LABOR LAW TSN FINALS
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RECRUITMENT AND PLACEMENT OF WORKERS
TITLE I CHAPTER I
Why is it there are a lot of victims of illegal
recruitment?
 Recruiters frequently offer a promising job and
facilitate faster processing of papers on the
OFW’s behalf.
 Regardless of what form of assistance these
recruiters can offer, their PRIMARY GOAL is to
charge clients as high as possible
 Sometimes, aspiring OFWs can be persuaded
easily because of the large sum og money which
can be earned abroad.
 In addition, illegal recruitment is another way to
undertake child trafficking and worst, as drug
couriers.
 Illegal recruiters aim to victimize those with strong
family attachment, unaware of human trafficking
and poor financial standing
 According to OWWA Chief, HANS LEO CACDAC,
drug traffickers hire carriers to transport pieces of
baggage on containing illegal drugs to a target
destination.
 If the OFW carrier is able to pass through the
immigration, this act can be done regularly and an
incentive can be given by drug suppliers for the
succeeding transactions
 HUMAN TRAFFICKING and ILLEGAL
RECRUITMENT are two severe criminal acts
prevailing at present times. They only represent
one single MOTIVE: To put the OFWS in a
terrible situation
 Human trafficking is one of the serious problems
in the Philippines particularly for victims like
OFWs.
 Affected OFWs are greatly exposed to:
 Discrimination
 Sexual abuse
 Deprivation of labor rights and
 Other physical maltreatment.
 In most instances, victims usually end up in
prostitution or working in a remote place to hide
their whereabouts. They are considered
UNDOCUMENTED OFWS residing as a total
stranger in a foreign territory.
NOTES FROM EMBASSY OF THE PHILIPPINES IN
MOSCOW, RUSSIA
 Modus Operandi of Illegal Recruiters
 Escort Services: Undocumented workers
are escorted at the airport or any international
exit to evade checkpoints set to check on the
documents of workers
 Tourist Worker Scheme: Workers leave the
country purportedly as tourist but in reality is
being deployed as worker abroad
 Assumed Identity: Workers particularly
minors are deployed abroad under an
assumed identity
 Direct Hiring: Workers are hired by foreign
employers without the intervention of
licensed recruitment agencies and are
deployed undocumented and without
protection
 Trainee Worker Scheme: Hired workers are
deployed allegedly not for employment but
for training purporses only and will return to
sending company after training
 Backdoor Points Scheme: Workers are
sent abroad not through regular exit channels
like airports but are deployed usually through
cargo ships
 Tie-Up System: Unlicensed recruiters with
foreign principals who are usually in the
blacklist use the name and offices of licensed
recruiters in their illegal activity
 Visa Assistance/Consultancy Scheme:
Firms that offer services including the pairing
of workers with foreign employers and
promising applicants immigrant visas but are
in reality engaged in the recruitment business
 Blind Ads Scheme: Workers are enticed to
apply and send cash payments addressed to
a Postal Office Box without the worker having
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the opportunity to communicate personally
with the recruiter
RA 8042 AS EMENDED BY RA 10022
 Recruitment and placement of local and migrant
workers
 Deployment of Migrant Workers: The State
shall allow the deployment of OFWs only in
countries where the rights of Filipino migrant
workers are protected. The government
recognizes any of the following as a guarantee on
the part of the receiving country for the protection
of the rights of OFWs:
A. It has existing labor and social laws protecting
the rights of workers, including migrant workers
B. It is a signatory to and/or a ratifi’;er of
multilateral conventions, declarations or
resolutions relating to the protection of workers,
including migrant workers
C. It has concluded a bilateral agreement or
arrangement with the government on the
protection of the rights of OFWs
Pertinent Provisions of RA 10022
Section 1. Paragraphs (a), (e), (g) and (h) of Section 2
of Republic Act No. 8042, as amended, otherwise
known as the “Migrant Workers and Overseas Filipinos
Act of 1995,” is hereby amended to read as follows:
(a) In the pursuit of an independent foreign policy
and while considering national sovereignty,
territorial integrity, national interest and the right to
self-determination paramount in its relations with
other states, the State shall, at all times, UPHOLD
THE DIGNITY OF ITS CITIZENS WHETHER IN
COUNTRY OR OVERSEAS, in general, and
Filipino migrant workes, in particular, continuously
monitor international conventions, adopt/be
signatory to and ratify those that guarantee
protection to our migrant workers, and endeavor
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to enter into bilateral agreements with countries
hosting overseas Filipino workers.
(e) Free access to the courts and quasi-judicial
bodies and adequate legal assistance shall not be
denied to any person by reason of poverty. In this
regard, it is imperative that an effective
mechanism be instituted to ensure that the rights
and interest of distressed overseas Filipinos, in
general, and Filipino migrant workers, in particular,
WHETHER REGULAR/DOCUMENTED OR
IRREGULAR/UNDOCUMENTED, are adequately
protected and safeguarded.
(g) The State recognized that the most effective
tool for empowerment is the possession of skills
by migrant workers. The government shall provide
them free and accessible skills development and
enhancement programs. Pursuant to this and as
soon as practicable, THE GOVERNMENT SHALL
DEPLOY AND/OR ALLOW THE DEPLOYMENT
ONLY OF SKILLED WORKERS.
OFW
Section 2. Section 3, paragraph (a) of RA 8042 as
amended is hereby amended to read as follows:
(a) Overseas Filipino Worker: A person who is
to be engaged, is engaged or has been engaged
in a remunerated activity ina state of which he or
she is not a citizen or on board a vessel navigating
the foreign seas other than a government ship
used for military or non-commercial purposes or
on an installation located offshore or on the high
seas; to be used interchangeable with migrant
worker.
Sec. 4. Deployment of Migrant Workers: The State
shall allow the deployment of overseas Filipino workers
only in countries where the rights of Filipino migrant
workers are protected. The government recognizes
any of the following as a guarantee on the part of the
receiving country for the protection of the rights of
OFWs:
(a) It has existing labor and social laws protecting
the rights of workers, including migrant workers
(b) It is a signatory to and/or a ratifier of
multilateral conventions, declarations or
resolutions relating to the protection of workers,
including migrant workers
(c) It has concluded a bilateral agreement or
arrangement with the government on the
protection of the rights of OFWs
NO PERMIT SHALL BE ISSUED BY POEA
 In the absense of a clear showing that any of the
aforementioned guarantees exists in the country
of destination of the migrant workers, no permit
for deployment shall be issued by POEA
(DEPLOYMENT BAN)
 The members of the POEA Governing Board who
actually voted in gavor of an order allowing the
deployment of migrant workers without any of the
aforementioned guarantees shall suffer the
penalties of removal or dismissal from service with
disqualification to hold any appointive public office
for FIVE YEARS. Furtherm the government
official or employee responsible for the issuance
of the permit or for allowing the deployment of
migrant workers in violation of this section and in
direct contravention of an order by the POEA
Governing Board prohibiting deployment shall be
meted the same penalties in this section.
 For this purpose, the DFA, through its foreign
posts, shall issue a certification to the POEA,
specifying therein the pertinent provisions of the
receiving country’s labor/social law, or the
convention/declaration/resolution, or the bilateral
agreement/arrangement which protect the rights
of migrant workers
 The State shall also allow the deployment of
OFWs to vessels navigating the foreign seas or to
installations located offshore or on high seas
whose owners/employers are compliant with
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international laws and standards that protect the
rights of migrant workers.
 The State shall likewise allow the deployment of
OFWs to companies and contractors with
international operations: Provided, that they are
compliant with standards, conditions and
requirements, as embodies in the employment
contracts prescribed by the POEA and in
accordance with internationally-accepted
standards.
ILLEGAL RECRUITMENT MAY BE COMMITTED BY
A LICENSE HOLDER OR NON-HOLDER OF
LICENSE
Section 5. Section 6 of RA No. 8042, as amended, is
hereby amended to read as follows:
Sec. 6. Definition - For purposes of this Act, ILLEGAL
RECRUITMENT shall mean any act of
 Canvassing
 Enlisting
 Contracting
 Transporting
 Utilizing
 Hiring
 Procuring workers
And includes
 Referring
 Contract services
 Promising
 Advertising for employment abroad
Whether for profit or not, when undertaken by
non-license or non-holder of authority contemplated
under Article 13(f) of PD No. 422, as amended,
otherwide known as the Labor Code of the Philippines:
 PROVIDED, that any such non-licensee or
non-holder who, in any manner, offers or
promises for a fee employment abroad to two or
more persons shall be deemed so engaged.
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 It shall likewise include the following acts, whether
committed by any person, whether a non-licensee
or non-holder, licensee or holder of authority:
(a) To charge or accept directly or indirectly any
amount greater than that specified in the schedule
of allowable fees prescribed by the Secretary of
Labor and Employment, or to make a worker pay
or acknowledge any amount greater than that
actually received by him as a loan or advance;
(b) To furnish or publish any false notice or
information or document in relation to recruitment
or employment
(c) To give any false notice, testimony,
information or document or commit any act of
misrepresentation for the purpose of securing a
license or authority under the Labor Code, or for
the purpose of documenting hired workers with
the POEA, which include the act of processing
workers through a job order that pertains to
nonexistent work, work different from the actual
overseas work, or work with a different employer
whether registered or not with the POEA
DISTINCTION BETWEEN LICENSE AND
AUTHORITY
License
 The document authorizing a person, partnership
or corporation to operate a private recruitment
agency
 Provides where the agency is allowed to
operate
Authority
 A document authorizing the officers, personnel,
agents of a licensed recruitment/manning agency
to conduct recruitment and placement activities
ina place stated in the license or in a specified
place
PROHIBITED ACTIVITES UNDER RA 10022
1. Grant a loan to an OFW with interest exceeding 8%
per annum, which will be used for payment of legal and
allowable placement fees and make the migrant
worker issue, either personally or through a guarantor
or accommodation party, postdated chesk in relation to
the said loan;
2. Impose a compulsory and exclusive arrangement
whereby an OFW is required to avail of a loan only
from specifically designated institutions, entities or
persons;
3. Refuse to condone or renegotiate a loan incurred by
an OFW after the latter’s employment contract has
been prematurely terminated through no fault of his/her
own
4. Impose a compulsory and exclusive arrangement
whereby an OFW is required to undergo health
examinations only from specifically designated medical
clinics, institutions, entities or persons, except in the
case of a seafarer whose medical examination cost is
shouldered by the principal/shipowner
5. Impose a compulsory and exclusive arrangement
whereby an OFW is required to undergo training,
seminar, instruction or schooling of any kind only from
specifically designated institutions, entities or persons,
except for recommendatory trainings mandated by
principals/shipowners where the latter shoulder the
cost of such trainings;
6. For a suspended recruitment/manning agency to
engage in any kind of recruitment activity including the
processing of pending workers’ applications; and
7. For a recruitment/manning agency or a foreign
principal/employer to pass on the OFW or deduct from
his/her salary the payment of the cost of insurance
fees, premium or other insurance related fees as
provided under the compulsory worker’s insurance
coverage.
2 TYPES OF ILLEGAL RECRUITMENT
1. Simple
2. Illegal recruitment involving economic sabotage
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a) Committed by a syndicate
b) Committed in a large scale
REFER TO BOOK OF AZUCENA FOR THE
DEFINITIONS
Definitions from Google
1. Simple Recruitment: Committed when two
essential elements concur:
a) The offender has no valid license or authority
required by law to enable him to lawfully
engage in the recruitment and placement of
workers, and/or
b) That the offender undertakes any activity
within the meaning of recruitment and
placement defined under RA No. 10022 or
any prohibited practices enumerated
thereunder
2. Illegal Recruitment by Economic Sabotage:
Failure to reimburse expenses incurred by the workers
in connection with his documentation and processing
for purposes of deployment, in cases where the
deployment does not actually take place without the
worker’s fault.
a) Committed by a Syndicate: Carried out by a
group of 3 or more persons conspiring or
confederating with one another
b) Committed in large scale: Committed
against 3 or more persons individually or as a
group
WHAT CONSTITUTES RECRUITMENT
 People vs Panis (1986)
 The number of persons is not an essential
ingredient of the act of recruitment and
placement of workers. Any of the act
committeed by the respondent is considered
illegal recruitment.
 People vs Goce (1995)
 The accused gave the distinct impression
that she had the power or ability to send the
complainant abroad for work, etc.
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 Darvin vs CA (1998)
 Procuring a passport, airline tickets and
foreign visa for another individuals without
more can hardly qualify as recruitment
activities.
READ THE FOLLOWING CASES ABOUT ART. 20!!!
 Wallem Shipping vs. Ministry of Labor
 Vir-jen Shipping and Marine Service vs. NLRC
 Chavez vs. Bonto-Perez
MINIMUM EMPLOYMENT CONDITIONS
 Basic monthly salary, including benefits and
allowances and mode of payment
 Food and accommodation or the monetary
equivalent which shall be commensurate to the
cost of living in the host country, or off-setting
benefits
 Commencement and duration of contract
 Free transportation from and back to the point of
hire, or off-setting benefits, and free inland
transportation at the jobsite or off-setting benefits
 Regular work hours and day off
 Overtime pay for services rendered beyond the
regular working hours, rest days and holidays
 Vacation leave nd sick leave for every year of
service
 Free emergency medical and dental treatment
REPATRIATION OF OFW
 Repatriation: Responsibility of the agency which
recruited or deployed the worker
 In case of death:
 Remains: Same above
 Worker at fault: Employer/Agency not liable
 OWWA: Shall undertake the repatriation
MANDATORY REMITTANCE OF SWELDO
 Art. 22. Mandatory Remittance of Foreign
Exchange Earnings:
 It shall be mandatory for all Filipino workers
abroad to remit a portion of their foreign
exchange earnings to their families,
dependents, and/or beneficiaries in the
country in accordance with rules and
regulations prescribed by the Secretary of
Labor
Book One: Pre-employment
Title I – Recruitment and Placement of Workers
Chapter II
REGULATIONS OF RECRUITMENT AND
PLACEMENT ACTIVITIES
Key questions: (Azucena)
1. What are the requirements and
restrictions for the private sector’s
participation in recruitment and placement of
workers, local, and overseas?
2. What acts or practices are prohibited in
recruitment and placement activities of
licensed recruiters?
3. On what grounds and by which office may
an employment license or recruitment permit
be cancelled?
Art. 25. Private sector participation in the
recruitment and placement of
workers. Pursuant to national development
objectives and in order to harness and
maximize the use of private sector
resources and initiative in the development
and implementation of a comprehensive
employment program, the private
employment sector shall participate in the
recruitment and placement of workers,
locally and overseas, under such
guidelines, rules and regulations as may be
issued by the Secretary of Labor.
Art. 26. Travel agencies prohibited to
recruit. Travel agencies and sales agencies
of airline companies are prohibited from
engaging in the business of recruitment and
4
placement of workers for overseas
employment whether for profit or not.
Art. 27. Citizenship requirement. Only
Filipino citizens or corporations,
partnerships or entities at least seventy-five
percent (75%) of the authorized and voting
capital stock of which is owned and
controlled by Filipino citizens shall be
permitted to participate in the recruitment
and placement of workers, locally or
overseas.
Disqualified to recruit
Art. 28. Capitalization. All applicants for
authority to hire or renewal of license to
recruit are required to have such substantial
capitalization as determined by the
Secretary of Labor.
Disqualifications:
1. Persons convicted of illegal recruitment, trafficking
in persons, anti-child labor violation, or crimes
involving moral turpitude.
2. Those whose licenses have been
previously revoked or cancelled by the
Department under Sec. 54 of these rules.1
3. Cooperatives – whether registered or not
under the Cooperative Act of the Philippines
4. Law enforcers and any official or employee of the
DOLE.
5. Those against whom probable cause or prima facie
finding of guilt for illegal recruitment or other related
cases exist particularly to owners or directors of
agencies who have committed illegal recruitment or
other related cases.
6. Sole proprietors of duly licensed agencies are
prohibited from securing another license to engage in
recruitment and placement
7. Sole proprietors, partnerships or corporations
licensed to engage in private recruitment and
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D.O. No. 141-14
LABOR LAW TSN FINALS
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placement for local employment are prohibited from
engaging in job contracting or sub-contracting
activities.2
Non-transferability of license or authority
Art. 29. Non-transferability of license or
authority. No license or authority shall be
used directly or indirectly by any person
other than the one in whose favor it was
issued or at any place other than that stated
in the license or authority be transferred,
conveyed or assigned to any other person or
entity. Any transfer of business address,
appointment or designation of any agent or
representative including the establishment
of additional offices anywhere shall be
subject to the prior approval of the
Department of Labor.
A license is an authority issued to a recruitment agency
to run a recruitment agency, whereas, an authority is
the right granted by the DOLE to a licensee to conduct
recruitment activities. This will protect furthermore the
innocent applicants from being duped by illegal
recruiters.
Art. 31. Bonds. All applicants for license or
authority shall post such cash and surety
bonds as determined by the Secretary of
Labor to guarantee compliance with
prescribed recruitment procedures, rules
and regulations, and terms and conditions of
employment as may be appropriate.
2
Section 5, D.O. No. 141-14, issued by the Bureau of Local
Employment
Capricorn Int’l Travel v. CA
G.R. No. 91096, April 3, 1990
From a different angle, neither may it be
argued that petitioner's judgment credit,
pertaining as it does to the value of airline
tickets ostensibly used by private
respondent to transport overseas workers
abroad, this one of those for which the cash
bond should answer. Private respondent's
liability to petitioner relates to a purely
contractual obligation arising from the
purchase and sale of airline tickets. While
the liability may have been incurred in
connection with the business of recruiting or
placing overseas workers, it is definitely not
one arising from violations of the conditions
for the grant and use of the license or
authority and contracts of employment. Nor
is it one arising from the violation of labor
laws.
In other words, the bond posted by the recruiter cannot
be garnished to answer for the obligation of the airline
because it is not one that arises from violation of labor
laws.
Art. 32. Fees to be paid by workers. Any
person applying with a private fee-charging
employment agency for employment
assistance shall not be charged any fee until
he has obtained employment through its
efforts or has actually commenced
employment. Such fee shall be always
covered with the appropriate receipt clearly
showing the amount paid. The Secretary of
Labor shall promulgate a schedule of
allowable fees.
Fees and costs chargeable to principals or
employer:
a. Visa, including the stamping fee
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b. Work permit and residence permit
c. Round trip airfare
d. POEA processing fee
e. OWWA membership fee
f. Transportation from airport to jobsite
g. Additional trade test or assessment if required by
the principal/employer
Fees/Costs chargeable to the OFW:
a. Placement Fee – equivalent to one month basic
salary specified in the POEA-approved contract,
except for the following:
 Domestic worker
 Workers to be deployed to countries
where the prevailing system, either by law,
policy or practice do not allow, directly or
indirectly, the charging and collection of
recruitment/placement fee.
b. Documentation Fee – such as:
 Passport
 NBI/Brgy/Police Clearance
 NSO authenticated birth certificate
 Transcript of records and diploma
 Professional license from PRC
 Certificate of Competency from TESDA or
other competent body
 DOH prescribed medical/health
examination
c. Membership with Philhealth, Pag-IBIG and SSS
Art. 34. Prohibited practices. It shall be
unlawful for any individual, entity, licensee,
or holder of authority:
a. To charge or accept, directly or
indirectly, any amount greater than
that specified in the schedule of
allowable fees prescribed by the
Secretary of Labor, or to make a
worker pay any amount greater than
that actually received by him as a
loan or advance;
b. To furnish or publish any false
LABOR LAW TSN FINALS
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notice or information or document in
relation to recruitment or
employment;
c. To give any false notice, testimony,
information or document or commit
any act of misrepresentation for the
purpose of securing a license or
authority under this Code.
d. To induce or attempt to induce a
worker already employed to quit his
employment in order to offer him to
another unless the transfer is
designed to liberate the worker from
oppressive terms and conditions of
employment;
e. To influence or to attempt to
influence any person or entity not to
employ any worker who has not
applied for employment through his
agency;
f. To engage in the recruitment or
placement of workers in jobs
harmful to public health or morality
or to the dignity of the Republic of
the Philippines;
g. To obstruct or attempt to obstruct
inspection by the Secretary of Labor
or by his duly authorized
representatives;
h. To fail to file reports on the status of
employment, placement vacancies,
remittance of foreign exchange
earnings, separation from jobs,
departures and such other matters
or information as may be required
by the Secretary of Labor.
i. To substitute or alter employment
contracts approved and verified by
the Department of Labor from the
time of actual signing thereof by the
parties up to and including the
periods of expiration of the same
without the approval of the
Secretary of Labor;
j. To become an officer or member of
the Board of any corporation
engaged in travel agency or to be
engaged directly or indirectly in the
management of a travel agency;
and
k. To withhold or deny travel
documents from applicant workers
before departure for monetary or
financial considerations other than
those authorized under this Code
and its implementing rules and
regulations.
Solidary liability assumed by recruitment agency
Royal Crown International v. NLRC
G.R. No. 78085, October 16, 1989
Facts: Petitioner, a private employment
agency, contends that there is no provision
in the LC or the omnibus implementing rules
which provides for the “third-party liability” of
an employment agency for violations of an
employment agreement performed abroad.
Neither does the law designate it as the
agent of the foreign employer for enforcing
claims arising from such employment
agreement.
Ruling: Petitioner conveniently overlooks
the fact that it had voluntarily assumed
solidary liability under the various
contractual undertakings it submitted to the
Bureau of Employment Services. In applying
for its license to operate a private
employment agency for overseas
recruitment and placement, petitioner was
required to submit, among others, a
document or verified undertaking whereby it
assumed all responsibilities for the proper
6
use of its license and the implementation of
the contracts of employment with the
workers it recruited and deployed for
overseas employment [Section 2(e), Rule V,
Book 1, Rules to Implement the Labor Code
(1976)]. It was also required to file with the
Bureau a formal appointment or agency
contract executed by the foreign-based
employer in its favor to recruit and hire
personnel for the former, which contained a
provision empowering it to sue and be sued
jointly and solidarily with the foreign principal
for any of the violations of the recruitment
agreement and the contracts of
employment [Section 10 (a) (2), Rule V,
Book I of the Rules to Implement the Labor
Code (1976)]. Petitioner was required as
well to post such cash and surety bonds as
determined by the Secretary of Labor to
guarantee compliance with prescribed
recruitment procedures, rules and
regulations, and terms and conditions of
employment as appropriate [Section 1 of
Pres. Dec. 1412 (1978) amending Article 31
of the Labor Code]
Sigma Personnel Services v. NLRC
G.R. No. 108284, June 30, 1993
A sister of a maltreated Filipino DH in Abu
Dhabi is a proper party to file a complaint.
The agency is liable for illegal dismissal of
the DH.
Seagull Maritime Corp v. Balatongan
G.R. No. 82252, February 2, 1989
Manning agent in the Philippines is jointly
and solidarily responsible with its principal.
LABOR LAW TSN FINALS
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Sunace Int’l Management Services v.
NLRC
G.R. No. 161757, January 25, 2006
Doctrine: Extension of employment
unknown to the agency, imputed knowledge
rule does not apply.
The worker (Divina) was recruited by the
Sunace Recruitment Agency and deployed
to Mr. hang in Taiwan under a 12-month
employment contract. When the contract
expired, Mr. Hang extended it for two more
years, without informing the Sunace Agency.
When the extended employment ended,
Divina filed with the NIRC a complaint for
unpaid salaries and illegal deductions done
by Mr. Hang during the two-year extension.
Included as respondent, Sunace denied any
liability, arguing that its solidary liability with
the principal ended when the original
12-month employment ended. The claimant
countered that the principal's act of
extending the employment bound the agent
because, despite lack of information, the
agency should be considered to have known
and consented to the act of the principal.
This, said the claimant, is the theory of
imputed knowledge, i.e., the knowledge of
the principal is imputed or attributed to the
agent.
The Supreme Court rejected and corrected
the claimant's contention. The theory of
imputed knowledge teaches, in correct form,
that the knowledge of the agent is
knowledge of the principal. It is not
knowledge of the principal is knowledge of
the agent. Hence, in this case, Sunace,
being ignorant of the employment extension
and of illegal acts of the employer-principal
during such extension, the agency is free
from liability. [The theory of imputed
knowledge was also not applied in New Life
Enterprises us. Court of Appeals, G.R. No.
94071, March 31, 1992.
Chapter III
MISCELLANEOUS PROVISIONS
[ILLEGAL RECRUITMENT AND PROHIBITED
ACTIVITIES]
Art. 37. Visitorial Power. The Secretary of
Labor or his duly authorized representatives
may, at any time, inspect the premises,
books of accounts and records of any
person or entity covered by this Title, require
it to submit reports regularly on prescribed
forms, and act on violation of any provisions
of this Title.
Title II – Employment of Non-Resident Aliens
Art. 40. Employment permit 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
7
of the government agency charged with the
supervision of said registered enterprise.
From the internet:
The Bureau of Immigration has vowed to tighten the
rules on the issuance of permits to foreign nationals
working in the Philippines.
BI Commissioner Jaime H. Morente made the
announcement after Justice Secretary Menardo I.
Guevarra led the signing on Wedndesday of the Joint
Guidelines on the issuance of work permits to foreign
nationals. Other signatories to the guidelines were
Labor Sec. Bello III and Revenue Commissioner
Caesar Dulay and Morente.
The Joint Guidelines regulate the issuance of special
work permits (SWP), provisional work permits (PWP)
and alien employment permits (AEP).
An AEP will be issued only if no Filipino is available to
perform the work which the foreign applicant seeks to
undertake.
Pending issuance of such AEP, the alien may work in
the country only if he or she has secured from the BI a
PWP which has a maximum effectivity of six months
only.
Meanwhile, an alien intending to work pursuant to an
employment arrangement is required to obtain an AEP
from the DOLE.
It clarifies that the BI may only issue an SWP to an
alien who intends to work in the country outside of an
employment arrangement.
This shift in policy was implemented following
concerns in the rising number of foreign nationals
working in the Philippines.
LABOR LAW TSN FINALS
CAUBANG, HERMANO, SUICO
“We saw a rise in the number of foreign nationals in the
previous years due to emerging industries such as the
online gaming industry,” said Morente.
“Issues and challenges only appear now. This has
never been a problem in the past because of the
relatively smaller number of foreign nationals working
in the Philippines then.”
Morente explained that the previous regulation in the
issuance of SWP did not have any restrictions, apart
from the duration. “The old system was prone to abuse;
hence we saw the need to tighten our regulations to
ensure that jobs that can be done by Filipinos will not
be given to foreigners,” he stated.
Based on its records, the BI said it had issued a total of
83,760 SWPs, while the DOLE reported issuing a total
of 54,241 AEPs, which is the primary requirement for
securing the 9(g) visa.
Read
DOLE D.O. No. 186-17
All foreign nationals who intend to engage in
gainful employment in the Philippines must
obtain an AEP.
Gainful employment – such relation that
creates an employer-employee relationship.
1. What is Alien Employment Permit (AEP)?
An AEP is a document issued by the DOLE through its
Regional Offices which is one of the requirements for a
foreign national to work in the Philippines.
Foreign nationals who intend to engage in gainful
employment in the Philippines with an
employer-employee relationship; foreign professionals
allowed by the PRC to practice their profession in the
Philippines; and holders of Special Investors Resident
Visa (SIRV), Special Retirees Resident Visa (SRRV),
Treaty Traders Visa (9d) or Special Non-Immigrant
Visa 47(a) who occupy any executive, advisory,
supervisory, or technical position in any establishment
are required to secure AEP from DOLE.
2. What is the difference between foreign nationals
exempted and excluded from securing an AEP?
Foreign national exempted from securing an AEP are
those covered by Art. 40, LC, but not required to
secure an AEP under the existing laws or guidelines.
Among the exemptions are the following:
 All members of the diplomatic service and
foreign government officials;
 Owners and representatives of foreign
principals whose companies are accredited by
POEA;
 Permanent resident foreign nationals and
probationary or temporary resident visa
holders under Section 13 of the Philippine
Immigration Act of 1940; etc.
Foreign nationals excluded from obtaining an AEP are
those providing/supplying services in the country but
their employers are located abroad or those without
EER in the Philippines and therefore not covered by
Art. 40, LC. Among the exclusions are the following:
 Members of the governing board with voting
rights only;
 Corporate officers as provided under the
Corporation Code of the Philippines;
 Intra corporate transferee and contractual
service supplier who is a manager, executive
or specialist; etc.
Art. 41. Prohibition against transfer of
employment.
a. After the issuance of an
employment permit, the alien shall
not transfer to another job or change
his employer without prior approval
of the Secretary of Labor.
b. Any non-resident alien who shall
8
take up employment in violation of
the provision of this Title and its
implementing rules and regulations
shall be punished in accordance
with the provisions of Articles 289
and 290 of the Labor Code.
In addition, the alien worker shall be
subject to deportation after service
of his sentence.
CASES PROVIDED BY ATTY. BATA
IPAMS v. De Vera and Arriola ( G.R. No. 205703,
March 07, 2016)
FACTS:
Petitioner Industrial Personnel & Management
Services, Inc. (IPAMS) is a local placement agency
duly organized and existing under Philippine laws.
Petitioner SNC Lavalin Engineers & Contractors, Inc.
(SNC-Lavalin) is the principal of IPAMS, a Canadian
company with business interests in several countries.
Respondent Alberto Arriola, a licensed general
surgeon in the Philippines, was hired by SNC-Lavalin,
through its local manning agency, IPAMS, as a safety
officer in its Ambatovy Project site in Madagascar.
After three months, Arriola received a notice of
pre-termination of employment due to diminishing
workload in the area of his expertise and the
unavailability of alternative assignments.
Consequently, Arriola was repatriated and he filed a
complaint against the petitioners for illegal dismissal
and non-payment of overtime pay, vacation leave and
sick leave pay before the Labor Arbiter (LA).
He claimed that SNC-Lavalin still owed him unpaid
salaries equivalent to the three-month unexpired
portion of his contract and asserted that the latter
never offered any valid reason for his early termination
and that he was not given enough notice regarding the
same. He also insisted that the petitioners must prove
LABOR LAW TSN FINALS
CAUBANG, HERMANO, SUICO
the applicability of Canadian law before the same could
be applied to his employment contract.
The petitioner denied the charge of illegal dismissal
against them. They relied on a copy of the Employment
Standards Act (ESA) of Ontario, which was duly
authenticated by the Canadian authorities and certified
by the Philippine Embassy. They insisted that all of
Arriola's employment documents were processed in
Canada, not to mention that SNC Lavalin's office was
in Ontario, the principle of lex loci celebrationis was
applicable. Hence, they insisted that Canadian laws
governed the contract.
The said foreign law did not require any ground for
early termination of employment, and the only
requirement was the written notice of termination. Even
if Philippine laws should apply, Arriola would still be
validly dismissed because domestic law recognized
retrenchment and redundancy as legal grounds for
termination.
The Labor Arbiter (LA) dismissed the complaint of
Arriola, while the NLRC reversed the LA's ruling stating
the Filipino workers are protected by our labor laws
wherever they may be working. The petitioners filed a
petition for certiorari before the CA arguing that it
should be the ESA, or the Ontario labor law, that
should be applied in Arriola's employment contract, but
the Court of Appeals affirmed NLRC. Hence, this
petition.
ISSUE: Whether or not Canadian law shall be applied
to this case.
RULING:
No, the foreign law invoked is contrary to the
Constitution and the Labor Code. As a rule, Philippine
laws apply even to overseas employment contracts.
This rule is rooted in the constitutional provision of
Section 3, Article XIII that the State shall afford full
protection to labor, whether local or overseas. Hence,
even if the OFW has his employment abroad, it does
not strip him of his rights to security of tenure, humane
conditions of work and a living wage under our
Constitution. As an exception, the parties may agree
that a foreign law shall govern the employment
contract. A synthesis of the existing laws and
jurisprudence reveals that this exception is subject to
the following requisites:
1. That it is expressly stipulated in the overseas
employment contract that a specific foreign law shall
govern;
2.That the foreign law invoked must be proven before
the courts pursuant to the Philippine rules on evidence;
3.That the foreign law stipulated in the overseas
employment contract must not be contrary to law,
morals, good customs, public order, or public policy of
the Philippines; and
4.That the overseas employment contract must be
processed through the POEA.
The Court is of the view that these four (4) requisites
must be complied with before the employer could
invoke the applicability of a foreign law to an overseas
employment contract. With these requisites, the State
would be able to abide by its constitutional obligation to
ensure that the rights and well-being of our OFWs are
fully protected. Lacking any one of the four requisites
would invalidate the application of the foreign law, and
the Philippine law shall govern the overseas
employment contract.
In the present case, as correctly held by the CA, even
though an authenticated copy of the ESA was
submitted, it did not mean that said foreign law could
be automatically applied to this case. The petitioners
miserably failed to adhere to the two other requisites.
The petitioners failed to comply with the first requisite
because no foreign law was expressly stipulated in the
overseas employment contract with Arriola. The
petitioners did not directly cite any specific provision or
stipulation in the said labor contract which indicated the
applicability of the Canadian labor laws or the ESA.
9
They failed to show on the face of the contract that a
foreign law was agreed upon by the parties. Rather,
they simply asserted that the terms and conditions of
Arriola’s employment were embodied in the Expatriate
Policy, Ambatovy Project - Site, Long Term.
The provisions of the ESA are patently inconsistent
with the right to security of tenure.Both the Constitution
and the Labor Code provide that this right is available
to any employee. In a host of cases, the Court has
upheld the employee's right to security of tenure in the
face of oppressive management behavior and
management prerogative. Security of tenure is a right
which cannot be denied on mere speculation of any
unclear and nebulous basis. Furthermore, not only do
these provisions collide with the right to security of
tenure, but they also deprive the employee of his
constitutional right to due process by denying him of
any notice of termination and the opportunity to be
heard.
In fine, as the petitioners failed to meet all the four (4)
requisites on the applicability of a foreign law, then the
Philippine labor laws must govern the overseas
employment contract of Arriola.
ROYAL CROWN INTERNATIONALE. vs. NLRC G.R
No. 78085 Oct.16,1989
FACTS:
In 1983, Royal Crown International, a private
employment agency, recruited and deployed Virgilio P.
Nacionales for employment with ZAMEL as an
architectural draftsman in Saudi Arabia. On February
13,1984, ZAMEL terminated the employment of private
respondent on the ground that his performance was
below at par. For the next three successive days, the
private respondent was detained at his quarters and
was not allowed to report to work until his exit papers
were ready. On February 16, 1984, he was made to
board a plane bound for the Philippines. Private
respondent filed a complaint for illegal termination
LABOR LAW TSN FINALS
CAUBANG, HERMANO, SUICO
against petitioner and ZAMEL with POEA, docketed as
POEA Case no. (L) 84- 04-40. Petitioner filed a motion
for reconsideration but the NLRC denied it for lack of
merit. Hence petitioner filed a petition for review.
ISSUES:
1. Whether or not petitioner as a private employment
agency may be held jointly and severally liable with the
foreign-based employer for any claim which may arise
in connection with the implementation of the
employment contracts of the employees recruited and
deployed abroad.
2. Whether or not sufficient evidence was presented
by petitioner to establish the termination of private
respondent’s employment for justified valid cause.
RULING:
1. Yes, for petitioner voluntarily assumed solidarity
liability under various contractual undertakings it
submitted to the Bureau of Employment services.
Under Sec.2 (e) Rule V Book 1, Rules to Implement
the Labor Code (1976), the requirement to operate a
private employment agency for overseas recruitment
and placement is to submit a document whereby it
assumed all responsibilities for the proper use of its
license and the implementation of the contracts of
employment with the workers it recruited and deployed
for overseas employment. And also it is required to file
with the Bureau a formal appointment or agency
contract executed by foreign-based employer in its
favor to recruit and hire personnel for the former, which
contained a provision empowering it to sue and be
sued jointly and solidarity with foreign principle for any
of the violations of the recruitment and the contracts of
employment. This is under Sec. 10 (a)(2), Rule V Book
1, Rules to Implement the Labor Code (1976). It was
required as well to post such cash and surety bonds as
determined by the Secretary of Labor to gurantee
compliance with prescribed recruitment procedure,
rules and regulations and terms and conditions of
employment as appropriate [Section 1 of Pres. Dec.
1412 (1978) amending Article 31 of the Labor Code].
2. It cannot be denied that the petitioner is an agent of
ZAMEL, one of the documents presented by the
petitioner contains an admission that it is the
representative and agent of ZAMEL. 2. No, the NLRC
upheld the POEA finding that the petitioner’s evidence
was insufficient to prove termination of employment for
just and valid cause. When termination cases involve a
Filipino worker recruited and deployed for overseas
employment, the burden naturally devolves upon both
the foreign base employer and the employment agency
or recruitment entity which recruited the workers for the
latter is not the only agent of the former, but is also
solidarity liable with its foreign principal for any claims
or liabilities arising from the dismissal of the worker.
(Art.277 of the Labor Code).
WPP Mktg v. Galera (G.R. No. 169207 March 25,
2010)
Facts:
Petitioner Jocelyn Galera is an American citizen
recruited by private respondents, a corporation based
in Hong Kong, China, to work in the Philippines for
WPP Marketing Communcations Inc. (WPP). Such
employment became effective on September 1, 1999.
Four months passed and petitioner was designated as
Vice President of WPP. On December 14, 2000, she
was verbally notified by private respondent Steedman
of her termination and a termination letter followed the
next day. She filed a complaint for illegal dismissal,
damages and backwages against them. The Labor
Arbiter found for the petitioner in claiming the dismissal
to be illegal and explained that that petitioner was not
afforded due process for her dismissal. The NLRC
reversed the ruling of the Arbiter and stated that Galera
was a corporate officer, being the Vice President of
WPP, and as such, the Labor Arbiter did not have
jurisdiction over the case since being an
10
intra-corporate dispute, it is not cognizable by the
Labor Arbiter. Galera appealed to the CA and it
reversed the decision of the NLRC stating that 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. The
case eventually reached the SC.
Issue:
1. Was Galera an Employee or a Corporate Officer of
WPP?
2. Whether or not the case was properly cognizable by
the Labor Arbiter.
3. Whether or not the dismissal of Galera without
being in compliance of the two-notice rule was proper.
4. Whether or not Galera was entitled to the monetary
award even without securing an Alien Employment
Permit prior to her employment.
RULING:
1. Galera is an employee. An examination of WPP's
by-laws resulted in a finding that her apointment as a
corporate officer was an appointment to a non-existent
corporate office. The by-laws provided for only one
Vice-President and five directorship positions and at
the time of her appointment, all the positions were still
occupied. Although the amended by-laws provided for
an additional Vice-President and two additional
directors, the approval of the amendment was effective
only on Februar 16, 2001 and being prospective, it
could not have affected the dismissal of Galera which
was on December 14, 2000. In addition, the four-fold
test of an employeremployee relationship was met as
substantiated by the provisions of her contract.
2. Being an employee, the case was properly
cognizable by the Labor Arbiter and the NLRC. Stated
in Article 217 of the Labor Code is the Jurisdiction of
Labor Arbiters and the Commission to hear and
decided cases involving all workers, whether
LABOR LAW TSN FINALS
CAUBANG, HERMANO, SUICO
agricultural or non-agricultural and the present case fell
under one of the categories.
3. No it was improper for lacking both substantive and
procedural due process. WPP failed to prove any just
and authorized cause for Galera's dismissal and did
not comply to the two-notice rule before termination of
employment can be legally effected which are: 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.
4. No. 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. 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.
Capricorn Intl Travel and Tours v. CA (G.R. No.
91096 April 3, 1990)
FACTS:
In Civil Case No. 86-36195 of the Regional Trial Court
of Manila, judgment was rendered in favor of Capricorn
and against Sameer, ordering the latter to pay
P91,216.60 with legal interest from the filing of the
complaint, 10% attorney's fees, and costs. A writ of
execution was issued and a notice of garnishment of
the cash bond posted by Sameer was served on the
POEA. The POEA, through its officials, was against
delivering the amount of Sameer's cash bond to the
sheriff, but subsequently, left with no other recourse
but to comply with the trial court's orders, the POEA
delivered a check for One Hundred Thousand Pesos
(P100,000.00) representing the amount of the cash
bond to Capricorn's counsel. In the meantime, Sameer
moved to quash the notice of garnishment, but this was
denied by the trial court. A motion for reconsideration
was filed, but this was also denied. The Court of
Appeals granted the petition for certiorari filed by
Sameer and annulled the trial court's orders relative to
the notice of garnishment. It also permanently enjoined
Capricorn from attaching, levying and garnishing
Sameer's cash bond and ordered Capricorn to return it
to the POEA, if still unreturned.
ISSUE: Whether or not the cash bond posted by a
recruitment agency in the Philippine Overseas
Employment Administration (POEA) may be garnished
by a judgment creditor of the agency.
RULING:
ACCORDINGLY, after deliberating on the Petition,
Comment and Reply, the Court Resolved to DENY the
petition for lack of merit.
1. Explicit from provisions of the Labor Code and the
POEA Rules and Regulation are that the cash bond is
a requisite for the issuance and renewal of a license or
authority to engage in the business of recruitment and
overseas placement; b. that the cash bond is to answer
for the liabilities of the agency arising from violations of
the conditions for the grant or use of the license or
authority or the contracts of employment, the Labor
Code, the POEA rules and Labor Department
issuances and all liabilities that the POEA may impose;
c. that the amount of the cash bond must be
maintained during the lifetime of the license or
authority; and d. that the amount of the cash bond shall
be returned to the agency only when it surrenders its
license or authority, and only upon posting of a surety
bond of the same amount valid for three (3) years. It
must also be added that the requirement for the
posting of a cash bond is also an indispensable adjunct
to the requirement that the agency undertakes to
assume joint and solidary liability with the employer for
11
all claims and liabilities which may arise in connection
with the implementation of the contract of overseas
employment and to guarantee compliance with existing
labor and social legislation of the Philippines and the
country of employment On a broader scale, the
undertaking to assume joint and solidary liability and to
guarantee compliance with labor laws, and the
consequent posting of cash and surety bonds, may be
traced all the way back to the constitutional mandate
for the State to "afford full protection to labor, local and
overseas" [Art. XIII, sec. 3]. The peculiar nature of
overseas employment makes it very difficult for the
Filipino overseas worker to effectively go after his
foreign employer for employment-related claims and,
hence, public policy dictates that, to afford overseas
workers' protection from unscrupulous employers, the
recruitment or placement agency in the Philippines be
made to share in the employer's responsibility.
Considering the rationale for requiring the posting of a
cash bond and its nature, it cannot therefore be argued
that the cash bond is not exempt from execution by a
judgment creditor simply because it is not one of those
enumerated in Rule 39, sec. 12 of the Rules of Court.
To accede to such an argument would be tantamount
to turning a blind eye to the clear intent of the law to
reserve the cash bond for the employment-related
claims of overseas workers and for violations of labor
laws.
From a different angle, neither may it be argued that
Capricorn's judgment credit, pertaining as it does to the
value of airline tickets ostensibly used by Sameer to
transport overseas workers abroad, this one of those
for which the cash bond should answer. Sameer's
liability to Capricorn relates to a purely contractual
obligation arising from the purchase and sale of airline
tickets. While the liability may have been incurred in
connection with the business of recruiting or placing
overseas workers, it is definitely not one arising from
violations of the conditions for the grant and use of the
license or authority and contracts of employment. Nor
is it one arising from the violation of labor laws. Thus, it
cannot be said that the Court of Appeals erred when it
LABOR LAW TSN FINALS
CAUBANG, HERMANO, SUICO
annulled the assailed orders of respondent judge,
enjoined Capricorn from garnishing the cash bond, and
ordered it to return the amount of the bond to the
POEA if it had not yet done so.
Andre James McBurnie v. Ganzon (G.R. Nos.
178034 & 178117 G R. Nos. 186984-85 October 17,
2013)
FACTS:
McBurnie, an Australian national, instituted a complaint
for illegal dismissal and other monetary claims against
the respondent. He claimed that he signed a 5-year
employment agreement with EGI as Executive VP who
shall oversee the management of the company’s
hotels and resorts within the Philippines. He performed
work for the company until November 1999 when he
got into an accident and went back to Australia to
recuperate from his injuries. While he was there, he
was informed that his services were no longer needed
because the project would no longer push through. The
respondents contended that the sole purpose of the
execution of the employment contract was to allow
McBurnie to obtain an alien work permit in Philippines.
However, when he left for Australia, he has not yet
obtained his work permit. The LA declared McBurnie
as having been illegally dismissed from employment.
Issue: WON McBurnie was illegally dismissed
Held: No. McBurnie is an Australian citizen and for him
to claim that he was illegally dismissed under our labor
laws, there is a need for him to establish that he was
qualified and duly authorized to obtain employment
within our jurisdiction. A requirement for foreigners who
intend to work within the country is an employment
permit, as provided under Article 40, Title II of the
Labor Code which reads:
Art. 40. Employment permit for 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.
A foreign national’s failure to seek an employment
permit prior to employment poses a serious problem in
seeking relief from the Court. 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."
Section 4, Rule XIV, Book I 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 be allowed
to be employed upon presentation of a duly approved
employment permit."
Clearly, this circumstance on the failure of McBurnie to
obtain an employment permit, by itself, necessitates
the dismissal of his labor complaint.
Furthermore, as has been previously discussed, the
NLRC has ruled in its Decision dated November 17,
2009 on the issue of illegal dismissal. It declared that
McBurnie was never an employee of any of the
respondents. It explained: All these facts and
circumstances prove that McBurnie was never an
employee of Eulalio Ganzon or the respondent
companies, but a potential investor in a project with a
group including Eulalio Ganzon and Martinez but said
12
project did not take off because of lack of funds.
There is no question that respondents assigned him
Condo Unit # 812 of the MCS, but this was not free of
charge. If it were true that it is part of the
compensation package as employee, then McBurnie
would not be obligated to pay anything, but clearly, he
admitted in his letter that he had to pay all the
expenses incurred in the apartment.
McBurnie failed to present a single evidence that
[the respondents] paid his salaries like payslip,
check or cash vouchers duly signed by him or any
document showing proof of receipt of his
compensation from the respondents or activity in
furtherance of the employment contract. Granting
again that there was a valid contract of employment, it
is undisputed that on November 1, 1999, McBurnie
left for Australia and never came back.
More importantly, the NLRC’s findings on the
contractual relations between McBurnie and the
respondents are supported by the records.
1. Before a case for illegal dismissal can prosper,
an employer-employee relationship must first be
established. Although an employment agreement
forms part of the case records, respondent Ganzon
signed it with the notation "per my note." The
respondents have sufficiently explained that the note
refers to the letter dated May 11, 1999 which
embodied certain conditions for the employment’s
effectivity. The said conditions, particularly on the
successful completion of the project financing for the
hotel project in Baguio City and McBurnie’s acquisition
of an Alien Employment Permit, failed to materialize.
Such defense of the respondents, which was duly
considered by the NLRC in its Decision dated
November 17, 2009, was not sufficiently rebutted by
McBurnie.
2. McBurnie failed to present any employment
LABOR LAW TSN FINALS
CAUBANG, HERMANO, SUICO
permit which would have authorized him to obtain
employment in the Philippines. This circumstance
negates McBurnie’s claim that he had been performing
work for the respondents by virtue of an
employer-employee relationship. The absence of the
employment permit instead bolsters the claim that the
supposed employment of McBurnie was merely
simulated, or did not ensue due to the non-fulfillment
of the conditions that were set forth in the letter of May
11, 1999.
3. McBurnie failed to present other competent
evidence to prove his claim of an
employer-employee relationship. Given the parties’
conflicting claims on their true intention in executing
the agreement, it was necessary to resort to the
established criteria for the determination of an
employer-employee relationship, namely:
(1) the selection and engagement of the employee;
(2) the payment of wages;
(3) the power of dismissal; and
(4) the power to control the employee’s conduct.
The rule of thumb remains: the onus probandi falls on
the claimant to establish or substantiate the claim by
the requisite quantum of evidence. Whoever claims
entitlement to the benefits provided by law should
establish his or her right thereto. McBurnie failed in this
regard. As previously observed by the NLRC,
McBurnie even failed to show through any document
such as payslips or vouchers that his salaries during
the time that he allegedly worked for the respondents
were paid by the company. In the absence of an
employer-employee relationship between McBurnie
and the respondents, McBurnie could not successfully
claim that he was dismissed, much less illegally
dismissed, by the latter. Even granting that there was
such an employer-employee relationship, the records
are barren of any document showing that its
termination was by the respondents’ dismissal of
McBurnie.
Pacific Consultants v. Schonfeld (G.R. No. 166920
February 19, 2007)
FACTS:
Respondent is a Canadian citizen. PPI is a corporation
duly established and incorporated in accordance with
the laws of the Philippines. The PPI’s president and
director, Henrichsen, was based in Tokyo. Its purpose
is to engage in the business of providing specialty and
technical services both in and out of the Philippines. It
is a subsidiary of Pacific Consultants International of
Japan (PCIJ). PCIJ decided to engage in consultancy
services for water and sanitation in the Philippines.
Respondent Schonfeld was employed by PCIJ,
through Henrichsen, as Sector Manager of PPI in its W
& S Department. However, PCIJ assigned him as PPI
sector manager in the Philippines and his salary was to
be paid partly by PPI and PCIJ.
Schonfeld signed the contract (Letter of Employment)
transmitted by Henrichsen. He arrived in the
Philippines and assumed his position as PPI Sector
Manager. He was accorded the status of a resident
alien. PPI applied for an AEP for respondent before the
DOLE. DOLE then granted the application and issued
the permit to Schonfeld. However, on May 1999,
Schonfeld received a letter of termination for the
reason that PCIJ and PPI had not been successful in
the water and sanitation sector in the Philippines.
Schonfeld files a Complaint for Illegal Dismissal
against petitioners PPI and Henrichsen before the LA.
The LA found that the contract of employment between
Schonfeld and PCIJ was controlling; the Philippines
was only a duty station where Schonfeld was required
to work under the General Conditions of Employment.
NLRC agreed with the disquisitions of the LA and
affirmed the latter’s decision in toto.
Issue: WON Schonfeld, a resident alien, can file an
illegal dismissal case against PPI and Henrichsen
13
Held: Yes.
Under the Omnibus Rules Implementing the Labor
Code, one of the requirements for the issuance of an
employment permit is the employment contract.
Section 5, Rule XIV (Employment of Aliens) of the
Omnibus Rules provides for the requirements for
employment permit applicants.
Under Section 6 of the Rule, the DOLE may issue an
alien employment permit based only on the following:
(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.
Thus, as claimed by respondent, he had an
employment contract with petitioner PPI; otherwise,
petitioner PPI would not have filed an application for a
Permit with the DOLE. Petitioners are thus estopped
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from alleging that the PCIJ, not petitioner PPI, had
been the employer of respondent all along.
There was an employer-employee relationship
between petitioner PPI and respondent using the
four-fold test. Jurisprudence is firmly settled that
whenever the existence of an employment relationship
is in dispute, four elements constitute the reliable
yardstick: (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’s conduct. It is the so-called "control test"
which constitutes the most important index of the
existence of the employer-employee relationship–that
is, whether the employer controls or has reserved the
right to control the employee not only as to the result of
the work to be done but also as to the means and
methods by which the same is to be accomplished.
Stated otherwise, an employer-employee relationship
exists where the person for whom the services are
performed reserves the right to control not only the end
to be achieved but also the means to be used in
reaching such end.
There is, indeed, substantial evidence on record which
would erase any doubt that the respondent company is
the true employer of petitioner. In the case at bar, the
power to control and supervise petitioner’s work
performance devolved upon the respondent company.
Likewise, the power to terminate the employment
relationship was exercised by the President of the
respondent company. It is not the letterhead used by
the company in the termination letter which controls,
but the person who exercised the power to terminate
the employee. It is also inconsequential if the second
letter of employment executed in the Philippines was
not signed by the petitioner. An employer-employee
relationship may indeed exist even in the absence of a
written contract, so long as the four elements
mentioned in the Mafinco case are all present.
Hence, since there exists an EER between PPI and
Schonfeld, the latter can file an illegal dismissal case
against the former being an employee who was
allegedly illegally dismissed by PPI.
Equi-Asia Placement v. DFA (G.R. No. 152214
September 19, 2006)
Facts:
Razon was an OFW who died of acute cardiac arrest
while asleep at the dormitory of his workplace in South
Korea. The POLO at South Korea immediately relayed
the incident to the Philippine Embasiy in SoKor. The
Labor Attaché of the Philippine Embassy dispatched a
letter to OWWA. OWWA then indorsed the matter to
Welfare Employment Office of the Philippine Overseas
Employment Administration. Upon verification, it was
discovered that Razon was deployed by Equi-Asia
Placement and POEA directed the former that they
should provide the repatriation costs for the deceased.
However, Equi-Asia cannot heed their requests
because Razon violated his employment contract and
unlawfully escaped from his company assignment.
Petitioner points out that it should be the OWWA which
should advance the costs of repatriation with the
resources coming out of the emergency repatriation
fund of said agency.
Issue: WON POEA order directing petitioner to pay, in
advance, for the costs of the repatriation of the remains
of the decease valid
Held: Yes. The order of the POEA is valid because the
directive was pursuant to existing laws and regulations.
Petitioner is impugning the subject provisions of the
Omnibus Rules for allegedly expanding the scope of
Section 15 of Republic Act No. 8042 by: first, imposing
upon it the primary obligation to repatriate the remains
of the deceased Razon including the duty to advance
the cost of the plane fare for the transport of Razon's
remains; and second, by ordering it to do so without
prior determination of the existence of
14
employer-employee relationship between itself and
Razon.
While Republic Act No. 8042 does not expressly state
that petitioner shall be primarily obligated to transport
back here to the Philippines the remains of the
deceased Razon, nevertheless, such duty is imposed
upon him as the statute clearly dictates that "the
repatriation of remains and transport of the personal
belongings of a deceased worker and all costs
attendant thereto shall be borne by the
principal and/or the local agency." The mandatory
nature of said obligation is characterized by the
legislature's use of the word "shall." That the
concerned government agencies opted to demand the
performance of said responsibility solely upon
petitioner does not make said directives invalid as the
law plainly obliges a local placement agency such as
herein petitioner to bear the burden of repatriating the
remains of a deceased OFW with or without recourse
to the principal abroad. In this regard, we Section 52 of
the omnibus rules cannot be invalidated as Republic
Act No. 8042 itself permits the situation wherein a local
recruitment agency can be held exclusively
responsible for the repatriation of a deceased OFW.
Section 53 of the Omnibus Rules cannot be
rendered invalid for allegedly contravening Section 15
of the law which states that a placement agency shall
not be responsible for a worker's repatriation should
the termination of the employer-employee relationship
be due to the fault of the OFW. The statute merely
states the general principle that in case the severance
of the employment was because of the OFW's own
undoing, it is only fair that he or she should shoulder
the costs of his or her homecoming. Section 15 of
Republic Act No. 8042, however, certainly does not
preclude a placement agency from establishing the
circumstances surrounding an OFW's dismissal from
service in an appropriate proceeding. As such
determination would most likely take some time, it is
only proper that an OFW be brought back here in
our country at the soonest possible time lest he
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remains stranded in a foreign land during the
whole time that recruitment agency contests its
liability for repatriation. As aptly pointed out by the
Solicitor General –
Such a situation is unacceptable.
24. This is the same reason why repatriation is
made by law an obligation of the agency
and/or its principal without the need of first
determining the cause of the termination of the
worker's employment. Repatriation is in effect
an unconditional responsibility of the agency
and/or its principal that cannot be delayed by
an investigation of why the worker was
terminated from employment. To be left
stranded in a foreign land without the financial
means to return home and being at the mercy
of unscrupulous individuals is a violation of the
OFW's dignity and his human rights. These are
the same rights R.A. No. 8042 seeks to
protect.
In this case, the challenged provisions of Republic Act
No. 8042 was enacted with the thought of upholding
the dignity of the Filipinos may they be here or abroad
and that the State shall at all times afford full protection
to labor, both here and abroad, meet the requirement
and provide enough guidance for the formulation of the
omnibus rules.
ILLEGAL RECRUITMENT AND ESTAFA
Article 38 of the Labor Code
- Definition of Illegal Recruitment has been
changed by RA 8042 and list of acts
considered as illegal recruitment has been
expanded by RCA10022.
Note: Any illegal activities that would oblige the
recruits to do for the recruiter (exclusive check-up from
the recruiter, unnecessary fees, etc.)
Two Kinds of Illegal Recruiter
1. First Kind – one without a license or authority
to recruit commits illegal recruitment when he
performs:
(a) Any of the acts defined as recruitment and
placement; or
(b) Any of the 14 acts enumerated in Section
6 of RA 8042.
2. Second Kind – Possesses a license or
authority to recruit but he commits any of the
14 wrongful acts enumerated in Section 6.
Note: There will be more wrongful acts that a
non-license or unauthorized can commit.
Two Types of Illegal Recruitment
1. Simple
2. Illegal recruitment involving economic
sabotage:
a) Committed by a syndicate
b) Committed in a large scale
Syndicate, Large Scale
 Committed by a syndicate – it is carried out by
a group of three or more persons conspiring
and confederating with one another;
 Committed in a large scale – if it is committed
against 3 or more persons individually or as a
group.
Note: There are separate or independent categories.
They need not coincide within the same case.
Syndicated Illegal Recruitment
 One carried out by 3 or more persons
conspiring and confederating with each other.
 There is conspiracy when 2 or more persons
come to an agreement concerning the
commission of a crime (RPC).
People vs. Guevara (1999)
Doctrine: The acts of the accused-appellants showed
unity in the purpose. Guevarra would visit each of the
complainants in their houses for several times
convincing them to work abroad and giving them the
impression that she had the capability of sending them
15
abroad.
Large Scale Illegal Recruitment
 Committed against 3 or more persons
individually or as a group. Therefore, a
conviction for large scale illegal recruitment
must be based on a finding in each case of
illegal recruitment must be more based on a
filing in each case of illegal recruitment of 3 or
more persons having been recruited whether
individually or as a group.
 The failure to prove at least three persons
recruited makes the crime a simple illegal
recruitment.
Some Principles on Illegal Recruitment
 Mere promise of employment abroad amounts
to recruitment
 There is no need to show that accused
represented himself as a licensed recruiter.
 Referrals may constitute illegal recruitment.
 Conduct of interviews may amount to illegal
recruitment.
 It is immaterial whether the recruitment is done
for profit or not.
 Actual receipt of fee not an element of the
crime of illegal recruitment.
 Absence of receipt not essential.
Note: Illegal recruitment (criminal offense) needs to
establish probable cause, and proving the same is
essential (proof beyond reasonable doubt).
ILL RECRUITMENT AND ESTAFA 2
Illegal Recruitment Not a Bar to Filing of Estafa
 The filing of illegal recruitment under RA 8042
shall be without prejudice to the filing of cases
punishable under other existing laws, rules
and regulations (Section 6) such as Estafa
under RPC or trafficking in person under RA
9208.
 A worker who suffers pecuniary damage,
regardless of the amount, as a result of a
previous or simultaneous false pretense
resorted to by a non-licensee or non-holder of
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authority may complain for Estafa under Article
315 of RPC.
Note: If you can recall during the previous discussions,
the Embassy of Philippines in Moscow, Russia, which
enumerates several forms of illegal recruitment,
including Child trafficking and Trafficking in person.
Cases under non-licensee or non-holder includes
Illegal Recruitment and Estafa.
Liability of Recruitment Agency and Foreign
Employer
Sameer Overseas Placement Agency vs. Cabiles
(October 20, 1999)
Doctrine: In line with the State policy of affording
protection of labor, it assures that the rights of OFW
will not be frustrated by difficulties in filing money
claims against foreign employers.
Facts: Petitioner, Sameer Overseas Placement
Agency, Inc., is a recruitment and placement agency.
Respondent Joy Cabiles was hired thus signed a
one-year employment contract for a monthly salary of
NT$15,360.00. Joy was deployed to work for Taiwan
Wacoal, Co. Ltd. (Wacoal) on June 26, 1997. She
alleged that in her employment contract, she agreed to
work as quality control for one year. In Taiwan, she
was asked to work as a cutter. Sameer claims that on
July 14, 1997, a certain Mr. Huwang from Wacoal
informed Joy, without prior notice, that she was
terminated and that “she should immediately report to
their office to get her salary and passport.” She was
asked to “prepare for immediate repatriation.” Joy
claims that she was told that from June 26 to July 14,
1997, she only earned a total of NT$9,000.15
According to her, Wacoal deducted NT$3,000 to cover
her plane ticket to Manila.
On October 15, 1997, Joy filed a complaint for illegal
dismissal with the NLRC against petitioner and
Wacoal. LA dismissed the complaint. NLRC reversed
LA’s decision. CA affirmed the ruling of the National
Labor Relations Commission finding respondent
illegally dismissed and awarding her three months’
worth of salary, the reimbursement of the cost of her
repatriation, and attorney’s fees.
Issue: Whether or not Cabiles was entitled to the
unexpired portion of her salary due to illegal dismissal.
Held: YES. The Court held that the award of the
three-month equivalent of respondent’s salary should
be increased to the amount equivalent to the unexpired
term of the employment contract. In Serrano v. Gallant
Maritime Services, Inc. and Marlow Navigation Co.,
Inc., this court ruled that the clause “or for three (3)
months for every year of the unexpired term, whichever
is less” is unconstitutional for violating the equal
protection clause and substantive due process. A
statute or provision which was declared
unconstitutional is not a law. It “confers no rights; it
imposes no duties; it affords no protection; it creates
no office; it is inoperative as if it has not been passed at
all.” The Court said that they are aware that the clause
“or for three (3) months for every year of the unexpired
term, whichever is less” was reinstated in Republic Act
No. 8042 upon promulgation of Republic Act No.
10022 in 2010.
Ruling on the constitutional issue
In the hierarchy of laws, the Constitution is supreme.
No branch or office of the government may exercise its
powers in any manner inconsistent with the
Constitution, regardless of the existence of any law
that supports such exercise. The Constitution cannot
be trumped by any other law. All laws must be read in
light of the Constitution. Any law that is inconsistent
with it is a nullity. Thus, when a law or a provision of
law is null because it is inconsistent with the
Constitution, the nullity cannot be cured by
reincorporation or reenactment of the same or a similar
law or provision. A law or provision of law that was
already declared unconstitutional remains as such
unless circumstances have so changed as to warrant a
reverse conclusion. The Court observed that the
reinstated clause, this time as provided in Republic
Act. No. 10022, violates the constitutional rights to
equal protection and due process.96 Petitioner as well
as the Solicitor General have failed to show any
compelling change in the circumstances that would
warrant us to revisit the precedent. The Court declared,
once again, the clause, “or for three (3) months for
every year of the unexpired term, whichever is less” in
16
Section 7 of Republic Act No. 10022 amending Section
10 of Republic Act No. 8042 is declared
unconstitutional and, therefore, null and void.
 In 2016 Revised Rules for Land-Based and
Sea-Based OFW – persons applying for a
license to operate a recruitment agency should
submit a notarized undertaking by the sole
proprietor, managing partner or president of
the corporation stating the applicant shall
assume full and complete responsibility for all
claims and liabilities which may arise in
connection with the use of license and assume
joint and several liability with the foreign
employer for all claims and liabilities which
may arise in connection to implementation of
the contract including but not limited to unpaid
wages, death, and disability compensation.
Note: It is easy now to prove joint and several
liability of the agencies because of their licenses,
and that when they recruit, they must execute an
undertaking wherein they should assume full and
complete responsibility in all claims and liabilities.
Theory of Imputed Knowledge
 This theory refers to a cognizance of a
circumstance of fact attributable to party
because of its position of its relationship with
or responsibility for another party. The
relationship is that of agent-principal the
former being the agent and latter, the principal.
Consequently, the theory of Imputed
knowledge ascribes knowledge of the agent to
the principal.
Sunace vs. NLRC (January 25, 2006)
Doctrine: The contract of the domestic helper was
renewed without the knowledge of Sunace. There is no
substantial evidence that Sunace knew of and
consented to be bound under the 2-year extension and
such it cannot be said to be privy thereto. Under the
Civil Code, contracts take effect only between the
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CAUBANG, HERMANO, SUICO
parties. Thus, theory of imputed knowledge is not
applicable.
Facts: Respondent Divina Montehermozo is a
domestic helper deployed to Taiwan by Sunace
International Management Services (Sunace) under a
12-month contract. Such employment was made with
the assistance of Taiwanese broker Edmund Wang.
After the expiration of the contract, Montehermozo
continued her employment with her Taiwanese
employer for another 2 years. When Montehermozo
returned to the Philippines, she filed a complaint
against Sunace, Wang, and her Taiwanese employer
before the National Labor Relations Commission
(NLRC). She alleges that she was underpaid and was
jailed for three months in Taiwan. She further alleges
that the 2-year extension of her employment contract
was with the consent and knowledge of Sunace.
Sunace, on the other hand, denied all the allegations.
The Labor Arbiter ruled in favor of Montehermozo and
found Sunace liable thereof. The National Labor
Relations Commission and Court of Appeals affirmed
the labor arbiter’s decision. Hence, the filing of this
appeal.
Issue: Whether or not the 2-year extension of
Montehermozo’s employment was made with the
knowledge and consent of Sunace.
Held: There is an implied revocation of an agency
relationship when after the termination of the original
employment contract, the foreign principal directly
negotiated with the employee and entered into a new
and separate employment contract. Contrary to the
Court of Appeals finding, the alleged continuous
communication was with the Taiwanese broker Wang,
not with the foreign employer. The finding of the Court
of Appeals solely on the basis of the telefax message
written by Wang to Sunace, that Sunace continually
communicated with the foreign "principal" (sic) and
therefore was aware of and had consented to the
execution of the extension of the contract is misplaced.
The message does not provide evidence that Sunace
was privy to the new contract executed after the
expiration on February 1, 1998 of the original contract.
That Sunace and the Taiwanese broker communicated
regarding Montehermozo’s allegedly withheld savings
does not necessarily mean that Sunace ratified the
extension of the contract. As can be seen from that
letter communication, it was just an information given
to Sunace that Montehermozo had taken already her
savings from her foreign employer and that no
deduction was made on her salary. It contains nothing
about the extension or Sunace’s consent thereto.
Parenthetically, since the telefax message is dated
February 21, 2000, it is safe to assume that it was sent
to enlighten Sunace who had been directed, by
Summons issued on February 15, 2000, to appear on
February 28, 2000 for a mandatory conference
following Montehermozo’s filing of the complaint on
February 14, 2000. Respecting the decision of Court of
Appeals following as agent of its foreign principal,
[Sunace] cannot profess ignorance of such an
extension as obviously, the act of its principal
extending [Montehermozo’s] employment contract
necessarily bound it, it too is a misapplication, a
misapplication of the theory of imputed knowledge.
The theory of imputed knowledge ascribes the
knowledge of the agent, Sunace, to the principal,
employer, not the other way around. The knowledge of
the principal-foreign employer cannot, therefore, be
imputed to its agent Sunace. There being no
substantial proof that Sunace knew of and consented
to be bound under the 2-year employment contract
extension, it cannot be said to be privy thereto. As
such, it and its "owner" cannot be held solidarily liable
for any of Montehermozo’s claims arising from the
2-year employment extension. As the New Civil Code
provides, Contracts take effect only between the
parties, their assigns, and heirs, except in case where
the rights and obligations arising from the contract are
not transmissible by their nature, or by stipulation or by
provision of law. Furthermore, as Sunace correctly
points out, there was an implied revocation of its
agency relationship with its foreign principal when,
after the termination of the original employment
contract, the foreign principal directly negotiated with
Montehermozo and entered into a new and separate
employment contract in Taiwan. Article 1924 of the
17
New Civil Code states that the agency is revoked if the
principal directly manages the business entrusted to
the agent, dealing directly with third persons.
The Principle of Lex Loci Contractus
 OFWs are entitled to security of tenure
guaranteed under the Constitution
notwithstanding the fact that the place of their
work is overseas.
 The contract is perfected in the Philippines
hence the law of the place where the contract
is made shall be followed.
Note: Principle of Forum Non Conveniens (see cases).
What is Illegal Recruitment? (POEA)
 Any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring
workers and includes referring, contract
services, promising or advertising for
employment abroad, whether for profit or not,
when undertaken by a non-license or
non-holder of authority contemplated under Art
13 (F) of Presidential Decree No. 442, as
amended otherwise known as the Labor Code
of the Philippines: Provided, That any such
non-licensee or non-holder who, in any
manner, offers or promises for a fee
employment abroad to two or more persons
shall be deemed so engaged. (sec. 6, RA
8042).
 It shall likewise include the following acts,
whether committed by any persons, whether a
non-licensee, non-holder, licensee or holder of
authority.
(a) To charge or accept directly or indirectly
any amount greater than the specified in the schedule
of allowable fees prescribed by the Secretary of Labor
and Employment, or to make a worker pay any amount
greater than that actually received by him as a loan or
advance;
(b) To furnish or publish any false notice or
information or document in relation to recruitment or
employment;
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(c) To give any false notice, testimony,
information or document or commit any act of
misrepresentation for the purpose of securing a license
or authority under the Labor Code;
(d) To induce or attempt to induce a worker
already employed to quit his employment in order to
offer him another unless the transfer is designed to
liberate a worker from oppressive terms and conditions
of employment;
(e) To influence or attempt to influence any
persons or entity not to employ any worker who has not
applied for employment through his agency;
(f) To engage in the recruitment of placement
of workers in jobs harmful to public health or morality or
to dignity of the Republic of the Philippines;
(g) To obstruct or attempt to obstruct
inspection by the Secretary of Labor and Employment
or by his duly authorized representative;
(h) To fail to submit reports on the status of
employment, placement vacancies, remittances of
foreign exchange earnings, separations from jobs,
departures and such other matters or information as
may be required by the Secretary of Labor and
Employment;
(i) To substitute or alter to the prejudice of the
worker, employment contracts approved and verified
by the Department of Labor and Employment from the
time of actual signing thereof by the parties up to and
including the period of the expiration of the same
without the approval of the Department of Labor and
Employment;
(j) For an officer or agent of a recruitment or
placement agency to become an officer or member of
the Board of any corporation engaged in travel agency
or to be engaged directly or indirectly in the
management of a travel agency;
(k) To withhold or deny travel documents from
applicant workers before departure for monetary or
financial considerations other than those authorized
under the Labor Code and its implementing rules and
regulations;
(l) Failure to actually deploy without valid
reasons as determined by the Department of Labor
and Employment; and
(m) Failure to reimburse expenses incurred by
the workers in connection with his documentation and
processing for purposes of deployment, in cases
where the deployment does not actually take place
without the worker's fault. Illegal recruitment when
committed by a syndicate or in large scale shall be
considered as offense involving economic sabotage.
 Illegal recruitment is deemed committed by a
syndicate carried out by a group of three (3) or
more persons conspiring or confederating with
one another. It is deemed committed in large
scale if committed against three (3) or more
persons individually or as a group.
 The persons criminally liable for the above
offenses are the principals, accomplices and
accessories. In case of juridical persons, the
officers having control, management or
direction of their business shall be liable.
AEP OFW 1
Foreigner Failed to Prove He Was a Holder of AEP
McBurnie vs. Ganzon, et al. (October 17, 2013)
Doctrine: A requirement for foreigners who intend to
work within the country is an employment permit, as
provided under Article 40, Title II of the Labor Code -
Employment permit for non-resident aliens which
provides that 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.
In WPP Marketing Communications, Inc. v. Galera, we
held that a foreign national’s failure to seen an
employment permit prior to employment poses a
serious problem in seeking relief from the Court. Thus,
although the respondent therein appeared to have
been illegally dismissed from employment, we
explained:
18
This is Galera’s dilemma: Galera worked in the
Philippines without proper work permit but now wants
to claim employee’s benefits under Philippine Labor
Laws.
Clearly, the circumstance on the failure of McBurnie to
obtain an employment permit, by itself necessitates the
dismissal of his labor complaint.
Facts: McBurnie, an Australian national, filed a
complaint for illegal dismissal and other monetary
claims against Eulalio Ganzon, EGI-Managers, Inc.,
and E. Ganzon, Inc., (respondents). McBurnie claimed
he signed a 5-year employment contract with the
company EGI as an Executive Vice-President. He
started his job until suddenly, McBurnie had an
accident that led him to go back to Australia for
recovery. While he was in Australia, he was informed
of his termination by the respondent. Respondents
contend that their agreement was for Mcburnie to have
investment in the company. They don’t intend to have
an Er-Er relationship with the petitioner. And that they
made him a contract to allow the respondent to have a
working permit here in the Philippines. The LA
declared McBurnie as having been illegally dismissed
from employment. The respondents filed their
Memorandum of Appeal and Motion to Reduce Bond
and posted an appeal bond in the amount of
P100,000.00 but the NLRC denied the motion. The
NLRC dismissed their appeal due to respondent's
failure to post the required additional bond. The
respondent’s motion for reconsideration was denied.
The respondents filed with the CA the Petition for
Certiorari. McBurnie filed a Motion for Leave (1) To File
Supplemental Motion for Reconsideration and (2) to
Admit the Attached Supplemental Motion for
Reconsideration, a prohibited pleading under Section
2, Rule 56 of the Rules of Court. Thus, the motion for
leave was denied by the Court and the July 4, 2007
became final and executor on November 13, 2007. The
CA ruled on the merits and rendered a decision
allowing the respondent's motion to reduce appeal
bond and directing the NLRC to give due course to
their appeal. The CA also ruled that the NLRC
committed grave abuse of discretion in immediately
LABOR LAW TSN FINALS
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denying the motion without fixing an appeal bond in an
amount that was reasonable. McBurnie filed a motion
for reconsideration. The respondents moved that the
appeal be resolved on the merits by the CA. The CA
denied both motions. McBurnie then filed with the
Supreme Court the Petition for Review on Certiorari.
Issue: Whether or not McBurnie was illegally
dismissed.
Held: There was no employer-employee relationship.
Considering that McBurnie, an Australian, alleged
illegal dismissal and sought to claim under our labor
laws, it was necessary for him to establish, first and
foremost, that he was qualified and duly authorized to
obtain employment within our jurisdiction. A
requirement for foreigners who intend to work within
the country is an employment permit, as provided
under Article 40, Title II of the Labor Code. Clearly, this
circumstance on the failure of McBurnie to obtain an
employment permit, by itself, necessitates the
dismissal of his labor complaint. McBurnie failed to
present any employment permit which would have
authorized him to obtain employment in the
Philippines. McBurnie failed to present other
competent evidence to prove his claim of an
employer-employee relationship. The necessary
criterias for the determination of an
employer-employee relationship are: (1) the selection
and engagement of the employee; (2) the payment of
wages; (3) the power of dismissal; and (4) the power to
control the employee conduct. The rule of thumb
remains: the onus probandi falls on the claimant to
establish or substantiate the claim by the requisite
quantum of evidence. Whoever claims entitlement to
the benefits provided by law should establish his or her
right thereto. McBurnie even failed to show through
any document such as payslips or vouchers that his
salaries during the time that he allegedly worked for
the respondents were paid by the company. McBurnie
could not successfully claim that he was dismissed,
much less illegally dismissed. The complaint for illegal
dismissal is DISMISSED.
Note: Foreign workers should be holders of alien
employment permit so that they can avail the benefits
of the Labor Laws and the Courts. Consultants don’t
have employer-employee relations, and thus, not
covered by AEP.
Application of Foreign Laws with Labor Contracts
 The general rule is that the Philippine Laws
apply even to overseas employment contracts.
IPAMS, et, al. vs. De Vera, et, al. (March 7, 2016)
Facts: Arriola was then hired by SNC-Lavalin, through
its local manning agency, IPAMS, and his overseas
employment contract was processed with the POEA. In
a letter of understanding, dated June 5, 2008,
SNC-Lavin confirmed Arriola’s assignment in the
Ambatovy Project. According to Arriola, he signed the
contract of employment in the Philippines. On June 9,
2008, Arriola started working in Madagascar. After 3
months, Arriola received a notive of pre-termination of
employment, dated September 9, 2009, from
SNC-Lavalin. Aggrieved Arriola filed a complaint
against the petitioners for illegal dismissal and
non-payment of overtime pay, vacation leave and sick
leave pay before the Labor Arbiter (LA). On the part of
the respondent, it argued that the rights and obligations
of the OFW, the local recruiter, and the foreign
employer are governed by the employment contract
citing EDI-Staffbuilders; that the terms and conditions
of Arriola’s employment are embodied in the
Expartriate Policy, Ambatovy Project – Site, Long
Term, hence the Laws of Canada must be applied.
Issue: Whether or not foreign or labor code will
govern.
Held: The general rule is that Philippine laws apply
even to overseas employment contracts. This rule is
rooted in the constitutional provision of Section 3,
Article XIII that the State shall afford full protection to
labor, whether local or overseas. Hence, even if the
OFW has his employment abroad, it does not strip him
of his rights to security of tenure, humane conditions of
work and a living wage under our Constitution.
As an exception, the parties may agree that a foreign
19
law shall govern the employment contract. A synthesis
of the existing laws and jurisprudence reveals that this
exception is subject to the following requisites:
 That it is expressly stipulated in the overseas
employment contract that a specific foreign law
shall govern;
 That the foreign law invoked must be proven
before the courts pursuant to the Philippine
rules on evidence;
 That the foreign law stipulated in the overseas
employment contract must not be contrary to
law, morals, good customs, public order, or
public policy of the Philippines; and
 That the overseas employment contract must
be processed through the POEA.
 That Court is of the view that these four
requisites must be complied with before the
employer could invoke the applicability of a
foreign law to an overseas employment
contract. With these requisites, the States
would be able to abide by its constitutional
obligation to ensure that the rights and
well-being of our OFWs are fully protected.
Repatriation of the Remains and Belongings of the
Deceased Worker is the Duty of the Principal and
Local Agency
Equi-Asia Placement, Inc. vs. DFA, et, al
(September 19, 2006)
Doctrine: Petitioner's argument that Section 15 does
not provide that it shall be primarily responsible for the
repatriation of a deceased OFW is specious and plain
nitpicking. While Republic Act No. 8042 does not
expressly state that petitioner shall be primarily
obligated to transport back here to the Philippines the
remains of the deceased Razon, nevertheless, such
duty is imposed upon him as the statute clearly
dictates that "the repatriation of remains and transport
of the personal belongings of a deceased worker and
all costs attendant thereto shall be borne by the
principal and/or the local agency." The mandatory
nature of said obligation is characterized by the
legislature's use of the word "shall." That the
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CAUBANG, HERMANO, SUICO
concerned government agencies opted to demand the
performance of said responsibility solely upon
petitioner does not make said directives invalid as the
law plainly obliges a local placement agency such as
herein petitioner to bear the burden of repatriating the
remains of a deceased OFW with or without recourse
to the principal abroad. In this regard, we see no
reason to invalidate Section 52 of the omnibus rules as
Republic Act No. 8042 itself permits the situation
wherein a local recruitment agency can be held
exclusively responsible for the repatriation of a
deceased OFW.
Facts: On September 2000, Manny dela Rosa Razon,
a native of Lemery, Batangas and an overseas Filipino
worker, died of acute cardiac arrest while asleep
(bangungot) at the dormitory of the Samsong Textile
Processing Factory in South Korea. Informed thereof,
the Philippine Overseas Labor Office (POLO) at South
Korea immediately relayed the incident to the
Philippine Embassy in South Korea. Forthwith, the
[Labor] Attaché of the Philippine Embassy dispatched
a letter to Eleuterio Gardiner, administrator of the
Overseas Workers Welfare Administration (OWWA),
telling him about what happened and to inform the
relatives of Razon. In turn, the OWWA indorsed the
matter, for appropriate action, to Director R. Casco of
the Welfare Employment Office of the Philippine
Overseas Employment Administration (WEO-POEA).
Upon verification by the WEO-POEA on its data base,
it was discovered that Manny Razon was recruited and
deployed by Equi-Asia Placement, and was sent to
South Korea in April 2000 to work-train at Yeongjin
Machinery, Inc. Thereupon, POEA addressed the first
assailed telegram-directive to the President/GM of the
petitioner. We quote the telegram: "PLEASE PROVIDE
PTA [Prepaid Ticket Advice] FOR THE
REPATRIATION OF REMAINS AND BELONGINGS
OF OFW MANNY DELA ROSA RAZON AS PER
REQUEST OF PHILIPPINE EMBASSY, KOREA, YOU
ARE GIVEN TWO (2) DAYS FROM RECEIPT
HEREOF WITHIN WHICH TO PROVIDE SAID
TICKET AND ASSISTANCE, FAILURE TO DO SO
WILL CONSTRAIN US TO IMPOSE APPROPRIATE
SANCTION UNDER OUR RULES" Responding
thereto, petitioner, thru its President Daniel Morga, Jr.,
faxed the following message to the Assistance and
Welfare Division of the POEA: "In connection with your
telegram, this is to report to your good office the
following: 2. He violated his
employment/training/dispatching contracts on June 25,
2000 by unlawfully escaping/running away (TNT) from
his company assignment without prior KFSMB
authorization and working/staying in unknown
company/place; In view thereof, we cannot heed your
requests as embodied in your telegram. However, his
relatives can avail of the benefits provided for by
OWWA in cases involving undocumented/illegal
Filipino workers abroad. On the same date, Director
Casco of the WEO-POEA sent to the petitioner the
second assailed letter-directive, which pertinently
reads: "Mmay we remind you that pursuant to Sections
52, 53, 54 and 55 of the Implementing Rules
Governing RA 8042, otherwise known as the Migrant
Workers and Overseas Filipino Act of 1995, the
repatriation of OFW, his/her remains and transport of
his personal effects is the primary responsibility of the
principal or agency and to immediately advance the
cost of plane fare without prior determination of the
cause of worker's repatriation. The Rules further
provide for the procedure to be followed in cases when
the foreign employer/agency fails to provide for the
cost of the repatriation, compliance of which is
punishable by suspension of the license of the agency
or such sanction as the Administration shall deem
proper. Hence, you are required to provide the PTA for
the deceased OFW in compliance with the requirement
in accordance with R.A. 8042. You are given forty-eight
(48) hours upon receipt hereof within which to provide
said ticket. Failure in this regard will constrain us to
impose the appropriate sanction under our rules.
Petitioner wrote back Director Casco, thus: "Please be
informed that under the provisions of Section 53 as
well as, and in relation to, Section 55 of the Omnibus
Rules and Regulations Implementing the Migrant
Workers and Overseas Filipinos Act of 1995, the action
to be imposed by POEA for non-compliance therewith
20
within 48 hours are violative of due process and/or the
principle on due delegation of power. This is so
because Sec. 15 of R.A. 8042 clearly contemplates
prior notice and hearing before responsibility
thereunder could be established against the agency
that sets up the defense of sole fault – in avoidance of
said responsibility. Besides, the sections in question
unduly grant the powers to require advance payment of
the plane fare, to impose the corresponding penalty of
suspension in case of non-compliance therewith, when
the law itself does not expressly provide for the grant of
such powers. Nonetheless, and apprehensive of the
adverse repercussions which may ensue on account of
its non-compliance with the directive, petitioner
advanced under protest the costs for the repatriation of
the remains of Razon. CA rendered a Decision
dismissing the petition.CA stated that petitioner was
mainly accusing the POEA of grave abuse of discretion
when it ordered petitioner to pay, in advance, the costs
for the repatriation of the remains of Razon.CA ruled
that POEA did not commit any grave abuse of
discretion as its directives to petitioner were issued
pursuant to existing laws and regulations. It likewise
held that a petition for certiorari, which was the remedy
availed of by petitioner, is not the proper remedy as the
same is only available when "there is no appeal, or any
plain, speedy, and adequate remedy in the ordinary
course of law." Section 62 of the Omnibus Rules and
Regulations Implementing the Migrant Workers and
Overseas Filipinos Act of 1995 or Republic Act 8042
("Omnibus Rules") states that "the Labor Arbiters of
NLRC shall have the original and exclusive jurisdiction
to hear and decide all claims arising out of
employer-employee relationship or by virtue of any law
or contract involving Filipino workers for overseas
deployment including claims for actual, moral,
exemplary and other forms of damages, subject to the
rules and procedures of the NLRC." There is,
therefore, an adequate remedy available to petitioner.
Lastly, the Court of Appeals declared that it could not
strike down as unconstitutional Sections 52, 53, 54,
and 55 of the Omnibus Rules as the unconstitutionality
of a statute or rules may not be passed upon unless
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CAUBANG, HERMANO, SUICO
the issue is directly raised in an appropriate
proceeding.
Issue: Whether or not CA erred in dismissing the
petition.
Held: No. At the center of this petition are the following
provisions of the omnibus rules: Section 52. Primary
Responsibility for Repatriation. – The repatriation of
the worker, or his/her remains, and the transport of
his/her personal effects shall be the primary
responsibility of the principal or agency which recruited
or deployed him/her abroad. All costs attendant thereto
shall be borne by the principal or the agency
concerned. Section 53. Repatriation of Workers. – The
primary responsibility to repatriate entails the obligation
on the part of principal or agency to advance the cost
of plane fare and to immediately repatriate the worker
should the need for it arise, without a prior
determination of the cause of the termination of the
worker's employment. However, after the worker has
returned to the country, the principal or agency may
recover the cost of repatriation from the worker if the
termination of employment was due solely to his/her
fault. Every contract for overseas employment shall
provide for the primary responsibility of agency to
advance the cost of plane fare, and the obligation of
the worker to refund the cost thereof in case his/her
fault is determined by the Labor Arbiter.
Section 54. Repatriation Procedure. – When a need for
repatriation arises and the foreign employer fails to
provide for it cost, the responsible personnel at site
shall simultaneously notify OWWA and the POEA of
such need. The POEA shall notify the agency
concerned of the need for repatriation. The agency
shall provide the plane ticket or the prepaid ticket
advice (PTA) to the Filipinos Resource Center or to the
appropriate Philippine Embassy; and notify POEA of
such compliance. The POEA shall inform OWWA of
the action of the agency. Section 55. Action on
Non-Compliance. – If the employment agency fails to
provide the ticket or PTA within 48 hours from receipt
of the notice, the POEA shall suspend the license of
the agency or impose such sanctions as it may deem
necessary. Upon notice from the POEA, OWWA shall
advance the costs of repatriation with recourse to the
agency or principal. The administrative sanction shall
not be lifted until the agency reimburses the OWWA of
the cost of repatriation with legal interest. Said
provisions, on the other hand, are supposed to
implement Section 15 of Republic Act No. 8042 which
provides: SEC. 15. Repatriation of Workers;
Emergency Repatriation Fund. – The repatriation of
the worker and the transport of his personal belongings
shall be the primary responsibility of the agency which,
recruited or deployed the worker overseas. All costs
attendant to repatriation shall be borne by or charged
to the agency concerned and/or its principal. Likewise,
the repatriation of remains and transport of the
personal belongings of a deceased worker and all
costs attendant thereto shall be borne by the principal
and/or the local agency. However, in cases where the
termination of employment is due solely to the fault of
the worker, the principal/employer or agency shall not
in any manner be responsible for the repatriation of the
former and/or his belongings. It bears emphasizing that
administrative bodies are vested with two basic
powers, the quasi-legislative and the quasi-judicial. In
Abella, Jr. v. Civil Service Commission, we discussed
the nature of these powers to be – In exercising its
quasi-judicial function, an administrative body
adjudicates the rights of persons before it, in
accordance with the standards laid down by the law.
The determination of facts and the applicable law, as
basis for official action and the exercise of judicial
discretion, are essential for the performance of this
function. On these considerations, it is elementary that
due process requirements, as enumerated in Ang
Tibay, must be observed. These requirements include
prior notice and hearing. On the other hand,
quasi-legislative power is exercised by administrative
agencies through the promulgation of rules and
regulations within the confines of the granting statute
and the doctrine of non-delegation of certain powers
flowing from the separation of the great branches of
the government. Prior notice to and hearing of every
affected party, as elements of due process, are not
required since there is no determination of past events
21
or facts that have to be established or ascertained. As
a general rule, prior notice and hearing are not
essential to the validity of rules or regulations
promulgated to govern future conduct. In this case,
petitioner assails certain provisions of the Omnibus
Rules. However, these rules were clearly promulgated
by DFA and DOLE the exercise of their
quasi-legislative powers or the authority to promulgate
rules and regulations. Because of this, petitioner was,
thus, mistaken in availing himself of the remedy of an
original action for certiorari as obviously, only judicial or
quasi-judicial acts are proper subjects thereof. If only
for these, the petition deserves outright dismissal. Be
that as it may, we shall proceed to resolve the
substantive issues raised in this petition for review in
order to finally remove the doubt over the validity of
Sections 52, 53, 54, and 55 of the Omnibus Rules. It is
now well-settled that delegation of legislative power to
various specialized administrative agencies is allowed
in the face of increasing complexity of modern life.
Hence, the need to delegate to administrative bodies,
as the principal agencies tasked to execute laws with
respect to their specialized fields, the authority to
promulgate rules and regulations to implement a given
statute and effectuate its policies. All that is required
for the valid exercise of this power of subordinate
legislation is that the regulation must be germane to
the objects and purposes of the law; and that the
regulation be not in contradiction to, but in conformity
with, the standards prescribed by the law. Under the
first test or the so-called completeness test, the law
must be complete in all its terms and conditions when it
leaves the legislature such that when it reaches the
delegate, the only thing he will have to do is to enforce
it. The second test or the sufficient standard test,
mandates that there should be adequate guidelines or
limitations in the law to determine the boundaries of the
delegate's authority and prevent the delegation from
running riot.
Basically, petitioner is impugning the subject provisions
of the Omnibus Rules for allegedly expanding the
scope of Section 15 of Republic Act No. 8042 by: first,
imposing upon it the primary obligation to repatriate the
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CAUBANG, HERMANO, SUICO
remains of Razon including the duty to advance the
cost of the plane fare for the transport of Razon's
remains; and second, by ordering it to do so without
prior determination of the existence of
employer-employee relationship between itself and
Razon. Petitioner's argument that Section 15 does not
provide that it shall be primarily responsible for the
repatriation of a deceased OFW is specious and plain
nitpicking. While Republic Act No. 8042 does not
expressly state that petitioner shall be primarily
obligated to transport back here to the Philippines the
remains of Razon, nevertheless, such duty is imposed
upon him as the statute clearly dictates that "the
repatriation of remains and transport of the personal
belongings of a deceased worker and all costs
attendant thereto shall be borne by the principal and/or
the local agency." The mandatory nature of said
obligation is characterized by the legislature's use of
the word "shall." That the concerned government
agencies opted to demand the performance of said
responsibility solely upon petitioner does not make
said directives invalid as the law plainly obliges a local
placement agency to bear the burden of repatriating
the remains of a deceased OFW with or without
recourse to the principal abroad. Nor do we see any
reason to stamp Section 53 of the Omnibus Rules as
invalid for allegedly contravening Section 15 of the law
which states that a placement agency shall not be
responsible for a worker's repatriation should the
termination of the employer-employee relationship be
due to the fault of the OFW. To our mind, the statute
merely states the general principle that in case the
severance of the employment was because of the
OFW's own undoing, it is only fair that he or she should
shoulder the costs of his or her homecoming. Section
15 of Republic Act No. 8042, however, certainly does
not preclude a placement agency from establishing the
circumstances surrounding an OFW's dismissal from
service in an appropriate proceeding. As such
determination would most likely take some time, it is
only proper that an OFW be brought back here in our
country at the soonest possible time lest he remains
stranded in a foreign land during the whole time that
recruitment agency contests its liability for repatriation.
As aptly pointed out by the Solicitor General – Such a
situation is unacceptable. 24. This is the same reason
why repatriation is made by law an obligation of the
agency and/or its principal without the need of first
determining the cause of the termination of the
worker's employment. Repatriation is in effect an
unconditional responsibility of the agency and/or its
principal that cannot be delayed by an investigation of
why the worker was terminated from employment. To
be left stranded in a foreign land without the financial
means to return home and being at the mercy of
unscrupulous individuals is a violation of the OFW's
dignity and his human rights. These are the same
rights R.A. No. 8042 seeks to protect. As for the
sufficiency of standard test, this Court had, in the past,
accepted as sufficient standards the following: "public
interest," "justice and equity," "public convenience and
welfare," and "simplicity, economy and welfare."
Probative Value of AEP
Pacific Consultants Intl. Asia, Inc. et al vs.
Schonfeld (February 19, 2007)
Doctrine: The CA found the petition meritorious.
Applying the four-fold test of determining an
employer-employee relationship, the CA declared that
respondent was an employee of PPI. On the issue of
venue, the appellate court declared that, even under
the January 7, 1998 contract of employment, the
parties were not precluded from bringing a case related
thereto in other venues. While there was, indeed, an
agreement that issues between the parties were to be
resolved in the London Court of Arbitration, the venue
is not exclusive, since there is no stipulation that the
complaint cannot be filed in any other forum other than
in the Philippines.
Facts: Respondent is a Canadian citizen and was a
resident of New Westminster, British Columbia,
Canada. He had been a consultant in the field of
environmental engineering and water supply and
sanitation. Pacicon Philippines, Inc. (PPI) is a
corporation duly established and incorporated in
accordance with the laws of the Philippines. The
22
primary purpose of PPI was to engage in the business
of providing specialty and technical services both in
and out of the Philippines.2 It is a subsidiary of Pacific
Consultants International of Japan (PCIJ).
On January 7, 1998, Henrichsen transmitted a letter of
employment to respondent in Canada, requesting him
to accept the same and affix his conformity thereto.
Respondent made some revisions in the letter of
employment and signed the contract.
Respondent arrived in the Philippines and assumed his
position as PPI Sector Manager. He was accorded the
status of a resident alien.
As required by Rule XIV (Employment of Aliens) of the
Omnibus Rules Implementing the Labor Code, PPI
applied for an Alien Employment Permit (Permit) for
respondent before the Department of Labor and
Employment (DOLE). It appended respondent's
contract of employment to the application.
On February 26, 1999, the DOLE granted the
application and issued the Permit to respondent.
Issue: Whether or not the respondent is an employee
of PPI (YES). Whether or not the labor arbiter has
jurisdiction to try and decide on the merits of the case
(YES).
Held: The CA found the petition meritorious. Applying
the four-fold test of determining an employer-employee
relationship, the CA declared that respondent was an
employee of PPI. On the issue of venue, the appellate
court declared that, even under the January 7, 1998
contract of employment, the parties were not precluded
from bringing a case related thereto in other venues.
While there was, indeed, an agreement that issues
between the parties were to be resolved in the London
Court of Arbitration, the venue is not exclusive, since
there is no stipulation that the complaint cannot be filed
in any other forum other than in the Philippines.
Inexplicably, the Labor Arbiter and the NLRC ignored
the documentary evidence which respondent
appended to his pleadings showing that he was an
employee of petitioner PPI; they merely focused on the
January 7, 1998 letter of employment and Section 21
of the General Conditions of Employment.
Petitioner PPI applied for the issuance of an AEP to
LABOR LAW TSN FINALS
CAUBANG, HERMANO, SUICO
respondent before the DOLE. In said application, PPI
averred that respondent is its employee. To show that
this was the case, PPI appended a copy of
respondent's employment contract. The DOLE then
granted the application of PPI and issued the permit.
It bears stressing that under the Omnibus Rules
Implementing the Labor Code, one of the requirements
for the issuance of an employment permit is the
employment contract. Section 5, Rule XIV
(Employment of Aliens) of the Omnibus Rules.
No AEP – Cannot Avail of the Protection under the
Labor Code
Galera vs. WPP Marketing Communications, et al
(March 25, 2010)
Facts: 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.
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.
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 VP 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.
Issue: Whether or not the case was properly
cognizable by the Labor Arbiter (No). Whether or not
Galera was entitled to the monetary award even
without securing an AEP prior to her employment (NO).
Held: The law and rules are consistent in stating that
the employment permit must be acquired prior to
employment. The Labor Code states that 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. 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.
Seafarer ER-EE Relationship Shall Commence
Only Upon Actual Departure From Point of Hire
Santiago vs. CF Sharp Crew Mgt. Inc. (July 10,
2007)
Facts: At the heart of this case involving a contract
between a seafarer, on one hand, and the manning
agent and the foreign principal, on the other, is this
erstwhile unsettled legal quandary: whether the
seafarer, who was prevented from leaving the port of
Manila and refused deployment without valid reason
but whose POEA-approved employment contract
provides that the employer-employee relationship shall
commence only upon the seafarer’s actual departure
from the port in the point of hire, is entitled to relief?
Petitioner had been working as a seafarer for Smith
Bell Management, Inc. (respondent) for about five (5)
years. On 3 February 1998, petitioner signed a new
contract of employment with respondent, with the
duration of nine (9) months. He was assured of a
monthly salary of US$515.00, overtime pay and other
benefits. The following day or on 4 February 1998, the
contract was approved by the Philippine Overseas
Employment Administration (POEA). Petitioner was to
be deployed on board the "MSV Seaspread" which
23
was scheduled to leave the port of Manila for Canada
on 13 February 1998.
On 9 February 1998, petitioner was thus told that he
would not be leaving for Canada anymore, but he was
reassured that he might be considered for deployment
at some future date.
Issue: Whether or not employer-employee
relationship has already commenced.
Held: There is no question that the parties entered into
an employment contract on 3 February 1998, whereby
petitioner was contracted by respondent to render
services on board "MSV Seaspread" for the
consideration of US$515.00 per month for nine (9)
months, plus overtime pay. However, respondent failed
to deploy petitioner from the port of Manila to Canada.
Considering that petitioner was not able to depart from
the airport or seaport in the point of hire, the
employment contract did not commence, and no
employer-employee relationship was created between
the parties.
However, a distinction must be made between the
perfection of the employment contract and the
commencement of the employer-employee
relationship. The perfection of the contract, which in
this case coincided with the date of execution thereof,
occurred when petitioner and respondent agreed on
the object and the cause, as well as the rest of the
terms and conditions therein. The commencement of
the employer-employee relationship, as earlier
discussed, would have taken place had petitioner been
actually deployed from the point of hire. Thus, even
before the start of any employer-employee
relationship, contemporaneous with the perfection of
the employment contract was the birth of certain rights
and obligations, the breach of which may give rise to a
cause of action against the erring party. Thus, if the
reverse had happened, that is the seafarer failed or
refused to be deployed as agreed upon, he would be
liable for damages.
Moreover, while the POEA Standard Contract must be
recognized and respected, neither the manning agent
nor the employer can simply prevent a seafarer from
being deployed without a valid reason.
LABOR LAW TSN FINALS
CAUBANG, HERMANO, SUICO
Contracts Undergo Three Distinct Stages, to wit:
Negotiation; Perfection or Birth; and
Consummation.
CF Sharp & Co., Inc. et al vs. Pioneer Insurance &
Surety Corp. (February 15, 2012)
Facts: Whether a local private employment agency
may be held liable for breach of contract for failure to
deploy a seafarer, is the bone of contention in this
case.
Responding to a newspaper advertisement of a job
opening for sandblasters and painters in Libya,
respondents Wilfredo C. Agustin and Hernando G.
Minimo applied with C.F. Sharp sometime in August
1990. After passing the interview, they were required to
submit their passports, seaman’s book, National
Bureau of Investigation clearance, employment
certificates, certificates of seminars attended, and
results of medical examination. Upon submission of
the requirements, a Contract of Employment was
executed between respondents and C.F. Sharp.
Thereafter, respondents were required to attend
various seminars, open a bank account with the
corresponding allotment slips, and attend a
pre-departure orientation. They were then advised to
prepare for immediate deployment and to report to C.F.
Sharp to ascertain the schedule of their deployment.
After a month, respondents were yet to be deployed
prompting them to request for the release of the
documents they had submitted to C.F. Sharp. C.F.
Sharp allegedly refused to surrender the documents
which led to the filing of a complaint by respondents
before the Philippine Overseas Employment
Administration (POEA) on 21 January 1991.
On 30 October 1991, POEA issued an Order finding
C.F. Sharp guilty of violation of Article 34(k) of the
Labor Code, which makes it unlawful for any entity “to
withhold or deny travel documents from applicant
workers before departure for monetary or financial
considerations other than those authorized under this
Code and its implementing rules and regulations.”
Consequently, C.F. Sharp’s license was suspended
until the return of the disputed documents to
respondents. POEA likewise declared that it has no
jurisdiction to adjudicate the monetary claims of
respondents.
Issue: Whether or not there is already a perfected
employment contract.
Held: As correctly ruled at the trial, contracts undergo
three distinct stages, to wit: negotiation; perfection or
birth; and consummation. Negotiation begins from the
time the prospective contracting parties manifest their
interest in the contract and ends at the moment of
agreement of the parties. Perfection or birth of the
contract takes place when the parties agree upon the
essential elements of the contract. Consummation
occurs when the parties fulfill or perform the terms
agreed upon in the contract, culminating in the
extinguishment thereof.
Under Article 1315 of the Civil Code, a contract is
perfected by mere consent and from that moment the
parties are bound not only to the fulfillment of what has
been expressly stipulated but also to all the
consequences which, according to their nature, may
be in keeping with good faith, usage and law.
An employment contract, like any other contract, is
perfected at the moment (1) the parties come to agree
upon its terms; and (2) concur in the essential
elements thereof: (a) consent of the contracting
parties, (b) object certain which is the subject matter of
the contract and (c) cause of the obligation.
Note: RTC awarded damages to OFW; under RA 8042
as amended, Labor Arbiter has jurisdiction on
damages filed by OFW. The ruling in Santiago was
reiterated in this case.
OFW Can File a Case Here in the Philippines
PNB vs. Cabansag (June 21, 2005)
Facts: "In late 1998, [herein Respondent Florence
Cabansag] arrived in Singapore as a tourist. She
applied for employment, with the Singapore Branch of
the Philippine National Bank, a private banking
corporation organized and existing under the laws of
24
the Philippines, with principal offices at the PNB
Financial Center, Roxas Boulevard, Manila. At the
time, the Singapore PNB Branch was under the helm
of Ruben C. Tobias, a lawyer, as General Manager,
with the rank of Vice-President of the Bank. At the time,
too, the Branch Office had two (2) types of employees:
(a) expatriates or the regular employees, hired in
Manila and assigned abroad including Singapore, and
(b) locally (direct) hired. She applied for employment
as Branch Credit Officer, at a total monthly package of
$SG4,500.00, effective upon assumption of duties after
approval. Ruben C. Tobias found her eminently
qualified and wrote on October 26, 1998, a letter to the
President of the Bank in Manila, recommending the
appointment of Florence O. Cabansag, for the position.
"However, on April 19, 1999, Ruben C. Tobias again
summoned Florence O. Cabansag and adamantly
ordered her to submit her letter of resignation. She
refused. On April 20, 1999, she received a letter from
Ruben C. Tobias terminating her employment with the
Bank.
Issue: Whether or not the arbitration branch of the
NLRC has jurisdiction (YES). Whether or not the
arbitration of the NLRC in the NCR is the proper venue
(YES). Whether or not Cabansag was illegally
dismissed (YES).
Held: Noteworthy is the fact that respondent likewise
applied for and secured an Overseas Employment
Certificate from the POEA through the Philippine
Embassy in Singapore. The Certificate, issued on
March 8, 1999, declared her a bona fide contract
worker for Singapore. Under Philippine law, this
document authorized her working status in a foreign
country and entitled her to all benefits and processes
under our statutes. Thus, even assuming arguendo
that she was considered at the start of her employment
as a "direct hire" governed by and subject to the laws,
common practices and customs prevailing in
Singapore she subsequently became a contract worker
or an OFW who was covered by Philippine labor laws
and policies upon certification by the POEA. At the
time her employment was illegally terminated, she
already possessed the POEA employment Certificate.
LABOR LAW TSN FINALS
CAUBANG, HERMANO, SUICO
Under the "Migrant Workers and Overseas Filipinos
Act of 1995" (RA 8042), a migrant worker "refers to a
person who is to be engaged, is engaged or has been
engaged in a remunerated activity in a state of which
he or she is not a legal resident; to be used
interchangeably with overseas Filipino worker."
Undeniably, respondent was employed by petitioner in
its branch office in Singapore. Admittedly, she is a
Filipino and not a legal resident of that state. She thus
falls within the category of "migrant worker" or
"overseas Filipino worker."
As such, it is her option to choose the venue of her
Complaint against petitioner for illegal dismissal. The
law gives her two choices: (1) at the Regional
Arbitration Branch (RAB) where she resides or (2) at
the RAB where the principal office of her employer is
situated. Since her dismissal by petitioner, respondent
has returned to the Philippines -- specifically to her
residence at Filinvest II, Quezon City. Thus, in filing her
Complaint before the RAB office in Quezon City, she
has made a valid choice of proper venue.
EMPLOYEES COMPENSATION COMMISSION
 Employees Compensation Commission (ECC)
 A government corporation
 It is attached to the DOLE for policy
coordination and guidance
 It is a quasi-judicial corporate entity created
to implement the Employees’ Compensation
Program (ECP).
 ECP: Provides a package of benefits for public
and private sector employeees and their
dependents in the event of work-connected
contingencies such as sickness, injury, disability
or death
 Benefits:
1. Loss of Income Benefit
2. Medical Benefit
3. Death and Funeral Benefits
4. Rehabilitation Services
 As administered by SSS and GSIS
CAN THE DEATH BENEFITS FROM SSS AND ECP
BE AVAILED OF AT THE SAME TIME?
 The ECP aims to assist workers who suffer
work-connected sickness or injury resulting in
disability or death.
 The benefits under the EC Program MAY BE
ENJOYED SIMULTANEOUSLY WITH
BENEFITS UNDER THE SSS effective June
1984.
WHAT ARE THE BENEFITS UNDER THE ECP BY
ECC?
 Under the program, workers who suffer from
work-related sickness, injury, or death, are entitled
to EC benefits such as
 Loss of income benefits
 Medical benefits
 Death and funeral benefits
EMPLOYEES AFFECTED BY THE DREADED
CORONAVIRUS DISEASE CAN NOW QUALIFY
FOR EC BENEFITS
By: Aurora C. Ignacio (SSS President and CEO)
 While businesses and companies are starting to
open and the lockdown guidelines are easing up,
employees are noe coming out of their homes to
report back to work.
 This exposes the members of the work force to
various dangerous factors such as inhaling
polluted air, road accidents, and most especially,
contracting the coronavirus disease.
 When an employee meets an accident, this
involves physical, emotional, and psychological
trauma, as well as financial burden.
 Let’s face it: People who had an accident know
the expense the incident entail
 With that in mind, an employee can file for an EC
benefit on work-related cases from the usual SSS
Benefits that they can get from the SSS
 Provided that the different criteria for
entitlement to the benefit as set by both
agencies are met
25
 Fortunately, employees affected by the dreaded
coronavirus disease can now qualify for benefits.
In an online article published on February 27,
2020 by the ECC, employees infected by the virus
can now file for EC benefit.
PRESIDENTIAL DECREE NO. 626
EMPLOYEES COMPENSATION AND STATE
INSURANCE FUND
 Article 164. Policy - The State shall promote and
develop a tax-exempt employees’ compensation
program whereby employees and their
dependents, in the event of work-connected
disability or death, may promptly secure
adequate income benefit and medical or related
benefits
 DEFINITIONS
 Injury: Any harmful change in the human
organism sustained at work carried out
during working hours at the workplace or
elsewhere while executing an order for the
employer
 Sickness: Any illness definitely accepted as
an occupational disease listed by the
Commission, or any illness caused by
employment subject to proof by the employee
that the risk of contracting the same is
increased by working conditions
 Death: Loss of life resulting from injury or
sickness
 Disability: Loss or impairment of a
physical/mental function resulting from injury
or sickness
 Compensation: All payments made under
this Title for income benefits, and medical or
other benefits
COMPENSABLE ILLNESS OR INJURY
 For injury and resulting disability or death to be
compensable, the following grounds MUST BE
SATISFIED:
LABOR LAW TSN FINALS
CAUBANG, HERMANO, SUICO
 Employee must have been inkured at the
place where his work requires him to be
 EE must have been performing his official
functions
 If injury is sustained elsewhere, EE must
have been executing an order for the
employer
 What is compensated is not the injury or
disease itself but the attendant loss or
impairment of earning capacity
MEANING OF “ARISING OUT OF” AND “IN THE
COURSE OF” THE EMPLOYMENT
CASE: Celerino Valeriano vs. ECC and GSIS
 To be compensable, an injury must have resulted
from an accident arising out of and in the course
of employment.
 It must be shown that it was sustained within the
scope of employment while the claimant was
performing an act reasonably necessary or
incidental thereto or while following the orders of a
superior.
 Indeed, the standard of “work connection” must be
satisfied even by one who invokes the 24-hour
duty doctrine; otherwise, the claim for
compensability must be denied.
 Celerino Valeriano was employed as a fire truck
driver assigned at the San Juan Fire Station.
Sometime on the evening of July 3, 1985,
petitioner was standing along Santolan Road,
Quezon City, when he met a friend by the name of
Alexander Agawin. They decided to proceed to
Bonanza Restaurant in EDSA, Quezon City, for
dinner.
 On their way home at around 9:30PM, the
owner-type jeeney they were riding in figured in a
head-on collision with another vehicle at the
intersection of N. Domingo and Broadway streets
in Quezon City.
 Due to the strong impact of the collision, petitioner
was thrown out of the vehicle ans was severely
injured. As a result of the mishap, petitioner was
brought to several hospitals for treatment.
VALERIANO IS NOT COMPENSABLE
 CA dismissed petitioner’s claim on the ground that
he has not been injured at his workplace,
executing an order of his superior, or performing
official functions when he met the accident.
 Thus, for injury to be compensable, the standard
of “work connection” must be substantially
satisfied. The injury and the resulting disability
sustained by reason of employment are
compensable regardless of the place where the
injured occured, if it can be proven that at the time
of the injury, the employee was acting within the
purview of his/her employment and performing an
act reasonably necessary or incidental thereto.
 Valeriano was not able to demonstrate solidly how
his job as a fire truck driver was related to the
injuries he had suffered.
 That he sustained the injuries after pursuing a
purely personal and social function - having dinner
with some friends - is clear from the records of the
case.
 His injuries were not acquired at his workplace,
nor were they sustained while he was performing
an act within the scope of his employment or in
pursuit of an order of his superior.
 Thus, we agree with the conclusion reached by
the appellate court that his injuries and
consequent disability were not work-connected
and thus, not compensable.
TEACHER INJURED INSIDE THE CLASSROOM
Case: Belarmino vs ECC, May 11, 1990
 Belarmino, a teacher, accidentally slipped and fell
on the classroom floor. She suffered abdominal
pain, etc. GSIS denied the husband’s claim
because septicemia post partum is not an
occupational diseased. ECC affirmed GSIS.
26
 SC’S RULING: Her fall was the proximate or
responsible cause that set in motion an unbroken
chain of events, leading to her demise.
 Proximate cause does not imply the nearest
in point of time or relation, but rather it is the
sufficient cause which may be the most
remote of an operation chain. It must be that
which sets the others in motion
MOONLIGHTING POLICEMAN
Case: GSIS vs CA and Alegre, April 20, 1999
 The claims was denied because at the time of the
incident, the police officer was driving his tricycle
and ferrying passengers within the vicinity of a
commercial complex
 The matter SP02 Alegre was attending to at the
time he met his death was intrinsically private and
unofficial in nature proceeding as it did from no
particular directive or permission of his superior
officer.
GOING TO OR COMING FROM WORK RULE
Case: Alano vs. ECC, March 16, 1988
 School principal was on her way to school was
bumped and run over by a speeding bus which
caused her death.
 Ruling: She was at the place where her job
necessarily required her to be if she was to reach
her place of work on time.
ACCIDENT ON THE WAY HOME
Case: Lazo vs. ECC
 Lazo a security guard of CB was forced to render
OT. On his way home, the vehicle he was riding
turned turtle and he suffered injuries.
 Ruling: Employment includes not only actual
doing of work but a reasonable margin of time and
space necessary to be used in passing to and
from the place where the work is to be done.
LABOR LAW TSN FINALS
CAUBANG, HERMANO, SUICO
INCIDENT OF EMPLOYMENT (INJURIES
SUSTAINED IN CONNECTION WITH ACTS WHICH
ARE REASONABLY INCIDENTAL TO
EMPLOYMENT) INCLUDE:
A. Act of Ministration (Quenching his thirst, going to
rest room)
B. Acts for the Benefit of the Employer
C. Acts During Emergency
D. Extra-Premises Rule
E. Special Errand Rule
F. While Living, Boarding or Lodging on the Premises
of Employer or at Working Place
G. While Travelling
H. Employer Sponsored Activities
I. Acts of God or Force Majeure - Hit by Lighting While
Working
J. Assault - Iloilo Dock Case
ECC BOARD RESOLUTION 3908
“PRESUMPTIVE COMPENSABILITY” FOR AFP
MEMBERS AND POLICEMENT
 Whereas, because of certain serious peace and
order problems of the country, more particularly
the insurgency problems, it has become generally
perceptible that on account of the nature of their
work, members of the AFP have become “marked
men” insofar as insurgents and other lawless
elements are concerned and are, therefore, killed
by such insurgents at every opportunity
 This Board, resolves, as it hereby resolves, to
approve the adoption of a policy that the moment
an AFP member suffers a contingency, the
presumption is that it is because of the nature
of his work;
 PROVIDED, that the evidentiary details of his
injury, or death, are clearly established through
duly issued medical certificates on his injury or
injuries, or death, by the attending physician or
duly authorized representatives of the hospital
where he is brought for medical treatment.
SICKNESS
 See definition under ARTICLE 173 and for
sickness and resulting disability or death to be
compensable, the sickness must be the result of
an occupational disease listed under Annex A of
the Rules (ECC) with the condition set therein
satisfied; otherwise, proof must be shown that the
risk of contracting the disease is increased by the
working conditions
 If the illnesses are not occupational diseases,
the claimant must present proof that he
contracted them in the course of his
employment.
 HE WHO ALLEGES A FACT HAS THE BURDEN
OF PROVING IT AND A MERE ALLEGATION IS
NOT EVIDENCE
ANNEX A OF ECC RULES SAYS
For occupational disease and resulting disability or
death to be compensable, all of the following
conditions must be satisfied:
1. Employee’s work must involve the risks described
therein
2. Disease was contracted as a result of the
employee’s exposure to the described risk
3. Disease was contracted within a period of exposure
and under such other factors necessary to contract it
4. There was no notorious negligence on the part of
the employee
THEORY OF INCREASED RISK
- If the ailment is not included in the list, there must
be a showing of reasonable work-connection to
establish compensability
Case: Menez vs. ECC, April 25, 1980
 Rheumatoid Arthritis and Pneumonia are not
occupational diseases but it was proven that she
contracted it by reason of her occupation as a
27
public high school teacher due to her exposure to
adverse working conditions.
Case: Narazo vs. ECC, Feb. 6, 1990
 Deceased was a budget examiner in the office of
the Governor. Prolonged sitting down and putting
off urination result in stagnation of the urine. This
encourage the growth of bacteria in the urine.
Delayed excretion may permit the retention and
survival of microorganism.
INCREASED RISK NOT SHOWN ON THE
FOLLOWING CASES (AZUCENA)
 Limbo vs. ECC: More or less same illness with
Narazo vs. ECC
 Dabatian vs. ECC: Peptic Ulcer
 Casumpang vs. ECC: Cancer of the Stomach
 Rodriguez vs. ECC: Employee was classroom
teacher, basketball coach and active member of
BSP; cancer of the colon
COVERAGE UPON EMPLOYERS AND
EMPLOYEES
 Art. 166. Compulsiry Coverage: Coverage in the
State Insurance Fund shall be COMPULSORY
upon all employers and their employees not over
60 years of age
 PROVIDED, that an employee who is over 60
years of age and paying contributions to
qualify for the retirement or life insurance
benefit administered by the System shall be
subject to compulsory coverage
 PROVIDED, further, that in case of an
employee who is both covered by the SSS
and GSIS, only his employment under the
GSIS shall be considered for purposes of his
coverage
 Art. 166. Effective Date of Coverage:
Compulsory coverage of the employer during the
effectivity of this Title shall take effect on the
FIRST DAY OF HIS OPERATION, AND THAT
LABOR LAW TSN FINALS
CAUBANG, HERMANO, SUICO
OF THE EMPLOYEE ON THE DATE OF HIS
EMPLOYMENT
CONTRIBUTIONS ENTIRELY BY THE EMPLOYER
 Contributions under this Title shall be paid in
their entirety by the employer and any contract
or device for the deduction of any portion thereof
from the wages or salaries of the employees shall
be null and void
 Art. 181. Employer’s Contributions:
(a) Under such regulations as the System may
prescribe, beginning as of the last day of the
month when an employee’s compulsory coverage
takes effect and every month thereafter during his
employment, his employer shall prepare to remit
to the System a contribution equivalent to 1% of
his monthly salary credit
(b) When a covered employee dies, becomes
disabled or is separated from employment, his
employer’s obligation to pay the monthly
contribution arising from that employment shall
cease at the end of the month of contingency and
during such months that he is not receiving waged
or salary.
PRESCRIPTIVE PERIOD
 Art. 194. Delinquent Contributions
A. An employer who is delinquent in his
contributions shall be liable to the System for the
benefits which may have been paid by the System
to his employees or their dependents, and any
benefit and expenses to which such employer is
liable shall constitute a lien on all his property, real
or personal, which is hereby declared to be
preferred to any credit except taxes. The payment
by the employer of the lump sum equivalent of
such liability shall absolve him from the payment
of the delinquent contributions and penalty
thereon with respect to the employee concerned
 Art. 199. Prescriptive Period: No claim for
compensation shall be given due course unless
notice thereof has been given to the employer in
accordance with the provisions herein, except
when said notice is not required. The right to
compensation shall be barred unless said claim is
filled with the System within one year from notice
to the employer.
PRESCRIPTION OF ACTION
Case: Maria Buena Obra vs. SSS, April 9, 2003
 Juanito Buena Obra, husband of petitioner,
worked as a driver for 24 years and 5 months. His
first and second employers were logging
companies. Thereafter, he was employed at Jollar
Industrial Sales and Services, Inc as a dump truck
driver from January 1980 to June 1988
 On April 13, 2000, the Commission rendered a
decision, dismissing the appeal. It ruled that
petitioner failed to show by substantial evidence
that her husband’s cause of death was due to, or
the risk of contracting his ailment was increased
by his occupation and working conditions, as per
Section 1(b), Rule III of PD No. 626, as amended.
In addition, the Commission declared that
petitioner’s claim has prescribed, citing ECC
Resolution No. 93-08-0068
 Ruling: We agree with the petitioner that her
claim for death benefits under the SSS law should
be considered as the Employees’ Compensation
claim itself. This is but logical and reasonable
because the claim for death benefits which
petitioner filed with the SSS is of the same nature
as her claim before the ECC.
 Furthermore, the SSS is the same agency with
which Employees’ Compensation claims are filed.
As correctly contended by the petitioner, when
she filed her claim for death benefits with the SSS
under the SSS law, she had already notified the
SSS of her employees’ compensation claim,
because the SSS is the very same agency where
28
claims for payment of sickness/disability/death
benefits under PD No. 626 are filed.
NO PROOF FEE BY AGENT OR LAWYER
 Article 201. Prohibition: No agent, attorney or
other person pursuing or in charge of the
preparation or filing of any claim for benefit under
this Title shall demand or charge for his services a
fee, and any stipulation to the contrary shall be
null and void. The retention or deduction of any
amount from any benefit granted under this Title
for the payment of fees of such services is
prohibited. Violation of any provision of this Article
shall be punished by a fine of not less than P500
no more than P5,000, or imprisonment for not less
than six months nor more than 1 year, or both, at
the discretion of the court.
 Art. 202. Exemption from Levy, Tax, etc: All
laws to the contrary notwithstanding, the State
Insurance Fund and all its assets shall be exempt
from any tax, free, charge, levy, or customs or
import duty, and no law hereafter enacted shall
apply to the State Indurance Fund unless it is
provided therein that the same is applicable by
expressly stating its name.
 Art. 331. Money Claims: All money claims arising
from employer-employee relations accruing during
the effectivity of this Code shall be filled within 3
years from the time the cause of action accrued;
otherwise, they shall be forever barred.
LABOR LAW TSN FINALS
CAUBANG, HERMANO, SUICO
Title II: Employees’ Compensation and State
Insurance Fund
Chapter I
POLICY AND DEFINITIONS
Employees’ Compensation Commission
The ECC is a government corporation. It is attached to
the DOLE for policy consideration and guidance.
It is a quasi-judicial corporate entity created to
implement the Employees’ Compensation Program.
The ECP provides a package of benefits for public and
private sector employees and their dependents in the
event of work-connected contingencies such as
sickness, injury, disability or death.
The ECP provides a package of benefits for public and
private sector employees and their dependents in the
event of work-connected contingencies such as
sickness, injury, disability or death. The program
provides for the following benefits: Loss of Income
Benefit, Medical Benefit, Death & Funeral Benefits,
and Rehabilitation Services as administered by the
GSIS and SSS.
Can the death benefits from SSS & ECP be availed
of at the same time?
The ECP aims to assist workers who suffer
work-connected sickness or injury resulting in disability
or death. The benefits under the ECP may be enjoyed
simultaneously with benefits under the social security
program effective Jun 1984.
What are the benefits under the ECP by ECC?
Under the program, workers who suffer from
work-related sickness, injury or death are entitled to
EC benefits such as loss of income, medical benefits,
and death and funeral benefits.
Employees affected by the dreaded Coronavirus
disease can now qualify for EC benefits.
(Aurora C. Ignacio, SSS President and CEO)
While businesses and companies are starting to open
and the lockdown guidelines are easing up, employees
are now coming out of their homes to report back to
work. This exposes the members of the work force to
various dangerous factors such as inhaling polluted air,
road accidents, and most especially, contracting the
disease. When an employee meets an accident, this
involves physical, emotional, and psychological trauma,
as well as financial burden. Let’s face it: people who
had an accident know the expense the incident entail.
With that in mind, an employee can file for an EC
benefit on work-related cases aside from the usual SS
benefits that they can get from the SSS – provided that
the different criteria for entitlement to the benefit as set
by both agencies are met.
Presidential Decree No. 626 – Employees Fund
Compensation and State Insurance Fund
Article 164. Policy. — The State shall
promote and develop a tax-exempt
employees' compensation program whereby
employees and their dependents, in the
event of work-connected disability or death,
may promptly secure adequate income
benefit, and medical or related benefits.
Article 165. Definition of Terms. — As used
in this Title, unless the context indicates
otherwise:
xxx
k) "Injury" means any harmful change in the
human organism sustained at work carried
out during working hours at the workplace or
elsewhere while executing an order for the
employer.
(l) "Sickness" means any illness definitely
accepted as an occupational disease listed
29
by the Commission, or any illness caused by
employment subject to proof by the
employee that the risk of contracting the
same is increased by working conditions.
(m) "Death" means loss of life resulting from
injury or sickness.
(n) "Disability" means loss or impairment of
a physical or mental function resulting from
injury or sickness.
(o) "Compensation" means all payments
made under this Title for income benefits,
and medical or related benefits.
Compensable illness or injury
For injury and resulting disability or death to be
compensable, the following grounds must be satisfied:
(a) EE must have been injured at the place where his
work requires him to be
(b) EE must have been performing his official
functions; and
(c) If injury is sustained elsewhere, EE must have been
executing an order for the ER.
What is compensated is not the injury or disease
itself but the attendant loss or impairment of
earning capacity.
Meaning of “arising out of” and “in the course of”
the employment
Celerino Valeriano v. ECC and GSIS
G.R. No. 136200, June 8, 2000
To be compensable, an injury must have
resulted from an accident arising out of and
in the course of employment. It must be
shown that it was sustained within the scope
of employment while the claimant was
performing an act reasonably necessary or
LABOR LAW TSN FINALS
CAUBANG, HERMANO, SUICO
incidental thereto or while following the
orders of a superior. Indeed, the standard of
"work connection" must be satisfied even by
one who invokes the 24-hour-duty doctrine;
otherwise, the claim for compensability must
be denied.
Celerino S. Valeriano was employed as a
fire truck driver assigned at the San Juan
Fire Station. Sometime on the evening of
July 3, 1985, petitioner was standing along
Santolan Road, Quezon City, when he met a
friend by the name of Alexander Agawin.
They decided to proceed to Bonanza
Restaurant in EDSA, Quezon City, for
dinner. On their way home at around 9:30
PM, the owner-type jeepney they were riding
in figured in a head-on collision with another
vehicle at the intersection of N. Domingo
and Broadway streets in Quezon City. Due
to the strong impact of the collision,
petitioner was thrown out of the vehicle and
was severely injured. As a result of the
mishap, petitioner was brought to several
hospitals for treatment.
Why not compensable?
The Court of Appeals dismissed petitioner's
claim on the ground that he had not been
injured at his work place, executing an order
of his superior, or performing official
functions when he met the accident.
Thus, for injury to be compensable, the
standard of "work connection" must be
substantially satisfied. The injury and the
resulting disability sustained by reason of
employment are compensable regardless of
the place where the injured occurred, if it
can be proven that at the time of the injury,
the employee was acting within the purview
of his or her employment and performing an
act reasonably necessary or incidental
thereto.
Petitioner Valeriano was not able to
demonstrate solidly how his job as a
firetruck driver was related to the injuries he
had suffered. That he sustained the injuries
after pursuing a purely personal and social
function — having dinner with some friends
— is clear from the records of the case. His
injuries were not acquired at his work place;
nor were they sustained while he was
performing an act within the scope of his
employment or in pursuit of an order of his
superior. Thus, we agree with the conclusion
reached by the appellate court that his
injuries and consequent disability were not
work-connected and thus not compensable.
Teacher injured inside the classroom
Belarmino v. ECC
G.R. No. 90204, May 11, 1990
Belarmino, a teacher, accidentally slipped
and fell on the classroom floor. She suffered
abdominal pain, etc. GSIS denied the
husband claim because septicemia post
partum is not an occupational disease. ECC
affirmed GSIS.
SC Ruling: Her fall was the proximate or
responsible cause that set in motion an
unbroken chain of events, leading to her
demise. Proximate cause does not imply the
nearest in point of time or relation, but rather
it is the sufficient cause which may be the
most remote of an operation chain. It must
be that which sets the others in motion.
Moonlighting policeman
GSIS v. CA and Alegre
G.R. No. 128524, April 20, 1999
30
The claim was denied because at the time of
the incident the police officer was driving his
tricycle and ferrying passengers within the
vicinity of a commercial complex. The matter
SPO2 Alegre was attending to at the time he
met his death, was intrinsically private and
unofficial in nature proceeding as it did from
the no particular directive or permission of
his superior officer.
Going to or coming from work rule
Alano v. ECC
March 16,1988
School principal was on her way to school
when she was bumped and run over by a
speeding bus which caused her death.
Ruling: She was at the place where her job
necessarily required her to be if she was to
reach her place of work on time.
Lazo v. ECC
June 18, 1990
Lazo, a security guard of CB, was forced to
render OT. On his way home, the vehicle he
was riding turned turtle and he suffered
injuries.
Ruling: Employment includes not only actual
doing of work but a reasonable margin of
time and space necessary to be used in
passing to and from the workplace where
the work is to be done.
Art. 173:
Incidents of employment (injuries sustained in
connection with acts which are reasonably
incidental to employment) include:
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i. Act of ministration (quenching his thirst, going to
rest room)
ii. Acts for the benefit of the employer
iii. Acts during emergency
iv. Extra-premises rule
v. Special errand rule
vi. While living, boarding or lodging on the premises
of employer or at working place
vii. While travelling
viii. Employer sponsored activities
ix. Acts of God or force majeure – hit by lighting while
working
x. Assault – Iloilo Dock case
ECC Board Resolution No. 3908
“Presumptive Compensability” for AFP Members
and Policemen
“Whereas, because of certain serious peace and
order problems of the country, more particularly the
insurgency problems, it has become generally
perceptible that on account of the nature of their work,
members of the AFP have become “marked men”
insofar as insurgents and other lawless elements are
concerned and are, therefore, killed by such
insurgents at every opportunity;
This Board resolves, as it hereby resolves, to approve
the adoption of a policy that the moment an AFP
member suffers a contingency, the presumption is that
it is because of the nature of his work; provided that
the evidentiary details of his injury, or death, are
clearly established through duly issued medical
certificates on his injury or injuries, or death, by the
attending physician or duly authorized representatives
of the hospital where he is brought for medical
treatment.”
Sickness
Art. 173 defines “sickness” as any illness definitely
accepted as an occupational disease listed by the
Commission, or any illness caused by employment,
subject to proof that the risk of contracting the same is
increased by working conditions. For this purpose, the
Commission is empowered to determine and approve
occupational diseases and work-related illnesses that
may be considered compensable based on peculiar
hazards of employment.
For sickness and resulting disability to be
compensable or death to be compensable, the
sickness must be the result of an occupational disease
listed under Annex “A” of the Rules (ECC) with the
condition set therein satisfied; otherwise, proof must be
shown that the risk of contracting the disease
increased by the working conditions.
If the illness are not occupational diseases, the
claimant must present proof that he contracted them in
the course of his employment. He who alleges a fact
has the burden of proving it and a mere allegation is
not evidence.
Annex “A” of the ECC Rules says:
For occupational diseases and resulting disability or
death to be compensable, all of the following
conditions must be satisfied:
(1) EE’s work must involve the risks described
therein.
(2) Disease was contracted as a result of the EE’s
exposure to the described risk.
(3) Disease was contracted within a period of
exposure and under such other factors
necessary to contract it.
(4) There was no notorious negligence on the part
of the employee.
Theory of increased risk – if the ailment is not
included in the list… there must be a showing of
reasonable work-connection to establish
compensability
Menez v. ECC
April 25, 1980
Rheumatoid arthritis and pneumonia are not
occupational diseases but it was proven that
31
she contracted it by reason if her occupation
as a public high school teacher due to her
exposure to adverse working conditions.
Narazo v. ECC
February 6, 1990
Deceased was a budget examiner in the
office of the Governor. Prolonged sitting
down and putting off urination result in
stagnation of the urine. This encouraged the
growth of bacteria in the urine. Delayed
excretion may permit the retention and
survival of microorganisms.
Increased risk not shown in the following cases:
Limbo v. ECC
G.R. No. 146891, July 30, 2002
Facts: Petitioenr Limbo was employed at
Nestle Philippines since 1966 as a salesman
and was later promoted as Area Sales
Supervisor in 1977. In December 1994, he
was confined for one week at the PGH for
joint pains. It was revealed that he had
elevated BUN, creatinine and anemia, and
that he had chronic renal disease. He
underwent a renal transplant and was
discharged on January 13, 1995. He
claimed compensation benefits under the
SSS-ECC invoking PD No. 626; however,
his claim was denied on the ground that his
illness had no causal relationship to his job
as ASS. He appealed to the ECC which
affirmed the decision of the SSS. The CA
likewise dismissed his petition.
Issue: WON end-stage renal disease
secondary to uric acid nephropathy is
compensable under PD 626 as amended
Held: The Court considered the workload
and areas of responsibility of petitioner and
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found that it was not unlikely for him to
develop hypertension leading to uremia. In
determining whether a disease is
compensable, it is enough that there exists a
reasonable work connection as the
workmen’s claim is based on probability and
not certainty.
Under the Amended Rules on EE’s
Compensation, “for the sickness and the
resulting disability to be compensable, the
sickness must be the result of an
occupational disease listed under Annex A
of these Rules with the conditions set therein
satisfied; otherwise, proof must be shown
that the risk of contracting the disease is
increased by the working conditions.
Concededly, end-stage renal disease
secondary to uric acid nephropathy is not
among the Occupational Diseases under
Annex A of the AREC. This, however, would
not automatically bar petitioner’s claim for as
long as he could prove that the risk of
contracting the illness was increased by his
working conditions.
Petitioner’s job description showed that he
was responsible for the following:
(1) Territory’s collection,
merchandising, market hygiene and
promotion goals;
(2) Nestle’s principal satisfaction
provider to the company’s
customers and business partners,
government and other significant
entities;
(3) Principal Liaison of the territory with
the National Sales Manager, Area
Sales Manager and other Nestle
units;
(4) Lead and manages territory sales
force and third party support.
Considering the workload and areas of
responsibility of petitioner in this case, it is
not unlikely for him to develop hypertension,
which in turn led to uremia. It should be
stressed that in determining whether a
disease is compensable, it is enough that
there exists a reasonable work connection. It
is sufficient that the hypothesis on which the
workmen’s claim is based is probable since
probability, not certainty, is the touchstone.
Dabatian v. GSIS
G.R. No. 47294, April 8, 1987
Facts: The widow of SAD filed a claim for
death benefits with the GSIS. At the time of
his death, SAD was a garbage truck driver in
the General Services Department of a city
government. He was assigned mostly in the
night shift. SAD was a heavy coffee drinker,
which was his way of warding off sleepiness.
Shortly before he died, his co-employees
observed that he became paler and weaker
while at work until the time he collapsed and
became unconscious while on his tour of
duty and was brought home by his
companions. He died two weeks thereafter,
when the old compensation law had already
been abrogated.
Issue: Is SAD’s death compensable?
Held: Since peptic ulcer is not included in
the list of occupational diseases as drawn up
by the Commission, the claimant (widow)
has the burden of proving that the nature of
her deceased husband’s work increased the
risk of contracting the disease. Aside from
the undisputed fact that deceased is a heavy
coffee drinker, which was hi way of warding
off sleepiness, no evidence was ever
adduced by claimant to bolster the theory
32
that her husband’s work increased the risk of
contracting the ailment.
Being a heavy coffee drinker may have
aggravated his peptic ulcer, but aggravation
of an illness is no longer a ground for
compensation under the present law.
The SC takes notice of the fact that the
conditions in this case are not peculiar to the
work mentioned herein. Many, if not most,
employees are equally exposed to similar
conditions but have not been victims of
peptic ulcer.
Casumpang v. ECC
G.R. No. 48664, May 20, 1987
Facts: JC contracted his disease or ailment
(cancer of the stomach) before January 1,
1975. There were no medical findings,
reports, affidavits or any indication that he
suffered from any pain prior to the effectivity
of the LC. His ailment (ruptured duodenal
ulcer with generalized peritonitis) was
officially diagnosed on June 28, 1976. This
was traced to hematemesis and melena
which began in November 1975. As prison
guard, JC escorted inmates to work in the
hinterlands of San Ramon Penal Colony. At
times he was overtaken by rain. He had to
work at night in case of prison escapes. He
missed his meals owing to the nature of his
duties.
Ruling: The claimant, JC’s widow, failed to
establish that JC’s ailment was the direct
result of his occupation or employment as
prison guard. The doctrine of presumptive
compensability which was then expressly
provided under the old Workmen’s
Compensation Act is not recognized under
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CAUBANG, HERMANO, SUICO
PD 626.
Rodriguez v. ECC
G.R. No. 46454, Sept. 28, 1989
Facts: Claimant does not dispute the fact
that the principal duties of the deceased as a
classroom teacher alone would not have any
connection with his disease. However, she
claims that the deceased’s auxiliary
activities as a classroom teacher directly
affected his physical constitution and
indubitably caused him to have sustained
some trauma in his abdominal cavity and
other parts of the body. The deceased was a
member of the basketball team of the public
school teachers in their school for the last
five years prior to his death and had served
as a coach in basketball for 3 years. He was
also an active member of the Boy Scouts of
the Philippines.
Ruling: The circumstances alleged by
claimant and the evidence she presented
are not enough to discharge the required
quantum of proof. There is no clear evidence
as to when the disease (intestinal
lipomatosis of the large colon with
obstruction of the ascending colon)
supervened. The tumors which developed in
the deceased’s colon may have been
growing for many years even before he was
employed as a teacher. Neither was there
any indication as to what really caused the
disease; in fact, the nature of the disease as
described militate against a finding of causal
nexus.
The trauma was supposed to have caused
or contributed to the disease was neither
satisfactorily clarified nor adequately proved.
The activities relied upon by claimant being
outside the regular or primary functions of a
teacher, could not have been done every
working day. The deceased’s work as a
teacher did not expose him to hazards
different or greater from those involved in
ordinary or normal lifestyles. There is no
showing that he did not engage in other
extraneous activities aside from playing
basketball or being a member of the boy
scouts. Exposure to the co-curricular
activities was on the voluntary choice of the
deceased. The decision to engage therein
was at his option since, not forming part of
his work as teacher, there was no
compulsion on him to participate in said
activities.
Coverage upon ER and EEs
Art. 166. Policy. The State shall promote
and develop a tax-exempt employees’
compensation program whereby employees
and their dependents, in the event of
work-connected disability or death, may
promptly secure adequate income benefit
and medical related benefits.
Chapter II
COVERAGE AND LIABILITY
Art. 168. Compulsory coverage. Coverage
in the State Insurance Fund shall be
compulsory upon all employers and their
employees not over sixty (60) years of age:
Provided, That an employee who is over
(60) years of age and paying contributions to
qualify for the retirement or life insurance
benefit administered by the System shall be
subject to compulsory coverage.
33
SOCIAL WELFARE LEGISLATION
SSS LAW - RA 11199 known as SOCIAL SECURITY
ACT OF 2018
 An Act Rationalizing and Expanding the Powers
and Duties of the Social Security Commission to
Ensure the Long-Term Viability of the Social
Security System, Repealing for the Purpose
Republic Act No. 1161, as amended by Republic
Act No. 8282, otherwise known as the “Social
Security Act of 1997”
 Compulsory Coverage
 Coverage in the SSS shall be compulsory
upon all employees not over 60 years of age
and their employers
AN OFFICE OF THE ACTUARY
 An Office of the Actuary shall be created to
conduct the necessary actuarial studies and
present recommendations on premiums,
investments and other related matters. The
Commission, upon the recommendation of the
SSS President, shall appoint the Chief Actuary
and such other personnel as may be deemed
necessary; prescribe their duties and establish
such methods and procedures as may be
necessary to ensure the efficient, honest and
economical administration of the provisions and
purposes of this Act:
 PROVIDED, however, that the personnel of
the SSS below the rank of Vice-President
shall be appointed by the SSS President
 PROVIDED FURTHER, that the personnel
appointed by the SSS President, except
those below the rank of assistant manager,
shall be subject to the confirmation by the
Commission
 PROVIDED FURTHER, that the personnel of
the SSS shall be selected only from civil
service eligibles and be subject to civil
service rules and regulations
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CAUBANG, HERMANO, SUICO
 PROVIDED FINALLY, that the SSS shall be
exempt from the provisions of RA 6759 and
RA 7430
 The Chief Actuary of the SSS can only be
removed by just causes which include among
others gross incompetence, gross inefficiency,
disloyalty, conflict of interest, dishonesty and
serious misconduct.
DEFINITION
 Empployer: Any person, natural or juridical,
domestic or foreign, who carries on in the
Philippines any trade, business, industry,
undertaking, or activity of any kind and uses the
services of another person who is under his
orders as regards the employment, except the
government and any of its political subdivisions,
branches or instrumentalities, including
corporations owned or controlled by the
Government
 PROVIDED, that a self-employed person
shall be both employee and employer at the
same time
 Employee: Any person who performs services for
an employer in which either or both mental or
physical efforts are used and who receives
compensation for such services, where there is an
employer-employee relationship
 PROVIDED, that a self-employed person
shall be both employee and employer at the
same time
DEPENDENTS
 The legal spouse entitled by law to receive
support from the member
 The legitimate, legitimated or legally adopted, and
illegitimate child who is unmarried, not gainfully
employed, and has not reached 21 years of age,
or if over 21 years of age, he is congenitally or
while still a minor has been permanently
incapacitated and incapable of self-support,
physically or mentally; and
 The parent who is receiving regular support from
the member
SSS VS. AGUAS ET AL, FEBRUARY 27, 2006
Note: Legitimate spouses and dependents for
support
 On the claims of Rosanna, it bears stressing that
for her to qualify as a primary beneficiary, she
must prove that she was “the legitimate spouse
dependent for support from the employee.” The
claimant-spouse must therefore establish two
qualifying factors:
 That she is the legitimate spouse
 That she is dependent upon the member for
support
 In this case, Rosanna presented proof to show
that she is the legitimate spouse of Pablo, that is,
a copy of their marriage certificate which was
verified with the civil register by petitioner.
 But whether or not Rosanna has sufficiently
established that she was still dependent on pablo
at the time of his death remains to be resolved.
 Indeed, a husband and wife are obliged to support
each other, butwhether one is actually dependent
for support upon the other is something that has to
be shown; it cannot be presumed from the fact of
marriage alone.
 In a parallel case involving a claim for
benefits under the GSIS law, the Court
defined a dependent as “one who derives his
or her main support from another. Meaning,
relying on, or subject to, someone else for
support; not able to exist or sustain oneself,
or to perform anything without the will, power,
or aid of someone else.”
 It should be noted that the GSIS law likewise
defines a dependent spouse as “the
legitimate spouse dependent for support
upon the member or pensioner.”
 In that case, the Court found it obvious that a
wife who abandoned the family for more than
17 years until her husband died, and lived
34
with other men, was not dependent on her
husband for suppport, financial or otherwise,
during that entire period. Hence, the Court
denied her claim for death benefits.
RA No. 11199 or the Social Security Act of 2018
Section 9-A. Compulsory Coverage of the
Self-Employed. — Coverage in the SSS shall also be
compulsory upon such self-employed persons as may
be determined by the Commission under such rules
and regulations as it may prescribe, including, but not
limited to the following:
(a) All seif-empioyed professionals;
(b) Partners and single proprietors of
businesses;
(c) Actors and actresses, directors,
scriptwriters and news correspondents who do
not fall within the definition of the term
"employee" in Section 8(d) of this Act;
(d) Professional athletes, coaches, trainers
and jockeys; and
(e) Individual farmers and fishermen.
Unless otherwise specified herein, all provisions of this
Act applicable to covered employees shall also be
applicable to the covered self-employed persons.
Section 9-B. Compulsory Coverage of Overseas
Filipino Workers (OFWs) -
(a) Coverage in the SSS shall be compulsory
upon all sea-based and land-based OFWs as
defined under Republic Act No. 8042,
otherwise known as the Migrant Workers and
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CAUBANG, HERMANO, SUICO
Overseas Filipinos Act of 1995. as amended
by Republic Act No. 10022: Provided, That
they are not over sixty (60) years of age.
All benefit provisions under this Act shall apply
to all covered OFWs. The benefits include,
among others, retirement, death, disability,
funeral, sickness and maternity.
(b) Manning agencies are agents of their
principals and are considered as employers of
sea-based OFWs.
35
pay the total contributions to maintain his right to full
benefit.
Section 11-A. Effect of Interruption of Business or
Professional Income. - If the self-employed member
realizes no income in any given month, he shall not be
required to pay contributions for that month. He may,
however, be allowed to continue paying contributions
under the same rules and regulations applicable to a
separated employee member: Provided, That no
retroactive payment of contributions shall be allowed
other than as prescribed under Section 22-A hereof.

For purposes of the implementation of this Act, BENEFITS – TWO MAIN CLASSIFICATIONS
any law to the contrary notwithstanding
manning agencies are jointly and severally or 1. Social Security Benefits - consist of Sickness,
solidarity liable with their principals with Maternity Leave, Retirement, Unemployment,
respect to the civil liabilities incurred for any Insurance or Involuntary Separation, Disability, Death
violation of this Act. and Funeral

The persons having direct control, 2. Employee’s Compensation Benefits

management or direction of the manning
agencies shall be held criminally liable for any
act or omission penalized under this Act
notwithstanding Section 28(f) hereof.

Section 10. Effective Date of Coverage. - Compulsory

coverage of the employer shall take effect on the first
day of his operation and that of the employee on the
day of his employment: Provided, That the compulsory
coverage of the self-employed person shall take effect
upon his registration with the SSS.

Section 11. Effect of Separation from Employment. -

When an employee under compulsory coverage is
separated from employment, his employer’s
contribution on his account and his obligation to pay
contributions arising from that employment shall cease
at the end of the month of separation, but said
employee shall be credited with all contributions paid
on his behalf and entitled to benefits according to the
provisions of this Act. He may, however, continue to