Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 92742 May 6, 1991

PHILIPPINE COMMERCIAL INTERNATIONAL BANK, petitioner,

vs.
NILDA S. JACINTO and NATIONAL LABOR RELATIONS COMMISSION, respondents.

Siguion Reyna, Montecillo & Ongsiako for petitioner.

Arturo A. Dimain for private respondent.

GANCAYCO, J.:

The responsibility of an employee of a bank for the loss of certain funds of the bank is the issue in this case.

Private respondent Nilda S. Jacinto is an employee of petitioner PCI Bank assigned at its Ninoy Aquino International
Airport (NAIA) Branch as customer relation assistant (CRA) since August 9, 1971. Her principal duties as CRA are
described in the Desk Manual signed and issued to her wherein it is also written that she acts as "alternate — FX
Clerk or Teller."

On May 1, 1984, the bank discovered the loss of some travelers checks amounting to P 25,325.00 in peso equivalent
transacted on April 30, 1984. As private respondent acted as FX clerk on said day inasmuch as the regular FX clerk
was on leave, an investigation was conducted by petitioner of private respondent and other personnel who were
interviewed and allowed to explain their side.

As petitioner found private respondent to be guilty of gross negligence, she was meted ten (10) days suspension
without pay on March 7 to 20, 1984 and was required to pay the amount of the loss of P25,325.00 by way of salary
deductions of P200.00 a month plus 50% of mid-year bonus; Christmas bonus and profit sharing. She was
transferred to the Baclaran branch of the bank on May 21, 1984.

Hence, private respondent filed a complaint with the National Labor Relations Commission (NLRC) on August 14,
1986 questioning her suspension and the penalty imposed on her as well as her transfer of assignment. After the
parties flied their position papers a decision was rendered by the designated labor arbiter on February 19, 1988 the
dispositive part of which reads as follows —

WHEREFORE, finding the ten (10) days suspension meted out to complainant as well as the
periodic deductions on her salary, bonuses, and 13th month pay for the payment of peso
equivalent of said lost travellers checks, to be unjustified, respondent PCIB should be, as it is
hereby ordered to erase from the service record or 201 file of complainant Nilda S. Jacinto said
suspension together with the merit increase and other benefits that she was deprived of, and to
return to her the amount so far deducted from her salary, bonuses and 13th month pay. Said
respondent is further directed to return complainant to her former assignment at MIA branch, if she
would prefer said assignment, there being no justifiable reason shown by respondent to overcome
complainant's contention that her said transfer to the Baclaran branch is due to her purported gross
negligence and which we, however, find to be unfounded.

SO ORDERED.1

Petitioner appealed therefrom to the public respondent NLRC wherein in due course a decision was rendered on
October 23, 1989 affirming the appealed decision with the only modification that the transfer of private respondent
was found to be an appropriate prerogative of management.

Hence, this petition for certiorari with a prayer for the issuance of a writ of preliminary injunction predicated on the
following grounds—

1. THE PUBLIC RESPONDENT GRAVELY ABUSED ITS DISCRETION IN HOLDING THAT

GROSS NEGLIGENCE CANNOT BE ATTRIBUTED TO RESPONDENT JACINTO AS SHE WAS
NOT FORMALLY DESIGNATED TO PERFORM THE FUNCTIONS OF AN FX CLERK.

2. THE PUBLIC RESPONDENT GRAVELY ABUSED ITS DISCRETION IN SUSTAINING THE

LABOR ARBITER'S FINDING OF NON-CULPABILITY IN FAVOR OF THE PRIVATE
RESPONDENT, NOTWITHSTANDING THE EVIDENCE ON RECORD SHOWING THE
CONTRARY.2

The petition is impressed with merit.

There is no question in the fact that on April 30, 1984, private respondent was requested by Mr. Gilberto C. Marquez,
who was the OIC of the NAIA branch of the bank, to assume the duties of Mrs. Bromeo, FX Clerk, who was on leave.
Private respondent acting as FX clerk stated that she received the travellers checks; she made the proof sheet
thereof and thereafter she placed the checks and proof sheet in the FX cash box. The following day, she reported the
loss of said travellers checks from the FX cash box.
In disclaiming any responsibility for the loss, she asserted that there was no memorandum or written designation for
her to act as FX Clerk, and that at the time, the one acting as FX Clerk was Mr. Marquez, in the absence of Mrs.
Bromeo so that she was only verbally requested by Mr. Marquez to perform the duties of FX Clerk then. She also
averred that the FX cash box was defective and should have been repaired by the bank.

What cannot be denied is the fact that private respondent actually performed the duties of the FX clerk on that fateful
day of April 30, 1984 upon request of Mr. Marquez. In so doing she assumed the responsibilities of the position.
Although she claimed to have prepared the proof sheet, none was found in the box. She did not microfilm the checks
as a matter of course. She did not formally endorse the FX box to the night shift FX clerk or to the cashier. More so,
considering that she knew the lock of the box was defective.

By and large, the Court holds that the finding of petitioner that private respondent was grossly negligent is well-taken.

Any employee who is entrusted with responsibility by his employer should perform the task assigned to him with care
and dedication. The lack of a written or formal designation should not be an excuse to disclaim any responsibility for
any damage suffered by the employer due to his negligence. The measure of the responsibility of an employee is that
if he performed his assigned task efficiently and according to the usual standards, then he may not be held personally
liable for any damage arising therefrom. Failing in this, the employee must suffer the consequences of his negligence
if not lack of due care in the performance of his duties.

The Court finds that the ten (10) days suspension of private respondent without pay as a penalty is proper and in
accordance with the prescribed rules of petitioner. However, the requirement that she reimburse the full value of the
loss to the bank is too harsh. Petitioner has also contributed to the loss when it failed to have the lock of the FX box
fixed and to have taken other security measures in the bank premises. Hence, said penalty should be mitigated by
requiring private respondent to reimburse the petitioner only one-half (1/2) of the loss by way of salary deduction.

WHEREFORE, the petition is GRANTED. The questioned decision of the public respondent dated October 23, 1989
and its resolution dated January 31, 1990 are hereby reversed and set aside, and the complaint of private respondent
is dismissed. However, the penalty imposed by petitioner on private respondent is hereby modified by requiring
private respondent to indemnify petitioner the amount of P 12,600.00, through regular payroll deductions. No costs.

SO ORDERED.

Narvasa, Cruz, Griño-Aquino and Medialdea, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

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

PEOPLE OF THE PHILIPPINES, petitioner,

vs.
HON. DOMINGO PANIS, Presiding Judge of the Court of First Instance of Zambales & Olongapo City, Branch
III and SERAPIO ABUG, respondents.

CRUZ, J:

The basic issue in this case is the correct interpretation of Article 13(b) of P.D. 442, otherwise known as the Labor
Code, reading as follows:

(b) Recruitment and placement' refers to any act of canvassing, enlisting, contracting,
transporting, hiring, or procuring workers, and includes referrals, contract services,
promising or advertising for employment, locally or abroad, whether for profit or not:
Provided, That any person or entity which, in any manner, offers or promises for a fee
employment to two or more persons shall be deemed engaged in recruitment and
placement.

Four informations were filed on January 9, 1981, in the Court of First Instance of Zambales and Olongapo City
alleging that Serapio Abug, private respondent herein, "without first securing a license from the Ministry of Labor as a
holder of authority to operate a fee-charging employment agency, did then and there wilfully, unlawfully and criminally
operate a private fee charging employment agency by charging fees and expenses (from) and promising employment
in Saudi Arabia" to four separate individuals named therein, in violation of Article 16 in relation to Article 39 of the
Labor Code. 1

Abug filed a motion to quash on the ground that the informations did not charge an offense because he was accused
of illegally recruiting only one person in each of the four informations. Under the proviso in Article 13(b), he claimed,
there would be illegal recruitment only "whenever two or more persons are in any manner promised or offered any
employment for a fee. " 2

Denied at first, the motion was reconsidered and finally granted in the Orders of the trial court dated June 24 and
September 17, 1981. The prosecution is now before us on certiorari. 3

The posture of the petitioner is that the private respondent is being prosecuted under Article 39 in relation to Article
16 of the Labor Code; hence, Article 13(b) is not applicable. However, as the first two cited articles penalize acts of
recruitment and placement without proper authority, which is the charge embodied in the informations, application of
the definition of recruitment and placement in Article 13(b) is unavoidable.

The view of the private respondents is that to constitute recruitment and placement, all the acts mentioned in this
article should involve dealings with two or m•re persons as an indispensable requirement. On the other hand, the
petitioner argues that the requirement of two or more persons is imposed only where the recruitment and placement
consists of an offer or promise of employment to such persons and always in consideration of a fee. The other acts
mentioned in the body of the article may involve even only one person and are not necessarily for profit.

Neither interpretation is acceptable. We fail to see why the proviso should speak only of an offer or promise of
employment if the purpose was to apply the requirement of two or more persons to all the acts mentioned in the basic
rule. For its part, the petitioner does not explain why dealings with two or more persons are needed where the
recruitment and placement consists of an offer or promise of employment but not when it is done through
"canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring (of) workers.

As we see it, the proviso was intended neither to impose a condition on the basic rule nor to provide an exception
thereto but merely to create a presumption. The presumption is that the individual or entity is engaged in recruitment
and placement whenever he or it is dealing with two or more persons to whom, in consideration of a fee, an offer or
promise of employment is made in the course of the "canvassing, enlisting, contracting, transporting, utilizing, hiring
or procuring (of) workers. "

The number of persons dealt with is not an essential ingredient of the act of recruitment and placement of workers.
Any of the acts mentioned in the basic rule in Article 13(b) win constitute recruitment and placement even if only one
prospective worker is involved. The proviso merely lays down a rule of evidence that where a fee is collected in
consideration of a promise or offer of employment to two or more prospective workers, the individual or entity dealing
with them shall be deemed to be engaged in the act of recruitment and placement. The words "shall be deemed"
create that presumption.

This is not unlike the presumption in article 217 of the Revised Penal Code, for example, regarding the failure of a
public officer to produce upon lawful demand funds or property entrusted to his custody. Such failure shall be prima
facie evidence that he has put them to personal use; in other words, he shall be deemed to have malversed such
funds or property. In the instant case, the word "shall be deemed" should by the same token be given the force of a
disputable presumption or of prima facie evidence of engaging in recruitment and placement. (Klepp vs. Odin Tp.,
McHenry County 40 ND N.W. 313, 314.)

It is unfortunate that we can only speculate on the meaning of the questioned provision for lack of records of debates
and deliberations that would otherwise have been available if the Labor Code had been enacted as a statute rather
than a presidential decree. The trouble with presidential decrees is that they could be, and sometimes were, issued
without previous public discussion or consultation, the promulgator heeding only his own counsel or those of his close
advisers in their lofty pinnacle of power. The not infrequent results are rejection, intentional or not, of the interest of
the greater number and, as in the instant case, certain esoteric provisions that one cannot read against the
background facts usually reported in the legislative journals.

At any rate, the interpretation here adopted should give more force to the campaign against illegal recruitment and
placement, which has victimized many Filipino workers seeking a better life in a foreign land, and investing hard-
earned savings or even borrowed funds in pursuit of their dream, only to be awakened to the reality of a cynical
deception at the hands of theirown countrymen.

WHEREFORE, the Orders of June 24, 1981, and September 17, 1981, are set aside and the four informations
against the private respondent reinstated. No costs.

SO ORDERED.

Teehankee, CJ, Abad Santos, Feria, Yap, Fernan, Narvasa, Melencio-Herrera, Alampay, Gutierrez, Jr. and Paras,
JJ., concur.
THE EXECUTIVE SECRETARY, THE SECRETARY OF JUSTICE, THE SECRETARY OF LABOR AND
EMPLOYMENT, AND THE SECRETARY OF FOREIGN AFFAIRS, OWWA PUNO, ADMINISTRATOR, and POEA
ADMINISTRATOR, petitioners,
vs.
THE HON. COURT OF APPEALS and ASIAN RECRUITMENT COUNCIL PHILIPPINE CHAPTER (ARCO-PHIL.),
INC., representing its members: Worldcare Services Internationale, Inc., Steadfast
International Recruitment Corporation, Dragon International Manpower Services Corporation, Verdant
Manpower Mobilization Corporation, Brent Overseas Personnel, Inc., ARL Manpower Services, Inc., Dahlzhen
International Services, Inc., Interworld Placement Center, Inc., Lakas Tao Contract Services, Ltd. Co., and
SSC Multiservices, respondents.

DECISION

CALLEJO, SR., J.:

In this petition for review on certiorari, the Executive Secretary of the President of the Philippines, the Secretary of
Justice, the Secretary of Foreign Affairs, the Secretary of Labor and Employment, the POEA Administrator and the
OWWA Administrator, through the Office of the Solicitor General, assail the Decision 1 of the Court of Appeals in CA-
G.R. SP No. 38815 affirming the Order2 of the Regional Trial Court of Quezon City dated August 21, 1995 in Civil
Case No. Q-95-24401, granting the plea of the petitioners therein for a writ of preliminary injunction and of the writ of
preliminary injunction issued by the trial court on August 24, 1995.

The Antecedents

Republic Act No. 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995, took effect on
July 15, 1995. The Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipino Act of
1995 was, thereafter, published in the April 7, 1996 issue of the Manila Bulletin. However, even before the law took
effect, the Asian Recruitment Council Philippine Chapter, Inc. (ARCO-Phil.) filed, on July 17, 1995, a petition for
declaratory relief under Rule 63 of the Rules of Court with the Regional Trial Court of Quezon City to declare as
unconstitutional Section 2, paragraph (g), Section 6, paragraphs (a) to (j), (l) and (m), Section 7, paragraphs (a) and
(b), and Sections 9 and 10 of the law, with a plea for the issuance of a temporary restraining order and/or writ of
preliminary injunction enjoining the respondents therein from enforcing the assailed provisions of the law.

In a supplement to its petition, the ARCO-Phil. alleged that Rep. Act No. 8042 was self-executory and that no
implementing rules were needed. It prayed that the court issue a temporary restraining order to enjoin the
enforcement of Section 6, paragraphs (a) to (m) on illegal recruitment, Section 7 on penalties for illegal recruitment,
and Section 9 on venue of criminal actions for illegal recruitments, viz:

Viewed in the light of the foregoing discussions, there appears to be urgent an imperative need for this
Honorable Court to maintain the status quo by enjoining the implementation or effectivity of the questioned
provisions of RA 8042, by way of a restraining order otherwise, the member recruitment agencies of the
petitioner will suffer grave or irreparable damage or injury. With the effectivity of RA 8042, a great majority of
the duly licensed recruitment agencies have stopped or suspended their operations for fear of being
prosecuted under the provisions of a law that are unjust and unconstitutional. This Honorable Court may
take judicial notice of the fact that processing of deployment papers of overseas workers for the past weeks
have come to a standstill at the POEA and this has affected thousands of workers everyday just because of
the enactment of RA 8042. Indeed, this has far reaching effects not only to survival of the overseas
manpower supply industry and the active participating recruitment agencies, the country’s economy which
has survived mainly due to the dollar remittances of the overseas workers but more importantly, to the poor
and the needy who are in dire need of income-generating jobs which can only be obtained from abroad. The
loss or injury that the recruitment agencies will suffer will then be immeasurable and irreparable. As of now,
even foreign employers have already reduced their manpower requirements from the Philippines due to their
knowledge that RA 8042 prejudiced and adversely affected the local recruitment agencies. 3

On August 1, 1995, the trial court issued a temporary restraining order effective for a period of only twenty (20) days
therefrom.

After the petitioners filed their comment on the petition, the ARCO-Phil. filed an amended petition, the amendments
consisting in the inclusion in the caption thereof eleven (11) other corporations which it alleged were its members and
which it represented in the suit, and a plea for a temporary restraining order enjoining the respondents from enforcing
Section 6 subsection (i), Section 6 subsection (k) and paragraphs 15 and 16 thereof, Section 8, Section 10,
paragraphs 1 and 2, and Sections 11 and 40 of Rep. Act No. 8042.

The respondent ARCO-Phil. assailed Section 2(g) and (i), Section 6 subsection (a) to (m), Section 7(a) to (b), and
Section 10 paragraphs (1) and (2), quoted as follows:

(g) THE STATE RECOGNIZES THAT THE ULTIMATE PROTECTION TO ALL MIGRANT WORKERS IS
THE POSSESSION OF SKILLS. PURSUANT TO THIS AND AS SOON AS PRACTICABLE, THE
GOVERNMENT SHALL DEPLOY AND/OR ALLOW THE DEPLOYMENT ONLY OF SKILLED FILIPINO
WORKERS.4

Sec. 2 subsection (i, 2nd par.)

Nonetheless, the deployment of Filipino overseas workers, whether land-based or sea-based, by local
service contractors and manning agents employing them shall be encourages (sic). Appropriate incentives
may be extended to them.

…
 II. ILLEGAL RECRUITMENT

SEC. 6. Definition. – For purposes of this Act, illegal recruitment shall mean any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring, or procuring workers and includes referring, contract services,
promising or advertising for employment abroad, whether for profit or not, when undertaken by a non-
licensee or non-holder of authority contemplated under Article 13(f) of Presidential Decree No. 442, as
amended, otherwise known as the Labor Code of the Philippines: Provided, That any such non-licensee or
non-holder who, in any manner, offers or promises for a fee employment abroad to two or more persons
shall be deemed so engaged. It shall, likewise, include the following acts, whether committed by any person,
whether a non-licensee, non-holder, licensee or holder of authority:

(a) To charge or accept directly or indirectly any amount greater than that specified in the schedule
of allowable fees prescribed by the Secretary of Labor and Employment, or to make a worker pay
any amount greater than that actually received by him as a loan or advance;

(b) To furnish or publish any false notice or information or document in relation to recruitment or
employment;

(c) To give any false notice, testimony, information or document or commit any act of
misrepresentation for the purpose of securing a license or authority under the Labor Code;

(d) To induce or attempt to induce a worker already employed to quit his employment in order to
offer him another unless the transfer is designed to liberate a worker from oppressive terms and
conditions of employment;

(e) To influence or attempt to influence any person or entity not to employ any worker who has not
applied for employment through his agency;

(f) To engage in the recruitment or placement of workers in jobs harmful to public health or morality
or to the dignity of the Republic of the Philippines;

(g) To obstruct or attempt to obstruct inspection by the Secretary of Labor and Employment or by
his duly authorized representative;

(h) To fail to submit reports on the status of employment, placement vacancies, remittance of
foreign exchange earnings, separation from jobs, departures and such other matters or information
as may be required by the Secretary of Labor and Employment;

(i) To substitute or alter to the prejudice of the worker, employment contracts approved and verified
by the Department of Labor and Employment from the time of actual signing thereof by the parties
up to and including the period of the expiration of the same without the approval of the Department
of Labor and Employment;

(j) For an officer or agent of a recruitment or placement agency to become an officer or member of
the Board of any corporation engaged in travel agency or to be engaged directly or indirectly in the
management of a travel agency;

(k) To withhold or deny travel documents from applicant workers before departure for monetary or
financial considerations other than those authorized under the Labor Code and its implementing
rules and regulations;

(l) Failure to actually deploy without valid reason as determined by the Department of Labor and
Employment; and

(m) Failure to reimburse expenses incurred by the worker in connection with his documentation and
processing for purposes of deployment, in cases where the deployment does not actually take
place without the worker’s fault. Illegal recruitment when committed by a syndicate or in large scale
shall be considered an offense involving economic sabotage.

Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons
conspiring or confederating with one another. It is deemed committed in large scale if committed against
three (3) or more persons individually or as a group.

The persons criminally liable for the above offenses are the principals, accomplices and accessories. In
case of juridical persons, the officers having control, management or direction of their business shall be
liable.

SEC. 7. Penalties. –

(a) Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of not less than six
(6) years and one (1) day but not more than twelve (12) years and a fine of not less than two hundred
thousand pesos (₱200,000.00) nor more than five hundred thousand pesos (₱500,000.00).
 (b) The penalty of life imprisonment and a fine of not less than five hundred thousand pesos (₱500,000.00)
nor more than one million pesos (₱1,000,000.00) shall be imposed if illegal recruitment constitutes economic
sabotage as defined herein.

Provided, however, That the maximum penalty shall be imposed if the person illegally recruited is less than
eighteen (18) years of age or committed by a non-licensee or non-holder of authority.

Sec. 8.

Prohibition on Officials and Employees. – It shall be unlawful for any official or employee of the Department
of Labor and Employment, the Philippine Overseas Employment Administration (POEA), or the Overseas
Workers Welfare Administration (OWWA), or the Department of Foreign Affairs, or other government
agencies involved in the implementation of this Act, or their relatives within the fourth civil degree of
consanguinity or affinity, to engage, directly or indirectly, in the business of recruiting migrant workers as
defined in this Act. The penalties provided in the immediate preceding paragraph shall be imposed upon
them. (underscoring supplied)

Sec. 10, pars. 1 & 2.

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.

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 contract for overseas
employment and shall be a condition precedent for its approval. The performance bond to be filed by the
recruitment/placement agency, as provided by law, 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 partners as the case may be, shall themselves be jointly and solidarily liable with
the corporation or partnership for the aforesaid claims and damages.

SEC. 11. Mandatory Periods for Resolution of Illegal Recruitment Cases. – The preliminary investigations of
cases under this Act shall be terminated within a period of thirty (30) calendar days from the date of their
filing. Where the preliminary investigation is conducted by a prosecution officer and a prima facie case is
established, the corresponding information shall be filed in court within twenty-four (24) hours from the
termination of the investigation. If the preliminary investigation is conducted by a judge and a prima facie
case is found to exist, the corresponding information shall be filed by the proper prosecution officer within
forty-eight (48) hours from the date of receipt of the records of the case.

The respondent averred that the aforequoted provisions of Rep. Act No. 8042 violate Section 1, Article III of the
Constitution.5 According to the respondent, Section 6(g) and (i) discriminated against unskilled workers and their
families and, as such, violated the equal protection clause, as well as Article II, Section 12 6 and Article XV, Sections
17 and 3(3) of the Constitution.8 As the law encouraged the deployment of skilled Filipino workers, only overseas
skilled workers are granted rights. The respondent stressed that unskilled workers also have the right to seek
employment abroad. According to the respondent, the right of unskilled workers to due process is violated because
they are prevented from finding employment and earning a living abroad. It cannot be argued that skilled workers are
immune from abuses by employers, while unskilled workers are merely prone to such abuses. It was pointed out that
both skilled and unskilled workers are subjected to abuses by foreign employers. Furthermore, the prohibition of the
deployment of unskilled workers abroad would only encourage fly-by-night illegal recruiters.

According to the respondent, the grant of incentives to service contractors and manning agencies to the exclusion of
all other licensed and authorized recruiters is an invalid classification. Licensed and authorized recruiters are thus
deprived of their right to property and due process and to the "equality of the person." It is understandable for the law
to prohibit illegal recruiters, but to discriminate against licensed and registered recruiters is unconstitutional.

The respondent, likewise, alleged that Section 6, subsections (a) to (m) is unconstitutional because licensed and
authorized recruitment agencies are placed on equal footing with illegal recruiters. It contended that while the Labor
Code distinguished between recruiters who are holders of licenses and non-holders thereof in the imposition of
penalties, Rep. Act No. 8042 does not make any distinction. The penalties in Section 7(a) and (b) being based on an
invalid classification are, therefore, repugnant to the equal protection clause, besides being excessive; hence, such
penalties are violative of Section 19(1), Article III of the Constitution. 9 It was also pointed out that the penalty for
officers/officials/employees of recruitment agencies who are found guilty of economic sabotage or large-scale illegal
recruitment under Rep. Act No. 8042 is life imprisonment. Since recruitment agencies usually operate with a
manpower of more than three persons, such agencies are forced to shut down, lest their officers and/or employees
be charged with large scale illegal recruitment or economic sabotage and sentenced to life imprisonment. Thus, the
penalty imposed by law, being disproportionate to the prohibited acts, discourages the business of licensed and
registered recruitment agencies.

The respondent also posited that Section 6(m) and paragraphs (15) and (16), Sections 8, 9 and 10, paragraph 2 of
the law violate Section 22, Article III of the Constitution10 prohibiting ex-post facto laws and bills of attainder. This is
because the provisions presume that a licensed and registered recruitment agency is guilty of illegal recruitment
involving economic sabotage, upon a finding that it committed any of the prohibited acts under the law. Furthermore,
officials, employees and their relatives are presumed guilty of illegal recruitment involving economic sabotage upon
such finding that they committed any of the said prohibited acts.

The respondent further argued that the 90-day period in Section 10, paragraph (1) within which a labor arbiter should
decide a money claim is relatively short, and could deprive licensed and registered recruiters of their right to due
process. The period within which the summons and the complaint would be served on foreign employees and,
thereafter, the filing of the answer to the complaint would take more than 90 days. This would thereby shift on local
licensed and authorized recruiters the burden of proving the defense of foreign employers. Furthermore, the
respondent asserted, Section 10, paragraph 2 of the law, which provides for the joint and several liability of the
officers and employees, is a bill of attainder and a violation of the right of the said corporate officers and employees to
due process. Considering that such corporate officers and employees act with prior approval of the board of directors
of such corporation, they should not be liable, jointly and severally, for such corporate acts.

The respondent asserted that the following provisions of the law are unconstitutional:

SEC. 9. Venue. – A criminal action arising from illegal recruitment as defined herein shall be filed with the
Regional Trial Court of the province or city where the offense was committed or where the offended party
actually resides at the time of the commission of the offense: Provided, That the court where the criminal
action is first filed shall acquire jurisdiction to the exclusion of other courts: Provided, however, That the
aforestated provisions shall also apply to those criminal actions that have already been filed in court at the
time of the effectivity of this Act.

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.

Sec. 40.

The departments and agencies charged with carrying out the provisions of this Act shall, within ninety (90)
days after the effectiviy of this Act, formulate the necessary rules and regulations for its effective
implementation.

According to the respondent, the said provisions violate Section 5(5), Article VIII of the Constitution 11 because they
impair the power of the Supreme Court to promulgate rules of procedure.

In their answer to the petition, the petitioners alleged, inter alia, that (a) the respondent has no cause of action for a
declaratory relief; (b) the petition was premature as the rules implementing Rep. Act No. 8042 not having been
released as yet; (c) the assailed provisions do not violate any provisions of the Constitution; and, (d) the law was
approved by Congress in the exercise of the police power of the State. In opposition to the respondent’s plea for
injunctive relief, the petitioners averred that:

As earlier shown, the amended petition for declaratory relief is devoid of merit for failure of petitioner to demonstrate
convincingly that the assailed law is unconstitutional, apart from the defect and impropriety of the petition. One who
attacks a statute, alleging unconstitutionality must prove its invalidity beyond reasonable doubt (Caleon v. Agus
Development Corporation, 207 SCRA 748). All reasonable doubts should be resolved in favor of the constitutionality
of a statute (People v. Vera, 65 Phil. 56). This presumption of constitutionality is based on the doctrine of separation
of powers which enjoin upon each department a becoming respect for the acts of the other departments (Garcia vs.
Executive Secretary, 204 SCRA 516 [1991]). Necessarily, the ancillary remedy of a temporary restraining order
and/or a writ of preliminary injunction prayed for must fall. Besides, an act of legislature approved by the executive is
presumed to be within constitutional bounds (National Press Club v. Commission on Elections, 207 SCRA 1).12

After the respective counsels of the parties were heard on oral arguments, the trial court issued on August 21, 1995,
an order granting the petitioner’s plea for a writ of preliminary injunction upon a bond of ₱50,000. The petitioner
posted the requisite bond and on August 24, 1995, the trial court issued a writ of preliminary injunction enjoining the
enforcement of the following provisions of Rep. Act No. 8042 pending the termination of the proceedings:

… Section 2, subsections (g) and (i, 2nd par.); Section 6, subsections (a) to (m), and pars. 15 & 16; Section
7, subsections (a) & (b); Section 8; Section 9; Section 10; pars. 1 & 2; Section 11; and Section 40 of
Republic Act No. 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995. … 13

The petitioners filed a petition for certiorari with the Court of Appeals assailing the order and the writ of preliminary
injunction issued by the trial court on the following grounds:

1. Respondent ARCO-PHIL. had utterly failed to show its clear right/s or that of its member-agencies to be
protected by the injunctive relief and/or violation of said rights by the enforcement of the assailed sections of
R.A. 8042;

2. Respondent Judge fixed a ₱50,000 injunction bond which is grossly inadequate to answer for the damage
which petitioner-officials may sustain, should respondent ARCO-PHIL. be finally adjudged as not being
entitled thereto.14

The petitioners asserted that the respondent is not the real party-in-interest as petitioner in the trial court. It is
inconceivable how the respondent, a non-stock and non-profit corporation, could sustain direct injury as a result of
the enforcement of the law. They argued that if, at all, any damage would result in the implementation of the law, it is
the licensed and registered recruitment agencies and/or the unskilled Filipino migrant workers discriminated against
who would sustain the said injury or damage, not the respondent. The respondent, as petitioner in the trial court, was
burdened to adduce preponderant evidence of such irreparable injury, but failed to do so. The petitioners further
insisted that the petition a quo was premature since the rules and regulations implementing the law had yet to be
promulgated when such petition was filed. Finally, the petitioners averred that the respondent failed to establish the
requisites for the issuance of a writ of preliminary injunction against the enforcement of the law and the rules and
regulations issued implementing the same.

On December 5, 1997, the appellate court came out with a four-page decision dismissing the petition and affirming
the assailed order and writ of preliminary injunction issued by the trial court. The appellate court, likewise, denied the
petitioners’ motion for reconsideration of the said decision.

The petitioners now come to this Court in a petition for review on certiorari on the following grounds:

1. Private respondent ARCO-PHIL. had utterly failed to show its clear right/s or that of its member-agencies
to be protected by the injunctive relief and/or violation of said rights by the enforcement of the assailed
sections of R.A. 8042;

2. The ₱50,000 injunction bond fixed by the court a quo and sustained by the Court of Appeals is grossly
inadequate to answer for the damage which petitioners-officials may sustain, should private respondent
ARCO-PHIL. be finally adjudged as not being entitled thereto. 15

On February 16, 1998, this Court issued a temporary restraining order enjoining the respondents from enforcing the
assailed order and writ of preliminary injunction.

The Issues

The core issue in this case is whether or not the trial court committed grave abuse of its discretion amounting to
excess or lack of jurisdiction in issuing the assailed order and the writ of preliminary injunction on a bond of only
₱50,000 and whether or not the appellate court erred in affirming the trial court’s order and the writ of preliminary
injunction issued by it.

The petitioners contend that the respondent has no locus standi. It is a non-stock, non-profit organization; hence, not
the real party-in-interest as petitioner in the action. Although the respondent filed the petition in the Regional Trial
Court in behalf of licensed and registered recruitment agencies, it failed to adduce in evidence a certified copy of its
Articles of Incorporation and the resolutions of the said members authorizing it to represent the said agencies in the
proceedings. Neither is the suit of the respondent a class suit so as to vest in it a personality to assail Rep. Act No.
8042; the respondent is service-oriented while the recruitment agencies it purports to represent are profit-oriented.
The petitioners assert that the law is presumed constitutional and, as such, the respondent was burdened to make a
case strong enough to overcome such presumption and establish a clear right to injunctive relief.

The petitioners bewail the ₱50,000 bond fixed by the trial court for the issuance of a writ of preliminary injunction and
affirmed by the appellate court. They assert that the amount is grossly inadequate to answer for any damages that
the general public may suffer by reason of the non-enforcement of the assailed provisions of the law. The trial court
committed a grave abuse of its discretion in granting the respondent’s plea for injunctive relief, and the appellate
court erred in affirming the order and the writ of preliminary injunction issued by the trial court.

The respondent, for its part, asserts that it has duly established its locus standi and its right to injunctive relief as
gleaned from its pleadings and the appendages thereto. Under Section 5, Rule 58 of the Rules of Court, it was
incumbent on the petitioners, as respondents in the RTC, to show cause why no injunction should issue. It avers that
the injunction bond posted by the respondent was more than adequate to answer for any injury or damage the
petitioners may suffer, if any, by reason of the writ of preliminary injunction issued by the RTC. In any event, the
assailed provisions of Rep. Act No. 8042 exposed its members to the immediate and irreparable damage of being
deprived of their right to a livelihood without due process, a property right protected under the Constitution.

The respondent contends that the commendable purpose of the law to eradicate illegal recruiters should not be done
at the expense and to the prejudice of licensed and authorized recruitment agencies. The writ of preliminary
injunction was necessitated by the great number of duly licensed recruitment agencies that had stopped or
suspended their business operations for fear that their officers and employees would be indicted and prosecuted
under the assailed oppressive penal provisions of the law, and meted excessive penalties. The respondent, likewise,
urges that the Court should take judicial notice that the processing of deployment papers of overseas workers have
come to a virtual standstill at the POEA.

The Court’s Ruling

The petition is meritorious.

The Respondent Has Locus Standi

To File the Petition in the RTC in Representation of the Eleven Licensed and Registered Recruitment Agencies
Impleaded in the Amended Petition

The modern view is that an association has standing to complain of injuries to its members. This view fuses the legal
identity of an association with that of its members.16 An association has standing to file suit for its workers despite its
lack of direct interest if its members are affected by the action. An organization has standing to assert the concerns of
its constituents.17
In Telecommunications and Broadcast Attorneys of the Philippines v. Commission on Elections, 18 we held that
standing jus tertii would be recognized only if it can be shown that the party suing has some substantial relation to the
third party, or that the right of the third party would be diluted unless the party in court is allowed to espouse the third
party’s constitutional claims.

In this case, the respondent filed the petition for declaratory relief under Rule 64 of the Rules of Court for and in
behalf of its eleven (11) licensed and registered recruitment agencies which are its members, and which approved
separate resolutions expressly authorizing the respondent to file the said suit for and in their behalf. We note that,
under its Articles of Incorporation, the respondent was organized for the purposes inter alia of promoting and
supporting the growth and development of the manpower recruitment industry, both in the local and international
levels; providing, creating and exploring employment opportunities for the exclusive benefit of its general
membership; enhancing and promoting the general welfare and protection of Filipino workers; and, to act as the
representative of any individual, company, entity or association on matters related to the manpower recruitment
industry, and to perform other acts and activities necessary to accomplish the purposes embodied therein. The
respondent is, thus, the appropriate party to assert the rights of its members, because it and its members are in every
practical sense identical. The respondent asserts that the assailed provisions violate the constitutional rights of its
members and the officers and employees thereof. The respondent is but the medium through which its individual
members seek to make more effective the expression of their voices and the redress of their grievances. 19

However, the respondent has no locus standi to file the petition for and in behalf of unskilled workers. We note that it
even failed to implead any unskilled workers in its petition. Furthermore, in failing to implead, as parties-petitioners,
the eleven licensed and registered recruitment agencies it claimed to represent, the respondent failed to comply with
Section 2 of Rule 6320 of the Rules of Court. Nevertheless, since the eleven licensed and registered recruitment
agencies for which the respondent filed the suit are specifically named in the petition, the amended petition is
deemed amended to avoid multiplicity of suits.21

The Assailed Order and Writ of

Preliminary Injunction Is Mooted

By Case Law

The respondent justified its plea for injunctive relief on the allegation in its amended petition that its members are
exposed to the immediate and irreparable danger of being deprived of their right to a livelihood and other
constitutional rights without due process, on its claim that a great number of duly licensed recruitment agencies have
stopped or suspended their operations for fear that (a) their officers and employees would be prosecuted under the
unjust and unconstitutional penal provisions of Rep. Act No. 8042 and meted equally unjust and excessive penalties,
including life imprisonment, for illegal recruitment and large scale illegal recruitment without regard to whether the
recruitment agencies involved are licensed and/or authorized; and, (b) if the members of the respondent, which are
licensed and authorized, decide to continue with their businesses, they face the stigma and the curse of being labeled
"illegal recruiters." In granting the respondent’s plea for a writ of preliminary injunction, the trial court held, without
stating the factual and legal basis therefor, that the enforcement of Rep. Act No. 8042, pendente lite, would cause
grave and irreparable injury to the respondent until the case is decided on its merits.

We note, however, that since Rep. Act No. 8042 took effect on July 15, 1995, the Court had, in a catena of cases,
applied the penal provisions in Section 6, including paragraph (m) thereof, and the last two paragraphs therein
defining large scale illegal recruitment committed by officers and/or employees of recruitment agencies by
themselves and in connivance with private individuals, and imposed the penalties provided in Section 7 thereof,
including the penalty of life imprisonment.22 The Informations therein were filed after preliminary investigations as
provided for in Section 11 of Rep. Act No. 8042 and in venues as provided for in Section 9 of the said act. In People
v. Chowdury,23 we held that illegal recruitment is a crime of economic sabotage and must be enforced.

In People v. Diaz,24 we held that Rep. Act No. 8042 is but an amendment of the Labor Code of the Philippines and is
not an ex-post facto law because it is not applied retroactively. In JMM Promotion and Management, Inc. v. Court of
Appeals,25 the issue of the extent of the police power of the State to regulate a business, profession or calling vis-à-
vis the equal protection clause and the non-impairment clause of the Constitution were raised and we held, thus:

A profession, trade or calling is a property right within the meaning of our constitutional guarantees. One
cannot be deprived of the right to work and the right to make a living because these rights are property
rights, the arbitrary and unwarranted deprivation of which normally constitutes an actionable wrong.

Nevertheless, no right is absolute, and the proper regulation of a profession, calling, business or trade has
always been upheld as a legitimate subject of a valid exercise of the police power by the state particularly
when their conduct affects either the execution of legitimate governmental functions, the preservation of the
State, the public health and welfare and public morals. According to the maxim, sic utere tuo ut alienum non
laedas, it must of course be within the legitimate range of legislative action to define the mode and manner
in which every one may so use his own property so as not to pose injury to himself or others.

In any case, where the liberty curtailed affects at most the rights of property, the permissible scope of
regulatory measures is certainly much wider. To pretend that licensing or accreditation requirements violates
the due process clause is to ignore the settled practice, under the mantle of the police power, of regulating
entry to the practice of various trades or professions. Professionals leaving for abroad are required to pass
rigid written and practical exams before they are deemed fit to practice their trade. Seamen are required to
take tests determining their seamanship. Locally, the Professional Regulation Commission has begun to
require previously licensed doctors and other professionals to furnish documentary proof that they had either
re-trained or had undertaken continuing education courses as a requirement for renewal of their licenses. It
is not claimed that these requirements pose an unwarranted deprivation of a property right under the due
process clause. So long as professionals and other workers meet reasonable regulatory standards no such
deprivation exists.
 Finally, it is a futile gesture on the part of petitioners to invoke the non-impairment clause of the Constitution
to support their argument that the government cannot enact the assailed regulatory measures because they
abridge the freedom to contract. In Philippine Association of Service Exporters, Inc. vs. Drilon, we held that
"[t]he non-impairment clause of the Constitution … must yield to the loftier purposes targeted by the
government." Equally important, into every contract is read provisions of existing law, and always, a
reservation of the police power for so long as the agreement deals with a subject impressed with the public
welfare.

A last point. Petitioners suggest that the singling out of entertainers and performing artists under the
assailed department orders constitutes class legislation which violates the equal protection clause of the
Constitution. We do not agree.

The equal protection clause is directed principally against undue favor and individual or class privilege. It is
not intended to prohibit legislation which is limited to the object to which it is directed or by the territory in
which it is to operate. It does not require absolute equality, but merely that all persons be treated alike under
like conditions both as to privileges conferred and liabilities imposed. We have held, time and again, that the
equal protection clause of the Constitution does not forbid classification for so long as such classification is
based on real and substantial differences having a reasonable relation to the subject of the particular
legislation. If classification is germane to the purpose of the law, concerns all members of the class, and
applies equally to present and future conditions, the classification does not violate the equal protection
guarantee.26

The validity of Section 6 of R.A. No. 8042 which provides that employees of recruitment agencies may be criminally
liable for illegal recruitment has been upheld in People v. Chowdury:27

As stated in the first sentence of Section 6 of RA 8042, the persons who may be held liable for illegal
recruitment are the principals, accomplices and accessories. An employee of a company or corporation
engaged in illegal recruitment may be held liable as principal, together with his employer, if it is shown that
he actively and consciously participated in illegal recruitment. It has been held that the existence of the
corporate entity does not shield from prosecution the corporate agent who knowingly and intentionally
causes the corporation to commit a crime. The corporation obviously acts, and can act, only by and through
its human agents, and it is their conduct which the law must deter. The employee or agent of a corporation
engaged in unlawful business naturally aids and abets in the carrying on of such business and will be
prosecuted as principal if, with knowledge of the business, its purpose and effect, he consciously contributes
his efforts to its conduct and promotion, however slight his contribution may be. … 28

By its rulings, the Court thereby affirmed the validity of the assailed penal and procedural provisions of Rep. Act No.
8042, including the imposable penalties therefor. Until the Court, by final judgment, declares that the said provisions
are unconstitutional, the enforcement of the said provisions cannot be enjoined.

The RTC Committed Grave Abuse of Its Discretion Amounting to Excess or Lack of Jurisdiction in Issuing the
Assailed Order and the Writ of Preliminary Injunction

The matter of whether to issue a writ of preliminary injunction or not is addressed to the sound discretion of the trial
court. However, if the court commits grave abuse of its discretion in issuing the said writ amounting to excess or lack
of jurisdiction, the same may be nullified via a writ of certiorari and prohibition.

In Social Security Commission v. Judge Bayona,29 we ruled that a law is presumed constitutional until otherwise
declared by judicial interpretation. The suspension of the operation of the law is a matter of extreme delicacy because
it is an interference with the official acts not only of the duly elected representatives of the people but also of the
highest magistrate of the land.

In Younger v. Harris, Jr.,30 the Supreme Court of the United States emphasized, thus:

Federal injunctions against state criminal statutes, either in their entirety or with respect to their separate and
distinct prohibitions, are not to be granted as a matter of course, even if such statutes are unconstitutional.
No citizen or member of the community is immune from prosecution, in good faith, for his alleged criminal
acts. The imminence of such a prosecution even though alleged to be unauthorized and, hence, unlawful is
not alone ground for relief in equity which exerts its extraordinary powers only to prevent irreparable injury to
the plaintiff who seeks its aid. 752 Beal v. Missouri Pacific Railroad Corp., 312 U.S. 45, 49, 61 S.Ct. 418,
420, 85 L.Ed. 577.

And similarly, in Douglas, supra, we made clear, after reaffirming this rule, that:

"It does not appear from the record that petitioners have been threatened with any injury other than that
incidental to every criminal proceeding brought lawfully and in good faith …" 319 U.S., at 164, 63 S.Ct., at
881.31

The possible unconstitutionality of a statute, on its face, does not of itself justify an injunction against good faith
attempts to enforce it, unless there is a showing of bad faith, harassment, or any other unusual circumstance that
would call for equitable relief.32 The "on its face" invalidation of statutes has been described as "manifestly strong
medicine," to be employed "sparingly and only as a last resort," and is generally disfavored.33

To be entitled to a preliminary injunction to enjoin the enforcement of a law assailed to be unconstitutional, the party
must establish that it will suffer irreparable harm in the absence of injunctive relief and must demonstrate that it is
likely to succeed on the merits, or that there are sufficiently serious questions going to the merits and the balance of
hardships tips decidedly in its favor.34 The higher standard reflects judicial deference toward "legislation or
regulations developed through presumptively reasoned democratic processes." Moreover, an injunction will alter,
rather than maintain, the status quo, or will provide the movant with substantially all the relief sought and that relief
cannot be undone even if the defendant prevails at a trial on the merits. 35 Considering that injunction is an exercise of
equitable relief and authority, in assessing whether to issue a preliminary injunction, the courts must sensitively
assess all the equities of the situation, including the public interest.36 In litigations between governmental and private
parties, courts go much further both to give and withhold relief in furtherance of public interest than they are
accustomed to go when only private interests are involved.37 Before the plaintiff may be entitled to injunction against
future enforcement, he is burdened to show some substantial hardship. 38

The fear or chilling-effect of the assailed penal provisions of the law on the members of the respondent does not by
itself justify prohibiting the State from enforcing them against those whom the State believes in good faith to be
punishable under the laws:

… Just as the incidental "chilling effect" of such statutes does not automatically render them
unconstitutional, so the chilling effect that admittedly can result from the very existence of certain laws on
the statute books does not in itself justify prohibiting the State from carrying out the important and necessary
task of enforcing these laws against socially harmful conduct that the State believes in good faith to be
punishable under its laws and the Constitution.39

It must be borne in mind that subject to constitutional limitations, Congress is empowered to define what acts or
omissions shall constitute a crime and to prescribe punishments therefor.40 The power is inherent in Congress and is
part of the sovereign power of the State to maintain peace and order. Whatever views may be entertained regarding
the severity of punishment, whether one believes in its efficiency or its futility, these are peculiarly questions of
legislative policy.41 The comparative gravity of crimes and whether their consequences are more or less injurious are
matters for the State and Congress itself to determine.42 Specification of penalties involves questions of legislative
policy.43

Due process prohibits criminal stability from shifting the burden of proof to the accused, punishing wholly passive
conduct, defining crimes in vague or overbroad language and failing to grant fair warning of illegal conduct.44 Class
legislation is such legislation which denies rights to one which are accorded to others, or inflicts upon one individual a
more severe penalty than is imposed upon another in like case offending. 45 Bills of attainder are legislative acts which
inflict punishment on individuals or members of a particular group without a judicial trial. Essential to a bill of attainder
are a specification of certain individuals or a group of individuals, the imposition of a punishment, penal or otherwise,
and the lack of judicial trial.46

Penalizing unlicensed and licensed recruitment agencies and their officers and employees and their relatives
employed in government agencies charged with the enforcement of the law for illegal recruitment and imposing life
imprisonment for those who commit large scale illegal recruitment is not offensive to the Constitution. The accused
may be convicted of illegal recruitment and large scale illegal recruitment only if, after trial, the prosecution is able to
prove all the elements of the crime charged.47

The possibility that the officers and employees of the recruitment agencies, which are members of the respondent,
and their relatives who are employed in the government agencies charged in the enforcement of the law, would be
indicted for illegal recruitment and, if convicted sentenced to life imprisonment for large scale illegal recruitment,
absent proof of irreparable injury, is not sufficient on which to base the issuance of a writ of preliminary injunction to
suspend the enforcement of the penal provisions of Rep. Act No. 8042 and avert any indictments under the law. 48
The normal course of criminal prosecutions cannot be blocked on the basis of allegations which amount to
speculations about the future.49

There is no allegation in the amended petition or evidence adduced by the respondent that the officers and/or
employees of its members had been threatened with any indictments for violations of the penal provisions of Rep. Act
No. 8042. Neither is there any allegation therein that any of its members and/or their officers and employees
committed any of the acts enumerated in Section 6(a) to (m) of the law for which they could be indicted. Neither did
the respondent adduce any evidence in the RTC that any or all of its members or a great number of other duly
licensed and registered recruitment agencies had to stop their business operations because of fear of indictments
under Sections 6 and 7 of Rep. Act No. 8042. The respondent merely speculated and surmised that licensed and
registered recruitment agencies would close shop and stop business operations because of the assailed penal
provisions of the law. A writ of preliminary injunction to enjoin the enforcement of penal laws cannot be based on
such conjectures or speculations. The Court cannot take judicial notice that the processing of deployment papers of
overseas workers have come to a virtual standstill at the POEA because of the assailed provisions of Rep. Act No.
8042. The respondent must adduce evidence to prove its allegation, and the petitioners accorded a chance to adduce
controverting evidence.

The respondent even failed to adduce any evidence to prove irreparable injury because of the enforcement of Section
10(1)(2) of Rep. Act No. 8042. Its fear or apprehension that, because of time constraints, its members would have to
defend foreign employees in cases before the Labor Arbiter is based on speculations. Even if true, such
inconvenience or difficulty is hardly irreparable injury.

The trial court even ignored the public interest involved in suspending the enforcement of Rep. Act No. 8042 vis-à-vis
the eleven licensed and registered recruitment agencies represented by the respondent. In People v. Gamboa, 50 we
emphasized the primary aim of Rep. Act No. 8042:

Preliminarily, the proliferation of illegal job recruiters and syndicates preying on innocent people anxious to
obtain employment abroad is one of the primary considerations that led to the enactment of The Migrant
Workers and Overseas Filipinos Act of 1995. Aimed at affording greater protection to overseas Filipino
workers, it is a significant improvement on existing laws in the recruitment and placement of workers for
overseas employment. Otherwise known as the Magna Carta of OFWs, it broadened the concept of illegal
recruitment under the Labor Code and provided stiffer penalties thereto, especially those that constitute
economic sabotage, i.e., Illegal Recruitment in Large Scale and Illegal Recruitment Committed by a
Syndicate.51
By issuing the writ of preliminary injunction against the petitioners sans any evidence, the trial court frustrated, albeit
temporarily, the prosecution of illegal recruiters and allowed them to continue victimizing hapless and innocent people
desiring to obtain employment abroad as overseas workers, and blocked the attainment of the salutary policies 52
embedded in Rep. Act No. 8042. It bears stressing that overseas workers, land-based and sea-based, had been
remitting to the Philippines billions of dollars which over the years had propped the economy.

In issuing the writ of preliminary injunction, the trial court considered paramount the interests of the eleven licensed
and registered recruitment agencies represented by the respondent, and capriciously overturned the presumption of
the constitutionality of the assailed provisions on the barefaced claim of the respondent that the assailed provisions of
Rep. Act No. 8042 are unconstitutional. The trial court committed a grave abuse of its discretion amounting to excess
or lack of jurisdiction in issuing the assailed order and writ of preliminary injunction. It is for this reason that the Court
issued a temporary restraining order enjoining the enforcement of the writ of preliminary injunction issued by the trial
court.

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The assailed decision of the appellate court is
REVERSED AND SET ASIDE. The Order of the Regional Trial Court dated August 21, 1995 in Civil Case No. Q-95-
24401 and the Writ of Preliminary Injunction issued by it in the said case on August 24, 1995 are NULLIFIED. No
costs.

SO ORDERED.

Puno*, Quisumbing**, Austria-Martinez, and Tinga, JJ., concur.

Footnotes

* On official leave.

** Acting Chairman.

1Penned by Associate Justice Jesus M. Elbinias with Associate Justices Hector L. Hofileña and Omar U.
Amin concurring.

2 Penned by Judge Teodoro P. Regino, who was later promoted Associate Justice of the Court of Appeals.

3 Records, Vol. I, pp. 86-87.

4 Section 2, paragraph (g).

5Section 1. No person shall be deprived of life, liberty or property without due process of law, nor shall any
person be denied the equal protection of the laws.

6 Sec. 12. The State recognizes the sanctity of family life and shall protect and strengthen the family as a
basic autonomous social institution. It shall equally protect the life of the mother and the life of the unborn
from conception.

The natural and primary right and duty of parents in the rearing of the youth for civic efficiency and
the development of moral character shall receive the support of the Government.

7 Section 1. The State recognizes the Filipino family as the foundation of the nation. Accordingly, it shall
strengthen its solidarity and actively promote its total development.

8 Sec. 3. The State shall defend the following:

(3) The right of the family to a family living wage and income.

9Sec. 19. (1) Excessive fines shall not be imposed, nor cruel, degrading or inhuman punishment inflicted.
Neither shall death penalty be imposed, unless, for compelling reasons involving heinous crimes, the
Congress hereafter provides for it. Any death penalty already imposed shall be reduced to reclusion
perpetua. (Section 19, Article III of the Constitution.)

10 Sec. 22. No ex-post facto law or bill of attainder shall be enacted.

11(5) Promulgate rules concerning the protection and enforcement of constitutional rights, pleading,
practice, and procedure in all courts, the admission to the practice of law, the Integrated Bar, and
legal assistance to the underprivileged. Such rules shall provide a simplified and inexpensive
procedure for the speedy disposition of cases, shall be uniform for all courts of the same grade,
and shall not diminish, increase, or modify substantive rights. Rules of procedure of special courts
and quasi-judicial bodies shall remain effective unless disapproved by the Supreme Court.

12 Records, Vol. I, p. 223.

13 Id. at 235.
14 CA Rollo, p. 10.

15 Rollo, p. 19.

16W.C.M. Winston Co., Inc. v. Bernardi, 730 F2d 486 (1984), citing NACCP v. Alabama, 2 L.ed.2d 1488
(1958).

17Maite v. Chicago Board of Education, 415 NE2d 1034 (1980), cited in DeWitt County Taxpayers
Association v. The County Board of Deliot County, 445 NE2d 509 (1983).

18 289 SCRA 337 (1998).

19 National Associates for the Advancement of Colored People v. State of Alabama, 2 L.Ed.2d 1488 (1958).

20 SEC. 2. Parties. – All persons who have or claim any interest which would be affected by the declaration
shall be made parties; and no declaration shall, except as otherwise provided in these Rules, prejudice the
rights of persons not parties to the action.

21 SEC. 11. Misjoinder and non-joinder of parties. – Neither misjoinder nor non-joinder of parties is ground
for dismissal of an action. Parties may be dropped or added by order of the court on motion of any party or
on its own initiative at any stage of the action and on such terms as are just. Any claim against a misjoined
party may be severed and proceeded with separately.

22 People v. Navarra, 352 SCRA 84 (2001); People v. Fajardo, 345 SCRA 395 (2000); People v. Saulo, 344
SCRA 605 (2000); People v. Gamboa, 341 SCRA 451 (2000); People v. Banzales, 336 SCRA 64 (2000);
People v. Ordoño, 335 SCRA 331 (2000); People v. Mercado de Arabia, 332 SCRA 49 (2000); People v.
Moreno, 314 SCRA 556 (1999); People v. Castillon, 306 SCRA 271 (1999); People v. Mercado, 304 SCRA
504 (1999); People v. Peralta, 283 SCRA 81 (1997); People v. Ortiz-Miyake, 279 SCRA 180 (1997); People
v. Villas, 277 SCRA 391 (1997); People v. Santos, 276 SCRA 329 (1997); People v. Tan Tiong Meng, 271
SCRA 125 (1997); People v. Mañozca, 269 SCRA 513 (1997); People v. Señoron, 267 SCRA 278 (1997);
People v. De Leon, 267 SCRA 644 (1997); People v. Benemerito, 264 SCRA 677 (1996); People v.
Pabalan, 262 SCRA 574 (1996); People v. Calonzo, 262 SCRA 534 (1996).

47 The essential elements for illegal recruitment are:

(1) the offender undertakes either any activity within the meaning of "recruitment and
placement" defined under Art. 13(b), or any of the prohibited practices enumerated under
Article 34 of the Labor Code; and

(2) he has no valid license or authority required by law to enable one to lawfully engage in
recruitment and placement of workers. [People v. Pascua, 366 SCRA 505 (2001)].

The essential elements for large scale illegal recruitment are:

(1) the accused engages in the recruitment and placement of workers, as defined under
Article 13(b) or in any prohibited activities under Article 34 of the Labor Code;

(2) accused has not complied with the guidelines issued by the Secretary of Labor and
Employment, particularly with respect to the securing of a license or an authority to recruit
and deploy workers, whether locally or overseas; and

(3) accused commits the same against three (3) or more persons, individually or as a
group. [People v. Saulo, 344 SCRA 605 (2000)].

52 (a) In the pursuit of an independent foreign policy and while considering national sovereignty, territorial
integrity, national interest and the right to self-determination paramount in its relations with other states, the
State shall, at all times, uphold the dignity of its citizens whether in country or overseas, in general, and
Filipino migrant workers, in particular.

(b) The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment opportunities for
all. Towards this end, the State shall provide adequate and timely social, economic and
legal services to Filipino migrant workers.

(c) While recognizing the significant contribution of Filipino migrant workers to the national
economy through their foreign exchange remittances, the State does not promote
overseas employment as a means to sustain economic growth and achieve national
development. The existence of the overseas employment program rests solely on the
assurance that the dignity and fundamental human rights and freedoms of the Filipino
citizen shall not, at any time, be compromised or violated. The State, therefore, shall
continuously create local employment opportunities and promote the equitable distribution
of wealth and the benefits of development.
 (d) The State affirms the fundamental equality before the law of women and men and the
significant role of women in nation-building. Recognizing the contribution of overseas
migrant women workers and their particular vulnerabilities, the State shall apply gender
sensitive criteria in the formulation and implementation of policies and programs affecting
migrant workers and the composition of bodies tasked for the welfare of migrant workers.

(e) Free access to the courts and quasi-judicial bodies and adequate legal assistance
shall not be denied to any person by reason of poverty. In this regard, it is imperative that
an effective mechanism be instituted to ensure that the rights and interest of distressed
overseas Filipinos, in general, and Filipino migrant workers, in particular, documented or
undocumented, are adequately protected and safeguarded.

(f) The right of Filipino migrant workers and all overseas Filipinos to participate in the
democratic decision-making processes of the State and to be represented in institutions
relevant to overseas employment is recognized and guaranteed.

(g) The State recognizes that the ultimate protection to all migrant workers is the
possession of skills. Pursuant to this and as soon as practicable, the government shall
deploy and/or allow the deployment only of skilled Filipino workers.

(h) Non-governmental organizations, duly recognized as legitimate, are partners of the

State in the protection of Filipino migrant workers and in the promotion of their welfare.
The State shall cooperate with them in a spirit of trust and mutual respect.

(i) Government fees and other administrative costs of recruitment, introduction, placement
and assistance to migrant workers shall be rendered free without prejudice to the
provision of Section 36 hereof.

Nonetheless, the deployment of Filipino overseas workers, whether land-based or sea-based, by

local service contractors and manning agencies employing them shall be encouraged. Appropriate
incentives may be extended to them. (Records, Vol. I, p. 35.)

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 155903 September 14, 2007

C.F. SHARP CREW MANAGEMENT, INC., petitioner,

vs.
HON. UNDERSECRETARY JOSE M. ESPANOL, JR., HON. SECRETARY LEONARDO A. QUISUMBING and
RIZAL INTERNATIONAL SHIPPING SERVICES, respondents.

DECISION

NACHURA, J.:

The petitioner C.F. Sharp Crew Management, Inc. (C.F. Sharp) appeals by certiorari the April 30, 2002 Decision 1 of
the Court of Appeals (CA) in CA-G.R. SP No. 53747 and the November 5, 2002 Resolution2 denying its
reconsideration.

In 1991, Louis Cruise Lines (LCL), a foreign corporation duly organized and existing under the laws of Cyprus,
entered into a Crewing Agreement3 with Papadopolous Shipping, Ltd. (PAPASHIP). PAPASHIP in turn appointed
private respondent Rizal International Shipping Services (Rizal) as manning agency in the Philippines, recruiting
Filipino seamen for LCL’s vessel.

On October 3, 1996, LCL terminated the Crewing Agreement with PAPASHIP to take effect on December 31, 1996. It
then appointed C.F. Sharp as crewing agent in the Philippines. C.F. Sharp requested for accreditation as the new
manning agency of LCL with the Philippine Overseas Employment Administration (POEA), but Rizal objected on the
ground that its accreditation still existed and would only expire on December 31, 1996.

Pending approval of the accreditation, Theodoros Savva and Adrias Tjiakouris of LCL arrived in the Philippines and
conducted a series of interviews for seafarers at C.F. Sharp’s office. Rizal reported LCL’s recruitment activities to the
POEA on December 9, 1996, and requested an ocular inspection of C.F. Sharp’s premises.

On December 17, 1996, POEA representatives conducted an inspection and found Savva and Tjiakouris at C.F.
Sharp interviewing and recruiting hotel staffs, cooks, and chefs for M/V Cyprus, with scheduled deployment in
January 1997.4 The Inspection Report5 signed by Corazon Aquino of the POEA and countersigned by Mr. Reynaldo
Banawis of C.F. Sharp was thereafter submitted to the POEA.
On January 2, 1997, Rizal filed a complaint 6 for illegal recruitment, cancellation or revocation of license, and
blacklisting against LCL and C.F. Sharp with the POEA, docketed as POEA Case No. RV-97-01-004. Then, on
January 31, 1997, Rizal filed a Supplemental Complaint7 adding violation of Section 29 of the Labor Code of the
Philippines, for designating and/or appointing agents, representatives and employees, without prior approval from the
POEA.

For its part, C.F. Sharp admitted that Savva and Tjiakouris conducted interviews at C.F. Sharp’s office, but denied
that they were for recruitment and selection purposes. According to C.F. Sharp, the interviews were held for LCL’s
ex-crew members who had various complaints against Rizal. It belittled the inspection report of the POEA inspection
team claiming that it simply stated that interviews and recruitment were undertaken, without reference to who were
conducting the interview and for what vessels.8 C.F. Sharp also averred that Rizal was guilty of forum shopping, and
prayed for the dismissal of the complaint on this ground and for its lack of merit. 9

The POEA Administrator was not persuaded and found C.F. Sharp liable for illegal recruitment. According to the
Administrator, the inspection report of Ms. Aquino established that Savva and Tjiakouris had conducted, and, at the
time of the inspection, had been conducting interviews, selection and hiring for LCL, without any authority from the
POEA. The Administrator also held that C.F. Sharp violated Section 29 of the Labor Code when it designated officers
and agents without prior approval of the POEA. 10

Thus, the Administrator disposed:

WHEREFORE, premises considered, the respondent CF Sharp Agency is as it is hereby ordered

suspended for a period of six (6) months or in lieu thereof, it is ordered to pay a fine of P50,000.00 for
violation of Art. 29 of the Labor Code, as amended in relation to Sec. 6(b), Rule II, Book II of the Rules and
Regulations Governing Overseas Employment in accordance with the schedule of penalties.

Further, the respondent CF Sharp is as it is hereby ordered suspended for another period of [eighteen] (18)
months or to pay the fine of P180,000.00 for committing 9 counts of violation of Article 29 of the Labor Code
as amended in relation to Sec. 2(k), Rule I, Book VI of the Rules and Regulations governing Overseas
Employment.

The period of suspension shall be served cummulatively (sic).

The charges of violation of Sec. 6(b) of RA 8042 are hereby referred to the Anti-Illegal Recruitment Branch
for appropriate action.

SO ORDERED.11

C.F. Sharp elevated the Administrator’s ruling to the Department of Labor and Employment (DOLE). On December
19, 1997, the then Secretary of Labor, Leonardo A. Quisumbing, 12 issued an Order,13 ruling that:

WHEREFORE, except as above MODIFIED, the Order dated March 13, 1997 of the POEA Administrator is
AFFIRMED.

Accordingly, the C.F. Sharp Crew Management, Inc. is hereby found guilty of having violated Sec. 6, R.A.
8042 in relation to Article 13 (b) and (f), and Article 16 of the Labor Code as amended; Rule II (jj), Book I and
Sec 1 and 6, Rule I, Book II, POEA Rules and Regulations Governing Overseas Employment, for having
conspired and confederated with the [Louis] Cruise Lines, Theodorus Savva and Andrias (sic) Tjiakouris in
the recruitment of seafarers for LCL’s ships, before it was duly accredited by POEA as the manning agency
of LCL, thus a non-holder of authority at the time. The penalty imposed against it of suspension of its license
for six (6) months or in lieu thereof, to pay a fine of Fifty Thousand Pesos (P50,000.00), is AFFIRMED.

Further, C.F. Sharp Crew Management, Inc. is hereby found guilty of one (1) count of violation of Art. 29 of
the Labor Code in relation to Sec. 2 (k), Rule I, Book VI of the Rules and Regulations Governing Overseas
Employment, and is imposed the penalty of two (2) months suspension of its license or in lieu thereof, to pay
a fine of P20,000.00.

The penalties of suspension for both violations shall be served cumulatively.

Out of the P230,000.00 cash supersedeas bond posted by the petitioner-appellant, let the amount of
P160,000.00 be released and refunded to it, retaining P70,000.00 to be applied to the payment of the fines
as imposed above, should the petitioner opt to pay the fine instead of undergoing suspension of its license.
However, the suspension shall remain in force until such fine is paid, or in the event that the petitioner-
appellant further appeals this Order.

The charge and finding of violation of Sec. 6 (b) of R.A. 8042 are hereby referred to the Anti-Illegal
Recruitment Branch for appropriate action.

SO ORDERED.14

C.F. Sharp’s motion for reconsideration having been denied on February 5, 1999 by the then Undersecretary, Jose
M. Espanol, Jr.,15 it elevated the case to this Court on petition for certiorari, with the case docketed as G.R. No.
137573. But, in the June 16, 1999 Resolution, this Court referred the petition to the CA.

In the meantime, on April 15, 1999, C.F. Sharp requested the lifting of the suspension decreed by the Secretary of
Labor in his December 19, 1997 Order,16 which was granted by Deputy Administrator for Licensing and Adjudication
Valentin C. Guanio. C.F. Sharp was allowed to deploy seafarers for its principals.
Consequently, on April 30, 2002, the CA denied C.F. Sharp’s petition for certiorari,17 holding that C.F. Sharp was
already estopped from assailing the Secretary of Labor’s ruling because it had manifested its option to have the cash
bond posted answer for the alternative fines imposed upon it. By paying the adjudged fines, C.F. Sharp effectively
executed the judgment, having acquiesced to, and ratified the execution of the assailed Orders of the Secretary of
Labor. The CA also agreed with the POEA Administrator and the Secretary of Labor that Savva and Tjiakouris of
LCL, along with C.F. Sharp, undertook recruitment activities on December 7, 9 to 12, 1996, sans any authority.
Finally, it affirmed both labor officials’ finding that C.F. Sharp violated Article 29 of the Labor Code and Section 2(k),
Rule I, Book VI of the POEA Rules when it appointed Henry Desiderio as agent, without prior approval from the
POEA. Thus, the appellate court declared that the Secretary of Labor acted well within his discretion in holding C.F.
Sharp liable for illegal recruitment.

C.F. Sharp filed a motion for reconsideration,18 but the CA denied it on November 25, 2002.19

Hence, this appeal, positing these issues:

A. WHETHER OR NOT THE COURT OF APPEALS PATENTLY ERRED IN RULING THAT PETITIONER
IS IN ESTOPPEL IN QUESTIONING THE ORDER DATED DECEMBER 19, 1997 AND THE RESOLUTION
DATED FEBRUARY 5, 1999.

B. WHETHER OR NOT THE COURT OF APPEALS PATENTLY ERRED WHEN IT RULED THAT
PETITIONER IS LIABLE FOR VIOLATION OF SECTION 6[,] R.A. NO. 8042 IN RELATION TO ARTICLE 13
(b) and (f) AND ARTICLE 66 (sic) OF THE LABOR CODE AS AMENDED; RULE II (jj) BOOK I; AND
SECTIONS 1 AND 6, RULE I, BOOK III POEA RULES AND REGULATIONS GOVERNING OVERSEAS
EMPLOYMENT.

WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED WHEN IT RULED THAT PETITIONER
IS LIABLE FOR VIOLATION OF ARTICLE 29 OF THE LABOR CODE, AS AMENDED, IN RELATION TO
SECTION II (k)[,] RULE I, BOOK VI OF THE RULES AND REGULATIONS GOVERNING OVERSEAS
EMPLOYMENT.20

C.F. Sharp faults the CA for ruling that petitioner is estopped from questioning the resolutions of the Secretary of
Labor. It denied that it voluntarily executed, or acquiesced to, the assailed resolutions of the Secretary.

The general rule is that when a judgment has been satisfied, it passes beyond review, satisfaction being the last act
and the end of the proceedings, and payment or satisfaction of the obligation thereby established produces
permanent and irrevocable discharge; hence, a judgment debtor who acquiesces to and voluntarily complies with the
judgment is estopped from taking an appeal therefrom.21

In holding C.F. Sharp in estoppel, the CA apparently relied on the April 15, 1999 Order of the POEA, and, thus,
declared:

[P]etitioner C.F. Sharp had already manifested its option to have the cash bond posted as an answer for the
alternative fines imposed in the Orders dated December 19, 1997 as stated in the Order dated April 15,
1999 of the POEA, Adjudication Office x x x. Thus, for voluntary execution of the Order of the Secretary of
DOLE dated December 19, 1997 by paying the adjudged fines, the petitioner was then estopped from
assailing such Order before Us by way of petition for certiorari. Where a party voluntarily executes, partially
or totally a judgment or acquiesces or ratifies the execution of the same, he is estopped from appealing
therefrom. x x x.22

The April 15, 1999 Order of Deputy Commissioner Valentin C. Guanio reads:

Respondent C.F. Sharp Crew Management, Inc., thru counsel having manifested its option to have the cash
bond posted answer for the alternative fines imposed in the above-entitled case; the alternative suspension
imposed in the Order of the Secretary dated December 19, 1997 is hereby Lifted.

SO ORDERED.23

This Order was issued in response to C.F. Sharp’s request to lift the suspension decree of the Secretary of Labor.
The request stated, viz.:

[W]e write in behalf of our client, C.F. Sharp Crew Management Inc., regarding the Advice To Operating
Units dated April 15, 1999, which arose from the Decision of the Office of the Secretary of Labor in the case
entitled C.F. Sharp Crew Management, Inc. versus Rizal Shipping and docketed as RV 97-01-004.

In this connection, we would like to express our option to have the cash bond posted by us in the case
entitled C.F. Sharp Crew Management, Inc. versus Rizal Shipping and docketed as RV 97-01-044 to answer
for any fine that the Supreme Court may finally decide that our client should pay in the Case entitled, C.F.
Sharp Crew Management, Inc. vs. Secretary Leonardo Quisumbing and Rizal International Shipping
Services and docketed as G.R. No. 137573.

Under the circumstances, it is most respectfully requested that the aforesaid advice be RECALLED and that
a clearance be issued in favor of our client, C.F. Sharp Crew Management, Inc.

Hoping for your immediate and favorable action on the matter.24 (Emphasis supplied)

C.F. Sharp’s letter was explicit that the cash bond posted would be answerable for any fine that it may ultimately be
held liable to pay by virtue of a final decision. In fact, on March 25, 1999, prior to the filing of the above-quoted letter-
request, C.F. Sharp had already filed a petition for certiorari assailing the Orders of the Secretary of Labor.
Furthermore, there is no showing that the assailed Order of then Secretary Quisumbing was indeed executed to
warrant the appellate court’s conclusion that C.F. Sharp was estopped from assailing the said Order. Clearly, there is
no basis for the CA to rule that C.F. Sharp voluntarily executed, or acquiesced to, the execution of the unfavorable
ruling of the Secretary of Labor.

The first issue having been settled, we now resolve whether C.F. Sharp is liable for illegal recruitment.

C.F. Sharp denies committing illegal recruitment activities in December 1996. It posits that the interviews undertaken
by Savva and Tjiakouris do not amount to illegal recruitment under Section 6 of Republic Act No. 8042 or the
Migrants Workers Act. Further, it contends that the interviews conducted were not for selection and recruitment
purposes, but were in connection with the seamen’s past employment with Rizal, specifically, their complaints for
non-remittance of SSS premiums, withholding of wages, illegal exactions from medical examinations and delayed
allotments. It claims that it was only upon approval of its application for accreditation that the employment contracts
were entered into and actual deployment of the seamen was made. C.F. Sharp, thus, concludes that it cannot be held
liable for illegal recruitment.

The reasoning is specious.

Undoubtedly, in December 1996, LCL had no approved POEA license to recruit. C.F. Sharp’s accreditation as LCL’s
new manning agency was still pending approval at that time. Yet Savva and Tjiakouris, along with C.F. Sharp,
entertained applicants for LCL’s vessels, and conducted preparatory interviews.

Article 13(b) of the Labor Code defines recruitment and placement as:

any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes
referrals, contract services, promising or advertising for employment, locally or abroad whether for profit or
not: Provided, That any person or entity which in any manner, offers or promises for a fee employment to
two or more persons shall be deemed engaged in recruitment and placement.

On the basis of this definition – and contrary to what C.F. Sharp wants to portray - the conduct of preparatory
interviews is a recruitment activity.

The fact that C.F. Sharp did not receive any payment during the interviews is of no moment. From the language of
Article 13(b), the act of recruitment may be "for profit or not." Notably, it is the lack of the necessary license or
authority, not the fact of payment, that renders the recruitment activity of LCL unlawful.

C.F. Sharp’s claim that the interviews were not for selection and recruitment purposes does not impress. As the
Secretary of Labor aptly said:

This Office cannot conceive of a good reason why LCL/Savva/Tjiakouris should be interested at the time in
unearthing alleged violations committed by Rizal Shipping whose representative status as manning agency
was to be terminated in just a few weeks thereafter, spending valuable time and money in the process. They
stood to gain nothing from such taxing exercise involving several hundreds of ex-crew members, which
could be handled by government agencies like the POEA, NLRC, SSS. The observation of the POEA
Administrator that the complaints of the crewmen were filed only after Rizal Shipping filed its complaints with
the POEA merely to bolster the defense of CF Sharp/LCL/Savva and Tjiakouris, is telling.

Upon the other hand, it was more to LCL’S gain to interview, select and recruit the disembarking crewmen
previously recruited by Rizal Shipping, using CF Sharp’s facilities, as this would result in less recruitment
time and cost.

Finally, the claim of Savva and Tjiakouris that Savva "talked to the POEA representative during their visit"
about these interviews and the violations which were confirmed, is just an afterthought to support their
defense; there is no entry in the Inspection Report confirming such claim. If such claim were true, then the
"able officer" of CF Sharp (LCL’s Attorney-in fact) who signed his conformity on the 4th page of the report,
and put his initial on the last page of the report containing the handwritten findings of the inspectors on the
selection and recruitment activities of Savva and Tjiakouris, would have insisted that an entry be made
thereon about what Savva told the inspectors, or he could simply himself have written thereon that the two
LCL officials merely conducted interviews on the violations committed by Rizal Shipping. However, the
report is bereft of anything to that effect. More significant is the fact that the inspectors, in their Memorandum
dated December 11, 1996 (the very same day they conducted the inspection), stated that they "approached
said persons" (referring to Banawis, Savva and Tjiakouris) "and told us that they were doing interview to
select applicants… to complement the crew of a passenger ship for [LOUIS] CRUISE LINES." 25

Indeed, it was Savva and Tjiakouris that conducted the interviews, and undertook selection and hiring. However, C.F.
Sharp cannot steer clear of liability for it conspired with LCL in committing illegal recruitment activities. As the
Secretary of Labor had taken pains to demonstrate:

x x x [T]here is substantial evidence on record that as alleged by Rizal Shipping, CF Sharp conspired with
LCL and its officers Savva and Tjiakouris to conduct recruitment activities in its offices, at a time when LCL
was not yet its POEA-accredited principal, in violation of Sec. 6, R.A. 8042 in relation to Article 13(b) and (f)
and Article 16 of the Labor Code as amended; Rule II(jj) Book I, and Sec. 1 and 6, Rule I, Book III, all of the
POEA Rules and Regulations Governing Overseas Employment.

Indeed, C.F. Sharp was aware of these violations when it alleged in its Petition for Review that:
 "…in any and all events, the findings relied upon by the Public Respondent show, at best, that the
parties responsible for the alleged acts of illegal recruitment are LCL and its officers alone, or at
worst, LCL and its officers, in conspiracy with petitioner. Yet, it is petitioner alone, who is severely
punished and penalized." (underscoring supplied)

xxxx

The intention, agreement and both common design of both LCL and CF Sharp to engage in recruitment of
crewmen for LCL’s ships had already been made manifest when LCL through Savva had instructed, in the
October 14, 1996 letter to disembarking crewmembers, for the latter to report to CF Sharp for processing of
their papers. This was followed by the execution by LCL on October 17, 1996 of a Special Power of Attorney
in favor of CF Sharp as new manning agent and attorney-in-fact of LCL, with authority, among others, "to
sign, authenticate and deliver all documents necessary to complete any transaction related to the
recruitment and hiring of Filipino seamen including the necessary steps to facilitate the departure of
recruited seamen"; "to assume, on our behalf and for our account, any liability that may arise in connection
with the recruitment of seamen and/or implementation of the employment contract of said seamen." And on
November 8, 1996, CF Sharp applied for accreditation as manning agent of LCL for the latter’s five named
vessels. The discovery by the POEA inspectors of the selection and recruitment activities undertaken by
Savva and Tjiakouris at CF Sharp’s offices on December 11, 1996, followed. The interviews by Savva and
Tjiakouris at CF Sharp’s offices on December 7, 1996 with around 300 crewmen, as sworn to by 98
crewmen (their affidavits were submitted in evidence by CF Sharp); the interviews for selection and
recruitment from December 9 to 12, 1996 as found by the POEA inspectors; and the immediate deployment
of 154 crewmen for LCL right after [the] POEA approval of accreditation of LCL as principal of CF Sharp,
could not have been undertaken without the assistance and cooperation of CF Sharp, even before such
transfer of accreditation was granted by POEA.

The petitioner-appellant must be reminded that prior to approval of the transfer of accreditation, no
recruitment or deployment may be made by the principal by itself or through the would-be transferee
manning agency, or by the latter, as this would constitute illegal recruitment by a non-holder of authority
under Sec. 6, R.A. 8042 in relation to Article 13(b) and (f) and Article 16 of the Labor Code as amended;
Rule II(jj), Book I, and Sec. 1 and 6, Rule 1, Book III, POEA Rules and Regulations Governing Overseas
Employment.

The petitioner-appellant alleges that "there is no need for a license to enable LCL’s officers to conduct their
alleged activities of interviewing, selecting and hiring crewmen. Indeed, LCL’s officers could have conducted
these activities without a license."

Such claim is without legal basis, as direct hiring by employers of Filipino workers for overseas employment
is banned; they can only do so through, among others, licensed private recruitment and shipping/mining
agencies (Art. 18, Labor Code as amended; Sec. 1, Rule 1, Book II, POEA Rules and Regulations
Governing Overseas Employment).26

We need not say more.

C.F. Sharp also denies violating Article 29 of the Labor Code. It insists that Henry Desiderio was neither an employee
nor an agent of C.F. Sharp. Yet, except for its barefaced denial, no proof was adduced to substantiate it.

Desiderio’s name does not appear in the list of employees and officials submitted by C.F. Sharp to the POEA.
However, his name appeared as the contact person of the applicants for the position of 2nd and 3rd assistant
engineers and machinist/fitter in C.F Sharp’s advertisement in the February 2, 1997 issue of The Bulletin Today.27

Article 29 of the Labor Code is explicit, viz.:

Art. 29. NON-TRANSFERABILITY OF LICENSE OR AUTHORITY

No license or authority shall be used directly or indirectly by any person other than the one in whose favor it
was issued or at any place other than that stated in the license or authority, nor may such license or
authority be transferred, conveyed or assigned to any other person or entity. Any transfer of business
address, appointment or designation of any agent or representative including the establishment of additional
offices anywhere shall be subject to the prior approval of the Department of Labor. (Emphasis ours)

Thus, Section 2(k), Rule 1, Book VI of the POEA Rules Governing Overseas Employment provides:

Section 2. Grounds for Suspension/Cancellation of License.

xxxx

k. Appointing or designating agents, representatives or employees without prior approval from the
Administration.

The appointment or designation of Desiderio as an employee or agent of C.F. Sharp, without prior approval from the
POEA, warrants administrative sanction. The CA, therefore, correctly rejected C.F. Sharp’s posture.

Apparently, realizing the folly of its defenses, C.F. Sharp assails the admissibility of the Memorandum and Inspection
Report of the POEA. It contends that these are patently inadmissible against C.F. Sharp for it was not given an
opportunity to cross–examine the POEA inspectors regarding the report.
The argument does not deserve even a short shrift. First, C.F. Sharp did not raise it before the POEA and Secretary
of Labor. The issue was raised for the first time in its petition for certiorari with the CA, where the jurisdiction of the
appellate court is limited to issues of jurisdiction and grave abuse of discretion. On numerous occasions, we have
made it clear that to allow fresh issues at this stage of the proceedings is violative of fair play, justice and due
process.28

Second, jurisprudence is replete with rulings that administrative bodies are not bound by the technical niceties of law
and procedure and the rules obtaining in the courts of law.29 Hence, whatever merit C.F. Sharp’s argument might
have in the context of ordinary civil actions, where the rules of evidence apply with greater rigidity, disappears when
adduced in connection with labor cases.

The claim of denial of due process on the part of C.F. Sharp must also be rejected. The essence of due process lies
in the reasonable opportunity afforded a party to be heard and to submit any evidence in support of its defense. What
is vital is not the opportunity to cross-examine an adverse witness, but an opportunity to be heard.30

In this case, C.F. Sharp was given ample opportunity to be heard, to adduce evidence in support of its version of the
material occurrences, and to controvert Rizal’s allegation and the Inspection Report. It submitted its position paper
with supporting affidavits and documents, and additionally pleaded its causes on appeal before the Secretary of
Labor. Under the circumstances, a claim of denial of due process on C.F. Sharp’s part is completely unavailing.

C.F. Sharp next impugns the probative value given by the Administrator and the Secretary of Labor to the Inspection
Report. It alleges that the POEA Administrator, the Labor Secretary and the CA relied only on the Inspection Report
and gave very little or no probative value to the affidavits that it submitted in support of its claim.

C.F. Sharp would have us re-evaluate the factual veracity and probative value of the evidence submitted in the
proceedings a quo. C.F. Sharp may well be reminded that it is not our function to review, examine, and evaluate or
weigh the evidence adduced by the parties. Elementary is the principle that this Court is not a trier of facts. Judicial
review of labor cases does not go beyond the evaluation of the sufficiency of the evidence upon which the labor
officials' findings rest. Hence, where the factual findings of the labor tribunals or agencies conform to, and are
affirmed by, the CA, the same are accorded respect and finality, and are binding upon this Court. It is only when the
findings of the labor agencies and the appellate court are in conflict that this Court will review the records to
determine which findings should be upheld as being more in conformity with the evidentiary facts. Where the CA
affirms the labor agencies on review and there is no showing whatsoever that said findings are patently erroneous,
this Court is bound by the said findings.31

Although the rule admits of several exceptions, none of them are in point in this case. In any event, we have carefully
examined the factual findings of the CA and found the same to be borne out of the record and sufficiently anchored
on the evidence presented.

WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of Appeals in CA-G.R. SP. No.
53747 are AFFIRMED.

SO ORDERED.

Ynares-Santiago, Chairperson, Austria-Martinez, Chico-Nazario, Reyes, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

A.M. No. 12-8-07-CA June 16, 2015

Re: Letter· of Court of Appeals Justice Vicente S.E. Veloso for Entitlement to Longevity Pay for His Services
as Commission Member III of the National Labor Relations Commission

x-----------------------x

A.M. No. 12-9-5-SC

Re: Computation of Longevity Pay of Court of Appeals Justice Angelita A. Gacutan

x-----------------------x

A.M. No. 13-02-07-SC

Re: Request of Court of Appeals Justice Remedios A. Salazar-Fernando that Her Services as MTC Judge and
as COMELEC Commissioner be considered as Part of Her Judicial Service and Included in the
computation/adjustment of Her longevity pay

RESOLUTION

BRION, J.:

Prefatory Statement

The Consolidated Cases

and the Affected Parties

For the Court’s consideration are the following: (1) letter-request dated August 22, 2012, of Court of Appeals ( CA)
Associate Justice Remedios A. Salazar-Fernando;1 (2) letter-request dated September 11, 2012, of CA Associate
Justice Angelita A. Gacutan;2 and (3) motion for reconsideration3 dated November 7, 2012, of CA Associate Justice
Vicente S.E. Veloso.4

The petitioners are all Justices of the Court of Appeals. Justices Veloso and Fernando claim longevity pay for
services rendered within and outside the Judiciary as part of their compensation package . Justice Gacutan, who has
recently retired, claims deficiency payment of her longevity pay for the services she had rendered before she joined
the Judiciary, as well as a re-computation of her retirement pay to include the claimed longevity pay.

Interest in the outcome of these consolidated cases goes beyond that of the petitioners; some incumbent justices and
judges, before joining the Judiciary, also served in the Executive Department and would like to see these previous
services credited in the computation of their longevity pay. Others who had also previously served with the Executive
Department currently enjoy longevity pay credit for their executive service; they would like to see their mistakenly
granted longevity pay credits maintained.

Thus, the Court’s decision on these consolidated cases, whether to find for or against the petitioners, will likewise
affect the interests of other judges and justices in similar circumstance, including several members of this honorable
court participating in these matters.

Antecedents

A. Letter-Request of Justice Salazar-Fernando

In her letter dated August 22, 2012,5 Justice Salazar-Fernando requested that her services as Judge of the Municipal
Trial Court ( MTC) of Sta. Rita, Pampanga, from February 15, 1983 to July 31, 1987, and as Commissioner of the
Commission on Elections ( COMELEC ), from February 14, 1992 to February 14, 1998, be considered as part of her
judicial services "as in the case of Hon. Bernar do P. Pardo, Retired Associate Justice of the Supreme Court."
Accordingly, Justice Salazar-Fernando requested that her longevity pay be adjusted "from the current 10% to 20% of
[her] basic salary effective May 25, 1999."

We referred this letter-request to Atty. Eden T. Candelaria, Chief of the Office of Administrative Services ( OAS ), for
study and recommendation.

In her February 18, 2013 Memorandum,6 Atty. Candelaria recommended that Justice Salazar-Fernando’s services as
MTC Judge be credited as judicial service that can be added to her present longevity pay. Atty. Candelaria, however,
recommended the denial of Justice Salazar-Fernando’srequest that her services at the COMELEC be also credited
for her present longevity pay. Nonetheless, she recommended that Justice Salazar-Fernando’s services in the
COMELEC be included in the computation of her longevity pay upon retirement "as in the case of Justice Pardo."

B. Letter-Request of Justice Gacutan

In her letter7 dated September 11, 2012, Justice Gacutan requested that: (a) her services as Commissioner IV of the
National Labor Relations Commission (NLRC) , from March 3, 1998 to November5, 2009, be credited as judicial
service for purposes of retirement; (b) she be given a longevity pay equivalent to 10% of her basic salary; and (c) an
adjustment of her salary, allowances and benefits be made from the time she assumed as CA Justice on November
6, 2009. In the Court’s Resolution8 of November 13, 2012, we required the Fiscal Management and Budget Office
(FMBO ) to comment onJustice Gacutan’s letter. In her Comment of January 4, 2013, Atty. Corazon G. Ferrer-Flores,
Deputy Clerk of Court and Chief of Office of the FMBO, recommended that: (1) Justice Gacutan’s request for the
crediting of her services as Commissioner IV of the NLRC as judicial service be granted, but only for purposes of her
retirement benefits, to take effect on her compulsory retirement on December 3, 2013;and (2) Justice Gacutan’s
request that her salary and allowances be adjusted retroactive from her assumption of office in the CA on November
6, 2009, be denied.9

C. Motion for Reconsideration of Justice Veloso

In his November 7, 2012 motion for reconsideration,10 Justice Veloso assailed the Court’s October 23, 2012
Resolution11 that denied his request for the crediting of his services as NLRC Commissioner as judicial service for
purposes of adjusting his salary and benefits, specifically his longevity pay.

Justice Veloso claimed that Republic Act No. (RA) 9347 which amended Article 216 of the Labor Code should be
applied retroactively since it is a curative statute. He maintained under this view that he already had the rank of a CA
Justice as NLRC Commissioner before he was appointed to the appellate court on February 4, 2004.
We referred Justice Veloso’s motion for reconsideration to the FMBO for report and recommendation in our
Resolution of November 27, 2012.12

In her Report and Recommendation dated February 15, 2013,13 Atty. Ferrer-Flores recommended that Justice
Veloso’s motion for reconsideration be denied since the points he raised were a rehash of his arguments in his July
30, 2012 letter-request.14

Our Rulings

I. Letter of Justice Salazar-Fernando in A.M. No. 13-02-07-SC

a. Services as MTC Judge

We grant the request of Justice Salazar-Fernando to credit as judicial service her previous services as MTC Judge of
Sta. Rita, Pampanga, as judicial service in the computation of her longevity pay.

Section 42 of Batas Pambansa Bilang ( B.P. Blg.) 129 provides:

Section 42. Longevity pay. – A monthly longevity pay equivalent to 5% of the monthly basic pay shall be paid to the
Justices and Judges of the courts herein created for each five years of continuous, efficient, and meritorious service
rendered in the judiciary; Provided, That in no case shall the total salary of each Justice or Judge concerned, after
this longevity pay is added, exceed the salary of the Justice or Judge next in rank. [Italics supplied; emphasis and
underscoring ours]

We find it undisputed that Justice Salazar-Fernando served as MTC Judge from February 15, 1983 to July 31, 1987.
This service constitutes continuous, efficient, and meritorious service rendered in the Judiciary and, hence, should be
included in the computation of her longevity pay.

b. Service as COMELEC Commissioner

We deny, however, the inclusion of Justice Salazar-Fernando’s request to credit her services as COMELEC
Commissioner, from February 14, 1992 to February 14, 1998, as judicial service for longevity pay purposes.

The only service recognized for purposes of longevity pay under Section 42 of B.P. Blg. 129 is service in the
Judiciary, not service in any other branch of government. The CO MELEC is an agency independent of the Judiciary;
hence, service in this agency cannot be considered as service rendered in the Judiciary.

We find Justice Salazar-Fernando’s invocation of the case of Justice Pardo, to support her claim to longevity pay,
misplaced.

b.1. Our Pardo Ruling

In In Re: Request of Justice Bernardo P. Pardo for Adjustment of His Longevity Pay, 15 we held that the inclusion of
Justice Pardo’s service in the COMELEC in the computation of his longevity pay upon his retirement was predicated
on the factual circumstances peculiar to him: he was an incumbent CA Justice when he was appointed COMELEC
Chairman, and was appointed to the Supreme Court after his service with the COMELEC, without any interruption in
his service .

The Court ― based on its reading of Section 3 of B.P. Blg. 129 16 ― did not consider his intervening service in the
COMELEC, an office outside the Judiciary, as a disruption of his service in the Judiciary.

Notably, the Court in In Re: Justice Pardo liberally interpreted the phrase "the Court" in Section 3 of BP 129 to mean
the entire judiciary, not just the Court of Appeals. The provision reads:

Any member who is reappointed to the Court after rendering service in any other position in the government shall
retain precedence to which he was entitled under his original appointment, and his service in the Court shall, for all
intents and purposes , be considered as continuous and uninterrupted. (emphases supplied)

This provision was an amendment to Section 3 of BP 129 which, as originally worded, referred only to the
organization of the CA, the appointment process of its justices, and the means by which seniority of rank is
determined among the CA justices. Executive Order No. 33 added this phrase, and hence Section 3 now reads as:

Sec. 3. Organization. There is hereby created a Court of Appeals which shall consist of a Presiding Justice and fifty
Associate Justices who shall be appointed by the President of the Philippines. The Presiding Justice shall be so
designated in hi s appointment, and the Associate Justice shall have precedence according to the dates of their
respective appointments, or when the appointments of two or more of them shall bear the same date, according to
the order in which their appointments were issued by the President. Any member w ho is reappointed to the Court
after rendering in any other position in the government shall retain the precedence to which he was entitled under his
original appointment, and his service in the Court shall, for all intents and purposes, be considered as continuous and
uninterrupted.

Thus, had the Court given a more literal interpretation of the phrase added by EO No. 33,then it would have
interpreted its application to refer to an incumbent CA justice only. The phrase, after all, had been added to Section 3
of BP 129, which referred to the organization of the CA. Following this interpretation, Justice Pardo’s service in the
COMELEC would not have been appreciated in determining his longevity pay, as he was reappointed not to the CA,
but to the Supreme Court.
Instead, the Court, taking a more liberal approach, interpreted the phrase "the Court" to mean the entire judiciary. It
noted that the additional phrase in Section 3 used the generic word "Court" instead of Court of Appeals, and that to
apply the stricter application of interpreting "Court" to mean "Court of Appeals" would "lead to absurdity, contradiction,
injustice, or would defeat the clear purpose of the lawmakers."

Thus, following this more liberal approach, Justice Pardo’s one-time service outside of the judiciary was considered
part of his service in the judiciary for purposes of determining hi s longevity pay. The same may be applied, for
instance, to a trial court judge who rendered service outside the judiciary and then returned to being a member of the
bench.

Thus, the Court’s ruling in In Re: Justice Pardo is authority for expanding EO No. 33’s amendment to Section 3 of BP
129 to all members of the judiciary.

b.2. The liberal Pardo ruling cannot and should not be extended to allow members of the judiciary to leave
and return more than once, without interrupting the continuity of their service.

The next question to be asked, then, refers to the frequency by which members of the judiciary may be able to serve
in other branches of government without breaking their ‘continuo us and uninterrupted’ service. Did the ruling in
Justice Pardo’s case allow members of the judiciary to leave for other branches of government numerous times, and
still maintain continuous and uninterrupted service in the judiciary? The answer to this question is a resounding no.

A critical aspect of Justice Pardo’s case was the absence of any gap in his service from the time he was appointed as
Caloocan City Judge in 1974, until he retired as an Associate Justice of the Supreme Court in 2002. He occupied the
positions of District Judge, Court of First Instance of Rizal, Branch 34, Caloocan City, from May 3, 1974 to January
17, 1983; Regional Trial Court (RTC), Branch 43, Manila, from January 18, 1983 to March 29, 1993; Associate
Justice of the CA, from March 30, 1993 to February 16,

1995; Chairman, COMELEC, from February 17, 1995 to October 6, 1998; and Associate Justice of the Supreme
Court, from October 7, 1998 to February 10, 2002.

In these lights, Justice Pardo’s case has nothing to offer by way of jurisprudential precedent in terms of determining
whether Section 3 of BP 129 allows judges and justices to leave the judiciary several times without breaking their
continuous service. There was no occasion to rule on this issue, as Justice Pardo left the judiciary only once, to serve
in the COMELEC.

Proceeding from this conclusion, the next level of inquiry leads us to examine whether Section 3 of BP 129 allows
multiple breaks in judicial office and considers these breaks as part of a continuous and uninterrupted judicial service.

The amendment to Section 3, as worded and interpreted in In Re: Justice Pardo , refers to the reappointment of a
member of the judiciary after serving in another branch of government. The judge shall retain the precedence to
which he was entitled under his original appointment, and his judicial service shall be considered uninterrupted.

This service outside the judiciary, however, should only occur once, as in Justice Pardo’s case. Section 3 refers to an
original appointment , which is the first appointment by which a lawyer becomes a member of the judiciary. As he
progresses in the judiciary ― whether by staying in his original post or by being appointed in other posts ― he
acquires seniority, which is especially applicable in determining his retirement and longevity pay. Once he leaves the
judiciary, however, his original appointment is cut off; hence, Section 3 can only refer to the judge’s return to the
judiciary as a "reappointment." He needs to get re-appointed back to the judiciary, as he is no longer part of it.

Section 3 works to bridge the gap between the time the judge left his original appointment and his reappointment to
the judiciary, provided the gap in service was rendered in another branch of government. Once reappointed to the
judiciary, however, he can no longer avail of Section 3, as Section 3 speaks of an original appointment. A second
reappointment, after another service in a different government agency, would be succeeding the first reappointment,
and not the original appointment. Section 3 operates to bridge an original appointment with a reappointment, and not
to connect a reappointment with a second appointment. Had the latter interpretation been the intent behind the law,
then it should and would have made this situation clearer.

Further, the application of Section 3 appears to be limited to service in a single position in government outside of the
judiciary. Section 3 speaks of "any other position in the government," and thus uses a singular noun. After this single
service, the judge or justice invoking the application of Section 3 must have returned to the judiciary in order for his
service to be deemed uninterrupted.

Additionally, it must not be lost on us that we have already given Section 3 a liberal interpretation in In Re: Justice
Pardo. To top this exercise of liberality with another liberal interpretation of the same provision, when the law is clear
regarding its application, would amount to judicial legislation that furthers the interests within our ranks.

To recapitulate, Section 3 applies to any judge or justice, who left the judiciary, served in a single non-judicial
governmental post, and returned to the judiciary. This was what happened in the case of Justice Pardo, when after a
long and continuous service in the judiciary, he left to serve in the COMELEC and from there was subsequently
appointed to the Supreme Court.

b.3. Justice Fernando is not entitled to her request even under the liberal Pardo ruling.

Justice Salazar-Fernando effectively asks us in her present case to give her the benefit of our Pardo ruling although
the attendant facts of her case differ from those of Justice Pardo’s and do not approximate the factual situation that
Section 3 requires.
In the first place, her record shows that her services in between her judicial services were not continuous and
uninterrupted.

We find that after Justice Salazar-Fernando’s stint as MTC Judge in July 1987, she was named Chairman of the Land
Transportation Franchising and Regulatory Board (LTFRB) where she served from August 1987 to February 13,
1992. During this period, she concurrently held directorship posts at the Light Rail Transit Authority (LRTA) and at the
Office of Transport Cooperatives (OTC). In the later part of 1991,Justice Salazar-Fernando held the position of
Officer-in-Charge/Assistant Secretary of the Land Transportation Office.

It was only after Justice Salazar-Fernando’s stints at the LTFRB, LRTA, and OTC all non-judicial offices that she was
appointed as Commissioner of the COMELEC on February 14, 1992, and served in this capacity until February 15,
1998. Three (3) days later, or on February 18, 1998, she started to serve as a consultant in the COMELEC until
October 6, 1998.

Parenthetically, her service as consultant is not a "position in government" that should be considered a part of her
government service as she did not occupy any specific position in government. Moreover, it was only five (5) months
after her COMELEC consultancy, or on March 25, 1999, that Justice Salazar-Fernando was appointed as Associate
Justice of the CA. Thus, significant gaps in her judicial service intervened so that her situation did not comply with the
requirement in Section 3 that only a single non-judicial position should intervene in her judicial service record.

Reduced to the bare essentials, the issue for us is whether we should apply with liberality a ruling that had already
been very liberally interpreted by this Court, under facts that do not entitle Justice Fernando to recognition of
continuous service under the requirements of Section 3.

Our brief and direct answer is that we cannot and must not allow the crediting of Justice Salazar Fernando’ s
COMELEC service for longevity pay purposes. Acceding to her request will constitute an outright judicial legislation
that the Court cannot undertake under the Constitution. As earlier noted, Justice Salazar-Fernando’s de tails do not at
all approximate the factual circumstances Section 3 of BP 129 that speaks of, nor the factual situation in In Re:
Justice Pardo.

If we had been liberal in the past and this liberal ruling is now cited, we should, at the very least, not go beyond the
facts under which our past liberality had been extended. If we further read liberally a Court ruling that only came to
being because of past liberality, we stand to hear a re-echo of the charge that this Court selectively applies its
liberality in favor of its own . (In fact, a favorable ruling in these consolidated cases may already raise eyebrows and
questions as the Court will be ruling on matters that will directly affect some of its participating Members .)

To sum up, Justice Salazar-Fernando’s services as COMELEC Commissioner cannot be included in the computation
of her longevity pay, now or upon her retirement .

II. Letter-Request of Justice Gacutan in A.M. No. 12-9-5-SC

a. Longevity Pay for Services as NLRC Commissioner

We deny Justice Gacutan’s request that her past services in the NLRC be recognized for purposes of her longevity
pay. She served as a Commissioner IV of the NLRC from March 3, 1998 to November 5, 2009, or for a period of
eleven years and eight months.

Section 42 of B.P. Blg. 129 is clear and explicit: a judge or justice should have rendered five years of continuous,
efficient and meritorious service in the Judiciary in order to qualify for a monthly longevity pay equivalent to 5% of the
monthly basic pay.

We point out that the NLRC is an agency attached to the Department of Labor and Employment – an adjunct of the
Executive Department – albeit for policy and program coordination only. Under the circumstances, Justice Gacutan’s
past service as NLRC Commissioner cannot be credited as judicial service for longevity pay purposes since she did
not render such service while with the Judiciary.

b. NLRC Services Considered in Retirement Pay

Nonetheless, Justice Gacutan’s service as NLRC Commissioner is creditable as part of overall government service
for retirement purposes under RA 910, as amended. Section 1 of this law provides:

Section 1. When a Justice of the Supreme Court or of the Court of Appeals who has rendered at least twenty years'
service either in the judiciary or in any other branch of the Government, or in both, (a) retires for having attained the
age of seventy y ears, or (b) resigns by reason of his incapacity to discharge the duties of his office, he shall receive
during the residue of his natural life, in the manner hereinafter provided, the salary which he was receiving at the time
of his retirement or resignation. And when a Justice of the Supreme Court or of the Court of Appeals has attained the
age of fifty-seven years and has rendered at least twenty years' service in the Government, ten or more of which
have been continuously rendered as such Justice or as judge of a court of record, he shall be likewise entitled to
retire and receive during the residue of his natural life, in the manner also hereinafter prescribed, the salary which he
was then receiving. It is a condition of the pension provided for herein that no retiring Justice during the time that he is
receiving said pension shall appear as counsel before any court in any civil case wherein the Government or any
subdivision or instrumentality thereof is the adverse party, or in any criminal case wherein an officer or employee of
the Government is accused of an offense committed in relation to his office, or collect any fee for his appearance in
any administrative proceedings to maintain an interest adverse to the Government, insular, provincial or municipal, or
to any of its legally constituted officers.
Considering the express wordings of RA 910, which include service "in all other branches of the Government" as
creditable service in the computation of the retirement benefits of a justice or judge, Justice Gacutan’s service as NL
RC Commissioner should be credited as part of her government service for retirement purposes under RA 910, as
amended.

III. Motion for Reconsideration of Justice Veloso in A.M. No. 12-8-07-CA

a. Background.

The chairman and members of the NLRC were entitled to receive an annual salary at least equivalent to the
allowances and benefits of the Presiding Justice and Associate Justices of the CA, respectively, prior to the
amendment of Article 216 of the Labor Code by RA 9347 .

Under RA 9347 (which took effect on August 26, 2006),17 NLRC commissioners were given the equivalent rank of a
CA Justice. The Labor Code, as now amended by Section 4 of RA 9347, reads:

Article 216. Salaries, Benefits and Emoluments. The Chairman and members of the Commission shall have the same
rank , receive an annual salary equivalent to, and be entitled to the same allowances, retirement and benefits as
those of the Presiding and Associate Justices of the Court of Appeals, respectively. [italics supplied, emphasis ours]

In his present motion, Justice Veloso claims that RA 9347 should be given a retroactive application. With the
equivalent rank of a CA Justice from the time RA 9347 was amended, his service as NLRC Commissioner should be
considered as judicial service for purposes of his longevity pay.

b. Our ruling and the reasons therefore

b.1. RA 9347 does not provide for retroactivity.

We disagree with Justice Veloso’s position and thus deny his motion.

First, nothing in the language of RA 9347 expressly indicates the intention to give it retroactive effect. We emphasize
that statutes, as a rule, apply prospectively, unless the legislative intention to give them retrospective effect is
expressly declared or is necessarily implied from the language used. 18 In "case of doubt, the doubt must be resolved
against the retroactive effect."19

Nor is retroactivity discernible, even by implication, from the provisions of RA 9347. It is not implied from the law’s
legislative intent, nor from the deliberations in Senate Bill No. 2035 (which became RA 9347). 20

In Re: Request of Retired Deputy Court Administrator Bernardo T. Ponferrada for Automatic Adjustment of His
Retirement Benefits to Include Special Allowance Under R.A. 9227,21 the Court refused to extend the benefits
provided by RA 9227 to official s of the Judiciary who retired prior to the passage of this law. RA 9227 granted a
special allowance to justices, judges, and all other positions in the Judiciary with the equivalent rank of justices of the
CA or judges of the RTC. Since the position of Deputy Court Administrator (DCA) carries the same rank as an
Associate Justice of the CA,22 retired DCA Ponferrada asked for the inclusion of the RA 9227 special allowance in his
retirement pay.

The Court denied the request, noting that RA 9227 did not expressly provide for retroactivity so that those who had
retired at the time of its enactment would be covered. Although the grant was extended to retired SC and CA justices,
this was justified under Section 3-A of RA 910, as amended, which states:

SEC. 3-A. In case the salary of Justices of the Supreme Court or of the Court Appeals is increased or decreased,
salary shall, for the purpose of this Act, be deemed to be the salary or the retirement pension which a Justice x x x
who retired was receiving at the time of his cessation in the office: Provided, That any benefits that have already
accrued prior to such increase or decrease shall not be affected thereby.23 [underscore ours]

According to the Court, parity in rank and salary does not automatically mean parity in retirement benefits under
Section 3-A of RA 910. Notably, the automatic adjustment of retirement benefits was expressly extended by RA 910,
as amended, but only to Justices of the SC and the CA, not to judicial officials with the equivalent rank. Additionally,
since he retired prior to the passage of RA 9227, DCA Ponferrada could not even invoke the automatic adjustment of
his retirement pay under Section 3-A of RA No. 910, as amended, to support his request.24

In the same way, RA 9347 was en acted into law only on July 27, 2006. Justice Veloso had, by then (on February 4,
2004) left his post as NLRC Commissioner to assume the position of Associate Justice of the Court of Appeals. In the
absence of any clear intent to give RA 9347 any retroactive effect, Justice Veloso cannot validly claim that he held
the rank of a CA justice during his stint as NLRC Commissioner from 1989 to 2004.

b.2. RA 9347 is not a curative statute.

"A curative statute is enacted to cure defects in a prior law or to validate legal proceedings, instruments or acts of
public authorities[,] which would otherwise be void for want of conformity with certain existing legal
requirements."25Simply put, curative laws are enacted to validate acts done that otherwise would be invalid under
existing laws.

RA 9347 is not a curative statute since it was not intended to supply deficiencies, abridge superfluities in existing
laws, or curb evils; the insertion of the word "rank" in Article 216 was merely to emphasize the increase in salaries
and benefits of the NLRC Commissioners and labor arbiters.
 b.3. Grant of Equivalent Rank is not Service in the Judiciary

At any rate, even if we recognize retroactivity as requested, the conferment of the rank of a CA Justice to Justice
Veloso during his tenure as NLRC Commissioner would not entitle him to longevity pay.

Section 42 of B.P. Blg. 129 is clear: a judge or justice shall be paid a monthly longevity pay equivalent to 5% of the
monthly basic pay for each five years of continuous, efficient, and meritorious service rendered in the Judiciary.
Service in the NLRC, even with the rank of a CA Justice, is not service with the Judiciary for purposes of longevity
pay. Justice Veloso’s service in the NLRC, however, m ay be credited as part of his government service for
retirement purposes under RA 910, as in the case of Justice Gacutan .

IV. General Discussions

With each of the consolidated petitions directly ruled upon, the following discussions are submitted to expound on the
conclusions reached and to generally comment on the issues the Dissents raised.

At the core of the issues raised is the question: should the past service of incumbent justices and judges, rendered at
the Executive Department, be recognized under Section 42 of BP 129 ( the longevity pay provision ) on the ground
that their previous executive positions now carry the rank, salary, and benefits of their counterparts in the Judiciary?

The law governing this issue is of course the longevity pay provision, heretofore quoted, 26 whose salient points are
summarized below:

1. The longevity pay is a monthly pay equivalent to 5% of monthly basic pay;

2. Recipients are the Justices and Judges of courts;

3. For each five years of continuous, efficient and meritorious service;

4. The service is to be rendered in the Judiciary;

5. In no case shall the total salary of each Justice or Judge, after his longevity pay is added,
exceed the salary of the Justice or Judge next in rank.

What would otherwise be a simple stand-alone provision is complicated by subsequent laws that grant the same
ranks, salaries and benefits.

- "as those of" their counterpart judge or justice (for the National Prosecution Service), or

- "as those of the Presiding Justice and Associate Justices of the Court of Appeals (for the National
Labor Relations Commission), and

- the [ "rank, prerogatives, salaries, allowances, benefits and privileges"] as their counterpart
Justice or Judge (for the Office of the Solicitor General).

These new levels of rank and salary are essentially what the present petitioners and the incumbent justices and
judges cite as basis for the grant or increase of their longevity pay.

Another complicating factor involves the past rulings of this Court where past executive service had been recognized,
not only for retirement pay purposes, but for longevity pay purposes upon retirement. Interestingly, no in-depth look
appears to have been made in these past rulings, although their results cannot be in doubt ― the Court recognized
past executive services for longevity pay purposes.

Interestingly, the Dissents, led by Justice De Castro, take a multi-pronged critique of the ponencia generally
chastising it for being overly strict in its reading of Section 42.

Among others, she posits that the ponencia disregards long established rulings of the Court on longevity pay without
a clear finding of the legal error made, and disregards as well the liberal interpretation the Court has applied in these
rulings; that the ponencia disregards too the intent of the relevant laws (referring to the subsequent laws that grants
ranks, salaries and benefits similar to those of their counterparts in the Judiciary), the legal presumption of legislative
awareness, and consideration of prior laws and jurisprudence in enacting a statute; and claims that the
contemporaneous construction given by the Department of Justice and other Executive branch officers, which disc
loses a similar treatment of the longevity pay provision of Section 42, de serves the court’s respect. Last but not the
least, Justice De Castro analyzes Section 42 and concludes that longevity pay is not a mere benefit but is a
component of the salary that should not be withheld from executive officers with the same rank, salary and benefits
as their counterparts in the Judiciary.

For his part, Justice Velasco essentially joins the Dissent of Justice De Castro and questions the ponencia’s proposal
to "freeze" the longevity pay grants for justices and judges who have been credited with their past service in the
Executive Department. He posits too that "what matters is their receiving, for purposes of computing longevity pay,
the salary of a Justice of the CA at the time they served as NLRC Commissioners." If this is the case, Justice Veloso
claims they should be credited with their service with the NLRC for purposes of their longevity pay.

Faced with these complications and dissents, the Court should not forget that our duty, first and foremost, is to
correctly interpret the law as written, not to stick to our past rulings at all costs nor to consider our personal interests.
In doing this, we must also be reminded that at the center of the dispute is Section 42 of BP 129 – the provision on
longevity pay that we must consider with a fresh eye.

The consolidated cases, too, do not embody claims by executive officers against their own Department for the
enforcement of what the law involving their Department provides. These cases involve claims by CA justices –
members of the Judiciary – who look up to laws involving the Executive Department to secure, maintain or increase
the longevity pay that provides benefit for judges and justices. Our primary focus, however, must be the interpretation
of our own law ― BP 129 and its Section 42.

A. Statutory Construction & Interpretation Perspectives

a. First rule of statutory construction: the plain meaning rule.

The primary rule in addressing any problem relating to the understanding or interpretation of a law (in this case, the
provision granting longevity pay) is to examine the law itself to see what it plainly says. This is the plain meaning rule
of statutory construction.27

The first aspect that offers itself in the examination of the law is its title, which gives us a direct indicator of the exact
subject matter of the law. In the present cases, the law under which the disputed longevity provision can be found is
B.P. Blg. 129, An Act Reorganizing the Judiciary, Appropriating Funds Therefore and For Other Purposes (simplified
as BP 129 or the Judiciary Reorganization Act of 1980).

This title alone already suggests that its provisions specifically relate to members of the judiciary, unless an express
contrary intent is made by the legislature. No such exception clause is evident under the terms of BP 129 or in any of
the other related laws (specifically, in R. A. 9347, 9417, and 10071) discussed in this ponencia .

As discussed more extensively below, these other general laws do not specifically mention at all the longevity
provision under BP 129, a specific grant made only to the judges and justices in the Judiciary.

Section 42 of this law has heretofore been quoted, but for convenience is again quoted below –

Section 42. Longevity pay . – A monthly longevity pay equivalent to 5% of the monthly basic pay shall be paid to the
Justices and Judges of the courts herein created for each five years of continuous, efficient, and meritorious service
rendered in the judiciary ; Provided , That in no case shall the total salary of each Justice or Judge concerned, after
this longevity pay is added, exceed the salary of the Justice or Judge next in rank. [italics supplied; emphasis and
underscore ours ]

As written, the language and terms of this provision are very clear and unequivocal: longevity pay is granted to a
judge or justice (and to none other) who has rendered five years of continuous, efficient and meritorious service in the
Judiciary. The granted monthly longevity pay is equivalent to 5% of the monthly basic pay.

The plain reading of Section 42 shows that longevity pay is not available even to a judicial officer who is not a judge
or justice. It is likewise not available, for greater reason, to an officer in the Executive simply because he or she is not
serving as a judge or justice. It cannot also be available t o a judge or justice for past services he or she did not
render within the Judiciary as services rendered outside the Judiciary for purposes of longevity pay is not
contemplated by law.

Significantly, the Court has had occasion to speak about the purpose of longevity pay. In In Re: Request of Justice
Bernardo P. Pardo for Adjustment of His Longevity Pay,28 the Court categorically declared that the purpose of the law
in granting longevity pay to judges and justices is to recompense them for each five y ears of continuous, efficient,
and meritorious service rendered in the Judiciary; it is the long service in the Judiciary - from the lowest to the highest
court of the land – and not in any other branch of government, that is rewarded, 29

In the case of the judge or justice now asking for the tacking of his/her past executive service, the reason for the
denial is simple and needs no intricate or complicated exercise in interpretation: these past services were undertaken
outside the Judiciary and are not the services the law contemplates. The tacking, to put it bluntly, violates the clear
purpose and wording of Section 42 of BP 129.

To look at Section 42 from another perspective, if indeed (as some would argue) the intent is to grant executive
officers longevity pay pursuant to their respective grants of benefits similar to that provided under Section 42 of BP
129, this presumed grant should be understood to be limited to the executive officer’s continued, efficient and
meritorious service in the Executive Department, to be given while the executive officer is still with that department.

When the public officer with equivalent rank, salary and benefits transfers to the Judiciary , the longevity pay to which
he may have been entitled under the law applicable to his previous Executive Department position, and which he may
have been receiving because of his continued service in that department, will simply have to be disregarded and
discontinued.

At the point of transfer, Section 42 of BP 129 will now apply and operate, and will require five (5) years of continued
and efficient service in the Judiciary before it can start to be earned. This application may sound hard and illiberal, but
this is the logical consequence of the combined effect of the Judiciary’s BP 129 longevity provision and the laws
granting parity to benefits applicable to the Judiciary.

To reiterate for emphasis, for a transferring public official, now a new justice or judge, to be entitled to longevity pay
under the terms of Section 42, he must first render continued, efficient and meritorious service in the Judiciary for at
least five years; his prior continued service in his previous department will not and should not be counted.
 b. The general laws that the Dissents cite cannot prevail over a specific law.

General laws (such as Republic Act Nos. [RA] 9347, 9417, and 10071) that generally grant the same ranks, salaries
and benefits to public officers in the Executive Department as those of their specified counterparts in the Judiciary,
cannot prevail over a special law such as BP 129 that specifically grants longevity pay solely to justices and judges
who have rendered five (5) years of continuous, efficient, and meritorious service rendered in the Judiciary.

A basic principle of statutory construction is that a special law prevails over a general law. 30 A later enactment like RA
9347 and RA 10071 cannot override BP 129 because the latter, as a special law, must prevail regardless of the dates
of the enactment of these other laws.31

As we held in Hon. Bagatsing v. Judge Ramirez,32 a general provision must give way to a particular provision. As a
special provision on the grant of longevity pay, Section 42 of BP 129 governs and is controlling; to hold otherwise, as
the dissent suggests, is to violate its clear mandate.

Following the rule on general and special laws, the general laws granting the same salaries and benefits cannot apply
to the longevity pay provision that, by its specific and express terms, is solely for the benefit of judges and justices
who have shown loyal service to the Judiciary; it is not for those who have been granted similar ranks, salaries and
benefits as those of their counterpart judges and justices. That they cannot be beneficiaries of longevity pay is
clinched by its purpose – the reward is intended for those with loyal service to the Judiciary.

c. Is there room for liberality in reading and interpreting Section 42?

As a general rule and contrary to the Dissent’s view, no room or occasion exists for any liberal construction or
interpretation; only the application of the letter of the law is required by basic statutory construction principles.

We should not forget that liberality is not a magic wand that can ward off the clear terms and import of express legal
provisions; it has a place only when, between two positions that the law can both accommodate, the Court chooses
the more expansive or more generous option. It has no place where no choice is available at all because the terms of
the law are clear and do not at all leave room for discretion.

In terms of the longevity pay’s purpose, liberality has no place where service is not to the Judiciary, as the element of
loyalty – the virtue that longevity pay rewards – is not at all present.

We cannot overemphasize too that the policy of liberal construction cannot and should not be to the point of engaging
in judicial legislation – an act that the Constitution absolutely forbids this Court to do. We may not, in the guise of
interpretation, enlarge the scope of a statute or include, under its terms, situations that were not provided nor
intended by the lawmakers. We cannot rewrite the law to conform to what we think should be the law.

In the present case, where the law is clear, we should likewise be clear and decisive in its application lest we be
accused of favoritism or accommodating former colleagues, or indirectly, ourselves, who will all inevitably retire from
our judicial posts.

d. Administrative construction is merely advisory and is not binding upon the courts.

We take exception to the Dissent’s invocation of the doctrine of contemporaneous construction to support its
expansive reading of RA 9347 in relation with Section 42 of BP 129.

The Dissent conveniently fails to mention that contemporaneous constructions of administrative or executive
agencies are merely at best advisory and not binding on the courts, for by the Constitution and the law, the courts are
given the task of finally determining what the law means. 33

We do so under our authority to state what the law is 34 and deference to an agency’s statutory interpretation should
be withheld whenever it conflicts with the language of the statute, as in the present case.

In Peralta v. Civil Service Commission,35 the Court had occasion to state and held:

Administrative construction, if we may repeat, is not necessarily binding upon the courts. Action of an administrative
agency may be disturbed or set aside by the judicial department if there is an error of law, or abuse of power or lack
of jurisdiction or grave abuse of discretion clearly conflicting with either the letter or the spirit of a legislative
enactment.

Thus, while the Executive possesses discretion in the implementation of laws, we should not forget the reason for the
Judiciary’s existence. We are the interpreters of the law and the Constitution, not the Executive, and when a legal
error exists, we must step in and intervene, however long and hard the Executive’s previous implementation of the
law had been.

e. The question of Judicial Legislation

Judicial legislation, in simplest terms, happens when the Court adds to what the law provides and does so in the
guise of interpretation, as the present dissents now want to do by seeking to tack and to credit, for longevity pay
purposes, the past services that justices and judges rendered in the Executive Department.

In fact, in their discussions, the Dissents take the view that the ponencia has engaged in judicial legislation because it
restricts the concept of salary merely to the "basic pay."
This Resolution does, in fact, reflect the views imputed to it and it has not been shy or hesitant from the very start in
taking this position. But rather than being narrow and illiberal in doing this, we believe that our position hews to the
letter of the law so that our stance cannot be the basis for the charge of judicial legislation.

Judicial legislation in fact transpires when the Court reads into the law an interpretation that the four corners of that
law cannot b ear. This expansive interpretation – i.e., that the term "salary" under Section 42 includes longevity pay
so that equivalency of "salary" translates to the mandatory recognition of longevity pay – is unfortunately what the
dissents espouse, driven perhaps by thoughts of what the law ought to be.

What "ought to be" as a matter of policy is not within the jurisdiction of this Court to decide upon. The Court
eloquently spoke in Canet v. Mayor Decena about this judicial limit, albeit in the context of discussing the maxim
expression unius est exclusio alterius (literally, what is expressed puts an end to what is implied). The Court said: 36

In other words, it is a basic precept of statutory construction that the express mention of one person, thing, act, or
consequence excludes all others, as expressed in the oft-repeated maxim expressio unius est exlusio alterius.
Elsewise stated, expressium facit cessare tacitum – what is expressed puts an end to what is implied. The rule
proceeds from the premise that the legislative body would not have made specific enumerations in a statute, if it had
the intention not to restrict its meaning and confine its terms to those expressly mentioned.

Even on the assumption that there is in fact a legislative gap caused by such an omission, neither could the Court
presume otherwise and supply the details thereof, because a legislative lacuna cannot be filled by judicial fiat.
Indeed, courts may not, in the guise of interpretation, enlarge the scope of a statute and include therein situations not
provided nor intended by the lawmakers. An omission at the time of the enactment, whether careless or calculated,
cannot be judicially supplied however after later wisdom may recommend the inclusion. Courts are not authorized to
insert into the law what they think should be in it or to supply what they think the legislature would have supplied if its
attention has been called to the omission.

Courts should not, by construction, revise even the most arbitrary and unfair action of the legislature, nor rewrite the
law to conform with what they think should be the law. Nor may they interpret into the law a requirement which the
law does not prescribe. Where a statute contains no limitations in its operation or scope, courts should not engraft
any. And where a provision of law expressly limits its application to certain transactions, it cannot be extended to
other transactions by interpretation. To do any of such things would be to do violence to the language of the law and
to invade the legislative sphere. [emphases ours]

Applied to the present consolidated cases, we cannot go beyond the terms of Section 42 by expanding its terms to
what it does not include: when the law speaks of service "in the Judiciary," it means what it says and cannot include
service outside the Judiciary. To relate this to the statutory construction rule discussed above give n the express and
clear terms of the law, the basic rule to apply is: "legislative intent is to be determined from the language employed,
and where there is no ambiguity in the words, there is no room for construction." 37

B. The Grant of Rank, Benefits and their Implications

a. Judicial Rank and Executive Rank.

The grant of a "rank" equivalent to (or even "the same as" ) "those of the" grantee’s counterpart judge or justice is a
matter that has not been the subject of extensive jurisprudential c overage. Hence, the subject of this Resolution
proceeds on a path that so far remains untrodden. The novelty of the issue posed need not deter us as the matters
before us call for resolution and should be written about if only to serve as guides for the future.

The Judiciary recognizes the ranks that the law accords to judges and justices. These judicial ranks wholly pertain to
the Judiciary as an independent, separate and co-equal branch of government. Under our current constitutional set-
up, no legislative or executive grant, fiat or recognition of rank can make the grantee, who is not a judge or justice, a
judicial officer, without violating the constitutional principles of separation of powers and independence of the
Judiciary.

As a consequence, the grant of rank at the same level as the grantees’ counterpart judges or justices is not and
cannot be a conferment of "judicial rank" and does not thereby accord the grantees recognition as members of the
Judiciary. For incumbent judges and justices who had previous government service outside the Judiciary , it follows
that the grant of rank to them under their old executive positions does not render their service in these previous
positions equivalent to and creditable as judicial service, unless Congress by law says otherwise and only for
purposes of entitlement to salaries and benefits.

To be sure, Congress can create and recognize ranks outside of the Judiciary that are equivalent to the ranks it has
created for the Judiciary, but again, this recognition doe s not thereby create "judicial ranks" outside of the Judiciary,
nor constitute the grantees of these ranks as judges and justices. Technically, what Congress creates or grants are
executive ranks that are equivalent to judicial ranks.

Notably, even for those within the Judiciary itself, the recognition of "judicial rank" in favor of those who are not
justices or judges does not thereby make the grantee a justice or a judge who is entitled to this formal title; the
grantee may be entitled to the benefits of the rank but he/she remains an administrative official in the Judiciary,
separate and distinct from the justices and judges who directly exercise judicial power, singly or collegially.

b. Commonalities and Divergence of Terms and Conditions of Government Service.

The principle of separation of powers between the Executive, Legislative, and Judicial branches of government
ordains that each of these three (3) great branches of government has exclusive cognizance of, and is supreme in
matters falling within its own constitutionally allocated sphere. 38
Each branch cannot invade the domain of the others.39 This principle presupposes mutual respect by and between
the Executive, Legislative, and Judicial departments and entitles them to be left alone to discharge their assigned
duties as they see fit.40

We generally draw attention to this constitutional principle to emphasize that while all officials in the three branches of
government are government officials, vast differences may exist in the terms and conditions of their government
service; these are ultimately traceable to the separation of power principle.

Government officials perform specifically assigned functions peculiar to their respective departments and these
functions justify their differing terms and conditions of government service. In the context of the present consolidated
cases, distinctions must necessarily exist between one who is appointed to the position of a judge or justice, (which
position carries law-defined salaries, benefits, and conditions specific to judges and justices), and one who is
appointed to an executive position with the equivalent rank, salary or benefits of a justice or judge in the Judiciary.

The extent to which those with equivalent executive and judicial ranks have commonalities or diverge in their salaries
and benefits is a matter that the Constitution leaves, within limits, to the discretion of the Legislature as a matter of
policy. What is important to recognize is the legal reality that the divergence of salaries and benefits across
government, even among those with equivalent ranks, is not at all unusual because these positions belong to
different branches of government and undertake functions peculiar to their departments.

A convenient example to cite is the allowance benefit that members of the Office of the Solicitor General are given as
peculiarly their own – honoraria and allowances from client departments, agencies and instrumentalities.41 Members
of the Judiciary do not enjoy these same benefits.

On the part of the Judiciary, the disputed longevity pay also serves as a good example. By its terms, longevity pay is
peculiar to the Judiciary as discussed above. Significantly, in all the cited laws that grant similarity of ranks, salaries,
and benefits between executive officials and their counterparts in the Judiciary, no mention at all is made of longevity
pay and its enjoyment outside the Judiciary. Longevity pay, of course, is not unique as a feature of judicial life that is
wholly the Judiciary’s own; there are other benefits that the Judiciary enjoys – by law, by rule or by practice – that are
not replicated in the executive agencies, in the same manner that there are benefits in executive agencies that the
Judiciary does not share.

In this sense, it approximates the absurd to claim that the grant of the "same" benefits to executive officials with the
"same" rank should encompass all the benefits that the comparator judge or justice enjoys.

b.1. The Question of Fairness.

A tempting question to raise when comparisons are made across branches of government and when equivalency of
salaries and benefits comes into focus, is the essential fairness, or lack of it, that results or should result.

The Judiciary, for example, may raise the point – if we are the comparators and all our benefits should be enjoyed by
the Solicitors, is there no resulting unfairness because no la w grants the Judiciary the same privilege of enjoying the
benefits that the Office of the Solicitor General enjoys?

To be sure, unfairness may factually result, but this is not a matter for the Judiciary to examine in the absence of a
case where this factual issue is raised and is relevant. Nor is there any indefensible inequality as a matter of law
viewed from the prism of the legal measuring standard ― the equal protection clause. Notably, the Judiciary and the
Executive Department belong to different branches of government whose roles and functions in government differ as
pointed out above. Thus, ground/s for distinctions may exist that render any seeming unfairness not legally
objectionable.

If the issue of unfairness will surface at all, this would transpire when the terms of the longevity provision under BP
129 would be disregarded, i.e., if longevity pay would be recognized in favor of the NLRC, the prosecutors and the
solicitors under the terms of their respective laws, when longevity pay – by the express terms fashioned out by
Congress – should be granted only to those who have served continuous, efficient, and meritorious service in the
judiciary.

Similarly unfair would be the tacking of previous services outside of the Judiciary rendered by judges and justices,
incumbent or retired, for purposes of longevity pay under Section 42. Of course, the main issue in this situation would
be legality, but this situation, to our mind, is one that is both illegal and unfair. Unfairness comes in because of the
grant of what is not legally due.

D. The Salary and Longevity Pay

a. The Applicable Law on Salary

An examination of BP 129 shows that its Section 41 treats of "salaries" of judges, while Section 42 provides for
longevity pay.

Under Section 41, the "salaries" or compensation (and allowances) that judges shall receive shall be the amount that
the President may authorize following the guidelines set fort h in Letter of Implementation (LOI) No. 93, pursuant to
Presidential Decree (PD) No. 985, as amended by PD 1597.

PD 985, as amended by PD 1597, implemented a position classification and compensation standardization scheme
(Scheme) :
 (1) under which positions are classified by occupational groups, series and classes according to the
similarities or differences in duties, responsibilities, and qualification requirements; and

(2) by which the rates of pay for each of the positions and employee groups/classes are determined
according to the salary and wage schedules fixed by the Decree to be uniformly app lied to all
belonging to a particular position.

Under Section 4 of PD 985, this position classification and compensation standardization scheme shall apply to all
positions in the national government, that under PD 1597’s amendment now includes the justices and judges in the
Judiciary.

Section 11 of PD 985 provides for the "Salary Schedule " under the compensation system for positions pa id on
annual or monthly basis. The Schedule consists of twenty-eight grades with each grade having eight prescribed
steps. Each grade represents a level of work difficulty and responsibility that distinguishes it from the other grades in
the Schedule. Each class of position in the Position Classification System is assigned a "salary grade" and
determines the position’s salary rate.42

Under the Scheme, every covered position receives a "salary" or compensation corresponding to the position’s
"salary grade" under the "Salary Schedule." Otherwise stated, all covered positions or employees belonging to a
particular "salary grade," regardless of the department, bureau, office, etc., to which they belong, shall receive the
same "salary rate," expressed as annual, in pesos, as fixed under the "Salary Schedule" (subject to certain salary
rate increments for each step within each salary grade). In short, a particular "salary grade" equates to a specific,
fixed "salary rate."

Prior to its amendment by PD 1597, Section 4 of PD 985 exempted from the position classification and compensation
standardization scheme the following positions or group of government officials and employees: (1) elected officers
and those whose compensation is fixed by the Constitution; (2) heads of executive departments and officials of
equivalent rank: (3) chiefs of diplomatic missions, ministers, and Foreign Service officers; (4) Justices and Judges of
the Judicial Department; (5) members of the armed forces; (6) heads and assistant heads of GOCCs, including the
senior management and technical positions; (7) heads of state universities and colleges; (8) positions in the career
executive service; and (9) provincial, city, municipal and other local government officials and employees. The salaries
or compensation and allowances of these exempted positions are those to be authorized by the President.

Pursuant to PD 985’s mandate, then President Ferdinand E. Marcos issued Letter of Implementation (L OI 93)
adopting an integrated compensation scheme for positions in the Judiciary. In almost the same fashion as PD 985,
Para graph 3.0 of LOI 93 enumerated the various positions in the Judicial Component of the Judiciary, i.e., Justices
and Judges of the Supreme Court, Court of Appeals, Sandiganbayan, Court of Tax Appeals, Court of Agrarian
Relations, the First and Second Level Courts, the Clerks of Court of the Supreme Court and Court of Appeals, and
the corresponding "salary rates" for each position, expressed as annual, in pesos.

With PD 1597’s amendment, those previously exempted positions, i.e., Justices and Judges of the Judicial
Department, are now included in the coverage of Section 4 of PD 985. PD 985, as amended by PD 1597, now limits
the exemptions to elected officers; to those whose compensation is fixed by the Constitution; and to local government
officials and employees.

Note that Section 11 of PD 985, as amended by PD 1597, and even Paragraph 3.0 of LOI 93, provided for fixed
"salary rates" for each "salary grade" expressed as annual, in pesos. As matters now stand, the "salary" or
compensation that an employee or a position in the government will receive is the prevailing "salary rate," fixed under
the "Salary Schedule," that corresponds to the employee or position’s "salary grade."

The "salary rate" as expressed in annual fixed rates, based on the "salary grade" referred to under LOI 93 pursuant to
PD 985, as amended by PD 1597 is the "salary" referred to in Section 41 of BP 129, i.e., an amount or salary rate
fixed as annual, in pesos, that is based on the recipient’s salary grading.

b. Longevity Pay under Section 42.

Section 42 of BP 129 provides for the payment and the manner of computing longevity pay, i.e., to be paid monthly,
based on the recipient’s monthly basic pay at the rate of 5% for each five years of continuous, efficient and
meritorious service rendered in the judiciary. Note that the amount of longevity pay to which a recipient shall be
entitled is not a fixed amount, in contrast with the "salary" under Section 41; it is a percentage of the recipient’s
monthly basic pay which, at the least, is equivalent to 5%.

Also, the payment of longevity pay is premised on a continued, efficient, and meritorious service: (1) in the Judiciary;
and (2) of at least five years. Long and continued service in the Judiciary is the basis and reason for the payment of
longevity pay; it rewards the loyal and efficient service of the recipient in the Judiciary.

From these perspectives, longevity pay is both a branch specific (i.e., to the judges and justices of the Judiciary) and
conditional (i.e., due only upon the fulfillment of certain conditions) grant. In negative terms, it is not an absolute grant
that is easily transferrable to other departments of government.

b.1. Salary and Longevity Pay compared.

In contrast with longevity pay, the "salary" under Section 41 entitles the official or employee to its receipt from day
one (or the first day of the first month) of his service. Its basis or reason for payment is the actual performance of
service or assigned duties, without regard to the months or years the recipient has been rendering the service.
Note, too, that the service contemplated under Section 42 for entitlement to longevity pay is service in the judiciary.
This intent is clear not only from Section 42’s explicit use of the word "judiciary" to qualify "service," but also from the
title of the statute to which this specific provision belongs, i.e., "The Judiciary Reorganization Act of 1980." In these
lights, the "same salary" that Article 216 of the Labor Code speaks of and to which the NLRC Commissioners shall be
entitled, should be read and understood as the salary under Section 41 or the "salary rate," as provided under the
"Salary Schedule" that corresponds to the "salary grade" of their counterpart justice or judge. Other laws that grant
other public officers in the executive department with the "same salary" as their counterpart justice or judge (i.e., RA
Nos. 9417 and 10071) should likewise be read and understood in this way.

b.2. Nature of Longevity Pay.

Based on these considerations, longevity pay should be treated as a benefit or an "add-on" and not a part, let alone
an integral component of "salary," contrary to the Dissents’ position.

This consequence necessarily results as "salary" and longevity pay: (1) are treated under different sections of BP
129; (2) have different bases for determination or computation; and (3) have different reasons for the payment or
grant.

In addition, Section 42 of BP 129 does not categorically state that the monthly longevity pay shall form part of the
"salary" or is an integral or inseparable component of “salary.” Even the most liberal interpretation of Section 42 does
not reveal any intention to treat longevity pay in this manner ― as part, or as an integral component, of “salary.”

On the contrary, Section 42 makes it clear that the "salary," which the Dissents submit serve as basis of the "salary"
of executive officers with the same rank of a justice or judge, is that referred to or contemplated in Section 41.

b.3. Section 42 Analyzed.

Note in this regard that the last clause of Section 42 which states that: "in no case shall the total salary of each
Justice or Judge concerned, after this longevity pay is added , exceed the salary of the Justice or Judge next in rank."

The use of the term "total salary" under the first portion of Section 42’s last clause, presupposes an addition of
components, and should be understood to refer to the total compensation received . This "total salary" is the "salary"
(or the salary rate fixed under the "Salary Schedule" as the recipient’s monthly compensation corresponding to his
"salary grade") plus the "add-on" longevity pay (or that portion or percentage of the "salary" as fixed under the Salary
Schedule) equivalent to at least 5% of the monthly salary.

In formula form, this should read –

Section 41 Salary + Section 42 Longevity Pay = Total Salary

Where:

Salary = monthly salary rate of position per the Salary Schedule

Longevity Pay = monthly salary rate x 5%.

That the word "total" was added to "salary" under the first portion of Section 42’s last clause, in no way signifies that
longevity pay is an integral part of the "salary" which a Justice or Judge will receive each month by virtue of his
position/rank/salary grade.

The word "total" was added simply to qualify "salary" (the recipient’s "salary" fixed under the "Salary Schedule") plus
any longevity pay to which he may be entitled. This treatment, to be sure, does not make the longevity pay a part of
the "salary."

In short, "total" simply modified "s alary," and in effect denotes that amount received or to be received as total
compensation, and distinguishes this resulting amount from the "salary" received each month by virtue of the
position/salary grade.

Note, too, the word "salary" under the last portion of Section 42’s last clause which is not qualified or modified by the
word "total," in contrast with the "total salary" under the first portion.

The last portion states: the salary of the Justice or Judge next in rank: this "salary" of the Justice or Judge next in
rank should not be exceeded by the "total salary" (or total compensation) of the recipient. The "salary" under the last
phrase, when read together with the "total salary" under the first phrase, shows that "salary" is distinct, and to be pa
id separately from longevity pay, so that the latter cannot be an integral part of "salary."

To sum up, the "same salary" to be received by the public officials in the Executive Department, with the same rank
of justice or judge, is the "salary" of the justice or judge under Section 41. The "salary" referred to in Section 41, in
turn, and as explained above, is the "salary rate" fixed under the "Salary Schedule" corresponding to the position’s
"salary grade."

Notably, Justice De Castro’s proposition that the term "salary" constitutes the basic monthly salary plus the longevity
pay when the Congress enacted RA Nos. 9417, 9347, and 10071 is not reflected in any of the congressional
deliberations. What the deliberations clearly reveal is simply the intention to increase the "salaries" of the covered
public officers in the Executive Department to the level of the "salaries" received by or granted to their counterpart in
the Judiciary.
This "salary" cannot but refer to the fixed sum that the system of "salary rate," "Salary Schedule," and "salary grade"
speaks of. It cannot refer to the variable amount of "total salary" that the dissent refers to, as the basis or comparator
cannot be a variable amount that reflects the seniority that a judge or justice has attained after years in the service.

Ironically, Justice De Castro’s cited case – Re Longevity pay of Justices of the Sandiganbayan, appearing at page 42
of this ponencia – best illustrates how the "salary" and "total salary" concepts operate.

E. The complete parity that the dissent advocates is a policy matter that Congress has not so far expressed.

The legislative history and record of the laws (that grant the same ranks, salaries, and benefits to officers in the
Executive department equivalent to their specified counterparts in the Judiciary) do not support the Dissent’s view
that these laws grant full parity in rank, salaries, and benefits or equal treatment between the executive
officers/grantees and the comparator judges and justices whose longevity pay arises from BP 129.

In fact, the legislative history and record of these statutes positively show that Congress has not yet gone as far as
the Dissents would want them to go―to recognize full parity that includes the grant of longevity pay under BP 129 to
executive officers in the Executive Department.

As the discussions below will show, the Dissent, without delving deep into legislative history and record of the
statutes it cited as bases, took the easy route of resorting to hasty generalizations to support its tenuous theory that
these laws operate under the principle of " equal in qualifications and equal in rank, equal in salaries and benefits
received."

This interpretative route may be easy but is a very dangerous one in its implications, as Congress has not in any way
shown that it has intended officers with the same rank and qualifications across government to receive equal pay and
equal benefits.

For this kind of "equalization" to prevail, the government must be ready to embark on a comparison, not only of rank
and qualifications, but on the quantification of job content and valuation of jobs of equal value, involving similar or
allied activities undertaken across government.

This is the requirement that the "equal pay for equal work" principle established in jurisdictions with more advanced
social legislation than the Philippines.43 To be sure, this is a serious policy matter that, under the terms of the
Constitution, is not for this Court but for Congress to establish .

To fully support these contentions, we embark on a brief look into the laws that the Dissent itself cited.

a. RA 934744 affecting the NLRC.

RA 9347 lapsed into law on July 27, 2006. This law was passed to address the then urgent need to improve the
administrative and operational efficiency of the National Labor Relations Commission (NLRC), particularly its rate of
disposition of pending cases and the reduction of its ballooning backlog of labor cases. 45 In dealing with these issues,
Congress then focused on measures that would encourage productivity and efficiency and boost the morale of NLRC
officials.

The congressional measures Congress passed included the increase in the number of commissioner-members of the
NLRC, the creation of positions for commission attorneys who would assist the NLRC commissioners in deciding the
labor cases, and a provision for retirement benefits to NLRC commissioners and labor arbiters equivalent to the
retirement benefits of justices of the CA and judges of the RTCs, respectively.

In appreciating RA 9347, note that as early as Presidential Decree No. (PD) 442, the commissioners of the NLRC
were already given the same salary and benefits as justices of the CA . As the old Article 216 of the Labor Code
provided, before the amendment:

Article 216. Salaries, benefits and other emoluments. The Chairman and members of the Commission shall receive
an annual salary at least equivalent to, and be entitled to the same allowances and benefits as those of the Presiding
Justice and Associate Justices of the Court of Appeals, respectively. The Executive Labor Arbiters shall receive an
annual salary at least equivalent to that of an Assistant Regional Director of the Department of Labor and
Employment and shall be entitled to the same allowances and benefits as that of a Regional Director of said
Department. The Labor Arbiters shall receive an annual salary at least equivalent to, and be entitled to the same
allowances and benefits as that of an Assistant Regional Director of the Department of Labor and Employment. In no
case, however, shall the provision of this Article result in the diminution of existing salaries, allowances and benefits
of the aforementioned officials. (As amended by Section 8, Republic Act No. 6715, March 21, 1989) 46

This old provision did not include retirement benefits in its wording. Thus, as enumerated, entitlement to equivalence
was limited to salaries, allowances and benefits. To address the perceived legislative gap, the amendatory RA 9347
expressly included the word retirement in the enumeration. This grant applied to both commissioners and labor
arbiters of the NLRC.

Aside from this observation, note too that the old Article 216 of the Labor Code did not give labor arbiters the salary,
allowances and benefits equivalent to those of the Regional Trial Court (RTC ) judges. Apart from addressing the
issue on retirement benefits, RA 9347 also sought to deal with the then situation of labor arbiters in terms of their
salaries and emoluments.

Thus, the congressional intent in RA 9347 was to deal with two gaps in PD 442 with respect to the salaries, benefits,
and emoluments of the members of the NLRC.
The first was the grant of salaries and benefits to labor arbiters equivalent to those of RTC judges, and the second
was the express inclusion of the retirement benefits of the labor arbiters and NLRC commissioners at the levels
equivalent to those of RTC judges and CA justices, respectively.

In the discussions and exchanges among the members of Congress – among them, the explanatory note of Senator
Ramon Revilla Jr. in Senate Bill No. 120447 and the sponsorship speech of Senator Jinggoy Ejercito Estrada of
Senate Bill No. 2035 (the senate bill that led to RA 9347)48 – nowhere did they deal with the issue of longevity pay as
a benefit that should be accorded to labor arbiters and commissioners of the NLRC.

In this light, we believe that to make the hasty generalization that the word benefit as enumerated in Article 216 of the
Labor Code should include longevity pay would run counter to the intention of the law. Note that had it been the intent
of Congress to give the labor arbiters and commissioners of the NLRC all the benefits enjoyed by the members of the
Judiciary as provided in BP 129 and in other laws specifically applicable to members of the Judiciary, then it should
not have amended Article 216 of the Labor Code by including "retirement benefits" in the enumeration. Congress
should have left the provision as it is since it already provides for the general term benefit.

Parenthetically, retirement pay is a specific form of allowance under the general term benefits. Congress had to
include this item as an express benefit precisely because the use of the general word benefit in the old Article 216 of
the Labor Code did not include all the benefits then being enjoyed by judges and justices of the Judiciary.

In providing for retirement benefits, Congress significantly did not simply state that the NLRC shall enjoy the terms
and benefits of judges and justices under their retirement law, RA 910, where longevity pay is a special and specific
provision. Congress contented itself with the plain insertion of "retirement pay" and stopped there.

Thus, as matters now stand, NLRC officials retire under the retirement law applicable to executive officials, with parity
of the terms of this retirement law with those of their counterparts in the Judiciary. Retirement benefits specific to the
Judiciary, however, were not and should not be interpreted to be wholly included.

b. RA 941749 affecting the OSG.

RA 9417 passed into law on March 30, 2007. As in the case of RA 9347, this law was passed to address the plight of
the members of the Office of the Solicitor General ( OSG ) by upgrading their salaries and benefits to improve their
efficiency as the Republic’s counsel.

In the sponsorship speech of Senator Juan Ponce Enrile regarding Senate Bill No. 2249, the predecessor Senate Bill
of RA 9417, Senator Enrile pointed out that the Senate’s Committee on Justice and Human Rights, in crafting Senate
Bill 2249, aimed to address the following issues regarding the OSG:

1. Increase the number of staff of the OSG and upgrade their positions;

2. Increase the existing 15 legal divisions of the OSG to 30;

3. Provide health care services, insurance coverage and scholarship and other benefits to all OSG
employees subject to the availability of funds;

4. Grant franking privileges to the OSG;

5. Establish a provident fund within the OSG; and

6. Grant retirement benefits to qualified employees. 50

As in the case of the NLRC, it must again be noted that this enumeration is specific with respect to the benefits
granted to members of the OSG: it particularly referred to the benefits to be granted. Although Section 3 of RA 9417 51
provides that the Solicitor General shall have the same qualifications for appointment, rank, prerogatives, salaries,
allowances, benefits and privileges as the Presiding Justice of the CA (and an Assistant Solicitor General as that of a
CA Associate Justice), RA 9417 still allocated express provisions for the other benefits to be enjoyed by the members
of the OSG. These provisions are the following:

Section 4- Compensation52

Section 5- Benefits and Privileges53

Section 6- Seminar and Other Professional Fees54

Section 7- Transportation Benefits55

Section 8- Other Benefits56

Section 10- Grant of Special Allowances57

Had Congress really intended to grant the benefit of longevity pay to the members of the OSG, then it should have
also included in the list of benefits granted under RA 9417 a provision pertaining to longevity pay. This provision is
glaringly missing and thus cannot be included via this Court’s decision without running afoul of the rule that prohibits
judicial legislation. Nor can this Court recognize the past service rendered by a current judge or justice in the OSG for
purposes of longevity pay.
A closer examination of this law shows that what Congress did was to grant benefits that were applicable to the type
of service that the OSG provides.

For example, OSG lawyers are entitle d to honoraria and allowances from client departments, agencies and
instrumentalities of the Government.58

This benefit is only proper as the main function of the OSG is to act as the counsel of the Government and its officers
acting in their official capacity. On the other hand, this benefit is not applicable to member s of the Judiciary as they
do not act as advocates but rather as impartial judges of the cases before them, for which they are not entitled to
honoraria and allowances on a per case basis.

Another indicator that should be considered from the congressional handling of RA 9417 is that Congress did not
intend to introduce a strict one-to-one correspondence between the grant of the same salaries and benefits to
members of the executive department and of the Judiciary. The congressional approach apparently was for laws
granting benefits to be of specific application that pertains to the different departments according to their personnel’s
needs and activities. No equalization or standardization of benefits was ever intended on a generalized or across-the-
board basis.

F. The structure of the laws providing for the salaries and benefits of members of the Judiciary, prosecutors, and
public officers in the OSG and the NLRC further negate the Dissent’s view that these laws intended equal treatment
among them.

We cannot also agree with the Dissent’s position that the laws providing for the salaries and benefits of members of
the Judiciary, the prosecution service, the OSG solicitors , and the members of the NLRC aim to provide equality
among these public officers in their salaries and benefits.

In terms of salaries, their rationalization has been addressed through Position Classification and Compensation
System of the government under PD 985, PD 1597 and LOI 93, heretofore discussed. It is through the amendments
of these legislative enactments that parity and equity can both be achieved in government.

On the other hand, a look at the structure of the laws affecting the Judiciary, the prosecutors, the OSG, and the
NLRC shows that there could be no equal treatment among them. Notably, under Section 16, par. 6 of RA 10071,59
only the prosecutors would have an automatic increase in salaries and benefits in case the salaries and benefits in
the Judiciary increase. This provision, by itself, shows that Congress did not intend full parity, because increases in
the salaries and benefits of prosecutors would not lead to an automatic increase in the salaries and benefits of
members of the Judiciary.

Extending our judicial lens even further, the laws increasing the salaries and benefits of executive officers in the OSG
and the NLRC do not also provide for an automatic increase should there be increases in the salaries and benefits of
the Judiciary; neither do these laws increase the salaries and benefits of the members of the Judiciary should the
salaries and benefits of these public officers increase.

Had Congress really intended full parity between the Judiciary and other public officers in the executive department, it
would have provided for reciprocity in the automatic increase of salaries, benefits and allowances, and the upgrading
of the grades or levels of the emoluments of these public officers.

Instead, the laws, as currently worded, allow for a situation where an increase in the salaries and benefits of
prosecutors would not result in the increase in the salaries of members of the Judiciary, the OSG and NLRC. Thus,
instead of equalization, the prosecutors (who were merely granted a rank at par with their named counterparts in the
Judiciary) would be in a better position than the actual judges and justices themselves, in the absence of a similar
provision of law giving the same benefits to justices and judges in the event additional emoluments would be given to
these prosecutors.

The inevitable conclusion from all these is that Congress, in increasing the salaries and benefits of these officers,
merely used the salary levels and benefits in the Judiciary as a yardstick to make their salaries and benefits
comparable to fellow government employees engaged in the administration of justice.

At the risk of endlessly belaboring a point, we cannot, without engaging in the prohibited act of judicial legislation,
construe that the Dissent’s cited laws fully intend and recognize full parity in rank, salaries, benefits, and other
emoluments among the public officers mentioned.

G. The Dissent’s cited cases of Santiago, Gancayco, Dela Fuente and Guevara-Salonga are not controlling in the
present case, as they are a strained and erroneous application of Section 42 of BP 129 that should be abandoned.

The dissent’s invocation of the cases of Judge Santiago and Justices Gancayco, Dela Fuente, and Guevara-Salonga
cannot be applied to the present case as they are erroneous applications of Section 42 of BP 129 in relation with RA
910 or the Judiciary’s retirement law.

Nor can these cases be cited to support the position that these past rulings already established that the past services
in the Executive Department of incumbent and retired justices and judges, should be given credit for purposes of
longevity pa y under Section 42 of BP 129.

a. The Guevarra-Salonga & Dela Fuente Cases

The grants of longevity pay to Justice Guevara-Salonga and Justice Dela Fuente, in particular, were based on a
misinterpretation and misunderstanding of the Judiciary’s retirement law ― RA 910, read in relation to Section 42 of
BP 129 ― and its interaction with RA 10071, which granted prosecutors the same rank and benefits (including
retirement benefits) of their counterparts in the Judiciary.

Although RA 910 recognized, for purposes of retirement pay, past services in the Judiciary or in any other branch of
the Government, the longevity pay provision under Section 42 of BP 129 recognizes only services in the Judiciary in
determining the longevity pay of 5% of the basic salary (given for each five years of service) that is carried over into
retirement from the service.

In considering the longevity pay in the cases of Justices Guevarra-Salonga and Dela Fuente, the Court mistakenly
recognized their services as prosecutors to be services in the Judiciary, because RA 10071 60 granted prosecutors the
same rank and benefits (including retirement benefits) as their counterparts in the Judiciary.

The Court failed to fully appreciate that the longevity pay provision under RA 910, in relation with Section 42 of BP
129, is unique to the Judiciary and can be enjoyed only for services actually rendered, and by those who retired, in
this branch of government. Thus, services at the Department of Justice, i.e., outside of the Judiciary, should not have
been recognized as additional judicial service for purposes of longevity pay on retirement.

Notably, the Court did not comprehensively discuss in these cited rulings the nature of service required for the
longevity provision to apply, nor the purpose, reason and history of the longevity pay provision under BP 129, for the
Dissents to conclude that the Court already treated the past service in the Executive Department to be equivalent to
service in the Judiciary.

As we earlier discussed, under our system of Government, the Judiciary is separate from, serves a purpose and
functions, and has powers, duties and prerogatives distinct from those of the Executive Department. Hence, the
Court, in these Resolutions, could not have regarded service in the Executive as unqualifiedly equivalent to service in
the Judiciary.

It should be considered, too, that an acceptance of past service in the Executive as service in the Judiciary may have
no basis. The qualification for the grant by the Judiciary should be its determination that there had been continuous,
efficient, and meritorious service. No such determination can be done by the Judiciary if it will simply recognize
longevity pay based solely on service in a position under the Executive Department with rank, salaries, and benefits
equivalent to specified positions in the Judiciary.

To reiterate, for clarity and emphasis, if the Judiciary would recognize past service in the Executive simply because of
the equivalency of rank, salaries and benefits, the situation would be legally problematic as it would have no way of
knowing for itself if the grantee would qualify (based on efficient and meritorious service) since the past service would
be with the Executive, not with the Judiciary. Of course, for this Court to simply recognize that past executive service
w ill be credited under Section 42 of BP 129 constitutes prohibited judicial legislation for going beyond the
requirement that service should be in the Judiciary.

b. The cited Sandiganbayan case.

Re: Longevity Pay of the Associate Justices of the Sandiganbayan (Sandiganbayan case) 61 is a very interesting case
that Justice De Castro uses as part of her argument on the liberal stance the Court has taken on longevity pay.

Significantly, this case did not treat the longevity pay under Section 42 as an integral component of the salary of the
recipient, to be given to and applied in equal degree and force, and under absolute circumstances to public officials in
the Executive Department granted the "same salary" as their counterpart in the Judiciary.

The Sandiganbayan ruling, in fact, does not apply to the factual situation of the present case; it solely involves
Justices of the Sandiganbayan ― members of the Judiciary. Note the following pronouncement in that case:

x x x longevity pay once earned and enjoyed becomes a vested right and forms part of the salary of the recipient
thereof which may not be reduced despite the subsequent appointment of a justice or judge next higher in rank who
is not entitled to longevity pay for being new and not having acquired any longevity in the government service.
Furthermore, diminution or decrease of the salary of an incumbent justice or judge is prohibited by Section 10 of
Article X of the Constitution; hence, such recipient continue to earn and receive addition l longevity pay as may be
warranted by subsequent services in the judiciary, because the purpose of the Longevity Pay Law is to reward
justices and judges for their long and dedicated service as such. The provision of the law that the total salary of each
justice or judge concerned, after adding his longevity pay, should not exceed the salary plus longevity pay of the
justice or judge next higher in rank, refers only to the initial implementation of the law and does not proscribe a justice
or judge who is already entitled to longevity pay, from continuing to earn and receive longevity pay for services
rendered in the judiciary subsequent to such implementation, by the mere accident of a newcomer being appointed to
the position next higher in rank.

These pronouncements reveal the Court’s recognition of a situation where a Justice or Judge who has rendered
service in the Judiciary for a considerable length of time and who will receive a total compensation that far exceeds
the "salary" that a newly appointed Justice or Judge, who has not rendered any prior service in the Judiciary, will earn
or receive based simply on his "salary grade." The former, the "long-serving" Justice or Judge, will earn far more than
the latter, the "newly-serving" Justice or Judge, because of the "add-on" longevity pay that he (the long-serving
Justice or Judge) will receive for his continued long service in the Judiciary, aside from the "salary" to which the latter
(the newly-serving Justice or Judge) shall only be entitled.

The Court realized this scenario as problematic and the obvious inequity it may bring if it were to cons true strictly the
words of Section 42. It is iniquitous for the "long-serving" Justice or Judge if the "add-on" pay (longevity pay) that he
earned under the law for his long and dedicated service in the Judiciary would be reduced or eliminated altogether
simply because of a new Justice or Judge w ho will not be entitle d to any "add-on" pay for lack of the required long
and dedicated service in the Judiciary, and who will thus receive lesser total compensation.
The Court met the case head on and declared that the limitation refers only to the "initial implementation of the law
and does not proscribe a justice or judge, who is already entitled to longevity pay, from continuing to earn and receive
longevity pay for services rendered in the judiciary subsequent to such implementation, by the mere accident of a
newcomer being appointed to the position next higher in rank." This case assumes importance in the present
consolidated cases as it stresses the purpose of longevity pay as discussed and interpreted in these
pronouncements: " to reward justices and judges for their long and dedicated service as such, " i.e., as justices or
judges.

It highlights, too, that " salary" and the "longevity pay" are separate components of a judge’s or justice’s total
compensation , and that such total compensation can be variable because seniority or years in the service is a factor
taken into account.

Most importantly, this case is an example of the Court’s prompt decisive action to act with liberality when such action
is called for.

c. Moving On

Construing Section 42 as we do in this Resolution does not and will not negate the applicable laws, contrary to
Justice De Castro’s Dissent. Rather, the interpretation that the term "salary" does not include longevity pay will rectify
the error that the Court’s past rulings have created on this subject.

To recapitulate, the Court’s prior rulings treated longevity pay as part of the "salary" – a ruling that, as explained, runs
counter to the express and implied intent of BP 129. They are erroneous because they introduced and included in the
definition and composition of "salary" under Section 41 an element that the law did not intend to include, either
expressly or impliedly.

Hence, the most compelling reason now exists to abandon the above-cited cases: they were clear and grossly
erroneous application of the law. In jurisdictional terms, they involved an interpretation not within the contemplation of
words expressed by the statute; hence, they were gravely abusive interpretation 62 that did not and cannot confer any
vested right protected by the due process clause. The worst approach the Court can take now is to compound the
problem by perpetuating our past mistakes and simply burying our heads in the sand of past-established rulings.

The first decisive move for the Court is to declare, as it hereby declares, the abandonment of our rulings on longevity
pay in the cases of Santiago, Gancayco, Dela Fuente, and Guevara-Salonga and to strike them out of our ruling case
law, without, however, withdrawing the grants to those who have benefitted from the Court’s misplaced final rulings.

Along these lines, the Court also hereby expressly declares that it does not disavow the longevity pay previously
granted to the retired justices and judicial officials for services rendered outside the Judiciary. They may continue
enjoying their granted benefits as their withdrawal now will be inequitable.

With the same objective, those still in the service who are now enjoying past longevity pay grants due to past services
outside the Judiciary, shall likewise continue with the grants already made, but their grants will have to be frozen at
their current levels until their services outside the Judiciary are compensated for by their present and future judicial
service.

WHEREFORE, premises considered, we resolve to:

(1) NOT the Memorandum dated February 18, 2013 of Atty. Eden T. Candelaria and the Report
and Recommendation dated February 15, 2013 of Atty. Corazon G. Ferrer-Flores;

(2) GRANT the request of Associate Justice Remedios A. Salazar-Fernando that her services as
Judge of the Municipal Trial Court of Sta. Rita, Pampanga be included in the computation of her
longevity pay;

(3) DENY the request of Associate Justice Remedios A. Salazar-Femando that her services as
COMELEC Commissioner be included in the computation of her longevity pay;

(4) DENY the request of Associate Justice Angelita Gacutan that her services as NLRC
Commissioner be included in the computation. of her longevity pay from the time she started her
judicial service;

(5) DENY with finality the motion for reconsideration of Associate Justice Vicente S.E. Veloso for
lack of merit; and

(6) DIRECT the Clerk of this Court to proceed with the handling of granted longevity pay benefits
under Section 42 of Batas Pambansa Blg. 129, pursuant to the guidelines and declarations outlined
in the Moving On portion of this Resolution.

SO ORDERED.

ARTURO D. BRION
Associate Justice

WE CONCUR:
 MARIA LOURDES P.A. SERENO
Chief Justice

I join the concurring and

I join the concurring dissenting
dissenting opinion.
opinion of J. Castro
(Please read Separate opinion)
ANTONIO T. CARPIO
PRESBITERO J. VELASCO, JR.
Associate Justice
Associate Justice

Please see my concurring

(On official leave)
and dissenting opinion:
DIOSDADO M. PERALTA*
TERESITA J. LEONARDO-DE CASTRO
Associate Justice
Associate Justice

I join the concurring and I join the concurring and

dissenting opinion of J. De Castro dissenting opinion of J. De Castro
LUCAS P. BERSAMIN MARIANO C. DEL CASTILLO
Associate Justice Associate Justice

I join the concurring and

MARTIN S. VILLARAMA, JR. dissenting opinion of Justice De Castro
Associate Justice JOSE PORTUGAL PEREZ
Associate Justice

JOSE CATRAL MENDOZA BIENVENIDO L. REYES

Associate Justice Associate Justice

(On official leave)

ESTELA M. PERLAS-BERNABE
MARVIC M.V.F. LEONEN*
Associate Justice
Associate Justice

No Part. Prior OSG Action

FRANCIS H. JARDELEZA
Associate Justice

Republic of the Philippines

SUPREME COURT

SECOND DIVISION

G.R. No. 150478. April 15, 2005

HACIENDA BINO/HORTENCIA STARKE, INC./HORTENCIA L. STARKE, Petitioners,

vs.
CANDIDO CUENCA, FRANCISCO ACULIT, ANGELINA ALMONIA, DONALD ALPUERTO, NIDA BANGALISAN,
ROGELIO CHAVEZ, ELMO DULINGGIS, MERCEDES EMPERADO, TORIBIO EMPERADO, JULIANA
ENCARNADO, REYNALDO ENCARNADO, GENE FERNANDO, JOVEN FERNANDO, HERNANI FERNANDO,
TERESITA FERNANDO, BONIFACIO GADON, JOSE GALLADA, RAMONITO KILAYKO, ROLANDO KILAYKO,
ALFREDO LASTIMOSO, ANTONIO LOMBO, ELIAS LOMBO, EMMA LOMBO, LAURENCIA LOMBO, LUCIA
LOMBO, JOEL MALACAPAY, ADELA MOJELLO, ERNESTO MOJELLO, FRUCTOSO MOJELLO, JESSICA
MOJELLO, JOSE MOJELLO, MARITESS MOJELLO, MERLITA MOJELLO, ROMEO MOJELLO, RONALDO
MOJELLO, VALERIANA MOJELLO, JAIME NEMENZO, RODOLFO NAPABLE, SEGUNDIA OCDEN,
JARDIOLINA PABALINAS, LAURO PABALINAS, NOLI PABALINAS, RUBEN PABALINAS, ZALDY
PABALINAS, ALFREDO PANOLINO, JOAQUIN PEDUHAN, JOHN PEDUHAN, REYNALDO PEDUHAN,
ROGELIO PEDUHAN, JOSEPHINE PEDUHAN, ANTONIO PORRAS, JR., LORNA PORRAS, JIMMY REYES,
ALICIA ROBERTO, MARCOS ROBERTO, JR., MARIA SANGGA, RODRIGO SANGGA, ARGENE SERON,
SAMUEL SERON, SR., ANGELINO SENELONG, ARMANDO SENELONG, DIOLITO SENELONG, REYNALDO
SENELONG, VICENTE SENELONG, FEDERICO STA. ANA, ROGELIO SUASIM, EDNA TADLAS, ARTURO
TITONG, JR., JOSE TITONG, JR., NANCY VINGNO, ALMA YANSON, JIMMY YANSON, MYRNA VILLANUEVA
BELENARIO, SALVADOR MALACAPAY, and RAMELO TIONGCO, Respondents.

DECISION

CALLEJO, SR., J.:

Before us is a petition for review of the Decision1 of the Court of Appeals (CA), dated July 31, 2001, and the
Resolution dated September 24, 2001 denying the petitioners’ motion for reconsideration. The assailed decision
modified the decision of the National Labor Relations Commission (NLRC) in NLRC Case No. V-000099-98.
Hacienda Bino is a 236-hectare sugar plantation located at Barangay Orong, Kabankalan City, Negros Occidental,
and represented in this case by Hortencia L. Starke, owner and operator of the said hacienda.

The 76 individual respondents were part of the workforce of Hacienda Bino consisting of 220 workers, performing
various works, such as cultivation, planting of cane points, fertilization, watering, weeding, harvesting, and loading of
harvested sugarcanes to cargo trucks.2

On July 18, 1996, during the off-milling season, petitioner Starke issued an Order or Notice which stated, thus:

To all Hacienda Employees:

Please bear in mind that all those who signed in favor of CARP are expressing their desire to get out of employment
on their own volition.

Wherefore, beginning today, July 18, only those who did not sign for CARP will be given employment by Hda. Bino.

(Sgd.) Hortencia Starke3

The respondents regarded such notice as a termination of their employment. As a consequence, they filed a
complaint for illegal dismissal, wage differentials, 13th month pay, holiday pay and premium pay for holiday, service
incentive leave pay, and moral and exemplary damages with the NLRC, Regional Arbitration Branch No. VI, Bacolod
City, on September 17, 1996.4

In their Joint Sworn Statement, the respondents as complainants alleged inter alia that they are regular and
permanent workers of the hacienda and that they were dismissed without just and lawful cause. They further alleged
that they were dismissed because they applied as beneficiaries under the Comprehensive Agrarian Reform Program
(CARP) over the land owned by petitioner Starke.5

For her part, petitioner Starke recounted that the company’s Board of Directors petitioned the Sangguniang Bayan of
Kabankalan for authority to re-classify, from agricultural to industrial, commercial and residential, the whole of
Hacienda Bino, except the portion earmarked for the CARP. She asserted that half of the workers supported the re-
classification but the others, which included the herein respondents, opted to become beneficiaries of the land under
the CARP. Petitioner Starke alleged that in July 1996, there was little work in the plantation as it was off-season; and
so, on account of the seasonal nature of the work, she issued the order giving preference to those who supported the
re-classification. She pointed out that when the milling season began in October 1996, the work was plentiful again
and she issued notices to all workers, including the respondents, informing them of the availability of work. However,
the respondents refused to report back to work. With respect to the respondents’ money claims, petitioner Starke
submitted payrolls evidencing payment thereof.

On October 6, 1997, Labor Arbiter Ray Allan T. Drilon rendered a Decision,6 finding that petitioner Starke’s notice
dated July 18, 1996 was tantamount to a termination of the respondents’ services, and holding that the petitioner
company was guilty of illegal dismissal. The dispositive portion of the decision reads:

WHEREFORE, premises considered, judgment is hereby rendered declaring the dismissal of the complainants illegal
and ordering respondent Hortencia L. Starke, Inc. represented by Hortencia L. Starke, as President, to:

1. Reinstate the complainants to their former position without loss of seniority rights immediately upon receipt of this
decision;

2. PAY the backwages and wage differentials of the complainants, to wit:

in the total amount of Four Hundred Ninety-Five Thousand Eight Hundred Fifty-Two and 72/100 (₱495,852.72)
Pesos; and

3. TO PAY the complainants attorney's fee in the amount of Forty-Nine Thousand Five Hundred Eighty-Five and
27/100 (₱49,585.27) Pesos.

Respondents are further directed to deposit to this Office the total judgment award of FIVE HUNDRED FORTY-FIVE
THOUSAND AND FOUR HUNDRED THIRTY-SEVEN AND 99/100 (₱545,437.99) PESOS within ten (10) days from
receipt of this decision.

All other claims are hereby DISMISSED for lack of merit.

SO ORDERED.7

Both the petitioners and the respondents appealed the case to the NLRC. On July 24, 1998, the NLRC affirmed with
modification the decision of the Labor Arbiter. The dispositive part of its decision reads:

WHEREFORE, premises considered, the Decision of the Labor Arbiter is AFFIRMED WITH MODIFICATIONS.
Respondent is further ordered to pay the complainants listed in the Holiday Pay Payroll the amounts due them.

SO ORDERED.8
A motion for reconsideration of the said decision was denied by the NLRC. 9 Dissatisfied, the respondents appealed
the case to the CA where the following issues were raised:

A. THE HONORABLE COMMISSION GRAVELY ABUSED ITS DISCRETION AND POWER BY VIOLATING THE
DOCTRINE OF "STARE DECISIS" LAID DOWN BY THE SUPREME COURT AND THE APPLICABLE LAWS AS TO
THE STATUS OF THE SUGAR WORKERS.

B. THE HONORABLE COMMISSION COMMITTED SERIOUS ERRORS BY ADMITTING THE MOTION TO

DISMISS AND/OR ANSWER TO PETITIONERS’ APPEAL MEMORANDUM DATED MARCH 26, 1998 FILED BY
COUNSEL FOR THE HEREIN RESPONDENTS INSPITE OF THE FACT THAT IT WAS FILED WAY BEYOND THE
REGLEMENTARY PERIOD.

C. THE HONORABLE COMMISSION COMMITTED GRAVE ERROR IN GIVING CREDENCE TO THE SWEEPING
ALLEGATIONS OF THE COMPLAINANTS AS TO THE AWARD OF BACKWAGES AND HOLIDAY PAY WITHOUT
ANY BASIS.10

On July 31, 2001, the CA rendered a Decision,11 the dispositive portion of which reads:

WHEREFORE, the decision of the National Labor Relations Commission is hereby MODIFIED by deleting the award
for holiday pay and premium pay for holidays. The rest of the Decision is hereby AFFIRMED.

SO ORDERED.12

The CA ruled that the concept of stare decisis is not relevant to the present case. It held that the ruling in Mercado,
Sr. v. NLRC13 does not operate to abandon the settled doctrine that sugar workers are considered regular and
permanent farm workers of a sugar plantation owner, considering that there are facts peculiar in that case which are
not present in the case at bar. In the Mercado case, the farm laborers worked only for a definite period for a farm
owner since the area of the land was comparatively small, after which they offer their services to other farm owners.
In this case, the area of the hacienda, which is 236 hectares, simply does not allow for the respondents to work for a
definite period only.

The CA also held that the petitioners’ reliance on Bacolod-Murcia Milling Co. Inc. v. NLRC14 was misplaced, as it in
fact, bolstered the respondents' posture that they are regular employees. In that case, the Court held that a sugar
worker may be considered as in regular employment even during those years when he is merely a seasonal worker
where the issues concern the determination of an employer-employee relationship and security of tenure.

Further, the CA held that the respondents’ appeal to the NLRC was not perfected since they failed to accompany
their notice of appeal with a memorandum of appeal, or to timely file a memorandum of appeal. Thus, as to them, the
decision of the Labor Arbiter became final and executory. The NLRC, therefore, gravely abused its discretion when it
modified the decision of the Labor Arbiter and awarded to the respondents holiday pay and premium for holiday pay.
Finally, the CA affirmed the award of backwages, finding no circumstance that would warrant a reversal of the
findings of the Labor Arbiter and NLRC on this point. 15

On September 24, 2001, the CA denied the motion for reconsideration filed by the petitioners due to their failure to
indicate the date of the receipt of the decision to determine the timeliness of the motion.16

Hence, this petition for review.

The petitioners submit the following issues:

A. WHETHER OR NOT THE HONORABLE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION AND
POWER BY VIOLATING THE DOCTRINE OF "STARE DECISIS" LAID DOWN BY THE SUPREME COURT AND
THE APPLICABLE LAWS AS TO THE STATUS OF THE SUGAR WORKERS.

B. WHETHER OR NOT THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN DISMISSING THE
MOTION FOR RECONSIDERATION FOR FAILURE TO STATE THE DATE OF THE RECEIPT OF THE DECISION
IN THE MOTION FOR RECONSIDERATION.17

Petitioner Starke contends that the established doctrine that seasonal employees are regular employees had been
overturned and abandoned by Mercado, Sr. v. NLRC.18 She stresses that in that case, the Court held that petitioners
therein who were sugar workers, are seasonal employees and their employment legally ends upon completion of the
project or the season. Petitioner Starke argues that the CA violated the doctrine of stare decisis in not applying the
said ruling. She asserts that the respondents, who are also sugar workers, are seasonal employees; hence, their
employment can be terminated at the end of the season and such termination cannot be considered an illegal
dismissal. Petitioner Starke maintains that the determination of whether the workers are regular or seasonal
employees is not dependent on the number of hectares operated upon by them, or the number of workers, or the
capitalization involved, but rather, in the nature of the work. She asserts that the respondents also made their
services available to the neighboring haciendas. To buttress her contention that the respondents are seasonal
employees, petitioner Starke cites Rep. Act 6982, An Act Strengthening the Social Amelioration Program in the Sugar
Industry, Providing the Mechanics for its Implementation, and for other Purposes, which recognizes the seasonal
nature of the work in the sugar industry.19

Petitioner Starke also takes exception to the denial of her motion for reconsideration due to failure to state the date of
the receipt of the decision. She asserts that a denial of a motion for reconsideration due to such cause is merely
directory and not mandatory on the part of the CA. Considering that the amount involved in this case and the fact that
the motion was filed within the reglementary period, the CA should have considered the motion for reconsideration
despite such procedural lapse.20
On the other hand, the respondents aver that the petitioners erroneously invoke the doctrine of stare decisis since the
factual backdrop of this case and the Mercado case is not similar. The respondents posit that the Mercado case ruled
on the status of employment of farm laborers who work only for a definite period of time for a farm owner, after which
they offer their services to other farm owners. Contrarily, the respondents contend that they do not work for a definite
period but throughout the whole year, and do not make their services available to other farm owners. Moreover, the
land involved in the Mercado case is comparatively smaller than the sugar land involved in this case. The
respondents insist that the vastness of the land involved in this case requires the workers to work on a year-round
basis, and not on an "on-and-off" basis like the farm workers in the Mercado case.

Finally, the respondents maintain that the requirement that the date of receipt of the decision should be indicated in
the motion for reconsideration is mandatory and jurisdictional and, if not complied with, the court must deny the
motion outright.21

The petition is without merit.

On the substantial issue of whether the respondents are regular or seasonal employees, the petitioners contend that
the CA violated the doctrine of stare decisis by not applying the ruling in the Mercado case that sugar workers are
seasonal employees. We hold otherwise. Under the doctrine of stare decisis, when a court has laid down a principle
of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases in which
the facts are substantially the same.22 Where the facts are essentially different, however, stare decisis does not apply,
for a perfectly sound principle as applied to one set of facts might be entirely inappropriate when a factual variance is
introduced.23

The CA correctly found that the facts involved in this case are different from the Mercado case; therefore, the ruling in
that case cannot be applied to the case at bar, thus:

We do not find the concept of stare decisis relevant in the case at bench. For although in the Mercado case, the
Supreme Court held the petitioners who were sugar workers not to be regular but seasonal workers, nevertheless,
the same does not operate to abandon the settled doctrine of the High Court that sugar workers are considered
regular and permanent farm workers of a sugar plantation owner, the reason being that there are facts present that
are peculiar to the Mercado case. The disparity in facts between the Mercado case and the instant case is best
exemplified by the fact that the former decision ruled on the status of employment of farm laborers, who, as found by
the labor arbiter, work only for a definite period for a farm worker, after which they offer their services to other farm
owners, considering the area in question being comparatively small, comprising of seventeen and a half (17½)
hectares of land, such that the planting of rice and sugar cane thereon could not possibly entail a whole year
operation. The herein case presents a different factual condition as the enormity of the size of the sugar hacienda of
petitioner, with an area of two hundred thirty-six (236) hectares, simply do not allow for private respondents to render
work only for a definite period.

Indeed, in a number of cases, the Court has recognized the peculiar facts attendant in the Mercado case. In Abasolo
v. NLRC,24 and earlier, in Philippine Tobacco Flue-Curing & Redrying Corporation v. NLRC,25 the Court made the
following observations:

… In Mercado, although respondent constantly availed herself of the petitioners’ services from year to year, it was
clear from the facts therein that they were not in her regular employ. Petitioners therein performed different phases of
agricultural work in a given year. However, during that period, they were free to work for other farm owners, and in
fact they did. In other words, they worked for respondent, but were nevertheless free to contract their services with
other farm owners. The Court was thus emphatic when it ruled that petitioners were mere project employees, who
could be hired by other farm owners….26

Recently, the Court reiterated the same observations in Hacienda Fatima v. National Federation of Sugarcane
Workers-Food and General Trade27 and added that the petitioners in the Mercado case were "not hired regularly and
repeatedly for the same phase/s of agricultural work, but on and off for any single phase thereof."

In this case, there is no evidence on record that the same particulars are present. The petitioners did not present any
evidence that the respondents were required to perform certain phases of agricultural work for a definite period of
time. Although the petitioners assert that the respondents made their services available to the neighboring haciendas,
the records do not, however, support such assertion.

The primary standard for determining regular employment is the reasonable connection between the particular
activity performed by the employee in relation to the usual trade or business of the employer.28 There is no doubt that
the respondents were performing work necessary and desirable in the usual trade or business of an employer.
Hence, they can properly be classified as regular employees.

For respondents to be excluded from those classified as regular employees, it is not enough that they perform work
or services that are seasonal in nature. They must have been employed only for the duration of one season.29 While
the records sufficiently show that the respondents’ work in the hacienda was seasonal in nature, there was, however,
no proof that they were hired for the duration of one season only. In fact, the payrolls, 30 submitted in evidence by the
petitioners, show that they availed the services of the respondents since 1991. Absent any proof to the contrary, the
general rule of regular employment should, therefore, stand. It bears stressing that the employer has the burden of
proving the lawfulness of his employee’s dismissal.31

On the procedural issue, petitioner Starke avers that the CA should not have denied outright her motion for
reconsideration, considering its timely filing and the huge amount involved. This contention is already moot. Petitioner
Starke has already aired in this petition the arguments in her motion for reconsideration of the CA decision, which
have been adequately addressed by this Court. Assuming arguendo that the CA indeed failed to consider the motion
for reconsideration, petitioner Starke was not left without any other recourse.32
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The Decision of the Court of Appeals, dated July 31,
2001, and its Resolution dated September 24, 2001 are hereby AFFIRMED.

SO ORDERED.

Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.

public of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 195419 October 12, 2011

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,

vs.
HADJA JARMA LALLI y PURIH, RONNIE ARINGOY y MASION, and NESTOR RELAMPAGOS (at large),
Accused.
HADJA JARMA LALLI y PURIH and RONNIE ARINGOY Accused-Appellants.

DECISION

CARPIO, J.:

The Case

This is a consolidated criminal case filed against the accused-appellants for the crimes of Illegal Recruitment
(Criminal Case No. 21930) and Trafficking in Persons (Criminal Case No. 21908).

The Regional Trial Court (RTC) of Zamboanga City, in its Decision dated 29 November 2005 (RTC Decision),1 found
accused-appellants guilty beyond reasonable doubt of the crimes of Illegal Recruitment and Trafficking in Persons
committed by a syndicate, and sentenced each of the accused to suffer the penalty of life imprisonment plus payment
of fines and damages. On appeal, the Court of Appeals (CA) in Cagayan de Oro, in its Decision dated 26 February
2010 (CA Decision),2 affirmed in toto the RTC Decision. The accused-appellants appealed to this Court by filing a
Notice of Appeal3 in accordance with Section 3(c), Rule 122 of the Rules of Court.

The Facts

The findings of fact of the RTC, which were affirmed in toto by the CA, are as follows:

In the evening of June 3, 2005, while Lolita Sagadsad Plando, 23 years old, single, was in Tumaga, Zamboanga City
on her way to the house of her grandfather, she met Ronnie Masion Aringoy and Rachel Aringoy Cañete. Ronnie
greeted Lolita, "Oy, it’s good you are here" ("oy, maayo kay dia ka"). Rachel asked Lolita if she is interested to work
in Malaysia. x x x Lolita was interested so she gave her cellphone number to Ronnie. After their conversation, Lolita
proceeded to her grandfather’s house.

xxx

On June 4, 2005, at about 7:00 o’clock in the morning, Lolita received a text message from Ronnie Aringoy inviting
her to go to the latter’s house. At 7:30 in the morning, they met at Tumaga on the road near the place where they had
a conversation the night before. Ronnie brought Lolita to the house of his sister in Tumaga. Lolita inquired what job is
available in Malaysia. Ronnie told her that she will work as a restaurant entertainer. All that is needed is a passport.
She will be paid 500 Malaysian ringgits which is equivalent to ₱7,000.00 pesos in Philippine currency. Lolita told
Ronnie that she does not have a passport. Ronnie said that they will look for a passport so she could leave
immediately. Lolita informed him that her younger sister, Marife Plando, has a passport. Ronnie chided her for not
telling him immediately. He told Lolita that she will leave for Malaysia on June 6, 2005 and they will go to Hadja
Jarma Lalli who will bring her to Malaysia. Ronnie sent a text message to Lalli but the latter replied that she was not
in her house. She was at the city proper.

On June 5, 2005, at about 6:00 o’clock in the evening, Ronnie Aringoy and Rachel Aringoy Cañete arrived on board a
tricycle driven by Ronnie at the house where Lolita was staying at Southcom Village. Ronnie asked if Lolita already
had a passport. Lolita said that she will borrow her sister’s passport. Ronnie, Rachel and Lolita went to Buenavista
where Lolita’s other sister, Gina Plando was staying. Her sister Marife Plando was there at that time. Lolita asked
Marife to let her use Marife’s passport. Marife refused but Lolita got the passport. Marife cried. Ronnie, Rachel and
Lolita proceeded to Tumaga. Ronnie, Rachel and Lolita went to the house of Hadja Jarma Lalli just two hundred
meters away from the house of Ronnie in Tumaga. Ronnie introduced Lolita to Hadja Jarma, saying "Ji, she is also
interested in going to Malaysia." Lolita handed a passport to Hadja Jarma telling her that it belongs to her sister
Marife Plando. Hadja Jarma told her it is not a problem because they have a connection with the DFA (Department of
Foreign Affairs) and Marife’s picture in the passport will be substituted with Lolita’s picture. Nestor Relampagos
arrived driving an owner-type jeep. Hadja Jarma introduced Nestor to Lolita as their financier who will accompany
them to Malaysia. x x x Lolita noticed three other women in Hadja Jarma’s house. They were Honey, about 20 years
old; Michele, 19 years old, and another woman who is about 28 years old. The women said that they are from Ipil,
Sibugay Province. Ronnie told Lolita that she will have many companions going to Malaysia to work. They will leave
the next day, June 6, and will meet at the wharf at 2:30 in the afternoon.

On June 6, 2005, Lolita went to Zamboanga City wharf at 2:00 o’clock in the afternoon bringing a bag containing her
make-up and powder. She met at the wharf Hadja Jarma Lalli, Ronnie Aringoy, Honey and Michele. Ronnie gave to
Lolita her boat ticket for the vessel M/V Mary Joy bound for Sandakan, Malaysia; a passport in the name of Marife
Plando but with Lolita’s picture on it, and ₱1,000.00 in cash. Hadja Jarma, Lolita, Honey, Michele and two other
women boarded the boat M/V Mary Joy bound for Sandakan. Ronnie Aringoy did not go with them. He did not board
the boat. x x x After the boat sailed, Hadja Jarma Lalli and Nestor Relampagos approached Lolita and her
companions. Nestor told them that they will have a good job in Malaysia as restaurant entertainers. They will serve
food to customers. They will not be harmed.

M/V Mary Joy arrived at the port of Sandakan, Malaysia at 10:00 o’clock in the morning of June 7, 2005. After
passing through the immigration office, Hadja Jarma Lalli, Nestor Relampagos, Lolita, Honey, Michele and two other
women boarded a van for Kota Kinabalu. x x x At the hotel, Nestor Relampagos introduced to Lolita and her
companions a Chinese Malay called "Boss" as their employer. After looking at the women, "Boss" brought Lolita,
Honey, Diane and Lorraine to a restaurant near the hotel. Diane and Lorraine were also on baord M/V Mary Joy when
it left the port of Zamboanga for Sandakan on June 6, 2005. When they were already at the restaurant, a Filipina
woman working there said that the place is a prostitution den and the women there are used as prostitutes. Lolita and
her companions went back to the hotel. They told Hadja Jarma and Nestor that they do not like to work as prostitutes.
x x x After about five minutes, another person called "boss" arrived. x x x [T]hey were fetched by a van at about 7:00
o’clock in the evening and brought to Pipen Club owned by "Boss Awa", a Malaysian. At the club, they were told that
they owe the club 2,000 ringgits each as payment for the amount given by the club to Hadja Jarma Lalli and Nestor
Relampagos. They will pay for the said amount by entertaining customers. The customers will pay 300 ringgits for
short time services of which 50 ringgits will go to the entertainer, and 500 ringgits for over night service of which 100
ringgits will be given to the entertainer. Pipen Club is a big club in a two-storey building. There were about 100
women working in the club, many of them were Filipina women.

Lolita Plando was forced to work as entertainer at Pipen Club. She started working at 8:30 in the evening of June 14,
2005. She was given the number 60 which was pinned on her. That night, she had her first customer who selected
her among the other women at the club. He was a very big man, about 32 years old, a Chinese-Malay who looked
like a wrestler. The man paid for short time service at the counter. Lolita was given by the cashier a small pink paper.
She was instructed to keep it. A small yellow paper is given to the entertainer for overnight services. The customer
brought Lolita to a hotel. She did not like to go with him but a "boss" at the club told her that she could not do
anything. At the hotel, the man poked a gun at Lolita and instructed her to undress. She refused. The man boxed her
on the side of her body. She could not bear the pain. The man undressed her and had sexual intercourse with her.
He had sexual intercourse with her every fifteen minutes or four times in one hour. When the customer went inside
the comfort room, Lolita put on her clothes and left. The customer followed her and wanted to bring her back to the
hotel but Lolita refused. At about 1:00 o’clock in the morning of June 15, 2005, Lolita was chosen by another
customer, a tall dark man, about 40 years old. The customer paid for an overnight service at the counter and brought
Lolita to Mariner Hotel which is far from Pipen Club. At the hotel, the man told Lolita to undress. When she refused,
the man brought her to the comfort room and bumped her head on the wall. Lolita felt dizzy. The man opened the
shower and said that both of them will take a bath. Lolita’s clothes got wet. She was crying. The man undressed her
and had sexual intercourse with her. They stayed at the hotel until 11:00 o’clock in the morning of June 15, 2005. The
customer used Lolita many times. He had sexual intercourse with her every hour.

Lolita worked at Pipen Club from June 14 to July 8, 2005. Every night, a customer used her. She had at least one
customer or more a night, and at most, she had around five customers a night. They all had sexual intercourse with
her. On July 9, 2005, Lolita was able to contact by cellphone at about 10:00 o’clock in the morning her sister Janet
Plando who is staying at Sipangkot Felda x x x. Janet is married to Said Abubakar, an Indonesian national who is
working as a driver in the factory. x x x Lolita told Janet that she is in Labuan, Malaysia and beg Janet to save her
because she was sold as a prostitute. Janet told Lolita to wait because her husband will go to Pipen Club to fetch
Lolita at 9:00 o’clock that evening of that day. x x x She told Janet to instruct her husband to ask for No. 60 at Pipen
Club. x x x At 9:00 o’clock in the evening, Lolita was told by Daddy Richard, one of the bosses at the club, that a
customer requested for No. 60. The man was seated at one of the tables. Lolita approached the man and said, "good
evening." The man asked her is she is the sister of Janet Plando. Lolita replied that she is, and asked the man if he is
the husband of her sister. He said, "yes." The man had already paid at the counter. He stood up and left the place.
Lolita got her wallet and followed him. x x x Lolita told her sister about her ordeal. She stayed at her sister’s house
until July 22, 2005. On July 21, 2005 at 7:00 o’clock in the evening, a policeman went to her sisters house and asked
if there is a woman staying in the house without a passport. Her sister told the policeman that she will send Lolita
home on July 22. At dawn on July 22, Lolita and her brother-in-law took a taxi from Sipangkot Felda to Mananamblas
where Lolita will board a speedboat to Sibuto, Tawi-Tawi. x x x

Upon arrival in Zamboanga City on July 24, 2005, Lolita went directly to the house of her eldest sister Alejandra
Plando Maywila at Sta. Catalina, Zamboanga City. She left her things at her sister’s house and immediately went to
the sister of Ronnie Aringoy in Tumaga. Ronnie was not there. She asked Russel, niece of Ronnie, to call for the
latter. Ronnie arrived and said to her, "so you are here, you arrived already." He said he is not involved in what
happened to her. Lolita asked Ronnie to accompany her to the house of Nestor Relampagos because she has
something to get from him. Ronnie refused. He told Lolita not to let them know that she had already arrived from
Malaysia.

Lolita was advised to file a complaint with the police regarding her ordeal in Malaysia. On August 2, 2005, at past
9:00 o’clock in the morning, Lolita Plando went to Zamboanga Police Office at Gov. Lim Avenue to file her complaint.
xxx

In her Counter-Affidavit (Exh. "1"; "1-A"-Lalli), Hadja Jarma Lalli admitted that she met Lolita Plando on June 6, 2005
on board M/V Mary Joy while the said vessel was at sea on its way to Sandakan, Malaysia. The meeting was purely
coincidental. By coincidence also, Hadja Jarma, Nestor Relampagos and Lolita Plando boarded the same van for
Kota Kinabalu, Malaysia. Upon arrival, they parted ways. They did not see each other anymore at Kota Kinabalu,
Malaysia. She did not know what happened to them. She went to Kota Kinabalu to visit his son-in-law. She denied
having recruited Lolita Plando for employment abroad (Exh. "1"; "1-A"). x x x
In his Counter-Affidavit (Exh. "1"-Aringoy), Ronnie Aringoy affirmed that he personally knows Lolita Plando since she
was a teenager and he knows for a fact that her name is Cristine and not Marife "as she purports it to appear."
Sometime in the first week of June 2005, Lolita borrowed ₱1,000.00 from Ronnie because she wanted to go to
Malaysia to work as a guest relation officer (GRO). Ronnie lent her ₱1,000.00. He told her that he knows "a certain
Hadja Jarma Lalli, distant neighbor, who frequents to Malaysia and with whom she can ask pertinent information on
job opportunities." The entries in Philippine Passport No. MM401136 issued to Hadja Jarma Lalli on January 29, 2004
(Exh. "2"; "2-A" to "2-Q") showed that she traveled to Malaysia no less than nine (9) times within the period from
March 2004 to June 2005.

xxx

Nora Mae Adling, ticketing clerk of Aleson Shipping Lines, owner of the vessel M/V Mary Joy 2 plying Zamboanga
City to Sandakan, Malaysia route and of M/V Kristel Jane 3, testified that Hadja Jarma Lalli bought passenger tickets
for her travel to Sandakan, not only for herself but also for other women passengers.

xxx

Ronnie Aringoy submitted the Affidavit of his witness Rachel Cañete (Exh. "2") and the Joint Affidavits of witnesses
Mercedita Salazar and Estrella Galgan. Rachel Canete declared that Lolita Plando whom she knows as Cristine
Plando worked as a GRO (guest relation officer) and massage attendant at Magic 2 Videoke and Massage Parlor,
that Lolita Plando has four children sired by different men; and that she knows for a fact that Lolita Plando has been
going to and from Malaysia to work in bars. When she testified in court, Rachel did not present other evidence to
substantiate her allegations. Mercedita Salazar and Estrella Galgan declared in their Joint Affidavit that Lolita Plando
who is known to them as Marife Plando was their co-worker as massage attendant and GRO (guest relation officer)
at Magic 2 Massage Parlor and Karaoke bar where she used the names Gina Plando and Cristine Plando. She
worked in the said establishment for nine months from February to October 2002. She has four children from four
different men. No other evidence was submitted in court to prove their assertions. 4

The Decision of the Trial Court

The Regional Trial Court rendered its Decision on 29 November 2005, with its dispositive portion declaring:

WHEREFORE, the Court finds accused HADJA JARMA LALLI y PURIH and RONNIE ARINGOY y MASION GUILTY
beyond reasonable doubt in Criminal Case No. 21908 of the Crime of Trafficking in Persons defined in Section 3(a)
and penalized under Section 10(c) in relation to Sections 4(a) and 6(c) of Republic Act No. 9208 known as the "Anti-
Trafficking in Persons Act of 2003" and in Criminal Case No. 21930 of the crime of Illegal Recruitment defined in
Section 6 and penalized under Section 7(b) of Republic Act No. 8042 known as the "Migrant Workers and Overseas
Filipinos Act of 1995" and SENTENCES each of said accused:

1. In Criminal Case No. 21908, to suffer the penalty of LIFE IMPRISONMENT and to pay a fine of
₱2,000,000.00 pesos;

2. In Criminal Case No. 21930, to suffer the penalty of LIFE IMPRISONMENT and to pay a fine of
₱500,000.00 pesos;

3. To pay the offended party Lolita Plando y Sagadsad, jointly and severally, the sum of
₱50,000.00 as moral damages, and ₱50,000.00 as exemplary damages; and

4. To pay the costs.

SO ORDERED.5

The trial court did not find credible the denials of the accused-appellants over the candid, positive and convincing
testimony of complainant Lolita Plando (Lolita). The accused, likewise, tried to prove that Lolita was a Guest
Relations Officer (GRO) in the Philippines with four children fathered by four different men. However, the trial court
found these allegations irrelevant and immaterial to the criminal prosecution. These circumstances, even if true,
would not exempt or mitigate the criminal liability of the accused. The trial court found that the accused, without a
POEA license, conspired in recruiting Lolita and trafficking her as a prostitute, resulting in crimes committed by a
syndicate.6 The trial court did not pronounce the liability of accused-at-large Nestor Relampagos (Relampagos)
because jurisdiction was not acquired over his person.

The Decision of the Court of Appeals

On 26 February 2010, the Court of Appeals affirmed in toto the RTC Decision and found accused-appellants guilty
beyond reasonable doubt of the crimes of Illegal Recruitment and Trafficking in Persons.

The Issue

The only issue in this case is whether the Court of Appeals committed a reversible error in affirming in toto the RTC
Decision.

The Ruling of this Court

We dismiss the appeal for lack of merit.

We modify and increase the payment of damages in the crime of Trafficking in Persons from ₱50,000 to ₱500,000 for
moral damages and ₱50,000 to ₱100,000 for exemplary damages.

Grounds for Appeal

In his Appeal Brief,7 Ronnie Aringoy (Aringoy) admits that he referred Lolita to a certain Hadja Jarma Lalli (Lalli),
Aringoy’s neighbor who frequents Malaysia and from whom Lolita could ask pertinent information on job
opportunities.8 Aringoy claims that he learned later that Lolita left for Malaysia. 9 He denies knowing Relampagos to
whom Lolita paid ₱28,000 as placement fee for finding her work in Malaysia.10

Aringoy presented three witnesses: his niece Rachel Aringoy Cañete (Rachel), Mercedita Salazar (Mercedita), and
Estrella Galgan (Estrella). In her testimony, Rachel declared that: (1) Lolita is a GRO and Massage Attendant at
Magic 2 Videoke and Massage Parlor; (2) Lolita has four children sired by different men; and (3) Lolita has been
travelling to Malaysia to work in bars. Mercedita and Estrella, on the other hand, declared in their testimonies that
Lolita was their co-worker as Massage Attendant and GRO in Magic 2 Massage Parlor and Karaoke Bar from
February to October 2002.11

Aringoy assailed the credibility of Lolita’s testimony because of inconsistencies with regard to: (1) Lolita’s
grandfather’s status and name; (2) the persons (Ronnie and Rachel) who approached Lolita to talk about the job
opportunity in Malaysia; (3) certain statements in Lolita’s testimony that were not alleged in her Sworn Statement; (4)
payment of placement fee of ₱ 28,000; and (5) names of the other female recruits who were with Lolita in the boat
going to Sandakan and Kota Kinabalu.12 Aringoy likewise claims that he was never included in the initial complaint
filed by Lolita, and Lolita’s statements about her meetings with him, Lalli and Relampagos on 3, 4, 5 and 6 June 2005
were not corroborated by any witness.13

On the other hand, in her Appeal Brief,14 Lalli claims that she simply met Lolita on 6 June 2005 on board the ship M/V
Mary Joy bound for Sandakan, Malaysia.15 Lalli denies having met Lolita prior to their meeting on board M/V Mary
Joy.16 Lalli claims she was going to Malaysia to visit her daughter and son-in-law who was a Malaysian national.17
Lalli further claims that she only spoke to Lolita aboard the ship for idle conversation to pass away the time.18 In this
conversation, she learned that Lolita was with a party of girls accompanied by Relampagos, and the latter was
bringing them to Malaysia to work as sales ladies.19 Lalli admits that Lolita, Relampagos and the other girls rode in
Lalli’s van in Sandakan, driven by a friend of Lalli’s son-in-law.20 They all rode together because Relampagos talked
to the van driver, requesting if he and his party of girls could board the van and pay their fare when they reach the city
proper of Kota Kinabalu.21 Lalli boarded the van with Lolita, Relampagos and their companions. 22 Upon reaching her
destination, Lalli got off the van, leaving Lolita, Relampagos and their other companions to continue their journey
towards the city proper of Kota Kinabalu.23 After spending several days in Malaysia with her daughter and son-in-law,
Lalli went to Brunei to visit a cousin on 12 June 2005, and headed back to Malaysia on 14 June 2005.24

Lalli assails the credibility of Lolita due to inconsistencies in her testimony with regard to: (1) Lolita not being in
Southcom Village on 5 June 2005 at 6:00 p.m., as she claimed, but in Buenavista Village; and (2) Lolita’s claim that
Lalli and Relampagos on 12 June 2005 brought the girls to Labuan, when in fact, Lalli was already in Brunei on 12
June 2005, as evidenced by the stamp in her passport.25

Credibility of Testimonies

Both Aringoy and Lalli, in their respective Appeal Briefs, assail the testimony of Lolita due to its alleged inconsistency
on immaterial facts, such as the status of Lolita’s grandfather, the name of the village she was in, the date she was
brought to Labuan, Malaysia, and the like. In a long line of cases, the Court has ruled that inconsistencies pointed out
by the accused in the testimony of prosecution witnesses relating to minor details do not destroy the credibility of
witnesses.26 On the contrary, they indicate that the witnesses were telling the truth and not previously rehearsed. 27

The clear material inconsistency in this case, however, lies in the testimonies of accused Aringoy and Lalli. Aringoy
admitted that he referred Lolita to a certain Hadja Jarma Lalli, his neighbor who frequents Malaysia and with whom
Lolita could ask pertinent information on job opportunities. 28 Lalli, on the other hand, denies having met Lolita prior to
their meeting on board M/V Mary Joy on 6 June 2005,29 and claims that her meeting with Lolita was purely
coincidental.30 Lalli admits that, even if she met Relampagos, Lolita and their companions only on that day on board
M/V Mary Joy, she allowed these people to ride with her in Malaysia using the van driven by the friend of Lalli’s son-
in-law.31 Lastly, Lalli claims that she often goes to Malaysia to visit her daughter and son-in-law.32 However, this does
not explain why Lalli purchased boat tickets, not only for herself, but for the other women passengers going to
Malaysia.33 From March 2004 to June 2005, Lalli traveled to Malaysia no less than nine (9) times. 34 Nora Mae Adling,
ticketing clerk of Aleson Shipping Lines, owner of the vessel M/V Mary Joy 2 plying Zamboanga City to Sandakan,
Malaysia route and of M/V Kristel Jane 3, testified in open court that "Hadja Jarma Lalli bought passenger tickets for
her travel to Sandakan, not only for herself but also for other women passengers." 35 Clearly, it is not Lolita’s
testimony that is materially inconsistent, but the testimonies of Lalli and Aringoy.

Aringoy presented his witnesses Rachel, Mercedita and Estrella to impeach the credibility of Lolita by alleging that
Lolita was a Massage Attendant and GRO in a massage parlor and videoke bar. His witness Rachel further declared
that Lolita, at the young age of 23 years, already had four children sired by four different men, and had been
previously travelling to Malaysia to work in bars. These bare allegations were not supported by any other evidence.
Assuming, for the sake of argument, that Lolita previously worked in a Karaoke Bar and Massage Parlor and that she
had four children from different men, such facts cannot constitute exempting or mitigating circumstances to relieve
the accused from their criminal liabilities. It does not change the fact that the accused recruited Lolita to work in
Malaysia without the requisite POEA license, thus constituting the crime of illegal recruitment. Worse, the accused
deceived her by saying that her work in Malaysia would be as restaurant entertainer, when in fact, Lolita would be
working as a prostitute, thus, constituting the crime of trafficking.

The facts found by the trial court, as affirmed in toto by the Court of Appeals, are, as a general rule, conclusive upon
this Court, in the absence of any showing of grave abuse of discretion. 36 The Court, however, may determine the
factual milieu of cases or controversies under specific circumstances, such as:
 (1) when the inference made is manifestly mistaken, absurd or impossible;

(2) when there is a grave abuse of discretion;

(3) when the finding is grounded entirely on speculations, surmises or conjectures;

(4) when the judgment of the Court of Appeals is based on misapprehension of facts;

(5) when the findings of fact are conflicting;

(6) when the Court of Appeals, in making its findings, went beyond the issues of the
case and the same is contrary to the admissions of both appellant and appellee;

(7) when the findings of the Court of Appeals are contrary to those of the trial court;

(8) when the findings of fact are conclusions without citation of specific evidence on
which they are based;

(9) when the Court of Appeals manifestly overlooked certain relevant facts not disputed
by the parties and which, if properly considered, would justify a different conclusion;
and

(10) when the findings of fact of the Court of Appeals are premised on the absence of
evidence and are contradicted by the evidence on record.37

In this case, none of these exceptions to the general rule on conclusiveness of facts are applicable. The Court gives
weight and respect to the trial court’s findings in criminal prosecution because the latter is in a better position to
decide the question, having heard the witnesses in person and observed their deportment and manner of testifying
during the trial.38 For this reason, the Court adopts the findings of fact of the trial court, as affirmed in toto by the
Court of Appeals, there being no grave abuse of discretion on the part of the lower courts.

Criminal Case No. 21930 (Illegal Recruitment)

Section 6 of Republic Act No. 8042 (RA 8042) defines illegal recruitment, as follows:

[I]llegal recruitment shall mean any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring
workers and includes referring, contact services, promising or advertising for employment abroad, whether for
profit or not, when undertaken by a non-licensee or non-holder of authority contemplated under Article 13(f) of
Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines.

xxx

Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving
economic sabotage.

xxx

Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons
conspiring or confederating with one another. (Emphasis supplied)

Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines,
defines "authority" as follows:

"Authority" means a document issued by the Department of Labor authorizing a person or association to engage in
recruitment and placement activities as a private recruitment entity.

Section 7 of RA 8042 provides for the penalty of illegal recruitment committed by a syndicate (which constitutes
economic sabotage), as follows:

(b) The penalty of life imprisonment and a fine of not less than Five hundred thousand pesos (₱500,000.00) nor more
than One million pesos (₱1,000,000.00) shall be imposed if illegal recruitment constitutes economic sabotage as
defined therein.

It is clear that a person or entity engaged in recruitment and placement activities without the requisite authority from
the Department of Labor and Employment (DOLE), whether for profit or not, is engaged in illegal recruitment. 39 The
Philippine Overseas Employment Administration (POEA), an agency under DOLE created by Executive Order No.
797 to take over the duties of the Overseas Employment Development Board, issues the authority to recruit under the
Labor Code. The commission of illegal recruitment by three or more persons conspiring or confederating with one
another is deemed committed by a syndicate and constitutes economic sabotage, 40 for which the penalty of life
imprisonment and a fine of not less than ₱ 500,000 but not more than ₱ 1,000,000 shall be imposed. 41

The penalties in Section 7 of RA 8042 have already been amended by Section 6 of Republic Act No. 10022, and
have been increased to a fine of not less than ₱ 2,000,000 but not more than ₱ 5,000,000. However, since the crime
was committed in 2005, we shall apply the penalties in the old law, RA 8042.

In People v. Gallo,42 the Court enumerated the elements of syndicated illegal recruitment, to wit:
 1. the offender undertakes either any activity within the meaning of "recruitment and placement"
defined under Article 13(b), or any of the prohibited practices enumerated under Art. 34 of the
Labor Code;

2. he has no valid license or authority required by law to enable one to lawfully engage in
recruitment and placement of workers; and

3. the illegal recruitment is committed by a group of three (3) or more persons conspiring or
confederating with one another.43

Article 13(b) of the Labor Code of the Philippines defines recruitment and placement as "any act of canvassing,
enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract services,
promising or advertising for employment, locally or abroad, whether for profit or not, provided, that any person or
entity which, in any manner, offers or promises for a fee, employment to two or more persons shall be deemed
engaged in recruitment and placement."

Clearly, given the broad definition of recruitment and placement, even the mere act of referring someone for
placement abroad can be considered recruitment. Such act of referral, in connivance with someone without the
requisite authority or POEA license, constitutes illegal recruitment. In its simplest terms, illegal recruitment is
committed by persons who, without authority from the government, give the impression that they have the power to
send workers abroad for employment purposes.44

In this case, the trial court, as affirmed by the appellate court, found Lalli, Aringoy and Relampagos to have conspired
and confederated with one another to recruit and place Lolita for work in Malaysia, without a POEA license. The three
elements of syndicated illegal recruitment are present in this case, in particular: (1) the accused have no valid license
or authority required by law to enable them to lawfully engage in the recruitment and placement of workers; (2) the
accused engaged in this activity of recruitment and placement by actually recruiting, deploying and transporting Lolita
to Malaysia; and (3) illegal recruitment was committed by three persons (Aringoy, Lalli and Relampagos), conspiring
and confederating with one another.

Aringoy claims and admits that he only referred Lolita to Lalli for job opportunities to Malaysia. Such act of referring,
whether for profit or not, in connivance with someone without a POEA license, is already considered illegal
recruitment, given the broad definition of recruitment and placement in the Labor Code.

Lalli, on the other hand, completely denies any involvement in the recruitment and placement of Lolita to Malaysia,
and claims she only met Lolita for the first time by coincidence on board the ship M/V Mary Joy. Lalli’s denial does not
deserve credence because it completely conflicts with the testimony of Aringoy who claims he referred Lolita to Lalli
who had knowledge of the job opportunities in Malaysia.

The conflicting testimonies of Lalli and Aringoy on material facts give doubt to the truth and veracity of their stories,
and strengthens the credibility of the testimony of Lolita, despite allegations of irrelevant inconsistencies.

No improper motive could be imputed to Lolita to show that she would falsely testify against the accused. The
absence of evidence as to an improper motive entitles Lolita’s testimony to full faith and credit.45

Aringoy claims that no conspiracy existed in illegal recruitment, as he denies even knowing Relampagos, who is
currently at-large. Lalli denies any involvement in the illegal recruitment, and claims that she only met Relampagos
through Lolita on board the ship M/V Mary Joy on 6 June 2005, and learned that Relampagos was bringing Lolita and
their other girl companions to Malaysia to work as sales ladies.

Under Article 8 of the Revised Penal Code, there is conspiracy "when two or more persons come to an agreement
concerning the commission of a felony and decide to commit it."

In People v. Lago,46 the Court discussed conspiracy in this wise:

The elements of conspiracy are the following: (1) two or more persons came to an agreement, (2) the agreement
concerned the commission of a felony, and (3) the execution of the felony was decided upon. Proof of the conspiracy
need not be based on direct evidence, because it may be inferred from the parties’ conduct indicating a common
understanding among themselves with respect to the commission of the crime. Neither is it necessary to show that
two or more persons met together and entered into an explicit agreement setting out the details of an unlawful
scheme or objective to be carried out. The conspiracy may be deduced from the mode or manner in which the crime
was perpetrated; it may also be inferred from the acts of the accused evincing a joint or common purpose and design,
concerted action and community of interest. 47

In this case, Lolita would not have been able to go to Malaysia if not for the concerted efforts of Aringoy, Lalli and
Relampagos. First, it was Aringoy who knew Lolita, since Aringoy was a neighbor of Lolita’s grandfather. It was
Aringoy who referred Lolita to Lalli, a fact clearly admitted by Aringoy. Second, Lolita would not have been able to go
to Malaysia if Lalli had not purchased Lolita’s boat ticket to Malaysia. This fact can be deduced from the testimony of
Nora Mae Adling (Nora), ticketing clerk of Aleson Shipping Lines, owner of the vessel M/V Mary Joy 2 plying
Zamboanga City to Sandakan, Malaysia route and of M/V Kristel Jane 3. Nora testified in open court that "Hadja
Jarma Lalli bought passenger tickets for her travel to Sandakan, not only for herself but also for other women
passengers." Lalli’s claim that she only goes to Malaysia to visit her daughter and son-in-law does not explain the fact
why she bought the boat tickets of the other women passengers going to Malaysia. In fact, it appears strange that
Lalli visited Malaysia nine (9) times in a span of one year and three months (March 2004 to June 2005) just to visit
her daughter and son-in-law. In Malaysia, it was Relampagos who introduced Lolita and her companions to a
Chinese Malay called "Boss" as their first employer. When Lolita and her companions went back to the hotel to tell
Relampagos and Lalli that they did not want to work as prostitutes, Relampagos brought Lolita and the girls on board
a van to Sangawan China Labuan, where they stayed in a room for one night. The next day, they were picked up by a
van and brought to Pipen Club, where Lolita and her companions worked as prostitutes. To date, accused
Relampagos is at large and has not been brought under the jurisdiction of the courts for his crimes.

Flight in criminal law is the evading of the course of justice by voluntarily withdrawing oneself in order to avoid arrest
or detention or the institution or continuance of criminal proceedings. 48 The unexplained flight of an accused person
may as a general rule be taken into consideration as evidence having a tendency to establish his guilt. 49 Clearly, in
this case, the flight of accused Relampagos, who is still at-large, shows an indication of guilt in the crimes he has
been charged.

It is clear that through the concerted efforts of Aringoy, Lalli and Relampagos, Lolita was recruited and deployed to
Malaysia to work as a prostitute. Such conspiracy among Aringoy, Lalli and Relampagos could be deduced from the
manner in which the crime was perpetrated – each of the accused played a pivotal role in perpetrating the crime of
illegal recruitment, and evinced a joint common purpose and design, concerted action and community of interest.

For these reasons, this Court affirms the CA Decision, affirming the RTC Decision, declaring accused Ronnie Aringoy
y Masion and Hadja Jarma Lalli y Purih guilty beyond reasonable doubt of the crime of illegal recruitment committed
by a syndicate in Criminal Case No. 21930, with a penalty of life imprisonment and a fine of ₱ 500,000 imposed on
each of the accused.

Criminal Case No. 21908 (Trafficking in Persons)

Section 3(a) of Republic Act No. 9208 (RA 9208), otherwise known as the Anti-Trafficking in Persons Act of 2003,
defines Trafficking in Persons, as follows:

Trafficking in Persons – refers to the recruitment, transportation, transfer or harboring, or receipt of persons with or
without the victim’s consent or knowledge, within or across national borders by means of threat or use of force, or
other forms of coercion, abduction, fraud, deception, abuse of power or of position, taking advantage of the
vulnerability of the person, or, the giving or receiving of payments or benefits to achieve the consent of a person
having control over another person for the purpose of exploitation which includes at a minimum, the exploitation or
the prostitution of others or other forms of sexual exploitation, forced labor or services, slavery, servitude or the
removal or sale of organs. x x x (Emphasis supplied)

Section 4 of RA 9208 enumerates the prohibited acts of Trafficking in Persons, one of which is:

(a) To recruit, transport, transfer, harbor, provide, or receive a person by any means, including those done under the
pretext of domestic or overseas employment or training or apprenticeship, for the purpose of prostitution,
pornography, sexual exploitation, forced labor, slavery, involuntary servitude or debt bondage.

The crime of Trafficking in Persons is qualified when committed by a syndicate, as provided in Section 6(c) of RA
9208:

(c) When the crime is committed by a syndicate, or in large scale. Trafficking is deemed committed by a syndicate if
carried out by a group of three (3) or more persons conspiring or confederating with one another. It is deemed
committed in large scale if committed against three (3) or more persons, individually or as a group.

Section 10(c) of RA 9208 provides for the penalty of qualified trafficking:

(c) Any person found guilty of qualified trafficking under Section 6 shall suffer the penalty of life imprisonment and a
fine of not less than Two million pesos (₱2,000,000.00) but not more than Five million pesos (₱5,000,000.00).

The Anti-Trafficking in Persons Act is a new law passed last 26 May 2003, designed to criminalize the act of
trafficking in persons for prostitution, sexual exploitation, foced labor and slavery, among others.

In this case, Aringoy claims that he cannot be convicted of the crime of Trafficking in Persons because he was not
part of the group that transported Lolita from the Philippines to Malaysia on board the ship M/V Mary Joy. In addition,
he presented his niece, Rachel, as witness to testify that Lolita had been travelling to Malaysia to work in bars. On the
other hand, Lalli denies any involvement in the recruitment and trafficking of Lolita, claiming she only met Lolita for
the first time on board M/V Mary Joy going to Malaysia.

The testimony of Aringoy’s niece, Rachel, that Lolita had been travelling to Malaysia to work in bars cannot be given
credence. Lolita did not even have a passport to go to Malaysia and had to use her sister’s passport when Aringoy,
Lalli and Relampagos first recruited her. It is questionable how she could have been travelling to Malaysia previously
without a passport, as Rachel claims. Moreover, even if it is true that Lolita had been travelling to Malaysia to work in
bars, the crime of Trafficking in Persons can exist even with the victim’s consent or knowledge under Section 3(a) of
RA 9208.

Trafficking in Persons under Sections 3(a) and 4 of RA 9208 is not only limited to transportation of victims, but also
includes the act of recruitment of victims for trafficking. In this case, since it has been sufficiently proven beyond
reasonable doubt, as discussed in Criminal Case No. 21930, that all the three accused (Aringoy, Lalli and
Relampagos) conspired and confederated with one another to illegally recruit Lolita to become a prostitute in
Malaysia, it follows that they are also guilty beyond reasonable doubt of the crime of Qualified Trafficking in Persons
committed by a syndicate under RA 9208 because the crime of recruitment for prostitution also constitutes trafficking.

When an act or acts violate two or more different laws and constitute two different offenses, a prosecution under one
will not bar a prosecution under the other.50 The constitutional right against double jeopardy only applies to risk of
punishment twice for the same offense, or for an act punished by a law and an ordinance. 51 The prohibition on double
jeopardy does not apply to an act or series of acts constituting different offenses.
 DAMAGES

Lolita claimed actual damages of ₱ 28,000, which she allegedly paid to the accused as placement fee for the work of
restaurant entertainer in Malaysia. The trial court did not award this amount to Lolita. We agree and affirm the trial
court’s non-award due to Lolita’s inconsistent statements on the payment of placement fee. In her sworn statement,
Lolita alleged that she paid ₱ 28,000 as placement fee to Lalli. 52 On cross-examination, however, she admitted that
she never paid ₱ 28,000 to the accused.53

We, however, modify and increase the payment of damages in the crime of Trafficking in Persons from ₱ 50,000 to ₱
500,000 as moral damages and ₱ 50,000 to ₱ 100,000 as exemplary damages.

The Civil Code describes moral damages in Article 2217:

Art. 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of pecuniary computation,
moral damages may be recovered if they are the proximate result of the defendant’s wrongful act for
omission.1avvphi1

Exemplary damages, on the other hand, are awarded in addition to the payment of moral damages, by way of
example or correction for the public good, as stated in the Civil Code:

Art. 2229. Exemplary or corrective damages are imposed, by way of example or correction for the public good, in
addition to the moral, temperate, liquidated or compensatory damages.

Art. 2230. In criminal offenses, exemplary damages as a part of the civil liability may be imposed when the crime was
committed with one or more aggravating circumstances. Such damages are separate and distinct from fines and shall
be paid to the offended party.

The payment of ₱ 500,000 as moral damages and ₱ 100,000 as exemplary damages for the crime of Trafficking in
Persons as a Prostitute finds basis in Article 2219 of the Civil Code, which states:

Art. 2219. Moral damages may be recovered in the following and analogous cases:

(1) A criminal offense resulting in physical injuries;

(2) Quasi-delicts causing physical injuries;

(3) Seduction, abduction, rape, or other lascivious acts;

(4) Adultery or concubinage;

(5) Illegal or arbitrary detention or arrest;

(6) Illegal search;

(7) Libel, slander or any other form of defamation;

(8) Malicious prosecution;

(9) Acts mentioned in Article 309;

(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.

The parents of the female seduced, abducted, raped, or abused, referred to in No. 3 of this article, may also recover
moral damages.

The spouse, descendants, ascendants, and brothers and sisters may bring the action mentioned in No. 9 of this
article, in the order named.

The criminal case of Trafficking in Persons as a Prostitute is an analogous case to the crimes of seduction,
abduction, rape, or other lascivious acts. In fact, it is worse. To be trafficked as a prostitute without one’s consent and
to be sexually violated four to five times a day by different strangers is horrendous and atrocious. There is no doubt
that Lolita experienced physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded
feelings, moral shock, and social humiliation when she was trafficked as a prostitute in Malaysia. Since the crime of
Trafficking in Persons was aggravated, being committed by a syndicate, the award of exemplary damages is likewise
justified.

WHEREFORE, we AFFIRM the Decision of the Court of Appeals dated 26 February 2010, affirming the Decision of
the Regional Trial Court of Zamboanga City dated 29 November 2005, finding accused Lalli and Aringoy guilty
beyond reasonable doubt of the crimes of Illegal Recruitment and Trafficking in Persons committed by a syndicate,
with the following MODIFICATIONS:

1. In Criminal Case No. 21908, each of the accused is sentenced to suffer the penalty of LIFE
IMPRISONMENT and to pay a fine of ₱ 2,000,000;
 2. In Criminal Case No. 21930, each of the accused is sentenced to suffer the penalty of LIFE
IMPRISONMENT and to pay a fine of ₱ 500,000;

3. Each of the accused is ordered to pay the offended party Lolita Plando y Sagadsad, jointly and
severally, the sum of ₱ 500,000 as moral damages, and ₱ 100,000 as exemplary damages for the
crime of Trafficking in Persons; and to pay the costs.

The Court cannot pronounce the liability of accused-at-large Nestor Relampagos as jurisdiction over his person has
not been acquired.

SO ORDERED.

ANTONIO T. CARPIO
Associate Justice

WE CONCUR:

ARTURO D. BRION
Associate Justice

MARIA LOURDES P. A. SERENO BIENVENIDO L. REYES

Associate Justice Associate Justice

ESTELA M. PERLAS-BERNABE*
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to
the writer of the opinion of the Court’s Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, I certify that the
conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.

RENATO C. CORONA
Chief Justice
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 105204 March 9, 1995

PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
THELMA REYES and NICK REYES, accused, THELMA REYES accused-appellant.

MENDOZA, J.:

This is an appeal from the decision of the Regional Trial Court of Laguna, Branch 35, the dispositive
portion of which reads as follows:

WHEREFORE, the prosecution having established the guilt of the accused

Thelma Reyes beyond reasonable doubt of Illegal Recruitment defined and
penalized under Article 38, P.D. No. 442 as amended, the Court hereby
sentences said accused to suffer a penalty of Reclusion Perpetua and to pay
a fine in the amount of P100,000.00 and to indemnify Rosalino Bitang and
Fabian Baradas, Mr. de Castro, Lorenzo Blanza and Ramon Mendoza the
sum of P45,000.00 and to pay the costs.

Appellant Thelma Reyes was charged together with her husband Nick Reyes, but the latter was at
large and so has remained up to now. Consequently, the trial proceeded only with respect to Thelma
Reyes in view of her plea of not guilty.

The prosecution's first witness, Rosalino Bitang, testified that sometime in 1985, he and five others
(Lorenzo Blanza, Fabian Baradas, Edgardo Garcia, Ramon Mendoza and Dionisio de Castro) went
to the house of the appellant in Los Baños, Laguna, to apply for employment abroad; that he gave
P5,000 to Nick Reyes as downpayment for the recruitment fees; that Nick Reyes handed the money
to his wife Thelma Reyes, and afterward issued a receipt (Exh. A), which reads:

RECEIPT

RECEIVED from MR. RIZALINO BITANG the amount of FIVE THOUSAND

(P5,000.00) PESOS, Philippine Currency.

Manila, September 19, 1985.

(SGD.) NICK N. REYES, SR.

Bitang testified that on January 14, 1986, he and his companions paid P34,000.00 more to the
spouses through Dionisio de Castro. Of this amount, P8,500.00 was for his (witness Bitang's)
placement fee, while the balance was for payment of his companions' fees. As before Nick Reyes
received the amount and gave it to his wife, Thelma Reyes, after which he issued a receipt (Exh. B)
which reads:

RECEIPT

RECEIVED from MR. DIONISIO DE CASTRO the amount of THIRTY FOUR

THOUSAND (P34,000.00) Pesos, Philippine Currency for the following:
Edgardo Garcia Ramon Mendoza Lorenzo Blanza, Fabian Barradas, and
Rosalino Bitang.

Manila, January 14, 1986.

(SGD) NICHOL REYES SR.

According to complainant, Nick Reyes promised to notify them as soon as they were accepted for
employment so that they could leave for abroad, but this promise was not fulfilled. He said that he
checked with the Philippine Overseas Employment Administration (POEA) and found out that the
spouses were not licensed recruiters. A certification to this effect was issued to him by the POEA.
(Exh. C)

The other complainant Fabian Baradas also testified. He stated that he was introduced to Thelma
Reyes sometime in September, 1985 at Lemery, Batangas, while the latter was recruiting workers
for deployment in Saudi Arabia.

On several occasions between September and December, 1985, he and several others went to
appellant's house at Junction, Los Baños Laguna for overseas employment and were required to
submit travel documents, such as passports, birth certificates and NBI clearances and to pay various
amounts of money.

On January 9, 1986, he gave P6,000.00 to Nick and Thelma Reyes, through his godfather Dionisio
de Castro, for which Nick Reyes issued to him a receipt (Exh. E), reading:

RECEIPT

Received from Mr. Dionisio de Castro the amount of Six Thousand

(P6,000.00) Pesos, Philippine Currency.

Manila, January 9, 1986.

(SGD.) NICK N. REYES

On January 14, 1986, he paid the additional amount of P12,000.00 to Reyes through Dionisio de
Castro as evidenced by Exh. B. The money was supposed to cover the cost of the processing
papers. However, as no job was forthcoming, he went to the POEA to inquire, and, like Rosalino
Bitang, he learned that the spouses were not licensed recruiters.

The complainants both testified that as soon as they obtained the POEA certification that appellant
and her husband were not licensed to recruit, they demanded from the spouses the return of their
money and when the latter did not give back their money, they filed the complaint in this case.

Only the appellant Thelma Reyes testified in her behalf. She claimed that she met the witnesses
Bitang and Baradas only when they were looking for her husband at their house in Los Baños,
Laguna, between March and May of 1986. She denied having met them before.

She admitted that the receipts (Exhs. A, B and E) were all written and signed by her husband, but
she denied she had anything to do with her husband's activities. She said they had been estranged
since March 1986 precisely because she did not approve of her husband's illegal activities. She
claimed that she had told her husband that, even though they were poor, they could live on their
earning and the monthly support of P10,000.00 which they were receiving from her mother-in-law
who lived in the United States.

According to appellant, she and her husband saw each other only occasionally, whenever they
visited their children in Los Baños where they were studying because she lived in Singalong, Manila.
She presumed that her husband had told complainants to go to the house in Los Baños which they
were merely renting for their children and that she was included in the complaint only because her
husband could not be located.

On cross-examination she admitted that there were fourteen (14) other cases of Illegal Recruitment
filed and/or pending against her and her husband in different courts of Manila and claimed that some
of the cases had been dismissed or settled after she had refunded the money of the complainants.

Testifying on rebuttal for the prosecution, Rosalino Bitang stated that it was Thelma Reyes herself
who gave the job applicants the address and sketch of their house in Los Baños, Laguna, and that
she represented to him that she was negotiating for job placements abroad. Bitang reiterated that
money paid to Nick Reyes was given to Thelma Reyes who counted it before Nick Reyes issued
receipts.

On the basis of the parties' evidence, the trial court found Thelma Reyes guilty of illegal recruitment
and sentenced her as stated in the beginning. Hence this appeal.

Appellant claims that the trial court erred —

1. IN FINDING THAT THE PROSECUTION HAS MARSHALLED THE

QUANTUM OF EVIDENCE SUFFICIENT TO CONVICT THE ACCUSED OF
 THE CRIME OF ILLEGAL RECRUITMENT UNDER ARTICLE 38, P.D. NO.
442.

2. IN NOT CONSIDERING THE FACT THAT THERE ARE ONLY TWO

COMPLAINANTS IN THE INFORMATION FILED ON DECEMBER 11, 1986
AGAINST THE ACCUSED HENCE THEY CANNOT BE PROSECUTED
UNDER ARTICLE 38, P.D. NO. 442.

3. IN GIVING CREDENCE TO THE VERBAL TESTIMONIES OF PRIVATE

COMPLAINANTS RATHER THAN THE DOCUMENTARY EVIDENCE.

We shall now deal with these contentions of appellant.

First. Appellant contends that the testimonies of Bitang and Baradas are insufficient to sustain
conviction. She contends that Dionisio de Castro, who allegedly advanced P34,000.00 for the
complainants and their companions, should have been presented to corroborate the claim of the
claimants.

The contention is without merit. To be sure, an accused can be convicted on the strength of the
testimony of a single witness, if such testimony is credible and positive and produces a conviction
beyond reasonable doubt.1 That the witness is also the complainant in a case makes little difference
as long as the court is convinced beyond doubt that the witness is telling the truth. For instance, in
Hernandez v. Court of Appeals2 this Court held:

Petitioner claims that the decision of the trial court is not supported by the
evidence, which is contrary to the findings of the Court of Appeals that said
decision is "in accordance with law and the evidence" (Rollo,
p. 12). He points out that the appellate court should not have believed the
trial court's conclusion that "the sole testimony of the offended party would
have sufficed to sustain her assertions" (Rollo, p. 47). He claims that self-
serving declarations of a party favorable to himself are not admissible and
that none of the alleged witnesses to the transactions were presented.

The common objection known as "self-serving" is not correct because almost

all testimonies are self-serving. The proper basis for objection is "hearsay"
(Wenke, Making and Meeting Objections, 69).

Petitioner fails to take into account the distinction between self-serving

statements and testimonies made in court. Self-serving statements are those
made by a party out of court advocating his own interest; they do not include
a party's testimony as a witness in court (National Development Co. v.
Workmen's Compensation Commission, 19 SCRA 861 [1967]).

Self-serving statements are inadmissible because the adverse party is not

given the opportunity for cross-examination, and their admission would
encourage fabrication of testimony. This cannot be said of a party's testimony
in court made under oath, with full opportunity on the part of the opposing
party for cross-examination.

It is not true that none of the alleged witnesses to the transactions was
presented in court (Rollo, p. 13). Yolanda Dela Rosa, an eye-witness to some
of the transactions, testified for the prosecution. Assuming that Dela Rosa
was not presented as a witness, the testimony of de Leon sufficed to sustain
the conviction of petitioner. The conviction of an accused may be on the
basis of the testimony of a single witness (People v. Rumeral, 200 SCRA 194
[1991]). In determining the value and credibility of evidence, witnesses are to
be weighed, not counted (People v. Villalobos, 209 SCRA 304 [1992]).

In the case at bar, the trial court gave weight to the testimonies of complainants because,

Except for the denial of accused Thelma Reyes that she has nothing to do
with the recruitment of the complaining witnesses as well as the collection of
the amount from them, said accused failed to sufficiently overthrow the
convincing testimony of the complaining witnesses that accused Thelma
Reyes was present and even counted the money evidenced by Exhibit[s] "A"
and "B" after her husband hands it to her and that her husband Nick Reyes
who issued the receipts to the complainants.
Moreover, when the issue is the credibility of witnesses, appellate courts will in general not disturb
the findings of the trial court unless certain facts or circumstances of weight have been overlooked,
misunderstood or misapplied which, if considered, might affect the result of the case. This is
because the trial court heard the testimony of the witnesses and observed their deportment and
manner of testifying during the trial.3

With respect to the fact that Dionisio de Castro was not presented to testify, it is sufficient to say that
there was no necessity for this because there is no question that the amount of P34,000.00 which he
had advanced for the complainants and others was received by Nick Reyes.

Second. Appellant contends that the receipts constitute the best evidence to show that only Nick
Reyes received the amounts stated therein because only his signature appears on the receipts. That
the receipts were signed by Nick Reyes alone only proves that it was to him that the amounts were
paid. What, on the other hand, complainants are saying is that appellant is guilty because she and
her husband, conspiring together, acted and made them believe that they were licensed recruiters. If
so, the acts of the husband were likewise those of her. Indeed, the evidence shows that after
receiving the amounts from complainants, Nick Reyes handed the money paid to the appellant and
that Nick Reyes issued the receipts in question only after appellant Thelma Reyes had counted it.

Appellant claims that she and her husband separated in 1985 precisely because she did not want to
be involved in his illegal activities. This seems to be us to be a convenient way to dissociate herself,
but her mere claim is not enough to overcome the evidence of the prosecution. If there was anyone
whose testimony needed corroboration it was appellant.

Taking another tack, appellant points out that complainants cannot explain why the purpose for
which payment was made is not stated in the receipts nor why the receipts purport to have been
issued in "Manila" and not in Los Baños where they said they had made all the payments. She
argues that if the illegal recruitment was made in Manila, then the Regional Trial Court of Laguna
had no jurisdiction to try the case.

The circumstances pointed out by appellant only underscores the deviousness of appellant and her
husband. Complainants have an elementary education only. It is not for them — but for appellant
and her husband — to explain these circumstances because it was the latter who made-the receipts.
It is not far fetched that they made the receipts this way precisely to create doubt as to their real
import. It is enough that complainants positively identified the appellant and her husband as having
illegally recruited them and collected money from them. Their testimonies have not been
successfully rebutted by the lame denial of appellant.

Third. Appellant contends that in any event the testimonies of the two complainants could not be the
basis for a finding of illegal recruitment on a large scale and for imposing the penalty of life
imprisonment on her. The Labor Code prescribes the penalty of life imprisonment for illegal
recruitment when committed on a "large scale." Art. 38 (b) of the Code provides:

(b) Illegal recruitment when committed by a syndicate or in large scale shall

be considered an offense involving economic sabotage and shall be
penalized in accordance with Article 39 hereof.

And Art. 39 (a) provides:

Art. 39. Penalties. — (a) The penalty of life imprisonment and a fine of One
Hundred Thousand Pesos (P100,000) shall be imposed if illegal recruitment
constitutes economic sabotage as defined herein.

We agree with this contention.

In this case the information against appellant mentioned only the two complainants Fabian Baradas
and Rosalino Bitang as having been illegally recruited by appellant and her husband. The trial Court,
however, held appellant guilty of illegal recruitment on a large scale because aside from Baradas
and Bitang, appellant and her husband allegedly recruited others, namely, Lorenzo Blanza, Edgardo
Garcia, Ramon Mendoza, and Dionisio de Castro.

This is error. To be sure, Blanza and Garcia, according to complainant Baradas were able to obtain
overseas employment. On the other hand, with respect to De Castro there is no evidence that he,
too, had been illegally recruited by the spouses. What appears in the record is that he advanced the
amount of P34,000.00 in behalf of the complainants and the three others. Only two, therefore, had
been illegally recruited.

There are, it is said, 14 other cases filed pending in the courts against the accused for illegal
recruitment. These cases cannot be taken into account for the purpose of Art. 38(b). When the Labor
Code speaks of illegal recruitment "committed against three (3) or more persons individually or as a
group," it must be understood as referring to the number of complainants in each case who are
complainants therein, otherwise, prosecutions for single crimes of illegal recruitment can be
cummulated to make out a case of large scale illegal recruitment. In other words, a conviction for
large scale illegal recruitment must be based on a finding in each case of illegal recruitment of three
or more persons whether individually or as a group.

Moreover, even it Blanza and Garcia had been illegally recruited so as to make the number of
persons illegally recruited four and make the crime that of illegal recruitment on a large scale, since
this was not alleged in the information and this is the more serious offense which includes that which
was charged, the appellant can only be found guilty of the less serious offense charged, pursuant to
Rule 120, §4.

Accordingly, appellant must be punished under Art. 39(c) of the Labor Code which provides:

(c) Any person who is neither a licensee nor a holder of authority under this
Title found violating any provision thereof or its implementing rules and
regulations shall upon conviction thereof, suffer the penalty of imprisonment
of not less than four years nor more than eight years or a fine of not less than
P20,000 nor more than P100,000 or both such imprisonment and fine, at the
discretion of the court.

WHEREFORE, the decision appealed from is SET ASIDE and another one is rendered, finding
appellant Thelma Reyes guilty of illegal recruitment on two (2) counts and is hereby sentenced for
each crime to suffer imprisonment of 6 years and 1 day to 8 years and pay a fine of P50,000.00; and
ordered to indemnify Rosalino Bitang in the amount of P13,500.00 and Fabian Baradas in the
amount of P18,000.00 and pay the costs.

SO ORDERED.

Narvasa, C.J., Bidin, Regalado and Puno, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 195770 July 17, 2012

AQUILINO Q. PIMENTEL, JR., SERGIO TADEO and NELSON ALCANTARA, Petitioners,

vs.
EXECUTIVE SECRETARY PAQUITO N. OCHOA and SECRETARY CORAZON JULIANO-
SOLIMAN OF THE DEPARTMENT OF SOCIAL WELFARE and DEVELOPMENT (DSWD),
Respondents.

DECISION

PERLAS-BERNABE, J.:

The Case

For the Court’s consideration in this Petition for Certiorari and Prohibition is the constitutionality of
certain provisions of Republic Act No. 10147 or the General Appropriations Act (GAA) of 20111 which
provides a P21 Billion budget allocation for the Conditional Cash Transfer Program (CCTP) headed
by the Department of Social Welfare & Development (DSWD). Petitioners seek to enjoin
respondents Executive Secretary Paquito N. Ochoa and DSWD Secretary Corazon Juliano-Soliman
from implementing the said program on the ground that it amounts to a "recentralization" of
government functions that have already been devolved from the national government to the local
government units.

The Facts
In 2007, the DSWD embarked on a poverty reduction strategy with the poorest of the poor as target
beneficiaries.2 Dubbed "Ahon Pamilyang Pilipino," it was pre-pilot tested in the municipalities of
Sibagat and Esperanza in Agusan del Sur; the municipalities of Lopez Jaena and Bonifacio in
Misamis Occidental, the Caraga Region; and the cities of Pasay and Caloocan3 upon the release of
the amount of P50 Million Pesos under a Special Allotment Release Order (SARO) issued by the
Department of Budget and Management.4

On July 16, 2008, the DSWD issued Administrative Order No. 16, series of 2008 (A.O. No. 16, s.
2008),5 setting the implementing guidelines for the project renamed "Pantawid Pamilyang Pilipino
Program" (4Ps), upon the following stated objectives, to wit:

1. To improve preventive health care of pregnant women and young children

2. To increase enrollment/attendance of children at elementary level

3. To reduce incidence of child labor

4. To raise consumption of poor households on nutrient dense foods

5. To encourage parents to invest in their children's (and their own) future

6. To encourage parent's participation in the growth and development of young

children, as well as involvement in the community.6

This government intervention scheme, also conveniently referred to as CCTP, "provides cash grant
to extreme poor households to allow the members of the families to meet certain human
development goals."7

Eligible households that are selected from priority target areas consisting of the poorest provinces
classified by the National Statistical Coordination Board (NCSB)8 are granted a health assistance of
P500.00/month, or P6,000.00/year, and an educational assistance of P300.00/month for 10 months,
or a total of P3,000.00/year, for each child but up to a maximum of three children per family.9 Thus,
after an assessment on the appropriate assistance package, a household beneficiary could receive
from the government an annual subsidy for its basic needs up to an amount of P15,000.00, under
the following conditionalities:

a) Pregnant women must get pre natal care starting from the 1st trimester, child birth
is attended by skilled/trained professional, get post natal care thereafter

b) Parents/guardians must attend family planning sessions/mother's class, Parent

Effectiveness Service and others

c) Children 0-5 years of age get regular preventive health check-ups and vaccines

d) Children 3-5 years old must attend day care program/pre-school

e) Children 6-14 years of age are enrolled in schools and attend at least 85% of the
time10

Under A.O. No. 16, s. 2008, the DSWD also institutionalized a coordinated inter-agency network
among the Department of Education (DepEd), Department of Health (DOH), Department of Interior
and Local Government (DILG), the National Anti-Poverty Commission (NAPC) and the local
government units (LGUs), identifying specific roles and functions in order to ensure effective and
efficient implementation of the CCTP. As the DSWD takes on the role of lead implementing agency
that must "oversee and coordinate the implementation, monitoring and evaluation of the program,"
the concerned LGU as partner agency is particularly tasked to –

a. Ensure availability of the supply side on health and education in the target areas.

b. Provide necessary technical assistance for Program implementation

c. Coordinate the implementation/operationalization of sectoral activities at the

City/Municipal level to better execute Program objectives and functions

d. Coordinate with various concerned government agencies at the local level,

sectoral representatives and NGO to ensure effective Program implementation
 e. Prepare reports on issues and concerns regarding Program implementation and
submit to the Regional Advisory Committee, and

f. Hold monthly committee meetings11

A Memorandum of Agreement (MOA)12 executed by the DSWD with each participating LGU outlines
in detail the obligation of both parties during the intended five-year implementation of the CCTP.

Congress, for its part, sought to ensure the success of the CCTP by providing it with funding under
the GAA of 2008 in the amount of Two Hundred Ninety-Eight Million Five Hundred Fifty Thousand
Pesos (P298,550,000.00). This budget allocation increased tremendously to P5 Billion Pesos in
2009, with the amount doubling to P10 Billion Pesos in 2010. But the biggest allotment given to the
CCTP was in the GAA of 2011 at Twenty One Billion One Hundred Ninety-Four Million One Hundred
Seventeen Thousand Pesos (P21,194,117,000.00).13 1âwphi1

Petitioner Aquilino Pimentel, Jr., a former Senator, joined by Sergio Tadeo, incumbent President of
the Association of Barangay Captains of Cabanatuan City, Nueva Ecija, and Nelson Alcantara,
incumbent Barangay Captain of Barangay Sta. Monica, Quezon City, challenges before the Court
the disbursement of public funds and the implementation of the CCTP which are alleged to have
encroached into the local autonomy of the LGUs.

The Issue

THE P21 BILLION CCTP BUDGET ALLOCATION UNDER THE DSWD IN THE GAA FY 2011
VIOLATES ART. II, SEC. 25 & ART. X, SEC. 3 OF THE 1987 CONSTITUTION IN RELATION TO
SEC. 17 OF THE LOCAL GOVERNMENT CODE OF 1991 BY PROVIDING FOR THE
RECENTRALIZATION OF THE NATIONAL GOVERNMENT IN THE DELIVERY OF BASIC
SERVICES ALREADY DEVOLVED TO THE LGUS.

Petitioners admit that the wisdom of adopting the CCTP as a poverty reduction strategy for the
Philippines is with the legislature. They take exception, however, to the manner by which it is being
implemented, that is, primarily through a national agency like DSWD instead of the LGUs to which
the responsibility and functions of delivering social welfare, agriculture and health care services have
been devolved pursuant to Section 17 of Republic Act No. 7160, also known as the Local
Government Code of 1991, in relation to Section 25, Article II & Section 3, Article X of the 1987
Constitution.

Petitioners assert that giving the DSWD full control over the identification of beneficiaries and the
manner by which services are to be delivered or conditionalities are to be complied with, instead of
allocating the P21 Billion CCTP Budget directly to the LGUs that would have enhanced its delivery of
basic services, results in the "recentralization" of basic government functions, which is contrary to
the precepts of local autonomy and the avowed policy of decentralization.

Our Ruling

The Constitution declares it a policy of the State to ensure the autonomy of local governments14 and
even devotes a full article on the subject of local governance15 which includes the following pertinent
provisions:

Section 3. The Congress shall enact a local government code which shall provide for a more
responsive and accountable local government structure instituted through a system of
decentralization with effective mechanisms of recall, initiative, and referendum, allocate among the
different local government units their powers, responsibilities, and resources, and provide for the
qualifications, election, appointment and removal, term, salaries, powers and functions and duties of
local officials, and all other matters relating to the organization and operation of the local units.

xxx

Section 14. The President shall provide for regional development councils or other similar bodies
composed of local government officials, regional heads of departments and other government
offices, and representatives from non-governmental organizations within the regions for purposes of
administrative decentralization to strengthen the autonomy of the units therein and to accelerate the
economic and social growth and development of the units in the region. (Underscoring supplied)

In order to fully secure to the LGUs the genuine and meaningful autonomy that would develop them
into self-reliant communities and effective partners in the attainment of national goals,16 Section 17 of
the Local Government Code vested upon the LGUs the duties and functions pertaining to the
delivery of basic services and facilities, as follows:
SECTION 17. Basic Services and Facilities. –

(a) Local government units shall endeavor to be self-reliant and shall continue
exercising the powers and discharging the duties and functions currently vested upon
them. They shall also discharge the functions and responsibilities of national
agencies and offices devolved to them pursuant to this Code. Local government units
shall likewise exercise such other powers and discharge such other functions and
responsibilities as are necessary, appropriate, or incidental to efficient and effective
provision of the basic services and facilities enumerated herein.

(b) Such basic services and facilities include, but are not limited to, x x x.

While the aforementioned provision charges the LGUs to take on the functions and
responsibilities that have already been devolved upon them from the national
agencies on the aspect of providing for basic services and facilities in their respective
jurisdictions, paragraph (c) of the same provision provides a categorical exception of
cases involving nationally-funded projects, facilities, programs and services, thus:

(c) Notwithstanding the provisions of subsection (b) hereof, public works and
infrastructure projects and other facilities, programs and services funded by the
National Government under the annual General Appropriations Act, other special
laws, pertinent executive orders, and those wholly or partially funded from foreign
sources, are not covered under this Section, except in those cases where the local
government unit concerned is duly designated as the implementing agency for such
projects, facilities, programs and services. (Underscoring supplied)

The essence of this express reservation of power by the national government is that, unless an LGU
is particularly designated as the implementing agency, it has no power over a program for which
funding has been provided by the national government under the annual general appropriations act,
even if the program involves the delivery of basic services within the jurisdiction of the LGU.

The Court held in Ganzon v. Court of Appeals17 that while it is through a system of decentralization
that the State shall promote a more responsive and accountable local government structure, the
concept of local autonomy does not imply the conversion of local government units into "mini-
states."18 We explained that, with local autonomy, the Constitution did nothing more than "to break up
the monopoly of the national government over the affairs of the local government" and, thus, did not
intend to sever "the relation of partnership and interdependence between the central administration
and local government units."19 In Pimentel v. Aguirre,20 the Court defined the extent of the local
government's autonomy in terms of its partnership with the national government in the pursuit of
common national goals, referring to such key concepts as integration and coordination. Thus:

Under the Philippine concept of local autonomy, the national government has not completely
relinquished all its powers over local governments, including autonomous regions. Only
administrative powers over local affairs are delegated to political subdivisions. The purpose of the
delegation is to make governance more directly responsive and effective at the local levels. In turn,
economic, political and social development at the smaller political units are expected to propel social
and economic growth and development. But to enable the country to develop as a whole, the
programs and policies effected locally must be integrated and coordinated towards a common
national goal. Thus, policy-setting for the entire country still lies in the President and Congress.

Certainly, to yield unreserved power of governance to the local government unit as to preclude any
and all involvement by the national government in programs implemented in the local level would be
to shift the tide of monopolistic power to the other extreme, which would amount to a decentralization
of power explicated in Limbona v. Mangelin21 as beyond our constitutional concept of autonomy, thus:

Now, autonomy is either decentralization of administration or decentralization of power. There is

1âw phi 1

decentralization of administration when the central government delegates administrative powers to

political subdivisions in order to broaden the base of government power and in the process to make
local governments ‘more responsive and accountable’ and ‘ensure their fullest development as self-
reliant communities and make them more effective partners in the pursuit of national development
and social progress.’ At the same time, it relieves the central government of the burden of managing
local affairs and enables it to concentrate on national concerns. The President exercises ‘general
supervision’ over them, but only to ‘ensure that local affairs are administered according to law.’ He
has no control over their acts in the sense that he can substitute their judgments with his own.

Decentralization of power, on the other hand, involves an abdication of political power in the [sic]
favor of local governments [sic] units declared to be autonomous. In that case, the autonomous
government is free to chart its own destiny and shape its future with minimum intervention from
central authorities. According to a constitutional author, decentralization of power amounts to ‘self-
immolation,’ since in that event, the autonomous government becomes accountable not to the
central authorities but to its constituency.22

Indeed, a complete relinquishment of central government powers on the matter of providing basic
facilities and services cannot be implied as the Local Government Code itself weighs against it. The
national government is, thus, not precluded from taking a direct hand in the formulation and
implementation of national development programs especially where it is implemented locally in
coordination with the LGUs concerned.

Every law has in its favor the presumption of constitutionality, and to justify its nullification, there
must be a clear and unequivocal breach of the Constitution, not a doubtful and argumentative one.23
Petitioners have failed to discharge the burden of proving the invalidity of the provisions under the
GAA of 2011. The allocation of a P21 billion budget for an intervention program formulated by the
national government itself but implemented in partnership with the local government units to achieve
the common national goal development and social progress can by no means be an encroachment
upon the autonomy of local governments.

WHEREFORE, premises considered, the petition is hereby DISMISSED.

SO ORDERED.

ESTELA M. PERLAS-BERNABE
Associate Justice

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. Nos. 182978-79 April 7, 2009

BECMEN SERVICE EXPORTER AND PROMOTION, INC., Petitioner,

vs.
SPOUSES SIMPLICIO and MILA CUARESMA (for and in behalf of their daughter, Jasmin G.
Cuaresma), WHITE FALCON SERVICES, INC. and JAIME ORTIZ (President,White Falcon
Services, Inc.), Respondents.

x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. Nos. 184298-99 April 7, 2009

SPOUSES SIMPLICIO and MILA CUARESMA (for and in behalf of their daughter, Jasmin G.
Cuaresma), Petitioners,
vs.
WHITE FALCON SERVICES, INC. and BECMEN SERVICE EXPORTER AND PROMOTION, INC.,
Respondents.

DECISION

YNARES-SANTIAGO, J.:

These consolidated petitions assail the Amended Decision1 of the Court of Appeals dated May 14,
2008 in CA-G.R. SP No. 80619 and CA-G.R. SP No. 81030 finding White Falcon Services, Inc. and
Becmen Service Exporter and Promotion, Inc. solidarily liable to indemnify spouses Simplicio and
Mila Cuaresma the amount of US$4,686.73 in actual damages with interest.

On January 6, 1997, Jasmin Cuaresma (Jasmin) was deployed by Becmen Service Exporter and
Promotion, Inc.2 (Becmen) to serve as assistant nurse in Al-Birk Hospital in the Kingdom of Saudi
Arabia (KSA), for a contract duration of three years, with a corresponding salary of US$247.00 per
month.

Over a year later, she died allegedly of poisoning.

Jessie Fajardo, a co-worker of Jasmin, narrated that on June 21, 1998, Jasmin was found dead by a
female cleaner lying on the floor inside her dormitory room with her mouth foaming and smelling of
poison.3

Based on the police report and the medical report of the examining physician of the Al-Birk Hospital,
who conducted an autopsy of Jasmin’s body, the likely cause of her death was poisoning. Thus:

According to letter No. 199, dated 27.2.1419H, issued by Al-Birk Police Station, for examining the
corpse of Jasmin Cuaresma, 12.20 P.M. 27.2.1419H, Sunday, at Al-Birk Hospital.

1. The Police Report on the Death

2. The Medical Diagnosis

Sex: Female Age: 25 years Relg: Christian

The said person was brought to the Emergency Room of the hospital; time 12.20
P.M. and she was unconscious, blue, no pulse, no respiration and the first aid esd
undertaken but without success.

3. Diagnosis and Opinion: Halt in blood circulation respiratory system and brain
damage due to an apparent poisoning which is under investigation.4

Name : Jasmin Cuaresma

Sex : Female
Marital Status : Single Nationality: Philipino (sic)
Religion : Christian

Profession : Nurse
Address : Al-Birk Genrl. Hospital Birth Place: The Philippines

On 27.2.1419H, Dr. Tariq Abdulminnem and Dr. Ashoki Komar, both have examined the dead body
of Jasmin Cuaresma, at 12.20 P.M., Sunday, 22.2.14189H, and the result was:

1. Report of the Police on the death

2. Medical Examination: Blue skin and paleness on the Extrimes (sic), total halt to
blood circulation and respiratory system and brain damage. There were no external
injuries. Likely poisoning by taking poisonous substance, yet not determined.
There was a bad smell in the mouth and unknown to us.5 (Emphasis supplied)

Jasmin’s body was repatriated to Manila on September 3, 1998. The following day, the City Health
Officer of Cabanatuan City conducted an autopsy and the resulting medical report indicated that
Jasmin died under violent circumstances, and not poisoning as originally found by the KSA
examining physician. The City Health Officer found that Jasmin had abrasions at her inner lip and
gums; lacerated wounds and abrasions on her left and right ears; lacerated wounds and hematoma
(contusions) on her elbows; abrasions and hematoma on her thigh and legs; intra-muscular
hemorrhage at the anterior chest; rib fracture; puncture wounds; and abrasions on the labia minora
of the vaginal area.6

On March 11, 1999, Jasmin’s remains were exhumed and examined by the National Bureau of
Investigation (NBI). The toxicology report of the NBI, however, tested negative for non-volatile,
metallic poison and insecticides.7

Simplicio and Mila Cuaresma (the Cuaresmas), Jasmin’s parents and her surviving heirs, received
from the Overseas Workers Welfare Administration (OWWA) the following amounts: P50,000.00 for
death benefits; P50,000.00 for loss of life; P20,000.00 for funeral expenses; and P10,000.00 for
medical reimbursement.

On November 22, 1999, the Cuaresmas filed a complaint against Becmen and its principal in the
KSA, Rajab & Silsilah Company (Rajab), claiming death and insurance benefits, as well as moral
and exemplary damages for Jasmin’s death.8

In their complaint, the Cuaresmas claim that Jasmin’s death was work-related, having occurred at
the employer’s premises;9 that under Jasmin’s contract with Becmen, she is entitled to "iqama
insurance" coverage; that Jasmin is entitled to compensatory damages in the amount of
US$103,740.00, which is the sum total of her monthly salary of US$247.00 per month under her
employment contract, multiplied by 35 years (or the remaining years of her productive life had death
not supervened at age 25, assuming that she lived and would have retired at age 60).

The Cuaresmas assert that as a result of Jasmin’s death under mysterious circumstances, they
suffered sleepless nights and mental anguish. The situation, they claim, was aggravated by findings
in the autopsy and exhumation reports which evidently show that a grave injustice has been
committed against them and their daughter, for which those responsible should likewise be made to
pay moral and exemplary damages and attorney’s fees.

In their position paper, Becmen and Rajab insist that Jasmin committed suicide, citing a prior
unsuccessful suicide attempt sometime in March or April 1998 and relying on the medical report of
the examining physician of the Al-Birk Hospital. They likewise deny liability because the Cuaresmas
already recovered death and other benefits totaling P130,000.00 from the OWWA. They insist that
the Cuaresmas are not entitled to "iqama insurance" because this refers to the "issuance" – not
insurance – of iqama, or residency/work permit required in the KSA. On the issue of moral and
exemplary damages, they claim that the Cuaresmas are not entitled to the same because they have
not acted with fraud, nor have they been in bad faith in handling Jasmin’s case.

While the case was pending, Becmen filed a manifestation and motion for substitution alleging that
Rajab terminated their agency relationship and had appointed White Falcon Services, Inc. (White
Falcon) as its new recruitment agent in the Philippines. Thus, White Falcon was impleaded as
respondent as well, and it adopted and reiterated Becmen’s arguments in the position paper it
subsequently filed.

On February 28, 2001, the Labor Arbiter rendered a Decision10 dismissing the complaint for lack of
merit. Giving weight to the medical report of the Al-Birk Hospital finding that Jasmin died of
poisoning, the Labor Arbiter concluded that Jasmin committed suicide. In any case, Jasmin’s death
was not service-connected, nor was it shown that it occurred while she was on duty; besides, her
parents have received all corresponding benefits they were entitled to under the law. In regard to
damages, the Labor Arbiter found no legal basis to warrant a grant thereof.

On appeal, the National Labor Relations Commission (Commission) reversed the decision of the
Labor Arbiter. Relying on the findings of the City Health Officer of Cabanatuan City and the NBI as
contained in their autopsy and toxicology report, respectively, the Commission, via its November 22,
2002 Resolution11 declared that, based on substantial evidence adduced, Jasmin was the victim of
compensable work-connected criminal aggression. It disregarded the Al-Birk Hospital attending
physician’s report as well as the KSA police report, finding the same to be inconclusive. It declared
that Jasmin’s death was the result of an "accident" occurring within the employer’s premises that is
attributable to her employment, or to the conditions under which she lived, and thus arose out of and
in the course of her employment as nurse. Thus, the Cuaresmas are entitled to actual damages in
the form of Jasmin’s lost earnings, including future earnings, in the total amount of US$113,000.00.
The Commission, however, dismissed all other claims in the complaint.

Becmen, Rajab and White Falcon moved for reconsideration, whereupon the Commission issued its
October 9, 2003 Resolution12 reducing the award of US$113,000.00 as actual damages to
US$80,000.00.13 The NLRC likewise declared Becmen and White Falcon as solidarily liable for
payment of the award.

Becmen and White Falcon brought separate petitions for certiorari to the Court of Appeals.14 On
June 28, 2006, the appellate court rendered its Decision,15 the dispositive portion of which reads, as
follows:

WHEREFORE, the subject petitions are DENIED but in the execution of the decision, it should first
be enforced against White Falcon Services and then against Becmen Services when it is already
impossible, impractical and futile to go against it (White Falcon).

SO ORDERED.16

The appellate court affirmed the NLRC’s findings that Jasmin’s death was compensable, the same
having occurred at the dormitory, which was contractually provided by the employer. Thus her death
should be considered to have occurred within the employer’s premises, arising out of and in the
course of her employment.

Becmen and White Falcon moved for reconsideration. On May 14, 2008, the appellate court
rendered the assailed Amended Decision, the dispositive portion of which reads, as follows:
WHEREFORE, the motions for reconsideration are GRANTED. Accordingly, the award of
US$80,000.00 in actual damages is hereby reduced to US$4,686.73 plus interest at the legal rate
computed from the time it became due until fully paid. Petitioners are hereby adjudged jointly and
solidarily liable with the employer for the monetary awards with Becmen Service Exporter and
Promotions, Inc. having a right of reimbursement from White Falcon Services, Inc.

SO ORDERED.17

In the Amended Decision, the Court of Appeals found that although Jasmin’s death was
compensable, however, there is no evidentiary basis to support an award of actual damages in the
amount of US$80,000.00. Nor may lost earnings be collected, because the same may be charged
only against the perpetrator of the crime or quasi-delict. Instead, the appellate court held that
Jasmin’s beneficiaries should be entitled only to the sum equivalent of the remainder of her 36-
month employment contract, or her monthly salary of US$247.00 multiplied by nineteen (19) months,
with legal interest.

Becmen filed the instant petition for review on certiorari (G.R. Nos. 182978-79). The Cuaresmas, on
the other hand, moved for a reconsideration of the amended decision, but it was denied. They are
now before us via G.R. Nos. 184298-99.

On October 6, 2008, the Court resolved to consolidate G.R. Nos. 184298-99 with G.R. Nos. 182978-
79.

In G.R. Nos. 182978-79, Becmen raises the following issues for our resolution:

(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT GAVE MORE CREDENCE AND
WEIGHT TO THE AUTOPSY REPORT CONDUCTED BY THE CABANATUAN CITY HEALTH
OFFICE THAN THE MEDICAL AND POLICE REPORTS ISSUED BY THE MINISTRY OF HEALTH
OF KINGDOM OF SAUDI ARABIA AND AL-BIRK HOSPITAL.

(THE COURT OF APPEALS) GRAVELY ERRED WHEN ON THE BASIS OF THE POSITION
PAPERS AND ANNEXES THERETO INCLUDING THE AUTOPSY REPORT, IT CONCLUDED
THAT THE DEATH OF JASMIN CUARESMA WAS CAUSED BY CRIMINAL AGGRESSION.

(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT HELD THAT THE DEATH OF JASMIN
CUARESMA WAS COMPENSABLE PURSUANT TO THE RULING OF THE SUPREME COURT IN
TALLER VS. YNCHAUSTI, G.R. NO. 35741, DECEMBER 20, 1932, WHICH IT FOUND TO BE
STILL GOOD LAW.

(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT HELD BECMEN LIABLE FOR THE
DEATH OF JASMIN CUARESMA NOTWITHSTANDING ITS ADMISSIONS THAT "IQAMA
INSURANCE" WAS A TYPOGRAPHICAL ERROR SINCE "IQAMA" IS NOT AN INSURANCE.

(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT CONCLUDED THAT THE DEATH OF
JASMIN WAS WORK RELATED.

(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT HELD BECMEN LIABLE TO JASMIN’S
BENEFICIARIES FOR THE REMAINDER OF HER 36-MONTH CONTRACT COMPUTED IN THIS
MANNER: MONTHLY SALARY OF US$246.67 MULTIPLIED BY 19 MONTHS, THE REMAINDER
OF THE TERM OF JASMIN’S EMPLOYMENT CONTRACT, IS EQUAL TO US$4,686.73.

(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT HELD BECMEN LIABLE TO PAY
INTEREST AT THE LEGAL RATE FROM THE TIME IT WAS DUE UNTIL FULLY PAID.

(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT HELD BECMEN AND WHITE FALCON
JOINTLY AND SEVERALLY LIABLE WITH THE EMPLOYER NOTWITHSTANDING THE
ASSUMPTION OF LIABILITY EXECUTED BY WHITE FALCON IN FAVOR OF BECMEN.

On the other hand, in G.R. Nos. 184298-99, the Cuaresmas raise the following issues:

(THE COURT OF APPEALS) GRAVELY ERRED IN APPLYING THE PROVISIONS OF THE CIVIL
CODE CONSIDERED GENERAL LAW DESPITE THE CASE BEING COVERED BY E.O. 247, R.A.
8042 AND LABOR CODE CONSIDERED AS SPECIAL LAWS.

(THE COURT OF APPEALS) GRAVELY ERRED IN NOT APPLYING THE DECEASED’S FUTURE
EARNINGS WHICH IS (AN) INHERENT FACTOR IN THE COMPUTATION OF DEATH BENEFITS
OF OVERSEAS FILIPINO CONTRACT WORKERS.
(THE COURT OF APPEALS) GRAVELY ERRED IN REDUCING THE DEATH BENEFITS
AWARDED BY NLRC CONSIDERED FINDINGS OF FACT THAT CANNOT BE DISTURBED
THROUGH CERTIORARI UNDER RULE 65 OF THE RULES OF COURT.

The issue for resolution is whether the Cuaresmas are entitled to monetary claims, by way of
benefits and damages, for the death of their daughter Jasmin.

The terms and conditions of Jasmin’s 1996 Employment Agreement which she and her employer
Rajab freely entered into constitute the law between them. As a rule, stipulations in an employment
contract not contrary to statutes, public policy, public order or morals have the force of law between
the contracting parties.18 An examination of said employment agreement shows that it provides for
no other monetary or other benefits/privileges than the following:

1. 1,300 rials (or US$247.00) monthly salary;

2. Free air tickets to KSA at the start of her contract and to the Philippines at the end
thereof, as well as for her vacation at the end of each twenty four-month service;

3. Transportation to and from work;

4. Free living accommodations;

5. Free medical treatment, except for optical and dental operations, plastic surgery
charges and lenses, and medical treatment obtained outside of KSA;

6. Entry visa fees will be shared equally between her and her employer, but the
exit/re-entry visa fees, fees for Iqama issuance, renewal, replacement, passport
renewal, sponsorship transfer and other liabilities shall be borne by her;

7. Thirty days paid vacation leave with round trip tickets to Manila after twenty four-
months of continuous service;

8. Eight days public holidays per year;

9. The indemnity benefit due her at the end of her service will be calculated as per
labor laws of KSA.

Thus, the agreement does not include provisions for insurance, or for accident, death or other
benefits that the Cuaresmas seek to recover, and which the labor tribunals and appellate court
granted variably in the guise of compensatory damages.

However, the absence of provisions for social security and other benefits does not make Jasmin’s
employment contract infirm. Under KSA law, her foreign employer is not obliged to provide her these
benefits; and neither is Jasmin entitled to minimum wage – unless of course the KSA labor laws
have been amended to the opposite effect, or that a bilateral wage agreement has been entered
into.

Our next inquiry is, should Jasmin’s death be considered as work-connected and thus
compensable? The evidence indicates that it is not. At the time of her death, she was not on duty, or
else evidence to the contrary would have been adduced. Neither was she within hospital premises at
the time. Instead, she was at her dormitory room on personal time when she died. Neither has it
been shown, nor does the evidence suggest, that at the time she died, Jasmin was performing an
act reasonably necessary or incidental to her employment as nurse, because she was at her
dormitory room. It is reasonable to suppose that all her work is performed at the Al-birk Hospital, and
not at her dormitory room.

We cannot expect that the foreign employer should ensure her safety even while she is not on duty.
It is not fair to require employers to answer even for their employees’ personal time away from work,
which the latter are free to spend of their own choosing. Whether they choose to spend their free
time in the pursuit of safe or perilous undertakings, in the company of friends or strangers, lovers or
enemies, this is not one area which their employers should be made accountable for. While we have
emphasized the need to observe official work time strictly,19 what an employee does on free time is
beyond the employer’s sphere of inquiry.

While the "employer’s premises" may be defined very broadly not only to include premises owned by
it, but also premises it leases, hires, supplies or uses,20 we are not prepared to rule that the
dormitory wherein Jasmin stayed should constitute employer’s premises as would allow a finding
that death or injury therein is considered to have been incurred or sustained in the course of or arose
out of her employment. There are certainly exceptions,21 but they do not appear to apply here.
Moreover, a complete determination would have to depend on the unique circumstances obtaining
and the overall factual environment of the case, which are here lacking.

But, did Jasmin commit suicide? Rajab, Becmen and White Falcon vehemently insist that she did;
thus, her heirs may not claim benefits or damages based on criminal aggression. On the other hand,
the Cuaresmas do not believe so.

The Court cannot subscribe to the idea that Jasmin committed suicide while halfway into her
employment contract. It is beyond human comprehension that a 25-year old Filipina, in the prime of
her life and working abroad with a chance at making a decent living with a high-paying job which she
could not find in her own country, would simply commit suicide for no compelling reason.

The Saudi police and autopsy reports – which state that Jasmin is a likely/or apparent victim of
poisoning – are patently inconclusive. They are thus unreliable as evidence.

On the contrary, the autopsy report of the Cabanatuan City Health Officer and the exhumation report
of the NBI categorically and unqualifiedly show that Jasmin sustained external and internal injuries,
specifically abrasions at her inner lip and gums; lacerated wounds and abrasions on her left
and right ears; lacerated wounds and hematoma (contusions) on her elbows; abrasions and
hematoma on her thigh and legs; intra-muscular hemorrhage at the anterior chest; a fractured
rib; puncture wounds; and abrasions on the labia minora of the vaginal area. The NBI
toxicology report came up negative on the presence of poison.

All these show that Jasmin was manhandled – and possibly raped – prior to her death.

Even if we were to agree with the Saudi police and autopsy reports that indicate Jasmin was
poisoned to death, we do not believe that it was self-induced. If ever Jasmin was poisoned, the
assailants who beat her up – and possibly raped her – are certainly responsible therefor.

We are not exactly ignorant of what goes on with our OFWs. Nor is the rest of the world blind to the
realities of life being suffered by migrant workers in the hands of some foreign employers. It is
inconceivable that our Filipina women would seek employment abroad and face uncertainty in a
foreign land, only to commit suicide for unexplained reasons. Deciding to leave their family, loved
ones, and the comfort and safety of home, to work in a strange land requires unrivaled strength and
courage. Indeed, many of our women OFWs who are unfortunate to end up with undesirable
employers have been there more times than they care to, beaten up and broken in body – yet they
have remained strong in mind, refusing to give up the will to live. Raped, burned with cigarettes,
kicked in the chest with sharp high-heeled shoes, starved for days or even weeks, stabbed, slaved
with incessant work, locked in their rooms, forced to serve their masters naked, grossly debased,
dehumanized and insulted, their spirits fought on and they lived for the day that they would once
again be reunited with their families and loved ones. Their bodies surrendered, but their will to
survive remained strong.

It is surprising, therefore, that Rajab, Becmen and White Falcon should insist on suicide, without
even lifting a finger to help solve the mystery of Jasmin’s death. Being in the business of sending
OFWs to work abroad, Becmen and White Falcon should know what happens to some of our OFWs.
It is impossible for them to be completely unaware that cruelties and inhumanities are inflicted on
OFWs who are unfortunate to be employed by vicious employers, or upon those who work in
communities or environments where they are liable to become victims of crime. By now they should
know that our women OFWs do not readily succumb to the temptation of killing themselves even
when assaulted, abused, starved, debased and, worst, raped.

Indeed, what we have seen is Rajab and Becmen’s revolting scheme of conveniently avoiding
responsibility by clinging to the absurd theory that Jasmin took her own life. Abandoning their legal,
moral and social obligation (as employer and recruiter) to assist Jasmin’s family in obtaining justice
for her death, they immediately gave up on Jasmin’s case, which has remained under investigation
as the autopsy and police reports themselves indicate. Instead of taking the cudgels for Jasmin, who
had no relative or representative in the KSA who would naturally demand and seek an investigation
of her case, Rajab and Becmen chose to take the most convenient route to avoiding and denying
liability, by casting Jasmin’s fate to oblivion. It appears from the record that to this date, no follow up
of Jasmin’s case was ever made at all by them, and they seem to have expediently treated Jasmin’s
death as a closed case. Despite being given the lead via the autopsy and toxicology reports of the
Philippine authorities, they failed and refused to act and pursue justice for Jasmin’s sake and to
restore honor to her name.

Indeed, their nonchalant and uncaring attitude may be seen from how Jasmin’s remains were
repatriated. No official representative from Rajab or Becmen was kind enough to make personal
representations with Jasmin’s parents, if only to extend their condolences or sympathies; instead, a
mere colleague, nurse Jessie Fajardo, was designated to accompany Jasmin’s body home.
Of all life’s tragedies, the death of one’s own child must be the most painful for a parent. Not
knowing why or how Jasmin’s life was snuffed out makes the pain doubly unbearable for Jasmin’s
parents, and further aggravated by Rajab, Becmen, and White Falcon’s baseless insistence and
accusation that it was a self-inflicted death, a mortal sin by any religious standard.

Thus we categorically hold, based on the evidence; the actual experiences of our OFWs; and the
resilient and courageous spirit of the Filipina that transcends the vilest desecration of her physical
self, that Jasmin did not commit suicide but a victim of murderous aggression.

Rajab, Becmen, and White Falcon’s indifference to Jasmin’s case has caused unfathomable pain
and suffering upon her parents. They have turned away from their moral obligation, as employer and
recruiter and as entities laden with social and civic obligations in society, to pursue justice for and in
behalf of Jasmin, her parents and those she left behind. Possessed with the resources to determine
the truth and to pursue justice, they chose to stand idly for the sake of convenience and in order that
they may avoid pecuniary liability, turning a blind eye to the Philippine authorities’ autopsy and
toxicology reports instead of taking action upon them as leads in pursuing justice for Jasmin’s death.
They have placed their own financial and corporate interests above their moral and social
obligations, and chose to secure and insulate themselves from the perceived responsibility of having
to answer for and indemnify Jasmin’s heirs for her death.

Under Republic Act No. 8042 (R.A. 8042), or the Migrant Workers and Overseas Filipinos Act of
1995,22 the State shall, at all times, uphold the dignity of its citizens whether in country or overseas,
in general, and Filipino migrant workers, in particular.23 The State shall provide adequate and timely
social, economic and legal services to Filipino migrant workers.24 The rights and interest of
distressed25 overseas Filipinos, in general, and Filipino migrant workers, in particular, documented or
undocumented, are adequately protected and safeguarded.26

Becmen and White Falcon, as licensed local recruitment agencies, miserably failed to abide by the
provisions of R.A. 8042. Recruitment agencies are expected to extend assistance to their deployed
OFWs, especially those in distress. Instead, they abandoned Jasmin’s case and allowed it to remain
unsolved to further their interests and avoid anticipated liability which parents or relatives of Jasmin
would certainly exact from them. They willfully refused to protect and tend to the welfare of the
deceased Jasmin, treating her case as just one of those unsolved crimes that is not worth wasting
their time and resources on. The evidence does not even show that Becmen and Rajab lifted a
finger to provide legal representation and seek an investigation of Jasmin’s case. Worst of all, they
unnecessarily trampled upon the person and dignity of Jasmin by standing pat on the argument that
Jasmin committed suicide, which is a grave accusation given its un-Christian nature.

We cannot reasonably expect that Jasmin’s parents should be the ones to actively pursue a just
resolution of her case in the KSA, unless they are provided with the finances to undertake this
herculean task. Sadly, Becmen and Rajab did not lend any assistance at all in this respect. The most
Jasmin’s parents can do is to coordinate with Philippine authorities as mandated under R.A. 8042,
obtain free legal assistance and secure the aid of the Department of Foreign Affairs, the Department
of Labor and Employment, the POEA and the OWWA in trying to solve the case or obtain relief, in
accordance with Section 2327 of R.A. 8042. To our mind, the Cuaresmas did all that was within their
power, short of actually flying to the KSA. Indeed, the Cuaresmas went even further. To the best of
their abilities and capacities, they ventured to investigate Jasmin’s case on their own: they caused
another autopsy on Jasmin’s remains as soon as it arrived to inquire into the true cause of her
death. Beyond that, they subjected themselves to the painful and distressful experience of exhuming
Jasmin’s remains in order to obtain another autopsy for the sole purpose of determining whether or
not their daughter was poisoned. Their quest for the truth and justice is equally to be expected of all
loving parents. All this time, Rajab and Becmen – instead of extending their full cooperation to the
Cuaresma family – merely sat on their laurels in seeming unconcern.

In Interorient Maritime Enterprises, Inc. v. NLRC,28 a seaman who was being repatriated after his
employment contract expired, failed to make his Bangkok to Manila connecting flight as he began to
wander the streets of Bangkok aimlessly. He was shot to death by Thai police four days after, on
account of running amuck with a knife in hand and threatening to harm anybody within sight. The
employer, sued for death and other benefits as well as damages, interposed as defense the
provision in the seafarer agreement which provides that "no compensation shall be payable in
respect of any injury, incapacity, disability or death resulting from a willful act on his own life by the
seaman." The Court rejected the defense on the view, among others, that the recruitment agency
should have observed some precautionary measures and should not have allowed the seaman, who
was later on found to be mentally ill, to travel home alone, and its failure to do so rendered it liable
for the seaman’s death. We ruled therein that –

The foreign employer may not have been obligated by its contract to provide a companion for a
returning employee, but it cannot deny that it was expressly tasked by its agreement to assure the
safe return of said worker. The uncaring attitude displayed by petitioners who, knowing fully
well that its employee had been suffering from some mental disorder, nevertheless still
allowed him to travel home alone, is appalling to say the least. Such attitude harks back to
another time when the landed gentry practically owned the serfs, and disposed of them when
the latter had grown old, sick or otherwise lost their usefulness.29 (Emphasis supplied)

Thus, more than just recruiting and deploying OFWs to their foreign principals, recruitment agencies
have equally significant responsibilities. In a foreign land where OFWs are likely to encounter
uneven if not discriminatory treatment from the foreign government, and certainly a delayed access
to language interpretation, legal aid, and the Philippine consulate, the recruitment agencies should
be the first to come to the rescue of our distressed OFWs since they know the employers and the
addresses where they are deployed or stationed. Upon them lies the primary obligation to protect the
rights and ensure the welfare of our OFWs, whether distressed or not. Who else is in a better
position, if not these recruitment agencies, to render immediate aid to their deployed OFWs abroad?

Article 19 of the Civil Code provides that every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and observe honesty and good
faith. Article 21 of the Code states that any person who wilfully causes loss or injury to another in a
manner that is contrary to morals, good customs or public policy shall compensate the latter for the
damage. And, lastly, Article 24 requires that in all contractual, property or other relations, when one
of the parties is at a disadvantage on account of his moral dependence, ignorance, indigence,
mental weakness, tender age or other handicap, the courts must be vigilant for his protection.

Clearly, Rajab, Becmen and White Falcon’s acts and omissions are against public policy because
they undermine and subvert the interest and general welfare of our OFWs abroad, who are entitled
to full protection under the law. They set an awful example of how foreign employers and recruitment
agencies should treat and act with respect to their distressed employees and workers abroad. Their
shabby and callous treatment of Jasmin’s case; their uncaring attitude; their unjustified failure and
refusal to assist in the determination of the true circumstances surrounding her mysterious death,
and instead finding satisfaction in the unreasonable insistence that she committed suicide just so
they can conveniently avoid pecuniary liability; placing their own corporate interests above of the
welfare of their employee’s – all these are contrary to morals, good customs and public policy, and
constitute taking advantage of the poor employee and her family’s ignorance, helplessness,
indigence and lack of power and resources to seek the truth and obtain justice for the death of a
loved one.

Giving in handily to the idea that Jasmin committed suicide, and adamantly insisting on it just to
protect Rajab and Becmen’s material interest – despite evidence to the contrary – is against the
moral law and runs contrary to the good custom of not denouncing one’s fellowmen for alleged grave
wrongdoings that undermine their good name and honor.30

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. 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
determinations or conventions agreed upon in a foreign country.31

The relations between capital and labor are so impressed with public interest,32 and neither shall act
oppressively against the other, or impair the interest or convenience of the public.33 In case of doubt,
all labor legislation and all labor contracts shall be construed in favor of the safety and decent living
for the laborer.34

The grant of moral damages to the employee by reason of misconduct on the part of the employer is
sanctioned by Article 2219 (10)35 of the Civil Code, which allows recovery of such damages in
actions referred to in Article 21.36

Thus, in view of the foregoing, the Court holds that the Cuaresmas are entitled to moral damages,
which Becmen and White Falcon are jointly and solidarily liable to pay, together with exemplary
damages for wanton and oppressive behavior, and by way of example for the public good.

Private employment agencies are held jointly and severally liable with the foreign-based employer
for any violation of the recruitment agreement or contract of employment. This joint and solidary
liability imposed by law against recruitment agencies and foreign employers is meant to assure the
aggrieved worker of immediate and sufficient payment of what is due him.37 If 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 corporation or
partnership for the aforesaid claims and damages.38
White Falcon’s assumption of Becmen’s liability does not automatically result in Becmen’s freedom
or release from liability. This has been ruled in ABD Overseas Manpower Corporation v. NLRC.39
Instead, both Becmen and White Falcon should be held liable solidarily, without prejudice to each
having the right to be reimbursed under the provision of the Civil Code that whoever pays for another
may demand from the debtor what he has paid.40

WHEREFORE, the Amended Decision of the Court of Appeals dated May 14, 2008 in CA-G.R. SP
No. 80619 and CA-G.R. SP No. 81030 is SET ASIDE. Rajab & Silsilah Company, White Falcon
Services, Inc., Becmen Service Exporter and Promotion, Inc., and their corporate directors
and officers are found jointly and solidarily liable and ORDERED to indemnify the heirs of Jasmin
Cuaresma, spouses Simplicio and Mila Cuaresma, the following amounts:

1) TWO MILLION FIVE HUNDRED THOUSAND PESOS (P2,500,000.00) as moral

damages;

2) TWO MILLION FIVE HUNDRED THOUSAND PESOS (P2,500,000.00) as

exemplary damages;

3) Attorney’s fees equivalent to ten percent (10%) of the total monetary award; and,

4) Costs of suit.

SO ORDERED.

CONSUELO YNARES-SANTIAGO
Associate Justice

G.R. No. 146964 August 10, 2006

ROSA C. RODOLFO, Petitioner,

vs.
PEOPLE OF THE PHILIPPINES, Respondent.

DECISION

CARPIO MORALES, J.:

Petitioner was charged before the Regional Trial Court (RTC) of Makati for illegal recruitment alleged
to have been committed as follows:

That in or about and during the period from August to September 1984, in Makati, Metro Manila,
Philippines, and within the jurisdiction of this Honorable Court, the said accused representing herself
to have the capacity to contract, enlist and transport Filipino workers for employment abroad, did
then and there willfully and unlawfully, for a fee, recruit and promise employment/job placement
abroad to VILLAMOR ALCANTARA, NARCISO CORPUZ, 1 NECITAS R. FERRE, GERARDO H.
TAPAWAN and JOVITO L. CAMA, without first securing the required license or authority from the
Ministry of Labor and Employment. 2

After trial on the merits, Branch 61 of the Makati RTC rendered its Judgment on the case, 3 the
decretal portion of which reads:

WHEREFORE, PREMISES ABOVE CONSIDERED, the Court finds the accused ROSA C.
RODOLFO as GUILTY of the offense of ILLEGAL RECRUITMENT and hereby sentences her [to] a
penalty of imprisonment of EIGHT YEARS and to pay the costs. 4 (Underscoring supplied)

In so imposing the penalty, the trial court took note of the fact that while the information reflected the
commission of illegal recruitment in large scale, only the complaint of the two of the five
complainants was proven.

On appeal, the Court of Appeals correctly synthesized the evidence presented by the parties as
follows:

[The evidence for the prosecution] shows that sometime in August and September 1984, accused-
appellant approached private complainants Necitas Ferre and Narciso Corpus individually and
invited them to apply for overseas employment in Dubai. The accused-appellant being their
neighbor, private complainants agreed and went to the former’s office. This office which bore the
business name "Bayside Manpower Export Specialist" was in a building situated at Bautista St.
Buendia, Makati, Metro Manila. In that office, private complainants gave certain amounts to appellant
for processing and other fees. Ferre gave P1,000.00 as processing fee (Exhibit A) and another
P4,000.00 (Exhibit B). Likewise, Corpus gave appellant P7,000.00 (Exhibit D). Appellant then told
private complainants that they were scheduled to leave for Dubai on September 8, 1984. However,
private complainants and all the other applicants were not able to depart on the said date as their
employer allegedly did not arrive. Thus, their departure was rescheduled to September 23, but the
result was the same. Suspecting that they were being hoodwinked, private complainants demanded
of appellant to return their money. Except for the refund of P1,000.00 to Ferre, appellant was not
able to return private complainants’ money. Tired of excuses, private complainants filed the present
case for illegal recruitment against the accused-appellant.

To prove that accused-appellant had no authority to recruit workers for overseas employment, the
prosecution presented Jose Valeriano, a Senior Overseas Employment Officer of the Philippine
Overseas Employment Agency (POEA), who testified that accused-appellant was neither licensed
nor authorized by the then Ministry of Labor and Employment to recruit workers for overseas
employment.

For her defense, appellant denied ever approaching private complainants to recruit them for
employment in Dubai. On the contrary, it was the private complainants who asked her help in
securing jobs abroad. As a good neighbor and friend, she brought the private complainants to the
Bayside Manpower Export Specialist agency because she knew Florante Hinahon, 5 the owner of the
said agency. While accused-appellant admitted that she received money from the private
complainants, she was quick to point out that she received the same only in trust for delivery to the
agency. She denied being part of the agency either as an owner or employee thereof. To
corroborate appellant’s testimony, Milagros Cuadra, who was also an applicant and a companion of
private complainants, testified that appellant did not recruit them. On the contrary, they were the
ones who asked help from appellant. To further bolster the defense, Eriberto C. Tabing, the
accountant and cashier of the agency, testified that appellant is not connected with the agency and
that he saw appellant received money from the applicants but she turned them over to the agency
through either Florantino Hinahon or Luzviminda Marcos. 6 (Emphasis and underscoring supplied)

In light thereof, the appellate court affirmed the judgment of the trial court but modified the penalty
imposed due to the trial court’s failure to apply the Indeterminate Sentence Law.

The appellate court thus disposed:

WHEREFORE, finding no merit in the appeal, this Court DISMISSES it and AFFIRMS the appealed
Decision EXCEPT the penalty x x x which is hereby changed to five (5) years as minimum to seven
(7) years as maximum with perpetual disqualification from engaging in the business of recruitment
and placement of workers. 7 (Underscoring supplied)

Petitioner’s Motion for Reconsideration having been denied, 8 the present petition was filed, faulting
the appellate court

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

[AND]

II

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

PROVE HER GUILT BEYOND REASONABLE DOUBT. 9 (Underscoring supplied)

Petitioner bewails the failure of the trial court and the Court of Appeals to credit the testimonies of
her witnesses, her companion Milagros Cuadra, and Eriberto C. Tabing who is an accountant-
cashier of the agency.

Further, petitioner assails the trial court’s and the appellate court’s failure to consider that the
provisional receipts she issued indicated that the amounts she collected from the private
complainants were turned over to the agency through Minda Marcos and Florante Hinahon. At any
rate, she draws attention to People v. Señoron 10 wherein this Court held that the issuance or signing
of receipts for placement fees does not make a case for illegal recruitment. 11

The petition fails.

Articles 38 and 39 of the Labor Code, the legal provisions applicable when the offense charged was
committed, 12 provided:

ART. 38. Illegal Recruitment. – (a) Any recruitment activities, including the prohibited practices
enumerated under Article 34 of this Code, to be undertaken by non-licensees or non-holders of
authority shall be deemed illegal and punishable under Article 39 of this Code. x x x

Article 39. Penalties. – x x x x

(c) Any person who is neither a licensee nor a holder of authority under this Title found violating any
provision thereof or its implementing rules and regulations shall, upon conviction thereof, suffer the
penalty of imprisonment of not less than four years nor more than eight years or a fine of not less
than P20,000 nor more than P100,000 or both such imprisonment and fine, at the discretion of the
court;

x x x x (Underscoring supplied)

The elements of the offense of illegal recruitment, which must concur, are: (1) that the offender has
no valid license or authority required by law to lawfully engage in recruitment and placement of
workers; and (2) that the offender undertakes any activity within the meaning of recruitment and
placement under Article 13(b), or any prohibited practices enumerated under Article 34 of the Labor
Code. 13 If another element is present that the accused commits the act against three or more
persons, individually or as a group, it becomes an illegal recruitment in a large scale. 14

Article 13 (b) of the Labor Code defines "recruitment and placement" as "[a]ny act of canvassing,
enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals,
contract services, promising or advertising for employment, locally or abroad, whether for profit or
not." (Underscoring supplied)

That the first element is present in the case at bar, there is no doubt. Jose Valeriano, Senior
Overseas Employment Officer of the Philippine Overseas Employment Administration, testified that
the records of the POEA do not show that petitioner is authorized to recruit workers for overseas
employment. 15 A Certification to that effect was in fact issued by Hermogenes C. Mateo, Chief of the
Licensing Division of POEA. 16

Petitioner’s disclaimer of having engaged in recruitment activities from the very start does not
persuade in light of the evidence for the prosecution. In People v. Alvarez, this Court held:

Appellant denies that she engaged in acts of recruitment and placement without first complying with
the guidelines issued by the Department of Labor and Employment. She contends that she did not
possess any license for recruitment, because she never engaged in such activity.

We are not persuaded. In weighing contradictory declarations and statements, greater weight must
be given to the positive testimonies of the prosecution witnesses than to the denial of the defendant.
Article 38 (a) clearly shows that illegal recruitment is an offense that is essentially committed by a
non-licensee or non-holder of authority. A non-licensee means any person, corporation or entity to
which the labor secretary has not issued a valid license or authority to engage in recruitment and
placement; or whose license or authority has been suspended, revoked or cancelled by the POEA or
the labor secretary. A license authorizes a person or an entity to operate a private employment
agency, while authority is given to those engaged in recruitment and placement activities.

xxxx

That appellant in this case had been neither licensed nor authorized to recruit workers for overseas
employment was certified by Veneranda C. Guerrero, officer-in-charge of the Licensing and
Regulation Office; and Ma. Salome S. Mendoza, manager of the Licensing Branch – both of the
Philippine Overseas Employment Administration. Yet, as complainants convincingly proved, she
recruited them for jobs in Taiwan. 17 (Italics in the original; underscoring supplied)

The second element is doubtless also present. The act of referral, which is included in recruitment, 18
is "the act of passing along or forwarding of an applicant for employment after an initial interview of a
selected applicant for employment to a selected employer, placement officer or bureau." 19
Petitioner’s admission that she brought private complainants to the agency whose owner she knows
and her acceptance of fees including those for processing betrays her guilt.

That petitioner issued provisional receipts indicating that the amounts she received from the private
complainants were turned over to Luzviminda Marcos and Florante Hinahon does not free her from
liability. For the act of recruitment may be "for profit or not." It is sufficient that the accused "promises
or offers for a fee employment" to warrant conviction for illegal recruitment. 20 As the appellate court
stated:

x x x Sec. 13(b) of P.D. 442 [The Labor Code] does not require that the recruiter receives and keeps
the placement money for himself or herself. For as long as a person who has no license to engage in
recruitment of workers for overseas employment offers for a fee an employment to two or more
persons, then he or she is guilty of illegal recruitment. 21

Parenthetically, why petitioner accepted the payment of fees from the private complainants when, in
light of her claim that she merely brought them to the agency, she could have advised them to
directly pay the same to the agency, she proferred no explanation.

On petitioner’s reliance on Señoron, 22 true, this Court held that issuance of receipts for placement
fees does not make a case for illegal recruitment. But it went on to state that it is "rather the
undertaking of recruitment activities without the necessary license or authority" that makes a case for
illegal recruitment. 23

A word on the penalty. Indeed, the trial court failed to apply the Indeterminate Sentence Law which
also applies to offenses punished by special laws.

Thus, Section 1 of Act No. 4103 (An Act to Provide for an Indeterminate Sentence and Parole for All
Persons Convicted of Certain Crimes by the Courts of the Philippine Islands; To Create A Board of
Indeterminate Sentence and to Provide Funds Therefor; and for Other Purposes) provides:

SECTION 1. Hereafter, in imposing a prison sentence for an offense punished by the Revised Penal
Code, or its amendments, the court shall sentence the accused to an indeterminate sentence the
maximum term of which shall be that which, in view of the attending circumstances, could be
properly imposed under the rules of the said Code, and the minimum which shall be within the range
of the penalty next lower to that prescribed by the Code for the offense; and if the offense is
punished by any other law, the court shall sentence the accused to an indeterminate sentence, the
maximum term of which shall not exceed the maximum fixed by said law and the minimum shall not
be less than the minimum term prescribed by the same. (As amended by Act No. 4225)
(Underscoring supplied)

While the penalty of imprisonment imposed by the appellate court is within the prescribed penalty for
the offense, its addition of "perpetual disqualification from engaging in the business of recruitment
and placement of workers" is not part thereof. Such additional penalty must thus be stricken off.

WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of the Court of
Appeals are AFFIRMED with MODIFICATION in that the accessory penalty imposed by it consisting
of "perpetual disqualification from engaging in the business of recruitment and placement of workers"
is DELETED.

Costs against petitioner.

SO ORDERED.

CONCHITA CARPIO MORALES

Associate Justice

G.R. No. 143726 February 23, 2004

PEOPLE OF THE PHILIPPINES, appellee,

vs.
LETICIA SAGAYAGA, ALMA SO, VICENTE SO YAN HAN and ORLANDO BURGOS, accused.
LETICIA SAGAYAGA, appellant.

DECISION

CALLEJO, SR., J.:

This is an appeal from the Decision1 of the Regional Trial Court of Manila, Branch 35, convicting the
appellant Leticia Sagayaga of large scale illegal recruitment as defined in Section 6, Republic Act
No. 8042 and sentencing her to suffer life imprisonment.

The Indictment

The appellant was charged with large scale illegal recruitment in an Information, the accusatory
portion of which reads:

That during the period from October 1997 to December 1997 and sometime prior or
subsequent thereto, in the City of Manila, Philippines, and within the jurisdiction of
this Honorable Court, above-named accused, conspiring, confederating and helping
each other and representing themselves to have the power, capacity and lawful
authority to deploy complainants as factory workers in Taiwan, did then and there
willfully, unlawfully and feloniously recruit and promise employment to ELMER
JANER, ERIC FAROL and ELMER RAMOS for and in consideration of amounts
ranging from P70,000.00 to P75,000.00 which they paid to said accused, without the
latter having deployed and/or reimbursed complainants of their payments despite
demands, to the damage and prejudice of said complainants.

CONTRARY TO LAW.2

Only the appellant was arrested, duly arraigned, and, with the assistance of counsel, pleaded not
guilty to the crime charged. The other accused remained at large.

The Case for the Prosecution

As culled by the Office of the Solicitor General, the facts which triggered the case in the trial court
are as follows:

Re: Elmer Janer

Sometime in the last week of October 1997, Elmer Janer went to the office of Alvis
Placement Service Corporation located at AP Building 1563 F. Agoncillo St., corner
Pedro Gil St., Ermita, Manila, to apply for overseas employment as factory worker in
Taiwan (pp. 4, 5 and 14, TSN, September 7, 1999). Appellant Leticia Sagayaga, after
personally receiving Elmer's application, required him to submit the necessary
documents (p. 5, TSN, September 7, 1999).

Appellant further asked Elmer to pay seventy-five thousand pesos (P75,000.00) as

placement fee (Id.). Elmer paid the said fee to appellant in three (3) installments, the
first, on November 5, 1997, in the amount of twenty-five thousand pesos
(P25,000.00); the second, on November 13, 1997, in the amount of five thousand
pesos (P5,000.00); and the third, on November 19, 1997, in the amount of forty-five
thousand pesos (P45,000.00). All the payments were made inside Alvis Placement
Agency (p. 6, id.).

As required, Elmer also had his medical examination at the Angeles Medical Clinic,
the result of which confirmed that he was fit to work (p. 9, Ibid.). Thereafter, he was
told to wait for the arrival of the employer. After seven (7) months, no employer
arrived. Tired of waiting, Elmer demanded that he be refunded of his money (Id.).
Despite appellant's promises to pay, Elmer was not refunded of his money.

Exasperated, Elmer asked appellant for a promissory note, which appellant

executed, promising to pay Elmer seventy-five thousand (P75,000.00) on May 6,
1998 (pp. 10 and 11, TSN, September 7, 1999). In said promissory note, appellant
designated herself as the assistant general manager of the placement agency (Id.).
When appellant failed to refund the amount to Elmer on the date stated in the
promissory note, the latter went to the Philippine Overseas Employment
Administration (POEA) and filed a sworn complaint against appellant (p. 11, TSN,
September 7, 1999).

Re: Testimony of Eric Farol

On November 20, 1997, Eric Farol first met appellant at Alvis Placement Service
Corporation when he applied for an overseas job in Taiwan as a plastic factory
worker (pp. 3-4, TSN, September 20, 1999). Appellant and her co-accused Vicente
So Yan Han discussed with Eric about the latter's job application (Id.). They required
Eric to submit to them his passport, National Bureau of Investigation (NBI) clearance,
 medical clearance and to pay seventy-five thousand pesos (P75,000.00) as
placement fee (Id.). Eric submitted all the aforestated requirements and paid the
seventy-five thousand pesos to appellant in two (2) installments, for which the latter
issued receipts affixing her signature thereon (pp. 5-9, TSN, September 20, 1999).
Appellant then promised Eric that he will be leaving for Taiwan before Christmas of
1997. Failing to fulfill her promise, appellant and Vicente So Yan Han told Eric to wait
up to the month of January 1998 (pp. 10 and 11, Ibid.). When appellant failed to
comply with her commitment to send Eric to Taiwan in January 1998, Eric demanded
from appellant the refund of his money (pp. 11 and 12, Ibid.). Appellant then issued
to him a check dated February 5, 1998, affixing her signature thereon, for the amount
of seventy-two thousand five hundred pesos (P72,500.00). But when Eric presented
the check to the drawee bank for payment, the same was dishonored by reason:
"ACCOUNT CLOSED" (pp. 11-14, TSN, September 20, 1999).

Insistent that he be refunded of his money, Vicente So Yan Han gave him cash
amounts on different dates: February 6, 1998 - - five thousand pesos; February 7,
1998 - - five thousand pesos; and February 17, 1998 - - one thousand pesos (pp. 14-
18, TSN, September 20, 1999). Eric was told to return on April 4, 1998 for the full
payment of the refund. However, when Eric went back on the first week of April,
appellant gave him a letter that the full refund of his money would be given on April
30, 1998 (p. 19, Ibid). Eric returned to appellant on April 30, 1998, but still, appellant
failed to refund the money (p. 20, Id.).

On May 8, 1998, Eric filed a complaint against appellant and Vicente So Yan Han at
the POEA (pp. 20-21, TSN, September 20, 1999).

Re: Elmer Ramos

Om September 27, 1997, Elmer Ramos went to the office of Alvis Placement
Services Corporation to apply for overseas employment as factory worker in Taiwan
(pp. 8 and 9, TSN, September 27, 1999). Initially, he took up his application with
Vicente So Yan Han who required him to submit his passport, NBI and medical
clearances and to pay seventy thousand pesos (P70,000.00) as placement fee (pp.
10 and 11, TSN, September 27, 1999). Elmer submitted the aforestated
requirements and paid the placement fee in two (2) installments: twenty thousand
pesos (P20,000.00) - - paid to appellant and Vicente So Yan Han on October 22,
1997; and fifty thousand pesos (P50,000.00) - - paid to Vicente So Yan Han on
November 12, 1997 (pp. 11-15, TSN, September 27, 1999). Vicente So Yan Han
then assured Elmer that he would be included for deployment in the first batch on the
first week of December 1997 which, however, did not materialize (pp. 19 and 20,
TSN, September 27, 1997). Elmer decided to withdraw his application. The
documents submitted were returned to Elmer but not the placement fee he paid (pp.
21 and 22, TSN, September 27, 1999). Instead, appellant issued a check dated
February 5, 1998 for the amount of seventy thousand pesos (P70,000.00) (p. 22, Id.).
When Elmer encashed the check with the bank, it was dishonored by reason: "closed
account" (p. 23, Ibid.).

On May 6, 1998, Elmer went back to the office of Alvis Placement Service
Corporation to demand the refund of his money. Elmer discussed the matter with
appellant, but the latter failed to return Elmer's money. The next day (May 7, 1998),
Elmer went to the POEA and filed a sworn complaint against appellant and Vicente
So Yan Han (pp. 25 and 26, TSN, September 27, 1999). On May 9, 1998, Elmer
again tried to get a refund from appellant, but the latter only issued a promissory note
assuring Elmer payment of the seventy thousand pesos on May 14 and 15, 1998 at
3:00 o'clock in the afternoon (pp. 27 and 28, Ibid.). On May 15, 1998, appellant gave
Elmer the amount of only five thousand pesos (P5,000.00) (p. 29, Ibid.).3

The Case for the Appellant

The appellant restates her case as follows:

On different dates in 1997, the three (3) complaining witnesses in this case (Elmer
Ramos, Elmer Janer and Eric Farol) filed separate applications for job placement as
factory workers in Taiwan with ALvis Placement Services Corporation, with business
address at Rm. 507, AP Bldg., 1563 F. Agoncillo cor. Pedro Gil Sts., Ermita, Manila[,]
where the appellant Leticia Sagayaga was then working as corporate treasurer.

Elmer Ramos filed his application sometime in September 1997 with the corporation,
through accused-at-large Vicente So Yan Han. It was the same Vicente So Yan Han
who asked him to submit the required documents (NBI and medical clearances, etc.),
 and to pay the amount of P70,000.00 as placement fee. He submitted the required
documents, and paid the placement fee in two (2) installments as follows:
P20,000.00 was paid by him on 22 October 1997 to appellant Letecia Sagayaga and
Vicente So Yan Han on the office of the corporation; and P50,000.00 was paid by
him on 12 November 1997 to Vicente So Yan Han. Then So Yan Han informed him
that he would be deployed in Taiwan in the first week of December 1997. The
promised deployment or job placement never came. He then decided to withdraw his
application and get back the documents he submitted and the money he had paid.
He was issued a check for the fee he had paid but the check was dishonored by the
bank for the reason "account closed." Failing to get his money ba[c]k, he filed a
complaint with the Philippine Overseas Employment Administration where he
executed a "Sinumpaang Salaysay" on 7 May 1998.

Elmer Janer filed his job placement application with Alvis Placement Services
Corporation in the last week of October 1997. Similarly, he was required to submit
the necessary documents and to pay the amount of P75,000.00 as placement fee.
He submitted the requisite documents and paid the placement in three (3)
installments, as follows: He paid P25,000.00 on 5 November 1997; P5,000.00 on 13
November 1997; and P45,000.00 on 19 November 1997. Thereafter, he was asked
to wait for 7 months for his employer to arrive. No employer arrive[d]. He decided to
withdraw his application and asked to be reimbursed the money he had paid.
Appellant Leticia Sagayaga gave him instead a "promissory note" indicating that
the amount of P75,000.00 will be paid to Elmer Janer on 6 May 1998. When no
payment was made to him as promised, he filed a complaint with the Philippine
Overseas Employment Administration and where he executed a "Sinumpaang
Salaysay" on 13 May 1998.

Eric Farol filed his job placement application with Alvis Placement Services
Corporation on 20 November 1997. After submitting the required documents, he paid
the placement fee of P75,000.00 in two (2) installments as follows: He paid the first
installment of P15,000.00 on 12 December 1997; and the balance of P60,000.00 was
paid by him on 16 December 1997. The appellant Leticia Sagayaga promised that he
would be able to leave for Taiwan before Christmas of 1997. When he was not able
to leave for Taiwan before the end of 1997, he was asked to wait until January 1998.
When he failed to leave as promised, he decided to withdraw his application and
asked that he be refunded the amount of P75,000.00 he had paid as placement fee.
The check given to him by the appellant bounced for the reason "account closed."
Forthwith, Vicente So Yan Han paid him on different dates the amounts of P5,000.00
on 6 February 1998, another P5,000.00 on 7 February 1998, and P1,000.00 on 17
February 1998. And as he was not refunded the full amount of the fee paid by him,
he filed a complaint with the Philippine Overseas Employment Administration and
executed a "Sinumpaang Salaysay" on 7 May 1998.

As supplied by the unrebutted testimony of the appellant, the persons who had
effective and actual control, management and direction of the business and
transactions of Alvis Placement Services Corporation were the accused-spouses
Vicente So Yan Han and Alma So. As Treasurer of the corporation, her duties were
limited to receiving money or fees paid to the agency by applicants and to deposit the
same in the bank in the name and for the account of the corporation. Although she
(appellant) received money from the complainants Elmer Janer and Eric Farol, the
same was deposited by her with the bank under the account of the corporation. And
if ever she signed promissory notes in behalf of the corporation and issued checks to
the complainants, she did so upon the instruction and assurance of accused-spouses
So Yan Han and Alma So that said notes and checks would have sufficient funds on
their due dates. And said checks and notes were never paid because the accused-
spouses disappeared and left for unknown addresses.4

After trial, the trial court rendered judgment convicting the appellant of the crime charged, the
dispositive portion of which reads:

WHEREFORE, judgment is rendered pronouncing accused LETICIA SAGAYAGA

guilty beyond reasonable doubt of illegal recruitment in large scale and sentencing
said accused to suffer the penalty of LIFE IMPRISONMENT and to pay a fine of
P750,000.00, and the costs.

The accused is further ordered to refund to Elmer Janer the sum of P75,000.00; to
Eric V. Farol the amount of P61,500.00; and to Elmer Ramos the amount of
P65,000.00.

SO ORDERED.5
The appellant assails the decision of the trial court contending that:

-I-

THE LOWER COURT SERIOUSLY ERRED IN HOLDING THAT "NO WEIGHT CAN
BE GIVEN TO THE CONTENTION OF THE ACCUSED THAT SHE IS NOT
CRIMINALLY LIABLE BECAUSE SHE HAD NO PARTICIPATION IN THE
OPERATION OF THE ALVIS PLACEMENT SERVICE CORPORATION, AND SHE
HAD NO KNOWLEDGE ABOUT ITS RECRUITMENT ACTIVITIES."

- II -

THE LOWER COURT SERIOUSLY ERRED IN HOLDING THAT AS TREASURER

OF ALVIS PLACEMENT SERVICE CORPO[R]ATION, THE ACCUSED-APPELLANT
"WAS IN CHARGE (OF) THE MANAGEMENT AND CONTROL OF THE FINANCIAL
AFFAIRS AND RESOURCES OF THE CORPORATION."

- III -

THE LOWER COURT SERIOUSLY ERRED IN HOLDING THAT AS THE VICE-

PRESIDENT/TREASURER AND ASSISTANT GENERAL MANAGER OF ALVIS
PLACEMENT SERVICE CORPORATION, THE ACCUSED-APPELLANT WAS A
TOP RANKING OFFICER OF SAID CORPORATION, WITH AUTHORITY TO
PARTICIPATE DIRECTLY IN THE CONTROL, MANAGEMENT OR DIRECTION OF
ITS BUSINESS AFFAIRS.

- IV -

THE LOWER COURT SERIOUSLY ERRED IN HOLDING THAT ACCUSED-

APPELLANT WAS GUILTY OF ILLEGAL RECRUITMENT "IN LARGE SCALE" AND
IN SENTENCING HER TO SUFFER THE PENALTY OF "LIFE IMPRISONMENT."6

The appellant avers that she is not criminally liable for the crime charged because the prosecution
failed to prove that she had a direct or actual control, management or direction of the business and
recruitment activities of the Alvis Placement Services Corporation (APSC). She asserts that she had
no knowledge of the recruitment activities of APSC and had no participation whatsoever in its
operation. In dealing with the private complainants, she was merely performing routinary office work
as a mere employee. Her participation as an employee of APSC with respect to the employment
application of Elmer Ramos for Taiwan was to receive his placement fee of P20,000.00. Hence, the
appellant avers, she cannot be held criminally liable for illegal recruitment in large scale. If, at all, she
can be held liable only with respect to the employment applications of Janer and Farol. Thus,
according to the appellant, the trial court erred in sentencing her to life imprisonment.

The appeal has no merit.

Under Section 6 (m) of Rep. Act No. 8042,7 illegal recruitment may be committed by any person,
whether a non-licensee, non-holder of authority, licensee or holder of authority, thus:

(m) Failure to reimburse expenses incurred by the worker in connection with his
documentation and processing for purposes of deployment, in cases where the
deployment does not actually take place without the worker's fault....8

Under the last paragraph of the said section, those criminally liable are the principals, accomplices
and accessories. In case of a juridical person, the officers having control, management or direction
of the business shall be criminally liable.

In this case, the appellant, as shown by the records of the POEA, was both the APSC Vice-
President-Treasurer and the Assistant General Manager. She was a high corporate officer who had
direct participation in the management, administration, direction and control of the business of the
corporation. As the trial court aptly declared in its decision:

Again, no weight can be given to the contention of the accused. The terms "control,
management or direction" used in the last paragraph of Section 6 of Republic Act No.
8042 broadly cover all phases of business operation. They include the aspects of
administration, marketing and finances, among others.

From the records of the POEA, the accused appears as the Vice President
(V.P.)/Treasurer of the Alvis Placement Service Corporation (Exhibit A). Moreover, in
the promissory note dated April 30, 1998 (Exhibit K), which the accused issued to
 Elmer Janer, she designated her position in the said corporation as its "Asst. General
Manager" (Exhibit K-1). Undoubtedly, the positions of vice-president, treasurer, and
assistant general manager are high ranking corporate positions in any corporate
body. These positions invest on the incumbent the authority of managing, controlling
and directing the corporate affairs.

The claim of the accused that her designation in the certification of the POEA (Exhibit
A) as the vice-president of Alvis Placement Service Corporation has surprised her
because, according to her, the vice-president was Vicente So Yan Han (TSN, Mar.
13, 2000, pp. 16-17), hardly inspires belief. If this were true, she would have no
difficulty in securing from the POEA an authenticated copy of the list of all officials of
the corporation which they were required to file with the said Office. For no stated
reason, however, the defense omitted to secure such list and submit it to this Court.

At any rate, the accused has expressly admitted in the course of her testimony that
she was at the time the Treasurer of their recruitment agency. As such she was in
charge of the management and control of the financial affairs and resources of the
corporation. She was in charge of collecting all its receivables, safely keeping them,
and disbursing them. She testified that it was part of her duties to receive and collect
the monies paid by applicants (TSN, Mar. 13, 2000, p. 5). Her disbursing authority
has been clearly demonstrated by her co-signing the checks Exhibits D-2 and G.9

The appellant is guilty of illegal recruitment as a principal by direct participation, having dealt directly
with the private complainants. In fact, she received their placement fees and even signed, in her
capacity as the Assistant General Manager of the APSC, the promissory note on May 6, 1998 in
favor of private complainant Elmer Janer, obliging the APSC to pay to him the amount of
P75,000.00. However, despite the private complainants' demands, their placement fees were not
reimbursed in full. In People vs. Cabais,10 we held thus:

Accused-appellant contends that she was not involved in recruitment but was merely
an employee of a recruitment agency. An employee of a company or corporation
engaged in illegal recruitment may be held liable as principal, together with his
employer, if it is shown that he actively and consciously participated in illegal
recruitment. Recruitment is "any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers, and includes referrals, contract
services, promising or advertising for employment, locally or abroad, whether for
profit or not: Provided, That any person or entity which, in any manner, offers or
promises for a fee employment to two or more persons shall be deemed engaged in
recruitment and placement…11

In this case, the overwhelming evidence on record indubitably shows that the appellant engaged in
illegal recruitment. As aptly ruled by the trial court:

The first line of defense invoked by the accused to exonerate herself of the criminal
charge is clearly and conclusively without merit. There is no dispute about the fact
that the three complainants engaged (sic) the Alvis Placement Service Corporation, a
recruitment agency duly authorized by the POEA wherein the accused was one of its
top officers, to deploy them as factory workers in Taiwan. Admittedly, they incurred
expenses, designated as placement fees, in connection with their documentation and
processing for purposes of their de[pl]oyment. Elmer Janer paid to the accused, who
received the payment, the total amount of P75,000.00 for his placement fee (Exhibit
J; TSN, Sept. 7, 1999, pp. 6-8). Eric Farol paid also to the accused a similar amount
for the same purpose (Exhibit E; TSN, Sept. 20, 1999, pp. 5-8). Elmer Ramos paid to
the agency the sum of P70,000.00 of which P20,000.00 was received by the
accused, and the balance of P50,000.00 was received by Vicente So Yan Han
(Exhibit F; TSN, Sept. 27, 1999, pp. 10-18). In the course of her testimony, the
accused admitted that she received these payments by the complainants of their
placement fees.

However, the expected deployment of the complainants as factory workers in

Taiwan, or even elsewhere, did not take place, without any fault on their part. There
is absolutely no evidence reflecting that the failure to deploy them was imputable to
their faults.

The evidence has satisfactorily established that the complainants have not been
reimbursed the full amount of their placement fees, notwithstanding their persistent
demands. Not a single peso of his placement fee was returned to Elmer Janer.
Instead, on April 30, 1998, the accused executed a promissory note (Exhibit K) in
behalf of the Alvis Placement Service Corporation, undertaking to pay Elmer Janer
 the amount of P75,000.00 on May 6, 1998. However, the amount covered by the
promissory note was not paid (TSN, Sept. 7, 1999, p. 11).

On the other hand, although Eric Farol and Elmer Ramos were reimbursed of
P11,000.00 and P5,000.00 in cash, respectively, and the balance of their placement
fees were covered by checks (Exhibits D-2 and G), these transactions did not relieve
the accused of her criminal liability. The reimbursement contemplated by paragraph
(m) of Section 6 of Republic Act No. 8042 is full reimbursement of the expenses
incurred by the worker in connection with the documentation and processing of his
deployment. To rule otherwise would be offensive to the administration of justice, as
illegal recruiters could easily escape criminal liability with impunity by simply
returning an insignificant portion of the amount they collected from the worker. The
checks drawn and issued by the accused to these two complainants, however, did
not produce the effect of payment, for they were both dishonored by the drawee bank
on the ground of closed account. Pursuant to the second paragraph of Article 1249 of
the Civil Code, "(t)he delivery of promissory notes payable to order, or bills of
exchange or other mercantile documents shall produce the effect of payment only
when they have been cashed, or when through the fault of the creditor they have
been impaired."12

The appellant's bare denial of her involvement in the management, administration, control and
operation of APSC cannot prevail over her judicial admissions, the positive testimonies of the private
complainants and the documentary evidence adduced by the prosecution.

Section 6 of Rep. Act No. 8042 provides that illegal recruitment shall be considered an offense
involving economic sabotage if committed in large scale, viz, committed against three (3) or more
persons individually or as a group, the imposable penalty for which is life imprisonment and a fine of
not less than P500,000.00 nor more than P1,000,000.00.13 In this case, there are three private
complainants, namely, Elmer Janer, Eric Farol and Elmer Ramos. The trial court, thus, correctly
convicted the appellant of large scale illegal recruitment and sentenced her to suffer life
imprisonment.

IN LIGHT OF ALL THE FOREGOING, the appeal is DENIED. The Decision of the Regional Trial
Court of Manila, Branch 35, is AFFIRMED. Costs against the appellant.

SO ORDERED.

Puno, (Chairman), Quisumbing, Austria-Martinez, and Tinga, JJ., concur

G.R. No. 161757 January 25, 2006

SUNACE INTERNATIONAL MANAGEMENT SERVICES, INC.Petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, Second Division; HON. ERNESTO S.
DINOPOL, in his capacity as Labor Arbiter, NLRC; NCR, Arbitration Branch, Quezon City and
DIVINA A. MONTEHERMOZO, Respondents.

DECISION

CARPIO MORALES, J.:

Petitioner, Sunace International Management Services (Sunace), a corporation duly organized and
existing under the laws of the Philippines, deployed to Taiwan Divina A. Montehermozo (Divina) as a
domestic helper under a 12-month contract effective February 1, 1997.1 The deployment was with
the assistance of a Taiwanese broker, Edmund Wang, President of Jet Crown International Co., Ltd.

After her 12-month contract expired on February 1, 1998, Divina continued working for her
Taiwanese employer, Hang Rui Xiong, for two more years, after which she returned to the
Philippines on February 4, 2000.

Shortly after her return or on February 14, 2000, Divina filed a complaint2 before the National Labor
Relations Commission (NLRC) against Sunace, one Adelaide Perez, the Taiwanese broker, and the
employer-foreign principal alleging that she was jailed for three months and that she was underpaid.

The following day or on February 15, 2000, Labor Arbitration Associate Regina T. Gavin issued
Summons3 to the Manager of Sunace, furnishing it with a copy of Divina’s complaint and directing it
to appear for mandatory conference on February 28, 2000.
The scheduled mandatory conference was reset. It appears to have been concluded, however.

On April 6, 2000, Divina filed her Position Paper4 claiming that under her original one-year contract
and the 2-year extended contract which was with the knowledge and consent of Sunace, the
following amounts representing income tax and savings were deducted:

Year Deduction for Income Tax Deduction for Savings

1997 NT10,450.00 NT23,100.00
1998 NT9,500.00 NT36,000.00
1999 NT13,300.00 NT36,000.00;5

and while the amounts deducted in 1997 were refunded to her, those deducted in 1998 and 1999
were not. On even date, Sunace, by its Proprietor/General Manager Maria Luisa Olarte, filed its
Verified Answer and Position Paper,6 claiming as follows, quoted verbatim:

COMPLAINANT IS NOT ENTITLED FOR THE REFUND OF HER 24 MONTHS SAVINGS

3. Complainant could not anymore claim nor entitled for the refund of her 24 months savings as she
already took back her saving already last year and the employer did not deduct any money from her
salary, in accordance with a Fascimile Message from the respondent SUNACE’s employer, Jet
Crown International Co. Ltd., a xerographic copy of which is herewith attached as ANNEX "2"
hereof;

COMPLAINANT IS NOT ENTITLED TO REFUND OF HER 14 MONTHS TAX AND PAYMENT OF

ATTORNEY’S FEES

4. There is no basis for the grant of tax refund to the complainant as the she finished her one year
contract and hence, was not illegally dismissed by her employer. She could only lay claim over the
tax refund or much more be awarded of damages such as attorney’s fees as said reliefs are
available only when the dismissal of a migrant worker is without just valid or lawful cause as defined
by law or contract.

The rationales behind the award of tax refund and payment of attorney’s fees is not to enrich the
complainant but to compensate him for actual injury suffered. Complainant did not suffer injury,
hence, does not deserve to be compensated for whatever kind of damages.

Hence, the complainant has NO cause of action against respondent SUNACE for monetary claims,
considering that she has been totally paid of all the monetary benefits due her under her
Employment Contract to her full satisfaction.

6. Furthermore, the tax deducted from her salary is in compliance with the Taiwanese law, which
respondent SUNACE has no control and complainant has to obey and this Honorable Office has no
authority/jurisdiction to intervene because the power to tax is a sovereign power which the
Taiwanese Government is supreme in its own territory. The sovereign power of taxation of a state is
recognized under international law and among sovereign states.

7. That respondent SUNACE respectfully reserves the right to file supplemental Verified Answer
and/or Position Paper to substantiate its prayer for the dismissal of the above case against the
herein respondent. AND BY WAY OF -

x x x x (Emphasis and underscoring supplied)

Reacting to Divina’s Position Paper, Sunace filed on April 25, 2000 an ". . . answer to complainant’s
position paper"7 alleging that Divina’s 2-year extension of her contract was without its knowledge and
consent, hence, it had no liability attaching to any claim arising therefrom, and Divina in fact
executed a Waiver/Quitclaim and Release of Responsibility and an Affidavit of Desistance, copy of
each document was annexed to said ". . . answer to complainant’s position paper."

To Sunace’s ". . . answer to complainant’s position paper," Divina filed a 2-page reply,8 without,
however, refuting Sunace’s disclaimer of knowledge of the extension of her contract and without
saying anything about the Release, Waiver and Quitclaim and Affidavit of Desistance.

The Labor Arbiter, rejected Sunace’s claim that the extension of Divina’s contract for two more years
was without its knowledge and consent in this wise:

We reject Sunace’s submission that it should not be held responsible for the amount withheld
because her contract was extended for 2 more years without its knowledge and consent because as
Annex "B"9 shows, Sunace and Edmund Wang have not stopped communicating with each other
and yet the matter of the contract’s extension and Sunace’s alleged non-consent thereto has not
been categorically established.

What Sunace should have done was to write to POEA about the extension and its objection thereto,
copy furnished the complainant herself, her foreign employer, Hang Rui Xiong and the Taiwanese
broker, Edmund Wang.

And because it did not, it is presumed to have consented to the extension and should be liable for
anything that resulted thereform (sic).10 (Underscoring supplied)

The Labor Arbiter rejected too Sunace’s argument that it is not liable on account of Divina’s
execution of a Waiver and Quitclaim and an Affidavit of Desistance. Observed the Labor Arbiter:

Should the parties arrive at any agreement as to the whole or any part of the dispute, the same shall
be reduced to writing and signed by the parties and their respective counsel (sic), if any, before the
Labor Arbiter.

The settlement shall be approved by the Labor Arbiter after being satisfied that it was voluntarily
entered into by the parties and after having explained to them the terms and consequences thereof.

A compromise agreement entered into by the parties not in the presence of the Labor Arbiter before
whom the case is pending shall be approved by him, if after confronting the parties, particularly the
complainants, he is satisfied that they understand the terms and conditions of the settlement and
that it was entered into freely voluntarily (sic) by them and the agreement is not contrary to law,
morals, and public policy.

And because no consideration is indicated in the documents, we strike them down as contrary to
law, morals, and public policy.11

He accordingly decided in favor of Divina, by decision of October 9, 2000,12 the dispositive portion of
which reads:

Wherefore, judgment is hereby rendered ordering respondents SUNACE INTERNATIONAL

SERVICES and its owner ADELAIDA PERGE, both in their personal capacities and as agent of
Hang Rui Xiong/Edmund Wang to jointly and severally pay complainant DIVINA A.
MONTEHERMOZO the sum of NT91,950.00 in its peso equivalent at the date of payment, as refund
for the amounts which she is hereby adjudged entitled to as earlier discussed plus 10% thereof as
attorney’s fees since compelled to litigate, complainant had to engage the services of counsel.

SO ORDERED.13 (Underescoring supplied)

On appeal of Sunace, the NLRC, by Resolution of April 30, 2002,14 affirmed the Labor Arbiter’s
decision.

Via petition for certiorari,15 Sunace elevated the case to the Court of Appeals which dismissed it
outright by Resolution of November 12, 2002,16 the full text of which reads:

The petition for certiorari faces outright dismissal.

The petition failed to allege facts constitutive of grave abuse of discretion on the part of the public
respondent amounting to lack of jurisdiction when the NLRC affirmed the Labor Arbiter’s finding that
petitioner Sunace International Management Services impliedly consented to the extension of the
contract of private respondent Divina A. Montehermozo. It is undisputed that petitioner was
continually communicating with private respondent’s foreign employer (sic). As agent of the foreign
principal, "petitioner cannot profess ignorance of such extension as obviously, the act of the
principal extending complainant (sic) employment contract necessarily bound it." Grave abuse
of discretion is not present in the case at bar.

ACCORDINGLY, the petition is hereby DENIED DUE COURSE and DISMISSED.17

SO ORDERED.

(Emphasis on words in capital letters in the original; emphasis on words in small letters and
underscoring supplied)

Its Motion for Reconsideration having been denied by the appellate court by Resolution of January
14, 2004,18 Sunace filed the present petition for review on certiorari.
The Court of Appeals affirmed the Labor Arbiter and NLRC’s finding that Sunace knew of and
impliedly consented to the extension of Divina’s 2-year contract. It went on to state that "It is
undisputed that [Sunace] was continually communicating with [Divina’s] foreign employer." It thus
concluded that "[a]s agent of the foreign principal, ‘petitioner cannot profess ignorance of such
extension as obviously, the act of the principal extending complainant (sic) employment contract
necessarily bound it.’"

Contrary to the Court of Appeals finding, the alleged continuous communication was with the
Taiwanese broker Wang, not with the foreign employer Xiong.

The February 21, 2000 telefax message from the Taiwanese broker to Sunace, the only basis of a
finding of continuous communication, reads verbatim:

xxxx

Regarding to Divina, she did not say anything about her saving in police station. As we
contact with her employer, she took back her saving already last years. And they did not
deduct any money from her salary. Or she will call back her employer to check it again. If
her employer said yes! we will get it back for her.

Thank you and best regards.

(Sgd.)
Edmund Wang
President19

The finding of the Court of Appeals solely on the basis of the above-quoted telefax message, that
Sunace continually communicated with the foreign "principal" (sic) and therefore was aware of and
had consented to the execution of the extension of the contract is misplaced. The message does not
provide evidence that Sunace was privy to the new contract executed after the expiration on
February 1, 1998 of the original contract. That Sunace and the Taiwanese broker communicated
regarding Divina’s allegedly withheld savings does not necessarily mean that Sunace ratified the
extension of the contract. As Sunace points out in its Reply20 filed before the Court of Appeals,

As can be seen from that letter communication, it was just an information given to the petitioner that
the private respondent had t[aken] already her savings from her foreign employer and that no
deduction was made on her salary. It contains nothing about the extension or the petitioner’s
consent thereto.21

Parenthetically, since the telefax message is dated February 21, 2000, it is safe to assume that it
was sent to enlighten Sunace who had been directed, by Summons issued on February 15, 2000, to
appear on February 28, 2000 for a mandatory conference following Divina’s filing of the complaint on
February 14, 2000.

Respecting the Court of Appeals following dictum:

As agent of its foreign principal, [Sunace] cannot profess ignorance of such an extension as
obviously, the act of its principal extending [Divina’s] employment contract necessarily bound it,22

it too is a misapplication, a misapplication of the theory of imputed knowledge.

The theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to the principal,
employer Xiong, not the other way around.23 The knowledge of the principal-foreign employer
cannot, therefore, be imputed to its agent Sunace.

There being no substantial proof that Sunace knew of and consented to be bound under the 2-year
employment contract extension, it cannot be said to be privy thereto. As such, it and its "owner"
cannot be held solidarily liable for any of Divina’s claims arising from the 2-year employment
extension. As the New Civil Code provides,

Contracts take effect only between the parties, their assigns, and heirs, except in case where the
rights and obligations arising from the contract are not transmissible by their nature, or by stipulation
or by provision of law.24

Furthermore, as Sunace correctly points out, there was an implied revocation of its agency
relationship with its foreign principal when, after the termination of the original employment contract,
the foreign principal directly negotiated with Divina and entered into a new and separate employment
contract in Taiwan. Article 1924 of the New Civil Code reading
The agency is revoked if the principal directly manages the business entrusted to the agent, dealing
directly with third persons.

thus applies.

In light of the foregoing discussions, consideration of the validity of the Waiver and Affidavit of
Desistance which Divina executed in favor of Sunace is rendered unnecessary.

WHEREFORE, the petition is GRANTED. The challenged resolutions of the Court of Appeals are
hereby REVERSED and SET ASIDE. The complaint of respondent Divina A. Montehermozo against
petitioner is DISMISSED.

SO ORDERED.

CONCHITA CARPIO MORALES

Associate Justice

G.R. No. 138193 March 5, 2003

OSM SHIPPING PHILIPPINES, INC., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION (Third Division) and FERMIN F. GUERRERO,
respondents.

PANGANIBAN, J.:

The Rules of Court do not require that all supporting papers and documents accompanying a petition
for certiorari should be duplicate originals or certified true copies. Furthermore, unilateral decisions
to alter the use of a vessel from overseas service to coastwise shipping will not affect the validity of
an existing employment contract validly executed. Workers should not be prejudiced by actions done
solely by employers without the former's consent or participation.

The Case

Before us is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court, seeking to set
aside the February 11, 1999 and the March 26, 1999 Resolutions of the Court of Appeals (CA) in
CA-GR SP No. 50667. The assailed Resolutions dismissed a Petition filed in the CA, challenging an
adverse ruling of the National Labor Relations Commission (NLRC). The first Resolution disposed as
follows:

"We resolve to OUTRIGHTLY DISMISS the petition."2

The second Resolution3 denied petitioners' Motion for Reconsideration.

On the other hand, the NLRC Decision disposed in this wise:

"WHEREFORE, premises considered, the Decision appealed from is hereby

MODIFIED in that respondents OSM Shipping Phils. Inc. and its principal, Philippine
Carrier Shipping Agency Services Co. are jointly and severally ordered to pay
complainant the sum of ELEVEN THOUSAND THREE HUNDRED FIFTY NINE and
65/100 [US dollars] (US$11,359.65) or its peso equivalent at the time of payment
representing complainant's unpaid salaries, accrued fixed overtime pay, allowance,
vacation leave pay and termination pay."4

The Facts

This case originated from a Complaint filed by Fermin F. Guerrero against OSM Shipping
Philippines, Inc.; and its principal, Philippine Carrier Shipping Agency Services Co. The Complaint
was for illegal dismissal and non-payment of salaries, overtime pay and vacation pay. The facts are
summarized in the NLRC Decision as follows:

"[Private respondent] was hired by [Petitioner] OSM for and in behalf of its principal,
Phil Carrier Shipping Agency Services Co. (PC-SLC) to board its vessel MN
'[Princess] Hoa' as a Master Mariner for a contract period of ten (10) months. Under
 the said contract, his basic monthly salary is US$1,070.00, US$220.00 allowance,
US$321.00 fixed overtime, US$89 vacation leave pay per month for . . . 44 hours [of]
work per week. He boarded the vessel on July 21, 1994 and complied faithfully with
the duties assigned to him.

"[Private respondent] alleged that from the start of his work with MN 'Princess Hoa',
he was not paid any compensation at all and was forced to disembark the vessel
sometime in January 1995 because he cannot even buy his basic personal
necessities. For almost seven (7) months, i.e. from July 1994 to January 1995,
despite the services he rendered, no compensation or remuneration was ever paid to
him. Hence, this case for illegal dismissal, [non-payment] of salaries, overtime pay
and vacation pay.

"[Petitioner] OSM, for its part, alleged that on July 26, 1994, Concorde Pacific, an
American company which owns MN 'Princess Hoa', then a foreign registered vessel,
appointed . . . Philippine Carrier Shipping Agency Services Co. (PC-SASCO) as ship
manager particularly to negotiate, transact and deal with any third persons, entities or
corporations in the planning of crewing selection or determination of qualifications of
Filipino Seamen. On the same date, [Petitioner] OSM entered into a Crew
Agreement with . . . PC-SASCO for the purpose of processing the documents of crew
members of MN 'Princess Hoa'. The initial plan of the [s]hip-owner was to use the
vessel in the overseas trade, particularly the East Asian Growth Area. Thereafter, the
contract of [private respondent] was processed before the POEA on September 20,
1994.

"OSM alleged further that the shipowner changed its plans on the use of the vessel.
Instead of using it for overseas trade, it decided to use it in the coastwise trade, thus,
the crewmembers hired never left the Philippines and were merely used by the
shipowner in the coastwise trade. Considering that the MN 'Princess Hoa' was a
foreign registered vessel and could not be used in the coastwise trade, the
shipowner converted the vessel to Philippine registry on September 28, 1994 by way
of bareboat chartering it out to another entity named Philippine Carrier Shipping
Lines Co. (PCSLC). To do this, the shipowner through Conrado V. Tendido had to
terminate its management agreement with . . . PC-SASCO on September 28, 1994
by a letter of termination dated September 20, 1994. In the same letter of
termination, the ship owner stated that it has bareboat chartered out the vessel to
said [PCSLC] and converted it into Philippine registry. Consequently, . . . PC-SASCO
terminated its crew agreement with OSM in a letter dated December 5, 1994.
Because of the bareboat charter of the vessel to PCSLC and its subsequent
conversion to Philippine registry and use in coastwise trade as well as to the
termination of the management agreement and crew agency agreement, a
termination of contract ensued whereby PCSLC, the bareboat charterer, became the
disponent owner/employer of the crew.

As a disponent owner/employer, PCSLC is now responsible for the payment of

complainant's wages. . . . .5

Labor Arbiter (LA) Manuel R. Caday rendered a Decision6 in favor of Private Respondent Guerrero.
Petitioner and its principal, Philippine Carrier Shipping Agency Services, Co. (PC-SASCO), were
ordered to jointly and severally pay Guerrero his unpaid salaries and allowances, accrued fixed
overtime pay, vacation leave pay and termination pay. The Decision held that there was a
constructive dismissal of private respondent, since he had not been paid his salary for seven
months. It also dismissed petitioner's contention that there was a novation of the employment
contract.

On appeal, the NLRC (Third Division) affirmed the LA's Decision, with a modification as to the
amount of liability. On January 28, 1999, petitioner filed with the CA a Petition7 to set aside the
NLRC judgment. The petition was dismissed, because petitioner had allegedly failed to comply with
the requirements of Section 3 of Rule 46 of the Rules of Court. Specifically, petitioner had attached
to its Petition, not a duplicate original or a certified true copy of the LA's Decision, but a mere
machine copy thereof. Further, it had not indicated the actual address of Private Respondent Fermin
F. Guerrero.8

Hence, this Petition.9

The Issues

In its Memorandum, petitioner raises the following issues for the Court's consideration:
 "1. Did not the Court of Appeals err in interpreting and applying the 1997 Rules when
it required as attachment to the Petition for Certiorari the duplicate original of another
Decision which is not the subject of the said Petition?

"2. Did not the Court of Appeals err in interpreting and applying the 1997 Rules when
it disregarded the subsequent compliance made by petitioner?

"3. Did not the Court of Appeals err in interpreting and applying the 1997 Rules when
it did not consider the Notice to private respondent Guerrero through his counsel as
Notice to Guerrero himself?"10

The foregoing issues all refer to the question of whether, procedurally, petitioner has complied with
Section 3 of Rule 46 of the Rules of Court. Additionally and in the interest of speedy justice, this
Court will also resolve the substantive issue brought before the CA: did the NLRC commit grave
abuse of discretion in ruling in favor of private respondent?

The Court's Ruling

While petitioner is procedurally correct, the case should nonetheless be decided on the merits in
favor of private respondent.

Procedural Issue:
Compliance with the Rules of Court

Petitioner puts at issue the proper interpretation of Section 3 of Rule 46 of the Rules of Court.11
Specifically, was petitioner required to attach a certified true copy of the LA's Decision to its Petition
for Certiorari challenging the NLRC judgment?

Section 3 of Rule 46 does not require that all supporting papers and documents accompanying a
petition be duplicate originals or certified true copies. Even under Rule 65 on certiorari and
prohibition, petitions need to be accompanied only by duplicate originals or certified true copies of
the questioned judgment, order or resolution. Other relevant documents and pleadings attached to it
may be mere machine copies thereof.12 Numerous decisions issued by this Court emphasize that in
appeals under Rule 45 and in original civil actions for certiorari under Rule 65 in relation to Rules 46
and 56, what is required to be certified is the copy of the questioned judgment, final order or
resolution.13 Since the LA's Decision was not the questioned ruling, it did not have to be certified.
What had to be certified was the NLRC Decision. And indeed it was.

As to the alleged missing address of private respondent, the indication by petitioner that Guerrero
could be served with process care of his counsel was substantial compliance with the Rules.

This Court has held that the sending of pleadings to a party is not required, provided that the party is
represented by counsel.14 This rule is founded on considerations of fair play, inasmuch as an
attorney of record is engaged precisely because a party does not feel competent to deal with the
intricacies of law and procedure.15 Both jurisprudence16 and the basics of procedure17 provide that
when a party has appeared through counsel, service is to be made upon the latter, unless the court
specifically orders that it be upon the party.

We also note that from the inception of the case at the LA's office, all pleadings addressed to private
respondent had always been sent to his counsel, Atty. Danilo G. Macalino. Note that private
respondent, who was employed as a seaman, was often out of his home. The service of pleadings
and other court processes upon him personally would have been futile, as he would not have been
around to receive them.

This Court has repeatedly held that while courts should meticulously observe the Rules, they should
not be overly strict about procedural lapses that do not impair the proper administration of justice.18
Rather, procedural rules should be liberally construed to secure the just, speedy and inexpensive
disposition of every action and proceeding.19

Substantive Issue:
Liability of Petitioner for Unpaid Salaries

It is worthwhile to note that what is involved in this case is the recovery of unpaid salaries and other
monetary benefits. The Court is mindful of the plight of private respondent and, indeed, of workers in
general who are seeking to recover wages that are being unlawfully withheld from them. Such
recovery should not be needlessly delayed at the expense of their survival. This case is now on its
ninth year since its inception at the LA's office. Its remand to the CA will only unduly delay its
disposition. In the interest of substantial justice,20 this Court will decide the case on the merits based
upon the records of the case, particularly those relating to the OSM Shipping Philippines' Petition
before the CA.

On behalf of its principal, PC-SASCO, petitioner does not deny hiring Private Respondent Guerrero
as master mariner. However, it argues that since he was not deployed overseas, his employment
contract became ineffective, because its object was allegedly absent. Petitioner contends that using
the vessel in coastwise trade and subsequently chartering it to another principal had the effect of
novating the employment contract. We are not persuaded.

As approved by the Philippine Overseas Employment Agency (POEA), petitioner was the legitimate
manning agent of PC-SASCO.21 As such, it was allowed to select, recruit, hire and deploy seamen
on board the vessel M/V Princess Hoa, which was managed by its principal, PC-SASCO.22 It was in
this capacity that petitioner hired private respondent as master mariner. They then executed and
agreed upon an employment contract.

An employment contract, like any other contract, is perfected at the moment (1) the parties come to
agree upon its terms; and (2) concur in the essential elements thereof: (a) consent of the contracting
parties, (b) object certain which is the subject matter of the contract and (c) cause of the obligation.23
Based on the perfected contract, Private Respondent Guerrero complied with his obligations
thereunder and rendered his services on board the vessel. Contrary to petitioner's contention, the
contract had an object, which was the rendition of service by private respondent on board the vessel.
The non-deployment of the ship overseas did not affect the validity of the perfected employment
contract. After all, the decision to use the vessel for coastwise shipping was made by petitioner only
and did not bear the written conformity of private respondent. A contract cannot be novated by the
will of only one party.24 The claim of petitioner that it processed the contract of private respondent
with the POEA only after he had started working is also without merit. Petitioner cannot use its own
misfeasance to defeat his claim.

Petitioner, as manning agent, is jointly and severally liable with its principal,25 PC-SASCO, for private
respondent's claim. This conclusion is in accordance with Section 1 of Rule II of the POEA Rules
and Regulations.26 Joint and solidary liability is meant to assure aggrieved workers of immediate and
sufficient payment of what is due them.27 The fact that petitioner and its principal have already
terminated their agency agreement does not relieve the former of its liability. The reason for this
ruling was given by this Court in Catan v. National Labor Relations Commission,28 which we
reproduce in part as follows:

"This must be so, because the obligations covenanted in the [manning] agreement
between the local agent and its foreign principal are not coterminus with the term of
such agreement so that if either or both of the parties decide to end the agreement,
the responsibilities of such parties towards the contracted employees under the
agreement do not at all end, but the same extends up to and until the expiration of
the employment contracts of the employees recruited and employed pursuant to the
said recruitment agreement. Otherwise, this will render nugatory the very purpose for
which the law governing the employment of workers for foreign jobs abroad was
enacted."29

WHEREFORE, the assailed Resolutions are hereby SET ASIDE, and the September 10, 1998
NLRC Decision REINSTATED and AFFIRMED. Costs against petitioner.

SO ORDERED.

Puno, Sandoval-Gutierrez and Carpio Morales, JJ., concur.

G.R. No. 167614 March 24, 2009

ANTONIO M. SERRANO, Petitioner,

vs.
Gallant MARITIME SERVICES, INC. and MARLOW NAVIGATION CO., INC., Respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

For decades, the toil of solitary migrants has helped lift entire families and communities out of
poverty. Their earnings have built houses, provided health care, equipped schools and planted the
seeds of businesses. They have woven together the world by transmitting ideas and knowledge from
country to country. They have provided the dynamic human link between cultures, societies and
economies. Yet, only recently have we begun to understand not only how much international
migration impacts development, but how smart public policies can magnify this effect.

United Nations Secretary-General Ban Ki-Moon

Global Forum on Migration and Development
Brussels, July 10, 20071

For Antonio Serrano (petitioner), a Filipino seafarer, the last clause in the 5th paragraph of Section
10, Republic Act (R.A.) No. 8042,2 to wit:

Sec. 10. Money Claims. - x x x In case of termination of overseas employment without just, valid or
authorized cause as defined by law or contract, the workers shall be entitled to the full
reimbursement of his placement fee with interest of twelve percent (12%) per annum, plus his
salaries for the unexpired portion of his employment contract or for three (3) months for every
year of the unexpired term, whichever is less.

x x x x (Emphasis and underscoring supplied)

does not magnify the contributions of overseas Filipino workers (OFWs) to national development, but
exacerbates the hardships borne by them by unduly limiting their entitlement in case of illegal
dismissal to their lump-sum salary either for the unexpired portion of their employment contract "or
for three months for every year of the unexpired term, whichever is less" (subject clause). Petitioner
claims that the last clause violates the OFWs' constitutional rights in that it impairs the terms of their
contract, deprives them of equal protection and denies them due process.

By way of Petition for Review under Rule 45 of the Rules of Court, petitioner assails the December
8, 2004 Decision3 and April 1, 2005 Resolution4 of the Court of Appeals (CA), which applied the
subject clause, entreating this Court to declare the subject clause unconstitutional.

Petitioner was hired by Gallant Maritime Services, Inc. and Marlow Navigation Co., Ltd.
(respondents) under a Philippine Overseas Employment Administration (POEA)-approved Contract
of Employment with the following terms and conditions:

Duration of contract 12 months

Position Chief Officer

Basic monthly salary US$1,400.00

Hours of work 48.0 hours per week

Overtime US$700.00 per month
Vacation leave with pay 7.00 days per month5

On March 19, 1998, the date of his departure, petitioner was constrained to accept a downgraded
employment contract for the position of Second Officer with a monthly salary of US$1,000.00, upon
the assurance and representation of respondents that he would be made Chief Officer by the end of
April 1998.6

Respondents did not deliver on their promise to make petitioner Chief Officer.7 Hence, petitioner
refused to stay on as Second Officer and was repatriated to the Philippines on May 26, 1998.8

Petitioner's employment contract was for a period of 12 months or from March 19, 1998 up to March
19, 1999, but at the time of his repatriation on May 26, 1998, he had served only two (2) months and
seven (7) days of his contract, leaving an unexpired portion of nine (9) months and twenty-three (23)
days.

Petitioner filed with the Labor Arbiter (LA) a Complaint9 against respondents for constructive
dismissal and for payment of his money claims in the total amount of US$26,442.73, broken down
as follows:

May US$ 413.90

27/31,
1998 (5
days)
incl.
Leave
pay
June 2,590.00
01/30,
1998
July 2,590.00
01/31,
1998
August 2,590.00
01/31,
1998
Sept. 2,590.00
01/30,
1998
Oct. 2,590.00
01/31,
1998
Nov. 2,590.00
01/30,
1998
Dec. 2,590.00
01/31,
1998
Jan. 2,590.00
01/31,
1999
Feb. 2,590.00
01/28,
1999
Mar. 1,640.00
1/19,
1999
(19
days)
incl.
leave
pay
--------------------------------------------------------------------------------
25,382.23
Amount
adjusted
to chief
mate's
salary
(March 1,060.5010
19/31,
1998 to
April
1/30,
1998) +
----------------------------------------------------------------------------------------------
TOTAL US$ 26,442.7311
CLAIM

as well as moral and exemplary damages and attorney's fees.

The LA rendered a Decision dated July 15, 1999, declaring the dismissal of petitioner
illegal and awarding him monetary benefits, to wit:
 WHEREFORE, premises considered, judgment is hereby rendered declaring that the
dismissal of the complainant (petitioner) by the respondents in the above-entitled
case was illegal and the respondents are hereby ordered to pay the complainant
[petitioner], jointly and severally, in Philippine Currency, based on the rate of
exchange prevailing at the time of payment, the amount of EIGHT THOUSAND
SEVEN HUNDRED SEVENTY U.S. DOLLARS (US $8,770.00), representing the
complainant’s salary for three (3) months of the unexpired portion of the
aforesaid contract of employment. 1avv phi 1

The respondents are likewise ordered to pay the complainant [petitioner], jointly and
severally, in Philippine Currency, based on the rate of exchange prevailing at the
time of payment, the amount of FORTY FIVE U.S. DOLLARS (US$ 45.00),12
representing the complainant’s claim for a salary differential. In addition, the
respondents are hereby ordered to pay the complainant, jointly and severally, in
Philippine Currency, at the exchange rate prevailing at the time of payment, the
complainant’s (petitioner's) claim for attorney’s fees equivalent to ten percent (10%)
of the total amount awarded to the aforesaid employee under this Decision.

The claims of the complainant for moral and exemplary damages are hereby
DISMISSED for lack of merit.

All other claims are hereby DISMISSED.

SO ORDERED.13 (Emphasis supplied)

In awarding petitioner a lump-sum salary of US$8,770.00, the LA based his

computation on the salary period of three months only -- rather than the entire
unexpired portion of nine months and 23 days of petitioner's employment contract -
applying the subject clause. However, the LA applied the salary rate of US$2,590.00,
consisting of petitioner's "[b]asic salary, US$1,400.00/month + US$700.00/month,
fixed overtime pay, + US$490.00/month, vacation leave pay =
US$2,590.00/compensation per month."14

Respondents appealed15 to the National Labor Relations Commission (NLRC) to

question the finding of the LA that petitioner was illegally dismissed.

Petitioner also appealed16 to the NLRC on the sole issue that the LA erred in not
applying the ruling of the Court in Triple Integrated Services, Inc. v. National Labor
Relations Commission17 that in case of illegal dismissal, OFWs are entitled to their
salaries for the unexpired portion of their contracts.18

In a Decision dated June 15, 2000, the NLRC modified the LA Decision, to wit:

WHEREFORE, the Decision dated 15 July 1999 is MODIFIED. Respondents are

hereby ordered to pay complainant, jointly and severally, in Philippine currency, at
the prevailing rate of exchange at the time of payment the following:

1. Three (3) months salary

$1,400 x 3 US$4,200.00
2. Salary differential 45.00

US$4,245.00

3. 10% Attorney’s fees 424.50

TOTAL US$4,669.50

The other findings are affirmed.

SO ORDERED.19

The NLRC corrected the LA's computation of the lump-sum salary awarded to petitioner by reducing
the applicable salary rate from US$2,590.00 to US$1,400.00 because R.A. No. 8042 "does not
provide for the award of overtime pay, which should be proven to have been actually performed, and
for vacation leave pay."20
Petitioner filed a Motion for Partial Reconsideration, but this time he questioned the constitutionality
of the subject clause.21 The NLRC denied the motion.22

Petitioner filed a Petition for Certiorari23 with the CA, reiterating the constitutional challenge against
the subject clause.24 After initially dismissing the petition on a technicality, the CA eventually gave
due course to it, as directed by this Court in its Resolution dated August 7, 2003 which granted the
petition for certiorari, docketed as G.R. No. 151833, filed by petitioner.

In a Decision dated December 8, 2004, the CA affirmed the NLRC ruling on the reduction of the
applicable salary rate; however, the CA skirted the constitutional issue raised by petitioner.25

His Motion for Reconsideration26 having been denied by the CA,27 petitioner brings his cause to this
Court on the following grounds:

The Court of Appeals and the labor tribunals have decided the case in a way not in accord with
applicable decision of the Supreme Court involving similar issue of granting unto the migrant worker
back wages equal to the unexpired portion of his contract of employment instead of limiting it to
three (3) months

II

In the alternative that the Court of Appeals and the Labor Tribunals were merely applying their
interpretation of Section 10 of Republic Act No. 8042, it is submitted that the Court of Appeals
gravely erred in law when it failed to discharge its judicial duty to decide questions of substance not
theretofore determined by the Honorable Supreme Court, particularly, the constitutional issues
raised by the petitioner on the constitutionality of said law, which unreasonably, unfairly and
arbitrarily limits payment of the award for back wages of overseas workers to three (3) months.

III

Even without considering the constitutional limitations [of] Sec. 10 of Republic Act No. 8042, the
Court of Appeals gravely erred in law in excluding from petitioner’s award the overtime pay and
vacation pay provided in his contract since under the contract they form part of his salary.28

On February 26, 2008, petitioner wrote the Court to withdraw his petition as he is already old and
sickly, and he intends to make use of the monetary award for his medical treatment and
medication.29 Required to comment, counsel for petitioner filed a motion, urging the court to allow
partial execution of the undisputed monetary award and, at the same time, praying that the
constitutional question be resolved.30

Considering that the parties have filed their respective memoranda, the Court now takes up the full
merit of the petition mindful of the extreme importance of the constitutional question raised therein.

On the first and second issues

The unanimous finding of the LA, NLRC and CA that the dismissal of petitioner was illegal is not
disputed. Likewise not disputed is the salary differential of US$45.00 awarded to petitioner in all
three fora. What remains disputed is only the computation of the lump-sum salary to be awarded to
petitioner by reason of his illegal dismissal.

Applying the subject clause, the NLRC and the CA computed the lump-sum salary of petitioner at
the monthly rate of US$1,400.00 covering the period of three months out of the unexpired portion of
nine months and 23 days of his employment contract or a total of US$4,200.00.

Impugning the constitutionality of the subject clause, petitioner contends that, in addition to the
US$4,200.00 awarded by the NLRC and the CA, he is entitled to US$21,182.23 more or a total of
US$25,382.23, equivalent to his salaries for the entire nine months and 23 days left of his
employment contract, computed at the monthly rate of US$2,590.00.31

The Arguments of Petitioner

Petitioner contends that the subject clause is unconstitutional because it unduly impairs the freedom
of OFWs to negotiate for and stipulate in their overseas employment contracts a determinate
employment period and a fixed salary package.32 It also impinges on the equal protection clause, for
it treats OFWs differently from local Filipino workers (local workers) by putting a cap on the amount
of lump-sum salary to which OFWs are entitled in case of illegal dismissal, while setting no limit to
the same monetary award for local workers when their dismissal is declared illegal; that the
disparate treatment is not reasonable as there is no substantial distinction between the two groups;33
and that it defeats Section 18,34 Article II of the Constitution which guarantees the protection of the
rights and welfare of all Filipino workers, whether deployed locally or overseas.35

Moreover, petitioner argues that the decisions of the CA and the labor tribunals are not in line with
existing jurisprudence on the issue of money claims of illegally dismissed OFWs. Though there are
conflicting rulings on this, petitioner urges the Court to sort them out for the guidance of affected
OFWs.36

Petitioner further underscores that the insertion of the subject clause into R.A. No. 8042 serves no
other purpose but to benefit local placement agencies. He marks the statement made by the Solicitor
General in his Memorandum, viz.:

Often, placement agencies, their liability being solidary, shoulder the payment of money claims in the
event that jurisdiction over the foreign employer is not acquired by the court or if the foreign
employer reneges on its obligation. Hence, placement agencies that are in good faith and which
fulfill their obligations are unnecessarily penalized for the acts of the foreign employer. To protect
them and to promote their continued helpful contribution in deploying Filipino migrant workers,
liability for money claims was reduced under Section 10 of R.A. No. 8042. 37 (Emphasis supplied)

Petitioner argues that in mitigating the solidary liability of placement agencies, the subject clause
sacrifices the well-being of OFWs. Not only that, the provision makes foreign employers better off
than local employers because in cases involving the illegal dismissal of employees, foreign
employers are liable for salaries covering a maximum of only three months of the unexpired
employment contract while local employers are liable for the full lump-sum salaries of their
employees. As petitioner puts it:

In terms of practical application, the local employers are not limited to the amount of backwages they
have to give their employees they have illegally dismissed, following well-entrenched and
unequivocal jurisprudence on the matter. On the other hand, foreign employers will only be limited to
giving the illegally dismissed migrant workers the maximum of three (3) months unpaid salaries
notwithstanding the unexpired term of the contract that can be more than three (3) months.38

Lastly, petitioner claims that the subject clause violates the due process clause, for it deprives him of
the salaries and other emoluments he is entitled to under his fixed-period employment contract.39

The Arguments of Respondents

In their Comment and Memorandum, respondents contend that the constitutional issue should not
be entertained, for this was belatedly interposed by petitioner in his appeal before the CA, and not at
the earliest opportunity, which was when he filed an appeal before the NLRC.40

The Arguments of the Solicitor General

The Solicitor General (OSG)41 points out that as R.A. No. 8042 took effect on July 15, 1995, its
provisions could not have impaired petitioner's 1998 employment contract. Rather, R.A. No. 8042
having preceded petitioner's contract, the provisions thereof are deemed part of the minimum terms
of petitioner's employment, especially on the matter of money claims, as this was not stipulated upon
by the parties.42

Moreover, the OSG emphasizes that OFWs and local workers differ in terms of the nature of their
employment, such that their rights to monetary benefits must necessarily be treated differently. The
OSG enumerates the essential elements that distinguish OFWs from local workers: first, while local
workers perform their jobs within Philippine territory, OFWs perform their jobs for foreign employers,
over whom it is difficult for our courts to acquire jurisdiction, or against whom it is almost impossible
to enforce judgment; and second, as held in Coyoca v. National Labor Relations Commission43 and
Millares v. National Labor Relations Commission,44 OFWs are contractual employees who can never
acquire regular employment status, unlike local workers who are or can become regular employees.
Hence, the OSG posits that there are rights and privileges exclusive to local workers, but not
available to OFWs; that these peculiarities make for a reasonable and valid basis for the
differentiated treatment under the subject clause of the money claims of OFWs who are illegally
dismissed. Thus, the provision does not violate the equal protection clause nor Section 18, Article II
of the Constitution.45

Lastly, the OSG defends the rationale behind the subject clause as a police power measure adopted
to mitigate the solidary liability of placement agencies for this "redounds to the benefit of the migrant
workers whose welfare the government seeks to promote. The survival of legitimate placement
agencies helps [assure] the government that migrant workers are properly deployed and are
employed under decent and humane conditions."46

The Court's Ruling

The Court sustains petitioner on the first and second issues.

When the Court is called upon to exercise its power of judicial review of the acts of its co-equals,
such as the Congress, it does so only when these conditions obtain: (1) that there is an actual case
or controversy involving a conflict of rights susceptible of judicial determination;47 (2) that the
constitutional question is raised by a proper party48 and at the earliest opportunity;49 and (3) that the
constitutional question is the very lis mota of the case,50 otherwise the Court will dismiss the case or
decide the same on some other ground.51

Without a doubt, there exists in this case an actual controversy directly involving petitioner who is
personally aggrieved that the labor tribunals and the CA computed his monetary award based on the
salary period of three months only as provided under the subject clause.

The constitutional challenge is also timely. It should be borne in mind that the requirement that a
constitutional issue be raised at the earliest opportunity entails the interposition of the issue in the
pleadings before a competent court, such that, if the issue is not raised in the pleadings before that
competent court, it cannot be considered at the trial and, if not considered in the trial, it cannot be
considered on appeal.52 Records disclose that the issue on the constitutionality of the subject clause
was first raised, not in petitioner's appeal with the NLRC, but in his Motion for Partial
Reconsideration with said labor tribunal,53 and reiterated in his Petition for Certiorari before the CA.54
Nonetheless, the issue is deemed seasonably raised because it is not the NLRC but the CA which
has the competence to resolve the constitutional issue. The NLRC is a labor tribunal that merely
performs a quasi-judicial function – its function in the present case is limited to determining
questions of fact to which the legislative policy of R.A. No. 8042 is to be applied and to resolving
such questions in accordance with the standards laid down by the law itself;55 thus, its foremost
function is to administer and enforce R.A. No. 8042, and not to inquire into the validity of its
provisions. The CA, on the other hand, is vested with the power of judicial review or the power to
declare unconstitutional a law or a provision thereof, such as the subject clause.56 Petitioner's
interposition of the constitutional issue before the CA was undoubtedly seasonable. The CA was
therefore remiss in failing to take up the issue in its decision.

The third condition that the constitutional issue be critical to the resolution of the case likewise
obtains because the monetary claim of petitioner to his lump-sum salary for the entire unexpired
portion of his 12-month employment contract, and not just for a period of three months, strikes at the
very core of the subject clause.

Thus, the stage is all set for the determination of the constitutionality of the subject clause.

Does the subject clause violate Section 10,

Article III of the Constitution on non-impairment
of contracts?

The answer is in the negative.

Petitioner's claim that the subject clause unduly interferes with the stipulations in his contract on the
term of his employment and the fixed salary package he will receive57 is not tenable.

Section 10, Article III of the Constitution provides:

No law impairing the obligation of contracts shall be passed.

The prohibition is aligned with the general principle that laws newly enacted have only a prospective
operation,58 and cannot affect acts or contracts already perfected;59 however, as to laws already in
existence, their provisions are read into contracts and deemed a part thereof.60 Thus, the non-
impairment clause under Section 10, Article II is limited in application to laws about to be enacted
that would in any way derogate from existing acts or contracts by enlarging, abridging or in any
manner changing the intention of the parties thereto.

As aptly observed by the OSG, the enactment of R.A. No. 8042 in 1995 preceded the execution of
the employment contract between petitioner and respondents in 1998. Hence, it cannot be argued
that R.A. No. 8042, particularly the subject clause, impaired the employment contract of the parties.
Rather, when the parties executed their 1998 employment contract, they were deemed to have
incorporated into it all the provisions of R.A. No. 8042.
But even if the Court were to disregard the timeline, the subject clause may not be declared
unconstitutional on the ground that it impinges on the impairment clause, for the law was enacted in
the exercise of the police power of the State to regulate a business, profession or calling, particularly
the recruitment and deployment of OFWs, with the noble end in view of ensuring respect for the
dignity and well-being of OFWs wherever they may be employed.61 Police power legislations
adopted by the State to promote the health, morals, peace, education, good order, safety, and
general welfare of the people are generally applicable not only to future contracts but even to those
already in existence, for all private contracts must yield to the superior and legitimate measures
taken by the State to promote public welfare.62

Does the subject clause violate Section 1,

Article III of the Constitution, and Section 18,
Article II and Section 3, Article XIII on labor
as a protected sector?

The answer is in the affirmative.

Section 1, Article III of the Constitution guarantees:

No person shall be deprived of life, liberty, or property without due process of law nor shall any
person be denied the equal protection of the law.

Section 18,63 Article II and Section 3,64 Article XIII accord all members of the labor sector, without
distinction as to place of deployment, full protection of their rights and welfare.

To Filipino workers, the rights guaranteed under the foregoing constitutional provisions translate to
economic security and parity: all monetary benefits should be equally enjoyed by workers of similar
category, while all monetary obligations should be borne by them in equal degree; none should be
denied the protection of the laws which is enjoyed by, or spared the burden imposed on, others in
like circumstances.65

Such rights are not absolute but subject to the inherent power of Congress to incorporate, when it
sees fit, a system of classification into its legislation; however, to be valid, the classification must
comply with these requirements: 1) it is based on substantial distinctions; 2) it is germane to the
purposes of the law; 3) it is not limited to existing conditions only; and 4) it applies equally to all
members of the class.66

There are three levels of scrutiny at which the Court reviews the constitutionality of a classification
embodied in a law: a) the deferential or rational basis scrutiny in which the challenged classification
needs only be shown to be rationally related to serving a legitimate state interest;67 b) the middle-tier
or intermediate scrutiny in which the government must show that the challenged classification serves
an important state interest and that the classification is at least substantially related to serving that
interest;68 and c) strict judicial scrutiny69 in which a legislative classification which impermissibly
interferes with the exercise of a fundamental right70 or operates to the peculiar disadvantage of a
suspect class71 is presumed unconstitutional, and the burden is upon the government to prove that
the classification is necessary to achieve a compelling state interest and that it is the least
restrictive means to protect such interest.72

Under American jurisprudence, strict judicial scrutiny is triggered by suspect classifications73 based
on race74 or gender75 but not when the classification is drawn along income categories.76

It is different in the Philippine setting. In Central Bank (now Bangko Sentral ng Pilipinas) Employee
Association, Inc. v. Bangko Sentral ng Pilipinas,77 the constitutionality of a provision in the charter of
the Bangko Sentral ng Pilipinas (BSP), a government financial institution (GFI), was challenged for
maintaining its rank-and-file employees under the Salary Standardization Law (SSL), even when the
rank-and-file employees of other GFIs had been exempted from the SSL by their respective
charters. Finding that the disputed provision contained a suspect classification based on salary
grade, the Court deliberately employed the standard of strict judicial scrutiny in its review of the
constitutionality of said provision. More significantly, it was in this case that the Court revealed the
broad outlines of its judicial philosophy, to wit:

Congress retains its wide discretion in providing for a valid classification, and its policies should be
accorded recognition and respect by the courts of justice except when they run afoul of the
Constitution. The deference stops where the classification violates a fundamental right, or
prejudices persons accorded special protection by the Constitution. When these violations
arise, this Court must discharge its primary role as the vanguard of constitutional guaranties, and
require a stricter and more exacting adherence to constitutional limitations. Rational basis should not
suffice.
Admittedly, the view that prejudice to persons accorded special protection by the Constitution
requires a stricter judicial scrutiny finds no support in American or English jurisprudence.
Nevertheless, these foreign decisions and authorities are not per se controlling in this jurisdiction. At
best, they are persuasive and have been used to support many of our decisions. We should not
place undue and fawning reliance upon them and regard them as indispensable mental crutches
without which we cannot come to our own decisions through the employment of our own
endowments. We live in a different ambience and must decide our own problems in the light of our
own interests and needs, and of our qualities and even idiosyncrasies as a people, and always with
our own concept of law and justice. Our laws must be construed in accordance with the intention of
our own lawmakers and such intent may be deduced from the language of each law and the context
of other local legislation related thereto. More importantly, they must be construed to serve our own
public interest which is the be-all and the end-all of all our laws. And it need not be stressed that our
public interest is distinct and different from others.

xxxx

Further, the quest for a better and more "equal" world calls for the use of equal protection as a tool of
effective judicial intervention.

Equality is one ideal which cries out for bold attention and action in the Constitution. The Preamble
proclaims "equality" as an ideal precisely in protest against crushing inequities in Philippine society.
The command to promote social justice in Article II, Section 10, in "all phases of national
development," further explicitated in Article XIII, are clear commands to the State to take affirmative
action in the direction of greater equality. x x x [T]here is thus in the Philippine Constitution no lack of
doctrinal support for a more vigorous state effort towards achieving a reasonable measure of
equality.

Our present Constitution has gone further in guaranteeing vital social and economic rights to
marginalized groups of society, including labor. Under the policy of social justice, the law bends over
backward to accommodate the interests of the working class on the humane justification that those
with less privilege in life should have more in law. And the obligation to afford protection to labor is
incumbent not only on the legislative and executive branches but also on the judiciary to translate
this pledge into a living reality. Social justice calls for the humanization of laws and the equalization
of social and economic forces by the State so that justice in its rational and objectively secular
conception may at least be approximated.

xxxx

Under most circumstances, the Court will exercise judicial restraint in deciding questions of
constitutionality, recognizing the broad discretion given to Congress in exercising its legislative
power. Judicial scrutiny would be based on the "rational basis" test, and the legislative discretion
would be given deferential treatment.

But if the challenge to the statute is premised on the denial of a fundamental right, or the
perpetuation of prejudice against persons favored by the Constitution with special
protection, judicial scrutiny ought to be more strict. A weak and watered down view would call
for the abdication of this Court’s solemn duty to strike down any law repugnant to the Constitution
and the rights it enshrines. This is true whether the actor committing the unconstitutional act is a
private person or the government itself or one of its instrumentalities. Oppressive acts will be struck
down regardless of the character or nature of the actor.

xxxx

In the case at bar, the challenged proviso operates on the basis of the salary grade or officer-
employee status. It is akin to a distinction based on economic class and status, with the higher
grades as recipients of a benefit specifically withheld from the lower grades. Officers of the BSP now
receive higher compensation packages that are competitive with the industry, while the poorer, low-
salaried employees are limited to the rates prescribed by the SSL. The implications are quite
disturbing: BSP rank-and-file employees are paid the strictly regimented rates of the SSL while
employees higher in rank - possessing higher and better education and opportunities for career
advancement - are given higher compensation packages to entice them to stay. Considering that
majority, if not all, the rank-and-file employees consist of people whose status and rank in life are
less and limited, especially in terms of job marketability, it is they - and not the officers - who have
the real economic and financial need for the adjustment . This is in accord with the policy of the
Constitution "to free the people from poverty, provide adequate social services, extend to them a
decent standard of living, and improve the quality of life for all." Any act of Congress that runs
counter to this constitutional desideratum deserves strict scrutiny by this Court before it can pass
muster. (Emphasis supplied)
Imbued with the same sense of "obligation to afford protection to labor," the Court in the present
case also employs the standard of strict judicial scrutiny, for it perceives in the subject clause a
suspect classification prejudicial to OFWs.

Upon cursory reading, the subject clause appears facially neutral, for it applies to all OFWs.
However, a closer examination reveals that the subject clause has a discriminatory intent against,
and an invidious impact on, OFWs at two levels:

First, OFWs with employment contracts of less than one year vis-à-vis OFWs with
employment contracts of one year or more;

Second, among OFWs with employment contracts of more than one year; and

Third, OFWs vis-à-vis local workers with fixed-period employment;

OFWs with employment contracts of less than one year vis-à-vis OFWs with employment
contracts of one year or more

As pointed out by petitioner,78 it was in Marsaman Manning Agency, Inc. v. National Labor Relations
Commission79 (Second Division, 1999) that the Court laid down the following rules on the application
of the periods prescribed under Section 10(5) of R.A. No. 804, to wit:

A plain reading of Sec. 10 clearly reveals that the choice of which amount to award an
illegally dismissed overseas contract worker, i.e., whether his salaries for the unexpired
portion of his employment contract or three (3) months’ salary for every year of the unexpired
term, whichever is less, comes into play only when the employment contract concerned has a
term of at least one (1) year or more. This is evident from the words "for every year of the
unexpired term" which follows the words "salaries x x x for three months." To follow
petitioners’ thinking that private respondent is entitled to three (3) months salary only simply because
it is the lesser amount is to completely disregard and overlook some words used in the statute while
giving effect to some. This is contrary to the well-established rule in legal hermeneutics that in
interpreting a statute, care should be taken that every part or word thereof be given effect since the
law-making body is presumed to know the meaning of the words employed in the statue and to have
used them advisedly. Ut res magis valeat quam pereat.80 (Emphasis supplied)

In Marsaman, the OFW involved was illegally dismissed two months into his 10-month contract, but
was awarded his salaries for the remaining 8 months and 6 days of his contract.

Prior to Marsaman, however, there were two cases in which the Court made conflicting rulings on
Section 10(5). One was Asian Center for Career and Employment System and Services v. National
Labor Relations Commission (Second Division, October 1998),81 which involved an OFW who was
awarded a two-year employment contract, but was dismissed after working for one year and two
months. The LA declared his dismissal illegal and awarded him SR13,600.00 as lump-sum salary
covering eight months, the unexpired portion of his contract. On appeal, the Court reduced the
award to SR3,600.00 equivalent to his three months’ salary, this being the lesser value, to wit:

Under Section 10 of R.A. No. 8042, a worker dismissed from overseas employment without just,
valid or authorized cause is entitled to his salary for the unexpired portion of his employment
contract or for three (3) months for every year of the unexpired term, whichever is less.

In the case at bar, the unexpired portion of private respondent’s employment contract is eight (8)
months. Private respondent should therefore be paid his basic salary corresponding to three (3)
months or a total of SR3,600.82

Another was Triple-Eight Integrated Services, Inc. v. National Labor Relations Commission (Third
Division, December 1998),83 which involved an OFW (therein respondent Erlinda Osdana) who was
originally granted a 12-month contract, which was deemed renewed for another 12 months. After
serving for one year and seven-and-a-half months, respondent Osdana was illegally dismissed, and
the Court awarded her salaries for the entire unexpired portion of four and one-half months of her
contract.

The Marsaman interpretation of Section 10(5) has since been adopted in the following cases:

Case Title Contract Period of Unexpired Period Applied in

Period Service Period the Computation
of the Monetary
Award
 Skippers v. 6 months 2 months 4 months 4 months
Maguad84

Bahia Shipping 9 months 8 months 4 months 4 months

v. Reynaldo
Chua 85
Centennial 9 months 4 months 5 months 5 months
Transmarine v.
dela Cruz l86

Talidano v. 12 months 3 months 9 months 3 months

Falcon87

Univan v. CA 88 12 months 3 months 9 months 3 months

Oriental v. CA 12 months more than 2 10 months 3 months

89
months

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

months months

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

Nayona91 days
JSS v.Ferrer92 12 months 16 days 11 months and 3 months
24 days
Pentagon v. 12 months 9 months and 2 months and 23 2 months and 23
Adelantar93 7 days days days

Phil. Employ v. 12 months 10 months 2 months Unexpired portion

Paramio, et
al.94
Flourish 2 years 26 days 23 months and 4 6 months or 3
Maritime v. days months for each
Almanzor 95 year of contract
Athenna 1 year, 10 1 month 1 year, 9 months 6 months or 3
Manpower v. months and and 28 days months for each
Villanos 96 28 days year of contract

As the foregoing matrix readily shows, the subject clause classifies OFWs into two categories. The
first category includes OFWs with fixed-period employment contracts of less than one year; in case
of illegal dismissal, they are entitled to their salaries for the entire unexpired portion of their contract.
The second category consists of OFWs with fixed-period employment contracts of one year or more;
in case of illegal dismissal, they are entitled to monetary award equivalent to only 3 months of the
unexpired portion of their contracts.

The disparity in the treatment of these two groups cannot be discounted. In Skippers, the respondent
OFW worked for only 2 months out of his 6-month contract, but was awarded his salaries for the
remaining 4 months. In contrast, the respondent OFWs in Oriental and PCL who had also worked for
about 2 months out of their 12-month contracts were awarded their salaries for only 3 months of the
unexpired portion of their contracts. Even the OFWs involved in Talidano and Univan who had
worked for a longer period of 3 months out of their 12-month contracts before being illegally
dismissed were awarded their salaries for only 3 months.

To illustrate the disparity even more vividly, the Court assumes a hypothetical OFW-A with an
employment contract of 10 months at a monthly salary rate of US$1,000.00 and a hypothetical
OFW-B with an employment contract of 15 months with the same monthly salary rate of
US$1,000.00. Both commenced work on the same day and under the same employer, and were
illegally dismissed after one month of work. Under the subject clause, OFW-A will be entitled to
US$9,000.00, equivalent to his salaries for the remaining 9 months of his contract, whereas OFW-B
will be entitled to only US$3,000.00, equivalent to his salaries for 3 months of the unexpired portion
of his contract, instead of US$14,000.00 for the unexpired portion of 14 months of his contract, as
the US$3,000.00 is the lesser amount.

The disparity becomes more aggravating when the Court takes into account jurisprudence that,
prior to the effectivity of R.A. No. 8042 on July 14, 1995,97 illegally dismissed OFWs, no matter
how long the period of their employment contracts, were entitled to their salaries for the entire
unexpired portions of their contracts. The matrix below speaks for itself:
 Case Title Contract Period of Unexpired Period Applied in the
Period Service Period Computation of the
Monetary Award

ATCI v. CA, et 2 years 2 months 22 months 22 months

al.98
Phil. Integrated 2 years 7 days 23 months 23 months and 23
v. NLRC99 and 23 days days

JGB v. NLC100 2 years 9 months 15 months 15 months

Agoy v. 2 years 2 months 22 months 22 months

NLRC101

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

et al.102
Barros v. 12 months 4 months 8 months 8 months
NLRC, et al.103
Philippine 12 months 6 months 5 months and 5 months and 18 days
Transmarine v. and 22 days 18 days
Carilla104

It is plain that prior to R.A. No. 8042, all OFWs, regardless of contract periods or the unexpired
portions thereof, were treated alike in terms of the computation of their monetary benefits in case of
illegal dismissal. Their claims were subjected to a uniform rule of computation: their basic salaries
multiplied by the entire unexpired portion of their employment contracts.

The enactment of the subject clause in R.A. No. 8042 introduced a differentiated rule of computation
of the money claims of illegally dismissed OFWs based on their employment periods, in the process
singling out one category whose contracts have an unexpired portion of one year or more and
subjecting them to the peculiar disadvantage of having their monetary awards limited to their salaries
for 3 months or for the unexpired portion thereof, whichever is less, but all the while sparing the
other category from such prejudice, simply because the latter's unexpired contracts fall short of one
year.

Among OFWs With Employment Contracts of More Than One Year

Upon closer examination of the terminology employed in the subject clause, the Court now has
misgivings on the accuracy of the Marsaman interpretation.

The Court notes that the subject clause "or for three (3) months for every year of the unexpired term,
whichever is less" contains the qualifying phrases "every year" and "unexpired term." By its ordinary
meaning, the word "term" means a limited or definite extent of time.105 Corollarily, that "every year" is
but part of an "unexpired term" is significant in many ways: first, the unexpired term must be at least
one year, for if it were any shorter, there would be no occasion for such unexpired term to be
measured by every year; and second, the original term must be more than one year, for otherwise,
whatever would be the unexpired term thereof will not reach even a year. Consequently, the more
decisive factor in the determination of when the subject clause "for three (3) months for every year of
the unexpired term, whichever is less" shall apply is not the length of the original contract period as
held in Marsaman,106 but the length of the unexpired portion of the contract period -- the subject
clause applies in cases when the unexpired portion of the contract period is at least one year, which
arithmetically requires that the original contract period be more than one year.

Viewed in that light, the subject clause creates a sub-layer of discrimination among OFWs whose
contract periods are for more than one year: those who are illegally dismissed with less than one
year left in their contracts shall be entitled to their salaries for the entire unexpired portion thereof,
while those who are illegally dismissed with one year or more remaining in their contracts shall be
covered by the subject clause, and their monetary benefits limited to their salaries for three months
only.

To concretely illustrate the application of the foregoing interpretation of the subject clause, the Court
assumes hypothetical OFW-C and OFW-D, who each have a 24-month contract at a salary rate of
US$1,000.00 per month. OFW-C is illegally dismissed on the 12th month, and OFW-D, on the 13th
month. Considering that there is at least 12 months remaining in the contract period of OFW-C, the
subject clause applies to the computation of the latter's monetary benefits. Thus, OFW-C will be
entitled, not to US$12,000,00 or the latter's total salaries for the 12 months unexpired portion of the
contract, but to the lesser amount of US$3,000.00 or the latter's salaries for 3 months out of the 12-
month unexpired term of the contract. On the other hand, OFW-D is spared from the effects of the
subject clause, for there are only 11 months left in the latter's contract period. Thus, OFW-D will be
entitled to US$11,000.00, which is equivalent to his/her total salaries for the entire 11-month
unexpired portion.

OFWs vis-à-vis Local Workers

With Fixed-Period Employment

As discussed earlier, prior to R.A. No. 8042, a uniform system of computation of the monetary
awards of illegally dismissed OFWs was in place. This uniform system was applicable even to local
workers with fixed-term employment.107

The earliest rule prescribing a uniform system of computation was actually Article 299 of the Code of
Commerce (1888),108 to wit:

Article 299. If the contracts between the merchants and their shop clerks and employees should
have been made of a fixed period, none of the contracting parties, without the consent of the other,
may withdraw from the fulfillment of said contract until the termination of the period agreed upon.

Persons violating this clause shall be subject to indemnify the loss and damage suffered, with the
exception of the provisions contained in the following articles.

In Reyes v. The Compañia Maritima,109 the Court applied the foregoing provision to determine the
liability of a shipping company for the illegal discharge of its managers prior to the expiration of their
fixed-term employment. The Court therein held the shipping company liable for the salaries of its
managers for the remainder of their fixed-term employment.

There is a more specific rule as far as seafarers are concerned: Article 605 of the Code of
Commerce which provides:

Article 605. If the contracts of the captain and members of the crew with the agent should be for a
definite period or voyage, they cannot be discharged until the fulfillment of their contracts, except for
reasons of insubordination in serious matters, robbery, theft, habitual drunkenness, and damage
caused to the vessel or to its cargo by malice or manifest or proven negligence.

Article 605 was applied to Madrigal Shipping Company, Inc. v. Ogilvie,110 in

which the Court held the shipping company liable for the salaries and subsistence allowance of its
illegally dismissed employees for the entire unexpired portion of their employment contracts.

While Article 605 has remained good law up to the present,111 Article 299 of the Code of Commerce
was replaced by Art. 1586 of the Civil Code of 1889, to wit:

Article 1586. Field hands, mechanics, artisans, and other laborers hired for a certain time and for a
certain work cannot leave or be dismissed without sufficient cause, before the fulfillment of the
contract. (Emphasis supplied.)

Citing Manresa, the Court in Lemoine v. Alkan112 read the disjunctive "or" in Article 1586 as a
conjunctive "and" so as to apply the provision to local workers who are employed for a time certain
although for no particular skill. This interpretation of Article 1586 was reiterated in Garcia Palomar v.
Hotel de France Company.113 And in both Lemoine and Palomar, the Court adopted the general
principle that in actions for wrongful discharge founded on Article 1586, local workers are entitled to
recover damages to the extent of the amount stipulated to be paid to them by the terms of their
contract. On the computation of the amount of such damages, the Court in Aldaz v. Gay114 held:

The doctrine is well-established in American jurisprudence, and nothing has been brought to our
attention to the contrary under Spanish jurisprudence, that when an employee is wrongfully
discharged it is his duty to seek other employment of the same kind in the same community, for the
purpose of reducing the damages resulting from such wrongful discharge. However, while this is the
general rule, the burden of showing that he failed to make an effort to secure other employment of a
like nature, and that other employment of a like nature was obtainable, is upon the defendant. When
an employee is wrongfully discharged under a contract of employment his prima facie damage is the
amount which he would be entitled to had he continued in such employment until the termination of
the period. (Howard vs. Daly, 61 N. Y., 362; Allen vs. Whitlark, 99 Mich., 492; Farrell vs. School
District No. 2, 98 Mich., 43.)115 (Emphasis supplied)

On August 30, 1950, the New Civil Code took effect with new provisions on fixed-term employment:
Section 2 (Obligations with a Period), Chapter 3, Title I, and Sections 2 (Contract of Labor) and 3
(Contract for a Piece of Work), Chapter 3, Title VIII, Book IV.116 Much like Article 1586 of the Civil
Code of 1889, the new provisions of the Civil Code do not expressly provide for the remedies
available to a fixed-term worker who is illegally discharged. However, it is noted that in Mackay
Radio & Telegraph Co., Inc. v. Rich,117 the Court carried over the principles on the payment of
damages underlying Article 1586 of the Civil Code of 1889 and applied the same to a case involving
the illegal discharge of a local worker whose fixed-period employment contract was entered into in
1952, when the new Civil Code was already in effect.118

More significantly, the same principles were applied to cases involving overseas Filipino workers
whose fixed-term employment contracts were illegally terminated, such as in First Asian Trans &
Shipping Agency, Inc. v. Ople,119 involving seafarers who were illegally discharged. In Teknika Skills
and Trade Services, Inc. v. National Labor Relations Commission,120 an OFW who was illegally
dismissed prior to the expiration of her fixed-period employment contract as a baby sitter, was
awarded salaries corresponding to the unexpired portion of her contract. The Court arrived at the
same ruling in Anderson v. National Labor Relations Commission,121 which involved a foreman hired
in 1988 in Saudi Arabia for a fixed term of two years, but who was illegally dismissed after only nine
months on the job -- the Court awarded him salaries corresponding to 15 months, the unexpired
portion of his contract. In Asia World Recruitment, Inc. v. National Labor Relations Commission,122 a
Filipino working as a security officer in 1989 in Angola was awarded his salaries for the remaining
period of his 12-month contract after he was wrongfully discharged. Finally, in Vinta Maritime Co.,
Inc. v. National Labor Relations Commission,123 an OFW whose 12-month contract was illegally cut
short in the second month was declared entitled to his salaries for the remaining 10 months of his
contract.

In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-term employment who were
illegally discharged were treated alike in terms of the computation of their money claims: they were
uniformly entitled to their salaries for the entire unexpired portions of their contracts. But with the
enactment of R.A. No. 8042, specifically the adoption of the subject clause, illegally dismissed
OFWs with an unexpired portion of one year or more in their employment contract have since been
differently treated in that their money claims are subject to a 3-month cap, whereas no such
limitation is imposed on local workers with fixed-term employment.

The Court concludes that the subject clause contains a suspect classification in that, in the
computation of the monetary benefits of fixed-term employees who are illegally discharged, it
imposes a 3-month cap on the claim of OFWs with an unexpired portion of one year or more
in their contracts, but none on the claims of other OFWs or local workers with fixed-term
employment. The subject clause singles out one classification of OFWs and burdens it with a
peculiar disadvantage.

There being a suspect classification involving a vulnerable sector protected by the Constitution, the
Court now subjects the classification to a strict judicial scrutiny, and determines whether it serves a
compelling state interest through the least restrictive means.

What constitutes compelling state interest is measured by the scale of rights and powers arrayed in
the Constitution and calibrated by history.124 It is akin to the paramount interest of the state125 for
which some individual liberties must give way, such as the public interest in safeguarding health or
maintaining medical standards,126 or in maintaining access to information on matters of public
concern.127

In the present case, the Court dug deep into the records but found no compelling state interest that
the subject clause may possibly serve.

The OSG defends the subject clause as a police power measure "designed to protect the
employment of Filipino seafarers overseas x x x. By limiting the liability to three months [sic], Filipino
seafarers have better chance of getting hired by foreign employers." The limitation also protects the
interest of local placement agencies, which otherwise may be made to shoulder millions of pesos in
"termination pay."128

The OSG explained further:

Often, placement agencies, their liability being solidary, shoulder the payment of money claims in the
event that jurisdiction over the foreign employer is not acquired by the court or if the foreign
employer reneges on its obligation. Hence, placement agencies that are in good faith and which
fulfill their obligations are unnecessarily penalized for the acts of the foreign employer. To protect
them and to promote their continued helpful contribution in deploying Filipino migrant workers,
liability for money are reduced under Section 10 of RA 8042.

This measure redounds to the benefit of the migrant workers whose welfare the government seeks
to promote. The survival of legitimate placement agencies helps [assure] the government that
migrant workers are properly deployed and are employed under decent and humane conditions.129
(Emphasis supplied)
However, nowhere in the Comment or Memorandum does the OSG cite the source of its perception
of the state interest sought to be served by the subject clause.

The OSG locates the purpose of R.A. No. 8042 in the speech of Rep. Bonifacio Gallego in
sponsorship of House Bill No. 14314 (HB 14314), from which the law originated;130 but the speech
makes no reference to the underlying reason for the adoption of the subject clause. That is only
natural for none of the 29 provisions in HB 14314 resembles the subject clause.

On the other hand, Senate Bill No. 2077 (SB 2077) contains a provision on money claims, to wit:

Sec. 10. Money Claims. - Notwithstanding any provision of law to the contrary, the Labor Arbiters of
the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to
hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising
out of an employer-employee relationship or by virtue of the complaint, the claim arising out of an
employer-employee relationship or by virtue of any law or contract involving Filipino workers for
overseas employment including claims for actual, moral, exemplary and other forms of damages.

The liability of the principal and the recruitment/placement agency or any and all claims under this
Section shall be joint and several.

Any compromise/amicable settlement or voluntary agreement on any money claims exclusive of

damages under this Section shall not be less than fifty percent (50%) of such money claims:
Provided, That any installment payments, if applicable, to satisfy any such compromise or voluntary
settlement shall not be more than two (2) months. Any compromise/voluntary agreement in violation
of this paragraph shall be null and void.

Non-compliance with the mandatory period for resolutions of cases provided under this Section shall
subject the responsible officials to any or all of the following penalties:

(1) The salary of any such official who fails to render his decision or resolution within
the prescribed period shall be, or caused to be, withheld until the said official
complies therewith;

(2) Suspension for not more than ninety (90) days; or

(3) Dismissal from the service with disqualification to hold any appointive public office
for five (5) years.

Provided, however, That the penalties herein provided shall be without prejudice to any liability
which any such official may have incurred under other existing laws or rules and regulations as a
consequence of violating the provisions of this paragraph.

But significantly, Section 10 of SB 2077 does not provide for any rule on the computation of money
claims.

A rule on the computation of money claims containing the subject clause was inserted and
eventually adopted as the 5th paragraph of Section 10 of R.A. No. 8042. The Court examined the
rationale of the subject clause in the transcripts of the "Bicameral Conference Committee
(Conference Committee) Meetings on the Magna Carta on OCWs (Disagreeing Provisions of Senate
Bill No. 2077 and House Bill No. 14314)." However, the Court finds no discernible state interest, let
alone a compelling one, that is sought to be protected or advanced by the adoption of the subject
clause.

In fine, the Government has failed to discharge its burden of proving the existence of a compelling
state interest that would justify the perpetuation of the discrimination against OFWs under the
subject clause.

Assuming that, as advanced by the OSG, the purpose of the subject clause is to protect the
employment of OFWs by mitigating the solidary liability of placement agencies, such callous and
cavalier rationale will have to be rejected. There can never be a justification for any form of
government action that alleviates the burden of one sector, but imposes the same burden on another
sector, especially when the favored sector is composed of private businesses such as placement
agencies, while the disadvantaged sector is composed of OFWs whose protection no less than the
Constitution commands. The idea that private business interest can be elevated to the level of a
compelling state interest is odious.

Moreover, even if the purpose of the subject clause is to lessen the solidary liability of placement
agencies vis-a-vis their foreign principals, there are mechanisms already in place that can be
employed to achieve that purpose without infringing on the constitutional rights of OFWs.
The POEA Rules and Regulations Governing the Recruitment and Employment of Land-Based
Overseas Workers, dated February 4, 2002, imposes administrative disciplinary measures on erring
foreign employers who default on their contractual obligations to migrant workers and/or their
Philippine agents. These disciplinary measures range from temporary disqualification to preventive
suspension. The POEA Rules and Regulations Governing the Recruitment and Employment of
Seafarers, dated May 23, 2003, contains similar administrative disciplinary measures against erring
foreign employers.

Resort to these administrative measures is undoubtedly the less restrictive means of aiding local
placement agencies in enforcing the solidary liability of their foreign principals.

Thus, the subject clause in the 5th paragraph of Section 10 of R.A. No. 8042 is violative of the right
of petitioner and other OFWs to equal protection. 1avvphi1

Further, there would be certain misgivings if one is to approach the declaration of the
unconstitutionality of the subject clause from the lone perspective that the clause directly violates
state policy on labor under Section 3,131 Article XIII of the Constitution.

While all the provisions of the 1987 Constitution are presumed self-executing,132 there are some
which this Court has declared not judicially enforceable, Article XIII being one,133 particularly
Section 3 thereof, the nature of which, this Court, in Agabon v. National Labor Relations
Commission,134 has described to be not self-actuating:

Thus, the constitutional mandates of protection to labor and security of tenure may be deemed as
self-executing in the sense that these are automatically acknowledged and observed without need
for any enabling legislation. However, to declare that the constitutional provisions are enough to
guarantee the full exercise of the rights embodied therein, and the realization of ideals therein
expressed, would be impractical, if not unrealistic. The espousal of such view presents the
dangerous tendency of being overbroad and exaggerated. The guarantees of "full protection to
labor" and "security of tenure", when examined in isolation, are facially unqualified, and the broadest
interpretation possible suggests a blanket shield in favor of labor against any form of removal
regardless of circumstance. This interpretation implies an unimpeachable right to continued
employment-a utopian notion, doubtless-but still hardly within the contemplation of the framers.
Subsequent legislation is still needed to define the parameters of these guaranteed rights to ensure
the protection and promotion, not only the rights of the labor sector, but of the employers' as well.
Without specific and pertinent legislation, judicial bodies will be at a loss, formulating their own
conclusion to approximate at least the aims of the Constitution.

Ultimately, therefore, Section 3 of Article XIII cannot, on its own, be a source of a positive
enforceable right to stave off the dismissal of an employee for just cause owing to the failure to
serve proper notice or hearing. As manifested by several framers of the 1987 Constitution, the
provisions on social justice require legislative enactments for their enforceability.135 (Emphasis
added)

Thus, Section 3, Article XIII cannot be treated as a principal source of direct enforceable rights, for
the violation of which the questioned clause may be declared unconstitutional. It may unwittingly risk
opening the floodgates of litigation to every worker or union over every conceivable violation of so
broad a concept as social justice for labor.

It must be stressed that Section 3, Article XIII does not directly bestow on the working class any
actual enforceable right, but merely clothes it with the status of a sector for whom the Constitution
urges protection through executive or legislative action and judicial recognition. Its utility is best
limited to being an impetus not just for the executive and legislative departments, but for the judiciary
as well, to protect the welfare of the working class. And it was in fact consistent with that
constitutional agenda that the Court in Central Bank (now Bangko Sentral ng Pilipinas) Employee
Association, Inc. v. Bangko Sentral ng Pilipinas, penned by then Associate Justice now Chief Justice
Reynato S. Puno, formulated the judicial precept that when the challenge to a statute is premised on
the perpetuation of prejudice against persons favored by the Constitution with special protection --
such as the working class or a section thereof -- the Court may recognize the existence of a suspect
classification and subject the same to strict judicial scrutiny.

The view that the concepts of suspect classification and strict judicial scrutiny formulated in Central
Bank Employee Association exaggerate the significance of Section 3, Article XIII is a groundless
apprehension. Central Bank applied Article XIII in conjunction with the equal protection clause.
Article XIII, by itself, without the application of the equal protection clause, has no life or force of its
own as elucidated in Agabon.
Along the same line of reasoning, the Court further holds that the subject clause violates petitioner's
right to substantive due process, for it deprives him of property, consisting of monetary benefits,
without any existing valid governmental purpose.136

The argument of the Solicitor General, that the actual purpose of the subject clause of limiting the
entitlement of OFWs to their three-month salary in case of illegal dismissal, is to give them a better
chance of getting hired by foreign employers. This is plain speculation. As earlier discussed, there is
nothing in the text of the law or the records of the deliberations leading to its enactment or the
pleadings of respondent that would indicate that there is an existing governmental purpose for the
subject clause, or even just a pretext of one.

The subject clause does not state or imply any definitive governmental purpose; and it is for that
precise reason that the clause violates not just petitioner's right to equal protection, but also her right
to substantive due process under Section 1,137 Article III of the Constitution.

The subject clause being unconstitutional, petitioner is entitled to his salaries for the entire unexpired
period of nine months and 23 days of his employment contract, pursuant to law and jurisprudence
prior to the enactment of R.A. No. 8042.

On the Third Issue

Petitioner contends that his overtime and leave pay should form part of the salary basis in the
computation of his monetary award, because these are fixed benefits that have been stipulated into
his contract.

Petitioner is mistaken.

The word salaries in Section 10(5) does not include overtime and leave pay. For seafarers like
petitioner, DOLE Department Order No. 33, series 1996, provides a Standard Employment Contract
of Seafarers, in which salary is understood as the basic wage, exclusive of overtime, leave pay and
other bonuses; whereas overtime pay is compensation for all work "performed" in excess of the
regular eight hours, and holiday pay is compensation for any work "performed" on designated rest
days and holidays.

By the foregoing definition alone, there is no basis for the automatic inclusion of overtime and
holiday pay in the computation of petitioner's monetary award, unless there is evidence that he
performed work during those periods. As the Court held in Centennial Transmarine, Inc. v. Dela
Cruz,138

However, the payment of overtime pay and leave pay should be disallowed in light of our ruling in
Cagampan v. National Labor Relations Commission, to wit:

The rendition of overtime work and the submission of sufficient proof that said was actually
performed are conditions to be satisfied before a seaman could be entitled to overtime pay which
should be computed on the basis of 30% of the basic monthly salary. In short, the contract provision
guarantees the right to overtime pay but the entitlement to such benefit must first be established.

In the same vein, the claim for the day's leave pay for the unexpired portion of the contract is
unwarranted since the same is given during the actual service of the seamen.

WHEREFORE, the Court GRANTS the Petition. 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; and the December 8, 2004 Decision and April 1, 2005
Resolution of the Court of Appeals are MODIFIED to the effect 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 month.

No costs.

SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice
G.R. No. 81510 March 14, 1990

HORTENCIA SALAZAR, petitioner,

vs.
HON. TOMAS D. ACHACOSO, in his capacity as Administrator of the Philippine Overseas
Employment Administration, and FERDIE MARQUEZ, respondents.

Gutierrez & Alo Law Offices for petitioner.

SARMIENTO, J.:

This concerns the validity of the power of the Secretary of Labor to issue warrants of arrest and
seizure under Article 38 of the Labor Code, prohibiting illegal recruitment.

The facts are as follows:

xxx xxx xxx

1. On October 21, 1987, Rosalie Tesoro of 177 Tupaz Street, Leveriza,

Pasay City, in a sworn statement filed with the Philippine Overseas
Employment Administration (POEA for brevity) charged petitioner Hortencia
Salazar, viz:

04. T: Ano ba ang dahilan at ikaw ngayon ay

narito at
nagbibigay ng salaysay.

S: Upang ireklamo sa dahilan ang aking PECC Card ay

ayaw ibigay sa akin ng dati kong manager. — Horty
Salazar — 615 R.O. Santos, Mandaluyong, Mla.

05. T: Kailan at saan naganap and ginawang

panloloko sa
iyo ng tao/mga taong inireklamo mo?

S. Sa bahay ni Horty Salazar.

06. T: Paano naman naganap ang

pangyayari?

S. Pagkagaling ko sa Japan ipinatawag niya

ako. Kinuha
ang PECC Card ko at sinabing hahanapan
ako ng
booking sa Japan. Mag 9 month's na ako sa
Phils. ay
hindi pa niya ako napa-alis. So lumipat ako ng
ibang
company pero ayaw niyang ibigay and PECC
Card
ko.

2. On November 3, 1987, public respondent Atty. Ferdinand Marquez to

whom said complaint was assigned, sent to the petitioner the following
telegram:

YOU ARE HEREBY DIRECTED TO APPEAR BEFORE

FERDIE MARQUEZ POEA ANTI ILLEGAL RECRUITMENT
UNIT 6TH FLR. POEA BLDG. EDSA COR. ORTIGAS AVE.
MANDALUYONG MM ON NOVEMBER 6, 1987 AT 10 AM
RE CASE FILED AGAINST YOU. FAIL NOT UNDER
PENALTY OF LAW.

4. On the same day, having ascertained that the petitioner had no license to
operate a recruitment agency, public respondent Administrator Tomas D.
Achacoso issued his challenged CLOSURE AND SEIZURE ORDER NO.
1205 which reads:

HORTY SALAZAR
No. 615 R.O. Santos St.
Mandaluyong, Metro Manila

Pursuant to the powers vested in me under Presidential Decree No. 1920

and Executive Order No. 1022, I hereby order the CLOSURE of your
recruitment agency being operated at No. 615 R.O. Santos St.,
Mandaluyong, Metro Manila and the seizure of the documents and
paraphernalia being used or intended to be used as the means of committing
illegal recruitment, it having verified that you have —

(1) No valid license or authority from the Department of Labor

and Employment to recruit and deploy workers for overseas
employment;

(2) Committed/are committing acts prohibited under Article 34

of the New Labor Code in relation to Article 38 of the same
code.

This ORDER is without prejudice to your criminal prosecution

under existing laws.

Done in the City of Manila, this 3th day of November, 1987.

5. On January 26, 1988 POEA Director on Licensing and Regulation Atty.

Estelita B. Espiritu issued an office order designating respondents Atty.
Marquez, Atty. Jovencio Abara and Atty. Ernesto Vistro as members of a
team tasked to implement Closure and Seizure Order No. 1205. Doing so,
the group assisted by Mandaluyong policemen and mediamen Lito Castillo of
the People's Journal and Ernie Baluyot of News Today proceeded to the
residence of the petitioner at 615 R.O. Santos St., Mandaluyong, Metro
Manila. There it was found that petitioner was operating Hannalie Dance
Studio. Before entering the place, the team served said Closure and Seizure
order on a certain Mrs. Flora Salazar who voluntarily allowed them entry into
the premises. Mrs. Flora Salazar informed the team that Hannalie Dance
Studio was accredited with Moreman Development (Phil.). However, when
required to show credentials, she was unable to produce any. Inside the
studio, the team chanced upon twelve talent performers — practicing a
dance number and saw about twenty more waiting outside, The team
confiscated assorted costumes which were duly receipted for by Mrs.
Asuncion Maguelan and witnessed by Mrs. Flora Salazar.

6. On January 28, 1988, petitioner filed with POEA the following letter:

Gentlemen:

On behalf of Ms. Horty Salazar of 615 R.O. Santos, Mandaluyong, Metro

Manila, we respectfully request that the personal properties seized at her
residence last January 26, 1988 be immediately returned on the ground that
said seizure was contrary to law and against the will of the owner thereof.
Among our reasons are the following:

1. Our client has not been given any prior notice or hearing,
hence the Closure and Seizure Order No. 1205 dated
November 3, 1987 violates "due process of law" guaranteed
under Sec. 1, Art. III, of the Philippine Constitution.

2. Your acts also violate Sec. 2, Art. III of the Philippine

Constitution which guarantees right of the people "to be
secure in their persons, houses, papers, and effects against
unreasonable searches and seizures of whatever nature and
for any purpose."

3. The premises invaded by your Mr. Ferdi Marquez and five

(5) others (including 2 policemen) are the private residence of
the Salazar family, and the entry, search as well as the
 seizure of the personal properties belonging to our client were
without her consent and were done with unreasonable force
and intimidation, together with grave abuse of the color of
authority, and constitute robbery and violation of domicile
under Arts. 293 and 128 of the Revised Penal Code.

Unless said personal properties worth around TEN

THOUSAND PESOS (P10,000.00) in all (and which were
already due for shipment to Japan) are returned within
twenty-four (24) hours from your receipt hereof, we shall feel
free to take all legal action, civil and criminal, to protect our
client's interests.

We trust that you will give due attention to these important

matters.

7. On February 2, 1988, before POEA could answer the letter, petitioner filed
the instant petition; on even date, POEA filed a criminal complaint against her
with the Pasig Provincial Fiscal, docketed as IS-88-836.1

On February 2, 1988, the petitioner filed this suit for prohibition. Although the acts sought to be
barred are already fait accompli, thereby making prohibition too late, we consider the petition as one
for certiorari in view of the grave public interest involved.

The Court finds that a lone issue confronts it: May the Philippine Overseas Employment
Administration (or the Secretary of Labor) validly issue warrants of search and seizure (or arrest)
under Article 38 of the Labor Code? It is also an issue squarely raised by the petitioner for the
Court's resolution.

Under the new Constitution, which states:

. . . no search warrant or warrant of arrest shall issue except upon probable

cause to be determined personally by the judge after examination under oath
or affirmation of the complainant and the witnesses he may produce, and
particularly describing the place to be searched and the persons or things to
be seized. 2

it is only a judge who may issue warrants of search and arrest. 3 In one case, it was declared that
mayors may not exercise this power:

xxx xxx xxx

But it must be emphasized here and now that what has just been described
is the state of the law as it was in September, 1985. The law has since been
altered. No longer does the mayor have at this time the power to conduct
preliminary investigations, much less issue orders of arrest. Section 143 of
the Local Government Code, conferring this power on the mayor has been
abrogated, rendered functus officio by the 1987 Constitution which took effect
on February 2, 1987, the date of its ratification by the Filipino people. Section
2, Article III of the 1987 Constitution pertinently provides that "no search
warrant or warrant of arrest shall issue except upon probable cause to be
determined personally by the judge after examination under oath or
affirmation of the complainant and the witnesses he may produce, and
particularly describing the place to be searched and the person or things to
be seized." The constitutional proscription has thereby been manifested that
thenceforth, the function of determining probable cause and issuing, on the
basis thereof, warrants of arrest or search warrants, may be validly exercised
only by judges, this being evidenced by the elimination in the present
Constitution of the phrase, "such other responsible officer as may be
authorized by law" found in the counterpart provision of said 1973
Constitution, who, aside from judges, might conduct preliminary
investigations and issue warrants of arrest or search warrants. 4

Neither may it be done by a mere prosecuting body:

We agree that the Presidential Anti-Dollar Salting Task Force exercises, or

was meant to exercise, prosecutorial powers, and on that ground, it cannot
be said to be a neutral and detached "judge" to determine the existence of
probable cause for purposes of arrest or search. Unlike a magistrate, a
 prosecutor is naturally interested in the success of his case. Although his
office "is to see that justice is done and not necessarily to secure the
conviction of the person accused," he stands, invariably, as the accused's
adversary and his accuser. To permit him to issue search warrants and
indeed, warrants of arrest, is to make him both judge and jury in his own
right, when he is neither. That makes, to our mind and to that extent,
Presidential Decree No. 1936 as amended by Presidential Decree No. 2002,
unconstitutional. 5

Section 38, paragraph (c), of the Labor Code, as now written, was entered as an amendment by
Presidential Decrees Nos. 1920 and 2018 of the late President Ferdinand Marcos, to Presidential
Decree No. 1693, in the exercise of his legislative powers under Amendment No. 6 of the 1973
Constitution. Under the latter, the then Minister of Labor merely exercised recommendatory powers:

(c) The Minister of Labor or his duly authorized representative shall have the
power to recommend the arrest and detention of any person engaged in
illegal recruitment. 6

On May 1, 1984, Mr. Marcos promulgated Presidential Decree No. 1920, with the avowed purpose
of giving more teeth to the campaign against illegal recruitment. The Decree gave the Minister of
Labor arrest and closure powers:

(b) The Minister of Labor and Employment shall have the power to cause the
arrest and detention of such non-licensee or non-holder of authority if after
proper investigation it is determined that his activities constitute a danger to
national security and public order or will lead to further exploitation of job-
seekers. The Minister shall order the closure of companies, establishment
and entities found to be engaged in the recruitment of workers for overseas
employment, without having been licensed or authorized to do so. 7

On January 26, 1986, he, Mr. Marcos, promulgated Presidential Decree No. 2018, giving the Labor
Minister search and seizure powers as well:

(c) The Minister of Labor and Employment or his duly authorized

representatives shall have the power to cause the arrest and detention of
such non-licensee or non-holder of authority if after investigation it is
determined that his activities constitute a danger to national security and
public order or will lead to further exploitation of job-seekers. The Minister
shall order the search of the office or premises and seizure of documents,
paraphernalia, properties and other implements used in illegal recruitment
activities and the closure of companies, establishment and entities found to
be engaged in the recruitment of workers for overseas employment, without
having been licensed or authorized to do so. 8

The above has now been etched as Article 38, paragraph (c) of the Labor Code.

The decrees in question, it is well to note, stand as the dying vestiges of authoritarian rule in its
twilight moments.

We reiterate that the Secretary of Labor, not being a judge, may no longer issue search or arrest
warrants. Hence, the authorities must go through the judicial process. To that extent, we declare
Article 38, paragraph (c), of the Labor Code, unconstitutional and of no force and effect.

The Solicitor General's reliance on the case of Morano v. Vivo 9 is not well-taken. Vivo involved a
deportation case, governed by Section 69 of the defunct Revised Administrative Code and by
Section 37 of the Immigration Law. We have ruled that in deportation cases, an arrest (of an
undesirable alien) ordered by the President or his duly authorized representatives, in order to carry
out a final decision of deportation is valid. 10 It is valid, however, because of the recognized
supremacy of the Executive in matters involving foreign affairs. We have held: 11

xxx xxx xxx

The State has the inherent power to deport undesirable aliens (Chuoco Tiaco
vs. Forbes, 228 U.S. 549, 57 L. Ed. 960, 40 Phil. 1122, 1125). That power
may be exercised by the Chief Executive "when he deems such action
necessary for the peace and domestic tranquility of the nation." Justice
Johnson's opinion is that when the Chief Executive finds that there are aliens
whose continued presence in the country is injurious to the public interest,
"he may, even in the absence of express law, deport them". (Forbes vs.
 Chuoco Tiaco and Crossfield, 16 Phil. 534, 568, 569; In re McCulloch Dick,
38 Phil. 41).

The right of a country to expel or deport aliens because their continued

presence is detrimental to public welfare is absolute and unqualified (Tiu
Chun Hai and Go Tam vs. Commissioner of Immigration and the Director of
NBI, 104 Phil. 949, 956). 12

The power of the President to order the arrest of aliens for deportation is, obviously, exceptional. It
(the power to order arrests) can not be made to extend to other cases, like the one at bar. Under the
Constitution, it is the sole domain of the courts.

Moreover, the search and seizure order in question, assuming, ex gratia argumenti, that it was
validly issued, is clearly in the nature of a general warrant:

Pursuant to the powers vested in me under Presidential Decree No. 1920

and Executive Order No. 1022, I hereby order the CLOSURE of your
recruitment agency being operated at No. 615 R.O. Santos St.,
Mandaluyong, Metro Manila and the seizure of the documents and
paraphernalia being used or intended to be used as the means of committing
illegal recruitment, it having verified that you have —

(1) No valid license or authority from the Department of Labor

and Employment to recruit and deploy workers for overseas
employment;

(2) Committed/are committing acts prohibited under Article 34

of the New Labor Code in relation to Article 38 of the same
code.

This ORDER is without prejudice to your criminal prosecution under existing

laws. 13

We have held that a warrant must identify clearly the things to be seized, otherwise, it is null and
void, thus:

xxx xxx xxx

Another factor which makes the search warrants under consideration

constitutionally objectionable is that they are in the nature of general
warrants. The search warrants describe the articles sought to be seized in
this wise:

1) All printing equipment, paraphernalia, paper, ink, photo

equipment, typewriters, cabinets, tables, communications/
recording equipment, tape recorders, dictaphone and the like
used and/or connected in the printing of the "WE FORUM"
newspaper and any and all documents/communications,
letters and facsimile of prints related to the "WE FORUM"
newspaper.

2) Subversive documents, pamphlets, leaflets, books, and

other publications to promote the objectives and purposes of
the subversive organizations known as Movement for Free
Philippines, Light-a-Fire Movement and April 6 Movement;
and

3) Motor vehicles used in the distribution/circulation of the

"WE FORUM" and other subversive materials and
propaganda, more particularly,

1) Toyota-Corolla, colored yellow with Plate No. NKA 892;

2) DATSUN, pick-up colored white with Plate No. NKV 969;

3) A delivery truck with Plate No. NBS 542;

 4) TOYOTA-TAMARAW, colored white with Plate No. PBP
665; and

5) TOYOTA Hi-Lux, pick-up truck with Plate No. NGV 472

with marking "Bagong Silang."

In Stanford v. State of Texas, the search warrant which authorized the search
for "books, records, pamphlets, cards, receipts, lists, memoranda, pictures,
recordings and other written instruments concerning the Communist Parties
of Texas, and the operations of the Community Party in Texas," was declared
void by the U.S. Supreme Court for being too general. In like manner,
directions to "seize any evidence in connection with the violation of SDC 13-
3703 or otherwise" have been held too general, and that portion of a search
warrant which authorized the seizure of any "paraphernalia which could be
used to violate Sec. 54-197 of the Connecticut General Statutes (the statute
dealing with the crime of conspiracy)" was held to be a general warrant, and
therefore invalid. The description of the articles sought to be seized under the
search warrants in question cannot be characterized differently.

In the Stanford case, the U.S. Supreme court calls to mind a notable chapter
in English history; the era of disaccord between the Tudor Government and
the English Press, when "Officers of the Crown were given roving
commissions to search where they pleased in order to suppress and destroy
the literature of dissent both Catholic and Puritan." Reference herein to such
historical episode would not be relevant for it is not the policy of our
government to suppress any newspaper or publication that speaks with "the
voice of non-conformity" but poses no clear and imminent danger to state
security. 14

For the guidance of the bench and the bar, we reaffirm the following principles:

1. Under Article III, Section 2, of the l987 Constitution, it is only judges, and
no other, who may issue warrants of arrest and search:

2. The exception is in cases of deportation of illegal and undesirable aliens,

whom the President or the Commissioner of Immigration may order arrested,
following a final order of deportation, for the purpose of deportation.

WHEREFORE, the petition is GRANTED. Article 38, paragraph (c) of the Labor Code is declared
UNCONSTITUTIONAL and null and void. The respondents are ORDERED to return all materials
seized as a result of the implementation of Search and Seizure Order No. 1205.

No costs.

SO ORDERED.

Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla,
Bidin, Cortes, Griño-Aquino, Medialdea and Regalado, JJ., concur.