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Labor Standards Digests

Labor Standards Digests

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Published by Howard Chan
Case digests of finman vs inocencio, eastern assurance vs secretary of labor, marsaman vs nlrc,
Case digests of finman vs inocencio, eastern assurance vs secretary of labor, marsaman vs nlrc,

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Published by: Howard Chan on Nov 24, 2011
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Labor Relations
www.uberdigests.info Page 1
Finman General vs Inocencio
Labor Standards
Impleading Sureties in Labor Cases
Pan Pacific Overseas is a recruitment agency which offers jobs abroad duly registered with the POEA. Finman General is acting as
Pan Pacific’s surety (as required by POEA rules and Art. 31 of the Labor Code).
Pan Pacific was sued by William Inocencio and 3others for alleged violation of Article 32 and 34 of the Labor Code. Inocencio alleged that Pan Pacific charged and collected fees butfailed to provide employment abroad.POEA ruled in favor of Inocencio et al and had impleaded Finman (upon request of Inocencio) in the complaint as well (Pan Pacificchanged business address without prior notice to POEA). Th
e Labor Secretary affirmed POEA’s ruling. Finman General asserts that it
should not be impleaded in the case because it is not a party to the contract between Pan Pacific and Inocencio et al.
Whether or not Finman General is solidarily liable in the case at bar.
Yes. Since Pan Pacific had thoughtfully refrained from notifying the POEA of its new address and from responding to thecomplaints, petitioner Finman may well be regarded as an indispensable party to the proceedings before the POEA. Whether Finmanwas an indispensable or merely a proper party to the proceedings, the SC held that the POEA could properly implead it as partyrespondent either upon the request of Inocencio et al or motu propio. Such is the situation under the Revised Rules of Court.Finman General is solidarily liable. Under Section 176 of the Insurance Code, as amended, the liability of a surety in a surety bond(Finman) is joint and several with the principal obligor (Pan Pacific).Further, Article 31 of the Labor Code provides:Art. 31. Bonds.
All applicants for license or authority shall post such cash and surety bonds as determined by theSecretary of Labor to guarantee compliance with prescribed recruitment procedures, rules and regulations, and terms and,conditions of employment as appropriate.xxx
The Secretary of Labor shall have the exclusive power to determine, decide, order or direct payment from, orapplication of, the cash and surety bond for any claim or injury covered and guaranteed by the bonds.Eastern Assurance vs Secretary of Labor
Labor Standards
Liability of Sureties
POEA Rules
Overseas Employment 
J&B Manpower is an overseas employment agency registered with the POEA and Eastern Assurance was its surety beginning January1985. From 1983 to December 1985, J&B recruited 33 persons but none of them were ever deployed. These 33 persons sued J&Band the POEA as well as the Secretary of Labor ruled in favor of the 33 workers and ordered J&B to refund them (with EasternAssurance being solidarily liable). Eastern Assurance assailed the ruling claiming that POEA and the Secretary of Labor have no jurisdiction over non-employees (since the 33 were never employed, in short, no employer-employee relations).
Whether or not Eastern Assurance can be held liable in the case at bar.
Yes. But only for the period covering from January 1985
when the surety took effect
(as already held by the Labor Secretary).The Secretary of Labor was given power by Article 34 (Labor Code) and Section 35 and 36 of EO 797 (POEA Rules) to "restrict andregulate the recruitment and placement activities of all agencies," but also to "promulgate rules and regulations to carry out theobjectives and implement the provisions" governing said activities.Implicit in these powers is the award of appropriate relief to the victims of the offenses committed by the respondent agency orcontractor, specially the refund or reimbursement of such fees as may have been fraudulently or otherwise illegally collected, or suchmoney, goods or services imposed and accepted in excess of what is licitly prescribed. It would be illogical and absurd to limit thesanction on an offending recruitment agency or contractor to suspension or cancellation of its license, without the concomitantobligation to repair the injury caused to its victims.Though some of the cases were filed after the expiration of the surety bond agreement between J&B and Eastern Assurance, noticewas given to J&B of such anomalies even before said expiration. In this connection, it may be stressed that the surety bond providesthat notice to the principal is notice to the surety. Besides, it has been held that the contract of a compensated surety likerespondent Eastern Assurance is to be interpreted liberally in the interest of the promises and beneficiaries rather than strictly infavor of the surety.
Labor Relations
www.uberdigests.info Page 2
Marsaman Manning and Diamantides Maritime vs NLRC and Cajeras
Labor Standards
Standard Employment Contract 
Mutual Consent 
Migrant Workers Act 
Marsaman Manning was the local agency of Diamantides Maritime. In June 1995, Marsaman contracted Cajeras to be a cook in oneof the ships operated by Diamantides (MV Prigipos). The contract was for 10 months. But less than 2 months later, Cajeras was sentback home. The captain of the shop, in his entry to the Deck Log, said that the dismissal of Cajeras was of mutual consent; that acertain Dr. Hoed diagnosed Cajeras to be having some sort of a mental disorder. Cajeras subsequently sued Marsaman for illegaldismissal. NLRC ruled in favor of Cajeras. Marsaman assailed the NLRC decision. Marsaman further alleged that in awardingbackpays to workers, the law applicable should be Sec. 10 or RA 8042 (or 3 months salary for every year of service).
Whether or not Cajeras was illegally dismissed.
Yes. There was no proof of the mutual consent between the captain and Cajeras. Under the Standard Employment Contractby the POEA, mutual consent of leaving overseas employment should be reduced in writing. There was no showing that Cajerasreduced his consent to writing. The captains entry in the Deck Log is a mere unilateral act which does not bind Cajeras. Further, theDeck Log was not properly produced and authenticated (unlike in a previous case
Wallem Maritime Services, Inc. v. NLRC 
).On the other hand, Dr. Hoed was not shown to be qualified to be making such diagnosis. The court cannot take judicial notice of hisfindings without competent proof as to his qualification. Neither did Dr. Hoed elaborate his findings which were mere sweeping
statements as to Cajeras’ illness. It did not show how such illness affected Cajeras’ function. In fact, as per the last rati
ng of Cajeras,
he was rated as a ―Very Good‖ cook.
 Section 10 of RA 8042 (Migran
t Workers Act) is indeed applicable but the assertion of Marsaman to pay only 3 months of Cajeras’s
salary is untenable. A plain reading of Sec. 10 clearly reveals that the choice of which amount to award an illegally dismissedoverseas contract worker, i.e., whether his salaries for the unexpired portion of his employment contract or three months salary forevery year of the unexpired term, whichever is less, comes into play only when the employment contract concerned has a term of atleast one year or more (Cajeras was contracted for 10 months only). 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 Marsaman’s thinking that Cajeras is entitled to three
monthssalary only simply because it is the lesser amount is to completely disregard and overlook some words used in the statute whilegiving effect to some. This is contrary to the well-established rule in legal hermeneutics that in interpreting a statute, care should betaken that every part or word thereof be given effect since the law-making body is presumed to know the meaning of the wordsemployed in the statue and to have used them advisedly.
Ut res magis valeat quam pereat 
Pacific Asia Overseas Shipping vs NLRC and Rances
Labor Standards
Delay in Filing Appeal (Employer)
Foreign Judgments Cannot Be Enforced by POEA
Pacific Asia is an overseas employment agency that provided Rances work abroad. Rances was engaged by Gulf-East ShipManagement a Radio Operator but due to insubordination he was dismissed our months later. According to Rances he sued Gulf-Eastin Dubai and the Gulf-
East compromised with him that instead of paying him $9k+ they’ll just pay
him $5.5k plus his fare going
home to the Philippines plus if in case Rances’ wife does not agree with the amount of the allowance being sent to her via Pa
cificAsia, Rances is entitled to have $1.5k more from pacific Asia.Back in the Philippines, Rances was sued by Pacific Asia for acts unbecoming of a marine officer (due in part to his insubordination to
Pacific Asia’s client). Rances filed a counterclaim for the $1.5k as his wife did not agree with the monthly allowance sent b
y PacificAsia to her. POE
A ruled in favor of Pacific Asia but did not rule on Rances’ counterclaim. Rances then filed a separate case for his
$1.5k claim. Rances produced the original copy of the Dubai court decision awarding him the compromised amount of $5.5k. Thesaid court decision was in Arabic but it came with an English translation. It also came with a certification from a certain Mohd BinSaleh who was purportedly an Honorary Consul for the Philippines. This time he won.Pacific Asia appealed but its appeal was one day late after the reglementary period. POEA denied the appeal. NLRC likewise deniedthe appeal.
Whether or not Pacific Asia can be allowed to appeal.
Yes. The delay was due to an excusable mistake. Apparently, there was a mistake in the filing of the appeal when the newmessenger honestly thought that the appeal was supposed to be filed in NLRC Intramuros but actually it was supposed to be in POEAOrtigas (that happened to be the last day as well, and when he was advised to go to Ortigas, offices were already closed).
Also, on the merits; POEA has no jurisdiction to enforce foreign judgments. It’s the regular courts that have jurisdiction. T
he POEA isnot a court; it is an administrative agency exercising, inter alia, adjudicatory or quasi-judicial functions. Further, Rances is not suingon the strength of an employer-employee relationship between him and Gulf-East, but rather on the strength of a foreign judgment.
Labor Relations
www.uberdigests.info Page 3
And, even if the POEA has jurisdiction over the matter, it cannot take in evidence the alleged original copy o the court decision fromDubai as it was not properly authenticated pursuant to the Rules of Court (Sect 25, 26 Rule 132). The translation was also not dulyauthenticated. And an honorary consul is not authorized to make authentication of foreign public records.
Chavez vs Bonto-Perez
Labor Standards
Standard Employment Contract for Entertainers
Chavez is a dancer who was contracted by Centrum Placement & Promotions Corporation to perform in Japan for 6 months. Thecontract was for $1.5k a month, which was approved by POEA. After the approval of said contract, Chavez entered into a sidecontract reducing her salary with her Japanese employer through her local manager-agency (Jaz Talents Promotion). The salary wasreduced to $500 and $750 was to go to Jaz Talents. In February 1991 (two years after the expiration of her contract), Chavez suedCentrum Placement and Jaz Talents for underpayment of wages before the POEA.The POEA ruled against her. POEA stated that the side agreement entered into by Chavez with her Japanese employer supersededthe Standard Employment Contract; that POEA had no knowledge of such side agreement being entered into; that Chavez is barredby laches for sleeping on her right for two years.
Whether or not Chavez is entitled to relief.
Yes. The SC ruled that the managerial commission agreement executed by Chavez to authorize her Japanese Employer todeduct her salary is void because it is against our existing laws, morals and public policy. It cannot supersede the standardemployment contract approved by the POEA with the following stipulation appended thereto:It is understood that the terms and conditions stated in this Employment Contract are in conformance with the StandardEmployment Contract for Entertainers prescribed by the POEA under Memorandum Circular No. 2, Series of 1986. Anyalterations or changes made in any part of this contract without prior approval by the POEA shall be null and void;The side agreement which reduced Chavez's basic wage is null and void for violating the POEA's minimum employment standards,and for not having been approved by the POEA. Here, both Centrum Placement and Jaz Talents are solidarily liable.Laches does not apply in the case at bar. In this case, Chavez filed her claim well within the three-year prescriptive period for thefiling of money claims set forth in Article 291 of the Labor Code. For this reason, laches is not applicable.
Filamer Christian Institute vs IAC and Kapunan
August 17, 1992
Labor Standards
Human Resources Development 
Section 14, Rule X, Book III, IRR (Labor Code)
NOTE: This case reversed Filamer vs CA (October 16, 1990)Daniel Funtecha was a working student of Filamer. He was assigned as the school janitor to clean the school 2 hours every morning.
Allan Masa was the son of the school president and at the same time he was the school’s jeepney service driver.
On October 20,1977 at about 6:30pm, after driving the students to their homes, Masa returned to the school to report and thereafter have to gohome with the jeep so that he could fetch the students early in the morning. Masa and Funtecha live in the same place so they
usually go home together. Funtecha had a student driver’s license so Masa let him take the driver’s seat.
While Funtecha wasdriving, he accidentally hit an elderly Kapunan which led to his hospitalization for 20 days. Kapunan filed a criminal case and anindependent civil action based on Article 2180 against Funtecha.In the independent civil action, the lower court ruled that Filamer is subsidiarily liable for the tortious act of Funcheta and wascompelled to pay for damages based on Article 2180 which provides that employers shall be liable for the damages caused by theiremployees and household helpers acting within the scope of their assigned tasks. Filamer assailed the decision and it argued thatunder Section 14, Rule X, Book III of the Labor Code IRR, working scholars are excluded from the employment coverage hence thereis no employer-employee relations between Filamer and Funcheta; that the negligent act of Funcheta was due to negligence onlyattributable to him alone as it is outside his assigne
d task of being the school janitor. The CA denied Filamer’s appeal but the
Supreme Court agreed with Filamer. Kapunan filed for a motion for reconsideration.
Whether or not Filamer should be held subsidiarily liable.
Yes. This time, the SC ruled in favor of Kapunan (actually his heirs cause by this time Kapunan was already dead). Theprovisions of Section 14, Rule X, Book III of the Labor Code IRR was only meant to provide guidelines as compliance with laborprovisions on working conditions, rest periods, and wages is concerned. This does not in any way affect the provisions of any otherlaws like the civil code. The IRR cannot defeat the provisions of the Civil Code. In other words, Rule X is merely a guide to the

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