1. CARLOS SUPERDRUG CORP. VS DSWD ET.AL.

(2007)

FACTS:

Petitioners are domestic corporations and proprietors operating pharmacies in the Philippines.

Public respondents, on the other hand, include the DSWD, DOH, DOF, DOJ, and the DILG, specifically
tasked to monitor the drugstores’ compliance with the law; promulgate the implementing rules and
regulations for the effective implementation of the law; and prosecute and revoke the licenses of erring
drugstore establishments.

On 2004, R.A. No. 9257, amending R.A. No. 7432, was signed into law by President Gloria Macapagal-
Arroyo, otherwise known as the “Expanded Senior Citizens Act of 2003.” Sec. 4(a) of the Act states that:

SEC. 4. Privileges for the Senior Citizens. – The senior citizens shall be entitled to the following:

(a) the grant of twenty percent (20%) discount from all establishments relative to the utilization
of services in hotels and similar lodging establishments, restaurants and recreation centers, and
purchase of medicines in all establishments for the exclusive use or enjoyment of senior citizens,
including funeral and burial services for the death of senior citizens;

Petitioners assail the said Act because it allegedly constitutes deprivation of private property and
compelling drugstore owners and establishments to grant the discount will result in a loss of profit and
capital.

ISSUE:

Whether Sec. 4(a) of the “Expanded Senior Citizens Act of 2003” is constitutional.

HELD:

Yes. The law is a legitimate exercise of police power which, similar to the power of eminent domain, has
general welfare for its object. The State, in promoting the health and welfare of a special group of
citizens, can impose upon private establishments the burden of partly subsidizing a government
program. The Senior Citizens Act was enacted primarily to maximize the contribution of senior citizens
to nation-building, and to grant benefits and privileges to them for their improvement and well-being as
the State considers them an integral part of our society.

Police power has been described as “the most essential, insistent and the least limitable of powers,
extending as it does to all the great public needs.” For this reason, when the conditions so demand as
determined by the legislature, property rights must bow to the primacy of police power because
property rights, though sheltered by due process, must yield to general welfare.

The difference between the Tax Credit (under the Old Senior Citizens Act) and Tax Deduction
(under the Expanded Senior Citizens Act).
 1.1. The provision of Section 4 of R.A. No. 7432 (the old Senior Citizens Act) grants twenty
percent (20%) discount from all establishments relative to the utilization of transportation
services, hotels and similar lodging establishment, restaurants and recreation centers and
purchase of medicines anywhere in the country, the costs of which may be claimed by the
private establishments concerned as tax credit.

Effectively, a tax credit is a peso-for-peso deduction from a taxpayers tax liability due to the
government of the amount of discounts such establishment has granted to a senior citizen. The
establishment recovers the full amount of discount given to a senior citizen and hence, the
government shoulders 100% of the discounts granted.

It must be noted, however, that conceptually, a tax credit scheme under the Philippine tax
system, necessitates that prior payments of taxes have been made and the taxpayer is
attempting to recover this tax payment from his/her income tax due. The tax credit scheme
under R.A. No. 7432 is, therefore, inapplicable since no tax payments have previously occurred.

1.2. The provision under R.A. No. 9257, on the other hand, provides that the
establishment concerned may claim the discounts under Section 4(a), (f), (g) and (h) as tax
deduction from gross income, based on the net cost of goods sold or services rendered.

Under this scheme, the establishment concerned is allowed to deduct from gross income, in
computing for its tax liability, the amount of discounts granted to senior citizens. Effectively, the
government loses in terms of foregone revenues an amount equivalent to the marginal tax rate
the said establishment is liable to pay the government. This will be an amount equivalent to 32%
of the twenty percent (20%) discounts so granted. The establishment shoulders the remaining
portion of the granted discounts.

It may be necessary to note that while the burden on [the] government is slightly diminished in
terms of its percentage share on the discounts granted to senior citizens, the number of
potential establishments that may claim tax deductions, have however, been broadened. Aside
from the establishments that may claim tax credits under the old law, more establishments
were added under the new law such as: establishments providing medical and dental services,
diagnostic and laboratory services, including professional fees of attending doctors in all private
hospitals and medical facilities, operators of domestic air and sea transport services, public
railways and skyways and bus transport services.

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2. Fernando vs St. Scholastica’s College

Facts:

Respondent SSC’s property is enclosed by a tall concrete perimeter fence. Marikina City enacted an
ordinance which provides that walls and fences shall not be built within a five-meter allowance between
the front monument line and the building line of an establishment.
The City Government of Marikina sent a letter to the respondents ordering them to demolish, replace,
and move back the fence. As a response, the respondents filed a petition for prohibition with an
application for a writ of preliminary injunction and temporary restraining order before the Regional Trial
Court of Marikina. The RTC granted the petition and the CA affirmed. Hence, this certiorari.

Issue:

Is Marikina Ordinance No. 192, imposing a five-meter setback, a validexercise of police power?

Ruling:

No. “Police power is the plenary power vested in the legislature to make statutes and ordinances to
promote the health, morals, peace, education, good order or safety and general welfare of the people.”
Two tests have been used by the Court – the rational relationship test and the strict scrutiny test:

Under the rational relationship test, an ordinance must pass the following requisites: (1) the interests of
the public generally, as distinguished from those of a particular class, require its exercise; and (2) the
means employed are reasonably necessary for the accomplishment of the purpose and not unduly
oppressive upon individuals.

The real intent of the setback requirement was to make the parking space free for use by the public and
not for the exclusive use of respondents. This would be tantamount to a taking of private property for
public use without just compensation. Anent the objectives of prevention of concealment of unlawful
acts and “un-neighborliness” due to the walls and fences, the parking area is not reasonably necessary
for the accomplishment of these goals. The Court, thus, finds Section 5 of the Ordinance to be
unreasonable and oppressive. Hence, the exercise of police power is not valid.

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DUE PROCESS

1. AGABON vs NLRC

Facts:

Private respondent Riviera Home Improvements, Inc. is engaged in the business of selling and
installing ornamental and construction materials. It employed petitioners Virgilio Agabon and
Jenny Agabon as gypsum board and cornice installers on January 2, 1992 until February 23, 1999
when they were dismissed for abandonment of work. Thus, Petitioners then filed a complaint
for illegal dismissal and payment of money claims

Petitioners also claim that private respondent did not comply with the twin requirements of
notice and hearing. Private respondent, on the other hand, maintained that petitioners were
not dismissed but had abandoned their work.

Issue: WON petitioners were illegally dismissed.

Held:

Accordingly, petitioners’ dismissal was for a just cause. They had abandoned their employment
and were already working for another employer.

To dismiss an employee, the law requires not only the existence of a just and valid cause but
also enjoins the employer to give the employee the opportunity to be heard and to defend
himself.

Abandonment is the deliberate and unjustified refusal of an employee to resume his

employment. It is a form of neglect of duty, hence, a just cause for termination of employment
by the employer.

After establishing that the terminations were for a just and valid cause, we now determine if the
procedures for dismissal were observed.

The procedure for terminating an employee is found in Book VI, Rule I, Section 2(d) of the
Omnibus Rules Implementing the Labor Code:

Standards of due process: requirements of notice. – In all cases of termination of employment,

the following standards of due process shall be substantially observed:
 For termination of employment based on just causes as defined in Article 282 of the Code:

A written notice served on the employee specifying the ground or grounds for termination, and
giving to said employee reasonable opportunity within which to explain his side;
A hearing or conference during which the employee concerned, with the assistance of counsel if
the employee so desires, is given opportunity to respond to the charge, present his evidence or
rebut the evidence presented against him; and
(c) A written notice of termination served on the employee indicating that upon due
consideration of all the circumstances, grounds have been established to justify his termination.

In case of termination, the foregoing notices shall be served on the employee’s last known
address.

Procedurally, (1) if the dismissal is based on a just cause under Article 282, the employer must
give the employee two written notices and a hearing or opportunity to be heard if requested by
the employee before terminating the employment: a notice specifying the grounds for which
dismissal is sought a hearing or an opportunity to be heard and after hearing or opportunity to
be heard, a notice of the decision to dismiss; and (2) if the dismissal is based on authorized
causes under Articles 283 and 284, the employer must give the employee and the Department
of Labor and Employment written notices 30 days prior to the effectivity of his separation.

From the foregoing rules four possible situations may be derived: (1) the dismissal is for a just
cause under Article 282 of the Labor Code, for an authorized cause under Article 283, or for
health reasons under Article 284, and due process was observed; (2) the dismissal is without just
or authorized cause but due process was observed; (3) the dismissal is without just or
authorized cause and there was no due process; and (4) the dismissal is for just or authorized
cause but due process was not observed.

The present case squarely falls under the fourth situation. The dismissal should be upheld
because it was established that the petitioners abandoned their jobs to work for another
company. Private respondent, however, did not follow the notice requirements and instead
argued that sending notices to the last known addresses would have been useless because they
did not reside there anymore. Unfortunately for the private respondent, this is not a valid
excuse because the law mandates the twin notice requirements to the employee’s last known
address. Thus, it should be held liable for non-compliance with the procedural requirements of
due process.

Petition denied. CA affirmed with modifications.

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2. SOUTHERN HEMISPHERE ENGAGEMENT NETWORK, INC., vs.ANTI-TERRORISM COUNCIL, et. al
G.R. No. 178552 October 5, 2010 chilling effect, facial challenge, Human Security Act of 2007, in
terrorem effect
 OCTOBER 6, 2017
FACTS:

Petitioners assail for being intrinsically vague and impermissibly broad the definition of the
crime of terrorism under RA 9372 (the Human Security Act of 2007) in that terms like
“widespread and extraordinary fear and panic among the populace” and “coerce the
government to give in to an unlawful demand” are nebulous, leaving law enforcement agencies
with no standard to measure the prohibited acts.

ISSUE:

Can the Human Security Act of 2007 be facially challenged on the grounds of vagueness and
overbreadh doctrines?

RULING:

No.

A facial invalidation of a statute is allowed only in free speech cases, wherein certain rules of
constitutional litigation are rightly excepted.

In Estrada vs. Sandiganbayan it was held that:

A facial challenge is allowed to be made to a vague statute and to one which is overbroad
because of possible”chilling effect” upon protected speech. The possible harm to society in
permitting some unprotected speech to go unpunished is outweighed by the possibility that the
protected speech of others may be deterred and perceived grievances left to fester because of
possible inhibitory effects of overly broad statutes.

This rationale does not apply to penal statutes. Criminal statutes have general in terrorem effect
resulting from their very existence, and, if facial challenge is allowed for this reason alone, the
State may well be prevented from enacting laws against socially harmful conduct. In the area of
criminal law, the law cannot take chances as in the area of free speech.
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EQUAL PROTECTION

1. GARCIA v. DRILON

FACTS:
 Petitioner Jesus Garcia (husband) admitted having an affair with a bank manager. His infidelity
emotionally wounded private respondent which spawned several quarrels that left respondent
wounded. Petitioner also unconscionably beat up their daughter, Jo-ann.

The private respondent was determined to separate from petitioner. But she was afraid he
would take away their children and deprive her of financial support. He warned her that if she
pursued legal battle, she would not get a single centavo from him. After she confronted him of
his affair, he forbade her to hold office. This deprived her of access to full information about
their businesses. Hence, no source of income.

Thus, the RTC found reasonable ground to believe there was imminent danger of violence
against respondent and her children and issued a series of Temporary Protection Orders (TPO)
pursuant to RA 9262.

Republic Act No. 9262 is a landmark legislation that defines and criminalizes acts of violence
against women and their children (VAWC) perpetrated by women's intimate partners.

Petitioner hence, challenged the constitutionality of RA 9262 on making a gender-based

classification.

ISSUE:
Whether or not RA 9262 is discriminatory, unjust, and violative of the equal protection clause.

RULING:
No. The equal protection clause in our Constitution does not guarantee an absolute prohibition
against classification. The non-identical treatment of women and men under RA 9262 is justified
to put them on equal footing and to give substance to the policy and aim of the state to ensure
the equality of women and men in light of the biological, historical, social, and culturally
endowed differences between men and women.

RA 9262, by affording special and exclusive protection to women and children, who are
vulnerable victims of domestic violence, undoubtedly serves the important governmental
objectives of protecting human rights, insuring gender equality, and empowering women. The
gender-based classification and the special remedies prescribed by said law in favor of women
and children are substantially related, in fact essentially necessary, to achieve such objectives.
Hence, said Act survives the intermediate review or middle-tier judicial scrutiny. The gender-
based classification therein is therefore not violative of the equal protection clause embodied in
the 1987 Constitution.
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2. SERRANO V. GALLANT MARITIME DIGEST

FACTS:
Petitioner Antonio Serrano was hired by respondents Gallant Maritime Services, Inc. and
Marlow Navigation Co., Inc., under a POEA-approved contract of employment for 12 months, as
Chief Officer, with the basic monthly salary of US$1,400, plus $700/month overtime pay, and 7
days paid vacation leave per month.

On March 19, 1998, the date of his departure, Serrano was constrained to accept a downgraded
employment contract for the position of Second Officer with a monthly salary of US$1,000 upon
the assurance and representation of respondents that he would be Chief Officer by the end of
April 1998.

Respondents did not deliver on their promise to make Serrano Chief Officer. Hence, Serrano
refused to stay on as second Officer and was repatriated to the Philippines on May 26, 1998,
serving only two (2) months and seven (7) days of his contract, leaving an unexpired portion of
nine (9) months and twenty-three (23) days.

Serrano filed with the Labor Arbiter (LA) a Complaint against respondents for constructive
dismissal and for payment of his money claims in the total amount of US$26,442.73 (based on
the computation of $2590/month from June 1998 to February 199, $413.90 for March 1998,
and $1640 for March 1999) as well as moral and exemplary damages.

The LA declared the petitioner's dismissal illegal and awarded him US$8,770, representing his
salaray for three (3) months of the unexpired portion of the aforesaid contract of employment,
plus $45 for salary differential and for attorney's fees equivalent to 10% of the total amount;
however, no compensation for damages as prayed was awarded.

On appeal, the NLRC modified the LA decision and awarded Serrano $4669.50, representing
three (3) months salary at $1400/month, plus 445 salary differential and 10% for attorney's fees.
This decision was based on the provision of RA 8042, which was made into law on July 15, 1995.

Serrano filed a Motion for Partial Reconsideration, but this time he questioned the
constitutionality of the last clause in the 5th paragraph of Section 10 of RA 8042, which reads:

Sec. 10. Money Claims. - x x x In case of termination of overseas employment without just, valid
or authorized cause as defined by law or contract, the workers shall be entitled to the full
reimbursement of his placement fee with interest of twelve percent (12%) per annum, plus his
salaries for the unexpired portion of his employment contract or for three (3) months for every
year of the unexpired term, whichever is less.

The NLRC denied the Motion; hence, Serrano filed a Petition for Certiorari with the Court of
Appeals (CA), reiterating the constitutional challenge against the subject clause. The CA affirmed
the NLRC ruling on the reduction of the applicable salary rate, but skirted the constitutional
issue raised by herein petitioner Serrano.
ISSUES:
1. Whether or not the subject clause violate Section 1, Article III of the Constitution, and Section
18, Article II and Section 3, Article XIII on labor as a protected sector.

HELD:
On the first issue.
The answer is in the affirmative.

Section 1, Article III of the Constitution guarantees: No person shall be deprived of life, liberty,
or property without due process of law nor shall any person be denied the equal protection of
the law.

Section 18, 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.

Such rights are not absolute but subject to the inherent power of Congress to incorporate, when
it sees fit, a system of classification into its legislation; however, to be valid, the classification
must comply with these requirements: 1) it is based on substantial distinctions; 2) it is germane
to the purposes of the law; 3) it is not limited to existing conditions only; and 4) it applies
equally to all members of the class.

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; 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 c) strict judicial scrutiny in which a
legislative classification which impermissibly interferes with the exercise of a fundamental right
or operates to the peculiar disadvantage of a suspect class is presumed unconstitutional, and
the burden is upon the government to prove that the classification is necessary to achieve a
compelling state interest and that it is the least restrictive means to protect such interest.

Upon cursory reading, the subject clause appears facially neutral, for it applies to all OFWs.
However, a closer examination reveals that the subject clause has a discriminatory intent
against, and an invidious impact on, OFWs at two levels:
First, OFWs with employment contracts of less than one year vis-à-vis OFWs with employment
contracts of one year or more;

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

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

In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-term employment who were
illegally discharged were treated alike in terms of the computation of their money claims: they
were uniformly entitled to their salaries for the entire unexpired portions of their contracts. But
with the enactment of R.A. No. 8042, specifically the adoption of the subject clause, illegally
dismissed OFWs with an unexpired portion of one year or more in their employment contract
have since been differently treated in that their money claims are subject to a 3-month cap,
whereas no such limitation is imposed on local workers with fixed-term employment.

The Court concludes that the subject clause contains a suspect classification in that, in the
computation of the monetary benefits of fixed-term employees who are illegally discharged, it
imposes a 3-month cap on the claim of OFWs with an unexpired portion of one year or more in
their contracts, but none on the claims of other OFWs or local workers with fixed-term
employment. The subject clause singles out one classification of OFWs and burdens it with a
peculiar disadvantage.

There being a suspect classification involving a vulnerable sector protected by the Constitution,
the Court now subjects the classification to a strict judicial scrutiny, and determines whether it
serves a compelling state interest through the least restrictive means.

What constitutes compelling state interest is measured by the scale of rights and powers
arrayed in the Constitution and calibrated by history. It is akin to the paramount interest of the
state for which some individual liberties must give way, such as the public interest in
safeguarding health or maintaining medical standards, or in maintaining access to information
on matters of public concern.

In the present case, the Court dug deep into the records but found no compelling state interest
that the subject clause may possibly serve.

In fine, the Government has failed to discharge its burden of proving the existence of a
compelling state interest that would justify the perpetuation of the discrimination against OFWs
under the subject clause.

Assuming that, as advanced by the OSG, the purpose of the subject clause is to protect the
employment of OFWs by mitigating the solidary liability of placement agencies, such callous and
cavalier rationale will have to be rejected. There can never be a justification for any form of
government action that alleviates the burden of one sector, but imposes the same burden on
another sector, especially when the favored sector is composed of private businesses such as
placement agencies, while the disadvantaged sector is composed of OFWs whose protection no
less than the Constitution commands. The idea that private business interest can be elevated to
the level of a compelling state interest is odious.

Moreover, even if the purpose of the subject clause is to lessen the solidary liability of
placement agencies vis-a-vis their foreign principals, there are mechanisms already in place that
can be employed to achieve that purpose without infringing on the constitutional rights of
OFWs.

The POEA Rules and Regulations Governing the Recruitment and Employment of Land-Based
Overseas Workers, dated February 4, 2002, imposes administrative disciplinary measures on
erring foreign employers who default on their contractual obligations to migrant workers and/or
their Philippine agents. These disciplinary measures range from temporary disqualification to
preventive suspension. The POEA Rules and Regulations Governing the Recruitment and
Employment of Seafarers, dated May 23, 2003, contains similar administrative disciplinary
measures against erring foreign employers.

Resort to these administrative measures is undoubtedly the less restrictive means of aiding local
placement agencies in enforcing the solidary liability of their foreign principals.

Thus, the subject clause in the 5th paragraph of Section 10 of R.A. No. 8042 is violative of the
right of petitioner and other OFWs to equal protection.

The subject clause “or for three months for every year of the unexpired term, whichever is less”
in the 5th paragraph of Section 10 of Republic Act No. 8042 is DECLARED UNCONSTITUTIONAL

Note:
When the Court is called upon to exercise its power of judicial review of the acts of its co-equals,
such as the Congress, it does so only when these conditions obtain: (1) that there is an actual
case or controversy involving a conflict of rights susceptible of judicial determination; (2) that
the constitutional question is raised by a proper party and at the earliest opportunity; and (3)
that the constitutional question is the very lis mota of the case, otherwise the Court will dismiss
the case or decide the same on some other ground.
----
As discussed earlier, prior to R.A. No. 8042, a uniform system of computation of the monetary
awards of illegally dismissed OFWs was in place. This uniform system was applicable even to
local workers with fixed-term employment.

Article 605 of the Code of Commerce provides:

 Article 605. If the contracts of the captain and members of the crew with the agent should be
for a definite period or voyage, they cannot be discharged until the fulfillment of their contracts,
except for reasons of insubordination in serious matters, robbery, theft, habitual drunkenness,
and damage caused to the vessel or to its cargo by malice or manifest or proven negligence.

Article 605 was applied to Madrigal Shipping Company, Inc. v. Ogilvie, in which the Court held
the shipping company liable for the salaries and subsistence allowance of its illegally dismissed
employees for the entire unexpired portion of their employment contracts.

While Article 605 has remained good law up to the present, Article 299 of the Code of
Commerce was replaced by Art. 1586 of the Civil Code of 1889, to wit:

Article 1586. Field hands, mechanics, artisans, and other laborers hired for a certain time and for
a certain work cannot leave or be dismissed without sufficient cause, before the fulfillment of
the contract.
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