G.R. No. 131656.

October 12, 1998

ASIAN CENTER FOR CAREER AND EMPLOYMENT SYSTEM AND SERVICES, INC. (ACCESS),
Petitioner, v. NATIONAL LABOR RELATIONS COMMISSION and IBNO MEDIALES, Respondents.

DECISION

As a rule, jurisdiction is determined by the law at the time of the commencement of the action.7 In the case at
bar, private respondents cause of action did not accrue on the date of his date of his employment or on
February 28, 1995. His cause of action arose only from the-time he was illegally dismissed by petitioner from
service in June 1996, after his vacation leave expired. It is thus clear that R.A. 8042 which took effect a year
earlier in July 1995 applies to the case at bar.

PUNO, J.:

In this petition for certiorari, petitioner ASIAN CENTER FOR CAREER & EMPLOYMENT SYSTEM &
SERVICES, INC. (ACCESS) seeks to modify the monetary awards against it in the Decision of respondent
National Labor Relations Commission (NLRC), dated October 14, 1997, a case for illegal dismissal.

The records disclose that petitioner hired respondent IBNO MEDIALES to work as a mason in Jeddah, Saudi
Arabia, with a monthly salary of 1,200 Saudi Riyals (SR). The term of his contract was two (2) years, from
February 28, 1995 until February 28, 1997.

On May 26, 1996, respondent applied with petitioner for vacation leave with pay which he earned after working
for more then a year. His application for leave was granted. While en route to the Philippines, his co-workers
informed him that he has been dismissed from service. The information turned out to be true.

On June 17, 1996, respondent filed a complaint with the labor arbiter for illegal dismissal, non-payment of
overtime pay, refund of transportation fare, illegal deductions, non-payment of 13th month pay and salary for
the unexpired portion of his employment contract.

On March 17, 1997, the labor arbiter found petitioner guilty of illegal dismissal.1 The dispositive portion reads:

IN VIEW OF THE FOREGOING, judgment is hereby rendered declaring the illegality of complainants dismissal
and ordering the respondent ACCESS and/or ABDULLAH LELINA to pay the complainant the amount of SR
13,200 representing complainants payment for the unexpired portion of his contract and refund of the illegality
deducted amount less P5,000.00, the legally allowed placement fee.

Respondent are further ordered to pay attorneys fees equivalent to ten percent (10%) of the judgment award or
the amount of SR 1,320, within ten (10) days from receipt hereof.

All other issues are dismissed for lack of merit.

SO ORDERD. (emphasis supplied)

It is noteworthy, however, that in the body of his decision, the labor arbiter applied Section 10 R.A. 8042,2 the
law relative to the protection of Filipino overseas-workers, and computed private respondents salary for the
unexpired portion of his contract as follows: SR1,200 x 3 months = SR3,600.

On appeal by petitioner, the NLRC affirmed the factual findings of the labor arbiter but modified the appealed
decision by deleting the order of refund of excessive placement fee for lack of jurisdiction.3cräläwvirtualibräry

Petitioner moved for reconsideration with respect to the labor arbiters award of SR13,200 in the dispositive
portion of the decision, representing respondents salary for the unexpired portion of his contract. invoking
Section 10 R.A. 8042. Petitioner urged that its liability for respondents salary is for only three (3) months.
Petitioner claimed that it should pay only SR 3.600 (SR 1,200 x 3 months) for the unexpired portion of
respondents employment and SR360 (10% of SR3,600) for attorneys fees.4cräläwvirtualibräry

The NLRC denied petitioners motion. It ruled that R.A. 8042 does not apply as respondents employment which
started in February 1995 occurred prior to its effectivity on July 15, 1995.5cräläwvirtualibräry

Hence, this petition for certiorari.

In the case at bar, petitioners illegal dismissal from service is no longer disputed. Petitioner merely impugns
the monetary awards granted by the NLRC to private respondent. It submits that although the unexpired
portion of private respondents employment contract is eight (8) months,6 it is liable to pay respondent only
three (3) months of his basic salary, pursuant to Section 10 of R.A. 8042, or SR1,200 (monthly salary)
multiplied by 3 months, for a total of SR3,600. Petitioner claims that the NLRC erred in ruling that as private
respondents employment started only on February 28, 1995, R.A. 8042, which took effect on July 15, 1995,
would not apply to his case. Petitioner argues that it is not the date of employment but the date of dismissal
which should be considered in determining the applicability of R.A. 8042. Petitioner prays that the award in the
NLRC Decision dated October 14, 1997, be changed to SR3,600 instead of 13,200 and that the award of
attorneys fees be deleted.

We affirm with modifications.

As a rule, jurisdiction is determined by the law at the time of the commencement of the action.7 In the case at
bar, private respondents cause of action did not accrue on the date of his date of his employment or on
February 28, 1995. His cause of action arose only from the-time he was illegally dismissed by petitioner from
service in June 1996, after his vacation leave expired. It is thus clear that R.A. 8042 which took effect a year
earlier in July 1995 applies to the case at bar.

Under Section 10 of R.A. 8042, a worker dismissed from overseas employment without just, valid or authorized
cause is entitled to his salary for the unexpired portion of his employment contract or for three (3) months for
every year of the unexpired term, whichever is less.

In the case at bar, the unexpired portion of private respondents employment contract is eight (8) months.
Private respondent should therefore be paid his basic salary corresponding to three (3) months or a total of
SR3,600.8cräläwvirtualibräry

We note that this same computation was made by the labor arbiter in the body of his decision.9 Despite said
computation in the body of the decision, however, the labor arbiter awarded higher sum (SR13,200) in the
dispositive portion.

The general rule is that where there is a conflict between the dispositive portion or the fallo and thebody of the
decision, the fallo controls. This rule rests on the theory that the fallo is the final order while the opinion in the
body is merely a statement ordering nothing. However, where the inevitable conclusion from the body of the
decision is so clear as to show that there was a mistake in the dispositive portion, the body of the decision will
prevail.10cräläwvirtualibräry

We find that the labor arbiters award of a higher amount in the dispositive portion was clearly an error for there
is nothing in the text of the decision which support the award of said higher amount. We reiterate that the
correct award to private respondent for the unexpired portion of his employment contract is SR3,600.

We come now to the award of attorneys fees in favor of private respondent. Article 2208 of the Civil Code
allows attorneys fees to be awarded when its claimant is compelled to litigate with third persons or to incur
expenses to protect his interest by reason of an unjustified act or omission of the party for whom it is sought.
Moreover, attorneys fees are recoverable when there is sufficient showing of bad faith.11 The Labor Code,12
on the other hand, fixes the attorneys fees that may be recovered in an amount which should not exceed 10%
of the total amount of wages awarded.

In the case at bar, petitioners bad faith in dismissing private respondent is manifest. Respondent was made to
believe that he would be temporarily leaving Jeddah, Kingdom of Saudi Arabia, for a 30-day vacation leave
with pay. However, while on board the plane back to the Philippines, his co-employees told him that he has
been dismissed from his job as he was given only a one-way plane ticket by petitioner. True enough, private
respondent was not allowed to return to his jobsite in Jeddah after his vacation leave. Thus, private respondent
was compelled to file an action for illegal dismissal with the labor arbiter and hence entitled to an award of
attorneys fees.

IN VIEW OF THE FOREGOING, the decision of the public respondent National Labor Relations Commission,
dated October 14, 1997, is AFFIRMED with modifications: petitioner is ordered to pay private respondent IBNO
MEDIALES the peso equivalent of the amounts of SR3,600 for the unexpired portion of his employment
contract, and SR360 for attorneys fees. No costs.

SO ORDERED.
G.R. No. 76633 October 18, 1988

EASTERN SHIPPING LINES, INC., petitioner,

vs.
PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA), MINISTER OF LABOR AND
EMPLOYMENT, HEARING OFFICER ABDUL BASAR and KATHLEEN D. SACO, respondents.

Under the 1985 Rules and Regulations on Overseas Employment, overseas employment is defined as
"employment of a worker outside the Philippines, including employment on board vessels plying international
waters, covered by a valid contract. 3 A contract worker is described as "any person working or who has
worked overseas under a valid employment contract and shall include seamen" 4 or "any person working
overseas or who has been employed by another which may be a local employer, foreign employer, principal or
partner under a valid employment contract and shall include seamen." 5 These definitions clearly apply to
Vitaliano Saco for it is not disputed that he died while under a contract of employment with the petitioner and
alongside the petitioner's vessel, the M/V Eastern Polaris, while berthed in a foreign country

CRUZ, J.:

The private respondent in this case was awarded the sum of P192,000.00 by the Philippine Overseas
Employment Administration (POEA) for the death of her husband. The decision is challenged by the petitioner
on the principal ground that the POEA had no jurisdiction over the case as the husband was not an overseas
worker.

Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was killed in an accident in Tokyo, Japan,
March 15, 1985. His widow sued for damages under Executive Order No. 797 and Memorandum Circular No.
2 of the POEA. The petitioner, as owner of the vessel, argued that the complaint was cognizable not by the
POEA but by the Social Security System and should have been filed against the State Insurance Fund. The
POEA nevertheless assumed jurisdiction and after considering the position papers of the parties ruled in favor
of the complainant. The award consisted of P180,000.00 as death benefits and P12,000.00 for burial
expenses.

The petitioner immediately came to this Court, prompting the Solicitor General to move for dismissal on the
ground of non-exhaustion of administrative remedies.

Ordinarily, the decisions of the POEA should first be appealed to the National Labor Relations Commission, on
the theory inter alia that the agency should be given an opportunity to correct the errors, if any, of its
subordinates. This case comes under one of the exceptions, however, as the questions the petitioner is raising
are essentially questions of law. 1 Moreover, the private respondent himself has not objected to the petitioner's
direct resort to this Court, observing that the usual procedure would delay the disposition of the case to her
prejudice.

The Philippine Overseas Employment Administration was created under Executive Order No. 797,
promulgated on May 1, 1982, to promote and monitor the overseas employment of Filipinos and to protect their
rights. It replaced the National Seamen Board created earlier under Article 20 of the Labor Code in 1974.
Under Section 4(a) of the said executive order, the POEA is vested with "original and exclusive jurisdiction
over all cases, including money claims, involving employee-employer relations arising out of or by virtue of any
law or contract involving Filipino contract workers, including seamen." These cases, according to the 1985
Rules and Regulations on Overseas Employment issued by the POEA, include "claims for death, disability and
other benefits" arising out of such employment. 2

The petitioner does not contend that Saco was not its employee or that the claim of his widow is not
compensable. What it does urge is that he was not an overseas worker but a 'domestic employee and
consequently his widow's claim should have been filed with Social Security System, subject to appeal to the
Employees Compensation Commission.

We see no reason to disturb the factual finding of the POEA that Vitaliano Saco was an overseas employee of
the petitioner at the time he met with the fatal accident in Japan in 1985.

Under the 1985 Rules and Regulations on Overseas Employment, overseas employment is defined as
"employment of a worker outside the Philippines, including employment on board vessels plying international
waters, covered by a valid contract. 3 A contract worker is described as "any person working or who has
worked overseas under a valid employment contract and shall include seamen" 4 or "any person working
overseas or who has been employed by another which may be a local employer, foreign employer, principal or
partner under a valid employment contract and shall include seamen." 5 These definitions clearly apply to
Vitaliano Saco for it is not disputed that he died while under a contract of employment with the petitioner and
alongside the petitioner's vessel, the M/V Eastern Polaris, while berthed in a foreign country. 6
It is worth observing that the petitioner performed at least two acts which constitute implied or tacit recognition
of the nature of Saco's employment at the time of his death in 1985. The first is its submission of its shipping
articles to the POEA for processing, formalization and approval in the exercise of its regulatory power over
overseas employment under Executive Order NO. 797. 7 The second is its payment 8 of the contributions
mandated by law and regulations to the Welfare Fund for Overseas Workers, which was created by P.D. No.
1694 "for the purpose of providing social and welfare services to Filipino overseas workers."

Significantly, the office administering this fund, in the receipt it prepared for the private respondent's signature,
described the subject of the burial benefits as "overseas contract worker Vitaliano Saco." 9 While this receipt is
certainly not controlling, it does indicate, in the light of the petitioner's own previous acts, that the petitioner and
the Fund to which it had made contributions considered Saco to be an overseas employee.

The petitioner argues that the deceased employee should be likened to the employees of the Philippine Air
Lines who, although working abroad in its international flights, are not considered overseas workers. If this be
so, the petitioner should not have found it necessary to submit its shipping articles to the POEA for processing,
formalization and approval or to contribute to the Welfare Fund which is available only to overseas workers.
Moreover, the analogy is hardly appropriate as the employees of the PAL cannot under the definitions given be
considered seamen nor are their appointments coursed through the POEA.

The award of P180,000.00 for death benefits and P12,000.00 for burial expenses was made by the POEA
pursuant to its Memorandum Circular No. 2, which became effective on February 1, 1984. This circular
prescribed a standard contract to be adopted by both foreign and domestic shipping companies in the hiring of
Filipino seamen for overseas employment. A similar contract had earlier been required by the National
Seamen Board and had been sustained in a number of cases by this Court. 10 The petitioner claims that it had
never entered into such a contract with the deceased Saco, but that is hardly a serious argument. In the first
place, it should have done so as required by the circular, which specifically declared that "all parties to the
employment of any Filipino seamen on board any ocean-going vessel are advised to adopt and use this
employment contract effective 01 February 1984 and to desist from using any other format of employment
contract effective that date." In the second place, even if it had not done so, the provisions of the said circular
are nevertheless deemed written into the contract with Saco as a postulate of the police power of the State. 11

But the petitioner questions the validity of Memorandum Circular No. 2 itself as violative of the principle of non-
delegation of legislative power. It contends that no authority had been given the POEA to promulgate the said
regulation; and even with such authorization, the regulation represents an exercise of legislative discretion
which, under the principle, is not subject to delegation.

The authority to issue the said regulation is clearly provided in Section 4(a) of Executive Order No. 797,
reading as follows:

... The governing Board of the Administration (POEA), as hereunder provided shall promulgate the necessary
rules and regulations to govern the exercise of the adjudicatory functions of the Administration (POEA).

Similar authorization had been granted the National Seamen Board, which, as earlier observed, had itself
prescribed a standard shipping contract substantially the same as the format adopted by the POEA.

The second challenge is more serious as it is true that legislative discretion as to the substantive contents of
the law cannot be delegated. What can be delegated is the discretion to determine how the law may be
enforced, not what the law shall be. The ascertainment of the latter subject is a prerogative of the legislature.
This prerogative cannot be abdicated or surrendered by the legislature to the delegate. Thus, in Ynot v.
Intermediate Apellate Court 12 which annulled Executive Order No. 626, this Court held:

We also mark, on top of all this, the questionable manner of the disposition of the confiscated property as
prescribed in the questioned executive order. It is there authorized that the seized property shall be distributed
to charitable institutions and other similar institutions as the Chairman of the National Meat Inspection
Commission may see fit, in the case of carabaos.' (Italics supplied.) The phrase "may see fit" is an extremely
generous and dangerous condition, if condition it is. It is laden with perilous opportunities for partiality and
abuse, and even corruption. One searches in vain for the usual standard and the reasonable guidelines, or
better still, the limitations that the officers must observe when they make their distribution. There is none. Their
options are apparently boundless. Who shall be the fortunate beneficiaries of their generosity and by what
criteria shall they be chosen? Only the officers named can supply the answer, they and they alone may choose
the grantee as they see fit, and in their own exclusive discretion. Definitely, there is here a 'roving commission
a wide and sweeping authority that is not canalized within banks that keep it from overflowing,' in short a
clearly profligate and therefore invalid delegation of legislative powers.

There are two accepted tests to determine whether or not there is a valid delegation of legislative power, viz,
the completeness test and the sufficient standard test. Under the first test, the law must be complete in all its
terms and conditions when it leaves the legislature such that when it reaches the delegate the only thing he will
have to do is enforce it. 13 Under the sufficient standard test, there must be adequate guidelines or stations in
the law to map out the boundaries of the delegate's authority and prevent the delegation from running riot. 14

Both tests are intended to prevent a total transference of legislative authority to the delegate, who is not
allowed to step into the shoes of the legislature and exercise a power essentially legislative.

The principle of non-delegation of powers is applicable to all the three major powers of the Government but is
especially important in the case of the legislative power because of the many instances when its delegation is
permitted. The occasions are rare when executive or judicial powers have to be delegated by the authorities to
which they legally certain. In the case of the legislative power, however, such occasions have become more
and more frequent, if not necessary. This had led to the observation that the delegation of legislative power
has become the rule and its non-delegation the exception.

The reason is the increasing complexity of the task of government and the growing inability of the legislature to
cope directly with the myriad problems demanding its attention. The growth of society has ramified its activities
and created peculiar and sophisticated problems that the legislature cannot be expected reasonably to
comprehend. Specialization even in legislation has become necessary. To many of the problems attendant
upon present-day undertakings, the legislature may not have the competence to provide the required direct
and efficacious, not to say, specific solutions. These solutions may, however, be expected from its delegates,
who are supposed to be experts in the particular fields assigned to them.

The reasons given above for the delegation of legislative powers in general are particularly applicable to
administrative bodies. With the proliferation of specialized activities and their attendant peculiar problems, the
national legislature has found it more and more necessary to entrust to administrative agencies the authority to
issue rules to carry out the general provisions of the statute. This is called the "power of subordinate
legislation."

With this power, administrative bodies may implement the broad policies laid down in a statute by "filling in' the
details which the Congress may not have the opportunity or competence to provide. This is effected by their
promulgation of what are known as supplementary regulations, such as the implementing rules issued by the
Department of Labor on the new Labor Code. These regulations have the force and effect of law.

Memorandum Circular No. 2 is one such administrative regulation. The model contract prescribed thereby has
been applied in a significant number of the cases without challenge by the employer. The power of the POEA
(and before it the National Seamen Board) in requiring the model contract is not unlimited as there is a
sufficient standard guiding the delegate in the exercise of the said authority. That standard is discoverable in
the executive order itself which, in creating the Philippine Overseas Employment Administration, mandated it to
protect the rights of overseas Filipino workers to "fair and equitable employment practices."

Parenthetically, it is recalled that this Court has accepted as sufficient standards "Public interest" in People v.
Rosenthal 15 "justice and equity" in Antamok Gold Fields v. CIR 16 "public convenience and welfare" in
Calalang v. Williams 17 and "simplicity, economy and efficiency" in Cervantes v. Auditor General, 18 to
mention only a few cases. In the United States, the "sense and experience of men" was accepted in Mutual
Film Corp. v. Industrial Commission, 19 and "national security" in Hirabayashi v. United States. 20

It is not denied that the private respondent has been receiving a monthly death benefit pension of P514.42
since March 1985 and that she was also paid a P1,000.00 funeral benefit by the Social Security System. In
addition, as already observed, she also received a P5,000.00 burial gratuity from the Welfare Fund for
Overseas Workers. These payments will not preclude allowance of the private respondent's claim against the
petitioner because it is specifically reserved in the standard contract of employment for Filipino seamen under
Memorandum Circular No. 2, Series of 1984, that—

Section C. Compensation and Benefits.—

1. In case of death of the seamen during the term of his Contract, the employer shall pay his beneficiaries the
amount of:

a. P220,000.00 for master and chief engineers

b. P180,000.00 for other officers, including radio operators and master electrician

c. P 130,000.00 for ratings.

2. It is understood and agreed that the benefits mentioned above shall be separate and distinct from, and will
be in addition to whatever benefits which the seaman is entitled to under Philippine laws. ...

3. ...
c. If the remains of the seaman is buried in the Philippines, the owners shall pay the beneficiaries of the
seaman an amount not exceeding P18,000.00 for burial expenses.

The underscored portion is merely a reiteration of Memorandum Circular No. 22, issued by the National
Seamen Board on July 12,1976, providing an follows:

Income Benefits under this Rule Shall be Considered Additional Benefits.—

All compensation benefits under Title II, Book Four of the Labor Code of the Philippines (Employees
Compensation and State Insurance Fund) shall be granted, in addition to whatever benefits, gratuities or
allowances that the seaman or his beneficiaries may be entitled to under the employment contract approved by
the NSB. If applicable, all benefits under the Social Security Law and the Philippine Medicare Law shall be
enjoyed by the seaman or his beneficiaries in accordance with such laws.

The above provisions are manifestations of the concern of the State for the working class, consistently with the
social justice policy and the specific provisions in the Constitution for the protection of the working class and
the promotion of its interest.

One last challenge of the petitioner must be dealt with to close t case. Its argument that it has been denied due
process because the same POEA that issued Memorandum Circular No. 2 has also sustained and applied it is
an uninformed criticism of administrative law itself. Administrative agencies are vested with two basic powers,
the quasi-legislative and the quasi-judicial. The first enables them to promulgate implementing rules and
regulations, and the second enables them to interpret and apply such regulations. Examples abound: the
Bureau of Internal Revenue adjudicates on its own revenue regulations, the Central Bank on its own circulars,
the Securities and Exchange Commission on its own rules, as so too do the Philippine Patent Office and the
Videogram Regulatory Board and the Civil Aeronautics Administration and the Department of Natural
Resources and so on ad infinitum on their respective administrative regulations. Such an arrangement has
been accepted as a fact of life of modern governments and cannot be considered violative of due process as
long as the cardinal rights laid down by Justice Laurel in the landmark case of Ang Tibay v. Court of Industrial
Relations 21 are observed.

Whatever doubts may still remain regarding the rights of the parties in this case are resolved in favor of the
private respondent, in line with the express mandate of the Labor Code and the principle that those with less in
life should have more in law.

When the conflicting interests of labor and capital are weighed on the scales of social justice, the heavier
influence of the latter must be counter-balanced by the sympathy and compassion the law must accord the
underprivileged worker. This is only fair if he is to be given the opportunity and the right to assert and defend
his cause not as a subordinate but as a peer of management, with which he can negotiate on even plane.
Labor is not a mere employee of capital but its active and equal partner.

WHEREFORE, the petition is DISMISSED, with costs against the petitioner. The temporary restraining order
dated December 10, 1986 is hereby LIFTED. It is so ordered.
[G.R. NO. 154213 - August 23, 2012]

EASTERN MEDITERRANEAN MARITIME LTD. AND AGEMAR MANNING AGENCY, INC., Petitioners, v.
EST ANISLAO SURIO, FREDDIE PALGUIRAN, GRACIANO MORALES, HENRY CASTILLO, ARISTOTLE
ARREOLA, ALEXANDER YGOT, ANRIQUE BA TTUNG, GREGORIO ALDOVINO, NARCISO FRIAS,
VICTOR FLORES, SAMUEL MARCIAL, CARLITO PALGUIRAN, DUQUE VINLUAN, .JESUS
MENDEGORIN, NEIL FLORES, ROMEO MANGALIAG, JOE GARFIN and SALESTINO SUSA,
Respondents.

DECISION

Republic Act No. 8042 applies to petitioners complaint by virtue of the case being then still pending or
undetermined at the time of the law s passage, there being no vested rights in rules of procedure.11 They
could not validly insist that the reckoning period to ascertain which law or rule should apply was the time when
the disciplinary complaint was originally filed in the POEA in 1993. Moreover, Republic Act No. 8042 and its
implementing rules and regulations were already in effect when petitioners took their appeal. A statute that
eliminates the right to appeal and considers the judgment rendered final and unappealable only destroys the
right to appeal, but not the right to prosecute an appeal that has been perfected prior to its passage, for, at that
stage, the right to appeal has already vested and cannot be impaired

BERSAMIN, J.:

On appeal is the decision the Court of Appeals (CA) promulgated on December 21, 2001 affirming the
resolution of the National Labor Relations Commission (NLRC) declaring itself to be without appellate
jurisdiction to review the decision of the Philippine Overseas Employment Administration (POEA) involving
petitioners complaint for disciplinary action against respondents.1ςrνll

Respondents were former crewmembers of MT Seadance, a vessel owned by petitioner Eastern

Mediterranean Maritime Ltd. and manned and operated by petitioner Agemar Manning Agency, Inc. While
respondents were still on board the vessel, they experienced delays in the payment of their wages and in the
remittance of allotments, and were not paid for extra work and extra overtime work. They complained about the
vessel s inadequate equipment, and about the failure of the petitioners to heed their repeated requests for the
improvement of their working conditions. On December 19, 1993, when MT Seadance docked at the port of
Brofjorden, Sweden to discharge oil, representatives of the International Transport Federation (ITF) boarded
the vessel and found the wages of the respondents to be below the prevailing rates. The ensuing negotiations
between the ITF and the vessel owner on the increase in respondents wages resulted in the payment by the
vessel owner of wage differentials and the immediate repatriation of respondents to the Philippines.

Subsequently, on December 23, 1993, the petitioners filed against the newly-repatriated respondents a
complaint for disciplinary action based on breach of discipline and for the reimbursement of the wage
increases in the Workers Assistance and Adjudication Office of the POEA.

During the pendency of the administrative complaint in the POEA, Republic Act No. 8042 (Migrant Workers
and Overseas Filipinos Act of 1995) took effect on July 15, 1995. Section 10 of Republic Act No. 8042 vested
original and exclusive jurisdiction over all money claims arising out of employer-employee relationships
involving overseas Filipino workers in the Labor Arbiters, to wit:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

Section 10. Money Claims. Notwithstanding any provision of law to the contrary, the Labor Arbiters of the
National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and
decide, within ninety (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 actual, moral, exemplary and other forms of damages.

The jurisdiction over such claims was previously exercised by the POEA under the POEA Rules and
Regulations of 1991 (1991 POEA Rules).

On May 23, 1996, the POEA dismissed the complaint for disciplinary action. Petitioners received the order of
dismissal on July 24, 1996.2ςrνll

Relying on Section 1, Rule V, Book VII of the 1991 POEA Rules, petitioners filed a partial appeal on August 2,
1996 in the NLRC, still maintaining that respondents should be administratively sanctioned for their conduct
while they were on board MT Seadance.

On March 21, 1997, the NLRC dismissed petitioners appeal for lack of jurisdiction,3 thus: We dismiss the
partial appeal.

The Commission has no jurisdiction to review cases decided by the POEA Administrator involving disciplinary
actions. Under the Migrant Workers and Overseas Filipinos Act of 1995, the Labor Arbiter shall have
jurisdiction over money claims involving employer-employee relationship (sec. 10, R.A. 8042). Said law does
not provide that appeals from decisions arising from complaint for disciplinary action rest in the Commission.

PREMISES CONSIDERED, instant appeal from the Order of May 23, 1996 is hereby DISMISSED for lack of
jurisdiction.

SO ORDERED.

Not satisfied, petitioners moved for reconsideration, but the NLRC denied their motion. They received the
denial on July 8, 1997.4ςrνll

Petitioners then commenced in this Court a special civil action for certiorari and mandamus . Citing St. Martin
Funeral Homes v. National Labor Relations Commission,5 however, the Court referred the petition to the CA
on November 25, 1998.

Petitioners contended in their petition that:

THE NLRC GRAVELY ABUSED ITS DISCRETION AND/OR GRAVELY ERRED IN DISMISSING
PETITIONERS APPEAL AND MOTION FOR RECONSIDERATION WHEN IT REFUSED TO TAKE
COGNIZANCE OF PETITIONERS APPEAL DESPITE BEING EMPOWERED TO DO SO UNDER THE
LAW.6ςrνll

chanrobles virtual law library

On December 21, 2001, the CA dismissed the petition for certiorari and mandamus, holding that the inclusion
and deletion of overseas contract workers from the POEA blacklist/watchlist were within the exclusive
jurisdiction of the POEA to the exclusion of the NLRC, and that the NLRC had no appellate jurisdiction to
review the matter, viz:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

Section 10 of RA 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995, provides
that:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

"Money Claims Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor
Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within
ninety (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 actual, moral, exemplary and other forms of damages.

xxxx

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Likewise, the Rules and Regulations implementing RA 8042 reiterate the jurisdiction of POEA,
thus:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

"Section 28. Jurisdiction of the POEA. The POEA shall exercise original and exclusive jurisdiction to hear and
decide:ςrαlαω

a) All cases, which are administrative in character, involving or arising out of violations of rules and regulations
relating to licensing and registration of recruitment and employment agencies or entities; andcralawlibrary

b) Disciplinary action cases and other special cases, which are administrative in character, involving
employers, principals, contracting partners and Filipino migrant workers."

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Further, Sections 6 and 7 Rule VII, Book VII of the POEA Rules & Regulations (1991) provide:ςηαñrοblεš
νιr†υαl lαω lιbrαrÿ

"Sec. 6. Disqualification of Contract Workers. Contract workers, including seamen, against whom have been
imposed or with pending obligations imposed upon them through an order, decision or resolution shall be
included in the POEA Blacklist Workers shall be disqualified from overseas employment unless properly
cleared by the Administration or until their suspension is served or lifted.

Sec. 7. Delisting of the Contract Worker s Name from the POEA Watchlist. The name of an overseas worker
may be excluded, deleted and removed from the POEA Watchlist only after disposition of the case by the
Administration."

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Thus, it can be concluded from the afore-quoted law and rules that, public respondent has no jurisdiction to
review disciplinary cases decided by the POEA involving contract workers. Clearly, the matter of inclusion and
deletion of overseas contract workers in the POEA Blacklist/Watchlist is within the exclusive jurisdiction of the
POEA to the exclusion of the public respondent. Nor has the latter appellate jurisdiction to review the findings
of the POEA involving such cases.

xxx

In fine, we find and so hold, that, no grave abuse of discretion can be imputed to the public respondent when it
issued the assailed Decision and Order, dated March 21, 1997 and June 13, 1997, respectively, dismissing
petitioners appeal from the decision of the POEA.

WHEREFORE, finding the instant petition not impressed with merit, the same is hereby DENIED DUE
COURSE. Costs against petitioners.

SO ORDERED.7ςrνll

Issue

Petitioners still appeal, submitting to the Court the sole issue of:ςrαlαω

WHETHER OR NOT THE NLRC HAS JURISDICTION TO REVIEW ON APPEAL CASES DECIDED BY THE
POEA ON MATTERS PERTAINING TO DISCIPLINARY ACTIONS AGAINST PRIVATE RESPONDENTS.

chanrobles virtual law library

They contend that both the CA and the NLRC had no basis to rule that the NLRC had no jurisdiction to
entertain the appeal only because Republic Act No. 8042 had not provided for its retroactive application.

Respondents counter that the appeal should have been filed with the Secretary of Labor who had exclusive
jurisdiction to review cases involving administrative matters decided by the POEA.

Rulingςηαñrοblεš νιr†υαl lαω lιbrαrÿ

The Petition for Review lacks merit.

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Petitioners adamant insistence that the NLRC should have appellate authority over the POEA s decision in the
disciplinary action because their complaint against respondents was filed in 1993 was unwarranted. Although
Republic Act No. 8042, through its Section 10, transferred the original and exclusive jurisdiction to hear and
decide money claims involving overseas Filipino workers from the POEA to the Labor Arbiters, the law did not
remove from the POEA the original and exclusive jurisdiction to hear and decide all disciplinary action cases
and other special cases administrative in character involving such workers. The obvious intent of Republic Act
No. 8042 was to have the POEA focus its efforts in resolving all administrative matters affecting and involving
such workers. This intent was even expressly recognized in the Omnibus Rules and Regulations Implementing
the Migrant Workers and Overseas Filipinos Act of 1995 promulgated on February 29, 1996,
viz:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

Section 28. Jurisdiction of the POEA. The POEA shall exercise original and exclusive jurisdiction to hear and
decide:ςrαlαω

(a) all cases, which are administrative in character, involving or arising out of violations or rules and regulations
relating to licensing and registration of recruitment and employment agencies or entities; andcralawlibrary

(b) disciplinary action cases and other special cases, which are administrative in character, involving
employers, principals, contracting partners and Filipino migrant workers.

Section 29. Venue The cases mentioned in Section 28(a) of this Rule, may be filed with the POEA Adjudication
Office or the DOLE/POEA regional office of the place where the complainant applied or was recruited, at the
option of the complainant. The office with which the complaint was first filed shall take cognizance of the case.

Disciplinary action cases and other special cases, as mentioned in the preceding Section, shall be filed with
the POEA Adjudication Office.

chanrobles virtual law library

It is clear to us, therefore, that the NLRC had no appellate jurisdiction to review the decision of the POEA in
disciplinary cases involving overseas contract workers.

Petitioners position that Republic Act No. 8042 should not be applied retroactively to the review of the POEA s
decision dismissing their complaint against respondents has no support in jurisprudence. Although, as a rule,
all laws are prospective in application unless the contrary is expressly provided,8 or unless the law is
procedural or curative in nature,9 there is no serious question about the retroactive applicability of Republic Act
No. 8042 to the appeal of the POEA s decision on petitioners disciplinary action against respondents. In a way,
Republic Act No. 8042 was a procedural law due to its providing or omitting guidelines on appeal. A law is
procedural, according to De Los Santos v. Vda. De Mangubat,10 when it ςηαñrοblεš νιr†υαl lαω
lιbrαrÿ

Refers to the adjective law which prescribes rules and forms of procedure in order that courts may be able to
administer justice. Procedural laws do not come within the legal conception of a retroactive law, or the general
rule against the retroactive operation of statues ― they may be given retroactive effect on actions pending
and undetermined at the time of their passage and this will not violate any right of a person who may feel that
he is adversely affected, insomuch as there are no vested rights in rules of procedure.

chanrobles virtual law library

Republic Act No. 8042 applies to petitioners complaint by virtue of the case being then still pending or
undetermined at the time of the law s passage, there being no vested rights in rules of procedure.11 They
could not validly insist that the reckoning period to ascertain which law or rule should apply was the time when
the disciplinary complaint was originally filed in the POEA in 1993. Moreover, Republic Act No. 8042 and its
implementing rules and regulations were already in effect when petitioners took their appeal. A statute that
eliminates the right to appeal and considers the judgment rendered final and unappealable only destroys the
right to appeal, but not the right to prosecute an appeal that has been perfected prior to its passage, for, at that
stage, the right to appeal has already vested and cannot be impaired.12 Conversely and by analogy, an appeal
that is perfected when a new statute affecting appellate jurisdiction comes into effect should comply with the
provisions of the new law, unless otherwise provided by the new law. Relevantly, petitioners need to be
reminded that the right to appeal from a decision is a privilege established by positive laws, which, upon
authorizing the taking of the appeal, point out the cases in which it is proper to present the appeal, the
procedure to be observed, and the courts by which the appeal is to be proceeded with and resolved.13 This is
why we consistently hold that the right to appeal is statutory in character, and is available only if granted by law
or statute.14ςrνll

When Republic Act No. 8042 withheld the appellate jurisdiction of the NLRC in respect of cases decided by the
POEA, the appellate jurisdiction was vested in the Secretary of Labor in accordance with his power of
supervision and control under Section 38(1), Chapter 7, Title II, Book III of the Revised Administrative Code of
1987, to wit:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

Section 38. Definition of Administrative Relationship. Unless otherwise expressly stated in the Code or in other
laws defining the special relationships of particular agencies, administrative relationships shall be categorized
and defined as follows:ςrαlαω

Supervision and Control. Supervision and control shall include authority to act directly whenever a specific
function is entrusted by law or regulation to a subordinate; direct the performance of duty; restrain the
commission of acts; review, approve, reverse or modify acts and decisions of subordinate officials or units;
determine priorities in the execution of plans and programs. Unless a different meaning is explicitly provided in
the specific law governing the relationship of particular agencies, the word "control" shall encompass
supervision and control as defined in this paragraph. xxx.

chanrobles virtual law library

Thus, Section 1, Part VII, Rule V of the 2003 POEA Rules and Regulations specifically provides, as
follows:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

Section 1. Jurisdiction. The Secretary shall have the exclusive and original jurisdiction to act on appeals or
Petition for Review of disciplinary action cases decided by the Administration.

chanrobles virtual law library

In conclusion, we hold that petitioners should have appealed the adverse decision of the POEA to the
Secretary of Labor instead of to the NLRC. Consequently, the CA, being correct on its conclusions, committed
no error in upholding the NLRC.

WHEREFORE, we AFFIRM the decision promulgated on December 21, 2001 by the Court of Appeals; and
ORDER the petitioners to pay the costs of suit.

SO ORDERED.
[G.R. NO. 151158 : August 17, 2007]

JOEL B. DE JESUS, Petitioner, v. NATIONAL LABOR RELATIONS COMMISSION and PACIFIC OCEAN
MANNING, INC., Respondents.

DECISION

The evidence shows that De Jesus previously suffered from ulcer but he ticked "NO" in his medical history. De
Jesus, therefore, committed misrepresentation. Nonetheless, he passed the pre-employment medical
examination, was reported fit to work, and was suffered to work on board M/V Author for more than two (2)
months, until his repatriation on June 19, 1997.

The rule is that an ailment contracted even prior to his employment, does not detract from the compensability
of the disease. It is not required that the employment be the sole factor in the growth, development or
acceleration of the illness to entitle the claimant to the benefits incident thereto. It is enough that the
employment had contributed, even in a small measure, to the development of the disease.

NACHURA, J.:

Petitioner Joel B. De Jesus appeals by certiorari under Rule 45 of the Rules of Court the September 28, 2001
Decision1 of the Court of Appeals (CA) in CA-G.R. SP. No. 58241, and the December 12, 2001 Resolution2
denying its reconsideration.

On November 20, 1996, De Jesus applied for shipboard employment with respondent Pacific Ocean Manning,
Inc. (POMI), a domestic corporation duly licensed by the Philippine Overseas Employment Administration
(POEA) to operate as a manning agency. As a standard operating procedure, POMI directed De Jesus to
undergo the pre-employment medical examination at the Our Lady of Fatima Medical Clinic, its accredited
clinic. On the query pertaining to his medical history, specifically as to whether he was suffering from or had
been told that he had any disease or ailment, including stomach pain or ulcer, De Jesus answered in the
negative. After the examination, he was reported fit for work.3

De Jesus was then hired as 4th Engineer by POMI, for and in behalf of its principal Celtic Pacific Ship
Management Ltd. (Celtic), on board the ocean-going vessel M/V Author on March 26, 1997. The employment
contract4 stipulated that he would work for a period of nine (9) months with a monthly salary of US$824.00 and
a fixed overtime rate of US$459.00. De Jesus also signed the Standard Employment Contract Addendum,5
barring alcohol, drugs, and any medication on board without written permission from the master of the vessel.
The use of drugs not prescribed by a medical doctor on board or ashore was prohibited and considered a
fundamental breach of the contract of employment. It was also provided that any prescribed drug should be
kept at the vessel's hospital, and used only with the approval and supervision of the captain. Any seafarer
taking any medication prescribed by a medical doctor was further required to inform the company master
manning agent or drug and alcohol test collector of this fact.

De Jesus departed from the Philippines on March 28, 1997 and embarked on M/V Author the following day.
Early in his stint on board M/V Author, De Jesus experienced stomach pains, which became unbearable during
the second month of his stay, especially when his captain required him to work even during meal hours. His
condition worsened and he severely lost weight. Thus, when the ship docked in Hamburg, Germany, De Jesus
requested for medical treatment. The ship captain referred him to Dr. Jan-Gerd H. Hagelstein. De Jesus was
diagnosed to be suffering from relapse of gastric ulcer and was advised to sign off for thorough diagnostic
examination and treatment. He was declared fit for repatriation.6

De Jesus was repatriated to the Philippines on June 19, 1997. Upon his arrival, he went to POMI and
requested financial assistance and medical treatment for his illness. POMI, however, refused. De Jesus was
constrained to seek medical treatment from Bataan Doctor's Hospital at his own expense. He sought
reimbursement from POMI, but again it was refused because De Jesus allegedly concealed his previous
history of ulcer. POMI, likewise, disallowed De Jesus' claim for unpaid salary, on the ground that the amount
had already been applied to the cost of his repatriation.7 Thus, De Jesus filed a complaint8 for the recovery of
unpaid wages, sickwage allowance and medical expenses.

POMI, on the other hand, had a different story. According to POMI, De Jesus committed misrepresentation
when he concealed in his medical history that he suffered from ulcer two (2) years ago; that he breached his
employment contract when he brought on board his medicines for ulcer without the ship captain's permission;
and that De Jesus admitted having deliberately brought pieces of Cimetidine for fear that his ulcer might recur
on board. POMI posited that De Jesus was validly discharged, and ultimately prayed for the denial of the
claims.9

By Decision10 of August 28, 1998, the Labor Arbiter declared that De Jesus' misrepresentation cannot be
made basis for the denial of his claims. According to the Labor Arbiter, De Jesus underwent a thorough
medical examination before his deployment and was reported fit to work by POMI's accredited clinic. POMI
cannot now be heard to claim otherwise. Besides, POMI was aware that De Jesus had been discharged on
November 29, 1994 due to illness while on board M/V Oriental Venus. It was, thus, expected that POMI would
conduct, as it, in fact, conducted a thorough medical examination in determining De Jesus' state of health
before his deployment. He concluded that De Jesus' illness was work-related or at least work-aggravated. He
also ruled that POMI failed to convincingly establish that De Jesus violated his employment contract.

The Labor Arbiter, thus, disposed:

WHEREFORE, premises considered, judgment is hereby entered in favor of complainant and against the
[respondent] ordering the latter, jointly and severally, to pay the sum of US$2,735.15 as unpaid salaries and
medical allowance for 59 days or its present peso equivalent in the sum of P118,705.51 plus another sum of
P5,000.00 as medical benefits or reimbursement of medical expenses of complainant.

SO ORDERED.11

POMI appealed to the National Labor Relations Commission (NLRC), claiming that there was prima facie
abuse of discretion on the part of the Labor Arbiter in granting the claims of De Jesus. The NLRC granted the
appeal. It found De Jesus guilty of unauthorized possession of medicines on board M/V Author, justifying his
discharge. Likewise, it denied the claim for medical and sickness allowance, stating that a relapse of ulcer was
not work - related, as the illness already existed when De Jesus applied with POMI, but the former intentionally
concealed it so he could be hired. Such misrepresentation disqualified De Jesus from claiming employment
benefits under the contract. Finally, the NLRC sustained POMI in applying De Jesus' unpaid salaries to the
cost of his repatriation.12 Hence, it reversed the decision of the Labor Arbiter, viz.:

WHEREFORE, premises considered, the appeal is hereby GRANTED. Accordingly, the Decision appealed
from is totally REVERSED and SET ASIDE and a new one [is] entered DISMISSING the instant case for lack
of merit.

SO ORDERED.13

De Jesus' motion for reconsideration having been denied by the Resolution14 of July 30, 2001, he elevated the
case to the Court of Appeals on petition for certiorari .

In its Decision15 of September 28, 2001, the Court of Appeals affirmed the NLRC. It agreed with the NLRC
that De Jesus' misrepresentation disqualified him from employment, benefits and claims. The appellate court
added that De Jesus did not categorically deny the charge of unauthorized possession of Cimetidine, in
violation of the Standard Employment Contract Addendum. The CA concluded that POMI was justified in
discharging him from M/V Author, and the NLRC, thus, acted well within its discretion in reversing the findings
of the Labor Arbiter.

De Jesus filed a Motion for Reconsideration,16 but the Court of Appeals denied it on December 12, 2001.17

Aggrieved by the Resolutions of the Court of Appeals, De Jesus comes to this Court positing these issues:

WHETHER OR NOT PETITIONER SHALL (sic) BE AWARDED HIS UNPAID SALARIES, MEDICAL
ALLOWANCE AND REIMBURSEMENT OF HIS MEDICAL EXPENSES.

II

WHETHER PETITIONER SHALL (sic) BEAR THE COST OF HIS REPATRIATION.18

It is a settled rule that under Rule 45 of the Rules of Court, only questions of law may be raised before this
Court. Judicial review by this Court does not extend to a re-evaluation of the sufficiency of the evidence upon
which the proper labor tribunal has based its determination. Firm is the doctrine that this Court is not a trier of
facts, and this applies with greater force in labor cases.19 However, factual issues may be considered and
resolved when the findings of facts and conclusions of law of the Labor Arbiter are inconsistent with those of
the NLRC and the Court of Appeals,20 as in this case.

De Jesus insists on reimbursement for his medical expenses and entitlement to sickness allowance and his
unpaid salaries. POMI, on the other hand, counters that De Jesus committed misrepresentation and breach of
contract. The Labor Arbiter lent credence to De Jesus' posture and granted his claims, but the NLRC and
Court of Appeals reversed the Arbiter's findings. Thus, a review of the records of the case, with an assessment
of the facts, is necessary.

The evidence shows that De Jesus previously suffered from ulcer but he ticked "NO" in his medical history. De
Jesus, therefore, committed misrepresentation. Nonetheless, he passed the pre-employment medical
examination, was reported fit to work, and was suffered to work on board M/V Author for more than two (2)
months, until his repatriation on June 19, 1997.

The rule is that an ailment contracted even prior to his employment, does not detract from the compensability
of the disease. It is not required that the employment be the sole factor in the growth, development or
acceleration of the illness to entitle the claimant to the benefits incident thereto. It is enough that the
employment had contributed, even in a small measure, to the development of the disease.21

In this case, POMI failed to rebut De Jesus' claim that he was required to work even during mealtime and that
the meals served on board did not fit the dietary preference of the Filipinos. Such plight took a toll on De Jesus'
health and surely contributed, even in a slight degree, to the relapse of his illness.

In OSM Shipping Philippines, Inc. v. Dela Cruz,22 this Court, in granting similar claims, held:

Labor contracts are impressed with public interest and the provisions of the POEA Standard Employment
Contract must be construed fairly, reasonably and liberally in favor of Filipino seamen in the pursuit of their
employment on board ocean-going vessels. Despite his misrepresentation, Arbit underwent and passed the
required pre-medical examination, was declared fit to work, and was suffered to work by petitioner. Upon
repatriation, he complied with the required post-employment medical examination.

Under the beneficent provisions of the Contract, it is enough that the work has contributed, even in a small
degree, to the development of the disease and in bringing about his death. Strict proof of causation is not
required.23

De Jesus' misrepresentation cannot, therefore, be made basis by POMI for the denial of his claims under the
contract.

Apparently realizing the folly of the denial grounded solely on the employee's misrepresentation, POMI then
asserted that De Jesus breached his employment contract. It alleged that De Jesus was caught in possession
of several pieces of Cimetidine, without the ship captain's permission, and that therefore, he was discharged
for a just cause.

Indeed, possession of medicines on board without the ship captain's permission was a violation of the
Standard Employment Contract Addendum and would entitle POMI to dismiss the erring crew member but only
after compliance with the procedure provided in the contract.24 Section 17 of the Revised Standard
Employment Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going
Vessels supplies the disciplinary procedure against an erring seafarer:

SECTION 17. DISCIPLINARY PROCEDURES:

The Master shall furnish the seafarer with the following disciplinary procedure against an erring seafarer:

A. The master shall furnish the seafarer with a written notice containing the following:

1. Grounds for the charges as listed in Section 31 of this Contract.

2. Date, time and place for a formal investigation of the charges against the seafarer concerned.

B. The Master or his authorized representative shall conduct the investigation or hearing, giving the seafarer
the opportunity to explain or defend himself against the charges. An entry on the investigation shall be entered
into the ship's logbook.

C. If after the investigation or hearing, the Master is convinced that imposition of a penalty is justified, the
Master shall issue a written notice of penalty and the reasons for it to the seafarer, which copies shall be
furnished to the Philippine Agent.

D. Dismissal for just cause may be effected by the master without furnishing the seafarer with notice of
dismissal if doing so will prejudice the safety of the crew or the vessel. This information shall be entered in the
ship's logbook. The Master shall send a complete report to the manning agency substantiated by the
witnesses, testimonies and any other documents in support thereof.

In this case, there was no showing that Celtic complied with the foregoing procedure, thus, casting a serious
doubt on the validity of De Jesus' discharge.

Likewise, neither the ship's logbook nor the report sent to POMI as Celtic's manning agent was presented in
the proceedings a quo to establish the breach committed by De Jesus. The pieces of evidence submitted
before the Labor Arbiter in support of De Jesus' discharge zeroed in on the alleged misrepresentation, which,
as mentioned, cannot be a valid basis for the denial of De Jesus' claims.
Settled is the rule that in termination cases, the burden of proof rests upon the employer to show that the
dismissal is for a just and valid cause. The case of the employer must stand or fall on its own merits and not on
the weakness of the employee's defense.25 In this case, no convincing proof was offered to prove POMI's
allegation. All that we have is its self-serving assertion that De Jesus violated his employment contract. There
is no proof that the prescribed disciplinary procedure was followed. We, therefore, agree with the Labor
Arbiter's finding that POMI utterly failed to establish its claim of valid dismissal. Accordingly, the NLRC and
Court of Appeals erred in reversing the said finding.

It is clear from the records that De Jesus disembarked for a medical reason. Hence, the cost of De Jesus'
repatriation should be borne by Celtic and POMI, pursuant to the provisions of Section 20(B)(4) of the
Standard Employment Contract:

4. Upon sign-off of the seafarer from the vessel for medical treatment. The employer shall bear the full cost of
repatriation in the event the seafarer is declared (1) fit for repatriation; or (2) fit to work but the employer is
unable to find employment for the seafarer on board his former vessel or another vessel of the employer
despite earnest efforts.

The cost of repatriation should not be deducted from De Jesus' unpaid salaries of US$911.00.

Likewise, records show that De Jesus immediately reported to POMI for post-employment medical examination
and treatment, but the latter adamantly refused to extend him medical assistance. He was constrained to seek
medical attention from Bataan Doctor's Hospital at his own expense. Celtic and POMI should, therefore,
reimburse De Jesus for his medical expenses.

Finally, De Jesus is entitled to his sickness allowance for fifty-nine (59) days from June 19, 1998 until August
16, 1998, when he was declared fit to work. Section 20(B)(3) of the Contract governs the contractual liability of
an employer to pay sickness allowance to a seafarer who suffered illness or injury during the term of his
contract viz.:

SECTION 20. COMPENSATION AND BENEFITS

xxx

B. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS

xxx

3. Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness allowance equivalent
to his basic wage until he is declared fit to work or the degree of permanent disability has been assessed by
the company-designated physician but in no case shall this period exceed one hundred twenty (120) days.

For this purpose, the seafarer shall submit himself to a post-employment medical examination by a company-
designated physician within three working days upon his return except when he is physically incapacitated to
do so, in which case a written notice to the agency within the same period is deemed as compliance. Failure of
the seafarer to comply with the mandatory reporting requirement shall result in the forfeiture of his right to claim
the above benefits x x x.chanrobles virtual law library

In fine, we affirm the Labor Arbiter's Decision granting De Jesus' claims for unpaid salary of US$911.00,
sickness allowance for fifty-nine (59) days, and reimbursement of his medical expenses.

WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. SP. No. 58241,
and its Resolution dated December 21, 2001, are REVERSED and SET ASIDE. The Decision dated August
28, 1998 of the Labor Arbiter is REINSTATED.

SO ORDERED.
[G.R. NO. 165389 : October 17, 2008]

NFD International Manning Agents and A/S VULCANUS OSLO, Petitioners, v. NATIONAL LABOR
RELATIONS COMMISSION, JOSE I. ILAGAN, JR. and CONSTANTINO CO, JR., Respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

Assailed in the present Petition for Review on Certiorari under Rule 45 of the Rules of Court is the June 21,
2004 Decision1 and September 14, 2004 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 78870.

The facts of the case are as follows:

Jose I. Ilagan, Jr. and Constantino Co, Jr. (private respondents) were among 21 Filipino seamen hired by
herein petitioner NFD International Manning Agents, Inc. (NFD) to work on board the chemical tanker M/T Lady
Helene, a vessel owned and operated by petitioner A/S Vulcanus Oslo (Vulcanus), NFD's foreign principal.

On February 11, 1997, while M/T Lady Helene was at Island View Port, Durban, South Africa, Ship Master
Captain Steiner Andersen dismissed the 21 Filipino seamen, including herein private respondents, from their
employment. They were subsequently repatriated, arriving in the Philippines on February 15, 1997.

On March 3, 1997, NFD filed before the Adjudication Office of the Philippine Overseas Employment
Administration (POEA), a disciplinary complaint against the 21 seamen alleging that they were guilty of mutiny,
insubordination, desertion/attempting to desert the vessel and conspiracy. Subsequently, in an Order3 dated
October 12, 1999, the POEA Adjudication Office dismissed the disciplinary complaint filed by NFD, ordering
that the names of the 21 seamen be removed from the POEA watchlist.

Meanwhile, on May 6, 1997, private respondents, together with eight (complainants) of the 21 seamen whose
employments were terminated, filed with the National Labor Relations Commission (NLRC), National Capital
Region in Quezon City, a Complaint4 for wrongful breach of contract, illegal dismissal and damages against
NFD and Vulcanus, contending that: they were summarily dismissed from their employment without just and
valid cause and in gross violation of the terms of their employment contracts; they were forcibly disembarked
from the vessel; at the time of their discharge, and up to the filing of their complaint, they had not been paid
their accrued salaries, guaranteed overtime pay and leave pay; for their summary dismissal, forcible
disembarkation and subsequent repatriation, they seek recovery of their unpaid wages and other benefits as
well as moral and exemplary damages and attorney's fees.

In their Position Paper,5 NFD and Vulcanus (petitioners) contended: The complainants were validly and
lawfully dismissed from their employment for their acts of "mutiny, insubordination, desertion/attempting to
desert the vessel and conspiracy among themselves together with the other Filipino seamen in refusing and or
failing to join M/T Lady Helene in its next trip or destination to Mauritius without just and valid cause"; contrary
to complainants' claim, they were not forcibly disembarked from the vessel; four out of the ten complainants
had already withdrawn their complaints; out of the remaining six complainants, five were given the option to
return to M/T Lady Helene and rejoin it in its next trip to Mauritius; the filing of the complaint was merely an
afterthought of the complainants after NFD filed cases for disciplinary action against them; complainants were
not entitled to any of the amounts which they sought to recover, instead, they should reimburse NFD for the
expenses incurred by the latter in connection with their valid dismissal and subsequent repatriation to the
Philippines.

In their Reply to Respondents' Position Paper,6 complainants averred that no single specific act of
insubordination, desertion or attempt to desert the vessel or refusal to sail with the vessel was attributed to
them; the Filipino crewman who reportedly instigated the alleged mutiny was among those absolved of any
liability by petitioners in exchange for a waiver or quitclaim which he may have had against the latter; the
disciplinary cases filed against them was a tactical move resorted to by herein petitioners to preempt
complainants from filing a complaint for illegal dismissal; nothing was alleged and no evidence was presented
to prove that complainants were accorded the benefit of due process before they were terminated from their
employment.

In their Rejoinder,7 private respondents contended that the Affidavit8 of Anselmo V. Rodriguez, NFD President
and General Manager, contained several attachments proving the illegal acts of the complainants; that it was
an act of desperation on the part of complainants to put color to the action of NFD in promptly reporting to the
POEA the illegal acts committed by the latter; that, on the contrary, the complaint for illegal dismissal, which
was filed three months after their termination from employment took place, was the complainants' belated
move to serve as a smokescreen for their illegal acts.

On January 30, 1998, the Labor Arbiter (LA) rendered judgment dismissing the Complaint on the ground that
the complainants were lawfully dismissed for just cause.9
Complainants filed an appeal with the NLRC.10

On August 30, 2001, the NLRC promulgated a Decision,11 the dispositive portion of which reads as follows:

WHEREFORE, the assailed decision is set aside. The respondents [herein petitioners] are directed to jointly
and severally pay the appellants complainants[herein private respondents and their companions] their wages
for the payment of the unexpired portion of their respective contracts, and unpaid wages including moral and
exemplary damages of P50,000.00 each and ten percent (10%) attorney's fees of the total amount awarded.
The complaint of Alcesar Baylosis is hereby dismissed in view of the settlement of the monetary claims
effected on July 17, 1997.

SO ORDERED.12

Herein petitioners then filed a Motion for Reconsideration.13 On April 9, 2002, the NLRC came up with the
herein assailed Resolution14 which granted petitioners' motion and reinstated the Decision dated January 30,
1998 of the LA in their favor.

Complainants filed a Motion for Reconsideration15 but it was denied by the NLRC in its Order16 promulgated
on June 16, 2003.

Thereafter, five out of the ten original complainants, to wit: Jose I. Ilagan, Jr. (herein private respondent),
Reynaldo G. Digma, Francisco C. Octavio, Constantino D. Co, Jr. (herein private respondent) and Jesus G.
Domingo filed a special civil action for certiorari with the CA assailing the April 9, 2002 Resolution and the June
16, 2003 Order of the NLRC.17

On September 17, 2003, the CA issued a Resolution18 denying due course to and dismissing the Petition for
Certiorari on the ground that only one out of the five petitioners therein signed the verification and certificate
against forum-shopping attached to the petition without any showing that such petitioner was duly authorized to
sign for and in behalf of the other petitioners.

On October 3, 2002, herein private respondents filed a Motion for Reconsideration with Motion to Exclude
Reynaldo G. Digma, Francisco C. Octavio and Jesus G. Domingo as petitioners on the ground that the above-
named seamen were still abroad by reason of their employment.19

In a Resolution20 dated October 16, 2003, the CA reinstated the petition insofar as herein private respondents
were concerned.

On June 21, 2004, the CA promulgated the presently assailed Decision in favor of private respondents, the
dispositive portion of which reads:

WHEREFORE, premises considered, the petition is GRANTED. The resolution and order dated April 9, 2002
and June 16, 2003 of the NLRC are hereby ANNULLED and SET ASIDE. The NLRC decision dated August
30, 2001 is hereby REINSTATED.

SO ORDERED.21 (Underscoring supplied)cralawlibrary

Herein petitioners filed a Motion for Reconsideration22 but the CA denied it in its Resolution of September 14,
2004.

Hence, the present petition with the following assignment of errors:

I.

THE COURT OF APPEALS COMMITTED GRAVE ERROR IN DISREGARDING THE FINDINGS OF THE
LABOR ARBITER AND THE NATIONAL LABOR RELATIONS COMMISSION, WHICH FINDINGS ARE
SUPPORTED BY SUBSTANTIAL EVIDENCE.

II.

THE COURT OF APPEALS COMMITTED GRAVE ERROR IN HOLDING THAT PETITIONERS FAILED TO
PRESENT SUBSTANTIAL EVIDENCE PROVING THAT RESPONDENTS WERE DISMISSED FOR JUST
AND VALID CAUSE.

THE EVIDENCE ON RECORD PROVES THAT RESPONDENTS WERE GUILTY OF MUTINY,

INSUBORDINATION, DESERTION/ATTEMPTING TO DESERT THE VESSEL AND CONSPIRACY WITH
THE OTHER FILIPINO SEAFARERS IN REFUSING AND/OR FAILING TO JOIN M/T LADY HELENE IN ITS
NEXT TRIP OR DESTINATION.
III.

THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT [RESPONDENTS'] TERMINATION

WAS EFFECTED WITHOUT DUE PROCESS OF LAW.

IV.

THE HONORABLE COURT COMMITTED GRAVE ERROR IN HOLDING THAT [RESPONDENTS']

TERMINATION WAS ATTENDED BY BAD FAITH OR DONE CONTRARY TO MORALS, GOOD CUSTOMS
OR PUBLIC POLICY.23

The petition has no merit.

The basic issue to be resolved in the instant case is whether private respondents' termination from their
employment was valid.

There are two requisites which must be complied with by an employer for a valid dismissal of employees, to
wit: (1) the dismissal must be for a just or authorized cause; and (2) the employee must be afforded due
process, i.e., he must be given opportunity to be heard and to defend himself.24

Anent the first requisite, it is a basic principle that in the dismissal of employees, the burden of proof rests upon
the employer to show that the dismissal is for a just and valid cause and failure to do so would necessarily
mean that the dismissal is not justified.25 This is in consonance with the guarantee of security of tenure in the
Constitution and in the Labor Code. A dismissed employee is not required to prove his innocence of the
charges leveled against him by his employer.26 The determination of the existence and sufficiency of a just
cause must be exercised with fairness and in good faith and after observing due process.27

The Court is not persuaded by petitioners' contentions in its first and second assigned errors that the CA
should have accorded respect and finality to the findings of fact and conclusions of the LA as these are
supported by substantial evidence; that petitioners, in fact, were able to present substantial evidence to prove
that private respondents were guilty of mutiny, insubordination, desertion/attempt to desert their vessel and
conspiracy with the other Filipino seamen in refusing to join said vessel in its next trip.

Factual findings of labor officials, who are deemed to have acquired expertise in matters within their respective
jurisdictions, are generally accorded not only respect but even finality. However, the rule is not without
exceptions, one of which is when the findings of fact of the labor officials on which the conclusion is based are
not supported by substantial evidence.28 Another exception is when it is perceived that far too much is
concluded, inferred or deduced from bare facts adduced in evidence.29 Moreover, when the findings of the LA
and the NLRC are inconsistent with that of the CA, as in the instant case, there is a need to review the records
to determine which of them should be preferred as more conformable to evidentiary facts.30 The Court finds
that the present case falls under the above-mentioned exceptions.

After a review of the arguments and evidence of the parties, the Court sustains the findings and conclusions of
the CA, the same being in accord with the facts and law of the case.

The Court agrees with the following findings and conclusion of the CA, to wit:

[Herein petitioners] charged [herein private respondents] for mutiny, insubordination, desertion and conspiracy
in refusing to join the vessel in its next trip. However, except for the disagreement between Capt. Andersen
and Engine Fitter Castillo, when the latter refused to resume his work in the Engine Room wherein the other
Filipino crew sided with Castillo, there is no proof showing the alleged mutinous and concerted actions of the
[private respondents] against Capt. Andersen. There is also the glaring absence of corroborative statements of
other officers or crew on board attesting that [private respondents] participated directly or indirectly to any
wrong doing, or even intervened in the quarrel between Andersen and Castillo. The records fail to establish
clearly the commission of any threat, or any serious misconduct which would justify [private respondents']
dismissal.31

which affirmed the earlier finding of the NLRC in its August 30, 2001 Decision, thus:

We also noted that [herein petitioners'] various charges against the [private respondents] were bereft of factual
details showing the alleged mutinous and concerted actions of herein [private respondents] against the ship
captain. The absence of competent evidence or corroborative statements of other officers or crew on board
attesting to the fact that complainants have participated directly or indirectly, to any wrongdoing or intervened
in the quarrel of the Ship Captain with Fitter Bautista32 deters us in considering the said charges with
probity.33
Moreover, the above-quoted findings of the CA and the NLRC are consistent with the findings of the POEA in
its October 12, 1999 Order dismissing the disciplinary complaint filed by NFD against herein private
respondents and their companions. Pertinent portions of the POEA Order reads:

Aside from telexes and telefax messages exchanged between complainant NFD International Manning Agents,
Inc. and its principal AS Vulcanus which are all self-serving in nature, no other proof, such as official logbook
extracts, was adduced in support of the complaint. Had respondents committed the offense charged, this
should at least deserve attention, entry and/or proper documentation in the vessel's logbook/journal.

Inciting mutiny, being a serious offense, and punishable under the "Table of Offense and Corresponding
Administrative Penalties of the Standard Employment Contract Governing Employment of All Filipino Seamen
on Board Ocean Going Vessels" for two to three year suspension, must be established by clear, strong, and
incontrovertible pieces of evidence. In the absence of substantial evidence, such as in the instant case, the
charge of inciting mutiny/refusal to sail cannot be given credence.34

Indeed, there is no record in the logbook or journal of the ship to indicate that the 21 Filipino seamen, including
herein private respondents who were terminated from their employment, threatened to cease and desist from
working and to abandon their vessel as a result of the misunderstanding that happened between the Ship
Master and a Filipino crew member.

Petitioners' claim that private respondents and their fellow Filipino seamen were guilty of conspiracy in
committing mutiny, insubordination, attempting to desert their vessel and refusing to sail with the vessel is not
supported by substantial evidence. Aside from the communications, through telex messages, sent by
representatives of petitioner Vulcanus and the President and General Manager of NFD, no competent
documentary proof was presented to substantiate the charges against private respondents and the other
Filipino seamen. No record of any hearing or investigation was presented. Moreover, petitioners did not
present the Ship Master or any member of the ship's crew in order to validate or verify the truth regarding the
charge against the 21 Filipino seamen. All that were presented by petitioners were allegations which they
claimed to have gathered from information provided by the Ship Master that herein private respondents and
their fellow Filipino seamen were guilty of the various acts of which they were accused to have committed.

Petitioners insist that the findings and conclusions of the LA should be respected. However, the Court finds
that the LA failed to cite substantial evidence to support his conclusions. It is not enough for the LA to declare
in his Decision that "the established facts of the case, however, reveal that complainant[s] were lawfully
dismissed for just cause"; or that "records show that complainants were discharged from their employment for
committing acts of mutiny, insubordination and desertion and/or attempting to desert the vessel as well as
conspiracy among themselves in refusing to join M/T Lady Helene in its next trip to Mauritius without just and
valid cause x x x" without specifying the evidence upon which he derived his conclusions.

It is true that the LA cited documents consisting of the following: (1) telex message, dated February 11, 1997,
sent by a certain Marianne D. Hovland whose connection with or position at Vulcanus was not indicated,
informing NFD that there had been no solution to their problems; and that a Filipino crewman named Castillo
has not left the vessel; and that "some other crew" have communicated their intention to leave if Castillo would
leave;35 (2) telex message, dated February 11, 1997, from the NFD President and General Manager
addressed to all NFD officers and crew warning them of the possible consequences, should they decide to
leave their vessel to accompany Castillo, and advising them to refrain from refusing to work and to treat their
problem intelligently and not to involve others;36 (3) telex message, dated February 12, 1997, from a Captain
Helge Grotle whose position at Vulcanus was also not indicated, informing NFD that the Ship Master of M/T
Lady Helene decided to dismiss its crew for refusal to go to sea with the vessel, and that according to Grotle,
the act of the crew constituted mutiny;37 (4) telex message, dated February 12, 1997, from Captain Andersen
informing NFD of his decision to give 14 of the Filipino seamen, which included herein petitioners, the option to
return to the vessel on the ground that these seamen were not involved in the alleged mutiny;38 (5) letter from
the NFD President and General Manager, dated February 28, 1997, informing the POEA about the dismissal of
the 21 Filipino seamen on grounds of mutiny and conspiracy for their concerted refusal to work and join the
vessel in going to its next destination.39

However, these documents, standing alone and uncorroborated by any other competent evidence, do not
constitute substantial proof that herein private respondents are indeed guilty of mutiny. On the contrary, it
proves their innocence. First, the evidence consisting of the telex messages from supposed representatives of
Vulcanus and NFD are hearsay because they did not come directly from the Ship Master or officer of M/T Lady
Helene. The information contained in these communications were merely based on the alleged report or
message which came from the Ship Master. However, petitioners failed to present any telex message,
testimony or even an affidavit of the Ship Master or any other crew member or officer of the subject vessel to
prove that private respondents and their companions were guilty of the acts with which they were charged.
Second, the telex message dated February 12, 1997 which came from the Ship Master himself established
that private respondents and 12 of their companions were not guilty of mutiny as, in fact, they were given the
option to return to the vessel if they wished to. Third, the letter-complaint filed by NFD with the POEA was later
found baseless as the POEA, in its Order dated October 12, 1999, dismissed the complaint of NFD.
Even the NLRC, in its subsequent Resolution dated April 9, 2002, subject of herein petition, wherein it set
aside its August 30, 2001 Decision and reinstated the LA's Decision, did not cite any specific evidence as basis
for adopting the factual findings of the LA.

The Court also finds that in their pleadings before the LA, the NLRC, the CA and this Court, petitioners failed to
cite any direct and substantial evidence to support their claim that private respondents and their companions
were guilty of mutiny and conspiracy.

Hence, the CA was correct in reinstating the NLRC August 30, 2001 Decision finding that petitioners failed to
discharge their burden of proving that the dismissal of private respondents was for a just and valid cause.

The next question is whether there was compliance with the second requisite of a valid dismissal which is due
process.

The Court does not agree with petitioners' asseverations in their third assigned error that in dismissing
respondents from their employment, the Ship Master simply acted within his management rights in order to
protect the safety of the vessel and its crew, which act, according to petitioners, is recognized under the
provisions of the POEA Standard Employment Contract.

The minimum requirement of due process in termination proceedings, which must be complied with even with
respect to seamen on board a vessel, consists of notice to the employees intended to be dismissed and the
grant to them of an opportunity to present their own side on the alleged offense or misconduct, which led to the
management's decision to terminate.40 To meet the requirements of due process, the employer must furnish
the worker sought to be dismissed with two written notices before termination of employment can be legally
effected, i.e., (1) a notice which apprises the employee of the particular acts or omissions for which his
dismissal is sought; and (2) the subsequent notice after due hearing which informs the employee of the
employers' decision to dismiss him.41

Petitioner maintains that the Ship Master is allowed to dismiss an erring seafarer without notice under Section
17, paragraph D of the Revised Standard Employment Terms and Conditions Governing the Employment of
Filipino Seafarers on Board Ocean-Going Vessels42 issued by the Philippine Overseas Employment
Administration (POEA).

Section 17 sets forth the disciplinary procedures against erring seafarers, to wit:

Section 17. DISCIPLINARY PROCEDURES

The Master shall comply with the following disciplinary procedures against an erring seafarer:

A. The Master shall furnish the seafarer with a written notice containing the following:

1. Grounds for the charges as listed in Section 31 of this Contract.

2. Date, time and place for a formal investigation of the charges against the seafarer concerned.

B. The Master or his authorized representative shall conduct the investigation or hearing, giving the seafarer
the opportunity to explain or defend himself against the charges. An entry on the investigation shall be entered
into the ship's logbook.

C. If, after the investigation or hearing, the Master is convinced that imposition of a penalty is justified, the
Master shall issue a written notice of penalty and the reasons for it to the seafarer, with copies furnished to the
Philippine agent.

D. Dismissal for just cause may be effected by the Master without furnishing the seafarer with a notice of
dismissal if doing so will prejudice the safety of the crew or the vessel. This information shall be entered in the
ship's logbook. The Master shall send a complete report to the manning agency substantiated by witnesses,
testimonies and any other documents in support thereof. (Emphasis supplied)cralawlibrary

Under paragraph D, Section 17 of the Revised Standard Employment Terms and Conditions Governing the
Employment of Filipino Seafarers on Board Ocean-Going Vessels, the Ship Master is excused from furnishing
a seafarer with the required notice of dismissal if doing so will prejudice the safety of the crew and the vessel,
as in cases of mutiny.

Explaining the notice requirements under Section 17, this Court held in Skippers Pacific, Inc. v. Mira,43 that :

x x x under Section 17 of what is termed the Standard Format, the "two-notice rule" is indicated. An erring
seaman is given a written notice of the charge against him and is afforded an opportunity to explain or defend
himself. Should sanctions be imposed, then a written notice of penalty and the reasons for it shall be furnished
the erring seafarer. It is only in the exceptional case of clear and existing danger to the safety of the crew or
vessel that the required notices are dispensed with; but just the same, a complete report should be sent to the
manning agency, supported by substantial evidence of the findings.44 (Emphasis supplied)cralawlibrary

However, in the instant case, petitioners failed to establish that private respondents and their companions were
guilty of mutiny or that, in any other manner, they posed a clear and present danger to the vessel and its crew
which would have justified the Ship Master in dispensing with the required notices. Even if the Ship Master was
justified in dispensing with the notice requirements, still, it was essential that his decision to dismiss the Filipino
seamen should have been entered in the ship's logbook; and that a complete report, substantiated by
witnesses, testimonies and any other documents in support thereof, duly sent to the manning agency. The
record of this case is bereft of any such entry in the ship's logbook or journal and of any report and supporting
documents. Instead, respondents and the other Filipino seamen were verbally ordered to disembark from the
vessel and were repatriated to the Philippines without being given written notice of the reasons why.

There being no mutiny, petitioners should have complied with Section 17A quoted above.

The records reveal that Section 17A was not complied with by the Ship Master. Petitioners failed to present
evidence to prove that private respondents and their fellow complainants were served written notices stating
the particular acts or omissions constituting the grounds for their termination. Neither was there evidence to
show that private respondents and their companions were given opportunity to answer the charges against
them.

Thus, the Court sustains the findings of the CA that private respondents and the other complainants were not
given the benefit of procedural due process before they were terminated from their employment.

Anent the last assigned error. While the Court agrees with petitioners that there is no evidence to prove that
force, violence or intimidation was employed to effect the disembarkation of the Filipino seamen, the Court still
sustains the finding of the CA that the dismissal of private respondents and their companions was done in bad
faith, contrary to morals, good customs or public policy, arbitrary and oppressive to labor, thus entitling them to
the award of moral and exemplary damages. Moral damages are recoverable where the dismissal of the
employee was attended by bad faith or fraud or constituted an act oppressive to labor, or was done in a
manner contrary to morals, good customs or public policy.45 On the other hand, exemplary damages are
proper when the dismissal was effected in a wanton, oppressive or malevolent manner, and public policy
requires that these acts must be suppressed and discouraged.46 In the instant case, it is undisputed that
respondents and the other Filipino seamen were actually engaged in the performance of their assigned tasks
aboard M/T Lady Helene and were even rendering overtime work when they were unceremoniously directed to
disembark from their vessel. Moreover, the total absence of any prior written notice of the charges against
them, the opportunity to defend themselves against such charges and a written notice of the subsequent
decision of the Ship Master to terminate their employment establish the arbitrary and oppressive character of
the dismissal from employment of private respondents and their companions.

WHEREFORE, the instant Petition is DENIED for lack of merit. The Decision and Resolution of the Court of
Appeals dated June 21, 2004 and September 14, 2004 in CA-G.R. SP No. 78870 are AFFIRMED.

SO ORDERED.
G.R. No. 205727

RUTCHER T. DAGASDAS, Petitioner,

vs.
GRAND PLACEMENT AND GENERAL SERVICES CORPORATION, Respondent.

DECISION

Security of tenure remains even if employees, particularly the overseas Filipino workers (OFW), work in a
different jurisdiction. Since the employment contracts of OFWs are perfected in the Philippines, and following
the principle of lex loci contractus (the law of the place where the contract is made), these contracts are
governed by our laws, prin1arily the Labor Code of the Philippines and its implementing rules and
regulations.37 At the same time, our laws generally apply even to employment contracts of OFWs as our
Constitution explicitly provides that the State shall afford full protection to labor, whether local or overseas.38
Thus, even if a Filipino is employed abroad, he or she is entitled to security of tenure, among other
constitutional rights.

DEL CASTILLO, J.:

Before us is a Petition for Review on Certiorari assailing the September 26, 2012 Decision1 of the Court of
Appeals (CA) in CA-G.R. SP No. 115396, which annulled and set aside the March 29, 20102 and June 2,
20103 Resolutions of the National Labor Relations Commission (NLRC) in NLRC LAC OFW-L-02-000071-10,
and concomitantly reinstated the November 27, 2009 Decision4 of the Labor Arbiter (LA) dismissing the
Complaint for lack of merit.

Also challenged is the January 28, 2013 Resolution5 denying the Motion for Reconsideration filed by Rutcher
T. Dagasdas (Dagasdas ).

Factual Antecedents

Grand Placement and General Services Corp. (GPGS) is a licensed

recruitment or placement agency in the Philippines while Saudi Aramco (Aramco) is its counterpart in Saudi
Arabia. On the other hand, Industrial & Management Technology Methods Co. Ltd. (ITM) is the principal of
GPGS, a company existing in Saudi Arabia. 6

In November 2007, GPGS, for and on behalf of ITM, employed Dagasdas as Network Technician. He was to
be deployed in Saudi Arabia under a one-year contract7 with a monthly salary of Saudi Riyal (SR) 5,112.00.
Before leaving the Philippines, Dagasdas underwent skill training8 and pre-departure orientation as Network
Technician.9 Nonetheless, his Job Offer10 indicated that he was accepted by Aramco and ITM for the position
of "Supt."

Dagasdas contended that although his position under his contract was as a Network Technician, he actually
applied for and was engaged as a Civil Engineer considering that his transcript of records, 11 diploma 12 as
well as his curriculum vitae 13 showed that he had a degree in Civil Engineering, and his work experiences
were all related to this field. Purportedly9 the position of Network Technician was only for the purpose of
securing a visa for Saudi Arabia because ITM could not support visa application for Civil Engineers. 14

On February 8, 2008, Dagasdas arrived in Saudi Arabia.15 Thereafter, he signed with ITM a new employment
contract16 which stipulated that the latter contracted him as Superintendent or in any capacity within the scope
of his abilities with salary of SR5,112.00 and allowance of SR2,045.00 per month. Under this contract,
Dagasdas shall be placed under a three-month probationary period; and, this new contract shall cancel all
contracts prior to its date from any source.

On February 11, 2008, Dagasdas reported at ITM's worksite in Khurais, Saudi Arabia. 17 There, he was
allegedly given tasks suited for a Mechanical Engineer, which were foreign to the job he applied for and to his
work experience. Seeing that he would not be able to perform well in his work, Dagasdas raised his conce1n to
his Supervisor in the Mechanical Engineering Department. Consequently, he was transferred to the Civil
Engineering Department, was temporarily given a position as Civil Construction Engineer, and was issued
anidentification card good for one month. Dagasdas averred that on March 9, 2008, he was directed to exit the
worksite but Rashid H. Siddiqui (Siddiqui), the Site Coordinator Manager, advised him to remain in the
premises, and promised to secure him the position he applied for. However, before Dagasdas' case was
investigated, Siddiqui had severed his employment with ITM. 18

In April 2008, Dagasdas returned to Al-Khobar and stayed at the ITM Office.19 Later, 11M gave him a
termination notice20 indicating that his last day of work was on April 30, 2008, and he was dismissed pursuant
to clause 17.4.3 of his contract, which provided that ITM reserved the right to terminate any employee within
the three-month probationary period without need of any notice to the employee.21
Before his repatriation, Dagasdas signed a Statement of Quitclaim22 with Final Settlement23 stating that ITM
paid him all the salaries and benefits for his services from February 11, 2008 to April 30, 2008 in the total
amow1t of SR7,156.80, and ITM was relieved from all financial obligations due to Dagasdas.

On June 24, 2008, Dagasdas returned to the Philippines.24 Thereafter, he filed an illegal dismissal case
against GPGS, ITM, and Aramco.

Dagasdas accused GPGS, ITM, and Aramco of misrepresentation, which resulted in the mismatch in the work
assigned to him. He contended that such claim was supported by exchanges of electronic mail (e-mail)
establishing that GPGS, ITM, and Aramco were aware of the job 1nismatch that had befallen him. 25 He also
argued that although he was engaged as a project employee, he was still entitled to security of tenure for the
duration of his contract. He maintained that GPGS, ITM, and Aramco merely invented "imaginary cause/s" to
terminate him. Thus, he claimed that he was dismissed without cause and due process of law.26

GPGS, ITM, and Aramco countered that Dagasdas was legally dismissed. They explained that Dagasdas was
aware that he was employed as Network Technician but he could not perform his work in accordance with the
standards of his employer. They added that Dagasdas was informed of his poor performance, and he
conformed to his termination as evidenced by his quitclaim. 27 They also stressed that Dagasdas was only a
probationary employee since he worked for ITM for less than three months.28

Ruling of the Labor Arbiter

On November 27, 2009, the LA dismissed the case for lack of merit. The LA pointed out that when Dagasdas
signed his new employment contract in Saudi Arabia, he accepted its stipulations, including the fact that he
had to undergo probationary status. She declared that this new contract was more advantageous for Dagasdas
as his position was upgraded to that of a Superintendent, and he was likewise given an allowance
ofSR2,045.00 aside from his salary of SR5,112.00 per month. According to the LA, for being more favorable,
this new contract was not prohibited by law. She also decreed that Dagasdas fell short of the expected work
performance; as such, his employer dismissed him as part of its management prerogative.

Consequently, Dagasdas appealed to the NLRC.

Ruling of the National Labor Relations Commission

On March 29, 2010, the NLRC issued a Resolution finding Dagasdas' dismissal illegal. The decretal portion of
the NLRC Resolution reads:

WHEREFORE, the decision appealed from is hereby REVERSED, and the respondent[s] are hereby ordered
to pay the complainant the salaries corresponding to the unexpired p01tion of his contract amounting to
SR46,008 (SR5112 x 9 months, or from May 1, 2008 to January 31, 2009), plus ten percent (10%) thereof as
attorney's foes. The respondents are jointly and severally liable for the judgment awards, which are payable in
Philippine currency converted on the basis of the exchange rate prevailing at the time of actual payment.

SO ORDERED.29

The NLRC stated that Dagasdas, who was a Civil Engineering graduate, was "recruited on paper" by GPGS as
Network Technician but the real understanding between the parties was to hire him as Superintendent. It held
that GPGS erroneously recruited Dagasdas, and failed to inform him that he was hired as a "Mechanical
Superintendent" meant for a Mechanical Engineer. It declared that while ITM has the prerogative to continue
the employment of individuals only if they were qualified, Dagasdas' dismissal amounted to illegal termination
since the mismatch between his qualifications and the job given him was no fault of his.

The NLRC added that Dagasdas should not be made to suffer the consequences of the miscommunication
between GPGS and ITM considering that the government obligates employment agencies recruiting Filipinos
for overseas work to "select only medically and technically qualified recruits."30

On June 2, 2010, the NLRC denied the Motion for Reconsideration of its Resolution dated March 29, 2010.

Undeterred, GPGS filed a Petition for Certiorari with the CA ascribing grave abuse of discretion on the part of
the NLRC in ruling that Dagasdas was illegally dismissed.

Ruling of the Court of Appeals

On September 26, 2012, the CA set aside the NLRC Resolutions and reinstated the LA Decision dismissing
the case for lack of merit.
The CA could not accede to the conclusion that the real agreement between the parties was to employ
Dagasdas as Superintendent. It stressed that Dagasdas left the Philippines pursuant to his employment
contract indicating that he was to work as a Network Technician; when he arrived in Saudi Arabia and signed a
new contract for the position of a Superintendent, the agreement was with no participation of GPGS, and said
new contract was only between Dagasdas and ITM. It emphasized that after commencing work as
Superintendent, Dagasdas realized that he could not perform his tasks, and "[s]eemingly, it was [Dagasdas]
himself who voluntarily withdrew from his assigned work for lack of competence."31 It faulted the NLRC for
falling to consider that Dagasdas backed out as Superintendent on the excuse that the same required the skills
of a Mechanical Engineer.

In holding that Dagasdas' dismissal was legal, the CA gave credence to Dagasdas' Statement of Quitclaim and
Final Settlement. It ruled that for having voluntarily accepted money from his employer, Dagasdas accepted his
termination and released his employer from future financial obligations arising from his past employment with
it.

On January 28, 2013, the CA denied Dagasdas' Motion for Reconsideration.

Hence, Dagasdas filed this Petition raising these grounds:

[1] THE HONORABLE COURT OF APPEALS COMMITIED A REVERSIBLE ERROR WHEN TT Rt. VERSED
THE FACTUAL FINDINGS OF THE NATIONAL LABOR RELATION’S COMMISSION.32

[2] THE HONORABLE COURT OF APPEALS PATENTLY ERRED WITH ITS FINDINGS THAT THE
CONTRACT SIGNED BY DAGASDAS IN ALKHOBAR IS MORE ADVANTAGEOUS TO THE LATTER AND
THAT IT WAS [H]IS PERSONAL ACT OR DECISION [TO SIGN] THE SAME.33

[3] THE HONORABLE COURT OF APPEALS ALSO GRAVELY ERRED IN FAULTING THE NLRC FOR ITS
FAILURE TO INVALIDATE OR DISCUSS THE FINAL SETTLEMENT AND STATEMENT OF QUITCLAIM
SIGNED BY [DAGASDAS].34

Dagasdas reiterates that he was only recruited "on paper" as a Network Technician but the real agreement
between him and his employer was to engage him as Superintendent in t'1e field of Civil Engineering, he being
a Civil Engineering graduate with vast experience in said field. He stresses that he was terminated because of
a "discipline mismatch" as his employer actually needed a Mechanical (Engineer) Superintendent, not a Civil
Engineer.

In addition, Dagasdas insists that he did not voluntarily back out from his work. If not for the discipline
mismatch, he could have performed his job as was expected of him. He also denies that the new employment
contract he signed while in Saudi Arabia was more advant1geous to him since the basic salary and allowance
stipulated therein are just the same with that in his Job Offer. He argues that the new contract was even
disadvantageous because it was inserted therein that he still had to undergo probationary status for three
months.

Finally, Dagasdas contends that the new contract he signed while in Saudi Arabia was void because it was not
approved by the Philippine Overseas Employment Administration (POEA). He also claims that CA should have
closely examined his quitclaim because he only signed it to afford his plane ticket for his repatriation.

On the other hand, G PGS maintains that Dagasdas was fully aware that he applied for and was accepted as
Network Technician. It also stresses that it was Dagasdas himself who decided to accept from ITM a new job
offer when he arrived in Saudi Arabia. It further declares that Dagasdas' quitclaim is valid as there is no
showing that he was compelled to sign it.

Issue

Was Dagasdas validly dismissed from work?

Our Ruling

The Petition is with merit.

As a rule, only questions of law may be raised in a petition under Rule 45 of the Rules of Court. However, this
rule allows certain exceptions, including a situation where the findings of fact of the courts or tribunals below
are conflicting.35 In this case, the CA and the NLRC arrived at divergent factual findings anent Dagasdas'
termination. As such, the Court deems it necessary to re-examine these findings and detemline whether the
CA has sufficient basis to annul the NLRC Decision, and set aside its finding that Dagasdas was illegally
dismissed from work.
Moreover, it is well-settled that employers have the prerogative to impose standards on the work quantity and
quality of their employees and provide measures to ensure compliance therewith. Non-compliance with work
standards may thus be a valid cause for dismissing an employee. Nonetheless, to ensure that employers will
not abuse their prerogatives, the same is tempered by security of tenure whereby the employees are
guaranteed substantive and procedural due process before they are dismissed from work. 36

Security of tenure remains even if employees, particularly the overseas Filipino workers (OFW), work in a
different jurisdiction. Since the employment contracts of OFWs are perfected in the Philippines, and following
the principle of lex loci contractus (the law of the place where the contract is made), these contracts are
governed by our laws, prin1arily the Labor Code of the Philippines and its implementing rules and
regulations.37 At the same time, our laws generally apply even to employment contracts of OFWs as our
Constitution explicitly provides that the State shall afford full protection to labor, whether local or overseas.38
Thus, even if a Filipino is employed abroad, he or she is entitled to security of tenure, among other
constitutional rights.39

In this case, prior to his deployment and while still in the Philippines, Dagasdas was made to sign a POEA-
approved contract with GPGS, on behalf of ITM; and, upon arrival in Saudi Arabia, ITM made him sign a new
employment contract. Nonetheless, this new contract, which was used as basis for dismissing Dagasdas, is
void.

First, Dagasdas' new contract is in clear violation of his right to security of tenure.

Under the Labor Code of the Philippines the following are the just causes for dismissing an employee:

ARTICLE 297. [282] Termination by Employer. - An employer may terminate an employment for any of the
following causes:

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or
representative in connection with his work;

(b) Gross and habitual neglect by the employee of his duties;

(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized
representative;

(d) Commission of a crime or offense by the employee against the person of his employer or any immediate
member of his family or his duly authorized representative; and

(e) Other causes analogous to the foregoing.40

However, per the notice of termination given to Dagasdas, ITM terminated him for violating clause 17.4.3 of his
new contract, viz.:

17.4 The Company reserves the right to terminate this agreement without serving any notice to the Consultant
in the following cases:

xxxx

17.4.3 If the Consultant is terminated by company or its client within the probation period of 3 months.41

Based on the foregoing, there is no clear justification for the dismissal of Dagasdas other than the exercise of
ITM's right to terminate him within the probationary period. While our Civil Code recognizes that parties may
stipulate in their contracts such terms and conditions as they may deem convenient, these terms and
conditions must not be contrary to law, morals, good customs, public order or policy.42 The above-cited clause
is contrary to law because as discussed, our Constitution guarantees that employees, local or overseas, are
entitled to security of tenure. To allow employers to reserve a right to terminate employees without cause is
violative of this guarantee of security of tenure.

Moreover, even assuming that Dagasdas was still a probationary employee when he was terminated, his
dismissal must still be with a valid cause. As regards a probationary employee, his or her dismissal may be
allowed only if there is just cause or such reason to conclude that the employee fails to qualify as regular
employee pursuant to reasonable standards made known to the employee at the time of engagement.43

Here, ITM failed to prove that it informed Dagasdas of any predetermined

standards from which his work will be gauged.44 In the contract he signed while still in the Philippines,
Dagsadas was employed as Network Technician; on the other hand, his new contract indicated that he was
employed as Superintendent. However, no job description - or such duties and responsibilities attached to
either position - was adduced in evidence. It thus means that the job for which Dagasdas was hired was not
definite from the beginning.

Indeed, Dagasdas was not sufficiently informed of the work standards for which his performance will be
measured. Even his position based on the job title given him was not fully explained by his employer. Simply
put, ITM failed to show that it set and communicated work standards for Dagasdas to follow, and on which his
efficiency (or the lack thereof) may be determined.

Second, the new contract was not shown to have been processed through the POEA. Under our Labor Code,
employers hiring OFWs may only do so through entities authorized by the Secretary of the Department of
Labor and Employment.45 Unless the employment contract of an OFW is processed through the POEA, the
same does not bind the concerned OFW because if the contract is not reviewed by the POEA, certainly the
State has no means of determining the suitability of foreign laws to our overseas workers. 46

This new contract also breached Dagasdas' original contract as it was entered into even before the expiration
of the original contract approved by the POEA. Therefore, it cannot supersede the original contract; its terms
and conditions, including reserving in favor of the employer the right to terminate an employee without notice
during the probationary period, are void.47

Third, under this new contract, Dagasdas was not afforded procedural due process when he was dismissed
from work.

As cited above, a valid dismissal requires substantive and procedural due process. As regards the latter, the
employer must give the concerned employee at least two notices before his or her tem1ination. Specifically,
the employer must inform the employee of the cause or causes for his or her termination, and thereafter, the
employer's decision to dismiss him. Aside from the notice requirement, the employee must be accorded the
opportunity to be heard.48

Here, no prior notice of purported infraction, and such opportunity to explain on any accusation against him
was given to Dagasdas.1âwphi1 He was simply given a notice of termination. In fact, it appears that ITM
intended not to comply with the twin notice requirement. As above-quoted, under the new contract, ITM
reserved in its favor the right to terminate the contract without serving any notice to Dagasdas in specified
cases, which included such situation where the employer decides to dismiss the employee within the
probationary period. Without doubt, ITM violated the due process requirement in dismissing an employee.

Lastly, while it is shown that Dagasdas executed a waiver in favor of his employer, the same does not preclude
him from filing this suit.

Generally, the employee's waiver or quitclaim cannot prevent the employee from demanding benefits to which
he or she is entitled, and from filing an illegal dismissal case. This is because waiver or quitclaim is looked
upon with disfavor, and is frowned upon for being contrary to public policy. Unless it can be established that
the person executing the waiver voluntarily did so, with full understanding of its contents, and with reasonable
and credible consideration, the same is not a valid and binding undertaking. Moreover, the burden to prove that
the waiver or quitclaim was voluntarily executed is with the employer.49

In this case, however, neither did GPGS nor its principal, ITM, successfully discharged its burden. GPGS
and/or ITM failed to show that Dagasdas indeed voluntarily waived his claims against the employer.

Indeed, even if Dagasdas signed a quitclaim, it does not necessarily follow that he freely and voluntarily agreed
to waive all his claims against his employer.1âwphi1 Besides, there was no reasonable consideration
stipulated in said quitclaim considering that it only determined the actual payment due to Dagasdas from
February 11, 2008 to April 30, 2008. Verily, this quitclaim, under the semblance of a final settlement, cannot
absolve GPGS nor ITM from liability arising from the employment contract of Dagasdas.50

All told, the dismissal of Dagasdas was without any valid cause and due process of law. Hence, the NLRC
properly ruled that Dagasdas was illegally dismissed. Evidently, it was an error on the part of the CA to hold
that the NLRC committed grave abuse of discretion amounting to lack or excess of jurisdiction when the NLRC
ruled for Dagasdas.

WHEREFORE, the Petition is GRANTED. The Decision dated September 26, 2012 and Resolution dated
January 28, 2013 of the Court of Appeals in CA-G.R. SP No. 115396 are REVERSED and SET ASIDE.
Accordingly, the March 29, 2010 and June 2, 2010 Resolutions of the National Labor Relations Commission in
NLRC LAC OFW-L-02-000071-10 are REINSTATED.

SO ORDERED.
G.R. No. L-50734-37 February 20, 1981

WALLEM PHILIPPINES SHIPPING, INC., petitioner,

vs.
THE HON. MINISTER OF LABOR, in his capacity as Chairman of the National Seamen Board Proper,
JAIME CAUNCA, ANTONIO CABRERA, EFREN GARCIA, JOSE OJEDA and RODOLFO PAGWAGAN,
respondents.

The findings and conclusion of the Board should be sustained. As already intimated above, there is no logic in
the statement made by the Secretariat's Hearing Officer that the private respondents are liable for breach of
their employment contracts for accepting salaries higher than their contracted rates. Said respondents are not
signatories to the Special Agreement, nor was there any showing that they instigated the execution thereof.
Respondents should not be blamed for accepting higher salaries since it is but human for them to grab every
opportunity which would improve their working conditions and earning capacity. It is a basic right of all
workingmen to seek greater benefits not only for themselves but for their families as well, and this can be
achieved through collective bargaining or with the assistance of trade unions. The Constitution itself
guarantees the promotion of social welfare and protection to labor. It is therefore the Hearing Officer that
gravely erred in disallowing the payment of the unexpired portion of the seamen's respective contracts of
employment.

DE CASTRO, J.:

Petition for certiorari with preliminary injunction with prayer that the Orders dated December 19, 1977 and April
3, 1979 of the National Seamen Board (NSB) be declared null and void. Private respondents were hired by
petitioner sometime in May 1975 to work as seamen for a period of ten months on board the M/V Woermann
Sanaga, a Dutch vessel owned and operated by petitioner's European principals. While their employment
contracts were still in force, private respondents were dismissed by their employer, petitioner herein, and were
discharged from the ship on charges that they instigated the International Transport Federation (ITF) to
demand the application of worldwide ITF seamen's rates to their crew.

Private respondents were repatriated to the Philippines on October 27, 1975 and upon their arrival in Manila,
they instituted a complaint against petitioner for illegal dismissal and recovery of wages and other benefits
corresponding to the five months' unexpired period of their shipboard employment contract.

In support of their complaint, private respondents submitted a Joint Affidavit 1 stating the circumstances
surrounding their employment and subsequent repatriation to the Philippines, material averments of which are
herein below reproduced:

JOINTAFFIDAVIT

xxx xxx xxx

5. That aside from our basic monthly salary we are entitled to two (2) months vacation leave, daily subsistence
allowance of US$8.14 each, daily food allowance of US$2.50. as well as overtime pay which we failed to
receive because our Shipboard Employment Contract was illegally terminated;

6. That while we were in Rotterdam, on or about July 9, 1975, representative of the ITF boarded our vessel
and talked with the Ship's Captain;

7. That the following day, the representatives of the ITF returned and was followed by Mr. M.S.K. Ogle who is
the Company's Administrative Manager, again went to see the Captain;

8. That at around 7:00 in the evening all the crew members were called in the Mess Hall where the ITF
representatives informed us that they have just entered into a "Special Agreement" with the Wallem Shipping
Management, Ltd., represented by Mr. M.S.K. Ogle, Administrative Manager, wherein new salary rates was
agreed upon and that we were going to be paid our salary differentials in view of the new rates;

9. That in the same meeting, Mr. M.S.K. Ogle also spoke where he told that a Special Agreement has been
signed and that we will be receiving new pay rate and enjoined us to work hard and be good boys;

10. That the same evening we received our salary differentials based on the new rates negotiated for us by the
ITF.

11. That while we were in the Port Dubai, Saudi Arabia, we were not receiving our pay, since the Ship's
Captain refused to implement the world-wide rates and insisted on paying us the Far East Rate;

12. That the Port Dubai is one that is within the Worldwide rates sphere.
13. That on October 22, 1975, Mr. Greg Nacional Operation Manager of respondent corporation, arrived in
Dubai Saudi Arabia and boarded our ship;

14. That on October 23, 1975, Mr. Nacional called all the crew members, including us to a meeting at the Mess
Hall and there he explained that the Company cannot accept the worldwide rate. The Special Agreement
signed by Mr. Ogle in behalf of the Company is nothing but a scrap of paper. Mr. Jaime Caunca then asked Mr.
Nacional, in view of what he was saying, whether the Company will honor the Special Agreement and Mr.
Nacional answered "Yes". That we must accept the Far East Rates which was put to a vote. Only two voted for
accepting the Far East Rates;

15. That immediately thereafter Mr. Nacional left us;

16. That same evening, Mr. Nacional returned and threatened that he has received a cable from the Home
Office that if we do not accept the Far East Rate, our services will be terminated and there will be a change in
crew;

17. That when Mr. Nacional left, we talked amongst ourselves and decided to accept the Far East Rates;

18. That in the meeting that evening because of the threat we informed Mr. Nacional we were accepting the
Far East Rate and he made us sign a document to that effect;

19. That we the complainants with the exception of Leopoldo Mamaril and Efren Garcia, were not able to sign
as we were at the time on work schedules, and Mr. Nacional did not bother anymore if we signed or not;

20. That after the meeting Mr. Nacional cabled the Home Office, informing them that we the complainants with
the exception of Messrs. Mamaril and Garcia were not accepting the Far East Rates;

21. That in the meeting of October 25, 1975, Mr. Nacional signed a document whereby he promised to give no
priority of first preference in "boarding a vessel and that we are not blacklisted";

22. That in spite of our having accepted the Far East Rate, our services were terminated and advised us that
there was a change in crew;

23. That on October 27, 1975, which was our scheduled flight home, nobody attended us, not even our
clearance for our group travel and consequently we were not able to board the plane, forcing us to sleep on the
floor at the airport in the evening of October 27, 1975;

24. That the following day we went back to the hotel in Dubai which was a two hours ride from the airport,
where we were to await another flight for home via Air France;

25. That we were finally able to leave for home on November 2, 1975 arriving here on the 3rd of November;

26. That we paid for all excess baggages;

27. That Mr. Nacional left us stranded, since he went ahead on October 27, 1975;

28. That immediately upon arriving in Manila, we went to respondent Company and saw Mr. Nacional, who
informed us that we were not blacklisted, however, Mr. Mckenzie, Administrative Manager did inform us that
we were all blacklisted;

29. That we were asking from the respondent Company our leave pay, which they refused to give, if we did not
agree to a US$100.00 deduction;

30. That with the exception of Messrs. Jaime Caunca Amado Manansala and Antonio Cabrera, we received
our leave pay with the US$100.00 deduction;

31. That in view of the written promise of Mr. Nacional in Dubai last October 23, 1975 to give us priority and
preference in boarding a vessel and that we were not blacklisted we have on several occasions approached
him regarding his promise, which up to the present he has refused to honor.

xxx xxx xxx

Answering the complaint, petitioner countered that when the vessel was in London, private respondents
together with the other crew insisted on worldwide ITF rate as per special agreement; that said employees
threatened the ship authorities that unless they agreed to the increased wages the vessel would not be able to
leave port or would have been picketed and/or boycotted and declared a hot ship by the ITF; that the Master of
the ship was left with no alternative but to agree; that upon the vessel's arrival at the Asian port of Dubai on
October 22, 1975, a representative of petitioner went on board the ship and requested the crew together with
private respondents to desist from insisting worldwide ITF rate and instead accept the Far East rate; that said
respondents refused to accept Far East ITF rates while the rest of the Filipino crew members accepted the Far
East rates; that private respondents were replaced at the expense of petitioner and it was prayed that
respondents be required to comply with their obligations under the contract by requiring them to pay their
repatriation expenses and all other incidental expenses incurred by the master and crew of the vessel.

After the hearing on the merits, the hearing Officer of the Secretariat rendered a decision 2 on March 14, 1977
finding private respondents to have violated their contract of employment when they accepted salary rates
different from their contract verified and approved by the National Seamen Board. As to the issue raised by
private respondents that the original contract has been novated, it was held that:

xxx xxx xxx

For novation to be a valid defense, it is a legal requirement that all parties to the contract should give their
consent. In the instant case only the complainants and respondents gave their consent. The National Seamen
Board had no participation in the alleged novation of the previously approved employment contract. It would
have been different if the consent of the National Seamen Board was first secured before the alleged novation
of the approved contract was undertaken, hence, the defense of novation is not in order.

xxx xxx xxx

The Hearing Officer likewise rules that petitioner violated the contract when its representative signed the
Special Agreement and he signed the same at his own risk and must bear the consequence of such act, and
since both parties are in paridelicto, complaint and counterclaim were dismissed for lack of merit but petitioner
was ordered to pay respondents Caunca and Cabrera their respective leave pay for the period that they have
served M/V Woermann Sanaga plus attorney's fees.

Private respondents filed a motion for reconsideration with the Board which modified the decision of the
Secretariat in an Order 3 of December 19, 1977 and ruled that petitioner is liable for breach of contract when it
ordered the dismissal of private respondents and their subsequent repatriation before the expiration of their
respective employment contracts. The Chairman of the Board stressed that "where the contract is for a definite
period, the captain and the crew members may not be discharged until after the contract shall have been
performed" citing the case of Madrigal Shipping Co., Inc. vs. Ogilvie, et al. (104 Phil. 748). He directed
petitioner to pay private respondents the unexpired portion of their contracts and their leave pay, less the
amount they received as differentials by virtue of the special agreements entered in Rotterdam, and ten
percent of the total amounts recovered as attorney's fees.

Petitioner sought clarification and reconsideration of the said order and asked for a confrontation with private
respondents to determine the specific adjudications to be made. A series of conferences were conducted by
the Board. It was claimed by petitioner that it did not have in its possession the records necessary to determine
the exact amount of the judgment since the records were in the sole custody of the captain of the ship and
demanded that private respondents produce the needed records. On this score, counsel for respondents
manifested that to require the master of the ship to produce the records would result to undue delay in the
disposition of the case to the detriment of his clients, some of whom are still unemployed.

Under the circumstances, the Board was left with no alternative but to issue an Order dated April 3, 1979 4
fixing the amount due private respondents at their three (3) months' salary equivalent without qualifications or
deduction. Hence,the instant petition before Us alleging grave abuse of discretion on the part of the respondent
official as Chairman of the Board, in issuing said order which allegedly nullified the findings of the Secretariat
and premised adjudication on imaginary conditions which were never taken up with full evidence in the course
of hearing on the merits.

The whole controversy is centered around the liability of petitioner when it ordered the dismissal of herein
private respondents before the expiration of their respective employment contracts.

In its Order of December 19, 1977 5 the Board, thru its Chairman, Minister Blas F. Ople, held that there is no
showing that the seamen conspired with the ITF in coercing the ship authorities to grant salary increases, and
the Special Agreement was signed only by petitioner and the ITF without any participation from the
respondents who, accordingly, may not be charged as they were, by the Secretariat, with violation of their
employment contract. The Board likewise stressed that the crew members may not be discharged until after
the expiration of the contract which is for a definite period, and where the crew members are discharged
without just cause before the contract shall have been performed, they shall be entitled to collect from the
owner or agent of the vessel their unpaid salaries for the period they were engaged to render the services,
applying the case of Madrigal Shipping Co., Inc. vs. Jesus Ogilivie et al. 6

The findings and conclusion of the Board should be sustained. As already intimated above, there is no logic in
the statement made by the Secretariat's Hearing Officer that the private respondents are liable for breach of
their employment contracts for accepting salaries higher than their contracted rates. Said respondents are not
signatories to the Special Agreement, nor was there any showing that they instigated the execution thereof.
Respondents should not be blamed for accepting higher salaries since it is but human for them to grab every
opportunity which would improve their working conditions and earning capacity. It is a basic right of all
workingmen to seek greater benefits not only for themselves but for their families as well, and this can be
achieved through collective bargaining or with the assistance of trade unions. The Constitution itself
guarantees the promotion of social welfare and protection to labor. It is therefore the Hearing Officer that
gravely erred in disallowing the payment of the unexpired portion of the seamen's respective contracts of
employment.

Petitioner claims that the dismissal of private respondents was justified because the latter threatened the ship
authorities in acceeding to their demands, and this constitutes serious misconduct as contemplated by the
Labor Code. This contention is not well-taken. The records fail to establish clearly the commission of any
threat. But even if there had been such a threat, respondents' behavior should not be censured because it is
but natural for them to employ some means of pressing their demands for petitioner, who refused to abide with
the terms of the Special Agreement, to honor and respect the same. They were only acting in the exercise of
their rights, and to deprive them of their freedom of expression is contrary to law and public policy. There is no
serious misconduct to speak of in the case at bar which would justify respondents' dismissal just because of
their firmness in their demand for the fulfillment by petitioner of its obligation it entered into without any
coercion, specially on the part of private respondents.

On the other hand, it is petitioner who is guilty of breach of contract when they dismissed the respondents
without just cause and prior to the expiration of the employment contracts. As the records clearly show,
petitioner voluntarily entered into the Special Agreement with ITF and by virtue thereof the crew men were
actually given their salary differentials in view of the new rates. It cannot be said that it was because of
respondents' fault that petitioner made a sudden turn-about and refused to honor the special agreement.

In brief, We declare petitioner guilty of breach of contract and should therefore be made to comply with the
directives contained in the disputed Orders of December 19, 1977 and April 3, 1979.

WHEREFORE, premises considered, the decision dated March 14, 1977 of the Hearing Officer is SET ASIDE
and the Orders dated December 19, 1977 and April 3, 1979 of the National Seamen Board are AFFIRMED in
toto. This decision is immediately executory. Without costs.

SO ORDERED.
[G.R. No. 109808. March 1, 1995.]

ESALYN CHAVEZ, Petitioner, v. HON. EDNA BONTO-PEREZ, HON. ROGELIO T. RAYALA, HON.
DOMINGO H. ZAPANTA, HON. JOSE N. SARMIENTO, CENTRUM PROMOTIONS & PLACEMENT
CORPORATION, JOSE A. AZUCENA, JR., and TIMES SURETY & INSURANCE COMPANY, INC.,
Respondents.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; WAGES; SIDE AGREEMENT TO REDUCE WAGES; NULLIFIED IN;
CASE AT BAR. — The managerial commission agreement executed by petitioner to authorize her Japanese
employer to deduct Two Hundred Fifty U.S. Dollars (US$250.00) from her monthly basic salary is void because
it is against our existing laws, morals and public policy. It cannot supersede the standard employment contract
of December 1, 1988, approved by the POEA. The basic salary of One Thousand Five Hundred U.S.
Dollars(US$1,500.00.) guaranteed to petitioner under the parties’ standard employment contract is in
accordance with the minimum employment standards, with respect to wages set by the POEA. Thus, the side
agreement which reduced petitioner’s basic wage to Seven Hundred Fifty U.S. Dollars (US$750.00) is null and
void for violating the POEA’s minimum employment standards, and for not having been approved by the
POEA. Indeed, this side agreement is a scheme all too frequently resorted to by unscrupulous employers
against our helpless overseas workers who are compelled to agree to satisfy their basic economic needs.

DECISION

PUNO, J.:

One of the anguished cries in our society today is that while our laws appear to protect the poor, their
interpretation is sometimes anti-poor, uncounselled entertainment dancer signed a contract with her Japanese
employer calling for a monthly salary of One Thousand Five Hundred U.S. Dollars (US$1,500) but later had to
sign an immoral side agreement reducing her salary below the minimum standard set by the POEA. Petitioner
invoked the law to collect her salary differentials, but incredibly found public respondents straining the seams
of our law to disfavor her. There is no greater disappointment to the poor like petitioner than to discover the
ugly reality behind the beautiful rhetoric of laws. We will not allow this traversty.

This is a petition for certiorari to review the Decision of the National Labor Relations Commission (NLRC), 1
dated December 29, 1992, which affirmed the Decision of public respondent Philippine Employment Agency
(POEA) Administrator Jose N. Sarmiento, dated February 17, 1992, dismissing petitioner’s complaint for
unpaid salaries amounting to six Thousand U.S. Dollars (US$6,000.00).chanrobles.com:cralaw:red

The facts are undisputed.

On December 1, 1988, Petitioner, an entertainment dancer, entered into a standard employment contract for
overseas Filipino artists and entertainers with Planning Japan Co., LTD., 2 through its Philippine
representative, private respondent Centrum Placement & Promotions Corporation. The contract had a duration
of two (2) to six (6) months, and petitioner was to be paid a monthly compensation of One Thousand Five
Hundred U.S. Dollars (US$1,500.00). On December 5, 1988, the POEA approved the contract. Subsequently,
petitioner executed the following side agreement with her Japanese employer through her local manager, Jaz
Talents Promotion:jgc:chanrobles.com.ph

"Date: Dec. 10, 1988

"SUBJECT: Salary Deduction

MANAGERIAL COMMISSION

"DATE OF DEPARTURE: _____________

"ATTENTION: MR. IWATA

I, ESALYN CHAVEZ, DANCER, do hereby with my own free will and voluntarily have the honor to authorize
your good office to please deduct the amount of TWO HUNDRED FIFTY DOLLARS ($250) from my contracted
monthly salary of SEVEN HUNDRED FIFTY DOLLARS ($750) as monthly commission for my Manager, Mr.
Jose A. Azucena, Jr.

"That my monthly salary (net) is FIVE HUNDRED DOLLARS ($500).

(sgd. by petitioner)" 3

On December 16, 1988, petitioner left for Osaka, Japan, where she worked for six (6) months, until June 10,
1989. She came back to the Philippines on June 14, 1989.chanrobles.com : virtual law library

Petitioner instituted the case at bench for underpayment of wages with the POEA on February 21, 1991. She
prayed for the payment of Six Thousand U.S. Dollars (US$6,000.00), representing the unpaid portion of her
basic salary for six months. Charged in the case were private respondent Centrum Promotions and Placement
Corporation, the Philippine representative of Planning Japan, Co., its insurer, Times Surety and Insurance Co.,
Inc., and Jaz Talents Promotion.chanrobles virtual lawlibrary

The complaint was dismissed by public respondent POEA Administrator on February 17, 1992. He
ratiocinated, inter alia:jgc:chanrobles.com.ph

". . . Apparently and form all indications, complainant (referring to petitioner herein) was satisfied and did not
have any complaint (about) anything regarding her employment in Japan until after almost two (2) years
(when) she filed the instant complaint on February 21, 1991. The records show that after signing the Standard
Employment Contract on December 1, 1988, she entered into a side agreement with the Japanese employer
into a side agreement with the Japanese employer thru her local manager, Jaz Talents Promotion consenting
to a monthly salary of US$750.00 which she affirmed during the conference of May 21, 1991. Respondent
agency had no knowledge nor participation in the said agreement such that it could not be faulted for violation
of the Standard Employment Contract regarding the stipulated salary. We cannot take cognizance of such
violation when one of the principal party (sic) thereto opted to receive a salary different from what has been
stipulated in their contract, especially so if the other contracting party did not consent/participate in such
arrangement. Complainant (petitioner) cannot now demand from respondent agency to pay her the salary
based (on) the processed Employment contract for she is now considered in bad faith and hence, estopped
from claiming thereto thru her own act of consenting and agreeing to receive a salary not in accordance with
her contract of employment. Moreover, her self-imposed silence for a long period of time worked to her own
disadvantage as she allowed laches to prevail which barred respondent from doing something at the outset.
Normally, if a person’s right (is) violated, she/he would immediately react to protect her/his rights which is not
true in the case at bar.

"The term laches has been defined as one’s negligence or failure to assert his right in due time or within
reasonable time from the accrual of his cause of action, thus, leading another party to believe that there is
nothing wrong with his own claim. This resulted in placing the negligent party in estoppel to assert or enforce
his right. . . . Likewise, the Supreme Court in one case held that only is inaction within reasonable time to
enforce a right the basic premise that underlies a valid defense of laches but such inaction evinces implied
consent or acquiescene to the violation of the right. . . .

"Under the prevailing circumstances of this case, it is outside the regulatory powers of the Administration to
rule on the liability of respondent Jaz Talents Promotions, if any, (it) not being a licensed private agency but a
promotion which trains entertainers for abroad.chanrobles virtual lawlibrary

"x x x

On appeal, the NLRC upheld the Decision, thus:jgc:chanrobles.com.ph

"We will to see any conspiracy that the complainant (petitioner herein) imputes to the respondents. She has, to
put it bluntly, not established and/or laid the basis for US to arrive at a conclusion that the respondents have
been and should be held liable for her claims.

"The way We see it, the records do not at all indicate any connection between respondents Centrum
Promotion & Placement Corporation and Jaz Talents Promotion.chanrobles virtual lawlibrary

"There is, therefore, no merit in the appeal. Hence, We affirmed. 4

Dissatisfied with the NLRC’s Decision, petitioner instituted the present petition, alleging that public respondents
committed grave abuse of discretion in finding: that she is guilty of laches; that she entered into a side contract
on December 10, 1988 for the reduction of her basic salary to Seven Hundred Fifty U.S. Dollars (US$750.00)
which superseded, nullified and invalidated the standard employment contract she entered into on December
1, 1988; and that Planning Japan Co., Ltd. and private respondents are not solidarily liable to her for Six
Thousand US Dollars (US$6,000.00) in unpaid wages. 5

The petition is meritorious.

Firstly, we hold that the managerial commission agreement executed by petitioner to authorize her Japanese
employer to deduct Two Hundred Fifty U.S. Dollars (US$250.00) from her monthly basic salary is void because
it is against our existing laws, morals and public policy. It cannot supersede the standard employment contract
of December 1, 1988 approved by the POEA with the following stipulation appended
thereto:jgc:chanrobles.com.ph

"It is understood that the terms and conditions stated in this Employment Contract are in conformance with the
Standard Employment contract for Entertainers prescribed by the POEA under Memorandum Circular No. 2,
Series of 1986. Any alterations or changes made in any part of this contract without prior approval by the
POEA shall be null and void;" 6 (Emphasis supplied.)

The stipulation is in line with the provisions of Rule II, Book V and Section 2(f), Rule I, Book VI of the 1991
Rules and Regulations Governing Overseas Employment, thus:jgc:chanrobles.com.ph

"Book V, Rule II

"Section 1. Employment Standards. The Administration shall determine, formulate and review employment
standards in accordance with the market development and welfare objectives of the overseas employment
program and the prevailing market conditions.

"Section 2. Minimum Provisions for Contract. The following shall be considered the minimum requirements for
contracts of employment:jgc:chanrobles.com.ph

"x x x

"Section 3. Standard Employment Contract. The Administration shall undertake development and/or periodic
review of region, country and skills specific employment contracts for landbased workers and conduct regular
review of standard employment contracts (SEC) for seafarers. These contracts shall provide for minimum
employment standards herein enumerated under Section 2, of this Rule and shall recognize the prevailing
labor and social legislations at the site of employment and international conventions. The SEC shall set the
minimum terms and conditions of employment. All employers and principals shall adopt the SEC in connection
with their adoption of other terms and conditions of employment over and above the minimum standards of the
Administration." (Emphasis supplied.)cralawnad

and

"BOOK VI, RULE I

"Section 2. Grounds for suspension/cancellation of license.

"x x x

"f. Substituting or altering employment contracts and other documents approved and verified by the
Administration from the time of actual signing thereof by the parties up to and including the period of expiration
of the same without the Administration’s approval.

"x x x" (Emphasis supplied)

Clearly, the basic salary of One Thousand five Hundred U.S. Dollars (US$1,500.00) guaranteed to petitioner
under the parties standard employment contract is in accordance with the minimum employment standards
with respect to wages set by the POEA. Thus, the side agreement which reduced petitioner’s basic wage to
Seven Hundred Fifty U.S. Dollars (US$750.00) is null and void for violating the POEA’s minimum employment
standards, and for not having been approved by the POEA. Indeed, this side agreement is a scheme all too
frequently resorted to by unscrupulous employers against our helpless oversees workers who are compelled to
agree to satisfy their basic economic needs.chanroblesvirtualawlibrary

Secondly. The doctrine of laches or "stale demands" cannot be applied to petitioner. Laches has been defined
as the failure or neglect for an unreasonable and unexplained length of time to do that which, by exercising due
diligence, could or should have been done earlier, 7 thus giving rise to a presumption that the party entitled to
assert it either has abandoned or declined to assert it. 8 It is not concerned with mere lapse of time; the fact of
delay, standing alone, is insufficient to constitute laches. 9

The doctrine of laches is based upon grounds of public policy which requires, for the peace of society, the
discouragement of stale claims, and is principally a question of the inequity or unfairness of permitting a right
or claim to be enforced or asserted. 10 There is no absolute rule as to what constitutes laches; each case is to
be determined according to its particular circumstances. The question of laches is addressed to the sound
discretion of the court, and since it is an equitable doctrine, its application is controlled by equitable
considerations. It cannot be worked to defeat justice or to perpetrate fraud and injustice. 11
In the case at bench, petitioner filed her claim well within the three-year prescriptive period for the filling of
money claims set forth in Article 291 of the Labor Code. 12 For this reason, we hold the doctrine of laches
inapplicable to petitioner. As we ruled in Imperial Victory Shipping Agency v. NLRC, 200 SCRA 178
(1991):jgc:chanrobles.com.ph

". . . Laches is a doctrine in equity while prescription is based on law. Our courts are basically courts of law not
courts of equity. Thus laches cannot be invoked to resist the enforcement of an existing legal right. We have
ruled in Arsenal v. Intermediate Appellate Court . . . that it is a long standing principle that equity follows the
law. Courts exercising equity jurisdiction are bound by rules of law and have no arbitrary discretion to disregard
them. In Zabat, Jr. v. Court of Appeals . . ., this Court was more emphatic in upholding the rules of procedure.
We said therein:jgc:chanrobles.com.ph

"As for equity, which has been aptly described as a ‘justice outside legality,’ this is applied only in the absence
of, and never against, statutory law or, as in this case, judicial rules of procedure. Aequetas nunguam
contravenit legis. The pertinent positive rules being present here, they should pre-empt and prevail over all
abstract arguments based only on equity.’

"Thus, where the claim was filed within the three-year statutory period, recovery therefore cannot be barred by
laches. courts should never apply the doctrine of laches earlier than the expiration of time limited for the
commencement of actions at law.cralawnad

"x x x"

(Emphasis supplied. Citations omitted.)

Thirdly, private respondents Centrum and Times as well as Planning Japan Co., Ltd. — the agency’s foreign
principal — are solidarily liable to petitioner for her unpaid wages. This is in accordance with stipulation 13.7 of
the parties’ standard employment contract which provides:jgc:chanrobles.com.ph

"13.7. The employer (in this case, Planning Japan Co., Ltd.) and its locally (sic) agent/promoter/representative
(private respondent Centrum Promotions & Placement Corporation) shall be jointly and severally responsible
for the proper implementation of the terms and conditions in this Contract." 13 (Emphasis supplied.)

This solidary liability also arises from the provisions of Section 10(a)(2), rule V, Book I of the Omnibus Rules
Implementing the Labor Code, as amended, thus:jgc:chanrobles.com.ph

"Section 10. Requirement before recruitment. — Before recruiting any worker, the private employment agency
shall submit to the Bureau the following documents:chanrob1es virtual 1aw library

a) A formal appointment or agency contract executed by a foreign-based employer in favor of the license
holder to recruit and hire personnel for the former . . . Such formal appointment or recruitment agreement shall
contain the following provisions, among other:chanrob1es virtual 1aw library

x x x

"2. Power of the agency to sue and be sued jointly and solidarily with the principal or foreign based employer
for any of the violations of the recruitment agreement and the contracts of employment." cralawnad

"x x x" (Emphasis supplied)

Our overseas workers constitute an exploited class. Most of them come from the poorest sector of our society.
They are thoroughly disadvantaged. Their profile shows they live in suffocating slums, trapped in an
environment of crime. hardly literate and in ill health, their only hope lies in jobs they can hardly find in our
country. Their unfortunate circumstance makes them easy prey to avaricious employers. They will climb
mountains, cross the seas, endure slave treatment in foreign lands just to survive. Out of despondence, they
will work under sub-human conditions and accept salaries below the minimum. The least we can do is to
protect them with our laws in our land. Regretfully, respondent public officials who should symphatize with the
working class appear to have a different orientation.

IN VIEW WHEREOF, the petition is GRANTED. The Decisions of respondent POEA Administrator and NLRC
commissioners in POEA Case No. Adj. 91-02-199 (ER), respectively dated February 17 and December 29,
1992, and the Resolution of the NLRC, dated March 23, 1993, are REVERSED and SET ASIDE. private
respondents are held jointly and severally liable to petitioner for the payment for the payment of SIX
THOUSAND US DOLLARS (US$6,000.00) in unpaid wages. Costs against private
respondents.chanrobles.com:cralaw:red

SO ORDERED.