1/28/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 582

G.R. No. 167614. March 24, 2009.*
ANTONIO M. SERRANO, petitioner, vs. Gallant MARITIME
SERVICES, INC. and MARLOW NAVIGATION CO., INC.,
respondents.

Constitutional Law; Non-impairment of Contracts; The non-
impairment clause under Section 10, Article II of the Constitution is limited
in application to laws about to be enacted that would in any way derogate
from existing acts or contracts by enlarging, abridging or in any manner
changing the intention of the parties thereto.—The prohibition is aligned
with the general principle that laws newly enacted have only a prospective
operation, and cannot affect acts or contracts already perfected; however, as
to laws already in existence, their provisions are read into contracts and
deemed a part thereof. Thus, the non-impairment clause under Section 10,
Article II is limited in application to laws about to be enacted that would in
any way derogate from existing acts or contracts by enlarging, abridging or
in any manner changing the intention of the parties thereto.
Same; Same; Police Power; Police power legislations adopted by the
State to promote the health, morals, peace, education, good order, safety,
and general welfare of the people are generally applicable not only to the
future contracts but even to those already in existence, for all private
contracts must yield to the superior and legitimate measures taken by the
State to promote public welfare.—But even if the Court were to disregard
the timeline, the subject clause may not be declared unconstitutional on the
ground that it impinges on the impairment clause, for the law was enacted in
the exercise of the police power of the State to regulate a business,
profession or calling, particularly the recruitment and deployment of OFWs,
with the noble end in view of ensuring respect for the dignity and well-being
of OFWs wherever they may be employed. Police power legislations
adopted by the State to promote the health, morals, peace, education, good
order, safety, and general welfare of the people are generally applicable not
only to future contracts but even to those already in existence, for all private
contracts must yield to the superior and legitimate measures taken by the
State to promote public welfare.

_______________

* EN BANC.

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Same; Labor Law; Section 18, Article II and Section 3, Article XIII
accord all members of the labor sector, without distinction as to place of
deployment, full protection of their rights and welfare.—Section 18, Article
II and Section 3, Article XIII accord all members of the labor sector,
without distinction as to place of deployment, full protection of their rights
and welfare. To Filipino workers, the rights guaranteed under the foregoing
constitutional provisions translate to economic security and parity: all
monetary benefits should be equally enjoyed by workers of similar category,
while all monetary obligations should be borne by them in equal degree;
none should be denied the protection of the laws which is enjoyed by, or
spared the burden imposed on, others in like circumstances.
Same; Same; Republic Act No. 8042; Prior to Republic Act 8042, all
Overseas Filipino workers (OFWs), regardless of contract periods or the
unexpired portions thereof, were treated alike in terms of the computation of
their monetary benefits in case of illegal dismissal. Their claims were
subjected to a uniform rule of computation: their basic salaries multiplied
by the entire unexpired portion of their employment contracts.—It is plain
that prior to R.A. No. 8042, all Overseas Filipino workers (OFWs),
regardless of contract periods or the unexpired portions thereof, were treated
alike in terms of the computation of their monetary benefits in case of illegal
dismissal. Their claims were subjected to a uniform rule of computation:
their basic salaries multiplied by the entire unexpired portion of their
employment contracts. The enactment of the subject clause in R.A. No.
8042 introduced a differentiated rule of computation of the money claims of
illegally dismissed OFWs based on their employment periods, in the process
singling out one category whose contracts have an unexpired portion of one
year or more and subjecting them to the peculiar disadvantage of having
their monetary awards limited to their salaries for 3 months or for the
unexpired portion thereof, whichever is less, but all the while sparing the
other category from such prejudice, simply because the latter’s unexpired
contracts fall short of one year.
Same; Same; Same; With the enactment of Republic Act 8042,
specifically the adoption of the subject clause, illegally dismissed Overseas
Filipino Workers (OFWs), with an unexpired portion of one year or more in
their employment contract have since been differently treated in that their
money claims are subject to a 3-month cap, whereas no such limitation is
imposed on local workers with fixed-

256

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—While all the provisions of the 1987 Constitution are presumed self-executing. with an unexpired portion of one year or more in their contracts.—The Court concludes that the subject clause contains a suspect classification in that. 8042. No. Article XIII being one. 257 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. it imposes a 3-month cap on the claim of OFWs with an unexpired portion of one year or more in their contracts. The subject clause singles out one classification of OFWs and burdens it with a peculiar disadvantage. 442 SCRA 573 (2004). in Agabon v. but none on the claims of other OFWs or local workers with fixed-term employment. the nature of which. being one.A.com. would be http://www. the Court now subjects the classification to a strict judicial scrutiny. this Court. The subject clause singles out one classification of Overseas Filipino Workers (OFWs). but none on the claims of other OFWs or local workers with fixed-term employment.central. has described to be not self-actuating: Thus. While all the provisions of the 1987 Constitution are presumed self-executing. in the computation of the monetary benefits of fixed-term employees who are illegally discharged. specifically the adoption of the subject clause. Same. Article XIII. Same. Same. it imposes a 3-month cap on the claim of Overseas Filipino Workers (OFWs). particularly Section 3 thereof. in the computation of the monetary benefits of fixed-term employees who are illegally discharged. National Labor Relations Commission. But with the enactment of R. to declare that the constitutional provisions are enough to guarantee the full exercise of the rights embodied therein. and determines whether it serves a compelling state interest through the least restrictive means.A. and the realization of ideals therein expressed. illegally dismissed OFWs with an unexpired portion of one year or more in their employment contract have since been differently treated in that their money claims are subject to a 3-month cap.1/28/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 582 term employment. Same. and burdens it with a peculiar disadvantage. No. there are some which this Court has declared not judicially enforceable. Same. the constitutional mandates of protection to 257 . Same.—Prior to R.ph/sfsreader/session/00000159e3796c4f4ee046e3003600fb002c009e/t/?o=False 3/28 . 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. However. There being a suspect classification involving a vulnerable sector protected by the Constitution. The Supreme Court concludes that the subject clause contains a suspect classification in that. 8042. whereas no such limitation is imposed on local workers with fixed-term employment. there are some which this Court has declared not judicially enforceable.

without any existing valid governmental purpose. but of the employers’ as well. This interpretation implies an unimpeachable right to continued employment—a utopian notion. but for the judiciary as well. The Supreme Court further holds that the subject clause violates petitioner’s right to substantive due process.” when examined in isolation. penned by then Associate Justice now Chief Justice Reynato S.central. but merely clothes it with the status of a sector for whom the Constitution urges protection through executive or legislative action and judicial recognition. Its utility is best limited to being an impetus not just for the executive and legislative departments. and the broadest interpretation possible suggests a blanket shield in favor of labor against any form of removal regardless of circumstance. not only the rights of the labor sector. The guarantees of “full protection to labor” and “security of tenure. consisting of monetary benefits. Same. for it deprives him of property. judicial bodies will be at a loss. Same. doubtless—but still hardly within the contemplation of the framers. 446 SCRA 299 (2004). v.—The view that the concepts of suspect classification and strict judicial scrutiny formulated in Central Bank Employee Association exaggerate the significance of Section 3. Same. to protect the welfare of the working class. Without specific and pertinent legislation. Same. Article XIII of the Constitution does not directly bestow on the working class any actual enforceable right.ph/sfsreader/session/00000159e3796c4f4ee046e3003600fb002c009e/t/?o=False 4/28 . Same. but merely clothes it with the status of a sector for whom the Constitution urges protection through executive or legislative action and judicial recognition. Subsequent legislation is still needed to define the parameters of these guaranteed rights to ensure the protection and promotion. Bangko Sentral ng Pilipinas. if not unrealistic. are facially unqualified. Same. formulated the judicial precept that when the challenge to a statute is premised on the perpetuation of prejudice against persons favored by the Consti- 258 258 SUPREME COURT REPORTS ANNOTATED tution with special protection—such as the working class or a section thereof—the Court may recognize the existence of a suspect classification and subject the same to strict judicial scrutiny. Puno. formulating their own conclusion to approximate at least the aims of the Constitution. Article XIII does not directly bestow on the working class any actual enforceable right. And it was in fact consistent with that constitutional agenda that the Court in Central Bank (now Bangko Sentral ng Pilipinas) Employee Association. Its utility is best limited to being an impetus not just for the executive and legislative departments. Inc.—It must be stressed that Section 3. Article XIII is a http://www.com. Section 3. to protect the welfare of the working class. The espousal of such view presents the dangerous tendency of being overbroad and exaggerated. but for the judiciary as well.1/28/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 582 impractical.

has no life or force of its own as elucidated in Agabon. petitioner is entitled to his salaries for the entire enexpired period of nine months and 23 days of his employment contract. 8042 is unconstitutional. Central Bank applied Article XIII in conjunction with the equal protection clause. whichever is less” in Section 10. Same.A.  J. paragraph 5.—The subject clause does not state or imply any definitive governmental purpose. but also her right to substantive due process under Section 1. Labor Law. pursuant to law and jurisprudence prior to the enactment of R. Same. The right to work and the right to earn a living necessarily includes the right to bargain for better terms in an employment contract and the right to enforce those terms. Separate Concurring Opinion: Constitutional Law. Article III of the Constitution.—I concur that the provision “or for three (3) months for every year of the unexpired term.1/28/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 582 groundless apprehension. Due Process. by itself.central. Right to Work. for it deprives him of property. consisting of monetary benefits.. petitioner is entitled to his salaries for the entire unexpired period of nine months and 23 days of his employment contract. the Court further holds that the subject clause violates petitioner’s right to substantive due process. 8042. The subject clause being unconstitutional. pursuant to law and jurisprudence prior to the enactment of Republic Act (RA) 8042. View that the provision “or for three (3) months for every year of the unexpired term. whichever is less” in Section 10. It is an invalid exercise of police power. 8042 is unconstitutional—it violates the prohibition against deprivation of property without due process of law. The provision violates the prohibition against deprivation of property without due process of law. Same. Article XIII. of Republic Act (RA) No. Right to Property. Same. CARPIO. The subject clause being unconstitutional. paragraph 5.ph/sfsreader/session/00000159e3796c4f4ee046e3003600fb002c009e/t/?o=False 5/28 . Same. without the application of the equal protection clause. without any existing valid governmental purpose. http://www. Same. No.—The right to work and the right to earn a living necessarily includes the right to bargain for better terms in an employment contract and the right to enforce those terms. Along the same line of reasoning. If protected property does not include these rights. of Republic Act (RA) No. then the right to work and the right to earn a living would become empty civil liberties—the State can deprive persons of their right to work and their right to earn a living by depriving them of the right to negotiate for better terms and the right to enforce those terms. and it is for that precise reason that the clause violates not just petitioner’s right to equal protection. 259 ground.com. but on a different 259 .

Article XIII. Substantive due process requires that the means employed in depriving persons of property must not be unduly oppressive. proceeds from a different reason and constitutional basis. the deprivation must be done with due process. Otherwise. it defeats the purpose for which it is exercised. of the Constitution states that. Substantive due process requires that the means employed in depriving persons of property must not be unduly oppressive. it may not be exercised arbitrarily or unreasonably. humane conditions of work. Same.com. Given these bases. v.—The exercise of police power.ph/sfsreader/session/00000159e3796c4f4ee046e3003600fb002c009e/t/?o=False 6/28 . to be valid.—My conclusion.” Thus. Article II.—The assailed provision is unduly oppressive. Section 18. In Philippine Association of Service Exporters. Concurring Opinion: Constitutional Law. Same. and (3) guarantee the rights of all workers to security of tenure. the Court held that: Notwithstanding its extensive sweep. Due Process. The assailed provision is unduly oppressive. Same. Same. and repugnant to the Consti- 260 260 SUPREME COURT REPORTS ANNOTATED tution. I see no necessity in invoking the equal protection clause. Section 3. unreasonable. however. the State may deprive persons of property through the exercise of police power.. Same. of the Constitution states that the State shall (1) afford full protection to overseas labor. The exercise of police power. Same. that is. (2) promote full employment and equality of employment opportunities for all. It undermines the mandate of the Constitution to protect the rights of overseas workers and to promote their welfare.central. J.— The right to property is not absolute—the prohibition against deprivation of property is qualified by the phrase “without due process of law.1/28/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 582 Same. and repugnant to the Constitution. and in that event. to advance the public good. For all its awesome consequences. to be valid. 163 SCRA 386 (1988). Drilon. and a living wage. must be reasonable and not repugnant to the Constitution. must be reasonable and not repugnant to the Constitution. police power is not without its own limitations. Labor Law. It undermines the mandate of the Constitution to protect the rights of overseas workers and to promote their welfare. Inc.” BRION. unreasonable. However. “The State affirms labor as a primary social economic force. I believe that this provision should be struck down for violations of the constitutional provisions in favor of labor and of the substantive aspect of the due process clause. Same. It shall protect the rights of workers and promote their welfare. Same. View that the provision should be struck down for violations of the constitutional provisions in favor of labor and of the substantive aspect of the due process clause. Underlying this restraint in invoking the equal http://www.

Same. the disputed portion of Section 10 is one that goes against the interests of labor. Same. This is true whatever may be the duration or character of employment. are not on the same plane as protection to labor in our constitutional hierarchy of values.A. View that the expansion of the Philippine overseas development program and the need for incentives to achieve results are simply not valid reasons to justify a classification. on constitutional standards.central. Section 10 diminished rather than enhanced the protection the Constitution envisions for Overseas Filipino Workers (OFWs). more importantly.1/28/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 582 protection clause is my hesitation to join the ponencia in declaring a classification as “suspect” and in using the strict scrutiny standard without clearly defined parameters on when this approach applies. commercial or political—is a zealously guarded value that we in the Philippines should not demean by allowing a breach of OFW contracts easy to undertake. Even RA 8042 repeats that “the State does not promote overseas employment as a means to sustain economic growth and national http://www. 8042. the integrity of contracts—be they labor.—The OSG could not even point to any reason other than the protection of recruitment agencies and the expansion of the Philippine overseas program as justification for the limitation of liability that has effectively distinguished OFWs from locally-based workers. 8042’s own declared purposes and. No.A. Same.ph/sfsreader/session/00000159e3796c4f4ee046e3003600fb002c009e/t/?o=False 7/28 . unfortunately. based on R. Same.—The difference in work locations and working conditions that the OSG pointed out are not 261 . Same. No. 8042’s own declared purposes and.—The situation of illegally dismissed OFWs changed for the worse after R. based on R. These reasons. View that the difference in work locations and working conditions that the Office of the Solicitor General (OSG) pointed out are not valid grounds for distinctions that should matter in the enforcement of employment contracts.com. 261 valid grounds for distinctions that should matter in the enforcement of employment contracts. on constitutional standards. No valid basis for classification thus exists to justify the differential treatment that resulted from the disputed Section 10. whatever their term and conditions may be subject only to their consistency with the law. View that the disputed portion of Section 10 is one that goes against the interests of labor. employment contracts. In this sense. more importantly. Same. Whether in the Philippines or elsewhere. must be respected during the whole contracted term and under the conditions agreed upon. Same. particularly when the incentive is in the form of oppressive and confiscatory limitation of liability detrimental to labor. Same.A. Section 10 diminished rather than enhanced the protection the Constitution envisions for OFWs. Same. No.

a Filipino seafarer. July 10.” Under RA 8042’s own terms.A. provided health care. 8042. No valid basis for classification thus exists to justify the differential treatment that resulted from the disputed Section 10. only recently have we begun to understand not only how much international migration impacts development.  PETITION for review on certiorari of the decision and resolution of the Court of Appeals.2 to wit: “Sec. the last clause in the 5th paragraph of Section 10. Republic Act (R. the toil of solitary migrants has helped lift entire families and communities out of poverty. Money Claims. Thus viewed. They have woven together the world by transmitting ideas and knowledge from country to country. 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 http://www. particularly when the incentive is in the form of oppressive and confiscatory limitation of liability detrimental to labor. Their earnings have built houses. societies and economies. the workers shall be entitled to the full reimbursement of his placement fee with interest of twelve percent (12%) per annum.    The facts are stated in the opinion of the Court. 262 262 SUPREME COURT REPORTS ANNOTATED AUSTRIA-MARTINEZ.central. valid or authorized cause as defined by law or contract. for respondents.com. the expansion of the Philippine overseas deployment program and the need for incentives to achieve results are simply not valid reasons to justify a classification.—x  x  x In case of termination of overseas employment without just. 20071 For Antonio Serrano (petitioner). Jr.1/28/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 582 development. Yet. x x x x” (Emphasis and underscoring supplied) does not magnify the contributions of Overseas Filipino workers (OFWs) to national development.ph/sfsreader/session/00000159e3796c4f4ee046e3003600fb002c009e/t/?o=False 8/28 . 10.   Ceballos Law Firm for petitioner. J. plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term. They have provided the dynamic human link between cultures.) No.: “For decades. equipped schools and planted the seeds of businesses. whichever is less. Lomabao. but how smart public policies can magnify this effect.   Apolinario N.” United Nations Secretary-General Ban Ki-Moon Global Forum on Migration and Development Brussels. the overseas employment program exists only for OFW protection.

upon the assurance and representation of respondents that he would be made Chief Officer by the end of April 1998.00 per month Vacation leave with pay  7.1/28/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 582 of their employment contract “or for three months for every year of the unexpired term.7 Hence. 263 violates the OFWs’ constitutional rights in that it impairs the terms of their contract.com.00 Hours of work  48.00 days per month5   On March 19. which applied the subject clause. Bersamin and Celia C. 1998.un. entreating this Court to declare the subject clause unconstitutional.0 hours per week Overtime  US$700. Librea-Leagogo. Jr. 2004 Decision3 and April 1. Ltd. 2005 Resolution4 of the Court of Appeals (CA). 1995. Rollo. p. petitioner assails the December 8. 4 Id. Petitioner was hired by Gallant Maritime Services. and concurred in by Associate Justices Lucas P. Inc. petitioner was constrained to accept a downgraded employment contract for the position of Second Officer with a monthly salary of US$1. 263 ..00. http://www. whichever is less” (subject clause). 248. deprives them of equal protection and denies them due process.central. 2 Migrant Workers and Overseas Filipinos Act of 1995.htm. Petitioner claims that the last clause _______________ 1 http://www.ph/sfsreader/session/00000159e3796c4f4ee046e3003600fb002c009e/t/?o=False 9/28 .400. at p.. at p.org/News/Press/docs/2007/sgsm11084. and Marlow Navigation Co. 231. petitioner refused to stay on as _______________ 3  Penned by Associate Justice Andres B.6 Respondents did not deliver on their promise to make petitioner Chief Officer.doc. 6 Id. (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. By way of Petition for Review under Rule 45 of the Rules of Court. 57. effective July 15.. Reyes. 58. the date of his departure. p. 5 Rollo.000.

1999  2. he had served only two (2) months and seven (7) days of his contract. 1998  2.590.00 Oct. 48.590.23 Amount adjusted to chief mate’s salary   (March 19/31. Rollo. 53-54. 1999  2. this amount represents the pro-rated difference between the salary of US$2.00 Sept.com. Leave pay  US$ 413. 1998.382. 1998 to April 30.590.00 per month which he was actually paid as Second Officer for the same period.00 Feb. 1998  2. 01/31.00 August 01/31. 01/31. 1999 (19 days) incl. leave pay _1. 01/30..590.590.8 Petitioner’s employment contract was for a period of 12 months or from March 19.5010 TOTAL CLAIM  US$ 26. 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. 1998) + _1.. leaving an unexpired portion of nine (9) months and twenty-three (23) days.7311 as well as moral and exemplary damages and attorney’s fees.590.00 Dec.590. _______________ 8  Id. at pp. 1998  2.00 July 01/31.00    25. 1998  2.850. 1998 (5 days) incl. 1/19.442. See LA Decision. 265 . 1998  2. 55. 1999.442.590. broken down as follows:  May 27/31. 1998 and the salary of US$1. 107 and 112. at p. pp.00 Mar.640.central. 10  According to petitioner. 1998 up to March 19.060. id. 1998  2..590. 264 264 SUPREME COURT REPORTS ANNOTATED Second Officer and was repatriated to the Philippines on May 26. 01/30. 1998  2.00 per month which he was supposed to receive as Chief Officer from March 19.ph/sfsreader/session/00000159e3796c4f4ee046e3003600fb002c009e/t/?o=False 10/28 . 1998. 11 Position Paper. at p.00 Nov. 01/28.590. but at the time of his repatriation on May 26.73.1/28/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 582 7Id.00 Jan. 1998 to April 1/30. 9  Id. 265 http://www. 01/31.90 June 01/30.

00 salary differential to which petitioner is entitled in view of his having received from respondents US$1. 319-321. “G” and “H”. Id. based on the rate of exchange prevailing at the time of payment. the respondents are hereby ordered to pay the complainant. + http://www.S.435. 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]. All other claims are hereby DISMISSED. the amount of EIGHT THOUSAND SEVEN HUNDRED SEVENTY U.590.”13 (Emphasis supplied) In awarding petitioner a lump-sum salary of US$8. 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. fixed overtime pay. 1999.com. to wit: “WHEREFORE.00). 13 Id. jointly and severally. representing the complainant’s salary for three (3) months of the unexpired portion of the aforesaid contract of employment.480.00/month + US$700. based on the rate of exchange prevailing at the time of payment. jointly and severally. premises considered.ph/sfsreader/session/00000159e3796c4f4ee046e3003600fb002c009e/t/?o=False 11/28 . DOLLARS (US $8. the LA based his computation on the salary period of three months only —rather than the entire unexpired portion of nine months and 23 days of petitioner’s employment contract— _______________ 12  The LA awarded petitioner US$45.400.00 out of the US$1.00/month. the amount of FORTY FIVE U. SO ORDERED.central.00).770. 114.. in Philippine Currency. US$1. jointly and severally.S. The respondents are likewise ordered to pay the complainant [petitioner].00. at the exchange rate prevailing at the time of payment.. in Philippine Currency. in Philippine Currency. at p. at pp. the LA applied the salary rate of US$2.1/28/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 582 The LA rendered a Decision dated July 15. consisting of petitioner’s “[b]asic salary. In addition. 266 266 SUPREME COURT REPORTS ANNOTATED applying the subject clause. DOLLARS (US$ 45. The claims of the complainant for moral and exemplary damages are hereby DISMISSED for lack of merit.00 as evidenced by receipts marked as Annexes “F”.12 representing the complainant’s claim for a salary differential.770. declaring the dismissal of petitioner illegal and awarding him monetary benefits.00. However.

No.”20 Petitioner filed a Motion for Partial Reconsideration.590.. the NLRC modified the LA Decision. 111-112.22 http://www.50 TOTAL US$4. 267 The NLRC corrected the LA’s computation of the lump-sum salary awarded to petitioner by reducing the applicable salary rate from US$2.00/month. at p. and for vacation leave pay. pp. at the prevailing rate of exchange at the time of payment the following:           1. 18 Appeal Memorandum. but this time he questioned the constitutionality of the subject clause. 134. p. 299 SCRA 608. OFWs are entitled to their salaries for the unexpired portion of their contracts. 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. 17 G. Rollo. the Decision dated 15 July 1999 is MODIFIED.ph/sfsreader/session/00000159e3796c4f4ee046e3003600fb002c009e/t/?o=False 12/28 .00/ compensation per month. at p. Respondents are hereby ordered to pay complainant.200. vacation leave pay = US$2.   10% Attorney's fees   424. National Labor Relations Commission17 that in case of illegal dismissal. 1998. 15 Id. 19 Id. December 3. Three (3) months salary          $1.00          3.R. v.1/28/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 582 US$490.669.”14 Respondents appealed15 to the National Labor Relations Commission (NLRC) to question the finding of the LA that petitioner was illegally dismissed. 2000. which should be proven to have been actually performed.com. in Philippine currency.00        US$4... to wit: “WHEREFORE. 267 .21 The NLRC denied the motion.400.central. at p.00 2.50     The other findings are affirmed. 121.245. 115.00 to US$1. SO ORDERED. jointly and severally. Inc. 124. 8042 “does not provide for the award of overtime pay.00 because R. 129584.400 x 3   US$4. 16 Id. Salary differential         45.590.”19 _______________ 14 Rollo.A. No.18 In a Decision dated June 15.

however.R. 248. filed by petitioner. the CA skirted the constitutional issue raised by petitioner.. 155.com. at p. at p. at pp. In a Decision dated December 8. as directed by this Court in its Resolution dated August 7. the constitutional issues raised by the petitioner on the constitutionality of said law.22 Petitioner filed a Petition for Certiorari23 with the CA. reiterating the constitutional challenge against the subject clause. particularly. at p. 239-241.. 22 Id. which unreasonably. unfairly and arbitrarily limits payment of the award for back wages of overseas workers to three (3) months.24 After initially dismissing the petition on a technicality. 25 CA Decision.1/28/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 582 NLRC denied the motion.. 8042. it is submitted that the Court of Appeals gravely erred in law when it failed to discharge its judicial duty to decide questions of substance not theretofore determined by the Honorable Supreme Court. 23 Id. 151833. docketed as G. id. Rollo. 2004. 146-150.. 153.. the CA affirmed the NLRC ruling on the reduction of the applicable salary rate. at pp.central. 26 Id. at pp.  268 268 SUPREME COURT REPORTS ANNOTATED 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. 27 Id. 242. 21 Id. 10 of Republic Act No. III Even without considering the constitutional limitations [of] Sec.. 140.27 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 _______________ 20 NLRC Decision. at p. 8042. 24 Id. 2003 which granted the petition for certiorari.25 His Motion for Reconsideration26 having been denied by the CA.ph/sfsreader/session/00000159e3796c4f4ee046e3003600fb002c009e/t/?o=False 13/28 . the Court of Appeals gravely erred in law in excluding from petitioner’s award the overtime pay and vacation pay http://www. 166-177. p. No.. the CA eventually gave due course to it.

200.00. 2008. 787.23 more or a total of US$25.00 covering the period of three months out of the unexpired portion of nine months and 23 days of his employment contract or a total of US$4.200.00 awarded by the NLRC and the CA. equivalent to his salaries for the entire nine months and 23 days left of his employment contract. NLRC and CA that the dismissal of petitioner was illegal is not disputed.. praying that the constitutional question be resolved. at p. Applying the subject clause.29 Required to comment.ph/sfsreader/session/00000159e3796c4f4ee046e3003600fb002c009e/t/?o=False 14/28 .central. 29 Id. petitioner contends that.182. he is entitled to US$21.400.com. and he intends to make use of the monetary award for his medical treatment and medication. the Court now takes up the full merit of the petition mindful of the extreme importance of the constitutional question raised therein. in addition to the US$4. the NLRC and the CA computed the lump-sum salary of petitioner at the monthly rate of US$1.590. petitioner wrote the Court to withdraw his petition as he is already old and sickly. computed at the monthly rate of US$2. 30 Id.30 Considering that the parties have filed their respective memoranda. urging the court to allow partial execution of the undisputed monetary award and.. 28.382. Likewise not disputed is the salary differential of US$45. 269 On the first and second issues The unanimous finding of the LA. p.1/28/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 582 provided in his contract since under the contract they form part of his salary. 269 . _______________ 28 Petition. Rollo. counsel for petitioner filed a motion.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. 799.32 It also impinges on http://www. What remains disputed is only the computation of the lump-sum salary to be awarded to petitioner by reason of his illegal dismissal. Impugning the constitutionality of the subject clause. at p.00 awarded to petitioner in all three fora. at the same time.23.00.28 On February 26.

viz.33 and that it defeats Section 18. Not only that. placement agencies that are in good faith and which fulfill their obligations are unnecessarily penalized for the acts of the foreign employer.1/28/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 582 the equal protection clause.36 Petitioner further underscores that the insertion of the subject clause into R. Hence.34 Article II of the Constitution which guarantees the protection of the rights and welfare of all Filipino workers. 8042. Though there are conflicting rulings on this. 282 32 Memorandum for Petitioner. p. 8042 serves no other purpose but to benefit local placement agencies. liability for money claims was reduced under Section 10 of R. 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. 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. No.35 Moreover. 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. the subject clause sacrifices the well-being of OFWs. while setting no limit to the same monetary award for local workers when their dismissal is declared illegal..: “Often. He marks the statement made by the Solicitor General in his Memorandum. that the disparate treatment is not reasonable as there is no substantial distinc- _______________ 31 Rollo.central.com. petitioner urges the Court to sort them out for the guidance of affected OFWs. at pp. the provision makes foreign employers better off than local employers because in cases _______________ http://www.A.A.”37 (Emphasis supplied) Petitioner argues that in mitigating the solidary liability of placement agencies. 270 270 SUPREME COURT REPORTS ANNOTATED tion between the two groups. id. No. their liability being solidary. To protect them and to promote their continued helpful contribution in deploying Filipino migrant workers.ph/sfsreader/session/00000159e3796c4f4ee046e3003600fb002c009e/t/?o=False 15/28 . 741-742. placement agencies. whether deployed locally or overseas.

Benipayo was Solicitor General at the time the Comment was filed. As petitioner puts it: “In terms of practical application. 40 Rollo. It shall protect the rights of workers and promote their welfare. Nachura (now an Associate Justice of the Supreme Court) was Solicitor General when the Memorandum was filed. for this was belatedly interposed by petitioner in his appeal before the CA.”38 Lastly. 271 . at p. The State affirms labor as a primary social economic force. 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.. 271 involving the illegal dismissal of employees. id. On the other hand. 8042 took effect on July 15.. id. at p. 645-646 and 512-513.central..39 The Arguments of Respondents In their Comment and Memorandum.40 The Arguments of the Solicitor General The Solicitor General (OSG)41 points out that as R. pp. 37 Memorandum of the Solicitor General. 735. 755. 761-763. which was when he filed an appeal before the NLRC. 41  Alfredo L. Antonio Eduardo B. the local employers are not limited to the amount of backwages they have to give their employees they have illegally dismissed. 35 Rollo.com. pp.. its provisions could not _______________ 38 Memorandum for Petitioner. 39 Id. for it deprives him of the salaries and other emoluments he is entitled to under his fixed-period employment contract. 763-766.1/28/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 582 33 Id. at pp. 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. 680. p. following well-entrenched and unequivocal jurisprudence on the matter.  272 http://www. 36 Petition. 34  Section  18. and not at the earliest opportunity. No.ph/sfsreader/session/00000159e3796c4f4ee046e3003600fb002c009e/t/?o=False 16/28 . 746-753. at pp. respondents contend that the constitutional issue should not be entertained.A. Rollo. 1995. petitioner claims that the subject clause violates the due process clause.

273 are properly deployed and are employed under decent and humane conditions. the OSG posits that there are rights and privileges exclusive to local workers. Hence. No. pp. especially on the matter of money claims. 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. 243 SCRA 190.ph/sfsreader/session/00000159e3796c4f4ee046e3003600fb002c009e/t/?o=False 17/28 . 662-665. The OSG enumerates the essential elements that distinguish OFWs from local workers: first. Article II of the Constitution. 273 . at pp. 43 G. and second. 385 SCRA 306. July 29. 1995. Rather. the provisions thereof are deemed part of the minimum terms of petitioner’s employment. as held in Coyoca v.42 Moreover. 45 Memorandum of the Solicitor General. No. over whom it is difficult for our courts to acquire jurisdiction.R.1/28/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 582 272 SUPREME COURT REPORTS ANNOTATED have impaired petitioner’s 1998 employment contract.A.com. March 31. the OSG emphasizes that OFWs and local workers differ in terms of the nature of their employment. the provision does not violate the equal protection clause nor Section 18. id. 113658. Rollo. National Labor Relations Commission43 and Millares v. while local workers perform their jobs within Philippine territory. No. 2002. but not available to OFWs. 8042 having preceded petitioner’s contract. R.. unlike local workers who are or can become regular employees. 110524.”46 http://www. as this was not stipulated upon by the parties. such that their rights to monetary benefits must necessarily be treated differently. 668-678. OFWs perform their jobs for foreign employers. 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.R.44 OFWs are contractual employees who can never acquire regular employment status. National Labor Relations Commission.45 Lastly. Thus. or against whom it is almost impossible to enforce judgment. 44 G. The survival of legitimate placement agencies helps [assure] the government that migrant workers _______________ 42 Memorandum of the Solicitor General.central.

It should be borne in mind that the requirement that a constitutional issue be raised at the earliest opportunity entails the interpo- _______________ 46 Id.47 (2) that the constitutional question is raised by a proper party48 and at the earliest opportunity. but in his Motion for Partial Reconsideration with said labor tribunal. 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. such as the Congress.50 otherwise the Court will dismiss the case or decide the same on some other ground. 449 SCRA 1. 49 David v. March 14. 2006. No. 2007. 48 Automotive Industry Workers Alliance v.R. Marasigan v.R. June 21. Inc.49 and (3) that the constitutional question is the very lis mota of the case. 489 SCRA 160. 682. No.R.central. 525 SCRA 198. 171396. 149719. G. 2004. June 15.R. G. 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. No. 50 Arceta v. at p. 157509.54 Nonetheless. 432 SCRA 136. When the Court is called upon to exercise its power of judicial review of the acts of its co-equals. 152895. 47  The Province of North Cotabato v. if not considered in the trial. G. 183591 October 14. The constitutional challenge is also timely.53 and reiterated in his Petition for Certiorari before the CA.com. G. 568 SCRA 402. if the issue is not raised in the pleadings before that competent court. 2005. 51 Moldex Realty. it cannot be considered at the trial and. Marasigan. G. January 18.1/28/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 582 The Court’s Ruling The Court sustains petitioner on the first and second issues.. the issue is deemed seasonably raised because it is not the NLRC but the CA http://www. Macapagal-Arroyo.52 Records disclose that the issue on the constitutionality of the subject clause was first raised.R. Romulo. No.51 Without a doubt. Housing and Land Use Regulatory Board.R. G. 274 274 SUPREME COURT REPORTS ANNOTATED sition of the issue in the pleadings before a competent court. The Government of the Republic of the Philippines Peace Panel on Ancestral Domain. 2008. not in petitioner’s appeal with the NLRC. May 3. it cannot be considered on appeal. such that. 548 SCRA 409. No. No.ph/sfsreader/session/00000159e3796c4f4ee046e3003600fb002c009e/t/?o=False 18/28 . 2008. Mangrobang. v. 156078.

2003. September 19. 53 Rollo.. Inc.com. on the other hand.R. 502 SCRA 295. the stage is all set for the determination of the constitutionality of the subject clause. and not to inquire into the validity of its provisions. Benipayo. No. 54 Id.56 Petitioner’s interposition of the constitutional issue before the CA was undoubtedly seasonable. 166. August 12. 145. p. 275 tract. The CA was therefore remiss in failing to take up the issue in its decision. No. National Telecommunications Commission. v. April 2.” http://www. 2002. The CA. 8042 is to be applied and to resolving such questions in accordance with the standards laid down by the law itself. Article III of the Constitution provides: “No law impairing the obligation of contracts shall be passed. strikes at the very core of the subject clause.55 thus.central. Inc. 275 . at p. 380 SCRA 49. 151908. 2006.R. and not just for a period of three months. Section 10. Department of Foreign Affairs. G. No. 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. 56 Equi-Asia Placement.A. No. v. G.ph/sfsreader/session/00000159e3796c4f4ee046e3003600fb002c009e/t/?o=False 19/28 . 8042. 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 con- _______________ 52 Matibag v.1/28/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 582 which has the competence to resolve the constitutional issue. Article III of the Constitution on non-impairment of contracts? The answer is in the negative. 152214. Thus.A. such as the subject clause. No. Does the subject clause violate Section 10. 55  Smart Communications.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. is vested with the power of judicial review or the power to declare unconstitutional a law or a provision thereof. G. 408 SCRA 678. 149036. its foremost function is to administer and enforce R.

2008. No. v. 83 U. Republic of the Philippines. December 6. particularly the subject clause. 314 (1873). Rollo. No.S. pp.58 and cannot affect acts or contracts already perfected. 8042. G. and general welfare of the people are generally applicable not only to future contracts but even to those already in existence.1/28/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 582 The prohibition is aligned with the general principle that laws newly enacted have only a prospective operation. peace. the non-impairment clause under Section 10. G. No.59 however. 58 Ortigas & Co. profession or calling. v. 2008. City of Davao.60 Thus. with the noble end in view of ensuring respect for the dignity and well-being of OFWs wherever they may be employed.R.R. 60 Walker v. Inc.R. impaired the employment contract of the parties. Article III of the Constitution.central. as to laws already in existence. Court of Appeals. July 9. G. 2000. Intra-Strata Assurance Corporation v. 163509. Rather.S. education. Article II and Section http://www. 8042. 565 SCRA 237.A. 362. Smart Communications.R. 126102. 276 276 SUPREME COURT REPORTS ANNOTATED ing or in any manner changing the intention of the parties thereto. 8042 in 1995 preceded the execution of the employment contract between petitioner and respondents in 1998. their provisions are read into contracts and deemed a part thereof.. No.com. abridg- _______________ 57 Memorandum for Petitioner. they were deemed to have incorporated into it all the provisions of R. good order.ph/sfsreader/session/00000159e3796c4f4ee046e3003600fb002c009e/t/?o=False 20/28 . 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. morals.A. 59 Picop Resources. 741-742.A. September 16. 346 SCRA 748. Whitehead. Wood v. Inc. Ltd. 2006. Base Metals Mineral Resources Corporation. December 4. But even if the Court were to disregard the timeline. G. 370 (1941). 510 SCRA 400. the subject clause may not be declared unconstitutional on the ground that it impinges on the impairment clause. 156571. when the parties executed their 1998 employment contract. 155491. particularly the recruitment and deployment of OFWs. v. it cannot be argued that R. No.62 Does the subject clause violate Section 1. As aptly observed by the OSG. 557 SCRA 363. 313 U. for the law was enacted in the exercise of the police power of the State to regulate a business.61 Police power legislations adopted by the State to promote the health. for all private contracts must yield to the superior and legitimate measures taken by the State to promote public welfare. safety. No. and Section 18. Lovett. No. the enactment of R. Hence.

or property without due process of law nor shall any person be denied the equal protection of the law. To Filipino workers. others in like circumstances. Article XIII on labor as a protected sector? The answer is in the affirmative.65 Such rights are not absolute but subject to the inherent power of Congress to incorporate. 118127. and promote full employment and equality of employment opportunities for all. 277 “No person shall be deprived of life. No. 131719.ph/sfsreader/session/00000159e3796c4f4ee046e3003600fb002c009e/t/?o=False 21/28 . 65 See City of Manila v. 62 Ortigas & Co. 548 http://www. No. The State shall afford full protection to labor. 2005. 3) it is not limited to existing conditions only. Court of Appeals.R. citing JMM Promotion and Management.66 There are three levels of scrutiny at which the Court reviews the constitutionality of a classification embodied in a _______________ 63  Section  18.R. 429 SCRA 81. 260 SCRA 319. liberty. Court of Appeals. Article III of the Constitution guarantees: _______________ 61 Executive Secretary v. 455 SCRA 308. and 4) it applies equally to all members of the class. Laguio.” Section 18. G. Court of Appeals.63 Article II and Section 3. organized and unorganized. 1996.com.R. while all monetary obligations should be borne by them in equal degree.central. when it sees fit. 64 Section  3. none should be denied the protection of the laws which is enjoyed by. May 25. It shall protect the rights of workers and promote their welfare. Pimentel III v. v. 178413.1/28/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 582 3. The State affirms labor as a primary social economic force. Ltd. August 5.. G. or spared the burden imposed on.R. however. Section 1. March 13. full protection of their rights and welfare. G. 2008. April 12. v. No. Inc. local and overseas. a system of classification into its legislation. 120095. the classification must comply with these requirements: 1) it is based on substantial distinctions. supra note 58. 2) it is germane to the purposes of the law. G. to be valid.64 Article XIII accord all members of the labor sector. Commission on Elections. 277 . without distinction as to place of deployment. 2004. No. 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.

and the burden is upon the government to prove that the classification is necessary to achieve a compelling state interest and that it is the least restrictive means to protect such interest. 476 SCRA 168. 278 278 SUPREME COURT REPORTS ANNOTATED 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. G. 70 America v. Commission on Elections G.S.November 25. 139147. Fainter. 175 SCRA 343.com. Inc. 640 (2000). Craig v. Heightened scrutiny has generally been applied to cases that involve discriminatory classifications based on sex or illegitimacy. 72 Grutter v.ph/sfsreader/session/00000159e3796c4f4ee046e3003600fb002c009e/t/?o=False 22/28 .R. 425 (2002). 66  League of Cities of the Philippines v.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. Boren. such as in Plyler v.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.pdf. Inc. 71 Adarand Constructors.R. 202. http://www. 2008.S. Carolene Prod-  279 http://www. 1. 1989.R. 571 SCRA 263. 176951. Bollinger. Almeda Books. Peña.S. G. where a heightened scrutiny standard was used to invalidate a State’s denial to the children of illegal aliens of the free public education that it made available to other residents. strict judicial scrutiny is triggered by suspect classifications73 based on _______________ 67  Association of Small Landowners in the Philippines v.72 Under American jurisprudence. No. (2007). 530 U. 2005. 457 U. v. Seattle School District No. v. No.1/28/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 582 SCRA 169. Parents Involved in Community Schools v. Secretary of Agrarian Reform.S. 535 U. 78742. Secretary of Health. 539 US 306 (2003). July 14. Bernal v. 551 U. 467 US 216 (1984).S.. Dale.central.supremecourtus. November 18. 515 US 230 (1995). Beltran v. 69  There is also the “heightened scrutiny” standard of review which is less demanding than “strict scrutiny” but more demanding than the standard rational relation test. 73 The concept of suspect classification first emerged in the famous footnote in the opinion of Justice Harlan Stone in U. 429 US 190 (1976).gov/opinions/06pdf/05-908. Doe. 68 Los Angeles v. No.

184. 510. see De Jonge v. California. 268 U. Nixon v. It is unnecessary to consider now whether legislation which restricts those political processes which can ordinarily be expected to bring about repeal of undesirable legislation is to be subjected to more exacting judicial scrutiny under the general prohibitions of the Fourteenth Amendment than are most other types of legislation.S. 299 U.S.S. Regents of the University of California v. 303 U. New York. California. 242. 369-370. n 2.S. supra: whether prejudice against discrete and insular minorities may be a special condition. which are deemed equally specific when held to be embraced within the Fourteenth. 518 U.central. see Nixon v.S.S. or national. 536. 4 Wheat. Rodriguez. Fiske v. Grosjean v. Barnwell Bros. 279 race74 or gender75 but not when the classification is drawn along income categories. 722. 438 U. 515 (1996). 353.S. Lowry. Nebraska. Lovell v. J. 428. 444. 380. v. 273 U. which tends seriously to curtail the operation of those political processes ordinarily to be relied upon to protect minorities. see Stromberg v. 233. 365. 268 U. supra. 677 (1973). Bangko Sentral ng Pilipinas.S.. 411 U.1/28/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 582 . On restrictions upon the right to vote. and see Holmes.S. as to prohibition of peaceable assembly. supra. Oregon. 262 U. Kansas.S. Tokushige.S. 214 (1944).S. 323 U. Inc. 283 U. Griffin. 303 U. Nor need we enquire whether similar considerations enter into the review of statutes directed at particular religious. See Stromberg v. Condon.S. 74 Korematsu v. South Carolina v. 280 280 SUPREME COURT REPORTS ANNOTATED It is different in the Philippine setting. in Gitlow v. Farrington v. 274 U.77 the constitutionality of a provision in the http://www. Virginia.S.com. 390. such as those of the first ten amendments. 297 U. supra. Society of Sisters. Richardson. 359. Maryland. Bakke. 357. Iowa. 452. In Central Bank (now Bangko Sentral ng Pilipinas) Employee Association.S.. 286 U. on restraints upon the dissemination of information..S. Olson.76 _______________ ucts Co. 283 U. Condon. 304 U. 652. see Near v.S. Griffin. Herndon. 262 U. 713-714. Bartels v. 673. 144 (1938).S.S. Herndon. Minnesota ex rel. 404. 73. Whitney v. 316. 301 U. on interferences with political organizations. 369. 411 U.S. Nixon v. and cases cited. Lovell v. 76 San Antonio Independent School District v. Meyer v. 274 U. 265 (1978).. 718-720. v. U.S.S. or racial minorities. 273 U. 697.ph/sfsreader/session/00000159e3796c4f4ee046e3003600fb002c009e/t/?o=False 23/28 . the full text of which footnote is reproduced below: There may be narrower scope for operation of the presumption of constitutionality when legislation appears on its face to be within a specific prohibition of the Constitution. American Press Co. Herndon v. California. 1 (1973). Pierce v. 284. 177. United States. and which may call for a correspondingly more searching judicial inquiry. Nixon v.S. 75 Frontiero v. 373-378. Compare McCulloch v.

com. 446 SCRA 299. 281 . The deference stops where the classification violates a fundamental right. even when the rank-and-file employees of other GFIs had been exempted from the SSL by their respective charters. No.1/28/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 582 charter of the Bangko Sentral ng Pilipinas (BSP). x x x x http://www. this Court must discharge its primary role as the vanguard of constitutional guaranties. they are persuasive and have been used to support many of our decisions. December 15.R. We live in a different ambience and must decide our own problems in the light of our own interests and needs. or prejudices persons accorded special protection by the Constitution. and of our qualities and even idiosyncrasies as a people. Finding that the disputed provision contained a suspect classification based on salary grade.ph/sfsreader/session/00000159e3796c4f4ee046e3003600fb002c009e/t/?o=False 24/28 . these foreign decisions and authorities are not per se controlling in this jurisdiction. More significantly. and require a stricter and more exacting adherence to constitutional limitations. was challenged for maintaining its rank- and-file employees under the Salary Standardization Law (SSL). Rational basis should not suffice. they must be construed to serve our own public interest which is the be-all and the end-all of all our laws.central. and its policies should be accorded recognition and respect by the courts of justice except when they run afoul of the Constitution. it was in this case that the Court revealed the broad outlines of its judicial philosophy. 2004. At best. a government financial institution (GFI). and always with our own concept of law and justice. 281 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. And it need not be stressed that our public interest is distinct and different from others. the Court deliberately employed the standard of strict judicial scrutiny in its review of the constitutionality of said provision. Nevertheless. Admittedly. 148208. When these violations arise. 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. 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. More importantly. to wit: “Congress retains its wide discretion in providing for a valid classification. Our laws must be construed in _______________ 77 G.

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.” further explicitated in Article XIII. Under the policy of social justice. recognizing the broad discretion given to Congress in exercising its legislative power.ph/sfsreader/session/00000159e3796c4f4ee046e3003600fb002c009e/t/?o=False 25/28 . It is akin to a distinction based on economic class and status. the quest for a better and more “equal” world calls for the use of equal protection as a tool of effective judicial intervention. including labor. 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. The command to promote social justice in Article II. x x x x Under most circumstances. the challenged proviso operates on the basis of the salary grade or officer-employee status. The Preamble proclaims “equality” as an ideal precisely in protest against crushing inequities in Philippine society. But if the challenge to the statute is premised on the denial of a fundamental right.1/28/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 582 Further. 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. and the legislative discretion would be given deferential treatment. 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. This is true whether the actor committing the unconstitutional act is a private person or the government itself or one of its instrumentalities.central. Judicial scrutiny would be based on the “rational basis” test. or the perpetuation of prejudice against 282 282 SUPREME COURT REPORTS ANNOTATED persons favored by the Constitution with special protection. the Court will exercise judicial restraint in deciding questions of constitutionality. with the higher grades as recipients of a benefit specifically withheld from the lower grades. Officers of the BSP now receive higher compensation packages that are competitive with the http://www. Oppressive acts will be struck down regardless of the character or nature of the actor. in “all phases of national development.com. are clear commands to the State to take affirmative action in the direction of greater equality. Our present Constitution has gone further in guaranteeing vital social and economic rights to marginalized groups of society. 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. Section 10. Equality is one ideal which cries out for bold attention and action in the Constitution. x x x x In the case at bar.

” (Emphasis supplied) Imbued with the same sense of “obligation to afford protection to labor. whether his salaries for the unexpired portion of his employment contract http://www. low-salaried employees are limited to the rates prescribed by the SSL. v. i. OFWs with employment contracts of less than one year vis-à-vis OFWs with employment contracts of one year or more. OFWs at two levels: “First. OFWs vis-à-vis local workers with fixed-period employment. 1999) that the Court laid down the following rules on the application of the periods prescribed under Section 10(5) of R.” Any act of Congress that runs counter to this constitutional desideratum deserves strict scrutiny by this Court before it can pass muster. and an invidious impact on. and improve the quality of life for all. Upon cursory reading.78 it was in Marsaman Manning Agency. Inc.” the Court in the present case also employs the standard of strict judicial scrutiny.central. 283 intent against. especially in terms of job marketability. the rank-and-file employees consist of people whose status and rank in life are less and limited. it is they—and not the officers—who have the real economic and financial need for the adjustment. the subject clause appears facially neutral. while the poorer. among OFWs with employment contracts of more than one year. if not all. for it applies to all OFWs.. for it perceives in the subject clause a suspect classification prejudicial to OFWs. However.e. The implications are quite disturbing: BSP rank-and- file employees are paid the strictly regimented rates of the SSL while employees higher in rank—possessing higher and better education and opportunities for career advancement—are given higher compensation packages to entice them to stay. extend to them a decent standard of living. provide adequate social services. Considering that majority.1/28/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 582 industry.com. This is in accord with the policy of the Constitution “to free the people from poverty.” 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. Second. 804. and Third.A. to wit: “A plain reading of Sec.ph/sfsreader/session/00000159e3796c4f4ee046e3003600fb002c009e/t/?o=False 26/28 . National Labor Relations Commission79 (Second Division. a closer examination reveals that the subject clause has a discriminatory 283 . No. 10 clearly reveals that the choice of which amount to award an illegally dismissed overseas contract worker.

the Court reduced the award to SR3. The LA declared his dismissal illegal and awarded him SR13.600. In the case at bar. 727 and 735. whichever is less.central. whichever is less. the unexpired portion of his contract. 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.00 equivalent to his three months’ salary.ph/sfsreader/session/00000159e3796c4f4ee046e3003600fb002c009e/t/?o=False 27/28 .A.1/28/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 582 or three (3) months’ salary for every year of the unexpired term.81 which involved an OFW who was awarded a two-year employment contract. National Labor Relations Commission (Second Division. October 1998). 8042.com. to wit: “Under Section 10 of R. there were two cases in which the Court made conflicting rulings on Section 10(5).600. No. 79 371 Phil. care should be taken that every part or word thereof be given effect since the law-making _______________ 78 Rollo. the OFW involved was illegally dismissed two months into his 10-month contract. 284 284 SUPREME COURT REPORTS ANNOTATED body is presumed to know the meaning of the words employed in the statue and to have used them advisedly.600. this being the lesser value. but was dismissed after working for one year and two months. the unexpired portion of private respondent’s employment contract is eight (8) months. One was Asian Center for Career and Employment System and Services v. This is contrary to the well- established rule in legal hermeneutics that in interpreting a statute. but was awarded his salaries for the remaining 8 months and 6 days of his contract. On appeal.”82 http://www. This is evident from the words “for every year of the unexpired term” which follows the words “salaries x  x  x for three months. 827. Prior to Marsaman. 313 SCRA 88  (1999). a worker dismissed from overseas employment without just. however. comes into play only when the employment contract concerned has a term of at least one (1) year or more.”80 (Emphasis supplied) In Marsaman.” 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. Private respondent should therefore be paid his basic salary corresponding to three (3) months or a total of SR3. pp. Ut res magis valeat quam pereat.00 as lump-sum salary covering eight months.

131656. v. p. 840-841. 1998. dela Cruz l86 http://www. October 20.83 which involved an OFW (therein respondent Erlinda _______________ 80 Id. After serving for one year and seven-and-a-half months. December 1998). The Marsaman interpretation of Section 10(5) has since been adopted in the following cases:   Case Title Contract Period Unexpired Period Applied in Period of Period the Computation Service of the Monetary Award   6 months   4 months   Skippers v.com. and the Court awarded her salaries for the entire unexpired portion of four and one-half months of her contract. 102. Reynaldo months months Chua 85 Centennial Transmarine v. 82 Id. 297 SCRA 727.1/28/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 582 Another was Triple-Eight Integrated Services.. 81 G. Inc. respondent Osdana was illegally dismissed. 83 Supra note 17.central.ph/sfsreader/session/00000159e3796c4f4ee046e3003600fb002c009e/t/?o=False 28/28 . which was deemed renewed for another 12 months. No. at pp. 285 . 285 Osdana) who was originally granted a 12-month contract.R. 2 4 months Maguad84 months Bahia Shipping  9 8  4 months 4 months v. National Labor Relations Commission (Third Division.