Serrano v. Gallant Maritime Services GR No.

16761424 March 2009

Facts: Antonio Serrano was hired by Gallant Maritime Services, Inc. and Marlow Navigation Co., Ltd. under a POEAapproved Contract of Employment which stated that he would be taking on the position of Chief Officer with a salary of $1,400 per month. However, on the date of his departure, or on 19 March 1998, he had to accept a downgraded employment contract for the position of Second Officer with a salary of $1,000 with the assurance by Gallant and Marlow that he would be made Chief Officer by the end of April1998.When Serrano was not promoted as promised, he refused to stay on as a Second Officer and was repatriated to the Philippines on 26 May 1998.The unexpired term on his contract was 9 months and 23 days. Serrano then filed a Complaint with the Labor Arbiter against Gallant and Marlow for constructive dismissal and for payment of his money claims for the total amount of $26,442.73 covering his salary for the entire unexpired term of his contract. The Labor Arbiter ruled in favor of Serrano, declaring his dismissal as illegal and awarding him monetary benefits to the tune of $8,770 representing his salary for threemonths of the unexpired portion of his contract. The LA applied Section10 of RA 8042. Upon appeal to the NLRC, the damages awarded by the LA were lowered because RA 8042 does not provide for the award of overtime pay, which should be proven to have been actually performed, and for vacation leave pay. Issues: W/N the clause or for three months for every year of the unexpired term, whichever is less found in Section10 of RA 8042 is constitutionally valid. Ruling: NO. The clause violates Section 1, Article III; Section 18, Article II; and Section 3, Article XIII of the Constitution. Section 10 of RA 8042contains a suspect classification inthat, in the computation of themonetary benefits of fixed-termemployees who are illegallydischarged, it imposes a 3-month capon 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 localworkers with fixedtermemployment. The subject clausesingles out one classification of OFWs and burdens it with a peculiar disadvantage. It violates Serranos right to substantive due process, for it deprives him of property, consisting of monetary benefits, without any existing valid governmental purpose. The subject clause being unconstitutional, Serrano 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 RA 8042. 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:(a)OFWs with employment contracts of less than one year vis--vis OFWs with employment contracts of one year or more;(b)OFWs with employment contracts of more than one year;(c)OFWs vis--vis local workers with fixed period employment. Issues: W/N overtime and leave pay should form part of the salary basis in the computation of monetary award for being fixed benefits. Ruling: NO. By definition of salaries in Section 10(5), there is no basis for the automatic inclusion of overtime and holiday pay in the computation of the monetary award, unless there is evidence that work had been performed during those periods.