of Labor and Employment; abroad for work such that the latter were convinced to part with their money in order to be
employed.22 As testified to by Mana-a, Ferrer, and Golidan, Ocden gave such an impression
(j) For an officer or agent of a recruitment or placement agency to become an officer through the following acts: (1) Ocden informed Mana-a, Ferrer, and Golidan about the job
or member of the Board of any corporation engaged in travel agency or to be opportunity in Italy and the list of necessary requirements for application; (2) Ocden required
engaged directly or indirectly in the management of a travel agency; Mana-a, Ferrer, and Golidan’s sons, Jeffries and Howard, to attend the seminar conducted by
Ramos at Ocden’s house in Baguio City; (3) Ocden received the job applications, pictures,
bio-data, passports, and the certificates of previous employment (which was also issued by
(k) To withhold or deny travel documents from applicant workers before departure for
Ocden upon payment of ₱500.00), of Mana-a, Ferrer, and Golidan’s sons, Jeffries and
monetary or financial considerations other than those authorized under the Labor
Howard; (4) Ocden personally accompanied Mana-a, Ferrer, and Golidan’s sons, Jeffries and
Code and its implementing rules and regulations;
Howard, for their medical examinations in Manila; (5) Ocden received money paid as
placement fees by Mana-a, Ferrer, and Golidan’s sons, Jeffries and Howard, and even issued
(l) Failure to actually deploy without valid reason as determined by the Department of receipts for the same; and (6) Ocden assured Mana-a, Ferrer, and Golidan’s sons, Jeffries
Labor and Employment; and and Howard, that they would be deployed to Italy.

(m) Failure to reimburse expenses incurred by the worker in connection with his It is not necessary for the prosecution to present a certification that Ocden is a non-licensee
documentation and processing for purposes of deployment, in cases where the or non-holder of authority to lawfully engage in the recruitment and placement of workers.
deployment does not actually take place without the worker's fault. Illegal recruitment Section 6 of Republic Act No. 8042 enumerates particular acts which would constitute illegal
when committed by a syndicate or in large scale shall be considered an offense recruitment "whether committed by any person, whether a non-licensee, non-holder,
involving economic sabotage. licensee or holder of authority." Among such acts, under Section 6(m) of Republic Act No.
8042, is the "[f]ailure to reimburse expenses incurred by the worker in connection with his
Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) documentation and processing for purposes of deployment, in cases where the deployment
or more persons conspiring or confederating with one another. It is deemed committed in does not actually take place without the worker’s fault."
large scale if committed against three (3) or more persons individually or as a group.
Since illegal recruitment under Section 6(m) can be committed by any person, even by a
xxxx licensed recruiter, a certification on whether Ocden had a license to recruit or not, is
inconsequential. Ocden committed illegal recruitment as described in said provision by
Sec. 7. Penalties. – receiving placement fees from Mana-a, Ferrer, and Golidan’s two sons, Jeffries and Howard,
evidenced by receipts Ocden herself issued; and failing to reimburse/refund to Mana-a,
(a) Any person found guilty of illegal recruitment shall suffer the penalty of Ferrer, and Golidan’s two sons the amounts they had paid when they were not able to leave
imprisonment of not less than six (6) years and one (1) day but not more than twelve for Italy, through no fault of their own.
Ocden questions why it was Golidan who testified for private complainants Jeffries and In her bid to exculpate herself, Ocden asserts that she was also just an applicant for overseas
Howard. Golidan had no personal knowledge of the circumstances proving illegal recruitment employment; and that she was receiving her co-applicants’ job applications and other
and could not have testified on the same. Also, Jeffries and Howard already executed an requirements, and accepting her co-applicants’ payments of placement fees, because she
affidavit of desistance. All Golidan wants was a reimbursement of the placement fees paid. was designated as the applicants’ leader by Ramos, the real recruiter.

Contrary to Ocden’s claims, Golidan had personal knowledge of Ocden’s illegal recruitment Ocden’s testimony is self-serving and uncorroborated. Ocden’s denial of any illegal
activities, which she could competently testify to. Golidan herself had personal dealings with recruitment activity cannot stand against the prosecution witnesses’ positive identification of
Ocden as Golidan assisted her sons, Jeffries and Howard, in completing the requirements for her in court as the person who induced them to part with their money upon the
their overseas job applications, and later on, in getting back home from Zamboanga where misrepresentation and false promise of deployment to Italy as factory workers. Besides,
Jeffries and Howard were stranded, and in demanding a refund from Ocden of the placement despite several opportunities given to Ocden by the RTC, she failed to present Ramos, who
fees paid. That Golidan is seeking a reimbursement of the placement fees paid for the failed Ocden alleged to be the real recruiter and to whom she turned over the placement fees paid
deployment of her sons Jeffries and Howard strengthens, rather than weakens, the by her co-applicants.
prosecution’s case. Going back to illegal recruitment under Section 6(m) of Republic Act No.
8042, failure to reimburse the expenses incurred by the worker when deployment does not Between the categorical statements of the prosecution witnesses, on the one hand, and the
actually take place, without the worker’s fault, is illegal recruitment. bare denial of Ocden, on the other, the former must perforce prevail. An affirmative testimony
is far stronger than a negative testimony especially when the former comes from the mouth of
The affidavit of desistance purportedly executed by Jeffries and Howard does not exonerate a credible witness. Denial, same as an alibi, if not substantiated by clear and convincing
Ocden from criminal liability when the prosecution had successfully proved her guilt beyond evidence, is negative and self-serving evidence undeserving of weight in law. It is considered
reasonable doubt. In People v. Romero,23 we held that: with suspicion and always received with caution, not only because it is inherently weak and
unreliable but also because it is easily fabricated and concocted. 25
The fact that complainants Bernardo Salazar and Richard Quillope executed a Joint Affidavit
of Desistance does not serve to exculpate accused-appellant from criminal liability insofar as Moreover, in the absence of any evidence that the prosecution witnesses were motivated by
the case for illegal recruitment is concerned since the Court looks with disfavor the dropping improper motives, the trial court’s assessment of the credibility of the witnesses shall not be
of criminal complaints upon mere affidavit of desistance of the complainant, particularly where interfered with by this Court.26 It is a settled rule that factual findings of the trial courts,
the commission of the offense, as is in this case, is duly supported by documentary evidence. including their assessment of the witnesses’ credibility, are entitled to great weight and
respect by the Supreme Court, particularly when the Court of Appeals affirmed such findings.
Generally, the Court attaches no persuasive value to affidavits of desistance, especially when After all, the trial court is in the best position to determine the value and weight of the
it is executed as an afterthought. It would be a dangerous rule for courts to reject testimonies testimonies of witnesses. The absence of any showing that the trial court plainly overlooked
solemnly taken before the courts of justice simply because the witnesses who had given certain facts of substance and value that, if considered, might affect the result of the case, or
them, later on, changed their mind for one reason or another, for such rule would make that its assessment was arbitrary, impels the Court to defer to the trial court’s determination
solemn trial a mockery and place the investigation of truth at the mercy of unscrupulous according credibility to the prosecution evidence.27
witness.
Ocden further argues that the prosecution did not sufficiently establish that she illegally
Complainants Bernardo Salazar and Richard Quillope may have a change of heart insofar as recruited at least three persons, to constitute illegal recruitment on a large scale. Out of the
the offense wrought on their person is concerned when they executed their joint affidavit of victims named in the Information, only Mana-a and Ferrer testified in court. Mana-a did not
desistance but this will not affect the public prosecution of the offense itself. It is relevant to complete her testimony, depriving Ocden of the opportunity to cross-examine her; and even if
note that "the right of prosecution and punishment for a crime is one of the attributes that by a Mana-a’s testimony was not expunged from the record, it was insufficient to prove illegal
natural law belongs to the sovereign power instinctly charged by the common will of the recruitment by Ocden. Although Ferrer testified that she and Mana-a filed a complaint for
members of society to look after, guard and defend the interests of the community, the illegal recruitment against Ocden, Ferrer’s testimony is competent only as to the illegal
individual and social rights and the liberties of every citizen and the guaranty of the exercise recruitment activities committed by Ocden against her, and not against Mana-a. Ocden again
of his rights." This cardinal principle which states that to the State belongs the power to objects to Golidan’s testimony as hearsay, not being based on Golidan’s personal knowledge.
prosecute and punish crimes should not be overlooked since a criminal offense is an outrage
to the sovereign State.24 Under the last paragraph of Section 6, Republic Act No. 8042, illegal recruitment shall be
considered an offense involving economic sabotage if committed in a large scale, that is,
committed against three or more persons individually or as a group.
In People v. Hu,28 we held that a conviction for large scale illegal recruitment must be based estafa is malum in se where the criminal intent of the accused is crucial for conviction.
on a finding in each case of illegal recruitment of three or more persons, whether individually Conviction for offenses under the Labor Code does not bar conviction for offenses punishable
or as a group. While it is true that the law does not require that at least three victims testify at by other laws. Conversely, conviction for estafa under par. 2(a) of Art. 315 of the Revised
the trial, nevertheless, it is necessary that there is sufficient evidence proving that the offense Penal Code does not bar a conviction for illegal recruitment under the Labor Code. It follows
was committed against three or more persons. In this case, there is conclusive evidence that that one’s acquittal of the crime of estafa will not necessarily result in his acquittal of the crime
Ocden recruited Mana-a, Ferrer, and Golidan’s sons, Jeffries and Howard, for purported of illegal recruitment in large scale, and vice versa.31
employment as factory workers in Italy. As aptly observed by the Court of Appeals:
Article 315, paragraph 2(a) of the Revised Penal Code defines estafa as:
Mana-a’s testimony, although not completed, sufficiently established that accused-appellant
promised Mana-a a job placement in a factory in Italy for a fee with accused-appellant even Art. 315. Swindling (estafa). - Any person who shall defraud another by any of the means
accompanying her for the required medical examination. Likewise, Julia Golidan’s testimony mentioned hereinbelow x x x:
adequately proves that accused-appellant recruited Jeffries and Howard Golidan for a job in
Italy, also for a fee. Contrary to the accused-appellant’s contention, Julia had personal xxxx
knowledge of the facts and circumstances surrounding the charges for illegal recruitment and
estafa filed by her sons. Julia was not only privy to her sons’ recruitment but also directly
transacted with accused-appellant, submitting her sons’ requirements and paying the 2. By means of any of the following false pretenses or fraudulent acts executed prior to or
placement fees as evidenced by a receipt issued in her name. Even after the placement did simultaneously with the commission of the fraud:
not materialize, Julia acted with her sons to secure the partial reimbursement of the
placement fees.29 (a) By using fictitious name, or falsely pretending to possess power, influence,
qualifications, property, credit, agency, business or imaginary transactions; or by
And even though only Ferrer and Golidan testified as to Ocden’s failure to reimburse the means of other similar deceits.
placements fees paid when the deployment did not take place, their testimonies already
established the fact of non-reimbursement as to three persons, namely, Ferrer and Golidan’s The elements of estafa are: (a) that the accused defrauded another by abuse of confidence
two sons, Jeffries and Howard. or by means of deceit, and (b) that damage or prejudice capable of pecuniary estimation is
caused to the offended party or third person.32
Section 7(b) of Republic Act No. 8042 prescribes a penalty of life imprisonment and a fine of
not less than ₱500,000.00 nor more than ₱1,000,000.00 if the illegal recruitment constitutes Both these elements are present in the instant case. Ocden represented to Ferrer, Golidan,
economic sabotage. The RTC, as affirmed by the Court of Appeals, imposed upon Ocden the and Golidan’s two sons, Jeffries and Howard, that she could provide them with overseas jobs.
penalty of life imprisonment and a fine of only ₱100,000.00. Since the fine of ₱100,000 is Convinced by Ocden, Ferrer, Golidan, and Golidan’s sons paid substantial amounts as
below the minimum set by law, we are increasing the same to ₱500,000.00. placement fees to her. Ferrer and Golidan’s sons were never able to leave for Italy, instead,
they ended up in Zamboanga, where, Ocden claimed, it would be easier to have their visas to
Estafa Italy processed. Despite the fact that Golidan’s sons, Jeffries and Howard, were stranded in
Zamboanga for almost a month, Ocden still assured them and their mother that they would be
able to leave for Italy. There is definitely deceit on the part of Ocden and damage on the part
We are likewise affirming the conviction of Ocden for the crime of estafa. The very same of Ferrer and Golidan’s sons, thus, justifying Ocden’s conviction for estafa in Criminal Case
evidence proving Ocden’s liability for illegal recruitment also established her liability for Nos. 16316-R, 16318-R, and 16964-R.
estafa.
The penalty for estafa depends on the amount of defraudation. According to Article 315 of the
It is settled that a person may be charged and convicted separately of illegal recruitment Revised Penal Code:
under Republic Act No. 8042 in relation to the Labor Code, and estafa under Article 315,
paragraph 2(a) of the Revised Penal Code. We explicated in People v. Yabut 30 that:
Art. 315. Swindling (estafa). – Any person who shall defraud another by any of the means
mentioned hereinbelow shall be punished by:
In this jurisdiction, it is settled that a person who commits illegal recruitment may be charged
and convicted separately of illegal recruitment under the Labor Code and estafa under par.
2(a) of Art. 315 of the Revised Penal Code. The offense of illegal recruitment is malum 1st. The penalty of prision correccional in its maximum period to prision mayor in its minimum
prohibitum where the criminal intent of the accused is not necessary for conviction, while 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 In Criminal Cases No. 19694-R, Ferrer was defrauded of the amount of ₱70,000.00, for which
imposed in its maximum period, adding one year for each additional 10,000 pesos; but the the Court of Appeals sentenced Ocden to an indeterminate penalty of 4 years and 2 months
total penalty which may be imposed shall not exceed twenty years. In such cases, and in of prision correccional, as minimum, to 12 years of prision mayor, as maximum. Upon
connection with the accessory penalties which may be imposed and for the purpose of the recomputation, we also have to modify the maximum term of the indeterminate sentence
other provisions of this Code, the penalty shall be termed prision mayor or reclusion temporal, imposed upon Ocden in Criminal Case No. 19694-R. Given that the amount defrauded
as the case may be. exceeds ₱22,000.00 by ₱48,000.00, 4 years shall be added to the maximum period of the
prescribed penalty (anywhere between 6 years, 8 months, and 21 days to 8 years). There
The prescribed penalty for estafa under Article 315 of the Revised Penal Code, when the likewise being no aggravating circumstance in this case, we add the 4 years of incremental
amount of fraud is over ₱22,000.00, is prision correccional maximum to prision mayor penalty to the lowest of the maximum period, which is 6 years, 8 months, and 21 days. The
minimum, adding one year to the maximum period for each additional ₱10,000.00, provided maximum term, therefor, of Ocden’s indeterminate sentence in Criminal Case No. 19694-R is
that the total penalty shall not exceed 20 years. only 10 years, 8 months, and 21 days of prision mayor.

Applying the Indeterminate Sentence Law, we take the minimum term from the penalty next WHEREFORE, the instant appeal of accused-appellant Dolores Ocden is DENIED. The
lower than the minimum prescribed by law, or anywhere within prision correccional minimum Decision dated April 21, 2006 of the Court of Appeals in CA-G.R. CR.-H.C. No. 00044 is
and medium (i.e., from 6 months and 1 day to 4 years and 2 months). 33 Consequently, both AFFIRMED with MODIFICATION.
the RTC and the Court of Appeals correctly fixed the minimum term in Criminal Case Nos.
16316-R and 16318-R at 2 years, 11 months, and 10 days of prision correccional; and in SAMEER OVERSEAS PLACEMENT AGENCY, INC., vs.JOY C. CABILES
Criminal Case No. 16964-R at 4 years and 2 months of prision correccional, since these are
within the range of prision correccional minimum and medium.1avvphi1 G.R. No. 170139               August 5, 2014

As for the maximum term under the Indeterminate Sentence Law, we take the maximum This case involves an overseas Filipino worker with shattered dreams. It is our duty, given the
period of the prescribed penalty, adding 1 year of imprisonment for every ₱10,000.00 in facts and the law, to approximate justice for her.
excess of ₱22,000.00, provided that the total penalty shall not exceed 20 years. To compute
the maximum period of the prescribed penalty, the time included in prision correccional We are asked to decide a petition for review 1 on certiorari assailing the Court of Appeals’
maximum to prision mayor minimum shall be divided into three equal portions, with each decision2 dated June 27, 2005. This decision partially affirmed the National Labor
portion forming a period. Following this computation, the maximum period for prision RelationsCommission’s resolution dated March 31, 2004, 3 declaring respondent’s dismissal
correccional maximum to prision mayor minimum is from 6 years, 8 months, and 21 days to 8 illegal, directing petitioner to pay respondent’s three-month salary equivalent to New Taiwan
years. The incremental penalty, when proper, shall thus be added to anywhere from 6 years, Dollar (NT$) 46,080.00, and ordering it to reimburse the NT$3,000.00 withheld from
8 months, and 21 days to 8 years, at the discretion of the court. 34 respondent, and pay her NT$300.00 attorney’s fees.4

In computing the incremental penalty, the amount defrauded shall be substracted by Petitioner, Sameer Overseas Placement Agency, Inc., is a recruitment and placement
₱22,000.00, and the difference shall be divided by ₱10,000.00. Any fraction of a year shall be agency.5 Responding to an ad it published, respondent, Joy C. Cabiles, submitted her
discarded as was done starting with People v. Pabalan. 35 application for a quality control job in Taiwan.6

In Criminal Case Nos. 16316-R and 16318-R, brothers Jeffries and Howard Golidan were Joy’s application was accepted.7 Joy was later asked to sign a oneyear employment contract
each defrauded of the amount of ₱40,000.00, for which the Court of Appeals sentenced for a monthly salary of NT$15,360.00.8 She alleged that Sameer Overseas Agency required
Ocden to an indeterminate penalty of 2 years, 11 months, and 10 days of prision correccional her to pay a placement fee of ₱70,000.00 when she signed the employment contract. 9
as minimum, to 9 years of prision mayor as maximum. Upon review, however, we modify the
maximum term of the indeterminate penalty imposed on Ocden in said criminal cases. Since
the amount defrauded exceeds ₱22,000.00 by ₱18,000.00, 1 year shall be added to the Joy was deployed to work for TaiwanWacoal, Co. Ltd. (Wacoal) on June 26, 1997. 10 She
maximum period of the prescribed penalty (anywhere between 6 years, 8 months, and 21 alleged that in her employment contract, she agreed to work as quality control for one
days to 8 years). There being no aggravating circumstance, we apply the lowest of the year.11 In Taiwan, she was asked to work as a cutter.12
maximum period, which is 6 years, 8 months, and 21 days. Adding the one year incremental
penalty, the maximum term of Ocden’s indeterminate sentence in these two cases is only 7 Sameer Overseas Placement Agencyclaims that on July 14, 1997, a certain Mr. Huwang from
years, 8 months, and 21 days of prision mayor. Wacoal informedJoy, without prior notice, that she was terminated and that "she should
immediately report to their office to get her salary and passport." 13 She was asked to "prepare The National Labor Relations Commission did not rule on the issue of reimbursement of
for immediate repatriation."14 placement fees for lack of jurisdiction. 43 It refused to entertain the issue of the alleged transfer
of obligations to Pacific.44 It did not acquire jurisdiction over that issue because Sameer
Joy claims that she was told that from June 26 to July 14, 1997, she only earned a total of Overseas Placement Agency failed to appeal the Labor Arbiter’s decision not to rule on the
NT$9,000.15 According to her, Wacoal deducted NT$3,000 to cover her plane ticket to matter.45
Manila.16
The National Labor Relations Commission awarded respondent only three (3) months worth
On October 15, 1997, Joy filed a complaint 17 with the National Labor Relations Commission of salaryin the amount of NT$46,080, the reimbursement of the NT$3,000 withheld from her,
against petitioner and Wacoal. She claimed that she was illegally dismissed. 18 She asked for and attorney’s fees of NT$300.46
the return of her placement fee, the withheld amount for repatriation costs, payment of her
salary for 23 months as well as moral and exemplary damages. 19 She identified Wacoal as The Commission denied the agency’s motion for reconsideration 47 dated May 12, 2004
Sameer Overseas Placement Agency’s foreign principal. 20 through a resolution48 dated July 2, 2004.

Sameer Overseas Placement Agency alleged that respondent's termination was due to her Aggrieved by the ruling, Sameer Overseas Placement Agency caused the filing of a
inefficiency, negligence in her duties, and her "failure to comply with the work requirements petition49 for certiorari with the Court of Appeals assailing the National Labor Relations
[of] her foreign [employer]."21 The agency also claimed that it did not ask for a placement fee Commission’s resolutions dated March 31, 2004 and July 2, 2004.
of ₱70,000.00.22 As evidence, it showedOfficial Receipt No. 14860 dated June 10, 1997,
bearing the amount of ₱20,360.00. 23 Petitioner added that Wacoal's accreditation with The Court of Appeals50 affirmed the decision of the National Labor Relations Commission
petitioner had already been transferred to the Pacific Manpower & Management Services, with respect to the finding of illegal dismissal, Joy’s entitlement to the equivalent of three
Inc. (Pacific) as of August 6, 1997. 24 Thus, petitioner asserts that it was already substituted by months worth of salary, reimbursement of withheld repatriation expense, and attorney’s
Pacific Manpower.25 fees.51 The Court of Appeals remanded the case to the National Labor Relations Commission
to address the validity of petitioner's allegations against Pacific. 52 The Court of Appeals held,
Pacific Manpower moved for the dismissal of petitioner’s claims against it. 26 It alleged that thus: Although the public respondent found the dismissal of the complainant-respondent
there was no employer-employee relationship between them. 27 Therefore, the claims against illegal, we should point out that the NLRC merely awarded her three (3) months backwages
it were outside the jurisdiction of the Labor Arbiter. 28 Pacific Manpower argued that the or the amount of NT$46,080.00, which was based upon its finding that she was dismissed
employment contract should first be presented so that the employer’s contractual obligations without due process, a finding that we uphold, given petitioner’s lack of worthwhile discussion
might be identified.29 It further denied that it assumed liability for petitioner’s illegal acts. 30 upon the same in the proceedings below or before us. Likewise we sustain NLRC’s finding in
regard to the reimbursement of her fare, which is squarely based on the law; as well as the
On July 29, 1998, the Labor Arbiter dismissed Joy’s complaint. 31 Acting Executive Labor award of attorney’s fees.
Arbiter Pedro C.Ramos ruled that her complaint was based on mereallegations. 32 The Labor
Arbiter found that there was no excess payment of placement fees, based on the official But we do find it necessary to remand the instant case to the public respondent for further
receipt presented by petitioner.33 The Labor Arbiter found unnecessary a discussion on proceedings, for the purpose of addressing the validity or propriety of petitioner’s third-party
petitioner’s transfer of obligations to Pacific 34 and considered the matter immaterial in view of complaint against the transferee agent or the Pacific Manpower & Management Services, Inc.
the dismissal of respondent’s complaint.35 and Lea G. Manabat. We should emphasize that as far as the decision of the NLRC on the
claims of Joy Cabiles, is concerned, the same is hereby affirmed with finality, and we hold
Joy appealed36 to the National Labor Relations Commission. petitioner liable thereon, but without prejudice to further hearings on its third party complaint
against Pacific for reimbursement.
In a resolution37 dated March 31, 2004, the National Labor Relations Commission declared
that Joy was illegally dismissed.38 It reiterated the doctrine that the burden of proof to show WHEREFORE, premises considered, the assailed Resolutions are hereby partly AFFIRMED
that the dismissal was based on a just or valid cause belongs to the employer. 39 It found that in accordance with the foregoing discussion, but subject to the caveat embodied inthe last
Sameer Overseas Placement Agency failed to prove that there were just causes for sentence. No costs.
termination.40 There was no sufficient proofto show that respondent was inefficient in her work
and that she failed to comply with company requirements. 41 Furthermore, procedural Dissatisfied, Sameer Overseas Placement Agency filed this petition.
dueprocess was not observed in terminating respondent. 42
We are asked to determine whether the Court of Appeals erred when it affirmed the ruling of Arabia do not require any certification by a competent public health authority in the dismissal
the National Labor Relations Commission finding respondent illegally dismissed and of employees due to illness.
awarding her three months’ worth of salary, the reimbursement of the cost ofher repatriation,
and attorney’s fees despite the alleged existence of just causes of termination. Again, petitioner’s argument is without merit.

Petitioner reiterates that there was just cause for termination because there was a finding of First, established is the rule that lex loci contractus (the law of the place where the contract is
Wacoal that respondent was inefficient in her work.55 made) governs in this jurisdiction. There is no question that the contract of employment in this
case was perfected here in the Philippines. Therefore, the Labor Code, its implementing rules
Therefore, it claims that respondent’s dismissal was valid. 56 and regulations, and other laws affecting labor apply in this case.Furthermore, settled is the
rule that the courts of the forum will not enforce any foreign claim obnoxious to the forum’s
Petitioner also reiterates that since Wacoal’s accreditation was validly transferred to Pacific at public policy. Herein the Philippines, employment agreements are more than contractual in
the time respondent filed her complaint, it should be Pacific that should now assume nature. The Constitution itself, in Article XIII, Section 3, guarantees the special protection of
responsibility for Wacoal’s contractual obligations to the workers originally recruited by workers, to wit:
petitioner.57
The State shall afford full protection to labor, local and overseas, organized and unorganized,
Sameer Overseas Placement Agency’spetition is without merit. We find for respondent. and promote full employment and equality of employment opportunities for all.

I It shall guarantee the rights of all workers to selforganization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in accordance with
law. They shall be entitled to security of tenure, humane conditions of work, and a living
Sameer Overseas Placement Agency failed to show that there was just cause for causing
wage. Theyshall also participate in policy and decision-making processes affecting their rights
Joy’s dismissal. The employer, Wacoal, also failed to accord her due process of law.
and benefits as may be provided by law.
Indeed, employers have the prerogative to impose productivity and quality standards at
....
work.58 They may also impose reasonable rules to ensure that the employees comply with
these standards.59 Failure to comply may be a just cause for their dismissal. 60 Certainly,
employers cannot be compelled to retain the services of anemployee who is guilty of acts that This public policy should be borne in mind in this case because to allow foreign employers to
are inimical to the interest of the employer. 61 While the law acknowledges the plight and determine for and by themselves whether an overseas contract worker may be dismissed on
vulnerability of workers, it does not "authorize the oppression or self-destruction of the the ground of illness would encourage illegal or arbitrary pretermination of employment
employer."62 Management prerogative is recognized in law and in our jurisprudence. contracts.66 (Emphasis supplied, citation omitted)

This prerogative, however, should not be abused. It is "tempered with the employee’s right to Even with respect to fundamental procedural rights, this court emphasized in PCL Shipping
security of tenure."63 Workers are entitled to substantive and procedural due process before Philippines, Inc. v. NLRC,67 to wit:
termination. They may not be removed from employment without a validor just cause as
determined by law and without going through the proper procedure. Petitioners admit that they did notinform private respondent in writing of the charges against
him and that they failed to conduct a formal investigation to give him opportunity to air his
Security of tenure for labor is guaranteed by our Constitution. 64 side. However, petitioners contend that the twin requirements ofnotice and hearing applies
strictly only when the employment is within the Philippines and that these need not be strictly
observed in cases of international maritime or overseas employment.
Employees are not stripped of their security of tenure when they move to work in a different
jurisdiction. With respect to the rights of overseas Filipino workers, we follow the principle of
lex loci contractus.Thus, in Triple Eight Integrated Services, Inc. v. NLRC, 65 this court noted: The Court does not agree. The provisions of the Constitution as well as the Labor Code
which afford protection to labor apply to Filipino employees whether working within the
Philippines or abroad. Moreover, the principle of lex loci contractus (the law of the place
Petitioner likewise attempts to sidestep the medical certificate requirement by contending that
where the contract is made) governs in this jurisdiction. In the present case, it is not disputed
since Osdana was working in Saudi Arabia, her employment was subject to the laws of the
that the Contract of Employment entered into by and between petitioners and private
host country. Apparently, petitioner hopes tomake it appear that the labor laws of Saudi
respondent was executed here in the Philippines with the approval of the Philippine Overseas
Employment Administration (POEA). Hence, the Labor Code together with its implementing employee] fails to qualify as a regular employee in accordance with reasonable standards
rules and regulations and other laws affecting labor apply in this case. 68 (Emphasis supplied, made known by the employer to the employee at the time of his [or her] engagement." 72
citations omitted)
However, we do not see why the application of that ruling should be limited to probationary
By our laws, overseas Filipino workers (OFWs) may only be terminated for a just or employment. That rule is basic to the idea of security of tenure and due process, which are
authorized cause and after compliance with procedural due process requirements. guaranteed to all employees, whether their employment is probationary or regular.

Article 282 of the Labor Code enumerates the just causes of termination by the employer. The pre-determined standards that the employer sets are the bases for determining the
Thus: probationary employee’s fitness, propriety, efficiency, and qualifications as a regular
employee. Due process requires that the probationary employee be informed of such
Art. 282. Termination by employer. An employer may terminate an employment for any of the standards at the time of his or her engagement so he or she can adjusthis or her character or
following causes: workmanship accordingly. Proper adjustment to fit the standards upon which the employee’s
qualifications will be evaluated will increase one’s chances of being positively assessed for
regularization by his or her employer.
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of
his employer or representative in connection with his work;
Assessing an employee’s work performance does not stop after regularization. The employer,
on a regular basis, determines if an employee is still qualified and efficient, based on work
(b) Gross and habitual neglect by the employee of his duties;
standards. Based on that determination, and after complying with the due process
requirements of notice and hearing, the employer may exercise its management prerogative
(c) Fraud or willful breach by the employee of the trust reposed in him by his of terminating the employee found unqualified.
employer or duly authorized representative;
The regular employee must constantlyattempt to prove to his or her employer that he or she
(d) Commission of a crime or offense by the employee against the person of his meets all the standards for employment. This time, however, the standards to be met are set
employer or any immediate member of his family or his duly authorized for the purpose of retaining employment or promotion. The employee cannot be expected to
representatives; and meet any standard of character or workmanship if such standards were not communicated to
him or her. Courts should remain vigilant on allegations of the employer’s failure to
(e) Other causes analogous to the foregoing. communicatework standards that would govern one’s employment "if [these are] to discharge
in good faith [their] duty to adjudicate."73
Petitioner’s allegation that respondentwas inefficient in her work and negligent in her
duties69 may, therefore, constitute a just cause for termination under Article 282(b), but only if In this case, petitioner merely alleged that respondent failed to comply with her foreign
petitioner was able to prove it. employer’s work requirements and was inefficient in her work. 74 No evidence was shown to
support such allegations. Petitioner did not even bother to specify what requirements were
The burden of proving that there is just cause for termination is on the employer. "The not met, what efficiency standards were violated, or what particular acts of respondent
employer must affirmatively show rationally adequate evidence that the dismissal was for a constituted inefficiency.
justifiable cause."70 Failure to show that there was valid or just cause for termination would
necessarily mean that the dismissal was illegal.71 There was also no showing that respondent was sufficiently informed of the standards
against which her work efficiency and performance were judged. The parties’ conflict as to
To show that dismissal resulting from inefficiency in work is valid, it must be shown that: 1) the position held by respondent showed that even the matter as basic as the job title was not
the employer has set standards of conduct and workmanship against which the employee will clear.
be judged; 2) the standards of conduct and workmanship must have been communicated
tothe employee; and 3) the communication was made at a reasonable time prior to the The bare allegations of petitioner are not sufficient to support a claim that there is just cause
employee’s performance assessment. for termination. There is no proof that respondent was legally terminated.

This is similar to the law and jurisprudence on probationary employees, which allow Petitioner failed to comply with
termination ofthe employee only when there is "just cause or when [the probationary the due process requirements
Respondent’s dismissal less than one year from hiring and her repatriation on the same day partners as the case may be, shall themselves be jointly and solidarily liable with the
show not onlyfailure on the partof petitioner to comply with the requirement of the existence of corporation orpartnership for the aforesaid claims and damages.
just cause for termination. They patently show that the employersdid not comply with the due
process requirement. Such liabilities shall continue during the entire period or duration of the employment contract
and shall not be affected by any substitution, amendment or modification made locally or in a
A valid dismissal requires both a valid cause and adherence to the valid procedure of foreign country of the said contract.
dismissal.75 The employer is required to give the charged employee at least two written
notices before termination.76 One of the written notices must inform the employee of the Any compromise/amicable settlement or voluntary agreement on money claims inclusive of
particular acts that may cause his or her dismissal. 77 The other notice must "[inform] the damages under this section shall be paid within four (4) months from the approval of the
employee of the employer’s decision." 78 Aside from the notice requirement, the employee settlement by the appropriate authority.
must also be given "an opportunity to be heard."79
In case of termination of overseas employment without just, valid or authorized cause as
Petitioner failed to comply with the twin notices and hearing requirements. Respondent defined by law or contract, the workers shall be entitled to the full reimbursement of his
started working on June 26, 1997. She was told that she was terminated on July 14, 1997 placement fee with interest of twelve (12%) per annum, plus his salaries for the unexpired
effective on the same day and barely a month from her first workday. She was also portion of his employment contract or for three (3) months for every year of the unexpired
repatriated on the same day that she was informed of her termination. The abruptness of the term, whichever is less.
termination negated any finding that she was properly notified and given the opportunity to be
heard. Her constitutional right to due process of law was violated. ....

II Section 15 of Republic Act No. 8042 states that "repatriation of the worker and the transport
of his [or her] personal belongings shall be the primary responsibility of the agency which
Respondent Joy Cabiles, having been illegally dismissed, is entitled to her salary for the recruited or deployed the worker overseas." The exception is when "termination of
unexpired portion ofthe employment contract that was violated together with attorney’s fees employment is due solely to the fault of the worker," 80 which as we have established, is not
and reimbursement of amounts withheld from her salary. the case. It reads: SEC. 15. REPATRIATION OF WORKERS; EMERGENCY
REPATRIATION FUND. – The repatriation of the worker and the transport of his personal
Section 10 of Republic Act No. 8042,otherwise known as the Migrant Workers and Overseas belongings shall be the primary responsibility of the agency which recruited or deployed the
Filipinos Act of1995, states thatoverseas workers who were terminated without just, valid, or worker overseas. All costs attendant to repatriation shall be borne by or charged to the
authorized cause "shall be entitled to the full reimbursement of his placement fee with interest agency concerned and/or its principal. Likewise, the repatriation of remains and transport of
of twelve (12%) per annum, plus his salaries for the unexpired portion of his employment the personal belongings of a deceased worker and all costs attendant thereto shall be borne
contract or for three (3) months for every year of the unexpired term, whichever is less." by the principal and/or local agency. However, in cases where the termination of employment
is due solely to the fault of the worker, the principal/employer or agency shall not in any
Sec. 10. MONEY CLAIMS. – Notwithstanding any provision of law to the contrary, the Labor manner be responsible for the repatriation of the former and/or his belongings.
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 filing of the ....
complaint, the claims arising out of an employer-employee relationship or by virtue of any law
or contract involving Filipino workers for overseas deployment including claims for actual, The Labor Code81 also entitles the employee to 10% of the amount of withheld wages as
moral, exemplary and other forms of damages. attorney’s feeswhen the withholding is unlawful.

The liability of the principal/employer and the recruitment/placement agency for any and all The Court of Appeals affirmedthe National Labor Relations Commission’s decision to award
claims under this section shall be joint and several. This provisions [sic] shall be incorporated respondent NT$46,080.00 or the threemonth equivalent of her salary, attorney’s fees of
in the contract for overseas employment and shall be a condition precedent for its approval. NT$300.00, and the reimbursement of the withheld NT$3,000.00 salary, which answered for
The performance bond to be filed by the recruitment/placementagency, as provided by law, her repatriation.
shall be answerable for all money claims or damages that may be awarded to the workers. If
the recruitment/placement agency is a juridical being, the corporate officers and directors and
We uphold the finding that respondent is entitled to all of these awards. The award of the In case of termination of overseas employment without just, valid or authorized cause as
three-month equivalent of respondent’s salary should, however, be increased to the amount defined by law or contract, or any unauthorized deductions from the migrant worker’s salary,
equivalent to the unexpired term of the employment contract. the worker shall be entitled to the full reimbursement if [sic] his placement fee and the
deductions made with interest at twelve percent (12%) per annum, plus his salaries for the
In Serrano v. Gallant Maritime Services, Inc. and Marlow Navigation Co., Inc., 82 this court unexpired portion of his employment contract or for three (3) months for every year of the
ruled that the clause "or for three (3) months for every year of the unexpired term, whichever unexpired term, whichever is less.
is less"83 is unconstitutional for violating the equal protection clause and substantive due
process.84 In case of a final and executory judgement against a foreign employer/principal, it shall be
automatically disqualified, without further proceedings, from participating in the Philippine
A statute or provision which was declared unconstitutional is not a law. It "confers no rights; it Overseas Employment Program and from recruiting and hiring Filipino workers until and
imposes no duties; it affords no protection; it creates no office; it is inoperative as if it has not unless it fully satisfies the judgement award.
been passed at all."85
Noncompliance with the mandatory periods for resolutions of case providedunder this section
We are aware that the clause "or for three (3) months for every year of the unexpired term, shall subject the responsible officials to any or all of the following penalties:
whichever is less"was reinstated in Republic Act No. 8042 upon promulgation of Republic Act
No. 10022 in 2010. Section 7 of Republic Act No. 10022 provides: (a) 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
Section 7.Section 10 of Republic Act No. 8042, as amended, is hereby amended to read as complies therewith;
follows:
(b) Suspension for not more than ninety (90) days; or
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 (c) Dismissal from the service with disqualification to hold any appointive public office
exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the for five (5) years.
complaint, the claims arising out of an employer-employee relationship or by virtue of any law
or contract involving Filipino workers for overseas deployment including claims for actual, Provided, however,That the penalties herein provided shall be without prejudice to any
moral, exemplary and other forms of damage. Consistent with this mandate, the NLRC shall liability which any such official may have incured [sic] under other existing laws or rules and
endeavor to update and keep abreast with the developments in the global services industry. regulations as a consequence of violating the provisions of this paragraph. (Emphasis
supplied)
The liability of the principal/employer and the recruitment/placement agency for any and all
claims under this section shall be joint and several. This provision shall be incorporated in the Republic Act No. 10022 was promulgated on March 8, 2010. This means that the
contract for overseas employment and shall be a condition precedent for its approval. The reinstatement of the clause in Republic Act No. 8042 was not yet in effect at the time of
performance bond to de [sic] filed by the recruitment/placement agency, as provided by law, respondent’s termination from work in 1997.86 Republic Act No. 8042 before it was amended
shall be answerable for all money claims or damages that may be awarded to the workers. If byRepublic Act No. 10022 governs this case.
the recruitment/placement agency is a juridical being, the corporate officers and directors and
partners as the case may be, shall themselves be jointly and solidarily liable with the When a law is passed, this court awaits an actual case that clearly raises adversarial
corporation or partnership for the aforesaid claims and damages. positions in their proper context before considering a prayer to declare it as unconstitutional.

Such liabilities shall continue during the entire period or duration of the employment contract However, we are confronted with a unique situation. The law passed incorporates the exact
and shall not be affected by any substitution, amendment or modification made locally or in a clause already declared as unconstitutional, without any perceived substantial change in the
foreign country of the said contract. circumstances.

Any compromise/amicable settlement or voluntary agreement on money claims inclusive of This may cause confusion on the part of the National Labor Relations Commission and the
damages under this section shall be paid within thirty (30) days from approval of the Court of Appeals.At minimum, the existence of Republic Act No. 10022 may delay the
settlement by the appropriate authority.
execution of the judgment in this case, further frustrating remedies to assuage the wrong The Office of the Solicitor General also argued that the clause was valid and
done to petitioner. constitutional.93 However, since the parties never raised the issue of the constitutionality of
the clause asreinstated in Republic Act No. 10022, its contention is that it is beyond judicial
Hence, there is a necessity to decide this constitutional issue. review.94

Moreover, this court is possessed with the constitutional duty to "[p]romulgate rules On the other hand, respondentargued that the clause was unconstitutional because it
concerning the protection and enforcement of constitutional rights." 87 When cases become infringed on workers’ right to contract.95
mootand academic, we do not hesitate to provide for guidance to bench and bar in situations
where the same violations are capable of repetition but will evade review. This is analogous We observe that the reinstated clause, this time as provided in Republic Act. No. 10022,
to cases where there are millions of Filipinos working abroad who are bound to suffer from violates the constitutional rights to equal protection and due process. 96 Petitioner as well as
the lack of protection because of the restoration of an identical clause in a provision the Solicitor General have failed to show any compelling changein the circumstances that
previously declared as unconstitutional. would warrant us to revisit the precedent.

In the hierarchy of laws, the Constitution is supreme. No branch or office of the government We reiterate our finding in Serrano v. Gallant Maritime that limiting wages that should be
may exercise its powers in any manner inconsistent with the Constitution, regardless of the recovered by anillegally dismissed overseas worker to three months is both a violation of due
existence of any law that supports such exercise. The Constitution cannot be trumped by any process and the equal protection clauses of the Constitution.
other law. All laws must be read in light of the Constitution. Any law that is inconsistent with it
is a nullity. Equal protection of the law is a guarantee that persons under like circumstances and falling
within the same class are treated alike, in terms of "privileges conferred and liabilities
Thus, when a law or a provision of law is null because it is inconsistent with the enforced."97 It is a guarantee against "undue favor and individual or class privilege, as well as
Constitution,the nullity cannot be cured by reincorporation or reenactment of the same or a hostile discrimination or the oppression of inequality."98
similar law or provision. A law or provision of law that was already declared unconstitutional
remains as such unless circumstances have sochanged as to warrant a reverse conclusion. In creating laws, the legislature has the power "to make distinctions and classifications." 99

We are not convinced by the pleadings submitted by the parties that the situation has so In exercising such power, it has a wide discretion.100
changed so as to cause us to reverse binding precedent.
The equal protection clause does not infringe on this legislative power. 101 A law is void on this
Likewise, there are special reasons of judicial efficiency and economy that attend to these basis, only if classifications are made arbitrarily. 102 There is no violation of the equal
cases. The new law puts our overseas workers in the same vulnerable position as they were protection clause if the law applies equally to persons within the same class and if there are
prior to Serrano. Failure to reiterate the very ratio decidendi of that case will result in the reasonable grounds for distinguishing between those falling within the class and those who
same untold economic hardships that our reading of the Constitution intended to avoid. do not fall within the class.103 A law that does not violate the equal protection clause
Obviously, we cannot countenance added expenses for further litigation thatwill reduce their prescribesa reasonable classification.104
hardearned wages as well as add to the indignity of having been deprived of the protection of
our laws simply because our precedents have not been followed. There is no constitutional A reasonable classification "(1) must rest on substantial distinctions; (2) must be germane to
doctrine that causes injustice in the face of empty procedural niceties. Constitutional the purposes of the law; (3) must not be limited to existing conditions only; and (4) must apply
interpretation is complex, but it is never unreasonable. equally to all members of the same class."105

Thus, in a resolution88 dated October 22, 2013, we ordered the parties and the Office of the The reinstated clause does not satisfy the requirement of reasonable classification.
Solicitor General to comment on the constitutionality of the reinstated clause in Republic Act
No. 10022.
In Serrano, we identified the classifications made by the reinstated clause. It distinguished
between fixed-period overseas workers and fixedperiod local workers. 106 It also distinguished
In its comment,89 petitioner argued that the clause was constitutional. 90 The legislators between overseas workers with employment contracts of less than one year and overseas
intended a balance between the employers’ and the employees’ rights by not unduly workers with employment contracts of at least one year. 107 Within the class of overseas
burdening the local recruitment agency.91 Petitioner is also of the view that the clause was workers with at least one-year employment contracts, there was a distinction between those
already declared as constitutional in Serrano.92
with at least a year left in their contracts and those with less than a year left in their contracts The rights violated when, say, a fixed-period local worker is illegally terminated are neither
when they were illegally dismissed.108 greater than norless than the rights violated when a fixed-period overseas worker is illegally
terminated. It is state policy to protect the rights of workers withoutqualification as to the place
The Congress’ classification may be subjected to judicial review. In Serrano, there is a of employment.119 In both cases, the workers are deprived of their expected salary, which
"legislative classification which impermissibly interferes with the exercise of a fundamental they could have earned had they not been illegally dismissed. For both workers, this
right or operates to the peculiar disadvantage of a suspect class." 109 deprivation translates to economic insecurity and disparity. 120 The same is true for the
distinctions between overseas workers with an employment contract of less than one year
and overseas workers with at least one year of employment contract, and between overseas
Under the Constitution, labor is afforded special protection. 110 Thus, this court in Serrano,
workers with at least a year left in their contracts and overseas workers with less than a year
"[i]mbued with the same sense of ‘obligation to afford protection to labor,’ . . . employ[ed] the
left in their contracts when they were illegally dismissed.
standard of strict judicial scrutiny, for it perceive[d] in the subject clause a suspect
classification prejudicial to OFWs."111
For this reason, we cannot subscribe to the argument that "[overseas workers] are
contractual employeeswho can never acquire regular employment status, unlike local
We also noted in Serranothat before the passage of Republic Act No. 8042, the money
workers"121 because it already justifies differentiated treatment in terms ofthe computation of
claims of illegally terminated overseas and local workers with fixed-term employment
money claims.122
werecomputed in the same manner. 112 Their money claims were computed based onthe
"unexpired portions of their contracts." 113 The adoption of the reinstated clause in Republic
Act No. 8042 subjected the money claims of illegally dismissed overseas workers with an Likewise, the jurisdictional and enforcement issues on overseas workers’ money claims do
unexpired term of at least a year to a cap of three months worth of their salary. 114 There was not justify a differentiated treatment in the computation of their money claims. 123 If anything,
no such limitation on the money claims of illegally terminated local workers with fixed-term these issues justify an equal, if not greater protection and assistance to overseas workers
employment.115 who generally are more prone to exploitation given their physical distance from our
government.
We observed that illegally dismissed overseas workers whose employment contracts had a
term of less than one year were granted the amount equivalent to the unexpired portion of We also find that the classificationsare not relevant to the purpose of the law, which is to
their employment contracts.116 Meanwhile, illegally dismissed overseas workers with "establish a higher standard of protection and promotion of the welfare of migrant workers,
employment terms of at least a year were granted a cap equivalent to three months of their their families and overseas Filipinos in distress, and for other purposes." 124 Further, we find
salary for the unexpired portions of their contracts.117 specious the argument that reducing the liability of placement agencies "redounds to the
benefit of the [overseas] workers."125
Observing the terminologies used inthe clause, we also found that "the subject clause creates
a sub-layer of discrimination among OFWs whose contract periods are for more than one Putting a cap on the money claims of certain overseas workers does not increase the
year: those who are illegally dismissed with less than one year left in their contracts shall be standard of protection afforded to them. On the other hand, foreign employers are more
entitled to their salaries for the entire unexpired portion thereof, while those who are illegally incentivizedby the reinstated clause to enter into contracts of at least a year because it gives
dismissed with one year or more remaining in their contracts shall be covered by the them more flexibility to violate our overseas workers’ rights. Their liability for arbitrarily
reinstated clause, and their monetary benefits limited to their salaries for three months terminating overseas workers is decreased at the expense of the workers whose rights they
only."118 violated. Meanwhile, these overseas workers who are impressed with an expectation of a
stable job overseas for the longer contract period disregard other opportunities only to be
terminated earlier. They are left with claims that are less than what others in the same
We do not need strict scrutiny to conclude that these classifications do not rest on any real or
situation would receive. The reinstated clause, therefore, creates a situation where the law
substantial distinctions that would justify different treatments in terms of the computation of
meant to protect them makes violation of rights easier and simply benign to the violator.
money claims resulting from illegal termination.

As Justice Brion said in his concurring opinion in Serrano:

Overseas workers regardless of their classifications are entitled to security of tenure, at least
for the period agreed upon in their contracts. This means that they cannot be dismissed
before the end of their contract terms without due process. If they were illegally dismissed, Section 10 of R.A. No. 8042 affects these well-laid rules and measures, and in fact provides a
the workers’ right to security of tenure is violated. hidden twist affecting the principal/employer’s liability. While intended as an incentive
accruing to recruitment/manning agencies, the law, as worded, simply limits the OFWs’
recovery in wrongfuldismissal situations. Thus, it redounds to the benefit of whoever may be
liable, including the principal/employer – the direct employer primarily liable for the wrongful recruitment/manning agencies may violate an OFW’s security of tenure which an employment
dismissal. In this sense, Section 10 – read as a grant of incentives to recruitment/manning contract embodies and actually profit from such violation based on an unconstitutional
agencies – oversteps what it aims to do by effectively limiting what is otherwise the full liability provision of law."129
of the foreign principals/employers. Section 10, in short, really operates to benefit the wrong
party and allows that party, without justifiable reason, to mitigate its liability for wrongful III
dismissals. Because of this hidden twist, the limitation ofliability under Section 10 cannot be
an "appropriate" incentive, to borrow the term that R.A. No. 8042 itself uses to describe the On the interest rate, the Bangko Sentral ng Pilipinas Circular No. 799 of June 21, 2013, which
incentive it envisions under its purpose clause. revised the interest rate for loan or forbearance from 12% to 6% in the absence of
stipulation,applies in this case. The pertinent portions of Circular No. 799, Series of 2013,
What worsens the situation is the chosen mode of granting the incentive: instead of a grant read: The Monetary Board, in its Resolution No. 796 dated 16 May 2013, approved the
that, to encourage greater efforts at recruitment, is directly related to extra efforts undertaken, following revisions governing the rate of interest in the absence of stipulation in loan
the law simply limits their liability for the wrongful dismissals of already deployed OFWs. This contracts, thereby amending Section 2 of Circular No. 905, Series of 1982:
is effectively a legally-imposed partial condonation of their liability to OFWs, justified solely by
the law’s intent to encourage greater deployment efforts. Thus, the incentive,from a more Section 1. The rate of interest for the loan or forbearance of any money, goods or credits and
practical and realistic view, is really part of a scheme to sell Filipino overseas labor at a the rate allowed in judgments, in the absence of an express contract as to such rateof
bargain for purposes solely of attracting the market. . . . interest, shall be six percent (6%) per annum.

The so-called incentive is rendered particularly odious by its effect on the OFWs — the Section 2. In view of the above, Subsection X305.1 of the Manual of Regulations for Banks
benefits accruing to the recruitment/manning agencies and their principals are takenfrom the and Sections 4305Q.1, 4305S.3 and 4303P.1 of the Manual of Regulations for Non-Bank
pockets of the OFWs to whom the full salaries for the unexpired portion of the contract Financial Institutions are hereby amended accordingly.
rightfully belong. Thus, the principals/employers and the recruitment/manning agencies even
profit from their violation of the security of tenure that an employment contract embodies.
Conversely, lesser protection is afforded the OFW, not only because of the lessened recovery This Circular shall take effect on 1 July 2013.
afforded him or her by operation of law, but also because this same lessened recovery
renders a wrongful dismissal easier and less onerous to undertake; the lesser cost of Through the able ponencia of Justice Diosdado Peralta, we laid down the guidelines in
dismissing a Filipino will always bea consideration a foreign employer will take into account in computing legal interest in Nacar v. Gallery Frames:130
termination of employment decisions. . . .126
II. With regard particularly to an award of interest in the concept of actual and compensatory
Further, "[t]here can never be a justification for any form of government action that alleviates damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:
the burden of one sector, but imposes the same burden on another sector, especially when
the favored sector is composed of private businesses suchas placement agencies, while the 1. When the obligation is breached, and it consists in the payment of a sum of
disadvantaged sector is composed ofOFWs whose protection no less than the Constitution money, i.e., a loan or forbearance of money, the interest due should be that which
commands. The idea thatprivate business interest can be elevated to the level of a may have been stipulated in writing. Furthermore, the interest due shall itself earn
compelling state interest is odious."127 legal interest from the time it is judicially demanded. In the absence of stipulation, the
rate of interest shall be 6% per annum to be computed from default, i.e., from judicial
Along the same line, we held that the reinstated clause violates due process rights. It is or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil
arbitrary as it deprives overseas workers of their monetary claims without any discernable Code.
valid purpose.128
2. When an obligation, not constituting a loan or forbearance of money, is breached,
Respondent Joy Cabiles is entitled to her salary for the unexpired portion of her contract, in an interest on the amount of damages awarded may be imposed at the discretion of
accordance with Section 10 of Republic Act No. 8042. The award of the three-month the court at the rate of 6% per annum. No interest, however, shall be adjudged on
equivalence of respondent’s salary must be modified accordingly. Since she started working unliquidated claims or damages, except when or until the demand can be established
on June 26, 1997 and was terminated on July 14, 1997, respondent is entitled to her salary with reasonable certainty. Accordingly, where the demand is established with
from July 15, 1997 to June 25, 1998. "To rule otherwise would be iniquitous to petitioner and reasonable certainty, the interest shall begin to run from the time the claim is made
other OFWs, and would,in effect, send a wrong signal that principals/employers and judicially or extrajudicially (Art. 1169, Civil Code), but when such certainty cannot be
so reasonably established at the time the demand is made, the interest shall begin to
 run only from the date the judgment of the court is made (at which time the Section 10 of Republic Act No. 8042 shall be subject to the 6% interest per annum in
quantification of damages may be deemed to have been reasonably ascertained). accordance with Circular No. 799.
The actual base for the computation of legal interest shall, in any case, be on the
amount finally adjudged. 3. When the judgment of the court awarding a sum of This means that respondent is also entitled to an interest of 6% per annum on her money
money becomes final and executory, the rate of legal interest, whether the case falls claims from the finality of this judgment.
under paragraph 1 or paragraph 2, above, shall be 6% per annum from such finality
until its satisfaction, this interim period being deemed to be by then an equivalent to a IV
forbearance of credit.
Finally, we clarify the liabilities ofWacoal as principal and petitioner as the employment
And, in addition to the above, judgments that have become final and executory prior to July 1, agency that facilitated respondent’s overseas employment.
2013, shall not be disturbed and shall continue to be implemented applying the rate of
interest fixed therein.131
Section 10 of the Migrant Workers and Overseas Filipinos Act of 1995 provides that the
foreign employer and the local employment agency are jointly and severally liable for money
Circular No. 799 is applicable only in loans and forbearance of money, goods, or credits, and claims including claims arising out of an employer-employee relationship and/or damages.
in judgments when there is no stipulation on the applicable interest rate. Further, it is only This section also provides that the performance bond filed by the local agency shall be
applicable if the judgment did not become final and executory before July 1, 2013. 132 answerable for such money claims or damages if they were awarded to the employee.

We add that Circular No. 799 is not applicable when there is a law that states otherwise. This provision is in line with the state’s policy of affording protection to labor and alleviating
While the Bangko Sentral ng Pilipinas has the power to set or limit interest rates, 133 these workers’ plight.136
interest rates do not apply when the law provides that a different interest rate shall be applied.
"[A] Central Bank Circular cannot repeal a law. Only a law can repeal another law." 134
In overseas employment, the filing of money claims against the foreign employer is attended
by practical and legal complications.1âwphi1 The distance of the foreign employer
For example, Section 10 of Republic Act No. 8042 provides that unlawfully terminated alonemakes it difficult for an overseas worker to reach it and make it liable for violations of the
overseas workers are entitled to the reimbursement of his or her placement fee with an Labor Code. There are also possible conflict of laws, jurisdictional issues, and procedural
interest of 12% per annum. Since Bangko Sentral ng Pilipinas circulars cannotrepeal rules that may be raised to frustrate an overseas worker’sattempt to advance his or her
Republic Act No. 8042, the issuance of Circular No. 799 does not have the effect of changing claims.
the interest on awards for reimbursement of placement fees from 12% to 6%. This is despite
Section 1 of Circular No. 799, which provides that the 6% interest rate applies even to
judgments. It may be argued, for instance, that the foreign employer must be impleaded in the complaint
as an indispensable party without which no final determination can be had of an action. 137
Moreover, laws are deemed incorporated in contracts. "The contracting parties need not
repeat them. They do not even have to be referred to. Every contract, thus, contains not only The provision on joint and several liability in the Migrant Workers and Overseas Filipinos Act
what has been explicitly stipulated, but the statutory provisions that have any bearing on the of 1995 assures overseas workers that their rights will not be frustrated with these
matter."135 There is, therefore, an implied stipulation in contracts between the placement complications. The fundamental effect of joint and several liability is that "each of the debtors
agency and the overseasworker that in case the overseas worker is adjudged as entitled to is liable for the entire obligation." 138 A final determination may, therefore, be achieved even if
reimbursement of his or her placement fees, the amount shall be subject to a 12% interest only oneof the joint and several debtors are impleaded in an action. Hence, in the case of
per annum. This implied stipulation has the effect of removing awards for reimbursement of overseas employment, either the local agency or the foreign employer may be sued for all
placement fees from Circular No. 799’s coverage. claims arising from the foreign employer’s labor law violations. This way, the overseas
workers are assured that someone — the foreign employer’s local agent — may be made to
answer for violationsthat the foreign employer may have committed.
The same cannot be said for awardsof salary for the unexpired portion of the employment
contract under Republic Act No. 8042. These awards are covered by Circular No. 799
because the law does not provide for a specific interest rate that should apply. The Migrant Workers and Overseas Filipinos Act of 1995 ensures that overseas workers
have recourse in law despite the circumstances of their employment. By providing that the
liability of the foreign employer may be "enforced to the full extent" 139 against the local
In sum, if judgment did not become final and executory before July 1, 2013 and there was no agent,the overseas worker is assured of immediate and sufficientpayment of what is due
stipulation in the contract providing for a different interest rate, other money claims under them.140
Corollary to the assurance of immediate recourse in law, the provision on joint and several their work has cost them. Twitter accounts, Facetime, and many other gadgets and online
liability in the Migrant Workers and Overseas Filipinos Act of 1995 shifts the burden of going applications will never substitute for their lost physical presence.
after the foreign employer from the overseas worker to the local employment agency.
However, it must be emphasized that the local agency that is held to answer for the overseas Unknown to them, they keep our economy afloat through the ebb and flow of political and
worker’s money claims is not leftwithout remedy. The law does not preclude it from going economic crises. They are our true diplomats, they who show the world the resilience,
after the foreign employer for reimbursement of whatever payment it has made to the patience, and creativity of our people. Indeed, we are a people who contribute much to the
employee to answer for the money claims against the foreign employer. provision of material creations of this world.

A further implication of making localagencies jointly and severally liable with the foreign This government loses its soul if we fail to ensure decent treatment for all Filipinos. We
employer is thatan additional layer of protection is afforded to overseas workers. Local default by limiting the contractual wages that should be paid to our workers when their
agencies, which are businesses by nature, are inoculated with interest in being always on the contracts are breached by the foreign employers. While we sit, this court will ensure that our
lookout against foreign employers that tend to violate labor law. Lest they risk their reputation laws will reward our overseas workers with what they deserve: their dignity.
or finances, local agenciesmust already have mechanisms for guarding against unscrupulous
foreign employers even at the level prior to overseas employment applications. Inevitably, their dignity is ours as weil.

With the present state of the pleadings, it is not possible to determine whether there was WHEREFORE, the petition is DENIED. The decision of the Court of Appeals is AFFIRMED
indeed a transfer of obligations from petitioner to Pacific. This should not be an obstacle for with modification. Petitioner Sameer Overseas Placement Agency is ORDERED to pay
the respondent overseas worker to proceed with the enforcement of this judgment. Petitioner respondent Joy C. Cabiles the amount equivalent to her salary for the unexpired portion of
is possessed with the resources to determine the proper legal remedies to enforce its rights her employment contract at an interest of 6% per annum from the finality of this judgment.
against Pacific, if any. Petitioner is also ORDERED to reimburse respondent the withheld NT$3,000.00 salary and
pay respondent attorney's fees of NT$300.00 at an interest of 6% per annum from the finality
V of this judgment.

Many times, this court has spoken on what Filipinos may encounter as they travel into the The clause, "or for three (3) months for every year of the unexpired term, whichever is less" in
farthest and mostdifficult reaches of our planet to provide for their families. In Prieto v. Section 7 of Republic Act No. 10022 amending Section 10 of Republic Act No. 8042 is
NLRC:141 declared unconstitutional and, therefore, null and void.

The Court is not unaware of the many abuses suffered by our overseas workers in the foreign
land where they have ventured, usually with heavy hearts, in pursuit of a more fulfilling future.
Breach of contract, maltreatment, rape, insufficient nourishment, sub-human lodgings, insults
and other forms of debasement, are only a few of the inhumane acts towhich they are
subjected by their foreign employers, who probably feel they can do as they please in their
own country. Whilethese workers may indeed have relatively little defense against
exploitation while they are abroad, that disadvantage must not continue to burden them when
they return to their own territory to voice their muted complaint. There is no reason why, in
their very own land, the protection of our own laws cannot be extended to them in full
measure for the redress of their grievances.142

But it seems that we have not said enough.

We face a diaspora of Filipinos. Their travails and their heroism can be told a million times
over; each of their stories as real as any other. Overseas Filipino workers brave alien cultures
and the heartbreak of families left behind daily. They would count the minutes, hours, days,
months, and years yearning to see their sons and daughters. We all know of the joy and
sadness when they come home to see them all grown up and, being so, they remember what
 c) notice to the Principal is also a notice to the Surety; and

d) LIABILITY of the surety . . . shall expire on JANUARY 02, 1986 and this bond shall be
automatically cancelled ten (10) days after its expiration and the surety shall not be liable for
any claim not discovered and presented to it in writing within said period of . . . from
expiration and the obligee hereby expressly waives the rights to file any court action against
the Surety after termination of said period of . . . . above cited. 2

As narrated by respondent Secretary of Labor, the facts are as follows: 3

From June 1983 to December 1985 . . . thirty three (33) . . . (persons) applied for
overseas employment with . . . (J & B). In consideration of promised deployment,
complainants paid respondent various amounts for various fees. Most of' the receipts
issued were sighed by Mrs. Baby Bundalian, Executive Vice-President of . . . (J & B).

Because of non-deployment . . . (the applicants) filed separate complaints with the

Licensing and Regulation Office of POEA against . . . (J & B) for violation of Articles
EASTERN ASSURANCE & SURETY CORPORATION vs. SECRETARY OF LABOR, 32 and 34 (a) of the Labor Code between the months of April to October 1985.
PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION, ELVIRA VENTURA, ESTER
TRANGUILLAN, et al.,  Despite summons/notices of hearing,, . . . (J & B) failed to file Answer nor appear in
the hearings conducted.
G.R. No. L-79436-50               January 17, 1990
In its separate Answer, . . . EASCO essentially disclaimed liability on the ground that
In connection with the application with the Philippine Overseas Employment Administration the claims were not expressly covered by the bond, that POEA had no jurisdiction to
(POEA) of J & B Manpower Specialist, Inc. for a license to engage in business as a order forfeiture of the bond, that some of the claims were paid beyond or prior to the
recruitment agency, a surety bond was filed on January 2, 1985 by the applicant and the period of effectivity of the bond.
Eastern Assurance and Surety Corporation, herein petitioner, in virtue of which they both held
themselves — On September 8, 1986, the POEA Administrator issued the Order in favor of
complainants ruling thus:
. . . firmly bound unto (said) Philippine Overseas Employment Administration, Ministry
of Labor in the penal sum of PESOS ONE HUNDRED FIFTY THOUSAND ONLY . . . After careful evaluation, we find that the receipts and testimonies of
(Pl50,000.00) for the payment of which will and truly to be made, . . . (they bound complainants, in the absence of controverting evidence substantially
themselves, their) heirs, executors, administrators, successors and assigns, jointly establish that respondent charged and collected fees from them in amounts
and severally . . exceeding what is prescribed by this Administration. Complainants' non-
deployment strongly indicates that there was no employment obtained for
The bond stipulated that: them. Hence, violation of Articles 32 and 34 (a) of the Labor Code, as
amended, is established against respondent. The claims of complainants
a) it was "conditioned upon the true and faithful performance and observance of the . . . having arose (arisen) out of acts of the principal covered under the surety
principal (J & B Manpower Specialist, Inc.) of its duties and obligations in accordance with all (bond), the respondent surety is equally liable therefor.
the rules and regulations promulgated by the Ministry of Labor Philippine Overseas
Employment Administration and with the terms and conditions stipulated in the License; Except for complainants Ramos, Samson, de Leon and Rizada, whose claims were
transacted prior to the effectivity of the bond, . . . EASCO was declared jointly and
b) the liability of the . . . Surety (petitioner) shall in no case exceed the sum of PESOS ONE severally liable with . . . (J & B) to twenty-nine (29) complainants.
HUNDRED FIFTY THOUSAND (P150,000.00) ONLY, PHILIPPINE CURRENCY; 1
 (The dispositive portion of the POEA Administrator's Order also contained the Deputy Minister of Labor of' December 19, 1986, and the Order of the Secretary of Labor of
following statement and direction, viz.: July 1, 1987, It theorizes that:

Respondent was suspended on May 23, 1985, June 26, 1985 and January 1) the POEA had no jurisdiction over the claims for refund filed by non-employees;
17, 1986 all for illegal exaction. Considering its track record of illegal exaction
activities and considering further the gross violation of recruitment rules and 2) neither did the Secretary of Labor have jurisdiction of the claims;
regulations established against it in the instant cases, and the expiration of its
license on February 15, 1985, it is hereby forever banned from participation 3) assuming they had jurisdiction, both the POEA and Secretary of Labor also
in the overseas employment program. It is ordered to cease and desist from committed legal errors and acted with grave abuse of discretion when they ruled that
further engaging in recruitment activities otherwise it shall be prosecuted for petitioner is liable on the claims.
illegal recruitment.')
EASCO contends that the POEA had no "adjudicatory jurisdiction" over the monetary claims
(J & B filed a motion for reconsideration). On December 19, 1986, the then deputy in question because the same "did not arise from employer-employee relations." Invoked in
Minister of Labor and Employment denied the . . . Motion for Reconsideration for lack support of the argument is Section 4 (a) of EO 797 providing in part 8 that the POEA has —
of merit and affirmed the findings in the Order of the POEA Administrator finding no
reversible error therein.
. . . original and exclusive jurisdiction over all cases, including money
claims, involving employer-employee relations arising out of or by virtue of any law or
On appeal by EASCO — J & B having as aforestated taken no part in the proceeding despite contract involving Filipino workers for overseas employment including seamen . . .
due service of summons — the judgment was modified by the Secretary of Labor, by Order
dated July 1, 1987, disposing as follows: 4
The complaints are however for violation of Articles 32 and 34 a) of the Labor Code. Article
32 and paragraph (a) of Article 34 read as follows:
WHEREFORE, in view of the foregoing, the Resolution of the then Deputy Minister of
Labor dated December 19, 1986 affirming the Order of the POEA Administrator dated
September 8, 1986 is hereby MODIFIED. Respondent J & B Manpower Specialist is Art. 32. Fees to be paid by workers.—Any person applying with a private fee-
directed to refund all thirty-three (33) complainants as listed in the Order of charging employment agency for employment assistance shall not be charged any
September 8, 1986 in the amounts listed thereto with the modification that fee until he has obtained employment through its efforts or has actually commenced
complainants Lucena Cabasal and Felix Rivero are both entitled only to P15,980 and employment. Such fee shall be always covered with the approved receipt clearly
not P15,980 each. Respondent Eastern Assurance and Surety Corporation is hereby showing the amount paid. The Secretary of Labor shall promulgate a schedule of
found jointly and severally liable with respondent J & B Manpower Specialist to allowable fees.
refund nineteen (19) complainants in the modified amounts . . .  (particularly
specified). Art. 34. Prohibited practices.—It shall be unlawful for any individual, entity, licensee,
or holder of authority:
The other findings in the Order of the POEA Administrator dated September 8, 1986
affirmed in the Resolution of the then Deputy Minister . . . are also hereby a) To charge or accept, directly or indirectly, any amount greater than that specified
AFFIRMED. This Order is FINAL. No further Motion for Reconsideration hereof shall in the schedule of allowable fees prescribed by the Secretary of Labor, or to make a
be entertained. worker pay any amount greater than actually received by him as a loan or
advance; . . .
It is noteworthy that EASCO's liability for the refund, jointly and severally with its principal,
was limited to 19 named complainants (in contrast to verdicts of the POEA and the Deputy The penalties of suspension and cancellation of license or authority are prescribed for
Minister which both ordered payment to no less than 33 complainants) and was violations of the above quoted provisions, among others. And the Secretary of Labor has the
correspondingly reduced from P308,751.75 and US $ 400.00 5 to the aggregate amount of P power under Section 35 of the law to apply these sanctions, as well as the authority,
140,817.75. 6 conferred by Section 36, not only, to "restrict and regulate the recruitment and placement
activities of all agencies," but also to "promulgate rules and regulations to carry out the
The special civil action of certiorari at bar was thereafter instituted by EASCO 7 praying for the objectives and implement the provisions" governing said activities. Pursuant to this rule-
nullification of the POEA Administrator's Order of September 8, 1986, the Resolution of the making power thus granted, the Secretary of Labor gave the POEA 9 "on its own initiative or
upon filing of a complaint or report or upon request for investigation by any aggrieved person, The related argument, that it is also not liable for claims filed after the expiry (on January 2,
. . . (authority to) conduct the necessary proceedings for the suspension or cancellation of the 1986) of the period stipulated in the surety bond for the filing of claims against the bond, must
license or authority of any agency or entity" for certain enumerated offenses including — however be rejected, as the Secretary did. The Court discerns no grave abuse of discretion in
the Secretary's statement of his reasons for doing so, to wit:
1) the imposition or acceptance, directly or indirectly, of any amount of money, goods or
services, or any fee or bond in excess of what is prescribed by the Administration, and . . . While it may be true that respondent EASCO received notice of their claims after
the ten (10) day expiration period from cancellation or after January 12, 1986 as
2) any other violation of pertinent provisions of the Labor Code and other relevant laws, rules provided in the surety bond, records show that . . . EASCO's principal, respondent
and regulations. 10 agency, was notified/ summoned prior to the expiration period or before January 12,
1986. Respondent agency received summons on July 24, 1985 with respect to claims
of complainants Penarroyo, dela Cruz and Canti. It also received summons on
The Administrator was also given the power to "order the dismissal of the case or the
November 26, 1985 with respect to Giovanni Garbillons' claim. Respondent agency
suspension of the license or authority of the respondent agency or contractor or
was likewise considered constructively notified of the claims of complainants
recommend to the Minister the cancellation thereof." 11
Calayag, Danuco Domingo and Campena on October 6, 1985. In this connection, it
may be stressed that the surety bond provides that notice to the principal is notice to
Implicit in these powers is the award of appropriate relief to the victims of the offenses the surety. Besides, it has been held that the contract of a compensated surety like
committed by the respondent agency or contractor, specially the refund or reimbursement of respondent EASCO is to be interpreted liberally in the interest of the promises and
such fees as may have been fraudulently or otherwise illegally collected, or such money, beneficiaries rather than strictly in favor of the surety (Acoustics Inc. v. American
goods or services imposed and accepted in excess of what is licitly prescribed. It would be Surety, 74 Nev-6, 320 P2d. 626, 74 Am. Jur. 2d).
illogical and absurd to limit the sanction on an offending recruitment agency or contractor to
suspension or cancellation of its license, without the concomitant obligation to repair the
So, too, EASCO's claim that it had not been properly served with summons as regards a few
injury caused to its victims. It would result either in rewarding unlawful acts, as it would leave
of the complaints must be rejected, the issue being factual, and the Court having been cited
the victims without recourse, or in compelling the latter to litigate in another forum, giving rise
to no grave error invalidating the respondent Secretary's conclusion that summons had
to that multiplicity of actions or proceedings which the law abhors.
indeed been duly served.
Even more untenable is EASCO's next argument that the recruiter and its victims are in   pari
Finally, EASCO's half-hearted argument that its liability should be limited to the maximum
delicto  — the former for having required payment, and the latter for having voluntarily paid,
amount set in its surety bond, i.e., P150,000.00, is palpably without merit, since the
"prohibited recruitment fees" — and therefore, said victims are barred from obtaining relief.
aggregate liability imposed on it, P140,817.75, supra, does not in fact exceed that limit.
The sophistical, if not callous, character of the argument is evident upon the most cursory
reading thereof; it merits no consideration whatever.
WHEREFORE, the petition is DISMISSED for lack of merit, and this decision is declared to
be immediately executory. Costs against petitioner.
The Court is intrigued by EASCO's reiteration of its argument that it should not be held liable
for claims which accrued  prior to or after the effectivity of its bond, considering that the
respondent Secretary had conceded the validity of part of said argument, at least. The
Secretary ruled that EASCO's "contention that it should not be held liable for claims/payments
made to respondent agency before the effectivity of the surety bond on January 2, 1985 is
well taken." According to the Secretary: 12

. . . A close examination of the records reveal(s) that respondent EASCO is not jointly
and severally liable with respondent agency to refund complainants Lucena Cabasal,
Felix Rivero, Romulo del Rosario, Rogelio Banzuela, Josefina Ogatis, Francisco
Sorato, Sonny Quiazon, Josefina Dictado, Mario del Guzman and Rogelio Mercado
(10 in all).  These complainants paid respondent agency in 1984, or before the
effectivity of the bond on January 2, 1985 as evidence by the reciept and their
testimonies.
ANDREW JAMES MCBURNIE vs. On March 31, 2005, the NLRC denied 11 the motion to reduce bond, explaining that "in cases
EULALIO GANZON, EGI-MANAGERS, INC. and E. GANZON, INC.,  involving monetary award, an employer seeking to appeal the [LA’s] decision to the
Commission is unconditionally required by Art. 223, Labor Code to post bond in the amount
G.R. Nos. 178034 & 178117 G R. Nos. 186984-85               October 17, 2013 equivalent to the monetary award x x x." 12 Thus, the NLRC required from the respondents the
posting of an additional bond in the amount of ₱54,083,910.00.
FACTS:
When their motion for reconsideration was denied, 13 the respondents decided to elevate the
matter to the Court of Appeals (CA) via the Petition for Certiorari and Prohibition (With
The Decision dated September 18, 2009 provides the following antecedent facts and
Extremely Urgent Prayer for the Issuance of a Preliminary Injunction and/or Temporary
proceedings –
Restraining Order)14 docketed as CA-G.R. SP No. 90845.
On October 4, 2002, McBurnie, an Australian national, instituted a complaint for illegal
In the meantime, in view of the respondents’ failure to post the required additional bond, the
dismissal and other monetary claims against the respondents. McBurnie claimed that on May
NLRC dismissed their appeal in a Resolution 15 dated March 8, 2006. The respondents’
11, 1999, he signed a five-year employment agreement 5 with the company EGI as an
motion for reconsideration was denied on June 30, 2006. 16 This prompted the respondents to
Executive Vice-President who shall oversee the management of the company’s hotels and
file with the CA the Petition for Certiorari (With Urgent Prayers for the Immediate Issuance of
resorts within the Philippines. He performed work for the company until sometime in
a Temporary Restraining Order and a Writ of Preliminary Injunction) 17 docketed as CA-G.R.
November 1999, when he figured in an accident that compelled him to go back to Australia
SP No. 95916, which was later consolidated with CA-G.R. SP No. 90845.
while recuperating from his injuries. While in Australia, he was informed by respondent
Ganzon that his services were no longer needed because their intended project would no
longer push through. CA-G.R. SP Nos. 90845 and 95916

The respondents opposed the complaint, contending that their agreement with McBurnie was On February 16, 2007, the CA issued a Resolution 18 granting the respondents’ application for
to jointly invest in and establish a company for the management of hotels. They did not intend a writ of preliminary injunction. It directed the NLRC, McBurnie, and all persons acting for and
to create an employer-employee relationship, and the execution of the employment contract under their authority to refrain from causing the execution and enforcement of the LA’s
that was being invoked by McBurnie was solely for the purpose of allowing McBurnie to decision in favor of McBurnie, conditioned upon the respondents’ posting of a bond in the
obtain an alien work permit in the Philippines. At the time McBurnie left for Australia for his amount of ₱10,000,000.00. McBurnie sought reconsideration of the issuance of the writ of
medical treatment, he had not yet obtained a work permit. preliminary injunction, but this was denied by the CA in its Resolution 19 dated May 29, 2007.

In a Decision6 dated September 30, 2004, the LA declared McBurnie as having been illegally McBurnie then filed with the Court a Petition for Review on Certiorari 20 docketed as G.R. Nos.
dismissed from employment, and thus entitled to receive from the respondents the following 178034 and 178117, assailing the CA Resolutions that granted the respondents’ application
amounts: (a) US$985,162.00 as salary and benefits for the unexpired term of their for the injunctive writ. On July 4, 2007, the Court denied the petition on the ground of
employment contract, (b) ₱2,000,000.00 as moral and exemplary damages, and (c) McBurnie’s failure to comply with the 2004 Rules on Notarial Practice and to sufficiently show
attorney’s fees equivalent to 10% of the total monetary award. that the CA committed any reversible error. 21 A motion for reconsideration was denied with
finality in a Resolution22 dated October 8, 2007.
Feeling aggrieved, the respondents appealed the LA’s Decision to the NLRC. 7 On November
5, 2004, they filed their Memorandum of Appeal 8 and Motion to Reduce Bond9, and posted an Unyielding, McBurnie filed a Motion for Leave (1) To File Supplemental Motion for
appeal bond in the amount of ₱100,000.00. The respondents contended in their Motion to Reconsideration and (2) To Admit the Attached Supplemental Motion for
Reduce Bond, inter alia, that the monetary awards of the LA were null and excessive, Reconsideration,23 which was treated by the Court as a second motion for reconsideration, a
allegedly with the intention of rendering them incapable of posting the necessary appeal prohibited pleading under Section 2, Rule 56 of the Rules of Court. Thus, the motion for leave
bond. They claimed that an award of "more than ₱60 Million Pesos to a single foreigner who was denied by the Court in a Resolution 24 dated November 26, 2007. The Court’s Resolution
had no work permit and who left the country for good one month after the purported dated July 4, 2007 then became final and executory on November 13, 2007; accordingly,
commencement of his employment" was a patent nullity. 10 Furthermore, they claimed that entry of judgment was made in G.R. Nos. 178034 and 178117. 25
because of their business losses that may be attributed to an economic crisis, they lacked the
capacity to pay the bond of almost ₱60 Million, or even the millions of pesos in premium In the meantime, the CA ruled on the merits of CA-G.R. SP No. 90845 and CA-G.R. SP No.
required for such bond. 95916 and rendered its Decision26 dated October 27, 2008, allowing the respondents’ motion
to reduce appeal bond and directing the NLRC to give due course to their appeal. The On September 18, 2009, the Third Division of this Court rendered its Decision 37 which
dispositive portion of the CA Decision reads: reversed the CA Decision dated October 27, 2008 and Resolution dated March 3, 2009. The
dispositive portion reads:
WHEREFORE, in view of the foregoing, the petition for certiorari and prohibition docketed as
CA GR SP No. 90845 and the petition for certiorari docketed as CA GR SP No. 95916 are WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R.
GRANTED. Petitioners’ Motion to Reduce Appeal Bond is GRANTED. Petitioners are hereby SP Nos. 90845 and 95916 dated October 27, 2008 granting respondents’ Motion to Reduce
DIRECTED to post appeal bond in the amount of ₱10,000,000.00. The NLRC is hereby Appeal Bond and ordering the National Labor Relations Commission to give due course to
DIRECTED to give due course to petitioners’ appeal in CA GR SP No. 95916 which is respondents’ appeal, and its March 3, 2009 Resolution denying petitioner’s motion for
ordered remanded to the NLRC for further proceedings. reconsideration, are REVERSED and SET ASIDE. The March 8, 2006 and June 30, 2006
Resolutions of the National Labor Relations Commission in NLRC NCR CA NO. 042913-05
SO ORDERED.27 dismissing respondents’ appeal for failure to perfect an appeal and denying their motion for
reconsideration, respectively, are REINSTATED and AFFIRMED.
On the issue28 of the NLRC’s denial of the respondents’ motion to reduce appeal bond, the
CA ruled that the NLRC committed grave abuse of discretion in immediately denying the SO ORDERED.38
motion without fixing an appeal bond in an amount that was reasonable, as it denied the
respondents of their right to appeal from the decision of the LA. 29 The CA explained that The Court explained that the respondents’ failure to post a bond equivalent in amount to the
"(w)hile Art. 223 of the Labor Code requiring bond equivalent to the monetary award is LA’s monetary award was fatal to the appeal. 39 Although an appeal bond may be reduced
explicit, Section 6, Rule VI of the NLRC Rules of Procedure, as amended, recognized as upon motion by an employer, the following conditions must first be satisfied: (1) the motion to
exception a motion to reduce bond upon meritorious grounds and upon posting of a bond in a reduce bond shall be based on meritorious grounds; and (2) a reasonable amount in relation
reasonable amount in relation to the monetary award." 30 to the monetary award is posted by the appellant. Unless the NLRC grants the motion to
reduce the cash bond within the 10-day reglementary period to perfect an appeal from a
On the issue31 of the NLRC’s dismissal of the appeal on the ground of the respondents’ judgment of the LA, the employer is mandated to post the cash or surety bond securing the
failure to post the additional appeal bond, the CA also found grave abuse of discretion on the full amount within the said 10-day period.40 The respondents’ initial appeal bond of
part of the NLRC, explaining that an appeal bond in the amount of ₱54,083,910.00 was ₱100,000.00 was grossly inadequate compared to the LA’s monetary award.
prohibitive and excessive. Moreover, the appellate court cited the pendency of the petition for
certiorari over the denial of the motion to reduce bond, which should have prevented the The respondents’ first motion for reconsideration 41 was denied by the Court for lack of merit
NLRC from immediately dismissing the respondents’ appeal. 32 via a Resolution42 dated December 14, 2009.

Undeterred, McBurnie filed a motion for reconsideration. At the same time, the respondents Meanwhile, on the basis of the Court’s Decision, McBurnie filed with the NLRC a motion for
moved that the appeal be resolved on the merits by the CA. On March 3, 2009, the CA issued reconsideration with motion to recall and expunge from the records the NLRC Decision dated
a Resolution33 denying both motions. McBurnie then filed with the Court the Petition for November 17, 2009.43 The motion was granted by the NLRC in its Decision 44 dated January
Review on Certiorari34 docketed as G.R. Nos. 186984-85. 14, 2010.45

In the meantime, the NLRC, acting on the CA’s order of remand, accepted the appeal from Undaunted by the denial of their first motion for reconsideration of the Decision dated
the LA’s decision, and in its Decision 35 dated November 17, 2009, reversed and set aside the September 18, 2009, the respondents filed with the Court a Motion for Leave to Submit
Decision of the LA, and entered a new one dismissing McBurnie’s complaint. It explained that Attached Second Motion for Reconsideration46 and Second Motion for
based on records, McBurnie was never an employee of any of the respondents, but a Reconsideration,  which motion for leave was granted in a Resolution 48 dated March 15,
47

potential investor in a project that included said respondents, barring a claim of dismissal, 2010. McBurnie was allowed to submit his comment on the second motion, and the
much less, an illegal dismissal. Granting that there was a contract of employment executed respondents, their reply to the comment. On January 25, 2012, however, the Court issued a
by the parties, McBurnie failed to obtain a work permit which would have allowed him to work Resolution49 denying the second motion "for lack of merit," "considering that a second motion
for any of the respondents.36 In the absence of such permit, the employment agreement was for reconsideration is a prohibited pleading x x x." 50
void and thus, could not be the source of any right or obligation.
The Court’s Decision dated September 18, 2009 became final and executory on March 14,
Court Decision dated September 18, 2009 2012. Thus, entry of judgment51 was made in due course, as follows:
ENTRY OF JUDGMENT SHOULD BE GIVEN A LIBERAL INTERPRETATION, ESPECIALLY IF THERE ARE
SPECIAL MERITORIOUS CIRCUMSTANCES AND ISSUES.
This is to certify that on September 18, 2009 a decision rendered in the above-entitled cases
was filed in this Office, the dispositive part of which reads as follows: IV. THE LA’S JUDGMENT WAS PATENTLY VOID SINCE IT AWARDS MORE THAN ₱60
MILLION PESOS TO A SINGLE FOREIGNER WHO HAD NO WORK PERMIT, AND NO
xxxx WORKING VISA.

and that the same has, on March 14, 2012 become final and executory and is hereby V.
recorded in the Book of Entries of Judgments.52
PETITIONER MCBURNIE DID NOT IMPLEAD THE NATIONAL LABOR RELATIONS
The Entry of Judgment indicated that the same was made for the Court’s Decision rendered COMMISSION (NLRC) IN HIS APPEAL HEREIN, MAKING THE APPEAL INEFFECTIVE
in G.R. Nos. 186984-85. AGAINST THE NLRC.

On March 27, 2012, the respondents filed a Motion for Leave to File Attached Third Motion VI.
for Reconsideration, with an attached Motion for Reconsideration (on the Honorable Court’s
25 January 2012 Resolution) with Motion to Refer These Cases to the Honorable Court En NLRC HAS DISMISSED THE COMPLAINT OF PETITIONER MCBURNIE IN ITS
Banc.53 The third motion for reconsideration is founded on the following grounds: NOVEMBER 17, 2009 DECISION.

I. VII.

THE PREVIOUS 15 MARCH 2010 RESOLUTION OF THE HONORABLE COURT THE HONORABLE COURT’S 18 SEPTEMBER 2009 DECISION WAS TAINTED WITH
ACTUALLY GRANTED RESPONDENTS’ "MOTION FOR LEAVE TO SUBMIT A SECOND VERY SERIOUS IRREGULARITIES.
MOTION FOR RECONSIDERATION."
VIII.
HENCE, RESPONDENTS RESPECTFULLY CONTEND THAT THE SUBSEQUENT 25
JANUARY 2012 RESOLUTION CANNOT DENY THE " SECOND MOTION FOR GR NOS. 178034 AND 178117 HAVE BEEN INADVERTENTLY INCLUDED IN THIS CASE.
RECONSIDERATION " ON THE GROUND THAT IT IS A PROHIBITED PLEADING.
MOREOVER, IT IS RESPECTFULLY CONTENDED THAT THERE ARE VERY PECULIAR IX.
CIRCUMSTANCES AND NUMEROUS IMPORTANT ISSUES IN THESE CASES THAT
CLEARLY JUSTIFY GIVING DUE COURSE TO RESPONDENTS’ "SECOND MOTION FOR
RECONSIDERATION," WHICH ARE: THE HONORABLE COURT DID NOT DULY RULE UPON THE OTHER VERY
MERITORIOUS ARGUMENTS OF THE RESPONDENTS WHICH ARE AS FOLLOWS:
II.
(A) PETITIONER NEVER ATTENDED ANY OF ALL 14 HEARINGS BEFORE THE
[LA] (WHEN 2 MISSED HEARINGS MEAN DISMISSAL).
THE 10 MILLION PESOS BOND WHICH WAS POSTED IN COMPLIANCE WITH THE
OCTOBER 27, 2008 DECISION OF THE COURT OF APPEALS IS A SUBSTANTIAL AND
SPECIAL MERITORIOUS CIRCUMSTANCE TO MERIT RECONSIDERATION OF THIS (B) PETITIONER REFERRED TO HIMSELF AS A "VICTIM" OF LEISURE
APPEAL. EXPERTS, INC., BUT NOT OF ANY OF THE RESPONDENTS.

III. (C) PETITIONER’S POSITIVE LETTER TO RESPONDENT MR. EULALIO GANZON

CLEARLY SHOWS THAT HE WAS NOT ILLEGALLY DISMISSED NOR EVEN
DISMISSED BY ANY OF THE RESPONDENTS AND PETITIONER EVEN
THE HONORABLE COURT HAS HELD IN NUMEROUS LABOR CASES THAT WITH PROMISED TO PAY HIS DEBTS FOR ADVANCES MADE BY RESPONDENTS.
RESPECT TO ARTICLE 223 OF THE LABOR CODE, THE REQUIREMENTS OF THE LAW
 (D) PETITIONER WAS NEVER EMPLOYED BY ANY OF THE RESPONDENTS. The general rule, however, against second and subsequent motions for reconsideration
PETITIONER PRESENTED WORK FOR CORONADO BEACH RESORT WHICH IS admits of settled exceptions. For one, the present Internal Rules of the Supreme Court,
[NEITHER] OWNED NOR CONNECTED WITH ANY OF THE RESPONDENTS. particularly Section 3, Rule 15 thereof, provides:

(E) THE [LA] CONCLUDED THAT PETITIONER WAS DISMISSED EVEN IF THERE Sec. 3. Second motion for reconsideration. ― The Court shall not entertain a second motion
WAS ABSOLUTELY NO EVIDENCE AT ALL PRESENTED THAT PETITIONER for reconsideration, and any exception to this rule can only be granted in the higher interest of
WAS DISMISSED BY THE RESPONDENTS. justice by the Court en banc upon a vote of at least two-thirds of its actual membership. There
is reconsideration "in the higher interest of justice" when the assailed decision is not only
(F) PETITIONER LEFT THE PHILIPPINES FOR AUSTRALIA JUST 2 MONTHS legally erroneous, but is likewise patently unjust and potentially capable of causing
AFTER THE START OF THE ALLEGED EMPLOYMENT AGREEMENT, AND HAS unwarranted and irremediable injury or damage to the parties. A second motion for
STILL NOT RETURNED TO THE PHILIPPINES AS CONFIRMED BY THE BUREAU reconsideration can only be entertained before the ruling sought to be reconsidered becomes
OF IMMIGRATION. final by operation of law or by the Court’s declaration.

(G) PETITIONER COULD NOT HAVE SIGNED AND PERSONALLY APPEARED x x x x (Emphasis ours)
BEFORE THE NLRC ADMINISTERING OFFICER AS INDICATED IN THE
COMPLAINT SHEET SINCE HE LEFT THE COUNTRY 3 YEARS BEFORE THE In a line of cases, the Court has then entertained and granted second motions for
COMPLAINT WAS FILED AND HE NEVER CAME BACK.54 reconsideration "in the higher interest of substantial justice," as allowed under the Internal
Rules when the assailed decision is "legally erroneous," "patently unjust" and "potentially
On September 4, 2012, the Court en banc 55 issued a Resolution56 accepting the case from capable of causing unwarranted and irremediable injury or damage to the parties." In
the Third Division. It also issued a temporary restraining order (TRO) enjoining the Tirazona v. Philippine EDS Techno-Service, Inc. (PET, Inc.), 59 we also explained that a
implementation of the LA’s Decision dated September 30, 2004. This prompted McBurnie’s second motion for reconsideration may be allowed in instances of "extraordinarily persuasive
filing of a Motion for Reconsideration,57 where he invoked the fact that the Court’s Decision reasons and only after an express leave shall have been obtained." 60 In Apo Fruits
dated September 18, 2009 had become final and executory, with an entry of judgment Corporation v. Land Bank of the Philippines,61 we allowed a second motion for
already made by the Court. reconsideration as the issue involved therein was a matter of public interest, as it pertained to
the proper application of a basic constitutionally-guaranteed right in the government’s
implementation of its agrarian reform program. In San Miguel Corporation v. NLRC, 62 the
Our Ruling
Court set aside the decisions of the LA and the NLRC that favored claimants-security guards
upon the Court’s review of San Miguel Corporation’s second motion for reconsideration. In
In light of pertinent law and jurisprudence, and upon taking a second hard look of the parties’ Vir-Jen Shipping and Marine Services, Inc. v. NLRC, et al., 63 the Court en banc reversed on a
arguments and the records of the case, the Court has ascertained that a reconsideration of third motion for reconsideration the ruling of the Court’s Division on therein private
this Court’s Decision dated September 18, 2009 and Resolutions dated December 14, 2009 respondents’ claim for wages and monetary benefits.
and January 25, 2012, along with the lifting of the entry of judgment in G.R. No. 186984-85, is
in order.
It is also recognized that in some instances, the prudent action towards a just resolution of a
case is for the Court to suspend rules of procedure, for "the power of this Court to suspend its
The Court’s acceptance of the own rules or to except a particular case from its operations whenever the purposes of justice
require it, cannot be questioned."64 In De Guzman v. Sandiganbayan,65 the Court, thus,
third motion for reconsideration explained:

At the outset, the Court emphasizes that second and subsequent motions for reconsideration The rules of procedure should be viewed as mere tools designed to facilitate the attainment
are, as a general rule, prohibited. Section 2, Rule 52 of the Rules of Court provides that "no of justice. Their strict and rigid application, which would result in technicalities that tend to
second motion for reconsideration of a judgment or final resolution by the same party shall be frustrate rather than promote substantial justice, must always be avoided. Even the Rules of
entertained." The rule rests on the basic tenet of immutability of judgments. "At some point, a Court envision this liberality. This power to suspend or even disregard the rules can be so
decision becomes final and executory and, consequently, all litigations must come to an pervasive and encompassing so as to alter even that which this Court itself has already
end."58 declared to be final, as we are now compelled to do in this case. x x x.
xxxx circumstances, (c) the merits of the case, (d) a cause not entirely attributable to the fault or
negligence of the party favored by the suspension of the rules, (e) a lack of any showing that
The Rules of Court was conceived and promulgated to set forth guidelines in the dispensation the review sought is merely frivolous and dilatory, and (f) the other party will not be unjustly
of justice but not to bind and chain the hand that dispenses it, for otherwise, courts will be prejudiced thereby.73 (Citations omitted)
mere slaves to or robots of technical rules, shorn of judicial discretion. That is precisely why
courts in rendering real justice have always been, as they in fact ought to be, conscientiously As we shall explain, the instant case also qualifies as an exception to, first, the proscription
guided by the norm that when on the balance, technicalities take a backseat against against second and subsequent motions for reconsideration, and second, the rule on
substantive rights, and not the other way around. Truly then, technicalities, in the appropriate immutability of judgments; a reconsideration of the Decision dated September 18, 2009,
language of Justice Makalintal, "should give way to the realities of the situation." x x along with the Resolutions dated December 14, 2009 and January 25, 2012, is justified by the
x.66 (Citations omitted) higher interest of substantial justice.

Consistent with the foregoing precepts, the Court has then reconsidered even decisions that To begin with, the Court agrees with the respondents that the Court’s prior resolve to grant ,
have attained finality, finding it more appropriate to lift entries of judgments already made in and not just merely note, in a Resolution dated March 15, 2010 the respondents’ motion for
these cases. In Navarro v. Executive Secretary, 67 we reiterated the pronouncement in De leave to submit their second motion for reconsideration already warranted a resolution and
Guzman that the power to suspend or even disregard rules of procedure can be so pervasive discussion of the motion for reconsideration on its merits. Instead of doing this, however, the
and compelling as to alter even that which this Court itself has already declared final. The Court issued on January 25, 2012 a Resolution 74 denying the motion to reconsider for lack of
Court then recalled in Navarro an entry of judgment after it had determined the validity and merit, merely citing that it was a "prohibited pleading under Section 2, Rule 52 in relation to
constitutionality of Republic Act No. 9355, explaining that: Section 4, Rule 56 of the 1997 Rules of Civil Procedure, as amended." 75 In League of Cities
of the Philippines (LCP) v. Commission on Elections, 76 we reiterated a ruling that when a
Verily, the Court had, on several occasions, sanctioned the recall of entries of judgment in motion for leave to file and admit a second motion for reconsideration is granted by the Court,
light of attendant extraordinary circumstances. The power to suspend or even disregard rules the Court therefore allows the filing of the second motion for reconsideration. In such a case,
of procedure can be so pervasive and compelling as to alter even that which this Court itself the second motion for reconsideration is no longer a prohibited pleading. Similarly in this
had already declared final. In this case, the compelling concern is not only to afford the case, there was then no reason for the Court to still consider the respondents’ second motion
movants-intervenors the right to be heard since they would be adversely affected by the for reconsideration as a prohibited pleading, and deny it plainly on such ground. The Court
judgment in this case despite not being original parties thereto, but also to arrive at the intends to remedy such error through this resolution.
correct interpretation of the provisions of the [Local Government Code (LGC)] with respect to
the creation of local government units. x x x.68 (Citations omitted) More importantly, the Court finds it appropriate to accept the pending motion for
reconsideration and resolve it on the merits in order to rectify its prior disposition of the main
In Munoz v. CA,69 the Court resolved to recall an entry of judgment to prevent a miscarriage issues in the petition. Upon review, the Court is constrained to rule differently on the petitions.
of justice. This justification was likewise applied in Tan Tiac Chiong v. Hon. Cosico, 70 wherein We have determined the grave error in affirming the NLRC’s rulings, promoting results that
the Court held that: are patently unjust for the respondents, as we consider the facts of the case, pertinent law,
jurisprudence, and the degree of the injury and damage to the respondents that will inevitably
result from the implementation of the Court’s Decision dated September 18, 2009.
The recall of entries of judgments, albeit rare, is not a novelty. In Muñoz v. CA , where the
case was elevated to this Court and a first and second motion for reconsideration had been
denied with finality , the Court, in the interest of substantial justice, recalled the Entry of The rule on appeal bonds
Judgment as well as the letter of transmittal of the records to the Court of Appeals. 71 (Citation
omitted) We emphasize that the crucial issue in this case concerns the sufficiency of the appeal bond
that was posted by the respondents. The present rule on the matter is Section 6, Rule VI of
In Barnes v. Judge Padilla,72 we ruled: the 2011 NLRC Rules of Procedure, which was substantially the same provision in effect at
the time of the respondents’ appeal to the NLRC, and which reads:
A final and executory judgment can no longer be attacked by any of the parties or be
modified, directly or indirectly, even by the highest court of the land. RULE VI
APPEALS
However, this Court has relaxed this rule in order to serve substantial justice considering (a)
matters of life, liberty, honor or property, (b) the existence of special or compelling
Sec. 6. BOND. – In case the decision of the Labor Arbiter or the Regional Director involves a reasonable amount in relation to the monetary award is posted by the appellant, otherwise
monetary award, an appeal by the employer may be perfected only upon the posting of a the filing of the motion to reduce bond shall not stop the running of the period to perfect an
cash or surety bond. The appeal bond shall either be in cash or surety in an amount appeal. The qualification effectively requires that unless the NLRC grants the reduction of the
equivalent to the monetary award, exclusive of damages and attorney’s fees. cash bond within the 10-day reglementary period, the employer is still expected to post the
cash or surety bond securing the full amount within the said 10-day period. If the NLRC does
xxxx eventually grant the motion for reduction after the reglementary period has elapsed, the
correct relief would be to reduce the cash or surety bond already posted by the employer
within the 10-day period.77 (Emphasis supplied; underscoring ours)
No motion to reduce bond shall be entertained except on meritorious grounds and upon the
posting of a bond in a reasonable amount in relation to the monetary award.
To begin with, the Court rectifies its prior pronouncement – the unqualified statement that
even an appellant who seeks a reduction of an appeal bond before the NLRC is expected to
The filing of the motion to reduce bond without compliance with the requisites in the
post a cash or surety bond securing the full amount of the judgment award within the 10-day
preceding paragraph shall not stop the running of the period to perfect an appeal. (Emphasis
reglementary period to perfect the appeal.
supplied)

The suspension of the period to

While the CA, in this case, allowed an appeal bond in the reduced amount of ₱10,000,000.00
perfect the appeal upon the filing of
and then ordered the case’s remand to the NLRC, this Court’s Decision dated September 18,
a motion to reduce bond
2009 provides otherwise, as it reads in part:

To clarify, the prevailing jurisprudence on the matter provides that the filing of a motion to
The posting of a bond is indispensable to the perfection of an appeal in cases involving
reduce bond, coupled with compliance with the two conditions emphasized in Garcia v. KJ
monetary awards from the decision of the Labor Arbiter. The lawmakers clearly intended to
Commercial78 for the grant of such motion, namely, (1) a meritorious ground, and (2) posting
make the bond a mandatory requisite for the perfection of an appeal by the employer as
of a bond in a reasonable amount, shall suffice to suspend the running of the period to perfect
inferred from the provision that an appeal by the employer may be perfected "only upon the
an appeal from the labor arbiter’s decision to the NLRC. 79 To require the full amount of the
posting of a cash or surety bond." The word "only" makes it clear that the posting of a cash or
bond within the 10-day reglementary period would only render nugatory the legal provisions
surety bond by the employer is the essential and exclusive means by which an employer’s
which allow an appellant to seek a reduction of the bond. Thus, we explained in Garcia:
appeal may be perfected. x x x.

The filing of a motion to reduce bond and compliance with the two conditions stop the running
Moreover, the filing of the bond is not only mandatory but a jurisdictional requirement as well,
of the period to perfect an appeal. x x x
that must be complied with in order to confer jurisdiction upon the NLRC. Non-compliance
therewith renders the decision of the Labor Arbiter final and executory. This requirement is
intended to assure the workers that if they prevail in the case, they will receive the money xxxx
judgment in their favor upon the dismissal of the employer’s appeal. It is intended to
discourage employers from using an appeal to delay or evade their obligation to satisfy their The NLRC has full discretion to grant or deny the motion to reduce bond, and it may rule on
employees’ just and lawful claims. the motion beyond the 10-day period within which to perfect an appeal. Obviously, at the time
of the filing of the motion to reduce bond and posting of a bond in a reasonable amount, there
xxxx is no assurance whether the appellant’s motion is indeed based on "meritorious ground" and
whether the bond he or she posted is of a "reasonable amount." Thus, the appellant always
runs the risk of failing to perfect an appeal.
Thus, it behooves the Court to give utmost regard to the legislative and administrative intent
to strictly require the employer to post a cash or surety bond securing the full amount of the
monetary award within the 10[-]day reglementary period. Nothing in the Labor Code or the x x x In order to give full effect to the provisions on motion to reduce bond, the appellant must
NLRC Rules of Procedure authorizes the posting of a bond that is less than the monetary be allowed to wait for the ruling of the NLRC on the motion even beyond the 10-day period to
award in the judgment, or would deem such insufficient posting as sufficient to perfect the perfect an appeal. If the NLRC grants the motion and rules that there is indeed meritorious
appeal. ground and that the amount of the bond posted is reasonable, then the appeal is perfected. If
the NLRC denies the motion, the appellant may still file a motion for reconsideration as
provided under Section 15, Rule VII of the Rules. If the NLRC grants the motion for
While the bond may be reduced upon motion by the employer, this is subject to the conditions
reconsideration and rules that there is indeed meritorious ground and that the amount of the
that (1) the motion to reduce the bond shall be based on meritorious grounds; and (2) a
bond posted is reasonable, then the appeal is perfected. If the NLRC denies the motion, then reasonableness of the bond tendered under the circumstances. 83 Time and again, the Court
the decision of the labor arbiter becomes final and executory. has cautioned the NLRC to give Article 223 of the Labor Code, particularly the provisions
requiring bonds in appeals involving monetary awards, a liberal interpretation in line with the
xxxx desired objective of resolving controversies on the merits. 84 The NLRC’s failure to take action
on the motion to reduce the bond in the manner prescribed by law and jurisprudence then
cannot be countenanced. Although an appeal by parties from decisions that are adverse to
In any case, the rule that the filing of a motion to reduce bond shall not stop the running of the
their interests is neither a natural right nor a part of due process, it is an essential part of our
period to perfect an appeal is not absolute. The Court may relax the rule. In Intertranz
judicial system. Courts should proceed with caution so as not to deprive a party of the right to
Container Lines, Inc. v. Bautista, the Court held:
appeal, but rather, ensure that every party has the amplest opportunity for the proper and just
disposition of their cause, free from the constraints of technicalities. 85 Considering the
"Jurisprudence tells us that in labor cases, an appeal from a decision involving a monetary mandate of labor tribunals, the principle equally applies to them.
award may be perfected only upon the posting of cash or surety bond. The Court, however,
has relaxed this requirement under certain exceptional circumstances in order to resolve
Given the circumstances of the case, the Court’s affirmance in the Decision dated September
controversies on their merits. These circumstances include: (1) fundamental consideration of
18, 2009 of the NLRC’s strict application of the rule on appeal bonds then demands a re-
substantial justice; (2) prevention of miscarriage of justice or of unjust enrichment; and (3)
examination. Again, the emerging trend in our jurisprudence is to afford every party-litigant
special circumstances of the case combined with its legal merits, and the amount and the
the amplest opportunity for the proper and just determination of his cause, free from the
issue involved."80 (Citations omitted and emphasis ours)
constraints of technicalities.86 Section 2, Rule I of the NLRC Rules of Procedure also provides
the policy that "the Rules shall be liberally construed to carry out the objectives of the
A serious error of the NLRC was its outright denial of the motion to reduce the bond, without Constitution, the Labor Code of the Philippines and other relevant legislations, and to assist
even considering the respondents’ arguments and totally unmindful of the rules and the parties in obtaining just, expeditious and inexpensive resolution and settlement of labor
jurisprudence that allow the bond’s reduction. Instead of resolving the motion to reduce the disputes."87
bond on its merits, the NLRC insisted on an amount that was equivalent to the monetary
award, merely explaining:
In accordance with the foregoing, although the general rule provides that an appeal in labor
cases from a decision involving a monetary award may be perfected only upon the posting of
We are constrained to deny respondents’ motion for reduction. As held by the Supreme Court a cash or surety bond, the Court has relaxed this requirement under certain exceptional
in a recent case, in cases involving monetary award, an employer seeking to appeal the circumstances in order to resolve controversies on their merits. These circumstances include:
Labor Arbiter’s decision to the Commission is unconditionally required by Art. 223, Labor (1) the fundamental consideration of substantial justice; (2) the prevention of miscarriage of
Code to post bond in the amount equivalent to the monetary award (Calabash Garments vs. justice or of unjust enrichment; and (3) special circumstances of the case combined with its
NLRC, G.R. No. 110827, August 8, 1996). x x x81 (Emphasis ours) legal merits, and the amount and the issue involved. 88 Guidelines that are applicable in the
reduction of appeal bonds were also explained in Nicol v. Footjoy Industrial
When the respondents sought to reconsider, the NLRC still refused to fully decide on the Corporation.89 The bond requirement in appeals involving monetary awards has been and
motion. It refused to at least make a preliminary determination of the merits of the appeal, as may be relaxed in meritorious cases, including instances in which (1) there was substantial
it held: compliance with the Rules, (2) surrounding facts and circumstances constitute meritorious
grounds to reduce the bond, (3) a liberal interpretation of the requirement of an appeal bond
We are constrained to dismiss respondents’ Motion for Reconsideration. Respondents’ would serve the desired objective of resolving controversies on the merits, or (4) the
contention that the appeal bond is excessive and based on a decision which is a patent nullity appellants, at the very least, exhibited their willingness and/or good faith by posting a partial
involves the merits of the case. x x x82 bond during the reglementary period.90

Prevailing rules and jurisprudence In Blancaflor v. NLRC,91 the Court also emphasized that while Article 223 92 of the Labor Code,
allow the reduction of appeal bonds. as amended by Republic Act No. 6715, which requires a cash or surety bond in an amount
equivalent to the monetary award in the judgment appealed from may be considered a
By such haste of the NLRC in peremptorily denying the respondents’ motion without jurisdictional requirement for the perfection of an appeal, nevertheless, adhering to the
considering the respondents’ arguments, it effectively denied the respondents of their principle that substantial justice is better served by allowing the appeal on the merits to be
opportunity to seek a reduction of the bond even when the same is allowed under the rules threshed out by the NLRC, the foregoing requirement of the law should be given a liberal
and settled jurisprudence. It was equivalent to the NLRC’s refusal to exercise its discretion, interpretation.
as it refused to determine and rule on a showing of meritorious grounds and the
As the Court, nonetheless, remains firm on the importance of appeal bonds in appeals from Meritorious ground as a condition
monetary awards of LAs, we stress that the NLRC, pursuant to Section 6, Rule VI of the for the reduction of the appeal bond
NLRC Rules of Procedure, shall only accept motions to reduce bond that are coupled with the
posting of a bond in a reasonable amount. Time and again, we have explained that the bond In all cases, the reduction of the appeal bond shall be justified by meritorious grounds and
requirement imposed upon appellants in labor cases is intended to ensure the satisfaction of accompanied by the posting of the required appeal bond in a reasonable amount.
awards that are made in favor of appellees, in the event that their claims are eventually
sustained by the courts.93 On the part of the appellants, its posting may also signify their good The requirement on the existence of a "meritorious ground" delves on the worth of the parties’
faith and willingness to recognize the final outcome of their appeal. arguments, taking into account their respective rights and the circumstances that attend the
case. The condition was emphasized in University Plans Incorporated v. Solano, 95 wherein
At the time of a motion to reduce appeal bond’s filing, the question of what constitutes "a the Court held that while the NLRC’s Revised Rules of Procedure "allows the [NLRC] to
reasonable amount of bond" that must accompany the motion may be subject to differing reduce the amount of the bond, the exercise of the authority is not a matter of right on the
interpretations of litigants. The judgment of the NLRC which has the discretion under the law part of the movant, but lies within the sound discretion of the NLRC upon a showing of
to determine such amount cannot as yet be invoked by litigants until after their motions to meritorious grounds."96 By jurisprudence, the merit referred to may pertain to an appellant’s
reduce appeal bond are accepted. lack of financial capability to pay the full amount of the bond, 97 the merits of the main appeal
such as when there is a valid claim that there was no illegal dismissal to justify the
Given these limitations, it is not uncommon for a party to unduly forfeit his opportunity to seek award,98 the absence of an employer-employee relationship, 99 prescription of claims,100 and
a reduction of the required bond and thus, to appeal, when the NLRC eventually disagrees other similarly valid issues that are raised in the appeal. 101 For the purpose of determining a
with the party’s assessment. These have also resulted in the filing of numerous petitions "meritorious ground", the NLRC is not precluded from receiving evidence, or from making a
against the NLRC, citing an alleged grave abuse of discretion on the part of the labor tribunal preliminary determination of the merits of the appellant’s contentions. 102
for its finding on the sufficiency or insufficiency of posted appeal bonds.
In this case, the NLRC then should have considered the respondents’ arguments in the
It is in this light that the Court finds it necessary to set a parameter for the litigants’ and the memorandum on appeal that was filed with the motion to reduce the requisite appeal bond.
NLRC’s guidance on the amount of bond that shall hereafter be filed with a motion for a Although a consideration of said arguments at that point would have been merely preliminary
bond’s reduction. To ensure that the provisions of Section 6, Rule VI of the NLRC Rules of and should not in any way bind the eventual outcome of the appeal, it was apparent that the
Procedure that give parties the chance to seek a reduction of the appeal bond are effectively respondents’ defenses came with an indication of merit that deserved a full review of the
carried out, without however defeating the benefits of the bond requirement in favor of a decision of the LA. The CA, by its Resolution dated February 16, 2007, even found justified
winning litigant, all motions to reduce bond that are to be filed with the NLRC shall be the issuance of a preliminary injunction to enjoin the immediate execution of the LA’s
accompanied by the posting of a cash or surety bond equivalent to 10% of the monetary decision, and this Court, a temporary restraining order on September 4, 2012.
award that is subject of the appeal, which shall provisionally be deemed the reasonable
amount of the bond in the meantime that an appellant’s motion is pending resolution by the Significantly, following the CA’s remand of the case to the NLRC, the latter even rendered a
Commission. In conformity with the NLRC Rules, the monetary award, for the purpose of Decision that contained findings that are inconsistent with McBurnie’s claims. The NLRC
computing the necessary appeal bond, shall exclude damages and attorney’s fees. 94 Only reversed and set aside the decision of the LA, and entered a new one dismissing McBurnie’s
after the posting of a bond in the required percentage shall an appellant’s period to perfect an complaint. It explained that McBurnie was not an employee of the respondents; thus, they
appeal under the NLRC Rules be deemed suspended. could not have dismissed him from employment. The purported employment contract of the
respondents with the petitioner was qualified by the conditions set forth in a letter dated May
The foregoing shall not be misconstrued to unduly hinder the NLRC’s exercise of its 11, 1999.
discretion, given that the percentage of bond that is set by this guideline shall be merely
provisional. The NLRC retains its authority and duty to resolve the motion and determine the For the NLRC, the employment agreement could not have given rise to an employer-
final amount of bond that shall be posted by the appellant, still in accordance with the employee relationship by reason of legal impossibility. The two conditions that form part of
standards of "meritorious grounds" and "reasonable amount". Should the NLRC, after their agreement, namely, the successful completion of the project financing for the hotel
considering the motion’s merit, determine that a greater amount or the full amount of the bond project in Baguio City and McBurnie’s acquisition of an Alien Employment Permit, remained
needs to be posted by the appellant, then the party shall comply accordingly. The appellant unsatisfied.104 The NLRC concluded that McBurnie was instead a potential investor in a
shall be given a period of 10 days from notice of the NLRC order within which to perfect the project that included Ganzon, but the said project failed to pursue due to lack of funds. Any
appeal by posting the required appeal bond. work performed by McBurnie in relation to the project was merely preliminary to the business
venture and part of his "due diligence" study before pursuing the project, "done at his own
instance, not in furtherance of the employment contract but for his own investment remand the case to the NLRC, which should first determine the merits of the motion. In
purposes."105 Lastly, the alleged employment of the petitioner would have been void for being University Plans,112 the Court also reversed the outright dismissal of an appeal where the
contrary to law, since it is undisputed that McBurnie did not have any work permit. The NLRC bond posted in a judgment award of more than ₱30,000,000.00 was ₱30,000.00. The Court
declared: then directed the NLRC to first determine the merit, or lack of merit, of the motion to reduce
the bond, after the appellant therein claimed that it was under receivership and thus, could
Absent an employment permit, any employment relationship that McBurnie contemplated with not dispose of its assets within a short notice. Clearly, the rule on the posting of an appeal
the respondents was void for being contrary to law. A void or inexistent contract, in turn, has bond should not be allowed to defeat the substantive rights of the parties. 113
no force and effect from the beginning as if it had never been entered into. Thus, without an
Alien Employment Permit, the "Employment Agreement" is void and could not be the source Notably, in the present case, following the CA’s rendition of its Decision which allowed a
of a right or obligation. In support thereof, the DOLE issued a certification that McBurnie has reduced appeal bond, the respondents have posted a bond in the amount of ₱10,000,000.00.
neither applied nor been issued an Alien Employment Permit (p. 204, Records). 106 In Rosewood, the Court deemed the posting of a surety bond of ₱50,000.00, coupled with a
motion to reduce the appeal bond, as substantial compliance with the legal requirements for
McBurnie moved to reconsider, citing the Court’s Decision of September 18, 2009 that an appeal from a ₱789,154.39 monetary award "considering the clear merits which appear,
reversed and set aside the CA’s Decision authorizing the remand. Although the NLRC res ipsa loquitor, in the appeal from the LA’s Decision, and the petitioner’s substantial
granted the motion on the said ground via a Decision 107 that set aside the NLRC’s Decision compliance with rules governing appeals." 114 The foregoing jurisprudence strongly indicate
dated November 17, 2009, the findings of the NLRC in the November 17, 2009 decision merit that in determining the reasonable amount of appeal bonds, the Court primarily considers the
consideration, especially since the findings made therein are supported by the case records. merits of the motions and appeals.

In addition to the apparent merit of the respondents’ appeal, the Court finds the reduction of Given the circumstances in this case and the merits of the respondents’ arguments before the
the appeal bond justified by the substantial amount of the LA’s monetary award. Given its NLRC, the Court holds that the respondents had posted a bond in a "reasonable amount",
considerable amount, we find reason in the respondents’ claim that to require an appeal bond and had thus complied with the requirements for the perfection of an appeal from the LA’s
in such amount could only deprive them of the right to appeal, even force them out of decision. The CA was correct in ruling that:
business and affect the livelihood of their employees. 108 In Rosewood Processing, Inc. v.
NLRC,109 we emphasized: "Where a decision may be made to rest on informed judgment In the case of Nueva Ecija I Electric Cooperative, Inc. (NEECO I) Employees Association,
rather than rigid rules, the equities of the case must be accorded their due weight because President Rodolfo Jimenez, and members, Reynaldo Fajardo, et al. vs. NLRC, Nueva Ecija I
labor determinations should not be ‘secundum rationem but also secundum caritatem.’" 110 Electric Cooperative, Inc. (NEECO I) and Patricio de la Peña (GR No. 116066, January 24,
2000), the Supreme Court recognized that: "the NLRC, in its Resolution No. 11-01-91 dated
What constitutes a reasonable November 7, 1991 deleted the phrase "exclusive of moral and exemplary damages as well as
amount in the determination of the attorney’s fees in the determination of the amount of bond, and provided a safeguard against
final amount of appeal bond the imposition of excessive bonds by providing that "(T)he Commission may in meritorious
cases and upon motion of the appellant, reduce the amount of the bond."
As regards the requirement on the posting of a bond in a "reasonable amount," the Court
holds that the final determination thereof by the NLRC shall be based primarily on the merits In the case of Cosico, Jr. vs. NLRC, 272 SCRA 583, it was held:
of the motion and the main appeal.
"The unreasonable and excessive amount of bond would be oppressive and unjust and would
Although the NLRC Rules of Procedure, particularly Section 6 of Rule VI thereof, provides have the effect of depriving a party of his right to appeal."
that the bond to be posted shall be "in a reasonable amount in relation to the monetary award
," the merit of the motion shall always take precedence in the determination. Settled is the xxxx
rule that procedural rules were conceived, and should thus be applied in a manner that would
only aid the attainment of justice. If a stringent application of the rules would hinder rather In dismissing outright the motion to reduce bond filed by petitioners, NLRC abused its
than serve the demands of substantial justice, the former must yield to the latter. 111 discretion. It should have fixed an appeal bond in a reasonable amount. Said dismissal
deprived petitioners of their right to appeal the Labor Arbiter’s decision.
Thus, in Nicol where the appellant posted a bond of ₱10,000,000.00 upon an appeal from the
LA’s award of ₱51,956,314.00, the Court, instead of ruling right away on the reasonableness xxxx
of the bond’s amount solely on the basis of the judgment award, found it appropriate to
NLRC Rules allow reduction of appeal bond on meritorious grounds (Sec. 6, Rule VI, NLRC The law and the rules are consistent in stating that the employment permit must be acquired
Rules of Procedure). This Court finds the appeal bond in the amount of ₱54,083,910.00 prior to employment. The Labor Code states: "Any alien seeking admission to the Philippines
prohibitive and excessive, which constitutes a meritorious ground to allow a motion for for employment purposes and any domestic or foreign employer who desires to engage an
reduction thereof.115 alien for employment in the Philippines shall obtain an employment permit from the
Department of Labor." Section 4, Rule XIV, Book I of the Implementing Rules and
The foregoing declaration of the Court requiring a bond in a reasonable amount, taking into Regulations provides:
account the merits of the motion and the appeal, is consistent with the oft-repeated principle
that letter-perfect rules must yield to the broader interest of substantial justice. 116 "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
The effect of a denial of the appeal to the NLRC permit from the Ministry. If an alien enters the country under a non-working visa and wishes
to be employed thereafter, he may be allowed to be employed upon presentation of a duly
approved employment permit."
In finding merit in the respondents’ motion for reconsideration, we also take into account the
unwarranted results that will arise from an implementation of the Court’s Decision dated
September 18, 2009. We emphasize, moreover, that although a remand and an order upon Galera cannot come to this Court with unclean hands. To grant Galera’s prayer is to sanction
the NLRC to give due course to the appeal would have been the usual course after a finding the violation of the Philippine labor laws requiring aliens to secure work permits before their
that the conditions for the reduction of an appeal bond were duly satisfied by the employment. We hold that the status quo must prevail in the present case and we leave the
respondents, given such results, the Court finds it necessary to modify the CA’s order of parties where they are. This ruling, however, does not bar Galera from seeking relief from
remand, and instead rule on the dismissal of the complaint against the respondents. other jurisdictions.119 (Citations omitted and underscoring ours)

Without the reversal of the Court’s Decision and the dismissal of the complaint against the Clearly, this circumstance on the failure of McBurnie to obtain an employment permit, by
respondents, McBurnie would be allowed to claim benefits under our labor laws despite his itself, necessitates the dismissal of his labor complaint.
failure to comply with a settled requirement for foreign nationals.
Furthermore, as has been previously discussed, the NLRC has ruled in its Decision dated
Considering that McBurnie, an Australian, alleged illegal dismissal and sought to claim under November 17, 2009 on the issue of illegal dismissal. It declared that McBurnie was never an
our labor laws, it was necessary for him to establish, first and foremost, that he was qualified employee of any of the respondents.120 It explained:
and duly authorized to obtain employment within our jurisdiction. A requirement for foreigners
who intend to work within the country is an employment permit, as provided under Article 40, All these facts and circumstances prove that McBurnie was never an employee of Eulalio
Title II of the Labor Code which reads: Ganzon or the respondent companies, but a potential investor in a project with a group
including Eulalio Ganzon and Martinez but said project did not take off because of lack of
Art. 40. Employment permit for non-resident aliens. Any alien seeking admission to the funds.
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 McBurnie further claims that in conformity with the provision of the employment contract
the Department of Labor. pertaining to the obligation of the respondents to provide housing, respondents assigned him
Condo Unit # 812 of the Makati Cinema Square Condominium owned by the respondents. He
In WPP Marketing Communications, Inc. v. Galera, 117 we held that a foreign national’s failure was also allowed to use a Hyundai car. If it were true that the contract of employment was for
to seek an employment permit prior to employment poses a serious problem in seeking relief working visa purposes only, why did the respondents perform their obligations to him?
from the Court.118 Thus, although the respondent therein appeared to have been illegally
dismissed from employment, we explained: There is no question that respondents assigned him Condo Unit # 812 of the MCS, but this
was not free of charge. If it were true that it is part of the compensation package as
This is Galera’s dilemma: Galera worked in the Philippines without proper work permit but employee, then McBurnie would not be obligated to pay anything, but clearly, he admitted in
now wants to claim employee’s benefits under Philippine labor laws. his letter that he had to pay all the expenses incurred in the apartment.

xxxx Assuming for the sake of argument that the employment contract is valid between them,
record shows that McBurnie worked from September 1, 1999 until he met an accident on the
last week of October. During the period of employment, the respondents must have paid his previously observed by the NLRC, McBurnie even failed to show through any document such
salaries in the sum of US$26,000.00, more or less. as payslips or vouchers that his salaries during the time that he allegedly worked for the
respondents were paid by the company. In the absence of an employer-employee
However, McBurnie failed to present a single evidence that [the respondents] paid his relationship between McBurnie and the respondents, McBurnie could not successfully claim
salaries like payslip, check or cash vouchers duly signed by him or any document showing that he was dismissed, much less illegally dismissed, by the latter. Even granting that there
proof of receipt of his compensation from the respondents or activity in furtherance of the was such an employer-employee relationship, the records are barren of any document
employment contract. Granting again that there was a valid contract of employment, it is showing that its termination was by the respondents’ dismissal of McBurnie.
undisputed that on November 1, 1999, McBurnie left for Australia and never came back. x x
x.121 (Emphasis supplied) Given these circumstances, it would be a circuitous exercise for the Court to remand the case
to the NLRC, more so in the absence of any showing that the NLRC should now rule
Although the NLRC’s Decision dated November 17, 2009 was set aside in a Decision dated differently on the case’s merits. In Medline Management, Inc. v. Roslinda, 127 the Court ruled
January 14, 2010, the Court’s resolve to now reconsider its Decision dated September 18, that when there is enough basis on which the Court may render a proper evaluation of the
2009 and to affirm the CA’s Decision and Resolution in the respondents’ favor effectively merits of the case, the Court may dispense with the time-consuming procedure of remanding
restores the NLRC’s basis for rendering the Decision dated November 17, 2009. a case to a labor tribunal in order "to prevent delays in the disposition of the case," "to serve
the ends of justice" and when a remand "would serve no purpose save to further delay its
disposition contrary to the spirit of fair play." 128 In Real v. Sangu Philippines, Inc., 129 we again
More importantly, the NLRC’s findings on the contractual relations between McBurnie and the
ruled:
respondents are supported by the records.

With the foregoing, it is clear that the CA erred in affirming the decision of the NLRC which
First, before a case for illegal dismissal can prosper, an employer-employee relationship must
dismissed petitioner’s complaint for lack of jurisdiction. In cases such as this, the Court
first be established.122 Although an employment agreement forms part of the case records,
normally remands the case to the NLRC and directs it to properly dispose of the case on the
respondent Ganzon signed it with the notation "per my note." 123 The respondents have
merits. "However, when there is enough basis on which a proper evaluation of the merits of
sufficiently explained that the note refers to the letter 124 dated May 11, 1999 which embodied
petitioner’s case may be had, the Court may dispense with the time-consuming procedure of
certain conditions for the employment’s effectivity. As we have previously explained,
remand in order to prevent further delays in the disposition of the case." "It is already an
however, the said conditions, particularly on the successful completion of the project
accepted rule of procedure for us to strive to settle the entire controversy in a single
financing for the hotel project in Baguio City and McBurnie’s acquisition of an Alien
proceeding, leaving no root or branch to bear the seeds of litigation. If, based on the records,
Employment Permit, failed to materialize. Such defense of the respondents, which was duly
the pleadings, and other evidence, the dispute can be resolved by us, we will do so to serve
considered by the NLRC in its Decision dated November 17, 2009, was not sufficiently
the ends of justice instead of remanding the case to the lower court for further proceedings." x
rebutted by McBurnie.
x x.130 (Citations omitted)
Second, McBurnie failed to present any employment permit which would have authorized him
It bears mentioning that although the Court resolves to grant the respondents’ motion for
to obtain employment in the Philippines. This circumstance negates McBurnie’s claim that he
reconsideration, the other grounds raised in the motion, especially as they pertain to
had been performing work for the respondents by virtue of an employer-employee
insinuations on irregularities in the Court, deserve no merit for being founded on baseless
relationship. The absence of the employment permit instead bolsters the claim that the
conclusions. Furthermore, the Court finds it unnecessary to discuss the other grounds that
supposed employment of McBurnie was merely simulated, or did not ensue due to the non-
are raised in the motion, considering the grounds that already justify the dismissal of
fulfillment of the conditions that were set forth in the letter of May 11, 1999.
McBurnie’s complaint.
Third, besides the employment agreement, McBurnie failed to present other competent
All these considered, the Court also affirms its Resolution dated September 4, 2012;
evidence to prove his claim of an employer-employee relationship. Given the parties’
accordingly, McBurnie’s motion for reconsideration thereof is denied.
conflicting claims on their true intention in executing the agreement, it was necessary to
resort to the established criteria for the determination of an employer-employee relationship,
namely: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the WHEREFORE, in light of the foregoing, the Court rules as follows:
power of dismissal; and (4) the power to control the employee’s conduct. 125 The rule of thumb
remains: the onus probandi falls on the claimant to establish or substantiate the claim by the (a) The motion for reconsideration filed on September 26, 2012 by petitioner Andrew
requisite quantum of evidence. Whoever claims entitlement to the benefits provided by law James McBurnie is DENIED;
should establish his or her right thereto. 126 McBurnie failed in this regard.1âwphi1 As
 (b) The motion for reconsideration filed on March 27, 2012 by respondents Eulalio
Ganzon, EGI-Managers, Inc. and E. Ganzon, Inc. is GRANTED.

(c) The Entry of Judgment issued in G.R. Nos. 186984-85 is LIFTED. This Court’s
Decision dated September 18, 2009 and Resolutions dated December 14, 2009 and
January 25, 2012 are SET ASIDE. The Court of Appeals Decision dated October 27,
2008 and Resolution dated March 3, 2009 in CA-G.R. SP No. 90845 and CA-G.R.
SP No. 95916 are AFFIRMED WITH MODIFICATION. In lieu of a remand of the case
to the National Labor Relations Commission, the complaint for illegal dismissal filed
by petitioner Andrew James McBurnie against respondents Eulalio Ganzon, EGI-
Managers, Inc. and E. Ganzon, Inc. is DISMISSED.

Furthermore, on the matter of the filing and acceptance of motions to reduce appeal bond, as
provided in Section 6, Rule VI of the 2011 NLRC Rules of Procedure, the Court hereby
RESOLVES that henceforth, the following guidelines shall be observed:

(a) The filing o a motion to reduce appeal bond shall be entertained by the NLRC
subject to the following conditions: (1) there is meritorious ground; and (2) a bond in a
reasonable amount is posted;
PACIFIC CONSULTANTS INTERNATIONAL ASIA, INC. and JENS PETER HENRICHSEN
(b) For purposes o compliance with condition no. (2), a motion shall be accompanied vs. KLAUS K. SCHONFELD
by the posting o a provisional cash or surety bond equivalent to ten percent (10,) of
the monetary award subject o the appeal, exclusive o damages and attorney's fees; G.R. No. 166920             February 19, 2007

(c) Compliance with the foregoing conditions shall suffice to suspend the running o FACTS:
the 1 0-day reglementary period to perfect an appeal from the labor arbiter's decision
to the NLRC;
Respondent is a Canadian citizen and was a resident of New Westminster, British Columbia,
Canada. He had been a consultant in the field of environmental engineering and water supply
(d) The NLRC retains its authority and duty to resolve the motion to reduce bond and and sanitation. Pacicon Philippines, Inc. (PPI) is a corporation duly established and
determine the final amount o bond that shall be posted by the appellant, still in incorporated in accordance with the laws of the Philippines. The primary purpose of PPI was
accordance with the standards o meritorious grounds and reasonable amount; and to engage in the business of providing specialty and technical services both in and out of the
Philippines.2 It is a subsidiary of Pacific Consultants International of Japan (PCIJ). The
(e) In the event that the NLRC denies the motion to reduce bond, or requires a bond president of PPI, Jens Peter Henrichsen, who was also the director of PCIJ, was based in
that exceeds the amount o the provisional bond, the appellant shall be given a fresh Tokyo, Japan. Henrichsen commuted from Japan to Manila and vice versa, as well as in
period o ten 1 0) days from notice o the NLRC order within which to perfect the other countries where PCIJ had business.
appeal by posting the required appeal bond.
In 1997, PCIJ decided to engage in consultancy services for water and sanitation in the
Philippines. In October 1997, respondent was employed by PCIJ, through Henrichsen, as
Sector Manager of PPI in its Water and Sanitation Department. However, PCIJ assigned him
as PPI sector manager in the Philippines. His salary was to be paid partly by PPI and PCIJ.

On January 7, 1998, Henrichsen transmitted a letter of employment to respondent in Canada,

requesting him to accept the same and affix his conformity thereto. Respondent made some
revisions in the letter of employment and signed the contract. 3 He then sent a copy to also claimed for separation pay and other unpaid benefits. He alleged that the company acted
Henrichsen. in bad faith and disregarded his rights. He prayed for the following reliefs:

Any question of interpretation, understanding or fulfillment of the conditions of employment, 1. Judgment be rendered in his favor ordering the respondents to reinstate
as well as any question arising between the Employee and the Company which is in complainant to his former position without loss of seniority and other privileges and
consequence of or connected with his employment with the Company and which can not be benefits, and to pay his full backwages from the time compensation was with held
settled amicably, is to be finally settled, binding to both parties through written submissions, (sic) from him up to the time of his actual reinstatement. In the alternative, if
by the Court of Arbitration in London.5 reinstatement is no longer feasible, respondents must pay the complainant full
backwages, and separation pay equivalent to one month pay for every year of
Respondent arrived in the Philippines and assumed his position as PPI Sector Manager. He service, or in the amount of US$16,400.00 as separation pay;
was accorded the status of a resident alien.
2. Judgment be rendered ordering the respondents to pay the outstanding monetary
As required by Rule XIV (Employment of Aliens) of the Omnibus Rules Implementing the obligation to complainant in the amount of US$10,131.76 representing the balance of
Labor Code, PPI applied for an Alien Employment Permit (Permit) for respondent before the unpaid salaries, leave pay, cost of his air travel and shipment of goods from Manila to
Department of Labor and Employment (DOLE). It appended respondent’s contract of Canada; and
employment to the application.1awphi1.net
3. Judgment be rendered ordering the respondent company to pay the complainant
On February 26, 1999, the DOLE granted the application and issued the Permit to damages in the amount of no less than US $10,000.00 and to pay 10% of the total
respondent. It reads: monetary award as attorney’s fees, and costs.

Respondent received his compensation from PPI for the following periods: February to June Other reliefs just and equitable under the premises are, likewise, prayed for. 12 1awphi1.net
1998, November to December 1998, and January to August 1999. He was also reimbursed
by PPI for the expenses he incurred in connection with his work as sector manager. He Petitioners filed a Motion to Dismiss the complaint on the following grounds: (1) the Labor
reported for work in Manila except for occasional assignments abroad, and received Arbiter had no jurisdiction over the subject matter; and (2) venue was improperly laid. It
instructions from Henrichsen.7 averred that respondent was a Canadian citizen, a transient expatriate who had left the
Philippines. He was employed and dismissed by PCIJ, a foreign corporation with principal
On May 5, 1999, respondent received a letter from Henrichsen informing him that his office in Tokyo, Japan. Since respondent’s cause of action was based on his letter of
employment had been terminated effective August 4, 1999 for the reason that PCIJ and PPI employment executed in Tokyo, Japan dated January 7, 1998, under the principle of lex loci
had not been successful in the water and sanitation sector in the Philippines. 8 However, on contractus, the complaint should have been filed in Tokyo, Japan. Petitioners claimed that
July 24, 1999, Henrichsen, by electronic mail, 9 requested respondent to stay put in his job respondent did not offer any justification for filing his complaint against PPI before the NLRC
after August 5, 1999, until such time that he would be able to report on certain projects and in the Philippines. Moreover, under Section 12 of the General Conditions of Employment
discuss all the opportunities he had developed. 10 Respondent continued his work with PPI appended to the letter of employment dated January 7, 1998, complainant and PCIJ had
until the end of business hours on October 1, 1999. agreed that any employment-related dispute should be brought before the London Court of
Arbitration. Since even the Supreme Court had already ruled that such an agreement on
venue is valid, Philippine courts have no jurisdiction.13
Respondent filed with PPI several money claims, including unpaid salary, leave pay, air fare
from Manila to Canada, and cost of shipment of goods to Canada. PPI partially settled some
of his claims (US$5,635.99), but refused to pay the rest. Respondent opposed the Motion, contending that he was employed by PPI to work in the
Philippines under contract separate from his January 7, 1998 contract of employment with
PCIJ. He insisted that his employer was PPI, a Philippine-registered corporation; it is
On December 5, 2000, respondent filed a Complaint 11 for Illegal Dismissal against petitioners
inconsequential that PPI is a wholly-owned subsidiary of PCIJ because the two corporations
PPI and Henrichsen with the Labor Arbiter. It was docketed as NLRC-NCR Case No. 30-12-
have separate and distinct personalities; and he received orders and instructions from
04787-00.
Henrichsen who was the president of PPI. He further insisted that the principles of forum non
conveniens and lex loci contractus do not apply, and that although he is a Canadian citizen,
In his Complaint, respondent alleged that he was illegally dismissed; PPI had not notified the Philippine Labor Laws apply in this case.
DOLE of its decision to close one of its departments, which resulted in his dismissal; and they
failed to notify him that his employment was terminated after August 4, 1999. Respondent
Respondent adduced in evidence the following contract of employment dated January 9, A. PETITIONER’S TRUE EMPLOYER IS NOT PACIFIC CONSULTANTS INTERNATIONAL
1998 which he had entered into with Henrichsen: OF JAPAN BUT RESPONDENT COMPANY, AND THEREFORE, THE LABOR ARBITER
HAS JURISDICTION OVER THE INSTANT CASE; AND
According to respondent, the material allegations of the complaint, not petitioners’ defenses,
determine which quasi-judicial body has jurisdiction. Section 21 of the Arbitration Clause in B. THE PROPER VENUE FOR THE PRESENT COMPLAINT IS THE ARBITRATION
the General Conditions of Employment does not provide for an exclusive venue where the BRANCH OF THE NLRC AND NOT THE COURT OF ARBITRATION IN LONDON.
complaint against PPI for violation of the Philippine Labor Laws may be filed. Respondent
pointed out that PPI had adopted two inconsistent positions: it was first alleged that he should II
have filed his complaint in Tokyo, Japan; and it later insisted that the complaint should have
been filed in the London Court of Arbitration.15 WITH ALL DUE RESPECT, THE HONORABLE NATIONAL LABOR RELATIONS
COMMISSION GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OR EXCESS
In their reply, petitioners claimed that respondent’s employer was PCIJ, which had exercised OF JURISDICTION WHEN IT AFFIRMED THE DISMISSAL OF THE COMPLAINT
supervision and control over him, and not PPI. Respondent was dismissed by PPI via a letter CONSIDERING THAT PETITIONER’S TERMINATION FROM EMPLOYMENT IS ILLEGAL:
of Henrichsen under the letterhead of PCIJ in Japan. 16 The letter of employment dated
January 9, 1998 which respondent relies upon did not bear his (respondent’s) signature nor A. THE CLOSURE OF RESPONDENT COMPANY’S WATER AND SANITATION
that of Henrichsen. SECTOR WAS NOT BONA FIDE.

On August 2, 2001, the Labor Arbiter rendered a decision granting petitioners’ Motion to B. ASSUMING ARGUENDO THAT THE CLOSURE OF RESPONDENT
Dismiss. The dispositive portion reads: COMPANY’S WATER AND SANITATION SECTOR WAS JUSTIFIABLE,
PETITIONER’S DISMISSAL WAS INEFFECTUAL AS THE DEPARTMENT OF
WHEREFORE, finding merit in respondents’ Motion to Dismiss, the same is hereby granted. LABOR AND EMPLOYMENT (DOLE) AND PETITIONER WAS NOT NOTIFIED
The instant complaint filed by the complainant is dismissed for lack of merit. THIRTY (30) DAYS BEFORE THE ALLEGED CLOSURE.19

SO ORDERED.17 Respondent averred that the absence or existence of a written contract of employment is not
decisive of whether he is an employee of PPI. He maintained that PPI, through its president
The Labor Arbiter found, among others, that the January 7, 1998 contract of employment Henrichsen, directed his work/duties as Sector Manager of PPI; proof of this was his letter-
between respondent and PCIJ was controlling; the Philippines was only the "duty station" proposal to the Development Bank of the Philippines for PPI to provide consultancy services
where Schonfeld was required to work under the General Conditions of Employment. PCIJ for the Construction Supervision of the Water Supply and Sanitation component of the World
remained respondent’s employer despite his having been sent to the Philippines. Since the Bank-Assisted LGU Urban Water and Sanitation Project. 20 He emphasized that as gleaned
parties had agreed that any differences regarding employer-employee relationship should be from Alien Employment Permit (AEP) No. M-029908-5017 issued to him by DOLE on
submitted to the jurisdiction of the court of arbitration in London, this agreement is controlling. February 26, 1999, he is an employee of PPI. It was PPI president Henrichsen who
terminated his employment; PPI also paid his salary and reimbursed his expenses related to
On appeal, the NLRC agreed with the disquisitions of the Labor Arbiter and affirmed the transactions abroad. That PPI is a wholly-owned subsidiary of PCIJ is of no moment because
latter’s decision in toto.18 the two corporations have separate and distinct personalities.

ISSUES: The CA found the petition meritorious. Applying the four-fold test 21 of determining an
employer-employee relationship, the CA declared that respondent was an employee of PPI.
On the issue of venue, the appellate court declared that, even under the January 7, 1998
I
contract of employment, the parties were not precluded from bringing a case related thereto
in other venues. While there was, indeed, an agreement that issues between the parties were
WITH ALL DUE RESPECT, THE HONORABLE NATIONAL LABOR RELATIONS to be resolved in the London Court of Arbitration, the venue is not exclusive, since there is no
COMMISSION GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OR EXCESS stipulation that the complaint cannot be filed in any other forum other than in the Philippines.
OF JURISDICTION WHEN IT AFFIRMED THE LABOR ARBITER’S DECISION
CONSIDERING THAT:
On November 25, 2004, the CA rendered its decision granting the petition, the decretal
portion of which reads:
WHEREFORE, the petition is GRANTED in that the assailed Resolutions of the NLRC are respondent. Respondent cannot rely on the pay slips, expenses claim forms, and
hereby REVERSED and SET ASIDE. Let this case be REMANDED to the Labor Arbiter a reimbursement memoranda to prove that he was an employee of petitioner PPI because
quo for disposition of the case on the merits. these documents are of doubtful authenticity.

SO ORDERED.22 Petitioners further contend that, although Henrichsen was both a director of PCIJ and
president of PPI, it was he who signed the termination letter of respondent upon instructions
A motion for the reconsideration of the above decision was filed by PPI and Henrichsen, of PCIJ. This is buttressed by the fact that PCIJ’s letterhead was used to inform him that his
which the appellate court denied for lack of merit. 23 employment was terminated. Petitioners further assert that all work instructions came from
PCIJ and that petitioner PPI only served as a "conduit." Respondent’s Alien Employment
Permit stating that petitioner PPI was his employer is but a necessary consequence of his
In the present recourse, PPI and Henrichsen, as petitioners, raise the following issues:
being "seconded" thereto. It is not sufficient proof that petitioner PPI is respondent’s
employer. The entry was only made to comply with the DOLE requirements.
I
There being no evidence that petitioner PPI is the employer of respondent, the Labor Arbiter
THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT AN EMPLOYMENT has no jurisdiction over respondent’s complaint.
RELATIONSHIP EXISTED BETWEEN PETITIONERS AND RESPONDENT DESPITE THE
UNDISPUTED FACT THAT RESPONDENT, A FOREIGN NATIONAL, WAS HIRED
Petitioners aver that since respondent is a Canadian citizen, the CA erred in ignoring their
ABROAD BY A FOREIGN CORPORATION, EXECUTED HIS EMPLOYMENT CONTRACT
claim that the principlesof forum non conveniens and lex loci contractus are applicable. They
ABROAD, AND WAS MERELY "SECONDED" TO PETITIONERS SINCE HIS WORK
also point out that the principal office, officers and staff of PCIJ are stationed in Tokyo, Japan;
ASSIGNMENT WAS IN MANILA.
and the contract of employment of respondent was executed in Tokyo, Japan.
II
Moreover, under Section 21 of the General Conditions for Employment incorporated in
respondent’s January 7, 1998 letter of employment, the dispute between respondent and
THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT THE LABOR ARBITER A PCIJ should be settled by the court of arbitration of London. Petitioners claim that the words
QUO HAS JURISDICTION OVER RESPONDENT’S CLAIM DESPITE THE UNDISPUTED used therein are sufficient to show the exclusive and restrictive nature of the stipulation on
FACT THAT RESPONDENT, A FOREIGN NATIONAL, WAS HIRED ABROAD BY A venue.
FOREIGN CORPORATION, EXECUTED HIS EMPLOYMENT CONTRACT ABROAD, AND
HAD AGREED THAT ANY DISPUTE BETWEEN THEM "SHALL BE FINALLY SETTLED BY
Petitioners insist that the U.S. Labor-Management Act applies only to U.S. workers and
THE COURT OF ARBITRATION IN LONDON."24
employers, while the Labor Code of the Philippines applies only to Filipino employers and
Philippine-based employers and their employees, not to PCIJ. In fine, the jurisdictions of the
Petitioners fault the CA for reversing the findings of the Labor Arbiter and the NLRC. NLRC and Labor Arbiter do not extend to foreign workers who executed employment
Petitioners aver that the findings of the Labor Arbiter, as affirmed by the NLRC, are agreements with foreign employers abroad, although "seconded" to the Philippines. 25
conclusive on the CA. They maintain that it is not within the province of the appellate court in
a petition for certiorari to review the facts and evidence on record since there was no conflict
In his Comment,26 respondent maintains that petitioners raised factual issues in their petition
in the factual findings and conclusions of the lower tribunals. Petitioners assert that such
which are proscribed under Section 1, Rule 45 of the Rules of Court. The finding of the CA
findings and conclusions, having been made by agencies with expertise on the subject
that he had been an employee of petitioner PPI and not of PCIJ is buttressed by his
matter, should be deemed binding and conclusive. They contend that it was the PCIJ which
documentary evidence which both the Labor Arbiter and the NLRC ignored; they erroneously
employed respondent as an employee; it merely seconded him to petitioner PPI in the
opted to dismiss his complaint on the basis of the letter of employment and Section 21 of the
Philippines, and assigned him to work in Manila as Sector Manager. Petitioner PPI, being a
General Conditions of Employment. In contrast, the CA took into account the evidence on
wholly-owned subsidiary of PCIJ, was never the employer of respondent.
record and applied case law correctly.
Petitioners assert that the January 9, 1998 letter of employment which respondent presented
The petition is denied for lack of merit.
to prove his employment with petitioner PPI is of doubtful authenticity since it was unsigned
by the purported parties. They insist that PCIJ paid respondent’s salaries and only coursed
the same through petitioner PPI. PPI, being its subsidiary, had supervision and control over It must be stressed that in resolving a petition for certiorari, the CA is not proscribed from
respondent’s work, and had the responsibilities of monitoring the "daily administration" of reviewing the evidence on record. Under Section 9 of Batas Pambansa Blg. 129, as amended
by R.A. No. 7902, the CA is empowered to pass upon the evidence, if and when necessary, (b) Contract of employment between the employer and the principal which shall
to resolve factual issues.27 If it appears that the Labor Arbiter and the NLRC misappreciated embody the following, among others:
the evidence to such an extent as to compel a contrary conclusion if such evidence had been
properly appreciated, the factual findings of such tribunals cannot be given great respect and 1. That the non-resident alien worker shall comply with all applicable laws
finality.28 and rules and regulations of the Philippines;

Inexplicably, the Labor Arbiter and the NLRC ignored the documentary evidence which 2. That the non-resident alien worker and the employer shall bind themselves
respondent appended to his pleadings showing that he was an employee of petitioner PPI; to train at least two (2) Filipino understudies for a period to be determined by
they merely focused on the January 7, 1998 letter of employment and Section 21 of the the Minister; and
General Conditions of Employment.
3. That he shall not engage in any gainful employment other than that for
Petitioner PPI applied for the issuance of an AEP to respondent before the DOLE. In said which he was issued a permit.
application, PPI averred that respondent is its employee. To show that this was the case, PPI
appended a copy of respondent’s employment contract. The DOLE then granted the (c) A designation by the employer of at least two (2) understudies for every alien
application of PPI and issued the permit. worker. Such understudies must be the most ranking regular employees in the
section or department for which the expatriates are being hired to insure the actual
It bears stressing that under the Omnibus Rules Implementing the Labor Code, one of the transfer of technology.
requirements for the issuance of an employment permit is the employment contract. Section
5, Rule XIV (Employment of Aliens) of the Omnibus Rules provides: Under Section 6 of the Rule, the DOLE may issue an alien employment permit based only on
the following:
SECTION 1. Coverage. – This rule shall apply to all aliens employed or seeking employment
in the Philippines and the present or prospective employers. (a) Compliance by the applicant and his employer with the requirements of Section 2
hereof;
SECTION 2. Submission of list. – All employers employing foreign nationals, whether resident
or non-resident, shall submit a list of nationals to the Bureau indicating their names, (b) Report of the Bureau Director as to the availability or non-availability of any
citizenship, foreign and local address, nature of employment and status of stay in the person in the Philippines who is competent and willing to do the job for which the
Philippines. services of the applicant are desired;

SECTION 3. Registration of resident aliens. – All employed resident aliens shall register with (c) His assessment as to whether or not the employment of the applicant will redound
the Bureau under such guidelines as may be issued by it. to the national interest;

SECTION 4. Employment permit required for entry. – No alien seeking employment, whether (d) Admissibility of the alien as certified by the Commission on Immigration and
as a resident or non-resident, may enter the Philippines without first securing an employment Deportation;
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. (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.
SECTION 5. Requirements for employment permit applicants. – The application for an
employment permit shall be accompanied by the following:
Thus, as claimed by respondent, he had an employment contract with petitioner PPI;
otherwise, petitioner PPI would not have filed an application for a Permit with the DOLE.
(a) Curriculum vitae duly signed by the applicant indicating his educational Petitioners are thus estopped from alleging that the PCIJ, not petitioner PPI, had been the
background, his work experience and other data showing that he possesses employer of respondent all along.
technical skills in his trade or profession.
We agree with the conclusion of the CA that there was an employer-employee relationship Petitioners’ insistence on the application of the principle of forum non conveniens must be
between petitioner PPI and respondent using the four-fold test. Jurisprudence is firmly settled rejected. The bare fact that respondent is a Canadian citizen and was a repatriate does not
that whenever the existence of an employment relationship is in dispute, four elements warrant the application of the principle for the following reasons:
constitute the reliable yardstick: (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 First. The Labor Code of the Philippines does not include forum non conveniens as a
employee’s conduct. It is the so-called "control test" which constitutes the most important ground for the dismissal of the complaint.34
index of the existence of the employer-employee relationship–that is, whether the employer
controls or has reserved the right to control the employee not only as to the result of the work Second. The propriety of dismissing a case based on this principle requires a factual
to be done but also as to the means and methods by which the same is to be accomplished. determination; hence, it is properly considered as defense. 35
Stated otherwise, an employer-employee relationship exists where the person for whom the
services are performed reserves the right to control not only the end to be achieved but also
the means to be used in reaching such end. 29 We quote with approval the following ruling of Third. In Bank of America, NT&SA, Bank of America International, Ltd. v. Court of
the CA: Appeals,36 this Court held that:

[T]here is, indeed, substantial evidence on record which would erase any doubt that the x x x [a] Philippine Court may assume jurisdiction over the case if it chooses to do so;
respondent company is the true employer of petitioner. In the case at bar, the power to provided, that the following requisites are met: (1) that the Philippine Court is one to which the
control and supervise petitioner’s work performance devolved upon the respondent company. parties may conveniently resort to; (2) that the Philippine Court is in a position to make an
Likewise, the power to terminate the employment relationship was exercised by the President intelligent decision as to the law and the facts; and, (3) that the Philippine Court has or is
of the respondent company. It is not the letterhead used by the company in the termination likely to have power to enforce its decision. x x x
letter which controls, but the person who exercised the power to terminate the employee. It is
also inconsequential if the second letter of employment executed in the Philippines was not Admittedly, all the foregoing requisites are present in this case.
signed by the petitioner. An employer-employee relationship may indeed exist even in the
absence of a written contract, so long as the four elements mentioned in the Mafinco case WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP
are all present.30 No. 76563 is AFFIRMED. This case is REMANDED to the Labor Arbiter for disposition of the
case on the merits. Cost against petitioners.
The settled rule on stipulations regarding venue, as held by this Court in the vintage case of
Philippine Banking Corporation v. Tensuan, 31 is that while they are considered valid and DREAMLAND HOTEL RESORT and WESTLEY J. PRENTICE, Petitioners,
enforceable, venue stipulations in a contract do not, as a rule, supersede the general rule set vs.
forth in Rule 4 of the Revised Rules of Court in the absence of qualifying or restrictive words. STEPHEN B. JOHNSON
They should be considered merely as an agreement or additional forum, not as limiting venue
to the specified place. They are not exclusive but, rather permissive. If the intention of the G.R. No. 191455               March 12, 2014
parties were to restrict venue, there must be accompanying language clearly and
categorically expressing their purpose and design that actions between them be litigated only
Before the Court is a Petition for Review on Certiorari 1 assailing the December 14, 2009 2 and
at the place named by them.32
February 11, 20103 Resolutions of the Court of Appeals (CA) in CA-G.R. SP No. 111693
which dismissed outright the petition for certiorari on technical grounds.
In the instant case, no restrictive words like "only," "solely," "exclusively in this court," "in no
other court save —," "particularly," "nowhere else but/except —," or words of equal import
Dreamland Hotel Resort (Dreamland) and its President, Westley J. Prentice (Prentice)
were stated in the contract.33 It cannot be said that the court of arbitration in London is an
(petitioners) alleged the following facts in the instant petition:
exclusive venue to bring forth any complaint arising out of the employment contract.

9. Dreamland is a corporation duly registered with the Securities and Exchange Commission
Petitioners contend that respondent should have filed his Complaint in his place of permanent
on January 15, 2003 to exist for a period of fifty [50] years with registration number SEC A
residence, or where the PCIJ holds its principal office, at the place where the contract of
1998-6436. Prentice is its current President and Chief Executive Officer. It is engaged in the
employment was signed, in London as stated in their contract. By enumerating possible
hotel, restaurant and allied businesses. Dreamland is presently undertaking operations of its
venues where respondent could have filed his complaint, however, petitioners themselves
business at National Highway, Sto. Tomas, Matain Subic, Zambales, 2209.
admitted that the provision on venue in the employment contract is indeed merely permissive.
10. Respondent Stephen B. Johnson is an Australian citizen who came to the Philippines as completed and operational by August 2007. Believing the representations of petitioner
a businessman/investor without the authority to be employed as the employee/officer of any Prentice, private respondent Johnson accepted the employment as Resort Manager and
business as he was not able to secure his Alien Employment Permit ["AEP" for brevity], which loaned money to petitioners [consisting of] his retirement pay in the amount of One Hundred
fact was duly supported by the Certification dated March 14, 2008 of the Department of Labor Thousand US Dollars (USD 100,000.00) to finish construction of the resort. x x x.
and Employment ["DOLE" for brevity] Regional Director, Regional Office No. III, San
Fernando City, Pampanga, 6. From the start of August 2007, as stipulated in the Employment Agreement, respondent
Johnson already reported for work. It was then that he found out to his dismay that the resort
x x x. was far from finished. However, he was instructed to supervise construction and speak with
potential guests. He also undertook the overall preparation of the guestrooms and staff for the
11. As a fellow Australian citizen, Johnson was able to convince Prentice to accept his offer opening of the hotel, even performing menial tasks (i.e. inspected for cracked tiles, ensured
to invest in Dreamland and at the same time provide his services as Operations Manager of proper grout installation, proper lighting and air-conditioning unit installation, measured
Dreamland with a promise that he will secure an AEP and Tax Identification Number ["TIN" windows for curtain width and showers for shower curtain rods, unloaded and installed
for brevity] prior to his assumption of work. mattresses, beddings, furniture and appliances and even ironed and hung guest room
curtains).
12. Sometime on June 21, 2007, Prentice and Johnson entered into an Employment
Agreement, which stipulates among others, that the [sic] Johnson shall serve as Operations xxxx
Manager of Dreamland from August 1, 2007 and shall serve as such for a period of three (3)
years. 8. As [Johnson] remained unpaid since August 2007 and he has loaned all his money to
petitioners, he asked for his salary after the resort was opened in October 2007 but the same
13. Before entering into the said agreement[,] Prentice required the submission of the AEP was not given to him by petitioners. [Johnson] became very alarmed with the situation as it
and TIN from Johnson. Johnson promised that the same shall be supplied within one (1) appears that there was no intention to pay him his salary, which he now depended on for his
month from the signing of the contract because the application for the TIN and AEP were still living as he has been left penniless. He was also denied the benefits promised him as part of
under process. Thus[,] it was agreed that the efficacy of the said agreement shall begin after his compensation such as service vehicles, meals and insurance.
one (1) month or on August 1, 2007. x x x.
9. [Johnson] was also not given the authority due to him as resort manager. Prentice
14. On or about October 8, 2007, Prentice asked on several occasions the production of the countermanded his orders to the staff at every opportunity. Worse, he would even be berated
AEP and TIN from Johnson. Johnson gave excuses and promised that he is already in and embarrassed in front of the staff. Prentice would go into drunken tiffs, even with
possession of the requirements. Believing the word of Johnson, Dreamland commenced a customers and [Johnson] was powerless to prohibit Prentice. It soon became clear to him that
dry run of its operations. he was only used for the money he loaned and there was no real intention to have him as
resort manager of Dreamland Hotel.
15. Johnson worked as a hotel and resort Operations Manager only at that time. He worked
for only about three (3) weeks until he suddenly abandoned his work and subsequently 10. Thus, on November 3, 2007, after another embarrassment was handed out by petitioner
resigned as Operations Manager starting November 3, 2007. He never reported back to work Prentice in front of the staff, which highlighted his lack of real authority in the hotel and the
despite several attempts of Prentice to clarify his issues. x x x. 4 disdain for him by petitioners, respondent Johnson was forced to submit his resignation, x x x.
In deference to the Employment Agreement signed, [Johnson] stated that he was willing to
continue work for the three month period stipulated therein.
On the other hand, respondent Stephen B. Johnson (Johnson) averred that:

11. However, in an SMS or text message sent by Prentice to [Johnson] on the same day at
4. There is also no truth to the allegation that it was [Johnson] who "offered" and "convinced"
around 8:20 pm, he was informed that "… I consider [yo]ur resignation as immediate".
petitioner Prentice to "invest" in and provide his services to petitioner Dreamland Hotel Resort
Despite demand, petitioners refused to pay [Johnson] the salaries and benefits due him. 5
x x x. The truth of the matter is that it was petitioners who actively advertised for a resort
manager for Dreamland Hotel. x x x
On January 31, 2008, Johnson filed a Complaint for illegal dismissal and non-payment of
salaries, among others, against the petitioners.
5. It was in response to these advertisements that private respondent Johnson contacted
petitioners to inquire on the terms for employment offered. It was Prentice who offered
employment and convinced Johnson to give out a loan, purportedly so the resort can be
On May 23, 2008, the Labor Arbiter (LA) rendered a Decision 6 dismissing Johnson’s SO ORDERED.9
complaint for lack of merit with the finding that he voluntarily resigned from his employment
and was not illegally dismissed. We quote: The NLRC also noted the following:

There [is] substantial evidence on record that [Johnson] indeed resigned voluntarily from his Insofar as the charge of abandonment against [Johnson] is concerned, it is significant that the
position by his mere act of tendering his resignation and immediately abandoned his work as contention that [Johnson] received a total of [P]172,000.00 from the [petitioners] since July
Operations Manager from the time that he filed said resignation letter on November 3, 2007 2007 is not supported by the evidence x x x submitted by the [petitioners]. Except for a
and never returned to his work up to the filing of this case. Evidence on record also show that promissory note x x x for [P]2,200.00, the pieces of evidence in question do not bear
[Johnson] only served as Operations Manager for a period of three (3) weeks after which he [Johnson’s] signature, and do not therefore constitute proof of actual receipt by him of the
tendered his voluntary resignation and left his job. This fact was not denied or questioned by amounts stated therein. Thus, based on the evidence and on the admission by [Johnson] that
him. His claim that there was breach of employment contract committed by the respondents he received the amount of [P]5,000.00 from the [petitioners], it appears that [Johnson]
and that he was not refunded his alleged investment with the respondent Dreamland Hotel received a total of only [P]7,200.00 from the [petitioners]. Since based on the Employment
and Resort were not properly supported with substantial evidence and besides these issues Agreement, his employment commenced on August 1, 2007, it follows that as of November 3,
are not within the ambit of jurisdiction of this Commission. 2007, when he tendered his resignation, the [petitioners] had failed to pay him a total of
[P]172,800.00 representing his unpaid salaries for three months ([P]60,000.00 x 3 mos. =
There being competent, concrete and substantial evidence to confirm the voluntary [P]180,000.00 – [P]7,200 = [P]172,800.00). Even the most reasonable employee would
resignation of [Johnson] from his employment, there was no illegal dismissal committed consider quitting his job after working for three months and receiving only an insignificant
against him and for him to be entitled to reinstatement to his former position and backwages. fraction of his salaries. There was, therefore, not an abandonment of employment nor a
resignation in the real sense, but a constructive dismissal, which is defined as an involuntary
xxxx resignation resorted to when continued employment is rendered impossible, unreasonable or
unlikely x x x. Consequently, [Johnson] is entitled to reinstatement with full backwages.
However, due to the strained relation between the parties, which renders his reinstatement
WHEREFORE, premises considered, let this case be as it is hereby ordered DISMISSED for
inadvisable, separation pay may be awarded in lieu of reinstatement. 10
lack of merit.

Consequently, the petitioners elevated the NLRC decision to the CA by way of Petition for
All the money claims of the complainant are likewise ordered dismissed for lack of legal
Certiorari with Prayer for the Issuance of a Temporary Restraining Order and/or Writ of
basis.
Preliminary Injunction under Rule 47.
SO ORDERED.7
In the assailed Resolution 11 dated December 14, 2009, the CA dismissed the petition for lack
of proof of authority and affidavit of service of filing as required by Section 13 of the 1997
Dissatisfied, Johnson appealed to the National Labor Relations Commission (NLRC). The Rules of Procedure. The subsequent motion for reconsideration filed by the petitioners was
NLRC rendered its Decision8 on April 30, 2009, the dispositive portion of which reads: likewise denied by the CA in a Resolution12 dated February 11, 2010.

WHEREFORE, the decision appeared from is hereby REVERSED. Respondent Wes[t]ley Undaunted, the petitioners filed before this Court the present Petition for Review on
Prentice and/or Dreamland Resort & Hotel, Inc[.] are hereby ordered to pay [Johnson] the Certiorari, raising the following issues, viz:
following:
A.
1. Backwages computed at [P]60,000.00 monthly from November
THE HONORABLE [CA] COMMITTED A REVERSIBLE ERROR IN
3, 2007 up to the finality of this decision; PROMULGATING ITS FIRST RESOLUTION (DECEMBER 14, 2009) WHICH
OUTRIGHTLY DISMISSED PETITIONERS’ PETITION FOR CERTIORARI.
2. Separation pay equivalent to one month’s salary, or [P]60,000.00;
B.
3. Unpaid salaries from August 1, 2007 to November 1, 2007 amounting to a total of
[P]172,800.00.
 THE HONORABLE [CA] COMMITTED A REVERSIBLE ERROR IN defeat rather than serve the ends of justice." 18 "It is true that procedural rules may be waived
PROMULGATING ITS SECOND RESOLUTION (FEBRUARY 11, 2010) WHICH or dispensed with in the interest of substantial justice."19
DENIED FOR LACK OF MERIT PETITIONERS’ MOTION FOR
RECONSIDERATION. Brushing aside technicalities, in the utmost interest of substantial justice and taking into
consideration the varying and conflicting factual deliberations by the LA and the NLRC, the
C. Court shall now delve into the merits of the case.

THE HONORABLE [CA] COMMITTED A REVERSIBLE ERROR IN NOT GIVING The petitioners contend that the employment of Johnson as operations manager commenced
DUE CONSIDERATION TO THE MERITS OF THE PETITIONERS’ PETITION AND only on October 8, 2007 and not on August 1, 2007. However, the employment contract
IN NOT GRANTING THEIR PRAYER FOR TEMPORARY RESTRAINING categorically stated that the "term of employment shall commence on [August 1, 2007]."
ORDER[.]13 Furthermore, the factual allegations of Johnson that he actually worked from August 1, 2007
were neither sufficiently rebutted nor denied by the petitioners. As Johnson has specifically
The petition is partially granted. set forth in his reply before the LA:

At its inception, the Court takes note of the Resolutions dated December 14, 2009 and Although the resort did not open until approximately 8th October 2007, [Johnson’s]
February 11, 2010 of the CA dismissing the Petition for Certiorari due to the following employment began, as per Employment Agreement, on 1st August 2007. During the interim
infirmities: period[, Johnson] was frequently instructed by [Prentice] to supervise the construction staff
and speak with potential future guests who visited the site out of curiosity. Other duties
carried out by [Johnson] prior to [the] opening included the overall preparation of the guest
1. The affiant has no proof of authority to file the petition in behalf of petitioner
rooms for eventual occupation ensuring cracked tiles were replaced, ensuring grout was
Dreamland.
properly installed between tiles, ensuring all lighting and air conditioning [were] functioning,
measuring windows for curtain width, measuring showers for shower curtain rods and
2. The petition has no appended affidavit of service to show proof of service of filing installing shower curtains. Other duties included the unloading, carrying and installation of
as required by Sec. 13 of the 1997 Rules of Civil Procedure. 14 mattresses, bedding[s], TV’s, refrigerators and other furnishings and ironing curtains x x x. 20

To justify their stance that the CA should have considered the merits of the case, instead of Notably, it was only in their Motion for Reconsideration 21 of the NLRC decision where the
dismissing merely on procedural grounds, the petitioners cited numerous cases wherein the petitioners belatedly disagreed that Johnson performed the abovementioned tasks and
Court has decided to waive the strict application of the Rules in the interest of substantial argued that had Johnson done the tasks he enumerated, those were tasks foreign and alien
justice.15 While "[u]tter disregard of [the rules of procedure] cannot justly be rationalized by to his position as operations manager and [were done] without their knowledge and consent. 22
harking on the policy of liberal construction," 16 the Court recognizes badges of inequity
present in the case at bar, which would be seemingly branded with approval should the Court
Nevertheless, Prentice did not deny that he ordered Johnson to speak with potential guests of
turn a blind eye and dismiss this petition on procedural grounds alone.
the hotel. In fact, the petitioners admitted and submitted documents 23 which showed that
Johnson has already taken his residence in the hotel as early as July 2007—a part of
"While it is desirable that the Rules of Court be faithfully observed, courts should not be so Johnson’s remuneration as the hotel operations manager. In presenting such documents, the
strict about procedural lapses that do not really impair the proper administration of justice. If petitioners would want to impress upon the Court that their act of accommodating Johnson
the rules are intended to ensure the proper and orderly conduct of litigation, it is because of was merely due to his being a fellow Australian national.
the higher objective they seek which are the attainment of justice and the protection of
substantive rights of the parties. Thus, the relaxation of procedural rules, or saving a
As it could not be determined with absolute certainty whether or not Johnson rendered the
particular case from the operation of technicalities when substantial justice requires it, as in
services he mentioned during the material time, doubt must be construed in his favor for the
the instant case, should no longer be subject to cavil." 17
reason that "the consistent rule is that if doubt exists between the evidence presented by the
employer and that by the employee, the scales of justice must be tilted in favor of the
Time and again, this Court has emphasized that procedural rules should be treated with latter."24 What is clear upon the records is that Johnson had already taken his place in the
utmost respect and due regard, since they are designed to facilitate the adjudication of cases hotel since July 2007.
to remedy the worsening problem of delay in the resolution of rival claims and in the
administration of justice. "From time to time, however, we have recognized exceptions to the
Rules but only for the most compelling reasons where stubborn obedience to the Rules would
For the petitioners’ failure to disprove that Johnson started working on August 1, 2007, as operations manager. Nevertheless, this does not negate the fact that the contract of
stated on the employment contract, payment of his salaries on said date, even prior to the employment had already become effective even prior to such date.
opening of the hotel is warranted.
In addition to the foregoing, there is no stipulation in the employment contract itself that the
The petitioners also maintain that they have paid the amount of ₱7,200.00 to Johnson for his same shall only be effective upon the submission of AEP and TIN. The petitioners did not
three weeks of service from October 8, 2007 until November 3, 2007, the date of Johnson’s present any proof to support this agreement prior to the execution of the employment
resignation,25 which Johnson did not controvert. Even so, the amount the petitioners paid to contract. In the case of Ortañez v. CA29, the Court held:
Johnson as his three-week salary is significantly deficient as Johnson’s monthly salary as
stipulated in their contract is ₱60,000.0026. Thus, the amount which Johnson should have Spoken words could be notoriously unreliable unlike a written contract which speaks of a
been paid is ₱45,000.00 and not ₱7,200.00. In light of this deficiency, there is more reason to uniform language. Thus, under the general rule in Section 9 of Rule 130 of the Rules of
believe that the petitioners withheld the salary of Johnson without a valid reason. If they Court, when the terms of an agreement were reduced to writing, as in this case, it is deemed
indeed believed that Johnson deserves to be paid only for three-week worth of service as to contain all the terms agreed upon and no evidence of such terms can be admitted other
operations manager, then they should still have paid him the amount due for three weeks of than the contents thereof. x x x.30 (Citations omitted)
work rendered.
As regards the NLRC findings that Johnson was constructively dismissed and did not
Another argument posited by the petitioners is that the employment contract executed by the abandon his work, the Court is in consonance with this conclusion with the following basis:
parties is inefficacious because the employment contract is subject to the presentation of
Johnson of his Alien Employment Permit (AEP) and Tax Identification Number (TIN). Even the most reasonable employee would consider quitting his job after working for three
months and receiving only an insignificant fraction of his salaries. There was, therefore, not
Again, this statement is wanting of merit. an abandonment of employment nor a resignation in the real sense, but a constructive
dismissal, which is defined as an involuntary resignation resorted to when continued
Johnson has adduced proof that as a permanent resident, he is exempted from the employment is rendered impossible, unreasonable or unlikely x x x. 31
requirement of securing an AEP as expressed under Department Order No. 75-06, Series of
2006 of the Department of Labor and Employment (DOLE), which we quote: The petitioners aver that considering that Johnson tendered his resignation and abandoned
his work, it is his burden to prove that his resignation was not voluntary on his part. 32
Rule I- Coverage and Exemption
With this, the Court brings to mind its earlier ruling in the case of SHS Perforated Materials,
xxxx Inc. v. Diaz33 where it held that:

2. Exemption. The following categories of foreign nationals are exempt from securing an "There is constructive dismissal if an act of clear discrimination, insensibility, or disdain by an
employment permit: employer becomes so unbearable on the part of the employee that it would foreclose any
choice by him except to forego his continued employment. It exists where there is cessation
xxxx of work because continued employment is rendered impossible, unreasonable or unlikely, as
an offer involving a demotion in rank and a diminution in pay." 34
2.7 Resident foreign nationals
It is impossible, unreasonable or unlikely that any employee, such as Johnson would continue
working for an employer who does not pay him his salaries. Applying the Court’s
Furthermore, Johnson submitted a Certification 27 from DOLE Regional Office III, stating that
pronouncement in Duldulao v. CA 35, the Court construes that the act of the petitioners in not
he is exempted from securing an AEP as a holder of Permanent Resident Visa.
paying Johnson his salaries for three months has become unbearable on the latter’s part that
Consequently, the condition imposed upon Johnson’s employment, if there is any, is in truth
he had no choice but to cede his employment with them. The Court quotes the pertinent
without effect to its validity.
sections of Johnson’s resignation letter which reflects the real reason why he was resigning
as operations manager of the hotel:
Anent the requirement of securing a TIN to make the contract of employment efficacious,
records show that Johnson secured his TIN only on December 2007 28 after his resignation as
I hereby tender my resignation to you, Mr[.] Wes Prentice, Dreamland Resort, Subic,
Zambales, Philippines.
Since joining Dreamland Resort & Hotel over three months ago I have put my heart and soul The NLRC held that Johnson is entitled to backwages from November 3, 2007 up to the
into the business. I have donated many hours of my personal time. I have frequently worked finality of the decision; separation pay equivalent to one month salary; and unpaid salaries
seven days a week and twelve to thirteen hours a day. I am now literally penniless, due totally from August 1, 2007 to November 1, 2007 amounting to a total of ₱172,800.00. 41
to the fact that I have lent you and your resort/hotel well over $200,000AU (approx 8million
pesos) and your non-payment of wages to me from 1st August 2007 as per Employment While the Court agrees with the NLRC that the award of separation pay and unpaid salaries
Agreement. x x x.36 (Emphasis and underscoring ours) is warranted, the Court does not lose sight of the fact that the employment contract states
that Johnson's employment is for a term of three years.
The above preceding statement only goes to show that while it was Johnson who tendered
his resignation, it was due to the petitioners’ acts that he was constrained to resign. The Accordingly, the award of backwages should be computed from November 3, 2007 to August
petitioners cannot expect Johnson to tolerate working for them without any compensation. 1, 2010 - which is three years from August 1, 2007. Furthermore, separation pay is computed
from the commencement of employment up to the time of termination, including the imputed
Since Johnson was constructively dismissed, he was illegally dismissed. As to the reliefs service for which the employee is entitled to backwages. 42 As one-month salary is awarded
granted to an employee who is illegally dismissed, Golden Ace Builders v. Talde 37 referring to as separation pay for every year of service, including imputed service, Johnson should be
Macasero v. Southern Industrial Gases Philippines38 is instructive: paid separation pay equivalent to his three-month salary for the three-year contract.

Thus, an illegally dismissed employee is entitled to two reliefs: backwages and reinstatement. WHEREFORE, the Resolutions dated December 14, 2009 and February 11, 2010 of the
The two reliefs provided are separate and distinct. In instances where reinstatement is no Court of Appeals in CA-G.R. SP No. 111693 are hereby SET ASIDE. The Decision of the
longer feasible because of strained relations between the employee and the employer, NLRC dated April 30, 2009 in NLRC LAC No. 07-002711-08 is REINSTATED and
separation pay is granted. In effect, an illegally dismissed employee is entitled to either AFFIRMED with MODIFICATIONS in the computation of backwages and separation pay.
reinstatement, if viable, or separation pay if reinstatement is no longer viable, and Dreamland Hotel Resort and Westley Prentice are ORDERED to PAY Stephen Johnson
backwages. backwages of ₱60,000.00 per month which should be computed from November 3, 2007 to
August 1, 2010 less the P.7,200.00 already paid to him. Likewise, separation pay of
The normal consequences of respondents’ illegal dismissal, then, are reinstatement without ₱180.000.00, representing Stephen Johnson's three-year contract should be awarded.
loss of seniority rights, and payment of backwages computed from the time compensation
was withheld up to the date of actual reinstatement. Where reinstatement is no longer viable
as an option, separation pay equivalent to one (1) month salary for every year of service
should be awarded as an alternative. The payment of separation pay is in addition to
payment of backwages.39 (Emphasis and underscoring supplied)

The case of Golden Ace further provides:

"The accepted doctrine is that separation pay may avail in lieu of reinstatement if
reinstatement is no longer practical or in the best interest of the parties. Separation pay in lieu
of reinstatement may likewise be awarded if the employee decides not to be reinstated." x x x

Under the doctrine of strained relations, the payment of separation pay is considered an
acceptable alternative to reinstatement when the latter option is no longer desirable or viable.
On one hand, such payment liberates the employee from what could be a highly oppressive
work environment.1âwphi1 On the other hand, it releases the employer from the grossly
unpalatable obligation of maintaining in its employ a worker it could no longer trust. 40

In the present case, the NLRC found that due to the strained relations between the parties,
separation pay is to be awarded to Johnson in lieu of his reinstatement.