Republic of the Philippines by Deputy Administrator and Officer-in-Charge Crescencio M.
Siddayao, the
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 78085 October 16, 1989
ROYAL CROWN INTERNATIONALE, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSI0N and VIRGILIO P.
NACIONALES, respondents.
Ceferino Padua Law Office for petitioner.
Acosta & Rico Law Offices for private respondent.
CORTES, J.:
Petitioner Royal Crown Internationale seeks the nullification of a resolution of the
National Labor Relations Commission (NLRC) which affirmed a decision of the
Philippine Overseas Employment Administration (POEA) holding it liable to pay,
jointly and severally with Zamel-Turbag Engineering and Architectural Consultant
(ZAMEL), private respondent Virgilio P. Nacionales' salary and vacation pay
corresponding to the unexpired portion of his employment contract with ZAMEL.
In 1983, petitioner, a duly licensed private employment agency, recruited and
deployed private respondent for employment with ZAMEL as an architectural
draftsman in Saudi Arabia. On May 25, 1983, a service agreement was executed
by private respondent and ZAMEL whereby the former was to receive per month
a salary of US$500.00 plus US$100.00 as allowance for a period of one (1) year
commencing from the date of his arrival in Saudi Arabia. Private respondent
departed for Saudi Arabia on June 28,1983.
On February 13, 1984, ZAMEL terminated the employment of private respondent
on the ground that his performance was below par. For three (3) successive days
thereafter, he was detained at his quarters and was not allowed to report to work
until his exit papers were ready. On February 16, 1984, he was made to board a
plane bound for the Philippines.
Private respondent then filed on April 23, 1984 a complaint for illegal termination
against petitioner and ZAMEL with the POEA, docketed as POEA Case No. (L)
84-04-401.
Based on a finding that petitioner and ZAMEL failed to establish that private
respondent was terminated for just and valid cause, the Workers' Assistance and
Adjudication Office of the POEA issued a decision dated June 23, 1986 signed
dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of the
complainant and against respondents, ordering the latter to pay,
jointly and severally, to complainant the following amounts:
1. TWO THOUSAND SIX HUNDRED FORTY US DOLLARS
(US$2,640.00) or its equivalent in Philippine currency at the time
of payment, representing the salaries corresponding to the
unexpired portion of complainant's contract;
2. SIX HUNDRED US DOLLARS (US$ 600.00) less partial
payment of FIVE HUNDRED FIFTY-EIGHT SAUDI RIYALS
(SR558), or its equivalent in Philippine currency at the time of
actual payment, representing the unpaid balance of complainant's
vacation pay;
3. THREE HUNDRED FIFTY US DOLLARS (US$350.00) or its
equivalent in Philippine currency at the time of actual payment
representing reimbursement of salary deductions for return travel
fund;
4. Ten percent (10%) of the above-stated amounts, as and for
attorney's fees.
Complainant's claim for legal and transportation expenses are
hereby DISMISSED for lack of merit.
SO ORDERED.
[POEA Decision, p. 5; Rollo, p. 34.]
On July 18, 1986, petitioner filed thru its new counsel a motion for
reconsideration which was treated as an appeal to the NLRC by the POEA.
Petitioner alleged that the POEA erred in holding it solidarity liable for ZAMEL's
violation of private respondent's service agreement even if it was not a party to
the agreement.
In a resolution promulgated on December 11, 1986, the NLRC affirmed the POEA
decision, holding that, as a duly licensed private employment agency, petitioner
is jointly and severally liable with its foreign principal ZAMEL for all claims and
liabilities which may arise in connection with the implementation of the
employment contract or service agreement [NLRC Decision, pp. 3-4; Rollo, pp.
26-27].
On March 30, 1987, the NLRC denied for lack of merit petitioner's motion for
reconsideration.
Hence, petitioner filed the present petition captioned as "Petition for Review".
At this point, it is not amiss to note that the filing of a "Petition for Review" under
Rule 45 of the Rules of Court is not the proper means by which NLRC decisions
are appealed to the Supreme Court. It is only through a petition
for certiorari under Rule 65 that NLRC decisions may be reviewed and nullified
on the grounds of lack of jurisdiction or grave abuse of discretion amounting to
lack or excess of jurisdiction. Nevertheless, in the interest of justice, this Court
opted to treat the instant petition as if it were a petition for certiorari. Thus, after
the filing of respondents' comments, petitioner's joint reply thereto, and
respondents' rejoinders, the Court resolved to consider the issues joined and the
case submitted for decision.
The case at bar involves two principal issues, to wit:
I. Whether or not petitioner as a private employment agency may
be held jointly and severally liable with the foreign-based
employer for any claim which may arise in connection with the
implementation of the employment contracts of the employees
recruited and deployed abroad;
II. Whether or not sufficient evidence was presented by petitioner
to establish the termination of private respondent's employment
for just and valid cause.
I.
Petitioner contends that there is no provision in the Labor Code, or the omnibus
rules implementing the same, which either provides for the "third-party liability" of
an employment agency or recruiting entity for violations of an employment
agreement performed abroad, or designates it as the agent of the foreign-based
employer for purposes of enforcing against the latter claims arising out of an
employment agreement. Therefore, petitioner concludes, it cannot be held jointly
and severally liable with ZAMEL for violations, if any, of private respondent's
service agreement.
Petitioner's conclusion is erroneous. Petitioner conveniently overlooks the fact
that it had voluntarily assumed solidary liability under the various contractual
undertakings it submitted to the Bureau of Employment Services. In applying for
its license to operate a private employment agency for overseas recruitment and
placement, petitioner was required to submit, among others, a document or
verified undertaking whereby it assumed all responsibilities for the proper use of
its license and the implementation of the contracts of employment with the
workers it recruited and deployed for overseas employment [Section 2(e), Rule V,
Book 1, Rules to Implement the Labor Code (1976)]. It was also required to file
with the Bureau a formal appointment or agency contract executed by the
foreign-based employer in its favor to recruit and hire personnel for the former,
which contained a provision empowering it to sue and be sued jointly and
solidarily with the foreign principal for any of the violations of the recruitment
agreement and the contracts of employment [Section 10 (a) (2), Rule V, Book I of
the Rules to Implement the Labor Code (1976)]. Petitioner was required as well
to post such cash and surety bonds as determined by the Secretary of Labor to
guarantee compliance with prescribed recruitment procedures, rules and
regulations, and terms and conditions of employment as appropriate [Section 1 of
Pres. Dec. 1412 (1978) amending Article 31 of the Labor Code].
These contractual undertakings constitute the legal basis for holding petitioner,
and other private employment or recruitment agencies, liable jointly and severally
with its principal, the foreign-based employer, for all claims filed by recruited
workers which may arise in connection with the implementation of the service
agreements or employment contracts [See Ambraque International Placement
and Services v. NLRC, G.R. No. 77970, January 28, 1988, 157 SCRA 431; Catan
v. NLRC, G.R. No. 77279, April 15, 1988, 160 SCRA 691; Alga Moher
International Placement Services v. Atienza, G.R. No. 74610, September 30,
1988].
In a belated attempt to bolster its position, petitioner contends in its joint reply
that the omnibus rules implementing the Labor Code are invalid for not having
been published in the Official Gazette pursuant to the Court's pronouncements in
the cases of Tanada v. Tuvera [G.R. No. 63915, April 25, 1985, 136 SCRA 27;
December 29, 1986, 146 SCRA 446]. Petitioner further contends that the 1985
POEA Rules and Regulations, in particular Section 1, Rule I of Book VII ** quoted in
the NLRC decision, should not have been retroactively applied to the case at bar.
But these contentions are irrelevant to the issues at bar. They proceed from a
misapprehension of the legal basis of petitioner's liabilities as a duly licensed
private employment agency. It bears repeating that the basis for holding
petitioner jointly and severally liable with the foreign-based employer ZAMEL is
the contractual undertakings described above which it had submitted to the
Bureau of Employment Services. The sections of the omnibus rules
implementing the Labor Code cited by this Court merely enumerate the various
documents or undertakings which were submitted by petitioner as applicant for
the license to operate a private employment agency for overseas recruitment and
placement. These sections do not create the obligations and liabilities of a private
employment agency to an employee it had recruited and deployed for work
overseas. It must be emphasized again that petitioner assumed the obligations
and liabilities of a private employment agency by contract. Thus, whether or not
the omnibus rules are effective in accordance with Tanada v. Tuvera is an issue
the resolution of which does not at all render nugatory the binding effect upon
petitioner of its own contractual undertakings.
The Court, consequently, finds it unnecessary to pass upon both the implications
of Tanada v. Tuvera on the omnibus rules implementing the Labor Code as well
as the applicability of the 1985 POEA Rules and Regulations.
Petitioner further argues that it cannot be held solidarily liable with ZAMEL since
public respondent had not acquired jurisdiction over ZAMEL through extra-
territorial service of summons as mandated by Section 17, Rule 14 of the Rules
of Court.
This argument is untenable. It is well-settled that service upon any agent of a
foreign corporation, whether or not engaged in business in the Philippines,
constitutes personal service upon that corporation, and accordingly, judgment
may be rendered against said foreign corporation [Facilities Management
Corporation v. De la Osa, G.R. No. L-38649, March 26, 1979, 89 SCRA 131]. In
the case at bar, it cannot be denied that petitioner is an agent of ZAMEL. The
service agreement was executed in the Philippines between private respondent
and Milagros G. Fausto, the General Manager of petitioner, for and in behalf of
ZAMEL [Annex "D" of Petition, p. 3; Rollo, p. 37]. Moreover, one of the
documents presented by petitioner as evidence, i.e., the counter-affidavit of its
General Manager Ms. Fausto, contains an admission that it is the representative
and agent of ZAMEL [See Paragraph No. 1 of Annex "H" of Petition; Rollo. p. 43].
Considering the foregoing, the Court holds that the NLRC committed no grave
abuse of discretion amounting to lack or excess of jurisdiction in declaring
petitioner jointly and severally liable with its foreign principal ZAMEL for all claims
which have arisen in connection with the implementation of private respondent's
employment contract.
II.
Petitioner asserts that the NLRC failed to consider the overwhelming evidence it
had presented before the POEA which establishes the fact that private
respondent was terminated for just and valid cause in accordance with his
service agreement with ZAMEL.
This assertion is without merit. The NLRC upheld the POEA finding that
petitioner's evidence was insufficient to prove termination from employment for
just and valid cause. And a careful study of the evidence thus far presented by
petitioner reveals to this Court that there is legal basis for public respondent's
conclusion.
It must be borne in mind that the basic principle in termination cases is that the
burden of proof rests upon the employer to show that the dismissal is for just and
valid cause, and failure to do so would necessarily mean that the dismissal was
not justified and, therefore, was illegal [Polymedic General Hospital v. NLRC,
G.R. No. 64190, January 31, 1985,134 SCRA 420; and also Article 277 of the
Labor Code]. And where the termination cases involve a Filipino worker recruited
and deployed for overseas employment, the burden naturally devolves upon both
the foreign-based employer and the employment agency or recruitment entity
which recruited the worker, for the latter is not only the agent of the former, but is
also solidarily liable with its foreign principal for any claims or liabilities arising
from the dismissal of the worker.
In the case at bar, petitioner had indeed failed to discharge the burden of proving
that private respondent was terminated from employment for just and valid
cause. Petitioner's evidence consisted only of the following documents:
(1) A letter dated May l5, 1984 allegedly written by an official of
ZAMEL, stating that a periodic evaluation of the entire staff was
conducted; that the personnel concerned were given a chance to
improve; that complainant's performance was found below par;
and that on February 13,1984, at about 8:30 AM, complainant
was caught on the way out of the office to look for another job
during office hours without the permission of his supervisor;
(2) A telex message allegedly sent by employees of ZAMEL,
stating that they have not experienced maltreatment, and that the
working conditions (in ZAMEL) are good;
(3) The signatures of fifteen (15) persons who allegedly sent the
telex message;
(4) A receipt dated February 16, 1984 signed by complainant,
stating that he was paid SR915 representing his salary and
SR558, representing vacation pay for the month of February
1984;
(5) The counter-affidavit of Milagros G. Fausto, the General
Manager of Royal Crown, stating that complainant was dismissed
because of poor performance, acts of dishonesty and
misconduct, and denying complainant's claim that his salary and
leave pay were not paid, and that he was maltreated [See POEA
Decision, p. 3; Rollo, p. 32, See also Annexes "E", "F", "F-1 ", "G"
and "H" of Petition; Rollo, pp. 38-43].
Certainly, the telex message supposedly sent by the employees of ZAMEL is not
relevant in the determination of the legality of private respondent's dismissal. On
the other hand, the receipt signed by private respondent does not prove payment
to him of the salary and vacation pay corresponding to the unexpired portion of
his contract.
More importantly, except for its allegation that private respondent was caught on
February 13,1984 on his way out of the office compound without permission,
petitioner had failed to allege and to prove with particularity its charges against
private respondent. The letter dated May 15, 1984 allegedly written by the Actg.
Project Architect and the counter-affidavit of petitoner's General Manager merely
stated that the grounds for the employee's dismissal were his unsatisfactory
performance and various acts of dishonesty, insubordination and misconduct. But
the particular acts which would indicate private respondent's incompetence or
constitute the above infractions were neither specified nor described therein. In
the absence of any other evidence to substantiate the general charges hurled
against private respondent, these documents, which comprise petitioner's
evidence in chief, contain empty and self-serving statements insufficient to
establish just and valid cause for the dismissal of private respondent [See Euro-
Lines, Phils., Inc. v. NLRC, G.R. No. 75782, December 1, 1987,156 SCRA 78;
Ambraque International Placement and Services v. NLRC, supra].
The Court is aware of the document attached in petitioner's manifestation and
joint reply which is purportedly a xerox copy of a statement executed on
December 13, 1987 in Saudi Arabia by private respondent claiming that the latter
had settled the case with ZAMEL and had "received all [his] benefits that is
salary, vacation pay, severance pay and all other bonuses before [he] left the
kingdom of Saudi Arabia on 13 Feb. 1984 and hereby indemnify [ZAMEL] from
any claims or liabilities, [he] raised in the Philippine Courts" [Annex "A" of
petitioner's Manifestation with Motion to hold in Abeyance; Rollo, p. 82. And also
Annex "A" of petitioner's Joint Reply; Rollo, p. 111].
But the veracity of the contents of the document is precisely disputed by private
respondent. He claims that he was made to sign the above statement against his
will and under threat of deportation [See Telex of private respondent received by
the Supreme Court of the Philippines on January 14,1988; Rollo, p. 83. And also
private respondent's Rejoinder, pp. 1-3; Rollo, pp. 139-141].
Petitioner finally contends that inasmuch as clause no. 13 of the service
agreement provided that the law under which the agreement shall be regulated
was the laws of Saudi Arabia [Annex "D" of Petition, p. 2; Rollo, p. 36], public
respondent should have taken into account the laws of Saudi Arabia and the
stricter concept of morality availing in that jurisdiction for the determination of the
legality of private respondent's dismissal.
This contention is patently erroneous. The provisions of the Labor Code of the
Philippines, its implementing rules and regulations, and doctrines laid down in
jurisprudence dealing with the principle of due process and the basic right of all
Filipino workers to security of tenure, provide the standard by which the legality
of the exercise by management of its prerogative to dismiss incompetent,
dishonest or recalcitrant employees, is to be determined. Whether employed
locally or overseas, all Filipino workers enjoy the protective mantle of Philippine
labor and social legislation, contract stipulations to the contrary notwithstanding.
This pronouncement is in keeping with the basic public policy of the State to
afford protection to labor, promote full employment, ensure equal work
opportunities regardless of sex, race or creed, and regulate the relations between
workers and employers. For the State assures the basic rights of all workers to
self-organization, collective bargaining, security of tenure, and just and humane
conditions of work [Article 3 of the Labor Code of the Philippines; See
also Section 18, Article II and Section 3, Article XIII, 1987 Constitution]. This
ruling is likewise rendered imperative by Article 17 of the Civil Code which states
that laws "which have for their object public order, public policy and good
customs shall not be rendered ineffective by laws or judgments promulgated, or
by determination or conventions agreed upon in a foreign country."
Needless to say, the laws of Saudi Arabia which were, incidentally, neither
pleaded nor proved by petitioner, have absolutely no bearing whatsoever to the
case at bar.
The Court holds, therefore, that the NLRC committed no grave abuse of
discretion amounting to lack or excess of jurisdiction in upholding the POEA's
finding of insufficiency of evidence to prove termination for just and valid cause.
WHEREFORE, the Court Resolved to DISMISS the instant petition.
SO ORDERED.
Fernan, C.J., Feliciano and Bidin, JJ., concur
Gutierrez, Jr., J., is on leave.
ROYAL CROWN INTERNATIONALE VS NLRC
GR NO. 78085
OCTOBER 16, 1989
FACTS: Petitioner, a duly licensed private employment agency, recruited and
deployed private respondent Virgilio for employment with ZAMEL as an architectural
draftsman in Saudi Arabia. Service agreement was executed by private respondent
and ZAMEL whereby the former was to receive per month a salary of US$500.00
plus US$100.00 as allowance for a period of one year commencing from the date of
his arrival in Saudi Arabia. However, ZAMEL terminated the employment of private
respondent on the ground that his performance was below par. For three successive
days thereafter, he was detained at his quarters and was not allowed to report to
work until his exit papers were ready. On February 16, 1984, he was made to board a
plane bound for the Philippines. Private respondent then filed a complaint for illegal
termination against Petitioner Royal Crown Internationale and ZAMEL with the
POEA.
Petitioner contends that there is no provision in the Labor Code, or the omnibus rules
implementing the same, which either provides for the "third-party liability" of an
employment agency or recruiting entity for violations of an employment agreement
performed abroad, or designates it as the agent of the foreign-based employer for
purposes of enforcing against the latter claims arising out of an employment
agreement. Therefore, petitioner concludes, it cannot be held jointly and severally
liable with ZAMEL for violations, if any, of private respondent's service agreement.
ISSUE: WON petitioner as a private employment agency may be held jointly and
severally liable with the foreign-based employer for any claim which may arise in
connection with the implementation of the employment contracts of the employees
recruited and deployed abroad.
HELD: Yes, Petitioner conveniently overlooks the fact that it had voluntarily assumed
solidary liability under the various contractual undertakings it submitted to the Bureau
of Employment Services. In applying for its license to operate a private employment
agency for overseas recruitment and placement, petitioner was required to submit,
among others, a document or verified undertaking whereby it assumed all
responsibilities for the proper use of its license and the implementation of the
contracts of employment with the workers it recruited and deployed for overseas
employment. It was also required to file with the Bureau a formal appointment or
agency contract executed by the foreign-based employer in its favor to recruit and
hire personnel for the former, which contained a provision empowering it to sue and
be sued jointly and solidarily with the foreign principal for any of the violations of the
recruitment agreement and the contracts of employment. Petitioner was required as
well to post such cash and surety bonds as determined by the Secretary of Labor to
guarantee compliance with prescribed recruitment procedures, rules and regulations,
and terms and conditions of employment as appropriate. These contractual
undertakings constitute the legal basis for holding petitioner, and other private
employment or recruitment agencies, liable jointly and severally with its principal, the
foreign-based employer, for all claims filed by recruited workers which may arise in
connection with the implementation of the service agreements or employment
contracts.
OSM SHIPPING PHILIPPINES, INC. VS. NLRC1
(Panganiban, 2003)
Petition for review on certiorari of the decisions of the CA
Facts:
 A complaint for illegal dismissal and non-payment of salaries, overtime pay and
vacation pay was filed by Fermin Guerrero against OSM Shipping Phils. Guerrero
was hired by petitioner, in behalf of its principal Phil. Carrier Shipping Agency
(PS-SLC) to board its vessel MV Princess Hoa as Master Mariner for a contract of
10 months.
 He boarded the ship on July 21, 1994. Almost 7 months later, he was forced to
disembark the ship because he was never paid any compensation for his work
since he boarded the ship and as such, he could not even buy his basic
necessities.
 OSM story:
o Concorde Pacific, the American company which owns the MV
Princess Hoa, appointed Phil. Carrier Shipping Agency Services Co.
(PC-SASCO) as ship manager, one of whose responsibilities was
the selection or determination of qualifications of Filipino Seamen.
o On the same date, OSM entered into a Crew Agreement with PC
-SASCO for the purpose of processing the documents of crew
members of the vessel.
o The initial plan was to use the vessel for overseas trade. But
Concorde changed its plans for the vessel and decided to use it
instead for coastwide trade, thus the vessel never left the
Philippines. It had the vessel converted to Philippine registry by
way of bareboat chartering it out to another entity named PS-SLC.
o To do this, Concorde, through its representative had to terminate is
crew agreement with PS-SASCO. Consequently, the latter
terminated its crew agreement with OSM.
o PS-SLC, the bareboat charterer, is now the disponent
owner/employer of the crew and is thus responsible for the
payment of the complainant’s wages.
 Labor Arbiter rendered its decision in favor of Guerrero, ordering OSM and PS-
SASCO to jointly and severally pay Guerrero’s claims. NLRC affirmed with
modification.
 OSM filed with the CA a petition to set aside the NLRC judgment. This was
dismissed because petitioner did not comply with the requirements of Sec. 3
Rule 46 of the ROC by failing to attach a duplicate original or certified true
copy of the LA’s decision. They only attached a mere machine copy.
 Hence this petition.
1 Farina Salvador

Issue:
1) Procedural – WON CA was correct in dismissing the petition for
failure to comply with the said requirement? – NO
2) Substantive – WON OSM is jointly liable with PC-SASCO, as its
agent. - YES
Held:
1) Sec. 3 rule 46 of the ROC requires that a duplicate original or certified
true copy of only the questioned decision should be attached to the
petition and not all supporting papers. Since the LA’s decision was not
questioned ruling, a machine copy of it would suffice. The duplicate original
of the questioned decision of the NLRC should be attached, and this was
complied with. However, even if petitioner’s procedural contention was
correct, this Court still ruled for Guerrero on the merits. To remand this
case to the CA would further delay the recovery of wages.
2) On behalf of its principal, OSM does not deny hiring Guerrero as master
mariner. Petitioner was the legitimate manning agent of PS-SASCO and it
was allowed to recruit, hire and deploy seamen on board the vessel.
a. It argues that since Guerrero was never deployed overseas, his
employment contract became ineffective because its object was
allegedly absent. – Employment contract like any contract is
perfected upon the concurrence of essential elements such as
consent of the parties, object certain (subject matter of the
contract) and the cause of the obligation. Contrary to
petitioner’s contention, the object of the contract was the
rendition of service by Guerrero on board the vessel. The
non-deployment overseas of the ship did not affect the
validity of the perfected employment contract.
b. OSM also contends that there was a novation of the contract when
Concorde decided to use the ship for coastwide trade. – A contract
cannot be novated solely by the will of one party.
3) Joint and solidary liability is meant to assure aggrieved workers of
immediate and sufficient payment of what is due them.
Decision of NLRC affirmed.
Santiago vs. CF Sharp Crew Management, Inc., 527 SCRA 165 ,
July 10, 2007
Labor Law; Employer-Employee Relationships; Seafarers; Considering
that petitioner was not able to depart from the airport or seaport in the
point of hire, the employment contract did not commence and no
employer-employee relationship was created between the parties.—
There is no question that the parties entered into an employment
contract on 3 February 1998, whereby petitioner was contracted by
respondent to render services on board “MSV Seaspread” for the
consideration of US$515.00 per month for nine (9) months, plus
overtime pay. However, respondent failed to deploy petitioner from the
port of Manila to Canada. Considering that petitioner was not able to
depart from the airport or seaport in the point of hire, the employment
contract did not commence, and no employer-employee relationship
was created between the parties.
Same; Same; Distinction must be made between the perfection of the
employment contract and the commencement of the employer
employee relationship; Even before the start of any employer-
employee relationship, contemporaneous with the perfection of the
employment contract was the birth of certain rights and obligations, the
breach of which may give rise to a cause of action against the erring
party.—A distinction must be made between the perfection of the
employment contract and the commencement of the employer-
employee relationship. The perfection of the contract, which in this
case coincided with the date of execution thereof, occurred when
petitioner and respondent agreed on the object and the cause, as well
as the rest of the terms and conditions therein. The commencement of
the employer employee relationship, as earlier discussed, would have
taken place had petitioner been actually deployed from the point of
hire. Thus, even before the start of any employer-employee
relationship, contemporaneous with the perfection of the employment
contract was the birth of certain rights and obligations, the breach of
which may give rise to a cause of action against the erring party. Thus,
if the reverse had happened, that is the seafarer failed or refused to be
deployed as agreed upon, he would be liable for damages.
Same; Same; Seafarers; Neither the manning agent nor the employer
can simply prevent a seafarer from being deployed without a valid
reason; Respondent unilaterally and unreasonably reneged on its
obligation to deploy petitioner and must therefore answer for the actual
damages he suffered.—While the POEA Standard Contract must be
recognized and respected, neither the manning agent nor the employer
can simply prevent a seafarer from being deployed without a valid
reason. Respondent’s act of preventing petitioner from departing the
port of Manila and boarding “MSV Seaspread” constitutes a breach of
contract, giving rise to petitioner’s cause of action. Respondent
unilaterally and unreasonably reneged on its obligation to deploy
petitioner and must therefore answer for the actual damages he
suffered.
Same; Same; Same; The fact that the Philippine Overseas
Employment Administration (POEA) Rules are silent as to the payment
of damages to the affected seafarer does not mean that the seafarer is
precluded from claiming the same.—We take exception to the Court of
Appeals’ conclusion that damages are not recoverable by a worker
who was not deployed by his agency. The fact that the POEA Rules
are silent as to the payment of damages to the affected seafarer does
not mean that the seafarer is precluded from claiming the same. The
sanctions provided for non-deployment do not end with the suspension
or cancellation of license or fine and the return of all documents at no
cost to the worker. They do not forfend a seafarer from instituting an
action for damages against the employer or agency which has failed to
deploy him.
Same; Same; Despite the absence of an employer-employee
relationship between petitioner and respondent, the Court rules that
the National Labor Relations Commission (NLRC) has jurisdiction over
petitioner’s complaint.—Despite the absence of an employer employee
relationship between petitioner and respondent, the Court rules that
the NLRC has jurisdiction over petitioner’s complaint. The jurisdiction
of labor arbiters is not limited to claims arising from employer-
employee relationships. Section 10 of R.A. No. 8042 (Migrant Workers
Act), provides that: Sec.10.Money Claims.—Notwithstanding any
provision of law to the contrary, the Labor Arbiters of the National
Labor Relations Commission (NLRC) shall have the original and
exclusive jurisdiction to hear and decide, within ninety (90) calendar
days after the filing of the complaint, the claims arising out of an
employer-employee relationship or by virtue of any law or contract
involving Filipino workers for overseas deployment including claims for
actual, moral, exemplary and other forms of damages. x x x [Emphasis
supplied] Since the present petition involves the employment contract
entered into by petitioner for overseas employment, his claims are
cognizable by the labor arbiters of the NLRC.
Same; Same; Seafarers; Respondent liable to pay petitioner actual
damages in the form of the loss of nine (9) months’ worth of salary as
provided in the contract, petitioner is not entitled to overtime pay.—
Respondent is thus liable to pay petitioner actual damages in the form
of the loss of nine (9) months’ worth of salary as provided in the
contract. He is not, however, entitled to overtime pay. While the
contract indicated a fixed overtime pay, it is not a guarantee that he
would receive said amount regardless of whether or not he rendered
overtime work. Even though petitioner was “prevented without valid
reason from rendering regular much less overtime service,” the fact
remains that there is no certainty that petitioner will perform overtime
work had he been allowed to board the vessel. The amount of
US$286.00 stipulated in the contract will be paid only if and when the
employee rendered overtime work. This has been the tenor of our
rulings in the case of Stolt-Nielsen Marine Services (Phils.), Inc. v.
National Labor Relations Commission, 258 SCRA 643 (1996), where
we discussed the matter in this light: The contract provision means that
the fixed overtime pay of 30% would be the basis for computing the
overtime pay if and when overtime work would be rendered. Simply
stated, the rendition of overtime. work and the submission of sufficient
proof that said work was actually performed are conditions to be
satisfied before a seaman could be entitled to overtime pay which
should be computed on the basis of 30% of the basic monthly salary.
In short, the contract provision guarantees the right to overtime pay but
the entitlement to such benefit must first be established. Realistically
speaking, a seaman, by the very nature of his job, stays on board a
ship or vessel beyond the regular eight-hour work schedule. For the
employer to give him overtime pay for the extra hours when he might
be sleeping or attending to his personal chores or even just lulling
away his time would be extremely unfair and unreasonable.
Same; Same; Attorney’s Fees; Respondent’s failure to deploy
petitioner is unfounded and unreasonable, forcing petitioner to institute
the suit below; Award of attorney’s fees is thus warranted.—The Court
also holds that petitioner is entitled to attorney’s fees in the concept of
damages and expenses of litigation. Attorney’s fees are recoverable
when the defendant’s act or omission has compelled the plaintiff to
incur expenses to protect his interest. We note that respondent’s basis
for not deploying petitioner is the belief that he will jump ship just like
his brother, a mere suspicion that is based on alleged phone calls of
several persons whose identities were not even confirmed. Time and
again, this Court has upheld management prerogatives so long as they
are exercised in good faith for the advancement of the employer’s
interest and not for the purpose of defeating or circumventing the rights
of the employees under special laws or under valid agreements.
Respondent’s failure to deploy petitioner is unfounded and
unreasonable, forcing petitioner to institute the suit below. The award
of attorney’s fees is thus warranted.
Same; Same; Seafarers; Nature of Employment; Seafarers are
considered contractual employees and cannot be considered as
regular employees under the Labor Code.—We likewise do not see
respondent’s failure to deploy petitioner as an act designed to prevent
the latter from attaining the status of a regular employee. Even if
petitioner was able to depart the port of Manila, he still cannot be
considered a regular employee, regardless of his previous contracts of
employment with respondent. In Millares v. National Labor Relations
Commission, 385 SCRA 306 (2002), the Court ruled that seafarers are
considered contractual employees and cannot be considered as
regular employees under the Labor Code. Their employment is
governed by the contracts they sign every time they are rehired and
their employment is terminated when the contract expires. The
exigencies of their work necessitates that they be employed on a
contractual basis.
SERRANO v. GALLANT MARITIME SERVICES INC. & MARLOWE
NAVIGATION CO., INC.
G.R. No. 167614. March 24, 2009
Facts:
Petitioner was hired by Gallant Maritime Services, Inc. and Marlow
Navigation Co., Ltd. (respondents) under a POEA-approved Contract of Employment.
On March 19, 1998, the date of his departure, petitioner was constrained to accept a
downgraded employment contract for the position of Second Officer with a monthly
salary of US$1,000.00, upon the assurance and representation of respondents that he
would be made Chief Officer by the end of April. However, 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.
Petitioner's employment contract was for a period of 12 months or from March
19, 1998 up to March 19, 1999, but at the time of his repatriation on May 26, 1998, he
had served only two (2) months and seven (7) days of his contract, leaving an
unexpired portion of nine (9) months and twenty-three (23) days.
Petitioner filed with the Labor Arbiter (LA) a Complaint against respondents
for constructive dismissal and for payment of his money claims. LA rendered the
dismissal of petitioner illegal and awarding him monetary benefits. Respondents
appealed to the NLRC to question the finding of the LA. Likewise, petitioner also
appealed to the NLRC on the sole issue that the LA erred in not applying the ruling of
the Court in Triple Integrated Services, Inc. v. National Labor Relations Commission
that in case of illegal dismissal, OFWs are entitled to their salaries for the unexpired
portion of their contracts.
Petitioner also appealed to the NLRC on the sole issue that the LA erred in not
applying the ruling of the Court in Triple Integrated Services, Inc. v. National Labor
Relations Commission that in case of illegal dismissal, OFWs are entitled to their
salaries for the unexpired portion of their contracts. Petitioner filed a Motion for Partial
Reconsideration; he questioned the constitutionality of the subject clause. Petitioner
filed a Petition for Certiorari with the CA, reiterating the constitutional challenge
against the subject clause. CA affirmed the NLRC ruling on the reduction of the
applicable salary rate; however, the CA skirted the constitutional issue raised by
petitioner.
th
The last clause in the 5 paragraph of Section 10, Republic Act (R.A.) No.
8042, to wit:
Sec. 10. Money Claims. - x x x In case of termination of
overseas employment without just, valid or authorized cause as
defined by law or contract, the workers shall be entitled to the full
reimbursement of his placement fee with interest of twelve percent
(12%) per annum, plus his salaries for the unexpired portion of his
employment contract or for three (3) months for every year of the
unexpired term, whichever is less.
Applying the subject clause, the NLRC and the CA computed the lump-sum
salary of petitioner at the monthly rate of US$1,400.00 covering the period of three
months out of the unexpired portion of nine months and 23 days of his employment
contract or a total of US$4,200.00.
Impugning the constitutionality of the subject clause, petitioner contends that,
in addition to the US$4,200.00 awarded by the NLRC and the CA, he is entitled to
US$21,182.23 more or a total of US$25,382.23, equivalent to his salaries for the entire
nine months and 23 days left of his employment contract, computed at the monthly rate
of US$2,590.00
Issue:
1.) Is petitioner entitled to his monetary claim which is the lump-sum salary
for the entire unexpired portion of his 12-month employment contract, and
not just for a period of three months?
2.) Should petitioner’s overtime and leave pay form part of the salary basis in
the computation of his monetary award, because these are fixed benefits
that have been stipulated into his contract?
Held:
1.) Yes. 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 month. The subject clause “or for three months for every year of the
unexpired term, whichever is less” in the 5th paragraph of Section 10 of Republic Act
No. 8042 is declared unconstitutional.
In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-term
employment who were illegally discharged were treated alike in terms of the
computation of their money claims: they were uniformly entitled to their salaries for
the entire unexpired portions of their contracts. But with the enactment of R.A. No.
8042, specifically the adoption of the subject clause, illegally dismissed OFWs with an
unexpired portion of one year or more in their employment contract have since been
differently treated in that their money claims are subject to a 3-month cap, whereas no
such limitation is imposed on local workers with fixed-term employment.
The Court concludes that the subject clause contains a suspect classification
in that, in the computation of the monetary benefits of fixed-term employees who are
illegally discharged, it imposes a 3-month cap on the claim of OFWs with an
unexpired portion of one year or more in their contracts, but none on the claims of
 other OFWs or local workers with fixed-term employment. The subject clause Sameer’s Defense:
singles out one classification of OFWs and burdens it with a peculiar disadvantage. Respondent’s termination was due to her inefficiency, negligence in her duties, and her
“failure to comply with the work requirements [of] her foreign [employer];
The agency also claimed that it did not ask for a placement fee of NT$70,000.00 (evidenced
The Court further holds that the subject clause violates petitioner's right to by an OR bearing NT% 20,360.00);
substantive due process, for it deprives him of property, consisting of monetary Petitioner added that Wacoal’s accreditation with petitioner had already been transferred to the
benefits, without any existing valid governmental purpose. The subject clause being Pacific Manpower & Management Services, Inc. (Aug. 06, 1997) thus, obligation is substituted with Pacific,
unconstitutional, petitioner is entitled to his salaries for the entire unexpired period of which the latter denied
nine months and 23 days of his employment contract, pursuant to law and Labor Arbiter Ruling:
Case is dismissed – Rationale: Complaint is based on mere allegations.
jurisprudence prior to the enactment of R.A. No. 8042.
No excess payment of placement fees, based on the official receipt presented by petitioner
Transfer of obligation to Pacific is immaterial
2.) No. The word salaries in Section 10(5) does not include overtime andNLRC Ruling:
leave pay. For seafarers like petitioner, DOLE Department Order No. 33, series 1996, Joy is illegally dismissed
provides a Standard Employment Contract of Seafarers, in which salary is understood Reiterated the doctrine that the burden of proof to show that the dismissal was based on a just
as the basic wage, exclusive of overtime, leave pay and other bonuses; whereas or valid cause belongs to the employer
overtime pay is compensation for all work “performed” in excess of the regular eight It found that Sameer Overseas Placement Agency failed to prove that there were just causes
for termination.
hours, and holiday pay is compensation for any work “performed” on designated rest
There was no sufficient proof to show that respondent was inefficient in her work and that she
days and holidays. failed to comply with company requirements. 41 Furthermore, procedural due process was not observed in
terminating respondent.
By the foregoing definition alone, there is no basis for the automatic Did not rule on the issue of reimbursement of placement fees for lack of jurisdiction
inclusion of overtime and holiday pay in the computation of petitioner's monetary It refused to entertain the issue of the alleged transfer of obligations to Pacific.
award; unless there is evidence that he performed work during those periods. It did not acquire jurisdiction over that issue because Sameer Overseas Placement Agency
failed to appeal the Labor Arbiter’s decision not to rule on the matter.
SAMEER OVERSEAS PLACEMENT AGENCY, INC., Petitioner, v. JOY C. CABILES, Respondent Sameer filed for MR but NLRC dismissed; filed for petition for certiorari at CA
FACTS OF THE CASE: CA Ruling:
Petitioner, Sameer Overseas Placement Agency, Inc., is a recruitment and placement agency. Responding to an Affirmed NLRC with respect to the finding of illegal dismissal, Joy’s entitlement to the
ad it published, respondent, Joy C. Cabiles, submitted her application for a quality control job in Taiwan,equivalent
and of three months worth of salary, reimbursement of withheld repatriation expense, and attorney’s
signed with a one-year employment contract for a monthly salary of NT$15,360.00. fees.
The agency required her to pay a placement fee of 70,000.00 when she signed the employment contract. Remanded case to NLRC to address the validity of petitioner’s allegations against Pacific.
She was deployed to work in Taiwan for Wacoal, but was given a position as a cutter. ISSUE OF THE CASE:
Sameer Overseas Placement Agency claims that on July 14, 1997, a certain Mr. Huwang from Wacoal informed WON the Court of Appeals erred when it affirmed the ruling of the National Labor Relations
Commission
Joy, without prior notice, that she was terminated and that “she should immediately report to their office to finding respondent illegally dismissed and awarding her three months’ worth of salary, the
get her salary and passport.” She was asked to “prepare for immediate repatriation.” reimbursement of the cost of her repatriation, and attorney’s fees despite the alleged existence of just causes
of
Joy claims that she was told that from June 26 to July 14, 1997, she only earned a total of NT$9,000. According termination;
to her, Wacoal deducted NT$3,000 to cover her plane ticket to Manila. WON there was a just cause for termination because there was a finding of Wacoal that
She filed a filed a complaint with the National Labor Relations Commission against petitioner and Wacoal respondent
for was inefficient in her work;
illegal dismissal.
o WON Pacific that should now assume responsibility for Wacoal’s contractual obligations to To show that dismissal resulting from inefficiency in work is valid, it must be
the workers originally recruited by petitioner shown that:
SC RULING/RATIONALE: 1) the employer has set standards of conduct and workmanship
1.) JUST CAUSE: against which the employee will be judged;
o Sameer Overseas Placement Agency’s petition is without merit. SC find for 2) the standards of conduct and workmanship must have been
respondent. communicated to the employee; and
o Sameer Overseas Placement Agency failed to show that there was just cause for 3) the communication was made at a reasonable time prior to the
causing Joy’s dismissal. The employer, Wacoal, also failed to accord her due process of law. employee’s performance assessment.
o Indeed, employers have the prerogative to impose productivity and quality The regular employee must constantly attempt to prove to his or her
standards at work. They may also impose reasonable rules to ensure that the employees comply employer that he or she meets all the standards for employment. Courts should remain vigilant on
with these standards.59 Failure to comply may be a just cause for their dismissal. Certainly, allegations of the employer’s failure to communicate work standards that would govern one’s
employers cannot be compelled to retain the services of an employee who is guilty of acts thatemployment
are “if [these are] to discharge in good faith [their] duty to adjudicate.”
inimical to the interest of the employer. While the law acknowledges the plight and vulnerability DUE of PROCESS REQUIREMENT
workers, it does not “authorize the oppression or self-destruction of the employer.” Management Petitioner failed to comply with the due process requirement
prerogative is recognized in law and in our jurisprudence.This prerogative, however, should not be A valid dismissal requires both a valid cause and adherence to the valid
abused. It is “tempered with the employee’s right to security of tenure. Workers are entitled to
procedure of dismissal.The employer is required to give the charged employee at least two written
substantive and procedural due process before termination. They may not be removed notices from before termination.
employment without a valid or just cause as determined by law and without going through the One of the written notices must inform the employee of the particular acts
proper procedure.Security of tenure for labor is guaranteed by our Constitution that may cause his or her dismissal. 77 The other notice must “[inform] the employee of the
o With respect to the rights of overseas Filipino workers, follow the principle of lexemployer’s
loci decision.” Aside from the notice requirement, the employee must also be given “an
contractus. opportunity to be heard.”
o Pinned - Triple Eight Integrated Services, Inc. v. NLRC Republic Act No. 8042, otherwise known as the Migrant Workers and Overseas Filipinos
o Article 282 of the Labor Code enumerates the just causes of termination byAct theof 1995
employer. Thus: Respondent Joy Cabiles, having been illegally dismissed, is entitled to her salary for
o Art. 282. Termination by employer. the unexpired portion of the employment contract that was violated together with attorney’s fees
o An employer may terminate an employment for any of the following and reimbursement of amounts withheld from her salary.
causes: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his Sec 10 of RA 1082 – MONEY CLAIMS
employer or representative in connection with his work;(b) Gross and habitual neglect by the SEC. 15. REPATRIATION OF WORKERS; EMERGENCY REPATRIATION
employee of his duties;(c) Fraud or willful breach by the employee of the trust reposed in him FUNDby
his employer or duly authorized representative;(d) Commission of a crime or offense by the The reinstatement of the clause in Republic Act No. 8042 was not yet in
employee against the person of his employer or any immediate member of his family or his effect duly at the time of respondent’s termination from work in 1997. Republic Act No. 8042 before it
authorized representatives;(e) Other causes analogous to the foregoing. was amended by Republic Act No. 10022 governs this case.
o Petitioner’s allegation that respondent was inefficient in her work and Republic Act. No. 10022, violates the constitutional rights to equal protection
negligent in her duties may, therefore, constitute a just cause for termination under Article 282(b),
and due process.
but only if petitioner was able to prove it. SC reiterate their finding in Serrano v. Gallant Maritime that
o The burden of proving that there is just cause for termination is onlimiting the wages that should be recovered by an illegally dismissed overseas worker to three
employer. “The employer must affirmatively show rationally adequate evidence that the dismissal months is both a violation of due process and the equal protection clauses of the
was for a justifiable cause.” Failure to show that there was valid or just cause for termination would
Constitution.
necessarily mean that the dismissal was illegal.
o Respondent Joy Cabiles is entitled to her salary for the unexpired of 6% per annum from the finality of this judgment. Petitioner is also ORDERED to
portion of her contract, in accordance with Section 10 of Republic Act No. 8042. The award ofreimburse the respondent the withheld NT$3,000.00 salary and pay respondent attorney’s fees
three-month equivalence of respondent’s salary must be modified accordingly. Since she started of NT$300.00 at an interest of 6% per annum from the finality of this judgment.
working on June 26, 1997 and was terminated on July 14, 1997, respondent is entitledThe clause, “or for three (3) months for every year of the unexpired term, whichever is less” in
to her
salary from July 15, 1997 to June 25, 1998. “To rule otherwise would be iniquitous to petitioner and Section 7 of Republic Act No. 10022 amending Section 10 of Republic Act No. 8042 is
other OFWs, and would, in effect, send a wrong signal that principals/employers declared and unconstitutional and, therefore, null and void.
recruitment/manning agencies may violate an OFW’s security of tenure which an employment
contract embodies and actually profit from such violation based on an unconstitutional provision of
law.”
o Respondent is also entitled to an interest of 6% per annum on her
money claims from the finality of this judgment.
4.) LIABILITIES OF EMPLOYER
o SC clarify the liabilities of Wacoal as principal and petitioner as the employment
agency that facilitated respondent’s overseas employment.
o 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 claims including claims arising out of an employer-employee relationship and/or
damages. This section also provides that the performance bond filed by the local agency shall be
answerable for such money claims or damages if they were awarded to the employee.
o This provision is in line with the state’s policy of affording protection to labor
and alleviating workers’ plight.
o 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” against the
local agent, the overseas worker is assured of immediate and sufficient payment of what is due
them.
o Pinned – Prieto vs NLRC
o 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
to which they are subjected by their foreign employers, who probably feel they can do as they
please in their own country. While these 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.
The decision of the Court of Appeals is AFFIRMED with modification. Petitioner Sameer
Overseas Placement Agency is ORDERED to pay respondent Joy C. Cabiles the amount
equivalent to her salary for the unexpired portion of her employment contract at an interest