SERRANO vs. GALLANT MARITIME SERVICES, INC. and MARLOW NAVIGATION CO., INC.

[G.R. No. 167614. March 24, 2009.]

Facts:

Petitioner Serrano was hired by respondents Gallant Maritime Services, Inc. and Marlow
Navigation Co., Ltd. Under the POEA-approved Contract of Employment, he was to be employed for a
period of 12 months as Chief Officer with basic monthly salary of US$1,400.00, overtime pay of
US$700.00 per month and vacation leave with pay. On the date of his departure, petitioner was
constrained to accept a downgraded employment contract for the position of Second Officer with a
monthly salary of US$1,000.00, upon the assurance and representation of respondents that he would be
made Chief Officer by the end of April. However, respondents did not deliver on their promise and
petitioner refused to stay on as Second Officer and was repatriated to the Philippines in May.
Petitioner's employment contract was for a period of 12 months, but he had served only two (2) months
and seven (7) days of his contract, leaving an unexpired portion of nine (9) months and twenty-three
(23) days.

Petitioner filed with the Labor Arbiter (LA) a complaint against respondents for constructive
dismissal and for payment of his money claims. The LA declared the dismissal of petitioner was illegal
and awarded monetary benefits. The LA based his computation on the salary period of three months
only — rather than the entire unexpired portion of nine months and 23 days of petitioner's employment
contract applying the subject clause.

Respondents appealed to the National Labor Relations Commission (NLRC) to question the
finding of the LA. Petitioner also appealed to the NLRC on the sole issue that the LA erred in not applying
the ruling of the Court in Triple Integrated Services, Inc. v. National Labor Relations Commission that in
case of illegal dismissal, OFWs are entitled to their salaries for the unexpired portion of their contracts
The NLRC corrected the LA's computation of the lump-sum salary awarded to petitioner by reducing the
applicable salary rate from US$2,590.00 to US$1,400.00 because R.A. No. 8042 does not provide for the
award of overtime pay, which should be proven to have been actually performed, and for vacation
leave pay." Petitioner filed a motion for Partial Reconsideration, but this time he questioned the
constitutionality of the subject clause. The NLRC denied the motion.

Petitioner filed a Petition for Certiorari with the CA, questioning the constitutionality of the subject
clause. The CA eventually granted the petition. The CA affirmed the NLRC ruling on the reduction of the
applicable salary rate; however, the CA denied the constitutional issue raised by petitioner. Having been
denied by the CA, petitioner brings his cause to the higher court.

Issues:

1. Whether or not Section 10 of Rep. Act No. 8402 is constitutional.

2. Whether or not Serrano is entitled to salaries equivalent of the entire nine months and 23
days left of his employment contract including overtime pay and holiday pay.
Ruling:

First Issue:

Yes. The subject clause violates the Equal Protection Clause and Right of an individual to due
Process (Sec 1, Art III), recognizing their rights as a protected Sector (Sec 18, Art II; and Section 3 of
Article XIII). Prior to R.A. 8042, all OFWs who were illegally terminated were subjected to a uniform rule
of monetary benefits computation: basic salary times the entire unexpired portion of their employment.
However, upon the enactment of R.A. 8042, illegally dismissed employees with unexpired portion of 1
year or more are singled out and subjected to the disadvantageous monetary award of 3 months of their
unexpired portion; as opposed to those illegally terminated OFWs with unexpired contracts of less than
one year who are entitled to their salaries for the unexpired period; and illegally dismissed local workers
with fixed-term employment who are not subjected to the 3-cap limitation.

In declaring the subject clause unconstitutional, the Court reasoned that since the same
deprived Serrano of property and money benefits without an existing valid and definitive governmental
purpose, it violated not only Serrano’s right to equal protection but as well as his right to substantive
due process under (Section1, Art. III of the Constitution); thus, entitling Serrano to his salaries for the
entire unexpired period.

Second Issue:

The subject clause being unconstitutional, petitioner is entitled to his salaries for the entire
unexpired period of nine months and 23 days of his employment contract, pursuant to law and
jurisprudence prior to the enactment of R.A. No. 8042, not including his overtime and leave pay
because there is no evidence that he performed work during those periods. The word salaries in Section
10(5) does not include overtime and leave pay. For seafarers like petitioner, DOLE Department Order
No. 33, series 1996, provides a Standard Employment Contract of Seafarers, in which salary is
understood as the basic wage, exclusive of overtime, leave pay and other bonuses; whereas overtime
pay is compensation for all work “performed” in excess of the regular eight hours, and holiday pay is
compensation for any work “performed” on designated rest days and holidays. The claim for the day’s
leave pays for the unexpired portion of the contract is unwarranted since the same is given during the
actual service of the seamen.
 TANGGA-AN vs. PHILIPPINE TRANSMARINE CARRIERS, INC.

G.R. No. 180636. March 13, 2013

Facts:

Petitioner Tangga-an entered an overseas employment contract with respondents PTC and on
behalf of its foreign employer, Universe Tankship Delaware, LLC. Under the employment contract, he
was to be employed for a period of six months as chief engineer and to be paid a basic salary of
US$5,000.00; vacation leave pay of US$2,500.00 per month and tonnage bonus of US$700.00 a month.

While the vessel was still at sea, the master required Tangga-an and the rest of the Filipino
Engineer Officers to report to his office where they were informed that they would be repatriated on
account of the delay in the cargo discharging in Japan, which was principally a duty belonging to the
deck officers. Upon verification, they found out that when the vessel berthed in Japan, the cargo hold
was not immediately opened, and the deck officers concerned did not prepare the stock. While cargo
discharging was ongoing, both the master and the chief mate again went on shore. To save face, they
harped on the Engine Department for their mistake.

Lorenzo Tangga-an filed a case for illegal dismissal with a claim for the payment of salaries
corresponding to the unexpired term of the contract, damages and attorney’s fees against PTC in Labor
Arbiter. The LA rendered a decision finding petitioner to have been illegally dismissed for lack of just
cause and for failure to comply with the twin requirements of notice and hearing. As regards petitioner’s
claim for back salaries, the LA ruled petitioner entitled not to four months which is equivalent to the
unexpired portion of his contract, but only to three months, inclusive of vacation leave pay and tonnage
bonus pursuant to Section 10 of RA No. 8042.

Respondents appealed to the National Labor Relations Commission but later dismissed lack of
merit. NLRC affirmed the decision of the LA.

Respondents went up to the CA by Petition for certiorari, seeking to annul the Decision of the
NLRC, the CA rendered the assailed decision and was partially granted

CA adhered to the finding of illegal dismissal. But considered only petitioner’s monthly basic
salary and disregarded his monthly vacation leave pay and tonnage bonus. It likewise held pursuant to
Section 1017 of RA. Petitioner filed a Motion for (Partial) Reconsideration which was denied Thus, he
filed the instant Petition.

Issues:

Whether or not an illegally dismissed overseas employee is only entitled to 3 months back
salaries.
Ruling:

No. The Labor Arbiter, NLRC, and the CA all took the view that the complaining employee was
entitled to his salary for the unexpired portion of his contract but limited to only three months pursuant
to Section 1024 of RA 8042. The Court did not agree and hence modified the judgment in said case. It
held that, following the wording of Section 10 and its ruling in Marsaman Manning Agency, Inc. v.
National Labor Relations Commission, when the illegally dismissed employee’s employment contract has
a term of less than one year, he/she shall be entitled to recovery of salaries representing the unexpired
portion of his/her employment contract. Petitioner must be awarded his salaries corresponding to the
unexpired portion of his six-month employment contract, or equivalent to four months. This includes all
his corresponding monthly vacation leave pay and tonnage bonuses which are expressly provided and
guaranteed in his employment contract as part of his monthly salary and benefit package.

Article 279 of the Labor Code mandates that an employee’s full back wages shall be inclusive of
allowances and other benefits or their monetary equivalent.” As we have time and again held, “it is the
obligation of the employer to pay an illegally dismissed employee or worker the whole amount of the
salaries or wages, plus all other benefits and bonuses and general increases, to which he would have
been normally entitled had he not been dismissed and had not stopped working.
 CALALANG vs. WILLIAMS et al.

G.R. No. 47800. December 2, 1940

Facts:

The National Traffic Commission, in its resolution, resolved to recommend to the Director of the
Public Works and to the Secretary of Public Works and Communications that animal-drawn vehicles be
prohibited from passing along the following for a period of one year from the date of the opening of the
Colgante Bridge to traffic in Rosario Street extending from Plaza Calderon de la Barca to Dasmariñas
Street and along Rizal Avenue extending from the railroad crossing at Antipolo Street to Echague Street
with each designated time schedules. The Chairman of the National Traffic Commission recommended
to the Director of Public Works with the approval of the Secretary of Public Works the adoption of the
measure proposed in the resolution aforementioned in pursuance of the provisions of the
Commonwealth Act No. 548 which authorizes said Director with the approval from the Secretary of the
Public Works and Communication to promulgate rules and regulations to regulate and control the use of
and traffic on national roads.

The Director recommended to the Secretary the approval of the recommendations made by the
Chairman of the National Traffic Commission with modifications. The Secretary of Public Works
approved the recommendations as well. The Mayor of Manila have enforced and caused to be enforced
the rules and regulation. Consequently, all animal-drawn vehicles are not allowed to pass and pick up
passengers in the places above mentioned to the detriment not only of their owners but of the riding
public as well.

Hence, Petitioner Maximo Calalang, in his capacity, brought before this court this petition for a
writ of prohibition against the rules and regulations promulgated by the respondents the respondents
Williams et al.

Issue:

Whether the rules and regulations complained of infringe upon the constitutional precept
regarding the promotion of social justice to insure the well-being and economic security of all the
people?

Ruling:

No. Social justice is “neither communism, nor despotism, nor atomism, nor anarchy,” but the
humanization of laws and the equalization of social and economic forces by the State so that justice in
its rational and objectively secular conception may at least be approximated. Social justice means the
promotion of the welfare of all the people, the adoption by the Government of measures calculated to
insure economic stability of all the competent elements of society, through the maintenance of a proper
economic and social equilibrium in the interrelations of the members of the community,
constitutionally, through the adoption of measures legally justifiable, or extra-constitutionally, through
the exercise of powers underlying the existence of all governments on the time-honored principles of
salus populi estsuprema lex.

Social justice must be founded on the recognition of the necessity of interdependence among
divers and diverse units of a society and of the protection that should be equally and evenly extended to
all groups as a combined force in our social and economic life, consistent with the fundamental and
paramount objective of the state of promoting health, comfort and quiet of all persons, and of bringing
about “the greatest good to the greatest number.”