THIRD DIVISION

SUNACE INTERNATIONAL
MANAGEMENT SERVICES, INC.
Petitioner,

G.R. No. 161757
Present:
QUISUMBING, J., Chairperson,
CARPIO,
CARPIO MORALES, and
TINGA, JJ.

- versus NATIONAL LABOR RELATIONS COMMISSION,
Second Division;HON. ERNESTO S. DINOPOL, in
his capacity as Labor Arbiter, NLRC; NCR,
Arbitration Branch, Quezon City and DIVINA A.
MONTEHERMOZO,
Respondents.

Promulgated:
January 25, 2006
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DECISION
CARPIO MORALES, J.:

Petitioner, Sunace International Management Services (Sunace), a corporation duly organized and existing under the
laws of thePhilippines, deployed to Taiwan Divina A. Montehermozo (Divina) as a domestic helper under a 12-month
contract effective February 1, 1997.[1] The deployment was with the assistance of a Taiwanese broker, Edmund Wang,
President of Jet Crown International Co., Ltd.
After her 12-month contract expired on February 1, 1998, Divina continued working for her Taiwanese employer,
Hang Rui Xiong, for two more years, after which she returned to the Philippines on February 4, 2000.
Shortly after her return or on February 14, 2000, Divina filed a complaint[2] before the National Labor Relations
Commission (NLRC) against Sunace, one Adelaide Perez, the Taiwanese broker, and the employer-foreign principal alleging
that she was jailed for three months and that she was underpaid.
The following day or on February 15, 2000, Labor Arbitration Associate Regina T. Gavin issued Summons [3] to the
Manager of Sunace, furnishing it with a copy of Divinas complaint and directing it to appear for mandatory conference on
February 28, 2000.
The scheduled mandatory conference was reset. It appears to have been concluded, however.
On April 6, 2000, Divina filed her Position Paper [4] claiming that under her original one-year contract and the 2-year
extended contract which was with the knowledge and consent of Sunace, the following amounts representing income tax and
savings were deducted:
Year

Deduction for
Income Tax

Deduction for Savings

1997
1998
1999

NT10,450.00
NT9,500.00
NT13,300.00

NT23,100.00
NT36,000.00
NT36,000.00;[5]

and while the amounts deducted in 1997 were refunded to her, those deducted in 1998 and 1999 were not. On even date,
Sunace, by its Proprietor/General Manager Maria Luisa Olarte, filed its Verified Answer and Position Paper, [6] claiming as
follows, quoted verbatim:
COMPLAINANT IS NOT ENTITLED
FOR THE REFUND OF HER 24 MONTHS
SAVINGS
3. Complainant could not anymore claim nor entitled for the refund of her 24 months savings as she already took
back her saving already last year and the employer did not deduct any money from her salary, in accordance
with a Fascimile Message from the respondent SUNACEs employer, Jet Crown International Co. Ltd., a
xerographic copy of which is herewith attached as ANNEX 2 hereof;
COMPLAINANT IS NOT ENTITLED
TO REFUND OF HER 14 MONTHS TAX
AND PAYMENT OF ATTORNEYS FEES
4. There is no basis for the grant of tax refund to the complainant as the she finished her one year contract and
hence, was not illegally dismissed by her employer. She could only lay claim over the tax refund or much
more be awarded of damages such as attorneys fees as said reliefs are available only when the dismissal of
a migrant worker is without just valid or lawful cause as defined by law or contract.
The rationales behind the award of tax refund and payment of attorneys fees is not to enrich the complainant but to
compensate him for actual injury suffered. Complainant did not suffer injury, hence, does not deserve to be
compensated for whatever kind of damages.
Hence, the complainant has NO cause of action against respondent SUNACE for monetary claims, considering that
she has been totally paid of all the monetary benefits due her under her Employment Contract to her full
satisfaction.
6.
Furthermore, the tax deducted from her salary is in compliance with the Taiwanese law,
which respondent SUNACE has no control and complainant has to obey and this Honorable Office has no
authority/jurisdiction to intervene because the power to tax is a sovereign power which the Taiwanese
Government is supreme in its own territory. The sovereign power of taxation of a state is recognized under
international law and among sovereign states.

7. That respondent SUNACE respectfully reserves the right to file supplemental Verified Answer and/or Position
Paper to substantiate its prayer for the dismissal of the above case against the herein respondent. AND BY
WAY OF x x x x (Emphasis and underscoring supplied)
Reacting to Divinas Position Paper, Sunace filed on April 25, 2000 an . . . ANSWER TO COMPLAINANTS POSITION
PAPER[7] alleging that Divinas 2-year extension of her contract was without its knowledge and consent, hence, it had no
liability attaching to any claim arising therefrom, and Divina in fact executed a Waiver/Quitclaim and Release of
Responsibility and an Affidavit of Desistance, copy of each document was annexed to said . . . ANSWER TO COMPLAINANTS
POSITION PAPER.
To Sunaces . . . ANSWER TO COMPLAINANTS POSITION PAPER, Divina filed a 2-page reply,[8] without, however, refuting
Sunaces disclaimer of knowledge of the extension of her contract and without saying anything about the Release, Waiver and
Quitclaim and Affidavit of Desistance.

The Labor Arbiter, rejected Sunaces claim that the extension of Divinas contract for two more years was without its
knowledge and consent in this wise:
We reject Sunaces submission that it should not be held responsible for the amount
withheld because her contract was extended for 2 more years without its knowledge and consent
because as Annex B[9] shows, Sunace and Edmund Wang have not stopped communicating with
each otherand yet the matter of the contracts extension and Sunaces alleged non-consent thereto
has not been categorically established.
What Sunace should have done was to write to POEA about the extension and its
objection thereto, copy furnished the complainant herself, her foreign employer, Hang Rui Xiong
and the Taiwanese broker, Edmund Wang.
And because it did not, it is presumed to have consented to the extension and should be
liable for anything that resulted thereform (sic).[10](Underscoring supplied)
The Labor Arbiter rejected too Sunaces argument that it is not liable on account of Divinas execution of a Waiver and
Quitclaim and an Affidavit of Desistance. Observed the Labor Arbiter:
Should the parties arrive at any agreement as to the whole or any part of the dispute, the same shall
be reduced to writing and signed by the parties and their respective counsel (sic), if any, before the Labor
Arbiter.
The settlement shall be approved by the Labor Arbiter after being satisfied that it was voluntarily
entered into by the parties and after having explained to them the terms and consequences thereof.
A compromise agreement entered into by the parties not in the presence of the Labor Arbiter
before whom the case is pending shall be approved by him, if after confronting the parties, particularly the
complainants, he is satisfied that they understand the terms and conditions of the settlement and that it was
entered into freely voluntarily (sic) by them and the agreement is not contrary to law, morals, and public
policy.
And because no consideration is indicated in the documents, we strike them down as contrary to
law, morals, and public policy.[11]

He accordingly decided in favor of Divina, by decision of October 9, 2000,[12] the dispositive portion of which reads:
Wherefore, judgment is hereby rendered ordering respondents SUNACE INTERNATIONAL
SERVICES and its owner ADELAIDA PERGE, both in their personal capacities and as agent of Hang Rui
Xiong/Edmund Wang to jointly and severally pay complainant DIVINA A. MONTEHERMOZO the sum
of NT91,950.00 in its peso equivalent at the date of payment, as refund for the amounts which she is hereby
adjudged entitled to as earlier discussed plus 10% thereof as attorneys fees since compelled to litigate,
complainant had to engage the services of counsel.
SO ORDERED.[13] (Underescoring supplied)

On appeal of Sunace, the NLRC, by Resolution of April 30, 2002,[14] affirmed the Labor Arbiters decision.
Via petition for certiorari,[15] Sunace elevated the case to the Court of Appeals which dismissed it outright by
Resolution of November 12, 2002,[16] the full text of which reads:
The petition for certiorari faces outright dismissal.
The petition failed to allege facts constitutive of grave abuse of discretion on the part of the public
respondent amounting to lack of jurisdiction when the NLRC affirmed the Labor Arbiters finding that
petitioner Sunace International Management Services impliedly consented to the extension of the contract

of private respondent Divina A. Montehermozo. It is undisputed that petitioner was continually
communicating with private respondents foreign employer(sic). As agent of the foreign principal, petitioner
cannot profess ignorance of such extension as obviously, the act of the principal extending
complainant(sic) employment contract necessarily bound it. Grave abuse of discretion is not present in
the case at bar.
ACCORDINGLY, the petition is hereby DENIED DUE COURSE and DISMISSED.[17]
SO ORDERED.
(Emphasis on words in capital letters in the original; emphasis on words in small letters and
underscoring supplied)

Its Motion for Reconsideration having been denied by the appellate court by Resolution of January 14, 2004, [18] Sunace filed
the present petition for review on certiorari.
The Court of Appeals affirmed the Labor Arbiter and NLRCs finding that Sunace knew of and impliedly consented
to the extension of Divinas 2-year contract. It went on to state that It is undisputed that [Sunace] was continually
communicating with [Divinas] foreign employer. It thus concluded that [a]s agent of the foreign principal, petitioner cannot
profess ignorance of such extension as obviously, the act of the principal extending complainant (sic) employment contract
necessarily bound it.
Contrary to the Court of Appeals finding, the alleged continuous communication was with the
Taiwanese broker Wang, not with the foreign employer Xiong.
The February 21, 2000 telefax message from the Taiwanese broker to Sunace, the only basis of a finding of
continuous communication, reads verbatim:
xxxx
Regarding to Divina, she did not say anything about her saving in police station.
As we contact with her employer, she took back her saving already last years. And they
did not deduct any money from her salary. Or she will call back her employer to check it
again. If her employer said yes! we will get it back for her.

Thank you and best regards.
(sgd.)
Edmund Wang
President[19]

The finding of the Court of Appeals solely on the basis of the above-quoted telefax message, that Sunace continually
communicated with the foreign principal (sic) and therefore was aware of and had consented to the execution of the extension
of the contract is misplaced. The message does not provide evidence that Sunace was privy to the new contract executed after
the expiration on February 1, 1998 of the original contract. That Sunace and the Taiwanese broker communicated regarding
Divinas allegedly withheld savings does not necessarily mean that Sunace ratified the extension of the contract. As Sunace
points out in its Reply[20] filed before the Court of Appeals,
As can be seen from that letter communication, it was just an information given to the
petitioner that the private respondent had t[aken] already her savings from her foreign employer
and that no deduction was made on her salary. It contains nothing about the extension or the
petitioners consent thereto.[21]

In light of the foregoing discussions. not the other way around.[23]The knowledge of the principal-foreign employer cannot. Article 1924 of the New Civil Code reading The agency is revoked if the principal directly manages the business entrusted to the agent. [22] it too is a misapplication. 2009 . The theory of imputed knowledge ascribes the knowledge of the agent. consideration of the validity of the Waiver and Affidavit of Desistance which Divina executed in favor of Sunace is rendered unnecessary. As the New Civil Code provides. Contracts take effect only between the parties. The complaint of respondent Divina A. or by stipulation or by provision of law. the petition is GRANTED. after the termination of the original employment contract. their assigns.R. to the principal. 167614 March 24. No. 2000. it cannot be said to be privy thereto. except in case where the rights and obligations arising from the contract are not transmissible by their nature. the foreign principal directly negotiated with Divina and entered into a new and separate employment contract in Taiwan. Sunace. SO ORDERED. since the telefax message is dated February 21. [Sunace] cannot profess ignorance of such an extension as obviously. by Summons issued on February 15. as Sunace correctly points out. a misapplication of the theory of imputed knowledge. Montehermozo against petitioner is DISMISSED. be imputed to its agent Sunace. employer Xiong.[24] Furthermore. there was an implied revocation of its agency relationship with its foreign principal when. There being no substantial proof that Sunace knew of and consented to be bound under the 2-year employment contract extension. 2000 for a mandatory conference following Divinas filing of the complaint on February 14. As such. the act of its principal extending [Divinas] employment contract necessarily bound it. The challenged resolutions of the Court of Appeals are hereby REVERSED and SET ASIDE. WHEREFORE.Parenthetically. it is safe to assume that it was sent to enlighten Sunace who had been directed. it and its owner cannot be held solidarily liable for any of Divinas claims arising from the 2-year employment extension. thus applies. and heirs. therefore. to appear on February 28. 2000. CONCHITA CARPIO MORALES Associate Justice Republic of the Philippines SUPREME COURT Manila EN BANC G. dealing directly with third persons. Respecting the Court of Appeals following dictum: As agent of its foreign principal. 2000.

By way of Petition for Review under Rule 45 of the Rules of Court. 8042.x x x In case of termination of overseas employment without just. They have provided the dynamic human link between cultures.00 Hours of work 48.. plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term.000.00. .8 . and Marlow Navigation Co. upon the assurance and representation of respondents that he would be made Chief Officer by the end of April 1998. They have woven together the world by transmitting ideas and knowledge from country to country. but how smart public policies can magnify this effect. the last clause in the 5th paragraph of Section 10. Petitioner was hired by Gallant Maritime Services. July 10. whichever is less. Money Claims.6 Respondents did not deliver on their promise to make petitioner Chief Officer. and MARLOW NAVIGATION CO.ANTONIO M. 2005 Resolution4 of the Court of Appeals (CA).. J. Ltd. Gallant MARITIME SERVICES. DECISION AUSTRIA-MARTINEZ. whichever is less" (subject clause). Petitioner. United Nations Secretary-General Ban Ki-Moon Global Forum on Migration and Development Brussels.0 hours per week Overtime US$700. 20071 For Antonio Serrano (petitioner). INC. only recently have we begun to understand not only how much international migration impacts development. petitioner refused to stay on as Second Officer and was repatriated to the Philippines on May 26. INC.7 Hence. Inc. valid or authorized cause as defined by law or contract. x x x x (Emphasis and underscoring supplied) does not magnify the contributions of overseas Filipino workers (OFWs) to national development.00 days per month5 On March 19.: For decades. societies and economies.00 per month Vacation leave with pay 7. entreating this Court to declare the subject clause unconstitutional. Their earnings have built houses. provided health care. which applied the subject clause.400. SERRANO. the date of his departure. 2004 Decision 3 and April 1.) No. (respondents) under a Philippine Overseas Employment Administration (POEA)-approved Contract of Employment with the following terms and conditions: Duration of contract 12 months Position Chief Officer Basic monthly salary US$1. petitioner was constrained to accept a downgraded employment contract for the position of Second Officer with a monthly salary of US$1. 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. Yet. petitioner assails the December 8.. equipped schools and planted the seeds of businesses. 1998. 1998. deprives them of equal protection and denies them due process.A.2 to wit: Sec. the toil of solitary migrants has helped lift entire families and communities out of poverty. 10. a Filipino seafarer. the workers shall be entitled to the full reimbursement of his placement fee with interest of twelve percent (12%) per annum. Respondents. vs. Republic Act (R. Petitioner claims that the last clause violates the OFWs' constitutional rights in that it impairs the terms of their contract.

1998 2. leave pay 1. 01/31.590. 1/19.90 June 01/30.442. leaving an unexpired portion of nine (9) months and twenty-three (23) days. 01/31.590. 1998 Sept. 1999 (19 days) incl. 1999. 1998 (5 days) incl. 01/31.590.00 Jan.590.73. 1998.00 August 2.00 -------------------------------------------------------------------------------25.00 July 01/31.00 01/31. he had served only two (2) months and seven (7) days of his contract.590. Leave pay US$ 413.00 Nov. 1998 2. broken down as follows: May 27/31.640.23 Amoun .590.00 Oct.00 Feb. 1998 2. 1998 2. 01/28.Petitioner's employment contract was for a period of 12 months or from March 19. 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. but at the time of his repatriation on May 26. 01/30. 1998 up to March 19. 1998 2.382. 1999 2.590. 1999 2.590.00 Mar.00 Dec.590. 01/30. 1998 2.

DOLLARS (US $8. jointly and severally. premises considered. to wit: WHEREFORE.applying the subject clause. the amount of FORTY FIVE U. in Philippine Currency.00/compensation per month. 1999. in Philippine Currency. at the exchange rate prevailing at the time of payment. SO ORDERED. 1998) + --------------------------------------------------------------------------------------------TOTA L CLAI M US$ 26.00/month.590. National Labor Relations Commission17 that in case of illegal dismissal. Inc.7311 as well as moral and exemplary damages and attorney's fees. OFWs are entitled to their salaries for the unexpired portion of their contracts. vacation leave pay = US$2. based on the rate of exchange prevailing at the time of payment.S. in Philippine Currency.5010 19/31.12 representing the complainant’s claim for a salary differential.770. the complainant’s (petitioner's) claim for attorney’s fees equivalent to ten percent (10%) of the total amount awarded to the aforesaid employee under this Decision. US$1.400. consisting of petitioner's "[b]asic salary. In addition.18 . based on the rate of exchange prevailing at the time of payment."14 Respondents appealed15 to the National Labor Relations Commission (NLRC) to question the finding of the LA that petitioner was illegally dismissed.t adjuste d to chief mate's salary (March 1.rather than the entire unexpired portion of nine months and 23 days of petitioner's employment contract .00/month + US$700.1avvphi1 The respondents are likewise ordered to pay the complainant [petitioner].00. All other claims are hereby DISMISSED. the amount of EIGHT THOUSAND SEVEN HUNDRED SEVENTY U. However.770. fixed overtime pay. jointly and severally.00).13 (Emphasis supplied) In awarding petitioner a lump-sum salary of US$8. v. DOLLARS (US$ 45.442. 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. the respondents are hereby ordered to pay the complainant.060.S. + US$490.00. The LA rendered a Decision dated July 15. The claims of the complainant for moral and exemplary damages are hereby DISMISSED for lack of merit. the LA applied the salary rate of US$2.00). the LA based his computation on the salary period of three months only -.00/month. declaring the dismissal of petitioner illegal and awarding him monetary benefits. jointly and severally. representing the complainant’s salary for three (3) months of the unexpired portion of the aforesaid contract of employment. 1998 to April 1/30.590. 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].

400 x 3 US$4. the NLRC modified the LA Decision. at the prevailing rate of exchange at the time of payment the following: 1.25 His Motion for Reconsideration26 having been denied by the CA. 10% Attorney’s fees TOTAL The other findings are affirmed. which unreasonably. however.00 to US$1.19 The NLRC corrected the LA's computation of the lump-sum salary awarded to petitioner by reducing the applicable salary rate from US$2. as directed by this Court in its Resolution dated August 7. 8042. jointly and severally. in Philippine currency. 8042.22 Petitioner filed a Petition for Certiorari23 with the CA.28 US$4. to wit: WHEREFORE. the Court of Appeals gravely erred in law in excluding from petitioner’s award the overtime pay and vacation pay provided in his contract since under the contract they form part of his salary.245. .590.00 because R. but this time he questioned the constitutionality of the subject clause. and for vacation leave pay. No.27 petitioner brings his cause to this Court on the following grounds: I The Court of Appeals and the labor tribunals have decided the case in a way not in accord with applicable decision of the Supreme Court involving similar issue of granting unto the migrant worker back wages equal to the unexpired portion of his contract of employment instead of limiting it to three (3) months II In the alternative that the Court of Appeals and the Labor Tribunals were merely applying their interpretation of Section 10 of Republic Act No.400. 2. the CA skirted the constitutional issue raised by petitioner. the CA eventually gave due course to it. the CA affirmed the NLRC ruling on the reduction of the applicable salary rate."20 Petitioner filed a Motion for Partial Reconsideration.A. unfairly and arbitrarily limits payment of the award for back wages of overseas workers to three (3) months. 8042 "does not provide for the award of overtime pay. 2004.00 3. 2003 which granted the petition for certiorari. No. Respondents are hereby ordered to pay complainant. particularly. SO ORDERED. 151833. In a Decision dated December 8. docketed as G. III Even without considering the constitutional limitations [of] Sec. 10 of Republic Act No. 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. which should be proven to have been actually performed. reiterating the constitutional challenge against the subject clause.In a Decision dated June 15. Three (3) months salary $1. 2000.21 The NLRC denied the motion. Salary differential US$4. filed by petitioner.R.24 After initially dismissing the petition on a technicality. the constitutional issues raised by the petitioner on the constitutionality of said law. the Decision dated 15 July 1999 is MODIFIED.

He marks the statement made by the Solicitor General in his Memorandum.A.36 Petitioner further underscores that the insertion of the subject clause into R. Impugning the constitutionality of the subject clause. petitioner contends that. 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. the provision makes foreign employers better off than local employers because in cases involving the illegal dismissal of employees.34 Article II of the Constitution which guarantees the protection of the rights and welfare of all Filipino workers.29 Required to comment. counsel for petitioner filed a motion.590.200. Not only that.200. 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. for it deprives him of the salaries and other emoluments he is entitled to under his fixed-period employment contract.182.00. No. No. 39 . the Court now takes up the full merit of the petition mindful of the extreme importance of the constitutional question raised therein. 38 Lastly.00. What remains disputed is only the computation of the lump-sum salary to be awarded to petitioner by reason of his illegal dismissal. petitioner claims that the subject clause violates the due process clause. and he intends to make use of the monetary award for his medical treatment and medication. 35 Moreover. the subject clause sacrifices the well-being of OFWs.23. Though there are conflicting rulings on this. Likewise not disputed is the salary differential of US$45. Applying the subject clause. urging the court to allow partial execution of the undisputed monetary award and.00 awarded by the NLRC and the CA. On the other hand. the NLRC and the CA computed the lump-sum salary of petitioner at the monthly rate of US$1. 37 (Emphasis supplied) Petitioner argues that in mitigating the solidary liability of placement agencies. To protect them and to promote their continued helpful contribution in deploying Filipino migrant workers. As petitioner puts it: In terms of practical application.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. following well-entrenched and unequivocal jurisprudence on the matter. 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. computed at the monthly rate of US$2.400.33 and that it defeats Section 18. 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.23 more or a total of US$25. placement agencies.A. 32 It also impinges on the equal protection clause. On the first and second issues The unanimous finding of the LA. 8042 serves no other purpose but to benefit local placement agencies.On February 26.00 awarded to petitioner in all three fora.31 The Arguments of Petitioner Petitioner contends that the subject clause is unconstitutional because it unduly impairs the freedom of OFWs to negotiate for and stipulate in their overseas employment contracts a determinate employment period and a fixed salary package. 2008. 8042.382.: Often. liability for money claims was reduced under Section 10 of R. while setting no limit to the same monetary award for local workers when their dismissal is declared illegal. at the same time. placement agencies that are in good faith and which fulfill their obligations are unnecessarily penalized for the acts of the foreign employer. he is entitled to US$21. that the disparate treatment is not reasonable as there is no substantial distinction between the two groups. viz. in addition to the US$4. foreign employers are liable for salaries covering a maximum of only three months of the unexpired employment contract while local employers are liable for the full lump-sum salaries of their employees.30 Considering that the parties have filed their respective memoranda. equivalent to his salaries for the entire nine months and 23 days left of his employment contract. whether deployed locally or overseas. the local employers are not limited to the amount of backwages they have to give their employees they have illegally dismissed. petitioner wrote the Court to withdraw his petition as he is already old and sickly. petitioner urges the Court to sort them out for the guidance of affected OFWs. NLRC and CA that the dismissal of petitioner was illegal is not disputed. praying that the constitutional question be resolved. their liability being solidary.

8042 is to be applied and to resolving such questions in accordance with the standards laid down by the law itself. The CA. and second.53 and reiterated in his Petition forCertiorari before the CA. No.52 Records disclose that the issue on the constitutionality of the subject clause was first raised. Hence.44 OFWs are contractual employees who can never acquire regular employment status. for this was belatedly interposed by petitioner in his appeal before the CA. Rather.The Arguments of Respondents In their Comment and Memorandum. over whom it is difficult for our courts to acquire jurisdiction. When the Court is called upon to exercise its power of judicial review of the acts of its co-equals. such that. its provisions could not have impaired petitioner's 1998 employment contract. The CA was therefore remiss in failing to take up the issue in its decision.40 The Arguments of the Solicitor General The Solicitor General (OSG)41 points out that as R. such as the subject clause. OFWs perform their jobs for foreign employers. is vested with the power of judicial review or the power to declare unconstitutional a law or a provision thereof. R. The survival of legitimate placement agencies helps [assure] the government that migrant workers are properly deployed and are employed under decent and humane conditions. such that their rights to monetary benefits must necessarily be treated differently. and not to inquire into the validity of its provisions. it cannot be considered on appeal. such as the Congress. 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. its foremost function is to administer and enforce R. unlike local workers who are or can become regular employees. 8042. 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. the OSG emphasizes that OFWs and local workers differ in terms of the nature of their employment. the OSG posits that there are rights and privileges exclusive to local workers. National Labor Relations Commission 43 and Millares v. especially on the matter of money claims. 8042 having preceded petitioner's contract.51 Without a doubt. No. 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. National Labor Relations Commission. and not at the earliest opportunity. No. The OSG enumerates the essential elements that distinguish OFWs from local workers: first. while local workers perform their jobs within Philippine territory.47 (2) that the constitutional question is raised by a proper party48 and at the earliest opportunity. as this was not stipulated upon by the parties. if not considered in the trial. respondents contend that the constitutional issue should not be entertained."46 The Court's Ruling The Court sustains petitioner on the first and second issues. on the other hand. Article II of the Constitution. No. but not available to OFWs.A. 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. or against whom it is almost impossible to enforce judgment. Thus. 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. not in petitioner's appeal with the NLRC.54 Nonetheless. 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. . 50otherwise the Court will dismiss the case or decide the same on some other ground. the issue is deemed seasonably raised because it is not the NLRC but the CA which has the competence to resolve the constitutional issue. 8042 took effect on July 15. 56Petitioner's interposition of the constitutional issue before the CA was undoubtedly seasonable. it cannot be considered at the trial and. as held in Coyoca v.42 Moreover. but in his Motion for Partial Reconsideration with said labor tribunal.A. if the issue is not raised in the pleadings before that competent court.55 thus.A. 1995.A. the provision does not violate the equal protection clause nor Section 18. The constitutional challenge is also timely. the provisions thereof are deemed part of the minimum terms of petitioner's employment. 45 Lastly. which was when he filed an appeal before the NLRC.49 and (3) that the constitutional question is the very lis mota of the case.

the subject clause may not be declared unconstitutional on the ground that it impinges on the impairment clause. Section 10. abridging or in any manner changing the intention of the parties thereto. others in like circumstances. when the parties executed their 1998 employment contract. No. full protection of their rights and welfare. No. Section 18. profession or calling. education. As aptly observed by the OSG. for all private contracts must yield to the superior and legitimate measures taken by the State to promote public welfare.60 Thus. or property without due process of law nor shall any person be denied the equal protection of the law. The prohibition is aligned with the general principle that laws newly enacted have only a prospective operation. as to laws already in existence. good order. the enactment of R. 8042.65 . 8042. Article III of the Constitution. strikes at the very core of the subject clause. and Section 18.A.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. morals. Article III of the Constitution on non-impairment of contracts? The answer is in the negative.63 Article II and Section 3. But even if the Court were to disregard the timeline. particularly the recruitment and deployment of OFWs. Rather. liberty.A. To Filipino workers. Article II is limited in application to laws about to be enacted that would in any way derogate from existing acts or contracts by enlarging.A. Article II and Section 3. Thus. 58and cannot affect acts or contracts already perfected. Section 1. No. with the noble end in view of ensuring respect for the dignity and well-being of OFWs wherever they may be employed. Article III of the Constitution guarantees: No person shall be deprived of life. they were deemed to have incorporated into it all the provisions of R. 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. it cannot be argued that R.64 Article XIII accord all members of the labor sector. or spared the burden imposed on.62 Does the subject clause violate Section 1. 61 Police power legislations adopted by the State to promote the health. without distinction as to place of deployment. Article XIII on labor as a protected sector? The answer is in the affirmative.59 however. peace. Hence. impaired the employment contract of the parties. particularly the subject clause. Does the subject clause violate Section 10. and general welfare of the people are generally applicable not only to future contracts but even to those already in existence. the non-impairment clause under Section 10. 8042 in 1995 preceded the execution of the employment contract between petitioner and respondents in 1998. Article III of the Constitution provides: No law impairing the obligation of contracts shall be passed. safety. while all monetary obligations should be borne by them in equal degree. and not just for a period of three months. 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. for the law was enacted in the exercise of the police power of the State to regulate a business. none should be denied the protection of the laws which is enjoyed by. the stage is all set for the determination of the constitutionality of the subject clause. their provisions are read into contracts and deemed a part thereof.

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. v. 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. The deference stops where the classification violates a fundamental right. it was in this case that the Court revealed the broad outlines of its judicial philosophy. We live in a different ambience and must decide our own problems in the light of our own interests and needs. 3) it is not limited to existing conditions only. in "all phases of national development. to be valid. 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. Nevertheless. The Preamble proclaims "equality" as an ideal precisely in protest against crushing inequities in Philippine society. to wit: Congress retains its wide discretion in providing for a valid classification.77 the constitutionality of a provision in the charter of the Bangko Sentral ng Pilipinas (BSP). or prejudices persons accorded special protection by the Constitution. they must be construed to serve our own public interest which is the be-all and the end-all of all our laws. Admittedly. a government financial institution (GFI). they are persuasive and have been used to support many of our decisions. Equality is one ideal which cries out for bold attention and action in the Constitution. . the quest for a better and more "equal" world calls for the use of equal protection as a tool of effective judicial intervention. In Central Bank (now Bangko Sentral ng Pilipinas) Employee Association.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. including labor. even when the rank-and-file employees of other GFIs had been exempted from the SSL by their respective charters. when it sees fit. the classification must comply with these requirements: 1) it is based on substantial distinctions. strict judicial scrutiny is triggered by suspect classifications 73 based on race74 or gender75 but not when the classification is drawn along income categories. Our present Constitution has gone further in guaranteeing vital social and economic rights to marginalized groups of society. Inc. 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. Section 10. and 4) it applies equally to all members of the class. this Court must discharge its primary role as the vanguard of constitutional guaranties." further explicitated in Article XIII. are clear commands to the State to take affirmative action in the direction of greater equality. 2) it is germane to the purposes of the law. More significantly. Finding that the disputed provision contained a suspect classification based on salary grade. and always with our own concept of law and justice. 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.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. And it need not be stressed that our public interest is distinct and different from others. At best. The command to promote social justice in Article II. Rational basis should not suffice. a system of classification into its legislation. and of our qualities and even idiosyncrasies as a people.66 There are three levels of scrutiny at which the Court reviews the constitutionality of a classification embodied in a law: a) the deferential or rational basis scrutiny in which the challenged classification needs only be shown to be rationally related to serving a legitimate state interest. 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 Further. and its policies should be accorded recognition and respect by the courts of justice except when they run afoul of the Constitution. the Court deliberately employed the standard of strict judicial scrutiny in its review of the constitutionality of said provision. 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. More importantly. Bangko Sentral ng Pilipinas. Under the policy of social justice.Such rights are not absolute but subject to the inherent power of Congress to incorporate. 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. however. was challenged for maintaining its rank-and-file employees under the Salary Standardization Law (SSL). these foreign decisions and authorities are not per se controlling in this jurisdiction.76 It is different in the Philippine setting. and require a stricter and more exacting adherence to constitutional limitations. When these violations arise.

if not all.are given higher compensation packages to entice them to stay. Upon cursory reading. extend to them a decent standard of living. National Labor Relations Commission79 (Second Division. 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. to wit: A plain reading of Sec.xxxx Under most circumstances. for it perceives in the subject clause a suspect classification prejudicial to OFWs. with the higher grades as recipients of a benefit specifically withheld from the lower grades. the rank-and-file employees consist of people whose status and rank in life are less and limited. judicial scrutiny ought to be more strict. A weak and watered down view would call for the abdication of this Court’s solemn duty to strike down any law repugnant to the Constitution and the rights it enshrines. it is they . OFWs with employment contracts of less than one year vis-à-vis OFWs with employment contracts of one year or more As pointed out by petitioner. The implications are quite disturbing: BSP rank-and-file employees are paid the strictly regimented rates of the SSL while employees higher in rank ." 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. 804.e. Second.A.who have the real economic and financial need for the adjustment .possessing higher and better education and opportunities for career advancement . This is evident from the words "for every year of the unexpired term" which follows the words "salaries x x x for three months. OFWs vis-à-vis local workers with fixed-period employment. among OFWs with employment contracts of more than one year. and improve the quality of life for all. for it applies to all OFWs. Considering that majority. whichever is less. 1999) that the Court laid down the following rules on the application of the periods prescribed under Section 10(5) of R. i." Any act of Congress that runs counter to this constitutional desideratum deserves strict scrutiny by this Court before it can pass muster. especially in terms of job marketability. provide adequate social services. Inc. It is akin to a distinction based on economic class and status. recognizing the broad discretion given to Congress in exercising its legislative power. No. But if the challenge to the statute is premised on the denial of a fundamental right. However. OFWs with employment contracts of less than one year vis-à-vis OFWs with employment contracts ofone year or more. Officers of the BSP now receive higher compensation packages that are competitive with the industry. (Emphasis supplied) Imbued with the same sense of "obligation to afford protection to labor. This is contrary to the well-established rule in legal hermeneutics that in interpreting a statute. Oppressive acts will be struck down regardless of the character or nature of the actor. the subject clause appears facially neutral.78 it was in Marsaman Manning Agency. This is in accord with the policy of the Constitution "to free the people from poverty. Ut res magis valeat quam pereat. and Third. Judicial scrutiny would be based on the "rational basis" test. or the perpetuation of prejudice against persons favored by the Constitution with special protection. xxxx In the case at bar. and the legislative discretion would be given deferential treatment. and an invidious impact on.80 (Emphasis supplied) . v. 10 clearly reveals that the choice of which amount to award an illegally dismissed overseas contract worker.. the Court will exercise judicial restraint in deciding questions of constitutionality.and not the officers . This is true whether the actor committing the unconstitutional act is a private person or the government itself or one of its instrumentalities. the challenged proviso operates on the basis of the salary grade or officer-employee status." the Court in the present case also employs the standard of strict judicial scrutiny. whether his salaries for the unexpired portion of his employment contract or three (3) months’ salary for every year of the unexpired term. OFWs at two levels: First. a closer examination reveals that the subject clause has a discriminatory intent against. comes into play only when the employment contract concerned has a term of at least one (1) year or more. while the poorer. low-salaried employees are limited to the rates prescribed by the SSL.

Reynaldo Chua 85 9 months 8 months 4 months 4 months Centennial Transmarine v.00 equivalent to his three months’ salary. however. 8042. National Labor Relations Commission (Second Division. whichever is less.00 as lumpsum salary covering eight months. the unexpired portion of private respondent’s employment contract is eight (8) months. CA89 12 months more than 2 months 10 months 3 months PCL v.81 which involved an OFW who was awarded a two-year employment contract. but was awarded his salaries for the remaining 8 months and 6 days of his contract. and the Court awarded her salaries for the entire unexpired portion of four and one-half months of her contract. October 1998). the Court reduced the award to SR3. Maguad84 6 months 2 months 4 months 4 months Bahia Shipping v. there were two cases in which the Court made conflicting rulings on Section 10(5). The Marsaman interpretation of Section 10(5) has since been adopted in the following cases: Case Title Contract Period Period of Service Unexpired Period Period Applied in the Computation of the Monetary Award Skippers v. a worker dismissed from overseas employment without just. December 1998). et al.In Marsaman. Prior to Marsaman. Nayona91 12 months 21 days 11 months and 9 days 3 months JSS v. Inc.A. dela Cruz l86 9 months 4 months 5 months 5 months Talidano v. which was deemed renewed for another 12 months. v.600. Falcon87 12 months 3 months 9 months 3 months Univan v. Private respondent should therefore be paid his basic salary corresponding to three (3) months or a total of SR3. Paramio.82 Another was Triple-Eight Integrated Services. Employ v. On appeal. After serving for one year and seven-and-a-half months. NLRC90 12 months more than 2 months more or less 9 months 3 months Olarte v. to wit: Under Section 10 of R. One was Asian Center for Career and Employment System and Services v. Adelantar93 Phil.94 12 months 12 months .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 10 months 2 months Unexpired portion Pentagon v. this being the lesser value. In the case at bar. the OFW involved was illegally dismissed two months into his 10-month contract. but was dismissed after working for one year and two months. the unexpired portion of his contract.83 which involved an OFW (therein respondent Erlinda Osdana) who was originally granted a 12-month contract. respondent Osdana was illegally dismissed.600.600. CA88 12 months 3 months 9 months 3 months Oriental v. No. National Labor Relations Commission (Third Division. The LA declared his dismissal illegal and awarded him SR13. 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.

they are entitled to their salaries for the entire unexpired portion of their contract. the Court assumes a hypothetical OFW-A with an employment contract of 10 months at a monthly salary rate of US$1. in case of illegal dismissal.00.97 illegally dismissed OFWs. equivalent to his salaries for 3 months of the unexpired portion of his contract. 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.000. prior to the effectivity of R. NLRC99 2 years 7 days 23 months and 23 days 23 months and 23 days JGB v.000. NLC100 2 years 9 months 15 months 15 months Agoy v.98 2 years 2 months 22 months 22 months Phil.000.000. but was awarded his salaries for the remaining 4 months. all OFWs. 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. OFW-A will be entitled to US$9. NLRC101 2 years 2 months 22 months 22 months EDI v. CA.000. NLRC. Under the subject clause. whereas OFW-B will be entitled to only US$3.00. were treated alike in terms of the computation of their monetary benefits in case of illegal dismissal. NLRC. equivalent to his salaries for the remaining 9 months of his contract. In contrast. the subject clause classifies OFWs into two categories.A. Almanzor 95 2 years 26 days 23 months and 4 days 6 months or 3 months for each year of contract Athenna Manpower v. 8042. et al. Integrated v. 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.00 is the lesser amount.102 2 years 5 months 19 months 19 months Barros v. Villanos 96 1 year. The disparity becomes more aggravating when the Court takes into account jurisprudence that. et al.Flourish Maritime v. The disparity in the treatment of these two groups cannot be discounted. Both commenced work on the same day and under the same employer. in case of illegal dismissal.00. were entitled to their salaries for the entire unexpired portions of their contracts. et al. the respondent OFW worked for only 2 months out of his 6-month contract. The first category includes OFWs with fixed-period employment contracts of less than one year. The second category consists of OFWs with fixed-period employment contracts of one year or more.00 and a hypothetical OFW-B with an employment contract of 15 months with the same monthly salary rate of US$1. In Skippers. no matter how long the period of their employment contracts.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. 8042 on July 14.00 for the unexpired portion of 14 months of his contract. No. as the US$3. instead of US$14.A. 10 months and 28 days 1 month 1 year. regardless of contract periods or the unexpired portions thereof. they are entitled to monetary award equivalent to only 3 months of the unexpired portion of their contracts. To illustrate the disparity even more vividly. 1995. 9 months and 28 days 6 months or 3 months for each year of contract As the foregoing matrix readily shows.000. Their claims were subjected . and were illegally dismissed after one month of work. No.

108 to wit: Article 299.105 Corollarily.106 but the length of the unexpired portion of the contract period -. prior to R. If the contracts between the merchants and their shop clerks and employees should have been made of a fixed period. No. whichever is less" shall apply is not the length of the original contract period as held in Marsaman. Persons violating this clause shall be subject to indemnify the loss and damage suffered." By its ordinary meaning. OFW-C is illegally dismissed on the 12th month.00 or the latter's total salaries for the 12 months unexpired portion of the contract. Considering that there is at least 12 months remaining in the contract period of OFW-C. This uniform system was applicable even to local workers with fixed-term employment.000. and second. OFW-D will be entitled to US$11. the subject clause applies to the computation of the latter's monetary benefits. No. and OFW-D. for otherwise. may withdraw from the fulfillment of said contract until the termination of the period agreed upon. 8042 introduced a differentiated rule of computation of the money claims of illegally dismissed OFWs based on their employment periods.A.00. OFW-C will be entitled. which arithmetically requires that the original contract period be more than one year. the original term must be more than one year. for if it were any shorter. In Reyes v. The enactment of the subject clause in R. On the other hand. for there are only 11 months left in the latter's contract period. and their monetary benefits limited to their salaries for three months only.00 per month. but to the lesser amount of US$3. which is equivalent to his/her total salaries for the entire 11-month unexpired portion. Thus.to a uniform rule of computation: their basic salaries multiplied by the entire unexpired portion of their employment contracts.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. whichever is less. while those who are illegally dismissed with one year or more remaining in their contracts shall be covered by the subject clause. the unexpired term must be at least one year.000. The Court therein held the shipping company liable for the salaries of its managers for the remainder of their fixed-term employment. 8042. Consequently.000. a uniform system of computation of the monetary awards of illegally dismissed OFWs was in place. that "every year" is but part of an "unexpired term" is significant in many ways: first. with the exception of the provisions contained in the following articles.the subject clause applies in cases when the unexpired portion of the contract period is at least one year.00 or the latter's salaries for 3 months out of the 12-month unexpired term of the contract. whichever is less" contains the qualifying phrases "every year" and "unexpired term.A. but all the while sparing the other category from such prejudice. not to US$12. who each have a 24-month contract at a salary rate of US$1. Viewed in that light. simply because the latter's unexpired contracts fall short of one year. the word "term" means a limited or definite extent of time. on the 13th month. whatever would be the unexpired term thereof will not reach even a year. without the consent of the other. . in the process singling out one category whose contracts have an unexpired portion of one year or more and subjecting them to the peculiar disadvantage of having their monetary awards limited to their salaries for 3 months or for the unexpired portion thereof. OFW-D is spared from the effects of the subject clause. the more decisive factor in the determination of when the subject clause "for three (3) months forevery year of the unexpired term.000. 107 The earliest rule prescribing a uniform system of computation was actually Article 299 of the Code of Commerce (1888). there would be no occasion for such unexpired term to be measured by every year. the Court now has misgivings on the accuracy of the Marsaman interpretation. the Court assumes hypothetical OFW-C and OFW-D. OFWs vis-à-vis Local Workers With Fixed-Period Employment As discussed earlier. To concretely illustrate the application of the foregoing interpretation of the subject clause. none of the contracting parties. Among OFWs With Employment Contracts of More Than One Year Upon closer examination of the terminology employed in the subject clause. Thus. The Compañia Maritima. The Court notes that the subject clause "or for three (3) months for every year of the unexpired term. 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.

it is noted that in Mackay Radio & Telegraph Co.120 an OFW who was illegally dismissed prior to the expiration of her fixed-period employment contract as a baby sitter. v. This interpretation of Article 1586 was reiterated in Garcia Palomar v. 43. National Labor Relations Commission.) Citing Manresa. 119 involving seafarers who were illegally discharged. and nothing has been brought to our attention to the contrary under Spanish jurisprudence. is upon the defendant. and Sections 2 (Contract of Labor) and 3 (Contract for a Piece of Work). v. Article 605 was applied to Madrigal Shipping Company. v.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. 8042. and damage caused to the vessel or to its cargo by malice or manifest or proven negligence. (Emphasis supplied. 1586 of the Civil Code of 1889.There is a more specific rule as far as seafarers are concerned: Article 605 of the Code of Commerce which provides: Article 605. In Asia World Recruitment. National Labor Relations Commission. Allen vs. Inc. and other laborers hired for a certain time and for a certain work cannot leave or be dismissed without sufficient cause. 2. v. when the new Civil Code was already in effect. the burden of showing that he failed to make an effort to secure other employment of a like nature. the Court in Lemoine v.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. While Article 605 has remained good law up to the present. On the computation of the amount of such damages. 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.. Gay114 held: The doctrine is well-established in American jurisprudence.. 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. Inc. Field hands. School District No. Chapter 3.116 Much like Article 1586 of the Civil Code of 1889. No.113 And in both Lemoine and Palomar.. Daly. Book IV. habitual drunkenness. 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. the unexpired portion of his contract. artisans. illegally dismissed OFWs with an unexpired portion of one year or more in their employment contract have since . Whitlark.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 fixedperiod employment contract was entered into in 1952. v. the Court in Aldaz v. Rich. National Labor Relations Commission. Ople. 492.121 which involved a foreman hired in 1988 in Saudi Arabia for a fixed term of two years. they cannot be discharged until the fulfillment of their contracts. in Vinta Maritime Co. 61 N. National Labor Relations Commission. for the purpose of reducing the damages resulting from such wrongful discharge. the new provisions of the Civil Code do not expressly provide for the remedies available to a fixed-term worker who is illegally discharged. Inc. Hotel de France Company. 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. Inc. Finally. the New Civil Code took effect with new provisions on fixed-term employment: Section 2 (Obligations with a Period). mechanics. However.. 362. but who was illegally dismissed after only nine months on the job -. Chapter 3. was awarded salaries corresponding to the unexpired portion of her contract. Inc. v.A. In Teknika Skills and Trade Services. 8042. 1950..)115 (Emphasis supplied) On August 30. Ogilvie.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. before the fulfillment of the contract. to wit: Article 1586. theft. that when an employee is wrongfully discharged it is his duty to seek other employment of the same kind in the same community. However. except for reasons of insubordination in serious matters. If the contracts of the captain and members of the crew with the agent should be for a definite period or voyage.the Court awarded him salaries corresponding to 15 months. In sum. The Court arrived at the same ruling in Anderson v. Y. robbery. (Howard vs. while this is the general rule. 99 Mich. But with the enactment of R. such as in First Asian Trans & Shipping Agency. Inc. and that other employment of a like nature was obtainable. prior to R. No. 98 Mich.A.111 Article 299 of the Code of Commerce was replaced by Art. the same principles were applied to cases involving overseas Filipino workers whose fixed-term employment contracts were illegally terminated. Title I.118 More significantly. the Court adopted the general principle that in actions for wrongful discharge founded on Article 1586. Title VIII. Farrell vs. specifically the adoption of the subject clause.

from which the law originated. their liability being solidary. Bonifacio Gallego in sponsorship of House Bill No. the claim arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas employment including claims for actual. That any installment payments.127 In the present case. and determines whether it serves a compelling state interest through the least restrictive means. the Court now subjects the classification to a strict judicial scrutiny. 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.A. The OSG locates the purpose of R. The subject clause singles out one classification of OFWs and burdens it with a peculiar disadvantage. The Court concludes that the subject clause contains a suspect classification in that. the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide. it imposes a 3-month cap on the claim of OFWs with an unexpired portion of one year or more in their contracts. liability for money are reduced under Section 10 of RA 8042. to .126 or in maintaining access to information on matters of public concern. 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. 10.129 (Emphasis supplied) However. What constitutes compelling state interest is measured by the scale of rights and powers arrayed in the Constitution and calibrated by history. The OSG defends the subject clause as a police power measure "designed to protect the employment of Filipino seafarers overseas x x x. To protect them and to promote their continued helpful contribution in deploying Filipino migrant workers. which otherwise may be made to shoulder millions of pesos in "termination pay. 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. the Court dug deep into the records but found no compelling state interest that the subject clause may possibly serve. 2077 (SB 2077) contains a provision on money claims. placement agencies. There being a suspect classification involving a vulnerable sector protected by the Constitution. Money Claims. exemplary and other forms of damages. in the computation of the monetary benefits of fixed-term employees who are illegally discharged. whereas no such limitation is imposed on local workers with fixed-term employment. This measure redounds to the benefit of the migrant workers whose welfare the government seeks to promote. By limiting the liability to three months [sic]. if applicable.been differently treated in that their money claims are subject to a 3-month cap. The survival of legitimate placement agencies helps [assure] the government that migrant workers are properly deployed and are employed under decent and humane conditions. but none on the claims of other OFWs or local workers with fixed-term employment. Filipino seafarers have better chance of getting hired by foreign employers. No. to wit: Sec.130 but the speech makes no reference to the underlying reason for the adoption of the subject clause. such as the public interest in safeguarding health or maintaining medical standards. The liability of the principal and the recruitment/placement agency or any and all claims under this Section shall be joint and several. moral. On the other hand. 14314 (HB 14314). placement agencies that are in good faith and which fulfill their obligations are unnecessarily penalized for the acts of the foreign employer."128 The OSG explained further: Often. Hence.124 It is akin to the paramount interest of the state125 for which some individual liberties must give way. . Senate Bill No. 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 limitation also protects the interest of local placement agencies.Notwithstanding any provision of law to the contrary. That is only natural for none of the 29 provisions in HB 14314 resembles the subject clause. 8042 in the speech of Rep.

dated May 23. 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. 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. the Court finds no discernible state interest. 131Article XIII of the Constitution. 14314). this Court. especially when the favored sector is composed of private businesses such as placement agencies. 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. No. but imposes the same burden on another sector. let alone a compelling one. in Agabon v. 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.133 particularly Section 3 thereof. (2) Suspension for not more than ninety (90) days. The POEA Rules and Regulations Governing the Recruitment and Employment of Land-Based Overseas Workers. There can never be a justification for any form of government action that alleviates the burden of one sector.A. 8042. contains similar administrative disciplinary measures against erring foreign employers. or caused to be.1avvphi1 Further. the nature of which. the purpose of the subject clause is to protect the employment of OFWs by mitigating the solidary liability of placement agencies.satisfy any such compromise or voluntary settlement shall not be more than two (2) months. National Labor Relations Commission. Provided. Section 10 of SB 2077 does not provide for any rule on the computation of money claims." However. 2077 and House Bill No. 8042 is violative of the right of petitioner and other OFWs to equal protection. there are mechanisms already in place that can be employed to achieve that purpose without infringing on the constitutional rights of OFWs. Any compromise/voluntary agreement in violation of this paragraph shall be null and void. Thus. In fine. Article XIII being one. that is sought to be protected or advanced by the adoption of the subject clause. 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. Moreover. imposes administrative disciplinary measures on erring foreign employers who default on their contractual obligations to migrant workers and/or their Philippine agents. as advanced by the OSG. Assuming that.134 has described to be not self-actuating: . 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. or (3) Dismissal from the service with disqualification to hold any appointive public office for five (5) years. No. 132 there are some which this Court has declared not judicially enforceable. These disciplinary measures range from temporary disqualification to preventive suspension.A. 2003. The POEA Rules and Regulations Governing the Recruitment and Employment of Seafarers. 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. the subject clause in the 5th paragraph of Section 10 of R. The idea that private business interest can be elevated to the level of a compelling state interest is odious. But significantly. dated February 4. While all the provisions of the 1987 Constitution are presumed self-executing. while the disadvantaged sector is composed of OFWs whose protection no less than the Constitution commands. withheld until the said official complies therewith. 2002. even if the purpose of the subject clause is to lessen the solidary liability of placement agencies vis-a-vis their foreign principals. however. such callous and cavalier rationale will have to be rejected.

without any existing valid governmental purpose. formulating their own conclusion to approximate at least the aims of the Constitution. pursuant to law and jurisprudence prior to the enactment of R. Puno. Inc. Subsequent legislation is still needed to define the parameters of these guaranteed rights to ensure the protection and promotion. Article XIII. for the violation of which the questioned clause may be declared unconstitutional. Without specific and pertinent legislation. when examined in isolation. The view that the concepts of suspect classification and strict judicial scrutiny formulated in Central Bank Employee Association exaggerate the significance of Section 3. 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 -. and the realization of ideals therein expressed.A. or even just a pretext of one. As earlier discussed. is to give them a better chance of getting hired by foreign employers. As manifested by several framers of the 1987 Constitution. 8042. Ultimately. but merely clothes it with the status of a sector for whom the Constitution urges protection through executive or legislative action and judicial recognition. Section 3. No. Along the same line of reasoning. would be impractical. doubtless-but still hardly within the contemplation of the framers. The subject clause being unconstitutional. 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. It must be stressed that Section 3.Thus. Article XIII is a groundless apprehension. And it was in fact consistent with that constitutional agenda that the Court in Central Bank (now Bangko Sentral ng Pilipinas) Employee Association. The subject clause does not state or imply any definitive governmental purpose.137 Article III of the Constitution. The guarantees of "full protection to labor" and "security of tenure". are facially unqualified. v. The espousal of such view presents the dangerous tendency of being overbroad and exaggerated. Bangko Sentral ng Pilipinas. 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. Section 3 of Article XIII cannot. by itself. Petitioner is mistaken. However. petitioner is entitled to his salaries for the entire unexpired period of nine months and 23 days of his employment contract. that the actual purpose of the subject clause of limiting the entitlement of OFWs to their three-month salary in case of illegal dismissal. to protect the welfare of the working class.135 (Emphasis added) Thus. on its own. because these are fixed benefits that have been stipulated into his contract. not only the rights of the labor sector. . but for the judiciary as well. 136 The argument of the Solicitor General. if not unrealistic. Article XIII cannot be treated as a principal source of direct enforceable rights. penned by then Associate Justice now Chief Justice Reynato S. for it deprives him of property. the constitutional mandates of protection to labor and security of tenure may be deemed as self-executing in the sense that these are automatically acknowledged and observed without need for any enabling legislation.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. and the broadest interpretation possible suggests a blanket shield in favor of labor against any form of removal regardless of circumstance. 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. 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. Central Bank applied Article XIII in conjunction with the equal protection clause. Article XIII does not directly bestow on the working class any actual enforceable right. but also her right to substantive due process under Section 1. the provisions on social justice require legislative enactments for their enforceability. the Court further holds that the subject clause violates petitioner's right to substantive due process. consisting of monetary benefits. without the application of the equal protection clause. This is plain speculation. and it is for that precise reason that the clause violates not just petitioner's right to equal protection. but of the employers' as well. Its utility is best limited to being an impetus not just for the executive and legislative departments. to declare that the constitutional provisions are enough to guarantee the full exercise of the rights embodied therein. has no life or force of its own as elucidated in Agabon. This interpretation implies an unimpeachable right to continued employment-a utopian notion. therefore. judicial bodies will be at a loss.

The subject clause "or for three months for every year of the unexpired term. DOLE Department Order No. By the foregoing definition alone. Inc. the Court GRANTS the Petition. SO ORDERED. whereas overtime pay is compensation for all work "performed" in excess of the regular eight hours. 2004 Decision and April 1. 8042 is DECLAREDUNCONSTITUTIONAL. Dela Cruz. the contract provision guarantees the right to overtime pay but the entitlement to such benefit must first be established. provides a Standard Employment Contract of Seafarers. In short. the payment of overtime pay and leave pay should be disallowed in light of our ruling in Cagampan v. in which salary is understood as the basic wage. and the December 8.00 per month.138 However. leave pay and other bonuses. As the Court held in Centennial Transmarine. WHEREFORE. 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. 33. there is no basis for the automatic inclusion of overtime and holiday pay in the computation of petitioner's monetary award. ALICIA AUSTRIA-MARTINEZ Associate Justice Republic of the Philippines Supreme Court Manila SECOND DIVISION . National Labor Relations Commission. For seafarers like petitioner.The word salaries in Section 10(5) does not include overtime and leave pay. exclusive of overtime. series 1996. MA.400. and holiday pay is compensation for any work "performed" on designated rest days and holidays. v. In the same vein. No costs. whichever is less" in the 5th paragraph of Section 10 of Republic Act No. unless there is evidence that he performed work during those periods. 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. 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.

YAP. Respondents. J.versus - THENAMARIS SHIPS MANAGEMENT and INTERMARE MARITIME AGENCIES. However.[4] .R. Inc. 2011 x------------------------------------------------------------------------------------x DECISION NACHURA. the vessel was sold. as found by the CA. NACHURA.. . Francisco B. Yap. Chairperson. G. They were also informed about the Advisory sent by Capt.: Before this Court is a Petition for Review on Certiorari[1] under Rule 45 of the Rules of Civil Procedure. M/T SEASCOUT on 14 August 2001 by Intermare Maritime Agencies. for their part. No. They further alleged that Yaps employment contract was validly terminated due to the sale of the vessel and no arrangement was made for Yaps transfer to Thenamaris other vessels. Yap was employed as electrician of the vessel. 179532 Present: CARPIO. ABAD. Promulgated: May 30. However. JJ. was informed by the Master of their vessel that the same was sold and will be scrapped. Yap signed off from the vessel on 10 November 2001 and was paid his wages corresponding to the months he worked or until 10 November 2001 plus his seniority bonus. and MENDOZA. The contract of employment entered into by Yap and Capt. He alleged that he opted for immediate transfer but none was made. The undisputed facts. was for a duration of 12 months. vacation bonus and extra bonus. on or about 08 November 2001. with respect to the payment of his wage. Petitioner. They alleged that following the sale of the M/T SEASCOUT. The Philippine Overseas Employment Administration (POEA) was informed about the sale on 06 December 2001 in a letter signed by Capt. 2007. seeking the reversal of the Court of Appeals (CA) Decision[2] dated February 28. along with the other crewmembers. which affirmed with modification the National Labor Relations Commission (NLRC) resolution[3] dated April 20. Vulture Shipping Limited. [Respondents]. PERALTA. He insisted that he was entitled to the payment of the unexpired portion of his contract since he was illegally dismissed from employment. Adviento. 2005. which states. Constatinou.. he refused to accept the payment of one-month basic wage. the General Manager of Intermare. vacation bonus. are as follows: [Petitioner] Claudio S. Adviento. INC. extra bonus along with the scrapping bonus. in behalf of its principal. Yap boarded M/T SEASCOUT and commenced his job as electrician.CLAUDIO S. On 23 August 2001. among others: PLEASE ASK YR OFFICERS AND RATINGS IF THEY WISH TO BE TRANSFERRED TO OTHER VESSELS AFTER VESSEL S DELIVERY (GREEK VIA ATHENS-PHILIPINOS VIA MANILA FOR CREW NOT WISH TRANSFER TO DECLARE THEIR PROSPECTED TIME FOR REEMBARKATION IN ORDER TO SCHEDULE THEM ACCLY Yap received his seniority bonus. contended that Yap was not illegally dismissed. J.

J. the NLRC held that instead of an award of salaries corresponding to nine months. the LA opined that since the unexpired portion of petitioners contract was less than one year. Respondents Intermare Maritime Agency. Subsequently. Complainant[s] salary for the unexpired portion of his contract should only be limited to three (3) months basic salary. v. On July 26. Petitioner made several follow-ups for his re-embarkation but respondents failed to heed his plea. thus. In its decision[7] dated January 14. the NLRC affirmed the LAs findings that petitioner was indeed constructively and illegally dismissed. premises considered.Thus. SO ORDERED. National Labor Relations Commission. petitioner was only entitled to salaries for three months as provided under Section 10[8] of Republic Act (R. 2005.00) are awarded plus ten percent (10%) of the total award as attorneys fees. Claudio S.000. and Vulture Shipping Limited/Stejo Shipping Limited.[.00) and exemplary damages of FIFTY THOUSAND PESOS (P50. SO ORDERED. the NLRC ruled in this wise: WHEREFORE. The LA disposed. Inc. Three (3) months basic salary US$4. finding the latter to have been constructively and illegally dismissed by respondents.000. Moral damages P100. petitioner was forced to litigate in order to vindicate his rights. Lastly. and that the award of attorneys fees was warranted. as follows: WHEREFORE.000. a decision is hereby rendered declaring complainant to have been constructively dismissed. respondents Intermare Maritime Agency Incorporated. Martionos. but actually he was not able to board one despite of respondents numerous vessels. moral damages of ONE HUNDRED THOUSAND PESOS (P100. 2. respondents sought recourse from the NLRC.[11] . Yap the sum of $12.A. 3. Other money claims are DISMISSED for lack of merit. Thenamaris Ships Mgt. he filed an amended complaint.] Vulture Shipping Limited and Thenamaris Ship Management are hereby ordered to jointly and severally pay complainant. and Vulture Shipping Limited are ordered to pay jointly and severally complainant Claudio S.00 or its peso equivalent at the time of actual payment.00 or its peso equivalent at the time of payment. Yap (petitioner) filed a complaint for Illegal Dismissal with Damages and Attorneys Fees before the Labor Arbiter (LA). Petitioner claimed that he was entitled to the salaries corresponding to the unexpired portion of his contract. in view of the foregoing.00 Exemplary damages P50.[9] as enunciated in our ruling in Marsaman Manning Agency. petitioner was entitled to his salaries for the unexpired portion of his contract for a period of nine months. 2004.290. In addition. that respondents bad faith was evident on their wilful failure to transfer petitioner to another vessel.000. Interseas Trading and Financing Corporation. Inc. the following: 1. 4. the decision of the Labor Arbiter finding the termination of complainant illegal is hereby AFFIRMED with a MODIFICATION. impleading Captain Francisco Adviento of respondents Intermare Maritime Agencies. (Intermare) and Thenamaris Ships Management (respondents).870.[10] Hence. together with C.) No. Moreover.. 8042.00 Attorneys fees equivalent to 10% of the total monetary award.[6] Aggrieved. the LA found that respondents acted in bad faith when they assured petitioner of re-embarkation and required him to produce an electrician certificate during the period of his contract. However. Accordingly. Inc. the LA rendered a decision [5] in favor of petitioner.

.

jurisprudence. In this regard. V-000038-04 (RAB VIII (OFW)-04-01-0006) are hereby AFFIRMED with the MODIFICATION that private respondent is entitled to three (3) months of basic salary computed at US$4. SO ORDERED. 8042 and held: In the present case. to wit: WHEREFORE. No. the CA relied on the clause or for three months for every year of the unexpired term.870. No. 2005. therefore. and that a new one be rendered dismissing the complaint.A. [12] praying for the reversal and setting aside of the NLRC decision. On February 28. warranting the imposition of moral and exemplary damages and attorneys fees. The Decision dated January 14. In the same token. the employment contract concerned has a term of one year or 12 months which commenced on August 14. the CA affirmed the lower agencies findings that the advisory of Captain Constantinou.Respondents filed a Motion for Partial Reconsideration. However. Pursuant to the provisions of Sec.00 or its peso equivalent at the time of actual payment. Undaunted. Likewise.290. The award of three (3) months basic salary in the sum of US$4. complainants Motion for Partial Reconsideration is hereby granted. respectively. whichever is less provided in the 5th paragraph of Section 10 of R.[13] praying that he be paid the nine (9)-month basic salary.00 is hereby modified in that complainant is entitled to his salary for the unexpired portion of employment contract in the sum of US$12. 2007. 8042. of public respondent National Labor Relations Commission-Fourth Division. on the other hand. the option of three months for every year of the unexpired term is applicable.A. However. 2005. All aspect of our January 14. the CA provided. [Petitioner] was paid his wages for the corresponding months he worked until the 10 th of November. respondents filed a petition for certiorari[16] under Rule 65 of the Rules of Civil Procedure before the CA. No. 10. a resolution [14] was rendered by the NLRC. Petitioner.] 8042. Cebu City. On April 20. only meant that the latter should have been re-embarked. affirming the findings of Illegal Dismissal and respondents failure to transfer petitioner to another vessel. Hence WHEREFORE. [R. filed his own Motion for Partial Reconsideration. it was preterminated without a valid cause. 2001. 2005 and July 29. Costs against Petitioners. However. the CA upheld the lower agencies unanimous finding of bad faith. 2005.290.[17] Thus. premises considered.A. holding that there can be no choice to grant only three (3) months salary for every year of the unexpired term because there is no full year of unexpired term which this can be applied.[18] . The CA held that respondents failed to show that the NLRC acted without statutory authority and that its findings were not supported by law. 2005 Decision STANDS. which the NLRC denied. the CA affirmed the findings and ruling of the LA and the NLRC that petitioner was constructively and illegally dismissed. and Resolutions. taken together with the other documents and additional requirements imposed on petitioner. and evidence on record. the NLRC reversed its earlier Decision.00 or its peso equivalent at the time of actual payment. finding merit in petitioners arguments. as awarded by the LA.[15] Respondents filed a Motion for Reconsideration. dated April 20. in NLRC No. premises considered. the CA ruled that the NLRC erred in sustaining the LAs interpretation of Section 10 of R. this Petition for Certiorari is DENIED.

Invoking Serrano. Respondents opine that petitioner should be entitled only to US$3. 2009.900. 8042. and the amount of P3.A.00 and not to US$4. denied in its Resolution[19] dated August 30.744.A. Finally.[20] In the meantime. 8042 is a substantive law that deals with the rights and obligations of the parties in case of Illegal Dismissal of a migrant worker and is not merely procedural in character. respondents claim that the tanker allowance should be excluded from the definition of the term salary.870.570. pursuant to the Civil Code. whether or not the Court of Appeals gravely erred in granting petitioner only three (3) months backwages when his unexpired term of 9 months is far short of the every year of the unexpired term threshold. 2007. which the CA. respondents manifest that the full sum of P878. as granted by the CA. 2007. petitioner claims that the 5 th paragraph of Section 10.47 in Intermares bank account was garnished and subsequently withdrawn and deposited with the NLRC Cashier of Tacloban City on February 14. the LA issued an Order releasing the amount of P781. Moreover. Apparently.[22] Article III and Section 3.290. whichever is less provided in the 5th paragraph of Section 10 of R.00 should not be included in the computation of the award as petitioners basic salary. and 2) Assuming that it is. Respondents submit that the CA erred in its computation since it included the said tanker allowance. while this case was pending before the CA.A. 8042 in Serranoshould not apply in this case because Section 10 of R. by virtue of Section 10 of R. have to waive nine months of their collectible backwages every time they have a year of unexpired term of contract to reckon with.] 8042. [24] On the other hand. No. petitioner posits that. respondents pray that the . however.00 as execution and deposit fees. there should be no retroactive application of the law in this case. we declared as unconstitutional the clause or for three months for every year of the unexpired term. Thus. migrant workers. R.A.914.A.300. 8042. Unyielding. respondents. and that said provision violates the equal protection clause under the Constitution because. aver that our pronouncement of unconstitutionality of the clause or for three months for every year of the unexpired term. petitioner filed this petition. is violative of Section 1. assuming said provision of law is constitutional. raising the following issues: 1) Whether or not Section 10 of R. No. as provided under his contract. 8042 in the case of Serrano v. Thus. to the extent that it affords an illegally dismissed migrant worker the lesser benefit of salaries for [the] unexpired portion of his employment contract or for three (3) months for every year of the unexpired term. the CA gravely abused its discretion when it reduced petitioners backwages from nine months to three months as his nine-month unexpired term cannot accommodate the lesser relief of three months for every year of the unexpired term. No. aware of our ruling in Serrano. was only US$1. while illegally dismissed local workers are guaranteed under the Labor Code of reinstatement with full backwages computed from the time compensation was withheld from them up to their actual reinstatement. No. 2007.03 to petitioner as his award. On February 16.00. whichever is less provided in the 5th paragraph of Section 10 of R.A. Also. [No. unaware of our ruling in Serrano. while this case was pending before this Court. that said provision of law has long been a source of abuse by callous employers against migrant workers. Inc. together with the sum of P86.00. whichever is less is constitutional. Gallant Maritime Services.44 to petitioners former lawyer as attorneys fees. respondents asseverate that petitioners tanker allowance of US$130.Both parties filed their respective motions for reconsideration.[23] Article XIII of the Constitution to the extent that it gives an erring employer the option to pay an illegally dismissed migrant worker only three months for every year of the unexpired term of his contract.[21] on March 24. No.

it affords no protection. [25] On this note. therefore. No. Laws are repealed only by subsequent ones. it confers no rights. Verily. Prefatorily. thus.A.00 or its peso equivalent. in the computation of the monetary benefits of fixed-term employees who are illegally discharged. pursuant to law and jurisprudence prior to the enactment of R. In Planters Products.instant petition be denied and that petitioner be directed to return to Intermare the sum of US$8.970. petitioner therein was accorded his salaries for the entire unexpired period of nine months and 23 days of his employment contract. we have already declared in Serrano that the clause or for three months for every year of the unexpired term.[29] we held: The doctrine of operative fact. nor was it raised in respondents pleadings other than in their Memorandum before this Court. No. only applies as a matter of equity and fair play. In an exhaustive discussion of the intricacies and ramifications of the said clause.A. The general rule is supported by Article 7 of the Civil Code. The doctrine of operative fact serves as an exception to the aforementioned general rule. it creates no office. 8042 is unconstitutional for being violative of the rights of Overseas Filipino Workers (OFWs) to equal protection of the laws. v. Thus. [28] Consequently. the NLRC and the CA. this Court held therein that the subject clause does not state or imply any definitive governmental purpose. 8042 and. it imposes no duties. No. whichever is lessprovided in the 5th paragraph of Section 10 of R. but none on the claims of other OFWs or local workers with fixed-term employment. which should not be allowed under the circumstances. It nullifies the effects of an unconstitutional law by recognizing that the existence of a .[26] The petition is impressed with merit. Inc. this Court. Fertiphil Corporation. We have already spoken. Article III of the Constitution. this case should not be different from Serrano. but also his right to substantive due process under Section 1. it imposes a 3-month cap on the claim of OFWs with an unexpired portion of one year or more in their contracts. it bears emphasis that the unanimous finding of the LA. and their violation or non-observance shall not be excused by disuse or custom or practice to the contrary. it is inoperative as if it has not been passed at all. 8042. the NLRC and the CA that the dismissal of petitioner was illegal is not disputed. What remains in issue. The subject clause singles out one classification of OFWs and burdens it with a peculiar disadvantage. pertinently held: The Court concludes that the subject clause contains a suspect classification in that. warranting the award of moral and exemplary damages and attorneys fees. as an exception to the general rule. is the constitutionality of the 5 th paragraph of Section 10 of R. hence. which provides: Art. [27] Moreover. Likewise not disputed is the tribunals unanimous finding of bad faith on the part of respondents.A. the same violates not just therein petitioners right to equal protection. inSerrano. an unconstitutional act is not a law. 7. necessarily. the proper computation of the lump-sum salary to be awarded to petitioner by reason of his illegal dismissal. As a general rule. petitioner counters that this new issue as to the inclusion of the tanker allowance in the computation of the award was not raised by respondents before the LA.

whereas overtime pay is compensation for all work performed in excess of the regular eight hours. Respondents invocation of Serrano is unavailing.[30] Following Serrano. Matters not taken up below cannot be raised for the first time on appeal. A final note. The doctrine is applicable when a declaration of unconstitutionality will impose an undue burden on those who have relied on the invalid law. Hence.00. In the same vein. pass upon this question.300. we cannot subscribe to respondents postulation that the tanker allowance of US$130. [31] Second. They must be raised seasonably in the proceedings before the lower tribunals.00 should not be included in the computation of the lump-sum salary to be awarded to petitioner.430. issues not raised before the lower tribunals cannot be raised for the first time on appeal. that respondents are raising this issue. we hold that this case should not be included in the aforementioned exception. for the first time on appeal. it was applied to a criminal case when a declaration of unconstitutionality would put the accused in double jeopardy or would put in limbo the acts done by a municipality in reliance upon a law creating it. trapped in an environment of crimes. Respondents themselves in their petition for certiorari before the CA averred that petitioners basic salary. consequently. we made the following pronouncements in Serrano. and which clearly included the US$130. The past cannot always be erased by a new judicial declaration.statute prior to a determination of unconstitutionality is an operative fact and may have consequences which cannot always be ignored. in effect. Most of them come from the poorest sector of our society. the contract per se should have indicated that said allowance does not form part of the basic salary or. forming part of the basic salary of petitioner. leave pay and other bonuses. and due process dictate that this Court cannot now. Indeed. the contract should have separated it from the basic salary clause. fair play. In Olarte v.[32] A close perusal of the contract reveals that the tanker allowance of US$130. First. Thus.00 was not categorized as a bonus but was rather encapsulated in the basic salary clause. It is only at this late stage.00 tanker allowance. Questions raised on appeal must be within the issues framed by the parties. more particularly in their Memorandum. simply. which computed the lump-sum salary of petitioner at the basic salary of US$1.00 + US$130. to wit: The word salaries in Section 10(5) does not include overtime and leave pay. 33. and holiday pay is compensation for any work performed on designated rest days and holidays. exclusive of overtime. it was not the fault of petitioner that he lost his job due to an act of illegal dismissal committed by respondents. send a wrong signal that principals/employers and recruitment/manning agencies may violate an OFWs security of tenure which an employment contract embodies and actually profit from such violation based on an unconstitutional provision of law. DOLE Department Order No. in which salary is understood as the basic wage. Nayona. pursuant to the contract. After all. Their profile shows they live in suffocating slums. .[33] If respondents intended it differently. provides a Standard Employment Contract of Seafarers.00 tanker allowance. and would. They did not even assail the award accorded by the CA. hence. justice. the NLRC. was US$1. It was not raised before the LA. We ought to be reminded of the plight and sacrifices of our OFWs. For seafarers like petitioner. series 1996. To rule otherwise would be iniquitous to petitioner and other OFWs.[34] this Court held that: Our overseas workers belong to a disadvantaged class. and the CA.

Joy filed a complaint17 with the National Labor Relations Commission against petitioner and Wacoal. 170139.7 Joy was later asked to sign a one-year employment contract for a monthly salary of NT$15. 2014 SAMEER OVERSEAS PLACEMENT AGENCY. 3 declaring respondent’s dismissal illegal. Co. 1997.000 to cover her plane ticket to Manila.Hardly literate and in ill health.5Responding to an ad it published. ANTONIO EDUARDO B. We are asked to decide a petition for review1 on certiorari assailing the Court of Appeals’ decision2dated June 27.360. She claimed that she was illegally dismissed.4cralawred Petitioner. WHEREFORE. INC.00 when she signed the employment contract.. she was asked to work as a cutter. NACHURA Associate Justice EN BANC G.9cralawred Joy was deployed to work for Taiwan Wacoal.430. and pay her NT$300. It is our duty. Out of despondence. is a recruitment and placement agency.R. their only hope lies in jobs they find with difficulty in our country. Inc. Ltd. 1997.000.18 She asked for the return of her placement fee. that she was terminated and that “she should immediately report to their office to get her salary and passport. No. to approximate justice for her. and ordering it to reimburse the NT$3. The Court of Appeals Decision dated February 28. directing petitioner to pay respondent’s three-month salary equivalent to New Taiwan Dollar (NT$) 46. she agreed to work as quality control for one year. Huwang from Wacoal informed Joy.. 2007 and Resolution dated August 30.16cralawred On October 15. respondent.10 She alleged that in her employment contract.”13 She was asked to “prepare for immediate repatriation.080.8 She alleged that Sameer Overseas Agency required her to pay a placement fee of P70. 6cralawred Joy’s application was accepted. SO ORDERED. given the facts and the law. Cabiles. (Wacoal) on June 26.00 withheld from respondent.”14cralawred Joy claims that she was told that from June 26 to July 14.00. Respondent. endure slave treatment in foreign lands just to survive. They will climb mountains.000. CABILES. No costs. 2007 are hereby MODIFIED to the effect that petitioner is AWARDED his salaries for the entire unexpired portion of his employment contract consisting of nine months computed at the rate of US$1. DECISION LEONEN.00 attorney’s fees. submitted her application for a quality control job in Taiwan. The least we can do is to protect them with our laws. J. she only earned a total of NT$9. All other awards are hereby AFFIRMED. 15 According to her.12cralawred Sameer Overseas Placement Agency claims that on July 14. cross the seas. v. the Petition is GRANTED.: This case involves an overseas Filipino worker with shattered dreams.00 per month. 1997. August 05.000. Wacoal deducted NT$3. This decision partially affirmed the National Labor Relations Commission’s resolution dated March 31.00. JOY C. they will work under sub-human conditions and accept salaries below the minimum. Joy C. Their unfortunate circumstance makes them easy prey to avaricious employers. Petitioner.11 In Taiwan. Sameer Overseas Placement Agency. 1997. the withheld amount for . 2004. without prior notice. 2005. a certain Mr.

32 The Labor Arbiter found that there was no excess payment of placement fees. for the purpose of addressing the validity or propriety of petitioner’s third-party complaint against the transferee agent or the Pacific Manpower & Management Services.360. thus:chanRoblesvirtualLawlibrary Although the public respondent found the dismissal of the complainant-respondent illegal. 42cralawred The National Labor Relations Commission did not rule on the issue of reimbursement of placement fees for lack of jurisdiction.43 It refused to entertain the issue of the alleged transfer of obligations to Pacific. 1997. 52 The Court of Appeals held.” 21 The agency also claimed that it did not ask for a placement fee of ?70. Inc. .35cralawred Joy appealed36 to the National Labor Relations Commission. In a resolution37 dated March 31.31 Acting Executive Labor Arbiter Pedro C.45cralawred The National Labor Relations Commission awarded respondent only three (3) months worth of salary in the amount of NT$46.38 It reiterated the doctrine that the burden of proof to show that the dismissal was based on a just or valid cause belongs to the employer. the National Labor Relations Commission declared that Joy was illegally dismissed.23 Petitioner added that Wacoal's accreditation with petitioner had already been transferred to the Pacific Manpower & Management Services. the Labor Arbiter dismissed Joy’s complaint. which is squarely based on the law.30cralawred On July 29. and Lea G. but without prejudice to further hearings on its third party complaint against Pacific for reimbursement. negligence in her duties.29 It further denied that it assumed liability for petitioner’s illegal acts. 44 It did not acquire jurisdiction over that issue because Sameer Overseas Placement Agency failed to appeal the Labor Arbiter’s decision not to rule on the matter.39 It found that Sameer Overseas Placement Agency failed to prove that there were just causes for termination. 2004. Ramos ruled that her complaint was based on mere allegations.20cralawred Sameer Overseas Placement Agency alleged that respondent's termination was due to her inefficiency. 2004. the claims against it were outside the jurisdiction of the Labor Arbiter.000 withheld from her. Inc. Likewise we sustain NLRC’s finding in regard to the reimbursement of her fare. we should point out that the NLRC merely awarded her three (3) months backwages or the amount of NT$46. it showed Official Receipt No. the same is hereby affirmed with finality. 14860 dated June 10.40 There was no sufficient proof to show that respondent was inefficient in her work and that she failed to comply with company requirements.33 The Labor Arbiter found unnecessary a discussion on petitioner’s transfer of obligations to Pacific34 and considered the matter immaterial in view of the dismissal of respondent’s complaint.00.080. is concerned.24 Thus. But we do find it necessary to remand the instant case to the public respondent for further proceedings. and we hold petitioner liable thereon.repatriation costs. as well as the award of attorney’s fees.00. and attorney’s fees of NT$300.27 Therefore. bearing the amount of ?20.000. 19 She identified Wacoal as Sameer Overseas Placement Agency’s foreign principal. We should emphasize that as far as the decision of the NLRC on the claims of Joy Cabiles. Aggrieved by the ruling. and attorney’s fees. a finding that we uphold. The Court of Appeals50 affirmed the decision of the National Labor Relations Commission with respect to the finding of illegal dismissal.26 It alleged that there was no employer-employee relationship between them. premises considered. Manabat. procedural due process was not observed in terminating respondent. the assailed Resolutions are hereby partlyAFFIRMED in accordance with the foregoing discussion.46cralawred The Commission denied the agency’s motion for reconsideration47 dated May 12. Sameer Overseas Placement Agency caused the filing of a petition 49 for certiorari with the Court of Appeals assailing the National Labor Relations Commission’s resolutions dated March 31. given petitioner’s lack of worthwhile discussion upon the same in the proceedings below or before us. and her “failure to comply with the work requirements [of] her foreign [employer].28 Pacific Manpower argued that the employment contract should first be presented so that the employer’s contractual obligations might be identified. WHEREFORE. but subject to the caveat embodied in the last sentence.25cralawred Pacific Manpower moved for the dismissal of petitioner’s claims against it. Joy’s entitlement to the equivalent of three months worth of salary. 1998. petitioner asserts that it was already substituted by Pacific Manpower. 1997.22 As evidence. No costs. (Pacific) as of August 6. based on the official receipt presented by petitioner.41 Furthermore. reimbursement of withheld repatriation expense. 2004 and July 2. payment of her salary for 23 months as well as moral and exemplary damages.51 The Court of Appeals remanded the case to the National Labor Relations Commission to address the validity of petitioner's allegations against Pacific. 2004. which was based upon its finding that she was dismissed without due process.080. 2004 through a resolution48 dated July 2. the reimbursement of the NT$3.00.

petitioner’s argument is without merit. it should be Pacific that should now assume responsibility for Wacoal’s contractual obligations to the workers originally recruited by petitioner.59 Failure to comply may be a just cause for their dismissal. and peaceful concerted activities.64cralawred Employees are not stripped of their security of tenure when they move to work in a different jurisdiction. This prerogative.55 Therefore.” 63 Workers are entitled to substantive and procedural due process before termination. to wit:chanRoblesvirtualLawlibrary The State shall afford full protection to labor. and attorney’s fees despite the alleged existence of just causes of termination. Wacoal. I Sameer Overseas Placement Agency failed to show that there was just cause for causing Joy’s dismissal. the reimbursement of the cost of her repatriation. The Constitution itself. petitioner hopes to make it appear that the labor laws of Saudi Arabia do not require any certification by a competent public health authority in the dismissal of employees due to illness. should not be abused. including the right to strike in accordance with law. in Triple Eight Integrated Services.56cralawred Petitioner also reiterates that since Wacoal’s accreditation was validly transferred to Pacific at the time respondent filed her complaint. v. and other laws affecting labor apply in this case. settled is the rule that the courts of the forum will not enforce any foreign claim obnoxious to the forum’s public policy. humane conditions of work. employment agreements are more than contractual in nature. employers have the prerogative to impose productivity and quality standards at work. its implementing rules and regulations. and promote full employment and equality of employment opportunities for all. Section 3. employers cannot be compelled to retain the services of an employee who is guilty of acts that are inimical to the interest of the employer.57cralawred Sameer Overseas Placement Agency’s petition is without merit. They shall be entitled to security of tenure. Again.60 Certainly. her employment was subject to the laws of the host country.53 Dissatisfied. The employer. it does not “authorize the oppression or self-destruction of the employer. 58They may also impose reasonable rules to ensure that the employees comply with these standards. however. Petitioner reiterates that there was just cause for termination because there was a finding of Wacoal that respondent was inefficient in her work.54cralawred We are asked to determine whether the Court of Appeals erred when it affirmed the ruling of the National Labor Relations Commission finding respondent illegally dismissed and awarding her three months’ worth of salary. Security of tenure for labor is guaranteed by our Constitution. First. also failed to accord her due process of law.SO ORDERED. We find for respondent. in Article XIII. NLRC. collective bargaining and negotiations. the Labor Code. local and overseas. There is no question that the contract of employment in this case was perfected here in the Philippines. They may not be removed from employment without a valid or just cause as determined by law and without going through the proper procedure. .61 While the law acknowledges the plight and vulnerability of workers. Thus.65 this court noted:chanRoblesvirtualLawlibrary Petitioner likewise attempts to sidestep the medical certificate requirement by contending that since Osdana was working in Saudi Arabia. It is “tempered with the employee’s right to security of tenure. organized and unorganized. established is the rule that lex loci contractus (the law of the place where the contract is made) governs in this jurisdiction.”62 Management prerogative is recognized in law and in our jurisprudence. Inc. Furthermore. Sameer Overseas Placement Agency filed this petition. it claims that respondent’s dismissal was valid. With respect to the rights of overseas Filipino workers. and a living wage. guarantees the special protection of workers. Therefore. we follow the principle of lex loci contractus. It shall guarantee the rights of all workers to self-organization. Apparently. Indeed. Here in the Philippines. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law.

Thus:chanRoblesvirtualLawlibrary Art. An employer may terminate an employment for any of the following causes:cralawlawlibrary (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work. 282. Petitioner’s allegation that respondent was inefficient in her work and negligent in her duties69 may. v. which allow termination of the employee only when there is “just cause or when [the probationary employee] fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his [or her] engagement. it is not disputed that the Contract of Employment entered into by and between petitioners and private respondent was executed here in the Philippines with the approval of the Philippine Overseas Employment Administration (POEA). therefore.66 (Emphasis supplied. In the present case. 68(Emphasis supplied. Hence. “The employer must affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause. and 3) the communication was made at a reasonable time prior to the employee’s performance assessment. Inc. but only if petitioner was able to prove it. whether their employment is .chanrobleslaw This public policy should be borne in mind in this case because to allow foreign employers to determine for and by themselves whether an overseas contract worker may be dismissed on the ground of illness would encourage illegal or arbitrary pre-termination of employment contracts.chanroblesvirtuallawlibrary (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative. the principle of lex loci contractus (the law of the place where the contract is made) governs in this jurisdiction. . it must be shown that: 1) the employer has set standards of conduct and workmanship against which the employee will be judged. constitute a just cause for termination under Article 282(b). andChanRoblesVirtualawlibrary (e) Other causes analogous to the foregoing. However. . This is similar to the law and jurisprudence on probationary employees. Moreover. Article 282 of the Labor Code enumerates the just causes of termination by the employer. we do not see why the application of that ruling should be limited to probationary employment. the Labor Code together with its implementing rules and regulations and other laws affecting labor apply in this case.. The Court does not agree. The burden of proving that there is just cause for termination is on the employer. That rule is basic to the idea of security of tenure and due process. .” 70 Failure to show that there was valid or just cause for termination would necessarily mean that the dismissal was illegal. The provisions of the Constitution as well as the Labor Code which afford protection to labor apply to Filipino employees whether working within the Philippines or abroad. NLRC. petitioners contend that the twin requirements of notice and hearing applies strictly only when the employment is within the Philippines and that these need not be strictly observed in cases of international maritime or overseas employment. Termination by employer.chanroblesvirtuallawlibrary (d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives. 71cralawred To show that dismissal resulting from inefficiency in work is valid.67 to wit:chanRoblesvirtualLawlibrary Petitioners admit that they did not inform private respondent in writing of the charges against him and that they failed to conduct a formal investigation to give him opportunity to air his side. 2) the standards of conduct and workmanship must have been communicated to the employee. overseas Filipino workers (OFWs) may only be terminated for a just or authorized cause and after compliance with procedural due process requirements. which are guaranteed to all employees. citations omitted) By our laws. citation omitted) Even with respect to fundamental procedural rights. this court emphasized in PCL Shipping Philippines.”72cralawred However.chanroblesvirtuallawlibrary (b) Gross and habitual neglect by the employee of his duties.

valid. This time. She was also repatriated on the same day that she was informed of her termination. the standards to be met are set for the purpose of retaining employment or promotion. on a regular basis. The pre-determined standards that the employer sets are the bases for determining the probationary employee’s fitness. and after complying with the due process requirements of notice and hearing.” Sec. 10. – Notwithstanding any provision of law to the contrary. Proper adjustment to fit the standards upon which the employee’s qualifications will be evaluated will increase one’s chances of being positively assessed for regularization by his or her employer. There is no proof that respondent was legally terminated. states that overseas workers who were terminated without just.”73cralawred In this case. 75The employer is required to give the charged employee at least two written notices before termination. Petitioner failed to comply with the due process requirements Respondent’s dismissal less than one year from hiring and her repatriation on the same day show not only failure on the part of petitioner to comply with the requirement of the existence of just cause for termination. Due process requires that the probationary employee be informed of such standards at the time of his or her engagement so he or she can adjust his or her character or workmanship accordingly.74No evidence was shown to support such allegations. Based on that determination. Respondent started working on June 26. The abruptness of the termination negated any finding that she was properly notified and given the opportunity to be heard. and qualifications as a regular employee. Courts should remain vigilant on allegations of the employer’s failure to communicate work standards that would govern one’s employment “if [these are] to discharge in good faith [their] duty to adjudicate. the employer may exercise its management prerogative of terminating the employee found unqualified. She was told that she was terminated on July 14. The bare allegations of petitioner are not sufficient to support a claim that there is just cause for termination. or authorized cause “shall be entitled to the full reimbursement of his placement fee with interest of twelve (12%) per annum. however. The regular employee must constantly attempt to prove to his or her employer that he or she meets all the standards for employment. having been illegally dismissed. based on work standards. A valid dismissal requires both a valid cause and adherence to the valid procedure of dismissal. The employee cannot be expected to meet any standard of character or workmanship if such standards were not communicated to him or her.76 One of the written notices must inform the employee of the particular acts that may cause his or her dismissal. the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide. 8042. 1997. They patently show that the employers did not comply with the due process requirement. within ninety (90) . what efficiency standards were violated. Her constitutional right to due process of law was violated. otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995. MONEY CLAIMS. The employer.”79cralawred Petitioner failed to comply with the twin notices and hearing requirements. The parties’ conflict as to the position held by respondent showed that even the matter as basic as the job title was not clear.probationary or regular. II Respondent Joy Cabiles. Assessing an employee’s work performance does not stop after regularization.”78 Aside from the notice requirement. petitioner merely alleged that respondent failed to comply with her foreign employer’s work requirements and was inefficient in her work. There was also no showing that respondent was sufficiently informed of the standards against which her work efficiency and performance were judged. Petitioner did not even bother to specify what requirements were not met. whichever is less. efficiency. the employee must also be given “an opportunity to be heard. or what particular acts of respondent constituted inefficiency. 1997 effective on the same day and barely a month from her first workday.77 The other notice must “[inform] the employee of the employer’s decision. is entitled to her salary for the unexpired portion of the employment contract that was violated together with attorney’s fees and reimbursement of amounts withheld from her salary. plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term. determines if an employee is still qualified and efficient. propriety. Section 10 of Republic Act No.

The performance bond to be filed by the recruitment/placement agency..00 or the three-month equivalent of her salary.080.82 this court ruled that the clause “or for three (3) months for every year of the unexpired term. whichever is less” was reinstated in Republic Act No. the corporate officers and directors and partners as the case may be. 15. 10022 in 2010. The liability of the principal/employer and the recruitment/placement agency for any and all claims under this section shall be joint and several. All costs attendant to repatriation shall be borne by or charged to the agency concerned and/or its principal.. . which answered for her repatriation.. However. In case of termination of overseas employment without just. – 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. Inc. and the reimbursement of the withheld NT$3. it creates no office.calendar days after filing of the complaint.00 salary. 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.” 80 which as we have established.. shall themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid claims and damages. valid or authorized cause as defined by law or contract. 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. and Marlow Navigation Co.84cralawred A statute or provision which was declared unconstitutional is not a law. be increased to the amount equivalent to the unexpired term of the employment contract. as provided by law. It “confers no rights. the principal/employer or agency shall not in any manner be responsible for the repatriation of the former and/or his belongings. Gallant Maritime Services. plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term. moral. the workers shall be entitled to the full reimbursement of his placement fee with interest of twelve (12%) per annum. Likewise. Section 7 of Republic Act No. it imposes no duties. 10022 provides:chanRoblesvirtualLawlibrary . REPATRIATION OF WORKERS. It reads:chanRoblesvirtualLawlibrary SEC. is not the case. .. In Serrano v. whichever is less”83 is unconstitutional for violating the equal protection clause and substantive due process. We uphold the finding that respondent is entitled to all of these awards. exemplary and other forms of damages.000. 8042 upon promulgation of Republic Act No. Inc. in cases where the termination of employment is due solely to the fault of the worker. The Court of Appeals affirmed the National Labor Relations Commission’s decision to award respondent NT$46. The award of the three-month equivalent of respondent’s salary should. whichever is less.. 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.” 85cralawred We are aware that the clause “or for three (3) months for every year of the unexpired term. Such liabilities shall continue during the entire period or duration of the employment contract and shall not be affected by any substitution. attorney’s fees of NT$300. 8042 states that “repatriation of the worker and the transport of his [or her] personal belongings shall be the primary responsibility of the agency which recruited or deployed the worker overseas. shall be answerable for all money claims or damages that may be awarded to the workers. The Labor Code81 also entitles the employee to 10% of the amount of withheld wages as attorney’s fees when the withholding is unlawful.00.. EMERGENCY REPATRIATION FUND. it affords no protection. (Emphasis supplied)chanrobleslaw Section 15 of Republic Act No. This provisions [sic] shall be incorporated in the contract for overseas employment and shall be a condition precedent for its approval.. If the recruitment/placement agency is a juridical being. however.” The exception is when “termination of employment is due solely to the fault of the worker. it is inoperative as if it has not been passed at all. amendment or modification made locally or in a foreign country of the said contract.

as provided by law. without further proceedings. the existence of Republic Act No. from participating in the Philippine Overseas Employment Program and from recruiting and hiring Filipino workers until and unless it fully satisfies the judgement award. 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. Consistent with this mandate. 8042 was not yet in effect at the time of respondent’s termination from work in 1997. is hereby amended to read as follows:chanRoblesvirtualLawlibrary SEC. – Notwithstanding any provision of law to the contrary. That the penalties herein provided shall be without prejudice to any liability which any such official may have incured [sic] under other existing laws or rules and regulations as a consequence of violating the provisions of this paragraph. it shall be automatically disqualified.chanroblesvirtuallawlibrary (b) Suspension for not more than ninety (90) days. However. the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide. valid or authorized cause as defined by law or contract. When a law is passed. further frustrating remedies to assuage the wrong done to petitioner. 10022 governs this case. or (c) Dismissal from the service with disqualification to hold any appointive public office for five (5) years. The performance bond to de [sic] filed by the recruitment/placement agency. exemplary and other forms of damage. The liability of the principal/employer and the recruitment/placement agency for any and all claims under this section shall be joint and several. 10. In case of a final and executory judgement against a foreign employer/principal. Such liabilities shall continue during the entire period or duration of the employment contract and shall not be affected by any substitution. shall be answerable for all money claims or damages that may be awarded to the workers. 8042. withheld until the said official complies therewith. Hence. this court awaits an actual case that clearly raises adversarial positions in their proper context before considering a prayer to declare it as unconstitutional. there is a necessity to decide this constitutional issue. however. Section 10 of Republic Act No. The law passed incorporates the exact clause already declared as unconstitutional. (Emphasis supplied) Republic Act No. If the recruitment/placement agency is a juridical being. Moreover. moral. 8042 before it was amended by Republic Act No. In case of termination of overseas employment without just. At minimum.”87 When cases become moot and academic. 10022 may delay the execution of the judgment in this case.86 Republic Act No. the NLRC shall endeavor to update and keep abreast with the developments in the global services industry. we do not hesitate to provide for guidance to .Section 7. or any unauthorized deductions from the migrant worker’s salary. or caused to be. without any perceived substantial change in the circumstances. Provided. This means that the reinstatement of the clause in Republic Act No. whichever is less. This may cause confusion on the part of the National Labor Relations Commission and the Court of Appeals. the corporate officers and directors and partners as the case may be. 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. plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term. This provision shall be incorporated in the contract for overseas employment and shall be a condition precedent for its approval. as amended. 10022 was promulgated on March 8. Money Claims. amendment or modification made locally or in a foreign country of the said contract. within ninety (90) calendar days after the filing of the complaint. the worker shall be entitled to the full reimbursement if [sic] his placement fee and the deductions made with interest at twelve percent (12%) per annum. 2010. 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:cralawlawlibrary (a) The salary of any such official who fails to render his decision or resolution within the prescribed period shall be. we are confronted with a unique situation. shall themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid claims and damages. this court is possessed with the constitutional duty to “[p]romulgate rules concerning the protection and enforcement of constitutional rights.

(3) must not be limited to existing conditions only.101 A law is void on this basis. All laws must be read in light of the Constitution. Constitutional interpretation is complex. Thus. In its comment. No branch or office of the government may exercise its powers in any manner inconsistent with the Constitution. respondent argued that the clause was unconstitutional because it infringed on workers’ right to contract. In the hierarchy of laws. as well as hostile discrimination or the oppression of inequality.” 99 In exercising such power. This is analogous to cases where there are millions of Filipinos working abroad who are bound to suffer from the lack of protection because of the restoration of an identical clause in a provision previously declared as unconstitutional. violates the constitutional rights to equal protection and due process. regardless of the existence of any law that supports such exercise. there are special reasons of judicial efficiency and economy that attend to these cases. We are not convinced by the pleadings submitted by the parties that the situation has so changed so as to cause us to reverse binding precedent. the nullity cannot be cured by reincorporation or reenactment of the same or a similar law or provision.100cralawred The equal protection clause does not infringe on this legislative power.102 There is no violation of the equal protection clause if the law applies equally to persons within the same class and if there are reasonable grounds for distinguishing between those falling within the class and those who do not fall within the class. Obviously.96 Petitioner as well as the Solicitor General have failed to show any compelling change in the circumstances that would warrant us to revisit the precedent.” 105cralawred . and (4) must apply equally to all members of the same class. Failure to reiterate the very ratio decidendi of that case will result in the same untold economic hardships that our reading of the Constitution intended to avoid. 10022.90 The legislators intended a balance between the employers’ and the employees’ rights by not unduly burdening the local recruitment agency. Any law that is inconsistent with it is a nullity. The Constitution cannot be trumped by any other law. Equal protection of the law is a guarantee that persons under like circumstances and falling within the same class are treated alike. (2) must be germane to the purposes of the law.93However. The new law puts our overseas workers in the same vulnerable position as they were prior toSerrano. No. Gallant Maritime that limiting wages that should be recovered by an illegally dismissed overseas worker to three months is both a violation of due process and the equal protection clauses of the Constitution. A law or provision of law that was already declared unconstitutional remains as such unless circumstances have so changed as to warrant a reverse conclusion. this time as provided in Republic Act. Thus. it has a wide discretion. when a law or a provision of law is null because it is inconsistent with the Constitution.95cralawred We observe that the reinstated clause. in terms of “privileges conferred and liabilities enforced. 10022. 10022. since the parties never raised the issue of the constitutionality of the clause as reinstated in Republic Act No.”98cralawred In creating laws. the Constitution is supreme. we cannot countenance added expenses for further litigation that will reduce their hard-earned wages as well as add to the indignity of having been deprived of the protection of our laws simply because our precedents have not been followed. only if classifications are made arbitrarily.104cralawred A reasonable classification “(1) must rest on substantial distinctions.”97 It is a guarantee against “undue favor and individual or class privilege. but it is never unreasonable. 2013. we ordered the parties and the Office of the Solicitor General to comment on the constitutionality of the reinstated clause in Republic Act No.103 A law that does not violate the equal protection clause prescribes a reasonable classification. We reiterate our finding in Serrano v.91 Petitioner is also of the view that the clause was already declared as constitutional in Serrano. There is no constitutional doctrine that causes injustice in the face of empty procedural niceties. in a resolution88 dated October 22. Likewise.94cralawred On the other hand. the legislature has the power “to make distinctions and classifications. its contention is that it is beyond judicial review.bench and bar in situations where the same violations are capable of repetition but will evade review.92cralawred The Office of the Solicitor General also argued that the clause was valid and constitutional.89 petitioner argued that the clause was constitutional.

this court in Serrano. and their monetary benefits limited to their salaries for three months only. .”118cralawred We do not need strict scrutiny to conclude that these classifications do not rest on any real or substantial distinctions that would justify different treatments in terms of the computation of money claims resulting from illegal termination. if not greater protection and assistance to overseas workers who generally are more prone to exploitation given their physical distance from our government. while those who are illegally dismissed with one year or more remaining in their contracts shall be covered by the reinstated clause.107 Within the class of overseas workers with at least one-year employment contracts. the workers are deprived of their expected salary. For this reason. labor is afforded special protection.117cralawred Observing the terminologies used in the clause. which is to “establish a higher standard of protection and promotion of the welfare of migrant workers. Overseas workers regardless of their classifications are entitled to security of tenure. In Serrano. 108cralawred The Congress’ classification may be subjected to judicial review. there was a distinction between those with at least a year left in their contracts and those with less than a year left in their contracts when they were illegally dismissed. and for other .112 Their money claims were computed based on the “unexpired portions of their contracts.114 There was no such limitation on the money claims of illegally terminated local workers with fixed-term employment. “[i]mbued with the same sense of ‘obligation to afford protection to labor. The rights violated when. 8042 subjected the money claims of illegally dismissed overseas workers with an unexpired term of at least a year to a cap of three months worth of their salary. we cannot subscribe to the argument that “[overseas workers] are contractual employees who can never acquire regular employment status.”109cralawred Under the Constitution. It distinguished between fixed-period overseas workers and fixed-period local workers.106 It also distinguished between overseas workers with employment contracts of less than one year and overseas workers with employment contracts of at least one year.’ . these issues justify an equal. employ[ed] the standard of strict judicial scrutiny. We also find that the classifications are not relevant to the purpose of the law. this deprivation translates to economic insecurity and disparity. say. unlike local workers”121 because it already justifies differentiated treatment in terms of the computation of money claims.”113 The adoption of the reinstated clause in Republic Act No. their families and overseas Filipinos in distress.”111cralawred We also noted in Serrano that before the passage of Republic Act No. for it perceive[d] in the subject clause a suspect classification prejudicial to OFWs. and between overseas workers with at least a year left in their contracts and overseas workers with less than a year left in their contracts when they were illegally dismissed. we identified the classifications made by the reinstated clause. It is state policy to protect the rights of workers without qualification as to the place of employment.110 Thus. . a fixed-period local worker is illegally terminated are neither greater than nor less than the rights violated when a fixed-period overseas worker is illegally terminated. we also found that “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. there is a “legislative classification which impermissibly interferes with the exercise of a fundamental right or operates to the peculiar disadvantage of a suspect class.120 The same is true for the distinctions between overseas workers with an employment contract of less than one year and overseas workers with at least one year of employment contract. at least for the period agreed upon in their contracts.116 Meanwhile. the jurisdictional and enforcement issues on overseas workers’ money claims do not justify a differentiated treatment in the computation of their money claims. 8042.123 If anything.The reinstated clause does not satisfy the requirement of reasonable classification.115cralawred We observed that illegally dismissed overseas workers whose employment contracts had a term of less than one year were granted the amount equivalent to the unexpired portion of their employment contracts. illegally dismissed overseas workers with employment terms of at least a year were granted a cap equivalent to three months of their salary for the unexpired portions of their contracts. which they could have earned had they not been illegally dismissed. This means that they cannot be dismissed before the end of their contract terms without due process.122cralawred Likewise. the money claims of illegally terminated overseas and local workers with fixed-term employment were computed in the same manner. the workers’ right to security of tenure is violated.119In both cases. For both workers. In Serrano. If they were illegally dismissed.

. Series of 2013. No. the principals/employers and the recruitment/manning agencies even profit from their violation of the security of tenure that an employment contract embodies. send a wrong signal that principals/employers and recruitment/manning agencies may violate an OFW’s security of tenure which an employment contract embodies and actually profit from such violation based on an unconstitutional provision of law. This is effectively a legally-imposed partial condonation of their liability to OFWs. really operates to benefit the wrong party and allows that party. but also because this same lessened recovery renders a wrongful dismissal easier and less onerous to undertake. to borrow the term that R. . we find specious the argument that reducing the liability of placement agencies “redounds to the benefit of the [overseas] workers. especially when the favored sector is composed of private businesses such as placement agencies. Meanwhile. we held that the reinstated clause violates due process rights. is really part of a scheme to sell Filipino overseas labor at a bargain for purposes solely of attracting the market. Thus. without justifiable reason. The idea that private business interest can be elevated to the level of a compelling state interest is odious. respondent is entitled to her salary from July 15. The reinstated clause.purposes. Because of this hidden twist.Section 10. lesser protection is afforded the OFW. 126 Further. as worded. 8042 itself uses to describe the incentive it envisions under its purpose clause. but imposes the same burden on another sector. Since she started working on June 26. simply limits the OFWs’ recovery in wrongful dismissal situations. 8042. “To rule otherwise would be iniquitous to petitioner and other OFWs. therefore. The pertinent portions of Circular No. 1997. What worsens the situation is the chosen mode of granting the incentive: instead of a grant that. the law. read:chanRoblesvirtualLawlibrary . the lesser cost of dismissing a Filipino will always be a consideration a foreign employer will take into account in termination of employment decisions. . On the other hand. which revised the interest rate for loan or forbearance from 12% to 6% in the absence of stipulation.”127cralawred Along the same line. Thus. the law simply limits their liability for the wrongful dismissals of already deployed OFWs. It is arbitrary as it deprives overseas workers of their monetary claims without any discernable valid purpose. creates a situation where the law meant to protect them makes violation of rights easier and simply benign to the violator. As Justice Brion said in his concurring opinion in Serrano:chanRoblesvirtualLawlibrary Section 10 of R.”129cralawred III On the interest rate. to mitigate its liability for wrongful dismissals. in short. the limitation of liability under Section 10 cannot be an “appropriate” incentive. . Section 10 – read as a grant of incentives to recruitment/manning agencies – oversteps what it aims to do by effectively limiting what is otherwise the full liability of the foreign principals/employers. “[t]here can never be a justification for any form of government action that alleviates the burden of one sector. Their liability for arbitrarily terminating overseas workers is decreased at the expense of the workers whose rights they violated. 8042 affects these well-laid rules and measures. 799 of June 21. to encourage greater efforts at recruitment. not only because of the lessened recovery afforded him or her by operation of law. from a more practical and realistic view. The so-called incentive is rendered particularly odious by its effect on the OFWs — the benefits accruing to the recruitment/manning agencies and their principals are taken from the pockets of the OFWs to whom the full salaries for the unexpired portion of the contract rightfully belong.128cralawred Respondent Joy Cabiles is entitled to her salary for the unexpired portion of her contract.”125cralawred Putting a cap on the money claims of certain overseas workers does not increase the standard of protection afforded to them.A. the Bangko Sentral ng Pilipinas Circular No. 1998. The award of the three-month equivalence of respondent’s salary must be modified accordingly. Conversely. 1997 and was terminated on July 14. . in effect. it redounds to the benefit of whoever may be liable. while the disadvantaged sector is composed of OFWs whose protection no less than the Constitution commands. applies in this case. 2013. In this sense. including the principal/employer – the direct employer primarily liable for the wrongful dismissal. 1997 to June 25.”124 Further. is directly related to extra efforts undertaken. While intended as an incentive accruing to recruitment/manning agencies. these overseas workers who are impressed with an expectation of a stable job overseas for the longer contract period disregard other opportunities only to be terminated earlier. justified solely by the law’s intent to encourage greater deployment efforts. They are left with claims that are less than what others in the same situation would receive. in accordance with Section 10 of Republic Act No.A. . and in fact provides a hidden twist affecting the principal/employer’s liability. foreign employers are more incentivized by the reinstated clause to enter into contracts of at least a year because it gives them more flexibility to violate our overseas workers’ rights. 799. Thus. No. the incentive. and would.

Accordingly. in any case. 2013. this interim period being deemed to be by then an equivalent to a forbearance of credit. 2013. but when such certainty cannot be so reasonably established at the time the demand is made. however. 2. in its Resolution No. the amount shall be subject to a 12% interest per annum.1 of the Manual of Regulations for Banks and Sections 4305Q. 4305S. 799. is breached. laws are deemed incorporated in contracts. except when or until the demand can be established with reasonable certainty.133 these interest rates do not apply when the law provides that a different interest rate shall be applied. shall be 6% per annum from such finality until its satisfaction. goods or credits and the rate allowed in judgments. When the judgment of the court awarding a sum of money becomes final and executory.1. Only a law can repeal another law. Through the able ponencia of Justice Diosdado Peralta.The Monetary Board. the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. This Circular shall take effect on 1 July 2013. i. therefore. Section 2. 8042. 905. the interest due should be that which may have been stipulated in writing. in addition to the above. Section 10 of Republic Act No. goods. 799 does not have the effect of changing the interest on awards for reimbursement of placement fees from 12% to 6%. Furthermore. whether the case falls under paragraph 1 or paragraph 2. where the demand is established with reasonable certainty. contains not only what has been explicitly stipulated.1 of the Manual of Regulations for Non-Bank Financial Institutions are hereby amended accordingly. an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum.132cralawred We add that Circular No. judgments that have become final and executory prior to July 1. thereby amending Section 2 of Circular No. which provides that the 6% interest rate applies even to judgments. Further. 796 dated 16 May 2013. 799 is not applicable when there is a law that states otherwise. In the absence of stipulation. Gallery Frames:130cralawred II. i. “The contracting parties need not repeat them. not constituting a loan or forbearance of money. the issuance of Circular No. shall be six percent (6%) per annum. “[A] Central Bank Circular cannot repeal a law. When an obligation.”135 There is. 3. 8042 provides that unlawfully terminated overseas workers are entitled to the reimbursement of his or her placement fee with an interest of 12% per annum. thus. The actual base for the computation of legal interest shall. shall not be disturbed and shall continue to be implemented applying the rate of interest fixed therein. In view of the above.e. the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). Civil Code).e. but the statutory provisions that have any bearing on the matter. as follows:chanRoblesvirtualLawlibrary 1. Series of 1982:cralawlawlibrary Section 1. And. the interest due shall itself earn legal interest from the time it is judicially demanded. The rate of interest for the loan or forbearance of any money. as well as the accrual thereof.” 134cralawred For example. This implied stipulation has the effect of removing awards for . from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code. and in judgments when there is no stipulation on the applicable interest rate. This is despite Section 1 of Circular No. Moreover. the rate of interest. an implied stipulation in contracts between the placement agency and the overseas worker that in case the overseas worker is adjudged as entitled to reimbursement of his or her placement fees.131 Circular No. Since Bangko Sentral ng Pilipinas circulars cannot repeal Republic Act No. and it consists in the payment of a sum of money. 1169. in the absence of an express contract as to such rate of interest. the rate of legal interest. or credits. we laid down the guidelines in computing legal interest in Nacar v. When the obligation is breached. shall be adjudged on unliquidated claims or damages. above.3 and 4303P. 799 is applicable only in loans and forbearance of money. a loan or forbearance of money. approved the following revisions governing the rate of interest in the absence of stipulation in loan contracts. it is only applicable if the judgment did not become final and executory before July 1. Every contract. While the Bangko Sentral ng Pilipinas has the power to set or limit interest rates. be on the amount finally adjudged. They do not even have to be referred to. Subsection X305... is imposed. No interest. the rate of interest shall be 6% per annum to be computed from default. With regard particularly to an award of interest in the concept of actual and compensatory damages.

This way. other money claims under Section 10 of Republic Act No. be achieved even if only one of the joint and several debtors are impleaded in an action. These awards are covered by Circular No. However. The distance of the foreign employer alone makes it difficult for an overseas worker to reach it and make it liable for violations of the Labor Code. in the case of overseas employment. the overseas workers are assured that someone — the foreign employer’s local agent — may be made to answer for violations that the foreign employer may have committed.reimbursement of placement fees from Circular No. By providing that the liability of the foreign employer may be “enforced to the full extent”139 against the local agent. 799. Hence. 799’s coverage. Lest they risk their reputation or finances. The same cannot be said for awards of salary for the unexpired portion of the employment contract under Republic Act No. Section 10 of the Migrant Workers and Overseas Filipinos Act of 1995 provides that the foreign employer and the local employment agency are jointly and severally liable for money claims including claims arising out of an employer-employee relationship and/or damages. it must be emphasized that the local agency that is held to answer for the overseas worker’s money claims is not left without remedy.140cralawred Corollary to the assurance of immediate recourse in law. the provision on joint and several liability in the Migrant Workers and Overseas Filipinos Act of 1995 shifts the burden of going after the foreign employer from the overseas worker to the local employment agency. This means that respondent is also entitled to an interest of 6% per annum on her money claims from the finality of this judgment. if judgment did not become final and executory before July 1. This provision is in line with the state’s policy of affording protection to labor and alleviating workers’ plight. the overseas worker is assured of immediate and sufficient payment of what is due them. The fundamental effect of joint and several liability is that “each of the debtors is liable for the entire obligation. 799 because the law does not provide for a specific interest rate that should apply. Local agencies. The Migrant Workers and Overseas Filipinos Act of 1995 ensures that overseas workers have recourse in law despite the circumstances of their employment. jurisdictional issues. local agencies must already have mechanisms for guarding against unscrupulous foreign employers even at the level prior to overseas employment applications. the filing of money claims against the foreign employer is attended by practical and legal complications. we clarify the liabilities of Wacoal as principal and petitioner as the employment agency that facilitated respondent’s overseas employment. This should not be an obstacle for the respondent overseas worker to proceed with the enforcement of . 8042. therefore. There are also possible conflict of laws. for instance. 2013 and there was no stipulation in the contract providing for a different interest rate. are inoculated with interest in being always on the lookout against foreign employers that tend to violate labor law. In sum. A further implication of making local agencies jointly and severally liable with the foreign employer is that an additional layer of protection is afforded to overseas workers. It may be argued. 8042 shall be subject to the 6% interest per annum in accordance with Circular No. that the foreign employer must be impleaded in the complaint as an indispensable party without which no final determination can be had of an action.137cralawred The provision on joint and several liability in the Migrant Workers and Overseas Filipinos Act of 1995 assures overseas workers that their rights will not be frustrated with these complications. either the local agency or the foreign employer may be sued for all claims arising from the foreign employer’s labor law violations. This section also provides that the performance bond filed by the local agency shall be answerable for such money claims or damages if they were awarded to the employee. and procedural rules that may be raised to frustrate an overseas worker’s attempt to advance his or her claims. IV Finally. it is not possible to determine whether there was indeed a transfer of obligations from petitioner to Pacific. With the present state of the pleadings. 136cralawred In overseas employment.” 138 A final determination may. The law does not preclude it from going after the foreign employer for reimbursement of whatever payment it has made to the employee to answer for the money claims against the foreign employer. which are businesses by nature.

8042 is declared unconstitutional and.J. the petition is DENIED. we are a people who contribute much to the provision of material creations of this world. We all know of the joy and sadness when they come home to see them all grown up and. Their travails and their heroism can be told a million times over. they keep our economy afloat through the ebb and flow of political and economic crises.. While we sit.. Acting C. who probably feel they can do as they please in their own country. Petitioner Sameer Overseas Placement Agency is ORDERED to pay respondent Joy C. Brion. null and void. concur. that disadvantage must not continue to burden them when they return to their own territory to voice their muted complaint. the protection of our own laws cannot be extended to them in full measure for the redress of their grievances. We default by limiting the contractual wages that should be paid to our workers when their contracts are breached by the foreign employers. They would count the minutes. and years yearning to see their sons and daughters. sub-human lodgings. There is no reason why. 10022 amending Section 10 of Republic Act No.142chanrobleslaw But it seems that we have not said enough. each of their stories as real as any other.. SO ORDERED.. JJ.. Perez. Overseas Filipino workers brave alien cultures and the heartbreak of families left behind daily. Reyes. Villarama. usually with heavy hearts. days. They are our true diplomats. While these workers may indeed have relatively little defense against exploitation while they are abroad. The clause. Facetime. patience. Indeed. if any. insufficient nourishment. Velasco. C. and creativity of our people. and Perlas-Bernabe. In Prieto v. Bersamin. see dissenting opinion. “or for three (3) months for every year of the unexpired term. Cabiles the amount equivalent to her salary for the unexpired portion of her employment contract at an interest of 6% per annum from the finality of this judgment. This government loses its soul if we fail to ensure decent treatment for all Filipinos. NLRC:141cralawred The Court is not unaware of the many abuses suffered by our overseas workers in the foreign land where they have ventured. The decision of the Court of Appeals is AFFIRMED with modification. Leonardo-De Castro. Breach of contract. Del Castillo. Petitioner is possessed with the resources to determine the proper legal remedies to enforce its rights against Pacific. they remember what their work has cost them. this court has spoken on what Filipinos may encounter as they travel into the farthest and most difficult reaches of our planet to provide for their families. Jr. and many other gadgets and online applications will never substitute for their lost physical presence. being so. in pursuit of a more fulfilling future. Carpio. hours. rape. Inevitably. J.00 salary and pay respondent attorney’s fees of NT$300.00 at an interest of 6% per annum from the finality of this judgment. V Many times. on Leave. months. in their very own land.. Peralta. maltreatment. We face a diaspora of Filipinos. insults and other forms of debasement.J. Mendoza. Unknown to them.this judgment. are only a few of the inhumane acts to which they are subjected by their foreign employers. their dignity is ours as well. Jr. . WHEREFORE. they who show the world the resilience. Twitter accounts. therefore. Petitioner is also ORDERED to reimburse respondent the withheld NT$3. whichever is less” in Section 7 of Republic Act No. Sereno.000. this court will ensure that our laws will reward our overseas workers with what they deserve: their dignity.