ANTONIO SERANO v.

GALLANT MARITIME SERVICES ET AL

G.R. No. 167614 24 March 2009

FACTS:

The Story
Gallant Maritime Services (Gallant) hired Antonio Serano (Serano) as a Chief Officer, with a
monthly salary of USD 1,400. The contract was for a year. In March 1998, on the day of his
departure, Serano’s position was downgraded to Second Officer and his salary to USD 1,000. He
was assured that he would be promoted to Chief Officer by April that year. The promotion never
came. Serano refused to stay as Second Officer and was sent home in May.

Labor Arbiter

Serano filed a complaint for constructive dismissal before the Labor Arbiter (LA). His money
claim was at USD 26, 442.73, his salary for the unexpired term of his contract. (9 months 23 days).
This amount includes the salary of a Chief Officer, overtime pay, and leave pay. The LA ruled that
Serano was illegally dismissed, but awarded only USD 8,770. The amount is based on Republic
Act 8042, which provides that an illegally dismissed employee will be paid an amount equal to the
total salary earned from the unexpired term of his contract, or an amount equal to three months’
salary, whichever is lower.

National Labor Relations Commission

Both Serano and Gallant appealed to the National Labor Relations Commission (NLRC). Serano
claimed that he should be paid an amount equal to the salary earned from the unexpired term of
his contract. Gallant argued that Serano was legally dismissed. The NLRC held that Serano was
illegally dismissed, but lowered the award. It reasoned that RA 8042 does not include overtime
pay in the compensation for illegally dismissed employees. Serano’s Motion for Reconsideration
was denied.

Court of Appeals

Serano filed a Petition for Certiorari before the Court of Appeals. He raised the issue of
constitutionality of RA 8042. The appellate court affirmed the NLRC but did not rule on the
constitutionality of RA 8042. Thus, he brought his case to the Supreme Court.
Supreme Court

Serano argued that RA 8042 violates the equal protection clause. Illegally dismissed local workers
have no limit as to the compensation they can get. But OFWs are limited to an amount equal to
their salary for three months. This treatment is unfair because there is no substantial difference
between a local worker and an OFW.

On the other hand, Gallant argued that the constitutional issue should be ignored, because Serano
was too late in raising it. He should have raised that before the NLRC, not when he went to the
Court of Appeals.

ISSUE: Did RA 8042 violate the equal protection clause?

RULING:
Yes, RA 8042 violated the equal protection clause.
The elements of a valid classification are:

 The classification is based on substantial distinctions;

 It is relevant to the purpose of the law;
 It is not limited to existing conditions;
 It applies equally to all members of the class.

In this case, Republic Act 8042 classifies workers into three: local workers, OFWs with an
unexpired contract term of a year or more, and OFWs with an unexpired contract term spanning
less than a year. The provision of RA 8042 capping the compensation applies to an illegally
dismissed OFW who has a year or more remaining in his contract.

The employee working in the Philippines will be fully compensated if he is illegally dismissed, no
matter how long or short the unexpired term is. OFWs will get different compensations. The Court
explained in an example.
Two OFWs illegally dismissed:
A= an OFW with 12 months unexpired term, hired at USD 1,000 per month for 24 months
B= an OFW with 10 months unexpired term, hired at USD 1,000 per month for 24 months
Since A has 12 months (one year) remaining on his contract, he is covered by RA 8042. Instead
of receiving USD 12,000, he only gets USD 3,000 or an amount equal to three months’ salary.
Since B only has 10 months, he is not covered by RA 8042. He will receive the full USD 10,000
of his unexpired term.

This discrimination is not relevant to the purpose of the law—which is to protect OFWs. Capping
the money claims of OFWs will never promote their welfare or protect them. RA 8042 did not
meet the second requisite of a valid classification.
Thus, RA 8042 violated the equal protection clause.