Laborrev Assignment No. 2 Page 1 of 166

[1]
G.R. No. 168715. September 15, 2010.*
MEDLINE MANAGEMENT, INC. and GRECOMAR SHIPPING AGENCY,

petitioners, vs. GLICERIA ROSLINDA and ARIEL ROSLINDA, respondents.
Labor Law; Seafarers; Money Claims; Prescription; Article 291 of the Labor Code is
the law governing the prescription of money claims of seafarers, a class of
overseas contract workers; Article 291 prevails over Section 28 of the Standard
Employment Contract for Seafarers which provides for claims to be brought only
within one year from the date of the seafarer’s return to the point of hire; Section 28
insofar as it limits the prescriptive period within which the seafarers may file their
money claims, is hereby declared null and void.—In Southeastern Shipping v.
Navarra, Jr., 621 SCRA 361 (2010), we ruled that “Article 291 is the law governing
the prescription of money claims of seafarers, a class of overseas contract workers.
This law prevails over Section 28 of the Standard Employment Contract for
Seafarers which provides for claims to be brought only within one year from the
date of the seafarer’s return to the point of hire.” We further declared that “for the
guidance of all, Section 28 of the Standard Employment Contract for Seafarers,
insofar as it limits the prescriptive period within which the seafarers may file their
money claims, is hereby declared null and void. The applicable provision is Article
291 of the Labor Code, it being more favorable to the seafarers and more in accord
with the State’s declared policy to afford full protection to labor. The prescriptive
period in the present case is thus three years from the time the cause of action
accrues.”
Same; Same; Same; Same; Parties in Interest; As the parties claiming benefits for
the death of a seafarer, respondents can file a case with the Labor Arbiter as
provided for under Section 28 of the POEA SEC.—Petitioners’ claim that the Labor
Arbiter has no jurisdiction to hear the case for want of employer-employee
relationship between the parties lacks merit. Petitioners have not taken into
consideration that respondents, as heirs of Juliano, have the personality to file the
claim for death benefits. As the parties claiming benefits for the death of a seafarer,
they can file a case with the Labor Arbiter as provided for under Section 28 of the
POEA SEC. It is clearly provided therein that the NLRC shall have original and
exclusive jurisdiction over any and all disputes or controversies arising out of or by
virtue of the Contract.
Same; Same; Death Benefits; In order to avail of death benefits, the death of the
employee should occur during the effectivity of the employment contract.—
In Southeastern Shipping v. Navarra, Jr., 621 SCRA 361 (2010), we declared that
“in order to avail of death benefits, the death of the employee should occur during
the effectivity of the employment contract.” “The death of a seaman during the term
of employment makes the employer liable to his heirs for death compensation
benefits. Once it is established that the seaman died during the effectivity of his
🍥LaborRev Assignment No. 2
Page 1 of 166
employment contract, the employer is liable.” Juliano did not die while he was
under the employ of petitioners. His contract of employment ceased when he was
discharged on January 20, 2000, after having completed his contract thereat. He
died on August 27, 2001 or one year, seven months and seven days after the
expiration of his contract. Thus, his beneficiaries are not entitled to the death
benefits under the Standard Employment Contract for Seafarers.
Same; Labor Code; Motion to Dismiss; A motion to dismiss on the ground of failure
to comply with a condition precedent is a prohibited pleading.—A motion to dismiss
that can be availed of is one which is based on lack of jurisdiction over the subject
matter, improper venue, res judicata, prescription and forum shopping. Conversely,
a motion to dismiss on the ground of failure to comply with a condition precedent is,
therefore, a prohibited pleading. Hence, the Labor Arbiter did not commit any grave
abuse of discretion amounting to lack or excess of jurisdiction when she denied the
Motion to Dismiss filed by petitioners.
Same; Same; Appeals; When the law says that the orders appealable to the
Commission are those which will become final and executory if not appealed, it can
only refer to a final order, not an interlocutory order such as a denial of a motion to
dismiss.—All the three provisions above-mentioned refer to final orders and not
interlocutory ones, such as, a denial of a motion to dismiss. Based on the above
provisions, the Labor Arbiter’s decisions, resolutions or orders shall be final and
executory unless appealed to the Commission. Only a final order can attain the
final and executory stage; an interlocutory order cannot go that far. Consequently,
when the law says that the orders appealable to the Commission are those which
will become final and executory if not appealed, it can only refer to a final order, not
an interlocutory order, such as a denial of a motion to dismiss.
PETITION for review on certiorari of the decision and resolution of the Court of
Appeals.
If a seafarer dies after the termination of his contract of employment, the Court can
only commiserate with his heirs because it has no alternative but to declare that his
beneficiaries are not entitled to the death benefits provided in the Philippine
Overseas Employment Administration (POEA) Standard Employment Contract
(SEC).
This Petition for Review on Certiorari 1 assails the Decision2 dated March 11, 2005
of the Court of Appeals (CA) in CA-G.R. SP No. 87648, which dismissed the
petition for certiorari with prayer for the issuance of a writ of preliminary injunction
and/or restraining order challenging the Resolution dated August 31, 2004 3 and
October 15, 20044 of the National Labor Relations Commission (NLRC) in NLRC
NCR CA No. 040435-04. Also assailed is the Resolution 5 dated June 22, 2005
denying the Motion for Reconsideration.
Factual Antecedents
Page 2 of 166
Petitioner Medline Management, Inc. (MMI), on behalf of its foreign principal,
petitioner Grecomar Shipping Agency (GSA), hired Juliano Roslinda (Juliano) to
work on board the vessel MV "Victory." Juliano was previously employed by the
petitioners under two successive separate employment contracts of varying
durations. His latest contract was approved by the POEA on September 9, 1998 for
a duration of nine months.6 In accordance with which, he boarded the vessel MV
"Victory" on October 25, 1998 as an oiler and, after several months of extension,
was discharged on January 20, 2000.
Months after his repatriation, or on March 6, 2000, Juliano consulted Dr. Pamela R.
Lloren (Dr. Lloren) of Metropolitan Hospital. He complained about abdominal
distention which is the medical term for a patient who vomits previously ingested
foods. From March 8 to August 24, 2000, Juliano visited Dr. Lloren for a series of
medical treatment.7 In a Medical Certificate8 issued by Dr. Lloren, the condition of
Juliano required hemodialysis which was initially done twice a week for a period of
two months and then once every 10 days. In medicine, hemodialysis is the method
of removing waste products such as creatinine and urea, as well as freeing water
from the blood, when the kidneys are in renal failure. 9
On August 27, 2001, Juliano died. On September 4, 2003, his wife Gliceria
Roslinda and son Ariel Roslinda, respondents herein, filed a complaint against MMI
and GSA for payment of death compensation, reimbursement of medical expenses,
damages, and attorney's fees before the Labor Arbitration Branch of the NLRC.
Petitioners received on September 25, 2003 a copy of the summons 10 and

complaint. Instead of filing an answer, they filed a Motion to Dismiss 11 on the
grounds of prescription, lack of jurisdiction and prematurity. Petitioners contended
that the action has already prescribed because it was filed three years, seven
months and 22 days from the time the deceased seafarer reached the point of hire.
They also argued that the case should be dismissed outright for prematurity
because respondents failed to comply with a condition precedent by not availing of
the grievance machinery. Lastly, petitioners opined that the Labor Arbiter had no
jurisdiction because there exists no employer-employee relationship between the
parties.
On January 9, 2004, respondents submitted their Position Paper with Opposition to

Motion to Dismiss.12 On January 26, 2004, petitioners submitted their
Comment/Reply with Motion to Expunge Complainant's Position Paper. 13
Ruling of the Labor Arbiter
On April 21, 2004, Labor Arbiter Fatima Jambaro-Franco denied the Motion to
Dismiss filed by the petitioners. The dispositive portion provides:
WHEREFORE, premises considered, the Motion to Dismiss is hereby DENIED for

lack of merit.
Page 3 of 166
In order to expedite the proceedings of this case, the respondents [herein
petitioners] are hereby ordered to submit their position paper on May 18, 2004 at
9:30 a.m.
SO ORDERED.14
Ruling of the National Labor Relations Commission
Petitioners, instead of complying with the order of the Labor Arbiter to submit their
position paper, filed their Notice of Appeal with Memorandum 15 of Appeal on May 7,
2004 with the NLRC.
Petitioners asserted that the Labor Arbiter seriously erred in disregarding the basic
provision of the POEA Contract. According to them, the POEA contract is clear that
any claim arising from the employment of a seafarer should be filed within one year
from the seafarer's return to the point of hire; otherwise, it shall be barred forever.
In addition, petitioners claimed that the Labor Arbiter also erred when she issued
an order without resolving the other issues in their Motion to Dismiss. The Labor
Arbiter failed to take into consideration that respondents have no employer-
employee relationship with herein petitioners, which means that the former have no
cause of action against the latter. Lastly, they opined that the Labor Arbiter failed to
resolve the issue of prematurity when the present case was filed without passing
through the grievance committee.
On August 31, 2004, the NLRC issued its Resolution, the dispositive portion of
which provides:
PREMISES CONSIDERED, respondents' appeal from the Order dated April 21,
2004 is hereby DISMISSED for lack of merit. Let records herein be REMANDED to
Arbitration Branch of origin for immediate appropriate proceedings.
SO ORDERED.16
Ruling of the Court of Appeals
After reviewing the case on certiorari, the CA ruled that the claim was filed within
the three-year prescriptive period which must be reckoned from the time of
Juliano's death on August 27, 2001 and not from the date of his repatriation on
January 20, 2000. As to the denial of the Motion to Dismiss, it found that under
Section 3 of Rule V of the NLRC Rules of Procedure, an order denying the Motion
to Dismiss or suspension of its resolution until the final determination of the case, is
not appealable. Anent the issue that the Labor Arbiter had no jurisdiction over the
case because there exists no employee-employer relationship between the parties,
the CA held that such matter is a factual issue which should be threshed out in the
trial of the case. Being a factual matter needing evidence for its existence, a motion

Page 4 of 166
to dismiss is not the proper remedy. The dispositive portion of the CA Decision
states:
IN VIEW OF ALL THE FOREGOING, the instant petition is ordered DISMISSED.

Costs against the petitioners.
SO ORDERED.17
After the denial by the CA of their Motion for Reconsideration, petitioners filed the
present petition for review on certiorari.
Issues
Petitioners raise the following issues:
I.
Whether the CA seriously erred in holding that the Order of the Labor Arbiter
dismissing the Motion to Dismiss is not appealable.
II.
Whether the CA seriously erred in ruling that the claim is not yet barred by
prescription despite the fact that it was filed beyond the one-year prescriptive
period provided by the POEA Standard Employment Contract.
III.
Whether the ruling of the CA is contrary to the jurisprudence laid down in the case
of Fem's Elegance Lodging House vs. Murillo decided by this Court.
Petitioners' Arguments
Petitioners contend that although Rule 1, Section 3 of the NLRC Rules of

Procedure provides for the suppletory application of the Rules of Court, the same is
proper only in the absence of applicable provision in the NLRC Rules of Procedure
to the issue at hand. Here, Section 1, Rule VI of the NLRC Rules of Procedure and
Article 223 of the Labor Code specifically provide that any order of the Labor Arbiter
is appealable to the NLRC, regardless if it is final or interlocutory in nature. Hence,
there is no room for the suppletory application of the Rules of Court in the case at
bench.
Petitioners also argue that the POEA SEC provides that the employer and the
seafarer agree that all claims arising from the contract shall be made within one
year from the date of seafarer's return to the point of hire. Hence, respondents’
Page 5 of 166
claim for death benefits has clearly prescribed because they filed their complaint
before the NLRC Arbitration Branch only on September 11, 2003 or three years
seven months and 22 days after the return of Juliano to the point of hire on January
20, 2000.
Respondents' Arguments
Respondents posit that Section 3, Rule V of the NLRC Rules of Procedure clearly
provides that an order denying a motion to dismiss or suspension of its resolution
until the final determination of the case is not appealable. It is for this reason that
petitioners were required to proceed with the Arbitration Branch of origin for further
proceedings.
Moreover, respondents argue that the Motion to Dismiss filed by the petitioners was
properly denied by the Labor Arbiter because the cause of action has not yet
prescribed. The prescriptive period that should apply is three years and not one
year as provided for in the POEA SEC. Therefore, when the complaint was filed on
September 4, 2003, it is well within the three-year prescriptive period. The
reckoning point is the time when the cause of action accrued which is from the time
of death of the seafarer and not from the time of repatriation.
Our Ruling
A close perusal of the three issues presented for our review readily reveals a single
issue of substance – that the Labor Arbiter seriously erred in denying the Motion to
Dismiss filed by the petitioners without ruling on all the grounds raised by them.
Another issue involved a procedural ground – that the CA erred in dismissing the
petition assailing the denial of the Motion to Dismiss based on Section 3, Rule V of
the NLRC Rules of Procedure.
The Labor Arbiter Properly Denied the Motion to Dismiss
The denial of the Motion to Dismiss by the Labor Arbiter, the NLRC, and the CA
was made in accordance with prevailing law and jurisprudence. It should be noted
that in the Motion to Dismiss filed by the petitioners before the Labor Arbiter, they
cited prescription, lack of jurisdiction and failure to comply with a condition
precedent, as the three grounds for dismissal of the case.
Prescription
The employment contract signed by Juliano stated that "Upon approval, the same
shall be deemed an integral part of the Standard Employment Contract
(SEC) for seafarers."18 Section 28 of the POEA SEC states:
SECTION 28. JURISDICTION

Page 6 of 166
The Philippine Overseas Employment Administration (POEA) or the National Labor
Relations Commission (NLRC) shall have original and exclusive jurisdiction over
any and all disputes or controversies arising out of or by virtue of this Contract.
Recognizing the peculiar nature of overseas shipboard employment, the employer

and the seafarer agree that all claims arising from this contract shall be made within
one (1) year from the date of the seafarer's return to the point of hire. (Emphasis
supplied)
On the other hand, the Labor Code states:
ART. 291. Money claims. – All money claims arising from employer-employee
relations accruing during the effectivity of this Code shall be filed within three (3)
years from the time the cause of action accrued; otherwise they shall forever be
barred.
x x x x (Emphasis supplied)
In Southeastern Shipping v. Navarra, Jr., 19 we ruled that "Article 291 is the law
governing the prescription of money claims of seafarers, a class of overseas
contract workers. This law prevails over Section 28 of the Standard Employment
Contract for Seafarers which provides for claims to be brought only within one year
from the date of the seafarer's return to the point of hire." We further declared that
"for the guidance of all, Section 28 of the Standard Employment Contract for
Seafarers, insofar as it limits the prescriptive period within which the seafarers may
file their money claims, is hereby declared null and void. The applicable provision is
Article 291 of the Labor Code, it being more favorable to the seafarers and more in
accord with the State's declared policy to afford full protection to labor. The
prescriptive period in the present case is thus three years from the time the cause
of action accrues."
In the present case, the cause of action accrued on August 27, 2001 when Juliano
died. Hence, the claim has not yet prescribed, since the complaint was filed with
the arbitration branch of the NLRC on September 4, 2003.
Lack of Jurisdiction
Petitioners’ claim that the Labor Arbiter has no jurisdiction to hear the case for want
of employer-employee relationship between the parties lacks merit. Petitioners
have not taken into consideration that respondents, as heirs of Juliano, have the
personality to file the claim for death benefits. As the parties claiming benefits for
the death of a seafarer, they can file a case with the Labor Arbiter as provided for
under Section 28 of the POEA SEC. It is clearly provided therein that the NLRC
shall have original and exclusive jurisdiction over any and all disputes or
controversies arising out of or by virtue of the Contract.

Page 7 of 166
Furthermore, Section 20 of the Standard Terms and Conditions Governing the
Employment of Filipino Seafarers On-Board Ocean-Going Vessels states:
A. COMPENSATION AND BENEFITS FOR DEATH
1. In the case of work-related death of the seafarer during the term of his contract,
the employer shall pay his beneficiaries the Philippine Currency equivalent to the
amount of Fifty Thousand US dollars (US$ 50,000.00) and an additional amount of
Seven Thousand US Dollars (US$ 7,000.00) to each child under the age of twenty-
one (21) but not exceeding four (4) children, at the exchange rate prevailing during
the time of payment.
xxxx
In filing the complaint for payment of death compensation, reimbursement of

medical expenses, damages and attorney's fees before the Labor Arbitration
Branch of the NLRC, respondents are actually enforcing their entitlement to the
above provision of the contract of Juliano with petitioners. They are the real parties
in interest as they stand to be benefited or injured by the judgment in this case, or
the parties entitled to the avails of the case.
Having shown that respondents have the personality to file the complaint and that
the Labor Arbiter has the original and exclusive jurisdiction over the said claims,
then this ground for petitioners' Motion to Dismiss has no basis and, therefore, its
denial was proper.
Failure to Comply with a Condition Precedent
Petitioners likewise contend that the present claim should have been dismissed on
the ground that respondents prematurely filed the present complaint because the
employment contract requires respondents to first bring their claim before the
Grievance Machinery.
Indeed, the records of this case would not give us any idea on what actions were
taken by respondents before they filed the case. What can only be deduced from
the records is that respondents demanded from petitioners the payment of death
benefits and the reimbursement of medical expenses incurred by Juliano from the
time of his repatriation on January 20, 2000 until his death on August 27, 2001
amounting to ₱149,490.00 which was refused by petitioners. There is therefore no
showing that they complied with the provisions of the employment contract to first
bring the matter before the Grievance Machinery.
Having shown that respondents failed to bring this matter to the Grievance
Machinery as provided in the POEA SEC, can we now conclude that the Labor
Arbiter erred in denying the Motion to Dismiss on the ground that respondents
failed to comply with a condition precedent? We answer this in the negative. The
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denial by the Labor Arbiter of the Motion to Dismiss filed by petitioners on the
ground of non-compliance with a condition precedent is still proper.
Section 4, Rule III of the New Rules of Procedure of the NLRC (As amended by
NLRC Resolution No. 01-02, series of 2002) provides:
SECTION 4. PROHIBITED PLEADINGS AND MOTIONS. – The following

pleadings, motions or petitions shall not be allowed in the cases covered by these
Rules:
(a) Motion to dismiss the complaint except on the ground of lack of jurisdiction over
the subject matter, improper venue, res adjudicata, prescription and forum
shopping;
xxxx
The above provision thus explicitly provides that a motion to dismiss that can be
availed of is one which is based on lack of jurisdiction over the subject matter,
improper venue, res judicata, prescription and forum shopping. Conversely, a
motion to dismiss on the ground of failure to comply with a condition precedent is,
therefore, a prohibited pleading. Hence, the Labor Arbiter did not commit any grave
abuse of discretion amounting to lack or excess of jurisdiction when she denied the
Motion to Dismiss filed by petitioners.
Having shown that the Labor Arbiter properly denied the Motion to Dismiss, the
NLRC and the CA have likewise acted in accordance with law in denying the
appeal of the dismissal of such Motion to Dismiss.
The CA Properly Denied the Petition Based on Section 3, Rule V of the NLRC
Rules of Procedure
Petitioners contend that Section 3 (now Section 6), Rule V of the NLRC Rules of
Procedure is in direct conflict with the provisions of Section 1, Rule VI of the same
NLRC Rules of Procedure and Article 223 of the Labor Code and, hence, it should
be the latter which should prevail.
We do not agree.
Section 3 (now Section 6) of Rule V and Section 1 of Rule VI of the NLRC Rules of
Procedure, as amended, provide:
SECTION 3. MOTION TO DISMISS. – On or before the date set for the

conference, the respondent may file a motion to dismiss. Any motion to dismiss on
the ground of lack of jurisdiction, improper venue, or that the cause of action is
barred by prior judgment, prescription or forum shopping, shall be immediately
resolved by the Labor Arbiter by a written order. An order denying the motion to
Page 9 of 166
dismiss or suspending its resolution until the final determination of the case is not
appealable.
SECTION 1. PERIODS OF APPEAL. – Decisions, resolutions or orders of the

Labor Arbiter shall be final and executory unless appealed to the Commission by
any or both parties within ten (10) calendar days from receipt of such decisions,
resolutions or orders of the Labor Arbiter and in case of a decision of the Regional
Director within five (5) calendar days from receipt of such decisions, resolutions, or
orders. If the 10th or 5th day, as the case may be, falls on a Saturday, Sunday or a
holiday, the last day to perfect the appeal shall be the next working day.
Another provision cited by petitioners is Article 223 of the Labor Code which states:
ART. 223. Appeal. – Decisions, awards, or orders of the Labor Arbiter are final and
executory unless appealed to the Commission by any or both parties within ten (10)
calendar days from receipt of such decisions, awards, or orders. Such appeal may
be entertained only on any of the following grounds:
xxxx
However, all the three provisions above-mentioned refer to final orders and not
interlocutory ones, such as, a denial of a motion to dismiss. Based on the above
provisions, the Labor Arbiter's decisions, resolutions or orders shall be final and
executory unless appealed to the Commission. Only a final order can attain the
final and executory stage; an interlocutory order cannot go that far. Consequently,
when the law says that the orders appealable to the Commission are those which
will become final and executory if not appealed, it can only refer to a final order, not
an interlocutory order, such as a denial of a motion to dismiss.
There is no conflict between the above provisions. The CA therefore correctly

dismissed the petition assailing the denial of the Motion to Dismiss based on
Section 3 (now Section 6), Rule V of the NLRC Rules of Procedure because it
involved an interlocutory order. Admittedly, the order denying a Motion to Dismiss is
an interlocutory order because it still requires a party to perform certain acts leading
to the final adjudication of a case.
Lastly, petitioners' reliance in FEM's Elegance Lodging House v. Murillo 20 to justify
their position that an interlocutory order like the denial of their Motion to Dismiss
can be appealed is misplaced. The CA properly addressed this issue in this wise:
Reliance in the case of FEM's Elegance vs. Murillo is misdirected. In that case, the
Labor Arbiter's denial was appealed directly to the Supreme Court and did not pass
the Court of Appeals. In ruling that orders of the Labor Arbiter shall be appealable
to the Court of Appeals, the High Court, to Our mind, was simply saying that you
cannot go and seek review directly from the Labor Arbiter to the Supreme Court.
One has to pass first the NLRC.21
Page 10 of 166
For Expediency, this Court can Decide the Merits of this Case
This Court is aware that in this case, since the petition is denied, the normal
procedure is for it to remand the case to the Labor Arbiter for further proceedings.
"However, when there is enough basis on which the Court may render a proper
evaluation of the merits of petitioners’ case, x x x the Court may dispense with the
time[-]consuming procedure in order to prevent further delays in the disposition of
the case."22 Indeed, remand of the case to the Labor Arbiter for further reception of
evidence is not conducive to the speedy administration of justice and it becomes
unnecessary where the Court is in a position to resolve the dispute based on the
records before it. Briefly stated, a remand of the instant case to the Labor Arbiter
would serve no purpose save to further delay its disposition contrary to the spirit of
fair play.
"It is an accepted precept of procedural law that the Court may resolve the dispute
in a single proceeding, instead of remanding the case to the lower court for further
proceedings if, based on the records, pleadings, and other evidence, the matter
can readily be ruled upon." 23 Instead of remanding the case to the Labor Arbiter for
further proceedings, we will resolve the dispute to serve the ends of
justice.1avvphi1
The complete records of this case have already been elevated to this Court. The
pleadings on record will fully support this adjudication.
Respondents are not Entitled to the Death Benefits Provided Under the POEA
Standard Employment Contract
In Southeastern Shipping v. Navarra, Jr., 24 we declared that "in order to avail of
death benefits, the death of the employee should occur during the effectivity of the
employment contract." "The death of a seaman during the term of employment
makes the employer liable to his heirs for death compensation benefits. Once it is
established that the seaman died during the effectivity of his employment contract,
the employer is liable."25
Juliano did not die while he was under the employ of petitioners. His contract of
employment ceased when he was discharged on January 20, 2000, after having
completed his contract thereat. He died on August 27, 2001 or one year, seven
months and seven days after the expiration of his contract. Thus, his beneficiaries
are not entitled to the death benefits under the Standard Employment Contract for
Seafarers.
Moreover, there is no evidence to show that Juliano’s illness was acquired during
the term of his employment with petitioners. In respondents’ Position Paper, 26 they
admitted that Juliano was discharged not because of any illness but due to the
expiration of his employment contract. 27 Although they stated that Juliano was
hospitalized on August 28, 1999, or five months before his contract expired, they
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presented no proof to support this allegation. Instead, what respondents presented
were the Medical Certificates28 issued by Dr. Lloren attesting to the fact that on
March 6, 2000, Juliano consulted her complaining of abdominal distention. We find
this not substantial evidence to prove that Juliano’s illness which caused his death
was contracted during the term of his contract. 29 "Indeed, the death of a seaman
several months after his repatriation for illness does not necessarily mean that: a)
the seaman died of the same illness; b) his working conditions increased the risk of
contracting the illness which caused his death; and c) the death is compensable,
unless there is some reasonable basis to support otherwise." 30 In the instant case,
Juliano was repatriated not because of any illness but because his contract of
employment expired. There is likewise no proof that he contracted his illness during
the term of his employment or that his working conditions increased the risk of
contracting the illness which caused his death.
"While the Court adheres to the principle of liberality in favor of the seafarer in
construing the Standard Employment Contract, we cannot allow claims for
compensation based on surmises. When the evidence presented negates
compensability, this Court has no choice but to deny the claim, lest we cause
injustice to the employer."31
WHEREFORE, the instant petition for review on certiorari is DENIED.
We hereby declare that the claim for death benefits of respondents Gliceria
Roslinda and Ariel Roslinda has not yet prescribed but petitioners are not liable to
pay to respondents death compensation benefits under the Standard Employment
Contract for Seafarers considering that Juliano's death occurred after the effectivity
of his contract. The Labor Arbiter is therefore DIRECTED to dismiss the complaint
filed by herein respondents against the petitioners for payment of death
compensation, reimbursement of medical expenses, damages and attorney’s fees.
SO ORDERED.

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[2]
G.R. No. 124439. February 5, 2004.*
PEOPLE OF THE PHILIPPINES, appellee, vs. FLOR GUTIERREZ Y TIMOD,

appellant.
Criminal Law; Labor Law; Illegal Recruitment; Recruitment and placement defined.

—Illegal recruitment is committed when two elements concur, namely: (1) the
offender has no valid license or authority required by law to enable one to lawfully
engage in recruitment and placement of workers; and (2) he undertakes either any
activity within the meaning of “recruitment and placement” defined under Art. 13(b),
or any of the prohibited practices enumerated under Art. 34 of the Labor Code. Art.
13(b) of the Labor Code defines “recruitment and placement” as “any act of
canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring
workers, and includes referrals, contract services, promising or advertising for
employment, locally or abroad, whether for profit or not: Provided, That any person
or entity which, in any manner, offers or promises for a fee employment to two or
more persons, shall be deemed engaged in recruitment and placement.”
Same; Same; Same; The crime becomes Illegal Recruitment in Large Scale when

the two elements concur, with the addition of a third element: the recruiter
committed the same against three or more persons, individually or as a group.—
The crime becomes Illegal Recruitment in Large Scale when the two elements
concur, with the addition of a third element: the recruiter committed the same
against three or more persons, individually or as a group.
Same; Same; Same; Recruitment and placement activities of agents or

representatives appointed by a licensee, whose appointments were not authorized
by the Administration shall likewise constitute illegal recruitment.—Section 1, Rule
X of the same Book, in turn, provides that “recruitment and placement activities of
agents or representatives appointed by a licensee, whose appointments were not
authorized by the Administration shall likewise constitute illegal recruitment.”
Same; Same; Same; Illegal recruitment in large scale is malum pro-hibitum, not

malum in se; Good faith is not a defense.—Appellant cannot escape liability by
claiming that she was not aware that before working for her employer in the
recruitment agency, she should first be registered with the POEA. Illegal
recruitment in large scale is malum prohibitum, not malum in se. Good faith is not a
defense.
Same; Same; Same; Evidence; Court attaches no persuasive value to affidavits of

desistance, especially when executed as an afterthought.—The Affidavits of
Desistance executed by two of the complainants deserve little weight. The Court
attaches no persuasive value to affidavits of desistance, especially when executed
Page 13 of 166
as an afterthought. As held in the case of People v. Ubiña, “it would be a
dangerous rule for courts to reject testimonies solemnly taken before the courts of
justice simply because the witnesses who had given them later on changed their
mind for one reason or another; for such role would make solemn trials a mockery
and place the investigation of truth at the mercy of unscrupulous witnesses.”
APPEAL from a decision of the Regional Trial Court of Pasay City, Br. 108.
In its decision dated 22 March 1996, the Regional Trial Court (RTC) of Pasay City,
Branch 1081 found accused Flor Gutierrez y Timod guilty beyond reasonable doubt
of Illegal Recruitment in Large Scale and sentenced her to suffer the penalty of life
imprisonment and to pay a fine of P100,000.00.
The Information in Criminal Case No. 95-6796 reads as follows:
That from the months of April to August 1994 in Pasay City, Philippines, and within
the jurisdiction of this Honorable Court, accused FLOR GUTIERREZ Y TIMOD
conspiring and confederating with CECILIA BAUTISTA, ESTHER GAMILDE,
LINDA RABAINO and MARILYN GARCIA (whose present whereabouts are
unknown) and mutually helping one another, acting in common accord, did then
and there, willfully, unlawfully and feloniously, engage in recruitment activities for
overseas job placement and actually contract, enlist and recruit EVELYN V.
RAMOS, ROSEMARIE I. TUGADE, GENEROSA G. ASUNCION and ROSALYN B.
SUMAYO as domestic helpers in Dubai, United Arab Emirates, for a fee of various
amounts ranging from P10,000.00 to P15,000.00 each, without first obtaining the
required license and/or authority from the Philippine Overseas Employment
Administration (POEA).
CONTRARY TO LAW.2
Arraigned on April 24, 1995, the accused entered a plea of not guilty. The version
of the prosecution is as follows:
On April 18, 1994, Rosemarie Tugade went to the house of one Celia Bautista, a
"recruiter-agent" of the accused, at Brgy. Bulala, Vigan, Ilocos Sur. 3 Celia told
Rosemarie that she had to submit the following requirements for her application to
work in Dubai as a domestic helper: P4,000.00 as placement fee, P1,200.00 for
passport, P850.00 for "medical," six (6) 2x2 pictures and her original birth
certificate.4
The next day, Rosemarie, together with "recruiter-agent" Celia Bautista and fellow
applicant Evelyn Ramos, traveled to Manila to the house of one Esther Gamilde,
another of the accused's "recruiter-agents." 5 There, Rosemarie and Evelyn filled out
their bio-data forms. The two then underwent a medical examination before having
Page 14 of 166
their whole-body picture taken. Esther told them that they would know the results of
their application from Celia.6
Two weeks later, Celia told Rosemarie that her application for Dubai was already
approved and that she will be receiving $150.00-dollars per month. For the first
three (3) months, however, there will be salary deductions. 7
On August 27, 1994, Rosemarie and Evelyn, along with Celia and Esther, went to
the accused's office at Sarifudin Manpower and General Services at EDSA
Extension, Pasay City.8 The accused told Rosemarie that she needed to pay
P2,000.00 more.9 The accused said she had received all of Rosemarie's
documents and the money paid to Celia. 10 Trusting in Celia, Rosemarie did not
demand a receipt from the accused.
On August 31, 1994, the accused asked Rosemarie to give P500.00 as terminal fee
for her departure in a week's time. 11 Rosemarie paid the amount, as evidenced by a
receipt.12 The scheduled departure did not push through, however. Instead,
Rosemarie was told that she was to leave on September 15, 1994, but, again, this
did not materialize.13 A series of postponements followed until finally she was told
that she would be leaving before Christmas 1994. Almost predictably, her trip never
came to pass.14
Private complainant Evelyn Ramos was with Rosemarie when she went to Celia
Bautista's house on April 19, 1994.15 Celia told Evelyn that for P4,000.00 she could
leave for Dubai to work as a domestic helper. 16 Like Rosemarie, Evelyn gave all her
documents and paid the fees to Celia, who in turn handed them to Esther Gamilde
in Tondo.17 On June 10, 1994, Ramos gave Bautista P8,000.00, which was also
turned over to Gamilde.18
On August 22, 1994, Celia told Evelyn that she only had to wait one more week
before she left for Dubai. 19 On August 27, 1994, Esther brought Evelyn to the
accused's office,20 where the accused asked for an additional P2,000.00 as
processing fee for the Philippine Overseas Employment Agency (POEA). 21 Evelyn
paid the amount on August 31, 1994, 22 including a terminal fee of P500.00. Like
Rosemarie, Evelyn was not able to leave the country despite the accused's
promises.
Another complainant, Rosalyn D. Sumayo, also applied for overseas job placement
as a domestic helper in Dubai. Her experience was more agonizing. In her case, it
was one Marilyn Garcia who assisted Rosalyn. 23 She submitted a copy of her birth
certificate, six (6) copies of 2 x 2 pictures, two (2) copies of her whole-body picture,
passport, and medical certificate.24 Marilyn also asked Rosalyn to pay: a processing
fee of P7,500.00, P2,620.00 as full tax, P500.00 as terminal fee, and P3,000.00 as
service charge.25

Page 15 of 166
All the documents and money given by Rosalyn to Marilyn were subsequently
remitted to the accused at her office on June 28, 1994. 26 The accused told Rosalyn
that she would be leaving anytime, but after three months, Rosalyn's departure did
not push through.27
Despite the setback, the accused kept assuring Rosalyn that she would still be able
to leave.28 One time, the accused brought her to the airport and instructed her to
hide in the airport restroom.29 After fifteen minutes, the accused told her that they
had to leave the airport because "mahigpit sa immigration."30 On another occasion,
the accused directed Rosalyn to hide inside the Kayumanggi Restaurant for fifteen
(15) minutes.31 Nothing happened after, though, and they went home.
On November 14, 1994, Rosalyn was again at the airport. 32 The accused warned
her, though, that if the Immigration Officer insisted on seeing her papers, it would
be better for her to leave.33 As directed, she left the airport when she was asked to
produce her documents.34
Exasperated, Rosalyn went to the accused's house and demanded the return of
her money and her documents. Instead of acceding to Rosalyn's demands, the
accused shouted at her and warned her that she had to pay a cancellation fee of
$300.00.35 Rosalyn was not able to give the amount so she stayed with the
accused, who assured her that she would still be able to leave the country and that
she would receive a monthly salary of $150 to $200. 36 These promises were never
fulfilled. Rosalyn thus went to the POEA, where POEA Administrator Felicisimo
Joson, Jr. informed her that the accused did not have a license to recruit. 37
Generosa Asuncion suffered the same fate as her co-applicants. In August 1994,
she applied for overseas job placement with one Linda Rabaino. 38 Generosa
submitted her passport, medical certificate, clearance from the National Bureau of
Investigation (NBI), birth certificate, bio-data and pictures. 39 She also paid
P15,000.00 in two installments on September 9 and 12, 1994, 40 which payments
were not receipted.
Linda told Generosa she would be leaving on September 13, 1994. 41 However, she
was not able to leave because, according to Linda, at 25, Generosa was under-
aged.42
Linda then referred Generosa to the accused in the latter's office, where Linda
turned over Generosa's documents as well as the P15,000 00 to the
accused.43 The accused promised that Linda would be able to leave, but her
departure never took place.44 When Generosa demanded the return of her money
and her documents, the accused told her that she had to pay a cancellation fee of
$600.00.45 Stunned, Linda just opted to await the further outcome of her
application.46 Her waiting was all for naught.

Page 16 of 166
With the promises of jobs abroad unfulfilled, complainants decided to verify if the
accused was a licensed recruiter. Upon learning from the POEA that she was not
so licensed,47 they proceeded to the Philippine Anti-Crime Commission (PACC) to
execute their respective affidavits.48
SPO4 Johnny Marqueta investigated the women's complaint. He confirmed with the
POEA that the accused was not licensed or authorized to recruit overseas contract
workers.49 The four complainants also informed him that the accused wanted to
meet with the group on January 26, 1995. 50 SPO4 Marqueta thus had their money,
totaling P2,000.00,51 marked at the National Bureau of Investigation (NBI) Forensic
Section for their entrapment operation.52
On January 26, 1995, the accused met with the four complainants at Jollibee,
Commonwealth Avenue, Quezon City. As soon as she finished counting the
marked money and wrapping it in Jollibee napkins, the accused was arrested. 53
In her defense, the accused claimed that as an "employee" of a duly licensed

agency who was tasked to recruit and offer job placements abroad, she could not
be held liable for illegal recruitment. 54 She admitted that she had no authority to
recruit in her personal capacity, 55 but that her authority emanated from a Special
Power of Attorney (SPA) and a Certification issued by a licensed agency. 56
At the time complainants applied for overseas employment, the accused was
"employed" as a Marketing Directress of Sarifudin Manpower and General
Services,57 a duly licensed agency with License No. OS-91-LB-61193-NL issued by
the Department of Labor and Employment. 58 A Special Power of Attorney (SPA)
from Sarifudin, dated May 1, 1994, 59 states that she was authorized:
1. To negotiate, enter into business transactions for manpower supply particularly

in the Middle East countries;
2. For and in behalf of SARIFUDIN, MANPOWER AND GENERAL SERVICES

using as guidelines and terms and conditions by both parties to secure:
(a) Verified Job Orders;
(b) Special Power of Attorney;
(c) Copy of Certified Certificate of Business Registration;
(d) VISA Authorization and/or NOC VISA.
....60
A Certification61 dated February 3, 1995, issued by the same agency, also states

that: "MRS. FLOR T. GUTIERREZ was (sic) employed as OVERSEAS
Page 17 of 166
MARKETING DIRECTRESS of SARIFUDIN MANPOWER AND GENERAL
SERVICES, effective May 1994, up to the present" 62
The defense also submitted several documents to prove compliance with the
requirements of the agency for her to assume her duties under the SPA. These
include receipts63 for a cash bond in the amount of P30,000.00 that she paid in
several installments. She also paid a royalty fee of P4,000.00 64 and an office rental
fee of P3,000.00.65
The accused was also required by the agency to submit a monthly report for June
1994, as evidenced by a Memorandum signed by the General Manager, Leah
Salud.66 She submitted said monthly report, indeed, several monthly reports. 67 A
document calling on all Marketing Directresses/Directors to attend a meeting on
July 8, 1994, was also presented.68
The accused did not receive any salary or allowances from Sarifudin but received
commissions from the agency's principals, the employers from foreign countries
(ten in the Middle East and two in Singapore) at the rate of U.S. $100.00 per
person.69 From her commissions, she paid rent and royalty to Sarifudin. 70
Edwin Cristobal, POEA Labor Employment Officer, confirmed that Sarifudin was
duly licensed to engage in recruitment activities. 71 He presented a Certification
issued by Ma. Salome S. Mendoza, Manager of the Licensing Branch 72 and
containing the list of officers and staff of Sarifudin. On said list appear the names
"Florna Gutierrez" and "Flor Gutierrez,"73 apparently, one and the same person. 74 In
the same Certification, appears the following:
It is further certified that the said agency revoked the appointment of Ms. Flor
Gutierrez as Overseas Mktg. Director/Manager in a letter dated Dec. 15, 1995,
although this Office has not received nor acknowledged the representation of Ms.
Gutierrez.75
Cristobal explained that the POEA, "Never had a letter from Sarifudin registering or
authorizing Flor Gutierrez... rather, [what] we received [was a] revocation of her
appointment."76 He also revealed that the name of the accused does not appear in
the records of the POEA as being employed by the agency from the assumption of
its license on June 11, 1993, up to its termination on June 11, 1995. 77
The defense likewise alleged that complainants Rosemarie Tugade and Evelyn
Ramos executed Affidavits of Desistance dated May 12, 1995, 78 stating that the
accused had returned to them the amounts they paid her and that the complaint
was a result of a misunderstanding.
On March 22, 1996, the trial court rendered its Decision finding the accused guilty
beyond reasonable doubt of Illegal Recruitment in Large Scale:

Page 18 of 166
WHEREFORE, after evaluating all the foregoing, the accused FLOR GUTIERREZ
is hereby found guilty beyond reasonable doubt of Illegal Recruitment in Large
Scale, and judgment is hereby rendered as follows:
(a) Convicting the accused of Illegal Recruitment in Large Scale and sentencing her
to suffer the penalty of life imprisonment and payment of P100,000.00 fine;
(b) No reimbursement to complainants is needed since their money have already

been returned;
(c) Accused to pay moral damages in the amount of P50,000.00 to each

complainant;
(d) Accused to pay exemplary damages in the amount of P50,000.00 to each

complainant; and
(e) To pay the costs of the suit.79
Accused Flor Gutierrez filed the present appeal seeking the reversal of her
conviction.
Illegal recruitment is committed when two elements concur, namely: (1) the
offender has no valid license or authority required by law to enable one to lawfully
engage in recruitment and placement of workers; and (2) he undertakes either any
activity within the meaning of "recruitment and placement" defined under Art. 13(b),
or any of the prohibited practices enumerated under Art. 34 of the Labor
Code.80 Art. 13(b) of the Labor Code defines "recruitment and placement" as "any
act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring
workers, and includes referrals, contract services, promising or advertising for
employment, locally or abroad, whether for profit or not: Provided, That any person
or entity which, in any manner, offers or promises for a fee employment to two or
more persons, shall be deemed engaged in recruitment and placement." 81
The crime becomes Illegal Recruitment in Large Scale when the two elements
concur, with the addition of a third element: the recruiter committed the same
against three or more persons, individually or as a group. 82
Appellant argues that as a representative of a duly licensed recruitment agency,

she cannot be held guilty of Illegal Recruitment in Large Scale. We disagree.
Section 11, Rule II, Book II of the Rules and Regulations Governing Overseas
Employment requires the prior approval of the POEA of the appointment of
representatives or agents:

Page 19 of 166
Section 11. Appointment of Representatives. Every appointment of
representatives or agents of licensed agency shall be subject to prior approval or
authority of the Administration.
The approval may be issued upon submission of or compliance with the following
requirements:
a. Proposed appointment or Special Power of Attorney;
b. Clearances of the proposed representative or agent from NBI;
c. A sworn or verified statement by the designating or appointing person or

company assuming full responsibility for all the acts of the agent or representative
done in connection with the recruitment and placement of workers.
Approval by the Administration of the appointment or designation does not

authorize the agent or representative to establish a branch or extension office of
the licensed agency represented.
Any revocation or amendment in the appointment should be communicated to the

administration. Otherwise, the designation or appointment shall be deemed as not
revoked or amended.
Section 1, Rule X of the same Book, in turn, provides that "recruitment and
placement activities of agents or representatives appointed by a licensee, whose
appointments were not authorized by the Administration shall likewise constitute
illegal recruitment."
The Certification from the POEA that it "has not received nor acknowledged the
representation of Ms. Gutierrez" establishes that the appointment of appellant by
Serafudin as a representative or agent was not authorized by the POEA. It may be
true that the POEA received from Serafudin a revocation of appellant's
appointment, but still is of no consequence since Serafudin in the first place did not
submit her appointment to the POEA, and so the POEA has nothing to approve.
As found by the trial court83 the evidence on record, notably appellant's own

version, indicates that she was running her own labor recruitment business.
Appellant cannot escape liability by claiming that she was not aware that before
working for her employer in the recruitment agency, she should first be registered
with the POEA.84 Illegal recruitment in large scale is malum prohibitum, not malum
in se.85 Good faith is not a defense.
That appellant engaged in recruitment and placement is beyond dispute. The

complaining witnesses categorically testified that the accused promised them on
several occasions that they would be leaving for work abroad. Appellant received
Page 20 of 166
complainants' money and documents, a fact that the complainants themselves
witnessed and which the accused acknowledged when she returned the same to
them after the filing of the case against her. Appellant even brought complainant
Rosalyn Sumayo to the airport three times, raising her expectations, but leaving her
hanging in mid-air. The accused even had the audacity to demand cancellation
fees from the complainants when they asked for a refund.
The Affidavits of Desistance executed by two of the complainants deserve little

weight. The Court attaches no persuasive value to affidavits of desistance,
especially when executed as an afterthought. As held in the case of People v.
Ubina,86 "it would be a dangerous rule for courts to reject testimonies solemnly
taken before the courts of justice simply because the witnesses who had given
them later on changed their mind for one reason or another; for such rule would
make solemn trials a mockery and place the investigation of truth at the mercy of
unscrupulous witnesses."87
As appellant committed illegal recruitment against three or more persons, she is

liable for Illegal Recruitment in Large Scale.
WHEREFORE, the Decision of the Regional Trial Court, finding appellant Flor

Gutierrez y Timod guilty beyond reasonable doubt of the crime of Illegal
Recruitment in Large Scale and sentencing her to life imprisonment and to pay a
fine of P100,000.00 is AFFIRMED.
SO ORDERED.

Page 21 of 166
[3] G.R. No. 119076. March 25, 2002.*
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. ROGER SEGUN and

JOSEPHINE CLAM, accused-appellants.
Criminal Law; Labor Law; Illegal Recruitment; Elements of the crime of illegal

recruitment in large scale.—The crime of illegal recruitment in large scale is
committed when three elements concur. First, the offender has no valid license or
authority required by law to enable one to lawfully engage in recruitment and
placement of workers. Second, he or she undertakes either any activity within the
meaning of “recruitment and placement” defined under Article 13 (b), or any
prohibited practices enumerated under Article 34 of the Labor Code. Third, the
offender commits said acts against three or more persons, individually or as a
group.
Same; Same; Same; Evidence; Testimony constituting conclusions of law has no

probative value and is not binding upon the court; The term “recruit” is a conclusion
of law.—By itself, Rogelio’s testimony is far from conclusive that appellants actually
recruited his wife and children. Rogelio used the term “recruit” which is a conclusion
of law; the prosecution did not elicit from him the specific act constituting the
recruitment. Section 36, Rule 130 of the Rules of Court states that a witness can
testify only to those facts which he knows of his personal knowledge. He is not
permitted to testify as to a conclusion of law. Law in the sense here used embraces
whatever conclusions belong properly to the court. Thus, it has been held that the
bare statements of a rape victim that she was “sexually assaulted” or “raped” by the
accused are not sufficient to establish the accused’s guilt for the crime of rape.
Testimony constituting conclusions of law has no probative value and is not binding
upon the court.
Same; Same; Same; Same; Same; The witness must testify as to the facts that

would prove recruitment.—As we held earlier, “recruit” is a legal conclusion. The
witness must testify as to the facts that would prove recruitment. It does not suffice
that the witness simply state that the accused “recruited” the “victim.” Hence, the
testimony of Josephine Aba that appellants “recruited” her nephews is, by itself,
insufficient to convict appellants for the recruitment of Pedro and Pablo Ozarraga.
APPEAL from a decision of the Regional Trial Court of Iligan City, Br. 4.
The facts are stated in the opinion of the Court.
Appellants Roger Segun and Josephine Clam were charged before the Regional
Trial Court (RTC) of Iligan City with violating Article 38 of the Labor Code, as
amended, in an information reading:
That on or about the 3rd day of March, 1993 and for sometime thereafter, at
Linamon, Lanao del Norte, Philippines and within the jurisdiction of this Honorable
Page 22 of 166
Court, the above-named accused, conspiring, confederating and mutually helping
each other, did then and there willfully, unlawfully and feloniously canvass, enlist,
contract, transport and recruit for employment the following persons, namely:
1. Mario Tambacan;
2. Mary Jane Cantil;
3. Richard Arañas;
4. Victoria Collantes;
5. Christine Collantes;
6. Rogelio Collantes;
7. Luther Caban;
8. Loreta Caban;
9. Jonard Genemelo;
10. Jhonely Genemelo;
11. Pedro Ozarraga;
12. Pablo Ozarraga; and
13. Pacifico Villaver,
Without any license and/or authority to engage in recruitment and placement of

workers from the Department of Labor and Employment. 1
Upon arraignment, appellants pleaded not guilty to the above charges.
The prosecution presented eight (8) witnesses, namely, Francita L. Manequis,

Conchita Tambacan, Josephine Aba, Melecio Ababa, Rogelio Collantes, Loreta
Caban, Christine Collantes and Elena Arañas.
Manequis, Employment Officer III and Administrative Officer of the Department of

Labor and Employment (DOLE), identified two certifications issued by Allan
Macaraya, then DOLE Director for Region XII. 2 The first Certification,3 dated
October 7, 1993, stated that "per records available in this Office" appellants were
"neither licensed nor authorized by this Department to recruit workers for overseas
employment." The second,4 dated May 17, 1993, was "issued upon the request of
[the] Honorable Mayor of Linamon, Lanao del Norte, Mayor Alejandro C. Alfeche." It
Page 23 of 166
stated that appellants, "per records of this Office," were "not authorized to conduct
recruitment for local and overseas employment."
Conchita Tambacan, 50, married, a tobacco vendor and a resident of Linamon,

Lanao del Norte testified that her son Mario, then 17, was "recruited" by appellants
on March 6, 1993 and brought to Manila. She knew that he was recruited only
because "many told [her]." Her son did not consult her regarding the recruitment. At
the time of her testimony, her son had sent her only two letters from Cabanatuan
City but had not returned home to Linamon, Lanao del Norte.
After learning of her son’s recruitment, Mrs. Tambacan went to the Mayor of
Linamon who, in turn, verified from DOLE whether appellants had any authority to
undertake recruitment. Subsequently, the mayor handed Mrs. Tambacan the
certification dated May 17, 1993.5
Josephine Ozarraga Aba, 28, married, a housekeeper, and a resident of Linamon,

is the aunt of twins Pedro and Pablo Ozarraga. Pedro and Pablo, then 18, are the
sons of her deceased sister. Mrs. Aba testified that sometime in March or April
1993 her nephews told her that they wanted to go to Manila and that they were
"recruited." Her nephews were then jobless and were looking for work. Mrs. Aba
went to appellants’ house to inquire from appellants, who were her neighbors, if
what her nephews told her was true. In appellants’ house, she saw appellants, her
nephews, among others. Appellants told her that her nephews would be given free
fare to Manila, free meals and good wages. These they also promised her
nephews. Mrs. Aba claimed that appellants brought one of the twins to Cabanatuan
and the other to Bulacan. When she testified, her nephews had not yet returned to
Linamon.6
Melecio Ababa, 64, married, a fish vendor, and a resident of Linamon, Lanao del
Norte, is the grandfather of Jhonely and Jonard Genemelo. Sometime in April 1992,
Ababa learned that appellants had "recruited" his grandsons. Ababa asked his
grandsons, "Why will you work there [in Cabanatuan City] [when] in fact you can
find jobs here?" Ababa went to the house of appellants who assured him that the
transportation to Manila was free, and that his grandsons were to be provided free
meals and paid good wages. Because of these promises, he acquiesced to the
recruitment. At the time of his testimony, Ababa’s grandsons had not returned to
Linamon. All he received from them were two letters but no money. 7
Another complainant, Rogelio Collantes, 44, jobless and a resident of Linamon,

Lanao del Norte, is the husband of Victoria Collantes and the father of Christine,
then 13, and Rogelio, Jr., then 6. Sometime in April 1993, Rogelio learned that
appellants had "recruited" Victoria, Christine and Roger. Rogelio talked to
appellants who promised that his wife and children’s transportation to Manila and
meals will be free and that they will receive good wages. Victoria, Christine and
Rogelio, Jr., who were then looking for jobs, were then brought to Cabanatuan City.

Page 24 of 166
At the time of his testimony, Rogelio’s children had already returned to Linamon,
traveling home with appellant Josephine Clam. Collantes’ wife, though, was still in
Nueva Ecija. She had sent letters to Rogelio thrice, and money twice, once in the
amount of P1,000.00 and the other time P800.00. 8
The prosecution also presented Rogelio’s daughter Christine, who was among
those allegedly recruited by appellants. Christine said her parents were jobless
during the months of March and April 1993 and were looking for work. Upon the
invitation of appellants, she and her mother went to the house of appellants on
March 26, 1993. Appellants offered her mother a job. Christine went with her
mother to Cabanatuan City where her mother forced her to work. According to
Christine, those "recruited" totaled thirteen, including her mother and her brother.
She and the others took a boat to Manila and Cabanatuan City. Appellants
shouldered the transportation expenses.
In Cabanatuan, Christine did housework for a certain Engr. Sy for seven (7)
months. She was paid P500.00 a month. She returned home in Linamon on
December 4, 1993. Neri Clam, Josephine’s sister, paid for her fare to Manila.
Like Christine, her mother Victoria also performed housework in Cabanatuan City
for a certain Mabini Llanera. Her brother, Rogelio, Jr., was not able to find work
because he was still a child.9
Loreta Cavan,* 14, and also a resident of Linamon, Lanao del Norte, testified that
sometime in March 1993, she was "recruited" by appellants and brought to Manila
then to Cabanatuan City. She related that she met appellants in the house of
Josephine Clam, where she was recruited. Appellants told her that Cabanatuan
City was a "good place" "because the salary [was] big." Loreta agreed to go. Loreta
further stated that those "recruited" by the couple totaled thirteen, including the twin
brothers Pedro and Pablo, a certain woman named Pasbel, a certain Johnny, and
Loreta’s sister Luther.
At Cabanatuan City, Loreta was able to work for a certain Barangay Captain
Centioco for three (3) months for P600.00 a month. Loreta purportedly was not paid
for her services since her two months’ salary was supposed to pay for her fare to
Manila.
Loreta denied that she went to the house of appellants to seek their help. Rather,
appellants allegedly offered her a job. Appellants invited her to go to their house on
March 27, 1993. Loreta learned from her sister Luther that appellants were
recruiting.
Loreta’s sister Luther, who was among those listed in the information as having
been recruited by appellants, went to Manila to work but her job was not provided
by appellants.10

Page 25 of 166
The prosecution also offered the testimony of Ester Cavan, the mother of Loreta
Cavan, to corroborate the latter’s testimony. The same was dispensed with,
however, the corroborative nature thereof having been admitted by counsel for the
defense.11
Finally, Elena Arañas, mother of Richard Arañas, related that on March 6, 1993
appellants brought her son, then 19, to Cabanatuan City. Her son, who was then
looking for work, was promised that he would be given a good salary. She learned
of the promise when she went to appellants’ house where she saw appellants, her
son, among others. Elena claimed that she was present when appellants
approached her son and offered him work in Cabanatuan City. Elena agreed to the
recruitment of her son because of the promise of a good salary. However, she has
not heard from her son since he left nor had she received any money from him. 12
Appellants’ defense was predicated on denial. They presented five witnesses to

support their case.
Myrna Sasil, 35, married, a housekeeper and a resident of Iligan City, testified that
in March 1993 she went to the appellants’ residence to ask them to find a job in
Manila for her daughter Margie. Prior to that, Myrna had known appellants for
almost a year. She knew that appellants could help their daughter find work in
Manila because they just came from Manila themselves. She said that before she
went to appellants’ house, she did not know that appellants were sending people to
Manila for work. As Myrna’s family was then suffering from financial difficulties,
Josephine agreed to find work for Myrna’s daughter.
According to Myrna, Margie left with the thirteen persons listed in the information as
having been recruited by appellants. Appellants paid for Margie’s fare to Manila,
which she reimbursed from her salary. At the time of Myrna’s testimony, Margie
was still working in Cabanatuan City and was sending Myrna money from her
salary.13
Losendo Servano, 50, married, a farmer and a resident of Linamon, Lanao del
Norte, is a neighbor of appellants as well as those of the thirteen persons they
allegedly recruited. Losendo had known Josephine Clam since she was born, and
Roger Segun when the latter and Josephine got married.
Losendo testified that his son Ruel did not have work in Linamon. If Ruel stayed in
Linamon, Losendo said he would become a hoodlum or a delinquent. His son thus
requested appellants to take him with them to Manila and find work for him, saying
"Manang, Manong, I just go with you to Manila."
In April 1993, Ruel, appellants and thirteen others left for Manila by boat.
Appellants shouldered Ruel’s expenses in going to Manila. When Ruel was able to
find work, he paid appellants by installment. Losendo claims that his son found
work through the help of appellants. 14
Page 26 of 166
Virgincita Ozarraga, 30, a housekeeper and a resident of Linamon, Lanao del
Norte, is the sister of appellant Josephine Clam. She is also the aunt of the twins
Pedro and Pablo Ozarraga and a neighbor of the thirteen persons allegedly
recruited by appellants.
According to Virgincita, Josephine Clam went to Nueva Ecija in 1991 but

transferred in 1992 to Dagupan City. In both places, Josephine worked as a house
helper. Roger Segun, on the other hand, worked as liaison officer for Rolmar
Employment Services.
Virgincita disputed Conchita Tambacan’s testimony that appellants recruited the

latter’s son Mario. She said that Mario went to appellants’ house. Josephine did not
promise him a job because they were not recruiters although appellants assured
him they would help him find a job.
Virgincita further testified that in March 1993 Pedro and Pablo Ozarraga also went
to the house of Virgincita’s mother to ask appellants to help them find work
because there were times they could not eat. Josephine allegedly told the twins
that she was not a recruiter but she would help them find work. She purportedly
said the same thing to Jhonely and Jonard Genemelo, Victoria and Christine
Collantes, and Loreta and Luther Cavan. Josephine also told them that she was not
promising them anything.
Appellants and the thirteen persons they purportedly recruited left for Manila by
boat. Appellants paid for their fare and were able to find work for them in Manila,
Cabanatuan and other places in Luzon. Thereafter, appellants returned to Linamon.
To Virgincita’s knowledge, no people sought their help to find them jobs after the
couple returned from Manila.15
Appellant Roger Segun, 34, single, is an employee of the Rolmar Employment

Services. As the liaison officer of the agency, appellant undertakes the processing
of the papers for the agency’s license.
According to appellant, around April and May of 1993, the thirteen persons listed in
the information went to the house of Josephine Clam to ask her to help them find
jobs in Cabanatuan City. Their neighbors knew that Josephine used to work in
Cabanatuan City, Pangasinan and Dagupan City. Josephine told them that she was
not a recruiter although she would help them find work.
Appellants accompanied the thirteen to Manila as they (appellants) were going

there anyway. Appellants shouldered their neighbors’ transportation and other
expenses from Linamon to Cabanatuan City upon the promise that they
(appellants) would be paid back. Eventually, some paid while others did not. Roger
did not bother to ask for payment from those who did not pay. He claimed he was
able to help find jobs for their neighbors by recommending them to friends who

Page 27 of 166
needed helpers and workers. Until they were able to find jobs, the thirteen stayed in
Roger’s house in Cabanatuan City.
Roger admitted that neither he nor Josephine Clam had a license to recruit. He said
he was not a recruiter. He also revealed that after he brought the thirteen to Manila,
he tried to secure a license to recruit but his application was disapproved. 16
Appellant Josephine Clam, 28, single, and residing at Linamon, Lanao del Norte,
used to work as a house helper in Pangasinan and Bulacan for a year after which
she returned to Linamon.
Around March and April 1993, the thirteen persons listed in the information went to
her house to ask her help to find them work. They knew that Josephine used to
work in Pangasinan and Dagupan. She told them she would try her best to help
them but informed them that she was not a recruiter.1âwphi1.nêt
Roger and Josephine shouldered their neighbors’ transportation and food expenses
on the condition that their neighbors reimburse appellants once they found jobs.
Some of them eventually paid them back although others did not. Appellants were
able to find jobs for the thirteen since Roger had many friends.
Josephine admitted that she did not have any license to recruit since she was not a
recruiter. She and Roger helped their neighbors find jobs because she took pity on
them when they begged her to help them find jobs. She even spent her and
Roger’s joint savings to answer for her neighbors’ expenses. 17
Based on the foregoing evidence, the Iligan City RTC convicted appellants for
violating Article 38 of the Labor Code, as amended:
WHEREFORE, finding the accused guilty beyond reasonable doubt of Illegal

Recruitment of the 13 persons mentioned in the information, namely: Mario
Tambacan, Mary Jane Cantil, Richard Aranas, Victoria Collantes, Christine
Collantes, Rogelio Collantes, Luther Caban, Loreta Caban, Jonard Genemilo,
Jhonely Genemilo, Pedro Ozarraga, Pablo Ozarraga and Pacifico Villaver in a large
scale, the accused are hereby sentenced to suffer a penalty of life imprisonment for
each of them and to pay a fine of P100,000.00 each. The bail bond put up by the
accused is hereby ordered cancelled, in view of the penalty imposed by this Court
of life imprisonment, which is a nonbailable offense.
SO ORDERED.18
Appellants contend that their guilt was not proven beyond reasonable doubt. They
maintain that it was their neighbors who approached them in the house of
Josephine Clam’s mother and solicited their assistance in their (the neighbors’)
desire to go to Manila. Josephine Clam had a history of employment in Luzon and
had just returned to Linamon. In Josephine, the neighbors saw an opportunity to
Page 28 of 166
taste economic progress and escape poverty and stagnation. Appellants took pity
on them and helped them find jobs, even defraying their neighbors’ travel
expenses. They submit, therefore, that they were not engaged in the recruitment of
persons for employment but in pursuit of a lawful and noble endeavor for the
benefit of the less fortunate. They neither collected nor received any consideration
for their efforts. Appellants point out that of the 13 allegedly recruited only Christine
Collantes and Loreta Cavan testified against them. Considering these
circumstances, appellants submit that the evidence against them is at most
ambiguous and inconclusive.19
The crime of illegal recruitment in large scale is committed when three elements
concur. First, the offender has no valid license or authority required by law to
enable one to lawfully engage in recruitment and placement of workers. Second, he
or she undertakes either any activity within the meaning of "recruitment and
placement" defined under Article 13 (b), or any prohibited practices enumerated
under Article 34 of the Labor Code. Third, the offender commits said acts against
three or more persons, individually or as a group. 20
There is no dispute that the first element is present in this case. The certification
dated May 17, 1993 and issued by DOLE Region XII Director Allen Macaraya,
states that appellants "were not authorized to conduct recruitment for local and
overseas employment." Both appellants conceded they have no license to recruit. 21
The next question is whether appellants undertook any activity constituting

recruitment and placement as defined by Article 13 (b) of the Labor Code, which
states:
"Recruitment and Placement" refers to any act of canvassing, enlisting, contracting,

transporting, utilizing, hiring or procuring workers, and includes referrals, contract
services, promising or advertising for employment, locally or abroad, whether for
profit or not: Provided, That any person or entity which, in any manner, offers or
promises for a fee employment to two or more persons shall be deemed engaged
in recruitment and placement.
Did the prosecution prove beyond a reasonable doubt that appellants canvassed,
enlisted, contracted and transported the thirteen persons listed in the information?
In examining the prosecution’s evidence, we bear in mind that a conviction for large
scale illegal recruitment must be based on a finding in each case of illegal
recruitment of three (3) or more persons whether individually or as a group. 22 While
the law does not require that at least three (3) victims testify at the trial, it is
necessary that there is sufficient evidence proving that the offense was committed
against three (3) or more persons.23
There is no evidence that appellant undertook the recruitment of Mary Jane Cantil
and Pacifico Villaver. Neither Cantil nor Villaver testified in court. No witness
testified as to the fact of their recruitment.
Page 29 of 166
As regards Mario Tambacan, his mother Conchita testified that she learned of his
recruitment only from other persons. On direct examination she said:
Q How did you know that he was recruited?
A Many told me.24
On cross-examination, she further revealed:
Q You claimed that he was recruited but you did not see the recruitment?
A This Josephine Clam and a companion recruited my son because many saw
them.
ATTY. BAYRON:
That is hearsay.
COURT:
Q But you, yourself, you did not see that he was recruited? Were you present
when Mario Tambacan was recruited by the accused?
A I was not present.
Q You were only informed?
A Yes.
Q Your testimony here that he was recruited was only told to you?
A Yes.25
Conchita Tambacan’s testimony is clearly hearsay and, thus, of little probative

value.26 It hardly suffices to prove Mario Tambacan’s recruitment beyond
reasonable doubt.
We now examine the evidence offered to prove the recruitment of the Collanteses.
The prosecution’s evidence consists of the testimonies of Rogelio Collantes and his
daughter Christine. Rogelio testified that his wife and children were "recruited" by
appellants, that appellants promised that his wife and children were to be provided
free meals and transportation to Manila and good wages, and that appellants
brought his wife and children to Manila.
Q Do you recall what happen[ed] to Victoria, Cristine and Roger Collantes, Jr.,
sometime in April, 1993?
Page 30 of 166
A They were recruited.
Q By whom?
A Roger Segun and Josephine Clam.
xxx
Q When you learn[ed] that your wife Victoria, Cristine your daughter and son
Roger Segun, Jr., were being recruited by the accused whom you just identified,
what did you do then?
A I verified about their recruited (sic).
Q You mean you were to talk to Josephine Clam and Roger Segun?
A Yes.
Q Have you talked to Josephine Clam and Roger Segun?
A Yes.
Q What did they tell you?
A They promised that the transportation to Manila will be free and the meals
and good wages.
xxx
Q Were these two accused Roger Segun and Josephine Clam able to bring
your wife and children to Manila?
A Yes.
Q Do you know what place in Manila they were taken?
A In Cabanatuan City.27
By itself, Rogelio’s testimony is far from conclusive that appellants actually

recruited his wife and children. Rogelio used the term "recruit" which is a
conclusion of law; the prosecution did not elicit from him the specific act constituting
the recruitment. Section 36, Rule 130 of the Rules of Court states that a witness
can testify only to those facts which he knows of his personal knowledge. He is not
permitted to testify as to a conclusion of law. Law in the sense here used embraces
whatever conclusions belong properly to the court. 28 Thus, it has been held that the
bare statements of a rape victim that she was "sexually assaulted" or "raped" by
Page 31 of 166
the accused are not sufficient to establish the accused’s guilt for the crime of
rape.29 Testimony constituting conclusions of law has no probative value and is not
binding upon the court.30
Rogelio also said that appellants made certain promises but it is not clear if these
were made to Rogelio or to his wife and children. That appellants "brought" them to
Manila does not necessarily mean that they were "transported" in the context of
Article 13 (b) for if we subscribe to the defense’s account, appellants merely
accompanied Rogelio’s family to Manila. If two inculpatory facts are capable of two
different interpretations, that which would favor the accused should be adopted. 31
On the other hand, Christine Collantes testified on direct examination:
Q Do you recall sometime in April, 1993 what transpired between you and
these 2 accused in this case?
A They treated me well.
Q How did it happen that these 2 accused treated you well sometime in April,
1993?
A They told us we would be given work.
Q Where will you be given work?
A In Cabanatuan City, sir.
Q In other words how many were you these 2 accused promised to give you
work in Cabanatuan City?
A We were 13.
Q That includes your mother and your brother Rogelio, Jr.?
A Yes, sir.
Q And that includes you also?
A Yes.
Q Did you agree to their proposal that you will be given job in Cabanatuan City
if you will go there?
A Yes, sir.
Q How about your mother?

Page 32 of 166
A Yes, sir.
Q How about your brother?
A My brother went with my mother.
Q When you agree[d] with your mother, were you able to go in Cabanatuan City
together with the accused as they promised?
A Yes, sir.
Q That includes the others recruited with the total of 13 of you?
A Yes, sir.
Q What means of transportation did you take from here to Manila?
A William Lines.
Q Who shoulder[ed] the expenses of that boat in going there from here?
A Josephine Clam and Roger Segun.
Q When you arrived in Manila you proceeded to Cabanatuan City, is that
correct?
A Yes.
Q That includes your mother and your brother?
A Yes, sir.
Q As promised by the accused that you would be given a job, were [you] able to
have a job there in Cabanatuan City?
A Yes, sir.
Q What is your work there?
A House work.
Q To whom did you work with?
A With Engr. Sy.
Q How much did he agree as your wages?

Page 33 of 166
A P500.00 a month.
Q Do you know if your mother was able to secure a job as promised by the
accused?
A Yes.
Q Was she able to get a job?
A Yes.
Q What kind of job?
A House work.
Q How about your younger brother, was he able to have a work there?
A No he is still a child.
COURT
Q To whom did your mother work?
A Mabini Llanera in Cabanatuan City.32
On cross-examination, she related:
Q Is it not a fact that your mother went to the house of the accused and
beg[ged] you to find a job?
A Yes, sir.
Q You also went with your parents when your mother went to the house of the
accused?
A Yes, sir.
Q The accused did not offer [a] job for your mother?
A She offered.
Q You went along with your mother to Cabanatuan City, is that correct?
A Yes.

Page 34 of 166
Q Now, will you please tell the court why did you go along with your mother to
Cabanatuan City?
A In order to work.
Q The accused did not offer you [a] job but you only went along with your
mother to Cabanatuan City, is that correct?
A No.
COURT
Q What do you mean when you say no?
A I was forced by my mother to work in Cabanatuan City. 33
And on re-cross:
ATTY. BAYRON
Q The accused did not invite you to go to their house on March 26, 1993, am I
correct?
A We were invited.
Q You and your mother went to the house of the accused because you ask[ed]
for help to find a job, am I correct?
FISCAL BALABAGAN
Already answered, Your Honor.
COURT
Answer.
WITNESS
A We were invited.34
Christine’s testimony establishes beyond a reasonable doubt that appellants

recruited Christine’s mother Victoria. Christine explicitly stated that appellants
offered her mother a job and told them that they "would be given work." Victoria
thus agreed to appellants’ "proposal" that she would be given a job in Cabanatuan
City.

Page 35 of 166
However, there is reasonable doubt whether appellants actually recruited Christine
herself since Christine said that she "was forced by [her] mother to work in
Cabanatuan City."
The Court also entertains grave doubts regarding the alleged recruitment of
Christine’s brother Rogelio, Jr., who, according to Christine, went with their mother
and was not able to work because, at 6, he was "still a child." Did Rogelio, Jr. go to
Cabanatuan City to work or did he just go together with his mother so she could
look after him? The former is unlikely while the latter is not farfetched since the
child was too young to work and still needed looking after.
The prosecution, however, succeeded in proving that appellants recruited Loreta

Cavan. Loreta testified that appellants told her that the salary in Cabanatuan City
was good, that she agreed to their proposal for her to work there, and that they
brought her to Manila then to Cabanatuan City:
Q Who brought you to Manila and then Cabanatuan City?
Q Why did they bring you to Manila then to Cabanatuan City?
A According to them that place is good because the salary is big.
xxx
Q You said you were brought to Manila by these two accused on March 27,
1993, before that March 27, was there any occasion that you met the accused in
this case?
A Yes, sir.
Q Where did you meet them?
A In Linamon.
Q In the house of Mrs. Josephine Clam?
A Yes, sir.
Q What transpired when you first met with the accused Josephine Clam in their
house in Linamon?
A They told us that in the boat where we are going to take, we are prohibited to
go around the boat.

Page 36 of 166
COURT
Q Prior to that when for the first time you met the accused?
WITNESS
A At the time when we are recruited.
Q How did they recruit you?
A They told me that the salary in that place is good.
FISCAL BALABAGAN
And because they told you that the salary is good, you are referring to Cabanatuan
City?
WITNESS
A Yes.
Q When they told you that the salary is good, what did you do?
A I am willing to go.
Q You mean you agreed with their proposal to you and that you are going to
work there?
A Yes, sir.35
On cross-examination, she said that appellants offered her employment and she
went to appellants’ house because they were recruiting:
ATTY. BAYRON
Q You said awhile ago that you went to the house of the accused in Linamon,
Lanao del Norte, can you recall when was that when you went to the house of the
accused in this case?
A March 27.
Q Did you go to the house of the accused alone or with companion?
A I have companions.

Page 37 of 166
Q Please tell the court why did you go to the house of the accused on March
27, 1993?
A Because they have recruited us.
Q Is it not a fact that you went to the house of the accused in Linamon because
you sought their help to find a job?
A No, sir.
Q The accused in this case did not offer you a job?
A They offered me.
Q Is it not a fact that you beg[ged] the accused to help you find a job outside
Linamon, Lanao del Norte?
A No, sir.
Q The accused in this case did not invite you to go in their house on March 27,
1993?
A No, sir.
Q You went there on March 27, 1993 on your own volition, am I correct?
A Sir, sir.
Q You are familiar with the house of the accused in Linamon, Lanao del Norte,
am I correct?
A Yes, sir.
Q In the house of the accused you can not find any signboard that they are
recruiting people for jobs, am I correct?
A No, sir.
COURT
Q What is your purpose in going to the house of the accused?
A Because they are recruiting.
Q Prior to that when you went there, you have not met them before?

Page 38 of 166
A No, sir.
Q Why did you go to the house of the accused and knew that they are
recruiting?
A I was told by my sister.
Q Luther is your elder sister?
A Yes.36
The prosecution however failed to prove that appellants recruited Loreta’s sister,
Luther. Loreta testified, thus:
Q How many of you were brought and were recruited by the accused?
A We were 13.
Q Can you mention who were your companions?
A The twin brother, Pedro and Pablo.
xxx
Q Who else?
A Luther Caban.
Q What is your relation with Luther Cavan?
A She is my sister.
xxx
FISCAL BALABAGAN
Q You said that you were recruited together with your sister and others and
were brought to Cabanatuan City, is that correct?
A Yes, sir.
Q Who brought you there?
ATTY. BAYRON
Already answered.
Page 39 of 166
COURT
Witness may answer.
WITNESS
A Josephine Clam and Roger Segun. 37
Again, the term "recruit" is a conclusion of law. The prosecution failed to elicit from
Loreta how appellants "recruited" Luther. While Loreta also said that Luther was
among the thirteen brought to Manila, it does not necessarily mean that her
transportation was for purposes of employment. Moreover, Loreta said that Luther’s
job, at least at the time Loreta testified, was not a result of appellant’s efforts.
Q How about your sister Luther, where is she now?
A She is in Manila.
Q Why [is] she is still in Manila until now?
A She went there to work.
Q Who gave her work, were the accused in this case as promised to you?
A No, sir.38
These circumstances give rise to doubts whether appellants indeed recruited

Luther Cavan.
Neither was the prosecution able to establish that appellants recruited the twins
Pedro and Pablo Ozarraga. Josephine Ozarraga Aba, the twins’ aunt, testified:
Q Sometime in March or April, 1993, what happen to these two nephews of
yours?
A They were recruited by Josephine Clam and Roger Segun.
xxx
Q You said that these 2 accused were the ones who recruited your 2 nephews
sometime in March or April, 1993. When you learn that they were recruited what did
you do if any?
A I went to their house and confronted them about my nephews and they told
me that my nephews will be given free fare to Manila, free meals and good wages
and they also promised that to my nephews.
Page 40 of 166
Q You said they promised your nephews free fare to Manila, free meals and
good wages, whom are you referring they?
Q Why were Josephine Clam and Roger Segun able to recruit your two
nephews?
A Because they brought them.
Q Where did they brought your nephews?
A One in Cabanatuan and the other one in Bulacan. 39
As we held earlier, "recruit" is a legal conclusion. The witness must testify as to

the facts that would prove recruitment. It does not suffice that the witness simply
state that the accused "recruited" the "victim." Hence, the testimony of Josephine
Aba that appellants "recruited" her nephews is, by itself, insufficient to convict
appellants for the recruitment of Pedro and Pablo Ozarraga.
That appellants allegedly told Josephine Aba that her nephews would be given

free fare and meals is not inconsistent with appellants’ account that they paid for
their neighbors’ expenses. The same holds true for the claim that appellants
brought the twins to Cabanatuan and Bulacan. According to appellants, they
accompanied the thirteen persons to help them find work. The reference to good
wages could mean that the rates of compensation in Cabanatuan or Bulacan are
relatively high compared to those in Lanao del Norte. These circumstances do not
necessarily mean that appellants recruited Pedro and Pablo Ozarraga.
We cannot give much credence to Josephine’s statement that appellants also

promised free fare and meals, and good wages to her nephews since the
prosecution did not show that Josephine was present when appellants made this
supposed promise to her nephews.
Neither did the prosecution prove beyond reasonable doubt that appellants
recruited Jhonely and Jonard Genemelo. Melecio Ababa, grandfather of Jhonely
and Jonard testified on direct examination:
Q Do you recall what happen to your 2 grandsons sometime in the month of
April, 1993?
A They were recruited by Roger Segun and Josephine Clam.
xxx
FISCAL BALABAGAN
Page 41 of 166
Q When you learn that your grandsons were being recruited by Roger and
Segun and Josephine Clam, what did you do?
A I went to their house.
Q You said you went to their house, whose house are your referring?
A The house of Roger Segun and Josephine Clam.
xxx
FISCAL BALABAGAN
Q Who were the people you met inside the house of Josephine Clam?
A Them.
Q Are you referring Roger Segun and Josephine Clam?
A Yes.
Q Then what happen there when you went to the house of the accused?
A They promised that the transportation to Manila is free and free meals and
good wages.
Q Because of this free meals and transportation to Manila they promised to
your grandsons and you what happen?
A They brought them to Cabanatuan City.
Q Did you agree with this?
A Yes, I agree.
Q You agreed because of this promise of free transportation and good wages
for your grandchildren?
A Yes.40
On cross-examination, Melecio said:
Q You only learn from somebody that your grandsons were recruited by the two
accused?
A From them personally because I went to their house.

Page 42 of 166
Q You mean the house of your grandson?
A I went to the house of the recruiters because they were staying in my house.
Q When you went to their house your grandsons were not there?
A My two grandsons were there.
Q Can you recall when your two grandsons Johnely and Jonard allegedly
recruited by the two accused?
A Sometime on the 16 or 17th.
Q What month?
A April.
Q You were not present when your two grandsons were allegedly recruited by
the two accused?
A I was there present.41
Note again the use of the term "recruit," a defect present in the testimonies of
Rogelio Collantes, Loreta Cavan and Josephine Aba. While Melecio Aba said that
appellants promised his grandsons free transportation and meals, and good wages,
these promises, as we have observed in analyzing Josephine Aba’s testimony, are
not incongruent with appellants’ version.
Lastly, Elena Arañas’ testimony on her son Richard’s alleged recruitment is

insufficient to prove appellants’ guilt. Elena testified on direct examination:
FISCAL BALABAGAN
Q Mrs. Elena Arañas, do you know Richard Arañas?
WITNESS
A Yes, he is my son.
Q Where is he now?
A In Cabanatuan City brought by Josephine Clam
Q Do you know what is the family name of Josephine?
A Yes, Clam.

Page 43 of 166
Q When was your son brought by Josephine Clam and Roger Segun?
A March 6, that was Saturday.
Q Do you know the reason why they brought your son in Cabanatuan on March
6, 1993?
A Because of the promise that he would be given good salary.
COURT
Q How do you know that he was promised of a good salary?
A Because I went to their house.
FISCAL BALABAGAN
Q Are you referring to the house of Josephine Clam?
A Yes.
Q Were there people there when you arrived there?
A Yes, Josephine Clam, Roger Segun, my son and others.
Q Did you agree to recruitment that your son will be brought to Cabanatuan
City?
A Yes.
Q Why did you agree?
A Because of the promise that they would receive good salary.
Q Did he went there personally?
A No.
xxx
FISCAL BALABAGAN
Q How was your son recruited by the accused in this case?
A As they promised that the salary is quite big.42

Page 44 of 166
On cross-examination, Elena said:
Q You were not present when your son was allegedly recruited by the
accused?
A I was there.
Q The accused in this case did not offer to your son but it was your son who
asked helped (sic) to find a job?
A My son was recruited that he would be given work.
COURT
Q The 2 accused never approached your son they have work in Cabanatuan
City?
A Yes, they said that.
ATTY. BAYRON
Q The accused tell (sic) your son that they will help your son to find a job?
A Yes, sir.43
Elena’s testimony fails to state the specific act constituting the recruitment. Elena
merely declared that her son was "recruited" – a legal conclusion. Appellants also
supposedly said that "they have work in Cabanatuan City" and that "they will help
[her] son to find a job." Elena did not state the context and the circumstances under
which these statements were made. Moreover, the statements attributed to
appellants are ambiguous and hardly incongruous with appellants’ claim that they
assisted their neighbors find work, which assistance does not necessarily translate
to an act of recruitment. That there was a supposed promise of a good salary is
also ambiguous for, as noted earlier, the reference to good wages could mean that
the rates of compensation in Cabanatuan City are higher compared to those in
Lanao del Norte.1âwphi1.nêt
In sum, the prosecution failed to elicit from many of its witnesses the specific acts
constituting the recruitment of the other alleged victims. The prosecution was able
to prove that appellants performed recruitment activities only in the cases of
Victoria Collantes and Loreta Cavan. The third element of illegal recruitment, i.e.,
that the offender commits the acts of recruitment against three or more persons is,
therefore, absent. Consequently, appellants can be convicted only of two counts of
"simple" illegal recruitment.

Page 45 of 166
WHEREFORE, the Decision of the Regional Trial Court is MODIFIED. Appellants
are found GUILTY beyond reasonable doubt of two counts of illegal recruitment, as
defined and punished by Article 38 (a) of the Labor Code, in relation to Articles 13
(b) and 39 thereof. They are each sentenced to suffer for each count imprisonment
of four (4) to five (5) years.
SO ORDERED.

Page 46 of 166
[4] G.R. No. 205727. January 18, 2017.*
RUTCHER T. DAGASDAS, petitioner, vs. GRAND PLACEMENT AND GENERAL

SERVICES CORPORATION, respondent.
Remedial Law; Civil Procedure; Appeals; Petition for Review on Certiorari; 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.—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. In this case, the CA
and the NLRC arrived at divergent factual findings anent Dagasdas’ termination. As
such, the Court deems it necessary to reexamine these findings and determine
whether the CA has sufficient basis to annul the NLRC Decision, and set aside its
finding that Dagasdas was illegally dismissed from work.
Labor Law; Management Prerogative; 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.—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. Noncompliance 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.
Same; Security of Tenure; Lex Loci Contractus; Since the employment contracts of
Overseas Filipino Workers (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, primarily the Labor Code of the
Philippines and its implementing rules and regulations (IRR); Thus, even if a
Filipino is employed abroad, he or she is entitled to security of tenure, among other
constitutional rights.—Security of tenure remains even if employees, particularly the
Overseas Filipino Workers (OFWs), 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, primarily the Labor Code of the
Philippines and its implementing rules and regulations. 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. Thus, even if a Filipino is employed abroad, he or she is entitled to
security of tenure, among other constitutional rights.

Page 47 of 166
Same; Probationary Employees; 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.—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. Here, ITM failed to prove
that it informed Dagasdas of any predetermined standards from which his work will
be gauged. In the contract he signed while still in the Philippines, Dagasdas 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.
Same; Employment Contracts; Overseas Filipino Workers; Unless the employment

contract of an Overseas Filipino Worker (OFW) is processed through the Philippine
Overseas Employment Administration (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.—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.
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.
Same; Termination of Employment; Overseas Filipino Workers; 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.—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 termination. 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. Here, no prior notice of purported infraction, and such
opportunity to explain on any accusation against him was given to Dagasdas. He
was simply given a notice of termination. In fact, it appears that ITM intended not to
Page 48 of 166
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.
Same; Quitclaims; 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.—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.
Appeals
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, 2010 2 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 Decision 4 of the Labor Arbiter (LA)
dismissing the Complaint for lack of merit.
Also challenged is the January 28, 2013 Resolution 5 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 training 8 and pre-departure orientation as

Page 49 of 166
Network Technician.9 Nonetheless, his Job Offer 10 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 contract 16 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 notice 20 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 Quitclaim 22 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.

Page 50 of 166
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
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.
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
Page 51 of 166
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.
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.

Page 52 of 166
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?

Page 53 of 166
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:

Page 54 of 166
(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
Page 55 of 166
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
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.
Page 56 of 166
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.

Page 57 of 166
[5]
Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 93666 April 22, 1991
GENERAL MILLING CORPORATION and EARL TIMOTHY CONE, petitioners,

vs.
HON. RUBEN D. TORRES, in his capacity as Secretary of Labor and
Employment, HON. BIENVENIDO E. LAGUESMA, in his capacity as Acting
Secretary of Labor and Employment, and BASKETBALL COACHES
ASSOCIATION OF THE PHILIPPINES, respondents.
Sobrevinas, Diaz, Hayudini & Bodegon Law Office for petitioners.

Rodrigo, Cuevas & De Borja for respondent BCAP.
RESOLUTION
FELICIANO, J.:
On 1 May 1989, the National Capital Region of the Department of Labor and
Employment issued Alien Employment Permit No. M-0689-3-535 in favor of
petitioner Earl Timothy Cone, a United States citizen, as sports consultant and
assistant coach for petitioner General Milling Corporation ("GMC").
On 27 December 1989, petitioners GMC and Cone entered into a contract of

employment whereby the latter undertook to coach GMC's basketball team.
On 15 January 1990, the Board of Special Inquiry of the Commission on

Immigration and Deportation approved petitioner Cone's application for a change of
admission status from temporary visitor to pre-arranged employee.
On 9 February 1990, petitioner GMC requested renewal of petitioner Cone's alien

employment permit. GMC also requested that it be allowed to employ Cone as full-
fledged coach. The DOLE Regional Director, Luna Piezas, granted the request on
15 February 1990.

Page 58 of 166
On 18 February 1990, Alien Employment Permit No. M-02903-881, valid until 25
December 1990, was issued.
Private respondent Basketball Coaches Association of the Philippines ("BCAP")

appealed the issuance of said alien employment permit to the respondent
Secretary of Labor who, on 23 April 1990, issued a decision ordering cancellation
of petitioner Cone's employment permit on the ground that there was no showing
that there is no person in the Philippines who is competent, able and willing to
perform the services required nor that the hiring of petitioner Cone would redound
to the national interest.
Petitioner GMC filed a Motion for Reconsideration and two (2) Supplemental
Motions for Reconsideration but said Motions were denied by Acting Secretary of
Labor Bienvenido E. Laguesma in an Order dated 8 June 1990.
Petitioners are now before the Court on a Petition for Certiorari, dated 14 June
1990, alleging that:
1. respondent Secretary of Labor gravely abused his discretion when he revoked

petitioner Cone's alien employment permit; and
2. Section 6 (c), Rule XIV, Book I of the Omnibus Rules Implementing the Labor
Code is null and void as it is in violation of the enabling law as the Labor Code does
not empower respondent Secretary to determine if the employment of an alien
would redound to national interest.
Deliberating on the present Petition for Certiorari, the Court considers that

petitioners have failed to show any grave abuse of discretion or any act without or
in excess of jurisdiction on the part of respondent Secretary of Labor in rendering
his decision, dated 23 April 1990, revoking petitioner Cone's Alien Employment
Permit.
The alleged failure to notify petitioners of the appeal filed by private respondent
BCAP was cured when petitioners were allowed to file their Motion for
Reconsideration before respondent Secretary of Labor. 1
Petitioner GMC's claim that hiring of a foreign coach is an employer's prerogative

has no legal basis at all. Under Article 40 of the Labor Code, an employer seeking
employment of an alien must first obtain an employment permit from the
Department of Labor. Petitioner GMC's right to choose whom to employ is, of
course, limited by the statutory requirement of an alien employment permit.
Petitioners will not find solace in the equal protection clause of the Constitution. As
pointed out by the Solicitor-General, no comparison can be made between
petitioner Cone and Mr. Norman Black as the latter is "a long time resident of the
country," and thus, not subject to the provisions of Article 40 of the Labor Code
Page 59 of 166
which apply only to "non-resident aliens." In any case, the term "non-resident alien"
and its obverse "resident alien," here must be given their technical connotation
under our law on immigration.
Neither can petitioners validly claim that implementation of respondent Secretary's

decision would amount to an impairment of the obligations of contracts. The
provisions of the Labor Code and its Implementing Rules and Regulations requiring
alien employment permits were in existence long before petitioners entered into
their contract of employment. It is firmly settled that provisions of applicable laws,
especially provisions relating to matters affected with public policy, are deemed
written into contracts.2 Private parties cannot constitutionally contract away the
otherwise applicable provisions of law.
Petitioners' contention that respondent Secretary of Labor should have deferred to

the findings of Commission on Immigration and Deportation as to the necessity of
employing petitioner Cone, is, again, bereft of legal basis. The Labor Code itself
specifically empowers respondent Secretary to make a determination as to the
availability of the services of a "person in the Philippines who is competent, able
and willing at the time of application to perform the services for which an alien is
desired."3
In short, the Department of Labor is the agency vested with jurisdiction to

determine the question of availability of local workers. The constitutional validity of
legal provisions granting such jurisdiction and authority and requiring proof of non-
availability of local nationals able to carry out the duties of the position involved,
cannot be seriously questioned.
Petitioners apparently also question the validity of the Implementing Rules and
Regulations, specifically Section 6 (c), Rule XIV, Book I of the Implementing Rules,
as imposing a condition not found in the Labor Code itself. Section 6 (c), Rule XIV,
Book I of the Implementing Rules, provides as follows:
Section 6. Issuance of Employment Permit –– the Secretary of Labor may issue an

employment permit to the applicant based on:
a) Compliance by the applicant and his employer with the requirements of Section
2 hereof;
b) Report of the Bureau Director as to the availability or non-availability of any

person in the Philippines who is competent and willing to do the job for which the
services of the applicant are desired.
(c) His assessment as to whether or not the employment of the applicant will

redound to the national interest;

Page 60 of 166
(d) Admissibility of the alien as certified by the Commission on Immigration and
Deportation;
(e) The recommendation of the Board of Investments or other appropriate

government agencies if the applicant will be employed in preferred areas of
investments or in accordance with the imperative of economic development;
x x x x x x x x x
(Emphasis supplied)
Article 40 of the Labor Code reads as follows:
Art. 40. Employment per unit of non-resident aliens. –– Any alien seeking

admission to the Philippines for employment purposes and any domestic or foreign
employer who desires to engage an alien for employment in the Philippines shall
obtain an employment permit from the Department of Labor.
The employment permit may be issued to a non-resident alien or to the applicant

employer after a determination of the non-availability of a person in the Philippines
who is competent, able and willing at the time of application to perform the services
for which the alien is desired.
For an enterprise registered in preferred areas of investments, said employment

permit may be issued upon recommendation of the government agency charged
with the supervision of said registered enterprise. (Emphasis supplied)
Petitioners apparently suggest that the Secretary of Labor is not authorized to take
into account the question of whether or not employment of an alien applicant would
"redound to the national interest" because Article 40 does not explicitly refer to
such assessment. This argument (which seems impliedly to concede that the
relationship of basketball coaching and the national interest is tenuous and unreal)
is not persuasive. In the first place, the second paragraph of Article 40 says: "[t]he
employment permit may be issued to a non-resident alien or to the applicant
for which the alien is desired." The permissive language employed in the Labor
Code indicates that the authority granted involves the exercise of discretion on the
part of the issuing authority. In the second place, Article 12 of the Labor Code sets
forth a statement of objectives that the Secretary of Labor should, and indeed must,
take into account in exercising his authority and jurisdiction granted by the Labor
Code,
Art. 12. Statement of Objectives. –– It is the policy of the State:

Page 61 of 166
a) To promote and maintain a state of full employment through improved manpower
training, allocation and utilization;
x x x x x x x x x
c) To facilitate a free choice of available employment by persons seeking work in

conformity with the national interest;
d) To facilitate and regulate the movement of workers in conformity with the

national interest;
e) To regulate the employment of aliens, including the establishment of a

registration and/or work permit system;
x x x x x x x x x
Thus, we find petitioners' arguments on the above points of constitutional law too
insubstantial to require further consideration.1avvphi1
Petitioners have very recently manifested to this Court that public respondent
Secretary of Labor has reversed his earlier decision and has issued an
Employment Permit to petitioner Cone. Petitioners seek to withdraw their Petition
for Certiorari on the ground that it has become moot and academic.
While ordinarily this Court would dismiss a petition that clearly appears to have
become moot and academic, the circumstances of this case and the nature of the
questions raised by petitioners are such that we do not feel justified in leaving those
questions unanswered.4
Moreover, assuming that an alien employment permit has in fact been issued to
petitioner Cone, the basis of the reversal by the Secretary of Labor of his earlier
decision does not appear in the record. If such reversal is based on some view of
constitutional law or labor law different from those here set out, then such
employment permit, if one has been issued, would appear open to serious legal
objections.
ACCORDINGLY, the Court Resolved to DISMISS the Petition for certiorari for lack

of merit. Costs against petitioners.
[6]

SUPREME COURT
Manila
SECOND DIVISION
Page 62 of 166
G.R. No. 169207 March 25, 2010
WPP MARKETING COMMUNICATIONS, INC., JOHN STEEDMAN, MARK

WEBSTER, and NOMINADA LANSANG, Petitioners,
vs.
JOCELYN M. GALERA, Respondent.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 169239
JOCELYN M. GALERA, Petitioner,
vs.
WEBSTER, and NOMINADA LANSANG, Respondents.
DECISION
CARPIO, Acting C.J.:
The Case
G.R. Nos. 169207 and 169239 are petitions for review 1 assailing the
Decision2 promulgated on 14 April 2005 as well as the Resolution 3 promulgated on
1 August 2005 of the Court of Appeals (appellate court) in CA-G.R. SP No. 78721.
The appellate court granted and gave due course to the petition filed by Jocelyn M.
Galera (Galera). The appellate court’s decision reversed and set aside that of the
National Labor Relations Commission (NLRC), and directed WPP Marketing
Communications, Inc. (WPP) to pay Galera backwages, separation pay, unpaid
housing benefit, unpaid personal and accident insurance benefits, cash value under
the company’s pension plan, 30 days paid holiday benefit, moral damages,
exemplary damages, 10% of the total judgment award as attorney’s fees, and costs
of the suit.
The Facts
The appellate court narrated the facts as follows:
Petitioner is Jocelyn Galera (GALERA), a [sic] American citizen who was recruited
from the United States of America by private respondent John Steedman,
Chairman-WPP Worldwide and Chief Executive Officer of Mindshare, Co., a
corporation based in Hong Kong, China, to work in the Philippines for private
respondent WPP Marketing Communications, Inc. (WPP), a corporation registered
and operating under the laws of Philippines. GALERA accepted the offer and she
signed an Employment Contract entitled "Confirmation of Appointment and

Page 63 of 166
Statement of Terms and Conditions" (Annex B to Petition for Certiorari). The
relevant portions of the contract entered into between the parties are as follows:
Particulars:
Name : Jocelyn M. Galera
Address : 163 Mediterranean Avenue
Hayward, CA 94544
Position : Managing Director
Mindshare Philippines
Annual Salary : Peso 3,924,000
Start Date : 1 September 1999
Commencement Date : 1 September 1999
(for continuous service)
Office : Mindshare Manila
6. Housing Allowance
The Company will provide suitable housing in Manila at a maximum cost (including
management fee and other associated costs) of Peso 576,000 per annum.
7. Other benefits.
The Company will provide you with a fully maintained company car and a driver.
The Company will continue to provide medical, health, life and personal accident
insurance plans, to an amount not exceeding Peso 300,000 per annum, in
accordance with the terms of the respective plans, as provided by JWT Manila.
The Company will reimburse you and your spouse one way business class air
tickets from USA to Manila and the related shipping and relocation cost not
exceeding US$5,000 supported by proper documentation. If you leave the
Company within one year, you will reimburse the Company in full for all costs of the
initial relocation as described therein.
You will participate in the JWT Pension Plan under the terms of this plan, the
Company reserves the right to transfer this benefit to a Mindshare Pension Plan in
the future, if so required.
8. Holidays

Page 64 of 166
You are entitled to 20 days paid holiday in addition to public holidays per calendar
year to be taken at times agreed with the Company. Carry-over of unused accrued
holiday entitlement into a new holiday year will not normally be allowed. No
payment will be made for holidays not taken. On termination of your employment,
unless you have been summarily dismissed, you will be entitled to receive payment
for unused accrued holiday pay. Any holiday taken in excess of your entitlement
shall be deducted from your final salary payment.
9. Leave Due to Sickness or Injury
The maximum provision for sick leave is 15 working days per calendar year.
12. Invention/Know-How
Any discovery, invention, improvement in procedure, trademark, trade name,

designs, copyrights or get-ups made, discovered or created by you during the
continuance of your employment hereunder relating to the business of the
Company shall belong to and shall be the absolute property of the Company. If
required to do so by the Company (whether during or after the termination of your
employment) you shall at the expense of the company execute all instruments and
do all things necessary to vest in ownership for all other rights, title and interests
(including any registered rights therein) in such discovery, invention, improvement
in procedure, trademark, trade name, design, copyright or get-up in the Company
(or its Nominee) absolutely and as sole beneficial owner.
14. Notice.
The first three months of your employment will be a trial period during which either
you or the Company may terminate your employment on one week’s notice. If at
the end of that period, the Company is satisfied with your performance, you will
become a permanent employee. Thereafter you will give Company and the
Company will give you three months notice of termination of employment. The
above is always subject to the following: (1) the Company’s right to terminate the
contract of employment on no or short notice where you are in breach of contract;
(2) your employment will at any event cease without notice on your retirement date
when you are 60 years of age.
SIGNED JOCELYN M. GALERA 8-16-99

Date of Birth [sic] 12-25-55
Employment of GALERA with private respondent WPP became effective

on September 1, 1999 solely on the instruction of the CEO and upon signing of the
contract, without any further action from the Board of Directors of
private respondent WPP.

Page 65 of 166
Four months had passed when private respondent WPP filed before the Bureau of
Immigration an application for petitioner GALERA to receive a working visa,
wherein she was designated as Vice President of WPP. Petitioner alleged that she
was constrained to sign the application in order that she could remain in the
Philippines and retain her employment.
Then, on December 14, 2000, petitioner GALERA alleged she was verbally notified
by private respondent STEEDMAN that her services had been terminated from
private respondent WPP. A termination letter followed the next day. 4
On 3 January 2001, Galera filed a complaint for illegal dismissal, holiday pay,
service incentive leave pay, 13th month pay, incentive plan, actual and moral
damages, and attorney’s fees against WPP and/or John Steedman (Steedman),
Mark Webster (Webster) and Nominada Lansang (Lansang). The case was
docketed as NLRC NCR Case No. 30-01-00044-01.
The Labor Arbiter’s Ruling
In his Decision dated 31 January 2002, Labor Arbiter Edgardo M. Madriaga (Arbiter
Madriaga) held WPP, Steedman, Webster, and Lansang liable for illegal dismissal
and damages. Arbiter Madriaga stated that Galera was not only illegally dismissed
but was also not accorded due process. Arbiter Madriaga explained, thus:
[WPP] failed to observe the two-notice rule. [WPP] through respondent Steedman
for a five (5) minute meeting on December 14, 2000 where she was verbally told
that as of that day, her employment was being terminated. [WPP] did not give
[Galera] an opportunity to defend herself and explain her side. [Galera] was even
prohibited from reporting for work that day and was told not to report for work the
next day as it would be awkward for her and respondent Steedman to be in the
same premises after her termination. [WPP] only served [Galera] her written notice
of termination only on 15 December 2001, one day after she was verbally apprised
thereof.
The law mandates that the dismissal must be properly done otherwise, the
termination is gravely defective and may be declared unlawful as we hereby hold
[Galera’s] dismissal to be illegal and unlawful. Where there is no showing of a clear,
valid and legal cause for the termination of employment, the law considers the
matter a case of illegal dismissal and the burden is on the employer to prove that
the termination was for a valid or authorized cause. The law mandates that both the
substantive and procedural aspects of due process should be observed. The facts
clearly show that respondents were remiss on both aspects. Perforce, the dismissal
is void and unlawful.
xxxx

Page 66 of 166
Considering the work performance and achievements of [Galera] for the year 2000,
we do not find any basis for the alleged claim of incompetence by herein
respondents. Had [Galera] been really incompetent, she would not have been able
to generate enormous amounts [sic] of revenues and business for [WPP]. She also
appears to be well liked as a leader by her subordinates, who have come forth in
support of [Galera]. These facts remain undisputed by respondents.
A man’s job being a property right duly protected by our laws, an employer who
deprives an employee [of] the right to defend himself is liable for damages
consistent with Article 32 of the Civil Code. To allow an employer to terminate the
employment of his worker based merely on allegations without proof places the
[employee] in an uncertain situation. The unflinching rule in illegal dismissal cases
is that the employer bears the burden of proof.
In the instant case, respondents have not been able to muster evidence to counter
[Galera’s] allegations. [Galera’s] allegations remain and stand absent proof from
respondents rebutting them. Hence, our finding of illegal dismissal against
respondents who clearly have conspired in bad faith to deprive [Galera] of her right
to substantive and procedural due process.5
The dispositive portion of Arbiter Madriaga’s decision reads as follows:
WHEREFORE, premises considered, we hereby hold herein respondents liable for

illegal dismissal and damages, and award to [Galera], by virtue of her expatriate
status, the following:
a. Reinstatement without loss of seniority rights.
b. Backwages amounting to $120,000 per year at ₱50.00 to US $1 exchange rate,

13th month pay, transportation and housing benefits.
c. Remuneration for business acquisitions amounting to Two Million Eight Hundred

Fifty Thousand Pesos (₱2,850,000.00) and Media Plowback Incentive equivalent to
Three Million Pesos (₱3,000,000.00) or a total of not less than One Hundred
Thousand US Dollars ($100,000.00).
d. US Tax Protection of up to 35% coverage equivalent to Thirty Eight Thousand

US Dollars ($38,000).
e. Moral damages including implied defamation and punitive damages equivalent to

Two Million Dollars (US$2,000,000.00).
f. Exemplary damages equivalent to One Million Dollars ($1,000,000.00).
g. Attorney’s fees of 10% of the total award herein.

Page 67 of 166
SO ORDERED.6
The Ruling of the NLRC
The First Division of the NLRC reversed the ruling of Arbiter Madriaga. In its
Decision7 promulgated on 19 February 2003, the NLRC stressed that Galera was
WPP’s Vice-President, and therefore, a corporate officer at the time she was
removed by the Board of Directors on 14 December 2000. The NLRC stated thus:
It matters not that her having been elected by the Board to an added position of
being a member of the Board of Directors did not take effect as her May 31, 2000
election to such added position was conditioned to be effective upon approval by
SEC of the Amended By-Laws, an approval which took place only in February 21,
2001, i.e., after her removal on December 14, 2000. What counts is, at the time of
her removal, she continued to be WPP’s Vice-President, a corporate officer, on
hold over capacity.
Ms. Galera’s claim that she was not a corporate officer at the time of her removal
because her May 31, 2000 election as Vice President for Media, under WPP’s
Amended By-Laws, was subject to the approval by the Securities and Exchange
Commission and that the SEC approved the Amended By-Laws only in February
2001. Such claim is unavailing. Even if Ms. Galera’s subsequent election as Vice
President for Media on May 31, 2000 was subject to approval by the SEC, she
continued to hold her previous position as Vice President under the December 31,
1999 election until such time that her successor is duly elected and qualified. It is a
basic principle in corporation law, which principle is also embodied in WPP’s by-
laws, that a corporate officer continues to hold his position as such until his
successor has been duly elected and qualified. When Ms. Galera was elected as
Vice President on December 31, 1999, she was supposed to have held that
position until her successor has been duly elected and qualified. The record shows
that Ms. Galera was not replaced by anyone. She continued to be Vice President of
WPP with the same operational title of Managing Director for Mindshare and
continued to perform the same functions she was performing prior to her May 31,
2000 election.
In the recent case of Dily Dany Nacpil v. International Broadcasting Corp., the
definition of corporate officer for purposes of intra-corporate controversy was even
broadened to include a Comptroller/Assistant Manager who was appointed by the
General Manager, and whose appointment was later approved by the Board of
Directors. In this case, the position of comptroller was not even expressly
mentioned in the By-Laws of the corporation, and yet, the Supreme Court found
him to be a corporate officer. The Court ruled that —
(since) petitioner’s appointment as comptroller required the approval and formal

action of IBC’s Board of Directors to become valid, it is clear therefore that
petitioner is a corporate officer whose dismissal may be the subject of a
Page 68 of 166
controversy cognizable by the SEC... Had the petitioner been an ordinary
employee, such board action would not have been required.
Such being the case, the imperatives of law require that we hold that the Arbiter
below had no jurisdiction over Galera’s case as, again, she was a corporate officer
at the time of her removal.
WHEREFORE, the appeals of petitioner from the Decision of Labor Arbiter

Edgardo Madriaga dated January 31, 2002 and his Order dated March 21, 2002,
respectively, are granted. The January 31, 2002 decision of the Labor Arbiter is set
aside for being null and void and the temporary restraining order we issued on April
24, 2002 is hereby made permanent. The complaint of Jocelyn Galera is dismissed
for lack of jurisdiction.
SO ORDERED.8
In its Resolution9 promulgated on 4 June 2003, the NLRC further stated:
We are fully convinced that this is indeed an intra-corporate dispute which is

beyond the labor arbiter’s jurisdiction. These consolidated cases clearly [involve]
the relationship between a corporation and its officer and is properly within the
definition of an intra-corporate relationship which, under P.D. No. 902-A, is within
the jurisdiction of the SEC (now the commercial courts). Such being the case, We
are constrained to rule that the Labor Arbiter below had no jurisdiction over Ms.
Galera’s complaint for illegal dismissal.
WHEREFORE, the motion for reconsideration filed by Ms. Galera is hereby denied
for lack of merit. We reiterate our February 19, 2003 Decision setting aside the
Labor Arbiter’s Decision dated January 31, 2002 for being null and void.
SO ORDERED.10
Galera assailed the NLRC’s decision and resolution before the appellate court and
raised a lone assignment of error.
The National Labor Relations Commission acted with grave abuse of discretion
amounting to lack or excess of jurisdiction when it reversed the decision of the
Labor Arbiter not on the merits but for alleged lack of jurisdiction. 11
The Decision of the Appellate Court
The appellate court reversed and set aside the decision of the NLRC. The appellate
court ruled that the NLRC’s dismissal of Galera’s appeal is not in accord with
jurisprudence. A person could be considered a "corporate officer" only if appointed
as such by a corporation’s Board of Directors, or if pursuant to the power given
them by either the Articles of Incorporation or the By-Laws. 12
Page 69 of 166
The appellate court explained:
A corporation, through its board of directors, could only act in the manner and
within the formalities, if any, prescribed by its charter or by the general law. If the
action of the Board is ultra vires such is motu proprio void ab initio and without legal
effect whatsoever. The by-laws of a corporation are its own private laws which
substantially have the same effect as the laws of the corporation. They are, in
effect, written into the charter. In this sense, they beome part of the fundamental
law of the corporation with which the corporation and its directors and officers must
comply.
Even if petitioner GALERA had been appointed by the Board of Directors on

December 31, 1999, private respondent WPP’s By-Laws provided for only one
Vice-President, a position already occupied by private respondent Webster. The
same defect also stains the Board of Directors’ appointment of petitioner GALERA
as a Director of the corporation, because at that time the By-Laws provided for only
five directors. In addition, the By-laws only empowered the Board of Directors to
appoint a general manager and/or assistant general manager as corporate officers
in addition to a chairman, president, vice-president and treasurer. There is no
mention of a corporate officer entitled "Managing Director."
Hence, when the Board of Directors enacted the Resolutions of December 31,
1999 and May 31, 2000, it exceeded its authority under the By-Laws and are,
therefore, ultra vires. Although private respondent WPP sought to amend these
defects by filing Amended By-Laws with the Securities and Exchange Commission,
they did not validate the ultra vires resolutions because the Amended By-Laws did
not take effect until February 16, 2001, when it was approved by the SEC. Since
by-laws operate only prospectively, they could not validate the ultra
vires resolutions.13
The dispositive portion of the appellate court’s decision reads:
WHEREFORE, the petition is hereby GRANTED and GIVEN DUE COURSE. The
assailed Decision of the National Labor Relations Commission is hereby
REVERSED and SET ASIDE and a new one is entered DIRECTING private
respondent WPP MARKETING COMMUNICATIONS, INC. to:
1. Pay [Galera] backwages at the peso equivalent of US$120,000.00 per annum

plus three months from her summary December 14, 2000 dismissal up to March
14, 2001 because three months notice is required under the contract, plus 13th
month pay, bonuses and general increases to which she would have been normally
entitled, had she not been dismissed and had she not been forced to stop working,
including US tax protection of up to 35% coverage which she had been enjoying as
an expatriate;

Page 70 of 166
2. Pay x x x GALERA the peso equivalent of US$185,000.00 separation pay (1 ½
years);
3. Pay x x x GALERA any unpaid housing benefit for the 18 ½ months of her
employment in the service to the Company as an expatriate in Manila, Philippines
at the rate of ₱576,000 per year; unpaid personal and accident insurance benefits
for premiums at the rate of ₱300,000.00 per year; whatever cash value in the JWT
Pension Plan; and thirty days paid holiday benefit under the contract for the 1 ½
calendar years with the Company;
4. Pay x x x GALERA the reduced amount of PhP2,000,000.00 as moral damages;
5. Pay [Galera] the reduced amount of PhP1,000,000.00 as exemplary damages;
6. Pay [Galera] an amount equivalent to 10% of the judgment award as attorney’s

fees;
7. Pay the cost of the suit.
SO ORDERED.14
Respondents filed a motion for reconsideration on 5 May 2005. Galera filed a

motion for partial reconsideration and/or clarification on the same date. The
appellate court found no reason to revise or reverse its previous decision and
subsequently denied the motions in a Resolution promulgated on 1 August 2005. 15
The Issues
WPP, Steedman, Webster, and Lansang raised the following grounds in G.R. No.
169207:
I. The Court of Appeals seriously erred in ruling that the NLRC has jurisdiction over
[Galera’s] complaint because she was not an employee. [Galera] was a corporate
officer of WPP from the beginning of her term until her removal from office.
II. Assuming arguendo that the Court of Appeals correctly ruled that the NLRC has
jurisdiction over [Galera’s] complaint, it should have remanded the case to the
Labor Arbiter for reception of evidence on the merits of the case.
III. [Galera] is an alien, hence, can never attain a regular or permanent working
status in the Philippines.
IV. [Galera] is not entitled to recover backwages, other benefits and damages from
WPP.16

Page 71 of 166
On the other hand, in G.R. No. 169239, Galera raised the following grounds in
support of her petition:
The CA decision should be consistent with Article 279 of the Labor Code and
applicable jurisprudence, that full backwages and separation pay (when in lieu of
reinstatement), should be reckoned from time of dismissal up to time of
reinstatement (or payment of separation pay, in case separation instead of
reinstatement is awarded).
Accordingly, petitioner Galera should be awarded full backwages and separation

pay for the period from 14 December 2000 until the finality of judgment by the
respondents, or, at the very least, up to the promulgation date of the CA decision.
The individual respondents Steedman, Webster and Lansang must be held

solidarily liable with respondent WPP for the wanton and summary dismissal of
petitioner Galera, to be consistent with law and jurisprudence as well as the specific
finding of the CA of bad faith on the part of respondents. 17
This Court ordered the consolidation of G.R. Nos. 169207 and 169239 in a
resolution dated 16 January 2006.18
The Ruling of the Court
In its consolidated comment, the Office of the Solicitor General (OSG)

recommended that (A) the Decision dated 14 April 2005 of the appellate court
finding (1) Galera to be a regular employee of WPP; (2) the NLRC to have
jurisdiction over the present case; and (3) WPP to have illegally dismissed Galera,
be affirmed; and (B) the case remanded to the Labor Arbiter for the computation of
the correct monetary award. Despite the OSG’s recommendations, we see that
Galera’s failure to seek an employment permit prior to her employment poses a
serious problem in seeking relief before this Court. Hence, we settle the various
issues raised by the parties for the guidance of the bench and bar.
Whether Galera is an Employee or a Corporate Officer
Galera, on the belief that she is an employee, filed her complaint before the Labor
Arbiter. On the other hand, WPP, Steedman, Webster and Lansang contend that
Galera is a corporate officer; hence, any controversy regarding her dismissal is
under the jurisdiction of the Regional Trial Court. We agree with Galera.
Corporate officers are given such character either by the Corporation Code or by
the corporation’s by-laws. Under Section 25 of the Corporation Code, the corporate
officers are the president, secretary, treasurer and such other officers as may be
provided in the by-laws. 19 Other officers are sometimes created by the charter or
by-laws of a corporation, or the board of directors may be empowered under the
by-laws of a corporation to create additional offices as may be necessary.
Page 72 of 166
An examination of WPP’s by-laws resulted in a finding that Galera’s appointment as
a corporate officer (Vice-President with the operational title of Managing Director of
Mindshare) during a special meeting of WPP’s Board of Directors is an
appointment to a non-existent corporate office. WPP’s by-laws provided for only
one Vice-President. At the time of Galera’s appointment on 31 December 1999,
WPP already had one Vice-President in the person of Webster. Galera cannot be
said to be a director of WPP also because all five directorship positions provided in
the by-laws are already occupied. Finally, WPP cannot rely on its Amended By-
Laws to support its argument that Galera is a corporate officer. The Amended By-
Laws provided for more than one Vice-President and for two additional directors.
Even though WPP’s stockholders voted for the amendment on 31 May 2000, the
SEC approved the amendments only on 16 February 2001. Galera was dismissed
on 14 December 2000. WPP, Steedman, Webster, and Lansang did not present
any evidence that Galera’s dismissal took effect with the action of WPP’s Board of
Directors.1avvphi1
The appellate court further justified that Galera was an employee and not a
corporate officer by subjecting WPP and Galera’s relationship to the four-fold test:
(a) the selection and engagement of the employee; (b) the payment of wages; (c)
the power of dismissal; and (d) the employer’s power to control the employee with
respect to the means and methods by which the work is to be accomplished. The
appellate court found:
x x x Sections 1 and 4 of the employment contract mandate where and how often
she is to perform her work; sections 3, 5, 6 and 7 show that wages she receives are
completely controlled by x x x WPP; and sections 10 and 11 clearly state that she is
subject to the regular disciplinary procedures of x x x WPP.
Another indicator that she was a regular employee and not a corporate officer is
Section 14 of the contract, which clearly states that she is a permanent employee
— not a Vice-President or a member of the Board of Directors.
xxxx
Another indication that the Employment Contract was one of regular employment is
Section 12, which states that the rights to any invention, discovery, improvement in
procedure, trademark, or copyright created or discovered by petitioner GALERA
during her employment shall automatically belong to private respondent WPP.
Under Republic Act 8293, also known as the Intellectual Property Code, this
condition prevails if the creator of the work subject to the laws of patent or copyright
is an employee of the one entitled to the patent or copyright.
Another convincing indication that she was only a regular employee and not a
corporate officer is the disciplinary procedure under Sections 10 and 11 of the
Employment Contract, which states that her right of redress is through Mindshare’s
Chief Executive Officer for the Asia-Pacific. This implies that she was not under the
Page 73 of 166
disciplinary control of private respondent WPP’s Board of Directors (BOD), which
should have been the case if in fact she was a corporate officer because only the
Board of Directors could appoint and terminate such a corporate officer.
Although petitioner GALERA did sign the Alien Employment Permit from the
Department of Labor and Employment and the application for a 9(g) visa with the
Bureau of Immigration – both of which stated that she was private respondent’s
WPP’ Vice President – these should not be considered against her.
Assurming arguendo that her appointment as Vice-President was a valid act, it
must be noted that these appointments occurred afater she was hired as a regular
employee. After her appointments, there was no appreciable change in her duties. 20
Whether the Labor Arbiter and the NLRC
have jurisdiction over the present case
Galera being an employee, then the Labor Arbiter and the NLRC have jurisdiction
over the present case. Article 217 of the Labor Code provides:
Jurisdiction of Labor Arbiters and the Commission. — (a) Except as otherwise

provided under this Code, the Labor Arbiters shall have original and exclusive
jurisdiction to hear and decide x x x the following cases involving all workers,
whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file
involving wages, rates of pay, hours of work and other terms and conditions of
employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions
involving the legality of strikes and lockouts;
6. Except claims for Employees Compensation, Social Security, Medicare and

other maternity benefits, all other claims, arising from employer-employee relations,
including those of persons in domestic or household service, involving an amount
exceeding five thousand pesos (₱5,000.00) regardless of whether accompanied
with a claim for reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction over all cases
decided by Labor Arbiters.
Page 74 of 166
(c) Cases arising from the interpretation of collective bargaining agreements and
those arising from the interpretation or enforcement of company personnel policies
shall be disposed of by the Labor Arbiter by referring the same to the grievance
machinery and voluntary arbitration as may be provided in said agreements.
In contrast, Section 5.2 of Republic Act No. 8799, or the Securities Regulation
Code, states:
The Commission’s jurisdiction over all cases enumerated under Section 5 of

Presidential Decree No. 902-A is hereby transferred to the courts of general
jurisdiction or the appropriate Regional Trial Court: Provided, That the Supreme
Court in the exercise of its authority may designate the Regional Trial Court
branches that shall exercise jurisdiction over these cases. The Commission shall
retain jurisdiction over pending cases involving intra-corporate disputes submitted
for final resolution which should be resolved within one year from the enactment of
this Code. The Commission shall retain jurisdiction over pending suspension of
payments/rehabilitation cases filed as of 30 June 2000 until finally disposed.
The pertinent portions of Section 5 of Presidential Decree No. 902-A, mentioned

above, states:
b) Controversies arising out of intra-corporate or partnership relations, between and

among stockholders, members or associates; between any or all of them and the
corporation, partnership or association of which they are stockholders, members or
associates, respectively; and between such corporation, partnership or association
and the state insofar as it concerns their individual franchise or right to exist as
such entity;
c) Controversies in the election or appointments of directors, trustees, officers or

managers of such corporations, partnerships or associations.
Whether WPP illegally dismissed Galera
WPP’s dismissal of Galera lacked both substantive and procedural due process.
Apart from Steedman’s letter dated 15 December 2000 to Galera, WPP failed to
prove any just or authorized cause for Galera’s dismissal. Steedman’s letter to
Galera reads:
The operations are currently in a shamble. There is lack of leadership and

confidence in your abilities from within, our agency partners and some clients.
Most of the staff I spoke with felt they got more guidance and direction from Minda
than yourself. In your role as Managing Director, that is just not acceptable.

Page 75 of 166
I believe your priorities are mismanaged. The recent situation where you felt an
internal strategy meeting was more important than a new business pitch is a good
example.
You failed to lead and advise on the two new business pitches. In both cases,
those involved sort (sic) Minda’s input. As I discussed with you back in July, my
directive was for you to lead and review all business pitches. It is obvious [that]
confusion existed internally right up until the day of the pitch.
The quality output is still not to an acceptable standard, which was also part of my
directive that you needed to focus on back in July.
I do not believe you understand the basic skills and industry knowledge required to
run a media special operation.21
WPP, Steedman, Webster, and Lansang, however, failed to substantiate the

allegations in Steedman’s letter. Galera, on the other hand, presented documentary
evidence22 in the form of congratulatory letters, including one from Steedman,
which contents are diametrically opposed to the 15 December 2000 letter.
The law further requires that the employer must furnish the worker sought to be
dismissed with two written notices before termination of employment can be legally
effected: (1) notice which apprises the employee of the particular acts or omissions
for which his dismissal is sought; and (2) the subsequent notice which informs the
employee of the employer’s decision to dismiss him. Failure to comply with the
requirements taints the dismissal with illegality. 23 WPP’s acts clearly show that
Galera’s dismissal did not comply with the two-notice rule.
Whether Galera is entitled to the monetary award
WPP, Steedman, Webster, and Lansang argue that Galera is not entitled to
backwages because she is an alien. They further state that there is no guarantee
that the Bureau of Immigration and the Department of Labor and Employment will
continue to grant favorable rulings on the applications for a 9(g) visa and an Alien
Employment Permit after the expiry of the validity of Galera’s documents on 31
December 2000. WPP’s argument is a circular argument, and assumes what it
attempts to prove. Had WPP not dismissed Galera, there is no doubt in our minds
that WPP would have taken action for the approval of documents required for
Galera’s continued employment.
This is Galera’s dilemma: Galera worked in the Philippines without a proper work
permit but now wants to claim employee’s benefits under Philippine labor laws.


Page 76 of 166
Four months had passed when private respondent WPP filed before the
Bureau of Immigration an application for petitioner GALERA to receive a
working visa, wherein she was designated as Vice President of WPP. Petitioner
alleged that she was constrained to sign the application in order that she could
remain in the Philippines and retain her employment. 24
The law and the rules are consistent in stating that the employment permit must be
acquired prior to employment. The Labor Code states: "Any alien seeking
obtain an employment permit from the Department of Labor." 25 Section 4, Rule XIV,
Book 1 of the Implementing Rules and Regulations provides:
Employment permit required for entry. — No alien seeking employment, whether
as a resident or non-resident, may enter the Philippines without first securing an
employment permit from the Ministry. If an alien enters the country under a non-
working visa and wishes to be employed thereafter, he may only be allowed to be
employed upon presentation of a duly approved employment permit.
Galera cannot come to this Court with unclean hands. To grant Galera’s prayer is
to sanction the violation of the Philippine labor laws requiring aliens to secure work
permits before their employment. We hold that the status quo must prevail in the
present case and we leave the parties where they are. This ruling, however, does
not bar Galera from seeking relief from other jurisdictions.
WHEREFORE, we PARTIALLY GRANT the petitions in G.R. Nos. 169207 and

169239. We SET ASIDE the Decision of the Court of Appeals promulgated on 14
April 2005 as well as the Resolution promulgated on 1 August 2005 in CA-G.R. SP
No. 78721.
SO ORDERED.

Page 77 of 166
[7]

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 114337 September 29, 1995
NITTO ENTERPRISES, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and ROBERTO
CAPILI, respondents.
KAPUNAN, J.:
This petition for certiorari under Rule 65 of the Rules of Court seeking to annul the
decision1 rendered by public respondent National Labor Relations Commission,
which reversed the decision of the Labor Arbiter.
Briefly, the facts of the case are as follows:
Petitioner Nitto Enterprises, a company engaged in the sale of glass and aluminum
products, hired Roberto Capili sometime in May 1990 as an apprentice machinist,
molder and core maker as evidenced by an apprenticeship agreement 2 for a period
of six (6) months from May 28, 1990 to November 28, 1990 with a daily wage rate
of P66.75 which was 75% of the applicable minimum wage.
At around 1:00 p.m. of August 2, 1990, Roberto Capili who was handling a piece of
glass which he was working on, accidentally hit and injured the leg of an office
secretary who was treated at a nearby hospital.
Later that same day, after office hours, private respondent entered a workshop
within the office premises which was not his work station. There, he operated one
of the power press machines without authority and in the process injured his left
thumb. Petitioner spent the amount of P1,023.04 to cover the medication of private
respondent.
The following day, Roberto Capili was asked to resign in a letter 3 which reads:

Page 78 of 166
August 2, 1990
Wala siyang tanggap ng utos mula sa superbisor at wala siyang experiensa kung
papaano gamitin and "TOOL" sa pagbuhat ng salamin, sarili niyang desisyon ang
paggamit ng tool at may disgrasya at nadamay pa ang isang sekretarya ng
kompanya.
Sa araw ding ito limang (5) minute ang nakakalipas mula alas-singko ng hapon siya
ay pumasok sa shop na hindi naman sakop ng kanyang trabaho. Pinakialaman at
kinalikot ang makina at nadisgrasya niya ang kanyang sariling kamay.
Nakagastos ang kompanya ng mga sumusunod:
Emergency and doctor fee P715.00

Medecines (sic) and others 317.04
Bibigyan siya ng kompanya ng Siyam na araw na libreng sahod hanggang

matanggal ang tahi ng kanyang kamay.
Tatanggapin niya ang sahod niyang anim na araw, mula ika-30 ng Hulyo at ika-4
ng Agosto, 1990.
Ang kompanya ang magbabayad ng lahat ng gastos pagtanggal ng tahi ng

kanyang kamay, pagkatapos ng siyam na araw mula ika-2 ng Agosto.
Sa lahat ng nakasulat sa itaas, hinihingi ng kompanya ang kanyang resignasyon,

kasama ng kanyang comfirmasyon at pag-ayon na ang lahat sa itaas ay totoo.
Naiintindihan ko ang lahat ng nakasulat sa itaas, at ang lahat ng ito ay aking

pagkakasala sa hindi pagsunod sa alintuntunin ng kompanya.
(Sgd.) Roberto Capili

Roberto Capili
On August 3, 1990 private respondent executed a Quitclaim and Release in favor

of petitioner for and in consideration of the sum of P1,912.79. 4
Three days after, or on August 6, 1990, private respondent formally filed before the
NLRC Arbitration Branch, National Capital Region a complaint for illegal dismissal
and payment of other monetary benefits.
On October 9, 1991, the Labor Arbiter rendered his decision finding the termination
of private respondent as valid and dismissing the money claim for lack of merit. The
dispositive portion of the ruling reads:
Page 79 of 166
WHEREFORE, premises considered, the termination is valid and for cause, and
the money claims dismissed for lack of merit.
The respondent however is ordered to pay the complainant the amount of P500.00
as financial assistance.
SO ORDERED.5
Labor Arbiter Patricio P. Libo-on gave two reasons for ruling that the dismissal of
Roberto Capilian was valid. First, private respondent who was hired as an
apprentice violated the terms of their agreement when he acted with gross
negligence resulting in the injury not only to himself but also to his fellow worker.
Second, private respondent had shown that "he does not have the proper attitude
in employment particularly the handling of machines without authority and proper
training.6
On July 26, 1993, the National Labor Relations Commission issued an order
reversing the decision of the Labor Arbiter, the dispositive portion of which reads:
WHEREFORE, the appealed decision is hereby set aside. The respondent is

hereby directed to reinstate complainant to his work last performed with backwages
computed from the time his wages were withheld up to the time he is actually
reinstated. The Arbiter of origin is hereby directed to further hear complainant's
money claims and to dispose them on the basis of law and evidence obtaining.
SO ORDERED.7
The NLRC declared that private respondent was a regular employee of petitioner
by ruling thus:
As correctly pointed out by the complainant, we cannot understand how an

apprenticeship agreement filed with the Department of Labor only on June 7, 1990
could be validly used by the Labor Arbiter as basis to conclude that the complainant
was hired by respondent as a plain "apprentice" on May 28, 1990. Clearly,
therefore, the complainant was respondent's regular employee under Article 280 of
the Labor Code, as early as May 28,1990, who thus enjoyed the security of tenure
guaranteed in Section 3, Article XIII of our 1987 Constitution.
The complainant being for illegal dismissal (among others) it then behooves upon
respondent, pursuant to Art. 227(b) and as ruled in Edwin Gesulgon vs. NLRC, et
al. (G.R. No. 90349, March 5, 1993, 3rd Div., Feliciano, J.) to prove that the
dismissal of complainant was for a valid cause. Absent such proof, we cannot but
rule that the complainant was illegally dismissed. 8
On January 28, 1994, Labor Arbiter Libo-on called for a conference at which only
private respondent's representative was present.
Page 80 of 166
On April 22, 1994, a Writ of Execution was issued, which reads:
NOW, THEREFORE, finding merit in [private respondent's] Motion for Issuance of

the Writ, you are hereby commanded to proceed to the premises of [petitioner] Nitto
Enterprises and Jovy Foster located at No. l 74 Araneta Avenue, Portero, Malabon,
Metro Manila or at any other places where their properties are located and effect
the reinstatement of herein [private respondent] to his work last performed or at the
option of the respondent by payroll reinstatement.
You are also to collect the amount of P122,690.85 representing his backwages as
called for in the dispositive portion, and turn over such amount to this Office for
proper disposition.
Petitioner filed a motion for reconsideration but the same was denied.
Hence, the instant petition — for certiorari.
The issues raised before us are the following:
WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE

ABUSE OF DISCRETION IN HOLDING THAT PRIVATE RESPONDENT WAS
NOT AN APPRENTICE.
II
WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE

ABUSE OF DISCRETION IN HOLDING THAT PETITIONER HAD NOT
ADEQUATELY PROVEN THE EXISTENCE OF A VALID CAUSE IN
TERMINATING THE SERVICE OF PRIVATE RESPONDENT.
We find no merit in the petition.
Petitioner assails the NLRC's finding that private respondent Roberto Capili cannot
plainly be considered an apprentice since no apprenticeship program had yet been
filed and approved at the time the agreement was executed.
Petitioner further insists that the mere signing of the apprenticeship agreement
already established an employer-apprentice relationship.
Petitioner's argument is erroneous.
The law is clear on this matter. Article 61 of the Labor Code provides:

Page 81 of 166
Contents of apprenticeship agreement. — Apprenticeship agreements, including
the main rates of apprentices, shall conform to the rules issued by the Minister of
Labor and Employment. The period of apprenticeship shall not exceed six months.
Apprenticeship agreements providing for wage rates below the legal minimum
wage, which in no case shall start below 75% per cent of the applicable minimum
wage, may be entered into only in accordance with apprenticeship program duly
approved by the Minister of Labor and Employment. The Ministry shall develop
standard model programs of apprenticeship. (emphasis supplied)
In the case at bench, the apprenticeship agreement between petitioner and private
respondent was executed on May 28, 1990 allegedly employing the latter as an
apprentice in the trade of "care maker/molder." On the same date, an
apprenticeship program was prepared by petitioner and submitted to the
Department of Labor and Employment. However, the apprenticeship Agreement
was filed only on June 7, 1990. Notwithstanding the absence of approval by the
Department of Labor and Employment, the apprenticeship agreement was enforced
the day it was signed.
Based on the evidence before us, petitioner did not comply with the requirements of
the law. It is mandated that apprenticeship agreements entered into by the
employer and apprentice shall be entered only in accordance with the
apprenticeship program duly approved by the Minister of Labor and Employment.
Prior approval by the Department of Labor and Employment of the proposed

apprenticeship program is, therefore, a condition sine quo non before an
apprenticeship agreement can be validly entered into.
The act of filing the proposed apprenticeship program with the Department of Labor
and Employment is a preliminary step towards its final approval and does not
instantaneously give rise to an employer-apprentice relationship.
Article 57 of the Labor Code provides that the State aims to "establish a national
apprenticeship program through the participation of employers, workers and
government and non-government agencies" and "to establish apprenticeship
standards for the protection of apprentices." To translate such objectives into
existence, prior approval of the DOLE to any apprenticeship program has to be
secured as a condition sine qua non before any such apprenticeship agreement
can be fully enforced. The role of the DOLE in apprenticeship programs and
agreements cannot be debased.
Hence, since the apprenticeship agreement between petitioner and private

respondent has no force and effect in the absence of a valid apprenticeship
program duly approved by the DOLE, private respondent's assertion that he was
hired not as an apprentice but as a delivery boy ("kargador" or "pahinante")
deserves credence. He should rightly be considered as a regular employee of
petitioner as defined by Article 280 of the Labor Code:
Page 82 of 166
Art. 280. Regular and Casual Employment. — The provisions of written agreement
to the contrary notwithstanding and regardless of the oral agreement of the parties,
an employment shall be deemed to be regular where the employee has been
engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer, except where the employment has been fixed for
a specific project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or where the work or
services to be performed is seasonal in nature and the employment is for the
duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding

paragraph: Provided, That, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered a
regular employee with respect to the activity in which he is employed and his
employment shall continue while such activity exists. (Emphasis supplied)
and pursuant to the constitutional mandate to "protect the rights of workers and
promote their welfare."9
Petitioner further argues that, there is a valid cause for the dismissal of private
respondent.
There is an abundance of cases wherein the Court ruled that the twin requirements
of due process, substantive and procedural, must be complied with, before valid
dismissal exists. 10 Without which, the dismissal becomes void.
The twin requirements of notice and hearing constitute the essential elements of
due process. This simply means that the employer shall afford the worker ample
opportunity to be heard and to defend himself with the assistance of his
representative, if he so desires.
Ample opportunity connotes every kind of assistance that management must

accord the employee to enable him to prepare adequately for his defense including
legal representation. 11
As held in the case of Pepsi-Cola Bottling Co., Inc. v. NLRC: 12
The law requires that the employer must furnish the worker sought to be dismissed
with two (2) written notices before termination of employee can be legally effected:
(1) notice which apprises the employee of the particular acts or omissions for which
his dismissal is sought; and (2) the subsequent notice which informs the employee
of the employer's decision to dismiss him (Sec. 13, BP 130; Sec. 2-6 Rule XIV,
Book V, Rules and Regulations Implementing the Labor Code as amended).
Failure to comply with the requirements taints the dismissal with illegality. This
procedure is mandatory, in the absence of which, any judgment reached by
management is void and in existent (Tingson, Jr. vs. NLRC, 185 SCRA 498 [1990];
Page 83 of 166
National Service Corp. vs. NLRC, 168 SCRA 122; Ruffy vs. NLRC. 182 SCRA 365
[1990]).
The fact is private respondent filed a case of illegal dismissal with the Labor Arbiter
only three days after he was made to sign a Quitclaim, a clear indication that such
resignation was not voluntary and deliberate.
Private respondent averred that he was actually employed by petitioner as a

delivery boy ("kargador" or "pahinante").
He further asserted that petitioner "strong-armed" him into signing the

aforementioned resignation letter and quitclaim without explaining to him the
contents thereof. Petitioner made it clear to him that anyway, he did not have a
choice. 13
Petitioner cannot disguise the summary dismissal of private respondent by

orchestrating the latter's alleged resignation and subsequent execution of a
Quitclaim and Release. A judicious examination of both events belies any
spontaneity on private respondent's part.
WHEREFORE, finding no abuse of discretion committed by public respondent

National Labor Relations Commission, the appealed decision is hereby
AFFIRMED.
SO ORDERED.

Page 84 of 166
[8]

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 75112 August 17, 1992
FILAMER CHRISTIAN INSTITUTE, petitioner,

vs.
HON. INTERMEDIATE APPELLATE COURT, HON. ENRIQUE P. SUPLICO, in
his capacity as Judge of the Regional Trial Court, Branch XIV, Roxas City and
POTENCIANO KAPUNAN, SR., respondents.
Bedona & Bedona Law Office for petitioner.
Rhodora G. Kapunan for private respondents.
GUTIERREZ, JR., J.:
The private respondents, heirs of the late Potenciano Kapunan, seek

reconsideration of the decision rendered by this Court on October 16, 1990
(Filamer Christian Institute v. Court of Appeals, 190 SCRA 477) reviewing the
appellate court's conclusion that there exists an employer-employee relationship
between the petitioner and its co-defendant Funtecha. The Court ruled that the
petitioner is not liable for the injuries caused by Funtecha on the grounds that the
latter was not an authorized driver for whose acts the petitioner shall be directly and
primarily answerable, and that Funtecha was merely a working scholar who, under
Section 14, Rule X, Book III of the Rules and Regulations Implementing the Labor
Code is not considered an employee of the petitioner.
The private respondents assert that the circumstances obtaining in the present
case call for the application of Article 2180 of the Civil Code since Funtecha is no
doubt an employee of the petitioner. The private respondents maintain that under
Article 2180 an injured party shall have recourse against the servant as well as the
petitioner for whom, at the time of the incident, the servant was performing an act in
furtherance of the interest and for the benefit of the petitioner. Funtecha allegedly
did not steal the school jeep nor use it for a joy ride without the knowledge of the
school authorities.
Page 85 of 166
After a re-examination of the laws relevant to the facts found by the trial court and
the appellate court, the Court reconsiders its decision. We reinstate the Court of
Appeals' decision penned by the late Justice Desiderio Jurado and concurred in by
Justices Jose C. Campos, Jr. and Serafin E. Camilon. Applying Civil Code
provisions, the appellate court affirmed the trial court decision which ordered the
payment of the P20,000.00 liability in the Zenith Insurance Corporation policy,
P10,000.00 moral damages, P4,000.00 litigation and actual expenses, and
P3,000.00 attorney's fees.
It is undisputed that Funtecha was a working student, being a part-time janitor and
a scholar of petitioner Filamer. He was, in relation to the school, an employee even
if he was assigned to clean the school premises for only two (2) hours in the
morning of each school day.
Having a student driver's license, Funtecha requested the driver, Allan Masa, and
was allowed, to take over the vehicle while the latter was on his way home one late
afternoon. It is significant to note that the place where Allan lives is also the house
of his father, the school president, Agustin Masa. Moreover, it is also the house
where Funtecha was allowed free board while he was a student of Filamer
Christian Institute.
Allan Masa turned over the vehicle to Funtecha only after driving down a road,
negotiating a sharp dangerous curb, and viewing that the road was clear. (TSN,
April 4, 1983, pp. 78-79) According to Allan's testimony, a fast moving truck with
glaring lights nearly hit them so that they had to swerve to the right to avoid a
collision. Upon swerving, they heard a sound as if something had bumped against
the vehicle, but they did not stop to check. Actually, the Pinoy jeep swerved
towards the pedestrian, Potenciano Kapunan who was walking in his lane in the
direction against vehicular traffic, and hit him. Allan affirmed that Funtecha followed
his advise to swerve to the right. (Ibid., p. 79) At the time of the incident (6:30 P.M.)
in Roxas City, the jeep had only one functioning headlight.
Allan testified that he was the driver and at the same time a security guard of the
petitioner-school. He further said that there was no specific time for him to be off-
duty and that after driving the students home at 5:00 in the afternoon, he still had to
go back to school and then drive home using the same vehicle.
Driving the vehicle to and from the house of the school president where both Allan
and Funtecha reside is an act in furtherance of the interest of the petitioner-school.
Allan's job demands that he drive home the school jeep so he can use it to fetch
students in the morning of the next school day.
It is indubitable under the circumstances that the school president had knowledge
that the jeep was routinely driven home for the said purpose. Moreover, it is not
improbable that the school president also had knowledge of Funtecha's possession

Page 86 of 166
of a student driver's license and his desire to undergo driving lessons during the
time that he was not in his classrooms.
In learning how to drive while taking the vehicle home in the direction of Allan's
house, Funtecha definitely was not having a joy ride. Funtecha was not driving for
the purpose of his enjoyment or for a "frolic of his own" but ultimately, for the
service for which the jeep was intended by the petitioner school. (See L. Battistoni
v. Thomas, Can SC 144, 1 D.L.R. 577, 80 ALR 722 [1932]; See also Association of
Baptists for World Evangelism, Inc. v. Fieldmen's Insurance Co., Inc. 124 SCRA
618 [1983]). Therefore, the Court is constrained to conclude that the act of
Funtecha in taking over the steering wheel was one done for and in behalf of his
employer for which act the petitioner-school cannot deny any responsibility by
arguing that it was done beyond the scope of his janitorial duties. The clause
"within the scope of their assigned tasks" for purposes of raising the presumption of
liability of an employer, includes any act done by an employee, in furtherance of the
interests of the employer or for the account of the employer at the time of the
infliction of the injury or damage. (Manuel Casada, 190 Va 906, 59 SE 2d 47
[1950]) Even if somehow, the employee driving the vehicle derived some benefit
from the act, the existence of a presumptive liability of the employer is determined
by answering the question of whether or not the servant was at the time of the
accident performing any act in furtherance of his master's business. (Kohlman v.
Hyland, 210 NW 643, 50 ALR 1437 [1926]; Jameson v. Gavett, 71 P 2d 937 [1937])
Section 14, Rule X, Book III of the Rules implementing the Labor Code, on which
the petitioner anchors its defense, was promulgated by the Secretary of Labor and
Employment only for the purpose of administering and enforcing the provisions of
the Labor Code on conditions of employment. Particularly, Rule X of Book III
provides guidelines on the manner by which the powers of the Labor Secretary
shall be exercised; on what records should be kept; maintained and preserved; on
payroll; and on the exclusion of working scholars from, and inclusion of resident
physicians in the employment coverage as far as compliance with the substantive
labor provisions on working conditions, rest periods, and wages, is concerned.
In other words, Rule X is merely a guide to the enforcement of the substantive law
on labor. The Court, thus, makes the distinction and so holds that Section 14, Rule
X, Book III of the Rules is not the decisive law in a civil suit for damages instituted
by an injured person during a vehicular accident against a working student of a
school and against the school itself.
The present case does not deal with a labor dispute on conditions of employment
between an alleged employee and an alleged employer. It invokes a claim brought
by one for damages for injury caused by the patently negligent acts of a person,
against both doer-employee and his employer. Hence, the reliance on the
implementing rule on labor to disregard the primary liability of an employer under
Article 2180 of the Civil Code is misplaced. An implementing rule on labor cannot

Page 87 of 166
be used by an employer as a shield to avoid liability under the substantive
provisions of the Civil Code.
There is evidence to show that there exists in the present case an extra-contractual
obligation arising from the negligence or reckless imprudence of a person "whose
acts or omissions are imputable, by a legal fiction, to other(s) who are in a position
to exercise an absolute or limited control over (him)." (Bahia v. Litonjua and
Leynes, 30 Phil. 624 [1915])
Funtecha is an employee of petitioner Filamer. He need not have an official

appointment for a driver's position in order that the petitioner may be held
responsible for his grossly negligent act, it being sufficient that the act of driving at
the time of the incident was for the benefit of the petitioner. Hence, the fact that
Funtecha was not the school driver or was not acting within the scope of his
janitorial duties does not relieve the petitioner of the burden of rebutting the
presumption juris tantum that there was negligence on its part either in the
selection of a servant or employee, or in the supervision over him. The petitioner
has failed to show proof of its having exercised the required diligence of a good
father of a family over its employees Funtecha and Allan.
The Court reiterates that supervision includes the formulation of suitable rules and
regulations for the guidance of its employees and the issuance of proper
instructions intended for the protection of the public and persons with whom the
employer has relations through his employees. (Bahia v. Litonjua and
Leynes, supra, at p. 628; Phoenix Construction, v. Intermediate Appellate Court,
148 SCRA 353 [1987])
An employer is expected to impose upon its employees the necessary discipline

called for in the performance of any act indispensable to the business and
beneficial to their employer.
In the present case, the petitioner has not shown that it has set forth such rules and
guidelines as would prohibit any one of its employees from taking control over its
vehicles if one is not the official driver or prohibiting the driver and son of the
Filamer president from authorizing another employee to drive the school vehicle.
Furthermore, the petitioner has failed to prove that it had imposed sanctions or
warned its employees against the use of its vehicles by persons other than the
driver.
The petitioner, thus, has an obligation to pay damages for injury arising from the
unskilled manner by which Funtecha drove the vehicle. (Cangco v. Manila Railroad
Co., 38 Phil. 768, 772 [1918]). In the absence of evidence that the petitioner had
exercised the diligence of a good father of a family in the supervision of its
employees, the law imposes upon it the vicarious liability for acts or omissions of its
employees. (Umali v. Bacani, 69 SCRA 263 [1976]; Poblete v. Fabros, 93 SCRA
200 [1979]; Kapalaran Bus Liner v. Coronado, 176 SCRA 792 [1989]; Franco v.
Page 88 of 166
Intermediate Appellate Court, 178 SCRA 331 [1989]; Pantranco North Express, Inc.
v. Baesa, 179 SCRA 384 [1989]) The liability of the employer is, under Article 2180,
primary and solidary. However, the employer shall have recourse against the
negligent employee for whatever damages are paid to the heirs of the plaintiff.
It is an admitted fact that the actual driver of the school jeep, Allan Masa, was not
made a party defendant in the civil case for damages. This is quite understandable
considering that as far as the injured pedestrian, plaintiff Potenciano Kapunan, was
concerned, it was Funtecha who was the one driving the vehicle and presumably
was one authorized by the school to drive. The plaintiff and his heirs should not
now be left to suffer without simultaneous recourse against the petitioner for the
consequent injury caused by a janitor doing a driving chore for the petitioner even
for a short while. For the purpose of recovering damages under the prevailing
circumstances, it is enough that the plaintiff and the private respondent heirs were
able to establish the existence of employer-employee relationship between
Funtecha and petitioner Filamer and the fact that Funtecha was engaged in an act
not for an independent purpose of his own but in furtherance of the business of his
employer. A position of responsibility on the part of the petitioner has thus been
satisfactorily demonstrated.
WHEREFORE, the motion for reconsideration of the decision dated October 16,
1990 is hereby GRANTED. The decision of the respondent appellate court affirming
the trial court decision is REINSTATED.
SO ORDERED.

Page 89 of 166
[9]

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 122917 July 12, 1999
MARITES BERNARDO, ELVIRA GO DIAMANTE, REBECCA E. DAVID, DAVID

P. PASCUAL, RAQUEL ESTILLER, ALBERT HALLARE, EDMUND M. CORTEZ,
JOSELITO O. AGDON GEORGE P. LIGUTAN JR., CELSO M. YAZAR, ALEX G.
CORPUZ, RONALD M. DELFIN, ROWENA M. TABAQUERO, CORAZON C.
DELOS REYES, ROBERT G. NOORA, MILAGROS O. LEQUIGAN, ADRIANA F.
TATLONGHARI, IKE CABANDUCOS, COCOY NOBELLO, DORENDA
CANTIMBUHAN, ROBERT MARCELO, LILIBETH Q. MARMOLEJO, JOSE E.
SALES, ISABEL MAMAUAG, VIOLETA G. MONTES, ALBINO TECSON,
MELODY V. GRUELA, BERNADETH D. AGERO, CYNTHIA DE VERA, LANI R.
CORTEZ, MA. ISABEL B. CONCEPCION, DINDO VALERIO, ZENAIDA MATA,
ARIEL DEL PILAR, MARGARET CECILIA CANOZA, THELMA SEBASTIAN, MA.
JEANETTE CERVANTES, JEANNIE RAMIL, ROZAIDA PASCUAL, PINKY
BALOLOA, ELIZABETH VENTURA, GRACE S. PARDO and
TIMOSA, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and FAR EAST BANK AND
TRUST COMPANY, respondents.
PANGANIBAN, J.:
The Magna Carta for Disabled Persons mandates that qualified disabled persons

be granted the same terms and conditions of employment as qualified able-bodied
employees. Once they have attained the status of regular workers, they should be
accorded all the benefits granted by law, notwithstanding written or verbal contracts
to the contrary. This treatments is rooted not merely on charity or accomodation,
but on justice for all.
The Case
Challenged in the Petition for Certiorari 1 before us is the June 20, 1995

Decision2 of the National Labor Relations Commission (NLRC), 3 which affirmed the
Page 90 of 166
August, 22 1994 ruling of Labor Arbiter Cornelio L. Linsangan. The labor arbiter's
Decision disposed as follows: 4
WHEREFORE, judgment is hereby rendered dismissing the above-mentioned

complaint for lack of merit.
Also assailed is the August 4, 1995 Resolution 5 of the NLRC, which denied the
Motion for Reconsideration.
The Facts
The facts were summarized by the NLRC in this wise: 6
Complainants numbering 43 (p. 176, Records) are deaf-mutes who were hired on
various periods from 1988 to 1993 by respondent Far East Bank and Trust Co. as
Money Sorters and Counters through a uniformly worded agreement called
"Employment Contract for Handicapped Workers". (pp. 68 & 69, Records) The full
text of said agreement is quoted below:
EMPLOYMENT CONTRACT FOR
HANDICAPPED WORKERS
This Contract, entered into by and between:
FAR EAST BANK AND TRUST COMPANY, a universal banking corporation duly
organized and existing under and by virtue of the laws of the Philippines, with
business address at FEBTC Building, Muralla, Intramuros, Manila, represented
herein by its Assistant Vice President, MR. FLORENDO G. MARANAN, (hereinafter
referred to as the "BANK");
-and-
—————, ————— years old, of legal age, ————, and residing at

(hereinafter referred to as the ("EMPLOYEE").
WITNESSETH : That
WHEREAS, the BANK, cognizant of its social responsibility, realizes that there is a
need to provide disabled and handicapped persons gainful employment and
opportunities to realize their potentials, uplift their socio-economic well being and
welfare and make them productive, self-reliant and useful citizens to enable them to
fully integrate in the mainstream of society;
WHEREAS, there are certain positions in the BANK which may be filled-up by
disabled and handicapped persons, particularly deaf-mutes, and the BANK ha[s]
Page 91 of 166
been approached by some civic-minded citizens and authorized government
agencies [regarding] the possibility of hiring handicapped workers for these
positions;
WHEREAS, the EMPLOYEE is one of those handicapped workers who [were]

recommended for possible employment with the BANK;
NOW, THEREFORE, for and in consideration of the foregoing premises and in

compliance with Article 80 of the Labor Code of the Philippines as amended, the
BANK and the EMPLOYEE have entered into this Employment Contract as follows:
1. The BANK agrees to employ and train the EMPLOYEE, and the EMPLOYEE
agrees to diligently and faithfully work with the BANK, as Money
Sorter and Counter.
2. The EMPLOYEE shall perform among others, the following duties and
responsibilities:
i. Sort out bills according to color;
ii. Count each denomination per hundred, either manually or with the aid of a
counting machine;
iii. Wrap and label bills per hundred;
iv. Put the wrapped bills into bundles; and
v. Submit bundled bills to the bank teller for verification.
3. The EMPLOYEE shall undergo a training period of one (1) month, after which
the BANK shall determine whether or not he/she should be allowed to finish the
remaining term of this Contract.
4. The EMPLOYEE shall be entitled to an initial compensation of P118.00 per day,

subject to adjustment in the sole judgment of the BANK, payable every 15th and
end of the month.1âwphi1.nêt
5. The regular work schedule of the EMPLOYEE shall be five (5) days per week,
from Mondays thru Fridays, at eight (8) hours a day. The EMPLOYEE may be
required to perform overtime work as circumstance may warrant, for which overtime
work he/she [shall] be paid an additional compensation of 125% of his daily rate if
performed during ordinary days and 130% if performed during Saturday or [a] rest
day.
6. The EMPLOYEE shall likewise be entitled to the following benefits:

Page 92 of 166
i. Proportionate 13th month pay based on his basic daily wage.
ii. Five (5) days incentive leave.
iii. SSS premium payment.
7. The EMPLOYEE binds himself/herself to abide [by] and comply with all the
BANK Rules and Regulations and Policies, and to conduct himself/herself in a
manner expected of all employees of the BANK.
8. The EMPLOYEE acknowledges the fact that he/she had been employed under a
special employment program of the BANK, for which reason the standard hiring
requirements of the BANK were not applied in his/her case. Consequently, the
EMPLOYEE acknowledges and accepts the fact that the terms and conditions of
the employment generally observed by the BANK with respect to the BANK's
regular employee are not applicable to the EMPLOYEE, and that therefore, the
terms and conditions of the EMPLOYEE's employment with the BANK shall be
governed solely and exclusively by this Contract and by the applicable rules and
regulations that the Department of Labor and Employment may issue in connection
with the employment of disabled and handicapped workers. More specifically, the
EMPLOYEE hereby acknowledges that the provisions of Book Six of the Labor
Code of the Philippines as amended, particularly on regulation of employment and
separation pay are not applicable to him/her.
9. The Employment Contract shall be for a period of six (6) months or from —— to
—— unless earlier terminated by the BANK for any just or reasonable cause. Any
continuation or extension of this Contract shall be in writing and therefore this
Contract will automatically expire at the end of its terms unless renewed in writing
by the BANK.
IN WITNESS WHEREOF, the parties, have hereunto affixed their signature[s] this
—— day of ———, ——— at Intramuros, Manila, Philippines.
In 1988, two (2) deaf-mutes were hired under this Agreement; in 1989 another two
(2); in 1990, nineteen (19); in 1991 six (6); in 1992, six (6) and in 1993, twenty-one
(21). Their employment[s] were renewed every six months such that by the time
this case arose, there were fifty-six (56) deaf-mutes who were employed by
respondent under the said employment agreement. The last one was Thelma
Malindoy who was employed in 1992 and whose contract expired on July 1993.
xxx xxx xxx
Disclaiming that complainants were regular employees, respondent Far East Bank
and Trust Company maintained that complainants who are a special class of
workers — the hearing impaired employees were hired temporarily under [a]
special employment arrangement which was a result of overtures made by some
Page 93 of 166
civic and political personalities to the respondent Bank; that complainant[s] were
hired due to "pakiusap" which must be considered in the light of the context career
and working environment which is to maintain and strengthen a corps of
professionals trained and qualified officers and regular employees who are
baccalaureate degree holders from excellent schools which is an unbending policy
in the hiring of regular employees; that in addition to this, training continues so that
the regular employee grows in the corporate ladder; that the idea of hiring
handicapped workers was acceptable to them only on a special arrangement basis;
that it was adopted the special program to help tide over a group of workers such
as deaf-mutes like the complainants who could do manual work for the respondent
Bank; that the task of counting and sorting of bills which was being performed by
tellers could be assigned to deaf-mutes that the counting and sorting of money are
tellering works which were always logically and naturally part and parcel of the
tellers' normal functions; that from the beginning there have been no separate
items in the respondent Bank plantilla for sortes or counters; that the tellers
themselves already did the sorting and counting chore as a regular feature and
integral part of their duties (p. 97, Records); that through the "pakiusap" of Arturo
Borjal, the tellers were relieved of this task of counting and sorting bills in favor of
deaf-mutes without creating new positions as there is no position either in the
respondent or in any other bank in the Philippines which deals with purely counting
and sorting of bills in banking operations.
Petitioners specified when each of them was hired and dimissed, viz: 7
NAME OF PETITIONER WORKPLACE Date Hired Date

Dismissed
1. MARITES BERNARDO Intramuros 12-Nov-90 17-Nov-93
2. ELVIRA GO DIAMANTE Intramuros 24-Jan-90 11-Jan-94
3. REBECCA E. DAVID Intramuros 16-Apr-90 23-Oct-93
4. DAVID P. PASCUAL Bel-Air 15-Oct-88 21-Nov-94
5. RAQUEL ESTILLER Intramuros 2-Jul-92 4-Jan-94
6. ALBERT HALLARE West 4-Jan-91 9-Jan-94
7. EDMUND M. CORTEZ Bel-Air 15-Jan-91 3-Dec-93
8. JOSELITO O. AGDON Intramuros 5-Nov-90 17-Nov-93
9. GEORGE P. LIGUTAN JR. Intramuros 6-Sep-89 19-Jan-94
10. CELSO M. YAZAR Intramuros 8-Feb-93 8-Aug-93
11. ALEX G. CORPUZ Intramuros 15-Feb-93 15-Aug-93
12. RONALD M. DELFIN Intramuros 22-Feb-93 22-Aug-93
13. ROWENA M. TABAQUERO Intramuros 22-Feb-93 22-Aug-93
14. CORAZON C. DELOS REYES Intramuros 8-Feb-93 8-Aug-93
15. ROBERT G. NOORA Intramuros 15-Feb-93 15-Aug-93
16. MILAGROS O. LEQUIGAN Intramuros 1-Feb-93 1-Aug-93

Page 94 of 166
17. ADRIANA F. TATLONGHARI Intramuros 22-Jan-93 22-Jul-93
18. IKE CABUNDUCOS Intramuros 24-Feb-93 24-Aug-93
19. COCOY NOBELLO Intramuros 22-Feb-93 22-Aug-93
20. DORENDA CATIMBUHAN Intramuros 15-Feb-93 15-Aug-93
21. ROBERT MARCELO West 31 JUL 93 8 1-Aug-93
22. LILIBETH Q. MARMOLEJO West 15-Jun-90 21-Nov-93
23. JOSE E. SALES West 6-Aug-92 12-Oct-93
24. ISABEL MAMAUAG West 8-May-92 10-Nov-93
25. VIOLETA G. MONTES Intramuros 2-Feb-90 15-Jan-94
26. ALBINO TECSON Intramuros 7-Nov-91 10-Nov-93
27. MELODY B. GRUELA West 28-Oct-91 3-Nov-93
28. BERNADETH D. AGERO West 19-Dec-90 27-Dec-93
29. CYNTHIA DE VERA Bel-Air 26-Jun-90 3-Dec-93
30. LANI R. CORTEZ Bel-Air 15-Oct-88 10-Dec-93
31. MARIA ISABEL West 6-Sep-90 6-Feb-94
B.CONCEPCION
32. DINDO VALERIO Intramuros 30-May-93 30-Nov-93
33. ZENAIDA MATA Intramuros 10-Feb-93 10-Aug-93
34. ARIEL DEL PILAR Intramuros 24-Feb-93 24-Aug-93
35. MARGARET CECILIA CANOZA Intramuros 27-Jul-90 4-Feb-94
36. THELMA SEBASTIAN Intramuros 12-Nov-90 17-Nov-93
37. MA. JEANETTE CERVANTES West 6-Jun-92 7-Dec-93
38. JEANNIE RAMIL Intramuros 23-Apr-90 12-Oct-93
39. ROZAIDA PASCUAL Bel-Air 20-Apr-89 29-Oct-93
40. PINKY BALOLOA West 3-Jun-91 2-Dec-93
41. ELIZABETH VENTURA West 12-Mar-90 FEB 94 [sic]
42. GRACE S. PARDO West 4-Apr-90 13-Mar-94
43. RICO TIMOSA Intramuros 28-Apr-93 28-Oct-93
As earlier noted, the labor arbiter and, on appeal, the NLRC ruled against herein
petitioners. Hence, this recourse to this Court. 9
In affirming the ruling of the labor arbiter that herein petitioners could not be
deemed regular employees under Article 280 of the Labor Code, as amended,
Respondent Commission ratiocinated as follows:
We agree that Art. 280 is not controlling herein. We give due credence to the
conclusion that complainants were hired as an accommodation to [the]
Page 95 of 166
recommendation of civic oriented personalities whose employment[s] were covered
by . . . Employment Contract[s] with special provisions on duration of contract as
specified under Art. 80. Hence, as correctly held by the Labor Arbiter a quo, the
terms of the contract shall be the law between the parties. 10
The NLRC also declared that the Magna Carta for Disabled Persons was not
applicable, "considering the prevailing circumstances/milieu of the case."
Issues
In their Memorandum, petitioners cite the following grounds in support of their

cause:
I. The Honorable Commission committed grave abuse of discretion in holding that

the petitioners — money sorters and counters working in a bank — were not
regular employees.
II. The Honorable Commission committed grave abuse of discretion in holding that
the employment contracts signed and renewed by the petitioners — which provide
for a period of six (6) months — were valid.
III. The Honorable Commission committed grave abuse of discretion in not applying
the provisions of the Magna Carta for the Disabled (Republic Act No. 7277), on
proscription against discrimination against disabled persons. 11
In the main, the Court will resolve whether petitioners have become regular
employees.
This Court's Ruling
The petition is meritorious. However, only the employees, who worked for more
than six months and whose contracts were renewed are deemed regular. Hence,
their dismissal from employement was illegal.
Preliminary Matter:
Propriety of Certiorari
Respondent Far East Bank and Trust Company argues that a review of the findings
of facts of the NLRC is not allowed in a petition for certiorari. Specifically, it
maintains that the Court cannot pass upon the findings of public respondent that
petitioners were not regular employees.
True, the Court, as a rule, does not review the factual findings of public
respondents in a certiorari proceeding. In resolving whether the petitioners have
become regular employees, we shall not change the facts found by the public
Page 96 of 166
respondent. Our task is merely to determine whether the NLRC committed grave
abuse of discretion in applying the law to the established facts, as above-quoted
from the assailed Decision.
Main Issue
Are Petitioners Regular Employee?
Petitioners maintain that they should be considered regular employees, because

their task as money sorters and counters was necessary and desirable to the
business of respondent bank. They further allege that their contracts served merely
to preclude the application of Article 280 and to bar them from becoming regular
employees.
Private respondent, on the other hand, submits that petitioners were hired only as
"special workers and should not in any way be considered as part of the regular
complement of the Bank." 12 Rather, they were "special" workers under Article 80 of
the Labor Code. Private respondent contends that it never solicited the services of
petitioners, whose employment was merely an "accommodation" in response to the
requests of government officials and civic-minded citizens. They were told from the
start, "with the assistance of government representatives," that they could not
become regular employees because there were no plantilla positions for "money
sorters," whose task used to be performed by tellers. Their contracts were renewed
several times, not because of need "but merely for humanitarian reasons."
Respondent submits that "as of the present, the "special position" that was created
for the petitioners no longer exist[s] in private respondent [bank], after the latter had
decided not to renew anymore their special employment contracts."
At the outset, let it be known that this Court appreciates the nobility of private
respondent's effort to provide employment to physically impaired individuals and to
make them more productive members of society. However, we cannot allow it to
elude the legal consequences of that effort, simply because it now deems their
employment irrelevant. The facts, viewed in light of the Labor Code and the Magna
Carta for Disabled Persons, indubitably show that the petitioners, except sixteen of
them, should be deemed regular employees. As such, they have acquired legal
rights that this Court is duty-bound to protect and uphold, not as a matter of
compassion but as a consequence of law and justice.
The uniform employment contracts of the petitioners stipulated that they shall be
trained for a period of one month, after which the employer shall determine whether
or not they should be allowed to finish the 6-month term of the contract.
Furthermore, the employer may terminate the contract at any time for a just and
reasonable cause. Unless renewed in writing by the employer, the contract shall
automatically expire at the end of the term.1âwphi1.nêt

Page 97 of 166
According to private respondent, the employment contracts were prepared in
accordance with Article 80 of the Labor code, which provides;
Art. 80. Employment agreement. — Any employer who employs handicapped

workers shall enter into an employment agreement with them, which agreement
shall include:
(a) The names and addresses of the handicapped workers to be employed;
(b) The rate to be paid the handicapped workers which shall be not less than
seventy five (75%) per cent of the applicable legal minimum wage;
(c) The duration of employment period; and
(d) The work to be performed by handicapped workers.
The employment agreement shall be subject to inspection by the Secretary of

Labor or his duly authorized representatives.
The stipulations in the employment contracts indubitably conform with the

aforecited provision. Succeeding events and the enactment of RA No. 7277 (the
Magna Carta for Disabled Persons), 13 however, justify the application of Article 280
of the Labor Code.
Respondent bank entered into the aforesaid contract with a total of 56 handicapped
workers and renewed the contracts of 37 of them. In fact, two of them worked from
1988 to 1993. Verily, the renewal of the contracts of the handicapped workers and
the hiring of others lead to the conclusion that their tasks were beneficial and
necessary to the bank. More important, these facts show that they were qualified to
perform the responsibilities of their positions. In other words, their disability did not
render them unqualified or unfit for the tasks assigned to them.
In this light, the Magna Carta for Disabled Persons mandates that a
qualified disabled employee should be given the same terms and conditions of
employment as a qualified able-bodied person. Section 5 of the Magna Carta
provides:
Sec. 5. Equal Opportunity for Employment. — No disabled person shall be denied

access to opportunities for suitable employment. A qualified disabled employee
shall be subject to the same terms and conditions of employment and the same
compensation, privileges, benefits, fringe benefits, incentives or allowances as a
qualified able bodied person.
The fact that the employees were qualified disabled persons necessarily removes
the employment contracts from the ambit of Article 80. Since the Magna Carta

Page 98 of 166
accords them the rights of qualified able-bodied persons, they are thus covered by
Article 280 of the Labor Code, which provides:
Art. 280. Regular and Casual Employment. — The provisions of written agreement

to the contrary notwithstanding and regardless of the oral agreement of the parties,
an employment shall be deemed to be regular where the employee has been
engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer, except where the employment has been fixed for
a specific project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or where the work or
services to be performed is seasonal in nature and the employment is for the
An employment shall be deemed to be casual if it is not covered by the preceding

paragraph: Provided, That, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered as
regular employee with respect to the activity in which he is employed and his
employment shall continue while such activity exists.
The test of whether an employee is regular was laid down in De Leon v. NLRC, 14 in
which this Court held:
The primary standard, therefore, of determining regular employment is the

reasonable connection between the particular activity performed by the employee
in relation to the usual trade or business of the employer. The test is whether the
former is usually necessary or desirable in the usual business or trade of the
employer. The connection can be determined by considering the nature of the work
performed and its relation to the scheme of the particular business or trade in its
entirety. Also if the employee has been performing the job for at least one year,
even if the performance is not continuous and merely intermittent, the law deems
repeated and continuing need for its performance as sufficient evidence of the
necessity if not indispensibility of that activity to the business. Hence, the
employment is considered regular, but only with respect to such activity, and while
such activity exist.
Without a doubt, the task of counting and sorting bills is necessary and desirable to
the business of respondent bank. With the exception of sixteen of them, petitioners
performed these tasks for more than six months. Thus, the following twenty-seven
petitioners should be deemed regular employees: Marites Bernardo, Elvira Go
Diamante, Rebecca E. David, David P. Pascual, Raquel Estiller, Albert Hallare,
Edmund M. Cortez, Joselito O. Agdon, George P. Ligutan Jr., Lilibeth Q.
Marmolejo, Jose E. Sales, Isabel Mamauag, Violeta G. Montes, Albino Tecson,
Melody V. Gruela, Bernadeth D. Agero, Cynthia de Vera, Lani R. Cortez, Ma. Isabel
B. Concepcion, Margaret Cecilia Canoza, Thelma Sebastian, Ma. Jeanette
Cervantes, Jeannie Ramil, Rozaida Pascual, Pinky Baloloa, Elizabeth Ventura and
Grace S. Pardo.
Page 99 of 166
As held by the Court, "Articles 280 and 281 of the Labor Code put an end to the
pernicious practice of making permanent casuals of our lowly employees by the
simple expedient of extending to them probationary appointments, ad
infinitum."15 The contract signed by petitioners is akin to a probationary
employment, during which the bank determined the employees' fitness for the job.
When the bank renewed the contract after the lapse of the six-month probationary
period, the employees thereby became regular employees. 16 No employer is
allowed to determine indefinitely the fitness of its employees.
As regular employees, the twenty-seven petitioners are entitled to security of

tenure; that is, their services may be terminated only for a just or authorized cause.
Because respondent failed to show such cause, 17 these twenty-seven petitioners
are deemed illegally dismissed and therefore entitled to back wages and
reinstatement without loss of seniority rights and other privileges. 18 Considering the
allegation of respondent that the job of money sorting is no longer available
because it has been assigned back to the tellers to whom it originally
belonged, 18 petitioners are hereby awarded separation pay in lieu of
reinstatement. 20
Because the other sixteen worked only for six months, they are not deemed regular
employees and hence not entitled to the same benefits.
Applicability of the
Brent Ruling
Respondent bank, citing Brent School v. Zamora 21 in which the Court upheld the
validity of an employment contract with a fixed term, argues that the parties entered
into the contract on equal footing. It adds that the petitioners had in fact an
advantage, because they were backed by then DSWD Secretary Mita Pardo de
Tavera and Representative Arturo Borjal.
We are not persuaded. The term limit in the contract was premised on the fact that
the petitioners were disabled, and that the bank had to determine their fitness for
the position. Indeed, its validity is based on Article 80 of the Labor Code. But as
noted earlier, petitioners proved themselves to be qualified disabled persons who,
under the Magna Carta for Disabled Persons, are entitled to terms and conditions
of employment enjoyed by qualified able-bodied individuals; hence, Article 80 does
not apply because petitioners are qualified for their positions. The validation of the
limit imposed on their contracts, imposed by reason of their disability, was a glaring
instance of the very mischief sought to be addressed by the new law.
Moreover, it must be emphasized that a contract of employment is impressed with

public interest. 22 Provisions of applicable statutes are deemed written into the
contract, and the "parties are not at liberty to insulate themselves and their
relationships from the impact of labor laws and regulations by simply contracting
Page 100 of 166
with each other." 23 Clearly, the agreement of the parties regarding the period of
employment cannot prevail over the provisions of the Magna Carta for Disabled
Persons, which mandate that petitioners must be treated as qualified able-bodied
employees.
Respondent's reason for terminating the employment of petitioners is instructive.

Because the Bangko Sentral ng Pilipinas (BSP) required that cash in the bank be
turned over to the BSP during business hours from 8:00 a.m. to 5:00 p.m.,
respondent resorted to nighttime sorting and counting of money. Thus, it reasons
that this task "could not be done by deaf mutes because of their physical limitations
as it is very risky for them to travel at night." 24 We find no basis for this argument.
Travelling at night involves risks to handicapped and able-bodied persons alike.
This excuse cannot justify the termination of their employment.
Other Grounds Cited by Respondent
Respondent argues that petitioners were merely "accommodated" employees. This

fact does not change the nature of their employment. As earlier noted, an employee
is regular because of the nature of work and the length of service, not because of
the mode or even the reason for hiring them.
Equally unavailing are private respondent's arguments that it did not go out of its
way to recruit petitioners, and that its plantilla did not contain their positions. In L. T.
Datu v. NLRC, 25 the Court held that "the determination of whether employment is
casual or regular does not depend on the will or word of the employer, and the
procedure of hiring . . . but on the nature of the activities performed by the
employee, and to some extent, the length of performance and its continued
existence."
Private respondent argues that the petitioners were informed from the start that
they could not become regular employees. In fact, the bank adds, they agreed with
the stipulation in the contract regarding this point. Still, we are not persuaded. The
well-settled rule is that the character of employment is determined not by
stipulations in the contract, but by the nature of the work performed. 26 Otherwise,
no employee can become regular by the simple expedient of incorporating this
condition in the contract of employment.
In this light, we iterate our ruling in Romares v. NLRC: 27
Art. 280 was emplaced in our statute books to prevent the circumvention of the
employee's right to be secure in his tenure by indiscriminately and completely ruling
out all written and oral agreements inconsistent with the concept of regular
employment defined therein. Where an employee has been engaged to perform
activities which are usually necessary or desirable in the usual business of the
employer, such employee is deemed a regular employee and is entitled to security
of tenure notwithstanding the contrary provisions of his contract of employment.
Page 101 of 166
xxx xxx xxx
At this juncture, the leading case of Brent School, Inc. v. Zamora proves

instructive. As reaffirmed in subsequent cases, this Court has upheld the legality of
fixed-term employment. It ruled that the decisive determinant in "term employment"
should not be the activities that the employee is called upon to perform but the day
certain agreed upon the parties for the commencement and termination of their
employment relationship. But this Court went on to say that where from the
circumstances it is apparent that the periods have been imposed to preclude
acquisition of tenurial security by the employee, they should be struck down or
disregarded as contrary to public policy and morals.
In rendering this Decision, the Court emphasizes not only the constitutional bias in
favor of the working class, but also the concern of the State for the plight of the
disabled. The noble objectives of Magna Carta for Disabled Persons are not based
merely on charity or accommodation, but on justice and the equal treatment
of qualified persons, disabled or not. In the present case, the handicap of
petitioners (deaf-mutes) is not a hindrance to their work. The eloquent proof of this
statement is the repeated renewal of their employment contracts. Why then should
they be dismissed, simply because they are physically impaired? The Court
believes, that, after showing their fitness for the work assigned to them, they should
be treated and granted the same rights like any other regular employees.
In this light, we note the Office of the Solicitor General's prayer joining the
petitioners' cause. 28
WHEREFORE, premises considered, the Petition is hereby GRANTED. The June

20, 1995 Decision and the August 4, 1995 Resolution of the NLRC are REVERSED
and SET ASIDE. Respondent Far East Bank and Trust Company is hereby
ORDERED to pay back wages and separation pay to each of the following twenty-
seven (27) petitioners, namely, Marites Bernardo, Elvira Go Diamante, Rebecca E.
David, David P. Pascual, Raquel Estiller, Albert Hallare, Edmund M. Cortez,
Joselito O. Agdon, George P. Ligutan Jr., Liliberh Q. Marmolejo, Jose E. Sales,
Isabel Mamauag, Violeta G. Montes, Albino Tecson, Melody V. Gruela, Bernadeth
D. Agero, Cynthia de Vera, Lani R. Cortez, Ma. Isabel B. Concepcion, Margaret
Cecilia Canoza, Thelma Sebastian, Ma. Jeanette Cervantes, Jeannie Ramil,
Rozaida Pascual, Pinky Baloloa, Elizabeth Ventura and Grace S. Pardo. The NLRC
is hereby directed to compute the exact amount due each of said employees,
pursuant to existing laws and regulations, within fifteen days from the finality of this
Decision. No costs.1âwphi1.nêt
SO ORDERED.
[4]
Page 102 of 166
G.R. No. 205727. January 18, 2017.*

RUTCHER T. DAGASDAS, petitioner, vs. GRAND PLACEMENT AND GENERAL
SERVICES CORPORATION, respondent.
Remedial Law; Civil Procedure; Appeals; Petition for Review on Certiorari; 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.—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. In this case, the CA
and the NLRC arrived at divergent factual findings anent Dagasdas’ termination. As
such, the Court deems it necessary to reexamine these findings and determine
whether the CA has sufficient basis to annul the NLRC Decision, and set aside its
finding that Dagasdas was illegally dismissed from work.
Labor Law; Management Prerogative; 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.—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. Noncompliance 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.
Same; Security of Tenure; Lex Loci Contractus; Since the employment
contracts of Overseas Filipino Workers (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, primarily the Labor
Code of the Philippines and its implementing rules and regulations (IRR); Thus,
among other constitutional rights.—Security of tenure remains even if employees,
particularly the Overseas Filipino Workers (OFWs), 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, primarily the Labor Code of the
Philippines and its implementing rules and regulations. 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. Thus, even if a Filipino is employed abroad, he or she is entitled to
security of tenure, among other constitutional rights.
Same; Probationary Employees; 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

Page 103 of 166
standards made known to the employee at the time of engagement.—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.
standards from which his work will be gauged. In the contract he signed while still in
the Philippines, Dagasdas was employed as Network Technician; on the other
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.

Same; Employment Contracts; Overseas Filipino Workers; Unless the
employment contract of an Overseas Filipino Worker (OFW) is processed through
the Philippine Overseas Employment Administration (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.—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. 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.
Same; Termination of Employment; Overseas Filipino Workers; 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.—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 termination. 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. Here, no prior notice of purported infraction, and such
opportunity to explain on any accusation against him was given to Dagasdas. 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,
Page 104 of 166
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.
Same; Quitclaims; 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.—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.
Appeals.
DECISION
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, 2010 2 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 Decision 4 of the Labor Arbiter (LA)
dismissing the Complaint for lack of merit.
Also challenged is the January 28, 2013 Resolution 5 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

Page 105 of 166
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 training 8 and pre-departure orientation as
Network Technician.9 Nonetheless, his Job Offer 10 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 contract 16 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 notice 20 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 Quitclaim 22 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.
Page 106 of 166
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
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.
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

Page 107 of 166
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.
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
Page 108 of 166
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

Page 109 of 166
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,
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:

Page 110 of 166
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:
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

Page 111 of 166
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
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
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.

Page 112 of 166
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.

Page 113 of 166
[2] G.R. No. 93666. April 22, 1991.*
GENERAL MILLING CORPORATION and EARL TIMOTHY CONE,

petitioners, vs. HON. RUBEN D. TORRES, in his capacity as Secretary of Labor
and Employment, HON. BIENVENIDO E. LAGUESMA, in his capacity as Acting
Secretary of Labor and Employment, and BASKETBALL COACHES
ASSOCIATION OF THE PHILIPPINES, respondents.
Contracts; Provisions of applicable laws especially those relating to matters

affected with public policy, are deemed written into contracts.—Neither can
petitioners validly claim that implementation of respondent Secretary’s decision
would amount to an impairment of the obligations of contracts. The provisions of
the Labor Code and its Implementing Rules and Regulations requiring alien
employment permits were in existence long before petitioners entered into their
contract of employment. It is firmly settled that provisions of applicable laws,
written into contracts. Private parties cannot constitutionally contract away the
Labor Law; The Department of Labor is the agency vested with jurisdiction to

determine the question of availability of local workers.—Petitioners’ contention that
respondent Secretary of Labor should have deferred to the findings of Commission
on Immigration and Deportation as to the necessity of employing petitioner Cone, is
again, bereft of legal basis. The Labor Code itself specifically empowers
respondent Secretary to make a determination as to the availability of the services
of a “person in the Philippines who is competent, able and willing at the time of
application to perform the services for which an alien is desired.” In short, the
Department of Labor is the agency vested with jurisdiction to determine the
question of availability of local workers. The constitutional validity of legal
provisions granting such jurisdiction and authority and requiring proof of non-
PETITION for certiorari to review the decision of the Department of Labor and
Employment.
On 1 May 1989, the National Capital Region of the Department of Labor and
Employment issued Alien Employment Permit No. M-0689-3-535 in favor of
petitioner Earl Timothy Cone, a United States citizen, as sports consultant and
assistant coach for petitioner General Milling Corporation ("GMC").
On 27 December 1989, petitioners GMC and Cone entered into a contract of

employment whereby the latter undertook to coach GMC's basketball team.
Page 114 of 166
On 15 January 1990, the Board of Special Inquiry of the Commission on
Immigration and Deportation approved petitioner Cone's application for a change of
admission status from temporary visitor to pre-arranged employee.
On 9 February 1990, petitioner GMC requested renewal of petitioner Cone's alien

employment permit. GMC also requested that it be allowed to employ Cone as full-
fledged coach. The DOLE Regional Director, Luna Piezas, granted the request on
15 February 1990.
On 18 February 1990, Alien Employment Permit No. M-02903-881, valid until 25

December 1990, was issued.
Private respondent Basketball Coaches Association of the Philippines ("BCAP")

appealed the issuance of said alien employment permit to the respondent
Secretary of Labor who, on 23 April 1990, issued a decision ordering cancellation
of petitioner Cone's employment permit on the ground that there was no showing
that there is no person in the Philippines who is competent, able and willing to
perform the services required nor that the hiring of petitioner Cone would redound
to the national interest.
Petitioner GMC filed a Motion for Reconsideration and two (2) Supplemental
Motions for Reconsideration but said Motions were denied by Acting Secretary of
Labor Bienvenido E. Laguesma in an Order dated 8 June 1990.
Petitioners are now before the Court on a Petition for Certiorari, dated 14 June
1990, alleging that:
1. respondent Secretary of Labor gravely abused his discretion when he

revoked petitioner Cone's alien employment permit; and
2. Section 6 (c), Rule XIV, Book I of the Omnibus Rules Implementing the
Labor Code is null and void as it is in violation of the enabling law as the
Labor Code does not empower respondent Secretary to determine if the
employment of an alien would redound to national interest.
Deliberating on the present Petition for Certiorari, the Court considers that

petitioners have failed to show any grave abuse of discretion or any act without or
in excess of jurisdiction on the part of respondent Secretary of Labor in rendering
his decision, dated 23 April 1990, revoking petitioner Cone's Alien Employment
Permit.
The alleged failure to notify petitioners of the appeal filed by private respondent
BCAP was cured when petitioners were allowed to file their Motion for
Reconsideration before respondent Secretary of Labor. 1

Page 115 of 166
Petitioner GMC's claim that hiring of a foreign coach is an employer's prerogative
has no legal basis at all. Under Article 40 of the Labor Code, an employer seeking
employment of an alien must first obtain an employment permit from the
Department of Labor. Petitioner GMC's right to choose whom to employ is, of
course, limited by the statutory requirement of an alien employment permit.
Petitioners will not find solace in the equal protection clause of the Constitution. As
pointed out by the Solicitor-General, no comparison can be made between
petitioner Cone and Mr. Norman Black as the latter is "a long time resident of the
country," and thus, not subject to the provisions of Article 40 of the Labor Code
which apply only to "non-resident aliens." In any case, the term "non-resident alien"
and its obverse "resident alien," here must be given their technical connotation
under our law on immigration.
Neither can petitioners validly claim that implementation of respondent Secretary's

decision would amount to an impairment of the obligations of contracts. The
provisions of the Labor Code and its Implementing Rules and Regulations requiring
alien employment permits were in existence long before petitioners entered into
their contract of employment. It is firmly settled that provisions of applicable laws,
written into contracts.2 Private parties cannot constitutionally contract away the
Petitioners' contention that respondent Secretary of Labor should have deferred to

the findings of Commission on Immigration and Deportation as to the necessity of
employing petitioner Cone, is, again, bereft of legal basis. The Labor Code itself
specifically empowers respondent Secretary to make a determination as to the
availability of the services of a "person in the Philippines who is competent, able
and willing at the time of application to perform the services for which an alien is
desired."3
In short, the Department of Labor is the agency vested with jurisdiction to

determine the question of availability of local workers. The constitutional validity of
legal provisions granting such jurisdiction and authority and requiring proof of non-
Petitioners apparently also question the validity of the Implementing Rules and
Regulations, specifically Section 6 (c), Rule XIV, Book I of the Implementing Rules,
as imposing a condition not found in the Labor Code itself. Section 6 (c), Rule XIV,
Book I of the Implementing Rules, provides as follows:
Section 6. Issuance of Employment Permit –– the Secretary of Labor may

issue an employment permit to the applicant based on:

Page 116 of 166
a) Compliance by the applicant and his employer with the requirements of
Section 2 hereof;
b) Report of the Bureau Director as to the availability or non-availability of

any person in the Philippines who is competent and willing to do the job for
which the services of the applicant are desired.
(c) His assessment as to whether or not the employment of the applicant will

redound to the national interest;
(d) Admissibility of the alien as certified by the Commission on Immigration

and Deportation;
(e) The recommendation of the Board of Investments or other appropriate

government agencies if the applicant will be employed in preferred areas of
investments or in accordance with the imperative of economic development;
x x x x x x x x x
(Emphasis supplied)
Article 40 of the Labor Code reads as follows:
Art. 40. Employment per unit of non-resident aliens. –– Any alien seeking

admission to the Philippines for employment purposes and any domestic or
foreign employer who desires to engage an alien for employment in the
Philippines shall obtain an employment permit from the Department of
Labor.
The employment permit may be issued to a non-resident alien or to the

applicant employer after a determination of the non-availability of a person in
the Philippines who is competent, able and willing at the time of application
to perform the services for which the alien is desired.
For an enterprise registered in preferred areas of investments, said

employment permit may be issued upon recommendation of the government
agency charged with the supervision of said registered enterprise.
(Emphasis supplied)
Petitioners apparently suggest that the Secretary of Labor is not authorized to take
into account the question of whether or not employment of an alien applicant would
"redound to the national interest" because Article 40 does not explicitly refer to
such assessment. This argument (which seems impliedly to concede that the
relationship of basketball coaching and the national interest is tenuous and unreal)
is not persuasive. In the first place, the second paragraph of Article 40 says: "[t]he
employment permit may be issued to a non-resident alien or to the applicant
Page 117 of 166
for which the alien is desired." The permissive language employed in the Labor
Code indicates that the authority granted involves the exercise of discretion on the
part of the issuing authority. In the second place, Article 12 of the Labor Code sets
forth a statement of objectives that the Secretary of Labor should, and indeed must,
take into account in exercising his authority and jurisdiction granted by the Labor
Code,
Art. 12. Statement of Objectives. –– It is the policy of the State:
a) To promote and maintain a state of full employment through improved

manpower training, allocation and utilization;
x x x x x x x x x
c) To facilitate a free choice of available employment by persons seeking

work in conformity with the national interest;
d) To facilitate and regulate the movement of workers in conformity with the

national interest;
e) To regulate the employment of aliens, including the establishment of a

registration and/or work permit system;
x x x x x x x x x
Thus, we find petitioners' arguments on the above points of constitutional law too
insubstantial to require further consideration.1avvphi1
Petitioners have very recently manifested to this Court that public respondent
Secretary of Labor has reversed his earlier decision and has issued an
Employment Permit to petitioner Cone. Petitioners seek to withdraw their Petition
for Certiorari on the ground that it has become moot and academic.
While ordinarily this Court would dismiss a petition that clearly appears to have
become moot and academic, the circumstances of this case and the nature of the
questions raised by petitioners are such that we do not feel justified in leaving those
questions unanswered.4
Moreover, assuming that an alien employment permit has in fact been issued to
petitioner Cone, the basis of the reversal by the Secretary of Labor of his earlier
decision does not appear in the record. If such reversal is based on some view of
constitutional law or labor law different from those here set out, then such
employment permit, if one has been issued, would appear open to serious legal
objections.
Page 118 of 166
ACCORDINGLY, the Court Resolved to DISMISS the Petition for certiorari for lack
of merit. Costs against petitioners.

Page 119 of 166
[3] G.R. No. 169207. March 25, 2010.*

WEBSTER, and NOMINADA LANSANG, petitioners, vs. JOCELYN M. GALERA,
respondent.
G.R. No. 169239. March 25, 2010.*
JOCELYN M. GALERA, petitioner, vs. WPP MARKETING COMMUNICATIONS,

INC., JOHN STEEDMAN, MARK WEBSTER, and NOMINADA LANSANG,
respondents.
Corporation Law; Corporate Officers; Under Section 25 of the Corporation Code,

the corporate officers are the president, secretary, treasurer and such other officers
as may be provided in the by-laws.—Corporate officers are given such character
either by the Corporation Code or by the corporation’s by-laws. Under Section 25 of
the Corporation Code, the corporate officers are the president, secretary, treasurer
and such other officers as may be provided in the by-laws. Other officers are
sometimes created by the charter or by-laws of a corporation, or the board of
directors may be empowered under the by-laws of a corporation to create
additional offices as may be necessary.
Labor Law; Termination of Employment; Employer must furnish the worker sought
to be dismissed with two written notices before termination of employment can be
legally effected; Failure to comply with the requirements taints the dismissal with
illegality.—The law further requires that the employer must furnish the worker
sought to be dismissed with two written notices before termination of employment
can be legally effected: (1) notice which apprises the employee of the particular
acts or omissions for which his dismissal is sought; and (2) the subsequent notice
which informs the employee of the employer’s decision to dismiss him. Failure to
comply with the requirements taints the dismissal with illegality. WPP’s acts clearly
show that Galera’s dismissal did not comply with the two-notice rule.
Same; Labor Code; Recruitment; Employment Permit; The law and the rules are
consistent in stating that the employment permit must be acquired prior to
employment.—This is Galera’s dilemma: Galera worked in the Philippines without a
proper work permit but now wants to claim employee’s benefits under Philippine
labor laws. The law and the rules are consistent in stating that the employment
permit must be acquired prior to employment. The Labor Code states: “Any alien
seeking admission to the Philippines for employment purposes and any domestic or
foreign employer who desires to engage an alien for employment in the Philippines
shall obtain an employment permit from the Department of Labor.”
PETITIONS for review on certiorari of the decision and resolution of the Court of
Appeals.
Page 120 of 166
DECISION
CARPIO, Acting C.J.:
The Case
G.R. Nos. 169207 and 169239 are petitions for review 1 assailing the
Decision2 promulgated on 14 April 2005 as well as the Resolution 3 promulgated on
1 August 2005 of the Court of Appeals (appellate court) in CA-G.R. SP No. 78721.
The appellate court granted and gave due course to the petition filed by Jocelyn M.
Galera (Galera). The appellate court’s decision reversed and set aside that of the
National Labor Relations Commission (NLRC), and directed WPP Marketing
Communications, Inc. (WPP) to pay Galera backwages, separation pay, unpaid
housing benefit, unpaid personal and accident insurance benefits, cash value under
the company’s pension plan, 30 days paid holiday benefit, moral damages,
exemplary damages, 10% of the total judgment award as attorney’s fees, and costs
of the suit.
The Facts
The appellate court narrated the facts as follows:
Petitioner is Jocelyn Galera (GALERA), a [sic] American citizen who was recruited
from the United States of America by private respondent John Steedman,
Chairman-WPP Worldwide and Chief Executive Officer of Mindshare, Co., a
corporation based in Hong Kong, China, to work in the Philippines for private
respondent WPP Marketing Communications, Inc. (WPP), a corporation registered
and operating under the laws of Philippines. GALERA accepted the offer and she
signed an Employment Contract entitled "Confirmation of Appointment and
Statement of Terms and Conditions" (Annex B to Petition for Certiorari). The
relevant portions of the contract entered into between the parties are as follows:
Particulars:
Name : Jocelyn M. Galera
Address : 163 Mediterranean Avenue
Hayward, CA 94544
Position : Managing Director
Mindshare Philippines
Annual Salary : Peso 3,924,000
Start Date : 1 September 1999

Page 121 of 166
Commencement Date : 1 September 1999
(for continuous service)
Office : Mindshare Manila
6. Housing Allowance
The Company will provide suitable housing in Manila at a maximum cost

(including management fee and other associated costs) of Peso 576,000 per
annum.
7. Other benefits.
The Company will provide you with a fully maintained company car and a
driver.
The Company will continue to provide medical, health, life and personal
accident insurance plans, to an amount not exceeding Peso 300,000 per
annum, in accordance with the terms of the respective plans, as provided by
JWT Manila.
The Company will reimburse you and your spouse one way business class
air tickets from USA to Manila and the related shipping and relocation cost
not exceeding US$5,000 supported by proper documentation. If you leave
the Company within one year, you will reimburse the Company in full for all
costs of the initial relocation as described therein.
You will participate in the JWT Pension Plan under the terms of this plan, the
Company reserves the right to transfer this benefit to a Mindshare Pension
Plan in the future, if so required.
8. Holidays
You are entitled to 20 days paid holiday in addition to public holidays per
calendar year to be taken at times agreed with the Company. Carry-over of
unused accrued holiday entitlement into a new holiday year will not normally
be allowed. No payment will be made for holidays not taken. On termination
of your employment, unless you have been summarily dismissed, you will be
entitled to receive payment for unused accrued holiday pay. Any holiday
taken in excess of your entitlement shall be deducted from your final salary
payment.
9. Leave Due to Sickness or Injury
The maximum provision for sick leave is 15 working days per calendar year.

Page 122 of 166
12. Invention/Know-How
Any discovery, invention, improvement in procedure, trademark, trade name,

designs, copyrights or get-ups made, discovered or created by you during
the continuance of your employment hereunder relating to the business of
the Company shall belong to and shall be the absolute property of the
Company. If required to do so by the Company (whether during or after the
termination of your employment) you shall at the expense of the company
execute all instruments and do all things necessary to vest in ownership for
all other rights, title and interests (including any registered rights therein) in
such discovery, invention, improvement in procedure, trademark, trade
name, design, copyright or get-up in the Company (or its Nominee)
absolutely and as sole beneficial owner.
14. Notice.
The first three months of your employment will be a trial period during which
either you or the Company may terminate your employment on one week’s
notice. If at the end of that period, the Company is satisfied with your
performance, you will become a permanent employee. Thereafter you will
give Company and the Company will give you three months notice of
termination of employment. The above is always subject to the following: (1)
the Company’s right to terminate the contract of employment on no or short
notice where you are in breach of contract; (2) your employment will at any
event cease without notice on your retirement date when you are 60 years of
age.
SIGNED JOCELYN M. GALERA 8-16-99

Date of Birth [sic] 12-25-55

Four months had passed when private respondent WPP filed before the Bureau of
Immigration an application for petitioner GALERA to receive a working visa,
wherein she was designated as Vice President of WPP. Petitioner alleged that she
was constrained to sign the application in order that she could remain in the
Philippines and retain her employment.
Then, on December 14, 2000, petitioner GALERA alleged she was verbally notified
by private respondent STEEDMAN that her services had been terminated from
private respondent WPP. A termination letter followed the next day. 4

Page 123 of 166
On 3 January 2001, Galera filed a complaint for illegal dismissal, holiday pay,
service incentive leave pay, 13th month pay, incentive plan, actual and moral
damages, and attorney’s fees against WPP and/or John Steedman (Steedman),
Mark Webster (Webster) and Nominada Lansang (Lansang). The case was
docketed as NLRC NCR Case No. 30-01-00044-01.
The Labor Arbiter’s Ruling
In his Decision dated 31 January 2002, Labor Arbiter Edgardo M. Madriaga (Arbiter
Madriaga) held WPP, Steedman, Webster, and Lansang liable for illegal dismissal
and damages. Arbiter Madriaga stated that Galera was not only illegally dismissed
but was also not accorded due process. Arbiter Madriaga explained, thus:
[WPP] failed to observe the two-notice rule. [WPP] through respondent Steedman
for a five (5) minute meeting on December 14, 2000 where she was verbally told
that as of that day, her employment was being terminated. [WPP] did not give
[Galera] an opportunity to defend herself and explain her side. [Galera] was even
prohibited from reporting for work that day and was told not to report for work the
next day as it would be awkward for her and respondent Steedman to be in the
same premises after her termination. [WPP] only served [Galera] her written notice
of termination only on 15 December 2001, one day after she was verbally apprised
thereof.
The law mandates that the dismissal must be properly done otherwise, the
termination is gravely defective and may be declared unlawful as we hereby hold
[Galera’s] dismissal to be illegal and unlawful. Where there is no showing of a clear,
valid and legal cause for the termination of employment, the law considers the
matter a case of illegal dismissal and the burden is on the employer to prove that
the termination was for a valid or authorized cause. The law mandates that both the
substantive and procedural aspects of due process should be observed. The facts
clearly show that respondents were remiss on both aspects. Perforce, the dismissal
is void and unlawful.
xxxx
Considering the work performance and achievements of [Galera] for the year 2000,
we do not find any basis for the alleged claim of incompetence by herein
respondents. Had [Galera] been really incompetent, she would not have been able
to generate enormous amounts [sic] of revenues and business for [WPP]. She also
appears to be well liked as a leader by her subordinates, who have come forth in
support of [Galera]. These facts remain undisputed by respondents.
A man’s job being a property right duly protected by our laws, an employer who
deprives an employee [of] the right to defend himself is liable for damages
consistent with Article 32 of the Civil Code. To allow an employer to terminate the
employment of his worker based merely on allegations without proof places the
Page 124 of 166
[employee] in an uncertain situation. The unflinching rule in illegal dismissal cases
is that the employer bears the burden of proof.
In the instant case, respondents have not been able to muster evidence to counter
[Galera’s] allegations. [Galera’s] allegations remain and stand absent proof from
respondents rebutting them. Hence, our finding of illegal dismissal against
respondents who clearly have conspired in bad faith to deprive [Galera] of her right
to substantive and procedural due process.5
The dispositive portion of Arbiter Madriaga’s decision reads as follows:
WHEREFORE, premises considered, we hereby hold herein respondents liable for

illegal dismissal and damages, and award to [Galera], by virtue of her expatriate
status, the following:
a. Reinstatement without loss of seniority rights.
b. Backwages amounting to $120,000 per year at ₱50.00 to US $1

exchange rate, 13th month pay, transportation and housing benefits.
c. Remuneration for business acquisitions amounting to Two Million Eight

Hundred Fifty Thousand Pesos (₱2,850,000.00) and Media Plowback
Incentive equivalent to Three Million Pesos (₱3,000,000.00) or a total of not
less than One Hundred Thousand US Dollars ($100,000.00).
d. US Tax Protection of up to 35% coverage equivalent to Thirty Eight

Thousand US Dollars ($38,000).
e. Moral damages including implied defamation and punitive damages

equivalent to Two Million Dollars (US$2,000,000.00).
f. Exemplary damages equivalent to One Million Dollars ($1,000,000.00).
g. Attorney’s fees of 10% of the total award herein.
SO ORDERED.6
The First Division of the NLRC reversed the ruling of Arbiter Madriaga. In its
Decision7 promulgated on 19 February 2003, the NLRC stressed that Galera was
WPP’s Vice-President, and therefore, a corporate officer at the time she was
removed by the Board of Directors on 14 December 2000. The NLRC stated thus:
It matters not that her having been elected by the Board to an added position of
being a member of the Board of Directors did not take effect as her May 31, 2000
Page 125 of 166
election to such added position was conditioned to be effective upon approval by
SEC of the Amended By-Laws, an approval which took place only in February 21,
2001, i.e., after her removal on December 14, 2000. What counts is, at the time of
her removal, she continued to be WPP’s Vice-President, a corporate officer, on
hold over capacity.
Ms. Galera’s claim that she was not a corporate officer at the time of her removal
because her May 31, 2000 election as Vice President for Media, under WPP’s
Amended By-Laws, was subject to the approval by the Securities and Exchange
Commission and that the SEC approved the Amended By-Laws only in February
2001. Such claim is unavailing. Even if Ms. Galera’s subsequent election as Vice
President for Media on May 31, 2000 was subject to approval by the SEC, she
continued to hold her previous position as Vice President under the December 31,
1999 election until such time that her successor is duly elected and qualified. It is a
basic principle in corporation law, which principle is also embodied in WPP’s by-
laws, that a corporate officer continues to hold his position as such until his
successor has been duly elected and qualified. When Ms. Galera was elected as
Vice President on December 31, 1999, she was supposed to have held that
position until her successor has been duly elected and qualified. The record shows
that Ms. Galera was not replaced by anyone. She continued to be Vice President of
WPP with the same operational title of Managing Director for Mindshare and
continued to perform the same functions she was performing prior to her May 31,
2000 election.
In the recent case of Dily Dany Nacpil v. International Broadcasting Corp., the
definition of corporate officer for purposes of intra-corporate controversy was even
broadened to include a Comptroller/Assistant Manager who was appointed by the
General Manager, and whose appointment was later approved by the Board of
Directors. In this case, the position of comptroller was not even expressly
mentioned in the By-Laws of the corporation, and yet, the Supreme Court found
him to be a corporate officer. The Court ruled that —
(since) petitioner’s appointment as comptroller required the approval and formal

action of IBC’s Board of Directors to become valid, it is clear therefore that
petitioner is a corporate officer whose dismissal may be the subject of a
controversy cognizable by the SEC... Had the petitioner been an ordinary
employee, such board action would not have been required.
Such being the case, the imperatives of law require that we hold that the Arbiter
below had no jurisdiction over Galera’s case as, again, she was a corporate officer
at the time of her removal.
WHEREFORE, the appeals of petitioner from the Decision of Labor Arbiter

Edgardo Madriaga dated January 31, 2002 and his Order dated March 21, 2002,
respectively, are granted. The January 31, 2002 decision of the Labor Arbiter is set
aside for being null and void and the temporary restraining order we issued on April
Page 126 of 166
24, 2002 is hereby made permanent. The complaint of Jocelyn Galera is dismissed
for lack of jurisdiction.
SO ORDERED.8
In its Resolution9 promulgated on 4 June 2003, the NLRC further stated:
We are fully convinced that this is indeed an intra-corporate dispute which is

beyond the labor arbiter’s jurisdiction. These consolidated cases clearly [involve]
the relationship between a corporation and its officer and is properly within the
definition of an intra-corporate relationship which, under P.D. No. 902-A, is within
the jurisdiction of the SEC (now the commercial courts). Such being the case, We
are constrained to rule that the Labor Arbiter below had no jurisdiction over Ms.
Galera’s complaint for illegal dismissal.
WHEREFORE, the motion for reconsideration filed by Ms. Galera is hereby denied
for lack of merit. We reiterate our February 19, 2003 Decision setting aside the
Labor Arbiter’s Decision dated January 31, 2002 for being null and void.
SO ORDERED.10
Galera assailed the NLRC’s decision and resolution before the appellate court and
raised a lone assignment of error.
The National Labor Relations Commission acted with grave abuse of discretion
amounting to lack or excess of jurisdiction when it reversed the decision of the
Labor Arbiter not on the merits but for alleged lack of jurisdiction. 11
The Decision of the Appellate Court
The appellate court reversed and set aside the decision of the NLRC. The appellate
court ruled that the NLRC’s dismissal of Galera’s appeal is not in accord with
jurisprudence. A person could be considered a "corporate officer" only if appointed
as such by a corporation’s Board of Directors, or if pursuant to the power given
them by either the Articles of Incorporation or the By-Laws. 12
The appellate court explained:
A corporation, through its board of directors, could only act in the manner and
within the formalities, if any, prescribed by its charter or by the general law. If the
action of the Board is ultra vires such is motu proprio void ab initio and without legal
effect whatsoever. The by-laws of a corporation are its own private laws which
substantially have the same effect as the laws of the corporation. They are, in
effect, written into the charter. In this sense, they beome part of the fundamental
law of the corporation with which the corporation and its directors and officers must
comply.
Page 127 of 166
Even if petitioner GALERA had been appointed by the Board of Directors on
December 31, 1999, private respondent WPP’s By-Laws provided for only one
Vice-President, a position already occupied by private respondent Webster. The
same defect also stains the Board of Directors’ appointment of petitioner GALERA
as a Director of the corporation, because at that time the By-Laws provided for only
five directors. In addition, the By-laws only empowered the Board of Directors to
appoint a general manager and/or assistant general manager as corporate officers
in addition to a chairman, president, vice-president and treasurer. There is no
mention of a corporate officer entitled "Managing Director."
Hence, when the Board of Directors enacted the Resolutions of December 31,
1999 and May 31, 2000, it exceeded its authority under the By-Laws and are,
therefore, ultra vires. Although private respondent WPP sought to amend these
defects by filing Amended By-Laws with the Securities and Exchange Commission,
they did not validate the ultra vires resolutions because the Amended By-Laws did
not take effect until February 16, 2001, when it was approved by the SEC. Since
by-laws operate only prospectively, they could not validate the ultra
vires resolutions.13
The dispositive portion of the appellate court’s decision reads:
WHEREFORE, the petition is hereby GRANTED and GIVEN DUE COURSE. The
assailed Decision of the National Labor Relations Commission is hereby
REVERSED and SET ASIDE and a new one is entered DIRECTING private
respondent WPP MARKETING COMMUNICATIONS, INC. to:
1. Pay [Galera] backwages at the peso equivalent of US$120,000.00 per

annum plus three months from her summary December 14, 2000 dismissal
up to March 14, 2001 because three months notice is required under the
contract, plus 13th month pay, bonuses and general increases to which she
would have been normally entitled, had she not been dismissed and had she
not been forced to stop working, including US tax protection of up to 35%
coverage which she had been enjoying as an expatriate;
2. Pay x x x GALERA the peso equivalent of US$185,000.00 separation pay

(1 ½ years);
3. Pay x x x GALERA any unpaid housing benefit for the 18 ½ months of her
employment in the service to the Company as an expatriate in Manila,
Philippines at the rate of ₱576,000 per year; unpaid personal and accident
insurance benefits for premiums at the rate of ₱300,000.00 per year;
whatever cash value in the JWT Pension Plan; and thirty days paid holiday
benefit under the contract for the 1 ½ calendar years with the Company;
4. Pay x x x GALERA the reduced amount of PhP2,000,000.00 as moral

damages;
Page 128 of 166
5. Pay [Galera] the reduced amount of PhP1,000,000.00 as exemplary
damages;
6. Pay [Galera] an amount equivalent to 10% of the judgment award as

attorney’s fees;
7. Pay the cost of the suit.
SO ORDERED.14
Respondents filed a motion for reconsideration on 5 May 2005. Galera filed a

motion for partial reconsideration and/or clarification on the same date. The
appellate court found no reason to revise or reverse its previous decision and
subsequently denied the motions in a Resolution promulgated on 1 August 2005. 15
The Issues
WPP, Steedman, Webster, and Lansang raised the following grounds in G.R. No.
169207:
I. The Court of Appeals seriously erred in ruling that the NLRC has
jurisdiction over [Galera’s] complaint because she was not an employee.
[Galera] was a corporate officer of WPP from the beginning of her term until
her removal from office.
II. Assuming arguendo that the Court of Appeals correctly ruled that the
NLRC has jurisdiction over [Galera’s] complaint, it should have remanded
the case to the Labor Arbiter for reception of evidence on the merits of the
case.
III. [Galera] is an alien, hence, can never attain a regular or permanent

working status in the Philippines.
IV. [Galera] is not entitled to recover backwages, other benefits and

damages from WPP.16
On the other hand, in G.R. No. 169239, Galera raised the following grounds in
support of her petition:
The CA decision should be consistent with Article 279 of the Labor Code and
applicable jurisprudence, that full backwages and separation pay (when in lieu of
reinstatement), should be reckoned from time of dismissal up to time of
reinstatement (or payment of separation pay, in case separation instead of
reinstatement is awarded).

Page 129 of 166
Accordingly, petitioner Galera should be awarded full backwages and separation
pay for the period from 14 December 2000 until the finality of judgment by the
respondents, or, at the very least, up to the promulgation date of the CA decision.
The individual respondents Steedman, Webster and Lansang must be held

solidarily liable with respondent WPP for the wanton and summary dismissal of
petitioner Galera, to be consistent with law and jurisprudence as well as the specific
finding of the CA of bad faith on the part of respondents. 17
This Court ordered the consolidation of G.R. Nos. 169207 and 169239 in a
resolution dated 16 January 2006.18
The Ruling of the Court
In its consolidated comment, the Office of the Solicitor General (OSG)

recommended that (A) the Decision dated 14 April 2005 of the appellate court
finding (1) Galera to be a regular employee of WPP; (2) the NLRC to have
jurisdiction over the present case; and (3) WPP to have illegally dismissed Galera,
be affirmed; and (B) the case remanded to the Labor Arbiter for the computation of
the correct monetary award. Despite the OSG’s recommendations, we see that
Galera’s failure to seek an employment permit prior to her employment poses a
serious problem in seeking relief before this Court. Hence, we settle the various
issues raised by the parties for the guidance of the bench and bar.
Whether Galera is an Employee or a Corporate Officer
Galera, on the belief that she is an employee, filed her complaint before the Labor
Arbiter. On the other hand, WPP, Steedman, Webster and Lansang contend that
Galera is a corporate officer; hence, any controversy regarding her dismissal is
under the jurisdiction of the Regional Trial Court. We agree with Galera.
Corporate officers are given such character either by the Corporation Code or by
the corporation’s by-laws. Under Section 25 of the Corporation Code, the corporate
officers are the president, secretary, treasurer and such other officers as may be
provided in the by-laws. 19 Other officers are sometimes created by the charter or
by-laws of a corporation, or the board of directors may be empowered under the
by-laws of a corporation to create additional offices as may be necessary.
An examination of WPP’s by-laws resulted in a finding that Galera’s appointment as

a corporate officer (Vice-President with the operational title of Managing Director of
Mindshare) during a special meeting of WPP’s Board of Directors is an
appointment to a non-existent corporate office. WPP’s by-laws provided for only
one Vice-President. At the time of Galera’s appointment on 31 December 1999,
WPP already had one Vice-President in the person of Webster. Galera cannot be
said to be a director of WPP also because all five directorship positions provided in
the by-laws are already occupied. Finally, WPP cannot rely on its Amended By-
Page 130 of 166
Laws to support its argument that Galera is a corporate officer. The Amended By-
Laws provided for more than one Vice-President and for two additional directors.
Even though WPP’s stockholders voted for the amendment on 31 May 2000, the
SEC approved the amendments only on 16 February 2001. Galera was dismissed
on 14 December 2000. WPP, Steedman, Webster, and Lansang did not present
any evidence that Galera’s dismissal took effect with the action of WPP’s Board of
Directors.1avvphi1
The appellate court further justified that Galera was an employee and not a
corporate officer by subjecting WPP and Galera’s relationship to the four-fold test:
(a) the selection and engagement of the employee; (b) the payment of wages; (c)
the power of dismissal; and (d) the employer’s power to control the employee with
respect to the means and methods by which the work is to be accomplished. The
appellate court found:
x x x Sections 1 and 4 of the employment contract mandate where and how often
she is to perform her work; sections 3, 5, 6 and 7 show that wages she receives are
completely controlled by x x x WPP; and sections 10 and 11 clearly state that she is
subject to the regular disciplinary procedures of x x x WPP.
Another indicator that she was a regular employee and not a corporate officer is
Section 14 of the contract, which clearly states that she is a permanent employee
— not a Vice-President or a member of the Board of Directors.
xxxx
Another indication that the Employment Contract was one of regular employment is
Section 12, which states that the rights to any invention, discovery, improvement in
procedure, trademark, or copyright created or discovered by petitioner GALERA
during her employment shall automatically belong to private respondent WPP.
Under Republic Act 8293, also known as the Intellectual Property Code, this
condition prevails if the creator of the work subject to the laws of patent or copyright
is an employee of the one entitled to the patent or copyright.
Another convincing indication that she was only a regular employee and not a
corporate officer is the disciplinary procedure under Sections 10 and 11 of the
Employment Contract, which states that her right of redress is through Mindshare’s
Chief Executive Officer for the Asia-Pacific. This implies that she was not under the
disciplinary control of private respondent WPP’s Board of Directors (BOD), which
should have been the case if in fact she was a corporate officer because only the
Board of Directors could appoint and terminate such a corporate officer.
Although petitioner GALERA did sign the Alien Employment Permit from the
Department of Labor and Employment and the application for a 9(g) visa with the
Bureau of Immigration – both of which stated that she was private respondent’s
WPP’ Vice President – these should not be considered against her.
Page 131 of 166
Assurming arguendo that her appointment as Vice-President was a valid act, it
must be noted that these appointments occurred afater she was hired as a regular
employee. After her appointments, there was no appreciable change in her duties. 20
Whether the Labor Arbiter and the NLRC have jurisdiction over the present
case
Galera being an employee, then the Labor Arbiter and the NLRC have jurisdiction
over the present case. Article 217 of the Labor Code provides:
Jurisdiction of Labor Arbiters and the Commission. — (a) Except as otherwise

provided under this Code, the Labor Arbiters shall have original and exclusive
jurisdiction to hear and decide x x x the following cases involving all workers,
whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers

may file involving wages, rates of pay, hours of work and other terms and
conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising
from the employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including
questions involving the legality of strikes and lockouts;
6. Except claims for Employees Compensation, Social Security, Medicare

and other maternity benefits, all other claims, arising from employer-
employee relations, including those of persons in domestic or household
service, involving an amount exceeding five thousand pesos (₱5,000.00)
regardless of whether accompanied with a claim for reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction over

all cases decided by Labor Arbiters.
(c) Cases arising from the interpretation of collective bargaining

agreements and those arising from the interpretation or enforcement
of company personnel policies shall be disposed of by the Labor
Arbiter by referring the same to the grievance machinery and
voluntary arbitration as may be provided in said agreements.
In contrast, Section 5.2 of Republic Act No. 8799, or the Securities Regulation
Code, states:
Page 132 of 166
The Commission’s jurisdiction over all cases enumerated under Section 5 of
Presidential Decree No. 902-A is hereby transferred to the courts of general
jurisdiction or the appropriate Regional Trial Court: Provided, That the Supreme
Court in the exercise of its authority may designate the Regional Trial Court
branches that shall exercise jurisdiction over these cases. The Commission shall
retain jurisdiction over pending cases involving intra-corporate disputes submitted
for final resolution which should be resolved within one year from the enactment of
this Code. The Commission shall retain jurisdiction over pending suspension of
payments/rehabilitation cases filed as of 30 June 2000 until finally disposed.
The pertinent portions of Section 5 of Presidential Decree No. 902-A, mentioned

above, states:
b) Controversies arising out of intra-corporate or partnership relations,

between and among stockholders, members or associates; between any or
all of them and the corporation, partnership or association of which they are
stockholders, members or associates, respectively; and between such
corporation, partnership or association and the state insofar as it concerns
their individual franchise or right to exist as such entity;
c) Controversies in the election or appointments of directors, trustees,

officers or managers of such corporations, partnerships or associations.
Whether WPP illegally dismissed Galera
WPP’s dismissal of Galera lacked both substantive and procedural due process.
Apart from Steedman’s letter dated 15 December 2000 to Galera, WPP failed to
prove any just or authorized cause for Galera’s dismissal. Steedman’s letter to
Galera reads:
The operations are currently in a shamble. There is lack of leadership and

confidence in your abilities from within, our agency partners and some clients.
Most of the staff I spoke with felt they got more guidance and direction from Minda
than yourself. In your role as Managing Director, that is just not acceptable.
I believe your priorities are mismanaged. The recent situation where you felt an
internal strategy meeting was more important than a new business pitch is a good
example.
You failed to lead and advise on the two new business pitches. In both cases,
those involved sort (sic) Minda’s input. As I discussed with you back in July, my
directive was for you to lead and review all business pitches. It is obvious [that]
confusion existed internally right up until the day of the pitch.

Page 133 of 166
The quality output is still not to an acceptable standard, which was also part of my
directive that you needed to focus on back in July.
I do not believe you understand the basic skills and industry knowledge required to
run a media special operation.21
WPP, Steedman, Webster, and Lansang, however, failed to substantiate the

allegations in Steedman’s letter. Galera, on the other hand, presented documentary
evidence22 in the form of congratulatory letters, including one from Steedman,
which contents are diametrically opposed to the 15 December 2000 letter.
The law further requires that the employer must furnish the worker sought to be
dismissed with two written notices before termination of employment can be legally
effected: (1) notice which apprises the employee of the particular acts or omissions
for which his dismissal is sought; and (2) the subsequent notice which informs the
employee of the employer’s decision to dismiss him. Failure to comply with the
requirements taints the dismissal with illegality. 23 WPP’s acts clearly show that
Galera’s dismissal did not comply with the two-notice rule.
Whether Galera is entitled to the monetary award
WPP, Steedman, Webster, and Lansang argue that Galera is not entitled to
backwages because she is an alien. They further state that there is no guarantee
that the Bureau of Immigration and the Department of Labor and Employment will
continue to grant favorable rulings on the applications for a 9(g) visa and an Alien
Employment Permit after the expiry of the validity of Galera’s documents on 31
December 2000. WPP’s argument is a circular argument, and assumes what it
attempts to prove. Had WPP not dismissed Galera, there is no doubt in our minds
that WPP would have taken action for the approval of documents required for
Galera’s continued employment.
This is Galera’s dilemma: Galera worked in the Philippines without a proper work
permit but now wants to claim employee’s benefits under Philippine labor laws.

Four months had passed when private respondent WPP filed before the
Bureau of Immigration an application for petitioner GALERA to receive a
working visa, wherein she was designated as Vice President of WPP. Petitioner
alleged that she was constrained to sign the application in order that she could
remain in the Philippines and retain her employment. 24

Page 134 of 166
The law and the rules are consistent in stating that the employment permit must be
acquired prior to employment. The Labor Code states: "Any alien seeking
obtain an employment permit from the Department of Labor." 25 Section 4, Rule XIV,
Book 1 of the Implementing Rules and Regulations provides:
Employment permit required for entry. — No alien seeking employment, whether
as a resident or non-resident, may enter the Philippines without first securing an
employment permit from the Ministry. If an alien enters the country under a non-
working visa and wishes to be employed thereafter, he may only be allowed to be
employed upon presentation of a duly approved employment permit.
Galera cannot come to this Court with unclean hands. To grant Galera’s prayer is
to sanction the violation of the Philippine labor laws requiring aliens to secure work
permits before their employment. We hold that the status quo must prevail in the
present case and we leave the parties where they are. This ruling, however, does
not bar Galera from seeking relief from other jurisdictions.
WHEREFORE, we PARTIALLY GRANT the petitions in G.R. Nos. 169207 and

169239. We SET ASIDE the Decision of the Court of Appeals promulgated on 14
April 2005 as well as the Resolution promulgated on 1 August 2005 in CA-G.R. SP
No. 78721.
SO ORDERED.

Page 135 of 166
[4] G.R. No. 114337. September 29, 1995.*
NITTO ENTERPRISES, petitioner, vs. NATIONAL LABOR RELATIONS

COMMISSION, and ROBERTO CAPILI, respondents.
Labor Law; Apprenticeship Agreements; Prior approval by the Department of

Labor and Employment of the proposed apprenticeship program is a condition sine
qua non before an apprenticeship agreement can be validly entered into.—In the
case at bench, the apprenticeship agreement between petitioner and private
apprentice in the trade of “care maker/molder.” On the same date, an
the day it was signed. Based on the evidence before us, petitioner did not comply
with the requirements of the law. It is mandated that apprenticeship agreements
entered into by the employer and apprentice shall be entered only in accordance
with the apprenticeship program duly approved by the Minister of Labor and
Employment. Prior approval by the Department of Labor and Employment of the
proposed apprenticeship program is, therefore, a condition sine qua non before an
Same; Same; Where the apprenticeship agreement has no force and effect, the

worker hired as apprentice should be considered as a regular employee.—Hence,
since the apprenticeship agreement between petitioner and private respondent has
no force and effect in the absence of a valid apprenticeship program duly approved
by the DOLE, private respondent’s assertion that he was hired not as an apprentice
but as a delivery boy (“kargador” or “pahinante”) deserves credence. He should
rightly be considered as a regular employee of petitioner as defined by Article 280
of the Labor Code.
Same; Dismissals; Due Process; The twin requirements of due process,

substantive and procedural, must be complied with before valid dismissal exists,
otherwise the dismissal becomes void.—There is an abundance of cases wherein
the Court ruled that the twin requirements of due process, substantive and
procedural, must be complied with, before valid dismissal exists. Without which, the
dismissal becomes void. The twin requirements of notice and hearing constitute the
essential elements of due process. This simply means that the employer shall
afford the worker ample opportunity to be heard and to defend himself with the
assistance of his representative, if he so desires. Ample opportunity connotes every
kind of assistance that management must accord the employee to enable him to
prepare adequately for his defense including legal representation.
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.

Page 136 of 166
This petition for certiorari under Rule 65 of the Rules of Court seeking to annul the
decision1 rendered by public respondent National Labor Relations Commission,
which reversed the decision of the Labor Arbiter.
Briefly, the facts of the case are as follows:
Petitioner Nitto Enterprises, a company engaged in the sale of glass and aluminum
products, hired Roberto Capili sometime in May 1990 as an apprentice machinist,
molder and core maker as evidenced by an apprenticeship agreement 2 for a period
of six (6) months from May 28, 1990 to November 28, 1990 with a daily wage rate
of P66.75 which was 75% of the applicable minimum wage.
At around 1:00 p.m. of August 2, 1990, Roberto Capili who was handling a piece of
glass which he was working on, accidentally hit and injured the leg of an office
secretary who was treated at a nearby hospital.
Later that same day, after office hours, private respondent entered a workshop
within the office premises which was not his work station. There, he operated one
of the power press machines without authority and in the process injured his left
thumb. Petitioner spent the amount of P1,023.04 to cover the medication of private
respondent.
The following day, Roberto Capili was asked to resign in a letter 3 which reads:
A
u
g
u
st
2,
1
9
9
0
Wala siyang tanggap ng utos mula sa superbisor at wala siyang

experiensa kung papaano gamitin and "TOOL" sa pagbuhat ng
salamin, sarili niyang desisyon ang paggamit ng tool at may disgrasya
at nadamay pa ang isang sekretarya ng kompanya.
Sa araw ding ito limang (5) minute ang nakakalipas mula alas-singko
ng hapon siya ay pumasok sa shop na hindi naman sakop ng
kanyang trabaho. Pinakialaman at kinalikot ang makina at
nadisgrasya niya ang kanyang sariling kamay.
Page 137 of 166
Nakagastos ang kompanya ng mga sumusunod:
Emergency and doctor fee P715.00

Medecines (sic) and others 317.04
Bibigyan siya ng kompanya ng Siyam na araw na libreng sahod

hanggang matanggal ang tahi ng kanyang kamay.
Tatanggapin niya ang sahod niyang anim na araw, mula ika-30 ng

Hulyo at ika-4 ng Agosto, 1990.
Ang kompanya ang magbabayad ng lahat ng gastos pagtanggal ng

tahi ng kanyang kamay, pagkatapos ng siyam na araw mula ika-2 ng
Agosto.
Sa lahat ng nakasulat sa itaas, hinihingi ng kompanya ang kanyang

resignasyon, kasama ng kanyang comfirmasyon at pag-ayon na ang
lahat sa itaas ay totoo.
Naiintindihan ko ang lahat ng nakasulat sa itaas, at ang lahat ng ito

ay aking pagkakasala sa hindi pagsunod sa alintuntunin ng
kompanya.
(Sgd.)
Roberto
Capili
Roberto
Capili
On August 3, 1990 private respondent executed a Quitclaim and Release in favor

of petitioner for and in consideration of the sum of P1,912.79. 4
Three days after, or on August 6, 1990, private respondent formally filed before the
NLRC Arbitration Branch, National Capital Region a complaint for illegal dismissal
and payment of other monetary benefits.
On October 9, 1991, the Labor Arbiter rendered his decision finding the termination
of private respondent as valid and dismissing the money claim for lack of merit. The
dispositive portion of the ruling reads:
WHEREFORE, premises considered, the termination is valid and for

cause, and the money claims dismissed for lack of merit.

Page 138 of 166
The respondent however is ordered to pay the complainant the
amount of P500.00 as financial assistance.
SO ORDERED.5
Labor Arbiter Patricio P. Libo-on gave two reasons for ruling that the dismissal of
Roberto Capilian was valid. First, private respondent who was hired as an
apprentice violated the terms of their agreement when he acted with gross
negligence resulting in the injury not only to himself but also to his fellow worker.
Second, private respondent had shown that "he does not have the proper attitude
in employment particularly the handling of machines without authority and proper
training.6
On July 26, 1993, the National Labor Relations Commission issued an order
reversing the decision of the Labor Arbiter, the dispositive portion of which reads:
WHEREFORE, the appealed decision is hereby set aside. The

respondent is hereby directed to reinstate complainant to his work last
performed with backwages computed from the time his wages were
withheld up to the time he is actually reinstated. The Arbiter of origin
is hereby directed to further hear complainant's money claims and to
dispose them on the basis of law and evidence obtaining.
SO ORDERED.7
The NLRC declared that private respondent was a regular employee

of petitioner by ruling thus:
As correctly pointed out by the complainant, we cannot understand

how an apprenticeship agreement filed with the Department of Labor
only on June 7, 1990 could be validly used by the Labor Arbiter as
basis to conclude that the complainant was hired by respondent as a
plain "apprentice" on May 28, 1990. Clearly, therefore, the
complainant was respondent's regular employee under Article 280 of
the Labor Code, as early as May 28,1990, who thus enjoyed the
security of tenure guaranteed in Section 3, Article XIII of our 1987
Constitution.
The complainant being for illegal dismissal (among others) it then

behooves upon respondent, pursuant to Art. 227(b) and as ruled in
Edwin Gesulgon vs. NLRC, et al. (G.R. No. 90349, March 5, 1993,
3rd Div., Feliciano, J.) to prove that the dismissal of complainant was
for a valid cause. Absent such proof, we cannot but rule that the
complainant was illegally dismissed.8

Page 139 of 166
On January 28, 1994, Labor Arbiter Libo-on called for a conference at which only
private respondent's representative was present.
On April 22, 1994, a Writ of Execution was issued, which reads:
NOW, THEREFORE, finding merit in [private respondent's] Motion for

Issuance of the Writ, you are hereby commanded to proceed to the
premises of [petitioner] Nitto Enterprises and Jovy Foster located at
No. l 74 Araneta Avenue, Portero, Malabon, Metro Manila or at any
other places where their properties are located and effect the
reinstatement of herein [private respondent] to his work last
performed or at the option of the respondent by payroll reinstatement.
You are also to collect the amount of P122,690.85 representing his

backwages as called for in the dispositive portion, and turn over such
amount to this Office for proper disposition.
Petitioner filed a motion for reconsideration but the same was denied.
Hence, the instant petition — for certiorari.
The issues raised before us are the following:
WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED

GRAVE ABUSE OF DISCRETION IN HOLDING THAT PRIVATE
RESPONDENT WAS NOT AN APPRENTICE.
II
WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED

GRAVE ABUSE OF DISCRETION IN HOLDING THAT PETITIONER
HAD NOT ADEQUATELY PROVEN THE EXISTENCE OF A VALID
CAUSE IN TERMINATING THE SERVICE OF PRIVATE
RESPONDENT.
We find no merit in the petition.
Petitioner assails the NLRC's finding that private respondent Roberto Capili cannot
plainly be considered an apprentice since no apprenticeship program had yet been
filed and approved at the time the agreement was executed.
Petitioner further insists that the mere signing of the apprenticeship agreement
already established an employer-apprentice relationship.

Page 140 of 166
Petitioner's argument is erroneous.
The law is clear on this matter. Article 61 of the Labor Code provides:
Contents of apprenticeship agreement. — Apprenticeship

agreements, including the main rates of apprentices, shall conform to
the rules issued by the Minister of Labor and Employment. The period
of apprenticeship shall not exceed six months. Apprenticeship
agreements providing for wage rates below the legal minimum wage,
which in no case shall start below 75% per cent of the applicable
minimum wage, may be entered into only in accordance with
apprenticeship program duly approved by the Minister of Labor and
Employment. The Ministry shall develop standard model programs of
apprenticeship. (emphasis supplied)
In the case at bench, the apprenticeship agreement between petitioner and private
apprentice in the trade of "care maker/molder." On the same date, an
the day it was signed.
Based on the evidence before us, petitioner did not comply with the requirements of
the law. It is mandated that apprenticeship agreements entered into by the
employer and apprentice shall be entered only in accordance with the
apprenticeship program duly approved by the Minister of Labor and Employment.
Prior approval by the Department of Labor and Employment of the proposed

apprenticeship program is, therefore, a condition sine quo non before an
The act of filing the proposed apprenticeship program with the Department of Labor
and Employment is a preliminary step towards its final approval and does not
instantaneously give rise to an employer-apprentice relationship.
Article 57 of the Labor Code provides that the State aims to "establish a national
apprenticeship program through the participation of employers, workers and
government and non-government agencies" and "to establish apprenticeship
standards for the protection of apprentices." To translate such objectives into
existence, prior approval of the DOLE to any apprenticeship program has to be
secured as a condition sine qua non before any such apprenticeship agreement
can be fully enforced. The role of the DOLE in apprenticeship programs and
agreements cannot be debased.

Page 141 of 166
Hence, since the apprenticeship agreement between petitioner and private
respondent has no force and effect in the absence of a valid apprenticeship
program duly approved by the DOLE, private respondent's assertion that he was
hired not as an apprentice but as a delivery boy ("kargador" or "pahinante")
deserves credence. He should rightly be considered as a regular employee of
petitioner as defined by Article 280 of the Labor Code:
Art. 280. Regular and Casual Employment. — The provisions of

written agreement to the contrary notwithstanding and regardless of
the oral agreement of the parties, an employment shall be deemed to
be regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual
business or trade of the employer, except where the employment has
been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the
engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the
An employment shall be deemed to be casual if it is not covered by

the preceding paragraph: Provided, That, any employee who has
rendered at least one year of service, whether such service is
continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment
shall continue while such activity exists. (Emphasis supplied)
and pursuant to the constitutional mandate to "protect the rights of workers

and promote their welfare."9
Petitioner further argues that, there is a valid cause for the dismissal of private
respondent.
There is an abundance of cases wherein the Court ruled that the twin requirements
of due process, substantive and procedural, must be complied with, before valid
dismissal exists. 10 Without which, the dismissal becomes void.
The twin requirements of notice and hearing constitute the essential elements of
due process. This simply means that the employer shall afford the worker ample
opportunity to be heard and to defend himself with the assistance of his
representative, if he so desires.
Ample opportunity connotes every kind of assistance that management must

accord the employee to enable him to prepare adequately for his defense including
legal representation. 11
As held in the case of Pepsi-Cola Bottling Co., Inc. v. NLRC: 12

Page 142 of 166
The law requires that the employer must furnish the worker sought to
be dismissed with two (2) written notices before termination of
employee can be legally effected: (1) notice which apprises the
employee of the particular acts or omissions for which his dismissal is
sought; and (2) the subsequent notice which informs the employee of
the employer's decision to dismiss him (Sec. 13, BP 130; Sec. 2-6
Rule XIV, Book V, Rules and Regulations Implementing the Labor
Code as amended). Failure to comply with the requirements taints the
dismissal with illegality. This procedure is mandatory, in the absence
of which, any judgment reached by management is void and in
existent (Tingson, Jr. vs. NLRC, 185 SCRA 498 [1990]; National
Service Corp. vs. NLRC, 168 SCRA 122; Ruffy vs. NLRC. 182 SCRA
365 [1990]).
The fact is private respondent filed a case of illegal dismissal with the Labor Arbiter
only three days after he was made to sign a Quitclaim, a clear indication that such
resignation was not voluntary and deliberate.
Private respondent averred that he was actually employed by petitioner as a

delivery boy ("kargador" or "pahinante").
He further asserted that petitioner "strong-armed" him into signing the

aforementioned resignation letter and quitclaim without explaining to him the
contents thereof. Petitioner made it clear to him that anyway, he did not have a
choice. 13
Petitioner cannot disguise the summary dismissal of private respondent by

orchestrating the latter's alleged resignation and subsequent execution of a
Quitclaim and Release. A judicious examination of both events belies any
spontaneity on private respondent's part.
WHEREFORE, finding no abuse of discretion committed by public respondent

National Labor Relations Commission, the appealed decision is hereby
AFFIRMED.
SO ORDERED.

Page 143 of 166
[5] G.R. No. 75112. August 17, 1992.*
FILAMER CHRISTIAN INSTITUTE, petitioner, vs. HON. INTERMEDIATE

APPELLATE COURT, HON. ENRIQUE P. SUPLICO, in his capacity as Judge of
the Regional Trial Court, Branch XIV, Roxas City and POTENCIANO
KAPUNAN, SR., respondents.
Labor Law; Employer-Employee relationship; In relation to the school, Funtecha

was an employee even if he was assigned to clean the school premises for only
two (2) hours in the morning of each school day.—It is undisputed that Funtecha
was a working student, being a part-time janitor and a scholar of petitioner Filamer.
He was, in relation to the school, an employee even if he was assigned to clean the
school premises for only two (2) hours in the morning of each school day.
Same; Same; Driving the vehicle to and from the house of the school president
where both Allan and Funtecha reside is an act in furtherance of the interest of the
petitioner-school.—Driving the vehicle to and from the house of the school
president where both Allan and Funtecha reside is an act in furtherance of the
interest of the petitioner-school. Allan’s job demands that he drive home the school
jeep so he can use it to fetch students in the morning of the next school day.
Same; Same; Court is constrained to conclude that the act of Funtecha in taking

over the steering wheel was done for and in behalf of his employer for which act
the petitioner school cannot deny any responsibility by arguing that it was done
beyond the scope of his janitorial duties.—In learning how to drive while taking the
vehicle home in the direction of Allan’s house, Funtecha definitely was not having a
joy ride. Funtecha was not driving for the purpose of his enjoyment or for a “frolic of
his own” but ultimately, for the service for which the jeep was intended by the
petitioner school. (See L. Battistoni v. Thomas, Can SC 144, 1 D.L.R.. 577, 80 ALR
722 [1932]; See also Association of Baptists for World Evangelism, Inc. v.
Fieldmen’s Insurance Co., Inc. 124 SCRA 618 [1983]). Therefore, the Court is
constrained to conclude that the act of Funtecha in taking over the steering wheel
was one done for and in behalf of his employer for which act the petitioner-school
cannot deny any responsibility by arguing that it was done beyond the scope of his
janitorial duties. The clause “within the scope of their assigned tasks” for purposes
of raising the presumption of liability of an employer, includes any act done by an
employee, in furtherance of the interests of the employer or for the account of the
employer at the time of the infliction of the injury or damage.
Same; Same; Section 14, Rule X, Book III of the Rules implementing the Labor
Code promulgated only for the purpose of administering and enforcing the
provisions of the Labor Code on conditions of employment.—Section 14, Rule X,
Book III of the Rules implementing the Labor Code, on which the petitioner anchors
its defense, was promulgated by the Secretary of Labor and Employment only for
the purpose of administering and enforcing the provisions of the Labor Code on
Page 144 of 166
conditions of employment. Particularly, Rule X of Book III provides guidelines on
the manner by which the powers of the Labor secretary shall be exercised; on what
records should be kept; maintained and preserved; on payroll; and on the exclusion
of working scholars from, and inclusion of resident physicians in the employment
coverage as far as compliance with the substantive labor provisions on working
conditions, rest periods, and wages, is concerned.
Same; Same; Section 14, Rule X, Book III of the Rules not the decisive law in a
civil suit for damages instituted by an injured person during a vehicular accident
against a working student of a school and against the school itself.—In other words,
Rule X is merely a guide to the enforcement of the substantive law on labor. The
Court, thus, makes the distinction and so holds that Section 14, Rule X, Book III of
the Rules is not the decisive law in a civil suit for damages instituted by an injured
person during a vehicular accident against a working student of a school and
against the school itself.
Same; Same; An implementing rule on labor cannot be used by an employer as a

shield to avoid liability under the substantive provisions of the Civil Code.—The
present case does not deal with a labor dispute on conditions of employment
Same; Civil Law; Negligence; There is evidence to show that there exists in the

present case an extra-contractual obligation arising from the negligence or reckless
imprudence of a person whose acts or omission are imputable by a legal fiction to
others who are in a position to exercise an absolute or limited control over him.—
obligation arising from the negligence or reckless imprudence of a person “whose
to exercise an absolute or limited control over (him).”
Same; Same; Same; Fact that Funtecha was not the school driver or was not
acting within the scope of his janitorial duties does not relieve the petitioner of the
burden of rebutting the presumption juris tantum that there was negligence on its
part either in the selection of a servant or employee or in the supervision over him.
—Funtecha is an employee of petitioner Filamer. He need not have an official
appointment for a driver’s position in order that the petitioner may be held
Page 145 of 166
Same; Same; Same; Supervision includes the formulation of suitable rules and

regulation for the guidance of its employees and the issuance of proper instructions
intended for the protection of the public and persons with whom the employer has
relations through his employees.—The Court reiterates that supervision includes
the formulation of suitable rules and regulation for the guidance of its employees
and the issuance of proper instructions intended for the protection of the public and
persons with whom the employer has relations through his employees.
Same; Same; Same; Employer is expected to impose upon its employees the

necessary discipline called for in the performance of any act indispensable to the
business and beneficial to their employer.—An employer is expected to impose
upon its employees the necessary discipline called for in the performance of any
act indispensable to the business and beneficial to their employer.
Same; Same; Same; In the absence of evidence that the petitioner had exercised

the diligence of a good father of a family in the supervision of its employees, the
law imposes upon it the vicarious liability for acts or omissions of its employees. —
employees.
Same; Same; Same; Liability of the employer under Article 2180 is primary and

solidary.—The liability of the employer is, under Article 2180, primary and solidary.
However, the employer shall have recourse against the negligent employee for
whatever damages are paid to the heirs of the plaintiff.
PETITION for reconsideration of the decision of the then Intermediate Appellate

Court.
The private respondents, heirs of the late Potenciano Kapunan, seek

reconsideration of the decision rendered by this Court on October 16, 1990
(Filamer Christian Institute v. Court of Appeals, 190 SCRA 477) reviewing the
appellate court's conclusion that there exists an employer-employee relationship
between the petitioner and its co-defendant Funtecha. The Court ruled that the
petitioner is not liable for the injuries caused by Funtecha on the grounds that the
latter was not an authorized driver for whose acts the petitioner shall be directly and
Page 146 of 166
primarily answerable, and that Funtecha was merely a working scholar who, under
Section 14, Rule X, Book III of the Rules and Regulations Implementing the Labor
Code is not considered an employee of the petitioner.
The private respondents assert that the circumstances obtaining in the present
case call for the application of Article 2180 of the Civil Code since Funtecha is no
doubt an employee of the petitioner. The private respondents maintain that under
Article 2180 an injured party shall have recourse against the servant as well as the
petitioner for whom, at the time of the incident, the servant was performing an act in
furtherance of the interest and for the benefit of the petitioner. Funtecha allegedly
did not steal the school jeep nor use it for a joy ride without the knowledge of the
school authorities.
After a re-examination of the laws relevant to the facts found by the trial court and
the appellate court, the Court reconsiders its decision. We reinstate the Court of
Appeals' decision penned by the late Justice Desiderio Jurado and concurred in by
Justices Jose C. Campos, Jr. and Serafin E. Camilon. Applying Civil Code
provisions, the appellate court affirmed the trial court decision which ordered the
payment of the P20,000.00 liability in the Zenith Insurance Corporation policy,
P10,000.00 moral damages, P4,000.00 litigation and actual expenses, and
P3,000.00 attorney's fees.
It is undisputed that Funtecha was a working student, being a part-time janitor and
a scholar of petitioner Filamer. He was, in relation to the school, an employee even
if he was assigned to clean the school premises for only two (2) hours in the
morning of each school day.
Having a student driver's license, Funtecha requested the driver, Allan Masa, and
was allowed, to take over the vehicle while the latter was on his way home one late
afternoon. It is significant to note that the place where Allan lives is also the house
of his father, the school president, Agustin Masa. Moreover, it is also the house
where Funtecha was allowed free board while he was a student of Filamer
Christian Institute.
Allan Masa turned over the vehicle to Funtecha only after driving down a road,
negotiating a sharp dangerous curb, and viewing that the road was clear. (TSN,
April 4, 1983, pp. 78-79) According to Allan's testimony, a fast moving truck with
glaring lights nearly hit them so that they had to swerve to the right to avoid a
collision. Upon swerving, they heard a sound as if something had bumped against
the vehicle, but they did not stop to check. Actually, the Pinoy jeep swerved
towards the pedestrian, Potenciano Kapunan who was walking in his lane in the
direction against vehicular traffic, and hit him. Allan affirmed that Funtecha followed
his advise to swerve to the right. (Ibid., p. 79) At the time of the incident (6:30 P.M.)
in Roxas City, the jeep had only one functioning headlight.

Page 147 of 166
Allan testified that he was the driver and at the same time a security guard of the
petitioner-school. He further said that there was no specific time for him to be off-
duty and that after driving the students home at 5:00 in the afternoon, he still had to
go back to school and then drive home using the same vehicle.
Driving the vehicle to and from the house of the school president where both Allan
and Funtecha reside is an act in furtherance of the interest of the petitioner-school.
Allan's job demands that he drive home the school jeep so he can use it to fetch
students in the morning of the next school day.
It is indubitable under the circumstances that the school president had knowledge
that the jeep was routinely driven home for the said purpose. Moreover, it is not
improbable that the school president also had knowledge of Funtecha's possession
of a student driver's license and his desire to undergo driving lessons during the
time that he was not in his classrooms.
In learning how to drive while taking the vehicle home in the direction of Allan's
house, Funtecha definitely was not having a joy ride. Funtecha was not driving for
the purpose of his enjoyment or for a "frolic of his own" but ultimately, for the
service for which the jeep was intended by the petitioner school. (See L. Battistoni
v. Thomas, Can SC 144, 1 D.L.R. 577, 80 ALR 722 [1932]; See also Association of
Baptists for World Evangelism, Inc. v. Fieldmen's Insurance Co., Inc. 124 SCRA
618 [1983]). Therefore, the Court is constrained to conclude that the act of
Funtecha in taking over the steering wheel was one done for and in behalf of his
employer for which act the petitioner-school cannot deny any responsibility by
arguing that it was done beyond the scope of his janitorial duties. The clause
"within the scope of their assigned tasks" for purposes of raising the presumption of
liability of an employer, includes any act done by an employee, in furtherance of the
interests of the employer or for the account of the employer at the time of the
infliction of the injury or damage. (Manuel Casada, 190 Va 906, 59 SE 2d 47
[1950]) Even if somehow, the employee driving the vehicle derived some benefit
from the act, the existence of a presumptive liability of the employer is determined
by answering the question of whether or not the servant was at the time of the
accident performing any act in furtherance of his master's business. (Kohlman v.
Hyland, 210 NW 643, 50 ALR 1437 [1926]; Jameson v. Gavett, 71 P 2d 937 [1937])
Section 14, Rule X, Book III of the Rules implementing the Labor Code, on which
the petitioner anchors its defense, was promulgated by the Secretary of Labor and
Employment only for the purpose of administering and enforcing the provisions of
the Labor Code on conditions of employment. Particularly, Rule X of Book III
provides guidelines on the manner by which the powers of the Labor Secretary
shall be exercised; on what records should be kept; maintained and preserved; on
payroll; and on the exclusion of working scholars from, and inclusion of resident
physicians in the employment coverage as far as compliance with the substantive
labor provisions on working conditions, rest periods, and wages, is concerned.

Page 148 of 166
In other words, Rule X is merely a guide to the enforcement of the substantive law
on labor. The Court, thus, makes the distinction and so holds that Section 14, Rule
X, Book III of the Rules is not the decisive law in a civil suit for damages instituted
by an injured person during a vehicular accident against a working student of a
school and against the school itself.
The present case does not deal with a labor dispute on conditions of employment
obligation arising from the negligence or reckless imprudence of a person "whose
to exercise an absolute or limited control over (him)." (Bahia v. Litonjua and
Leynes, 30 Phil. 624 [1915])
Funtecha is an employee of petitioner Filamer. He need not have an official

appointment for a driver's position in order that the petitioner may be held
The Court reiterates that supervision includes the formulation of suitable rules and
regulations for the guidance of its employees and the issuance of proper
instructions intended for the protection of the public and persons with whom the
employer has relations through his employees. (Bahia v. Litonjua and
Leynes, supra, at p. 628; Phoenix Construction, v. Intermediate Appellate Court,
148 SCRA 353 [1987])
An employer is expected to impose upon its employees the necessary discipline

called for in the performance of any act indispensable to the business and
beneficial to their employer.
In the present case, the petitioner has not shown that it has set forth such rules and
guidelines as would prohibit any one of its employees from taking control over its
vehicles if one is not the official driver or prohibiting the driver and son of the
Page 149 of 166
Filamer president from authorizing another employee to drive the school vehicle.
Furthermore, the petitioner has failed to prove that it had imposed sanctions or
warned its employees against the use of its vehicles by persons other than the
driver.
employees. (Umali v. Bacani, 69 SCRA 263 [1976]; Poblete v. Fabros, 93 SCRA
200 [1979]; Kapalaran Bus Liner v. Coronado, 176 SCRA 792 [1989]; Franco v.
Intermediate Appellate Court, 178 SCRA 331 [1989]; Pantranco North Express, Inc.
v. Baesa, 179 SCRA 384 [1989]) The liability of the employer is, under Article 2180,
primary and solidary. However, the employer shall have recourse against the
negligent employee for whatever damages are paid to the heirs of the plaintiff.
It is an admitted fact that the actual driver of the school jeep, Allan Masa, was not
made a party defendant in the civil case for damages. This is quite understandable
considering that as far as the injured pedestrian, plaintiff Potenciano Kapunan, was
concerned, it was Funtecha who was the one driving the vehicle and presumably
was one authorized by the school to drive. The plaintiff and his heirs should not
now be left to suffer without simultaneous recourse against the petitioner for the
consequent injury caused by a janitor doing a driving chore for the petitioner even
for a short while. For the purpose of recovering damages under the prevailing
circumstances, it is enough that the plaintiff and the private respondent heirs were
able to establish the existence of employer-employee relationship between
Funtecha and petitioner Filamer and the fact that Funtecha was engaged in an act
not for an independent purpose of his own but in furtherance of the business of his
employer. A position of responsibility on the part of the petitioner has thus been
satisfactorily demonstrated.
WHEREFORE, the motion for reconsideration of the decision dated October 16,
1990 is hereby GRANTED. The decision of the respondent appellate court affirming
the trial court decision is REINSTATED.
SO ORDERED.

Page 150 of 166
[6] G.R. No. 122917. July 12, 1999.*
MARITES BERNARDO, ELVIRA GO DIAMANTE, REBECCA E. DAVID, DAVID P.

PASCUAL, RAQUEL ESTILLER, ALBERT HALLARE, EDMUND M. CORTEZ,
JOSELITO O. AGDON, GEORGE P. LIGUTAN, JR., CELSO M. YAZAR, ALEX G.
CORPUZ, RONALD M. DELFIN, ROWENA M. TABAQUERO, CORAZON C.
DELOS REYES, ROBERT G. NOORA, MILAGROS O. LEQUIGAN, ADRIANA F.
TATLONGHARI, IKE CABANDUCOS, COCOY NOBELLO, DORENDA
CANTIMBUHAN, ROBERT MARCELO, LILIBETH Q. MARMOLEJO, JOSE E.
SALES, ISABEL MAMAUAG, VIOLETA G. MONTES, ALBINO TECSON, MELODY
V. GRUELA, BERNADETH D. AGERO, CYNTHIA
Labor Law; Labor Code; The facts, viewed in light of the Labor Code and the
Magna Carta for Disabled Persons, indubitably show that the petitioners, except
sixteen of them, should be deemed regular employees.—At the outset, let it be
known that this Court appreciates the nobility of private respondent’s effort to
provide employment to physically impaired individuals and to make them more
productive members of society. However, we cannot allow it to elude the legal
consequences of that effort, simply because it now deems their employment
irrelevant. The facts, viewed in light of the Labor Code and the Magna Carta for
Disabled Persons, indubitably show that the petitioners, except sixteen of them,
should be deemed regular employees. As such, they have acquired legal rights that
this Court is duty-bound to protect and uphold, not as a matter of compassion but
as a consequence of law and justice.
Same; Same; Since the Magna Carta accords them the rights of qualified able-
bodied persons, they are thus covered by Article 280 of the Labor Code.—The fact
that the employees were qualified disabled persons necessarily removes the
employment contracts from the ambit of Article 80. Since the Magna Carta accords
them the rights of qualified able-bodied persons, they are thus covered by Article
280 of the Labor Code.
Same; Same; The test of whether an employee is regular was laid down in De

Leon vs. National Labor Relations Commission.—The test of whether an employee
is regular was laid down in De Leon v. NLRC, in which this Court held: “The primary
standard, therefore, of determining regular employment is the reasonable
connection between the particular activity performed by the employee in relation to
the usual trade or business of the employer. The test is whether the former is
usually necessary or desirable in the usual business or trade of the employer. The
connection can be determined by considering the nature of the work performed and
its relation to the scheme of the particular business or trade in its entirety. Also if
the employee has been performing the job for at least one year, even if the
performance is not continuous and merely intermittent, the law deems repeated
and continuing need for its performance as sufficient evidence of the necessity if
not indispensability of that activity to the business. Hence, the employment is
Page 151 of 166
considered regular, but only with respect to such activity, and while such activity
exists.”
Same; Same; When the bank renewed the contract after the lapse of the six-month
probationary period, the employees thereby became regular employees.—As held
by the Court, “Articles 280 and 281 of the Labor Code put an end to the pernicious
practice of making permanent casuals of our lowly employees by the simple
expedient of extending to them probationary appointments, ad infinitum.” The
contract signed by petitioners is akin to a probationary employment, during which
the bank determined the employees’ fitness for the job. When the bank renewed
the contract after the lapse of the six-month probationary period, the employees
thereby became regular employees. No employer is allowed to determine
indefinitely the fitness of its employees.
Same; Same; As regular employees, the twenty-seven petitioners are entitled to

security of tenure; that is, their services may be terminated only for a just or
authorized cause.—As regular employees, the twenty-seven petitioners are entitled
to security of tenure; that is, their services may be terminated only for a just or
authorized cause. Because respondent failed to show such cause, these twenty-
seven petitioners are deemed illegally dismissed and therefore entitled to back
wages and reinstatement without loss of seniority rights and other privileges.
Considering the allegation of respondent that the job of money sorting is no longer
available because it has been assigned back to the tellers to whom it originally
belonged, petitioners are hereby awarded separation pay in lieu of reinstatement.
Same; Same; An employee is regular because of the nature of work and the length
of service, not because of the mode or even the reason for hiring them.—
Respondent argues that petitioners were merely “accommodated” employees. This
Same; Same; The determination of whether employment is casual or regular does

not depend on the will or word of the employer, and the procedure of hiring x x x
but on the nature of the activities performed by the employee, and to some extent,
the length of performance and its continued existence.—Equally unavailing are
private respondent’s arguments that it did not go out of its way to recruit petitioners,
and that its plantilla did not contain their positions. In L. T. Datu v. NLRC, the Court
held that “the determination of whether employment is casual or regular does not
depend on the will or word of the employer, and the procedure of hiring x x x but on
the nature of the activities performed by the employee, and to some extent, the
length of performance and its continued existence.”
Same; Same; The well-settled rule is that the character of employment is

determined not by stipulations in the contract, but by the nature of the work
performed.—Private respondent argues that the petitioners were informed from the
Page 152 of 166
start that they could not become regular employees. In fact, the bank adds, they
agreed with the stipulation in the contract regarding this point. Still, we are not
persuaded. The well-settled rule is that the character of employment is determined
not by stipulations in the contract, but by the nature of the work performed.
Otherwise, no employee can become regular by the simple expedient of
incorporating this condition in the contract of employment.
Same; Same; The noble objectives of Magna Carta for Disabled Persons are not
based merely on charity or accommodation, but on justice and the equal treatment
of qualified persons, disabled or not.—In rendering this decision, the Court
emphasizes not only the constitutional bias in favor of the working class, but also
the concern of the State for the plight of the disabled. The noble objectives of
Magna Carta for Disabled Persons are not based merely on charity or
accommodation, but on justice and the equal treatment of qualified persons,
disabled or not. In the present case, the handicap of petitioners (deaf-mutes) is not
a hindrance to their work. The eloquent proof of this statement is the repeated
renewal of their employment contracts. Why then should they be dismissed, simply
because they are physically impaired? The Court believes, that, after showing their
fitness for the work assigned to them, they should be treated and granted the same
rights like any other regular employees.
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.
The Magna Carta for Disabled Persons mandates that qualified disabled persons

be granted the same terms and conditions of employment as qualified able-bodied
employees. Once they have attained the status of regular workers, they should be
accorded all the benefits granted by law, notwithstanding written or verbal contracts
to the contrary. This treatments is rooted not merely on charity or accomodation,
but on justice for all.
The Case
Challenged in the Petition for Certiorari 1 before us is the June 20, 1995

Decision2 of the National Labor Relations Commission (NLRC), 3 which affirmed the
August, 22 1994 ruling of Labor Arbiter Cornelio L. Linsangan. The labor arbiter's
Decision disposed as follows: 4
WHEREFORE, judgment is hereby rendered dismissing the above-

mentioned complaint for lack of merit.
Also assailed is the August 4, 1995 Resolution 5 of the NLRC, which denied the
Motion for Reconsideration.
The Facts
Page 153 of 166
The facts were summarized by the NLRC in this wise: 6
Complainants numbering 43 (p. 176, Records) are deaf-mutes who

were hired on various periods from 1988 to 1993 by respondent Far
East Bank and Trust Co. as Money Sorters and Counters through a
uniformly worded agreement called "Employment Contract for
Handicapped Workers". (pp. 68 & 69, Records) The full text of said
agreement is quoted below:
EMPLOYMENT CONTRACT FOR
HANDICAPPED WORKERS
This Contract, entered into by and between:
FAR EAST BANK AND TRUST COMPANY, a universal

banking corporation duly organized and existing under
and by virtue of the laws of the Philippines, with
business address at FEBTC Building, Muralla,
Intramuros, Manila, represented herein by its Assistant
Vice President, MR. FLORENDO G. MARANAN,
(hereinafter referred to as the "BANK");
-and-
—————, ————— years old, of legal age,

————, and residing at (hereinafter referred to as the
("EMPLOYEE").
WITNESSETH : That
WHEREAS, the BANK, cognizant of its social

responsibility, realizes that there is a need to provide
disabled and handicapped persons gainful employment
and opportunities to realize their potentials, uplift their
socio-economic well being and welfare and make them
productive, self-reliant and useful citizens to enable
them to fully integrate in the mainstream of society;
WHEREAS, there are certain positions in the BANK

which may be filled-up by disabled and handicapped
persons, particularly deaf-mutes, and the BANK ha[s]
been approached by some civic-minded citizens and
authorized government agencies [regarding] the
possibility of hiring handicapped workers for these
positions;
Page 154 of 166
WHEREAS, the EMPLOYEE is one of those
handicapped workers who [were] recommended for
possible employment with the BANK;
NOW, THEREFORE, for and in consideration of the

foregoing premises and in compliance with Article 80 of
the Labor Code of the Philippines as amended, the
BANK and the EMPLOYEE have entered into this
Employment Contract as follows:
1. The BANK agrees to employ and train the

EMPLOYEE, and the EMPLOYEE agrees to diligently
and faithfully work with the BANK, as Money
Sorter and Counter.
2. The EMPLOYEE shall perform among others, the

following duties and responsibilities:
i. Sort out bills according to

color;
ii. Count each denomination

per hundred, either manually
or with the aid of a counting
machine;
iii. Wrap and label bills per

hundred;
iv. Put the wrapped bills into

bundles; and
v. Submit bundled bills to the

bank teller for verification.
3. The EMPLOYEE shall undergo a training period of

one (1) month, after which the BANK shall determine
whether or not he/she should be allowed to finish the
remaining term of this Contract.
4. The EMPLOYEE shall be entitled to an initial

compensation of P118.00 per day, subject to adjustment
in the sole judgment of the BANK, payable every 15th
and end of the month.1âwphi1.nêt

Page 155 of 166
5. The regular work schedule of the EMPLOYEE shall
be five (5) days per week, from Mondays thru Fridays,
at eight (8) hours a day. The EMPLOYEE may be
required to perform overtime work as circumstance may
warrant, for which overtime work he/she [shall] be paid
an additional compensation of 125% of his daily rate if
performed during ordinary days and 130% if performed
during Saturday or [a] rest day.
6. The EMPLOYEE shall likewise be entitled to the

following benefits:
i. Proportionate 13th month

pay based on his basic daily
wage.
ii. Five (5) days incentive

leave.
iii. SSS premium payment.
7. The EMPLOYEE binds himself/herself to abide [by]

and comply with all the BANK Rules and Regulations
and Policies, and to conduct himself/herself in a manner
expected of all employees of the BANK.
8. The EMPLOYEE acknowledges the fact that he/she

had been employed under a special employment
program of the BANK, for which reason the standard
hiring requirements of the BANK were not applied in
his/her case. Consequently, the EMPLOYEE
acknowledges and accepts the fact that the terms and
conditions of the employment generally observed by the
BANK with respect to the BANK's regular employee are
not applicable to the EMPLOYEE, and that therefore,
the terms and conditions of the EMPLOYEE's
employment with the BANK shall be governed solely
and exclusively by this Contract and by the applicable
rules and regulations that the Department of Labor and
Employment may issue in connection with the
employment of disabled and handicapped workers.
More specifically, the EMPLOYEE hereby
acknowledges that the provisions of Book Six of the
Labor Code of the Philippines as amended, particularly
on regulation of employment and separation pay are not
applicable to him/her.
Page 156 of 166
9. The Employment Contract shall be for a period of six
(6) months or from —— to —— unless earlier
terminated by the BANK for any just or reasonable
cause. Any continuation or extension of this Contract
shall be in writing and therefore this Contract will
automatically expire at the end of its terms unless
renewed in writing by the BANK.
IN WITNESS WHEREOF, the parties, have hereunto

affixed their signature[s] this —— day of ———, ———
at Intramuros, Manila, Philippines.
In 1988, two (2) deaf-mutes were hired under this Agreement; in 1989
another two (2); in 1990, nineteen (19); in 1991 six (6); in 1992, six (6)
and in 1993, twenty-one (21). Their employment[s] were renewed
every six months such that by the time this case arose, there were
fifty-six (56) deaf-mutes who were employed by respondent under the
said employment agreement. The last one was Thelma Malindoy who
was employed in 1992 and whose contract expired on July 1993.
xxx xxx xxx
Disclaiming that complainants were regular employees, respondent

Far East Bank and Trust Company maintained that complainants who
are a special class of workers — the hearing impaired employees
were hired temporarily under [a] special employment arrangement
which was a result of overtures made by some civic and political
personalities to the respondent Bank; that complainant[s] were hired
due to "pakiusap" which must be considered in the light of the context
career and working environment which is to maintain and strengthen
a corps of professionals trained and qualified officers and regular
employees who are baccalaureate degree holders from excellent
schools which is an unbending policy in the hiring of regular
employees; that in addition to this, training continues so that the
regular employee grows in the corporate ladder; that the idea of hiring
handicapped workers was acceptable to them only on a special
arrangement basis; that it was adopted the special program to help
tide over a group of workers such as deaf-mutes like the
complainants who could do manual work for the respondent Bank;
that the task of counting and sorting of bills which was being
performed by tellers could be assigned to deaf-mutes that the
counting and sorting of money are tellering works which were always
logically and naturally part and parcel of the tellers' normal functions;
that from the beginning there have been no separate items in the
respondent Bank plantilla for sortes or counters; that the tellers
themselves already did the sorting and counting chore as a regular
Page 157 of 166
feature and integral part of their duties (p. 97, Records); that through
the "pakiusap" of Arturo Borjal, the tellers were relieved of this task of
counting and sorting bills in favor of deaf-mutes without creating new
positions as there is no position either in the respondent or in any
other bank in the Philippines which deals with purely counting and
sorting of bills in banking operations.
Petitioners specified when each of them was hired and dimissed, viz: 7
NAME OF PETITIONER WORKPLACE Date Hired Date

Dismissed
1. MARITES BERNARDO Intramuros 12-Nov-90 17-Nov-93
2. ELVIRA GO DIAMANTE Intramuros 24-Jan-90 11-Jan-94
3. REBECCA E. DAVID Intramuros 16-Apr-90 23-Oct-93
4. DAVID P. PASCUAL Bel-Air 15-Oct-88 21-Nov-94
5. RAQUEL ESTILLER Intramuros 2-Jul-92 4-Jan-94
6. ALBERT HALLARE West 4-Jan-91 9-Jan-94
7. EDMUND M. CORTEZ Bel-Air 15-Jan-91 3-Dec-93
8. JOSELITO O. AGDON Intramuros 5-Nov-90 17-Nov-93
9. GEORGE P. LIGUTAN JR. Intramuros 6-Sep-89 19-Jan-94
10. CELSO M. YAZAR Intramuros 8-Feb-93 8-Aug-93
11. ALEX G. CORPUZ Intramuros 15-Feb-93 15-Aug-93
12. RONALD M. DELFIN Intramuros 22-Feb-93 22-Aug-93
13. ROWENA M. TABAQUERO Intramuros 22-Feb-93 22-Aug-93
14. CORAZON C. DELOS REYES Intramuros 8-Feb-93 8-Aug-93
15. ROBERT G. NOORA Intramuros 15-Feb-93 15-Aug-93
16. MILAGROS O. LEQUIGAN Intramuros 1-Feb-93 1-Aug-93
17. ADRIANA F. TATLONGHARI Intramuros 22-Jan-93 22-Jul-93
18. IKE CABUNDUCOS Intramuros 24-Feb-93 24-Aug-93
19. COCOY NOBELLO Intramuros 22-Feb-93 22-Aug-93
20. DORENDA CATIMBUHAN Intramuros 15-Feb-93 15-Aug-93
21. ROBERT MARCELO West 31 JUL 93 8 1-Aug-93
22. LILIBETH Q. MARMOLEJO West 15-Jun-90 21-Nov-93
23. JOSE E. SALES West 6-Aug-92 12-Oct-93
24. ISABEL MAMAUAG West 8-May-92 10-Nov-93
25. VIOLETA G. MONTES Intramuros 2-Feb-90 15-Jan-94
26. ALBINO TECSON Intramuros 7-Nov-91 10-Nov-93
27. MELODY B. GRUELA West 28-Oct-91 3-Nov-93
28. BERNADETH D. AGERO West 19-Dec-90 27-Dec-93

Page 158 of 166
29. CYNTHIA DE VERA Bel-Air 26-Jun-90 3-Dec-93
30. LANI R. CORTEZ Bel-Air 15-Oct-88 10-Dec-93
31. MARIA ISABEL West 6-Sep-90 6-Feb-94
B.CONCEPCION
32. DINDO VALERIO Intramuros 30-May-93 30-Nov-93
33. ZENAIDA MATA Intramuros 10-Feb-93 10-Aug-93
34. ARIEL DEL PILAR Intramuros 24-Feb-93 24-Aug-93
35. MARGARET CECILIA CANOZA Intramuros 27-Jul-90 4-Feb-94
36. THELMA SEBASTIAN Intramuros 12-Nov-90 17-Nov-93
37. MA. JEANETTE CERVANTES West 6-Jun-92 7-Dec-93
38. JEANNIE RAMIL Intramuros 23-Apr-90 12-Oct-93
39. ROZAIDA PASCUAL Bel-Air 20-Apr-89 29-Oct-93
40. PINKY BALOLOA West 3-Jun-91 2-Dec-93
41. ELIZABETH VENTURA West 12-Mar-90 FEB 94 [sic]
42. GRACE S. PARDO West 4-Apr-90 13-Mar-94
43. RICO TIMOSA Intramuros 28-Apr-93 28-Oct-93
As earlier noted, the labor arbiter and, on appeal, the NLRC ruled against herein
petitioners. Hence, this recourse to this Court. 9
In affirming the ruling of the labor arbiter that herein petitioners could not be
deemed regular employees under Article 280 of the Labor Code, as amended,
Respondent Commission ratiocinated as follows:
We agree that Art. 280 is not controlling herein. We give due

credence to the conclusion that complainants were hired as an
accommodation to [the] recommendation of civic oriented
personalities whose employment[s] were covered by . . . Employment
Contract[s] with special provisions on duration of contract as specified
under Art. 80. Hence, as correctly held by the Labor Arbiter a quo, the
terms of the contract shall be the law between the parties. 10
The NLRC also declared that the Magna Carta for Disabled Persons was not
applicable, "considering the prevailing circumstances/milieu of the case."
Issues
In their Memorandum, petitioners cite the following grounds in support of their

cause:

Page 159 of 166
I. The Honorable Commission committed grave abuse of discretion in
holding that the petitioners — money sorters and counters working in
a bank — were not regular employees.
II. The Honorable Commission committed grave abuse of discretion in

holding that the employment contracts signed and renewed by the
petitioners — which provide for a period of six (6) months — were
valid.
III. The Honorable Commission committed grave abuse of discretion

in not applying the provisions of the Magna Carta for the Disabled
(Republic Act No. 7277), on proscription against discrimination
against disabled persons. 11
In the main, the Court will resolve whether petitioners have become regular
employees.
This Court's Ruling
The petition is meritorious. However, only the employees, who worked for more
than six months and whose contracts were renewed are deemed regular. Hence,
their dismissal from employement was illegal.
Preliminary Matter: Propriety of Certiorari
Respondent Far East Bank and Trust Company argues that a review of the findings
of facts of the NLRC is not allowed in a petition for certiorari. Specifically, it
maintains that the Court cannot pass upon the findings of public respondent that
petitioners were not regular employees.
True, the Court, as a rule, does not review the factual findings of public
respondents in a certiorari proceeding. In resolving whether the petitioners have
become regular employees, we shall not change the facts found by the public
respondent. Our task is merely to determine whether the NLRC committed grave
abuse of discretion in applying the law to the established facts, as above-quoted
from the assailed Decision.
Main Issue Are Petitioners Regular Employee?
Petitioners maintain that they should be considered regular employees, because

their task as money sorters and counters was necessary and desirable to the
business of respondent bank. They further allege that their contracts served merely
to preclude the application of Article 280 and to bar them from becoming regular
employees.

Page 160 of 166
Private respondent, on the other hand, submits that petitioners were hired only as
"special workers and should not in any way be considered as part of the regular
complement of the Bank." 12 Rather, they were "special" workers under Article 80 of
the Labor Code. Private respondent contends that it never solicited the services of
petitioners, whose employment was merely an "accommodation" in response to the
requests of government officials and civic-minded citizens. They were told from the
start, "with the assistance of government representatives," that they could not
become regular employees because there were no plantilla positions for "money
sorters," whose task used to be performed by tellers. Their contracts were renewed
several times, not because of need "but merely for humanitarian reasons."
Respondent submits that "as of the present, the "special position" that was created
for the petitioners no longer exist[s] in private respondent [bank], after the latter had
decided not to renew anymore their special employment contracts."
At the outset, let it be known that this Court appreciates the nobility of private
respondent's effort to provide employment to physically impaired individuals and to
make them more productive members of society. However, we cannot allow it to
elude the legal consequences of that effort, simply because it now deems their
employment irrelevant. The facts, viewed in light of the Labor Code and the Magna
Carta for Disabled Persons, indubitably show that the petitioners, except sixteen of
them, should be deemed regular employees. As such, they have acquired legal
rights that this Court is duty-bound to protect and uphold, not as a matter of
compassion but as a consequence of law and justice.
The uniform employment contracts of the petitioners stipulated that they shall be
trained for a period of one month, after which the employer shall determine whether
or not they should be allowed to finish the 6-month term of the contract.
Furthermore, the employer may terminate the contract at any time for a just and
reasonable cause. Unless renewed in writing by the employer, the contract shall
automatically expire at the end of the term.1âwphi1.nêt
According to private respondent, the employment contracts were prepared in

accordance with Article 80 of the Labor code, which provides;
Art. 80. Employment agreement. — Any employer who employs

handicapped workers shall enter into an employment agreement with
them, which agreement shall include:
(a) The names and addresses of the handicapped

workers to be employed;
(b) The rate to be paid the handicapped workers which

shall be not less than seventy five (75%) per cent of the
applicable legal minimum wage;
(c) The duration of employment period; and

Page 161 of 166
(d) The work to be performed by handicapped workers.
The employment agreement shall be subject to inspection by the

Secretary of Labor or his duly authorized representatives.
The stipulations in the employment contracts indubitably conform with the

aforecited provision. Succeeding events and the enactment of RA No. 7277 (the
Magna Carta for Disabled Persons), 13 however, justify the application of Article 280
of the Labor Code.
Respondent bank entered into the aforesaid contract with a total of 56 handicapped
workers and renewed the contracts of 37 of them. In fact, two of them worked from
1988 to 1993. Verily, the renewal of the contracts of the handicapped workers and
the hiring of others lead to the conclusion that their tasks were beneficial and
necessary to the bank. More important, these facts show that they were qualified to
perform the responsibilities of their positions. In other words, their disability did not
render them unqualified or unfit for the tasks assigned to them.
In this light, the Magna Carta for Disabled Persons mandates that a
qualified disabled employee should be given the same terms and conditions of
employment as a qualified able-bodied person. Section 5 of the Magna Carta
provides:
Sec. 5. Equal Opportunity for Employment. — No disabled person

shall be denied access to opportunities for suitable employment. A
qualified disabled employee shall be subject to the same terms and
conditions of employment and the same compensation, privileges,
benefits, fringe benefits, incentives or allowances as a qualified able
bodied person.
The fact that the employees were qualified disabled persons necessarily removes
the employment contracts from the ambit of Article 80. Since the Magna Carta
accords them the rights of qualified able-bodied persons, they are thus covered by
Article 280 of the Labor Code, which provides:
Art. 280. Regular and Casual Employment. — The provisions of

written agreement to the contrary notwithstanding and regardless of
the oral agreement of the parties, an employment shall be deemed to
be regular where the employee has been engaged to perform
business or trade of the employer, except where the employment has
been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the
engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the
Page 162 of 166
An employment shall be deemed to be casual if it is not covered by
the preceding paragraph: Provided, That, any employee who has
rendered at least one year of service, whether such service is
continuous or broken, shall be considered as regular employee with
respect to the activity in which he is employed and his employment
shall continue while such activity exists.
The test of whether an employee is regular was laid down in De Leon v. NLRC, 14 in
which this Court held:
The primary standard, therefore, of determining regular employment

is the reasonable connection between the particular activity
performed by the employee in relation to the usual trade or business
of the employer. The test is whether the former is usually necessary
or desirable in the usual business or trade of the employer. The
connection can be determined by considering the nature of the work
performed and its relation to the scheme of the particular business or
trade in its entirety. Also if the employee has been performing the job
for at least one year, even if the performance is not continuous and
merely intermittent, the law deems repeated and continuing need for
its performance as sufficient evidence of the necessity if not
indispensibility of that activity to the business. Hence, the employment
is considered regular, but only with respect to such activity, and while
such activity exist.
Without a doubt, the task of counting and sorting bills is necessary and desirable to
the business of respondent bank. With the exception of sixteen of them, petitioners
performed these tasks for more than six months. Thus, the following twenty-seven
petitioners should be deemed regular employees: Marites Bernardo, Elvira Go
Diamante, Rebecca E. David, David P. Pascual, Raquel Estiller, Albert Hallare,
Edmund M. Cortez, Joselito O. Agdon, George P. Ligutan Jr., Lilibeth Q.
Marmolejo, Jose E. Sales, Isabel Mamauag, Violeta G. Montes, Albino Tecson,
Melody V. Gruela, Bernadeth D. Agero, Cynthia de Vera, Lani R. Cortez, Ma. Isabel
B. Concepcion, Margaret Cecilia Canoza, Thelma Sebastian, Ma. Jeanette
Cervantes, Jeannie Ramil, Rozaida Pascual, Pinky Baloloa, Elizabeth Ventura and
Grace S. Pardo.
As held by the Court, "Articles 280 and 281 of the Labor Code put an end to the
pernicious practice of making permanent casuals of our lowly employees by the
simple expedient of extending to them probationary appointments, ad
infinitum."15 The contract signed by petitioners is akin to a probationary
employment, during which the bank determined the employees' fitness for the job.
When the bank renewed the contract after the lapse of the six-month probationary
period, the employees thereby became regular employees. 16 No employer is
allowed to determine indefinitely the fitness of its employees.

Page 163 of 166
As regular employees, the twenty-seven petitioners are entitled to security of
tenure; that is, their services may be terminated only for a just or authorized cause.
Because respondent failed to show such cause, 17 these twenty-seven petitioners
are deemed illegally dismissed and therefore entitled to back wages and
reinstatement without loss of seniority rights and other privileges. 18 Considering the
allegation of respondent that the job of money sorting is no longer available
because it has been assigned back to the tellers to whom it originally
belonged, 18 petitioners are hereby awarded separation pay in lieu of
reinstatement. 20
Because the other sixteen worked only for six months, they are not deemed regular
employees and hence not entitled to the same benefits.
Applicability of the Brent Ruling
Respondent bank, citing Brent School v. Zamora 21 in which the Court upheld the
validity of an employment contract with a fixed term, argues that the parties entered
into the contract on equal footing. It adds that the petitioners had in fact an
advantage, because they were backed by then DSWD Secretary Mita Pardo de
Tavera and Representative Arturo Borjal.
We are not persuaded. The term limit in the contract was premised on the fact that
the petitioners were disabled, and that the bank had to determine their fitness for
the position. Indeed, its validity is based on Article 80 of the Labor Code. But as
noted earlier, petitioners proved themselves to be qualified disabled persons who,
under the Magna Carta for Disabled Persons, are entitled to terms and conditions
of employment enjoyed by qualified able-bodied individuals; hence, Article 80 does
not apply because petitioners are qualified for their positions. The validation of the
limit imposed on their contracts, imposed by reason of their disability, was a glaring
instance of the very mischief sought to be addressed by the new law.
Moreover, it must be emphasized that a contract of employment is impressed with

public interest. 22 Provisions of applicable statutes are deemed written into the
contract, and the "parties are not at liberty to insulate themselves and their
relationships from the impact of labor laws and regulations by simply contracting
with each other." 23 Clearly, the agreement of the parties regarding the period of
employment cannot prevail over the provisions of the Magna Carta for Disabled
Persons, which mandate that petitioners must be treated as qualified able-bodied
employees.
Respondent's reason for terminating the employment of petitioners is instructive.

Because the Bangko Sentral ng Pilipinas (BSP) required that cash in the bank be
turned over to the BSP during business hours from 8:00 a.m. to 5:00 p.m.,
respondent resorted to nighttime sorting and counting of money. Thus, it reasons
that this task "could not be done by deaf mutes because of their physical limitations
as it is very risky for them to travel at night." 24 We find no basis for this argument.
Page 164 of 166
Travelling at night involves risks to handicapped and able-bodied persons alike.
This excuse cannot justify the termination of their employment.
Other Grounds Cited by Respondent
Respondent argues that petitioners were merely "accommodated" employees. This

Equally unavailing are private respondent's arguments that it did not go out of its
way to recruit petitioners, and that its plantilla did not contain their positions. In L. T.
Datu v. NLRC, 25 the Court held that "the determination of whether employment is
casual or regular does not depend on the will or word of the employer, and the
procedure of hiring . . . but on the nature of the activities performed by the
employee, and to some extent, the length of performance and its continued
existence."
Private respondent argues that the petitioners were informed from the start that
they could not become regular employees. In fact, the bank adds, they agreed with
the stipulation in the contract regarding this point. Still, we are not persuaded. The
well-settled rule is that the character of employment is determined not by
stipulations in the contract, but by the nature of the work performed. 26 Otherwise,
no employee can become regular by the simple expedient of incorporating this
condition in the contract of employment.
In this light, we iterate our ruling in Romares v. NLRC: 27
Art. 280 was emplaced in our statute books to prevent the

circumvention of the employee's right to be secure in his tenure by
indiscriminately and completely ruling out all written and oral
agreements inconsistent with the concept of regular employment
defined therein. Where an employee has been engaged to perform
business of the employer, such employee is deemed a regular
employee and is entitled to security of tenure notwithstanding the
contrary provisions of his contract of employment.
xxx xxx xxx
At this juncture, the leading case of Brent School,

Inc. v. Zamora proves instructive. As reaffirmed in subsequent cases,
this Court has upheld the legality of fixed-term employment. It ruled
that the decisive determinant in "term employment" should not be the
activities that the employee is called upon to perform but the day
certain agreed upon the parties for the commencement and
Page 165 of 166
termination of their employment relationship. But this Court went on to
say that where from the circumstances it is apparent that the periods
have been imposed to preclude acquisition of tenurial security by the
employee, they should be struck down or disregarded as contrary to
public policy and morals.
In rendering this Decision, the Court emphasizes not only the constitutional bias in
favor of the working class, but also the concern of the State for the plight of the
disabled. The noble objectives of Magna Carta for Disabled Persons are not based
merely on charity or accommodation, but on justice and the equal treatment
of qualified persons, disabled or not. In the present case, the handicap of
petitioners (deaf-mutes) is not a hindrance to their work. The eloquent proof of this
statement is the repeated renewal of their employment contracts. Why then should
they be dismissed, simply because they are physically impaired? The Court
believes, that, after showing their fitness for the work assigned to them, they should
be treated and granted the same rights like any other regular employees.
In this light, we note the Office of the Solicitor General's prayer joining the
petitioners' cause. 28
WHEREFORE, premises considered, the Petition is hereby GRANTED. The June

20, 1995 Decision and the August 4, 1995 Resolution of the NLRC are REVERSED
and SET ASIDE. Respondent Far East Bank and Trust Company is hereby
ORDERED to pay back wages and separation pay to each of the following twenty-
seven (27) petitioners, namely, Marites Bernardo, Elvira Go Diamante, Rebecca E.
David, David P. Pascual, Raquel Estiller, Albert Hallare, Edmund M. Cortez,
Joselito O. Agdon, George P. Ligutan Jr., Liliberh Q. Marmolejo, Jose E. Sales,
Isabel Mamauag, Violeta G. Montes, Albino Tecson, Melody V. Gruela, Bernadeth
D. Agero, Cynthia de Vera, Lani R. Cortez, Ma. Isabel B. Concepcion, Margaret
Cecilia Canoza, Thelma Sebastian, Ma. Jeanette Cervantes, Jeannie Ramil,
Rozaida Pascual, Pinky Baloloa, Elizabeth Ventura and Grace S. Pardo. The NLRC
is hereby directed to compute the exact amount due each of said employees,
pursuant to existing laws and regulations, within fifteen days from the finality of this
Decision. No costs.1âwphi1.nêt
SO ORDERED.

Page 166 of 166

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[1]

G.R. No. 168715. September 15, 2010.*

MEDLINE MANAGEMENT, INC. and GRECOMAR SHIPPING AGENCY,

Petitioners received on September 25, 2003 a copy of the summons 10 and

On January 9, 2004, respondents submitted their Position Paper with Opposition to

Ruling of the Labor Arbiter

WHEREFORE, premises considered, the Motion to Dismiss is hereby DENIED for

Ruling of the National Labor Relations Commission

Ruling of the Court of Appeals

🍥LaborRev Assignment No. 2

IN VIEW OF ALL THE FOREGOING, the instant petition is ordered DISMISSED.

Petitioners raise the following issues:

Petitioners contend that although Rule 1, Section 3 of the NLRC Rules of

The Labor Arbiter Properly Denied the Motion to Dismiss

(SEC) for seafarers."18 Section 28 of the POEA SEC states:

SECTION 28. JURISDICTION

Recognizing the peculiar nature of overseas shipboard employment, the employer

On the other hand, the Labor Code states:

🍥LaborRev Assignment No. 2

A. COMPENSATION AND BENEFITS FOR DEATH

In filing the complaint for payment of death compensation, reimbursement of

Failure to Comply with a Condition Precedent

SECTION 4. PROHIBITED PLEADINGS AND MOTIONS. – The following

SECTION 3. MOTION TO DISMISS. – On or before the date set for the

SECTION 1. PERIODS OF APPEAL. – Decisions, resolutions or orders of the

There is no conflict between the above provisions. The CA therefore correctly

WHEREFORE, the instant petition for review on certiorari is DENIED.

🍥LaborRev Assignment No. 2

G.R. No. 124439. February 5, 2004.*

PEOPLE OF THE PHILIPPINES, appellee, vs. FLOR GUTIERREZ Y TIMOD,

Criminal Law; Labor Law; Illegal Recruitment; Recruitment and placement defined.

Same; Same; Same; The crime becomes Illegal Recruitment in Large Scale when

Same; Same; Same; Recruitment and placement activities of agents or

Same; Same; Same; Illegal recruitment in large scale is malum pro-hibitum, not

Same; Same; Same; Evidence; Court attaches no persuasive value to affidavits of

The Information in Criminal Case No. 95-6796 reads as follows:

🍥LaborRev Assignment No. 2

🍥LaborRev Assignment No. 2

In her defense, the accused claimed that as an "employee" of a duly licensed

1. To negotiate, enter into business transactions for manpower supply particularly

2. For and in behalf of SARIFUDIN, MANPOWER AND GENERAL SERVICES

(a) Verified Job Orders;

(b) Special Power of Attorney;

(c) Copy of Certified Certificate of Business Registration;

(d) VISA Authorization and/or NOC VISA.

A Certification61 dated February 3, 1995, issued by the same agency, also states

🍥LaborRev Assignment No. 2

(b) No reimbursement to complainants is needed since their money have already

(c) Accused to pay moral damages in the amount of P50,000.00 to each

(d) Accused to pay exemplary damages in the amount of P50,000.00 to each

(e) To pay the costs of the suit.79

Appellant argues that as a representative of a duly licensed recruitment agency,

🍥LaborRev Assignment No. 2

a. Proposed appointment or Special Power of Attorney;

b. Clearances of the proposed representative or agent from NBI;

c. A sworn or verified statement by the designating or appointing person or

Approval by the Administration of the appointment or designation does not

Any revocation or amendment in the appointment should be communicated to the

As found by the trial court83 the evidence on record, notably appellant's own

That appellant engaged in recruitment and placement is beyond dispute. The

The Affidavits of Desistance executed by two of the complainants deserve little

As appellant committed illegal recruitment against three or more persons, she is

WHEREFORE, the Decision of the Regional Trial Court, finding appellant Flor