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G.R. No.

162419

July 10, 2007

To this message the captain of "MSV Seaspread" replied:

PAUL V. SANTIAGO, petitioner,


vs.
CF SHARP CREW MANAGEMENT, INC., respondent.
DECISION
TINGA, J.:
At the heart of this case involving a contract between a seafarer, on one hand, and the manning agent
and the foreign principal, on the other, is this erstwhile unsettled legal quandary: whether the seafarer,
who was prevented from leaving the port of Manila and refused deployment without valid reason but
whose POEA-approved employment contract provides that the employer-employee relationship shall
commence only upon the seafarers actual departure from the port in the point of hire, is entitled to
relief?
This treats of the petition for review filed by Paul V. Santiago (petitioner) assailing the Decision and
Resolution of the Court of Appeals dated 16 October 2003 and 19 February 2004, respectively, in CAG.R. SP No. 68404.1
Petitioner had been working as a seafarer for Smith Bell Management, Inc. (respondent) for about five
(5) years.2On 3 February 1998, petitioner signed a new contract of employment with respondent, with
the duration of nine (9) months. He was assured of a monthly salary of US$515.00, overtime pay and
other benefits. The following day or on 4 February 1998, the contract was approved by the Philippine
Overseas Employment Administration (POEA). Petitioner was to be deployed on board the "MSV
Seaspread" which was scheduled to leave the port of Manila for Canada on 13 February 1998.
A week before the scheduled date of departure, Capt. Pacifico Fernandez, respondents Vice President,
sent a facsimile message to the captain of "MSV Seaspread," which reads:
I received a phone call today from the wife of Paul Santiago in Masbate asking me not to
send her husband to MSV Seaspread anymore. Other callers who did not reveal their identity
gave me some feedbacks that Paul Santiago this time if allowed to depart will jump ship in
Canada like his brother Christopher Santiago, O/S who jumped ship from the C.S. Nexus in
Kita-kyushu, Japan last December, 1997.
We do not want this to happen again and have the vessel penalized like the C.S. Nexus in
Japan.
Forewarned is forearmed like his brother when his brother when he was applying he behaved
like a Saint but in his heart he was a serpent. If you agree with me then we will send his
replacement.
Kindly advise.3

Many thanks for your advice concerning P. Santiago, A/B. Please cancel plans for him to
return to Seaspread.4
On 9 February 1998, petitioner was thus told that he would not be leaving for Canada anymore, but he
was reassured that he might be considered for deployment at some future date.
Petitioner filed a complaint for illegal dismissal, damages, and attorney's fees against respondent and
its foreign principal, Cable and Wireless (Marine) Ltd.5 The case was raffled to Labor Arbiter Teresita
Castillon-Lora, who ruled that the employment contract remained valid but had not commenced since
petitioner was not deployed. According to her, respondent violated the rules and regulations governing
overseas employment when it did not deploy petitioner, causing petitioner to suffer actual damages
representing lost salary income for nine (9) months and fixed overtime fee, all amounting to US$7,
209.00.
The labor arbiter held respondent liable. The dispositive portion of her Decision dated 29 January 1999
reads:
WHEREFORE, premises considered, respondent is hereby Ordered to pay complainant
actual damages in the amount of US$7,209.00 plus 10% attorney's fees, payable in
Philippine peso at the rate of exchange prevailing at the time of payment.
All the other claims are hereby DISMISSED for lack of merit.
SO ORDERED.6
On appeal by respondent, the National Labor Relations Commission (NLRC) ruled that there is no
employer-employee relationship between petitioner and respondent because under the Standard Terms
and Conditions Governing the Employment of Filipino Seafarers on Board Ocean Going Vessels (POEA
Standard Contract), the employment contract shall commence upon actual departure of the seafarer
from the airport or seaport at the point of hire and with a POEA-approved contract. In the absence of an
employer-employee relationship between the parties, the claims for illegal dismissal, actual damages,
and attorneys fees should be dismissed.7 On the other hand, the NLRC found respondents decision
not to deploy petitioner to be a valid exercise of its management prerogative.8 The NLRC disposed of
the appeal in this wise:
WHEREFORE, in the light of the foregoing, the assailed Decision dated January 29, 1999 is
hereby AFFIRMED in so far as other claims are concerned and with MODIFICATION by
VACATING the award of actual damages and attorneys fees as well as excluding Pacifico
Fernandez as party respondent.
SO ORDERED.9
Petitioner moved for the reconsideration of the NLRCs Decision but his motion was denied for lack of
merit.10 He elevated the case to the Court of Appeals through a petition for certiorari.

In its Decision11 dated 16 October 2003, the Court of Appeals noted that there is an ambiguity in the
NLRCs Decision when it affirmed with modification the labor arbiters Decision, because by the very
modification introduced by the Commission (vacating the award of actual damages and attorneys fees),
there is nothing more left in the labor arbiters Decision to affirm.12
According to the appellate court, petitioner is not entitled to actual damages because damages are not
recoverable by a worker who was not deployed by his agency within the period prescribed in
the POEA Rules.13 It agreed with the NLRCs finding that petitioners non-deployment was a valid
exercise of respondents management prerogative.14 It added that since petitioner had not departed
from the Port of Manila, no employer-employee relationship between the parties arose and any claim
for damages against the so-called employer could have no leg to stand on.15

executed an affidavit21 strongly denying having called respondent, and that the other alleged callers did
not even disclose their identities to respondent.22Thus, it was error for the Court of Appeals to adopt the
unfounded conclusion of the NLRC, as the same was not based on substantial evidence.23
On the other hand, respondent argues that the Labor Arbiter has no jurisdiction to award petitioners
monetary claims. His employment with respondent did not commence because his deployment was
withheld for a valid reason. Consequently, the labor arbiter and/or the NLRC cannot entertain
adjudication of petitioners case much less award damages to him. The controversy involves a breach
of contractual obligations and as such is cognizable by civil courts.24 On another matter, respondent
claims that the second issue posed by petitioner involves a recalibration of facts which is outside the
jurisdiction of this Court.25
There is some merit in the petition.

Petitioners subsequent motion for reconsideration was denied on 19 February 2004.16


The present petition is anchored on two grounds, to wit:
A. The Honorable Court of Appeals committed a serious error of law when it ignored [S]ection
10 of Republic Act [R.A.] No. 8042 otherwise known as the Migrant Workers Act of 1995 as
well as Section 29 of the Standard Terms and Conditions Governing the Employment of
Filipino Seafarers On-Board Ocean-Going Vessels (which is deemed incorporated under the
petitioners POEA approved Employment Contract) that the claims or disputes of the
Overseas Filipino Worker by virtue of a contract fall within the jurisdiction of the Labor Arbiter
of the NLRC.
B. The Honorable Court of Appeals committed a serious error when it disregarded the
required quantum of proof in labor cases, which is substantial evidence, thus a total
departure from established jurisprudence on the matter.17
Petitioner maintains that respondent violated the Migrant Workers Act and the POEA Rules when it
failed to deploy him within thirty (30) calendar days without a valid reason. In doing so, it had
unilaterally and arbitrarily prevented the consummation of the POEA- approved contract. Since it
prevented his deployment without valid basis, said deployment being a condition to the consummation
of the POEA contract, the contract is deemed consummated, and therefore he should be awarded
actual damages, consisting of the stipulated salary and fixed overtime pay.18 Petitioner adds that since
the contract is deemed consummated, he should be considered an employee for all intents and
purposes, and thus the labor arbiter and/or the NLRC has jurisdiction to take cognizance of his claims. 19
Petitioner additionally claims that he should be considered a regular employee, having worked for five
(5) years on board the same vessel owned by the same principal and manned by the same local agent.
He argues that respondents act of not deploying him was a scheme designed to prevent him from
attaining the status of a regular employee.20
Petitioner submits that respondent had no valid and sufficient cause to abandon the employment
contract, as it merely relied upon alleged phone calls from his wife and other unnamed callers in
arriving at the conclusion that he would jump ship like his brother. He points out that his wife had

There is no question that the parties entered into an employment contract on 3 February 1998, whereby
petitioner was contracted by respondent to render services on board "MSV Seaspread" for the
consideration of US$515.00 per month for nine (9) months, plus overtime pay. However, respondent
failed to deploy petitioner from the port of Manila to Canada. Considering that petitioner was not able to
depart from the airport or seaport in the point of hire, the employment contract did not commence, and
no employer-employee relationship was created between the parties.26
However, a distinction must be made between the perfection of the employment contract and the
commencement of the employer-employee relationship. The perfection of the contract, which in this
case coincided with the date of execution thereof, occurred when petitioner and respondent agreed on
the object and the cause, as well as the rest of the terms and conditions therein. The commencement of
the employer-employee relationship, as earlier discussed, would have taken place had petitioner been
actually deployed from the point of hire. Thus, even before the start of any employer-employee
relationship, contemporaneous with the perfection of the employment contract was the birth of certain
rights and obligations, the breach of which may give rise to a cause of action against the erring party.
Thus, if the reverse had happened, that is the seafarer failed or refused to be deployed as agreed
upon, he would be liable for damages.
Moreover, while the POEA Standard Contract must be recognized and respected, neither the manning
agent nor the employer can simply prevent a seafarer from being deployed without a valid reason.
Respondents act of preventing petitioner from departing the port of Manila and boarding "MSV
Seaspread" constitutes a breach of contract, giving rise to petitioners cause of action. Respondent
unilaterally and unreasonably reneged on its obligation to deploy petitioner and must therefore answer
for the actual damages he suffered.
We take exception to the Court of Appeals conclusion that damages are not recoverable by a worker
who was not deployed by his agency. The fact that the POEA Rules27 are silent as to the payment of
damages to the affected seafarer does not mean that the seafarer is precluded from claiming the same.
The sanctions provided for non-deployment do not end with the suspension or cancellation of license or
fine and the return of all documents at no cost to the worker. They do not forfend a seafarer from
instituting an action for damages against the employer or agency which has failed to deploy him.

The POEA Rules only provide sanctions which the POEA can impose on erring agencies. It does not
provide for damages and money claims recoverable by aggrieved employees because it is not the
POEA, but the NLRC, which has jurisdiction over such matters.
Despite the absence of an employer-employee relationship between petitioner and respondent, the
Court rules that the NLRC has jurisdiction over petitioners complaint. The jurisdiction of labor arbiters is
not limited to claims arising from employer-employee relationships. Section 10 of R.A. No. 8042
(Migrant Workers Act), provides that:
Sec. 10. Money Claims. Notwithstanding any provision of law to the contrary, the Labor
Arbiters of the National Labor Relations Commission (NLRC) shall have the original and
exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the
complaint, the claims arising out of an employer-employee relationship or by virtue of any law
or contract involving Filipino workers for overseas deployment including claims for actual,
moral, exemplary and other forms of damages. x x x [Emphasis supplied]
Since the present petition involves the employment contract entered into by petitioner for overseas
employment, his claims are cognizable by the labor arbiters of the NLRC.
Article 2199 of the Civil Code provides that one is entitled to an adequate compensation only for such
pecuniary loss suffered by him as he has duly proved. Respondent is thus liable to pay petitioner actual
damages in the form of the loss of nine (9) months worth of salary as provided in the contract. He is
not, however, entitled to overtime pay. While the contract indicated a fixed overtime pay, it is not a
guarantee that he would receive said amount regardless of whether or not he rendered overtime work.
Even though petitioner was "prevented without valid reason from rendering regular much less overtime
service,"28 the fact remains that there is no certainty that petitioner will perform overtime work had he
been allowed to board the vessel. The amount of US$286.00 stipulated in the contract will be paid only
if and when the employee rendered overtime work. This has been the tenor of our rulings in the case
of Stolt-Nielsen Marine Services (Phils.), Inc. v. National Labor Relations Commission 29 where we
discussed the matter in this light:
The contract provision means that the fixed overtime pay of 30% would be the basis for
computing the overtime pay if and when overtime work would be rendered. Simply stated, the
rendition of overtime work and the submission of sufficient proof that said work was actually
performed are conditions to be satisfied before a seaman could be entitled to overtime pay
which should be computed on the basis of 30% of the basic monthly salary. In short, the
contract provision guarantees the right to overtime pay but the entitlement to such benefit
must first be established. Realistically speaking, a seaman, by the very nature of his job,
stays on board a ship or vessel beyond the regular eight-hour work schedule. For the
employer to give him overtime pay for the extra hours when he might be sleeping or attending
to his personal chores or even just lulling away his time would be extremely unfair and
unreasonable.30
The Court also holds that petitioner is entitled to attorneys fees in the concept of damages and
expenses of litigation. Attorney's fees are recoverable when the defendant's act or omission has
compelled the plaintiff to incur expenses to protect his interest.31 We note that respondents basis for
not deploying petitioner is the belief that he will jump ship just like his brother, a mere suspicion that is

based on alleged phone calls of several persons whose identities were not even confirmed. Time and
again, this Court has upheld management prerogatives so long as they are exercised in good faith for
the advancement of the employers interest and not for the purpose of defeating or circumventing the
rights of the employees under special laws or under valid agreements. 32Respondents failure to deploy
petitioner is unfounded and unreasonable, forcing petitioner to institute the suit below. The award of
attorneys fees is thus warranted.
However, moral damages cannot be awarded in this case. While respondents failure to deploy
petitioner seems baseless and unreasonable, we cannot qualify such action as being tainted with bad
faith, or done deliberately to defeat petitioners rights, as to justify the award of moral damages. At
most, respondent was being overzealous in protecting its interest when it became too hasty in making
its conclusion that petitioner will jump ship like his brother.
We likewise do not see respondents failure to deploy petitioner as an act designed to prevent the latter
from attaining the status of a regular employee. Even if petitioner was able to depart the port of Manila,
he still cannot be considered a regular employee, regardless of his previous contracts of employment
with respondent. InMillares v. National Labor Relations Commission,33 the Court ruled that seafarers are
considered contractual employees and cannot be considered as regular employees under the Labor
Code. Their employment is governed by the contracts they sign every time they are rehired and their
employment is terminated when the contract expires. The exigencies of their work necessitates that
they be employed on a contractual basis.34
WHEREFORE, petition is GRANTED IN PART. The Decision dated 16 October 2003 and the
Resolution dated 19 February 2004 of the Court of Appeals are REVERSED and SET ASIDE. The
Decision of Labor Arbiter Teresita D. Castillon-Lora dated 29 January 1999 is REINSTATED with the
MODIFICATION that respondent CF Sharp Crew Management, Inc. is ordered to pay actual or
compensatory damages in the amount of US$4,635.00
representing salary for nine (9) months as stated in the contract, and attorneys fees at the reasonable
rate of 10% of the recoverable amount.
SO ORDERED.

JEBSENS MARITIME INC.,


represented by MS. ARLENE
ASUNCION and/or ALLIANCE MARINE SERVICES,
LTD., Petitioners,
- versus ENRIQUE UNDAG, Respondent.

DECISION
MENDOZA, J.:

representing total permanent disability compensation benefits for US$3,224.00 sickness allowance, and
This petition for review assails the September 16, 2009 Decision [1] and the March 3, 2010
Resolution[2] of the Court of Appeals (CA), which set aside the October 17, 2005 and January 24, 2006
Resolutions of the National Labor Relations Commission (NLRC), dismissing the complaint of
respondent Enrique Undag (respondent) for disability benefits.
Records bear out that respondent was hired as Lead Operator on board the vessel FPSO

10% attorneys fees.


On appeal, however, the NLRC reversed the LA decision and denied respondents claim for
disability benefits. The NLRC reasoned out that respondent failed to present substantial evidence
proving that he had suffered any illness while on board or after disembarking from petitioners vessel.
Respondents motion for reconsideration was later denied.

Jamestown owned by Alliance Marine Services, Ltd. and managed by its local agent, Jebsens Maritime,
Inc. (petitioners). Respondents contract with petitioners was for a period of four (4) months with a basic
salary of US$806.00 a month. He was deployed on March 24, 2003 and eventually repatriated to the
Philippines on July 18, 2003 after his contract with the petitioners had expired.
On September 24, 2003, about two months after repatriation, he went to see a physician, Dr.
Efren Vicaldo (Dr. Vicaldo), for a physical check-up and was diagnosed to have Hypertensive
cardiovascular disease, Atrial Fibrillation, Diabetes Mellitus II, Impediment Grade X (20.15%).
According to Dr. Vicaldo, respondent had a history of hypertension and diabetes and was at risk of
developing a stroke, coronary artery disease and congestive heart failure. He likewise stated that
respondents ailment was aggravated by his work as a seaman and that he was no longer fit for work.
For said reason, respondent requested for financial assistance from petitioners but the latter denied his
request.

Not satisfied with the NLRC decision, respondent appealed before the CA. On September 16,
2009, the CA rendered a decision setting aside the ruling of the NLRC. The appellate court stated that
respondent was able to prove by substantial evidence that his work as a seafarer caused his
hypertensive cardiovascular disease or, at least, was a relevant factor in contracting his illness. The CA
explained that as Lead Operator, respondent performed multi-tasking functions which required
excessive physical and mental effort. Moreover, he was also exposed to the perils of the sea and was
made to endure unpredictable and extreme climate changes in the daily performance of his job. The CA
also took judicial notice of the fact that overseas workers suffer a great degree of emotional strain while
on duty on board vessels because of their being separated from their families for the duration of their
contract. The CA was of the strong view that the inherent difficulties in respondents job definitely
caused his illness. The CA added that because of the nature of his work, the illness suffered by

Constrained, he filed a complaint for sickness benefits against petitioners before


the NLRC, alleging that he had been suffering from chest pains and difficulty of breathing since July
2003 when he was on board petitioners vessel. Despite knowing his bad physical condition upon
repatriation, the petitioners did not give him any financial assistance. Thus, he prayed that petitioners
be ordered to reimburse him for his medical expenses and pay him sickness allowance amounting to
US$3,224.00, including damages and attorneys fees.

respondent contributed to the aggravation of his injury which was pre-existing at the time of his
employment. Finally, the CA ruled that respondent is entitled to claim total and permanent disability
benefits because of the undisputed doctors findings that he is now unfit to resume work as a seaman
in any capacity, which clearly constitutes a permanent and total disability as defined by law.
Not in conformity with the CA decision, petitioners filed this petition for review praying for its
reversal raising this lone

Petitioners countered that respondent was not entitled to disability benefits because his
repatriation was not due to medical reasons but due to the expiration of his employment contract.
Petitioners basically argued that, under the POEA Standard Employment Contract (POEA-SEC), a
seafarer was entitled to disability benefits only if he had suffered a work-related illness during the term

ISSUE
WHETHER OR NOT THE COURT OF APPEALS ERRED IN AWARDING FULL
DISABILITY BENEFITS TO THE PRIVATE RESPONDENT.

of his contract.
On June 30, 2005, after due hearing, the Labor Arbiter (LA) rendered a decision ordering
petitioners to pay, jointly and severally, respondent the Philippine peso equivalent of US$60,000.00

In advocacy of their position, petitioners argue that the CA committed a reversible error in
awarding respondent disability benefits on the principal ground that there are numerous substantial and

competent evidence on record which clearly establish the fact that respondent was guilty of fraudulent

Lastly, he asserts that his disability is permanent and total because he has been declared to be

misrepresentation, hence, forfeiting his right to any benefits under the POEA contract. For one,

unfit for sea duty for which he is entitled to recover attorneys fees and litigation costs under Article

respondent intentionally lied when he declared that he was not suffering from a previous medical

2208.

condition in his pre-employment medical examination (PEME). Specifically, he failed to disclose the fact
THE COURTS RULING

that he was suffering from diabetes and heart problem, which is a clear case of concealment.
Secondly, respondents illnesses were not acquired during the term of his contract with
petitioners. He had no evidence showing that he acquired the heart problem and hypertension while he
was on board the vessel. The fact that respondent passed his PEME does not automatically mean that
he suffered his illness on board the vessel or that the same was not pre-existing.
Third, the Labor Code provision on permanent disability is not applicable in a claim for
disability benefits under the POEA contract.

No substantial evidence that


illness was work-related

Entitlement of seamen on overseas work to disability benefits is a matter governed, not only
by medical findings, but by law and by contract. The material statutory provisions are Articles 191 to
193 under Chapter VI (Disability Benefits) of the Labor Code, in relation with Rule X of the Rules and
Regulations Implementing Book IV of the Labor Code. By contract, the POEA-SEC, as provided under
Department Order No. 4, series of 2000 of the Department of Labor and Employment, and the parties

Respondents Position
Respondent counters that petitioners never raised the issue of fraudulent misrepresentation
before the labor tribunals despite being given the opportunity to do so. Hence, they are estopped from

Collective Bargaining Agreement (CBA) bind the seaman and his employer to each other.[3]
Deemed incorporated in every Filipino seafarers contract of employment, denominated as
POEA-SEC or the Philippine Overseas Employment Administration-Standard Employment Contract, is
a set of standard provisions established and implemented by the POEA, called the Amended Standard

raising it for the first time on appeal. At any rate, he claims that he did not commit any fraud or

Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels,

misrepresentation because he underwent a stringent PEME, which included a blood and urine

which contain the minimum requirements prescribed by the government for the employment of Filipino

examination, conducted by the company-designated physician. His illness, therefore, was not pre-

seafarers. Section 20(B), paragraph 6, of the 2000 Amended Standard Terms and Conditions provides:

existing. In any case, the pre-existence of an illness is not a bar for the compensability of a seafarers
illness. His non-compliance with the mandatory 3-day reporting upon signoff is irrelevant because it
only applies to a seafarer who has signed off from the vessel for medical reasons.
Moreover, respondent argues that a repatriation due to a finished contract does not preclude a
seafarer from recovery of benefits, as the only requirement is that the disease must be a consequence
or a result of the work performed. He has shown by substantial evidence that his cardiovascular
disease was work-related. The strenuous work conditions that he experienced while on sea duty
coupled with his usual encounter with the unfriendly forces of nature increased the risk of contracting
his heart ailment.

SECTION 20. COMPENSATION AND BENEFITS


xxx
B.

COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS

The liabilities of the employer when the seafarer suffers work-related


injury or illness during the term of his contract are as follows:
Xxx
6.
In case of permanent total or partial disability of the seafarer
caused by either injury or illness the seafarer shall be compensated in accordance
with the schedule of benefits enumerated in Section 32 of this Contract.
Computation of his benefits arising from an illness or disease shall be governed by
the rates and the rules of compensation applicable at the time the illness or
disease was contracted.

Pursuant to the aforequoted provision, two elements must concur for an injury or illness to be

In labor cases as in other administrative proceedings, substantial evidence or such relevant

compensable. First, that the injury or illness must be work-related; and second, that the work-related

evidence as a reasonable mind might accept as sufficient to support a conclusion is required. The oft-

injury or illness must have existed during the term of the seafarers employment contract.

repeated rule is that whoever claims entitlement to the benefits provided by law should establish his or

The 2000 POEA Amended Standard Terms and Conditions defines "work-related injury" as

her right thereto by substantial evidence.[5] Substantial evidence is more than a mere scintilla. The

"injury(ies) resulting in disability or death arising out of and in the course of employment" and "work-

evidence must be real and substantial, and not merely apparent; for the duty to prove work-causation or

related illness" as "any sickness resulting in disability or death as a result of an occupational disease

work-aggravation imposed by law is real and not merely apparent.[6]

listed under Section 32-A of this contract with the conditions set therein satisfied." These are:
SECTION 32-A.

OCCUPATIONAL DISEASES

For an occupational disease and the resulting disability or death to be


compensable, all of the following conditions must be satisfied:

In this case, the Court is of the considered view that respondent failed to prove that his
ailment was work-related and was acquired during his 4-month sea deployment. Respondent claims
that sometime in July 2003, he showed manifestations of a heart disease when he suddenly felt chest
pains, shortness of breath and fatigability.[7] He, however, never substantiated such claim. He never

1) The seafarers work must involve the risks described herein;

showed any written note, request or record about any medical check-up, consultation or

2) The disease was contracted as a result of the seafarers


exposure to the described risks;

treatment. Similarly, he failed to substantiate his allegation that after his arrival in Manila on July 18,

3) The disease was contracted within a period of exposure and


under such other factors necessary to contract it; and

he was experiencing but petitioners ignored him.[8]

4)

There was no notorious negligence on the part of the


seafarer.

2003, he reported to petitioners office on July 31, 2003 to seek medical consultation for the discomfort

He also alleged that on August 4, 2003, more or less sixteen (16) days after arriving
in Manila, he underwent a physical and laboratory examination at the Maritime Clinic for International
Service, Inc. conducted by petitioners where he was declared to be unfit for sea duty. Again, there is no

Sec. 32-A(11) of the 2000 POEA Amended Standard Terms and Conditions explicitly
considers a cardiovascular disease as an occupational disease if the same was contracted
under working conditions that involve any of the following risks
a) If the heart disease was known to have been present during employment, there
must be proof that an acute exacerbation was clearly precipitated by the
unusual strain by reasons of the nature of his work.
b) The strain of the work that brings about an acute attack must be sufficient
severity and must be followed within 24 hours by the clinical signs of cardiac
insult to constitute causal relationship.
c) If a person who was apparently asymptomatic before being subjected to strain
at work showed signs and symptoms of cardiac injury during the performance
of his work and such symptoms and signs persisted, it is reasonable to claim
a causal relationship.

record of this except his self-serving claim. What is on record is that on September 24, 2003,
respondent surfaced demanding payment of disability benefits.
Respondent failed to comply
with the mandatory 3-day rule

More importantly, respondent failed to comply with the mandatory 3-day medical examination
deadline provided in Section 20(B), paragraph (3) of the 2000 Amended Standard Terms and
Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels. As earlier
stated, it was only on September 24, 2003, or more than two (2) months after his arrival in Manila, that
he sought a medical opinion from Dr. Vicaldo who declared him unfit to work as a seaman due to

Consequently, for cardiovascular disease to constitute an occupational disease for which the

hypertensive cardiovascular disease, atrial fibrillation and diabetes mellitus II. [9] Section 20(B),

seafarer may claim compensation, it is incumbent upon said seafarer to show that he developed the

paragraph (3) of the 2000 Amended Standard Terms and Conditions Governing the Employment of

same under any of the three conditions identified above.

[4]

Filipino Seafarers on Board Ocean-Going Vessels, reads:


Section 20(B), paragraph (3) thereof states:

X x x.
3. Upon sign off from the vessel for medical treatment, the seafarer is
entitled to sickness allowance equivalent to his basic wage until he is declared fit to
work or the degree of permanent disability has been assessed by the companydesignated physician but in no case shall this period exceed one-hundred twenty
(120) days.
For this purpose, the seafarer shall submit himself to a postemployment medical examination by a company-designated physician within
three working days upon his return except when he is physically
incapacitated to do so, in which case a written notice to the agency within the
same period is deemed as compliance. Failure of the seafarer to comply with
the mandatory reporting requirement shall result in his forfeiture of the right
to claim the above benefits. [Emphases and underscoring supplied]
While the rule is not absolute, there is no credible explanation from respondent why he failed
to comply with the mandatory rule considering his claim that in July, 2003, he was suffering from chest

requirement. Lately, in the recent case of Alex C. Cootauco v. MMS Phil. Maritime Services, Inc., [11] it
was written:
For this purpose, the seafarer shall submit himself to a post-employment
medical examination by a company-designated physician within three working
days upon his return except when he is physically incapacitated to do so, in which
case a written notice to the agency within the same period is deemed as
compliance. Failure of the seafarer to comply with the mandatory reporting
requirement shall result in his forfeiture of the right to claim the above benefits.
As these provisions operate, the seafarer, upon sign-off from his vessel,
must report to the company-designated physician within three working days from
arrival for diagnosis and treatment.
Applying the above provision of Section 20(B), paragraph (3), petitioner
is required to undergo post-employment medical examination by a companydesignated physician within three working days from arrival, except when he is
physically incapacitated to do so, in which case, a written notice to the agency
within the same period would suffice.

pain, shortness of breath and fatigue. An award of disability benefit to a seaman in this case, despite
non-compliance with strict mandatory requirements of the law, cannot be sustained. The rationale
behind the rule can easily be divined. Within three days from repatriation, it would be fairly easier for a

In Maunlad Transport, Inc. v. Manigo, Jr., this Court explicitly declared


that it is mandatory for a claimant to be examined by a company-designated
physician within three days from his repatriation. The unexplained omission of this
requirement will bar the filing of a claim for disability benefits.

physician to determine if the illness was work-related or not. After that period, there would be difficulty
in ascertaining the real cause of the illness.
To ignore the rule would set a precedent with negative repercussions because it would open
the floodgates to a limitless number of seafarers claiming disability benefits. It would certainly be unfair
to the employer who would have difficulty determining the cause of a claimants illness considering the
passage of time. In such a case, the employers would have no protection against unrelated disability
claims.
Respondent claims that the 3-day mandatory rule is not applicable as it is only for those who
were repatriated for medical reasons. This could only mean that he had no medical reason then. In his
pleadings, he claimed that sometime in July 2003, he showed manifestations of a heart disease as he
suddenly felt chest pains, shortness of breath and fatigability.[10] He, however, failed to disclose when
exactly in July 2003 that he felt those manifestations whether before or after his repatriation on July 18,
2003. If it was before the said date, he should have submitted himself to a medical examination three
days after repatriation.
The Courts ruling is not novel. In the past, the Court repeatedly denied the payment of
disability benefits to seamen who failed to comply with the mandatory reporting and examination

The NLRC and the Court of Appeals determined that petitioner did not
observe the established procedure as there is no proof at all that he reported to the
office of the respondents. We see no reason to depart from their findings. While
petitioner remains firm that he reported to the office of the respondents for
mandatory reporting, the records are bereft of any proof to fortify his claim. The
onus probandi falls on petitioner to establish or substantiate such claim by the
requisite quantum of evidence. There is absolutely no evidence on record to prove
petitioners claim that he reported to respondents office for mandatory reportorial
requirement. Petitioner therefore failed to adduce substantial evidence as basis for
the grant of relief. [Emphasis and underscoring supplied]
The Court reiterated the same ruling in the case of Coastal Safeway Marine Services, Inc. vs.
Elmer T. Esguerra,[12] where it was written:
For this purpose, the seafarer shall submit himself to a postemployment medical examination by a company-designated physician
within three working days upon his return except when he is physically
incapacitated to do so, in which case, a written notice to the agency within the
same period is deemed as compliance. Failure of the seafarer to comply with the
mandatory reporting requirement shall result in his forfeiture of the right to claim the
above benefits.

If a doctor appointed by the seafarer disagrees with the assessment, a


third doctor may be agreed jointly between the employer and the seafarer. The
third doctor's decision shall be final and binding on both parties.

DONATO A. ALMANZOR,Respondent.

DECISION
The foregoing provision has been interpreted to mean that it is the
company-designated physician who is entrusted with the task of assessing
the seaman's disability, whether total or partial, due to either injury or illness,
during the term of the latter's employment. Concededly, this does not mean that
the assessment of said physician is final, binding or conclusive on the claimant, the
labor tribunal or the courts. Should he be so minded, the seafarer has the
prerogative to request a second opinion and to consult a physician of his choice
regarding his ailment or injury, in which case the medical report issued by the latter
shall be evaluated by the labor tribunal and the court, based on its inherent merit.
For the seamans claim to prosper, however, it is mandatory that he should be
examined by a company-designated physician within three days from his
repatriation. Failure to comply with this mandatory reporting requirement without
justifiable cause shall result in forfeiture of the right to claim the compensation and
disability benefits provided under the POEA-SEC. [Emphases and underscoring
supplied]
WHEREFORE, the petition is GRANTED. The September 16, 2009 Decision of the Court of Appeals
and its March 3, 2010 Resolution are herebyREVERSED and SET ASIDE, and the October 17,
2005 and January 24, 2006 Resolutions of the National Labor Relations Commission
are REINSTATED.

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the
Decision[1] of the Court of Appeals dated February 27, 2007 and its Resolution[2] dated May 18, 2007 in
CA-G.R. SP No. 95056. The assailed Decision affirmed with modification the Decision [3] of the National
Labor Relations Commission (NLRC) dated April 28, 2006 in NLRC NCR CA NO. 046596-05 which, in
turn, affirmed the Decision[4] of Labor Arbiter Lutricia F. Quitevis-Alconcel, dated October 7, 2005 in
OFW NLRC CASE NO. (M) 05-01-0243-00.
The facts of the case are as follows:
Respondent Donato A. Almanzor entered into a two-year employment contract with Flourish
Maritime Shipping as fisherman, with a monthly salary of NT15,840.00 with free meals every day. It
was, likewise, agreed that respondent would be provided with suitable accommodations.[5]

SO ORDERED.

On October 1, 2004, respondent was deployed to Taipei, Taiwan as part of the crew of a
fishing vessel known as FV Tsang Cheng 66. Respondent was surprised to learn that there were only
five (5) crew members on board and he had to buy his own food, contrary to the agreed stipulation of
free food and accommodation.[6]
While on board, the master of the vessel gave respondent orders which he could not
understand; thus, he failed to obey him. Consequently, enraged at not being obeyed, the master struck
him, hitting the right dorsal part of his body. He then requested medical assistance, but the master
refused.[7] Hence, he sought the help of petitioner Lolita Uy (the manning agency owner), who then
talked to the master of the vessel.
While the vessel was docked at the Taipei port, respondent was informed that he would be
repatriated. Upon his arrival in the Philippines, he reported to petitioners and sought medical
assistance after which he was declared fit to work. Petitioners promised that he would be redeployed,

FLOURISH MARITIME SHIPPING and LOLITA


UY,Petitioners,
- versus -

but it turned out that it was no longer possible because of his age, for then he was already 49 years
old.

Thus, respondent filed a complaint for illegal dismissal, payment for the unexpired portion of
his employment contract, earned wages, moral and exemplary damages plus attorneys fees.

from employment after only 26 days of actual work. The CA, however, disagreed with such
interpretation. According to the CA, since respondent actually worked for 26 days and was thereafter
dismissed from employment, the unexpired portion of the contract is one (1) year, eleven (11) months

Petitioners countered that respondent voluntarily resigned[8] from his employment and
returned to the Philippines on the same day. They, likewise, sought the dismissal of the complaint for
failure of respondent to comply with the grievance machinery and arbitration clause embodied in the
contract of employment. Lastly, they insisted that respondent failed to discharge the burden to prove
that he was illegally dismissed.[9]

salary. As to the 11 months and 4 days of the first year, the appellate court refused to apply the threemonth rule. Instead, in addition to three months (for the unexpired second year), it awarded full
compensation corresponding to the whole unexpired term of 11 months and 4 days. Thus, the CA
deemed it proper to award a total amount equivalent to the respondents salary for 14 months and 4

On October 7, 2005, the Labor Arbiter rendered a Decision in favor of respondent, the
dispositive portion of which reads:

days.[13]
Petitioners now raise the following issues for resolution:

WHEREFORE, viewed from the foregoing, judgment is hereby rendered


declaring respondents guilty of illegal dismissal.
Respondents Flourish Maritime Shipping and Wang Yung Chin are
hereby ordered to jointly and solidarily pay complainant Donato A. Almanzor the
amount of NT15,840.00 times six (6) months or a total of NT Ninety-Five Thousand
Forty (NT95,040.00). Respondents shall pay the total amount in its peso
equivalent at the time of actual payment plus legal interest.
All other claims herein sought and prayed for are hereby denied for lack
of legal and factual bases.
SO ORDERED.

and four (4) days. For the unexpired one (second) whole year, the court awarded three months

1. WHETHER OR NOT THE THREE LETTERS ARE RESIGNATION


LETTERS OR QUITCLAIMS.
2. WHETHER OR NOT THE MODIFICATION OF THE
DECISION BY THE COURT OF APPEALS IS CONTRARY TO LAW.[14]

NLRC

Simply stated, petitioners want this Court to resolve the issue of whether respondent was
illegally dismissed from employment and if so, to determine the correct award of compensation due
respondent.

[10]

The Labor Arbiter concluded that petitioners, who had the burden of proof, failed to adduce
On appeal to the NLRC, the Commission affirmed in toto the Labor Arbiters findings.

any convincing evidence to establish and substantiate its claim that respondent voluntarily resigned
from employment.[15] Likewise, the NLRC held that petitioners failed to show that respondent was not
physically fit to perform work due to his old age. Moreover, the labor tribunal said that petitioners failed

Unsatisfied, petitioners elevated the matter to the Court of Appeals on petition for certiorari.
[11]

The appellate court agreed with the Labor Arbiters conclusion (as affirmed by the NLRC) that

respondent was illegally dismissed from employment. It, however, modified the NLRC decision by
increasing the monetary award due respondent in accordance with its interpretation of Section 10 of
Republic Act (R.A.) 8042.[12]
Both the Labor Arbiter and the NLRC Board of Commissioners awarded such amount
equivalent to respondents salary for six (6) months (3 months for every year of the unexpired term)
considering that respondents employment contract covered a two-year period and he was dismissed

to prove that the employment contract indeed provided a grievance machinery.[16] Clearly, both labor
tribunals correctly concluded, as affirmed by the Court of Appeals, that respondent was not redeployed
for work, in violation of their employment contract. Perforce, the termination of respondents services is
without just or valid cause.
We reiterate the dictum that this Court is not a trier of facts, and this doctrine applies with
greater force in labor cases. Factual questions are for the labor tribunals to resolve. In this case, the
factual issues were resolved by the Labor Arbiter and the NLRC. Their findings were affirmed by the

Court of Appeals. Judicial review by this Court does not extend to a reevaluation of the sufficiency of
the evidence upon which the proper labor tribunal has based its determination.

[17]

WHEREFORE, the petition is

PARTIALLY GRANTED. The Decision of the Court of

Appeals, dated February 27, 2007, and its Resolution dated May 18, 2007 in CA-G.R. SP No. 95056,
are AFFIRMED with the MODIFICATION that the monetary award to be paid the respondent shall be

On the amount of the award due respondent, Section 10 of R.A. 8042 provides:

the amount set forth in the decision of the Labor Arbiter as affirmed by the NLRC.

SECTION 10. Money Claims. x x x


xxxx

SO ORDERED.

In case of termination of overseas employment without just, valid or


authorized cause as defined by law or contract, the worker shall be entitled to the
full reimbursement of his placement fee with interest at 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.
G.R. No. 170834

The correct interpretation of this provision was settled in Marsaman Manning


Agency Inc. v. National Labor Relations Commission [18] where this Court held 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.[19]

August 29, 2008

PEOPLE OF THE PHILIPPINES, plaintiff-appellee,


vs.
ANTONIO NOGRA, accused-appellant.
DECISION
AUSTRIA-MARTINEZ, J.:

The employment contract involved in the instant case covers a two-year period but the
overseas contract worker actually worked for only 26 days prior to his illegal dismissal. Thus, the three
months salary rule applies. There is a similar factual milieu between the case at bench and Olarte v.
Nayona.[20] The only difference lies in the length of the subject employment contract: Olarte involved a

Before the Court is an appeal from the Decision1 dated August 31, 2005 of the Court of Appeals (CA) in
CA-G.R. C.R. No. 00244 affirming the Judgment of the Regional Trial Court (RTC), Branch 19, Naga
City in Criminal Case No. 98-7182, convicting Antonio Nogra (appellant) of large scale illegal
recruitment under Section 6(m) in relation to Section 7(b) of Republic Act No. 8042 (R.A. No.
8042),2otherwise known as the "Migrant Workers and Overseas Filipinos Act of 1995." 3

one-year contract; while the employment in this case covers a two-year period. However, they both fall
under the three months salary rule since the term of the contract is at least one year or

The inculpatory portion of the Information charging one Lorna G. Orciga and appellant with large scale
illegal recruitment reads as follows:

more. In Olarte, as well as in JSS Indochina Corporation v. Ferrer,[21] we ordered the employer of an
illegally dismissed overseas contract worker to pay an amount equivalent to three (3) months salary.
We are not in accord with the ruling of the Court of Appeals that respondent should be paid
his salaries for 14 months and 4 days. Records show that his actual employment lasted only for 26
days. Applying the above provision, and considering that the employment contract covers a two-year
period, we agree with the Labor Arbiters disposition, as affirmed by the NLRC, that respondent is
entitled to six (6) months salary. This is obviously what the law provides.

That sometime during the period of March 1997 to November, 1997 in the City of Naga,
Philippines, and within the jurisdiction of this Honorable Court, the above-named accused,
being the General Manager and Operations Manager of LORAN INTERNATIONAL
OVERSEAS RECRUITMENT CO., LTD., with office at Concepcion Grande, Naga City,
conspiring, confederating together and mutually helping each other, representing themselves
to have the capacity to contract, enlist, hire and transport Filipino workers for employment
abroad, did then and there willfully, unlawfully and criminally, for a fee, recruit and promise
employment/job placement to the herein complaining witnesses RENATO ALDEN, OLIVER
SARMIENTO, FE ZABALLA, TEOFILA LUALHATI, PILIPINA MENDOZA and KERWIN
DONACAO, but failed to actually deploy them without valid reason, as well as to reimburse
their documentation, placement and processing expenses for purposes of deployment

despite their repeated demands for the return of the same, to their damage and prejudice in
the amounts as may be proven in court.
CONTRARY TO LAW.4
Only appellant was brought to the jurisdiction of the trial court since Lorna G. Orciga was then and still
is at large. Arraigned with the assistance of counsel, appellant entered a plea of "NOT GUILTY" to the
crime charged. Thereafter, trial of the case ensued.
Of the six complainants, the prosecution was able to present five of them, namely: Renato Alden, Fe
Zaballa, Teofila Lualhati, Filipina Mendoza and Kerwin Donacao. Anaielyn Sarmiento, wife of
complainant Oliver Sarmiento, also testified for the prosecution.
The facts, as established by the prosecution, are aptly summarized by the Office of the Solicitor
General (OSG), as follows:
Appellant held office at Loran International Overseas Recruitment Co., (Loran) in Concepcion
Grande, Naga City (p. 4, TSN, October 19, 1998). A nameplate on his table prominently
displayed his name and position as operations manager (p. 11, TSN, November 17, 1998; p.
4, TSN, January 12, 1999; p. 21, TSN, November 19, 1998). The license of Loran also
indicated appellant as the operations manager (p. 5, TSN, February 10, 1999). The POEA
files also reflect his position as operations manager of Loran (Exhibit L to L-4, pp. 5-9, TSN,
November 19, 1998).
Sometime in December 1996, Renato Alden went to Loran to apply for a job as hotel worker
for Saipan. He was interviewed by appellant, who required Alden to submit an NBI clearance
and medical certificate and to pay the placement fee. Alden paid the amount of P31,000.00.
The additional amount of P4,000.00 was to be paid prior to his departure to Saipan (pp. 5-6,
TSN, November 17, 1998). Appellant promised Alden that he would leave within a period of
three to four months. After one year of waiting Alden was not able to leave. Alden filed a
complaint with the NBI when he was not able to recover the amount and could no longer talk
with appellant (p. 6, TSN, November 17, 1998).
On April 18, 1997, Teofila Lualhati applied for employment as hotel worker for Saipan with
Loran (pp. 1-3, 10, TSN, November 19, 1998). Appellant required her to submit an NBI
clearance and medical certificate and to pay the processing fee in the amount of P35,000.00
so she could leave immediately. She paid the amount of P35,000.00 to Loran's secretary in
the presence of appellant. She was promised that within 120 days or 4 months she would be
able to leave (pp. 11-13, TSN, November 19, 1998). Despite repeated follow-ups, Lualhati
was unable to work in Saipan. She demanded the refund of the processing fee. When the
amount was not returned to her, she filed a complaint with the NBI (pp. 14-15, TSN,
November 19, 1998).
Sometime in April 1998, Filipina Mendoza went to Loran to apply for employment as hotel
worker (p. 4, TSN, July 12, 1999). She paid the amount of P35,000.00 as placement fee.
When she was not able to work abroad, she went to Loran and sought the return
of P35,000.00 from appellant (p. 7, TSN, January 21, 1999).

Sometime in October 1997, Kerwin Donacao went to Loran to apply for employment as
purchaser in Saipan (p. 4, TSN, February 10, 1999). He was required to submit NBI
clearance, police clearance, previous employment certificate and his passport. He paid the
placement fee ofP35,000.00 (pp.4-5, TSN, February 10, 1999). After paying the amount, he
was told to wait for two to three months. When he was not able to leave for Saipan, he
demanded the return of the placement fee, which was not refunded (pp. 6-7, TSN, February
10, 1999).
During the first week of November 1997, Annelyn Sarmiento and her husband, Oliver
Sarmiento, applied for overseas employment. For the application of Oliver Sarmiento, they
submitted his medical certificate and certification of previous employment. They were also
made to pay the amount of P27,000.00 as processing fee. Oliver Sarmiento was promised
that within 1 month, he would be able to leave. Initially, Oliver Sarmiento was told that
allegedly his visa was yet to be obtained. When he was not able to leave and what he paid
was not refunded, he filed a complaint with the NBI (pp. 4-6, TSN, April 23, 1999).
Sometime in May 1997, Fe Zaballa applied for overseas employment in Saipan with Loran (p.
4, TSN, May 21, 1999). She was required to submit her medical certificate, original copy of
her birth certificate, NBI clearance and police clearance. She was also required to pay the
amount ofP35,000.00 as placement fee. When she could not be deployed, she sought to
recover the amount she paid, which was not returned (pp. 7-8, TSN, May 2, 1999).5
On the other hand, appellant presented the following evidence:
The defense presented [appellant] Antonio Nogra and the agency's secretary and cashier,
Maritess Mesina.
From their testimonies it was established that LORAN INTERNATIONAL OVERSEAS
RECRUITMENT CO., LTD., (LORAN, for brevity) was owned by accused Lorna Orciga and
Japanese national Kataru Tanaka (TSN, September 30, 2000, p. 7). Sometime in July 1994,
[appellant] Antonio Nogra read from outside the agency's main office at Libertad,
Mandaluyong City that it was in need of a liaison officer. He applied for the position. The partowner and co-accused, Lorna Orciga, hired him instead as Operations Manager as the
agency was then still in the process of completing the list of personnel to be submitted to the
POEA. (TSN, January 31, 2001, p. 5).
[Appellant] Nogra started working with LORAN in October 1994. In 1995, he was transferred
to Naga City when the agency opened a branch office thereat. Although he was designated
as the Operations Manager, [appellant] Nogra was a mere employee of the agency. He was
receiving a monthly salary of P5,000.00 and additional P2,000.00 monthly meal allowance.
He was in-charge of the advertisement of the company. He also drove for the company. He
fetched from the airport the agency's visitors and guests and drove them to hotels and other
places. (TSN, May 3, 2000, pp. 2-9).
Although part-owner Lorna Orciga was stationed in Manila, she, however, actually remained
in control of the branch office in Naga City. She conducted the final interview of the applicants
and transacted with the foreign employers. She also controlled the financial matters and

assessment fees of the agency in Naga City (TSN, September 20, 2000, pp. 8-9). The
placement and processing fees collected by the agency in Naga City were all deposited in the
bank account of Lorna Orciga and not a single centavo went to the benefit of [appellant]
Nogra (TSN, January 10, 2000, pp. 14-22).6
On March 26, 2003, the RTC rendered Judgment7 finding appellant guilty beyond reasonable doubt of
the crime charged. The fallo of the decision reads:
WHEREFORE, the Court finds the accused ANTONIO NOGRA guilty beyond reasonable
doubt of the crime of Illegal Recruitment Committed in Large Scale defined under Sections
6(m) and 7(b) of RA 8042, otherwise known as The Migrant Workers and Overseas Filipinos
Act of 1995 and, accordingly, hereby imposes upon him the penalty of life imprisonment and
a fine of Five hundred thousand pesos (P500,000.00).

THE TRIAL COURT ERRED IN CONVICTING THE ACCUSED-APPELLANT OF THE


OFFENSE-CHARGED DESPITE THE FACT THAT UNDER THE LAW, HE WAS NOT
CRIMINALY LIABLE FOR HIS AGENCY'S TRANSACTIONS.16
Appellant argues that the agency was under the management and control of Orciga, and that he was a
mere employee; that he could not be held personally liable for illegal recruitment in the absence of any
showing that he was validly issued special authority to recruit workers, which was approved by the
Philippine Overseas Employment Administration (POEA); that his non-flight is indicative of his
innocence.
Appellee, through the OSG, counters that appellant is not a mere clerk or secretary of Loran, but its
Operations Manager who directly participated in the recruitment scheme by promising private
complainants work abroad, but failed to deploy them and refused to reimburse the applicants'
placement fees when demanded.

SO ORDERED.8
The appeal fails. The CA did not commit any error in affirming the decision of the RTC.
On April 10, 2003, appellant filed a Notice of Appeal.9 The RTC ordered the transmittal of the entire
records of the case to this Court.

R.A. No. 8042 broadened the concept of illegal recruitment under the

Conformably to the ruling in People v. Mateo,10 the case was referred to the CA for intermediate
review.11

Labor Code17 and provided stiffer penalties, especially those that constitute economic
sabotage, i.e.,Illegal Recruitment in Large Scale and Illegal Recruitment Committed by a Syndicate.

On August 31, 2005, the CA rendered a Decision12 affirming the decision of the RTC. The CA held that
being an employee is not a valid defense since employees who have knowledge and active
participation in the recruitment activities may be criminally liable for illegal recruitment activities, based
upon this Court's ruling in People v. Chowdury13 and People v. Corpuz;14 that appellant had knowledge
of and active participation in the recruitment activities since all the prosecution witnesses pinpointed
appellant as the one whom they initially approached regarding their plans of working overseas and he
was the one who told them about the fees they had to pay, as well as the papers that they had to
submit; that the mere fact that appellant was not issued special authority to recruit does not exculpate
him from any liability but rather strongly suggests his guilt; that appellant's invocation of non-flight
cannot be weighed in his favor since there is no established rule that non-flight is, in every instance, an
indication of innocence.

Section 6 of R.A. No. 8042 defined when recruitment is illegal:

A Notice of Appeal15 having been timely filed by appellant, the CA forwarded the records of the case to
this Court for further review.
In his Brief, appellant assigns as errors the following:

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

I
THE TRIAL COURT ERRED IN NOT FINDING THAT THE ACCUSED-APPELLANT WAS A
MERE EMPLOYEE OF THE RECRUITMENT AGENCY DESPITE HIS DESIGNATION AS
ITS OPERATIONS MANAGER.
II

(m) Failure to reimburse expenses incurred by the workers 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 as offense involving
economic sabotage.

Illegal recruitment is deemed committed by a syndicate 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. (Emphasis and underscoring supplied)
In the present case, evidence for the prosecution showed that Loran
International Overseas Recruitment Co., Ltd. is a duly licensed recruitment agency with authority to
establish a branch office. However, under R.A. No. 8042, even a licensee or holder of authority can be
held liable for illegal recruitment, should he commit or omit to do any of the acts enumerated in Section
6.
Appellant was charged with illegal recruitment in large scale under Section 6 (l) and (m) of R.A. No.
8042. Section 6 (l) refers to the failure to actually deploy without valid reason, as determined by the
Department of Labor and Employment (DOLE). Section 6 (m) involves the failure to reimburse
expenses incurred by the worker in connection with his documentation and processing for purposes of
deployment, in cases in which the deployment does not actually take place without the workers fault.
A thorough scrutiny of the prosecution's evidence reveals that it failed to prove appellant's liability under
Section 6 (l) of R.A. No. 8042. The law requires not only that the failure to deploy be without valid
reason "as determined by the Department of Labor and Employment." The law envisions that there be
independent evidence from the DOLE to establish the reason for non-deployment, such as the absence
of a proper job order. No document from the DOLE was presented in the present case to establish the
reason for the accused's failure to actually deploy private complainants. Thus, appellant cannot be held
liable under Section 6 (l) of R.A. No. 8042.
As to Section 6 (m) of R.A. No. 8042, the prosecution has proven beyond reasonable doubt that private
complainants made payments to Loran, and appellant failed to reimburse the amounts paid by private
complainants when they were not deployed. The prosecution presented the receipts issued by Loran to
private complainants evidencing payment of placement fees ranging from P27,000.00 toP35,000.00.
Appellant does not dispute that private complainants were not deployed for overseas work, and that the
placement fees they paid were not returned to them despite demand. However, he seeks to exculpate
himself on the ground that he is a mere employee of Loran.

position as Operations Manager. As such, he received private complainants' job applications; and
interviewed and informed them of the agencys requirements prior to their deployment, such as NBI
clearance, police clearance, medical certificate, previous employment certificate and the payment of
placement fee. He was also responsible for the radio advertisements and leaflets, which enticed
complaining witnesses to apply for employment with the agency. Clearly, as Operations Manager, he
was in the forefront of the recruitment activities.
The defense of being a mere employee is not a shield against his conviction for large scale illegal
recruitment. In People v. Gasacao18 and People v. Sagayaga,19 the Court reiterated the ruling inPeople
v. Cabais,20 People v. Chowdury21 and People v. Corpuz22 that an employee of a company or
corporation engaged in illegal recruitment may be held liable as principal by direct participation,
together with its employer, if it is shown that he actively and consciously participated in the recruitment
process.
In the present case, it was clearly established that appellant dealt directly with the private complainants.
He interviewed and informed them of the documentary requirements and placement fee. He promised
deployment within a three or four month-period upon payment of the fee, but failed to deploy them and
to reimburse, upon demand, the placement fees paid.
The Court is not persuaded by appellant's argument that his non-flight is indicative of his innocence.
Unlike the flight of an accused, which is competent evidence against him tending to establish his guilt,
non-flight is simply inaction, which may be due to several factors. It may not be construed as an
indication of innocence.23
Of marked relevance is the absence of any showing that the private complainants had any ill motive
against appellant other than to bring him to the bar of justice to answer for the crime of illegal
recruitment. Besides, for strangers to conspire and accuse another stranger of a most serious crime
just to mollify their hurt feelings would certainly be against human nature and experience.24 Where there
is nothing to show that the witnesses for the prosecution were actuated by improper motive, their
positive and categorical declarations on the witness stand under the solemnity of an oath deserve full
faith and credence.25
It is a settled rule that factual findings of the trial courts, including their assessment of the witnesses
credibility, are entitled to great weight and respect by the Supreme Court, particularly when the CA
affirmed such findings.26 After all, the trial court is in the best position to determine the value and weight
of the testimonies of witnesses.27 The absence of any showing that the trial court plainly overlooked
certain facts of substance and value that, if considered, might affect the result of the case, or that its
assessment was arbitrary, impels the Court to defer to the trial courts determination according
credibility to the prosecution evidence.

The Court is unswayed by appellant's contention.


The penultimate paragraph of Section 6 of R.A. No. 8042 explicitly states that those criminally liable are
the "principals, accomplices, and accessories. In case of juridical persons, the officers having control,
management or direction of their business shall be liable." Contrary to appellant's claim, the
testimonies of the complaining witnesses and the documentary evidence for the prosecution clearly
established that he was not a mere employee of Loran, but its Operations Manager. The license of
Loran, the files of the POEA and the nameplate prominently displayed on his office desk reflected his

Under the last paragraph of Section 6 of R.A. No. 8042, illegal recruitment shall be considered an
offense involving economic sabotage if committed in large scale, viz, committed against three or more
persons individually or as a group. In the present case, five complainants testified against appellants
acts of illegal recruitment, thereby rendering his acts tantamount to economic sabotage. Under Section
7 (b) of R.A. No. 8042, the penalty of life imprisonment and a fine of not less than P500,000.00 nor
more than P1,000.000.00 shall be imposed if illegal recruitment constitutes economic sabotage.

Thus, the RTC and the CA correctly found appellant guilty beyond reasonable doubt of large scale
illegal recruitment.

The three private complainants, Leonora Domingo (Leonora), Mauro Reyes (Mauro), and Valentino
Crisostomo (Valentino), testified for the prosecution.

WHEREFORE, the appeal is DISMISSED. The Decision dated August 31, 2995 of the Court of Appeals
affirming the conviction of appellant Antonio Nogra for large scale illegal recruitment under Sections 6
(m) and 7 (b) of Republic Act No. 8042 is AFFIRMED.

They narrated that they first met appellant in the house of Manolito Reyes in Plaridel, Bulacan in June
1998. Appellant allegedly made representations to private complainants, among others, that his brother,
Monchito, and his sister-in-law, Ruth, had the capacity to recruit apple and grape pickers for
employment in New Zealand.5

SO ORDERED.
On 5 July 1998, the group, composed of the three private complainants and 35 others, 6 went to La
Union where they met with Monchito and Ruth. Ruth proceeded to explain their prospective
employment with a $1,200.00 monthly salary. Ruth also required the group to attend bible study
sessions every Sunday because their prospective employer is a devout Catholic. Pursuant to their
desire to work in New Zealand, the group attended bible study from 5 July to December 1998.7
G.R. No. 178204
August 20, 2008
[Formerly G.R. No. 156497]
THE PEOPLE OF THE PHILIPPINES, appellee,
vs.
MARCOS GANIGAN, appellant.
DECISION
TINGA, J.:
Before us for automatic review is the Decision1 dated 14 November 2006 of the Court of Appeals
affirming the judgment of conviction2 for the crime of illegal recruitment rendered by the Regional Trial
Court (RTC) of Malolos, Bulacan, Branch 21.3
In an Information filed before the RTC, accused Ruth, Monchito, Eddie, Avelin Sulaiman and Marcos
(appellant), all surnamed Ganigan, were charged with illegal recruitment committed as follows:
That sometime between the period from July and August 1998 in Plaridel, Bulacan and within
the jurisdiction of this Honorable Court, the above-named accused, representing themselves
to have the capacity to contract, enlist and transport workers for employment in New Zealand,
conspiring, confederating and mutually helping one another, did then and there willfully,
unlawfully and feloniously recruit for a fee the following persons namely: MAURO EUSEBIO,
VALENTINO CRISOSTOMO and LEONORA DOMINGO, all residents of Sto. Nio, Plaridel,
Bulacan for employment in New Zealand, without first obtaining the required license and/or
authority from the Philippine Overseas Employment Administration.

Each member of the group was asked to pay P2,000.00 as assurance fee.8 Leonora paid an
additional P400.00 for her National Statistics Office-issued birth certificate,9 P500.00 for physical
examination and P320.00 for medical fee.10 Mauro gave an additional P320.00 for medical
expenses11whereas Valentino shelled out P180.00 for pictures, P1,000.00 for bio-data and P350.00 for
medical examination.12 The three attested that appellant received their payment and a document was
prepared by one of their companions as evidence of the receipt.13 The exhibits submitted by the
prosecution show that Monchito acknowledged having received a total of P101,480.00 from various
applicants.14Other documents showed that appellant and Ruth received payment from the applicants.15
Ruth and appellant allegedly promised them that they would leave for New Zealand before October
1998. When they were unable to leave, however, they were told that their prospective employer would
arrive in the Philippines on 22 November 1998. On the designated date, they were informed that their
prospective employer fell down the stairway of the airplane. An interview was then scheduled on 29
December 1998 but on that day, they were told that their prospective employer had been held up. This
prompted the complainants to go to the Philippine Overseas Employment Administration (POEA) to
check on the background of the accused.
They learned that appellant, Ruth and Monchito do not have the authority to recruit workers for
employment abroad.16 Certifications to that effect were issued by the POEA.17
Appellant denied having recruited private complainants for work abroad. He claimed that he himself
was also a victim as he had also paid P3,000.00 for himself and P2,000.00 for his daughter. He likewise
attended the bible study sessions as a requirement for the overseas employment.18 He contended that
he was merely implicated in the case because he was the only one apprehended among the accused.19
The trial court rendered judgment convicting appellant of the crime of illegal recruitment. The dispositive
portion of the decision reads:

CONTRARY TO LAW.4
Only appellant was arrested. The other accused remained at large.
Appellant, assisted by counsel, pleaded not guilty on arraignment. Trial ensued.

Wherefore, all premises considered, this Court finds and so holds that the prosecution was
able to establish by proof beyond reasonable doubt the criminal culpability of the accused
Marcos Ganigan on the offense charged against him. Accordingly, this Court finds him guilty
of the crime of illegal recruitment in large scale resulting in economic sabotage as defined
under Section 6 and penalized under Section 7(b) of Republic Act No. 8042, otherwise known

as the Migrant Workers and Overseas Filipinos Act of 1995. Accordingly, he is sentenced to
suffer the penalty of life imprisonment and to pay a fine of P500,000.00.
Accused Marcos Ganigan is also directed to pay complainants Leonora Domingo, Mauro
Reyes and Valentino Crisostomo the amounts of P2,400.00 each plus the sum of P500.00 for
Leonora Domingo for actual damages and P25,000.00 as and for moral damages.
With regard to accused Ruth Ganigan, Monchito Ganigan, Eddie Ganigan and Avelin
Sulaiman Ganigan, who remain at large until this time, the case against them is ordered
archived. Let an alias Warrant of arrest be issued for their apprehension.
SO ORDERED.20
The trial court found that all elements of illegal recruitment in large scale had been established through
the testimonial and documentary evidence of the prosecution.
In view of the penalty imposed, the case was elevated to this Court on automatic review. However, this
Court resolved to transfer the case to the Court of Appeals for intermediate review in light of our ruling
in People v. Mateo.21
On 14 November 2006, the Court of Appeals affirmed the trial court's decision.
Upon receipt of the unfavorable decision, appellant filed a notice of appeal. On 15 October 2007, this
Court resolved to accept the case and to require the parties to simultaneously submit their respective
supplemental briefs. The Office of the Solicitor General (OSG) filed a Manifestation and Motion 22stating
that it would no longer file any supplemental briefs and instead adopt its appellee's brief filed on 12
January 2006. Appellant likewise manifested that he would merely adopt his appellant's brief.23
Appellant argues that the prosecution has failed to establish his guilt beyond reasonable doubt. He
maintains that he did not participate in any recruitment activity and that the alleged payments made by
private complainants were for membership in the Christian Catholic Mission, as shown by the fact that
private complainants have regularly attended bible study sessions from 5 July to November 1998. He
also points out that nothing on record would show that the necessary training or orientation seminar
pertaining to the supposed employment has ever been conducted.
Assuming arguendo that the Christian Catholic Mission was only a front to an illegal venture, appellant
avers that he was not part of the conspiracy because he was a victim himself as he in fact also paid
assurance fees for membership in the Christian Catholic Mission. He laments that aside from
introducing private complainants to Ruth, he has not done any other act tantamount to recruitment.
The OSG defended the decision of the trial court in giving full faith and credence to the testimonies of
the complaining witnesses. It contends that there is no showing that the victims were impelled by any ill
motive to falsely testify against appellant. It asserts that the collective testimony of the witnesses has
categorically established appellant's participation in the crime.24

The crime of illegal recruitment is committed when these two elements concur: (1) the offenders have
no valid license or authority required by law to enable them to lawfully engage in the recruitment and
placement of workers; and (2) the offenders undertake any activity within the meaning of recruitment
and placement defined in Article 13(b) or any prohibited practices enumerated in Article 34 of the Labor
Code. In case of illegal recruitment in large scale, a third element is added - that the accused commits
the acts against three or more persons, individually or as a group.25
Article 13(b) 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." In the 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.26
Since appellant, along with the other accused, made misrepresentations concerning their purported
power and authority to recruit for overseas employment, and in the process collected from private
complainants various amounts in the guise of placement fees, the former clearly committed acts
constitutive of illegal recruitment. In fact, this Court held that illegal recruiters need not even expressly
represent themselves to the victims as persons who have the ability to send workers abroad. It is
enough that these recruiters give the impression that they have the ability to enlist workers for job
placement abroad in order to induce the latter to tender payment of fees.27
It is clear from the testimonies of private complainants that appellant undertook to recruit them for a
purported employment in New Zealand and in the process collected various amounts from them as
"assurance fees" and other fees related thereto.
Private complainants testified in a clear, positive and straightforward manner. Leonora testified that
appellant recruited her to work in New Zealand as a fruit picker and was promised by Ruth a monthly
salary of $1,200.00. She was required to pay an assurance fee of P2,000.00. She later learned that
appellant and his cohorts had not been licensed by the POEA to recruit for overseas employment. 28On
cross-examination, she confirmed that she turned over the amount of fees to appellant with the
understanding that such payment was for employment abroad.29
Mauro similarly recounted that he was introduced to Monchito and Ruth by appellant as an applicant for
farm work in New Zealand. He was told to prepare P2,000.00 as assurance fee, which he paid to
appellant. When he was unable to leave, he checked with the POEA and found out that appellant had
no license to recruit.30 During the cross-examination, Mauro was firm in his stance that he paid the
amount of P2,000.00 as assurance of employment in New Zealand. Furthermore, he regularly attended
the bible study as a requirement for said employment.31
Valentino's testimony corroborated that of Leonora and Mauro.32
The trial court found these testimonies credible and convincing.
Well-settled is the doctrine that great weight is accorded to the factual findings of the trial court
particularly on the ascertainment of the credibility of witnesses; this can only be discarded or disturbed
when it appears in the record that the trial court overlooked, ignored or disregarded some fact or

circumstance of weight or significance which if considered would have altered the result.33 In the
present case, we find no reason to depart from the rule.

DECISION
CALLEJO, SR., J.:

Verily, we agree with the OSG that the testimonies of private complainants have adequately established
the elements of the crime, as well as appellant's indispensable participation therein. Appellant recruited
at least three persons, the private complainants in this case, giving them the impression that he and his
relatives had the capability of sending them to New Zealand for employment as fruit pickers. The OSG
adds that appellant went to Bulacan to invite the victims and accompanied them to a fellowship and
briefing in La Union; that appellant misrepresented that joining the religious group would ensure their
overseas employment; and that appellant without any license or authority to recruit, collected various
amounts from private complainants.
Appellant miserably failed to convince this Court that the payments made by the complainants were
actually for their membership in the religious organization. He did not present any document to prove
this allegation.
For their part, private complainants were adamant that the payments made to appellant were for
purposes of employment to New Zealand. They further explained that their participation in the bible
study sessions was but a requirement imposed by appellant because their prospective employer was
also a member of the same religious group.
Moreover, appellant has failed to rebut the evidence presented by the prosecution consisting of a
receipt of payment signed by him.34 His flimsy denial that the signature on the receipt was not his own
does not merit consideration in light of the trial court's contrary finding.

This is an appeal from the Decision1 of the Regional Trial Court (RTC) of Quezon City in Criminal Case
No. Q-97-72769 convicting appellant Joseph Jamilosa of large scale illegal recruitment under Sections
6 and 7 of Republic Act (R.A.) No. 8042, and sentencing him to life imprisonment and to pay
a P500,000.00 fine.
The Information charging appellant with large scale illegal recruitment was filed by the Senior State
Prosecutor on August 29, 1997. The inculpatory portion of the Information reads:
That sometime in the months of January to February, 1996, or thereabout in the City of Quezon, Metro
Manila, Philippines, and within the jurisdiction of this Honorable Court, representing to have the
capacity, authority or license to contract, enlist and deploy or transport workers for overseas
employment, did then and there, willfully, unlawfully and criminally recruit, contract and promise to
deploy, for a fee the herein complainants, namely, Haide R. Ruallo, Imelda D. Bamba, Geraldine M.
Lagman and Alma E. Singh, for work or employment in Los Angeles, California, U.S.A. in Nursing Home
and Care Center without first obtaining the required license and/or authority from the Philippine
Overseas Employment Administration (POEA).
Contrary to law.2
On arraignment, the appellant, assisted by counsel, pleaded not guilty to the charge.

As between the positive and categorical testimonies of private complainants and the unsubstantiated
denial proffered by appellant, this Court is inclined to give more weight to the former.

The case for the prosecution, as synthesized by the Court of Appeals (CA), is as follows:

In sum, appellant is correctly found guilty of large scale illegal recruitment tantamount to economic
sabotage.

The prosecution presented three (3) witnesses, namely: private complainants Imelda D. Bamba,
Geraldine M. Lagman and Alma E. Singh.

Under Section 7(b) of Republic Act No. 8042, the penalty of life imprisonment and a fine of not less
than P500,000.00 nor more than P1,000.000.00 shall be imposed if illegal recruitment constitutes
economic sabotage.

Witness Imelda D. Bamba testified that on January 17, 1996, she met the appellant in Cubao, Quezon
City on board an aircon bus. She was on her way to Shoemart (SM), North EDSA, Quezon City where
she was working as a company nurse. The appellant was seated beside her and introduced himself as
a recruiter of workers for employment abroad. The appellant told her that his sister is a head nurse in a
nursing home in Los Angeles, California, USA and he could help her get employed as a nurse at a
monthly salary of Two Thousand US Dollars ($2,000.00) and that she could leave in two (2) weeks
time. He further averred that he has connections with the US Embassy, being a US Federal Bureau of
Investigation (FBI) agent on official mission in the Philippines for one month. According to the appellant,
she has to pay the amount of US$300.00 intended for the US consul. The appellant gave his pager
number and instructed her to contact him if she is interested to apply for a nursing job abroad.

WHEREFORE, premises considered, the decision of the Court of Appeals in CA-G.R. CR-H.C. No.
00867 is AFFIRMED. SO ORDERED.

G.R. No. 169076

January 23, 2007

PEOPLE OF THE PHILIPPINES, Appellee,


vs.
JOSEPH JAMILOSA, Appellant.

On January 21, 1996, the appellant fetched her at her office. They then went to her house where she
gave him the photocopies of her transcript of records, diploma, Professional Regulatory Commission
(PRC) license and other credentials. On January 28 or 29, 1996, she handed to the appellant the
amount of US$300.00 at the McDonalds outlet in North EDSA, Quezon City, and the latter showed to
her a photocopy of her supposed US visa. The appellant likewise got several pieces of jewelry which

she was then selling and assured her that he would sell the same at the US embassy. However, the
appellant did not issue a receipt for the said money and jewelry. Thereafter, the appellant told her to
resign from her work at SM because she was booked with Northwest Airlines and to leave for Los
Angeles, California, USA on February 25, 1996.
The appellant promised to see her and some of his other recruits before their scheduled departure to
hand to them their visas and passports; however, the appellant who was supposed to be with them in
the flight failed to show up. Instead, the appellant called and informed her that he failed to give the
passport and US visa because he had to go to the province because his wife died. She and her
companions were not able to leave for the United States. They went to the supposed residence of the
appellant to verify, but nobody knew him or his whereabouts. They tried to contact him at the hotel
where he temporarily resided, but to no avail. They also inquired from the US embassy and found out
that there was no such person connected with the said office. Thus, she decided to file a complaint with
the National Bureau of Investigation (NBI).
Prosecution witness Geraldine Lagman, for her part, testified that she is a registered nurse by
profession. In the morning of January 22, 1996, she went to SM North EDSA, Quezon City to visit her
cousin Imelda Bamba. At that time, Bamba informed her that she was going to meet the appellant who
is an FBI agent and was willing to help nurses find a job abroad. Bamba invited Lagman to go with her.
On the same date at about 2:00 oclock in the afternoon, she and Bamba met the appellant at the SM
Fast-Food Center, Basement, North EDSA, Quezon City. The appellant convinced them of his ability to
send them abroad and told them that he has a sister in the United States. Lagman told the appellant
that she had no working experience in any hospital but the appellant assured her that it is not
necessary to have one. The appellant asked for US$300.00 as payment to secure an American visa
and an additional amount of Three Thousand Four Hundred Pesos (P3,400.00) as processing fee for
other documents.
On January 24, 1996, she and the appellant met again at SM North EDSA, Quezon City wherein she
handed to the latter her passport and transcript of records. The appellant promised to file the said
documents with the US embassy. After one (1) week, they met again at the same place and the
appellant showed to her a photocopy of her US visa. This prompted her to give the amount of
US$300.00 and two (2) bottles of Black Label to the appellant. She gave the said money and liquor to
the appellant without any receipt out of trust and after the appellant promised her that he would issue
the necessary receipt later. The appellant even went to her house, met her mother and uncle and
showed to them a computer printout from Northwest Airlines showing that she was booked to leave for
Los Angeles, California, USA on February 25, 1996.
Four days after their last meeting, Extelcom, a telephone company, called her because her number was
appearing in the appellants cellphone documents. The caller asked if she knew him because they were
trying to locate him, as he was a swindler who failed to pay his telephone bills in the amount
of P100,000.00. She became suspicious and told Bamba about the matter. One (1) week before her
scheduled flight on February 25, 1996, they called up the appellant but he said he could not meet them
because his mother passed away. The appellant never showed up, prompting her to file a complaint
with the NBI for illegal recruitment.
Lastly, witness Alma Singh who is also a registered nurse, declared that she first met the appellant on
February 13, 1996 at SM North EDSA, Quezon City when Imelda Bamba introduced the latter to her.
The appellant told her that he is an undercover agent of the FBI and he could fix her US visa as he has

a contact in the US embassy. The appellant told her that he could help her and her companions Haidee
Raullo, Geraldine Lagman and Imelda Bamba find jobs in the US as staff nurses in home care centers.
On February 14, 1996 at about 6:30 in the evening, the appellant got her passport and picture. The
following day or on February 15, 1996, she gave the appellant the amount of US$300.00 and a bottle of
cognac as "grease money" to facilitate the processing of her visa. When she asked for a receipt, the
appellant assured her that there is no need for one because she was being directly hired as a nurse in
the United States.
She again met the appellant on February 19, 1996 at the Farmers Plaza and this time, the appellant
required her to submit photocopies of her college diploma, nursing board certificate and PRC license.
To show his sincerity, the appellant insisted on meeting her father. They then proceeded to the office of
her father in Barrio Ugong, Pasig City and she introduced the appellant. Thereafter, the appellant asked
permission from her father to allow her to go with him to the Northwest Airlines office in Ermita, Manila
to reserve airline tickets. The appellant was able to get a ticket confirmation and told her that they will
meet again the following day for her to give P10,000.00 covering the half price of her plane ticket. Singh
did not meet the appellant as agreed upon. Instead, she went to Bamba to inquire if the latter gave the
appellant the same amount and found out that Bamba has not yet given the said amount. They then
paged the appellant through his beeper and told him that they wanted to see him. However, the
appellant avoided them and reasoned out that he could not meet them as he had many things to do.
When the appellant did not show up, they decided to file a complaint for illegal recruitment with the NBI.
The prosecution likewise presented the following documentary evidence:
Exh. "A" Certification dated February 23, 1998 issued by Hermogenes C. Mateo, Director II, Licensing
Branch, POEA.
Exh. "B" Affidavit of Alma E. Singh dated February 23, 1996.3
On the other hand, the case for the appellant, as culled from his Brief, is as follows:
Accused JOSEPH JAMILOSA testified on direct examination that he got acquainted with Imelda Bamba
inside an aircon bus bound for Caloocan City when the latter borrowed his cellular phone to call her
office at Shoe Mart (SM), North Edsa, Quezon City. He never told Bamba that he could get her a job in
Los Angeles, California, USA, the truth being that she wanted to leave SM as company nurse because
she was having a problem thereat. Bamba called him up several times, seeking advice from him if Los
Angeles, California is a good place to work as a nurse. He started courting Bamba and they went out
dating until the latter became his girlfriend. He met Geraldine Lagman and Alma Singh at the Shoe Mart
(SM), North Edsa, Quezon City thru Imelda Bamba. As complainants were all seeking advice on how
they could apply for jobs abroad, lest he be charged as a recruiter, he made Imelda Bamba, Geraldine
Lagman and Alma Singh sign separate certifications on January 17, 1996 (Exh. "2"), January 22, 1996
(Exh. "4"), and February 19, 1996 (Exh. "3"), respectively, all to the effect that he never recruited them
and no money was involved. Bamba filed an Illegal Recruitment case against him because they
quarreled and separated. He came to know for the first time that charges were filed against him in
September 1996 when a preliminary investigation was conducted by Fiscal Daosos of the Department
of Justice. (TSN, October 13, 1999, pp. 3-9 and TSN, December 8, 1999, pp. 2-9)4

On November 10, 2000, the RTC rendered judgment finding the accused guilty beyond reasonable
doubt of the crime charged.5 The fallo of the decision reads:
WHEREFORE, judgment is hereby rendered finding accused guilty beyond reasonable doubt of Illegal
Recruitment in large scale; accordingly, he is sentenced to suffer the penalty of life imprisonment and to
pay a fine of Five Hundred Thousand Pesos (P500,000.00), plus costs.
Accused is ordered to indemnify each of the complainants, Imelda Bamba, Geraldine Lagman and
Alma Singh the amount of Three Hundred US Dollars ($300.00).
SO ORDERED.6
In rejecting the defenses of the appellant, the trial court declared:
To counter the version of the prosecution, accused claims that he did not recruit the complainants for
work abroad but that it was they who sought his advice relative to their desire to apply for jobs in Los
Angeles, California, USA and thinking that he might be charged as a recruiter, he made them sign three
certifications, Exh. "2," "3" and "4," which in essence state that accused never recruited them and that
there was no money involved.
Accuseds contention simply does not hold water. Admittedly, he executed and submitted a counteraffidavit during the preliminary investigation at the Department of Justice, and that he never mentioned
the aforesaid certifications, Exhibits 2, 3 and 4 in said counter-affidavit. These certifications were
allegedly executed before charges were filed against him. Knowing that he was already being charged
for prohibited recruitment, why did he not bring out these certifications which were definitely favorable to
him, if the same were authentic. It is so contrary to human nature that one would suppress evidence
which would belie the charge against him.
Denials of the accused can not stand against the positive and categorical narration of each complainant
as to how they were recruited by accused who had received some amounts from them for the
processing of their papers. Want of receipts is not fatal to the prosecutions case, for as long as it has
been shown, as in this case, that accused had engaged in prohibited recruitment. (People v. Pabalan,
262 SCRA 574).
That accused is neither licensed nor authorized to recruit workers for overseas employment, is shown
in the Certification issued by POEA, Exh. "A."
In fine, the offense committed by the accused is Illegal Recruitment in large scale, it having been
committed against three (3) persons, individually.7
Appellant appealed the decision to this Court on the following assignment of error:
THE TRIAL COURT ERRED IN CONVICTING ACCUSED-APPELLANT OF THE CRIME OF ILLEGAL
RECRUITMENT IN LARGE SCALE DESPITE THE FACT THAT THE LATTERS GUILT WAS NOT
PROVED BEYOND REASONABLE DOUBT BY THE PROSECUTION.8

According to appellant, the criminal Information charging him with illegal recruitment specifically
mentioned the phrase "for a fee," and as such, receipts to show proof of payment are indispensable. He
pointed out that the three (3) complaining witnesses did not present even one receipt to prove the
alleged payment of any fee. In its eagerness to cure this "patent flaw," the prosecution resorted to
presenting the oral testimonies of complainants which were "contrary to the ordinary course of nature
and ordinary habits of life [under Section 3(y), Rule 131 of the Rules on Evidence] and defied credulity."
Appellant also pointed out that complainants testimony that they paid him but no receipts were issued
runs counter to the presumption under Section [3](d), Rule 131 of the Rules on Evidence that persons
take ordinary care of their concern. The fact that complainants were not able to present receipts lends
credence to his allegation that it was they who sought advice regarding their desire to apply for jobs in
Los Angeles, California, USA. Thus, thinking that he might be charged as a recruiter, he made them
sign three (3) certifications stating that he never recruited them and there was no money involved. On
the fact that the trial court disregarded the certifications due to his failure to mention them during the
preliminary investigation at the Department of Justice (DOJ), appellant pointed out that there is no
provision in the Rules of Court which bars the presentation of evidence during the hearing of the case
in court. He also pointed out that the counter-affidavit was prepared while he was in jail "and probably
not assisted by a lawyer."9
Appellee, through the Office of the Solicitor General (OSG), countered that the absence of receipts
signed by appellant acknowledging receipt of the money and liquor from the complaining witnesses
cannot defeat the prosecution and conviction for illegal recruitment. The OSG insisted that the
prosecution was able to prove the guilt of appellant beyond reasonable doubt via the collective
testimonies of the complaining witnesses, which the trial court found credible and deserving of full
probative weight. It pointed out that appellant failed to prove any ill-motive on the part of the
complaining witnesses to falsely charge him of illegal recruitment.
On appellants claim that the complaining witness Imelda Bamba was his girlfriend, the OSG averred:
Appellants self-serving declaration that Imelda is his girlfriend and that she filed a complaint for illegal
recruitment after they quarreled and separated is simply preposterous. No love letters or other
documentary evidence was presented by appellant to substantiate such claim which could be made
with facility. Imelda has no reason to incriminate appellant except to seek justice. The evidence shows
that Alma and Geraldine have no previous quarrel with appellant. Prior to their being recruited by
appellant, Alma and Geraldine have never met appellant. It is against human nature and experience for
private complainants to conspire and accuse a stranger of a most serious crime just to mollify their hurt
feelings. (People v. Coral, 230 SCRA 499, 510 [1994])10
The OSG posited that the appellants reliance on the certifications11 purportedly signed by the
complaining witnesses is misplaced, considering that the certifications are barren of probative weight.
On February 23, 2005, the Court resolved to transfer the case to the CA.12 On June 22, 2005, the CA
rendered judgment affirming the decision of the RTC.13
The OSG filed a Supplemental Brief, while the appellant found no need to file one.
The appeal has no merit.

Article 13(b) of the Labor Code of the Philippines defines recruitment and placement as follows:
(b) "Recruitment and placement" refers to 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.
Section 6 of R.A. No. 8042 defined when recruitment is illegal:
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 nonlicensee 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. x x x
Any recruitment activities to be undertaken by non-licensee or non-holder of contracts shall be deemed
illegal and punishable under Article 39 of the Labor Code of the Philippines. 14 Illegal recruitment is
deemed committed in large scale if committed against three (3) or more persons individually or as a
group.15
To prove illegal recruitment in large scale, the prosecution is burdened to prove three (3) essential
elements, to wit: (1) the person charged undertook a recruitment activity under Article 13(b) or any
prohibited practice under Article 34 of the Labor Code; (2) accused did not have the license or the
authority to lawfully engage in the recruitment and placement of workers; and (3) accused committed
the same against three or more persons individually or as a group.16 As gleaned from the collective
testimonies of the complaining witnesses which the trial court and the appellate court found to be
credible and deserving of full probative weight, the prosecution mustered the requisite quantum of
evidence to prove the guilt of accused beyond reasonable doubt for the crime charged. Indeed, the
findings of the trial court, affirmed on appeal by the CA, are conclusive on this Court absent evidence
that the tribunals ignored, misunderstood, or misapplied substantial fact or other circumstance.
The failure of the prosecution to adduce in evidence any receipt or document signed by appellant
where he acknowledged to have received money and liquor does not free him from criminal liability.
Even in the absence of money or other valuables given as consideration for the "services" of appellant,
the latter is considered as being engaged in recruitment activities.
It can be gleaned from the language of Article 13(b) of the Labor Code that 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.17 As the Court held in People v. Sagaydo:18
Such is the case before us. The complainants parted with their money upon the prodding and
enticement of accused-appellant on the false pretense that she had the capacity to deploy them for
employment abroad. In the end, complainants were neither able to leave for work abroad nor get their
money back.

The fact that private complainants Rogelio Tibeb and Jessie Bolinao failed to produce receipts as proof
of their payment to accused-appellant does not free the latter from liability. The absence of receipts
cannot defeat a criminal prosecution for illegal recruitment. As long as the witnesses can positively
show through their respective testimonies that the accused is the one involved in prohibited recruitment,
he may be convicted of the offense despite the absence of receipts.19
Appellants reliance on the certifications purportedly signed by the complaining witnesses Imelda
Bamba, Alma Singh and Geraldine Lagman20 is misplaced. Indeed, the trial court and the appellate
court found the certifications barren of credence and probative weight. We agree with the following
pronouncement of the appellate court:
Anent the claim of the appellant that the trial court erred in not giving weight to the certifications (Exhs.
"2," "3" & "4") allegedly executed by the complainants to the effect that he did not recruit them and that
no money was involved, the same deserves scant consideration.
The appellant testified that he was in possession of the said certifications at the time the same were
executed by the complainants and the same were always in his possession; however, when he filed his
counter-affidavit during the preliminary investigation before the Department of Justice, he did not
mention the said certifications nor attach them to his counter-affidavit.lavvphil.net
We find it unbelievable that the appellant, a college graduate, would not divulge the said certifications
which would prove that, indeed, he is not an illegal recruiter. By failing to present the said certifications
prior to the trial, the appellant risks the adverse inference and legal presumption that, indeed, such
certifications were not genuine. When a party has it in his possession or power to produce the best
evidence of which the case in its nature is susceptible and withholds it, the fair presumption is that the
evidence is withheld for some sinister motive and that its production would thwart his evil or fraudulent
purpose. As aptly pointed out by the trial court:
"x x x These certifications were allegedly executed before charges were filed against him. Knowing that
he was already being charged for prohibited recruitment, why did he not bring out these certifications
which were definitely favorable to him, if the same were authentic. It is so contrary to human nature that
one would suppress evidence which would belie the charge against him." (Emphasis Ours) 21
At the preliminary investigation, appellant was furnished with copies of the affidavits of the complaining
witnesses and was required to submit his counter-affidavit. The complaining witnesses identified him as
the culprit who "recruited" them. At no time did appellant present the certifications purportedly signed by
the complaining witnesses to belie the complaint against him. He likewise did not indicate in his
counter-affidavit that the complaining witnesses had executed certifications stating that they were not
recruited by him and that he did not receive any money from any of them. He has not come forward
with any valid excuse for his inaction. It was only when he testified in his defense that he revealed the
certifications for the first time. Even then, appellant lied when he claimed that he did not submit the
certifications because the State Prosecutor did not require him to submit any counter-affidavit, and that
he was told that the criminal complaint would be dismissed on account of the failure of the complaining
witnesses to appear during the preliminary investigation. The prevarications of appellant were exposed
by Public Prosecutor Pedro Catral on cross-examination, thus:

Q Mr. Witness, you said that a preliminary investigation [was] conducted by the Department of Justice
through State Prosecutor Daosos. Right?

Q You mean the date appearing in the Certification.


A Yes, Sir.

A Yes, Sir.
Q Where was this handed to you by Imelda Bamba, Mr. Witness?
Q Were you requested to file your Counter-Affidavit?
A At SM North Edsa, Sir.
A Yes, Sir. I was required.
Q Did you file your Counter-Affidavit?

Q During the direct examination you were also asked to identify a Certification Exh. "3" for the defense
dated February 19, 1996, allegedly issued by Alma Singh, one of the complainants in this case, will you
please go over this and tell us when did Alma Singh allegedly issue to you this Certification?

A Yes, Sir, but he did not accept it.


A On February 19, 1996, Sir.
Q Why?
A Because he said "never mind" because the witness is not appearing so he dismissed the case.
Q Are you sure that he did not accept your Counter-Affidavit, Mr. Witness?
A I dont know of that, Sir.
Q If I show you that Counter-Affidavit you said you prepared, will you be able to identify the same, Mr.
Witness?
A Yes, Sir.
Q I will show you the Counter-Affidavit dated June 16, 1997 filed by one Joseph J. Jamilosa, will you
please go over this and tell if this is the same Counter-Affidavit you said you prepared and you are
going to file with the investigating state prosecutor?

Q And also during the direct examination, you were asked to identify a Certification which was already
marked as Exh. "4" for the defense dated January 22, 1996 allegedly issued by Geraldine M. Lagman,
one of the complainants in this case, will you please tell the court when did Geraldine Lagman give you
this Certification?
A January 22, 1996, Sir.
Q During that time, January 22, 1996, January 17, 1996 and February 19, 1996, you were in
possession of all these Certification. Correct, Mr. Witness?
A Yes, Sir.
Q These were always in your possession. Right?
A Yes, Sir, with my papers.

A Yes, Sir. This the same Counter-Affidavit.

Q Do you know when did the complainants file cases against you?

Q There is a signature over the typewritten name Joseph J. Jamilosa, will you please go over this and
tell this Honorable Court if this is your signature, Mr. Witness?

A I dont know, Sir.

A Yes, Sir. This is my signature.


Q During the direct examination you were asked to identify [the] Certification as Exh. "2" dated January
17, 1996, allegedly issued by Bamba, one of the complainants in this case, when did you receive this
Certification issued by Imelda Bamba, Mr. Witness?
A That is the date, Sir.

Q Alright. I will read to you this Counter-Affidavit of yours, and I quote "I, Joseph Jamilosa, of legal age,
married and resident of Manila City Jail, after having duly sworn to in accordance with law hereby
depose and states that: 1) the complainants sworn under oath to the National Bureau of Investigation
that I recruited them and paid me certain sums of money assuming that there is truth in those allegation
of this (sic) complainants. The charge filed by them should be immediately dismissed for certain lack of
merit in their Sworn Statement to the NBI Investigator; 2) likewise, the complainants allegation is not
true and I never recruited them to work abroad and that they did not give me money, they asked me for
some help so I [helped] them in assisting and processing the necessary documents, copies for getting
US Visa; 3) the complainant said under oath that they can show a receipt to prove that they can give
me sums or amount of money. That is a lie. They sworn (sic), under oath, that they can show a receipt
that I gave to them to prove that I got the money from them. I asked the kindness of the state

prosecutor to ask the complainants to show and produce the receipts that I gave to them that was
stated in the sworn statement of the NBI; 4) the allegation of the complainants that the charges filed by
them should be dismissed because I never [received] any amount from them and they can not show
any receipt that I gave them," Manila City Jail, Philippines, June 16, 1997. So, Mr. Witness, June 16,
1997 is the date when you prepared this. Correct?
A Yes, Sir.
Q Now, my question to you, Mr. Witness, you said that you have with you all the time the Certification
issued by [the] three (3) complainants in this case, did you allege in your Counter-Affidavit that this
Certification you said you claimed they issued to you?

COURT
Q You said it was dismissed. Correct?
A Yes, Your Honor.
Q Did you receive a resolution of this dismissal?
A No, Your Honor.
FISCAL CATRAL

A I did not say that, Sir.


Q What did you receive?
Q So, it is not here in your Counter-Affidavit?
A I did not receive any resolution, Sir. Its just now that I learned about the finding.
A None, Sir.
Q You said you learned here in court, did you read the resolution filed against you, Mr. Witness?
Q What is your educational attainment, Mr. Witness?
A I did not read it, Sir.
A I am a graduate of AB Course Associate Arts in 1963 at the University of the East.
Q Did you read by yourself the resolution made by State Prosecutor Daosos, Mr. Witness?
Q You said that the State Prosecutor of the Department of Justice did not accept your Counter-Affidavit,
are you sure of that, Mr. Witness?

A Not yet, Sir.

A Yes, Sir.

Q What did you take, if any, when you received the subpoena from this court?

Q Did you receive a copy of the dismissal which you said it was dismissed?

A I was in court already when I asked Atty. Usita to investigate this case.

A No, Sir. I did not receive anything.

Q You said a while ago that your Affidavit was not accepted by State Prosecutor Daosos. Is that
correct?

Q Did you receive a resolution from the Department of Justice?


A Yes, Sir.
A No, Sir.
Q Did you go over the said resolution you said you received here?

Q Will you please read to us paragraph four (4), page two (2) of this resolution of State Prosecutor
Daosos.

A I just learned about it now, Sir.

(witness reading par. 4 of the resolution)

Q Did you read the content of the resolution?

Alright. What did you understand of this paragraph 4, Mr. Witness?

A Not yet, Sir. Its only now that I am going to read.

A Probably, guilty to the offense charge.22

It turned out that appellant requested the complaining witnesses to sign the certifications merely to
prove that he was settling the cases:

DECISION
CARPIO MORALES, J.:

COURT
Q These complainants, why did you make them sign in the certifications?
A Because one of the complainants told me to sign and they are planning to sue me.
Q You mean they told you that they are filing charges against you and yet you [made] them sign
certifications in your favor, what is the reason why you made them sign?

Accused-appellant Fujita Zenchiro (Zenchiro), a Japanese national, and one Eva Regino (Eva) were, in
an Information filed before the Regional Trial Court (RTC) of Malolos, Bulacan where it was docketed
as Criminal Case No. 3261-M-2001, charged to have conspired in committing illegal recruitment in
large scale as follows:
Criminal Case No. 3261-M-2001:
xxxx

A To prove that Im settling this case.


Q Despite the fact that they are filing cases against you and yet you were able to make them sign
certifications?
A Only one person, Your Honor, who told me and he is not around.
Q But they all signed these three (3) certifications and yet they filed charges against you and yet you
made them sign certifications in your favor, so what is the reason why you made them sign?
(witness can not answer)23
The Court notes that the trial court ordered appellant to refund US$300.00 to each of the complaining
witnesses. The ruling of the appellate court must be modified. Appellant must pay only the peso
equivalent of US$300.00 to each of the complaining witnesses.
IN LIGHT OF ALL THE FOREGOING, the appeal is DISMISSED. The Decision of the Court of Appeals
affirming the conviction of Joseph Jamilosa for large scale illegal recruitment under Sections 6 and 7 of
Republic Act No. 8042 is AFFIRMED WITH MODIFICATION. The appellant is hereby ordered to refund
to each of the complaining witnesses the peso equivalent of US$300.00. Costs against appellant.
SO ORDERED.

G.R. No. 176733

August 11, 2008

PEOPLE OF THE PHILIPPINES, plaintiff-appellee,


vs.
FUJITA ZENCHIRO, accused-appellant.

That in or about the month of January, 1999, in the municipality of Meycauayan, province of
Bulacan, Philippines, and within the jurisdiction of this Honorable Court, the above-named
accused, conspiring and helping each other, non-licensees or non-holders of authority from
the Department of Labor and Employment to recruit and/or place workers in employment
either locally or overseas, did then and there willfully, unlawfully and feloniously, with false
pretenses, undertake illegal recruitment and placement for a fee of Alberto M.
Anatalio, Fredie1 P. Ocampoand Alicia A. Diaz for overseas employment.2 (Underscoring
supplied)
Zenchiro and Eva were, in Informations also filed before the same court where they were docketed as
Criminal Cases No. 3262-M-2001, 3263-M-2001, and 3264-M-2001, likewise charged to have
conspired in committing three counts of estafa under Article 315, paragraph 2 (a) of the Revised Penal
Code as follows:
Criminal Case No. 3262-M-2001:
That on or about the 2nd day of February, 1999, in the municipality of Meycauayan, province
of Bulacan, Philippines, and within the jurisdiction of this Honorable Court, the above-named
accused, conspiring and helping each other, with intent of gain, did then and there willfully,
unlawfully and feloniously defraud Alberto M. Anatalio and Fredie P. Ocampo in the sum of
P50,000.00 each, by then and there misrepresenting that they have the power and
qualification to recruit and employ the said Alberto M. Anatalio and Fredie P. Ocampo as
worker[s] or assist them in securing employment abroad, more particularly in Japan, and
could facilitate the processing and approval of the necessary papers in connection therewith,
when in truth and in fact, as they well knew, they did not have such qualifications, that
pursuant to such misrepresentation and defraudation, said accused demanded and received
from Alberto M. Anatalio and Fredie P. Ocampo the sum of P50,000.00 each; that said
accused failed and refused to comply with their aforementioned undertakings and instead,
misappropriated the sum of P50,000.00 each, for their benefit, to the damage and prejudice
of the said Alberto M. Anatalio and Fredie P. Ocampo, in the total amount of
P100,000.00.3 (Underscoring supplied)
Criminal Case No. 3263-M-2001:

That on or about the 10th of March, 1999, in the municipality of Meycauayan, province of
Bulacan, Philippines, and within the jurisdiction of this Honorable Court, the above-named
accused, conspiring and helping each other, with intent of gain, did then and there willfully,
unlawfully and feloniously defraud one Alicia A. Diaz in the sum of P10,000.00, by then and
there misrepresenting that they have the power and qualification to recruit and employ the
said Alicia A. Diaz as worker or assist her in securing employment abroad, more particularly
in Japan, and could facilitate the processing and approval of the necessary papers in
connection therewith, when in truth and in fact, as they well knew, they did not have such
qualifications; that pursuant to such misrepresentation and defraudation, said accused
demanded and received from Alicia A. Diaz the sum of P10,000.00; that said accused failed
and refused to comply with their aforementioned undertakings and instead, misappropriated
the sum of P10,000.00 for their benefit, to the damage and prejudice of the said Alicia A. Diaz
in the said amount of P10,000.00.4 (Underscoring supplied)

Contrary, however, to Eva's promises that they would be hired at her sister's hanger factory, Anatalio
and Ocampo were idle for two months, and whenever they asked her and Zenchiro (who alternately
stayed in Japan for one month and the Philippines for another month) about why, Zenchiro and Eva
would merely converse with each other in Japanese.
In September 1999, Anatalio and Ocampo returned to the Philippines upon which they asked Zenchiro
to refund the amounts they paid him. Zenchiro did promise to refund them, but he welched thereon,
prompting the filing of complaints against him that led to the filing of the Informations.
Anatalio and Ocampo were later to learn that Zenchiro and Eva are neither licensed nor authorized to
recruit workers for overseas employment.
From the testimony of private complainant Alicia Diaz (Alicia),9 the following version is gathered:

Criminal Case No. 3264-M-2001:


That on or about the 12th of March, 1999, in the municipality of Meycauayan, province of
Bulacan, Philippines, and within the jurisdiction of this Honorable Court, the above-named
accused, conspiring and helping each other, with intent of gain, did then and there willfully,
unlawfully, and feloniously defraud one Alicia A. Diaz in the sum of P40,000.00, by then and
there misrepresenting that they have the power and qualification to recruit and employ the
said Alicia A. Diaz as worker or assist her in securing employment abroad, more particularly
in Japan, and could facilitate the processing and approval of the necessary papers in
connection therewith, when in truth and in fact, as they well knew they did not have such
qualifications, that pursuant to such misrepresentation and defraudation, said accused
demanded and received from Alicia A. Diaz the sum of P40,000.00; that said accused failed
and refused to comply with their aforementioned undertakings and instead, misappropriated
the sum of P40,000.00 for their benefit, to the damage and prejudice of the said Alicia A. Diaz
in the said amount of P40,000.00.5 (Underscoring supplied)
Zenchiro pleaded not guilty to all the charges on arraignment.6 Eva has remained at large.
From the testimonies of prosecution witnesses-private complainants Alberto Anatalio (Anatalio) and his
cousin Fredie Ocampo (Ocampo), the following version is gathered:7
In January 1999, Eva introduced private complainants to Zenchiro, telling them that Zenchiro could
deploy them to work in Japan. Speaking in "broken" Tagalog, Zenchiro told the two that he would take
care of everything because he knows many persons who could work on their papers, and that they
would receive a monthly salary of 30 lapad, a lapad being equivalent to P3,500.

Zenchiro offered Alicia a job at the hanger factory in Japan of Eva's sister for a P250,000 placement
fee, he undertaking to take care of the processing of all her travel documents. Alicia accepted the offer
and thus paid Zenchiro the amount in several installments for which she was issued receipts.
On January 12, 1999, Alicia, accompanied by Zenchiro, left for Japan where Eva met them. Eva at
once brought her to "Movara" where she stayed with Zenchiro and two Filipinos. After the lapse of a
week, she was transferred to Chiba but she remained jobless. Via overseas telephone call to Zenchiro
who had gone back to the Philippines, she asked him what they were doing to her, but he gave no
answer. Eva even scolded her for calling Zenchiro.
Alicia returned to the Philippines on March 16, 1999 and confronted Eva and Zenchiro who asked for
forgiveness, they promising to deploy her to work. The promise remained unfulfilled, however, hence,
she demanded the refund of her money, but Zenchiro refunded her only P50,000.10
Anatalio, Ocampo, and Alicia identified Zenchiro in open court. 11
In addition to testimonial evidence, the prosecution presented documentary evidence consisting of
private complainants' sworn statements, a certification from the Philippine Overseas Employment
Administration12 that the accused are not licensed to recruit workers for employment overseas, receipts
signed by Zenchiro acknowledging receipt of payments for "replayment fee" to Japan, 13receipts for
"VISA ASSISTANCE GOING TO JAPAN" signed by Eva,14 and receipt signed by Alicia, bearing
Zenchiro's signature, acknowledging a partial refund of P50,00015 from Zenchiro.

Eva and Zenchiro charged P250,000 each of the private complainants who each gave him P50,000 on
February 2, 1999 as downpayment for the processing of their papers. Ocampo's sister, Florinda
Cadorna, also a prosecution witness, paid P400,000 representing the total balance of Anatalio and
Ocampo. 8

Upon the other hand, Zenchiro, denying having promised private complainants that he would deploy
them for work in Japan,16 claimed that his involvement in the transactions was limited to assistance in
the processing of their travel documents and escorting them to Japan;17 and that private complainants
in fact landed on jobs in Japan18 in support of which he presented certificates, worded in Japanese,
issued by Yugengaisha P-I and Kabushikigaisha Sekine Kagaku Kogyo, said to attest that Anatalio and
Ocampo worked in Japan in July up to September 1999.19

On June 26, 1999, Anatalio and Ocampo, escorted by Zenchiro, went to Japan where they were met by
Eva who thereupon accompanied them to her aunt's house in Tokyo where they stayed.

By Joint Decision20 of July 5, 2005, Branch 11 of the RTC of Malolos convicted Zenchiro in Criminal
Case Nos. 3261-M-2001 (for illegal recruitment), 3263-M-2001 (for Estafa on complaint of Alicia ), and

3264-M-2001 (for Estafa on complaint of Alicia). It dismissed Criminal Case No. 3262-M-2001 (for
Estafa on complaint of Anatalio and Ocampo) on the ground of double jeopardy.21
In arriving at its Joint Decision, the trial court noted the following findings:
When the three (3) complainants went to the residence of the Regino's at Sto. Nio,
Meycauayan on different occasions, in the early part of January 1999, and the matter of their
supposed employment in Japan was taken up Zenchiro was personally present. Regino did
much of the talking but as testified to by the complainants she talked with Zenchiro in
Nippongo, every now and then ostensibly to apprise him of what was being talked about.
Foremost was therepresentation by Regino, which Zenchiro appears to have acquiesced into,
that he was in a position to find work for the complainants in Japan. On this point, Zenchiro's
own admission that he offered his own services to work for complainants' Japanese visa was
a dead giveaway on his part of his active involvement in the illicit recruitment of the latter to
work in Japan. xxx This coupled with the uncontroverted fact that he even escorted the
complainants in going to Japan in the months of June, 1999 and January 2000 even living
under the same house with Anatalio and Ocampo therein make a strong case against him for
the offense charged.
That the complainants were duped into shelling large amounts for fictitious employment in
Japan has been convincingly shown. All three (3) were categorical in their assertion that the
accused demanded, and received, from each of them the amount of P250,000.00 as
placement fee, adducing receipts in substantiation of these exactions. In the case of Anatalio
and Ocampo, the two (2) were uncontradicted in their claim that, on February 2, 1999, both
gave P50,000.00 each to Regino as initial payment of their supposed placement fee in the
presence of Zenchiro, and on this occasion, the latter told them that he would take care of
their papers. Two (2) days later, before their departure to Japan or on June 24, 1999, Florinda
"Bong" Cadorna handed over to Zenchiro P400,000.00 duly receipted by the latter who even
signed his name in Japanese character[s].
The same situation holds true with Diaz. In her case on March 10, 1999, she gave Regino the
initial amount of P10,000.00 in her place at Sto. Nio, Meycauayan, Bulacan and two (2)
days later or on March 12, 1999, she gave her the additional amount of P40,000.00 as
downpayment for her replacement fee. After her visa was issued, on December 20, 1999 she
gave the amount of P100,000.00 in cash and a check worth P100,000.00 to Zenchiro
personally xxx to complete her employment fee. xxx This transaction between Diaz and the
accused is fully substantiated by the receipt dated December 20, 1999 signed by Zenchiro
again in Japanese characters. Although Zenchiro made it appear in said receipt that the
payment was for visa assistance, the enormity of the amount does not warrant belief to such
a pretension[.]

With the Certification from the POEA that the accused are not licensed to recruit
workers either for local and foreign employment, both stand liable for qualified illegal
recruitment in large scale under the provisions of the Labor Code, the same having been
committed against three (3) persons.22 (Citations omitted; underscoring supplied)
The trial court thus disposed:
WHEREFORE, in Criminal Case No. 3261-M-2001, this Court finds the accused Fujita
Zenchiro GUILTY beyond reasonable doubt of the crime of Illegal Recruitment in Large
Scale defined and penalized under Article 38 (b) in relation to Articles 34 and 39 of the Labor
Code of the Philippines, P.D. No. 442, as amended and hereby sentences him to suffer the
penalty of Life Imprisonment and a fine of P100,000.00. Accused is likewise ordered to pay
the private complainants the following amounts as actual damages, to wit:
1. P250,000.00 to Alberto Anatalio;
2. P250,000.00 to Freddie Ocampo; and
3. P250,000.00 to Alicia Diaz.
In Criminal Case No. 3263-M-2001, this Court finds the accused Fujita Zenchiro GUILTY
beyond reasonable doubt of Estafa under Art. 315, par. 2(a) of the Revised Penal Code, as
amendedand hereby sentences him to a prison term ranging from four (4) months and
Twenty (20) days of Arresto Mayor, as minimum, up to Two (2) years, Eleven (11) months and
Ten (10) days of prision correccional, as maximum and to pay Alicia Diaz the amount of
P10,000.00 as actual damages.
In Criminal Case No. 3264-M-2001, this Court finds the accused Fujita Zenchiro GUILTY
beyond reasonable doubt of Estafa under Art. 315 par. 2(a) of the Revised Penal Code, as
amendedand hereby sentences him to a prision term ranging from Four (4) Years, Nine (9)
months and Eleven (11) days of prision correccional, as minimum, up to Six (6) years, Eight
(8) months, and one (1) day of prision mayor as maximum and to pay Alicia Diaz the amount
of P40,000.00 as actual damages.
Criminal Case No. 3262-M-2001 is hereby DISMISSED.
The cases against Eva Regino are hereby ARCHIVED.
SO ORDERED.23 (Emphasis and underscoring supplied)

Zenchiro's attempt to show that complainants worked in different firms in Japan is futile. All
that he has to show to prove his point are purported certifications from dubious Japanese
firmsattesting to their supposed employment which from the mere fact that these are written
in Japanese characters without any official translation in English hardly deserve any
evidentiary value[.]

On appeal to the Court of Appeals, Zenchiro assigned to the trial court the following errors:
I

. . . CONVICTING THE ACCUSED-APPELLANT FOR THE CRIME OF LARGE SCALE


ILLEGAL RECRUITMENT DESPITE THE FAILURE OF THE PROSECUTION TO PROVE
BEYOND REASONABLE DOUBT THAT HIS ACT OF SECURING COMPLAINANTS'
JAPANESE VISAS IS UNDER THE TERM "RECRUITMENT AND PLACEMENT".
II
. . . FINDING THE ACCUSED-APPELLANT GUILTY FOR THE CRIME OF
ESTAFA DESPITE FAILURE OF THE PROSECUTION TO PROVE BEYOND REASONABLE
DOUBT THAT THERE WAS DECEPTION ON HIS PART.24
The Court of Appeals affirmed the trial court's decision,25 hence, Zenchiro's appeal to this Court.26
Zenchiro maintains that what he promised to private complainants was assistance in securing their
visas, not employment. And he argues that he is not guilty of estafa because there was no deceit, he
not having misrepresented that he could obtain jobs for them in Japan.
As a general rule, the factual findings of the trial court, especially when affirmed by the appellate court
as in the cases at bar, are binding and conclusive on the Supreme Court.27 The above-quoted portions
of the trial court's factual findings are supported by the evidence. More particularly, Zenchiro's claim that
his involvement in the transaction was limited to mere assistance in the processing of private
complainants' travel documents is negated by documentary evidence showing that he received
"replayment" fees from them.
Zenchiro goes on to reiterate his argument that Eva promised employment to private complainants
without his knowledge, he being a Japanese national and could not understand the conversation in
Tagalog between Eva and the private complainants. The Court of Appeals' brushing aside such
argument is well taken.
In the first place, appellant during his arraignment even assented to the reading of the
information in Filipino because according to his counsel it is a language known and
understood by him. And as testified to by the private complainants, appellant even spoke to
them in broken Tagalog when he was promising them employment in Japan upon payment of
placement fee to him and his co-accused Regino. Private complainant Diaz also testified that
during their conversation regarding the proposed employment in Japan, while it was Regino
who was explaining things to them,Regino would first talk to appellant in Japanese and
hence appellant cannot feign ignorance of the dealings and undertakings by Regino with
private complainants. Appellant knew and cooperated in the misrepresentations and
fraudulent scheme of Regino as they both duped private complainants into shelling
substantial amounts of money for those promised jobs as factory workers in
Japan.28 (Underscoring supplied)

Illegal recruitment is deemed committed in large scale if it is committed against three or more persons
individually or as a group.29 Clearly, Zenchiro committed illegal recruitment against the three private
complainants.
His conviction in Criminal Case Nos. 3261-M-2001, 3263-M-2001 must thus be affirmed. Section 7 (b)
of the Migrant Workers and Overseas Filipinos Act of 1995 imposes a fine of not less than P500,000
nor more than P1,000,000 if illegal recruitment for overseas employment constitutes economic
sabotage - illegal recruitment committed by a syndicate or in large scale. Since Zenchiro's act was
committed in large scale, the fine of P100,000 imposed upon him in Criminal Case No. 3261-M-2001
must be increased to P500,000.
Considering that Zenchiro already gave Alicia a partial refund of P50,000, the actual damages awarded
to her in Criminal Case No. 3261-M-2001 is reduced to P200,000, and the awards of actual damages to
Alicia in Criminal Cases Nos. 3263-M-2001 and 3264-M-2001 are deleted.
Respecting the penalty imposed in Criminal Case No. 3264-M-2001, Article 315 of the Revised Penal
Code provides:
Article 315. Swindling (estafa). - Any person who shall defraud another by any of the means
mentioned hereinbelow shall be punished by:
1st. The penalty of prision correccional in its maximum period to prision mayor in its minimum
period, if the amount of the fraud is over 12,000 pesos but does not exceed 22,000
pesos; and if such amounts exceeds the latter sum, the penalty provided in this
paragraph shall be imposed in its maximum period, adding one year for each
additional 10,000 pesos; but the total penalty which may be imposed shall not exceed
twenty years. In such cases, and in connection with the accessory penalties which may be
imposed and for the purpose of the other provisions of this Code, the penalty shall be
termed prision mayor or reclusion temporal, as the case may be. (Underscoring supplied)
Applying the Indeterminate Sentence Law, the minimum of the penalty should be taken from the range
of the penalty next lower in degree to that prescribed under the Revised Penal Code. In this case, the
penalty next lower in degree is prision correccional in its minimum and medium periods. This Court
imposes a minimum penalty of two years of prision correccional.
With regard to the maximum penalty in Criminal Case No. 3264-M-2001, since the amount involved
exceeds P22,000, the imposable penalty shall be taken from the maximum period of prision
correccional maximum period to prision mayor minimum period, which, when divided into three equal
portions following Article 65 of the Revised Penal Code, have the following periods:
Minimum period - four years, two months, and one day to five years, five months, and ten
days.

In fine, Zenchiro's disclaimer of the charges fails.


Medium period - five years, five months, and 11 days to six years, eight months, and 20 days
Maximum period - six years, eight months and 21 days to eight years.30

Following the above-quoted portion of the provision of Article 315 of the Revised Penal Code, the
maximum term of the penalty imposed by the trial court in Criminal Case No. 3264-M-2001 should be
increased by one year.
Adding one year to the maximum period of the prescribed penalty, which is from six years, eight months
and 21 days to eight years of prision mayor, the maximum penalty may be taken from seven years,
eight months and 21 days to nine years of prision mayor.31 Thus, the maximum penalty imposed by the
trial court in Criminal Case No. 3264-M-2001 is increased to seven years, eight months, and 21 days
of prision mayor.

ESPERANZA BACKIAN y LAD-EY, ZALDY DUMPILES y MALIKDAN, JOEL


EDIONG y CALDERON, RICKY WALDO y NICKEY, JEROME MONTAEZ y
OSBEN, DOVAL DUMPILES y SAP-AY, JONATHAN NGAOSI y DUMPILES,
EDMUND DIEGO y SUBIANGAN and MARLON PETTOCO y SUGOT, without said
accused having first secured the necessary license or authority from the
Department of Labor and Employment.
CONTRARY TO LAW.

The Information was docketed in the RTC as Crim. Case No. 16427-R and raffled to
WHEREFORE, the October 23, 2006 Decision of the Court of Appeals is AFFIRMED with the
MODIFICATION that the fine in Criminal Case No. 3261-M-2001 is P500,000. In Criminal Case No. 20M-2001, the minimum term of the imprisonment imposed is two years of prision correccional and the
maximum term of the imprisonment imposed is Seven Years, Eight Months and 21 Days of prision
mayor.

Branch 60 thereof.
On the same date April 5, 1999 and in the same court, twelve (12) separate
Informations[2] for Estafa were filed against the same accused at the instance of the same

In all other aspects, the appellate court's decision is AFFIRMED.

complainants. Docketed as Criminal Case Nos. 16428-R to 16439-R and likewise raffled to the same
branch of the court, the twelve (12) Informations for Estafa, varying only as regards the names of the

SO ORDERED.

offended parties and the respective amounts involved, uniformly recite:

PEOPLE OF THE PHILIPPINES Plaintiff-Appellee,


- versus CHARLIE COMILA and
AIDA COMILA, Accused-Appellants.

DECISION
On April 5, 1999, in the Regional Trial Court (RTC) of Baguio City, an Information [1] for Illegal
Recruitment committed in large scale by a syndicate, as defined and penalized under Article 13(6) in
relation to Articles 38(b), 34 and 39 of Presidential Decree No. 442, otherwise known as the New
Labor Code, as amended, was filed against Charlie Comila, Aida Comila and one Indira Ram Singh
Lastra, allegedly committed as follows:
That on or about the 7th day of September, 1998, in the City of Baguio,
Philippines, and within the jurisdiction of this Honorable Court, the above-named
accused, conspiring, confederating, and mutually aiding one another, did then and
there willfully, unlawfully and feloniously offer, recruit, and promise employment as
contract workers in Italy, to the herein complainants, namely: MARLYN ARO y
PADCAYAN, ANNIE FELIX y BAKISAN, ELEONOR DONGGA-AS y ANGHEL,

That on or about the 10th day of November, 1998, in the City of Baguio,
Philippines, and within the jurisdiction of this Honorable Court, the above-named
accused, conspiring, confederating and mutually aiding one another did then and
there willfully, unlawfully and feloniously defraud one ZALDY DUMPILES Y
MALIKDAN by way of false pretenses, which are executed prior to or
simultaneously with the commission of the fraud, as follows, to wit: the accused
knowing fully well that he/she/they is/are not AUTHORIZED job RECRUITERS for
persons intending to secure work abroad convinced said Zaldy Dumpiles y
Malikdan and pretended that he/she/they could secure a job for him/her abroad, for
and in consideration of the sum of P25,000.00 and representing the placement and
medical fees when in truth and in fact could not; the said Zaldy Dumpiles y
Malikdan deceived and convinced by the false pretenses employed by the accused
parted away the total sum of P25,000,00 in favor of the accused, to the damage
and prejudice of the said Zaldy Dumpiles y Malikdan in the aforementioned amount
of TWENTY FIVE THOUSAND PESOS (P25,000.00), Philippine currency.
CONTRARY TO LAW.

Of the three accused named in all the aforementioned two sets of Informations, only accused
Aida Comila and Charlie Comila were brought under the jurisdiction of the trial court, the third, Indira
Ram Singh Lastra, being then and still is at large.

Arraigned with assistance of counsel, accused Aida Comila and Charlie Comila entered a
plea of NOT GUILTY not only to the Information for Illegal Recruitment (Crim. Case No. 16427R) but also to the twelve (12) Informations for Estafa (Crim. Case Nos. 16428-R to 16439-R).

Thereafter, a joint trial of the cases ensued.

They shall also jointly and severally pay the


complainant, Marilyn Aro, the sum of P25,500.00
plus interest from the date this Information was filed
until it is fully paid;
3.

In Criminal Case No. 16431-R, GUILTY beyond


reasonable doubt of the crime of Estafa. There being
no mitigating and aggravating circumstances and
applying the provisions of the Indeterminate
Sentence Law, they are hereby sentenced to each
suffer an indeterminate penalty of four (4) years and
two (2) months of prision correccional, as minimum,
to ten (10) years of prision mayor, as maximum.
They shall also jointly and severally pay the
complainant, Annie Felix, the sum of P50,000.00
plus interest from the date this Information was filed
until it is fully paid;

4.

In Criminal Case No. 16432-R, GUILTY beyond


reasonable doubt of the crime of Estafa. There being
no mitigating and aggravating circumstances, and
applying the provisions of the Indeterminate
Sentence Law, they are hereby sentenced to each
suffer an indeterminate penalty of four (4) years and
two (2) months of prision correccional, as minimum,
to ten (10) years of prision mayor, as maximum.
They shall also jointly and severally pay the
complainant, Eleanor Dongga-as, the sum of
P50,000.00 plus interest from the date this
Information was filed until it is fully paid;

5.

In Criminal Case No. 16434-R, GUILTY beyond


reasonable doubt of the crime of Estafa. There being
no mitigating and aggravating circumstances and
applying the provisions of Indeterminate Sentence
Law, they are hereby sentenced to each suffer an
indeterminate penalty of four (4) years and two (2)
months of prision correccional, as minimum, to eight
(8) years of prision mayor, as maximum. They shall
also jointly and severally pay the complainant,
Edmund Diego, the sum of P25,000.00 plus interest
from the date this Information was filed until it is fully
paid;

6.

In Criminal Case No. 16436-R, GUILTY beyond


reasonable doubt of the crime of Estafa. There being
no mitigating and aggravating circumstances, and
applying the provisions of the Indeterminate
Sentence Law, they are hereby sentenced to each

Of the twelve (12) complainants in both the illegal recruitment and estafa charges, the
prosecution was able to present only seven (7) of them, namely: Annie Felix y Bakisan; Ricky Waldo y
Nickey; Jonathan Ngaosi y Dumpiles; Marilyn Aro y Padcayan; Edmund Diego y Subiangan; Jerome
Montaez y Osben; and Eleonor Dongga-as y Anghel. A certain Jose Matias of the Philippine Overseas
Employment Administration (POEA) was supposed to testify for the prosecution but his testimony was
dispensed after the defense agreed that he will merely testify to the effect that as per POEA records,
accused Aida Comila and Charlie Comila were not duly licensed or authorized to recruit workers for
overseas employment.
In a consolidated decision[3] dated October 3, 2000, the trial court found both accused GUILTY
beyond reasonable doubt of the crimes of Illegal Recruitment committed in large scale by a syndicate,
as charged in Crim. Case No. 16427-R, and of estafa, as charged in Crim. Case Nos. 16430-R; 16431R, 16432-R, 16434-R, 16436-R, 16438-R, and 16439-R. The other informations for estafa in Crim.
Case Nos. 16428-R, 16429-R, 16433-R, 16435-R and 16437-R were, however, dismissed for lack of
evidence. We quote the fallo of the trial courts decision:
WHEREFORE, premises considered, this court hereby finds the accused,
Aida Comila and Charlie Comila:
1.

In Criminal Case No. 16427-R, GUILTY beyond


reasonable doubt of the crime of Illegal Recruitment
in Large Scale Committed by a Syndicate. They are
hereby sentenced to each suffer the penalty of life
imprisonment and a fine of P100,000.00;

2.

In Criminal Case No. 16430-R, GUILTY beyond


reasonable doubt of the crime of Estafa. There being
no mitigating and aggravating circumstances and
applying the provisions of the Indeterminate
Sentence Law, they are hereby sentenced to each
suffer an indeterminate penalty of four (4) years and
two (2) months of prision correccional, as minimum,
to eight (8) years of prision mayor, as maximum.

suffer an indeterminate penalty of four (4) years and


two (2)months of prision correccional, as minimum,
to eight (8) years of prision mayor, as maximum.
They shall also jointly and severally pay the
complainant, Jonathan Ngaosi, the sum of
P25,000.00 plus interest from the date this
Information was filed until it is fully paid;
7.

8.

9.

In Criminal Case No. 16438-R, GUILTY beyond


reasonable doubt of the crime of Estafa. There being
no mitigating and aggravating circumstances, and
applying the provisions of the Indeterminate
Sentence Law, they are hereby sentenced to each
suffer an indeterminate penalty of four (4) years and
two (2) months of prision correccional, as minimum,
to eight (8) years of prision mayor as maximum.
They shall also jointly and severally pay the
complainant, Ricky Waldo, the sum of P25,000.00
plus interest from the date this Information was filed
until it is fully paid;
In Criminal Case No. 16439-R, GUILTY beyond
reasonable doubt of the crime of Estafa. There being
no mitigating and aggravating circumstances, and
applying the provisions of the Indeterminate
Sentence Law, they are hereby sentenced to each
suffer an indeterminate penalty of four (4) years and
two (2) months of prision correccional, as minimum
to eight (8) years of prision mayor, as maximum.
They shall also jointly and severally pay the
complainant, Jerome Montaez, the sum of
P25,000.00 plus interest from the date this
Information was filed; and
Criminal Cases Nos. 16428-R; 16429-R; 16433R; 16435-R and 16437-R are hereby DISMISSED
for lack of evidence.

In the service of the various prison terms herein imposed upon the accused Aida
Comila and Charlie Comila, the provisions of Article 70 of the Revised Penal Code
shall be observed.
As to the accused, Indira Sighn Lastra, let all these cases be archived in
the meantime until the said accused is arrested.
SO ORDERED.

Pursuant to a Notice of Appeal[4] filed by the two accused, the trial court forwarded the
records of the cases to this Court in view of the penalty of life imprisonment meted in Crim. Case No.
16427-R (Illegal Recruitment in large scale). In its Resolution [5] of October 3, 2001, the Court resolved
to accept the appeal and the subsequent respective briefs for the appellants [6] and the appellee[7] as
well as the appellants reply brief.[8]
Thereafter, and consistent with its pronouncement in People v. Mateo,[9] the Court, via its
Resolution[10] of September 22, 2004, transferred the cases to the Court of Appeals (CA) for
appropriate action and disposition. In the CA, the cases were assigned one docket number and thereat
docketed as CA-G.R. CR H.C. No. 01615.
In a decision[11] promulgated on December 29, 2005, the appellate court affirmed that of the
trial court, to wit:
WHEREFORE, premises considered, the Decision dated October 3,
2000 of the Regional Trial Court of Baguio City, Branch 60, in Criminal Cases Nos.
16427-R to 16439-R finding accused-appellants guilty of (1) illegal recruitment
committed in large scale; and (2) seven (7) counts of estafa is hereby AFFIRMED
and UPHELD.
With costs against the accused-appellants.
SO ORDERED.

The cases are again with this Court in view of the Notice of Appeal [12] interposed by the
herein accused-appellants from the aforementioned affirmatory CA decision.
Acting thereon, the Court required the parties to simultaneously submit their respective
supplemental briefs, if they so desire.
In their respective manifestations,[13] the parties opted not to file any supplemental brief and
instead merely reiterated what they have said in their earlier appellants and appellee's briefs.
The Office of the Solicitor General, in the brief [14] it filed for appellee People, summarizes the
facts of the case in the following manner:

Annie Felix was introduced by her sister-in-law, Ella Bakisan, to appellant


Aida Comila in August 1998 (pp. 3, 24, tsn, September 14, 1999). Ella Bakisan told
her that appellant Aida Comila could help her find work abroad as she was
recruiting workers for a factory in Palermo, Italy (ibid.). Annie Felix then went to
meet appellant Aida Comila at the Jollibee outlet along Magsaysay Avenue, Baguio
City in August, 1998 to inquire about the supposed work in Italy (pp. 3-4, tsn, ibid.).
There were other applicants, aside from Annie at the Jollibee outlet at the time,
similarly inquiring about the prospective jobs abroad (ibid.).
Annie met appellant again at the St. Theresas College on or about
September 6 or 7, 1998 (p.11, ibid.). there were around fifty (50) to sixty (60)
applicants at that time (ibid.). Appellant introduced them to a certain Erlinda
Ramos, one of the agents of Mrs. Indira Lastra, a representative of the Far East
Trading Corporation (p.4,11, ibid.). Accordingly, Erlinda Ramos would be
responsible for the processing of the applicants visas (ibid.). Erlinda Ramos even
showed them the copy of the job order from Italy (ibid.). Like Ramos, appellant
likewise introduced herself to Annie and the other applicants as an agent of Lastra
(pp. 3-4, ibid.).
Annie submitted all her requirements to appellant, along with the amount
of two thousand pesos (P2,000.00) as processing fee (p.6, tsn, ibid.). She also paid
a total of twenty three thousand (P23,000.00) as partial payment of her placement
fee of fifty thousand pesos (P50,000.00) on or about September 6 or 7, 1998.
Appellant issued a common receipt detailing the amounts she received not only
from Annie Felix (23,000.00) but also for her fellow applicants, Zaldy Dumpiles
(P23,000.00), Joel Ediong (P25,000.00), and Ricky Baldo (P25, 000.00) (p. 8, tsn,
ibid.).
Annie went to Manila several times to complete her medical examination
as required (pp. 14-16, tsn, ibid.). Considering appellant Aida Comilas pregnancy
at that time, her husband Charlie Comila, also an agent of Lastra, accompanied
Annie and the other applicants during their medical check-up (pp. 22-24, ibid.).
On the last week of October, 1998, Annie again paid appellant the total
amount of twenty five thousand pesos (P25,000.00) to complete her placement fee
of fifty thousand pesos (P50,000.00). Annie was told that her flight to Italy was
scheduled on September 14, 1998 (p. 20, ibid.). Later on, Erlinda Ramos told
Annie that her flight to Italy was re-scheduled to October, 1998 due to a typhoon
(p.20, ibid.).
There were others like Annie Felix who were similarly enticed to apply for
the promised job in Italy (pp. 4-5, tsn, September 22, 1999). Among them were
Ricky Waldo, Edmund Diego, Eleanor Donga-as, Jonathan Ngaosi, Marilyn Aro
and Jerome Montaez (pp. 4-5; 19-28, tsn, September 22, 1999, afternoon
session).
In the briefing at St. Theresas College, Navy Road, Pacdal, Baguio City,
(p. 7, tsn, September 22, 1999; pp. 29-30, tsn, September 14, 1999) appellant
briefed Ricky Waldo and the rest of the applicants on their application requirements
(pp. 7-8, tsn, Sept. 22, 1999). The briefing was conducted by appellants Aida

Comila, Charlie Comila, and Erlinda Ramos who alternately talked about the
documents to be submitted for the processing of their applications and the
processing fee of fifty thousand pesos (P50,000.00) they have to pay (p.8, tsn,
September 22, 1999). In the same briefing, they were also told that Erlinda Ramos
was scheduled to go to Italyon September 14, 1998 and that whoever would pay
P25,000.00 first, or half of the P50,000.00 processing fee would be able to go with
her to Italy (p. 8. tsn, September 22, 1999). Per the job order shown to Jonathan
Ngaosi, for instance, male workers were to receive a salary of two thousand three
hundred dollars ($2,300.00) plus an additional eight dollars ($8.00) for overtime
work (p.8, tsn, September 21, 1999, afternoon session).
After undergoing the required medical examination in Manila, applicants
Ricky Waldo and company paid the following amounts for their respective
processing fees, which were duly receipted by appellant Aida Comila in three
separate documents, thus:
8-23-98, received the amount of P14,000.00 from Ella Bakisan. Signed,
Aida Comila. The second document again is a piece of paper of which the following
is written: 9-7-98. Received the amount of the following: Philip Waldo, P20,000.00;
Doval Dumpiles, P23,000.00 Edmund Diego, P25,000.00; Jerome Montaez,
P25,000.00 Total- P93,000.00. Received by A. Comila. The 3rd document is page
of a yellow pad and it reads 9-7-98, received the following amounts from Zaldy
Dumpiles - P23,000.00; Joel Ediong - P25,000.00; Ricky Waldo- P25,000.00; Annie
Felix - P23,000.00; Marlon Tedoco P23,000.00. Total P119,000.00. Received by
Aida Comila; witnesses Ella Bakisan. (p.14, tsn, of witness Edmund
Diego, September 22, 1999, morning session).
Considering the payments they made, Ricky Waldos flight to Italy was
scheduled on September 14, 1999 while those of Marilyn Aro, Edmund Diego,
Jerome Montanez, Jonathan Ngaosi, and Eleanor Donga-as were scheduled on
October 27, 1999 (pp. 8-9, tsn, September 22, 1999; pp. 32-33, tsn, September 14,
1999; pp. 2-4, tsn, September 15, 1999; p. 24, September 21, 1999; p.10, tsn,
September 22, 1999, morning session; p. 27, tsn, September 22, 1999, afternoon
session).
Like Annie Felix, Ricky Waldos flight did not push through as scheduled
on September 14, 1999 (pp. 32-34, tsn, September 14, 1999; pp. 2-4,
tsn, September 15, 1999). Appellant Aida Comila explained that the re-scheduling
was due to typhoon (ibid.). Rickys flight was then re-scheduled to October 7, 1999
but was again moved to October 27, 1999 as, according to appellant Aida Comila,
there were some problems in his papers and that of the other applicants (pp. 2-3,
ibid.).

On October 25, 1998, appellant Aida Comila called the applicants for a
briefing at the St. Therese Building at the Navy Base, Baguio City (p.24,
tsn, September 21, 1999). In the same briefing, Erlinda Ramos, as representative
of the supposed principal, Indira Lastra, explained to the applicants that their flight
on October 27, 1999was cancelled but will be re-scheduled (ibid.). Appellant Aida

Comila told them that they have to wait for the notice from the Italian Embassy
(ibid.).
On the first week of November, 1998, appellant Charlie Comila told
Marilyn Aro and several other applicants that their visas would be released (p. 25,
September, 21, 1999). Appellant Charlie Comila accompanied them and the others
to the Elco Building at Shaw Boulevard, Pasig City purportedly to see Erlinda
Ramos (p.25, tsn,September 21, 1999). When Erlinda Ramos arrived, she told
Marilyn and the other applicants to wait for the release of their visas, the following
day (p.25, ibid.). Marilyn and the rest came back each day for one whole week but
the promised visas were not released to them (ibid.).
Marilyn and the other applicants complained to appellant Charlie Comila
about the delay and told him of their doubts about their application and the
promised job in Italy (ibid.). At this point, appellant Charlie Comila assured them
that they should not worry and that everything will be alright (ibid). Appellant
Charlie Comila then brought them to Indira Lastra (p.26, ibid.).
Marilyn Aro, Annie Felix, and the rest were all shocked to find out that
Indira Lastra was actually an inmate of Manila (Quiapo) city jail. (p.26, ibid.; p. 13,
tsn,September 14, 1999). They felt at once that they were, indeed, victims of illegal
recruitment (ibid.).When they demanded the return of their money from Indira
Lastra, the latter told them to withdraw their money from appellant Aida Comila
(p.26. ibid.).
Upon their return to Baguio, Marilyns group proceeded to appellant Aida
Comilas residence at Km. 6, La Trinidad, Benguet to demand the return of their
money (p. 27, tsn, ibid.). Appellant Aida Comila, however, told them to wait as
Indira Lastra will soon be out of jail and will personally process their papers at the
Italian Embassy (ibid.). Marilyn and the other applicants followed-up several times
with appellant Aida Comila the return of the amounts of money they paid for their
supposed placement fee, but were simply told to wait (ibid.). the last time
complainants visited them, appellants Aida Comila and Charlie Comila were
already in a Bulacan jail (p. 27, ibid.).

In their appellants brief, accused-appellants would fault the two courts below in (1) finding
them guilty beyond reasonable doubt of the crimes of illegal recruitment and estafa; and (2) totally
disregarding the defense of denial honestly advanced by them.
It is not disputed that accused-appellants Charlie Comila and Aida Comila are husband-andwife. Neither is it disputed that husband and wife knew and are well-acquainted with their co-accused,
Indira Ram Singh Lastra, and one Erlinda Ramos. It is their posture, however, that from the very
beginning, appellant Aida Comila never professed that she had the authority to recruit and made it clear
to the applicants for overseas employment that it was Erlinda Ramos who had such authority and who
issued the job orders from Italy. Upon this premise, this appellant contends that the subsequent
transactions she had with the applicants negate the presence of deceit, an essential element of estafa
under paragraph 2(a) of Article 315 of the Revised Penal Code. On the charge of illegal recruitment,
this appellant argues that she was merely trying to help the applicants to process their papers,
believing that Indira Ram Sighn Lastra and Erlinda Ramos would really send the applicants
to Italy. With respect to co-appellant Charlie Comila, the defense submits that the prosecution
miserably failed to prove his participation in the illegal recruitment and estafa.
The appeal must fail.
After a careful and circumspect review of the records, we are fully convinced that both the
trial and appellate courts committed no error in finding both appellants guilty beyond moral certainty of

In April, 1999, Marilyn Aro, Edmund Diego, Annie Felix, Eleanor Dongaas, Jerome Montanez, Ricky Waldo and Jonathan Ngaosi filed their complaint
against appellants Aida Comila and Charlie Comila before the Criminal
Investigation Group (CIG).

doubt of the crimes charged against them. Through the respective testimonies of its witnesses, the

In the same month of April 1999, separate Informations for estafa and
illegal recruitment committed in large scale by a syndicate or violation of Article 13
(b) in relation to Article 38 (b) 34, and 39 of P.D. No. 442, otherwise known as the
Labor Code of the Philippines were filed against appellants Charlie Comila, Aida
Comila and Indira Lastra.

appellant Aida Comila as the one who promised them foreign employment and assured them of

prosecution has satisfactorily established that both appellants were then engaged in unlawful
recruitment and placement activities. The combined testimonies of the prosecution witnesses point to

placement overseas through the help of their co-accused Indira Ram Singh Lastra. For sure, it was
Aida herself who informed them of the existence of job orders from Palermo, Italy, and of the
documents needed for the processing of their applications. Aida, in fact, accompanied the applicants to
undergo medical examinations in Manila. And relying completely on Aidas representations, the

applicants-complainants entrusted their money to her only to discover later that their hopes for an
overseas employment were but vain. In the words of the trial court:
Aida Comila cannot escape culpability by the mere assertion that the
recruitment activities were done by Ella Bakisan, Erlinda Ramos and Indira Lastra
as if she was just a mere observer of the activities going on right under her nose,
especially so that the seven complainants who testified all pointed to her as their
recruiter. She could not adequately explain why: (1) she had to show and explain
the job order and the work and travel requirements to the complainants; (2) she
had to meet the complainants at Jollibee, Magsaysay Ave., Baguio City and in her
residence; (3) she had to be present at the briefings for the applicants; (4) she
received the placement fees even if she claims that she received them from Ella
Bakisan; (5) she had to go down to Manila and accompanied the complainants for
their medical examination; and (6) she had to go out of her way to do all these
things even when she was pregnant and was about to give birth. Certainly, she was
not a social worker or a humanitarian who had all the time in this world to go out of
her way to render free services to other people whom she did not know or just met.
To be sure, Aida Comila had children to attend to and a husband who was
unemployed to be able to conduct such time-consuming charitable activities.[15]

Charlie Comila could not, likewise, feign ignorance of the illegal


transactions. It is contrary to human experience, hence, highly incredible for a
husband not to have known the activities of his wife who was living with him under
the same roof. In fact, he admitted that when Aida gave birth, he had to accompany
the complainants toManila for their medical examination and again, on another trip,
to bring them to the office of Erlinda Ramos to follow-up their visas. The fact that
he knew the ins and outs of Manila was a desperate excuse or reason why he
accompanied the complainants to Manila considering that, as he and his wife
claimed, they have nothing to do with the recruitment activities. Furthermore, if he
and his wife had nothing to do with the recruitment of the complainants, why did he
have to sign the letter and accommodate the request of Myra Daluca whom they
have not really known. But damning was his statement that he signed the letter
because Aida was not there to sign it. Such a statement would only show that they
were indeed parties to these illegal transactions. Charlie Comila would even claim
that he was just an elementary graduate and so he did not understand what he was
asked to sign. But his booking sheet showed that he was a high school graduate.
He was a conductor of a bus company who should know and understand how to
read and write. Furthermore, he was already a grown up man in his thirties who
knew what was right and wrong and what he should or should not do.

It is well
Running in parallel vein is what the CA wrote in its appealed decision:

[16]

As regards appellant Aida Comilas contention that she did not represent
herself as a licensed recruiter, and that she merely helped complainants avail of
the job opportunity on the belief that Indira Lastra and Erlinda Ramos would really
send them to Italy, the same hardly deserves merit. The crime of illegal recruitment
is committed when, among other things, a person who, without being duly
authorized according to law represents or gives the distinct impression that he or
she has the power or the ability to provide work abroad convincing those to whom
the representation is made or to whom the impression is given to thereupon part
with their money in order to be assured of that employment.

established in jurisprudence that

person

may

be

charged and convicted for both illegal recruitment and estafa. The reason therefor is not hard to
discern: illegal recruitment is malum prohibitum, while estafa is malum in se. In the first, the
criminal intent of the accused is not necessary for conviction. In the second, such an intent is
imperative. Estafa under Article 315, paragraph 2, of the Revised Penal Code, is committed by any
person who defrauds another by using fictitious name, or falsely pretends to possess power, influence,
qualifications, property, credit, agency, business or imaginary transactions, or by means of similar
deceits executed prior to or simultaneously with the commission of fraud.[18] Here, it has been
sufficiently proven that both appellants represented themselves to the complaining witnesses to have

In fact, even if there is no consideration involved, appellant will still be


deemed as having engaged in recruitment activities, since it was sufficiently
demonstrated that she promised overseas employment to private complainants. To
be engaged in the practice and placement, it is plain that there must at least be
a promise or offer of an employment from the person posing as a recruiter whether
locally or abroad.

As regards appellant Charlie Comila, it is inconceivable for him to feign ignorance of the
illegal recruitment activities of his wife Aida, and of his lack of participation therein. Again, we quote
with approval what the trial court has said in its decision:[17]

the capacity to send them to Italy for employment, even as they do not have the authority or license
for the purpose. Doubtless, it is this misrepresentation that induced the complainants to part with their
hard-earned money for placement and medical fees. Such act on the part of the appellants clearly
constitutes estafa under Article 315, paragraph (2), of the Revised Penal Code.
Appellants next bewail the alleged total disregard by the two courts below their defense of
denial which, had it been duly considered and appreciated, could have merited their acquittal.

The Court disagrees. The two courts below did consider their defense of denial. However,
given the positive and categorical testimonies of the complainants who were one in pointing to
appellants, in cahoots with their co-accused Indira Ram Singh Lastra, as having recruited and promised
them with overseas employment, appellants defense of denial must inevitably collapse.
All told, we rule and so hold that the two courts below committed no error in adjudging
both appellants guilty beyond reasonable doubt of the crimes of illegal recruitment committed by a
syndicate in large scale and of estafa in seven (7) counts. We also rule that the penalties imposed by
the court of origin, as affirmed by the CA, accord with law and jurisprudence.
IN VIEW WHEREOF, the instant appeal is DISMISSED and the appealed decision of the CA,
affirmatory of that the trial court, is AFFIRMED in toto.
Costs against appellants. SO ORDERED.

[G.R. No. 127195. August 25, 1999]


MARSAMAN MANNING AGENCY, INC. and DIAMANTIDES MARITIME, INC., petitioners, vs.
NATIONAL
LABOR
RELATIONS
COMMISSION
and
WILFREDO
T.
CAJERAS, respondents.
DECISION
BELLOSILLO, J.:
MARSAMAN MANNING AGENCY, INC. (MARSAMAN) and its foreign principal DIAMANTIDES
MARITIME, INC. (DIAMANTIDES) assail the Decision of public respondent National Labor Relations
Commission dated 16 September 1996 as well as its Resolution dated 12 November 1996 affirming the
Labor Arbiter's decision finding them guilty of illegal dismissal and ordering them to pay respondent
Wilfredo T. Cajeras salaries corresponding to the unexpired portion of his employment contract, plus
attorney's fees.
Private respondent Wilfredo T. Cajeras was hired by petitioner MARSAMAN, the local manning
agent of petitioner DIAMANTIDES, as Chief Cook Steward on the MV Prigipos, owned and operated by
DIAMANTIDES, for a contract period of ten (10) months with a monthly salary of US$600.00, evidenced
by a contract between the parties dated 15 June 1995. Cajeras started work on 8 August 1995 but less

than two (2) months later, or on 28 September 1995, he was repatriated to the Philippines allegedly by
mutual consent.
On 17 November 1995 private respondent Cajeras filed a complaint for illegal dismissal against
petitioners with the NLRC National Capital Region Arbitration Branch alleging that he was dismissed
illegally, denying that his repatriation was by mutual consent, and asking for his unpaid wages, overtime
pay, damages, and attorneys fees.[1] Cajeras alleged that he was assigned not only as Chief Cook
Steward but also as assistant cook and messman in addition to performing various inventory and
requisition jobs. Because of his additional assignments he began to feel sick just a little over a month
on the job constraining him to request for medical attention. He was refused at first by Capt. Kouvakas
Alekos, master of theMV Prigipos, who just ordered him to continue working. However a day after the
ships arrival at the port of Rotterdam, Holland, on 26 September 1995 Capt. Alekos relented and had
him examined at the Medical Center for Seamen. However, the examining physician, Dr. Wden Hoed,
neither apprised private respondent about the diagnosis nor issued the requested medical certificate
allegedly because he himself would forward the results to private respondents superiors. Upon
returning to the vessel, private respondent was unceremoniously ordered to prepare for immediate
repatriation the following day as he was said to be suffering from a disease of unknown origin.
On 28 September 1995 he was handed his Seaman's Service Record Book with the following
entry: "Cause of discharge - Mutual Consent." [2] Private respondent promptly objected to the entry but
was not able to do anything more as he was immediately ushered to a waiting taxi which transported
him to the Amsterdam Airport for the return flight to Manila. After his arrival in Manila on 29 September
1995 Cajeras complained to MARSAMAN but to no avail.[3]
MARSAMAN and DIAMANTIDES, on the other hand, denied the imputation of illegal
dismissal. They alleged that Cajeras approached Capt. Alekos on 26 September 1995 and informed
the latter that he could not sleep at night because he felt something crawling over his
body. Furthermore, Cajeras reportedly declared that he could no longer perform his duties and
requested for repatriation. The following paragraph in the vessel's Deck Log was allegedly entered by
Capt. Alekos, to wit:
Cajeras approached me and he told me that he cannot sleep at night and that he feels something
crawling on his body and he declared that he can no longer perform his duties and he must be
repatriated.[4]
Private respondent was then sent to the Medical Center for Seamen at Rotterdam where he was
examined by Dr. Wden Hoed whose diagnosis appeared in a Medical Report as paranoia and other
mental problems.[5] Consequently, upon Dr. Hoeds recommendation, Cajeras was repatriated to the
Philippines on 28 September 1995.
On 29 January 1996 Labor Arbiter Ernesto S. Dinopol resolved the dispute in favor of private
respondent Cajeras ruling that the latter's discharge from the MV Prigipos allegedly by mutual consent
was not proved by convincing evidence. The entry made by Capt. Alekos in the Deck Log was
dismissed as of little probative value because it was a mere unilateral act unsupported by any
document showing mutual consent of Capt. Alekos, as master of the MV Prigipos, and Cajeras to the
premature termination of the overseas employment contract as required by Sec. H of the Standard
Employment Contract Governing the Employment of all Filipino Seamen on Board Ocean-Going

Vessels. Dr. Hoeds diagnosis that private respondent was suffering from paranoia and other mental
problems was likewise dismissed as being of little evidentiary value because it was not supported by
evidence on how the paranoia was contracted, in what stage it was, and how it affected respondent's
functions as Chief Cook Steward which, on the contrary, was even rated Very Good in respondent's
Service Record Book. Thus, the Labor Arbiter disposed of the case as follows:
WHEREFORE, judgment is hereby rendered declaring the repatriation and dismissal of complaint
Wilfredo T. Cajeras as illegal and ordering respondents Marsaman Manning Agency, Inc. and
Diamantides Maritime, Inc. to jointly and severally pay complainant the sum of USD 5,100.00 or its
peso equivalent at the time of payment plus USD 510.00 as 10% attorneys fees it appearing that
complainant had to engage the service of counsel to protect his interest in the prosecution of this case.
The claims for nonpayment of wages and overtime pay are dismissed for having been withdrawn
(Minutes, December 18, 1995). The claims for damages are likewise dismissed for lack of merit, since
no evidence was presented to show that bad faith characterized the dismissal.[6]
Petitioners appealed to the NLRC. [7] On 16 September 1996 the NLRC affirmed the appealed
findings and conclusions of the Labor Arbiter.[8] The NLRC subscribed to the view that Cajeras
repatriation by alleged mutual consent was not proved by petitioners, especially after noting that private
respondent did not actually sign his Seamans Service Record Book to signify his assent to the
repatriation as alleged by petitioners. The entry made by Capt. Alekos in the Deck Log was not
considered reliable proof that private respondent agreed to his repatriation because no opportunity was
given the latter to contest the entry which was against his interest. Similarly, the Medical Report issued
by Dr. Hoed of Holland was dismissed as being of dubious value since it contained only a sweeping
statement of the supposed ailment of Cajeras without any elaboration on the factual basis thereof.
Petitioners' motion for reconsideration was denied by the NLRC in its Resolution dated 12
November 1996.[9] Hence, this petition contending that the NLRC committed grave abuse of
discretion: (a) in not according full faith and credit to the official entry by Capt. Alekos in the vessels
Deck Log conformably with the rulings in Haverton Shipping Ltd. v. NLRC[10] and Wallem Maritime
Services, Inc. v. NLRC;[11] (b) in not appreciating the Medical Report issued by Dr. Wden Hoed as
conclusive evidence that respondent Cajeras was suffering from paranoia and other mental problems;
(c) in affirming the award of attorneys fees despite the fact that Cajeras' claim for exemplary damages
was denied for lack of merit; and, (d) in ordering a monetary award beyond the maximum of three (3)
months salary for every year of service set by RA 8042.
We deny the petition. In the Contract of Employment[12] entered into with private respondent,
petitioners convenanted strict and faithful compliance with the terms and conditions of the Standard
Employment Contract approved by the POEA/DOLE[13] which provides:
1. The employment of the seaman shall cease upon expiration of the contract period indicated in the
Crew Contract unless the Master and the Seaman, by mutual consent, in writing, agree to an early
termination x x x x (underscoring ours).
Clearly, under the foregoing, the employment of a Filipino seaman may be terminated prior to the
expiration of the stipulated period provided that the master and the seaman (a)mutually consent thereto
and (b) reduce their consent in writing.

In the instant case, petitioners do not deny the fact that they have fallen short of the
requirement. No document exists whereby Capt. Alekos and private respondent reduced to writing their
alleged mutual consent to the termination of their employment contract. Instead, petitioners
presented the vessel's Deck Log wherein an entry unilaterally made by Capt. Alekos purported to show
that private respondent himself asked for his repatriation. However, the NLRC correctly dismissed its
evidentiary value. For one thing, it is a unilateral act which is vehemently denied by private
respondent. Secondly, the entry in no way satisfies the requirement of a bilateral documentation to
prove early termination of an overseas employment contract by mutual consent required by the
Standard Employment Contract. Hence, since the latter sets the minimum terms and conditions of
employment for the protection of Filipino seamen subject only to the adoption of better terms and
conditions over and above the minimum standards,[14] the NLRC could not be accused of grave abuse
of discretion in not accepting anything less.
However petitioners contend that the entry should be considered prima facie evidence that
respondent himself requested his repatriation conformably with the rulings in Haverton Shipping Ltd. v.
NLRC[15] and Abacast Shipping and Management Agency, Inc. v. NLRC.[16] Indeed, Haverton says that a
vessels log book is prima facie evidence of the facts stated therein as they are official entries made by
a person in the performance of a duty required by law. However, this jurisprudential principle does not
apply to win the case for petitioners. In Wallem Maritime Services, Inc. v. NLRC [17] the Haverton ruling
was not given unqualified application because the log book presented therein was a mere typewritten
collation of excerpts from what could be the log book. [18] The Court reasoned that since the log book
was the only piece of evidence presented to prove just cause for the termination of respondent therein,
the log book had to be duly identified and authenticated lest an injustice would result from a blind
adoption of its contents which were but prima facie evidence of the incidents stated therein.
In the instant case, the disputed entry in the Deck Log was neither authenticated nor supported
by credible evidence. Although petitioners claim that Cajeras signed his Seamans Service Record
Book to signify his conformity to the repatriation, the NLRC found the allegation to be actually untrue
since no signature of private respondent appeared in the Record Book.
Neither could the Medical Report prepared by Dr. Hoed be considered corroborative and
conclusive evidence that private respondent was suffering from paranoia and other mental problems,
supposedly just causes for his repatriation. Firstly, absolutely no evidence, not even an allegation, was
offered to enlighten the NLRC or this Court as to Dr. Hoed's qualifications to diagnose mental illnesses.
It is a matter of judicial notice that there are various specializations in medical science and that a
general practitioner is not competent to diagnose any and all kinds of illnesses and diseases. Hence,
the findings of doctors who are not proven experts are not binding on this Court. [19] Secondly, the
Medical Report prepared by Dr. Hoed contained only a general statement that private respondent was
suffering from paranoia and other mental problems without providing the details on how the
diagnosis was arrived at or in what stage the illness was. If Dr. Hoed indeed competently examined
private respondent then he would have been able to discuss at length the circumstances and
precedents of his diagnosis. Petitioners cannot rely on the presumption of regularity in the performance
of official duties to make the Medical Report acceptable because the presumption applies only to public
officers from the highest to the lowest in the service of the Government, departments, bureaus, offices,
and/or its political subdivisions,[20] which Dr. Wden Hoed was not shown to be. Furthermore, neither did
petitioners prove that private respondent was incompetent or continuously incapacitated for the duties
for which he was employed by reason of his alleged mental state. On the contrary his ability as Chief

Cook Steward, up to the very moment of his repatriation, was rated Very Good in his Seamans
Service Record Book as correctly observed by public respondent.
Considering all the foregoing we cannot ascribe grave abuse of discretion on the part of the
NLRC in ruling that petitioners failed to prove just cause for the termination of private respondent's
overseas employment. Grave abuse of discretion is committed only when the judgment is rendered in
a capricious, whimsical, arbitrary or despotic manner, which is not true in the present case. [21]
With respect to attorneys fees, suffice it to say that in actions for recovery of wages or where an
employee was forced to litigate and thus incurred expenses to protect his rights and interests, a
maximum award of ten percent (10%) of the monetary award by way of attorneys fees is legally and
morally justifiable under Art. 111 of the Labor Code, [22] Sec. 8, Rule VIII, Book III of its Implementing
Rules,[23] and par. 7, Art. 2208[24] of the Civil Code.[25] The case of Albenson Enterprises Corporation v.
Court of Appeals[26] cited by petitioners in arguing against the award of attorneys fees is clearly not
applicable, being a civil action for damages which deals with only one of the eleven (11) instances when
attorneys fees could be recovered under Art. 2208 of the Civil Code.
Lastly, on the amount of salaries due private respondent, the rule has always been that an
illegally dismissed worker whose employment is for a fixed period is entitled to payment of his salaries
corresponding to the unexpired portion of his employment. [27] However on 15 July 1995, RA 8042
otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995 took effect, Sec. 10 of
which provides:
Sec. 10. In case of termination of overseas employment without just, valid or authorized cause as
defined by law or contract, the worker shall be entitled to the full reimbursement of his placement fee
with interest at twelve percent (12%) per annum, plus his salaries for the unexpired portion of the
employment contract or for three (3) months for every year of the unexpired term whichever is
less (underscoring ours).
The Labor Arbiter, rationalizing that the aforesaid law did not apply since it became effective only one
(1) month after respondent's overseas employment contract was entered into on 15 June 1995, simply
awarded private respondent his salaries corresponding to the unexpired portion of his employment
contract, i.e., for 8.6 months. The NLRC affirmed the award and the Office of the Solicitor General
(OSG) fully agreed. But petitioners now insist that Sec. 10, RA 8042 is applicable because although
private respondents contract of employment was entered into before the law became effective his
alleged cause of action, i.e., his repatriation on 28 September 1995 without just, valid or authorized
cause, occurred when the law was already in effect. Petitioners' purpose in so arguing is to invoke the
law in justifying a lesser monetary award to private respondent, i.e., salaries for three (3) months only
pursuant to the last portion of Sec. 10 as opposed to the salaries for 8.6 months awarded by the Labor
Arbiter and affirmed by the NLRC.
We agree with petitioners that Sec. 10, RA 8042, applies in the case of private respondent and to
all overseas contract workers dismissed on or after its effectivity on 15 July 1995 in the same way that
Sec. 34,[28] RA 6715,[29] is made applicable to locally employed workers dismissed on or after 21 March
1989.[30] However, we cannot subscribe to the view that private respondent is entitled to three (3)
months salary only. 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 wellestablished rule in legal hermeneutics that in interpreting a statute, care should be taken that every part
or word thereof be given effect[31] since the law-making body is presumed to know the meaning of the
words employed in the statue and to have used them advisedly.[32] Ut res magis valeat quam pereat.[33]
WHEREFORE, the questioned Decision and Resolution dated 16 September 1996 and 12
November 1996, respectively, of public respondent National Labor Relations Commission are
AFFIRMED. Petitioners MARSAMAN MANNING AGENCY, INC., and DIAMANTIDES MARITIME,
INC., are ordered, jointly and severally, to pay private respondent WILFREDO T. CAJERAS his salaries
for the unexpired portion of his employment contract or USD$5,100.00, reimburse the latter's placement
fee with twelve percent (12%) interest per annum conformably with Sec. 10 of RA 8042, as well as
attorney's fees of ten percent (10%) of the total monetary award. Costs against petitioners.
SO ORDERED.

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:

May 27/31, 1998 (5


days) incl. Leave
pay

US$ 413.90

June 01/30, 1998

2,590.00

July 01/31, 1998

2,590.00

August 01/31, 1998

2,590.00

Sept. 01/30, 1998

2,590.00

Oct. 01/31, 1998

2,590.00

Nov. 01/30, 1998

2,590.00

Dec. 01/31, 1998

2,590.00

Jan. 01/31, 1999

2,590.00

Feb. 01/28, 1999

2,590.00

Mar. 1/19, 1999 (19


days) incl. leave
pay

1,640.00

-------------------------------------------------------------------------------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:

25,382.23
Amount adjusted to
chief mate's salary
(March 19/31, 1998
to April 1/30, 1998)
+

1,060.5010

--------------------------------------------------------------------------------------------TOTAL CLAIM

US$ 26,442.7311

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 complainants salary for three (3) months of the
unexpired portion of the aforesaid contract of employment.1avvphi1

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
complainants 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 complainants (petitioner's) claim for attorneys 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.

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.

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

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:
I

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

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

$1,400 x 3

US$4,200.00

2. Salary differential

45.00

US$4,245.00
3. 10% Attorneys fees

424.50

TOTAL

US$4,669.50

The other findings are affirmed.

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

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 petitioners 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.

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:

On the first and second issues

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

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

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 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

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 Commission 43 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,50otherwise 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 acompetent 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 forCertiorari 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.56Petitioner'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.

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.

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:

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

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,58and 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 nonimpairment clause under Section 10, Article II is limited in application to laws about to be enacted that

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 theleast restrictive
means to protect such interest.72
Under American jurisprudence, strict judicial scrutiny is triggered by suspect classifications 73 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.

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
Courts 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

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.

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-andfile 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--vis OFWs with
employment contracts ofone year or more;

Second, among OFWs with employment contracts of more than one year; and

Case Title

Contract
Period

Period of
Service

Unexpired
Period

Period Applied in the


Computation of the
Monetary Award

Skippers v.
Maguad84

6 months

2 months

4 months

4 months

Bahia Shipping v.
Reynaldo Chua 85

9 months

8 months

4 months

4 months

Centennial
Transmarine v. dela
Cruz l86

9 months

4 months

5 months

5 months

Talidano v. Falcon87

12 months

3 months

9 months

3 months

Univan v. CA88

12 months

3 months

9 months

3 months

Oriental v. CA89

12 months

more than
2 months

10 months

3 months

PCL v. NLRC90

12 months

more than
2 months

more or less 9
months

3 months

Olarte v. Nayona91

12 months

21 days

11 months and
9 days

3 months

JSS v.Ferrer92

12 months

16 days

11 months and
24 days

3 months

9 months
and 7 days

2 months and
23 days

2 months and 23 days

Third, OFWs vis--vis local workers with fixed-period employment;


OFWs with employment contracts of less than one year vis--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 respondents 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:

Pentagon v.
Adelantar93

12 months

Phil. Employ v.
Paramio, et al.94

12 months

10 months

2 months

Unexpired portion

Flourish Maritime v.
Almanzor 95

2 years

26 days

23 months and
4 days

6 months or 3 months for


each year of contract

Athenna Manpower
v. Villanos 96

1 year, 10
months and 28
days

1 month

1 year, 9
months and 28
days

6 months or 3 months for


each 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.

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

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

Period of
Service

Unexpired
Period

Period Applied in the


Computation of the
Monetary Award

ATCI v. CA, et al.98

2 years

2 months

22 months

22 months

Phil. Integrated v.
NLRC99

2 years

7 days

23 months and
23 days

23 months and 23 days

JGB v. NLC100

2 years

9 months

15 months

15 months

Agoy v. NLRC101

2 years

2 months

22 months

22 months

EDI v. NLRC, et
al.102

2 years

5 months

19 months

19 months

Barros v. NLRC, et
al.103

12 months

4 months

8 months

8 months

Philippine
Transmarine v.
Carilla104

12 months

6 months
and 22 days

5 months and
18 days

5 months and 18 days

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

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 forevery 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 12month 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--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 Compaia 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 employeremployee 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 3,131Article 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:

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.

Thus, the constitutional mandates of protection to labor and security of tenure may be deemed as selfexecuting 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.

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.

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

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 DECLAREDUNCONSTITUTIONAL; 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.

or not paid at all. Their housing accommodations were cramped and were shared with 27 other
occupants. The lodging house was in Sharjah, which was far from their jobsite in Dubai, leaving them
only three to four hours of sleep a day because of the long hours of travel to and from their place of
work; there was no potable water and the air was polluted.

SO ORDERED.

When the respondents received their first salaries (at the rates provided in their appointment letters and
with deductions for placement fees) and because of their difficult living and working conditions, they
called up the agency and complained about their predicament. The agency assured them that their
concerns would be promptly addressed, but nothing happened.
G.R. No. 197528

September 5, 2012

PERT/CPM MANPOWER EXPONENT CO., INC., Petitioner,


vs.
ARMANDO A. VINUY A, LOUIE M. ORDOVEZ, ARSENIO S. LUMANTA,. JR., ROBELITO S.
ANIPAN, VIRGILIO R. ALCANTARA, MARINO M. ERA, SANDY 0. ENJAMBRE and NOEL T.
LADEA, Respondents.
DECISION
BRION, J.:
We resolve the present petition for review on certiorari1 assailing the decision2 dated May 9, 2011 and
the resolution3dated June 23, 2011 of the Court of Appeals (CA) in CA-G.R. SP No. 114353.
The Antecedents
On March 5, 2008, respondents Armando A. Vinuya, Louie M. Ordovez, Arsenio S. Lumanta, Jr.,
Robelito S. Anipan, Virgilio R. Alcantara, Marino M. Era, Sandy O. Enjambre and Noel T. Ladea
(respondents) filed a complaint for illegal dismissal against the petitioner Pert/CPM Manpower
Exponent Co., Inc. (agency), and its President Romeo P. Nacino.
The respondents alleged that the agency deployed them between March 29, 2007 and May 12, 2007 to
work as aluminum fabricator/installer for the agencys principal, Modern Metal Solution LLC/MMS
Modern Metal Solution LLC (Modern Metal) in Dubai, United Arab Emirates.

On May 5, 2007, Modern Metal required the respondents to sign new employment contracts,7 except for
Era who was made to sign later. The contracts reflected the terms of their appointment letters.
Burdened by all the expenses and financial obligations they incurred for their deployment, they were left
with no choice but to sign the contracts. They raised the matter with the agency, which again took no
action.
On August 5, 2007, despondent over their unbearable living and working conditions and by the
agencys inaction, the respondents expressed to Modern Metal their desire to resign. Out of fear, as
they put it, that Modern Metal would not give them their salaries and release papers, the respondents,
except Era, cited personal/family problems for their resignation.8 Era mentioned the real reason
"because I dont (sic) want the company policy"9 for his resignation.
It took the agency several weeks to repatriate the respondents to the Philippines. They all returned to
Manila in September 2007. Except for Ordovez and Enjambre, all the respondents shouldered their
own airfare.
For its part, the agency countered that the respondents were not illegally dismissed; they voluntarily
resigned from their employment to seek a better paying job. It claimed that the respondents, while still
working for Modern Metal, applied with another company which offered them a higher pay.
Unfortunately, their supposed employment failed to materialize and they had to go home because they
had already resigned from Modern Metal.
The agency further alleged that the respondents even voluntarily signed affidavits of quitclaim and
release after they resigned. It thus argued that their claim for benefits, under Section 10 of Republic Act
No. (R.A.) 8042, damages and attorneys fees is unfounded.
The Compulsory Arbitration Rulings

The respondents employment contracts,4 which were approved by the Philippine Overseas
Employment Administration (POEA), provided for a two-year employment, nine hours a day, salary of
1,350 AED with overtime pay, food allowance, free and suitable housing (four to a room), free
transportation, free laundry, and free medical and dental services. They each paid a P 15,000.00
processing fee.5
On April 2, 2007, Modern Metal gave the respondents, except Era, appointment letters6 with terms
different from those in the employment contracts which they signed at the agencys office in the
Philippines. Under the letters of appointment, their employment was increased to three years at 1,000
to 1,200 AED and food allowance of 200 AED.
The respondents claimed that they were shocked to find out what their working and living conditions
were in Dubai. They were required to work from 6:30 a.m. to 6:30 p.m., with a break of only one hour to
one and a half hours. When they rendered overtime work, they were most of the time either underpaid

On April 30, 2008, Labor Arbiter Ligerio V. Ancheta rendered a Decision10 dismissing the complaint,
finding that the respondents voluntarily resigned from their jobs. He also found that four of them
Alcantara, Era, Anipan and Lumanta even executed a compromise agreement (with quitclaim and
release) before the POEA. He considered the POEA recourse a case of forum shopping.
The respondents appealed to the National Labor Relations Commission (NLRC). They argued that the
labor arbiter committed serious errors in (1) admitting in evidence the quitclaims and releases they
executed in Dubai, which were mere photocopies of the originals and which failed to explain the
circumstances behind their execution; (2) failing to consider that the compromise agreements they
signed before the POEA covered only the refund of their airfare and not all their money claims; and (3)
ruling that they violated the rule on non-forum shopping.

On May 12, 2009, the NLRC granted the appeal.11 It ruled that the respondents had been illegally
dismissed. It anchored its ruling on the new employment contracts they were made to sign in Dubai. It
stressed that it is illegal for an employer to require its employees to execute new employment papers,
especially those which provide benefits that are inferior to the POEA-approved contracts.
The NLRC rejected the quitclaim and release executed by the respondents in Dubai. It believed that the
respondents executed the quitclaim documents under duress as they were afraid that they would not be
allowed to return to the Philippines if they did not sign the documents. Further, the labor tribunal
disagreed with the labor arbiters opinion that the compromise agreement they executed before the
POEA had effectively foreclosed the illegal dismissal complaint before the NLRC and that the
respondents had been guilty of forum shopping. It pointed out that the POEA case involved predeployment issues; whereas, the complaint before the NLRC is one for illegal dismissal and money
claims arising from employment.
Consequently, the NLRC ordered the agency, Nacino and Modern Metal to pay, jointly and severally,
the respondents, as follows:
WHEREFORE, the Decision dated 30 April 2008 is hereby REVERSED and SET ASIDE, a new
Decision is hereby issued ordering the respondents PERT/CPM MANPOWER EXPONENTS CO., INC.,
ROMEO NACINO, and MODERN METAL SOLUTIONS, INC. to jointly and severally, pay the
complainants the following:

Underpaid
Salary

Placement
fee

Salary for
the
unexpired
portion of
the contract
(1350 x 6
months)

Vinuya,
ARMANDO

150 x 6 = 900 AED

USD 400

8100 AED

Alcantara
VIRGILIO

150 X 4 = 600 AED

USD 400

8100 AED

P 20,000.00

Era,
MARINO

350 x 4 = 1400 AED

USD 400

8100 AED

P 20,000.00

Ladea,
NOEL

150 x 5 = 750 AED

USD 400

8100 AED

P 20,000.00

Employee

Exemplary
Damages

P 20,000.00

Ordovez,
LOUIE

250 X 3 = 750 AED

USD 400

8100 AED

P 20,000.00

Anipan,
ROBELITO

150 x 4 = 600 AED

USD 400

8100 AED

P 20,000.00

Enjambre,
SANDY

150 x 4 = 600 AED

USD 400

8100 AED

P 20,000.00

Lumanta,

250 x 5 = 1250 AED

USD 400

8100 AED

P 20,000.00

ARSENIO
TOTAL:

6,850 AED

US$3,200

64,800 AED

P 400,000.00

or their peso equivalent at the time of actual payment plus attorneys fees equivalent to 10% of the
judgment award.12
The agency moved for reconsideration, contending that the appeal was never perfected and that the
NLRC gravely abused its discretion in reversing the labor arbiters decision.The respondents, on the
other hand, moved for partial reconsideration, maintaining that their salaries should have covered the
unexpired portion of their employment contracts, pursuant to the Courts ruling in Serrano v. Gallant
Maritime Services, Inc.13
The NLRC denied the agencys motion for reconsideration, but granted the respondents motion.14 It
sustained the respondents argument that the award needed to be adjusted, particularly in relation to
the payment of their salaries, consistent with the Courts ruling in Serrano. The ruling declared
unconstitutional the clause, "or for three (3) months for every year of the unexpired term, whichever is
less," in Section 10, paragraph 5, of R.A. 8042, limiting the entitlement of illegally dismissed overseas
Filipino workers to their salaries for the unexpired term of their contract or three months, whichever is
less. Accordingly, it modified its earlier decision and adjusted the respondents salary entitlement based
on the following matrix:

Employee

Duration of
Contract

Departure date

Date dismissed

Unexpired
portion of
contract

Vinuya,
ARMANDO

2 years

29 March 2007

8 August 2007

19 months
and 21 days

Alcantara,
VIRGILIO

2 years

3 April 2007

8 August 2007

20 months
and 5 days

Era,
MARINO

2 years

12 May 2007

8 August 2007

21 months
and 4 days

Ladea,
NOEL

2 years

29 March 2007

8 August 2007

19 months
and 21 days

Ordovez,

2 years

3 April 2007

26 July 2007

21 months

1. affirming the NLRCs finding that the respondents were illegally dismissed;
LOUIE

and 23 days

Anipan,
ROBELITO

2 years

3 April 2007

8 August 2007

20 months
and 5 days

Enjambre,
SANDY

2 years

29 March 2007

26 July 2007

20 months
and 3 days

Lumanta,
ARSENIO

2 years

29 March 2007

8 August 2007

19 months
and 21 days15

Again, the agency moved for reconsideration, reiterating its earlier arguments and, additionally,
questioning the application of the Serrano ruling in the case because it was not yet final and executory.
The NLRC denied the motion, prompting the agency to seek recourse from the CA through a petition
for certiorari.
The CA Decision
The CA dismissed the petition for lack of merit.16 It upheld the NLRC ruling that the respondents were
illegally dismissed. It found no grave abuse of discretion in the NLRCs rejection of the respondents
resignation letters, and the accompanying quitclaim and release affidavits, as proof of their voluntary
termination of employment.
The CA stressed that the filing of a complaint for illegal dismissal is inconsistent with resignation.
Moreover, it found nothing in the records to substantiate the agencys contention that the respondents
resignation was of their own accord; on the contrary, it considered the resignation letters "dubious for
having been lopsidedly-worded to ensure that the petitioners (employers) are free from any liability."17
The appellate court likewise refused to give credit to the compromise agreements that the respondents
executed before the POEA. It agreed with the NLRCs conclusion that the agreements pertain to the
respondents charge of recruitment violations against the agency distinct from their illegal dismissal
complaint, thus negating forum shopping by the respondents.
Lastly, the CA found nothing legally wrong in the NLRC correcting itself (upon being reminded by the
respondents), by adjusting the respondents salary award on the basis of the unexpired portion of their
contracts, as enunciated in the Serrano case.
The agency moved for, but failed to secure, a reconsideration of the CA decision.18
The Petition
The agency is now before the Court seeking a reversal of the CA dispositions, contending that the CA
erred in:

2. holding that the compromise agreements before the POEA pertain only to the respondents
charge of recruitment violations against the agency; and
3. affirming the NLRCs award to the respondents of their salaries for the unexpired portion of
their employment contracts, pursuant to the Serrano ruling.
The agency insists that it is not liable for illegal dismissal, actual or constructive. It submits that as
correctly found by the labor arbiter, the respondents voluntarily resigned from their jobs, and even
executed affidavits of quitclaim and release; the respondents stated family concerns for their
resignation. The agency posits that the letters were duly proven as they were written unconditionally by
the respondents. It, therefore, assails the conclusion that the respondents resigned under duress or
that the resignation letters were dubious.
The agency raises the same argument with respect to the compromise agreements, with quitclaim and
release, it entered into with Vinuya, Era, Ladea, Enjambre, Ordovez, Alcantara, Anipan and Lumanta
before the POEA, although it submitted evidence only for six of them. Anipan, Lumanta, Vinuya and
Ladea signing one document;19Era20 and Alcantara21 signing a document each. It points out that the
agreement was prepared with the assistance of POEA Conciliator Judy Santillan, and was duly and
freely signed by the respondents; moreover, the agreement is not conditional as it pertains to all issues
involved in the dispute between the parties.
On the third issue, the agency posits that the Serrano ruling has no application in the present case for
three reasons. First, the respondents were not illegally dismissed and, therefore, were not entitled to
their money claims. Second, the respondents filed the complaint in 2007, while the Serrano ruling came
out on March 24, 2009. The ruling cannot be given retroactive application. Third, R.A. 10022, which
was enacted on March 8, 2010 and which amended R.A. 8042, restored the subject clause in Section
10 of R.A. 8042, declared unconstitutional by the Court.
The Respondents Position
In their Comment (to the Petition) dated September 28, 2011,22 the respondents ask the Court to deny
the petition for lack of merit. They dispute the agencys insistence that they resigned voluntarily. They
stand firm on their submission that because of their unbearable living and working conditions in Dubai,
they were left with no choice but to resign. Also, the agency never refuted their detailed narration of the
reasons for giving up their employment.
The respondents maintain that the quitclaim and release affidavits,23 which the agency presented,
betray its desperate attempt to escape its liability to them. They point out that, as found by the NLRC,
the affidavits are ready-made documents; for instance, in Lumantas24 and Eras25 affidavits, they
mentioned a certain G & A International Manpower as the agency which recruited them a fact totally
inapplicable to all the respondents. They contend that they had no choice but to sign the documents;
otherwise, their release papers and remaining salaries would not be given to them, a submission which
the agency never refuted.
On the agencys second line of defense, the compromise agreement (with quitclaim and release)
between the respondents and the agency before the POEA, the respondents argue that the
agreements pertain only to their charge of recruitment violations against the agency. They add that
based on the agreements, read and considered entirely, the agency was discharged only with respect
to the recruitment and pre-deployment issues such as excessive placement fees, non-issuance of
receipts and placement misrepresentation, but not with respect to post-deployment issues such as

illegal dismissal, breach of contract, underpayment of salaries and underpayment and nonpayment of
overtime pay. The respondents stress that the agency failed to controvert their contention that the
agreements came about only to settle their claim for refund of their airfare which they paid for when
they were repatriated.
Lastly, the respondents maintain that since they were illegally dismissed, the CA was correct in
upholding the NLRCs award of their salaries for the unexpired portion of their employment contracts,
as enunciated in Serrano. They point out that the Serrano ruling is curative and remedial in nature and,
as such, should be given retroactive application as the Court declared in Yap v. Thenamaris Ships
Management.26 Further, the respondents take exception to the agencys contention that the Serrano
ruling cannot, in any event, be applied in the present case in view of the enactment of R.A. 10022 on
March 8, 2010, amending Section 10 of R.A. 8042. The amendment restored the subject clause in
paragraph 5, Section 10 of R.A. 8042 which was struck down as unconstitutional in Serrano.
The respondents maintain that the agency cannot raise the issue for the first time before this Court
when it could have raised it before the CA with its petition for certiorari which it filed on June 8,
2010;27 otherwise, their right to due process will be violated. The agency, on the other hand, would later
claim that it is not barred by estoppel with respect to its reliance on R.A. 10022 as it raised it before the
CA in CA-G.R. SP No. 114353.28 They further argue that RA 10022 cannot be applied in their case, as
the law is an amendatory statute which is, as a rule, prospective in application, unless the contrary is
provided.29 To put the issue to rest, the respondents ask the Court to also declare unconstitutional
Section 7 of R.A. 10022.
Finally, the respondents submit that the petition should be dismissed outright for raising only questions
of fact, rather than of law.
The Courts Ruling
The procedural question
We deem it proper to examine the facts of the case on account of the divergence in the factual
conclusions of the labor arbiter on the one hand, and, of the NLRC and the CA, on the other.30 The
arbiter found no illegal dismissal in the respondents loss of employment in Dubai because they
voluntarily resigned; whereas, the NLRC and the CA adjudged them to have been illegally dismissed
because they were virtually forced to resign.
The merits of the case
We find no merit in the petition. The CA committed no reversible error and neither did it commit
grave abuse of discretion in affirming the NLRCs illegal dismissal ruling.
The agency and its principal, Modern Metal, committed flagrant violations of the law on overseas
employment, as well as basic norms of decency and fair play in an employment relationship, pushing
the respondents to look for a better employment and, ultimately, to resign from their jobs.
First. The agency and Modern Metal are guilty of contract substitution. The respondents entered into a
POEA-approved two-year employment contract,31 with Modern Metal providing among others, as
earlier discussed, for a monthly salary of 1350 AED. On April 2, 2007, Modern Metal issued to them
appointment letters32 whereby the respondents were hired for a longer three-year period and a reduced
salary, from 1,100 AED to 1,200 AED, among other provisions. Then, on May 5, 2007, they were
required to sign new employment contracts33 reflecting the same terms contained in their appointment

letters, except that this time, they were hired as "ordinary laborer," no longer aluminum
fabricator/installer. The respondents complained with the agency about the contract substitution, but the
agency refused or failed to act on the matter.
The fact that the respondents contracts were altered or substituted at the workplace had never been
denied by the agency.1wphi1 On the contrary, it admitted that the contract substitution did happen
when it argued, "as to their claim for underpayment of salary, their original contract mentioned 1350
AED monthly salary, which includes allowance while in their Appointment Letters, they were supposed
to receive 1,300 AED. While there was a difference of 50 AED monthly, the same could no longer be
claimed by virtue of their Affidavits of Quitclaims and Desistance." 34
Clearly, the agency and Modern Metal committed a prohibited practice and engaged in illegal
recruitment under the law. Article 34 of the Labor Code provides:
Art. 34. Prohibited Practices. It shall be unlawful for any individual, entity, licensee, or holder of
authority:
xxxx
(i) To substitute or alter employment contracts approved and verified by the Department of Labor from
the time of actual signing thereof by the parties up to and including the periods of expiration of the
same without the approval of the Secretary of Labor.
Further, Article 38 of the Labor Code, as amended by R.A. 8042,35 defined "illegal recruitment" to
include the following act:
(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.
Second. The agency and Modern Metal committed breach of contract. Aggravating the contract
substitution imposed upon them by their employer, the respondents were made to suffer substandard
(shocking, as they put it) working and living arrangements. Both the original contracts the respondents
signed in the Philippines and the appointment letters issued to them by Modern Metal in Dubai provided
for free housing and transportation to and from the jobsite. The original contract mentioned free and
suitable housing.36 Although no description of the housing was made in the letters of appointment
except: "Accommodation: Provided by the company," it is but reasonable to think that the housing or
accommodation would be "suitable."
As earlier pointed out, the respondents were made to work from 6:30 a.m. to 6:30 p.m., with a meal
break of one to one and a half hours, and their overtime work was mostly not paid or underpaid. Their
living quarters were cramped as they shared them with 27 other workers. The lodging house was in
Sharjah, far from the jobsite in Dubai, leaving them only three to four hours of sleep every workday
because of the long hours of travel to and from their place of work, not to mention that there was no
potable water in the lodging house which was located in an area where the air was polluted. The
respondents complained with the agency about the hardships that they were suffering, but the agency
failed to act on their reports. Significantly, the agency failed to refute their claim, anchored on the ordeal
that they went through while in Modern Metals employ.

Third. With their original contracts substituted and their oppressive working and living conditions
unmitigated or unresolved, the respondents decision to resign is not surprising. They were compelled
by the dismal state of their employment to give up their jobs; effectively, they were constructively
dismissed. A constructive dismissal or discharge is "a quitting because continued employment is
rendered impossible, unreasonable or unlikely, as, an offer involving a demotion in rank and a
diminution in pay."37
Without doubt, the respondents continued employment with Modern Metal had become unreasonable.
A reasonable mind would not approve of a substituted contract that pays a diminished salary from
1350 AED a month in the original contract to 1,000 AED to 1,200 AED in the appointment letters, a
difference of 150 AED to 250 AED (not just 50 AED as the agency claimed) or an extended employment
(from 2 to 3 years) at such inferior terms, or a "free and suitable" housing which is hours away from the
job site, cramped and crowded, without potable water and exposed to air pollution.
We thus cannot accept the agencys insistence that the respondents voluntarily resigned since they
personally prepared their resignation letters38 in their own handwriting, citing family problems as their
common ground for resigning. As the CA did, we find the resignation letters "dubious," 39 not only for
having been lopsidedly worded to ensure that the employer is rendered free from any liability, but also
for the odd coincidence that all the respondents had, at the same time, been confronted with urgent
family problems so that they had to give up their employment and go home. The truth, as the
respondents maintain, is that they cited family problems as reason out of fear that Modern Metal would
not give them their salaries and their release papers. Only Era was bold enough to say the real reason
for his resignation to protest company policy.
We likewise find the affidavits40of quitclaim and release which the respondents executed suspect.
Obviously, the affidavits were prepared as a follow through of the respondents supposed voluntary
resignation. Unlike the resignation letters, the respondents had no hand in the preparation of the
affidavits. They must have been prepared by a representative of Modern Metal as they appear to come
from a standard form and were apparently introduced for only one purpose to lend credence to the
resignation letters. In Modern Metals haste, however, to secure the respondents affidavits, they did not
check on the model they used. Thus, Lumantas affidavit41mentioned a G & A International Manpower
as his recruiting agency, an entity totally unknown to the respondents; the same thing is true for Eras
affidavit.42 This confusion is an indication of the employers hurried attempt to avoid liability to the
respondents.
The respondents position is well-founded. The NLRC itself had the same impression, which we find in
order and hereunder quote:
The acts of respondents of requiring the signing of new contracts upon reaching the place of work and
requiring employees to sign quitclaims before they are paid and repatriated to the Philippines are all too
familiar stories of despicable labor practices which our employees are subjected to abroad. While it is
true that quitclaims are generally given weight, however, given the facts of the case, We are of the
opinion that the complainants-appellants executed the same under duress and fear that they will not be
allowed to return to the Philippines.43
Fourth. The compromise agreements (with quitclaim and release)44 between the respondents and the
agency before the POEA did not foreclose their employer-employee relationship claims before the
NLRC. The respondents, except Ordovez and Enjambre, aver in this respect that they all paid for their
own airfare when they returned home45 and that the compromise agreements settled only their claim for
refund of their airfare, but not their other claims.46 Again, this submission has not been refuted or denied
by the agency.

On the surface, the compromise agreements appear to confirm the agencys position, yet a closer
examination of the documents would reveal their true nature. Copy of the compromise agreement is a
standard POEA document, prepared in advance and readily made available to parties who are involved
in disputes before the agency, such as what the respondents filed with the POEA ahead (filed in 2007)
of the illegal dismissal complaint before the NLRC (filed on March 5, 2008).
Under the heading "Post-Deployment," the agency agreed to pay Era47 and Alcantara48 P 12,000.00
each, purportedly in satisfaction of the respondents claims arising from overseas employment,
consisting of unpaid salaries, salary differentials and other benefits, including money claims with the
NLRC. The last document was signed by (1) Anipan, (2) Lumanta, (3) Ladea, (4) Vinuya, (5) Jonathan
Nangolinola, and (6) Zosimo Gatchalian (the last four signing on the left hand side of the document; the
last two were not among those who filed the illegal dismissal complaint).49
The agency agreed to pay them a total of P 72,000.00. Although there was no breakdown of the
entitlement for each of the six, but guided by the compromise agreement signed by Era and Alcantara,
we believe that the agency paid them P 12,000.00 each, just like Era and Alcantara.
The uniform insubstantial amount for each of the signatories to the agreement lends credence to their
contention that the settlement pertained only to their claim for refund of the airfare which they
shouldered when they returned to the Philippines. The compromise agreement, apparently, was
intended by the agency as a settlement with the respondents and others with similar claims, which
explains the inclusion of the two (Nangolinola and Gatchalian) who were not involved in the case with
the NLRC. Under the circumstances, we cannot see how the compromise agreements can be
considered to have fully settled the respondents claims before the NLRC illegal dismissal and
monetary benefits arising from employment. We thus find no reversible error nor grave abuse of
discretion in the rejection by the NLRC and the CA of said agreements.
Fifth. The agencys objection to the application of the Serrano ruling in the present case is of no
moment. Its argument that the ruling cannot be given retroactive effect, because it is curative and
remedial, is untenable. It points out, in this respect, that the respondents filed the complaint in 2007,
while the Serrano ruling was handed down in March 2009. The issue, as the respondents correctly
argue, has been resolved in Yap v. Thenamaris Ships Management, 50 where the Court sustained the
retroactive application of the Serrano ruling which declared unconstitutional the subject clause in
Section 10, paragraph 5 of R.A. 8042, limiting to three months the payment of salaries to illegally
dismissed Overseas Filipino Workers.
Undaunted, the agency posits that in any event, the Serrano ruling has been nullified by R.A. No.
10022, entitled "An Act Amending Republic Act No. 8042, Otherwise Known as the Migrant Workers
and Overseas Filipinos Act of 1995, As Amended, Further Improving the Standard of Protection and
Promotion of the Welfare of Migrant Workers, Their Families and Overseas Filipinos in Distress, and
For Other Purposes."51 It argues that R.A. 10022, which lapsed into law (without the Signature of the
President) on March 8, 2010, restored the subject clause in the 5th paragraph, Section 10 of R.A. 8042.
The amendment, contained in Section 7 of R.A. 10022, reads as follows:
In case of termination of overseas employment without just, valid or authorized cause as defined by law
or contract, or any unauthorized deductions from the migrant workers salary, the worker shall be
entitled to the full reimbursement "of" his placement fee and the deductions made with interest at 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.52 (emphasis ours)
This argument fails to persuade us. Laws shall have no retroactive effect, unless the contrary is
provided.53 By its very nature, the amendment introduced by R.A. 10022 restoring a provision of R.A.
8042 declared unconstitutional cannot be given retroactive effect, not only because there is no

express declaration of retroactivity in the law, but because retroactive application will result in an
impairment of a right that had accrued to the respondents by virtue of the Serrano ruling - entitlement to
their salaries for the unexpired portion of their employment contracts.
All statutes are to be construed as having only a prospective application, unless the purpose and
intention of the legislature to give them a retrospective effect are expressly declared or are necessarily
implied from the language used.54 We thus see no reason to nullity the application of the Serrano ruling
in the present case. Whether or not R.A. 1 0022 is constitutional is not for us to rule upon in the present
case as this is an issue that is not squarely before us. In other words, this is an issue that awaits its
proper day in court; in the meanwhile, we make no pronouncement on it.
WHEREFORE, premises considered, the petition is DENIED. The assailed Decision dated May 9, 2011
and the Resolution dated June 23, 2011 of the Court of Appeals in CA-G.R. SP No. 114353
are AFFIRMED. Let this Decision be brought to the attention of the Honorable Secretary of Labor and
Employment and the Administrator of the Philippine Overseas Employment Administration as a black
mark in the deployment record of petitioner Pert/CPM Manpower Exponent Co., Inc., and as a record
that should be considered in any similar future violations.

This appeal by certiorari seeks the nullification of the decision 1 of respondent Court of Appeals in CAG.R. CV No. 13866 which reversed the decision of the Regional Trial Court, Branch LVII at Lucena City,
jointly deciding Civil Cases Nos. 6-84, 7-84 and 8-84 thereof and consequently ordered the dismissal of
the aforesaid actions filed by herein petitioners.
The undisputed background of this case as found by the court a quo and adopted by respondent court,
being sustained by the evidence on record, we hereby reproduce the same with approval. 2
The antecedents of this case show that Julian Sy and Jose Sy Bang have formed a
business partnership in the City of Lucena. Under the business name of New Life
Enterprises, the partnership engaged in the sale of construction
materials at its place of business, a two storey building situated at Iyam,
Lucena City. The facts show that Julian Sy insured the stocks in trade of New Life
Enterprises with Western Guaranty Corporation, Reliance Surety and Insurance.
Co., Inc., and Equitable Insurance Corporation.
On May 15, 1981, Western Guaranty Corporation issued Fire Insurance Policy No.
37201 in the amount of P350,000.00. This policy was renewed on May, 13, 1982.

Costs against the petitioner.


SO ORDERED.

On July 30,1981, Reliance Surety and Insurance Co., Inc. issued Fire
Insurance Policy No. 69135 inthe amount of P300,000.00 (Renewed under
Renewal Certificate No. 41997) An additional
insurancewas issued by the same company on
November 12, 1981 under Fire Insurance Policy No. 71547 in the amount of
P700,000.00.
On February 8, 1982, Equitable Insurance
Corporation issued Fire Insurance Policy No. 39328 in the amount of P200,000.00.

G.R. No. 94071 March 31, 1992


NEW LIFE ENTERPRISES and JULIAN SY, petitioners,
vs.
HON. COURT OF APPEALS, EQUITABLE INSURANCE CORPORATION, RELIANCE SURETY AND
INSURANCE CO., INC. and WESTERN GUARANTY CORPORATION, respondents.

Thus when the building occupied by the New Life Enterprises


was gutted by fire at about 2:00 o'clock in the morning of October 19, 1982, the
stocks in the trade inside said building were insured against
fire in the total amount of P1,550,000.00.
According to the certification issued by the Headquarters, Philippine
Constabulary /Integrated National Police, Camp Crame, the cause of firewas
electrical in nature. According to the plaintiffs,
the building and the stocks inside were burned.
After the fire, Julian Sy went to the agent of
Reliance Insurance whom he asked to accompany him to the
office of the company so that he can file his claim. He averred that in support of his
claim, he submitted the fire clearance, the insurance policies and inventory
of stocks. He further testified thatthe three insurance companies are sister
companies, and as a matter of fact when he was following-up his claim with
Equitable Insurance, the Claims Manager told him to go first to Reliance
Insuranceand if said company agrees to pay, they would also pay. The same
treatment was given him by theother insurance
companies. Ultimately, the three insurance companies denied plaintiffs' claim for
payment.
In its letter of denial dated March 9, 1983, (Exhibit "C" No. 884) Western Guaranty Corporationthrough Claims Manager Bernard S. Razon told
the plaintiff that his claim "is
denied for breach ofpolicy conditions." Reliance Insurance purveyed the same

message in its letter dated November 23, 1982 and signed by Executive VicePresident Mary Dee Co (Exhibit "C" No. 7-84) which said that "plaintiff's
claim is denied for breach of policy conditions." The letter of denial received by the
plaintifffrom Equitable Insurance Corporation (Exhibit "C" No. 6-84) was of the
same tenor, as said letter dated February 22, 1983, and signed by Vice-President
Elma R. Bondad, said "we find that certain
policy conditions were violated, therefore, we regret, we have to deny your claim,
as it is hereby denied in its entirety."
In relation to the case against Reliance
Surety and Insurance Company, a certain Atty. Serafin D.Dator, acting in behalf of
the plaintiff, sent a letter dated February 13, 1983 (Exhibit "G-l" No 784) toExecutive Vice-President Mary Dee Co asking that he be informed as to
the specific policy conditions allegedly violated by the plaintiff. In her reply-letter
dated March 30, 1983, Executive Vice-President Mary Dee Co informed Atty.
Dator that Julian Sy violated Policy Condition No. "3" whichrequires the insured
to give notice of any insurance or insurances already effected covering the stocks
in trade. 3
Because of the denial of their claims for payment by the three (3) insurance
companies, petitioner filed separate civil actions against the former before the Regional Trial
Court of Lucena City, which cases were consolidated for trial,
and thereafter the court below rendered its decision on December 19, l986 with the following
disposition:
WHEREFORE, judgment in the above-entitled cases is rendered in the following
manner, viz:
1. In Civil Case No. 6-84, judgment is rendered for the
plaintiff New Life Enterprises and against the defendant Equitable Insurance
Corporation ordering the latter to pay the former the sum of
TwoHundred Thousand (P200,000.00) Pesos and
considering that payment of the claim of the insuredhas been unreasonably denied
, pursuant to Sec. 244 of the Insurance Code, defendant is furtherordered to pay th
e plaintiff attorney's fees in the amount of Twenty Thousand (P20,000.00)
Pesos.All sums of money to be paid by virtue hereof shall bear interest at 12% per
annum (pursuant to Sec.244 of the Insurance Code) from
February 14, 1983, (91st day from November 16, 1982, whenSworn Statement of
Fire Claim was received from the insured) until they are fully paid;
2. In Civil Case No. 784, judgment is rendered for the plaintiff Julian Sy and against
the defendantReliance Surety and Insurance Co.,
Inc., ordering the latter to pay the former the sum
ofP1,000,000.00 (P300,000.00 under Policy
No. 69135 and P700,000.00 under Policy No. 71547)
andconsidering that payment of the claim of the
insured has been unreasonably denied, pursuant to
Sec. 244 of the Insurance Code, defendant is further ordered
to pay the plaintiff the amount of P100,000.00 as attorney's fees.
All sums of money to be paid by virtue hereof shall bear interest at 12% per
annum (pursuant to Sec. 244 of the Insurance Code) from February 14, 1983,

(91st day from November 16,


1982 when SwornStatement of Fire Claim was received from the insured) until they
are fully paid;
3. In Civil Case No. 8-84, judgment is rendered for
the plaintiff New Life Enterprises and against thedefendant Western Guaranty Corp
oration ordering the latter to pay the sum of P350,000.00
to theConsolidated Bank and Trust Corporation,
Lucena Branch, Lucena City, as stipulated on the
face ofPolicy No. 37201, and considering that payment of the
aforementioned sum of money has been
unreasonably denied, pursuant to Sec. 244 of the Insurance Code,
defendant is further ordered topay the plaintiff attorney's fees in the amount of
P35,000.00.
All sums of money to be paid by virtue hereof shall bear interest at 12% per
annum (pursuant to Sec. 244 of the Insurance Code) from February 5, 1982, (91st
day from 1st week of November 1983 when
insured filed formal claim for full indemnity according to adjuster
Vetremar Dela Merced) until they are fully paid. 4
As aforestated, respondent Court of Appeals reversed said judgment of the trial court, hence
this petition the cruxwherein is whether or not Conditions Nos. 3 and 27 of
the insurance contracts were violated by petitionersthereby resulting in
their forfeiture of all the benefits thereunder.
Condition No. 3 of said insurance policies, otherwise known as
the "Other Insurance Clause," is uniformlycontained in all the aforestated
insurance contracts of herein petitioners, as follows:
3. The insured shall give notice to the Company
of any insurance or insurances already effected, orwhich
may subsequently be effected, covering any of the property or properties
consisting of stocksin trade, goods in process
and/or inventories only hereby insured, and unless
such notice be givenand the particulars of such
insurance or insurances be stated therein or endorsed on this policy pursuant to
Section 50 of the Insurance Code, by or on behalf of the Company
before theoccurrence of any loss or damage, all benefits under this policy shall be
deemed forfeited, providedhowever, that this condition shall not apply when the
total insurance or insurances in force at thetime of loss or damage not more than
P200,000.00. 5
Petitioners admit that the respective insurance policies
issued by private respondents did not state or endorse thereon
the other insurance coverage obtained or subsequently effected on the same stocks in trade for the
loss of which compensation is claimed by petitioners. 6 The policy
issued by respondent Western Guaranty Corporation(Western) did not
declare respondent Reliance Surety and Insurance Co., Inc. (Reliance) and respondent Equitable
Insurance Corporation (Equitable) as co-insurers on the same stocks,
while Reliance's Policies covering the same stocks did not
likewisedeclare Western and Equitable as such co-insurers. It is
further admitted by petitioners that Equitable's policy stated "nil" in the space thereon requiring

indication of any co-insurance although there were three (3) policies subsisting on the same stocks in
trade at the time of the loss, namely, that of Western in the amount of P350,000.00 and two (2) policies
of Reliance in the total amount of P1,000,000.00. 7
In other words, the coverage by other insurance or co-insurance effected
or subsequently arranged by petitioners were neither stated nor endorsed in the policies of the three (3)
private respondents, warranting forfeiture of all benefits thereunder if we are to follow the express
stipulation in the aforequoted Policy Condition No. 3.
Petitioners contend that they are not to be blamed for the omissions,
alleging that insurance agent Leon Alvarez (for Western) and Yap Kam Chuan (for
Reliance and Equitable) knew about the existence of the additional insurance coverage and that they
were not informed about the requirement that such other or additional insurance should be stated in the
policy, as they have not even read policies. 8 These contentions cannot pass judicial muster.
The terms of the contract are clear and unambiguous.
The insured is specifically required to disclose to the insurer any other insurance and its
particulars which he may have effected on the same subject matter. Theknowledge of such insurance
by the insurer's agents, even assuming the acquisition thereof by the former, is notthe "notice" that
would estop the insurers from denying the claim. Besides, the so-called theory of imputed knowledge,
that is, knowledge of the agent is knowledge of the principal, aside from being
of dubious applicabilityhere has likewise been roundly
refuted by respondent court whose factual findings we find acceptable.
Thus, it points out that while petitioner Julian Sy claimed that he had informed insurance agent Alvarez
regarding the co-insurance on the property, he contradicted
himself by inexplicably claiming that he had not read the termsof the policies; that
Yap Dam Chuan could not likewise have obtained such knowledge for the same reason,aside from the
fact that the insurance with Western was obtained before those of
Reliance and Equitable; andthat the conclusion of the trial court that Reliance and Equitable are "sister
companies" is an unfoundedconjecture drawn from the mere fact that Yap Kam Chuan was
an agent for both companies which also had the same insurance claims adjuster. Availment of the
services of the same agents and adjusters by different companies is a
common practice in the insurance business and such facts
do not warrant the speculativeconclusion of the trial court.
Furthermore, when the words and language of documents are clear and plain
or readily understandable by an ordinary reader thereof, there is absolutely no room for interpretation or
construction anymore. 9 Courts are not allowed to make contracts for the parties; rather, they will
intervene only when the terms of the policy are ambiguous, equivocal,
oruncertain. 10 The parties must abide by the terms of the contract because such terms constitute the
measure of the insurer's liabilityand compliance therewith is a
condition precedent to the insured's right of recovery from the insurer. 11
While it is a cardinal principle of insurance law that a policy or contract
of insurance is to be construed liberally infavor of the insured and strictly against the insurer
company, yet contracts of insurance, like other contracts, are to be construed according to
the sense and meaning of the terms which the parties themselves have used. Ifsuch terms are clear
and unambiguous, they must be taken and understood in their plain, ordinary and popular
sense. 12 Moreover, obligations arising from contracts have the force of law between
the contracting parties and should becomplied with in good faith. 13

Petitioners should be aware of the fact that a party is not relieved of the duty to exercise the ordinary
care and prudence that would be exacted in relation to other contracts. The conformity of the insured to
the terms of the policy is implied from his failure to express any disagreement with
what is provided for. 14 It may be true that themajority rule, as cited by petitioners, is that injured
persons may accept policies without reading them, and that this is not negligence per se. 15 But, this is
not without any exception. It is and was incumbent upon petitioner Sy to read the insurance contracts,
and this can be reasonably expected of him considering that he has been a businessman since
1965 16 and the contract concerns indemnity in case of loss inhis money-making trade of which
important consideration he could not have been unaware as it was pre-in case of loss in his moneymaking trade of which important consideration he could not have been unaware as it was precisely the
reason for his procuring the same.
We reiterate our pronouncement in Pioneer Insurance and Surety Corporation vs. Yap: 17
...
And considering the terms of the policy which required the insured to declare other
insurances,the statement in question must be deemed to be a statement (warranty)
binding on both insurer and insured, that there were no other insurance on the
property. . . .
The annotation then, must be deemed to be a warranty that the property was not
insured by any other policy. Violation thereof entitled the insurer to rescind (Sec.
69, Insurance Act). Suchmisrepresentation is fatal in the light of our views in Santa
Ana vs. Commercial Union Assurance Company, Ltd., 55 Phil. 329.
The materiality of non-disclosure of other insurance policies is not open to doubt.
xxx xxx xxx
The obvious purpose of the aforesaid requirement in the policy is to prevent overinsurance and thus avert the perpetration of fraud. The public, as well as the
insurer, is interested in preventing the situation in which a fire would be profitable to
the insured. According to Justice Story: "The insured has
no right to complain, for he assents to comply with all the stipulations on
his side, in order toentitle himself to the
benefit of the contract, which, upon reason or principle, he
has no right to askthe court to dispense with the performance of his own part of the
agreement, and yet to bind theother party to
obligations, which, but for those stipulations, would not have been entered into."
Subsequently, in the case of Pacific Banking Corporation vs. Court of Appeals, et al., 18 we held:
It is not disputed that the insured failed to reveal before the
loss three other insurances. As found by the Court
of Appeals, by reason of said unrevealed insurances, the insured had been
guilty of a falsedeclaration; a clear misrepresentation and a vital one because
where the insured had been asked to reveal
but did not, that was deception. Otherwise stated, had the
insurer known that there were many co-insurances, it could have hesitated or
plainly desisted from entering into such contract.
Hence, the insured was guilty of clear fraud (Rollo, p. 25).

Petitioner's contention that the allegation of fraud is but


a mere inference or suspicion is untenable. In fact, concrete evidence of fraud or
false declaration by the insured was furnished by the petitioner itself when the facts
alleged in the policy under clauses "Co-Insurances Declared" and
"OtherInsurance Clause" are materially different from the actual number of coinsurances taken over thesubject property. Consequently, "the whole foundation of
the contract fails, the risk does not attachand the policy never becomes a contract
between the parties." Representations of facts are the
foundation of the contract and if the foundation does not
exist, the superstructure does not arise.Falsehood in such representations is not
shown to vary or add to the contract, or to terminate a contract which has
once been made, but to show that no contract has ever
existed (Tolentino,Commercial Laws of the Philippines, p.
991, Vol. II, 8th Ed.,) A void or inexistent contract is one which has no
force and effect from the very beginning, as if it had never been entered into, and
which cannot be validated either by time or by ratification
(Tongoy vs. C.A., 123 SCRA 99 (1983); Avila v. C.A., 145 SCRA, 1986).
As the insurance policy against fire expressly required that notice should be given
by the insured ofother insurance upon the same property, the total absence of such
notice nullifies the policy.
To further warrant and justify the forfeiture of the
benefits under the insurance contracts involved, we need
merely to turn to Policy Condition No. 15 thereof, which reads in part:
15. . . . if any false declaration be made or used
in support thereof, . . . all benefits under this Policy shall be forfeited . . . . 19
Additionally, insofar as the liability of respondent
Reliance is concerned, it is not denied that the complaint for recovery was filed in court by petitioners
only on January 31, 1984, or after more than one (1) year had
elapsedfrom petitioners' receipt of the insurers' letter of
denial on November 29, 1982. Policy Condition No. 27 of their insurance contract with Reliance
provides:

or reasons for the denial of his claim,reason for which his lawyer, Atty. Dator
deemed it wise to send a letter of inquiry to the defendantwhich was answered by
defendant's Executive Vice-President in a letter dated March 30, 1983, . . .
.Assuming, gratuitously, that the letter of Executive Vice-President Mary Dee Co
dated March 30, 1983, was received by plaintiff on the same date, the period
of limitation should start to run only fromsaid date in the spirit of fair play and
equity. . . . 21
We have perforce to reject this theory of the court below for being contrary to what we have heretofore
declared:
It is important to note the principle laid down by this Court in the case of Ang vs.
Fulton Fire Insurance Co. (2 SCRA 945 [1961]) to wit:
The condition contained in an insurance policy that claims mus
t be presented within one year
after rejection is not merely a procedural requirement but an i
mportant matter essential to a prompt settlement of claims
against insurance companies as it
demandsthat insurance suits be brought by
the insured while the evidence as to the
origin andcause of destruction have not yet disappeared.
In enunciating the above-cited principle, this Court had definitely
settled the rationale for the necessity of bringing suits against the Insurer
within one year from the rejection of the claim. The contention
of the respondents that the one-year prescriptive period does
not start to run until thepetition for reconsideration had been resolved by the insure
r, runs counter to the declared purpose for requiring that an
action or suit be filed in the Insurance Commission or in a court of competent
jurisdiction from the denial of the claim. To uphold respondents' contention would
contradict anddefeat the very principle which this Court had laid down. Moreover,
it can easily be used by insured persons as a scheme or device to waste time
until any evidence which may be considered againstthem is destroyed.
xxx xxx xxx

27. Action or suit


clause. If a claim be made and rejected and an action or suit be not commenced
either in the Insurance Commission or any court of competent jurisdiction of notice
of such rejection,or in case of arbitration taking place
as provided herein, within twelve (12) months after due
notice ofthe award made by the arbitrator or arbitrators
or umpire, then the claim shall for all purposes be
deemed to have been abandoned and shall not thereafter be recoverable
hereunder. 20
On this point, the trial court ruled:
. . . However, because of the peculiar circumstances of this case, we hesitate
in concluding thatplaintiff's right to ventilate his claim in court has been barred by re
ason of the time constraintprovided in the insurance contract. It is
evident that after the plaintiff had received
the letter of denial,he still found it necessary to be informed of the specific causes

While in the Eagle Star case (96 Phil. 701),


this Court uses the phrase "final rejection", the
samecannot be taken to mean the rejection of a petition for reconsideration as
insisted by respondents.
Such was clearly not the meaning contemplated by this Court. The insurance polic
y in said caseprovides that the insured should file his claim first, with
the carrier and then with the insurer. The"final rejection" being referred to in said
case is the rejection by the insurance company. 22
Furthermore, assuming arguendo that petitioners felt the
legitimate need to be clarified as to the policy condition violated, there was a considerable lapse of time
from their receipt of the insurer's clarificatory letter dated March 30, 1983, up to the time the complaint
was filed in court on January 31, 1984. The one-year prescriptive periodwas yet
to expire on November 29, 1983, or about eight (8) months from the
receipt of the clarificatory letter, butpetitioners let the period lapse without bringing their action in court.

We accordingly find no "peculiarcircumstances" sufficient to relax the enforcement of the oneyear prescriptive period and we, therefore, hold thatpetitioners' claim was definitely filed out of time.

When Montehermozo returned to the Philippines, she filed a complaint against Sunace, Wang, and her
Taiwanese employer before the National Labor Relations Commission(NLRC). She alleges that she

WHEREFORE, finding no cogent reason to disturb the judgment


of respondent Court of Appeals, the same ishereby AFFIRMED.

was underpaid and was jailed for three months in Taiwan. She further alleges that the 2-year extension
of her employment contract was with the consent and knowledge of Sunace. Sunace, on the other

SO ORDERED.

hand,

denied

all

the

allegations.

The Labor Arbiter ruled in favor of Montehermozo and found Sunace liable thereof. The National Labor
Relations Commission and Court of Appeals affirmed the labor arbiters decision. Hence, the filing of
this appeal.

ISSUE:
Whether or not the 2-year extension of Montehermozos employment was made with the knowledge
and consent of Sunace

HELD:
Contrary to the Court of Appeals finding, the alleged continuous communication was with the Taiwanese
broker Wang, not with the foreign employer.

The finding of the Court of Appeals solely on the basis of the telefax message written by Wang to
SUNACE INTERNATIONAL MANAGEMENT SERVICES, INC. VSNATIONAL LABOR

Sunace, that Sunace continually communicated with the foreign principal (sic) and therefore was

RELATIONS COMMISSION

aware of and had consented to the execution of the extension of thecontract is misplaced. The

480 SCRA 146 (2006)

message does not provide evidence that Sunace was privy to the new contract executed after the
expiration on February 1, 1998 of the originalcontract. That Sunace and the Taiwanese broker

There is an implied revocation of an agency relationship when after the termination of the original

communicated regarding Montehermozos allegedly withheld savings does not necessarily mean that

employment contract, the foreign principal directly negotiated with the employee and entered into a new

Sunace ratified the extension of the contract.

and separate employment contract.


As can be seen from that letter communication, it was just an information given to Sunace that
Respondent Divina

Montehermozo

is

domestic

helper

deployed

to

Taiwan

by

SunaceInternational Management Services (Sunace) under a 12-month contract. Such employment


was made with the assistance of Taiwanese broker Edmund Wang. After the expiration of the contract,
Montehermozo continued her employment with her Taiwanese employer for another 2 years.

Montehermozo had taken already her savings from her foreign employer and that no deduction was
made on her salary. It contains nothing about the extension or Sunaces consent thereto.

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 Montehermozos filing of the complaint on
February 14, 2000.

Respecting the decision of Court of Appeals following as agent of its foreign principal, [Sunace] cannot
profess ignorance of such an extension as obviously, the act of its principal extending
[Montehermozos] employment contract necessarily bound it, 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,

C.F. SHARP & CO.


ROCHA, Petitioners,

INC.

and

JOHN

J.

-versusPIONEER INSURANCE & SURETY CORPORATION,


WILFREDO C. AGUSTIN and HERNANDO G. MINIMO,
Respondents.

DECISION
Whether a local private employment agency may be held liable for breach of contract for failure
to deploy a seafarer, is the bone of contention in this case.

Assailed in this petition for review are the Decision [1] dated 30 October 2003 and the 29 August
2007 Resolution of the Court of Appeals in CA-G.R. CV No. 53336 finding petitioners C.F. Sharp Co.
Inc. (C.F. Sharp) and John J. Rocha (Rocha) liable for damages.

employer, not the other way around. The knowledge of the principal-foreign employer cannot, therefore,
be imputed to its agent Sunace.

Responding to a newspaper advertisement of a job opening for sandblasters and painters in


Libya, respondents Wilfredo C. Agustin and Hernando G. Minimo applied with C.F. Sharp sometime in

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

August 1990. After passing the interview, they were required to submit their passports, seamans book,
National Bureau of Investigation clearance, employment certificates, certificates of seminars attended,

be held solidarily liable for any of Montehermozos claims arising from the 2-year employment

and results of medical examination. Upon submission of the requirements, a Contract of Employment

extension. As the New Civil Code provides, Contracts take effect only between the parties, their

was executed between respondents and C.F. Sharp. Thereafter, respondents were required to attend

assigns, and heirs, except in case where the rights and obligations arising from the contract are not

various seminars, open a bank account with the corresponding allotment slips, and attend a pre-

transmissible by their nature, or by stipulation or by provision of law.

departure orientation. They were then advised to prepare for immediate deployment and to report to
C.F. Sharp to ascertain the schedule of their deployment.

Furthermore, as Sunace correctly points out, there was an implied revocation of its agency relationship

After a month, respondents were yet to be deployed prompting them to request for the release of

with its foreign principal when, after the termination of the original employment contract, the foreign

the documents they had submitted to C.F. Sharp. C.F. Sharp allegedly refused to surrender the

principal directly negotiated with Montehermozo and entered into a new and separate

documents which led to the filing of a complaint by respondents before the Philippine Overseas

employment contract in Taiwan. Article 1924 of the New Civil Code states that the agency is revoked if

Employment Administration (POEA) on 21 January 1991.

the principal directly manages the business entrusted to the agent, dealing directly with third persons.

On 30 October 1991, POEA issued an Order finding C.F. Sharp guilty of violation of Article 34(k)
of the Labor Code, which makes it unlawful for any entity to withhold or deny travel documents from
applicant workers before departure for monetary or financial considerations other than those authorized
under this Code and its implementing rules and regulations. Consequently, C.F. Sharps license was

suspended until the return of the disputed documents to respondents. POEA likewise declared that it

trial court and maintained that the perfection and effectivity of the Contract of Employment depend upon

has no jurisdiction to adjudicate the monetary claims of respondents.

the actual deployment of respondents.

On 10 March 1995, respondents filed a Complaint for breach of contract and damages against

The Court of Appeals upheld the jurisdiction of the trial court by ruling that petitioners are now

C.F. Sharp and its surety, Pioneer Insurance and Surety Corporation (Pioneer Insurance), before the

estopped from raising such question because they have actively participated in the proceedings before

Regional Trial Court (RTC) of Pasay City. Respondents claimed that C.F. Sharp falsely assured them

the trial court. The Court of Appeals further held that since there is no perfected employment contract

of deployment and that its refusal to release the disputed documents on the ground that they were

between the parties, it is the RTC and not the POEA, whose jurisdiction pertains only to claims arising

already bound by reason of the Contract of Employment, denied respondents of employment

from contracts involving Filipino seamen, which has jurisdiction over the instant case.

opportunities abroad and a guaranteed income. Respondents also prayed for damages. Pioneer
Insurance filed a cross claim against C.F. Sharp and John J. Rocha, the executive vice-president of C.F.

Despite the finding that no contract was perfected between the parties, the Court of Appeals
adjudged C.F. Sharp and Rocha liable for damages, to wit:

Sharp, based on an Indemnity Agreement which substantially provides that the duo shall jointly and
WHEREFORE, the Appeal of C.F. Sharp Co Inc. and John J. Rocha is
PARTIALLY GRANTED only insofar as We declare that there is no breach of
contract because no contract of employment was perfected. However, We find
appellants C.F. Sharp Co. Inc. and John J. Rocha liable to plaintiff-appellees for
damages pursuant to Article 21 of the Civil Code and award each plaintiff-appellees
temperate damages amounting to P100,000.00, and moral damages in the
increased amount ofP100,000.00. The award of exemplary damages and
attorneys fees amounting to P50,000.00, respectively, is hereby affirmed.[3]

severally indemnify Pioneer Insurance for damages, losses, and costs which the latter may incur as
surety. The RTC rendered judgment on 27 June 1996 favoring respondents, to wit:
WHEREFORE, plaintiffs causes of action having been proved with a
preponderance of evidence, judgment is hereby ordered as follows:
a.
b.

c.
d.
e.

Declaring the non-deployment of plaintiffs and the refusal to


release documents as breach of contract;
By way of compensatory damages, awarding $450 per month and
$439 overtime per month, which should have been received by
plaintiffs from other employers, making a joint and solidary
obligation on the part of the two defendants C.F. Sharp and
Pioneer for the period covered by the employment contracts;
Ordering each defendant to pay each plaintiff P50,000.00 as
moral damages and another P50,000.00 each as exemplary
damages;
Ordering defendants to share in the payment to plaintiffs
of P50,000.00 attorneys fees;
Defendants to pay litigation expenses and costs of suit.[2]

The trial court ruled that there was a violation of the contract when C.F. Sharp failed to deploy
and release the papers and documents of respondents, hence, they are entitled to damages. The trial
court likewise upheld the cause of action of respondents against Pioneer Insurance, the former being
the actual beneficiaries of the surety bond.
On appeal, C.F. Sharp and Rocha raise a jurisdictional issue that the RTC has no
jurisdiction over the instant case pursuant to Section 4(a) of Executive Order No. 797 which vests upon
the POEA the jurisdiction over all cases, including money claims, arising out of or by virtue of any
contract involving workers for overseas employment. C.F. Sharp and Rocha refuted the findings of the

The Court of Appeals limited the liability of Pioneer Insurance to the amount of P150,000.00
pursuant to the Contract of Suretyship between C.F. Sharp and Pioneer Insurance.

Rocha filed the instant petition on the submission that there is no basis to hold him liable for
damages under Article 21 of the Civil Code because C.F. Sharp has signified its intention to return the
documents and had in fact informed respondents that they may, at any time of the business day,
withdraw their documents. Further, respondents failed to establish the basis for which they are entitled
to moral damages. Rocha refuted the award of exemplary damages because the act of requiring
respondents to sign a quitclaim prior to the release of their documents could not be considered bad
faith. Rocha also questions the award of temperate damages on the ground that the act of withholding
respondents documents could not be considered chronic and continuing.[4]
Right off, insofar as Pioneer Insurance is concerned, the petition should be dismissed against it
because the ruling of the Court of Appeals limited its liability to P150,000.00 was not assailed by
Rocha, hence the same has now attained finality.
Before us, respondents maintain that they are entitled to damages under Article 21 of the
Civil Code for C.F. Sharps unjustified refusal to release the documents to them and for requiring them
to

sign

quitclaim

which

would

effectively

bar

them

from

seeking

redress

against

petitioners. Respondents justify the award of other damages as they suffered pecuniary losses
attributable to petitioners malice and bad faith.

The core issue pertains to damages.

In his Reply, Rocha introduced a new argument, i.e., that he should not be held jointly liable with
C.F. Sharp considering that the company has a separate personality. Rocha argues that there is no

The bases of the lower courts award of damages differ. In upholding the perfection of

showing in the Complaint that he had participated in the malicious act complained. He adds that his

contract between respondents and C.F. Sharp, the trial court stated that the unjustified failure to deploy

liability only stems from the Indemnity Agreement with Pioneer Insurance and does not extend to

and subsequently release the documents of respondents entitled them to compensatory damages,

respondents.

among others. Differently, the appellate court found that no contract was perfected between the parties

Records disclose that Rocha was first impleaded in the case by Pioneer Insurance. Pioneer

that will give rise to a breach of contract. Thus, the appellate court deleted the award of actual

Insurance, as surety, was sued by respondents together with C.F. Sharp. Pioneer Insurance in turn

damages. However, it adjudged other damages against C.F. Sharp for its unlawful withholding of

filed a third party complaint against Rocha on the basis of an Indemnity Agreement whereby he bound

documents from respondents.

himself to indemnify and hold harmless Pioneer Insurance from and against any and all damages which
the latter may incur in consequence of having become a surety. [5] The third party complaint partakes

We sustain the trial courts ruling.

the nature of a cross-claim.


C.F. Sharp, as defendant-appellant and Rocha, as third-party defendant-appellant, filed only
one brief before the Court of Appeals essentially questioning the declaration of the trial court that non-

On the issue of whether respondents are entitled to relief for failure to deploy them, the RTC
ruled in this wise:

deployment is tantamount to breach of contract and the award of damages. The Court of Appeals
found them both liable for damages. Both C.F. Sharp and Rocha sought recourse before this Court via
a Motion for Extension of Time (To File a Petition for Review) on 19 September 2007. [6] In the Petition
for Review, however, C.F. Sharp was noticeably dropped as petitioner. Rocha maintains essentially the
same argument that he and C.F. Sharp were wrongfully adjudged liable for damages.

The contract of employment entered into by the plaintiffs and the defendant
C.F. Sharp is an actionable document, the same contract having the essential
requisites for its validity. It is worthy to note that there are three stages of a
contract: (1) preparation, conception, or generation which is the period of
negotiation and bargaining ending at the moment of agreement of the parties.
(2) Perfection or birth of the contract, which is the moment when the parties come
to agree on the terms of the contract. (3) Consummation or death, which is the
fulfillment or performance of the terms agreed upon in the contract.

late in the day for Rocha to change his theory. It is doctrinal that defenses not pleaded in the answer

Hence, it is imperative to know the stage reached by the contract entered into
by the plaintiffs and C.F. sharp. Based on the testimonies of the witnesses
presented in this Court, there was already a perfected contract between plaintiffs
and defendant C.F. Sharp. Under Article 1315 of the New Civil Code of the
Philippines, it states that:

may not be raised for the first time on appeal. A party cannot, on appeal, change fundamentally the

xxxx

nature of the issue in the case. When a party deliberately adopts a certain theory and the case is

Thus, when plaintiffs signed the contract of employment with C.F. Sharp (as
agent of the principal WB Slough) consequently, the latter is under obligation to
deploy the plaintiffs, which is the natural effect and consequence of the contract
agreed by them.[8]

It was only in its Reply dated 25 March 2008 that Rocha, through a new representation,
suddenly forwarded the argument that he should not be held liable as an officer of C.F. Sharp. It is too

decided upon that theory in the court below, he will not be permitted to change the same on appeal,
because to permit him to do so would be unfair to the adverse party. [7] More so in this case, where
Rocha introduced a new theory at the Reply stage. Disingenuousness may even be indicated by the

We agree.

sudden exclusion of the name of C.F. Sharp from the main petition even as Rocha posited arguments
not just for himself and also in behalf of C.F. Sharp.

As correctly ruled at the trial, contracts undergo three distinct stages, to wit: negotiation;
perfection or birth; and consummation. Negotiation begins from the time the prospective contracting

parties manifest their interest in the contract and ends at the moment of agreement of the parties.
Perfection or birth of the contract takes place when the parties agree upon the essential elements of the
contract. Consummation occurs when the parties fulfill or perform the terms agreed upon in the
contract, culminating in the extinguishment thereof.[9]
Under Article 1315 of the Civil Code, a contract is perfected by mere consent and from that
moment the parties are bound not only to the fulfillment of what has been expressly stipulated but also
to all the consequences which, according to their nature, may be in keeping with good faith, usage and
law.[10]
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

Violations of the terms and conditions of this Contract with its approved
addendum shall warrant the imposition of appropriate disciplinary or administrative
sanctions against the erring party.
The Employee hereby certifies that he had received, read or has had
explained to him and fully understood this contract as well as the POEA revised
Employment Contract of 1989 and the Collective Bargaining Agreement (CBA)
and/or company terms and conditions of employment covering this vessel and that
he is fully aware of and has head or has had explained to him the terms and
conditions including those in the POEA Employment Contract, the CBA and this
contract which constitute his entire agreement with the employer.
The Employee also confirms that no verbal or other written promises
other than the terms and conditions of this Contract as well as the POEA Revised
Employment Contract, the CBA and/or company terms and conditions had been
given to the Employee. Therefore, the Employee cannot claim any additional
benefits or wages of any kind except those which have been provided in this
Contract Agreement.[12]
By the contract, C.F. Sharp, on behalf of its principal, International Shipping Management,

obligation.[11]
We have scoured through the Contract of Employment and we hold that it is a perfected
contract of employment. We reproduce below the terms of the Contract of Employment for easy

Inc., hired respondents as Sandblaster/Painter for a 3-month contract, with a basic monthly salary of
US$450.00. Thus, the object of the contract is the service to be rendered by respondents on board the
vessel while the cause of the contract is the monthly compensation they expect to receive. These

reference:

terms were embodied in the Contract of Employment which was executed by the parties. The
WITNESSETH

agreement upon the terms of the contract was manifested by the consent freely given by both parties

That the Seafarer shall be employed on board under the following terms
and conditions:

through their signatures in the contract. Neither parties disavow the consent they both voluntarily

1.1
1.2
1.3
1.4
1.5
1.6
1.7

Duration of Contract: 3 month/s


Position: SANDBLASTER/PAINTER
Basic Monthly Salary: $450.00 per month
Living Allowances: $0.00 per month
Hours of Work: 48 per week
Overtime Rate: $439.00 per month
Vacation Leave with Pay: 30.00 day/s per month on board

The terms and conditions of the Revised Employment Contract for


seafarers governing the employment of all Filipino seafarers approved by the
POEA/DOLE on July 14, 1989 under Memorandum Circular No. 41 series of 1989
and amending circulars relative thereto shall be strictly and faithfully observed.
Any alterations or changes, in any part of this Contract shall be
evaluated, verified, processed and approved by the Philippine Overseas
Employment Administration (POEA). Upon approval, the same shall be deemed an
integral part of the Standard Employment Contract (SEC) for seafarers.
All claims, complaints or controversies relative to the implementation and
interpretation of this overseas employment contract shall be exclusively resolved
through the established Grievance Machinery in the Revised Employment Contract
for seafarers, the adjudication procedures of the Philippine Overseas Employment
Administration and the Philippine Courts of Justice, in that order.

gave. Thus, there is a perfected contract of employment.


The Court of Appeals agreed with the submission of C.F. Sharp that the perfection and
effectivity of the Contract of Employment depend upon the actual deployment of respondents. It based
its conclusion that there was no perfected contract based on the following rationale:
The commencement of the employer-employee relationship between
plaintiffs-appellees and the foreign employer, as correctly represented by C.F.
Sharp requires that conditions under Sec. D be met. The Contract of Employment
was duly Verified and approved by the POEA. Regrettably, We have painfully
scrutinized the Records and find no evidence that plaintiffs-appellees were cleared
for travel and departure to their port of embarkation overseas by government
authorities. Consequently, non-fulfillment of this condition negates the
commencement and existence of employer-employee relationship between the
plaintiffs-appellees and C.F. Sharp. Accordingly, no contract between them was
perfected that will give rise to plaintiffs-appellees right of action. There can be no
breach of contract when in the first place, there is no effective contract to speak
of. For the same reason, and finding that the award of actual damages has no
basis, the same is hereby deleted.[13]
The Court of Appeals erred.

The commencement of an employer-employee relationship must be treated separately from

We respect the lower courts findings that C.F. Sharp unjustifiably refused to return the

the perfection of an employment contract. Santiago v. CF Sharp Crew Management, Inc.,[14] which was

documents submitted by respondent. The finding was that C.F. Sharp would only release the

promulgated on 10 July 2007, is an instructive precedent on this point. In said case, petitioner was

documents if respondent would sign a quitclaim. On this point, the trial court was affirmed by the Court

hired by respondent on board MSV Seaspread for US$515.00 per month for nine (9) months, plus

of Appeals. As a consequence, the award by the trial court of moral damages must likewise be

overtime pay. Respondent failed to deploy petitioner from the port of Manila to Canada. We made a

affirmed.

distinction between the perfection of the employment contract and the commencement of the employeremployee relationship, thus:
The perfection of the contract, which in this case coincided with the date
of execution thereof, occurred when petitioner and respondent agreed on the object
and the cause, as well as the rest of the terms and conditions therein. The
commencement of the employer-employee relationship, as earlier discussed, would
have taken place had petitioner been actually deployed from the point of hire. Thus,
even before the start of any employer-employee relationship, contemporaneous
with the perfection of the employment contract was the birth of certain rights and
obligations, the breach of which may give rise to a cause of action against the
erring party.[15]

Despite the fact that the employer-employee relationship has not commenced due to the

Moral damages may be recovered under Article 2219 of the Civil Code in relation to Article
21. The pertinent provisions read:
Art. 2219. Moral damages may be recovered in the following and analogous
cases:
xxxx
(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and
35.
xxxx
Art. 21. 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.

failure to deploy respondents in this case, respondents are entitled to rights arising from the perfected
Contract of Employment, such as the right to demand performance by C.F. Sharp of its obligation under
the contract.
The right to demand performance was a categorical pronouncement in Santiago which ruled
that failure to deploy constitutes breach of contract, thereby entitling the seafarer to damages:
Respondents act of preventing petitioner from departing the port of
Manila and boarding MSV Seaspread constitutes a breach of contract, giving
rise to petitioners cause of action. Respondent unilaterally and unreasonably
reneged on its obligation to deploy petitioner and must therefore answer for the
actual damages he suffered.
We take exception to the Court of Appeals conclusion that damages are
not recoverable by a worker who was not deployed by his agency. The fact that
the POEA Rules are silent as to the payment of damages to the affected seafarer
does not mean that the seafarer is precluded from claiming the same. The
sanctions provided for non-deployment do not end with the suspension or
cancellation of license or fine and the return of all documents at no cost to the
worker. They do not forfend a seafarer from instituting an action for damages
against the employer or agency which has failed to deploy him.[16]
The appellate court could not be faulted for its failure to adhere to Santiago considering that
the Court of Appeals Decision was promulgated way back in 2003 while Santiago was decided in
2007. We now reiterate Santiago and, accordingly, decide the case at hand.

We agree with the appellate court that C.F. Sharp committed an actionable wrong when it
unreasonably withheld documents, thus preventing respondents from seeking lucrative employment
elsewhere. That C.F. Sharp arbitrarily imposed a condition that the documents would only be released
upon signing of a quitclaim is tantamount to bad faith because it effectively deprived respondents of
resort to legal remedies.
Furthermore, we affirm the award of exemplary damages and attorneys fees. Exemplary
damages may be awarded when a wrongful act is accompanied by bad faith or when the defendant
acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner which would justify an award
of exemplary damages under Article 2232 of the Civil Code. Since the award of exemplary damages is
proper in this case, attorneys fees and cost of the suit may also be recovered as provided under Article
2208 of the Civil Code.[17]

WHEREFORE, the petition is DENIED. The Decision dated 27 June 1996 of the Regional
Trial Court of Pasay City is REINSTATED. Accordingly, the Decision dated 30 October 2003 of the
Court of Appeals is MODIFIED.

SO ORDERED.

(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 citizens 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 persons 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.

REPUBLIC ACT NO. 8042


Migrant Workers and Overseas Filipinos Act of 1995
An act to institute the policies of overseas employment and establish a higher standard of protection
and promotion of the welfare of migrant workers, their families and overseas Filipinos in distress, and
for other purposes.
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
SEC. 1. SHORT TITLE. - This act shall be known and cited as the "Migrant Workers and Overseas
Filipinos Act of 1995."
SEC. 2. DECLARATION OF POLICIES-(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.

(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 to 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.
SEC. 3. DEFINITIONS. - For purposes of this Act:
(a) "Migrant worker" refers to a person who is to be engaged, is engaged or has been engaged in a
renumerated activity in a state of which he or she is not a legal resident to be used interchangeably with
overseas Filipino worker.

(b) "Gender-sensitivity" shall mean cognizance of the inequalities and inequities prevalent in society
between women and men and a commitment to address issues with concern for the respective
interests of the sexes.

(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;

(c) "Overseas Filipinos" refers to dependents of migrant workers and other Filipino nationals abroad
who are in distress as mentioned in Sections 24 and 26 of this Act.

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

I. DEPLOYMENT

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

SEC. 4. Deployment of Migrant Workers - The State shall deploy overseas Filipino workers only in
countries where the rights of Filipino migrant workers are protected. The government recognizes any of
the following as guarantee on the part of the receiving country for the protection and the rights of
overseas Filipino workers:

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

(a) It has existing labor and social laws protecting the rights of migrant workers;

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

(b) It is a signatory to multilateral conventions, declaration or resolutions relating to the protection of


migrant workers;
(c) It has concluded a bilateral agreement or arrangement with the government protecting the rights of
overseas Filipino workers; and
(d) It is taking positive, concrete measures to protect the rights of migrant workers.
SEC. 5. TERMINATION OR BAN ON DEPLOYMENT - Notwithstanding the provisions of Section 4
hereof, the government, in pursuit of the national interest or when public welfare so requires, may, at
any time, terminate or impose a ban on the deployment of migrant workers.
II. ILLEGAL RECRUITMENT
Sec. 6. DEFINITIONS. - For purposes of this Act, illegal recruitment shall mean any act of canvassing,
enlisting, contracting, transporting, utilizing, hiring, procuring workers and includes referring, contact
services, promising or advertising for employment abroad, whether for profit or not, when undertaken
by a non-license 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 such nonlicense 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 persons, whether a non-licensee, non-holder, licensee or holder of authority.
(a) To charge or accept directly or indirectly any amount greater than the 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;

(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 on 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 reasons as determined by the Department of Labor and
Employment; and
(m) Failure to reimburse expenses incurred by the workers 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 as offense involving economic sabotage.
Illegal recruitment is deemed committed by a syndicate 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 not less than two hundred
thousand pesos (P200,000.00) nor more than five hundred thousand pesos (P500,000.00).

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.

(b) The penalty of life imprisonment and a fine of not less than five hundred thousand pesos
(P500,000.00) nor more than one million pesos (P1,000,000.00) shall be imposed if illegal recruitment
constitutes economic sabotage as defined herein.

Non-compliance with the mandatory periods for resolutions of cases provided under this
section shall subject the responsible officials to any or all of the following penalties:

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.

(a) The salary of any such official who fails to render his decision or resolutions within the
prescribed period shall be, or caused to be, withheld until the said official complies therewith;

SEC. 8. PROHIBITION ON OFFICIALS AND EMPLOYEES. - Ot shall be unlawful for any official or
employee of the Department of Labor and Employment, the Philippine Overseas Employment
Administration, or the Overseas Workers Welfare Administration, 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 shall be imposed upon them.
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 same 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. - Botwithstanding any provision of law to the contrary, the Labor Arbiters of
the National Labor Relations Commission (NLRC) shall have the priginal and exclusive jurisdiction to
hear and decide, within ninety (90) calendar days after filing of the complaint, the claims arising out of
an employer-employee relationship or by virtue of any law or contract involving Filipino workers for
overseas deployment including claims for actual, 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 provisions 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.
Such liabilities shall continue during the entire period or duration of the employment contract
and shall not be affected by any substitution, amendment or modification made locally or in a foreign
country of the said contract.
Any compromise/amicable settlement or voluntary agreement on money claims inclusive of
damages under this section shall be paid within four (4) months from the approval of the settlement by
the appropriate authority.

(b) Suspension for not more than ninety (90) days; or


(c) Dismissal from the service with disqualifications 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.
SEC. 11. MANADATORY 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, prosecution officer within
forty-eight (48) hours from the date of receipt of the records of the case.
SEC. 12. PRESCRIPTIVE PERIODS. - Illegal recruitment cases under this Act shall
prescribe in five (5) years: Provided, however, That illegal recruitment cases involving economic
sabotage as defined herein shall prescribe in twenty (20) years.
SEC. 13. FREE LEGAL ASSISTANCE, PREFERENTIAL ENTITLEMENT UNDER THE
WITNESS PROTECTION PROGRAM. - A mechanism for free legal assistance for victims of illegal
recruitment shall be established within the Department of Labor and Employment including its regional
offices. Such mechanism must include coordination and cooperation with the Department of Justice, the
Integrated Bar of the Philippines, and other non-governmental organizations and volunteer groups.
The provisions of Republic Act No. 6981 to the contrary, notwithstanding, any person who is a
victim of illegal recruitment shall be entitled to the Witness Protection Program provided thereunder.
III. SERVICES
SEC. 14. TRAVEL ADVISORY/INFORMATION DISSEMINATION. - To give utmost priority to
the establishment of programs and services to prevent illegal recruitment, fraud, and exploitation or
abuse of Filipino migrant workers, all embassies and consular offices, through the Philippine Overseas
Employment Administration (POEA), shall issue travel advisories or disseminate information on labor
and employment conditions, migration realities and other facts; and adherence of particular countries to

international standards on human and workers' rights which will adequately prepare individuals into
making informed and intelligent decisions about overseas employment. Such advisory or information
shall be published in a newspaper of general circulation at least three (3) times in every quarter.
SEC. 15. REPATRIATION OF WORKERS; EMERGENCY REPATRIATION FUND. - The
repatriation of the worker and the transport of his personal belongings shall be the primary
responsibility of the agency which recruited or deployed the worker overseas. All costs attendant to
repatriation shall be borne by or charged to the agency concerned and/or its principal. Likewise, the
repatriation of remains and transport of the personal belongings of a deceased worker and all costs
attendant thereto shall be borne by the principal and/or local agency. However, in cases where the
termination of employment is due solely to the fault of the worker, the principal/employer or agency
shall not in any manner be responsible for the repatriation of the former and/or his belongings.
The Overseas Workers Welfare Administration (OWWA), in coordination ith appropriate
international agencies, shall undertake the repatriation of workers in cases of war, epidemic, disasters
or calamities, natural or man-made, and other similar events without prejudice to reimbursement by the
responsible principal or agency. However, in cases where the principal or recruitment agency cannot be
identified, all costs attendant to repatriation shall be borne by the OWWA.

(a) Develop livelihood programs and projects for returning Filipino migrant workers in
coordination with the private sector;
(b) Coordinate with appropriate private and government agencies the promotion,
development, re-placement and the full utilization of their potentials;
(c) Institute in cooperation with other government agencies concerned, a computer-based
information system on skilled Filipino migrant workers which shall be accessible to all local recruitment
agencies and employers, both public and private;
(d) Provide a periodic study and assessment of job opportunities for returning Filipino migrant
workers.
SEC. 19. ESTABLISHMENT OF A MIGRANT WORKERS AND OTHER OVERSEAS
FILIPINOS RESOURCE CENTER. - Within the premises and under the administrative jurisdiction of the
Philippine Embassy in countries where there are large concentrations of Filipino migrant workers, there
shall be establish a Migrant Workers and Other Overseas Filipinos Resource Center with the following
services:
(a) Counseling and legal services;

For this purposes, there is hereby created and established an emergency repatriation fund
under the administration control and supervision of the OWWA, initially to consist of one hundred million
pesos (P100,000,000.00), inclusive of outstanding balances.
SEC. 16. MANDATORY REPATRIATION OF UNDERAGE MIGRANT WORKERS. - Upon
discovery or being informed of the presence of migrant workers whose actual ages fall below the
minimum age requirement for overseas deployment, the responsible officers in the foreign service shall
without delay repatriate said workers and advise the Department of Foreign Affairs through the fastest
means of communication availavle of such discovery and other relevant information.
SEC. 17. ESTABLISHMENT OF RE-PLACEMENT AND MONITORING CENTER. - A
replacement and monitoring center is hereby created in the Department of Labor and Employment for
returning Filipino migrant workers which shall provide a mechanism for their reintegration into the
Philippine society, serve as a promotion house for their local employment, and tap their skills and
potentials for national development.
The Department of Labor and Employment, the Overseas Workers Welfare Administration,
and the Philippine Overseas Employment Administration shall, within ninety (90) days from the
effectivity of this Act, formulate a program that would motivate migrant workers to plan for productive
options such as entry into highly technical jobs or undertakings, livelihood and entrepreneurial
development, better wage employment, and investment of savings.
For this purpose, the Technical Education and Skills Development Authority (TESDA), the
Technology Livelihood Resource Center (TLRC), and other government agencies involved in training
and livelihood development shall give priority to return who had been employed as domestic helpers
and entertainers.
SEC. 18. FUNCTIONS OF THE RE-PLACEMENT AND MONITORING CENTER. - The
center shall provide the following service:

(b) Welfare assistance including the procurement of medical and hospitalization services;
(c) Information, advisory and programs to promote social integration such as post-arrival
orientation, settlement and community networking services for social integration;
(d) Institute a scheme of registration of undocumented workers to bring them within the
purview of this Act. For this purpose, the Center is enjoined to compel existing undocumented workers
to register with it within six (6) months from the effectivity of this Act, under pain of having his/her
passport cancelled;
(e) Human resource development, such as training and skills upgrading;
(f) Gender sensitive programs and activities to assist particular needs of women migrant
workers;
(g) Orientation program for returning workers and other migrants; and
(h) Monitoring of daily situations, circumstances and activities affecting migrant workers and
other overseas Filipinos.
The establishment and operations of the Center shall be a joint undertaking of the various
government agencies. The Center shall be open for twenty-four (24) hours daily, including Saturdays,
Sundays and holidays, and shall be staffed by Foreign Service personnel, service attaches or officers
who represent other organizations from the host countries. In countries categorized as highly
problematic by the Department of Foreign Affairs and the Department of Labor and Employment and
where there is a concentration of Filipino migrant workers, the government must provide a lawyer and a

social worker for the Center. The Labor Attache shall coordinate the operation of the Center and shall
keep the Chief of Mission informed and updated on all matters affecting it.
The Center shall have a counterpart 24-hour information and assistance center at the
Department of Foreign Affairs to ensure a continuous network and coordinative mechanism at the home
office.
SEC. 20. ESTABLISHMENT OF A SHARED GOVERNMENT INFORMATION SYSTEM FOR
MIGRATION. - An inter-agency committee composed of the Department of Foreign Affairs and its
attached agency, the Commission on Filipino Overseas, the Department of Labor and Employment, the
Philippine Overseas Employment Administration, The Overseas Workers Welfare Administration, The
Department of Tourism, the Department of Justice, the Bureau of Immigration, the National Bureau of
Investigation, and the National Statistics Office shall be established to implement a shared government
information system for migration. The inter-agency committee shall initially make available to itself the
information contained in existing data bases/files. The second phase shall involve linkaging of computer
facilities in order to allow free-flow data exchanges and sharing among concerned agencies.

Loan Guarantee Fund is hereby created and the revolving amount of one hundred million pesos
(P100,000,000.00) from the OWWA is set aside as a guarantee fund in favor of participating
government financial institutions.
SEC. 22. RIGHTS AND ENFORCEMENT MECHANISM UNDER INTERNATIONAL AND
REGIONAL HUMAN RIGHTS SYSTEMS. - The Department of Foreign Affairs is mandated to
undertake the necessary initiative such as promotions, acceptance or adherence of countries receiving
Filipino workers to multilateral convention, declaration or resolutions pertaining to the protection of
migrant workers' rights. The Department of Foreign Affairs is also mandated to make an assessment of
rights and avenues of redress under international and regional human rights systems that are available
to Filipino migrant workers who are victims of abuse and violation and, as far as practicable and
through the Legal Assistant for Migrant Workers Affairs created under this Act, pursue the same on
behalf of the victim if it is legally impossible to file individual complaints. If a complaints machinery is
available under international or regional systems, the Department of Foreign Affairs shall fully apprise
the Filipino migrant workers of the existence and effectiveness of such legal options.
IV. GOVERNMENT AGENCIES

The inter-agency committee shall convene to identify existing data bases which shall be
declassified and shared among member agencies. These shared data bases shall initially include, but
not limited to, the following information:

SEC. 23. ROLE OF GOVERNMENT AGENCIES. - The following government agencies shall
perform the following to promote the welfare and protect the rights of migrant workers and, as far as
applicable, all overseas Filipinos:

(a) Masterlists of departing/arriving Filipinos;


(b) Inventory of pending legal cases involving Filipino migrant workers and other Filipino
nationals, including those serving prison terms;
(c) Masterlists of departing/arriving Filipinos;
(d) Statistical profile on Filipino migrant workers/overseas Filipinos/Tourists;
(e) Blacklisted foreigners/undesirable aliens;
(f) Basic data on legal systems, immigration policies, marriage laws and civil and criminal
codes in receiving countries particularly those with the large numbers of Filipinos;
(g) List of labor and other human rights instruments where receiving countries are
signatories;
(h) A tracking system of past and present gender disaggregated cases involving male and
female migrant workers; and
(I) Listing of overseas posts which may render assistance to overseas Filipinos, in general,
and migrant workers, in particular.
SEC. 21. MIGRANT WORKERS LOAN GUARANTEE FUND. - In order to further prevent
unscrupulous illegal recruiters from taking advantage of workers seeking employment abroad, the
OWWA, in coordination with government financial institutions, shall institute financing schemes that will
expand the grant of pre-departure loan and family assistance loan. For this purpose, a Migrant Workers

(a) Department of Foreign Affairs. - The Department, through its home office or foreign posts,
shall take priority action its home office or foreign posts, shall take priority action or make
representation with the foreign authority concerned to protect the rights of migrant workers and other
overseas Filipinos and extend immediate assistance including the repatriation of distressed or
beleaguered migrant workers and other overseas Filipinos;
(b) Department of Labor and Employment - The Department of Labor and Employment shall
see to it that labor and social welfare laws in the foreign countries are fairly applied to migrant workers
and whenever applicable, to other overseas Filipinos including the grant of legal assistance and the
referral to proper medical centers or hospitals:
(b.1) Philippine Overseas Employment Administration - Subject to deregulation and phase
out as provided under Sections 29 and 30 herein, the Administration shall regulate private sector
participation in the recruitment and overseas placement of workers by setting up a licensing and
registration system. It shall also formulate and implement, in coordination with appropriate entities
concerned, when necessary employment of Filipino workers taking into consideration their welfare and
the domestic manpower requirements.
(b.2) Overseas Workers Welfare Administration - The Welfare Officer or in his absence, the
coordinating officer shall provide the Filipino migrant worker and his family all the assistance they may
need in the enforcement of contractual obligations by agencies or entities and/or by their principals. In
the performance of this functions, he shall make representation and may call on the agencies or entities
concerned to conferences or conciliation meetings for the purpose of settling the complaints or
problems brought to his attention.
V. THE LEGAL ASSISTANT FOR MIGRANT WORKERS AFFAIRS

SEC. 24. LEGAL ASSISTANT FOR MIGRANT WORKERS AFFAIRS. - There is hereby
created the position of Legal Assistant for Migrant Workers Affairs under the Department of Foreign
Affairs who shall be primarily responsible for the provision and overall coordination of all legal
assistance services to be provided to Filipino migrant workers as well as overseas Filipinos in distress.
He shall have the rank, salary and privileges equal to that of an undersecretary of said Department.
The said Legal Assistant for Migrant Workers Affairs shall be appointed by the President and
must be of proven competence in the field of law with at least ten (10) years of experience as a legal
practitioner and must not have been a candidate to an elective office in the last local or national
elections.

Any balances of existing fund which have been set aside by the government specifically as
legal assistance or defense fund to help migrant workers shall, upon effectivity of this Act, to be turned
over to, and form part of, the Fund created under this Act.
SEC. 26. USES OF THE LEGAL ASSISTANCE FUND. - The Legal Assistance Fund created
under the preceeding section shall be used exclusively to provide legal services to migrant workers
and overseas Filipinos in distress in accordance witht the guidelines, criteria and procedures
promulgated in accordance with Section 24 (a) hereof. The expenditures to be charged against the
Fund shall include the fees for the foreign lawyers to be hired by the Legal Assistance for Migrant
Workers Affairs to represent migrant workers facing charges abroad, bail bonds to secure the
temporary release of workers under detention, court fees and charges and other litigation expenses.

Among the functions and responsibilities of the aforesaid Legal Assistant are:
VI. COUNTRY - TEAM APPROACH
(a) To issue the guidelines, procedures and criteria for the provisions of legal assistance
services to Filipino migrant workers;
(b) To establish close linkages with the Department of Labor and Employment, the POEA,
the OWWA and other government agencies concerned, as well as with non-governmental organizations
assisting migrant workers, to ensure effective coordination and cooperation in the provision of legal
assistance to migrant workers;
(c) To tap the assistance of reputable law firms and the Integrated Bar of the Philippines and
other bar associations to complement the government's efforts to provide legal assistance to migrant
workers;
(d) To administer the legal assistance fund for migrant workers established under Section 25
hereof and to authorize disbursements there from in accordance with the purposes for which the fund
was set up; and
(e) To keep and maintain the information system as provided in Section 20.
The legal Assistant for Migrant Workers Affairs shall have authority to hire private lawyers,
domestic or foreign, in order to assist him in the effective discharge of the above functions.
SEC. 25. LEGAL ASSISTANCE FUND - There is hereby established a legal assistance
fund for migrant workers, herein after referred to as Legal Assistance fund, in the amount of One
hundred million pesos (P100,000,000.00) to be constituted from the following sources:
Fifty million pesos (P50,000,000.00) from the Contingency Fund of the President;
Thirty million pesos (P30,000,000.00) from the Presidential Social Fund; and
Twenty million pesos (P20,000,000.00) from the Welfare Fund for Overseas Workers
established under Letter of Instruction No. 537, as amended by Presidential Decree Nos. 1694 and
1809.

SEC. 27. PRIORITY CONCERNS OF PHILIPPINE FOREIGN SERVICE POSTS. - The


country team approach, as enunciated under Executive Order No. 74, series of 1993, shall be the mode
under which Philippine embassies or their personnel will operate in the protection of the Filipino migrant
workers as well as in the promotion of their welfare. The protection of the Filipino migrant workers and
the promotion of their welfare, in particular, and the protection of the dignity and fundamental rights and
freedoms of the Filipino citizen abroad, in general, shall be the highest priority concerns of the
Secretary of Foreign Affairs and the Philippine Foreign Service Posts.
SEC. 28. COUNTRY-TEAM APPROACH. - Under the country-team approach, all officers,
representatives and personnel of the Philippine government posted abroad regardless of their mother
agencies shall, on a per country basis, act as one country-team with a mission under the leadership of
the ambassador. In this regard, the ambassador may recommend to the Secretary of the Department of
Foreign Affairs the recall of officers, representatives and personnel of the Philippine government posted
abroad for acts inimical to the national interest such as, but not limited to, failure to provide the
necessary services to protect the rights of overseas Filipinos.
Upon receipt of the recommendation of the ambassador, the Secretary of the Department of
Foreign Affairs shall, in the case of officers, representatives and personnel of other departments,
endorse such recommendation to the department secretary concerned for appropriate action. Pending
investigation by an appropriate body in the Philippines, the person recommended for recall may be
placed under preventive suspension by the ambassador.
In host countries where there are Philippine consulates, such consulates shall also constitute
part of the country-team under the leadership of the ambassador.
In the implementation of the country-team approach, visiting Philippine delegations shall be
provided full support and information.
VII. DEREGULATION AND PHASE-OUT
SEC. 29. COMPREHENSIVE DEREGULATION PLAN ON RECRUITMENT ACTIVITIES. Pursuant to a progressive policy of deregulation whereby the migration of workers becomes strictly a
matter between the worker and his foreign employer, the DOLE within one (1) year from the effectivity
of this Act, is hereby mandated to formulate a five-year comprehensive deregulation plan on

recruitment activities taking into account labor market trends, economic conditions of the country and
emergency circumstances which may affect the welfare of migrant workers.
SEC. 30. GRADUAL PHASE-OUT OF REGULATORY FUNCTIONS. - Within a period of five
(5) years from the effectivity of this Act, the DOLE shall phase out the regulatory functions of the POEA
pursuant to the objectives of deregulation.
VII. PROFESSIONAL AND OTHER HIGHLY-SKILLED FILIPINOS ABROAD
SEC. 31. INCENTIVES TO PROFESSIONALS AND OTHER HIGHLY-SKILLED FILIPINOS
ABROAD. - Pursuant to the objective of encouraging professionals and other highly-skilled Filipinos
abroad especially in the field of science and technology to participate in, and contribute to national
development, the government shall provide proper and adequate incentives and programs so as to
secure their services in priority development areas of the public and private sectors.
IX. MISCELLANEOUS PROVISIONS
SEC. 32. POEA AND OWWA BOARD; ADDITIONAL MEMBERSHIPS. - Notwithstanding any
provision of law to the contrary, the respective Boards of the POEA and the OWWA shall, in addition to
their present composition, have three (3) members each who shall come from the women, sea-based
and land-based sectors, respectively, to be appointed by the President in the same manner as the other
members.
SEC. 33. REPORT TO CONGRESS. - In order to inform the Philippine Congress on the
implementation of the policy enunciated in Section 4 hereof, the Department of Foreign Affairs and the
Department of Labor and Employment shall submit to the said body a semi-annual report of Philippine
foreign posts located in countries hosting Filipino migrant workers. The report shall not be limited to the
following information:
(a) Masterlist of Filipino migrant workers, and inventory of pending cases involving them and other
Filipino nationals including those serving prison terms;
(b) Working conditions of Filipino migrant workers;
(c) Problems encountered by the migrant workers, specifically violations of their rights;
(d) Initiative/actions taken by the Philippine foreign posts to address the problems of Filipino migrant
workers;
(e) Changes in the laws and policies of host countries; and
(f) Status of negotiations on bilateral labor agreements between the Philippines and the host country.
Any officer of the government who fails to report as stated in the preceeding section shall be
subjected to administrative penalty.
SEC. 34. REPRESENTATION IN CONGRESS. - Pursuant to Section 3(2), Article VI of the
Constitution and in line with the objective of empowering overseas Filipinos to participate in the policymaking process to address Filipino migrant concerns, two (2) sectoral representatives for migrant

workers in the House of Representatives shall be appointed by the President from the ranks of migrant
workers: Provided, that at least one (1) of the two (2) sectoral representatives shall come from the
women migrant workers sector: Provided, further, that all nominees must have at least two (2) years
experience as a migrant worker.
SEC. 35. EXEMPTION FROM TRAVEL TAX AND AIRPORT FEE. - All laws to the country
notwithstanding, the migrant worker shall be exempt from the payment of travel tax and airport fee upon
proper showing of proof of entitlement by the POEA.
SEC. 36. NON-INCREASE OF FEES; ABOLITION OF REPATRIATION BOND. - Upon
approval of this Act, all fees being charged by any government office on migrant workers shall remain at
their present levels and the repatriation bond shall be established.
SEC. 37. THE CONGRESSIONAL MIGRANT WORKERS SCHOLARSHIP FUND. - There is
hereby created a Congressional Migrant Workers Scholarship Fund which shall benefit deserving
migrant workers and/or their immediate descendants below twenty-one (21) years of age who intent to
pursue courses or training primarily in the field of science and technology. The initial seed fund of two
hundred million pesos (P200,000,000.00) shall be constituted from the following sources:
(a) Fifty million pesos (P50,000,000.00) from the unexpected Countrywide Development
Fund for 1995 in equal sharing by all members of Congress; and
(b) The remaining one hundred fifty million pesos (P150,000,000.00) shall be funded from the
proceeds of Lotto.
The Congressional Migrant Workers Scholarship Fund as herein created shall be
administered by the DOLE in coordination with the Department of Science and Technology (DOST). To
carry out the objectives of this section, the DOLE and the DOST shall formulate the necessary rules
and regulations.
SEC. 38. APPROPRIATION AND OTHER SOURCES OF FUNDING. - The amount
necessary to carry out the provisions of this Act shall be provided for in the General Appropriations Act
of the year following its enactment into law and thereafter.
SEC. 39. MIGRANT WORKERS DAY. - The day of signing by the President of this Act shall
be designated as the Migrant Workers Day and shall henceforth be commemorated as such annually.
SEC. 40. IMPLEMENTING RULES AND REGULATIONS. - The departments and agencies
charged with carrying out the provisions of this Act shall, within ninety (90) days after the effectivity of
this Act, formulate the necessary rules and regulations for its effective implementation.
SEC. 41. REPEATING CLAUSE. - All laws, decrees, executive orders, rules and regulations,
or parts thereof inconsistent with the provisions of this Act are hereby repealed or modified accordingly.

SEC. 42. SEPARABILITY CLAUSE. - If, for any reason, any section or provision of this Act is
held unconstitutional or invalid, the other sections or provisions hereof shall not be affected thereby.

SEC. 43. EFFECTIVITY CLAUSE. - This Act shall take effect after fifteen (15) days from its
publication in the Official Gazette or in at least two (2) national newspapers of general circulation
whichever comes earlier.

AN ACT AMENDING REPUBLIC ACT NO. 8042, OTHERWISE KNOWN AS THE MIGRANT
WORKERS AND OVERSEAS FILIPINOS ACT OF 1995, AS AMENDED, FURTHER IMPROVING
THE STANDARD OF PROTECTION AND PROMOTION OF THE WELFARE OF MIGRANT
WORKERS, THEIR FAMILIES AND OVERSEAS FILIPINOS IN DISTRESS, AND FOR OTHER
PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
Section 1. Paragraphs (a), (e), (g) and (h) of Section 2 of Republic Act. No. 8042, as amended,
otherwise known as the "Migrant Workers and Overseas Filipinos Act of 1995," is hereby amended to
read as follows:
"(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, continuously monitor international conventions, adopt/be
signatory to and ratify those that guarantee protection to our migrant workers, and endeavor to enter
into bilateral agreements with countries hosting overseas Filipino 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, whether regular/documented or irregular/undocumented, are
adequately protected and safeguarded."
"(g) The State recognizes that the most effective tool for empowerment is the possession of skills by
migrant workers. The government shall provide them free and accessible skills development and
enhancement programs. Pursuant to this and as soon as practicable, the government shall deploy
and/or allow the deployment only of skilled Filipino workers."
"(h) The State recognizes non-governmental organizations, trade unions, workers associations,
stakeholders and their similar entities 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. The significant contribution of recruitment and manning
agencies shall from part this partnership."
Section 2. Section 3, paragraph (a) of Republic Act No. 8042, as amended, is hereby amended to read
as follows:
"(a) "Overseas Filipino worker" refers to a person who is to be engaged, is engaged or has been
engaged in a remunerated activity in a state of which he or she is not a citizen or on board a vessel
navigating the foreign seas other than a government ship used for miliatry or non-commercial purposes
or on an installation located offshore or on the high seas; to be used interchangeably with migrant
worker."

REPUBLIC ACT No. 10022


Section 3. Section 4 of Republic Act No. 8042, as amended, is hereby amended to rerad as follows:

"SEC. 4. Deployment of Migrant Workers. - The State shall allow the deployment of overseas Filipino
workers only in countries where the rights of Filipino migrant workers are protected. The government
recognizes any of the following as a guarantee on the part of the receiving country for the protection of
the rights of overseas Filipino workers:
"(a) It has existing labor and social laws protecting the rights of workers, including migrant
workers;
"(b) It is a signatory to and/or a ratifier of multilateral conventions, declarations or resolutions
relating to the protection of workers, including migrant workers; and
"(c) It has concluded a bilateral agreement or arrangement with the government on the
protection of the rights of overseas Filipino Workers:
Provided, That the receiving country is taking positive, concrete measures to protect the rights of
migrant workers in furtherance of any of the guarantees under subparagraphs (a), (b) and (c) hereof.
"In the absence of a clear showing that any of the aforementioned guarantees exists in the country of
destination of the migrant workers, no permit for deployment shall be issued by the Philippine Overseas
Employment Administration (POEA).
"The members of the POEA Governing Board who actually voted in favor of an order allowing the
deployment of migrant workers without any of the aforementioned guarantees shall suffer the penalties
of removal or dismissal from service with disqualification to hold any appointive public office for five (5)
years, Further, the government official or employee responsible for the issuance of the permit or for
allowing the deployment of migrant workers in violation of this section and in direct contravention of an
order by the POEA Governing Board prohibiting deployment shall be meted the same penalties in this
section.
"For this purpose, the Department of Foreign Affairs, through its foreign posts, shall issue a certification
to the POEA, specifying therein the pertinent provisions of the receiving country's labor/social law, or
the convention/declaration/resolution, or the bilateral agreement/arrangement which protect the rights
of migrant workers.
"The State shall also allow the deployment of overseas Filipino workers to vessels navigating the
foreign seas or to installations located offshore or on high seas whose owners/employers are compliant
with international laws and standards that protect the rights of migrant workers.

"SEC. 5. Termination or Ban on Deployment. - Notwithstanding the provisions of Section 4 hereof, in


pursuit of the national interest or when public welfare so requires, the POEA Governing Board, after
consultation with the Department of Foreign Affairs, may, at any time, terminate or impose a ban on the
deployment of migrant workers."
Section 5. Section 6 of Republic Act No. 8042, as amended, is hereby amended to read as follows:
"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 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 nonlicensee 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 or acknowledge 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, or
for the purpose of documenting hired workers with the POEA, which include the act of
reprocessing workers through a job order that pertains to nonexistent work, work different
from the actual overseas work, or work with a different employer whether registered or not
with the POEA;
"(d) To include 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 or who has formed, joined or supported,
or has contacted or is supported by any union or workers' organization;

"The State shall likewise allow the deployment of overseas Filipino workers to companies and
contractors with international operations: Provided, That they are compliant with standards, conditions
and requirements, as embodied in the employment contracts prescribed by the POEA and in
accordance with internationally-accepted standards."

"(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;

Section 4. Section 5 of Republic Act No. 8042, as amended, is hereby amended to read as follows:

"(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 travel agency;
"(k) To withhold or deny travel documents from applicant workers before departure for
monetary or financial considerations, or for any other reasons, other than those authorized
under the Labor Code and its implementing rules and regulations;
"(l) Failure to actually deploy a contracted worker without valid reason as determined by the
Department of Labor and Employment;
"(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;
and
"(n) To allow a non-Filipino citizen to head or manage a licensed recruitment/manning
agency.
"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.
"In addition to the acts enumerated above, it shall also be unlawful for any person or entity to commit
the following prohibited acts:
"(1) Grant a loan to an overseas Filipino worker with interest exceeding eight percent (8%)
per annum, which will be used for payment of legal and allowable placement fees and make
the migrant worker issue, either personally or through a guarantor or accommodation party,
postdated checks in relation to the said loan;
"(2) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is
required to avail of a loan only from specifically designated institutions, entities or persons;

institutions, entities or persons, except in the case of a seafarer whose medical examination
cost is shouldered by the principal/shipowner;
"(5) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is
required to undergo training, seminar, instruction or schooling of any kind only from
specifically designated institutions, entities or persons, except fpr recommendatory trainings
mandated by principals/shipowners where the latter shoulder the cost of such trainings;
"(6) For a suspended recruitment/manning agency to engage in any kind of recruitment
activity including the processing of pending workers' applications; and
"(7) For a recruitment/manning agency or a foreign principal/employer to pass on the
overseas Filipino worker or deduct from his or her salary the payment of the cost of insurance
fees, premium or other insurance related charges, as provided under the compulsory
worker's insurance coverage.
"The persons criminally liable for the above offenses are the principals, accomplices and accessories.
In case of juridical persons, the officers having ownership, control, management or direction of their
business who are responsible for the commission of the offense and the responsible employees/agents
thereof shall be liable.
"In the filing of cases for illegal recruitment or any of the prohibited acts under this section, the
Secretary of Labor and Employment, the POEA Administrator or their duly authorized representatives,
or any aggrieved person may initiate the corresponding criminal action with the appropriate office. For
this purpose, the affidavits and testimonies of operatives or personnel from the Department of Labor
and Employment, POEA and other law enforcement agencies who witnessed the acts constituting the
offense shall be sufficient to prosecute the accused.
"In the prosecution of offenses punishable under this section, the public prosecutors of the Department
of Justice shall collaborate with the anti-illegal recruitment branch of the POEA and, in certain cases,
allow the POEA lawyers to take the lead in the prosecution. The POEA lawyers who act as prosecutors
in such cases shall be entitled to receive additional allowances as may be determined by the POEA
Administrator.
"The filing of an offense punishable under this Act shall be without prejudice to the filing of cases
punishable under other existing laws, rules or regulations."1avvphi1
Section 6. Section 7 of Republic Act No. 8042, as amended, is hereby amended to read as follows:
"SEC. 7. Penalties. -

"(3) Refuse to condone or renegotiate a loan incurred by an overseas Filipino worker after the
latter's employment contract has been prematurely terminated through no fault of his or her
own;
"(4) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is
required to undergo health examinations only from specifically designated medical clinics,

"(a) Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of
not less than twelve (12) years and one (1) day but not more than twenty (20) years and a
fine of not less than One million pesos (P1,000,000.00) nor more than Two million pesos
(P2,000,000.00).

"(b) The penalty of life imprisonment and a fine of not less than Two million pesos
(P2,000,000.00) nor more than Five million pesos (P5,000,000.00) shall be imposed if illegal
recruitment constitutes economic sabotage as defined therein.
"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 nonholder of authority.
"(c) Any person found guilty of any of the prohibited acts 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 Five hundred thousand pesos (P500,000.00) nor more than
One million pesos (P1,000,000.00).
"If the offender is an alien, he or she shall, in addition to the penalties herein prescribed, be deported
without further proceedings.
"In every case, conviction shall cause and carry the automatic revocation of the license or registration
of the recruitment/manning agency, lending institutions, training school or medical clinic."
Section 7. Section 10 of Republic Act No. 8042, as amended, is hereby amended to read as follows:
"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 damage.
Consistent with this mandate, the NLRC shall endeavor to update and keep abreast with the
developments in the global services industry.
"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 de
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.
"Such liabilities shall continue during the entire period or duration of the employment contract and shall
not be affected by any substitution, amendment or modification made locally or in a foreign country of
the said contract.
"Any compromise/amicable settlement or voluntary agreement on money claims inclusive of damages
under this section shall be paid within thirty (30) days from approval of the settlement by the
appropriate authority.

"In case of termination of overseas employment without just, valid or authorized cause as defined by
law or contract, or any unauthorized deductions from the migrant worker's salary, the worker shall be
entitled to the full reimbursement if his placement fee and the deductions made with interest at 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.
"In case of a final and executory judgement against a foreign employer/principal, it shall be
automatically disqualified, without further proceedings, from participating in the Philippine Overseas
Employment Program and from recruiting and hiring Filipino workers until and unless it fully satisfies the
judgement award.
"Noncompliance with the mandatory periods for resolutions of case provided under this section shall
subject the responsible officials to any or all of the following penalties:
"(a) The salary of any such official who fails to render his decision or resolution within the
prescribed period shall be, or caused to be, withheld until the said official complies therewith;
"(b) Suspension for not more than ninety (90) days; or
"(c) 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 incured under other existing laws or rules and regulations as a consequence
of violating the provisions of this paragraph."
Section 8. The first paragraph of Section 13 of Republic Act No. 8042, as amended is hereby amended
to read as follows:
"SEC. 13. Free Legal Assistance; Preferential Entitlement Under the Witness Protection Program. - A
mechanism for free legal assistance for victims of illegal recruitment shall be established in the antiillegal recruitment branch of the POEA including its regional offices. Such mechanism shall include
coordination and cooperation with the Department of Justice, the Integrated Bar of the Philippines, and
other non-governmental organizations and volunteer groups."
Section 9. Section 16 of Republic Act No. 8042, as amended, is hereby amended to read as follows:
"SEC. 16. Mandatory Repatriation of Underage Migrant Workers. - Upon discovery or being informed of
the presence of migrant workers whose ages fall below the minimum age requirement for overseas
deployment, the responsible officers in the foreign service shall without delay repatriate said workers
and advise the Department of Foreign Affairs through the fastest means of communication available of
such discovery and other relevant information. The license of a recruitment/manning agency which
recruited or deployed an underage migrant worker shall be automatically revoked and shall be imposed
a fine of not less than Five hundred thousand pesos (Php 500,000.00) but not more than One million
pesos (Php 1,000,000.00). All fees pertinent to the processing of papers or documents in the
recruitment or deployment shall be refunded in full by the responsible recruitment/manning agency,

without need of notice, to the underage migrant worker or to his parents or guardian. The refund shall
be independent of and in addition to the indemnification for the damages sustained by the underage
migrant worker. The refund shall be paid within thirty (30) days from the date of the mandatory
repatriation as provided for in this Act."

"(f) Maintain an internet-based communication system for on-line registration and interaction
with clients, and maintain and upgrade computer-based service capabilities of the NRCO;
"(g) Develop capacity-building programs for returning overseas Filipino workers and their
families, implementers, service providers, and stakeholders; and

Section 10. Section 17 of Republic Act No. 8042, as amended, is hereby amended to read as follows:
"(h) Conduct research for policy recommendations and program development."
"SEC. 17. Establishment of National Reintegration Center for Overseas Filipino Workers. -A national
reintegration center for overseas Filipino workers (NRCO) is hereby created in the Department of Labor
and Employment for returning Filipino migrant workers which shall provide a mechanism for their
reintegration into the Philippine society, serve as a promotion house for their local employment, and tap
their skills and potentials for national development.

Section 12. The second paragraph of Section 19 of Republic Act No. 8042, as amended, is hereby
amended to read as follows:

"For this purpose, the Technical Education and Skills Development Authority (TESDA), the Technology
Livelihood Resource Center (TLRC), and other government agencies involved in training and livelihood
development shall give priority to returnees who had been employed as domestic helpers and
entertainers."

"The establishment and operations of the Center shall be a joint undertaking of the various government
agencies. The Center shall be open for twenty-four (24) hours daily including Saturdays, Sundays and
holidays, and shall be staffed by Foreign Service personnel, service attaches or officers who represent
other Philippine government agencies abroad and, if available, individual volunteers and bona fide nongovernment organizations from the host countries. In countries categorized as highly problematic by the
Department of Foreign Affairs and the Department of Labor and Employment and where there is a
concentration of Filipino migrant workers, the government must provide a Sharia or human rights
lawyer, a psychologist and a social worker for the Center. In addition to these personnel, the
government must also hire within the receiving country, in such number as may be needed by the post,
public relation officers or case officers who are conversant, orally and in writing, with the local language,
laws, customs and practices. The Labor Attache shall coordinate the operation of the Center and shall
keep the Chief of Mission informed and updated on all matters affecting it."

Section 11. Section 18 of Republic Act No. 8042, as amended is hereby amended to read as follows:

Section 13. Section 20 of Republic Act No. 8042, as amended, is hereby amended to read as follows:

"SEC. 18. Functions of the National Reintegration Center for Overseas Filipino Workers. -The Center
shall provide the following services:

"SEC. 20. Establishment of a Shared Government Information System for Migration. - An interagency
committee composed of the Department of Foreign Affairs and its attached agency, the Commission on
Filipinos Overseas, the Department of Labor and Employment and its attached concerned agencies,
the Department of Tourism, the Department of Justice the Bureau of Immigration, the National Bureau
of Investigation, the Department of the Interior and Local Government, the National
Telecommunications Commission, the Commission on Information and Communications Technology,
the National Computer Center, the National Statistical and Coordination Board, the National Statistics
Office and other government agencies concerned with overseas employment shall be established to
implement a shared government information system for migration. The interagency committee shall
initially make available to itself the information contained in existing data bases/files. The second phase
shall involve linkaging of computer facilities on order to allow free-flow data exchanges and sharing
among concerned agencies.

"The Department of Labor and Employment, the Overseas Workers Welfare Administration (OWWA),
and the Philippine Overseas Employment Administration (POEA) shall, within ninety (90) days from the
effectivity of this Act, formulate a program that would motivate migrant workers to plan for productive
options such as entry into highly technical jobs or undertakings, livelihood and entrepreneurial
development, better wage employment, and investment of savings.

"(a) Develop and support programs and projects for livelihood, entrepreneurship, savings,
investments and financial literacy for returning Filipino migrant workers and their families in
coordination with relevant stakeholders, service providers and international organizations;
"(b) Coordinate with appropriate stakeholders, service providers and relevant international
organizations for the promotion, development and the full utilization of overseas Filipino
worker returnees and their potentials;
"(c) Institute, in cooperation with other government agencies concerned, a computer-based
information system on returning Filipino migrant workers shall be accessible to all local
recruitment agencies and employers, both public and private;
"(d) Proved a periodic study and assessment of job opportunities for returning Filipino migrant
workers;
"(e) Develop and implement other appropriate programs to promote the welfare of returning
Filipino migrant workers;

"The inter-agency committee shall be co-chaired by the Department of Foreign Affairs and the
Department of Labor and Employment. The National Computer Center shall provide the necessary
technical assistance and shall set the appropriate information and communications technology
standards to facilitate the sharing of information among the member agencies.
"The inter-agency committee shall meet regularly to ensure the immediate and full implementation of
this section and shall explore the possibility setting up a central storage facility for the data on

migration. The progress of the implementation of this section shall be include in the report to Congress
of the Department of Foreign Affairs and the Department of Labor and Employment under Section 33.
"The inter-agency committee shall convene to identify existing data bases which shall be declassified
and shared among member agencies. These shared data bases shall initially include, but not be limited
to, the following information:
"(a) Masterlists of Filipino migrant workers/overseas Filipino classified according to
occupation/job category, civil status, by country/state of destination including visa
classification;
"(b) Inventory of pending legal cases involving Filipino migrant workers and other Filipino
nationals, including those serving prison terms;
"(c) Masterlists of departing/arriving Filipinos;
"(d) Statistical profile on Filipino migrant workers/overseas Filipinos/tourists;
"(e) Blacklisted foreigners/undesirable aliens;
"(f) Basic data on legal systems, immigration policies, marriage laws and civil and criminal
codes in receiving countries particularly those with large numbers of Filipinos;
"(g) List of Labor and other human rights instruments where receiving countries are
signatories;
"(h) A tracking system of past and present gender disaggregated cases involving male and
female migrant workers, including minors; and
"(i) Listing of overseas posts which may render assistance to overseas Filipinos, in general,
and migrant workers, in particular."
Section 14. Subparagraph (b.1) of paragraph (b) of Section 23 of Republic Act No. 8042, as amended,
is hereby amended to read as follows:

"(b.1) Philippine Overseas Employment Administration. - The Administration shall regulate private
sector participation in the recruitment and overseas placement of workers by setting up a licensing and
registration system. It shall also formulate and implement, in coordination with appropriate entities
concerned, when necessary, a system for promoting and monitoring the overseas employment of
Filipino workers taking into consideration their welfare and the domestic manpower requirements. It
shall be responsible for the regulation and management of overseas employment from the preemployment stage, securing the best possible employment terms and conditions for overseas Filipino
workers, and taking into consideration the needs of vulnerable sectors and the peculiarities of seabased and land-based workers. In appropriate cases, the Administration shall allow the lifting of
suspension of erring recruitment/manning agencies upon the payment of fine of Fifty thousand pesos
(P50,000.00) for every month of suspension.
"in addition to its powers and functions, the Administration shall inform migrant workers not only of their
rights as workers but also of their rights as human beings, instruct and guide the workers how to assert
their rights and provide the available mechanism to redress violation of their rights. It shall also be
responsible for the implementation, in partnership with other law-enforcement agencies, of an
intensified program against illegal recruitment activities. For this purpose, the POEA shall provide
comprehensive Pre-Employment Orientation Seminars (PEOS) that will discuss topics such as
prevention of illegal recruitment and gender-sensitivity.
"The Administration shall not engage in the recruitment and placement of overseas workers except on a
government-to-government arrangement only.
"In the recruitment and placement of workers to service the requirements for trained and competent
Filipino workers of foreign governments and their instrumentalitys, and such other employers as public
interests may require, the Administration shall deploy only to countries where the Philippine has
conclude bilateral labor agreements or arrangements: Provided, That such countries shall guarantee to
protect the rights of Filipino migrant workers; and Provided, further, That such countries shall observe
and/or comply with the international laws and standards for migrant workers."
Section 15. Sub-paragraph (b.2) of Paragraph (b) of Section 23 of Republic Act No. 8042, as
amended, is hereby amended to read as follows:
"(b.2) Overseas Workers Welfare Administration. - The Welfare officer of in his absence, the
coordinating officer shall provide the Filipino migrant worker and his family all the assistance they may
need in the enforcement of contractual obligations by agencies or entities and/or by their principals. In
the performance of this function, he shall make representation and may call on the agencies or entities
concerned to conferences or conciliation meetings for the purpose of settling the compliance or
problems brought to his attention. The OWWA shall likewise formulate and implement welfare programs
for overseas Filipino workers and their families while they are abroad and upon their return. It shall
ensure the awareness by the overseas Filipino workers and their families of these programs and other
related governmental programs.
"In the repatriation of workers to be undertaken by OWWA, the latter shall be authorized to pay
repatriation-related expenses, such as fines or penalties, subject to such guidelines as the OWWA
Board of Trustees may prescribe."

Section 16. Under Section 23 of Republic Act No. 8042, as amended, add new paragraphs (c) and (d)
with their corresponding subparagraphs to read as follows:

penalty is without prejudice to any other liability which he or she may have incurred under existing laws,
rules or regulations.

"(c) Department of Health. - The Department of Health (DOH) shall regulate the activities and
operations of all clinics which conduct medical, physical, optical, dental, psychological and other similar
examinations, hereinafter referred to as health examinations, on Filipino migrant workers as
requirement for their overseas employment. Pursuant to this, the DOH shall ensure that:

"(d) Local Government Units. - In the fight against illegal recruitment, the local government units
(LGUs), in partnership with the POEA, other concerned government agencies , and non-government
organizations advocating the rights and welfare of overseas Filipino workers, shall take a proactive
stance by being primarily responsible for the dissemination of information to their constituents on all
aspects of overseas employment. To carry out this task, the following shall be undertaken by the LGUs:

" (c.1) The fees for the health examinations are regulated, regularly monitored and duly
published to ensure that the said fees are reasonable and not exorbitant;
" (c.2) The Filipino migrant worker shall only be required to undergo health examinations
when there is reasonable certainty that he or she will be hired and deployed to the jobsite
and only those health examinations which are absolutely necessary for the type of job applied
for or those specifically required by the foreign employer shall be conducted;
" (c.3) No group or groups of medical clinics shall have a monopoly of exclusively conducting
health examinations on migrant workers for certain receiving countries;
" (c.4) Every Filipino migrant worker shall have the freedom to choose any of the DOHaccredited or DOH-operated clinics that will conduct his/her health examinations and that his
or her rights as a patient are respected. The decking practice, which requires an overseas
Filipino worker to go first to an office for registration and then farmed out to a medical clinic
located elsewhere, shall not be allowed;
" (c.5) Within a period of three (3) years from the effectivity of this Act, all DOH regional
and/or provincial hospitals shall establish and operate clinics that can be serve the health
examination requirements of Filipino migrant workers to provide them easy access to such
clinics all over the country and lessen their transportation and lodging expenses and
" (c.6) All DOH-accredited medical clinics, including the DOH-operated clinics, conducting
health examinations for Filipino migrant workers shall observe the same standard operating
procedures and shall comply with internationally-accepted standards in their operations to
conform with the requirements of receiving countries or of foreign employers/principals.
"Any Foreign employer who does not honor the results of valid health examinations conducted by a
DOH-accredited or DOH-operated clinic shall be temporarily disqualified from the participating in the
overseas employment program, pursuant to POEA rules and regulations.
"In case an overseas Filipino worker is found to be not medically fit upon his/her immediate arrival in
the country of destination, the medical clinic that conducted the health examination/s of such overseas
Filipino worker shall pay for his or her repatriation back to the Philippines and the cost of deployment of
such worker.
"Any government official or employee who violates any provision of this subsection shall be removed or
dismissed from service with disqualification to hold any appointive public office for five(5) years. Such

"(d.1) Provide a venue for the POEA, other concerned government agencies and nongovernment organizations to conduct PEOS to their constituents on a regular basis;
"(d.2) Establish overseas Filipino worker help desk or kiosk in their localities with the
objective of providing current information to their constituents on all the processes aspects of
overseas employment. Such desk or kiosk shall, as be linked to the database of all
concerned government agencies, particularly the POEA for its updated lists of overseas job
orders and licensed recruitment agencies in good standing."
Section 17. Subparagraph ( c ) of Section of Republic Act No. 8042, as amended, is hereby amended
to read as follows:
"( c ) To tap the assistance of reputable law firms, the Integrated Bar of the Philippines, other bar
associations and other government legal experts on overseas Filipino worker laws to complement the
government's efforts to provide legal assistance to our migrant workers;"
Section 18. Section 25 of Republic Act No. 8042, as amended, is hereby amended to read as follows:
"SEC. 25. Legal Assistance Fund. - There is herby established a legal assistance fund for migrant
workers, hereinafter referred to as the Legal Assistance Fund, in the amount of one hundred million
pesos (P100,000,000.00) to be constituted from the following sources.
"Fifty million pesos (50,000,000.00) from the Contingency Fund of the President;
"Thirty million pesos (30,000,000.00) from the Contingency Fund of the President Social Fund;
"Twenty million pesos (20,000,000.00) from the Welfare Fund for Overseas Workers established under
Letter of Instructions No. 537 as amended by Presidential Decree Nos. 1694 and 1809; and
"An amount appropriated in the annual General Appropriations Act (GAA) which shall not be less than
Thirty million pesos (30,000,000.00) per year: Provided, that the balance of the Legal Assistance Fund
(LAF) including the amount appropriated for the year shall not be less than One hundred million pesos
(P100,000,000.00) : Provided, further, That the fund shall be treated as a special fund in the National
Treasury and its balance, including the amount appropriated in the GAA, which shall form part of the
Fund, shall not revert to the General Fund.

" Any balances of existing funds which have been set aside by the government specifically as legal
assistance or defense fund to help migrant workers shall upon effectivity of this Act, be turned over to,
and form part of, the Fund created under this Act."

"(d) A final list of all the nominees selected by the OWWA/POEA governing boards, which
shall consist of three(3) names for each sector to be represented, shall be submitted to the
President and published in a newspaper of general circulation;

Section 19. Section 26 of Republic Act No. 8042, as amended, is hereby amended to read as follows:

"Within thirty (30) days from the submission of the list, the President shall select and appoint from the
list, the representatives to the POEA/OWWA governing boards.

"SEC. 26. Uses of the Legal Assistance Fund. - The Legal Assistance Fund created under the
preceding section shall be used exclusively6 to provide legal services to migrant workers and overseas
Filipinos in distress in accordance with the guidelines, criteria and procedures promulgated in
accordance with Section 24 ( a ) herof. The expenditures to be charged against the Fund shall include
the fees for the foreign lawyers to be hired by the Legal Assistant for Migrant Workers Affairs to
represent migrant workers facing charges or in filing cases against erring or abusive employers abroad,
bail bonds to secure the temporary releases and other litigation expenses: Provided, That at the end of
every year, the Department of Foreign Affairs shall include in its report to Congress, as provided for
under Section 33 of this Act, the status of the Legal Assistance Fund, including the expenditures from
the said fund duly audited by the Commission on Audit (COA): Provided, further,That the hiring of
foreign legal counsels, when circumstances warrant urgent action, shall be exempt from the coverage
of Republic Act No. 9184 or the Government Procurement Act."
Section 20. Section 32 of Republic Act No. 8042, as amended, is hereby amended to read as follows:
"SEC. 32. POEA, OWWA and other Boards; Additional Memberships. - Notwithstanding any provision
of law to the contrary, the respective Boards of the POEA and the OWWA shall, in addition to their
present composition, have three (3) members each who shall come from the women, sea-based and
land-based sectors respectively, to be selected and nominated openly by the general membership of
the sector being represented.
" The selection and nomination of the additional members from the women, sea-based and land-based
sectors shall be governed by the following guidelines:
"(a) The POEA and the OWWA shall launch a massive information campaign on the selection
of nominees and provide for a system of consultative sessions for the certified leaders or
representatives of the concerned sectors, at least three (3) times, within ninety (90) days
before the boards shall be convened, for purposes of selection. The process shall be open,
democratic and transparent;
"(b) Only non-government organizations that protect and promote the rights and welfare of
overseas Filipino workers, duly registered with the appropriate Philippine government agency
and in good standing as such, and in existence for at least three (3) years prior to the
nomination shall be qualified to nominate a representative for each sector to the Board;
"(c) The nominee must be at least twenty-five (25) years of age, able to read and write, and a
migrant worker at the time of his or her nomination or was a migrant worker with at least three
(3) years experience as such; and

"The additional members shall have a term of three (3) years and shall be eligible for reappointment for
another three (3) years. In case of vacancy, the President shall in accordance with the provisions of this
Act, appoint a replacement who shall serve the unexpired term of his or her predecessor.
"Any executive issuances or orders issued that contravene the provisions of this section shall have no
force and effect.
"All other government agencies and government-owned or controlled corporations which require at
least one (1) representative from the overseas workers sector to their respective boards shall follow all
the applicable provisions of this section."
Section 21. The first and last paragraph of Section 33 of Republic Act No. 8042, as amended, is
hereby amended to read as follows:
"SEC. 33. Report to Congress. - In order to inform the Philippine Congress on the implementation of the
policy enunciated in Section 4 hereof, the Department of Foreign Affairs and the Department of Labor
and Employment shall submit separately to the said body a semi-annual report of Philippine foreign
posts located in countries hosting Filipino migrant workers. The mid-year report covering the period
January to June shall be submitted not later than October 31 of the same year while the year-end
report covering the period July to December shall be submitted not later than May 31 of the following
year. The report shall include, but shall not limited to, the following information:
"xxx
" Any officer of the government who fails to submit the report as stated in this section shall be subject to
an administrative penalty of dismissal from the service with disqualification to hold any appointive public
office for five (5) years."
Section 22. Section 35 of Republic Act No. 8042, as amended, is hereby amended to read as follows:
SEC. 35. Exemption from Travel Tax Documentary Stamp and Airport Fee. - All laws to the contrary
notwithstanding, the migrant workers shall be exempt from the payment of travel tax and airport-fee
upon proper showing of proof entitlement by the POEA.
"The remittances of all overseas Filipino workers, upon showing of the same proof of entitlement by the
overseas Filipino worker's beneficiary or recipient, shall be exempt from the payment of documentary
stamp tax.

Section 23. A new Section 37-A. of Replublic Act No. 8042, as amended, is hereby added to read as
follows:
"SEC. 37-A. Compulsory Insurance Coverage for Agency-Hired Workers. - In addition to the
performance bond to be filed by the recruitment/manning agency under Section 10, each migrant
worker deployed by a recruitment/manning agency shall be covered by a compulsory insurance policy
which shall be secured at no cost to the said worker. Such insurance policy shall be effective for the
duration of the migrant worker's employment and shall cover, at the minimum:
"(a) Accidental death, with at least Fifteen thousand United States dollars (US$10,000.00)
survivor's benefit payable to the migrant worker's beneficiaries;
"(c) Permanent total disablement, with at least Seven thousand five hundred United States
dollars (US$7,500.00) disability benefit payable to the migrant worker. The following
disabilities shall be deemed permanent: total, complete loss of sight of both eyes; loss of
two(2) limbs at or above the ankles or wrists; permanent complete paralysis of two (2) limbs;
brain injury resulting to incurable imbecility or insanity;
"(d) Repatriation cost of the worker when his/her employment is terminated without any valid
cause, including the transport of his or her personal belongings. In case of death, the
insurance provider shall arrange and pay for the repatriation or return of the worker's
remains. The insurance provider shall also render any assistance necessary in the transport
including, but not limited to, locating a local licensed funeral home, mortuary or direct
disposition facility to prepare the body for transport, completing all documentation, obtaining
legal clearances, procuring consular services, providing necessary casket or air transport
container, as well as transporting the remains including retrieval from site of death and
delivery to the receiving funeral home;
"(e) Subsistence allowance benefit, with at least One hundred United States dollars
(US$100.00) Per month for a maximum of six (6) months for a migrant worker who is involved
in a case or litigation for the protection of his/her rights in the receiving country;
"(f) Money claims arising from employer's liability which may be awarded or given to the
worker in a judgment or settlement of his or her case in the NLRC. The insurance coverage
for money claims shall be equivalent to at least three (3) months for every year of the migrant
worker's employment contract;
"In addition to the above coverage, the insurance policy shall also include:
"(g) Compassionate visit. When a migrant worker is hospitalized and has been confined for at
least seven (7) consecutive days, he shall be entitled to a compassionate visit by one (1)
family member or a requested individual. The insurance company shall pay for the
transportation cost of the family member or requested individual to the major airport closest to
the place of hospitalization of the worker. It is, however, the responsibility of the family
member or requested individual to meet all visa and travel document requirements;

"(h) Medical evacuation. When an adequate medical facility is not available proximate to the
migrant worker, as determined by the insurance company's physician and/or a consulting
physician, evacuation under appropriate medical supervision by the mode of transport
necessary shall be undertaken by the insurance provider; and
"(i) Medical repatriation. When medically necessary as determined by the attending
physician, repatriation under medical supervision to the migrant worker's residence shall be
undertaken by the insurance provider at such time that the migrant worker is medically
cleared for travel by commercial carrier. If the period to receive medical clearance to travel
exceeds fourteen (14) days from the date of discharge from the hospital, an alternative
appropriate mode of transportation, such as air ambulance, may be arranged. Medical and
non-medical escorts may be provided when necessary.
"Only reputable private insurance companies duly registered with the Insurance Commission (IC) ,
which are in existence and operational for at least Five hundred million pesos (P500,000,000.00) to be
determined by the IC, and with a current year certificate of authority shall be qualified to provide for the
worker's insurance coverage. Insurance companies who have directors, partners, officers, employees
or agents with relatives, within the fourth civil degree of consanguinity or affinity, who work or have
interest in any of the licensed recruitment/manning agencies or in any of the government agencies
involved in the overseas employment program shall be disqualified from providing this workers'
insurance coverage.
"The recruitment/manning agency shall have the right to choose from any of the qualified insurance
providers the company that will insure the migrant worker it will deploy. After procuring such insurance
policy, the recruitment/manning agency shall provide an authenticated copy thereof to the migrant
worker. It shall then submit the certificate of insurance coverage of the migrant worker to POEA as a
requirement for the issuance of an Overseas Employment Certificate (OEC) to the migrant worker. In
the case of seafarers who are insured under policies issued by foreign insurance companies, the POEA
shall accept certificates or other proofs of cover from recruitment/manning agencies: Provided, That the
minimum coverage under sub-paragraphs (a) to (i) are included therein.
"Any person having a claim upon the policy issued pursuant to subparagraphs (a), (b), (c), (d) and (e) of
this section shall present to the insurance company concerned a written notice of claim together with
pertinent supporting documents. The insurance company shall forthwith ascertain the truth and extent
of the claim and make payment within ten (10) days from the filing of the notice of claim.
"Any claim arising from accidental death, natural death or disablement under this section shall be paid
by the insurance company without any contest and without the necessity of providing fault or
negligence of any kind on the part of the insured migrant worker: Provided, That the following
documents, duly authenticated by the Philippine foreign posts, shall be sufficient evidence to
substantiate the claim:
"(1) Death Certificate - In case of natural or accidental death;
"(2) Police or Accident Report - In case of accidental death; and
"(3) Medical Certificate - In case of permanent disablement;

"For repatriation under subparagraph (d) hereof, a certification which states the reason/s for the
termination of the migrant worker's employment and the need for his or her repatriation shall be issued
by the Philippine foreign post or the Philippine Overseas Labor Office (POLO) located in the receiving
country.
"For subsistence allowance benefit under subparagraph (e), the concerned labor attach or, in his
absence, the embassy or consular official shall issue a certification which states the name of the case,
the names of the parties and the nature of the cause of action of the migrant worker.
"For the payment of money claims under subparagraph (f), the following rules shall govern:
"(1) After a decision has become final and executor or a settlement/compromise agreement
has been reached between the parties at the NLRC, an order shall be released mandating
the respondent recruitment/manning agency to pay the amount adjudged or agreed upon
within thirty (30) days;
"(2) The recruitment/manning agency shall then immediately file a notice of claim with its
insurance provider for the amount of liability insured, attaching therewith a copy of the
decision or compromise agreement;
"(3) Within ten (10) days from the filing of notice of claim, the insurance company shall make
payment to the recruitment/manning agency the amount adjudged or agreed upon, or the
amount of liability insured, whichever is lower. After receiving the insurance payment, the
recruitment/manning agency shall immediately pay the migrant worker's claim in full, taking
into account that in case the amount of insurance coverage is insufficient to satisfy the
amount adjudged or agreed upon, it is liable to pay the balance thereof;
"(4) In case the insurance company fails to make payment within ten (10) days from the filing
of the claim, the recruitment/ manning agency shall pay the amount adjudged or agreed upon
within the remaining days of the thirty (30)-day period, as provided in the first subparagraph
hereof;
"(5) If the worker's claim was not settled within the aforesaid thirty (30)-day period, the
recruitment/manning agency's performance bond or escrow deposit shall be forthwith
garnished to satisfy the migrant worker's claim;
"(6) The provision of compulsory worker's insurance under this section shall not affect the
joint and solidary liability of the foreign employer and the recruitment/manning agency under
Section 10;
"(7) Lawyers for the insurance companies, unless the latter is impleaded, shall be prohibited
to appear before the NLRC in money claims cases under this section.
"Any question or dispute in the enforcement of any insurance policy issued under this section shall be
brought before the IC for mediation or adjudication.

"In case it is shown by substantial evidence before the POEA that the migrant worker who was
deployed by a licensed recruitment/manning agency has paid for the premium or the cost of the
insurance coverage or that the said insurance coverage was used as basis by the recruitment/manning
agency to claim any additional fee from the migrant worker, the said licensed recruitment/manning
agency shall lose its license and all its directors, partners, proprietors, officers and employees shall be
perpetually disqualified from engaging in the business of recruitment of overseas workers. Such penalty
is without prejudice to any other liability which such persons may have incurred under existing laws,
rules or regulations.
"For migrant workers recruited by the POEA on a government-to-government arrangement, the POEA
shall establish a foreign employers guarantee fund which shall be answerable to the workers' monetary
claims arising from breach of contractual obligations. For migrant workers classified as rehires, name
hires or direct hires, they may opt to be covered by this insurance coverage by requesting their foreign
employers to pay for the cost of the insurance coverage or they may pay for the premium themselves.
To protect the rights of these workers, the POEA shall provide them adequate legal assistance,
including conciliation and mediation services, whether at home or abroad.
"At the end of every year, the Department of Labor and Employment and the IC shall jointly make an
assessment of the performance of all insurance providers, based upon the report of the NLRC and the
POEA on their respective interactions and experiences with the insurance companies, and they shall
have the authority to ban or blacklist such insurance companies which are known to be evasive or not
responsive to the legitimate claims of migrant workers. The Department of Labor and Employment shall
include such assessment in its year-end report to Congress.
"For purposes of this section, the Department of Labor and Employment, IC, NLRC and the POEA, in
consultation with the recruitment/manning agencies and legitimate non-government organizations
advocating the rights and welfare of overseas Filipino workers, shall formulate the necessary
implementing rules and regulations.
"The foregoing provisions on compulsory insurance coverage shall be subject to automatic review
through the Congressional Oversight Committee immediately after three (3) years from the effectivity of
this Act in order to determine its efficacy in favor of the covered overseas Filipino workers and the
compliance by recruitment/manning agencies and insurance companies, without prejudice to an earlier
review if necessary and warranted for the purpose of modifying, amending and/or repealing these
subject provisions.
Section 24. A new Section 37-B of Republic Act No. 8042, as amended, is hereby added to read as
follows:
"Sec. 37-B. Congressional Oversight Committee. - There is hereby created a Joint Congressional
Oversight Committee composed of five (5) Senators and five (5) Representatives to be appointed by
the Senate President and the Speaker of the House of Representatives, respectively. The Oversight
Committee shall be co-chaired by the chairpersons of the Senate Committee on Labor and
Employment and the House of Representatives Committee on Overseas Workers Affairs. The Oversight
Committee shall have the following duties and functions:

"(a) To set the guidelines and overall framework to monitor and ensure the proper
implementation of Republic Act No. 8042, as amended, as well as all programs, projects and
activities related to overseas employment;
"(b) To ensure transparency and require the submission of reports from concerned
government agencies on the conduct of programs, projects and policies relating to the
implementation of Republic Act No. 8042, as amended;
"(c) To approve the budget for the programs of the Oversight Committee and all
disbursements therefrom, including compensation of all personnel;
"(d) To submit periodic reports to the President of the Philippines and Congress on the
implementation of the provisions of Republic Act No. 8042, as amended;
"(e) To determine weaknesses in the law and recommend the necessary remedial legislation
or executive measures; and
"(f) To perform such other duties, functions and responsibilities as may be necessary to attain
its objectives.
"The Oversight Committee shall adopt its internal rules of procedure, conduct hearings and receive
testimonies, reports, and technical advice, invite or summon by subpoena ad testificandum any public
official or private citizen to testify before it, or require any person by subpoena duces tecumdocuments
or other materials as it may require consistent with the provisions of Republic Act No. 8042, as
amended.
"The Oversight Committee shall organize its staff and technical panel, and appoint such personnel,
whether on secondment from the Senate and the House of Representatives or on temporary,
contractual, or on consultancy, and determine their compensation subject to applicable civil service
laws, rules and regulations with a view to ensuring a competent and efficient secretariat.
"The members of the Oversight Committee shall not receive additional compensation, allowances or
emoluments for services rendered thereto except traveling, extraordinary and other necessary
expenses to attain its goals and objectives.
"The Oversight Committee shall exist for a period of ten (10) years from the effectivity of this Act and
may be extended by a joint concurrent resolution."
Section 25. Implementing Rules and Regulations. - The departments and agencies charged with
carrying out the provisions of this Act, except as otherwise provided herein, in consultation with the
Senate Committee on Labor and Employment and the House of Representatives Committee on
Overseas Workers Affairs, shall, within sixty (60) days after the effectivity of this Act, formulate the
necessary rules and regulations for its effective implementation.
Section 26. Funding. - The departments, agencies, instrumentalities, bureaus, offices and governmentowned and controlled corporations charged with carrying out the provisions of this Act shall include in

their respective programs the implementation of this Act, the funding of which shall be included in the
General Appropriations Act. The Congressional Oversight Committee on Overseas Workers Affairs shall
have the sum of Twenty-five million pesos (P25,000,000.00), half of which shall be charged against the
current appropriations of the Senate while the other half shall be charged against the current
appropriations of the House of Representatives, to carry out its powers and functions for its initial
operations and for fiscal years wherein the General Appropriations Act is reenacted and no provision for
its continued operation is included in such Act. Thereafter, such amount necessary for its continued
operations shall be included in the annual General Appropriations Act.
Section 27. Separability Clause. - If, for any reason, may portion of this Act is declared unconstitutional
or invalid, the same shall not affect the validity of the other provisions not affected thereby.
Section 28. Repealing Clause. - All laws, decrees, executive orders, issuances, rules and regulations
or parts thereof inconsistent with the provisions of this Act are hereby repealed or modified accordingly.
Section 29. Effectivity. - This Act shall take effect fifteen (15) days after its publication in at least two (2)
newspapers of general circulation.
Approved,