No. L-76633, [Oct.

18, 1988]
Eastern Shipping Lines, Inc. vs Philippine Overseas Employment Administration

Facts:

On March 15, 1985, Vitaliano Saco, who was then the Chief Officer of the M/V
Eastern Polaris, was killed in an accident in Tokyo, Japan. The widow of the deceased
Saco sued for damages under Executive Order No. 797 and Memorandum Circular No.
2 of the POEA. The 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 Fund Insurance. The POEA nevertheless assumed jurisdiction and after
considering the position papers of the parties ruled in favor of the complainant. The
petition was dismissed, with costs against the petitioner. The temporary restraining
order dated Dec. 10, 1986 was lifted.

Issues:

(1) Whether the POEA had jurisdiction over the case as the husband was not an
overseas worker?
(2) Whether the validity of Memorandum Circular No. 2 itself as violative of the
principle of non-delegation of legislative power.

Ruling:

(1) Yes. The Philippine Overseas Employment Administration was created under
EO. 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 Art. 20 of the Labor Code in 1974. Under Section 4(a) of the
said executive order, the POEA 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 Regulation on Overseas Employment
issued by the POEA, include, “claims for death disability and other benefits” arising out
of such employment.
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 Feb. 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.

(2) No. Memorandum Circular No. 2 is an 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 POEA, mandated it to protect the rights of
overseas Filipino workers to “fair and equitable employment practices

“GENERAL RULE: Non-delegation of powers; exception

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.

Two Tests of Valid Delegation of Legislative Power

There are two accepted tests to determine whether or not there is a valid
delegation of legislative power. These are 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 to enforce it. 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.

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 delegation of legislative power has become the rule and it non-delegation
the exception.

Rational for Delegation of Legislative Power

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 to reasonably comprehend. Specialization even in legislation has
become necessary. Too 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 solution. These solution
may, however, be expected from its delegates, who are supposed to be
experts in the particular fields.

Power of Subordinate Legislation

The reason 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.”