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Recruitment and Employment of Overseas Workers

A. R.A. 8042, as amended by R.A. 10022


1. People v. Panis (L-58674, July 11, 1990)

Facts:

Serapio Abug was charged with violation of the Labor Code for operating a fee-charging employment
agency without first securing a license from the Ministry of Labor. He charged fees and promised
employment in Saudi Arabia to four individuals.

Abug invokes Article 13(b) of the Labor Code which defines “recruitment and placement” as any act of
canvassing, enlisting, contracting, transporting, hiring, or procuring workers, whether for profit or not:
Provided, that any person or entity which offers or promises for a fee employment to two or more persons
shall be deemed engaged in recruitment and placement. Thus, he contends that any violation of Article
39 should involve dealings with two or more persons as an indispensable requirement, as oppose to this
case where each information indicates that he is dealing with only one person.

The prosecution argues that this argument is imposed only where the recruitment and placement consist
of an offer or promise of employment to such persons and always in consideration of a fee. The other acts
mentioned in the body of the article may involve even only one person and are not necessarily for profit.

Issue:

Whether or not recruitment and placement should involve only dealings with two or more persons

Held:

No, this is not an essential ingredient of the act of recruitment and placement of workers.

The proviso was to create a presumption that the individual or entity is engaged in recruitment and
placement whenever he or it is dealing with two or more persons to whom, in consideration of a fee, an
offer or promise of employment is made in the course of the canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring of workers.

The number of persons dealt with is not an essential ingredient of the acts mentioned in Article 13(b) will
constitute recruitment and placement even if only one prospective worker is involved. The words "shall
be deemed" create that presumption.
B. Illegal Recruitment
(Syndicated )
2. People v. Gallo (187730, June 29, 2010)

Facts:

Edgardo Dela Caza was introduced to Rodolfo Gallo, Fides Pacardo, Pilar Manta, Mardeolyn Martir, Lulu
Mendanes, Yeo Sin Ung and another Korean national at the office of MPM Agency. Gallo informed Dela
Caza that the agency was able to send workers abroad on a placement fee of P150,000, with a down
payment of P45,000. Thereafter, Dela Caza was briefed about the processing of his application papers for
job placement in Korea as a factory worker. He paid P45,000 through Gallo who signed receipt. After two
weeks, Dela Caza decided to withdraw his application and recover the amount he paid but he was
convinced to push through with the decision. After two more months of waiting to be deployed, Dela Caza
decided to take action. Gallo, together with Pacardo and Manta, were then arrested.

For his defense, Gallo denied having any part in the recruitment of Dela Caza. He testified that he also
applied with MPM Agency for deployment to Korea as a factory worker. He explains that was also
promised deployment abroad but it never materialized. Accused-appellant avers that he cannot be held
criminally liable for illegal recruitment because he was neither an officer nor an employee of the
recruitment agency. He alleges that even assuming that he was an employee, such cannot warrant his
outright conviction sans evidence that he acted in conspiracy with the officers of the agency.

Issue:

Whether or not Gallo is guilty of illegal recruitment committed by a syndicate

Held:

Yes, Gallo and all the persons involved in MPM agency are guilty of syndicated illegal recruitment.

Illegal Recruitment

To commit syndicated illegal recruitment, three elements must be established: (1) the offender
undertakes either any activity within the meaning of "recruitment and placement" defined under Article
13(b), or any of the prohibited practices enumerated under Art. 34 of the Labor Code; (2) he has no valid
license or authority required by law to enable one to lawfully engage in recruitment and placement of
workers; and (3) the illegal recruitment is committed by a group of three or more persons conspiring or
confederating with one another. When illegal recruitment is committed by a syndicate or in large scale,
i.e., if it is committed against three or more persons individually or as a group, it is considered an offense
involving economic sabotage.

Here, MPM Agency was never licensed by the POEA to recruit workers for overseas employment. Even
with a license, however, illegal recruitment could still be committed under Section 6 of R.A. No. 8042,
otherwise known as the Migrants and Overseas Filipinos Act of 1995, which provides that illegal
recruitment shall include the following acts, whether committed by any person, whether a non-licensee,
non-holder, licensee or holder of authority:
(a) To charge or accept directly or indirectly any amount greater than that specified in the schedule of
allowable fees prescribed by the Secretary of Labor and Employment, or to make a worker pay any amount
greater than that actually received by him as a loan or advance;

xxxx

(l) Failure to actually deploy without valid reason as determined by the DOLE; and

(m) Failure to reimburse expenses incurred by the worker in connection with his documentation and
processing for purposes of deployment and processing for purposes of deployment, in cases where the
deployment does not actually take place without the worker’s fault. Illegal recruitment when committed
by a syndicate or in large scale shall be considered an offense involving economic sabotage.

The persons criminally liable for the above offenses are the principals, accomplices and accessories. In
case of juridical persons, the officers having control, management or direction of their business shall be
liable.

Here, Gallo committed the acts enumerated in Sec. 6 of R.A. 8042. In consideration of a promise of foreign
employment, he received P45,000 from Dela Caza. When he made misrepresentations concerning the
agency’s purported power and authority to recruit for overseas employment, and collected money in the
guise of placement fees, the former committed acts constitutive of illegal recruitment. Essentially, Dela
Caza’s testimony showed that Gallo made false misrepresentations and promises in assuring them that
after they paid the placement fee, jobs in Korea as factory workers were waiting for them and that they
would be deployed soon. Additionally, Gallo’s active participation in the illegal recruitment is
unmistakable. The fact that he issued and signed the official receipt belies his profession of innocence.
Likewise, there exists conspiracy between Gallo and the other persons in the agency who are currently at
large, resulting in the commission of the crime of syndicated illegal recruitment.

It cannot be denied that Gallo and the rest of the officers and employees of MPM Agency participated in
a network of deception. Verily, the active involvement of each in the recruitment scam was directed at
one single purpose – to divest complainants with their money on the pretext of guaranteed employment
abroad. Without a doubt, the nature and extent of the actions of Gallo, as well as with the other persons
in MPM Agency show unity of action towards a common undertaking. Hence, conspiracy is present.

Evidence

In People v. Gamboa, it was held that conspiracy to defraud aspiring overseas contract workers was
evident from the acts of the malefactors whose conduct before, during and after the commission of the
crime clearly indicated that they were one in purpose and united in its execution. Direct proof of previous
agreement to commit a crime is not necessary as it may be deduced from the mode and manner in which
the offense was perpetrated or inferred from the acts of the accused pointing to a joint purpose and
design, concerted action and community of interest.

As such, all the accused, including accused-appellant, are equally guilty of the crime of illegal recruitment
since in a conspiracy the act of one is the act of all.
(Large Scale)
3. People v. Dela Piedra (121777, January 24, 2001)

Facts:

Erlie Ramos, Attorney II of the POEA, received a telephone call from an unidentified woman inquiring
about the legitimacy of the recruitment conducted by a certain Carol Figueroa. Upon investigation on the
recruitment office with a friend, it was noted that there were talks of possible employment in Singapore
for the applicants, but operating without license obtained from POEA. An entrapment was then planned
by the Criminal Investigation Service headed by Capt. Mendoza and successfully arrested Carol Dela
Piedra. Later on, in the course of their investigation, the CIS discovered that Carol Figueroa had many
aliases, among them, Carol Llena and Carol Dela Piedra.

Dela Piedra was charged for offering employment abroad in Singapore for a fee. Furthermore, the acts
complained therein were so complained as amounting to economic sabotage in that the same were
committed in large scale. At the trial, the prosecution presented five witnesses, namely, Erlie Ramos, SPO2
Erwin Manalopilar, Eileen Fermindoza, Nancy Araneta and Lourdes Modesto, who help positively
identified that the accused offered jobs in Singapore.

Issue:

Whether or not Dela Piedra is engaged in illegal recruitment in a large scale

Held:

No, but she is guilty of simple illegal recruitment.

Illegal recruitment is committed when two elements concur. First, the offender has no valid license or
authority to enable one to lawfully engage in recruitment and placement of workers. Second, he or she
undertakes either any activity within the meaning of “recruitment and placement” defined under Article
13(b), or any prohibited practices enumerated under Article 34 of the Labor Code.

Here, the both elements are present. The certification of POEA Officer-in-Charge Macarulay states that
appellant is not licensed or authorized to engage in recruitment and placement. Appellant is also
presumed engaged in recruitment and placement under Article 13(b) of the Labor Code for both Araneta
and Modesto testified that appellant promised them employment for a fee. Their testimonies corroborate
each other on material points: the briefing conducted, the time and place thereof, the fees involved.
Respondent has not shown that these witnesses were incited by any motive to testify falsely against her.
The testimonies meet the standard of proof beyond reasonable doubt that appellant committed
recruitment and placement.

However, a conviction for large scale illegal recruitment must be based on a finding of illegal recruitment
of three or more persons whether individually or as a group. In this case, only two persons are proven to
have been recruited by appellant. The third person named in the complaint, Baez, was not presented in
court to testify. It is true that law does not require that at least three victims testify at the trial; it is
necessary that there is sufficient evidence proving that the offense was committed against three or more
persons. In this case, evidence that appellant likewise promised her employment for a fee is sketchy – the
testimony of Nancy Araneta, who said that she and her friends, Baez and Aquino, came to the briefing and
that they filled up application forms. This does not satisfy the requirement.
4. People v. Chua (184058, March 10, 2010)

Facts:

There were five complainants against Melissa Chua and Josie Campos for large scale illegal recruitment.
However, only three testified, namely, Marilyn Macaranas, Erik de Guia Tan and Harry James King.

Marilyn’s testimony:

After she was introduced by Campos to respondent as capacitated to deploy factory workers to Taiwan,
she paid Chua P80,000 and P3,750 as placement and medical expenses fees, respectively. A receipt for
the first amount of which was issued. Respondent told her that she could leave for Taiwan in the last week
of September 2002 but she did not, and thereafter she would leave in the first or second week of October,
just the same she did not. She thus asked for the refund but never received it. She later learned that
respondent was not a licensed recruiter, prompting her to file the complaint.

Tan’s testimony:

After he was introduced by Campos to respondent at the Golden Gate, Inc., an agency in Ermita, he
underwent medical examination upon appellant’s assurance that he could work in Taiwan as a factory
worker. He thus paid respondent P70,000 representing placement fees for which she issued a receipt.
Appellant welched on her promise to deploy him to Taiwan, however, hence, he demanded the refund of
his money but appellant failed to. He later learned that Golden Gate was not licensed to deploy workers
to Taiwan, hence, he filed the complaint.

King’s testimony:

His friend Napoleon Yu introduced him to Campos who in turn introduced respondent as one who could
deploy him to Taiwan. He paid P20,000 representing partial payment for placement fees amounting to
P80,000, but when he later inquired when he would be deployed, Golden Gate’s office was already closed.
He later learned that Golden Gate’s license had already expired, prompting him to file the complaint.

Respondent denied the charges claiming having worked as a temporary cashier from January to October,
2002 at the office of Golden Gate, owned by one Marilyn Calueng, she maintained that Golden Gate was
a licensed recruitment agency and that Campos, who is her godmother, was an agent. She admitted having
received P80,000 each from Marilyn and Tan, but denying receiving any amount from King, she claimed
that she turned over the money to the documentation officer, who in turn remitted the money to Marilyn
Calueng whose present whereabouts she did not know.

Issue:

Whether or not Chua may be held liable for large scale illegal recruitment

Held:

Yes, Chua is held guilty of large scale illegal recruitment.

For illegal recruitment in large scale to prosper, three essential elements must be proved, to wit: (1) the
accused undertook a recruitment activity under Article 13(b) or any prohibited practice under Article 34
of the Labor Code; (2) the accused did not have the license or the authority to lawfully engage in the
recruitment and placement of workers; and (3) the accused committed such illegal activity against three
or more persons individually or as a group.

Here, Golden Gate, of which respondent admitted being a cashier from January to October 2002, was
initially authorized to recruit workers for deployment abroad. Per the certification from the POEA, Golden
Gate’s license only expired on February 23, 2002 and it was delisted from the roster of licensed agencies
on April 2, 2002.

Respondent was positively pointed to as one of the persons who enticed the complainants to part with
their money upon the fraudulent representation that they would be able to secure for them employment
abroad. In the absence of any evidence that complainants were motivated by improper motives, the trial
court’s assessment of their credibility shall not be interfered with.

Even if respondent was a mere temporary cashier of Golden Gate, that did not make her any less an
employee to be held liable for illegal recruitment as principal by direct participation, together with the
employer, as it was shown that she actively and consciously participated in the recruitment process.

Assuming arguendo that appellant was unaware of the illegal nature of the recruitment business of
Golden Gate, that does not free her of liability either. Illegal Recruitment in Large Scale penalized under
Republic Act No. 8042, or The Migrant Workers and Overseas Filipinos Act of 1995, is a special law, a
violation of which is malum prohibitum, not malum in se. Intent is thus immaterial. And that explains why
appellant was, aside from Estafa, convicted of such offense.

Illegal recruitment is malum prohibitum, while estafa is malum in se. In the first, the criminal intent of the
accused is not necessary for conviction. In the second, such an intent is imperative. Estafa under Article
315(2), of the RPC, is committed by any person who defrauds another by using fictitious name, or falsely
pretends to possess power, influence, qualifications, property, credit, agency, business or imaginary
transactions, or by means of similar deceits executed prior to or simultaneously with the commission of
fraud.
(Jurisdiction)
5. David v. Marquez (209859, June 5, 2017)

Facts:

Glenda Marquez alleged, among others, that she is a resident of Sampaloc, Manila and that Eileen David
approached her in Kidapawan City and represented that she could recruit her to work abroad. Petitioner
demanded payment of placement fees and other expenses from her for the processing of the application.
Respondent's application was, however, denied and the money that she put out therefor was never
returned.

Petitioner countered that it was physically impossible for her to have committed the said acts as she was
in Canada at that time, as evidenced by the entries in her passport. She further averred that she was never
engaged in the recruitment business. The amount deposited in her account was not for her but was just
coursed through her to be given to her friend in Canada who was the one processing respondent's
application. Further, petitioner argued that assuming that the allegations of recruitment were true, the
case should be filed in Kidapawan City and not in Manila.

Two separate Informations were filed against petitioner for Illegal Recruitment and Estafa, respectively.

Issue:

Whether or not Manila RTC has jurisdiction over the case

Held:

Yes, it has jurisdiction over both cases of illegal recruitment and of estafa. For jurisdiction to be acquired
by courts in criminal cases, Section 15(a) of Rule 110 of the Rules of Court provides that the offense should
have been committed or any one of its essential ingredients took place within the territorial jurisdiction
of the court. Otherwise, the court should dismiss the action. However, Section 9 of R.A. No. 8042 fixed an
alternative venue, i.e., a criminal action arising from illegal recruitment may also be filed where the
offended party actually resides at the time of the commission of the offense and the court where the
action is first filed shall acquire jurisdiction to the exclusion of other courts.

Here, respondent resides in Manila; hence, the filing of the case before the Manila RTC was proper. Thus,
the trial court should have taken cognizance of the case, and if it will eventually be shown during trial that
the offense was committed somewhere else, then action should be dismissed for want of jurisdiction.

Likewise, with the case of estafa arising therefrom, the same was within the jurisdiction of Manila.
Respondent presented evidence that some of the essential elements of the crime were committed within
Manila, such as the payment of processing and placement fees, considering that these were deposited in
certain banks located in Manila. Thus, the trial court should have taken cognizance of the case, and if
during the trial it was proven that the offense was committed somewhere else, the case should be
dismissed for want of jurisdiction.
C. Jurisdiction over Disputes
6. Republic v. Principalia Management and Personnel Consultants, Inc. (167639, April 19, 2006)

Facts:

In the first complaint, Ruth Concha alleged that she applied with Principalia for placement as caregiver or
physical therapist in the USA or Canada. Despite paying P20,000 out of the P150,000 fee required by
Principalia which was not properly receipted, Principalia failed to deploy Concha for employment abroad.
POEA found Principalia liable for violations of the 2002 POEA Rules and Regulations, particularly for
collecting a fee before employment; for non-issuance of official receipt; and for misrepresenting that it
was able to secure employment. Rafael Baldoza initiated the second complaint alleging that Principalia
assured him of employment in Qatar as a machine operator. After paying P20,000 as placement fee, he
departed for Qatar but he was made to work as welder. He insisted that he was hired as machine operator
but the alternative position offered to him was that of helper, which he refused. Thus, he was repatriated.
Baldoza and Principalia entered into a compromise for redeployment but failed to materialize. Hence,
POEA suspended Principalia’s documentary processing.

POEA suspended the license of Principalia, and ruled for the compensation of the two complainants. This
is for violation of POEA Rules and Regulations. Principalia prayed for a preliminary prohibitory injunction
against the decision of the POEA for the suspension of its license. The RTC granted the preliminary
injunction on the basis that such immediate executory of the suspension would deprive Principalia the
right to recruit and deploy. It also held that the suspension would tarnish the reputation of Principalia to
its clients. POEA avers that the trial court gravely abused its discretion in granting respondent Principalia
the writ when the requirements to issue the same have not been met. It asserts that Principalia had no
clear and convincing right to the relief demanded as it had no proof of irreparable damage as required
under the Rules of Court.

Issue:

Whether or not the trial court erred in issuing the writ of preliminary injunction over the suspension of
the license of Principalia to operate

Held:

No, the trial court has power and authority to issue the writ of preliminary injunction in this case.

First, for all intents and purposes, POEA can determine whether the licensee has complied with the
requirements. In this instance, the trial court observed that the Order of Suspension was pending appeal
with the Secretary of the DOLE. Thus, until such time that the appeal is resolved with finality by the DOLE,
Principalia has a right to operate as a recruitment agency.

Second, irreparable damage was duly proven by Principalia, that may lead to tremendous loss and even
closure of its business. More importantly, its reputation would be tarnished and it would be difficult, for
it to regain its existing clientele if the immediate implementation of the suspension of its license
continues. If the injunctive writ was not granted, Principalia would have been labeled as an untrustworthy
recruitment agency before there could be any final adjudication of its case by the DOLE. It would have lost
both its employer-clients and its prospective Filipino-applicants. Loss of the former due to a tarnished
reputation is not quantifiable.
Third, POEA would have no authority to exercise its regulatory functions over Principalia because the
matter had already been brought to the jurisdiction of the DOLE. Principalia has been granted the license
to recruit and process documents for Filipinos interested to work abroad. Thus, POEA’s action of
suspending Principalia’s license before final adjudication by the DOLE would be premature and would
amount to a violation of the latter’s right to recruit and deploy workers.

Finally, the presumption of regular performance of duty by the POEA applies only where a duty is imposed
on an official to act in a certain way, and assumes that the law tells him what his duties are. Therefore,
the presumption that an officer will discharge his duties according to law does not apply where his duties
are not specified by law and he is given unlimited discretion. The issue threshed out before the trial court
was whether the order of suspension should be implemented pending appeal. It did not correct a
ministerial duty of the POEA.
7. Trans Action Overseas Corporation v. DOLE Secretary (109583, September 5, 1997)

Facts:

From July 24 to September 9, 1987, Trans Action Overseas Corporation, a private fee-charging
employment agency, scoured for possible recruits for alleged job vacancies in Hongkong. Private
respondents sought employment as domestic helpers through its employees, Luzviminda Aragon, Ben Hur
Domincil and his wife Cecille. The applicants paid placement fees, but petitioner failed to deploy them.
Their demands for refund proved unavailing; thus, they were constrained to institute complaints against
petitioner for violation of Articles 32 and 34(a) 1 of the Labor Code. Petitioner denied having received the
amounts allegedly collected from respondents, and averred that Aragon and the spouses Domincil were
not authorized to collect fees. Accordingly, it cannot be held liable.

Labor Undersecretary Nieves Confesor rendered that petitioner be ordered ordered to pay, jointly and
severally, 33 of respondents. Three complaints were dismissed in view of their desistance. Five were
dismissed for failure to appear. Four were dismissed for lack of evidence. Respondent was held liable for
28 counts of violation of Article 32 and five counts of Article 34(a) with a corresponding suspension in the
aggregate period of 66 months. Lastly, its license was cancelled.

Confesor provisionally lifted the cancellation of petitioner's license pending resolution of its Motion for
Reconsideration. However, the motion for reconsideration was eventually denied for lack of merit, and
the order revoking its license was reinstated.

Issue:

Whether or not the Secretary has jurisdiction to cancel or revoke the license of Trans Action

Held:

Yes, the Secretary ha concurrent jurisdiction with the Administrator to cancel or revoke licenses.

The POEA was established and mandated to assume the functions of the Overseas Employment
Development Board (OEDB), the National Seamen Board (NSB), and the overseas employment function of
the Bureau of Employment Services (BES). Petitioner that these rendered Article 35 ineffective, which
provides that the Minister of Labor shall have the power to suspend or cancel any license or authority to
recruit employees for overseas employment for violation of rules and regulations issued by the Ministry
of Labor, the OEDB, and the NSB, or for violation of the provisions of this and other applicable laws.

In Eastern Assurance and Surety Corp. v. Secretary of Labor, it was held that the Secretary has the power
to apply these sanctions, as well as the authority to promulgate rules governing said activities. The
Secretary of Labor gave POEA, authority to conduct the necessary proceedings for the suspension or
cancellation of the license for certain offenses. The Administrator was also given the power to order the
dismissal of the case of the suspension of the license or recommend the cancellation thereof.

Also, the POEA Revised Rules on the Schedule of Penalties was issued pursuant to Article 34. It did not
prescribe additional rules and regulations governing overseas employment but only detailed the
administrative sanctions imposable by this Office for some enumerated prohibited acts. Under the
circumstances, the license of the respondent agency was cancelled on the authority of Article 35 of the
Labor Code, as amended, and not pursuant to the 1987 POEA Revised Rules on Schedule of Penalties.
8. Stolt-Nielsen Transportation Group v. Medequillo (177498, January 18, 2012)

Facts:

Sulpecio Madequillo filed a complaint before POEA against Stolt-Nielsen Transportation Group for illegal
dismissal under a first contract and for failure to deploy under a second contract. He alleged that he was
hired by petitioner on behalf of Chung-Gai Ship Management of Panama as Third Assistant Engineer on
board the vessel Stolt Aspiration for nine months. He joined the vessel and for nearly three months of
rendering service and while the vessel was at Batangas, he was repatriated for no reason or explanation.

He immediately proceeded to the petitioner’s office where he was transferred employment with another
vessel named MV Stolt Pride under the same terms and conditions of the First Contract. This was approved
by the POEA without knowledge that he was not deployed with the vessel. Petitioner failed to deploy him
with the vessel. He made a follow-up but the same refused to comply.

He demanded for his passport, seaman’s book and other employment documents. However, he was only
allowed to claim the said documents in exchange of his signing a document. He was constrained to sign
the document involuntarily because without these documents, he could not seek other employment.

He prayed for actual damages as well as attorney’s fees for his illegal dismissal and in view of petitioner’s
bad faith in not complying with the Second Contract. The LA found that respondent was constructively
dismissed by petitioner which can be held liable only for the breach of the second contract. NLRC upheld
the finding of unjustified termination of contract for failure of petitioners to present evidence that justify
non-deployment of respondent. The CA affirmed decision of the labor tribunal.

Issue:

Whether or not the LAs of the NLRC have jurisdiction over the case

Held:

Yes, the findings of quasi-judicial bodies like the NLRC, and affirmed by the CA in due course, are conclusive
on this Court, which is not a trier of facts. Findings of fact of administrative agencies and quasi-judicial
bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are
generally accorded finality when affirmed by the CA. With the finding that respondent was still employed
under the first contract when he negotiated with petitioners on the second contract, novation was made.
Also, factual findings of labor officials, who are deemed to have acquired expertise in matters within their
jurisdiction, are generally accorded finality by the courts when supported by substantial evidence. But
these findings are not infallible. When there is a showing that they were arrived at arbitrarily, they may
be examined by the courts. In this case, there was no showing of any arbitrariness.

Furthermore, the Migrant Workers Act provides that the LA and the NLRC shall have the original and
exclusive jurisdiction to hear and decide, within 90 calendar days after the filing of the complaint, the
claims arising out of an employer-employee relationship or by virtue of any law or contract involving
Filipino workers for overseas deployment including claims for damages. Following the law, the claim is still
cognizable by the LAs of the NLRC.

Applying the rules on actual damages, petitioner is thus liable to pay respondent actual damages in the
form of the loss of nine months’ worth of salary as provided in the contract.
9. Estate of Nelson Dulay v. Aboitiz Jebsen Maritime (172642, June 13, 2012)

Facts:

Nelson Dulay was employed by General Charters Inc. He initially worked as a seaman and later as a bosun
on contractual business. Twenty-five days after the completion of his employment contract, Nelson died
due to acute renal failure secondary to septicemia. At the time of his death, he was a bona fide member
of AMOSUP, GCI’s collective bargaining agent.

Dulay’s widow, Merridy Jane, thereafter claimed for death benefits through the grievance procedure of
the CBA between AMOSUP and GCI. The procedure was declared deadlocked as GCI refused to grant the
benefits sought by the widow.

The LA ruled in favor of the estate and took cognizance of the case by virtue of Article 217(a)(6) of the
Labor Code. The NLRC affirmed the LA decision as to the grant of death benefits under the CBA but
reversed the latter’s ruling as to the proximate cause of Nelson’s death.

The CA referred the case to the National Conciliation and Mediation Board for the designation of the
Voluntary Arbitrator. It ruled that while the suit filed by the widow is a money claim, the same basically
involves the interpretation and application of the provisions in the subject CBA. As such, jurisdiction
belongs to the VA and not the LA.

GCI claimed that the NLRC had no jurisdiction over the action on account of the absence of employer-
employee between GCI and Nelson at the time of the latter’s death.

Issue:

Whether or not voluntary arbitrators have jurisdiction over disputes covered by a CBA

Held:

Yes, they have jurisdiction over CBA disputes.

The Migrant Workers Act is a special law governing overseas Filipino worker but it does not provide
specific provisions for jurisdiction over disputes or unresolved grievances regarding the interpretation or
implementation of a CBA. However, the Labor Code provides that voluntary arbitrators have jurisdiction
over cases arising from the interpretation of CBAs.

Here, the basic issue raised by the widow in her complaint filed with the NLRC is which provision of the
CBA applies insofar as death benefits due to the heirs of Dulay are concerned. This issue clearly involves
the interpretation or implementation of the said CBA. Thus, the specific or special provisions of the Labor
Code govern.

With respect to disputes involving claims of Filipino seafarers wherein the parties are covered by a CBA,
the dispute or claim should be submitted to the jurisdiction of a voluntary arbitrator. It is only in the
absence of a CBA that parties may opt to submit to dispute to either the NLRC or to a voluntary arbitrator.
10. Santiago v. CF Sharp Crew Management (162419, July 10, 2007)

Facts:

Paul Santiago had been working as a seafarer for Smith Bell Management, Inc. (respondent) for about five
years. Later, he signed a new contract of employment, with the duration of nine months. He was assured
of a monthly salary, overtime pay and other benefits. The contract was approved by POEA. He was to be
deployed on board the "MSV Seaspread" scheduled to leave the port of Manila for Canada.

A week before departure, Capt. Pacifico Fernandez, VP of respondent, sent a facsimile message to the
captain of "MSV Seaspread," informing the latter that the wife of Santiago asks not to send her husband
to the sea anymore. Other anonymous callers also gave some feedbacks that Santiago will jump ship in
Canada, and Fernandez asked the captain of the vessel for his discretion, to which the latter agreed. Thus,
petitioner was thus told that he would not be leaving for Canada anymore, but he was reassured that he
might be considered for deployment at some future date.

Petitioner filed an action for illegal dismissal. He maintains that respondent violated the Migrant Workers
Act and the POEA Rules when it failed to deploy him within thirty (30) calendar days without a valid reason.
In doing so, it had unilaterally and arbitrarily prevented the consummation of the POEA-approved
contract. Since it prevented his deployment without valid basis, said deployment being a condition to the
consummation of the POEA contract, the contract is deemed consummated, and therefore he should be
awarded actual damages. Petitioner adds that he should be considered a regular employee, having
worked for five years on board the same vessel, and thus the LA and NLRC has jurisdiction on his claims.

On the other hand, respondent argues that the LA has no jurisdiction to award petitioner’s monetary
claims. His employment with respondent did not commence because his deployment was withheld for a
valid reason. The controversy involves a breach of contractual obligations and is cognizable by civil courts.

Issue:

Whether or not the LAs of the NLRC have jurisdiction over the case when employment has not
commenced

Held:

Yes, the LAs of the NLRC have jurisdiction over the case even in the absence of employment relationship.

Right of Action for Damages

There is no question that the parties entered into an employment contract. However, respondent failed
to deploy petitioner. Considering that petitioner was not able to depart, the employment contract did not
commence, and no employer-employee relationship was created between the parties. However, a
distinction must be made between the perfection of the employment contract and the commencement
of the employer-employee relationship. The perfection of the contract occurred when petitioner and
respondent agreed on the object and the cause, as well as the rest of the terms and conditions therein.
The commencement of the employer-employee relationship, would have taken place had petitioner
been actually deployed from the point of hire. Thus, even before the start of any employer-employee
relationship, contemporaneous with the perfection of the employment contract was the birth of certain
rights and obligations, the breach of which may give rise to a cause of action against the erring party.
Moreover, while the POEA Standard Contract must be recognized and respected, neither the manning
agent nor the employer can simply prevent a seafarer from being deployed without a valid reason.
Respondent’s act of preventing petitioner from departing constitutes a breach of contract, giving rise to
petitioner’s cause of action. Respondent unilaterally and unreasonably reneged on its obligation to deploy
petitioner and must therefore answer for the actual damages he suffered.

The fact that the POEA Rules are silent as to the payment of damages to the affected seafarer does not
mean that the seafarer is precluded from claiming the same. The sanctions provided for non-deployment
do not end with the suspension or cancellation of license or fine and the return of all documents at no
cost to the worker. They do not forfend a seafarer from instituting an action for damages against the
employer or agency which has failed to deploy him. The POEA Rules only provide sanctions which the
POEA can impose on erring agencies. It does not provide for damages and money claims recoverable by
aggrieved employees because it is the NLRC, which has jurisdiction over such matters.

Jurisdiction over the Case

Despite the absence of an employer-employee relationship between petitioner and respondent, the Court
rules that the NLRC has jurisdiction over petitioner’s complaint. The jurisdiction of LAs is not limited to
claims arising from employer-employee relationships.

Section 10 of the Migrant Workers Act provides that the LAs of the NLRC shall have the original and
exclusive jurisdiction to hear and decide, within 90 calendar days after the filing of the complaint, the
claims arising out of an employer-employee relationship or by virtue of any law or contract involving
Filipino workers for overseas deployment including claims for damages.

Since the present petition involves the employment contract entered into by petitioner for overseas
employment, his claims are cognizable by the LA of the NLRC.
11. Industrial Personnel and Management Services v. De Vera (205703, March 7, 2016)

Facts:

Employee’s position:

Alberto Arriola was offered the position of Safety Officer in Madagascar. He was hired by SNC-Lavalin,
through its local manning agency, Industrial Personnel & Management Services, Inc. (IPAMS). His overseas
employment contract was processed with POEA and his contract was signed in the Philippines. Thereafter,
he started working in Madagascar. But after three months, he received a notice of pre-termination of
employment due to the diminishing workload in his area of expertise and that there are no more
alternative assignments available. He was later repatriated. Arriola filed a complaint for illegal dismissal
asserting that SNC- Lavalin did not offer valid reason for his early termination.

Employer’s position:

Petitioners denied the charge of illegal dismissal. They claimed that SNC-Lavalin was affected by the global
financial crisis in 2008. As a consequence, it had to minimize its expenditures and operational expenses.
Arriola was one of those affected. Petitioners contend that the labor laws of a foreign country
incorporated in a contract between an OFW and a foreign employer was valid. Here, as all of Arriola's
employment documents were processed in Canada, not to mention that SNC-Lavalin's office was in
Canada, the principle of lex loci celebrationis was applicable. Thus, the petitioners insisted that Canadian
laws governed the contract. The foreign law did not require any ground for early termination of
employment, and the only requirement was the written notice of termination. Even assuming that
Philippine laws should apply, Arriola would still be validly dismissed because domestic law recognized
retrenchment and redundancy as legal grounds for termination.

The LA dismissed Arriola's complaint for lack of merit. The NLRC reversed the LA decision and ruled that
he was illegally dismissed by the petitioners. The CA affirmed that Arriola was illegally dismissed by the
petitioners.

Issue:

Whether or not the Canadian law governs over the employment contract of Arriola

Held:

No, domestic laws must be applied in this case.

The Migrant Workers Act does not provide that foreign laws are absolutely and automatically applicable
in overseas employment contracts. The labor relationship between OFW and the foreign employer is
much affected with public interest and that the otherwise applicable Philippine laws and regulations
cannot be rendered illusory by the parties agreeing upon some other law to govern their relationship.
Jurisprudence dictates the general rule that Philippine laws apply even to overseas employment contracts.
This rule is rooted in the constitutional provision of Section 3, Article XIII that the State shall afford full
protection to labor, whether local or overseas. Hence, even if the employment is abroad, the employee is
not stripped off his rights to security of tenure, humane conditions of work, and a living wage.

However, the parties may agree that a foreign law shall govern the employment contract, provided that
the exception follows these requisites: 1) That it is expressly stipulated in the overseas employment
contract that a specific foreign law shall govern; 2) That the foreign law invoked must be proven before
the courts pursuant to the Philippine rules on evidence; 3) That the foreign law stipulated in the overseas
employment contract must not be contrary to law, morals, good customs, public order, or public policy of
the Philippines; and 4) That the overseas employment contract must be processed through the POEA.

If the 1st requisite is absent, then the domestic labor laws shall apply in accordance with the principle of
lex loci contractus.

If the 2nd requisite is lacking, then the international law doctrine of processual presumption operates. The
said doctrine declares that where a foreign law is not pleaded or, even if pleaded, is not proved, the
presumption is that foreign law is the same as ours.

If the 3rd requisite is not followed, then Philippine laws govern.

And if the 4th requisite is missing, then Article 18 of the Labor Code is violated. Article 18 provides that no
employer may hire a Filipino worker for overseas employment except through the boards and entities
authorized by the Secretary of Labor. Section 4 of R.A. No. 8042, as amended, states that the State shall
only allow the deployment of overseas Filipino workers in countries where the rights of Filipino migrant
workers are protected. Thus, the POEA, through the assistance of the DFA, reviews and checks whether
the countries have existing labor and social laws protecting the rights of workers, including migrant
workers.

Absence of any one of the four requisites would invalidate the application of the foreign law, and the
Philippine law shall govern the overseas employment contract.

In this case, the petitioners were able to follow the 2nd requisite as they presented the Employment
Standards Act authenticated by Canada and certified by the Philippine Embassy. The petitioners also
followed the 4th requisite as Arriola’s employment contract was processed through POEA.

However, petitioners failed to observe the 1st and 3rd requisites. No foreign law was expressly stipulated
in the overseas employment contract. They did not show that a foreign law was agreed upon by the
parties. A provision therein merely stated that the policy would be governed by the laws of the country
where the SNC-Lavalin office was located. Petitioners were only stretching the contract to allow them to
invoke the foreign law improperly. With regard to the 3rd requisite, the Court found that the foreign law
invoked is contrary to the Constitution and the Labor Code. First, the ESA does not require any ground for
the early termination of employment. Second, the ESA allows the employer to dispense with the prior
notice of termination to an employee by simply paying the latter a severance pay.

Authorized Cause

Finally, as to the contention that where the domestic laws is applicable, Arriola was dismissed because of
authorized causes, it is bereft of merit. He was illegally dismissed as no authorized cause for dismissal was
proven. The petitioners asserted that Arriola was terminated because no there was no more job available
for him due to the global financial crisis with weakened Madagascar’s economy and SNC-Lavalin’s
business. However, it was not even clear what specific authorized cause, whether retrenchment or
redundancy, was used to justify his dismissal.
D. Money Claims
12. Datuman v. First Cosmopolitan Manpower & Promotion Services (156029, November 14, 2008)

Facts:

Respondent recruited Santosa Datuman to work in Bahrain as a saleslady. She was deployed to Bahrain
after paying the required placement fee. However, her employer took her passport when she arrived
there; and she was forced to work as a domestic helper with a salary lower to that agreed in her contract
approved by POEA. Her employer transferred her to another employer. She continued working against
her will, and even worked without compensation from September 1991 to April 1993. After her return,
petitioner filed a complaint before the POEA against respondent for underpayment and nonpayment of
salary, vacation leave and refund of her plane fare.

Respondent countered that petitioner agreed to work in Bahrain as a housemaid for one year because it
was the only position available then. However, since such position was not yet allowed by the POEA at
that time, they mutually agreed to submit the contract to the POEA indicating petitioner's position as
saleslady. It added that it was petitioner who violated the terms of their contract when she allegedly
transferred to another employer without respondent's knowledge and approval. Lastly, it raised the
defense of prescription of cause of action since the claim was filed beyond the three-year period from the
time the right accrued. The LA found respondent liable for violating the terms of the Employment Contract
and ordering it to pay petitioner.

Issue:

Whether or not respondent is liable for the money claims

Held:

Yes, Datuman is entitled to her claims against respondent.

Solidary Liability

The POEA Rules and Regulations provides that the applicant for license to operate a private employment
agency shall submit an application with a verified undertaking to assume joint and solidary liability with
the employer for all claims and liabilities which may arise in connection with the implementation of the
contract; including but not limited to payment of wages, death and disability compensation and
repatriation. Private employment agencies are held jointly and severally liable with the foreign-based
employer for any violation of the recruitment agreement or contract of employment.

As the agency which recruited petitioner, respondent is jointly and solidarily liable with the latter's
principal employer abroad for her money claims. Respondent cannot exempt itself from all the claims and
liabilities arising from the implementation of their contract of employment.

The solidary liability extends not only to the original, POEA-approved contract which had a term of until
April 1990. The signing of the "substitute" contracts with the foreign employer/principal before the
expiration of the POEA-approved contract and any continuation of employment beyond the original term,
against the will of petitioner, are continuing breaches of the original POEA-approved contract. To accept
the contrary reasoning will open the floodgates to even more abuse of our overseas workers at the hands
of their foreign employers and local recruiters, since the recruitment agency could easily escape its
mandated solidary liability for breaches of the POEA-approved contract by colluding with their foreign
principals in substituting the approved contract with another upon the worker's arrival in the country of
employment. RA No. 8042 explicitly prohibits the substitution or alteration to the prejudice of the worker
of employment contracts already approved and verified by the DOLE from the time of actual signing
thereof by the parties up to and including the period of the expiration of the same without the approval
of the DOLE.

Respondent's contention that it was petitioner who violated their contract deserves scant consideration.
Petitioner was forced to work long after the term of her original POEA-approved contract, through the
illegal acts of the foreign employer. Also, the side agreement of an overseas contract worker with her
foreign employer which reduced her salary below the amount approved by the POEA is void because it is
against our existing laws, morals and public policy. The said side agreement cannot supersede the terms
of the standard employment contract approved by the POEA.

Hence, in the present case, the diminution in the salary of petitioner is void for violating the POEA-
approved contract which set the minimum standards, terms, and conditions of her employment.
Consequently, the solidary liability of respondent with the foreign employer for the money claims
continues although she was forced to sign another contract in Bahrain. It is the terms of the original POEA-
approved employment contract that shall govern the relationship of petitioner with the respondent and
the foreign employer.

Furthermore, respondent admitted to submitting to the POEA a contract stating that the position to be
filled by petitioner is that of "Saleslady" although she was to be employed as a domestic helper since the
latter position was not approved for deployment by the POEA at that time. Respondent's evident bad faith
belie its protestations of innocence and put petitioner in a position where she could be exploited and
taken advantage of overseas. It is the recruitment agency's responsibility to ensure that the terms and
conditions of the employment contract are faithfully complied with and implemented properly by its
foreign principal.

Prescription

Article 291 of the Labor Code provides that all money claims arising from employer-employee relations
shall be filed within three years from the time that cause of action accrued; otherwise, they shall be
forever barred. The right to claim unpaid salaries accrue as they fall due. Thus, petitioner's cause of action
to claim salary differential for October 1989 only accrued after she had rendered service for that month
or at the end of October 1989, and so on and so forth.

To determine for which months petitioner's right to claim salary differentials has not prescribed, we must
count three years prior to the filing of the complaint on May 31, 1995. Thus, only claims accruing prior to
May 31, 1992 have prescribed. Petitioner is entitled to her claims for salary differentials for the period
May 31, 1992 to April 1993, or approximately 11 months.
13. Gagui v. Dejero (196036, October 23, 2013)

Facts:

Simeon Dejero and Teodoro Permejo filed separate Complaints for illegal dismissal against PRO Agency
Manila, Inc., and Abdul Rahman Al Mahwes. The LA rendered a decision ordering the defendants solidarily
liable. Later, respondents filed a motion to implead Pro Agency Manila, Inc.’s corporate officers and
directors as judgment debtors. This was granted with Merlita Lapuz and Elizabeth Gagui accordingly held
liable to respondents jointly and solidarily with the original party-respondent adjudged liable. The NLRC
denied petitioner’s appeal, following the writs of execution ordered against her.

Petitioner argues that while it is true that R.A. No. 8042 and the Corporation Code provide for solidary
liability, this liability must be so stated in the decision sought to be implemented. Absent this express
statement, a corporate officer may not be impleaded and made to personally answer for the liability of
the corporation. If at all, respondents are clearly guilty of laches for waiting for five years before taking
action against petitioner.

Issue:

Whether or not Gagui may be held solidarily liable with PRO Agency Manila, Inc. in accordance with
Section 10 of R.A. No. 8042, despite not having been impleaded in the Complaint

Held:

No, Gagui may not be held jointly and severally liable, absent a finding that she was remiss in directing
the affairs of the agency. Thus, the writs of execution against her are nullities.

In Sto. Tomas v. Salac, it was held that the second paragraph of Section 10, R.A. No. 8042, which holds the
corporate directors, officers, and partners of recruitment and placement agencies jointly and solidarily
liable for money claims and damages that may be adjudged against the latter agencies, is unconstitutional.
Pending adjudication of this case, the liability of corporate directors and officers is not automatic. To make
them jointly and solidarily liable with their company, there must be a finding that they were remiss in
directing the affairs of that company, such as sponsoring or tolerating the conduct of illegal activities.

Here, there was no finding of neglect on the part of the petitioner in directing the affairs of the agency. In
fact, respondents made no mention of any instance when petitioner allegedly failed to manage the agency
in accordance with law, thereby contributing to their illegal dismissal. Hence, for petitioner to be found
solidarily liable, there must be a separate finding that she was remiss in directing the affairs of the agency,
resulting in the illegal dismissal of respondents.

Moreover, petitioner is correct in saying that impleading her for the purpose of execution is tantamount
to modifying a decision that had long become final and executory. The fallo of the 1997 Decision by the
NLRC only held respondents Pro Agency Manila Inc., and Abdul Rahman Al Mahwes to jointly and severally
pay complainants. By holding her liable despite not being ordained as such by the decision, both the CA
and NLRC violated the doctrine on immutability of judgments. In other words, once a decision becomes
final and executory, it is removed from the jurisdiction of the court which rendered it to further alter or
amend it. Any amendment or alteration which substantially affects a final and executory judgment is null
and void for lack of jurisdiction, including the entire proceedings held for that purpose. An order of
execution which varies the tenor of the judgment or exceeds the terms thereof is a nullity.
14. Sealanes Marine Services, Inc. v. Dela Torre (214132, February 18, 2015)

Facts:

Arnel Dela Torre was hired by Sealanes Marine Services, Inc., a local manning agency, through its President
Christopher Dumatol, in behalf of its foreign principal Arklow Shipping Netherland, as a seaman on board
M/V Arklow Venture for a period of nine months. An overriding CBA called "CBA for Filipino Ratings on
Board Netherlands Flag Vessels" also covered his contract.

Dela Torre embarked on January 21, 2010. Later, he figured in an accident and injured his lower back
during the crew’s rescue boat drill at the port of Leith, Scotland. While according to his attending physician
he sustained no major injury, the pain in his back persisted and he was repatriated. He underwent several
physical therapy sessions, and finally on March 10, 2011 the company-designated physician assessed him
with a Grade 11 disability for slight rigidity or one-third loss of motion or lifting power of trunk.
Nonetheless, he was informed more than 240 days since the accident.

Issue:

Whether or not the officers and directors of corporations and partnerships may be held jointly and
severally liable with the principal and placement agency over money claims

Held:

Yes, all three parties should uphold the promise of solidary liability since a corporation or partnership’s
application to engage in the business of recruitment and placement of workers.

The liability of the principal/employer and the recruitment/placement agency for any and all claims under
Section 10 of R.A. No. 8042 shall be joint and several. This shall be incorporated in the contract for
overseas employment and shall be a condition precedent for its approval. The performance bond to be
filed by the agency shall be answerable for all money claims or damages that may be awarded to the
workers. If the agency is a juridical being, the corporate officers and directors and partners as the case
may be, shall themselves be jointly and solidarily liable with the corporation or partnership for the
aforesaid claims and damages. Such liabilities shall continue during the entire period or duration of the
employment contract and shall not be affected by any substitution, amendment or modification.

Thus, every applicant for license to operate a seafarers’ manning agency shall, in the case of a corporation
or partnership, submit a written application together with, among others, a verified undertaking by
officers, directors and partners that they will be jointly and severally liable with the company over claims
arising from employer-employee relationship. Laws are deemed incorporated in employment contracts
and the contracting parties need not repeat them. Every contract, thus, contains not only what has been
explicitly stipulated, but also the statutory provisions that have any bearing on the matter.
15. Gargallo v. Dohle Seafront Crewing (215551, August 17, 2016)

Facts:

Jakerson Gargallo accidentally fell on deck while lifting heavy loads of lube oil drum, with his left arm
hitting the floor first, bearing his full body weight. He remained permanently unfit for further sea service
despite major surgery and further treatment by the company-designated physicians. His permanent total
unfitness to work was duly certified by his chosen physician. He filed a complaint for permanent total
disability benefits against respondents before the NLRC.

Respondents countered that the fit-to-work findings of the company-designated physicians must prevail
over that of petitioner's independent doctor, considering that: they were the ones who continuously
treated and monitored petitioner's medical condition. Respondents further averred that the filing of the
disability claim was premature since petitioner was still undergoing medical treatment within the
allowable 240-day period at the time the complaint was filed.

In its September 16, 2015 Decision, the Court dismissed petitioner's claim for permanent total disability
benefits, but ordered Dohle Seafront and Dohle Manning, jointly and severally, to pay petitioner the
income benefit arising from his temporary total disability which lasted for 194 days from his repatriation
until his last visit to the company-designated physician plus as attorney's fees. Meanwhile, Mayronilo
Padiz, a corporate officer, was held not solidarity liable with Dohle Seafront and Dohle Manning for
payment of the monetary awards to petitioner, absent any showing that acted beyond the scope of his
authority or with malice.

Issue:

Whether or not Padiz may be held solidarily liable with his co-respondents for the money claim

Held:

Yes, Padiz should be solidarily liable with the principal Dohle Seafront and the agent Dohle Manning, as
this should have been part of the mandates of their contract.

Applicable laws form part of, and are read into, contracts without need for any express reference thereto;
more so, when it pertains to a labor contract which is imbued with public interest. Each contract thus
contains not only what was explicitly stipulated therein, but also the statutory provisions that have any
bearing on the matter." Section 10 of R.A. No. 8042, as amended, and the pertinent POEA Rules are
deemed incorporated in petitioner's employment contract with respondents. These provisions are in line
with the State's policy of affording protection to labor and alleviating the workers' plight, and are meant
to assure OFWs immediate and sufficient payment of what is due them.

Thus, as the law provides, corporate directors and officers are themselves solidarily liable with the
recruitment/placement agency for all money claims or damages that may be awarded to OFWs. Based on
the foregoing, therefore, Padiz must be declared jointly and solidarily liable with Dohle Seafront and Dohle
Manning for the payment of the income benefit arising from petitioner's temporary total disability, and,
to such extent, grants petitioner's motion for reconsideration, and, in consequence, modifies the
September 16, 2015 Decision accordingly.
16. Princess Talent Center Production, Inc. v. Masagca (191310, April 11, 2018)

Facts:

Desiree Masagca went to the office of PTCPI, and was persuaded by PTCPI’s president Moldes to apply for
a job as a singer/entertainer in South Korea.

Respondent's Allegations

Respondent was made to sign two Employment Contracts but she was not given the chance to read any
of them despite her requests, relying only on representations. For nine months, she worked at Seaman's
Seven Pub without receiving any salary. Respondent subsisted on the 20% commission that she received
for every lady's drink the customers purchased for her and had to remit half to Moldes for the payment
of the fictitious loan. Failed to have remitted any amount, Moldes demanded that respondent pay the
balance. Respondent engaged the legal services of a Philippine law firm and discovered that her
employment was just for six months and that her monthly compensation was US$600, not just US$400.
Moldes went to South Korea and personally handed her a copy of the loan document for US$10,600 and
demanded that respondent terminate the services of her legal counsel in the Philippines. When
respondent refused to do, petitioner withheld her salary. Subsequently, Park turned respondent over to
the South Korean immigration authorities for deportation on the ground of an expired visa. It was only
then that she found out that Moldes did not renew her visa. She filed the complaint for illegal dismissal.

Petitioner’s Allegations

Petitioner countered that respondent signed only one contract, and that respondent read its contents.
Respondent understood that her contract was only for six months since she underwent the mandatory
post-arrival briefing before the Philippine Labor Office in South Korea. Respondent eventually completed
the full term of her contract and extended her contract with SAENCO on her own, and so petitioners'
liability should not extend beyond the original six-month term. They received complaints that respondent
violated the club policies of SAENCO against wearing skimpy and revealing dresses, dancing in a
provocative and immoral manner, and going out with customers after working hours. Respondent was
repatriated to the Philippines on account of her illegal or immoral activities. Petitioner also insisted that
respondent's salaries were paid in full as evidenced by the nine cash vouchers. It submitted the
Sinumpaang Salaysay of respondent's coworkers, who confirmed that she violated the club policies and
respondent received her salaries. It also submitted the Sworn Statement of respondent's husband, to
prove that respondent obtained a loan from PTCPI. Baltazar affirmed that PTCPI lent them some money
for her job application, training, and processing of documents so that she could work abroad. Moldes, for
her part, disavowed personal liability, stating that she merely acted in her capacity as a corporate officer
of PTCPI.

Issue:

Whether or not PTCPI and Moldes are liable

Held:

No, they are not liable. Respondent had already been paid her salary for the nine months she worked so
she is no longer entitled an award for the same.
Here, petitioners submitted nine cash vouchers with respondent’s signature. The said vouchers clearly
state that these were “salary full payment” for US$600. However, respondent is entitled to an award of
her salaries for the unexpired three months of her extended Employment Contract pursuant to the fifth
paragraph of Section 10 of RA 8042. Given that respondent's monthly salary was US$600, petitioners and
SAENCO shall pay respondent a total of US$1,800 for the remaining three months of her extended
contract. The said amount is subject to legal interest of 12% per annum from respondent's illegal dismissal
in June 2004 to June 30, 2013 and 6% per annum from July 1, 2013 to the date this decision becomes final
and executory. Respondent also has the right to the reimbursement of her placement fee with interest of
12% per annum from her illegal dismissal in June 2004 to the date this Decision becomes final and
executory.

With regard to liability, petitioner’s arguments that only SAENCO, being the principal should be
answerable is untenable due to the second paragraph of Section 10 of R.A. No. 8042 which provides that
the liability of the principal/employer and the recruitment/placement agency for any and all claims under
this section shall be joint and several. This is intended to give utmost protection to the OFW, who may not
have the resources to pursue money claims and damages against a foreign principal/employer in another
country. In turn, since PTCPI is a juridical entity, Moldes is herself jointly and solidarily liable with PTCPI
for respondent’s monetary awards as its corporate officer.
17. Powerhouse Staffbuilders International, Inc. v. Rey (190203, November 7, 2016)

Facts:

Petitioner hired respondents as operators for its foreign principal, Catcher Technical Co. Ltd./Catcher
Industrial Co. Ltd., based in Taiwan, for the duration of two years commencing upon their arrival at the
jobsite. Later, Catcher informed respondents that their working days will be reduced due to low orders
and financial difficulties. Thereafter, respondent employees were repatriated to the Philippines. This
prompted respondent employees to file their complaints for illegal dismissal, refund of placement fees,
moral and exemplary damages, as well asattorney’s fees, against Powerhouse and Catcher.

During the proceedings, petitioner moved to implead JEJ International Manpower Services as respondent
on account of the alleged transfer to the latter of Catcher’s accreditation. The motion was granted and
JEJ submitted its position paper, arguing that the supposed transfer of accreditation to it did not affect
the joint and solidary liability of petitioner in favor of respondent employees. It averred that any contract
between JEJ and petitioner could not be enforced in the case as it involved no employer-employee
relationship and is therefore outside the jurisdiction of the labor arbiter.

Issue:

Whether or not respondents are entitled to monetary awards

Held:

Yes, respondents are entitled to the payment of monetary claims. They were made to resign against their
will after the foreign principal, Catcher, stopped providing them food for their subsistence, when they
were informed that they would be repatriated. The complaints for illegal dismissal belie the claim that
respondents voluntarily chose to be separated and repatriated. Respondent employees are entitled to
money claims and full reimbursement of their respective placement fees. However, the award of
respondents’ salaries should be an amount equivalent to the unexpired term of the employment contract.

Section 10 of R.A. No. 8042 clearly states the solidary liability of the principal and the recruitment agency
to the employees and this liability shall not be affected by any substitution, amendment or modification
for the entire duration of the employment contract. Here, even if there was transfer of accreditation by
Catcher from petitioner to JEJ, petitioner’s liability to respondents remained intact because respondents
are not privy to such contract, and in their overseas employment contract approved by POEA, petitioner
is the recruitment agency of Catcher.

To relieve Powerhouse from liability arising from the approved overseas employment contract is to
change the contract without the consent from the other contracting party, respondents. To rule otherwise
and free petitioner of liability would go against the rationale of R.A. No. 8042 to protect and safeguard
the rights and interests of overseas Filipinos and overseas Filipino workers, in particular, and run contrary
to this law’s intention to an additional layer of protection to overseas workers. By providing that the
liability of the foreign employer may be enforced to the full extent against the local agent, the overseas
worker is assured of immediate and sufficient payment of what is due them.
18. Sunace International Management Services, Inc. v. NLRC (161757, January 25, 2006)

Facts:

Divina Montehermozo was a domestic helper who was deployed by petitioner—with the assistance of
Edmund Wang, a Taiwanese broker—to Taiwan for 12 months, upon the expiration of which she
continued working for another 2 years. When she returned to the Philippines, she filed a case against
Wang, petitioner, an Adelaide Perez, and her Taiwanese employer Xiong, alleging that she was underpaid
and jailed for three months. For its part, petitioner alleged that it had no knowledge of the two-year
extension of the contract, and therefore no liability could ever attach to Sunace.

The LA and the CA rejected petitioner’s argument that it should not be held liable because during the
extension period, petitioner and Wang were in communication with each other, yet its alleged non-
consent was not established. Thus, by applying the theory of imputed knowledge, knowledge of the the
foreign employer is equivalent to knowledge of the petitioner. What petitioner should have done was
write to the POEA objecting to the extension; because it didn’t, it is presumed to have consented thereto.

Issue:

Whether or not petitioner is deemed to have knowledge of the contract extension

Held:

No, petitioner was never in constant communication with the foreign employer, and it only communicated
once with Wang about Montehermozo’s savings, not about her extension. This does not mean that
petitioner ratified her extension.

The theory of imputed knowledge ascribes the knowledge of the petitioner, as agent, to the principal,
Xiong, not the other way around. The knowledge of the principal-foreign employer cannot, therefore, be
imputed to its agent. Thus, since there is no proof that petitioner had knowledge of the extension, it
cannot be liable for claims arising from it. In addition, there was already an implied revocation of the
agency when the foreign principal directly negotiated with Divina and entered into a new and separate
employment contract.
19. Yap v. Thenamaris Ship’s Management (179532, May 30, 2011)

Facts:

Claudio Yap was employed as electrician of the vessel, M/T Seascout by Intermare Maritime Agencies, Inc.
in behalf of its principal, Thenamaris Ship’s Management. The contract of employment entered into by
Yap and Capt. Francisco B. Adviento, the General Manager of Intermare, was for a duration of 12 months.

Yap boarded M/T Seascout and commenced his job as electrician. However, the vessel was later sold. The
POEA was informed about the sale in a letter signed by Capt. Adviento. Yap, along with the other
crewmembers, was informed by the Master of their vessel that the same was sold and will be scrapped.
They were also informed about the Advisory sent by Capt. Constatinou that if the crew-members wished
to be transferred to other vessels, they must inform their officers or ratings and those who does not wish
to be transferred their prospected time for re-embarkation must be declared.

Yap received his seniority bonus, vacation bonus, extra bonus along with the scrapping bonus. However,
with respect to the payment of his wage, he refused to accept the payment of one-month basic wage. He
insisted that he was entitled to the payment of the unexpired portion of his contract since he was illegally
dismissed from employment. He alleged that he opted for immediate transfer but none was made.
Respondents contended that Yap was not illegally dismissed, alleging that following the sale of the M/T
Seascout, Yap signed off from the vessel and was paid his wages corresponding to the months he worked
plus his seniority bonus, vacation bonus and extra bonus. They further alleged that Yap’s employment
contract was validly terminated due to the sale of the vessel and no arrangement was made for Yap’s
transfer to Thenamaris’ other vessels.

Issue:

Whether or not Yap is entitled to the salaries corresponding to the unexpired portion of his contract

Held:

Yes, he may claim the amount of salaries pertaining to the unexpired portion of his contract. Section 3,
Rule 7 of R.A 10022, provides that the employer and the recruitment/placement agency shall be jointly
and severally liable on any and all money claims which shall be awarded to the workers. Such liabilities
shall continue during the entire period or duration of the employment contract.

The unexpired portion of Yap’s contract was less than one year, he was entitled to his salaries for the
unexpired portion of his contract for a period of nine months from Intermare Maritime Agencies, Inc. and
Thenamaris Ships Management. Therefore, the unexpired portion which were not paid to Yap by
Thenamaris Ship Management as his employer renders Intermare Maritime Agency as the recruitment
/placement agency to be jointly and severally liable with Thenamaris due to the money claim of Yap for
the unexpired portion of his contract.
20. Sameer Overseas Placement Agency, Inc. v. Cabiles (170139, August 5, 2014)

Facts:

Sameer Overseas Placement Agency, Inc., is a recruitment and placement agency. Joy Cabiles signed a
one-year employment contract for a monthly salary of NT$15,360. respondent was deployed to work for
Taiwan Wacoal, Co. Ltd. She alleged that in her employment contract, she agreed to work as quality
control for one year. In Taiwan, she was asked to work as a cutter.

Petitioner claims that on July 14, 1997, a certain Huwang from Wacoal informed respondent, without
prior notice, that she was terminated and that she should immediately report to their office to get her
salary and passport. She was asked to prepare for immediate repatriation. Respondent claims that she
was told that from June 26 to July 14, 1997, she only earned a total of NT$9,000. According to her, Wacoal
deducted NT$3,000 to cover her plane ticket to Manila.

Respondent filed a complaint for illegal dismissal against petitioner and Wacoal. The CA found respondent
illegally dismissed and awarded her three months’ worth of salary, the reimbursement of the cost of her
repatriation, and attorney’s fees.

Issue:

Whether or not Cabiles was entitled to the unexpired portion of her salary due to illegal dismissal

Held:

Yes, the award of the three-month equivalent of respondent’s salary should be increased to the amount
equivalent to the unexpired term of the employment contract.

In Serrano v. Gallant Maritime Services, Inc. it was held that the clause “or for three months for every year
of the unexpired term, whichever is less” is unconstitutional for violating the equal protection clause and
substantive due process. A statute or provision which was declared unconstitutional is not a law. It confers
no rights; it imposes no duties; it affords no protection; it creates no office; it is inoperative as if it has not
been passed at all.

The clause was reinstated in R.A. No. 8042 upon promulgation of R.A. No. 10022. In the hierarchy of laws,
the Constitution is supreme. No branch or office of the government may exercise its powers in any manner
inconsistent with the Constitution, regardless of the existence of any law that supports such exercise. Any
law that is inconsistent with it is a nullity. Thus, when a law or a provision of law is null because it is
inconsistent with the Constitution, the nullity cannot be cured by reincorporation or reenactment of the
same or a similar law or provision. A law or provision of law that was already declared unconstitutional
remains as such unless circumstances have so changed as to warrant a reverse conclusion.

The Court observed that the reinstated clause, this time as provided in Republic Act. No. 10022, violates
the constitutional rights to equal protection and due process. The parties have failed to show any
compelling change in the circumstances that would warrant to revisit the precedent ruling. Once again,
the clause “or for three months for every year of the unexpired term, whichever is less” in Section 7 of
Republic Act No. 10022 is declared unconstitutional and, therefore, null and void.
21. Maersk-Filipinas Crewing, Inc. v. Avestruz (207010, February 18, 2015)

Facts:

Maersk-Filipinas Crewing, Inc., on behalf of its foreign principal, A.P. Moller Singapore Pte. Ltd., hired
Toribio Avestruz as Chief Cook on board the vessel M/V Nedlloyd Drake for a period of six months, with a
basic monthly salary of US$698. In the course of the weekly inspection of the galley around one and a half
months later, Captain Charles Woodward noticed that the cover of the garbage bin in the kitchen near
the washing area was oily.

As part of Avestruz’s job was to ensure the cleanliness of the galley, Woodward called him and asked him
to stand near the garbage bin where the former took the latter’s right hand and swiped it on the oily cover
of the garbage bin, telling Avestruz to feel it. Avestruz remarked, “Sir if you are looking for dirt, you can
find it the ship is big. Tell us if you want to clean and we will clean it.” Woodward replied by shoving
Avestruz’s chest, to which the latter complained and said, “Don’t touch me,” causing an argument to
ensue between them. Woodward summoned and required Avestruz to state in writing what transpired in
the galley that morning. Avestruz complied and submitted his written statement on that same day.
Woodward likewise asked Messman Jomilyn Kong to submit his own written statement regarding the
incident, to which the latter immediately complied.

On the very same day, Woodward informed Avestruz that he would be dismissed from service and be
disembarked in India. Subsequently, Avestruz filed a complaint for illegal dismissal, payment for the
unexpired portion of his contract, damages, and attorney’s fees against Maersk, A.P. Moller, and Jesus
Agbayani, an officer of Maersk.

Issue:

Whether or not Avestruz was entitled to money claims

Held:

Yes, she may claim from either Maersk, A.P. Moller, or Agbayani as solidary debtors for his illegal dismissal.

The burden of proving that the termination of an employee was for a just or authorized cause lies with
the employer. If the employer fails to meet this burden, the conclusion would be that the dismissal was
unjustified and, therefore, illegal. In order to discharge this burden, the employer must present substantial
evidence, which is defined as that amount of relevant evidence which a reasonable mind might accept as
adequate to justify a conclusion, and not based on mere surmises or conjectures.

Petitioners maintain that Avestruz was dismissed on the ground of insubordination, consisting of his
repeated failure to obey his superior’s order to maintain cleanliness in the galley of the vessel as well as
his act of insulting a superior officer by words or deeds. Conversely, apart from Captain Woodward’s e-
mails, no other evidence was presented by the petitioners to support their claims.

Insubordination, as a just cause for the dismissal of an employee, necessitates two requisites: (1) the
employee’s assailed conduct must have been willful, that is, characterized by a wrongful and perverse
attitude; and (2) the order violated must have been reasonable, lawful, made known to the employee,
and must pertain to the duties which he had been engaged to discharge. Here, the contents of
Woodward’s e-mails do not establish that Avestruz’s conduct had been willful, or characterized by a
wrongful and perverse attitude. The Court concurs with the CA’s observation that Avestruz’s statement62
regarding the incident in the galley deserves more credence, being corroborated63 by Kong, a messman
who witnessed the same.

Finally, with respect to the monetary awards given to Avestruz by the CA which is the full reimbursement
of his placement fee and the deductions made with interest at 12% per annum, plus his salaries for the
unexpired portion of his employment contract, the same is in consonance with Section 10 of R.A. No.
8042, as amended by RA 10022, which provides that in case of termination of overseas employment
without just, valid or authorized cause as defined by law or contract, or any unauthorized deductions
from the migrant worker’s salary, the worker shall be entitled to the full reimbursement of his
placement fee and the deductions made with interest at 12% per annum, plus his salaries for the
unexpired portion of his employment contract or for three months for every year of the unexpired term,
whichever is less.