Labor Law I LO1

Case Analysis Assignment

1. Maternity Childrens Hosp vs. Secretary of Labor. GR No. 78909 June 30, 1989 - Labor Standard Case
About Wages, Ecola ( Article 128 of the Labor Code of the Philippines, the Secretary of Labor and Employment
or his/her duly authorized representatives 1) shall have access to employer’s records and premises at any time
of the day or night, 2) shall have power to issue compliance orders and issue writs of execution for the
enforcement of the orders, and 3) may order stoppage of work or suspension of operations of any unit or
department of an establishment when non-compliance with the law or rules poses grave and imminent
danger to the health and safety of workers.)

2. Calalang vs. Williams 70 Phils 726- Social Justice Case (THE PETITION IS DENIED WITH COSTS AGAINST
THE PETITIONER.) Salus populi est suprema lex. The welfare of the people is the supreme law. No advocate of
the law or public servant could aspire to serve under a higher principle. It is a recognition that laws and rules
derive their value from how well they serve their purpose of protecting and promoting the public good.
Hence, when discussing issues of legality, the question of what will truly benefit the people is not merely
always relevant, but, in fact, deserves the highest consideration.

3. Abella vs NLRC GR No. 71812 Jul 20, 1987- Seperation Pay (Art 284- the employer may also terminate
the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to
prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing
is for the purpose of circumventing the provisions of this title, by serving a written notice on the workers and
the Ministry of Labor and Employment at least month before the intended date thereof.)

4. Cebu Royal Plant vs. Minister of Labor GR No. 58639 August 12, 1987- Illegal Dismissal ( Section 8, Rule
I, Book VI, of the Rules and Regulations Implementing the Labor Code which states that “the employer shall
not terminate his employment unless there is a certification by a competent public health authority that the
disease is of such nature or at such a stage that it cannot be cured within a period of six (6) months even with
proper medical treatment.” The record does not contain the certification required by the above rule. Hence,
dismissal was illegal.)

5. SSSEA vs CA GR No. 85279 July 28, 1989- Strike of SSS employees (Not allowed because of government
sector)

6. Wallen Shipping Inc vs Ministry of Labor 102 SCRA 835- Dismissal ( conspired with the ITF in coercing
the ship authorities to pay the seamen and worldwide rate, instead of the lower Far East rate as provided in
their contracts of employment)

7. Vir-jen Shipping and Marine Service vs NLRC 115 SCRA 347- Illegal Termination and Unfair Wages (
Bisula also pointed out that Vir-jen rates were “very far in comparison with other shipping agencies in
Manila.)

8. Eastern Assurance and Surety Corp. vs Sec. of Labor GR Nos. 79436-50, Jan. 17, 1990- Payment of
Bond (violation of Articles 32 and 34 (a) of the LC, as amended, is established against J&B. The claims of
complainants having arisen out of acts of the principal covered under the surety (bond), EASCO is equally
liable therefor.)

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 9. People vs F. Hernandez GR No. 141221-36 March 7, 2002- Illegal recruitment and Estafa
(Illegal promise of working abroad. The evidence on record shows that they promised overseas
employment to private complainants and required them to prepare the necessary documents
and to pay the placement fee, although they did not have any license to do so. There is illegal
recruitment when one who does not possess the necessary authority or license gives the
impression of having the ability to send a worker abroad.)
10. People vs Tan Tiong GR Nos. 120835-40 Apr 10, 1997

11. People vs Arabia GR Nos. 138431-36 Sept. 12, 2001

12. People vs Goce GR N. 113161 August 29, 1995

13. People vs Calonzo GR No. 115150-55 Sept. 27, 1997

14. Salazar vs Achacoso and Marquez GR No. 81510 Mar 14, 1990

15. General Milling Corp. vs Torres GR No, 9366 April 22, 1991

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 Maternity Children’s Hospital vs. Secretary of Labor
G.R. No. 78909 June 30, 1989

EN BANC: MEDIALDEA, J.:

Facts:

Petitioner is a semi-government hospital, managed by the Board of Directors of the Cagayan de

Oro Women's Club and Puericulture Center, headed by Mrs. Antera Dorado, as holdover
President. The hospital derives its finances from the club itself as well as from paying patients,
averaging 130 per month. It is also partly subsidized by the Philippine Charity Sweepstakes
Office and the Cagayan De Oro City government.

Petitioner has forty-one (41) employees. Aside from salary and living allowances, the
employees are given food, but the amount spent therefor is deducted from their respective
salaries

On May 23, 1986, ten (10) employees of the petitioner employed in different capacities/positions
filed a complaint with the Office of the Regional Director of Labor and Employment, Region X,
for underpayment of their salaries and ECOLAS, which was docketed as ROX Case No. CW-
71-86.

On June 16, 1986, the Regional Director directed two of his Labor Standard and Welfare
Officers to inspect the records of the petitioner to ascertain the truth of the allegations in the
complaints. Based on their inspection report and recommendation, the Regional Director issued
an Order dated August 4, 1986, directing the payment of P723,888.58, representing
underpayment of wages and ECOLAs to all the petitioner's employees.

Petitioner appealed from this Order to the Minister of Labor and Employment, Hon. Augusto S.
Sanchez, who rendered a Decision on September 24, 1986, modifying the said Order in that
deficiency wages and ECOLAs should be computed only from May 23, 1983 to May 23, 1986,

On October 24, 1986, the petitioner filed a motion for reconsideration which was denied by the
Secretary of Labor in his Order dated May 13, 1987, for lack of merit.

Issue:

Whether or not the Regional Director had jurisdiction over the case and if so, the extent of
coverage of any award that should be forthcoming, arising from his visitorial and enforcement
powers under Article 128 of the Labor Code.

Held:

This is a labor standards case, and is governed by Art. 128-b of the Labor Code, as amended
by E.O. No. 111. Under the present rules, a Regional Director exercises both visitorial and
enforcement power over labor standards cases, and is therefore empowered to adjudicate
money claims, provided there still exists an employer-employee relationship, and the findings of
the regional office is not contested by the employer concerned.

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Labor standards refer to the minimum requirements prescribed by existing laws, rules, and
regulations relating to wages, hours of work, cost of living allowance and other monetary and
welfare benefits, including occupational, safety, and health standards (Section 7, Rule I, Rules
on the Disposition of Labor Standards Cases in the Regional Office, dated September 16,
1987).

Decision:

ACCORDINGLY, this petition should be dismissed, as it is hereby DISMISSED, as regards all

persons still employed in the Hospital at the time of the filing of the complaint, but GRANTED as
regards those employees no longer employed at that time. SO ORDERED.

( Article 128 of the Labor Code of the Philippines, the Secretary of Labor and Employment or
his/her duly authorized representatives 1) shall have access to employer’s records and
premises at any time of the day or night, 2) shall have power to issue compliance orders and
issue writs of execution for the enforcement of the orders, and 3) may order stoppage of work or
suspension of operations of any unit or department of an establishment when non-compliance
with the law or rules poses grave and imminent danger to the health and safety of workers.)

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 Calalang vs. Williams
G.R. No. 47800 2 December 1940

FIRST DIVISION, LAUREL (J): 4 CONCUR

Facts:

A resolution by the National Traffice Commission that animal drawn vehicles be prohibited from
passing along Rosario Street extending from Plaza Calderon de la Barca to Dasmariñas Street,
from 7:30 a.m. to 12:30 p.m. and from 1:30 p.m. to 5:30 p.m.; and along Rizal Avenue extending
from the railroad crossing at Antipolo Street to Echague Street, from 7 a.m. to 11 p.m., for a
period of one year from the date of the opening of the Colgante Bridge to traffic was approved
and adopted by the Secretary of Public Works and Communications upon indorsement by the
Director of Public Works pursuant to Commonwealth Act 548 with modifications that Rosario
Street and Rizal Avenue be closed to traffic of animal-drawn vehicles, between the points and
during the hours as indicated.

The Mayor of Manila and the Acting Chief of Police of Manila have enforced and caused to be
enforced the rules and regulations thus adopted. Maximo Calalang, in his capacity as a private
citizen and as a taxpayer of Manila, brought before the Supreme Court the petition for a writ of
prohibition against A. D. Williams, as Chairman of the National Traffic Commission; Vicente
Fragante, as Director of Public Works; Sergio Bayan, as Acting Secretary of Public Works and
Communications; Eulogio Rodriguez, as Mayor of the City of Manila; and Juan Dominguez, as
Acting Chief of Police of Manila.

Issue:

Whether the rules and regulations promulgated by the Director of Public Works infringe upon
the constitutional precept regarding the promotion of social justice to insure the well-being and
economic security of all the people.

Held:

The promotion of social justice is to be achieved not through a mistaken sympathy towards any
given group.

Social justice is "neither communism, nor despotism, nor atomism, nor anarchy," but the
humanization of laws and the equalization of social and economic forces by the State so that
justice in its rational and objectively secular conception may at least be approximated. Social
justice means the promotion of the welfare of all the people, the adoption by the Government of
measures calculated to insure economic stability of all the competent elements of society,
through the maintenance of a proper economic and social equilibrium in the interrelations of the
members of the community, constitutionally, through the adoption of measures legally justifiable,
or extra-constitutionally, through the exercise of powers underlying the existence of all
governments on the time-honored principle of salus populi est suprema lex.

Social justice, therefore, must be founded on the recognition of the necessity of

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

Decision:

IN VIEW OF THE FOREGOING, the Writ of Prohibition Prayed for is hereby denied, with costs
against the petitioner. So ordered.

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Abella vs. NLRC

G.R. No. 71813 July 20, 1987 EN BANC: PARAS (J), 13 CONCUR

Facts:

On June 27, 1960, herein petitioner Rosalina Perez Abella leased a farm land in Monteverde, Negros
Occidental, known as Hacienda Danao-Ramona, for a period of ten (10) years, renewable, at her option, for
another ten (10) years. On August 13, 1970, she opted to extend the lease contract for another ten (10)
years During the existence of the lease, she employed the herein private respondents. Private respondent
Ricardo Dionele, Sr. has been a regular farm worker since 1949 and he was promoted to Cabo in 1963. On the
other hand, private respondent Romeo Quitco started as a regular employee in 1968 and was promoted to
Cabo in November of the same year. Upon the expiration of her leasehold rights, petitioner dismissed private
respondents and turned over the hacienda to the owners thereof on October 5, 1981, who continued the
management, cultivation and operation of the farm.

On November 20, 1981, private respondents filed a complaint against the petitioner for overtime pay, illegal
dismissal and reinstatement with backwages. 

Labor Arbiter Manuel M. Lucas, Jr., in a Decision dated July 16, 1982, ruled that the dismissal is warranted by
the cessation of business, but granted the private respondents separation pay. The First Division of this Court,
in a Resolution dated March 31, 1986, resolved to give due course to the petition; and to require the parties to
submit simultaneous memoranda. In compliance therewith, the Solicitor General filed his Memorandum on
June 18, 1986 and petitioner on July 23, 1986.

Issue: W/ON PRIVATE RESPONDENTS ARE ENTITLED TO SEPARATION PAY.

Held:

Yes. Art. 284. Closure of establishment and reduction of personnel.  There is no question that Article 284 of the
Labor Code as amended by BP 130 is the law applicable in this case. The purpose of Article 284 as amended is
obvious-the protection of the workers whose employment is terminated because of the closure of
establishment and reduction of personnel. Without said law, employees like private respondents in the case at
bar will lose the benefits to which they are entitled — for the thirty three years of service in the case of
Dionele and fourteen years in the case of Quitco. Although they were absorbed by the new management of
the hacienda, in the absence of any showing that the latter has assumed the responsibilities of the former
employer, they will be considered as new employees and the years of service behind them would

In any event, it is well-settled that in the implementation and interpretation of the provisions of the Labor
Code and its implementing regulations, the workingman’s welfare should be the primordial and paramount
consideration.

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Petitioner’s contention that aforesaid provision violates constitutional
guarantee against impairment of obligations and contracts because
upon leasing of said Hacienda Danao-Ramona neither she nor the
lessor contemplated the creation of the obligation to pay separation
pay to the workers at the end of the lease is untenable. In Anucension
vs. NLRC, the Court ruled that “the prohibition is not to be read with
literal exactness…for it prohibits unreasonable impairment only.” And
added that in the implementation and interpretation of the provisions
of the Labor Code, the workingman’s welfare should be the
primordial and paramount consideration and all doubts should always
be resolved in favor of labor. The policy is to extend the law’s reach
to a greater number of employees who can avail of the benefits under
the law which is in consonance with the avowed policy of the State to
give maximum aid and protection to labor.

closure of establishment and reduction of personnel. — The employer may also terminate the employment of
any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or
the closing or cessation of operation of the establisment or undertaking unless the closing is for the purpose of
circumventing the provisions of this title, by serving a written notice on the workers and the Ministry of Labor
and Employment at least one (1) month before the intended date thereof. In case of termination due to the
installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a
separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of
service, whichever is higher. In case of retrenchment to prevent losses and in cases of closure or cessation of
operations of establishment or undertaking not due to serious business losses or financial reverses, the
separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of
service whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year.

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G.R. No. L-58639 August 12, 1987

CEBU ROYAL PLANT (SAN MIGUEL CORPORATION), vs.

THE HONORABLE DEPUTY MINISTER OF LABOR and RAMON PILONES

Subject: Labor Standards

FACTS:

Ramon Pilones, private respondent, was employed on February 16, 1978 on a probationary period of
employment for six (6) months with petitioner CRP. After said period, he underwent medical examination for
qualification as regular employee but the results showed that he is suffering from PTB minimal. Consequently,
he was informed of the termination of his employment by respondent since his illness was not curable within
6 months.

Pilones complained against his termination before the Ministry of Labor which dismissed the same. The
dismissal was reversed by the public respondent who ordered the reinstatement and payment of back wages.

Granting reinstatement, the public respondent argues that Pilones was already a permanent employee at the
time of his dismissal and so was entitled to security of tenure. The alleged ground for his removal, to wit,
“pulmonary tuberculosis minimal,” was not certified as incurable within six months as to justify his separation
and that the petitioner should have first obtained a clearance, as required by the regulations then in force, for
the termination of his employment.

CRP claims that the private respondent was still on probation at the time of his dismissal and so had no
security of tenure. The dismissal was necessary for the protection of the public health, as he was handling
ingredients in the processing of soft drinks which were being sold to the public.

ISSUE: Whether the dismissal was proper.

HELD:

No. The dismissal was not proper. Under Article 282 of the Labor Code, “an employee who is allowed to work
after a probationary period shall be considered a regular employee.” Pilones was already on permanent status
when he was dismissed on August 21, 1978, or four days after he ceased to be a probationer. As such, he
could validly claim the security of tenure guaranteed to him by the Constitution and the Labor Code.

The petitioner claims it could not have dismissed the private respondent earlier because the x-ray examination
was made only on August 17, 1978, and the results were not immediately available. That excuse is untenable.
We note that when the petitioner had all of six months during which to conduct such examination, it chose to
wait until exactly the last day of the probation period.

The applicable rule on the ground for dismissal invoked against him is Section 8, Rule I, Book VI, of the Rules
and Regulations Implementing the Labor Code which states that “the employer shall not terminate his
employment unless there is a certification by a competent public health authority that the disease is of such
nature or at such a stage that it cannot be cured within a period of six (6) months even with proper medical
treatment.” The record does not contain the certification required by the above rule. Hence, dismissal was
illegal.

It is also worth noting that the petitioner’s application for clearance to terminate the employment of the
private respondent was filed with the Ministry of Labor only on August 28, 1978, or seven days after his
dismissal. As the NLRC has repeatedly and correctly said, the prior clearance rule (which was in force at that
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time) was not a “trivial technicality.” It required “not just the mere filing of a petition or the mere attempt to
procure a clearance” but that “the said clearance be obtained prior to the operative act of termination.

Although we must rule in favor of his reinstatement, this must be conditioned on his fitness to resume his
work, as certified by competent authority.

**Another Doctrine under Sec4 of Labor Code on construction:

Concern for the lowly worker who, often at the mercy of his employers, must look up to the law for his
protection. Fittingly, that law regards him with tenderness and even favor and always with faith and hope in
his capacity to help in shaping the nation’s future. It is error to take him for granted. He deserves our abiding
respect. How society treats him will determine whether the knife in his hands shall be a caring tool for beauty
and progress or an angry weapon of defiance and revenge. The choice is obvious, of course. If we cherish him
as we should, we must resolve to lighten “the weight of centuries” of exploitation and disdain that bends his
back but does not bow his head.

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SOCIAL SECURITY SYSTEM EMPLOYEES ASSOCIATION (SSSEA) vs THE COURT OF APPEALS G.R. No. 85279 July
28, 1989

FACTS: Primarily, the issue raised in this petition is whether or not the Regional Trial Court can enjoin the
Social Security System Employees Association (SSSEA) from striking and order the striking employees to return
to work. Collaterally, it is whether or not employees of the Social Security System (SSS) have the right to strike.

SSS filed with the Regional Trial Court of Quezon City a complaint for damages with a prayer for a writ of
preliminary injunction against petitioners, alleging that officers and members of SSSEA staged an illegal strike
and barricaded the entrances to the SSS Building, preventing non-striking employees from reporting for work
and SSS members from transacting business with the SSS; that the strike was reported to the Public Sector
Labor – Management Council, which ordered the strikers to return to work; that the strikers refused to return
to work; and that the SSS suffered damages as a result of the strike. The complaint prayed that a writ of
preliminary injunction be issued to enjoin the strike and that the strikers be ordered to return to work; that
the defendants (petitioners herein) be ordered to pay damages; and that the strike be declared illegal.

It appears that the SSSEA went on strike after the SSS failed to act on the union’s demands, which included:
implementation of the provisions of the old SSS-SSSEA collective bargaining agreement (CBA) on check-off of
union dues; payment of accrued overtime pay, night differential pay and holiday pay; conversion of temporary
or contractual employees with six (6) months or more of service into regular and permanent employees and
their entitlement to the same salaries, allowances and benefits given to other regular employees of the SSS;
and payment of the children’s allowance of P30.00, and after the SSS deducted certain amounts from the
salaries of the employees and allegedly committed acts of discrimination and unfair labor practices. 

In dismissing the petition for certiorari and prohibition with preliminary injunction filed by petitioners, the
Court of Appeals held that since the employees of the SSS, are government employees, they are not allowed
to strike, and may be enjoined by the Regional Trial Court, which had jurisdiction over the SSS’ complaint for
damages, from continuing with their strike.

ISSUE: w/n SSS employees have the right to strike

HELD: No. The 1987 Constitution provides that the State “shall guarantee the rights of all workers to self-
organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to
strike in accordance with law” [Art. XIII, Sec. 31].

By itself, this provision would seem to recognize the right of all workers and employees, including those in the
public sector, to strike. But the Constitution itself fails to expressly confirm this impression, for it provides,
after defining the scope of the civil service as “all branches, subdivisions, instrumentalities, and agencies of the
Government, including government-owned or controlled corporations with original charters,” that “[t]he right
to self-organization shall not be denied to government employees” [Art. IX(B), Sec. 2(l) and (50)].
Parenthetically, the Bill of Rights also provides that “[tlhe right of the people, including those employed in
the public and private sectors, to form unions, associations, or societies for purposes not contrary to law
shall not abridged” [Art. III, Sec. 8]. Thus, while there is no question that the Constitution recognizes the right
of government employees to organize, it is silent as to whether such recognition also includes the right to
strike.

Resort to the intent of the framers of the organic law becomes helpful in understanding the meaning of these
provisions. A reading of the proceedings of the Constitutional Commission that drafted the 1987 Constitution
would show that in recognizing the right of government employees to organize, the commissioners intended
to limit the right to the formation of unions or associations only, without including the right to strike.
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At present, in the absence of any legislation allowing government employees to strike, recognizing their right
to do so, or regulating the exercise of the right, they are prohibited from striking, by express provision of
Memorandum Circular No. 6 and as implied in E.O. No. 180.

The SSS is a GOCC with an original charter, having been created under R.A. No. 1161, its employees are part of
the civil service and are covered by the Civil Service Commission’s memorandum prohibiting strikes. This being
the case, the strike staged by the employees of the SSS was illegal. The strike staged by the employees of the
SSS belonging to petitioner union being prohibited by law, an injunction may be issued to restrain it.

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Wallem Shipping, Inc. vs. Ministry of Labor 102 SCRA 835

FACTS: Petition for certiorari with preliminary injunction with prayer that the Orders dated December 19, 1977
and April 3, 1979 of the National Seamen Board (NSB) be declared null and void. Private respondents were
hired by petitioner sometime in May 1975 to work as seamen for a period of ten months on board the M/V
Woermann Sanaga, a Dutch vessel owned and operated by petitioner's European principals. While their
employment contracts were still in force, private respondents were dismissed by their employer, petitioner
herein, and were discharged from the ship on charges that they instigated the International Transport
Federation (ITF) to demand the application of worldwide ITF seamen's rates to their crew. Private respondents
were repatriated to the Philippines on October 27, 1975 and upon their arrival in Manila, they instituted a
complaint against petitioner for illegal dismissal and recovery of wages and other benefits corresponding to
the five months' unexpired period of their shipboard employment contract.

Petitioner defended the dismissal by alleging that the seamen had conspired with the ITF in coercing the ship
authorities to pay the seamen and worldwide rate, instead of the lower Far East rate as provided in their
contracts of employment. It further charged that the seamed threatened the ship authorities that unless they
would agree to the increased wages, the ship would not be able to leave port; it would be picketed or
boycotted and declared as a “hot” ship by the ITF.

ISSUE: WON private respondents are liable for breach of their employment contracts for accepting salaries
higher than their contracted rates

HELD: The findings and conclusion of the Board should be sustained. As already intimated above, there is no
logic in the statement made by the Secretariat's Hearing Officer that the private respondents are liable for
breach of their employment contracts for accepting salaries higher than their contracted rates. Said
respondents are not signatories to the Special Agreement, nor was there any showing that they instigated the
execution thereof. Respondents should not be blamed for accepting higher salaries since it is but human for
them to grab every opportunity which would improve their working conditions and earning capacity. It is a
basic right of all workingmen to seek greater benefits not only for themselves but for their families as well, and
this can be achieved through collective bargaining or with the assistance of trade unions. The Constitution
itself guarantees the promotion of social welfare and protection to labor. It is therefore the Hearing Officer
that gravely erred in disallowing the payment of the unexpired portion of the seamen's respective contracts of
employment. it is petitioner who is guilty of breach of contract when they dismissed the respondents without
just cause and prior to the expiration of the employment contracts. As the records clearly show, petitioner
voluntarily entered into the Special Agreement with ITF and by virtue thereof the crew men were actually
given their salary differentials in view of the new rates. It cannot be said that it was because of respondents'
fault that petitioner made a sudden turn-about and refused to honor the special agreement. In brief, We
declare petitioner guilty of breach of contract and should therefore be made to comply with the directives
contained in the disputed Orders of December 19, 1977 and April 3, 1979.

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 VIR-JEN Shipping and Marine Services, Inc., vs. NLRC
G.R. No. L-58011 & L-58012 November 18, 1983

EN BANC, GUTIERREZ, JR., J.:

Facts:

Certain seamen entered into a contract of employment for a 12-month period. Some three
months after the commencement of their employment, the seamen demanded a 50 % increase
of their salaries and benefits. The seamen demanded this increase while their vessel was en
route to a port in Australia controlled by thye International Transport Workers’ Federation (ITF),
a militant international labor organization with affiliates in different ports of the world, which
reputedly can tie a vessel in a port by preventing its loading and unloading unless it paid its
seamen their prescribed ITF rates.

In reply, the agent of the owner of the vessel agreed to pay a 25% increase, but when the
vessel arrived in Japan shortly afterwards, the seamen were repatriated to Manila and their
contract terminated. There is no showing that the Seamen were given the opportunity to at least
comment for the cancellation of their contracts, although they had served only three (3) out of
the twelve (12) months' duration of their contracts.

The private respondents filed a complaint for illegal dismissal and non-payment of earned
wages with the National Seamen Board (NSB). The Vir-jen Shipping and Marine Services Inc. in
turn filed a complaint for breach of contract and recovery of excess salaries and overtime pay
against the private respondents. On July 2, 1980, the NSB rendered a decision declaring that
the seamen breached their employment contracts when they demanded and received from Vir-
jen Shipping wages over and above their contracted rates. The dismissal of the seamen was
declared legal and the seamen were ordered suspended.

The seamen appealed the decision to the NLRC which reversed the decision of the on the
ground that the termination of the contract by the petitioner was without valid cause. Hence, the
petition.

Issue:

Whether or not the findings of the NSB is more credible than the NLRC that the seamen did not
violate their contract.

Held:

No, The decision sought to be reconsidered appears to be a deviation from the Court's
decision, speaking through the First Division, in Wallem Shipping, Inc. v. Hon. Minister of
Labor (102 SCRA 835). Faced with two seemingly conflicting resolutions of basically the same
issue by its two Divisions, the Court. therefore, resolved to transfer the case to the Court en
banc.

We sustain the decision of the respondent National labor Relations Commission.

The contention that manning industries in the Philippines would not survive if the instant case is
not decided in favor of the petitioner is not supported by evidence. The Wallem case was
decided on February 20, 1981. There have been no severe repercussions, no drying up of

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employment opportunities for seamen, and none of the dire consequences repeatedly
emphasized by the petitioner. Why should Vir-jen be all exception?

Filipino seamen are admittedly as competent and reliable as seamen from any other country in
the world. Otherwise, there would not be so many of them in the vessels sailing in every ocean
and sea on this globe. It is competence and reliability, not cheap labor that makes our seamen
so greatly in demand. Filipino seamen have never demanded the same high salaries as seamen
from the United States, the United Kingdom, Japan and other developed nations. But certainly
they are entitled to government protection when they ask for fair and decent treatment by their
employer.-, and when they exercise the right to petition for improved terms of employment,
especially when they feel that these are sub-standard or are capable of improvement according
to internationally accepted rules. In the domestic scene, there are marginal employers who
prepare two sets of payrolls for their employees — one in keeping with minimum wages and the
other recording the sub-standard wages that the employees really receive, The reliable
employers, however, not only meet the minimums required by fair labor standards legislation but
even go way above the minimums while earning reasonable profits and prospering. The same is
true of international employment. There is no reason why this Court and the Ministry of Labor
and. Employment or its agencies and commissions should come out with pronouncements
based on the standards and practices of unscrupulous or inefficient shipowners, who claim they
cannot survive without resorting to tricky and deceptive schemes, instead of Government
maintaining labor law and jurisprudence according to the practices of honorable, competent,
and law-abiding employers, domestic or foreign.

Prescinding from the above, we now hold that neither the National Seamen Board nor the
National Labor Relations Commission should, as a matter of official policy, legitimize and
enforce cubious arrangements where shipowners and seamen enter into fictitious contracts
similar to the addendum agreements or side contracts in this case whose purpose is to deceive.
The Republic of the Philippines and its ministries and agencies should present a more
honorable and proper posture in official acts to the whole world, notwithstanding our desire to
have as many job openings both here and abroad for our workers. At the very least, such as
sensitive matter involving no less than our dignity as a people and the welfare of our
workingmen must proceed from the Batasang Pambansa in the form of policy legislation, not
from administrative rule making or adjudication

The facts show that when the respondents boarded the M/T Jannu there was no intention
to send their ship to Australia. On January 10, 1979, the petitioner sent a cable to
respondent shipmaster Bisula informing him of the procedure to be followed in the
computation of special compensation of crewmembers while in ITF controlled ports and
expressed regrets for not having earlier clarified the procedure as it thought that the
vessel would trade in Carribean ports only.

On March 22, 1979, the petitioner sent another cable informing Bisula of the special
compensation when the ship would call at Kwinana Australia. The following day,
shipmaster Bisula cabled Vir-jen stating that the officers and crews were not interested in
ITF membership if not paid ITF rates and that their only demand was a 50 percent increase
based on their then salaries. Bisula also pointed out that Vir-jen rates were “very far in
comparison with other shipping agencies in Manila.

WHEREFORE, the motions for reconsideration are hereby GRANTED. The petition is
DISMISSED for lack of merit. The decision of the National Labor Relations Commission is
AFFIRMED. No costs. SO ORDERED.

15
Fernando, C.J., Guerrero, Abad Santos, Plana, Escolin and Relova, JJ., concur.

16
 Eastern Assurance and Surety Corp. vs Sec. of
Labor GR No L-79436-50 January 17, 1990

Parties:
EASTERN ASSURANCE & SURETY CORPORATION, petitioner,
vs.
SECRETARY OF LABOR, PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION,
ELVIRA VENTURA, ESTER TRANGUILLAN, et al., respondents.
Tanjuatco, Oreta, Tanjuatco, Berenguer & San Vicente for petitioner.

Narvasa, J.

Facts:
In connection with the application with the Philippine Overseas Employment Administration
(POEA) of J & B Manpower Specialist, Inc. for a license to engage in business as a recruitment
agency, a surety bond was filed on January 2, 1985 by the applicant and the Eastern Assurance
and Surety Corporation, herein petitioner, in virtue of which they both held themselves —
. . . firmly bound unto (said) Philippine Overseas Employment Administration, Ministry of
Labor in the penal sum of PESOS ONE HUNDRED FIFTY THOUSAND ONLY . . .
(Pl50,000.00) for the payment of which will and truly to be made, . . . (they bound
themselves, their) heirs, executors, administrators, successors and assigns, jointly and
severally . .

The bond stipulated that:

a) it was "conditioned upon the true and faithful performance and observance of the . . .
principal (J & B Manpower Specialist, Inc.) of its duties and obligations in accordance
with all the rules and regulations promulgated by the Ministry of Labor Philippine
Overseas Employment Administration and with the terms and conditions stipulated in the
License;

b) the liability of the . . . Surety (petitioner) shall in no case exceed the sum of PESOS
ONE HUNDRED FIFTY THOUSAND (P150,000.00) ONLY, PHILIPPINE CURRENCY;

c) notice to the Principal is also a notice to the Surety; and

d) LIABILITY of the surety . . . shall expire on JANUARY 02, 1986 and this bond shall be
automatically cancelled ten (10) days after its expiration and the surety shall not be liable
for any claim not discovered and presented to it in writing within said period of . . . from
expiration and the obligee hereby expressly waives the rights to file any court action
against the Surety after termination of said period of above cited.

Issues:
EASCO essentially disclaimed liability on the ground that the claims were not expressly covered
by the bond, that POEA had no jurisdiction to order forfeiture of the bond, that some of the
claims were paid beyond or prior to the period of effectivity of the bond.

Held:
EASCO's liability for the refund, jointly and severally with its principal, was limited to 19
named complainants (in contrast to verdicts of the POEA and the Deputy Minister which both

17
ordered payment to no less than 33 complainants) and was correspondingly reduced
from P308,751.75 and US $ 400.00 to the aggregate amount of P 140,817.75.

The penalties of suspension and cancellation of license or authority are prescribed

for violations of the above quoted provisions, among others. And the Secretary of Labor
has the power under Section 35 of the law to apply these sanctions, as well as the
authority, conferred by Section 36, not only, to "restrict and regulate the recruitment and
placement activities of all agencies," but also to "promulgate rules and regulations to carry
out the objectives and implement the provisions" governing said activities. Pursuant to this
rule-making power thus granted, the Secretary of Labor gave the POEA "on its own
initiative or upon filing of a complaint or report or upon request for investigation by any
aggrieved person, . . . (authority to) conduct the necessary proceedings for the suspension
or cancellation of the license or authority of any agency or entity" for certain enumerated
offenses including —
1) the imposition or acceptance, directly or indirectly, of any amount of money,
goods or services, or any fee or bond in excess of what is prescribed by the
Administration, and
2) any other violation of pertinent provisions of the Labor Code and other relevant
laws, rules and regulations.

The Administrator was also given the power to "order the dismissal of the case or the
suspension of the license or authority of the respondent agency or contractor or
recommend to the Minister the cancellation thereof."

EASCO's claim that it had not been properly served with summons as regards a few of the
complaints must be rejected, the issue being factual, and the Court having been cited to
no grave error invalidating the respondent Secretary's conclusion that summons had
indeed been duly served.

EASCO's half-hearted argument that its liability should be limited to the maximum amount
set in its surety bond, i.e., P150,000.00, is palpably without merit, since the aggregate
liability imposed on it, P140,817.75, supra, does not in fact exceed that limit.

Decision:
WHEREFORE, the petition is DISMISSED for lack of merit, and this decision is declared
to be immediately executory. Costs against petitioner.

18
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs.
FRANCISCO HERNANDEZ (at large), KARL REICHL, and YOLANDA GUTIERREZ
DE
REICHL, accused,
KARL REICHL and YOLANDA GUTIERREZ DE REICHL, accused-appellants

PUNO, J.:

FACTS:

n April 1993, eight (8) informations for syndicated and large scale illegal recruitment and
eight (8) informations for estafa were filed against accused-appellants, spouses Karl and
Yolanda Reichl, together with Francisco Hernandez. Only the Reichl spouses were tried
and convicted by the trial court as Francisco Hernandez remained at large.1âwphi1.nêt
The evidence for the prosecution consisted of the testimonies of private complainants; a
certification from the Philippine Overseas Employment Administration (POEA) that
Francisco Hernandez, Karl Reichl and Yolanda Gutierrez Reichl in their personal
capacities were neither licensed nor authorized by the POEA to recruit workers for
overseas employment; the receipts for the payment made by private complainants; and
two documents signed by the Reichl spouses where they admitted that they promised to
secure Austrian tourist visas for private complainants and that they would return all the
expenses incurred by them if they are not able to leave by March 24, 1993, and where
Karl Reichl pledged to refund to private complainants the total sum of P1,388,924.00
representing the amounts they paid for the processing of their papers.
ISSUE: Are the persons accused guilty of illegal recruitment and estafa?

COURT’S RULING:
Article 38 of the Labor Code defines illegal recruitment as “any recruitment activities,
including the prohibited practices enumerated under Article 34 of (the Labor Code), to
be undertaken by non-licensees or non-holders of authority.” The term “recruitment and
placement” refers to any act of canvassing, enlisting, contracting, transporting, utilizing,
hiring or procuring workers, including 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. The law
imposes a higher penalty when the illegal recruitment is committed by a syndicate or in
large scale as they are considered an offense involving economic sabotage. Illegal
recruitment is deemed committed by a syndicate if carried out by a group of three (3) or
more persons conspiring and/or confederating with one another in carrying out any
unlawful or illegal transaction, enterprise or scheme. It is deemed committed in large
scale if committed against three (3) or more persons individually or as a group.
In the case at bar, the prosecution was able to prove beyond reasonable doubt that
accused-appellants engaged in activities that fall within the definition of recruitment and
placement under the Labor Code. The evidence on record shows that they promised
overseas employment to private complainants and required them to prepare the
necessary documents and to pay the placement fee, although they did not have any
license to do so. There is illegal recruitment when one who does not possess the
necessary authority or license gives the impression of having the ability to send a
worker abroad.
We also hold that the prosecution also proved the guilt of accused-appellants for the

19
crime of estafa. A person who is convicted of illegal recruitment may, in addition, be
convicted of estafa under Art. 315 (2) of the Revised Penal Code provided the elements
of estafa are present. Estafa under Article 315, paragraph 2 of the Revised Penal Code
is committed by any person who defrauds another by using a fictitious name, or falsely
pretends to possess power, influence, qualifications, property, credit, agency, business
or imaginary transactions, or by means of similar deceits executed prior to or
simultaneously with the commission of the fraud. The offended party must have relied
on the false pretense, fraudulent act or fraudulent means of the accused-appellant and
as a result thereof, the offended party suffered damages. It has been proved in this case
that accused-appellants represented themselves to private complainants to have the
capacity to send domestic helpers to Italy, although they did not have any authority or
license. It is by this representation that they induced private complainants to pay a
placement fee of P150,000.00. Such act clearly constitutes estafa under Article 315 (2)
of the Revised Penal Code.

20
PEOPLE OF THE PHILIPPINES VS. TAN TIONG MENG ALIAS "TOMMY TAN" G.R.
No. 120835-40 April 10, 1997

FACTS: Six (6) complainants went to Borja’s house to meet accused, Tan Tiong Meng,
allegedly a job recruiter. Accused promised to complainants that they could get jobs as
factory worker in Taiwan with a monthly salary of P 20,000. Accused required them to
submit their passports, bio-data and their high school diploma as well as to pay P
15,000 each for placement and processing fees. Accused kept on promising to
complainants that they would be able to leave, but the promises were never fulfilled.
When complainants knew that accused was not a licensed or authorized overseas
recruiter, they filed for complaints for illegal recruitment and estafa against accused.
Accused contend that he merely acted as a collector of money for the principal recruiter
Borja who made the representations that he(accused) could give the applicants jobs in
Taiwan.

ISSUE: WON accused is guilty of the offense of illegal recruitment in large scale and 6
counts of estafa. –

YES HELD: Circumstances belie the version of accused: (1) Mascardo(one of the
complainants) testified that accused could no longer return the money because he had
already sent it to his brother-in-law in Taiwan; (2) all the receipts issued to complainants
were signed by accused; (3) Accused admitted that he and his wife are respondents in
about 70 cases of estafa and illegal recruitment; (4) complainants pointed to Tan and
not Borja as the one who had represented to them that he could give them jobs in
Taiwan. The accused’ acts of accepting placement fees from job applicants and
representing to said applicants that he could get them jobs in Taiwan constitute
recruitment and placement under the Labor Code and is deemed illegal and punishable
under Art. 39 of the Labor Code. The offense committed against the 6 complainants is
illegal recruitment in large scale. Accused is also guilty of 6 separate crimes of estafa. It
was held in the case of People vs Calonzo that a person convicted for illegal recruitment
under the Labor Code can be convicted for violation of the RPC provisions on estafa
provided the elements are present: (1) the accused defrauded another by abuse of
confidence or by means of deceit; and (2) damage or prejudice capable of pecuniary
estimation is caused to the offended party or third person

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