G.R. No. 124439. February 5, 2004.*
Illegal recruitment in large scale is malum
PEOPLE OF THE PHILIPPINES, appellee, vs. FLOR GUTIERREZ
Y TIMOD, appellant.
Criminal Law; Labor Law; Illegal Recruitment; Recruitment and
placement defined.—Illegal recruitment is committed when two elements
concur, namely: (1) the offender has no valid license or authority required
by law to enable one to lawfully engage in recruitment and placement of
workers; and (2) he undertakes either any activity within the meaning of
_______________
22 Loyao, Jr. v. Armecin, A.M. No. P-99-1329, 1 August 2000, 337
SCRA 37.
* SECOND DIVISION.
33
VOL. 422, FEBRUARY 5, 2004 33
People vs. Gutierrez
“recruitment and placement” defined under Art. 13(b), or any of the
prohibited practices enumerated under Art. 34 of the Labor Code. Art.
13(b) of the Labor Code defines “recruitment and placement” as “any act of
canvassing, enlisting, contracting, transporting, utilizing, hiring, or
procuring workers, and includes referrals, contract services, promising or
advertising for employment, locally or abroad, whether for profit or not:
Provided, That any person or entity which, in any manner, offers or
promises for a fee employment to two or more persons, shall be deemed
engaged in recruitment and placement.”
Same; Same; Same; The crime becomes Illegal Recruitment in Large
Scale when the two elements concur, with the addition of a third element:
the recruiter committed the same against three or more persons,
individually or as a group.—The crime becomes Illegal Recruitment in
Large Scale when the two elements concur, with the addition of a third
element: the recruiter committed the same against three or more persons,
individually or as a group.
Same; Same; Same; Recruitment and placement activities of agents or
representatives appointed by a licensee, whose appointments were not
authorized by the Administration shall likewise constitute illegal
recruitment.—Section 1, Rule X of the same Book, in turn, provides that
“recruitment and placement activities of agents or representatives
appointed by a licensee, whose appointments were not authorized by the
Administration shall likewise constitute illegal recruitment.”
Same; Same; Same; Illegal recruitment in large scale is malum pro-
hibitum, not malum in se; Good faith is not a defense.—Appellant cannot
escape liability by claiming that she was not aware that before working for
her employer in the recruitment agency, she should first be registered with
the POEA.
prohibitum, not malum in se.Good faith is not a defense.
Same; Same; Same; Evidence; Court attaches no persuasive value to
affidavits of desistance, especially when executed as an afterthought.—The
Affidavits of Desistance executed by two of the complainants deserve little
weight. The Court attaches no persuasive value to affidavits of desistance,
especially when executed as an afterthought. As held in the case of People
v. Ubiña,“it would be a dangerous rule for courts to reject testimonies
solemnly taken before the courts of justice simply because the witnesses
who had given them later on changed their mind for one reason or another;
for such role would make solemn trials a mockery and place the
investigation of truth at the mercy of unscrupulous witnesses.”
34
34 SUPREME COURT REPORTS ANNOTATED
People vs. Gutierrez
APPEAL from a decision of the Regional Trial Court of Pasay City, Br.
108.
The facts are stated in the opinion of the Court.
The Solicitor General for plaintiff-appellee.
Juanito P. Noel for accused-appellant.
TlNGA, J.:
In its decision dated 22 March 1996, the Regional Trial Court (RTC) of
Pasay City, Branch 1081 found accused Flor Gutierrez y Timod guilty
beyond reasonable doubt of Illegal Recruitment in Large Scale and
sentenced her to suffer the penalty of life imprisonment and to pay a fine
of P100,000.00.
The Information in Criminal Case No. 95-6796 reads as follows:
That from the months of April to August 1994 in Pasay City, Philippines,
and within the jurisdiction of this Honorable Court, accused FLOR
GUTIERREZ Y TIMOD conspiring and confederating with CECILIA
BAUTISTA, ESTHER GAMILDE, LINDA RABAINO and MARILYN
GARCIA (whose present whereabouts are unknown) and mutually
helping one another, acting in common accord, did then and there,
willfully, unlawfully and feloniously, engage in recruitment activities for
overseas job placement and actually contract, enlist and recruit EVELYN
V. RAMOS, ROSEMARIE I. TUGADE, GENEROSA G. ASUNCION and
1
ROSALYN B. SUMAYO as domestic helpers in Dubai, United Arab
Emirates, for a fee of various amounts ranging from P10,000.00 to
P15,000.00 each, without first obtaining the required license and/or
authority from the Philippine Overseas Employment Administration
(POEA).
CONTRARY TO LAW.2
Arraigned on April 24, 1995, the accused entered a plea of not guilty. The
version of the prosecution is as follows:
On April 18, 1994, Rosemarie Tugade went to the house of one Celia
Bautista, a "recruiter-agent" of the accused, at Brgy. Bulala, Vigan, Ilocos
Sur.3 Celia told Rosemarie that she had to submit the following
requirements for her application to work in Dubai as a domestic helper:
P4,000.00 as placement fee, P1,200.00 for passport, P850.00 for "medical,"
six (6) 2x2 pictures and her original birth certificate.4
The next day, Rosemarie, together with "recruiter-agent" Celia Bautista
and fellow applicant Evelyn Ramos, traveled to Manila to the house of
one Esther Gamilde, another of the accused's "recruiter-agents."5 There,
Rosemarie and Evelyn filled out their bio-data forms. The two then
underwent a medical examination before having their whole-body picture
taken. Esther told them that they would know the results of their
application from Celia.6
Two weeks later, Celia told Rosemarie that her application for Dubai was
already approved and that she will be receiving $150.00-dollars per
month. For the first three (3) months, however, there will be salary
deductions.7
On August 27, 1994, Rosemarie and Evelyn, along with Celia and Esther,
went to the accused's office at Sarifudin Manpower and General Services
at EDSA Extension, Pasay City.8 The accused told Rosemarie that she
needed to pay P2,000.00 more.9 The accused said she had received all of
Rosemarie's documents and the money paid to Celia.10 Trusting in Celia,
Rosemarie did not demand a receipt from the accused.
On August 31, 1994, the accused asked Rosemarie to give P500.00 as
terminal fee for her departure in a week's time.11 Rosemarie paid the
amount, as evidenced by a receipt.12 The scheduled departure did not
push through, however. Instead, Rosemarie was told that she was to
leave on September 15, 1994, but, again, this did not materialize.13 A
series of postponements followed until finally she was told that she would
be leaving before Christmas 1994. Almost predictably, her trip never
came to pass.14
Private complainant Evelyn Ramos was with Rosemarie when she went
to Celia Bautista's house on April 19, 1994.15 Celia told Evelyn that for
P4,000.00 she could leave for Dubai to work as a domestic helper.16 Like
Rosemarie, Evelyn gave all her documents and paid the fees to Celia, who
in turn handed them to Esther Gamilde in Tondo.17 On June 10, 1994,
Ramos gave Bautista P8,000.00, which was also turned over to Gamilde.18
On August 22, 1994, Celia told Evelyn that she only had to wait one more
week before she left for Dubai.19 On August 27, 1994, Esther brought
Evelyn to the accused's office,20 where the accused asked for an additional
P2,000.00 as processing fee for the Philippine Overseas Employment
Agency (POEA).21 Evelyn paid the amount on August 31,
1994,22 including a terminal fee of P500.00. Like Rosemarie, Evelyn was
not able to leave the country despite the accused's promises.
Another complainant, Rosalyn D. Sumayo, also applied for overseas job
placement as a domestic helper in Dubai. Her experience was more
agonizing. In her case, it was one Marilyn Garcia who assisted
Rosalyn.23 She submitted a copy of her birth certificate, six (6) copies of 2
x 2 pictures, two (2) copies of her whole-body picture, passport, and
medical certificate.24 Marilyn also asked Rosalyn to pay: a processing fee
of P7,500.00, P2,620.00 as full tax, P500.00 as terminal fee, and
P3,000.00 as service charge.25
All the documents and money given by Rosalyn to Marilyn were
subsequently remitted to the accused at her office on June 28, 1994.26 The
accused told Rosalyn that she would be leaving anytime, but after three
months, Rosalyn's departure did not push through.27
Despite the setback, the accused kept assuring Rosalyn that she would
still be able to leave.28 One time, the accused brought her to the airport
and instructed her to hide in the airport restroom.29 After fifteen minutes,
the accused told her that they had to leave the airport because "mahigpit
sa immigration."30 On another occasion, the accused directed Rosalyn to
hide inside the Kayumanggi Restaurant for fifteen (15)
minutes.31 Nothing happened after, though, and they went home.
2
On November 14, 1994, Rosalyn was again at the airport.32 The accused
warned her, though, that if the Immigration Officer insisted on seeing her
papers, it would be better for her to leave.33 As directed, she left the
airport when she was asked to produce her documents.34
Exasperated, Rosalyn went to the accused's house and demanded the
return of her money and her documents. Instead of acceding to Rosalyn's
demands, the accused shouted at her and warned her that she had to pay
a cancellation fee of $300.00.35 Rosalyn was not able to give the amount
so she stayed with the accused, who assured her that she would still be
able to leave the country and that she would receive a monthly salary of
$150 to $200.36 These promises were never fulfilled. Rosalyn thus went to
the POEA, where POEA Administrator Felicisimo Joson, Jr. informed her
that the accused did not have a license to recruit.37
Generosa Asuncion suffered the same fate as her co-applicants. In August
1994, she applied for overseas job placement with one Linda
Rabaino.38 Generosa submitted her passport, medical certificate,
clearance from the National Bureau of Investigation (NBI), birth
certificate, bio-data and pictures.39 She also paid P15,000.00 in two
installments on September 9 and 12, 1994,40 which payments were not
receipted.
Linda told Generosa she would be leaving on September 13,
1994.41 However, she was not able to leave because, according to Linda, at
25, Generosa was under-aged.42
Linda then referred Generosa to the accused in the latter's office, where
Linda turned over Generosa's documents as well as the P15,000 00 to the
accused.43 The accused promised that Linda would be able to leave, but
her departure never took place.44 When Generosa demanded the return of
her money and her documents, the accused told her that she had to pay a
cancellation fee of $600.00.45 Stunned, Linda just opted to await the
further outcome of her application.46 Her waiting was all for naught.
With the promises of jobs abroad unfulfilled, complainants decided to
verify if the accused was a licensed recruiter. Upon learning from the
POEA that she was not so licensed,47 they proceeded to the Philippine
Anti-Crime Commission (PACC) to execute their respective affidavits.48
SPO4 Johnny Marqueta investigated the women's complaint. He
confirmed with the POEA that the accused was not licensed or authorized
to recruit overseas contract workers.49 The four complainants also
informed him that the accused wanted to meet with the group on January
26, 1995.50 SPO4 Marqueta thus had their money, totaling
P2,000.00,51 marked at the National Bureau of Investigation (NBI)
Forensic Section for their entrapment operation.52
On January 26, 1995, the accused met with the four complainants at
Jollibee, Commonwealth Avenue, Quezon City. As soon as she finished
counting the marked money and wrapping it in Jollibee napkins, the
accused was arrested.53
In her defense, the accused claimed that as an "employee" of a duly
licensed agency who was tasked to recruit and offer job placements
abroad, she could not be held liable for illegal recruitment.54 She
admitted that she had no authority to recruit in her personal
capacity,55 but that her authority emanated from a Special Power of
Attorney (SPA) and a Certification issued by a licensed agency.56
At the time complainants applied for overseas employment, the accused
was "employed" as a Marketing Directress of Sarifudin Manpower and
General Services,57 a duly licensed agency with License No. OS-91-LB-
61193-NL issued by the Department of Labor and Employment.58 A
Special Power of Attorney (SPA) from Sarifudin, dated May 1,
1994,59 states that she was authorized:
1. To negotiate, enter into business transactions for manpower
supply particularly in the Middle East countries;
2. For and in behalf of SARIFUDIN, MANPOWER AND
GENERAL SERVICES using as guidelines and terms and
conditions by both parties to secure:
(a) Verified Job Orders;
(b) Special Power of Attorney;
(c) Copy of Certified Certificate of Business Registration;
(d) VISA Authorization and/or NOC VISA.
....60
3
A Certification61 dated February 3, 1995, issued by the same agency, also
states that: "MRS. FLOR T. GUTIERREZ was (sic) employed as
OVERSEAS MARKETING DIRECTRESS of SARIFUDIN MANPOWER
AND GENERAL SERVICES, effective May 1994, up to the present"62
The defense also submitted several documents to prove compliance with
the requirements of the agency for her to assume her duties under the
SPA. These include receipts63 for a cash bond in the amount of P30,000.00
that she paid in several installments. She also paid a royalty fee of
P4,000.0064 and an office rental fee of P3,000.00.65
The accused was also required by the agency to submit a monthly report
for June 1994, as evidenced by a Memorandum signed by the General
Manager, Leah Salud.66 She submitted said monthly report, indeed,
several monthly reports.67 A document calling on all Marketing
Directresses/Directors to attend a meeting on July 8, 1994, was also
presented.68
The accused did not receive any salary or allowances from Sarifudin but
received commissions from the agency's principals, the employers from
foreign countries (ten in the Middle East and two in Singapore) at the
rate of U.S. $100.00 per person.69 From her commissions, she paid rent
and royalty to Sarifudin.70
Edwin Cristobal, POEA Labor Employment Officer, confirmed that
Sarifudin was duly licensed to engage in recruitment activities.71 He
presented a Certification issued by Ma. Salome S. Mendoza, Manager of
the Licensing Branch72 and containing the list of officers and staff of
Sarifudin. On said list appear the names "Florna Gutierrez" and "Flor
Gutierrez,"73 apparently, one and the same person.74 In the same
Certification, appears the following:
It is further certified that the said agency revoked the appointment of Ms.
Flor Gutierrez as Overseas Mktg. Director/Manager in a letter dated Dec.
15, 1995, although this Office has not received nor acknowledged the
representation of Ms. Gutierrez.75
Cristobal explained that the POEA, "Never had a letter from Sarifudin
registering or authorizing Flor Gutierrez... rather, [what] we received
[was a] revocation of her appointment."76 He also revealed that the name
of the accused does not appear in the records of the POEA as being
employed by the agency from the assumption of its license on June 11,
1993, up to its termination on June 11, 1995.77
The defense likewise alleged that complainants Rosemarie Tugade and
Evelyn Ramos executed Affidavits of Desistance dated May 12,
1995,78 stating that the accused had returned to them the amounts they
paid her and that the complaint was a result of a misunderstanding.
On March 22, 1996, the trial court rendered its Decision finding the
accused guilty beyond reasonable doubt of Illegal Recruitment in Large
Scale:
WHEREFORE, after evaluating all the foregoing, the accused FLOR
GUTIERREZ is hereby found guilty beyond reasonable doubt of Illegal
Recruitment in Large Scale, and judgment is hereby rendered as follows:
(a) Convicting the accused of Illegal Recruitment in Large Scale
and sentencing her to suffer the penalty of life imprisonment and
payment of P100,000.00 fine;
(b) No reimbursement to complainants is needed since their
money have already been returned;
(c) Accused to pay moral damages in the amount of P50,000.00 to
each complainant;
(d) Accused to pay exemplary damages in the amount of
P50,000.00 to each complainant; and
(e) To pay the costs of the suit.79
Accused Flor Gutierrez filed the present appeal seeking the reversal of
her conviction.
Illegal recruitment is committed when two elements concur, namely: (1)
the offender has no valid license or authority required by law to enable
one to lawfully engage in recruitment and placement of workers; and (2)
he undertakes either any activity within the meaning of "recruitment and
placement" defined under Art. 13(b), or any of the prohibited practices
enumerated under Art. 34 of the Labor Code.80 Art. 13(b) of the Labor
Code defines "recruitment and placement" as "any act of canvassing,
enlisting, contracting, transporting, utilizing, hiring, or procuring
4
workers, and includes referrals, contract services, promising or
advertising for employment, locally or abroad, whether for profit or not:
Provided, That any person or entity which, in any manner, offers or
promises for a fee employment to two or more persons, shall be deemed
engaged in recruitment and placement."81
The crime becomes Illegal Recruitment in Large Scale when the two
elements concur, with the addition of a third element: the recruiter
committed the same against three or more persons, individually or as a
group.82
Appellant argues that as a representative of a duly licensed recruitment
agency, she cannot be held guilty of Illegal Recruitment in Large Scale.
We disagree.
Section 11, Rule II, Book II of the Rules and Regulations Governing
Overseas Employment requires the prior approval of the POEA of the
appointment of representatives or agents:
Section 11. Appointment of Representatives. Every appointment of
representatives or agents of licensed agency shall be subject to prior
approval or authority of the Administration.
The approval may be issued upon submission of or compliance with the
following requirements:
a. Proposed appointment or Special Power of Attorney;
b. Clearances of the proposed representative or agent from NBI;
c. A sworn or verified statement by the designating or appointing
person or company assuming full responsibility for all the acts of
the agent or representative done in connection with the
recruitment and placement of workers.
Approval by the Administration of the appointment or designation does
not authorize the agent or representative to establish a branch or
extension office of the licensed agency represented.
Any revocation or amendment in the appointment should be
communicated to the administration. Otherwise, the designation or
appointment shall be deemed as not revoked or amended.
Section 1, Rule X of the same Book, in turn, provides that "recruitment
and placement activities of agents or representatives appointed by a
licensee, whose appointments were not authorized by the Administration
shall likewise constitute illegal recruitment."
The Certification from the POEA that it "has not received nor
acknowledged the representation of Ms. Gutierrez" establishes that the
appointment of appellant by Serafudin as a representative or agent was
not authorized by the POEA. It may be true that the POEA received from
Serafudin a revocation of appellant's appointment, but still is of no
consequence since Serafudin in the first place did not submit her
appointment to the POEA, and so the POEA has nothing to approve.
As found by the trial court83 the evidence on record, notably appellant's
own version, indicates that she was running her own labor recruitment
business.
Appellant cannot escape liability by claiming that she was not aware that
before working for her employer in the recruitment agency, she should
first be registered with the POEA.84 Illegal recruitment in large scale
is malum prohibitum, not malum in se.85 Good faith is not a defense.
That appellant engaged in recruitment and placement is beyond dispute.
The complaining witnesses categorically testified that the accused
promised them on several occasions that they would be leaving for work
abroad. Appellant received complainants' money and documents, a fact
that the complainants themselves witnessed and which the accused
acknowledged when she returned the same to them after the filing of the
case against her. Appellant even brought complainant Rosalyn Sumayo to
the airport three times, raising her expectations, but leaving her hanging
in mid-air. The accused even had the audacity to demand cancellation
fees from the complainants when they asked for a refund.
The Affidavits of Desistance executed by two of the complainants deserve
little weight. The Court attaches no persuasive value to affidavits of
desistance, especially when executed as an afterthought. As held in the
case of People v. Ubina,86 "it would be a dangerous rule for courts to reject
testimonies solemnly taken before the courts of justice simply because the
witnesses who had given them later on changed their mind for one reason
or another; for such rule would make solemn trials a mockery and place
the investigation of truth at the mercy of unscrupulous witnesses."87
5
As appellant committed illegal recruitment against three or more appellants for the recruitment of Pedro and Pablo Ozarraga. APPEAL from
persons, she is liable for Illegal Recruitment in Large Scale. a decision of the Regional Trial Court of Iligan City, Br. 4.
______________
WHEREFORE, the Decision of the Regional Trial Court, finding
appellant Flor Gutierrez y Timod guilty beyond reasonable doubt of the *FIRST DIVISION.
crime of Illegal Recruitment in Large Scale and sentencing her to life 674
imprisonment and to pay a fine of P100,000.00 is AFFIRMED. 674 SUPREME COURT REPORTS ANNOTATED
People vs. Segun
SO ORDERED. The facts are stated in the opinion of the Court.
The Solicitor General for plaintiff-appellee.
G.R. No. 119076. March 25, 2002.* Public Attorney’s Office for accused-appellant.
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. ROGER KAPUNAN, J.:
SEGUN and JOSEPHINE CLAM, accused-appellants.
Criminal Law; Labor Law; Illegal Recruitment; Elements of the crime
of illegal recruitment in large scale.—The crime of illegal recruitment in Appellants Roger Segun and Josephine Clam were charged before the
large scale is committed when three elements concur. First, the offender Regional Trial Court (RTC) of Iligan City with violating Article 38 of the
has no valid license or authority required by law to enable one to lawfully Labor Code, as amended, in an information reading:chanrob1es virtual
engage in recruitment and placement of workers. Second, he or she 1aw library
undertakes either any activity within the meaning of “recruitment and
placement” defined under Article 13 (b), or any prohibited practices That on or about the 3rd day of March, 1993 and for sometime thereafter,
enumerated under Article 34 of the Labor Code. Third, the offender at Linamon, Lanao del Norte, Philippines and within the Jurisdiction of
commits said acts against three or more persons, individually or as a group. this Honorable Court, the above-named accused, conspiring,
Same; Same; Same; Evidence; Testimony constituting conclusions of confederating and mutually helping each other, did then and there
law has no probative value and is not binding upon the court; The term willfully, unlawfully and feloniously canvass, enlist, contract, transport
“recruit” is a conclusion of law.—By itself, Rogelio’s testimony is far from and recruit for employment the following persons, namely:chanrob1es
conclusive that appellants actually recruited his wife and children. Rogelio virtual 1aw library
used the term “recruit” which is a conclusion of law; the prosecution did
not elicit from him the specific act constituting the recruitment. Section 36, 1. Mario Tambacan;
Rule 130 of the Rules of Court states that a witness can testify only to those
facts which he knows of his personal knowledge. He is not permitted to 2. Mary Jane Cantil;
testify as to a conclusion of law. Law in the sense here used embraces
whatever conclusions belong properly to the court. Thus, it has been held 3. Richard Arañas;
that the bare statements of a rape victim that she was “sexually assaulted”
or “raped” by the accused are not sufficient to establish the accused’s guilt 4. Victoria Collantes;
for the crime of rape. Testimony constituting conclusions of law has no
probative value and is not binding upon the court. 5. Christine Collantes;
Same; Same; Same; Same; Same; The witness must testify as to the
facts that would prove recruitment.—As we held earlier, “recruit” is a legal 6. Rogelio Collantes;
conclusion. The witness must testify as to the facts that would prove
recruitment. It does not suffice that the witness simply state that the 7. Luther Caban;
accused “recruited” the “victim.” Hence, the testimony of Josephine Aba
that appellants “recruited” her nephews is, by itself, insufficient to convict 8. Loreta Caban;

6
9. Jonard Genemelo;
10. Jhonely Genemelo;
11. Pedro Ozarraga;
12. Pablo Ozarraga; and
13. Pacifico Villaver,
Without any license and/or authority to engage in recruitment and
placement of workers from the Department of Labor and Employment. 1
Upon arraignment, appellants pleaded not guilty to the above charges.
The prosecution presented eight (8) witnesses, namely, Francita L.
Manequis, Conchita Tambacan, Josephine Aba, Melecio Ababa, Rogelio
Collantes, Loreta Caban, Christine Collantes and Elena Arañas.
Manequis, Employment Officer III and Administrative Officer of the
Department of Labor and Employment (DOLE), identified two
certifications issued by Allan Macaraya, then DOLE Director for Region
XII 2 . The first Certification, 3 dated October 7, 1993, stated that "per
records available in this Office" appellants were "neither licensed nor
authorized by this Department to recruit workers for overseas
employment." The second, 4 dated May 17, 1993, was "issued upon the
request of [the] Honorable Mayor of Linamon, Lanao del Norte, Mayor
Alejandro C. Alfeche." It stated that appellants, "per records of this
Office," were "not authorized to conduct recruitment for local and
overseas employment."cralaw virtua1aw library
Conchita Tambacan, 50, married, a tobacco vendor and a resident of
Linamon, Lanao del Norte testified that her son Mario, then 17, was
"recruited" by appellants on March 6, 1993 and brought to Manila. She
knew that he was recruited only because "many told [her]." Her son did
not consult her regarding the recruitment. At the time of her testimony,
her son had sent her only two letters from Cabanatuan City but had not
returned home to Linamon, Lanao del Norte.
After learning of her son’s recruitment, Mrs. Tambacan went to the
Mayor of Linamon who, in turn, verified from DOLE whether appellants
had any authority to undertake recruitment. Subsequently, the mayor
handed Mrs. Tambacan the certification dated May 17, 1993. 5
Josephine Ozarraga Aba, 28, married, a housekeeper, and a resident of
Linamon, is the aunt of twins Pedro and Pablo Ozarraga. Pedro and
Pablo, then 18, are the sons of her deceased sister. Mrs. Aba testified that
sometime in March or April 1993 her nephews told her that they wanted
to go to Manila and that they were "recruited." Her nephews were then
jobless and were looking for work. Mrs. Aba went to appellants’ house to
inquire from appellants, who were her neighbors, if what her nephews
told her was true. In appellants’ house, she saw appellants, her nephews,
among others. Appellants told her that her nephews would be given free
fare to Manila, free meals and good wages. These they also promised her
nephews. Mrs. Aba claimed that appellants brought one of the twins to
Cabanatuan and the other to Bulacan. When she testified, her nephews
had not yet returned to Linamon. 6
Melecio Ababa, 64, married, a fish vendor, and a resident of Linamon,
Lanao del Norte, is the grandfather of Jhonely and Jonard Genemelo.
Sometime in April 1992, Ababa learned that appellants had "recruited"
his grandsons. Ababa asked his grandsons, "Why will you work there [in
Cabanatuan City] [when] in fact you can find jobs here?" Ababa went to
the house of appellants who assured him that the transportation to
Manila was free, and that his grandsons were to be provided free meals
and paid good wages. Because of these promises, he acquiesced to the
recruitment. At the time of his testimony, Ababa’s grandsons had not
returned to Linamon. All he received from them were two letters but no
money. 7
Another complainant, Rogelio Collantes, 44, jobless and a resident of
Linamon, Lanao del Norte, is the husband of Victoria Collantes and the
father of Christine, then 13, and Rogelio, Jr., then 6. Sometime in April
1993, Rogelio learned that appellants had "recruited" Victoria, Christine
and Roger. Rogelio talked to appellants who promised that his wife and
children’s transportation to Manila and meals will be free and that they
will receive good wages. Victoria, Christine and Rogelio, Jr., who were
then looking for jobs, were then brought to Cabanatuan City.
At the time of his testimony, Rogelio’s children had already returned to
Linamon, traveling home with appellant Josephine Clam. Collantes’ wife,
though, was still in Nueva Ecija. She had sent letters to Rogelio thrice,
and money twice, once in the amount of P1,000.00 and the other time
P800.00. 8
The prosecution also presented Rogelio’s daughter Christine, who was
7
among those allegedly recruited by appellants. Christine said her parents
were jobless during the months of March and April 1993 and were looking
for work. Upon the invitation of appellants, she and her mother went to
the house of appellants on March 26, 1993. Appellants offered her mother
a job. Christine went with her mother to Cabanatuan City where her
mother forced her to work. According to Christine, those "recruited"
totaled thirteen, including her mother and her brother. She and the
others took a boat to Manila and Cabanatuan City. Appellants shouldered
the transportation expenses.
In Cabanatuan, Christine did housework for a certain Engr. Sy for seven
(7) months. She was paid P500.00 a month. She returned home in
Linamon on December 4, 1993. Neri Clam, Josephine’s sister, paid for her
fare to Manila.
Like Christine, her mother Victoria also performed housework in
Cabanatuan City for a certain Mabini Llanera. Her brother, Rogelio, Jr.,
was not able to find work because he was still a child. 9
Loreta Cavan, * 14, and also a resident of Linamon, Lanao del Norte,
testified that sometime in March 1993, she was "recruited" by appellants
and brought to Manila then to Cabanatuan City. She related that she met
appellants in the house of Josephine Clam, where she was recruited.
Appellants told her that Cabanatuan City was a "good place" "because the
salary [was] big." Loreta agreed to go. Loreta further stated that those
"recruited" by the couple totaled thirteen, including the twin brothers
Pedro and Pablo, a certain woman named Pasbel, a certain Johnny, and
Loreta’s sister Luther.
At Cabanatuan City, Loreta was able to work for a certain Barangay
Captain Centioco for three (3) months for P600.00 a month. Loreta
purportedly was not paid for her services since her two months’ salary
was supposed to pay for her fare to Manila.
Loreta denied that she went to the house of appellants to seek their help.
Rather, appellants allegedly offered her a job. Appellants invited her to go
to their house on March 27, 1993. Loreta learned from her sister Luther
that appellants were recruiting.
Loreta’s sister Luther, who was among those listed in the information as
having been recruited by appellants, went to Manila to work but her job
was not provided by appellants. 10
The prosecution also offered the testimony of Ester Cavan, the mother of
Loreta Cavan, to corroborate the latter’s testimony. The same was
dispensed with, however, the corroborative nature thereof having been
admitted by counsel for the defense. 11
Finally, Elena Arañas, mother of Richard Arañas, related that on March
6, 1993 appellants brought her son, then 19, to Cabanatuan City. Her
son, who was then looking for work, was promised that he would be given
a good salary. She learned of the promise when she went to appellants’
house where she saw appellants, her son, among others. Elena claimed
that she was present when appellants approached her son and offered
him work in Cabanatuan City. Elena agreed to the recruitment of her son
because of the promise of a good salary. However, she has not heard from
her son since he left nor had she received any money from him. 12
Appellants’ defense was predicated on denial. They presented five
witnesses to support their case.
Myrna Sasil, 35, married, a housekeeper and a resident of Iligan City,
testified that in March 1993 she went to the appellants’ residence to ask
them to find a job in Manila for her daughter Margie. Prior to that,
Myrna had known appellants for almost a year. She knew that appellants
could help their daughter find work in Manila because they just came
from Manila themselves. She said that before she went to appellants’
house, she did not know that appellants were sending people to Manila
for work. As Myrna’s family was then suffering from financial difficulties,
Josephine agreed to find work for Myrna’s daughter.
According to Myrna, Margie left with the thirteen persons listed in the
information as having been recruited by appellants. Appellants paid for
Margie’s fare to Manila, which she reimbursed from her salary. At the
time of Myrna’s testimony, Margie was still working in Cabanatuan City
and was sending Myrna money from her salary. 13
Losendo Servano, 50, married, a farmer and a resident of Linamon,
Lanao del Norte, is a neighbor of appellants as well as those of the
thirteen persons they allegedly recruited. Losendo had known Josephine
Clam since she was born, and Roger Segun when the latter and Josephine
got married.
Losendo testified that his son Ruel did not have work in Linamon. If Ruel
stayed in Linamon, Losendo said he would become a hoodlum or a
delinquent. His son thus requested appellants to take him with them to
8
Manila and find work for him, saying "Manong, Manong, I just go with
you to Manila."cralaw virtua1aw library
In April 1993, Ruel, appellants and thirteen others left for Manila by
boat. Appellants shouldered Ruel’s expenses in going to Manila. When
Ruel was able to find work, he paid appellants by installment. Losendo
claims that his son found work through the help of appellants. 14
Virgincita Ozarraga, 30, a housekeeper and a resident of Linamon, Lanao
del Norte, is the sister of appellant Josephine Clam. She is also the aunt
of the twins Pedro and Pablo Ozarraga and a neighbor of the thirteen
persons allegedly recruited by appellants.
According to Virgincita, Josephine Clam went to Nueva Ecija in 1991 but
transferred in 1992 to Dagupan City. In both places, Josephine worked as
a house helper. Roger Segun, on the other hand, worked as liaison officer
for Rolmar Employment Services.
Virgincita disputed Conchita Tambacan’s testimony that appellants
recruited the latter’s son Mario. She said that Mario went to appellants’
house. Josephine did not promise him a job because they were not
recruiters although appellants assured him they would help him find a
job.
Virgincita further testified that in March 1993 Pedro and Pablo Ozarraga
also went to the house of Virgincita’s mother to ask appellants to help
them find work because there were times they could not eat. Josephine
allegedly told the twins that she was not a recruiter but she would help
them find work. She purportedly said the same thing to Jhonely and
Jonard Genemelo, Victoria and Christine Collantes, and Loreta and
Luther Cavan. Josephine also told them that she was not promising them
anything.
Appellants and the thirteen persons they purportedly recruited left for
Manila by boat. Appellants paid for their fare and were able to find work
for them in Manila, Cabanatuan and other places in Luzon. Thereafter,
appellants returned to Linamon. To Virgincita’s knowledge, no people
sought their help to find them jobs after the couple returned from Manila.
15
Appellant Roger Segun, 34, single, is an employee of the Rolmar
Employment Services. As the liaison officer of the agency, appellant
undertakes the processing of the papers for the agency’s license.
According to appellant, around April and May of 1993, the thirteen
persons listed in the information went to the house of Josephine Clam to
ask her to help them find jobs in Cabanatuan City. Their neighbors knew
that Josephine used to work in Cabanatuan City, Pangasinan and
Dagupan City. Josephine told them that she was not a recruiter although
she would help them find work.
Appellants accompanied the thirteen to Manila as they (appellants) were
going there anyway. Appellants shouldered their neighbors’
transportation and other expenses from Linamon to Cabanatuan City
upon the promise that they (appellants) would be paid back. Eventually,
some paid while others did not. Roger did not bother to ask for payment
from those who did not pay. He claimed he was able to help find jobs for
their neighbors by recommending them to friends who needed helpers
and workers. Until they were able to find jobs, the thirteen stayed in
Roger’s house in Cabanatuan City.
Roger admitted that neither he nor Josephine Clam had a license to
recruit. He said he was not a recruiter. He also revealed that after he
brought the thirteen to Manila, he tried to secure a license to recruit but
his application was disapproved. 16
Appellant Josephine Clam, 28, single, and residing at Linamon, Lanao
del Norte, used to work as a house helper in Pangasinan and Bulacan for
a year after which she returned to Linamon.
Around March and April 1993, the thirteen persons listed in the
information went to her house to ask her help to find them work. They
knew that Josephine used to work in Pangasinan and Dagupan. She told
them she would try her best to help them but informed them that she was
not a recruiter.
Roger and Josephine shouldered their neighbors’ transportation and food
expenses on the condition that their neighbors reimburse appellants once
they found jobs. Some of them eventually paid them back although others
did not. Appellants were able to find jobs for the thirteen since Roger had
many friends.
Josephine admitted that she did not have any license to recruit since she
was not a recruiter. She and Roger helped their neighbors find jobs
because she took pity on them when they begged her to help them find
jobs. She even spent her and Roger’s joint savings to answer for her
9
neighbors’ expenses. 17
Based on the foregoing evidence, the Iligan City RTC convicted appellants
for violating Article 38 of the Labor Code, as amended:chanrob1es virtual
1aw library
WHEREFORE, finding the accused guilty beyond reasonable doubt of
Illegal Recruitment of the 13 persons mentioned in the information,
namely: Mario Tambacan, Mary Jane Cantil, Richard Aranas, Victoria
Collantes, Christine Collantes, Rogelio Collantes, Luther Caban, Loreta
Caban, Jonard Genemilo, Jhonely Genemilo, Pedro Ozarraga, Pablo
Ozarraga and Pacifico Villaver in a large scale, the accused are hereby
sentenced to suffer a penalty of life imprisonment for each of them and to
pay a fine of P100,000.00 each. The bail bond put up by the accused is
hereby ordered cancelled, in view of the penalty imposed by this Court of
life imprisonment, which is a nonbailable offense.
SO ORDERED. 18
Appellants contend that their guilt was not proven beyond reasonable
doubt. They maintain that it was their neighbors who approached them
in the house of Josephine Clam’s mother and solicited their assistance in
their (the neighbors’) desire to go to Manila. Josephine Clam had a
history of employment in Luzon and had just returned to Linamon. In
Josephine, the neighbors saw an opportunity to taste economic progress
and escape poverty and stagnation. Appellants took pity on them and
helped them find jobs, even defraying their neighbors’ travel expenses.
They submit, therefore, that they were not engaged in the recruitment of
persons for employment but in pursuit of a lawful and noble endeavor for
the benefit of the less fortunate. They neither collected nor received any
consideration for their efforts. Appellants point out that of the 13
allegedly recruited only Christine Collantes and Loreta Cavan testified
against them. Considering these circumstances, appellants submit that
the evidence against them is at most ambiguous and inconclusive. 19
The crime of illegal recruitment in large scale is committed when three
elements concur. First, the offender has no valid license or authority
required by law to enable one to lawfully engage in recruitment and
placement of workers. Second, he or she undertakes either any activity
within the meaning of "recruitment and placement" defined under Article
13 (b), or any prohibited practices enumerated under Article 34 of the
Labor Code. Third, the offender commits said acts against three or more
persons, individually or as a group. 20
There is no dispute that the first element is present in this case. The
certification dated May 17, 1993 and issued by DOLE Region XII Director
Allen Macaraya, states that appellants "were not authorized to conduct
recruitment for local and overseas employment." Both appellants
conceded they have no license to recruit. 21
The next question is whether appellants undertook any activity
constituting recruitment and placement as defined by Article 13 (b) of the
Labor Code, which states:jgc:chanrobles.com.ph
"Recruitment and Placement" refers to any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring or procuring workers, and
includes referrals, contract services, promising or advertising for
employment, locally or abroad, whether for profit or not: Provided, That
any person or entity which, in any manner, offers or promises for a fee
employment to two or more persons shall be deemed engaged in
recruitment and placement.
Did the prosecution prove beyond a reasonable doubt that appellants
canvassed, enlisted, contracted and transported the thirteen persons
listed in the information? In examining the prosecution’s evidence, we
bear in mind that a conviction for large scale illegal recruitment must be
based on a finding in each case of illegal recruitment of three (3) or more
persons whether individually or as a group. 22 While the law does not
require that at least three (3) victims testify at the trial, it is necessary
that there is sufficient evidence proving that the offense was committed
against three (3) or more persons. 23
There is no evidence that appellant undertook the recruitment of Mary
Jane Cantil and Pacifico Villaver. Neither Cantil nor Villaver testified in
court. No witness testified as to the fact of their recruitment.
As regards Mario Tambacan, his mother Conchita testified that she
learned of his recruitment only from other persons. On direct
examination she said:chanrob1es virtual 1aw library
Q How did you know that he was recruited?
A Many told me. 24
On cross-examination, she further revealed:chanrob1es virtual 1aw
library
10
 Q By whom?
Q You claimed that he was recruited but you did not see the
recruitment? A Roger Segun and Josephine Clam.

A This Josephine Clam and a companion recruited my son because many x x x

saw them.

ATTY. BAYRON:chanrob1es virtual 1aw library Q When you learn[ed] that your wife Victoria, Cristine your daughter and
son Roger Segun, Jr., were being recruited by the accused whom you just
That is hearsay. identified, what did you do then?

COURT:chanrob1es virtual 1aw library A I verified about their recruited (sic).

Q But you, yourself, you did not see that he was recruited? Were you Q You mean you were to talk to Josephine Clam and Roger Segun?
present when Mario Tambacan was recruited by the accused?
A Yes.
A I was not present.
Q Have you talked to Josephine Clam and Roger Segun?
Q You were only informed?
A Yes.
A Yes.
Q What did they tell you?
Q Your testimony here that he was recruited was only told to you?
A They promised that the transportation to Manila will be free and the
A Yes.25cralaw:red meals and good wages.

Conchita Tambacan’s testimony is clearly hearsay and, thus, of little x x x

probative value. 26 It hardly suffices to prove Mario Tambacan’s
recruitment beyond reasonable doubt.
Q Were these two accused Roger Segun and Josephine Clam able to bring
We now examine the evidence offered to prove the recruitment of the your wife and children to Manila?
Collanteses. The prosecution’s evidence consists of the testimonies of
Rogelio Collantes and his daughter Christine. Rogelio testified that his A Yes.
wife and children were "recruited" by appellants, that appellants
promised that his wife and children were to be provided free meals and Q Do you know what place in Manila they were taken?
transportation to Manila and good wages, and that appellants brought
his wife and children to Manila. A In Cabanatuan City. 27

Q Do you recall what happen[ed] to Victoria, Cristine and Roger
Collantes, Jr., sometime in April, 1993?
A They were recruited.
By itself, Rogelio’s testimony is far from conclusive that appellants
actually recruited his wife and children. Rogelio used the term "recruit"
which is a conclusion of law; the prosecution did not elicit from him the
specific act constituting the recruitment. Section 36, Rule 130 of the
Rules of Court states that a witness can testify only to those facts which

11
he knows of his personal knowledge. He is not permitted to testify as to a Q And that includes you also?
conclusion of law. Law in the sense here used embraces whatever
conclusions belong properly to the court. 28 Thus, it has been held that A Yes.
the bare statements of a rape victim that she was "sexually assaulted" or
"raped" by the accused are not sufficient to establish the accused’s guilt Q Did you agree to their proposal that you will be given job in
for the crime of rape. 29 Testimony constituting conclusions of law has no Cabanatuan City if you will go there?
probative value and is not binding upon the court. 30
A Yes, sir.
Rogelio also said that appellants made certain promises but it is not clear
if these were made to Rogelio or to his wife and children. That appellants Q How about your mother?
"brought" them to Manila does not necessarily mean that they were
"transported" in the context of Article 13 (b) for if we subscribe to the A Yes, sir.
defense’s account, appellants merely accompanied Rogelio’s family to
Manila. If two inculpatory facts are capable of two different Q How about your brother?
interpretations, that which would favor the accused should be adopted.
31 A My brother went with my mother.

On the other hand, Christine Collantes testified on direct Q When you agree[d] with your mother, were you able to go in
examination:chanrob1es virtual 1aw library Cabanatuan City together with the accused as they promised?

Q Do you recall sometime in April, 1993 what transpired between you A Yes, sir.
and these 2 accused in this case?
Q That includes the others recruited with the total of 13 of you?
A They treated me well.
A Yes, sir.
Q How did it happen that these 2 accused treated you well sometime in
April, 1993? Q What means of transportation did you take from here to Manila?

A They told us we would be given work. A William Lines.

Q Where will you be given work? Q Who shoulder[ed] the expenses of that boat in going there from here?

A In Cabanatuan City, sir. A Josephine Clam and Roger Segun.

Q In other words how many were you these 2 accused promised to give Q When you arrived in Manila you proceeded to Cabanatuan City, is that
you work in Cabanatuan City? correct?

A We were 13. A Yes.

Q That includes your mother and your brother Rogelio, Jr.? Q That includes your mother and your brother?

A Yes, sir. A Yes, sir.

12
Q As promised by the accused that you would be given a job, were [you] beg[ged] you to find a job?
able to have a job there in Cabanatuan City?
A Yes, sir.
A Yes, sir.
Q You also went with your parents when your mother went to the house
Q What is your work there? of the accused?

A House work. A Yes, sir.

Q To whom did you work with? Q The accused did not offer [a] job for your mother?

A With Engr. Sy. A She offered.

Q How much did he agree as your wages? Q You went along with your mother to Cabanatuan City, is that correct?

A P500.00 a month. A Yes.

Q Do you know if your mother was able to secure a job as promised by the Q Now, will you please tell the court why did you go along with your
accused? mother to Cabanatuan City?

A Yes. A In order to work.

Q Was she able to get a job? Q The accused did not offer you [a] job but you only went along with your
mother to Cabanatuan City, is that correct?
A Yes.
A No.
Q What kind of job?
COURT
A House work.
Q What do you mean when you say no?
Q How about your younger brother, was he able to have a work there?
A I was forced by my mother to work in Cabanatuan City. 33
A No he is still a child.
And on re-cross:chanrob1es virtual 1aw library
COURT
ATTY. BAYRON
Q To whom did your mother work?
Q The accused did not invite you to go to their house on March 26, 1993,
A Mabini Llanera in Cabanatuan City. 32 am I correct?

On cross-examination, she related:chanrob1es virtual 1aw library A We were invited.

Q Is it not a fact that your mother went to the house of the accused and Q You and your mother went to the house ,of the accused because you

13
ask[ed] for help to find a job, am I correct?
A According to them that place is good because the salary is big.
FISCAL BALABAGAN
x x x
Already answered, Your Honor.

COURT Q You said you were brought to Manila by these two accused on March
27, 1993, before that March 27, was there any occasion that you met the
Answer. accused in this case?

WITNESS A Yes, sir.

A We were invited. 34 Q Where did you meet them?

Christine’s testimony establishes beyond a reasonable doubt that A In Linamon.

appellants recruited Christine’s mother Victoria. Christine explicitly
stated that appellants offered her mother a job and told them that they Q In the house of Mrs. Josephine Clam?
"would be given work." Victoria thus agreed to appellants’ "proposal" that
she would be given a job in Cabanatuan City. A Yes, sir.

However, there is reasonable doubt whether appellants actually recruited Q What transpired when you first met with the accused Josephine Clam
Christine herself since Christine said that she "was forced by [her] in their house in Linamon?
mother to work in Cabanatuan City."cralaw virtua1aw library
A They told us that in the boat where we are going to take, we are
The Court also entertains grave doubts regarding the alleged recruitment prohibited to go around the boat.
of Christine’s brother Rogelio, Jr., who, according to Christine, went with
their mother and was not able to work because, at 6, he was "still a child." COURT
Did Rogelio, Jr. go to Cabanatuan City to work or did he just go together
with his mother so she could look after him? The former is unlikely while Q Prior to that when for the first time you met the accused?
the latter is not farfetched since the child was too young to work and still
needed looking after. WITNESS

The prosecution, however, succeeded in proving that appellants recruited A At the time when we are recruited.
Loreta Cavan. Loreta testified that appellants told her that the salary in
Cabanatuan City was good, that she agreed to their proposal for her to Q How did they recruit you?
work there, and that they brought her to Manila then to Cabanatuan
City:chanrob1es virtual 1aw library A They told me that the salary in that place is good.

Q Who brought you to Manila and then Cabanatuan City? FISCAL BALABAGAN

A Josephine Clam and Roger Segun. And because they told you that the salary is good, you are referring to
Cabanatuan City?
Q Why did they bring you to Manila then to Cabanatuan City?

14
WITNESS Q Is it not a fact that you beg[ged] the accused to help you find a job
outside Linamon, Lanao del Norte?
A Yes.
A No, sir.
Q When they told you that the salary is good, what did you do?
Q The accused in this case did not invite you to go in their house on
A I am willing to go. March 27, 1993?

Q You mean you agreed with their proposal to you and that you are going A No, sir.
to work there?
Q You went there on March 27, 1993 on your own volition, am I correct?
A Yes, sir. 35
A Sir, sir.*
On cross-examination, she said that appellants offered her employment
and she went to appellants’ house because they were Q You are familiar with the house of the accused in Linamon, Lanao del
recruiting:chanrob1es virtual 1aw library Norte, am I correct?

ATTY. BAYRON A Yes, sir.

Q You said awhile ago that you went to the house of the accused in Q In the house of the accused you can not find any signboard that they
Linamon, Lanao del Norte, can you recall when was that when you went are recruiting people for jobs, am I correct?
to the house of the accused in this case?
A No, sir.
A March 27.
COURT
Q Did you go to the house of the accused alone or with companion?
Q What is your purpose in going to the house of the accused?
A I have companions.
A Because they are recruiting.
Q Please tell the court why did you go to the house of the accused on
March 27, 1993? Q Prior to that when you went there, you have not met them before?

A Because they have recruited us. A No, sir.

Q Is it not a fact that you went to the house of the accused in Linamon Q Why did you go to the house of the accused and knew that they are
because you sought their help to find a job? recruiting?

A No, sir. A I was told by my sister.

Q The accused in this case did not offer you a job? Q Luther is your elder sister?

A They offered me. A Yes. 36

15
The prosecution however failed to prove, that appellants recruited WITNESS
Loreta’s sister, Luther. Loreta testified, thus:chanrob1es virtual 1aw
library A Josephine Clam and Roger Segun. 37

Q How many of you were brought and were recruited by the accused? Again, the term "recruit" is a conclusion of law. The prosecution failed to
elicit from Loreta how appellants "recruited" Luther. While Loreta also
A We were 13. said that Luther was among the thirteen brought to Manila, it does not
necessarily mean that her transportation was for purposes of
Q Can you mention who were your companions? employment. Moreover, Loreta said that Luther’s job, at least at the time
Loreta testified, was not a result of appellant’s efforts.
A The twin brother, Pedro and Pablo.
Q How about your sister Luther, where is she now?
x x x
A She is in Manila.

Q Who else? Q Why [is] she is still in Manila until now?

A Luther Caban. A She went there to work.

Q What is your relation with Luther Cavan? Q Who gave her work, were the accused in this case as promised to you?

A She is my sister. A No, sir. 38

x x x These circumstances give rise to doubts whether appellants indeed

recruited Luther Cavan.

FISCAL BALABAGAN Neither was the prosecution able to establish that appellants recruited
the twins Pedro and Pablo Ozarraga. Josephine Ozarraga Aba, the twins’
Q You said that you were recruited together with your sister and others aunt, testified:chanrob1es virtual 1aw library
and were brought to Cabanatuan City, is that correct?
Q Sometime in March or April, 1993, what happen to these two nephews
A Yes, sir. of yours?

Q Who brought you there? A They were recruited by Josephine Clam and Roger Segun.

ATTY. BAYRON x x x

Already answered.
Q You said that these 2 accused were the ones who recruited your 2
COURT nephews sometime in March or April, 1993. When you learn that they
were recruited what did you do if any?
Witness may answer.
A I went to their house and confronted them about my nephews and they

16
told me that my nephews will be given free fare to Manila, free meals and
good wages and they also promised that to my nephews.
Q You said they promised your nephews free fare to Manila, free meals
and good wages, whom are you referring they?
Q Do you recall what happen to your 2 grandsons sometime in the month
of April, 1993?
A They were recruited by Roger Segun and Josephine Clam.

A Josephine Clam and Roger Segun. x x x

Q Why were Josephine Clam and Roger Segun able to recruit your two
nephews? FISCAL BALABAGAN

A Because they brought them. Q When you learn that your grandsons were being recruited by Roger and
Segun and Josephine Clam, what did you do?
Q Where did they brought your nephews?
A I went to their house.
A One in Cabanatuan and the other one in Bulacan. 39
Q You said you went to their house, whose house are your referring?
As we held earlier, "recruit" is a legal conclusion. The witness must
testify as to the facts that would prove recruitment. It does not suffice A The house of Roger Segun and Josephine Clam.
that the witness simply state that the accused "recruited" the "victim."
Hence, the testimony of Josephine Aba that appellants "recruited" her x x x
nephews is, by itself, insufficient to convict appellants for the recruitment
of Pedro and Pablo Ozarraga.
FISCAL BALABAGAN
That appellants allegedly told Josephine Aba that her nephews would be
given free fare and meals is not inconsistent with appellants’ account that Q Who were the people you met inside the house of Josephine Clam?
they paid for their neighbors’ expenses. The same holds true for the claim
that appellants brought the twins to Cabanatuan and Bulacan. According A Them.
to appellants, they accompanied the thirteen persons to help them find
work. The reference to good wages could mean that the rates of Q Are you referring Roger Segun and Josephine Clam?
compensation in Cabanatuan or Bulacan are relatively high compared to
those in Lanao del Norte. These circumstances do not necessarily mean A Yes.
that appellants recruited Pedro and Pablo Ozarraga.
Q Then what happen there when you went to the house of the accused?
We cannot give much credence to Josephine’s statement that appellants
also promised free fare and meals, and good wages to her nephews since A They promised that the transportation to Manila is free and free meals
the prosecution did not show that Josephine was present when appellants and good wages.
made this supposed promise to her nephews.
Q Because of this free meals and transportation to Manila they promised
Neither did the prosecution prove beyond reasonable doubt that to your grandsons and you what happen?
appellants recruited Jhonely and Jonard Genemelo. Melecio Ababa,
grandfather of Jhonely and Jonard testified on direct A They brought them to Cabanatuan City.
examination:chanrob1es virtual 1aw library

17
Q Did you agree with this? observed in analyzing Josephine Aba’s testimony, are not incongruent
with appellants’ version.
A Yes, I agree.
Lastly, Elena Arañas’ testimony on her son Richard’s alleged recruitment
Q You agreed because of this promise of free transportation and good is insufficient to prove appellants’ guilt. Elena testified on direct
wages for your grandchildren? examination:chanrob1es virtual 1aw library

A Yes. 40 FISCAL BALABAGAN

On cross-examination, Melecio said:chanrob1es virtual 1aw library Q Mrs. Elena Arañas, do you know Richard Arañas?

Q You only learn from somebody that your grandsons were recruited by WITNESS
the two accused?
A Yes, he is my son.
A From them personally because I went to their house.
Q Where is he now?
Q You mean the house of your grandson?
A In Cabanatuan City brought by Josephine Clam.
A I went to the house of the recruiters because they were staying in my
house. Q Do you know what is the family name of Josephine?

Q When you went to their house your grandsons were not there? A Yes, Clam.

A My two grandsons were there. Q When was your son brought by Josephine Clam and Roger Segun?

Q Can you recall when your two grandsons Johnely and Jonard allegedly A March 6, that was Saturday.
recruited by the two accused?
Q Do you know the reason why they brought your son in Cabanatuan on
A Sometime on the 16 or 17th. March 6, 1993?

Q What month? A Because of the promise that he would be given good salary.

A April. COURT

Q You were not present when your two grandsons were allegedly Q How do you know that he was promised of a good salary?
recruited by the two accused?
A Because I went to their house.
A I was there present. 41
FISCAL BALABAGAN
Note again the use of the term "recruit," a defect present in the
testimonies of Rogelio Collantes, Loreta Cavan and Josephine Aba. While Q Are you referring to the house of Josephine Clam?
Melecio Aba said that appellants promised his grandsons free
transportation and meals, and good wages, these promises, as we have A Yes.

18
Q Were there people there when you arrived there? A Yes, they said that.

A Yes, Josephine Clam, Roger Segun, my son and others. ATTY. BAYRON

Q Did you agree to recruitment that your son will be brought to Q The accused tell (sic) your son that they will held your son to find a job?
Cabanatuan City?
A Yes, sir. 43
A Yes.
Elena’s testimony fails to state the specific act constituting the
Q Why did you agree? recruitment. Elena merely declared that her son was "recruited" — a
legal conclusion. Appellants also supposedly said that "they have work in
A Because of the promise that they would receive good salary. Cabanatuan City" and that "they will help [her] son to find a job." Elena
did not state the context and the circumstances under which these
Q Did he went there personally? statements were made. Moreover, the statements attributed to appellants
are ambiguous and hardly incongruous with appellants’ claim that they
A No. assisted their neighbors find work, which assistance does not necessarily
translate to an act of recruitment. That there was a supposed promise of
x x x a good salary is also ambiguous for, as noted earlier, the reference to good
wages could mean that the rates of compensation in Cabanatuan City are
higher compared to those in Lanao del Norte.
FISCAL BALABAGAN
In sum, the prosecution failed to elicit from many of its witnesses the
Q How was your son recruited by the accused in this case? specific acts constituting the recruitment of the other alleged victims. The
prosecution was able to prove that appellants performed recruitment
A As they promised that the salary is quite big. 42 activities only in the cases of Victoria Collantes and Loreta Cavan. The
third element of illegal recruitment, i.e., that the offender commits the
On cross-examination, Elena said:chanrob1es virtual 1aw library acts of recruitment against three or more persons is, therefore, absent.
Consequently, appellants can be convicted only of two counts of "simple"
Q You were not present when your son was allegedly recruited by the illegal recruitment.
accused?
WHEREFORE, the Decision of the Regional Trial Court is MODIFIED.
A I was there. Appellants are found GUILTY beyond reasonable doubt of two counts of
illegal recruitment, as defined and punished by Article 38 (a) of the Labor
Q The accused in this case did not offer to your son but it was your son Code, in relation to Articles 13 (b) and 39 thereof. They are each
who asked helped (sic) to find a job? sentenced to suffer for each count imprisonment of four (4) to five (5)
years.
A My son was recruited that he would be given work.
SO ORDERED.
COURT

Q The 2 accused never approached your son they have work in

Cabanatuan City?

19
 G.R. No. 205727. January 18, 2017.*
RUTCHER T. DAGASDAS, petitioner, vs. GRAND PLACEMENT
AND GENERAL SERVICES CORPORATION, respondent.
Remedial Law; Civil Procedure; Appeals; Petition for Review on
Certiorari; As a rule, only questions of law may be raised in a petition under
Rule 45 of the Rules of Court. However, this rule allows certain exceptions,
including a situation where the findings of fact of the courts or tribunals
below are conflicting.—As a rule, only questions of law may be raised in a
petition under Rule 45 of the Rules of Court. However, this rule allows
certain exceptions, including a situation where the findings of fact of the
courts or tribunals below are conflicting. In this case, the CA and the NLRC
arrived at divergent factual findings anent Dagasdas’ termination. As
such, the Court deems it necessary to reexamine these findings and
determine whether the CA has sufficient basis to annul the NLRC
Decision, and set aside its finding that Dagasdas was illegally dismissed
from work.
Labor Law; Management Prerogative; It is well-settled that employers
have the prerogative to impose standards on the work quantity and quality
of their employees and provide measures to ensure compliance therewith.—
It is well-settled that employers have the prerogative to impose standards
on the work quantity and quality of their employees and provide measures
to ensure compliance therewith. Noncompliance with work standards may
thus be a valid cause for dismissing an employee. Nonetheless, to ensure
that employers will not abuse their prerogatives, the same is tempered by
security of tenure whereby the employees are guaranteed substantive and
procedural due process before they are dismissed from work.
Same; Security of Tenure; Lex Loci Contractus; Since the employment
contracts of Overseas Filipino Workers (OFWs) are perfected in the
Philippines, and following the principle of lex loci contractus (the law of the
place where the contract is made), these contracts are
_______________
* FIRST DIVISION.
530
530 SUPREME COURT REPORTS ANNOTATED
Dagasdas vs. Grand Placement and GeneralServices Corporation
governed by our laws, primarily the Labor Code of the Philippines and
its implementing rules and regulations (IRR); Thus, even if a Filipino is
employed abroad, he or she is entitled to security of tenure, among other
constitutional rights.—Security of tenure remains even if employees,
particularly the Overseas Filipino Workers (OFWs), work in a different
jurisdiction. Since the employment contracts of OFWs are perfected in the
Philippines, and following the principle of lex loci contractus (the law of the
place where the contract is made), these contracts are governed by our
laws, primarily the Labor Code of the Philippines and its implementing
rules and regulations. At the same time, our laws generally apply even to
employment contracts of OFWs as our Constitution explicitly provides that
the State shall afford full protection to labor, whether local or overseas.
Thus, even if a Filipino is employed abroad, he or she is entitled to security
of tenure, among other constitutional rights.
Same; Probationary Employees; As regards a probationary employee,
his or her dismissal may be allowed only if there is just cause or such reason
to conclude that the employee fails to qualify as regular employee pursuant
to reasonable standards made known to the employee at the time of
engagement.—Even assuming that Dagasdas was still a probationary
employee when he was terminated, his dismissal must still be with a valid
cause. As regards a probationary employee, his or her dismissal may be
allowed only if there is just cause or such reason to conclude that the
employee fails to qualify as regular employee pursuant to reasonable
standards made known to the employee at the time of engagement. Here,
ITM failed to prove that it informed Dagasdas of any predetermined
standards from which his work will be gauged. In the contract he signed
while still in the Philippines, Dagasdas was employed as Network
Technician; on the other hand, his new contract indicated that he was
employed as Superintendent. However, no job description — or such duties
and responsibilities attached to either position — was adduced in evidence.
It thus means that the job for which Dagasdas was hired was not definite
from the beginning. Indeed, Dagasdas was not sufficiently informed of the
work standards for which his performance will be measured. Even his
position based on the job title given him was not fully explained by his
employer. Simply put, ITM failed to show that it set and communicated
work standards for Dagasdas to follow, and on which his efficiency (or the
lack thereof) may be determined.
531
VOL. 814, JANUARY 18, 2017 531
Dagasdas vs. Grand Placement and GeneralServices Corporation
Same; Employment Contracts; Overseas Filipino Workers; Unless the
employment contract of an Overseas Filipino Worker (OFW) is processed
through the Philippine Overseas Employment Administration (POEA), the
same does not bind the concerned OFW because if the contract is not
reviewed by the POEA, certainly the State has no means of determining the
20
suitability of foreign laws to our overseas workers.—The new contract was
not shown to have been processed through the POEA. Under our Labor
Code, employers hiring OFWs may only do so through entities authorized
by the Secretary of the Department of Labor and Employment. Unless the
employment contract of an OFW is processed through the POEA, the same
does not bind the concerned OFW because if the contract is not reviewed
by the POEA, certainly the State has no means of determining the
suitability of foreign laws to our overseas workers.
Same; Termination of Employment; Overseas Filipino Workers; The
employer must inform the employee of the cause or causes for his or her
termination, and thereafter, the employer’s decision to dismiss him. Aside
from the notice requirement, the employee must be accorded the opportunity
to be heard.—A valid dismissal requires substantive and procedural due
process. As regards the latter, the employer must give the concerned
employee at least two notices before his or her termination. Specifically,
the employer must inform the employee of the cause or causes for his or
her termination, and thereafter, the employer’s decision to dismiss him.
Aside from the notice requirement, the employee must be accorded the
opportunity to be heard. Here, no prior notice of purported infraction, and
such opportunity to explain on any accusation against him was given to
Dagasdas. He was simply given a notice of termination. In fact, it appears
that ITM intended not to comply with the twin notice requirement. As
above quoted, under the new contract, ITM reserved in its favor the right
to terminate the contract without serving any notice to Dagasdas in
specified cases, which included such situation where the employer decides
to dismiss the employee within the probationary period. Without doubt,
ITM violated the due process requirement in dismissing an employee.
Same; Quitclaims; Generally, the employee’s waiver or quitclaim
cannot prevent the employee from demanding benefits to which he or she is
entitled, and from filing an illegal dismissal case.—Generally, the
employee’s waiver or quitclaim cannot prevent the
532
532 SUPREME COURT REPORTS ANNOTATED
Dagasdas vs. Grand Placement and GeneralServices Corporation
employee from demanding benefits to which he or she is entitled, and
from filing an illegal dismissal case. This is because waiver or quitclaim is
looked upon with disfavor, and is frowned upon for being contrary to public
policy. Unless it can be established that the person executing the waiver
voluntarily did so, with full understanding of its contents, and with
reasonable and credible consideration, the same is not a valid and binding
undertaking. Moreover, the burden to prove that the waiver or quitclaim
was voluntarily executed is with the employer.
PETITION for review on certiorari of the decision and resolution of the
Court of Appeals.
The facts are stated in the opinion of the Court.
Miguel C. Inocencio, Jr. for petitioner.
Neal J. Chua for respondent.
DEL CASTILLO, J.:
Before us is a Petition for Review on Certiorari assailing the September
26, 2012 Decision1 of the Court of Appeals (CA) in C.A.-G.R. S.P. No.
115396, which annulled and set aside the March 29, 20102 and June 2,
20103 Resolutions of the National Labor Relations Commission (NLRC) in
NLRC LAC OFW-L-02-000071-10, and concomitantly reinstated the
November 27, 2009 Decision4 of the Labor Arbiter (LA) dismissing the
Complaint for lack of merit.
_______________
1 CA Rollo, pp. 312-320; penned by Associate Justice Manuel M.
Barrios and concurred in by Associate Justices Remedios A. Salazar-
Fernando and Normandie B. Pizarro.
2 Id., at pp. 128-135; penned by Commissioner Napoleon M. Menese
and concurred in by Presiding Commissioner Raul T. Aquino and
Commissioner Teresita D. Castillon-Lora.
3 Id., at pp. 145-146.
4 Id., at pp. 103-108; penned by Labor Arbiter Virginia T. Luyas-
Azarraga.
533
VOL. 814, JANUARY 18, 2017 533
Dagasdas vs. Grand Placement and GeneralServices Corporation
Also challenged is the January 28, 2013 Resolution5denying the Motion
for Reconsideration filed by Rutcher T. Dagasdas (Dagasdas).
Factual Antecedents
Grand Placement and General Services Corp. (GPGS) is a licensed
recruitment or placement agency in the Philippines while Saudi Aramco
(Aramco) is its counterpart in Saudi Arabia. On the other hand, Industrial
& Management Technology Methods Co. Ltd. (ITM) is the principal of
GPGS, a company existing in Saudi Arabia.6
21
 In November 2007, GPGS, for and on behalf of ITM, employed
Dagasdas as Network Technician. He was to be deployed in Saudi Arabia
under a one-year contract7 with a monthly salary of Saudi Riyal (SR)
5,112.00. Before leaving the Philippines, Dagasdas underwent skill
training8 and predeparture orientation as Network
Technician.9Nonetheless, his Job Offer10 indicated that he was accepted by
Aramco and ITM for the position of “Supt.”
Dagasdas contended that although his position under his contract was
as a Network Technician, he actually applied for and was engaged as a
Civil Engineer considering that his transcript of records,11 diploma12 as
well as his curriculum vitae13 showed that he had a degree in Civil
Engineering, and his work experiences were all related to this field.
Purportedly, the position of Network Technician was only for the
_______________
5 Id., at pp. 353-355.
6 Id., at pp. 21, 38.
7 Id., at pp. 62-65.
8 Id., at p. 66.
9 Id., at p. 67.
10 Id., at pp. 60-61.
11 Id., at pp. 54-57.
12 Id., at p. 58.
13 Id., at pp. 49-52.
534
534 SUPREME COURT REPORTS ANNOTATED
Dagasdas vs. Grand Placement and GeneralServices Corporation
purpose of securing a visa for Saudi Arabia because ITM could not support
visa application for Civil Engineers.14
On February 8, 2008, Dagasdas arrived in Saudi Arabia.15 Thereafter,
he signed with ITM a new employment contract16 which stipulated that the
latter contracted him as Superintendent or in any capacity within the scope
of his abilities with salary of SR5,112.00 and allowance of SR2,045.00 per
month. Under this contract, Dagasdas shall be placed under a three-month
probationary period; and this new contract shall cancel all contracts prior
to its date from any source.
On February 11, 2008, Dagasdas reported at ITM’s worksite in
Khurais, Saudi Arabia.17 There, he was allegedly given tasks suited for a
Mechanical Engineer, which were foreign to the job he applied for and to
his work experience. Seeing that he would not be able to perform well in
his work, Dagasdas raised his concern to his Supervisor in the Mechanical
Engineering Department. Consequently, he was transferred to the Civil
Engineering Department, was temporarily given a position as Civil
Construction Engineer, and was issued an identification card good for one
month. Dagasdas averred that on March 9, 2008, he was directed to exit
the worksite but Rashid H. Siddiqui (Siddiqui), the Site Coordinator
Manager, advised him to remain in the premises, and promised to secure
him the position he applied for. However, before Dagasdas’ case was
investigated, Siddiqui had severed his employment with ITM.18
In April 2008, Dagasdas returned to Al-Khobar and stayed at the ITM
Office.19 Later, ITM gave him a termination no-
_______________
14 Id., at p. 39.
15 Id., at p. 75.
16 Id., at pp. 68-72.
17 Id., at p. 75.
18 Id., at pp. 39-40.
19 Id., at p. 40.
535
VOL. 814, JANUARY 18, 2017 535
Dagasdas vs. Grand Placement and GeneralServices Corporation
tice20 indicating that his last day of work was on April 30, 2008, and he was
dismissed pursuant to clause 17.4.3 of his contract, which provided that
ITM reserved the right to terminate any employee within the three-month
probationary period without need of any notice to the employee.21
Before his repatriation, Dagasdas signed a Statement of
Quitclaim22 with Final Settlement23 stating that ITM paid him all the
salaries and benefits for his services from February 11, 2008 to April 30,
2008 in the total amount of SR7,156.80, and ITM was relieved from all
financial obligations due to Dagasdas.
On June 24, 2008, Dagasdas returned to the Philippines.24 Thereafter,
he filed an illegal dismissal case against GPGS, ITM, and Aramco.
Dagasdas accused GPGS, ITM, and Aramco of misrepresentation,
which resulted in the mismatch in the work assigned to him. He contended
that such claim was supported by exchanges of electronic mail (e-mail)
establishing that GPGS, ITM, and Aramco were aware of the job mismatch
that had befallen him.25 He also argued that although he was engaged as
a project employee, he was still entitled to security of tenure for the
duration of his contract. He maintained that GPGS, ITM, and Aramco
merely invented “imaginary cause/s” to terminate him. Thus, he claimed
that he was dismissed without cause and due process of law.26
22
 GPGS, ITM, and Aramco countered that Dagasdas was legally WHEREFORE, the decision appealed from is hereby REVERSED, and
dismissed. They explained that Dagasdas was aware that he was employed the respondent[s] are hereby
as Network Technician but he could not _______________
_______________
27 Id., at pp. 22-24.
20 Id., at p. 81. 28 Id., at p. 88.
21 Id., at p. 70.
22 Id., at p. 82.
23 Id., at pp. 83-84. 537
24 Id., at p. 21. VOL. 814, JANUARY 18, 2017 537
25 Id., at pp. 92-93.
Dagasdas vs. Grand Placement and GeneralServices Corporation
26 Id., at p. 42.
ordered to pay the complainant the salaries corresponding to the unexpired
portion of his contract amounting to SR46,008 (SR5112 x 9 months, or from
May 1, 2008 to January 31, 2009), plus ten percent (10%) thereof as
536
attorney’s fees. The respondents are jointly and severally liable for the
536 SUPREME COURT REPORTS ANNOTATED judgment awards, which are payable in Philippine currency converted on
Dagasdas vs. Grand Placement and GeneralServices Corporation the basis of the exchange rate prevailing at the time of actual payment.
perform his work in accordance with the standards of his employer. They SO ORDERED.29
added that Dagasdas was informed of his poor performance, and he
conformed to his termination as evidenced by his quitclaim.27 They also The NLRC stated that Dagasdas, who was a Civil Engineering
stressed that Dagasdas was only a probationary employee since he worked graduate, was “recruited on paper” by GPGS as Network Technician but
for ITM for less than three months.28 the real understanding between the parties was to hire him as
Superintendent. It held that GPGS erroneously recruited Dagasdas, and
Ruling of the Labor Arbiter failed to inform him that he was hired as a “Mechanical Superintendent”
meant for a Mechanical Engineer. It declared that while ITM has the
On November 27, 2009, the LA dismissed the case for lack of merit. prerogative to continue the employment of individuals only if they were
The LA pointed out that when Dagasdas signed his new employment qualified, Dagasdas’ dismissal amounted to illegal termination since the
contract in Saudi Arabia, he accepted its stipulations, including the fact mismatch between his qualifications and the job given him was no fault of
that he had to undergo probationary status. She declared that this new his.
contract was more advantageous for Dagasdas as his position was The NLRC added that Dagasdas should not be made to suffer the
upgraded to that of a Superintendent, and he was likewise given an consequences of the miscommunication between GPGS and ITM
allowance of SR2,045.00 aside from his salary of SR5,112.00 per month. considering that the government obligates employment agencies recruiting
According to the LA, for being more favorable, this new contract was not Filipinos for overseas work to “select only medically and technically
prohibited by law. She also decreed that Dagasdas fell short of the expected qualified recruits.”30
work performance; as such, his employer dismissed him as part of its On June 2, 2010, the NLRC denied the Motion for Reconsideration of
management prerogative. its Resolution dated March 29, 2010.
Consequently, Dagasdas appealed to the NLRC. Undeterred, GPGS filed a Petition for Certiorari with the CA ascribing
grave abuse of discretion on the part of the NLRC in ruling that Dagasdas
Ruling of the National Labor was illegally dismissed.
Relations Commission _______________

On March 29, 2010, the NLRC issued a Resolution finding Dagasdas’ 29 Id., at p. 134.
dismissal illegal. The decretal portion of the NLRC Resolution reads: 30 Id., at p. 133.
23

538
538 SUPREME COURT REPORTS ANNOTATED
Dagasdas vs. Grand Placement and GeneralServices Corporation
Ruling of the Court of Appeals
On September 26, 2012, the CA set aside the NLRC Resolutions and
reinstated the LA Decision dismissing the case for lack of merit.
The CA could not accede to the conclusion that the real agreement
between the parties was to employ Dagasdas as Superintendent. It
stressed that Dagasdas left the Philippines pursuant to his employment
contract indicating that he was to work as a Network Technician; when he
arrived in Saudi Arabia and signed a new contract for the position of a
Superintendent, the agreement was with no participation of GPGS, and
said new contract was only between Dagasdas and ITM. It emphasized that
after commencing work as Superintendent, Dagasdas realized that he
could not perform his tasks, and “[s]eemingly, it was [Dagasdas] himself
who voluntarily withdrew from his assigned work for lack of
competence.”31 It faulted the NLRC for falling to consider that Dagasdas
backed out as Superintendent on the excuse that the same required the
skills of a Mechanical Engineer.
In holding that Dagasdas’ dismissal was legal, the CA gave credence to
Dagasdas’ Statement of Quitclaim and Final Settlement. It ruled that for
having voluntarily accepted money from his employer, Dagasdas accepted
his termination and released his employer from future financial obligations
arising from his past employment with it.
On January 28, 2013, the CA denied Dagasdas’ Motion for
Reconsideration.
Hence, Dagasdas filed this Petition raising these grounds:
[1] THE HONORABLE COURT OF APPEALS COMMITIED A
REVERSIBLE ERROR WHEN IT REVERSED THE FACTUAL
FINDINGS OF THE NATIONAL LABOR RELATIONS COMMISSION.32
_______________
31 Id., at p. 318.
32 Rollo, p. 26.
539
VOL. 814, JANUARY 18, 2017 539
Dagasdas vs. Grand Placement and GeneralServices Corporation
[2] THE HONORABLE COURT OF APPEALS PATENTLY ERRED
WITH ITS FINDINGS THAT THE CONTRACT SIGNED BY DAGASDAS
IN AL KHOBAR IS MORE ADVANTAGEOUS TO THE LATTER AND
THAT IT WAS [H]IS PERSONAL ACT OR DECISION [TO SIGN] THE
SAME.33
[3] THE HONORABLE COURT OF APPEALS ALSO GRAVELY ERRED
IN FAULTING THE NLRC FOR ITS FAILURE TO INVALIDATE OR
DISCUSS THE FINAL SETTLEMENT AND STATEMENT OF
QUITCLAIM SIGNED BY [DAGASDAS].34
Dagasdas reiterates that he was only recruited “on paper” as a Network
Technician but the real agreement between him and his employer was to
engage him as Superintendent in the field of Civil Engineering, he being a
Civil Engineering graduate with vast experience in said field. He stresses
that he was terminated because of a “discipline mismatch” as his employer
actually needed a Mechanical (Engineer) Superintendent, not a Civil
Engineer.
In addition, Dagasdas insists that he did not voluntarily back out from
his work. If not for the discipline mismatch, he could have performed his
job as was expected of him. He also denies that the new employment
contract he signed while in Saudi Arabia was more advantageous to him
since the basic salary and allowance stipulated therein are just the same
with that in his Job Offer. He argues that the new contract was even
disadvantageous because it was inserted therein that he still had to
undergo probationary status for three months.
Finally, Dagasdas contends that the new contract he signed while in
Saudi Arabia was void because it was not approved by the Philippine
Overseas Employment Administration (POEA). He also claims that CA
should have closely
_______________
33 Id., at p. 29.
34 Id., at p. 32.
540
540 SUPREME COURT REPORTS ANNOTATED
Dagasdas vs. Grand Placement and GeneralServices Corporation
examined his quitclaim because he only signed it to afford his plane ticket
for his repatriation.
24
 On the other hand, GPGS maintains that Dagasdas was fully aware
that he applied for and was accepted as Network Technician. It also
stresses that it was Dagasdas himself who decided to accept from ITM a
new job offer when he arrived in Saudi Arabia. It further declares that
Dagasdas’ quitclaim is valid as there is no showing that he was compelled
to sign it.
Issue
Was Dagasdas validly dismissed from work?
Our Ruling
The Petition is with merit.
As a rule, only questions of law may be raised in a petition under Rule
45 of the Rules of Court. However, this rule allows certain exceptions,
including a situation where the findings of fact of the courts or tribunals
below are conflicting.35 In this case, the CA and the NLRC arrived at
divergent factual findings anent Dagasdas’ termination. As such, the Court
deems it necessary to reexamine these findings and determine whether the
CA has sufficient basis to annul the NLRC Decision, and set aside its
finding that Dagasdas was illegally dismissed from work.
Moreover, it is well-settled that employers have the prerogative to
impose standards on the work quantity and quality of their employees and
provide measures to ensure compliance therewith. Noncompliance with
work standards may thus be a valid cause for dismissing an employee.
Nonetheless, to ensure that employers will not abuse their prerogatives,
the same is tempered by security of tenure whereby the
_______________
35 Unicol Management Services, Inc. v. Malipot, G.R. No. 206562,
January 21, 2015, 747 SCRA 191, 202-203.
541
VOL. 814, JANUARY 18, 2017 541
Dagasdas vs. Grand Placement and GeneralServices Corporation
employees are guaranteed substantive and procedural due process before
they are dismissed from work.36
Security of tenure remains even if employees, particularly the Overseas
Filipino Workers (OFW), work in a different jurisdiction. Since the
employment contracts of OFWs are perfected in the Philippines, and
following the principle of lex loci contractus (the law of the place where the
contract is made), these contracts are governed by our laws, primarily the
Labor Code of the Philippines and its implementing rules and
regulations.37 At the same time, our laws generally apply even to
employment contracts of OFWs as our Constitution explicitly provides that
the State shall afford full protection to labor, whether local or
overseas.38 Thus, even if a Filipino is employed abroad, he or she is entitled
to security of tenure, among other constitutional rights.39
In this case, prior to his deployment and while still in the Philippines,
Dagasdas was made to sign a POEA-approved contract with GPGS, on
behalf of ITM; and upon arrival in Saudi Arabia, ITM made him sign a new
employment contract. Nonetheless, this new contract, which was used as
basis for dismissing Dagasdas, is void.
First, Dagasdas’ new contract is in clear violation of his right to security
of tenure.
Under the Labor Code of the Philippines the following are the just
causes for dismissing an employee:
_______________
36 Sameer Overseas Placement Agency, Inc. v. Cabiles, G.R. No.
170139, August 5, 2014, 732 SCRA 22, 41-42.
37 Id., at p. 42.
38 Constitution, Article XIII.
Section 3. The State shall afford full protection to labor, local and
overseas, organized and unorganized, and promote full employment and
equality of employment opportunities for all.
39 Industrial Personnel & Management Services, Inc. (IPAMS) v. De
Vera, G.R. No. 205703, March 7, 2016, 785 SCRA 562, 581.
542
542 SUPREME COURT REPORTS ANNOTATED
Dagasdas vs. Grand Placement and GeneralServices Corporation
ARTICLE 297. [282] Termination by Employer.—An employer may
terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the
lawful orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him
by his employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the
person of his employer or any immediate member of his family or his duly
authorized representative; and
(e) Other causes analogous to the foregoing.40
25

However, per the notice of termination given to Dagasdas, ITM
terminated him for violating clause 17.4.3 of his new contract, viz.:
17.4 The Company reserves the right to terminate this agreement
without serving any notice to the Consultant in the following cases:
xxxx
17.4.3 If the Consultant is terminated by company or its client within
the probation period of 3 months.41
Based on the foregoing, there is no clear justification for the dismissal
of Dagasdas other than the exercise of ITM’s right to terminate him within
the probationary period.
_______________
40 Labor Code of the Philippines, Amended and Renumbered, July 21,
2015.
41 CA Rollo, p. 70.
543
VOL. 814, JANUARY 18, 2017 543
Dagasdas vs. Grand Placement and GeneralServices Corporation
While our Civil Code recognizes that parties may stipulate in their
contracts such terms and conditions as they may deem convenient, these
terms and conditions must not be contrary to law, morals, good customs,
public order or policy.42 The above cited clause is contrary to law because
as discussed, our Constitution guarantees that employees, local or
overseas, are entitled to security of tenure. To allow employers to reserve
a right to terminate employees without cause is violative of this guarantee
of security of tenure.
Moreover, even assuming that Dagasdas was still a probationary
employee when he was terminated, his dismissal must still be with a valid
cause. As regards a probationary employee, his or her dismissal may be
allowed only if there is just cause or such reason to conclude that the
employee fails to qualify as regular employee pursuant to reasonable
standards made known to the employee at the time of engagement.43
Here, ITM failed to prove that it informed Dagasdas of any
predetermined standards from which his work will be gauged.44 In the
contract he signed while still in the Philippines, Dagsadas was employed
as Network Technician; on the other hand, his new contract indicated that
he was employed as Superintendent. However, no job description — or such
duties and responsibilities attached to either position — was adduced in
evidence. It thus means that the job for which Dagasdas was hired was not
definite from the beginning.
Indeed, Dagasdas was not sufficiently informed of the work standards
for which his performance will be measured. Even his position based on the
job title given him was not fully
_______________
42 Civil Code of the Philippines.
Article 1306. The contracting parties may establish such
stipulations, clauses, terms and conditions as they may deem convenient,
provided they are not contrary to law, morals, good customs, public order,
or public policy. (1255a)
43 Supra note 36 at p. 46.
44 Id.
544
544 SUPREME COURT REPORTS ANNOTATED
Dagasdas vs. Grand Placement and GeneralServices Corporation
explained by his employer. Simply put, ITM failed to show that it set and
communicated work standards for Dagasdas to follow, and on which his
efficiency (or the lack thereof) may be determined.
Second, the new contract was not shown to have been processed
through the POEA. Under our Labor Code, employers hiring OFWs may
only do so through entities authorized by the Secretary of the Department
of Labor and Employment.45 Unless the employment contract of an OFW
is processed through the POEA, the same does not bind the concerned OFW
because if the contract is not reviewed by the POEA, certainly the State
has no means of determining the suitability of foreign laws to our overseas
workers.46
This new contract also breached Dagasdas’ original contract as it was
entered into even before the expiration of the original contract approved by
the POEA. Therefore, it cannot supersede the original contract; its terms
and conditions, including reserving in favor of the employer the right to
terminate an employee without notice during the probationary period, are
void.47
Third, under this new contract, Dagasdas was not afforded procedural
due process when he was dismissed from work.
As cited above, a valid dismissal requires substantive and procedural
due process. As regards the latter, the employer must give the concerned
employee at least two notices before
_______________
26
 45 Article 18. Ban on Direct-Hiring.—No employer may hire a
Filipino worker for overseas employment except through the Boards and
entities authorized by the Secretary of Labor. Direct-hiring by members of
the diplomatic corps, international organizations and such other employers
as may be allowed by the Secretary of Labor is exempted from this
provision. (Labor Code of the Philippines, Amended & Renumbered, July
21, 2015)
46 Supra note 39.
47 Datuman v. First Cosmopolitan Manpower and Promotion Services,
Inc., 591 Phil. 662, 673-674; 571 SCRA 41, 54-55 (2008).
545
VOL. 814, JANUARY 18, 2017 545
Dagasdas vs. Grand Placement and GeneralServices Corporation
his or her termination. Specifically, the employer must inform the
employee of the cause or causes for his or her termination, and thereafter,
the employer’s decision to dismiss him. Aside from the notice requirement,
the employee must be accorded the opportunity to be heard.48
Here, no prior notice of purported infraction, and such opportunity to
explain on any accusation against him was given to Dagasdas. He was
simply given a notice of termination. In fact, it appears that ITM intended
not to comply with the twin notice requirement. As above quoted, under
the new contract, ITM reserved in its favor the right to terminate the
contract without serving any notice to Dagasdas in specified cases, which
included such situation where the employer decides to dismiss the
employee within the probationary period. Without doubt, ITM violated the
due process requirement in dismissing an employee.
Lastly, while it is shown that Dagasdas executed a waiver in favor of
his employer, the same does not preclude him from filing this suit.
Generally, the employee’s waiver or quitclaim cannot prevent the
employee from demanding benefits to which he or she is entitled, and from
filing an illegal dismissal case. This is because waiver or quitclaim is looked
upon with disfavor, and is frowned upon for being contrary to public policy.
Unless it can be established that the person executing the waiver
voluntarily did so, with full understanding of its contents, and with
reasonable and credible consideration, the same is not a valid and binding
undertaking. Moreover, the burden to prove that the waiver or quitclaim
was voluntarily executed is with the employer.49
_______________
49 Universal Staffing Services, Inc. v. National Labor Relations
Commission, 581 Phil. 199, 209-210; 559 SCRA 221, 232 (2008).
48 EDI-Staffbuilders International, Inc. v. National Labor Relations
Commission, 563 Phil. 1, 28-29; 537 SCRA 409, 436 (2007).
546
546 SUPREME COURT REPORTS ANNOTATED
Dagasdas vs. Grand Placement and GeneralServices Corporation
In this case, however, neither did GPGS nor its principal, ITM,
successfully discharged its burden. GPGS and/or ITM failed to show that
Dagasdas indeed voluntarily waived his claims against the employer.
Indeed, even if Dagasdas signed a quitclaim, it does not necessarily
follow that he freely and voluntarily agreed to waive all his claims against
his employer. Besides, there was no reasonable consideration stipulated in
said quitclaim considering that it only determined the actual payment due
to Dagasdas from February 11, 2008 to April 30, 2008. Verily, this
quitclaim, under the semblance of a final settlement, cannot absolve GPGS
nor ITM from liability arising from the employment contract of Dagasdas.50
All told, the dismissal of Dagasdas was without any valid cause and due
process of law. Hence, the NLRC properly ruled that Dagasdas was
illegally dismissed. Evidently, it was an error on the part of the CA to hold
that the NLRC committed grave abuse of discretion amounting to lack or
excess of jurisdiction when the NLRC ruled for Dagasdas.
WHEREFORE, the Petition is GRANTED. The Decision dated
September 26, 2012 and Resolution dated January 28, 2013 of the Court of
Appeals in C.A.-G.R. S.P. No. 115396 are REVERSED and SET ASIDE.
Accordingly, the March 29, 2010 and June 2, 2010 Resolutions of the
National Labor Relations Commission in NLRC LAC OFW-L-02-000071-
10 are REINSTATED.
SO ORDERED.
Sereno (CJ., Chairperson), Leonardo-De Castro, Perlas-
Bernabe and Caguioa, JJ., concur.
Petition granted, judgment and resolution reversed and set aside.
_______________
50 Id.
547
VOL. 814, JANUARY 18, 2017 547
Dagasdas vs. Grand Placement and GeneralServices Corporation
Notes.—It is acknowledged that an employer has free rein and enjoys
a wide latitude of discretion to regulate all aspects of employment,
27
including the prerogative to instill discipline on his employees and to
impose penalties, including dismissal, if warranted, upon erring
employees. (Caong, Jr. vs. Regualos, 640 SCRA 597 [2011])
The law protects both the welfare of employees and the prerogatives of
management. (The University of the Immaculate Conception vs. National
Labor Relations Commission, 640 SCRA 608 [2011])
——o0o——
G.R. No. 93666. April 22, 1991.*
GENERAL MILLING CORPORATION and EARL TIMOTHY CONE,
petitioners, vs. HON. RUBEN D. TORRES, in his capacity as
Secretary of Labor and Employment, HON. BIENVENIDO E.
LAGUESMA, in his capacity as Acting Secretary of Labor and
Employment, and BASKETBALL COACHES ASSOCIATION OF
THE PHILIPPINES, respondents.
Contracts; Provisions of applicable laws especially those relating to
matters affected with public policy, are deemed written into contracts.—
Neither can petitioners validly claim that implementation of respondent
Secretary’s decision would amount to an impairment of the obligations of
contracts. The provisions of the Labor Code and its Implementing Rules
and Regulations requiring alien employment permits were in existence
long before petitioners entered into their contract of employment. It is
firmly settled that provisions of applicable laws, especially provisions
relating to matters affected with public policy, are deemed written into
contracts. Private parties cannot constitutionally contract away the
otherwise applicable provisions of law.
Labor Law; The Department of Labor is the agency vested with
jurisdiction to determine the question of availability of local workers.—
Petitioners’ contention that respondent Secretary of Labor should have
deferred to the findings of Commission on Immigration and Deportation as
to the necessity of employing petitioner Cone, is again, bereft of legal basis.
The Labor Code itself specifically empowers respondent Secretary to make
a determination as to the availability of the services of a “person in the
Philippines who is competent, able and willing at the time of application to
perform the services for which an alien is desired.” In short, the
Department of Labor is the agency vested with jurisdiction to determine
the question of availability of local workers. The constitutional validity of
legal provisions granting such jurisdiction and authority and requiring
proof of non-availability of local nationals able to carry out the duties of the
position involved, cannot be seriously questioned.
PETITION for certiorari to review the decision of the Department of
Labor and Employment.
_______________
*THIRD DIVISION.
216
216 SUPREME COURT REPORTS ANNOTATED
General Milling Corporation vs. Torres
The facts are stated in the resolution of the Court.
Sobrevinas, Diaz, Hayudini & Bodegon Law Officefor petitioners.
Rodrigo, Cuevas & De Borja for respondent BCAP.
RESOLUTION
FELICIANO, J.:
On 1 May 1989, the National Capital Region of the Department of Labor
and Employment issued Alien Employment Permit No. M-0689-3-535 in
favor of petitioner Earl Timothy Cone, a United States citizen, as sports
consultant and assistant coach for petitioner General Milling Corporation
("GMC").
On 27 December 1989, petitioners GMC and Cone entered into a contract
of employment whereby the latter undertook to coach GMC's basketball
team.
On 15 January 1990, the Board of Special Inquiry of the Commission on
Immigration and Deportation approved petitioner Cone's application for a
change of admission status from temporary visitor to pre-arranged
employee.
On 9 February 1990, petitioner GMC requested renewal of petitioner
Cone's alien employment permit. GMC also requested that it be allowed
to employ Cone as full-fledged coach. The DOLE Regional Director, Luna
Piezas, granted the request on 15 February 1990.
On 18 February 1990, Alien Employment Permit No. M-02903-881, valid
until 25 December 1990, was issued.
Private respondent Basketball Coaches Association of the Philippines
("BCAP") appealed the issuance of said alien employment permit to the
respondent Secretary of Labor who, on 23 April 1990, issued a decision
ordering cancellation of petitioner Cone's employment permit on the
ground that there was no showing that there is no person in the
28
Philippines who is competent, able and willing to perform the services
required nor that the hiring of petitioner Cone would redound to the
national interest.
Petitioner GMC filed a Motion for Reconsideration and two (2)
Supplemental Motions for Reconsideration but said Motions were denied
by Acting Secretary of Labor Bienvenido E. Laguesma in an Order dated
8 June 1990.
Petitioners are now before the Court on a Petition for Certiorari, dated 14
June 1990, alleging that:
1. respondent Secretary of Labor gravely abused his discretion
when he revoked petitioner Cone's alien employment permit; and
2. Section 6 (c), Rule XIV, Book I of the Omnibus Rules
Implementing the Labor Code is null and void as it is in violation
of the enabling law as the Labor Code does not empower
respondent Secretary to determine if the employment of an alien
would redound to national interest.
Deliberating on the present Petition for Certiorari, the Court considers
that petitioners have failed to show any grave abuse of discretion or any
act without or in excess of jurisdiction on the part of respondent Secretary
of Labor in rendering his decision, dated 23 April 1990, revoking
petitioner Cone's Alien Employment Permit.
The alleged failure to notify petitioners of the appeal filed by private
respondent BCAP was cured when petitioners were allowed to file their
Motion for Reconsideration before respondent Secretary of Labor.1
Petitioner GMC's claim that hiring of a foreign coach is an employer's
prerogative has no legal basis at all. Under Article 40 of the Labor Code,
an employer seeking employment of an alien must first obtain an
employment permit from the Department of Labor. Petitioner GMC's
right to choose whom to employ is, of course, limited by the statutory
requirement of an alien employment permit.
Petitioners will not find solace in the equal protection clause of the
Constitution. As pointed out by the Solicitor-General, no comparison can
be made between petitioner Cone and Mr. Norman Black as the latter is
"a long time resident of the country," and thus, not subject to the
provisions of Article 40 of the Labor Code which apply only to "non-
resident aliens." In any case, the term "non-resident alien" and its
obverse "resident alien," here must be given their technical connotation
under our law on immigration.
Neither can petitioners validly claim that implementation of respondent
Secretary's decision would amount to an impairment of the obligations of
contracts. The provisions of the Labor Code and its Implementing Rules
and Regulations requiring alien employment permits were in existence
long before petitioners entered into their contract of employment. It is
firmly settled that provisions of applicable laws, especially provisions
relating to matters affected with public policy, are deemed written into
contracts.2 Private parties cannot constitutionally contract away the
otherwise applicable provisions of law.
Petitioners' contention that respondent Secretary of Labor should have
deferred to the findings of Commission on Immigration and Deportation
as to the necessity of employing petitioner Cone, is, again, bereft of legal
basis. The Labor Code itself specifically empowers respondent Secretary
to make a determination as to the availability of the services of a "person
in the Philippines who is competent, able and willing at the time of
application to perform the services for which an alien is desired."3
In short, the Department of Labor is the agency vested with jurisdiction
to determine the question of availability of local workers. The
constitutional validity of legal provisions granting such jurisdiction and
authority and requiring proof of non-availability of local nationals able to
carry out the duties of the position involved, cannot be seriously
questioned.
Petitioners apparently also question the validity of the Implementing
Rules and Regulations, specifically Section 6 (c), Rule XIV, Book I of the
Implementing Rules, as imposing a condition not found in the Labor Code
itself. Section 6 (c), Rule XIV, Book I of the Implementing Rules, provides
as follows:
Section 6. Issuance of Employment Permit –– the Secretary of
Labor may issue an employment permit to the applicant based on:
a) Compliance by the applicant and his employer with the
requirements of Section 2 hereof;
29
 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;
xxx xxx xxx
(Emphasis supplied)
Article 40 of the Labor Code reads as follows:
Art. 40. Employment per unit of non-resident aliens. –– Any alien
seeking admission to the Philippines for employment purposes
and any domestic or foreign employer who desires to engage an
alien for employment in the Philippines shall obtain an
employment permit from the Department of Labor.
The employment permit may be issued to a non-resident alien or to
the applicant employer after a determination of the non-
availability of a person in the Philippines who is competent, able
and willing at the time of application to perform the services for
which the alien is desired.
For an enterprise registered in preferred areas of investments,
said employment permit may be issued upon recommendation of
the government agency charged with the supervision of said
registered enterprise. (Emphasis supplied)
Petitioners apparently suggest that the Secretary of Labor is not
authorized to take into account the question of whether or not
employment of an alien applicant would "redound to the national
interest" because Article 40 does not explicitly refer to such assessment.
This argument (which seems impliedly to concede that the relationship of
basketball coaching and the national interest is tenuous and unreal) is
not persuasive. In the first place, the second paragraph of Article 40 says:
"[t]he employment permit may be issued to a non-resident alien or to the
applicant 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." The
permissive language employed in the Labor Code indicates that the
authority granted involves the exercise of discretion on the part of the
issuing authority. In the second place, Article 12 of the Labor Code sets
forth a statement of objectives that the Secretary of Labor should, and
indeed must, take into account in exercising his authority and
jurisdiction granted by the Labor Code,
Art. 12. Statement of Objectives. –– It is the policy of the State:
a) To promote and maintain a state of full employment through
improved manpower training, allocation and utilization;
xxx xxx xxx
c) To facilitate a free choice of available employment by persons
seeking work in conformity with the national interest;
d) To facilitate and regulate the movement of workers in
conformity with the national interest;
e) To regulate the employment of aliens, including the
establishment of a registration and/or work permit system;
xxx xxx xxx
Thus, we find petitioners' arguments on the above points of constitutional
law too insubstantial to require further consideration.1avvphi1
Petitioners have very recently manifested to this Court that public
respondent Secretary of Labor has reversed his earlier decision and has
issued an Employment Permit to petitioner Cone. Petitioners seek to
withdraw their Petition for Certiorari on the ground that it has become
moot and academic.
30
While ordinarily this Court would dismiss a petition that clearly appears
to have become moot and academic, the circumstances of this case and
the nature of the questions raised by petitioners are such that we do not
feel justified in leaving those questions unanswered.4
Moreover, assuming that an alien employment permit has in fact been
issued to petitioner Cone, the basis of the reversal by the Secretary of
Labor of his earlier decision does not appear in the record. If such
reversal is based on some view of constitutional law or labor law different
from those here set out, then such employment permit, if one has been
issued, would appear open to serious legal objections.
ACCORDINGLY, the Court Resolved to DISMISS the Petition
for certiorari for lack of merit. Costs against petitioners.
Fernan, C.J., Bidin and Davide, Jr., JJ., concur.
G.R. No. 169207. March 25, 2010.*
WPP MARKETING COMMUNICATIONS, INC., JOHN STEEDMAN,
MARK WEBSTER, and NOMINADA LANSANG,
petitioners, vs. JOCELYN M. GALERA, respondent.
G.R. No. 169239. March 25, 2010.*
JOCELYN M. GALERA, petitioner, vs. WPP MARKETING
COMMUNICATIONS, INC., JOHN STEEDMAN, MARK WEBSTER,
and NOMINADA LANSANG, respondents.
Corporation Law; Corporate Officers; Under Section 25 of the
Corporation Code, the corporate officers are the president, secretary,
treasurer and such other officers as may be provided in the by-laws.—
Corporate officers are given such character either by the Corporation Code
or by the corporation’s by-laws. Under Section 25 of the Corporation Code,
the corporate officers are the president, secretary, treasurer and such other
officers as may be provided in the by-laws. Other officers are sometimes
created by the charter or by-laws of a corporation, or the board of directors
may be empowered under the by-laws of a corporation to create additional
offices as may be necessary.
Labor Law; Termination of Employment; Employer must furnish the
worker sought to be dismissed with two written notices before termination
of employment can be legally effected; Failure to comply with the
requirements taints the dismissal with illegality.—The law further requires
that the employer must furnish the worker sought to be dismissed with two
written notices before termination of employment can be legally effected:
(1) notice which apprises the employee of the particular acts or omissions
for which his dismissal is sought; and (2) the subsequent notice which
informs the employee of the employer’s decision to dismiss him. Failure to
comply with the requirements taints the dismissal with illegality. WPP’s
acts clearly show that Galera’s dismissal did not comply with the two-
notice rule.
_______________
* SECOND DIVISION.
423
VOL. 616, MARCH 25, 2010 423
WPP Marketing Communications, Inc. vs. Galera
Same; Labor Code; Recruitment; Employment Permit; The law and
the rules are consistent in stating that the employment permit must be
acquired prior to employment.—This is Galera’s dilemma: Galera worked
in the Philippines without a proper work permit but now wants to claim
employee’s benefits under Philippine labor laws. The law and the rules are
consistent in stating that the employment permit must be
acquired prior to employment. The Labor Code states: “Any alien seeking
admission to the Philippines for employment purposes and any domestic
or foreign employer who desires to engage an alien for employment in the
Philippines shall obtain an employment permit from the Department of
Labor.”
PETITIONS for review on certiorari of the decision and resolution of the
Court of Appeals.
The facts are stated in the opinion of the Court.
Sycip, Salazar, Hernandez & Gatmaitan for WPP Marketing
Communications, Inc., John Steedman, Mark Webster and Nominada
Lansang.
Picazo, Buyco, Tan, Fider & Santos; Cervantes, Jurisprudencia and
Partners; and Egmedio J. Castillon, Jr.for Jocelyn M. Galera.
CARPIO, Acting C.J.:
The Case
G.R. Nos. 169207 and 169239 are petitions for review1assailing the
Decision2 promulgated on 14 April 2005 as well as the
Resolution3 promulgated on 1 August 2005 of the Court of
_______________
1 Under Rule 45 of the 1997 Rules of Civil Procedure.
2 Rollo (G.R. No. 169207), pp. 10-43; Rollo, (G.R. No. 169239), pp. 40-
73. Penned by Associate Justice Vicente Q. Roxas with Associate Justices
Renato C. Dacudao and Lucas P. Bersamin, concurring; Associate Justice
31
Jose Catral Mendoza, concurring and dissenting; and Associate Justice
Celia C. Librea-Leagogo, dissenting.
3 Rollo (G.R. No. 169207), pp. 63-64; Rollo, (G.R. No. 169239), pp. 93-
94. Penned by Associate Justice Vicente Q. Roxas with Asso-
424
424 SUPREME COURT REPORTS ANNOTATED
WPP Marketing Communications, Inc. vs. Galera
Appeals (appellate court) in CA-G.R. SP No. 78721. The appellate court
granted and gave due course to the petition filed by Jocelyn M. Galera
(Galera). The appellate court’s decision reversed and set aside that of the
National Labor Relations Commission (NLRC), and directed WPP 7. Other benefits.
Marketing Communications, Inc. (WPP) to pay Galera backwages,
separation pay, unpaid housing benefit, unpaid personal and accident
insurance benefits, cash value under the company’s pension plan, 30 days
paid holiday benefit, moral damages, exemplary damages, 10% of the total
judgment award as attorney’s fees, and costs of the suit.
The Facts
The appellate court narrated the facts as follows:
“Petitioner is Jocelyn Galera (GALERA), a [sic] American citizen who
was recruited from the United States of America by private respondent
John Steedman, Chairman-WPP Worldwide and Chief Executive Officer of
Mindshare, Co., a corporation based in Hong Kong, China, to work in the
Philippines for private respondent WPP Marketing Communications, Inc.
(WPP), a corporation registered and operating under the laws of
Philippines. GALERA accepted the offer and she signed an Employment 8. Holidays
Contract entitled “Confirmation of Appointment and Statement of Terms
and Conditions” (Annex “B” to Petition for Certiorari). The relevant
portions of the contract entered into between the parties are as follows:
Particulars:
Name: Jocelyn M. Galera
Address: 163 Mediterranean Avenue
Hayward, CA 94544
Position: Managing Director
Mindshare Philippines
Annual Salary: Peso 3,924,000 426
Start Date: 1 September 1999
_______________
ciate Justices Renato C. Dacudao and Lucas P. Bersamin, concurring;
Associate Justice Jose Catral Mendoza, concurring and dissenting; and
Associate Justice Celia C. Librea-Leagogo, dissenting.
425
VOL. 616, MARCH 25, 2010 425
WPP Marketing Communications, Inc. vs. Galera
Commencement Date: 1 September 1999
(for continuous service)
Office: Mindshare Manila
6. Housing Allowance
The Company will provide suitable housing in Manila at a
maximum cost (including management fee and other associated
costs) of Peso 576,000 per annum.
The Company will provide you with a fully maintained company
car and a driver.
The Company will continue to provide medical, health, life and
personal accident insurance plans, to an amount not exceeding Peso
300,000 per annum, in accordance with the terms of the respective
plans, as provided by JWT Manila.
The Company will reimburse you and your spouse one way
business class air tickets from USA to Manila and the related
shipping and relocation cost not exceeding US$5,000 supported by
proper documentation. If you leave the Company within one year,
you will reimburse the Company in full for all costs of the initial
relocation as described therein.
You will participate in the JWT Pension Plan under the terms of
this plan, the Company reserves the right to transfer this benefit to
a Mindshare Pension Plan in the future, if so required.
You are entitled to 20 days paid holiday in addition to public
holidays per calendar year to be taken at times agreed with the
Company. Carry-over of unused accrued holiday entitlement into a
new holiday year will not normally be allowed. No payment will be
made for holidays not taken. On termination of your employment,
unless you have been summarily dismissed, you will be entitled to
receive payment for unused accrued holiday pay. Any holiday taken
in excess of your entitlement shall be deducted from your final salary
payment.426
SUPREME COURT REPORTS ANNOTATED
WPP Marketing Communications, Inc. vs. Galera
9. Leave Due to Sickness or Injury
The maximum provision for sick leave is 15 working days per
calendar year.
12. Invention/Know-How
32
 Any discovery, invention, improvement in procedure, trademark,
trade name, designs, copyrights or get-ups made, discovered or
created by you during the continuance of your employment
hereunder relating to the business of the Company shall belong to
and shall be the absolute property of the Company. If required to do
so by the Company (whether during or after the termination of your
employment) you shall at the expense of the company execute all
instruments and do all things necessary to vest in ownership for all
other rights, title and interests (including any registered rights
therein) in such discovery, invention, improvement in procedure,
trademark, trade name, design, copyright or get-up in the Company
(or its Nominee) absolutely and as sole beneficial owner.
14. Notice.
The first three months of your employment will be a trial period
during which either you or the Company may terminate your
employment on one week’s notice. If at the end of that period, the
Company is satisfied with your performance, you will become a
permanent employee. Thereafter you will give Company and the
Company will give you three months notice of termination of
employment. The above is always subject to the following: (1) the
Company’s right to terminate the contract of employment on no or
short notice where you are in breach of contract; (2) your
employment will at any event cease without notice on your
retirement date when you are 60 years of age.
SIGNED JOCELYN M. GALERA 8-16-99
Date of Borth [sic] 12-25-55
Employment of GALERA with private respondent WPP became
effective on September 1, 1999 solely on the instruction of the CEO and
upon signing of the contract, without any further action from the Board of
Directors of private respondent WPP.
Four months had passed when private respondent WPP filed before the
Bureau of Immigration an application for petitioner
427
VOL. 616, MARCH 25, 2010 427
WPP Marketing Communications, Inc. vs. Galera
GALERA to receive a working visa, wherein she was designated as Vice
President of WPP. Petitioner alleged that she was constrained to sign the
application in order that she could remain in the Philippines and retain
her employment.
Then, on December 14, 2000, petitioner GALERA alleged she was
verbally notified by private respondent STEEDMAN that her services had
been terminated from private respondent WPP. A termination letter
followed the next day.”4
On 3 January 2001, Galera filed a complaint for illegal dismissal,
holiday pay, service incentive leave pay, 13th month pay, incentive plan,
actual and moral damages, and attorney’s fees against WPP and/or John
Steedman (Steedman), Mark Webster (Webster) and Nominada Lansang
(Lansang). The case was docketed as NLRC NCR Case No. 30-01-00044-
01.
The Labor Arbiter’s Ruling
In his Decision dated 31 January 2002, Labor Arbiter Edgardo M.
Madriaga (Arbiter Madriaga) held WPP, Steedman, Webster, and Lansang
liable for illegal dismissal and damages. Arbiter Madriaga stated that
Galera was not only illegally dismissed but was also not accorded due
process. Arbiter Madriaga explained, thus:
“[WPP] failed to observe the two-notice rule. [WPP] through respondent
Steedman for a five (5) minute meeting on December 14, 2000 where she
was verbally told that as of that day, her employment was being
terminated. [WPP] did not give [Galera] an opportunity to defend herself
and explain her side. [Galera] was even prohibited from reporting for work
that day and was told not to report for work the next day as it would be
awkward for her and respondent Steedman to be in the same premises
after her termination. [WPP] only served [Galera] her written notice of
termination only on 15 December 2001, one day after she was verbally
apprised thereof.”
_______________
4 Rollo (G.R. No. 169207), pp. 12-15; Rollo (G.R. No. 169239), pp. 42-45.
428
428 SUPREME COURT REPORTS ANNOTATED
WPP Marketing Communications, Inc. vs. Galera
The law mandates that the dismissal must be properly done otherwise,
the termination is gravely defective and may be declared unlawful as we
hereby hold [Galera’s] dismissal to be illegal and unlawful. Where there is
no showing of a clear, valid and legal cause for the termination of
employment, the law considers the matter a case of illegal dismissal and
the burden is on the employer to prove that the termination was for a valid
or authorized cause. The law mandates that both the substantive and
procedural aspects of due process should be observed. The facts clearly
show that respondents were remiss on both aspects. Perforce, the dismissal
is void and unlawful.
xxxx
Considering the work performance and achievements of [Galera] for the
year 2000, we do not find any basis for the alleged claim of incompetence
33
by herein respondents. Had [Galera] been really incompetent, she would
not have been able to generate enormous amounts [sic] of revenues and
business for [WPP]. She also appears to be well liked as a leader by her
subordinates, who have come forth in support of [Galera]. These facts
remain undisputed by respondents.
A man’s job being a property right duly protected by our laws, an
employer who deprives an employee [of] the right to defend himself is liable
for damages consistent with Article 32 of the Civil Code. To allow an
employer to terminate the employment of his worker based merely on
allegations without proof places the [employee] in an uncertain situation.
The unflinching rule in illegal dismissal cases is that the employer bears
the burden of proof.
In the instant case, respondents have not been able to muster evidence
to counter [Galera’s] allegations. [Galera’s] allegations remain and stand
absent proof from respondents rebutting them. Hence, our finding of illegal
dismissal against respondents who clearly have conspired in bad faith to
deprive [Galera] of her right to substantive and procedural due process.”5
The dispositive portion of Arbiter Madriaga’s decision reads as follows:
_______________
5 Rollo (G.R. No. 169207), pp. 337-341; Rollo (G.R. No. 169239), pp. 299-
303.
429
VOL. 616, MARCH 25, 2010 429
WPP Marketing Communications, Inc. vs. Galera
“WHEREFORE, premises considered, we hereby hold herein
respondents liable for illegal dismissal and damages, and award to
[Galera], by virtue of her expatriate status, the following:
a. Reinstatement without loss of seniority rights.
b. Backwages amounting to $120,000 per year at P50.00 to US $1
exchange rate, 13th month pay, transportation and housing
benefits.
c. Remuneration for business acquisitions amounting to Two Million
Eight Hundred Fifty Thousand Pesos (P2,850,000.00) and Media
Plowback Incentive equivalent to Three Million Pesos
(P3,000,000.00) or a total of not less than One Hundred Thousand
US Dollars ($100,000.00).
d. US Tax Protection of up to 35% coverage equivalent to Thirty Eight
Thousand US Dollars ($38,000).
e. Moral damages including implied defamation and punitive damages
equivalent to Two Million Dollars (US$2,000,000.00).
f. Exemplary damages equivalent to One Million Dollars
($1,000,000.00).
g. Attorney’s fees of 10% of the total award herein.
SO ORDERED.”6
The Ruling of the NLRC
The First Division of the NLRC reversed the ruling of Arbiter
Madriaga. In its Decision7 promulgated on 19 February 2003, the NLRC
stressed that Galera was WPP’s Vice-President, and therefore, a corporate
officer at the time she was removed by the Board of Directors on 14
December 2000. The NLRC stated thus:
_______________
6 Rollo (G.R. No. 169207), p. 344; Rollo (G.R. No. 169239), p. 306.
7 Rollo (G.R. No. 169239), pp. 140-150. Per Curiam decision signed by
Commissioners Roy V. Señeres and Victoriano R. Calaycay.
430
430 SUPREME COURT REPORTS ANNOTATED
WPP Marketing Communications, Inc. vs. Galera
“It matters not that her having been elected by the Board to an added
position of being a member of the Board of Directors did not take effect as
her May 31, 2000 election to such added position was conditioned to be
effective upon approval by SEC of the Amended By-Laws, an approval
which took place only in February 21, 2001, i.e., after her removal on
December 14, 2000. What counts is, at the time of her removal, she
continued to be WPP’s Vice President, a corporate officer, on hold over
capacity.
Ms. Galera’s claim that she was not a corporate officer at the time of
her removal because her May 31, 2000 election as Vice President for Media,
under WPP’s Amended By-Laws, was subject to the approval by the
Securities and Exchange Commission and that the SEC approved the
Amended By-Laws only in February 2001. Such claim is unavailing. Even
if Ms. Galera’s subsequent election as Vice President for Media on May 31,
2000 was subject to approval by the SEC, she continued to hold her
previous position as Vice President under the December 31, 1999 election
until such time that her successor is duly elected and qualified. It is a basic
principle in corporation law, which principle is also embodied in WPP’s by-
laws, that a corporate officer continues to hold his position as such until
his successor has been duly elected and qualified. When Ms. Galera was
elected as Vice President on December 31, 1999, she was supposed to have
held that position until her successor has been duly elected and qualified.
The record shows that Ms. Galera was not replaced by anyone. She
continued to be Vice President of WPP with the same operational title of
34
Managing Director for Mindshare and continued to perform the same
functions she was performing prior to her May 31, 2000 election.
In the recent case of Dily Dany Nacpil v. International Broadcasting
Corp., the definition of corporate officer for purposes of intra-corporate
controversy was even broadened to include a Comptroller/Assistant
Manager who was appointed by the General Manager, and whose
appointment was later approved by the Board of Directors. In this case, the
position of comptroller was not even expressly mentioned in the By-Laws
of the corporation, and yet, the Supreme Court found him to be a corporate
officer. The Court ruled that—
(since) petitioner’s appointment as comptroller required the
approval and formal action of IBC’s Board of Directors to become
valid, it is clear therefore that petitioner is a corporate officer whose
dismissal may be the subject of a controversy
431
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WPP Marketing Communications, Inc. vs. Galera
cognizable by the SEC... Had the petitioner been an ordinary
employee, such board action would not have been required.
Such being the case, the imperatives of law require that we hold that
the Arbiter below had no jurisdiction over Galera’s case as, again, she was
a corporate officer at the time of her removal.
WHEREFORE, the appeals of petitioner from the Decision of Labor
Arbiter Edgardo Madriaga dated January 31, 2002 and his Order dated
March 21, 2002, respectively, are granted. The January 31, 2002 decision
of the Labor Arbiter is set aside for being null and void and the temporary
restraining order we issued on April 24, 2002 is hereby made permanent.
The complaint of Jocelyn Galera is dismissed for lack of jurisdiction.
SO ORDERED.”8
In its Resolution9 promulgated on 4 June 2003, the NLRC further
stated:
“We are fully convinced that this is indeed an intra-corporate dispute
which is beyond the labor arbiter’s jurisdiction. These consolidated cases
clearly [involve] the relationship between a corporation and its officer and
is properly within the definition of an intra-corporate relationship which,
under P.D. No. 902-A, is within the jurisdiction of the SEC (now the
commercial courts). Such being the case, We are constrained to rule that
the Labor Arbiter below had no jurisdiction over Ms. Galera’s complaint for
illegal dismissal.
WHEREFORE, the motion for reconsideration filed by Ms. Galera is
hereby denied for lack of merit. We reiterate our February 19, 2003
Decision setting aside the Labor Arbiter’s Decision dated January 31, 2002
for being null and void.
SO ORDERED.”10
Galera assailed the NLRC’s decision and resolution before the appellate
court and raised a lone assignment of error.
_______________
8 Id., at pp. 148-150.
9 Rollo (G.R. No. 169207), pp. 502-505; Rollo (G.R. No. 169239), pp.
151-154.
10 Rollo (G.R. No. 169207), pp. 504-505; Rollo (G.R. No. 169239), pp.
153-154.
432
432 SUPREME COURT REPORTS ANNOTATED
WPP Marketing Communications, Inc. vs. Galera
“The National Labor Relations Commission acted with grave abuse of
discretion amounting to lack or excess of jurisdiction when it reversed the
decision of the Labor Arbiter not on the merits but for alleged lack of
jurisdiction.”11
The Decision of the Appellate Court
The appellate court reversed and set aside the decision of the NLRC.
The appellate court ruled that the NLRC’s dismissal of Galera’s appeal is
not in accord with jurisprudence. A person could be considered a “corporate
officer” only if appointed as such by a corporation’s Board of Directors, or
if pursuant to the power given them by either the Articles of Incorporation
or the By-Laws.12
The appellate court explained:
“A corporation, through its board of directors, could only act in the
manner and within the formalities, if any, prescribed by its charter or by
the general law. If the action of the Board is ultra vires such is motu proprio
void ab initio and without legal effect whatsoever. The by-laws of a
corporation are its own private laws which substantially have the same
effect as the laws of the corporation. They are, in effect, written into the
charter. In this sense, they beome part of the fundamental law of the
corporation with which the corporation and its directors and officers must
comply.
Even if petitioner GALERA had been appointed by the Board of
Directors on December 31, 1999, private respondent WPP’s By-Laws
provided for only one Vice-President, a position already occupied by private
respondent Webster. The same defect also stains the Board of Directors’
appointment of petitioner GALERA as a Director of the corporation,
because at that time the By-Laws provided for only five directors. In
addition, the By-laws only empowered the Board of Directors to appoint a
35
general manager and/or assistant general manager as corporate officers in
addition to a chairman, president, vice-president and treasurer. There is
no mention of a corporate officer entitled “Managing Director.”
_______________
11 Rollo (G.R. No. 169207), p. 18.
12 Rollo (G.R. No. 169207), p. 21; Rollo (G.R. No. 169239), p. 51.
433
VOL. 616, MARCH 25, 2010 433
WPP Marketing Communications, Inc. vs. Galera
Hence, when the Board of Directors enacted the Resolutions of
December 31, 1999 and May 31, 2000, it exceeded its authority under the
By-Laws and are, therefore, ultra vires. Although private respondent WPP
sought to amend these defects by filing Amended By-Laws with the
Securities and Exchange Commission, they did not validate the ultra
vires resolutions because the Amended By-Laws did not take effect until
February 16, 2001, when it was approved by the SEC. Since by-laws
operate only prospectively, they could not validate the ultra
vires resolutions.”13
The dispositive portion of the appellate court’s decision reads:
“WHEREFORE, the petition is hereby GRANTED and GIVEN DUE
COURSE. The assailed Decision of the National Labor Relations
Commission is hereby REVERSED and SET ASIDE and a new one is
entered DIRECTING private respondent WPP MARKETING
COMMUNICATIONS, INC. to:
1. Pay [Galera] backwages at the peso equivalent of US$120,000.00
per annum plus three months from her summary December 14, 2000
dismissal up to March 14, 2001 because three months notice is
required under the contract, plus 13th month pay, bonuses and
general increases to which she would have been normally entitled,
had she not been dismissed and had she not been forced to stop
working, including US tax protection of up to 35% coverage which
she had been enjoying as an expatriate;
2. Pay x x x GALERA the peso equivalent of US$185,000.00
separation pay (1 ½ years);
3. Pay x x x GALERA any unpaid housing benefit for the 18 ½ months
of her employment in the service to the Company as an expatriate
in Manila, Philippines at the rate of P576,000 per year; unpaid
personal and accident insurance benefits for premiums at the rate
of P300,000.00 per year; whatever cash value in the JWT Pension
Plan; and thirty days paid holiday benefit under the contract for the
1 ½ calendar years with the Company;
_______________
13 Rollo (G.R. No. 169207), pp. 33-34; Rollo (G.R. No. 169239), pp. 63-
64.
434
434 SUPREME COURT REPORTS ANNOTATED
WPP Marketing Communications, Inc. vs. Galera
4. Pay x x x GALERA the reduced amount of PhP2,000,000.00 as
moral damages;
5. Pay [Galera] the reduced amount of PhP1,000,000.00 as exemplary
damages;
6. Pay [Galera] an amount equivalent to 10% of the judgment award
as attorney’s fees;
7. Pay the cost of the suit.
SO ORDERED.”14
Respondents filed a motion for reconsideration on 5 May 2005. Galera
filed a motion for partial reconsideration and/or clarification on the same
date. The appellate court found no reason to revise or reverse its previous
decision and subsequently denied the motions in a Resolution promulgated
on 1 August 2005.15
The Issues
WPP, Steedman, Webster, and Lansang raised the following grounds in
G.R. No. 169207:
I. The Court of Appeals seriously erred in ruling that the NLRC has
jurisdiction over [Galera’s] complaint because she was not an
employee. [Galera] was a corporate officer of WPP from the
beginning of her term until her removal from office.
II. Assuming arguendo that the Court of Appeals correctly ruled that
the NLRC has jurisdiction over [Galera’s] complaint, it should have
remanded the case to the Labor Arbiter for reception of evidence on
the merits of the case.
III. [Galera] is an alien, hence, can never attain a regular or
permanent working status in the Philippines.
_______________
14 Rollo (G.R. No. 169207), p. 42; Rollo (G.R. No. 169239), p. 72.
15 Rollo (G.R. No. 169207), pp. 63-64; Rollo (G.R. No. 169239), pp. 93-
94.
435
VOL. 616, MARCH 25, 2010 435
WPP Marketing Communications, Inc. vs. Galera
36
 IV. [Galera] is not entitled to recover backwages, other benefits and
damages from WPP.16
On the other hand, in G.R. No. 169239, Galera raised the following
grounds in support of her petition:
“The CA decision should be consistent with Article 279 of the Labor Code
and applicable jurisprudence, that full backwages and separation pay
(when in lieu of reinstatement), should be reckoned from time of dismissal
up to time of reinstatement (or payment of separation pay, in case
separation instead of reinstatement is awarded).
Accordingly, petitioner Galera should be awarded full backwages and
separation pay for the period from 14 December 2000 until the finality of
judgment by the respondents, or, at the very least, up to the promulgation
date of the CA decision.
The individual respondents Steedman, Webster and Lansang must be held
solidarily liable with respondent WPP for the wanton and summary
dismissal of petitioner Galera, to be consistent with law and jurisprudence
as well as the specific finding of the CA of bad faith on the part of
respondents.”17
This Court ordered the consolidation of G.R. Nos. 169207 and 169239
in a resolution dated 16 January 2006.18
The Ruling of the Court
In its consolidated comment, the Office of the Solicitor General (OSG)
recommended that (A) the Decision dated 14 April 2005 of the appellate
court finding (1) Galera to be a regular employee of WPP; (2) the NLRC to
have jurisdiction over the present case; and (3) WPP to have illegally
dismissed Galera, be affirmed; and (B) the case remanded to the Labor
Arbiter for the computation of the correct monetary award. Despite the
OSG’s recommendations, we see that Galera’s
_______________
16 Rollo (G.R. No. 169207), pp. 83-84.
17 Rollo (G.R. No. 169239), pp. 18-19.
18 Rollo (G.R. No. 169207), p. 879; Rollo (G.R. No. 169239), p. 470.
436
436 SUPREME COURT REPORTS ANNOTATED
WPP Marketing Communications, Inc. vs. Galera
failure to seek an employment permit prior to her employment poses a
serious problem in seeking relief before this Court. Hence, we settle the
various issues raised by the parties for the guidance of the bench and bar.
Whether Galera is an Employee or a Corporate Officer
Galera, on the belief that she is an employee, filed her complaint before
the Labor Arbiter. On the other hand, WPP, Steedman, Webster and
Lansang contend that Galera is a corporate officer; hence, any controversy
regarding her dismissal is under the jurisdiction of the Regional Trial
Court. We agree with Galera.
Corporate officers are given such character either by the Corporation
Code or by the corporation’s by-laws. Under Section 25 of the Corporation
Code, the corporate officers are the president, secretary, treasurer and
such other officers as may be provided in the by-laws.19 Other officers are
sometimes created by the charter or by-laws of a corporation, or the board
of directors may be empowered under the by-laws of a corporation to create
additional offices as may be necessary.
An examination of WPP’s by-laws resulted in a finding that Galera’s
appointment as a corporate officer (Vice-President with the operational
title of Managing Director of Mindshare) during a special meeting of WPP’s
Board of Directors is an appointment to a non-existent corporate office.
WPP’s by-laws provided for only one Vice-President. At the time of Galera’s
appointment on 31 December 1999, WPP already had one Vice-President
in the person of Webster. Galera cannot be said to be a director of WPP also
because all five directorship positions provided in the by-laws are already
occupied. Finally, WPP cannot rely on its Amended By-Laws to support its
argument that Galera is a corporate officer. The Amended By-Laws
provided for more than one Vice-President and for
_______________
19 Easycall Communications Phils., Inc. v. King, G.R. No. 145901, 15
December 2005, 478 SCRA 102.
437
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WPP Marketing Communications, Inc. vs. Galera
two additional directors. Even though WPP’s stockholders voted for the
amendment on 31 May 2000, the SEC approved the amendments only on
16 February 2001. Galera was dismissed on 14 December 2000. WPP,
Steedman, Webster, and Lansang did not present any evidence that
Galera’s dismissal took effect with the action of WPP’s Board of Directors.
The appellate court further justified that Galera was an employee and
not a corporate officer by subjecting WPP and Galera’s relationship to the
four-fold test: (a) the selection and engagement of the employee; (b) the
payment of wages; (c) the power of dismissal; and (d) the employer’s power
to control the employee with respect to the means and methods by which
the work is to be accomplished. The appellate court found:
“x x x Sections 1 and 4 of the employment contract mandate where and
how often she is to perform her work; sections 3, 5, 6 and 7 show that wages
37
she receives are completely controlled by x x x WPP; and sections 10 and
11 clearly state that she is subject to the regular disciplinary procedures of
x x x WPP.
Another indicator that she was a regular employee and not a corporate
officer is Section 14 of the contract, which clearly states that she is a
permanent employee—not a Vice-President or a member of the Board of
Directors.
xxxx
Another indication that the Employment Contract was one of regular
employment is Section 12, which states that the rights to any invention,
discovery, improvement in procedure, trademark, or copyright created or
discovered by petitioner GALERA during her employment shall
automatically belong to private respondent WPP. Under Republic Act
8293, also known as the Intellectual Property Code, this condition prevails
if the creator of the work subject to the laws of patent or copyright is an
employee of the one entitled to the patent or copyright.
Another convincing indication that she was only a regular employee
and not a corporate officer is the disciplinary procedure under Sections 10
and 11 of the Employment Contract, which states that her right of redress
is through Mindshare’s Chief Executive Officer
438
438 SUPREME COURT REPORTS ANNOTATED
WPP Marketing Communications, Inc. vs. Galera
for the Asia-Pacific. This implies that she was not under the disciplinary
control of private respondent WPP’s Board of Directors (BOD), which
should have been the case if in fact she was a corporate officer because only
the Board of Directors could appoint and terminate such a corporate officer.
Although petitioner GALERA did sign the Alien Employment Permit
from the Department of Labor and Employment and the application for a
9(g) visa with the Bureau of Immigration—both of which stated that she
was private respondent’s WPP’ Vice President—these should not be
considered against her. Assuming arguendothat her appointment as Vice-
President was a valid act, it must be noted that these appointments
occurred after she was hired as a regular employee. After her
appointments, there was no appreciable change in her duties.”20
Whether the Labor Arbiter and the NLRC
have jurisdiction over the present case
Galera being an employee, then the Labor Arbiter and the NLRC have
jurisdiction over the present case. Article 217 of the Labor Code provides:
“Jurisdiction of Labor Arbiters and the Commission.—(a) Except as
otherwise provided under this Code, the Labor Arbiters shall have original
and exclusive jurisdiction to hear and decide x x x the following cases
involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that
workers may file involving wages, rates of pay, hours of work and
other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages
arising from the employer-employee relations;
_______________
20 Rollo (G.R. No. 169207), pp. 34-36; Rollo (G.R. No. 169239), pp. 64-
66.
439
VOL. 616, MARCH 25, 2010 439
WPP Marketing Communications, Inc. vs. Galera
5. Cases arising from any violation of Article 264 of this Code,
including questions involving the legality of strikes and lockouts;
6. Except claims for Employees Compensation, Social Security,
Medicare and other maternity benefits, all other claims, arising from
employer-employee relations, including those of persons in domestic
or household service, involving an amount exceeding five thousand
pesos (P5,000.00) regardless of whether accompanied with a claim
for reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction
over all cases decided by Labor Arbiters.
(c) Cases arising from the interpretation of collective
bargaining agreements and those arising from the
interpretation or enforcement of company personnel policies
shall be disposed of by the Labor Arbiter by referring the same
to the grievance machinery and voluntary arbitration as may
be provided in said agreements.”
In contrast, Section 5.2 of Republic Act No. 8799, or the Securities
Regulation Code, states:
“The Commission’s jurisdiction over all cases enumerated under
Section 5 of Presidential Decree No. 902-A is hereby transferred to the
courts of general jurisdiction or the appropriate Regional Trial Court:
Provided, That the Supreme Court in the exercise of its authority may
designate the Regional Trial Court branches that shall exercise jurisdiction
over these cases. The Commission shall retain jurisdiction over pending
cases involving intra-corporate disputes submitted for final resolution
which should be resolved within one year from the enactment of this Code.
The Commission shall retain jurisdiction over pending suspension of
38
payments/rehabilitation cases filed as of 30 June 2000 until finally
disposed.”
The pertinent portions of Section 5 of Presidential Decree No. 902-A,
mentioned above, states:
b) Controversies arising out of intra-corporate or partnership
relations, between and among stockholders, mem-
440
440 SUPREME COURT REPORTS ANNOTATED
WPP Marketing Communications, Inc. vs. Galera
bers or associates; between any or all of them and the corporation,
partnership or association of which they are stockholders, members or
associates, respectively; and between such corporation, partnership or
association and the state insofar as it concerns their individual franchise
or right to exist as such entity;
c) Controversies in the election or appointments of directors, trustees,
officers or managers of such corporations, partnerships or
associations.
Whether WPP illegally dismissed Galera
WPP’s dismissal of Galera lacked both substantive and procedural due
process.
Apart from Steedman’s letter dated 15 December 2000 to Galera, WPP
failed to prove any just or authorized cause for Galera’s dismissal.
Steedman’s letter to Galera reads:
‘The operations are currently in a shamble. There is lack of leadership and
confidence in your abilities from within, our agency partners and some
clients.
Most of the staff I spoke with felt they got more guidance and direction
from Minda than yourself. In your role as Managing Director, that is just
not acceptable.
I believe your priorities are mismanaged. The recent situation where you
felt an internal strategy meeting was more important than a new business
pitch is a good example.
You failed to lead and advise on the two new business pitches. In both
cases, those involved sort (sic) Minda’s input. As I discussed with you back
in July, my directive was for you to lead and review all business pitches. It
is obvious [that] confusion existed internally right up until the day of the
pitch.
The quality output is still not to an acceptable standard, which was also
part of my directive that you needed to focus on back in July.
I do not believe you understand the basic skills and industry knowledge
required to run a media special operation.”21
_______________
21 Rollo (G.R. No. 169239), p. 267.
441
VOL. 616, MARCH 25, 2010 441
WPP Marketing Communications, Inc. vs. Galera
WPP, Steedman, Webster, and Lansang, however, failed to
substantiate the allegations in Steedman’s letter. Galera, on the other
hand, presented documentary evidence22 in the form of congratulatory
letters, including one from Steedman, which contents are diametrically
opposed to the 15 December 2000 letter.
The law further requires that the employer must furnish the worker
sought to be dismissed with two written notices before termination of
employment can be legally effected: (1) notice which apprises the employee
of the particular acts or omissions for which his dismissal is sought; and
(2) the subsequent notice which informs the employee of the employer’s
decision to dismiss him. Failure to comply with the requirements taints the
dismissal with illegality.23WPP’s acts clearly show that Galera’s dismissal
did not comply with the two-notice rule.
Whether Galera is entitled to the monetary award
WPP, Steedman, Webster, and Lansang argue that Galera is not
entitled to backwages because she is an alien. They further state that there
is no guarantee that the Bureau of Immigration and the Department of
Labor and Employment will continue to grant favorable rulings on the
applications for a 9(g) visa and an Alien Employment Permit after the
expiry of the validity of Galera’s documents on 31 December 2000. WPP’s
argument is a circular argument, and assumes what it attempts to prove.
Had WPP not dismissed Galera, there is no doubt in our minds that WPP
would have taken action for the approval of documents required for
Galera’s continued employment.
_______________
22 Id., at pp. 237-266.
23 Pepsi-Cola Bottling Co. v. NLRC, G.R. No. 101900, 23 June 1992,
210 SCRA 277, 286.
442
442 SUPREME COURT REPORTS ANNOTATED
WPP Marketing Communications, Inc. vs. Galera
This is Galera’s dilemma: Galera worked in the Philippines without a
proper work permit but now wants to claim employee’s benefits under
Philippine labor laws.
39
 “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
Vice President of WPP. Petitioner alleged that she was constrained to sign
the application in order that she could remain in the Philippines and retain
her employment.”24
The law and the rules are consistent in stating that the employment
permit must be acquired prior to employment. The Labor Code states:
“Any alien seeking 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.”25 Section 4, Rule XIV, Book 1 of the
Implementing Rules and Regulations provides:
“Employment permit required for entry.—No alien seeking employment,
whether as a resident or non-resident, may enter the Philippines without
first securing an employment permit from the Ministry. If an alien enters
the country under a non-working visa and wishes to be employed
thereafter, he may only be allowed to be employed upon presentation of a
duly approved employment permit.”

Galera cannot come to this Court with unclean hands. To grant Galera’s
prayer is to sanction the violation of the Philippine labor laws requiring
aliens to secure work permits before their employment. We hold that
the status quo must prevail in the present case and we leave the parties
where they are. This ruling, however, does not bar Galera from seeking
relief from other jurisdictions.

WHEREFORE, we PARTIALLY GRANT the petitions in G.R. Nos.

169207 and 169239. We SET ASIDE the Decision of the Court of Appeals
promulgated on 14 April 2005 as well as the Resolution promulgated on 1
August 2005 in CA-G.R. SP No. 78721.

SO ORDERED.

40
G.R. No. 114337. September 29, 1995.*
NITTO ENTERPRISES, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION, and ROBERTO CAPILI, respondents.
Labor Law; Apprenticeship Agreements; Prior approval by the
Department of Labor and Employment of the proposed apprenticeship
program is a condition sine qua non before an apprenticeship agreement
can be validly entered into.—In the case at bench, the apprenticeship
agreement between petitioner and private respondent was executed on
May 28, 1990 allegedly employing the latter as an apprentice in the trade
of “care maker/molder.” On the same date, an apprenticeship program was
prepared by petitioner and submitted to the Department of Labor and
Employment. However, the apprenticeship Agreement was filed only on
June 7, 1990. Notwithstanding the absence of ap-
_______________
* FIRST DIVISION.
655
VOL. 248, SEPTEMBER 29, 1995 655
Nitto Enterprises vs. National Labor Relations Commission
proval by the Department of Labor and Employment, the
apprenticeship agreement was enforced the day it was signed. Based on
the evidence before us, petitioner did not comply with the requirements of
the law. It is mandated that apprenticeship agreements entered into by the
employer and apprentice shall be entered only in accordance with the
apprenticeship program duly approved by the Minister of Labor and
Employment. Prior approval by the Department of Labor and Employment
of the proposed apprenticeship program is, therefore, a condition sine qua
nonbefore an apprenticeship agreement can be validly entered into.
Same; Same; Where the apprenticeship agreement has no force and
effect, the worker hired as apprentice should be considered as a regular
employee.—Hence, since the apprenticeship agreement between petitioner
and private respondent has no force and effect in the absence of a valid
apprenticeship program duly approved by the DOLE, private respondent’s
assertion that he was hired not as an apprentice but as a delivery boy
(“kargador” or “pahinante”) deserves credence. He should rightly be
considered as a regular employee of petitioner as defined by Article 280 of
the Labor Code.
Same; Dismissals; Due Process; The twin requirements of due process,
substantive and procedural, must be complied with before valid dismissal
exists, otherwise the dismissal becomes void.—There is an abundance of
cases wherein the Court ruled that the twin requirements of due process,
substantive and procedural, must be complied with, before valid dismissal
exists. Without which, the dismissal becomes void. The twin requirements
of notice and hearing constitute the essential elements of due process. This
simply means that the employer shall afford the worker ample opportunity
to be heard and to defend himself with the assistance of his representative,
if he so desires. Ample opportunity connotes every kind of assistance that
management must accord the employee to enable him to prepare
adequately for his defense including legal representation.
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.
The facts are stated in the opinion of the Court.
Sinforoso R. Pagunsan for petitioner.
Ma. Elena Enly B. Nazareta representative of private respondent.
KAPUNAN, J.:
This petition for certiorari under Rule 65 of the Rules of Court seeking to
annul the decision1 rendered by public respondent National Labor
Relations Commission, which reversed the decision of the Labor Arbiter.
Briefly, the facts of the case are as follows:
Petitioner Nitto Enterprises, a company engaged in the sale of glass and
aluminum products, hired Roberto Capili sometime in May 1990 as an
apprentice machinist, molder and core maker as evidenced by an
apprenticeship agreement2 for a period of six (6) months from May 28,
1990 to November 28, 1990 with a daily wage rate of P66.75 which was
75% of the applicable minimum wage.
At around 1:00 p.m. of August 2, 1990, Roberto Capili who was handling
a piece of glass which he was working on, accidentally hit and injured the
leg of an office secretary who was treated at a nearby hospital.
Later that same day, after office hours, private respondent entered a
workshop within the office premises which was not his work station.
There, he operated one of the power press machines without authority
and in the process injured his left thumb. Petitioner spent the amount of
P1,023.04 to cover the medication of private respondent.
The following day, Roberto Capili was asked to resign in a letter3 which
reads:
41
 A Sa lahat ng nakasulat sa itaas, hinihingi ng kompanya
u ang kanyang resignasyon, kasama ng kanyang
g comfirmasyon at pag-ayon na ang lahat sa itaas ay totoo.
u
s
t
2 Naiintindihan ko ang lahat ng nakasulat sa itaas, at ang
, lahat ng ito ay aking pagkakasala sa hindi pagsunod sa
1 alintuntunin ng kompanya.
9
9
0

Wala siyang tanggap ng utos mula sa superbisor at wala

siyang experiensa kung papaano gamitin and "TOOL" sa
pagbuhat ng salamin, sarili niyang desisyon ang
paggamit ng tool at may disgrasya at nadamay pa ang
isang sekretarya ng kompanya.

Sa araw ding ito limang (5) minute ang nakakalipas mula

alas-singko ng hapon siya ay pumasok sa shop na hindi
naman sakop ng kanyang trabaho. Pinakialaman at
kinalikot ang makina at nadisgrasya niya ang kanyang
sariling kamay.

Nakagastos ang kompanya ng mga

sumusunod:

Emergency and doctor fee P715.00

Medecines (sic) and others 317.04

Bibigyan siya ng kompanya ng Siyam na araw na libreng

sahod hanggang matanggal ang tahi ng kanyang kamay.

Tatanggapin niya ang sahod niyang anim na araw, mula

ika-30 ng Hulyo at ika-4 ng Agosto, 1990.

Ang kompanya ang magbabayad ng lahat ng gastos

pagtanggal ng tahi ng kanyang kamay, pagkatapos ng
siyam na araw mula ika-2 ng Agosto.

42
On August 3, 1990 private respondent executed a Quitclaim and Release
in favor of petitioner for and in consideration of the sum of P1,912.79.4
Three days after, or on August 6, 1990, private respondent formally filed
before the NLRC Arbitration Branch, National Capital Region a
complaint for illegal dismissal and payment of other monetary benefits.
On October 9, 1991, the Labor Arbiter rendered his decision finding the
termination of private respondent as valid and dismissing the money
claim for lack of merit. The dispositive portion of the ruling reads:
WHEREFORE, premises considered, the termination is
valid and for cause, and the money claims dismissed for
lack of merit.
The respondent however is ordered to pay the
complainant the amount of P500.00 as financial
assistance.
SO ORDERED.5
Labor Arbiter Patricio P. Libo-on gave two reasons for ruling that the
dismissal of Roberto Capilian was valid. First, private respondent who
was hired as an apprentice violated the terms of their agreement when he
acted with gross negligence resulting in the injury not only to himself but
also to his fellow worker. Second, private respondent had shown that "he
does not have the proper attitude in employment particularly the
handling of machines without authority and proper training.6
On July 26, 1993, the National Labor Relations Commission issued an
order reversing the decision of the Labor Arbiter, the dispositive portion
of which reads:
WHEREFORE, the appealed decision is hereby set aside.
The respondent is hereby directed to reinstate
complainant to his work last performed with backwages
computed from the time his wages were withheld up to
the time he is actually reinstated. The Arbiter of origin is
hereby directed to further hear complainant's money
claims and to dispose them on the basis of law and
evidence obtaining.
SO ORDERED.7
The NLRC declared that private respondent was a regular
employee of petitioner by ruling thus:
As correctly pointed out by the complainant, we cannot
understand how an apprenticeship agreement filed with
the Department of Labor only on June 7, 1990 could be
validly used by the Labor Arbiter as basis to conclude that
the complainant was hired by respondent as a plain
"apprentice" on May 28, 1990. Clearly, therefore, the
complainant was respondent's regular employee under
Article 280 of the Labor Code, as early as May 28,1990,
who thus enjoyed the security of tenure guaranteed in
Section 3, Article XIII of our 1987 Constitution.
The complainant being for illegal dismissal (among
others) it then behooves upon respondent, pursuant to
Art. 227(b) and as ruled in Edwin Gesulgon vs. NLRC, et
al. (G.R. No. 90349, March 5, 1993, 3rd Div., Feliciano, J.)
to prove that the dismissal of complainant was for a valid
cause. Absent such proof, we cannot but rule that the
complainant was illegally dismissed.8
On January 28, 1994, Labor Arbiter Libo-on called for a conference at
which only private respondent's representative was present.
On April 22, 1994, a Writ of Execution was issued, which reads:
NOW, THEREFORE, finding merit in [private
respondent's] Motion for Issuance of the Writ, you are
hereby commanded to proceed to the premises of
[petitioner] Nitto Enterprises and Jovy Foster located at
No. l 74 Araneta Avenue, Portero, Malabon, Metro Manila
or at any other places where their properties are located
and effect the reinstatement of herein [private
respondent] to his work last performed or at the option of
the respondent by payroll reinstatement.
You are also to collect the amount of P122,690.85
representing his backwages as called for in the dispositive
43
 portion, and turn over such amount to this Office for
proper disposition.
Petitioner filed a motion for reconsideration but the same
was denied.
Hence, the instant petition — for certiorari.
The issues raised before us are the following:
I (emphasis supplied)
WHETHER OR NOT PUBLIC RESPONDENT NLRC
COMMITTED GRAVE ABUSE OF DISCRETION IN
HOLDING THAT PRIVATE RESPONDENT WAS NOT
AN APPRENTICE.
II
WHETHER OR NOT PUBLIC RESPONDENT NLRC
COMMITTED GRAVE ABUSE OF DISCRETION IN
HOLDING THAT PETITIONER HAD NOT
ADEQUATELY PROVEN THE EXISTENCE OF A
VALID CAUSE IN TERMINATING THE SERVICE OF
PRIVATE RESPONDENT.
We find no merit in the petition.
Petitioner assails the NLRC's finding that private respondent Roberto
Capili cannot plainly be considered an apprentice since no apprenticeship
program had yet been filed and approved at the time the agreement was
executed.
Petitioner further insists that the mere signing of the apprenticeship
agreement already established an employer-apprentice relationship.
Petitioner's argument is erroneous.
The law is clear on this matter. Article 61 of the Labor Code provides:
Contents of apprenticeship agreement. — Apprenticeship
agreements, including the main rates of apprentices, shall
conform to the rules issued by the Minister of Labor and
Employment. The period of apprenticeship shall not
exceed six months. Apprenticeship agreements providing
for wage rates below the legal minimum wage, which in
no case shall start below 75% per cent of the applicable
minimum wage, may be entered into only in accordance
with apprenticeship program duly approved by the
Minister of Labor and Employment. The Ministry shall
develop standard model programs of apprenticeship.
In the case at bench, the apprenticeship agreement between petitioner
and private respondent was executed on May 28, 1990 allegedly
employing the latter as an apprentice in the trade of "care maker/molder."
On the same date, an apprenticeship program was prepared by petitioner
and submitted to the Department of Labor and Employment. However,
the apprenticeship Agreement was filed only on June 7, 1990.
Notwithstanding the absence of approval by the Department of Labor and
Employment, the apprenticeship agreement was enforced the day it was
signed.
Based on the evidence before us, petitioner did not comply with the
requirements of the law. It is mandated that apprenticeship agreements
entered into by the employer and apprentice shall be entered only in
accordance with the apprenticeship program duly approved by the
Minister of Labor and Employment.
Prior approval by the Department of Labor and Employment of the
proposed apprenticeship program is, therefore, a condition sine quo
non before an apprenticeship agreement can be validly entered into.
The act of filing the proposed apprenticeship program with the
Department of Labor and Employment is a preliminary step towards its
final approval and does not instantaneously give rise to an employer-
apprentice relationship.
Article 57 of the Labor Code provides that the State aims to "establish a
national apprenticeship program through the participation of employers,
workers and government and non-government agencies" and "to establish
apprenticeship standards for the protection of apprentices." To translate
44
such objectives into existence, prior approval of the DOLE to any
apprenticeship program has to be secured as a condition sine qua
non before any such apprenticeship agreement can be fully enforced. The
role of the DOLE in apprenticeship programs and agreements cannot be
debased.
Hence, since the apprenticeship agreement between petitioner and
private respondent has no force and effect in the absence of a valid
apprenticeship program duly approved by the DOLE, private
respondent's assertion that he was hired not as an apprentice but as a
delivery boy ("kargador" or "pahinante") deserves credence. He should
rightly be considered as a regular employee of petitioner as defined by
Article 280 of the Labor Code:
Art. 280. Regular and Casual Employment. — The
provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of
the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform activities
which are usually necessary or desirable in the usual
business or trade of the employer, except where the
employment has been fixed for a specific project or
undertaking the completion or termination of which has
been determined at the time of the engagement of the
employee or where the work or services to be performed is
seasonal in nature and the employment is for the duration
of the season.
An employment shall be deemed to be casual if it is not
covered by the preceding paragraph: Provided, That, any
employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity
in which he is employed and his employment shall
continue while such activity exists. (Emphasis supplied)
and pursuant to the constitutional mandate to "protect the rights
of workers and promote their welfare."9
Petitioner further argues that, there is a valid cause for the dismissal of
private respondent.
There is an abundance of cases wherein the Court ruled that the twin
requirements of due process, substantive and procedural, must be
complied with, before valid dismissal exists. 10 Without which, the
dismissal becomes void.
The twin requirements of notice and hearing constitute the essential
elements of due process. This simply means that the employer shall
afford the worker ample opportunity to be heard and to defend himself
with the assistance of his representative, if he so desires.
Ample opportunity connotes every kind of assistance that management
must accord the employee to enable him to prepare adequately for his
defense including legal representation. 11
As held in the case of Pepsi-Cola Bottling Co., Inc. v. NLRC: 12
The law requires that the employer must furnish the
worker sought to be dismissed with two (2) written notices
before termination of employee can be legally effected: (1)
notice which apprises the employee of the particular acts
or omissions for which his dismissal is sought; and (2) the
subsequent notice which informs the employee of the
employer's decision to dismiss him (Sec. 13, BP 130; Sec.
2-6 Rule XIV, Book V, Rules and Regulations
Implementing the Labor Code as amended). Failure to
comply with the requirements taints the dismissal with
illegality. This procedure is mandatory, in the absence of
which, any judgment reached by management is void and
in existent (Tingson, Jr. vs. NLRC, 185 SCRA 498 [1990];
National Service Corp. vs. NLRC, 168 SCRA 122; Ruffy
vs. NLRC. 182 SCRA 365 [1990]).
The fact is private respondent filed a case of illegal dismissal with the
Labor Arbiter only three days after he was made to sign a Quitclaim, a
clear indication that such resignation was not voluntary and deliberate.
Private respondent averred that he was actually employed by petitioner
as a delivery boy ("kargador" or "pahinante").
He further asserted that petitioner "strong-armed" him into signing the
aforementioned resignation letter and quitclaim without explaining to
45
him the contents thereof. Petitioner made it clear to him that anyway, he
did not have a choice. 13
Petitioner cannot disguise the summary dismissal of private respondent
by orchestrating the latter's alleged resignation and subsequent execution
of a Quitclaim and Release. A judicious examination of both events belies
any spontaneity on private respondent's part.
WHEREFORE, finding no abuse of discretion committed by public
respondent National Labor Relations Commission, the appealed decision
is hereby AFFIRMED.
SO ORDERED.
G.R. No. 75112. August 17, 1992.*
FILAMER CHRISTIAN INSTITUTE, petitioner, vs. HON.
INTERMEDIATE APPELLATE COURT, HON. ENRIQUE P.
SUPLICO, in his capacity as Judge of the Regional Trial Court,
Branch XIV, Roxas City and POTENCIANO KAPUNAN, SR.,
respondents.
Labor Law; Employer-Employee relationship; In relation to the school,
Funtecha was an employee even if he was assigned to clean the school
premises for only two (2) hours in the morning of each school day.—It is
undisputed that Funtecha was a working student, being a part-time janitor
and a scholar of petitioner Filamer. He was, in
________________
* THIRD DIVISION.
638
638 SUPREME COURT REPORTS ANNOTATED
Filamer Christian Institute vs. Intermediate Appellate Court
relation to the school, an employee even if he was assigned to clean
the school premises for only two (2) hours in the morning of each school
day.
Same; Same; Driving the vehicle to and from the house of the school
president where both Allan and Funtecha reside is an act in furtherance of
the interest of the petitioner-school.—Driving the vehicle to and from the
house of the school president where both Allan and Funtecha reside is an
act in furtherance of the interest of the petitioner-school. Allan’s job
demands that he drive home the school jeep so he can use it to fetch
students in the morning of the next school day.
Same; Same; Court is constrained to conclude that the act of Funtecha
in taking over the steering wheel was done for and in behalf of his employer
for which act the petitioner school cannot deny any responsibility by arguing
that it was done beyond the scope of his janitorial duties.—In learning how
to drive while taking the vehicle home in the direction of Allan’s house,
Funtecha definitely was not having a joy ride. Funtecha was not driving
for the purpose of his enjoyment or for a “frolic of his own” but ultimately,
for the service for which the jeep was intended by the petitioner school.
(See L. Battistoni v. Thomas, Can SC 144, 1 D.L.R.. 577, 80 ALR 722
[1932]; See also Association of Baptists for World Evangelism, Inc. v.
Fieldmen’s Insurance Co., Inc. 124 SCRA 618 [1983]). Therefore, the Court
is constrained to conclude that the act of Funtecha in taking over the
steering wheel was one done for and in behalf of his employer for which act
the petitioner-school cannot deny any responsibility by arguing that it was
done beyond the scope of his janitorial duties. The clause “within the scope
of their assigned tasks” for purposes of raising the presumption of liability
of an employer, includes any act done by an employee, in furtherance of the
interests of the employer or for the account of the employer at the time of
the infliction of the injury or damage.
Same; Same; Section 14, Rule X, Book III of the Rules implementing
the Labor Code promulgated only for the purpose of administering and
enforcing the provisions of the Labor Code on conditions of employment.—
Section 14, Rule X, Book III of the Rules implementing the Labor Code, on
which the petitioner anchors its defense, was promulgated by the Secretary
of Labor and Employment only for the purpose of administering and
enforcing the provisions of the Labor Code on conditions of employment.
Particularly, Rule X of Book III provides guidelines on the manner by
which the powers of the Labor
639
VOL. 212, AUGUST 17, 1992 639
Filamer Christian Institute vs. Intermediate Appellate Court
Secretary shall be exercised; on what records should be kept;
maintained and preserved; on payroll; and on the exclusion of working
scholars from, and inclusion of resident physicians in the employment
coverage as far as compliance with the substantive labor provisions on
working conditions, rest periods, and wages, is concerned.
Same; Same; Section 14, Rule X, Book III of the Rules not the decisive
law in a civil suit for damages instituted by an injured person during a
vehicular accident against a working student of a school and against the
school itself.—In other words, Rule X is merely a guide to the enforcement
of the substantive law on labor. The Court, thus, makes the distinction and
so holds that Section 14, Rule X, Book III of the Rules is not the decisive
law in a civil suit for damages instituted by an injured person during a
46
vehicular accident against a working student of a school and against the
school itself.
Same; Same; An implementing rule on labor cannot be used by an
employer as a shield to avoid liability under the substantive provisions of
the Civil Code.—The present case does not deal with a labor dispute on
conditions of employment between an alleged employee and an alleged
employer. It invokes a claim brought by one for damages for injury caused
by the patently negligent acts of a person, against both doer-employee and
his employer. Hence, the reliance on the implementing rule on labor to
disregard the primary liability of an employer under Article 2180 of the
Civil Code is misplaced. An implementing rule on labor cannot be used by
an employer as a shield to avoid liability under the substantive provisions
of the Civil Code.
Same; Civil Law; Negligence; There is evidence to show that there
exists in the present case an extra-contractual obligation arising from the
negligence or reckless imprudence of a person whose acts or omission are
imputable by a legal fiction to others who are in a position to exercise an
absolute or limited control over him.—There is evidence to show that there
exists in the present case an extra-contractual obligation arising from the
negligence or reckless imprudence of a person “whose acts or omissions are
imputable, by a legal fiction, to other(s) who are in a position to exercise an
absolute or limited control over (him).”
Same; Same; Same; Fact that Funtecha was not the school driver or
was not acting within the scope of his janitorial duties does not relieve the
petitioner of the burden of rebutting the presumption juris tantum that there
was negligence on its part either in the selection of a
640
640 SUPREME COURT REPORTS ANNOTATED
Filamer Christian Institute vs. Intermediate Appellate Court
servant or employee or in the supervision over him.—Funtecha is an
employee of petitioner Filamer. He need not have an official appointment
for a driver’s position in order that the petitioner may be held responsible
for his grossly negligent act, it being sufficient that the act of driving at the
time of the incident was for the benefit of the petitioner. Hence, the fact
that Funtecha was not the school driver or was not acting within the scope
of his janitorial duties does not relieve the petitioner of the burden of
rebutting the presumption juris tantum that there was negligence on its
part either in the selection of a servant or employee, or in the supervision
over him. The petitioner has failed to show proof of its having exercised the
required diligence of a good father of a family over its employees Funtecha
and Allan.
Same; Same; Same; Supervision includes the formulation of suitable
rules and regulation for the guidance of its employees and the issuance of
proper instructions intended for the protection of the public and persons
with whom the employer has relations through his employees.—The Court
reiterates that supervision includes the formulation of suitable rules and
regulation for the guidance of its employees and the issuance of proper
instructions intended for the protection of the public and persons with
whom the employer has relations through his employees.
Same; Same; Same; Employer is expected to impose upon its employees
the necessary discipline called for in the performance of any act
indispensable to the business and beneficial to their employer.—An
employer is expected to impose upon its employees the necessary discipline
called for in the performance of any act indispensable to the business and
beneficial to their employer.
Same; Same; Same; In the absence of evidence that the petitioner had
exercised the diligence of a good father of a family in the supervision of its
employees, the law imposes upon it the vicarious liability for acts or
omissions of its employees.—The petitioner, thus, has an obligation to pay
damages for injury arising from the unskilled manner by which Funtecha
drove the vehicle. (Cangco v. Manila Railroad Co., 38 Phil. 768, 772 [1918]).
In the absence of evidence that the petitioner had exercised the diligence
of a good father of a family in the supervision of its employees, the law
imposes upon it the vicarious liability for acts or omissions of its employees.
Same; Same; Same; Liability of the employer under Article 2180 is
primary and solidary.—The liability of the employer is, under Article 2180,
primary and solidary. However, the employer shall have
641
VOL. 212, AUGUST 17, 1992 641
Filamer Christian Institute vs. Intermediate Appellate Court
recourse against the negligent employee for whatever damages are
paid to the heirs of the plaintiff.
PETITION for reconsideration of the decision of the then Intermediate
Appellate Court.
The facts are stated in the opinion of the Court.
Bedona & Bedona Law Office for petitioner.
Rhodora G. Kapunan for private respondents.
GUTIERREZ, JR., J.:
The private respondents, heirs of the late Potenciano Kapunan, seek
reconsideration of the decision rendered by this Court on October 16,
1990 (Filamer Christian Institute v. Court of Appeals, 190 SCRA 477)
47
reviewing the appellate court's conclusion that there exists an employer-
employee relationship between the petitioner and its co-defendant
Funtecha. The Court ruled that the petitioner is not liable for the injuries
caused by Funtecha on the grounds that the latter was not an authorized
driver for whose acts the petitioner shall be directly and primarily
answerable, and that Funtecha was merely a working scholar who, under
Section 14, Rule X, Book III of the Rules and Regulations Implementing
the Labor Code is not considered an employee of the petitioner.
The private respondents assert that the circumstances obtaining in the
present case call for the application of Article 2180 of the Civil Code since
Funtecha is no doubt an employee of the petitioner. The private
respondents maintain that under Article 2180 an injured party shall have
recourse against the servant as well as the petitioner for whom, at the
time of the incident, the servant was performing an act in furtherance of
the interest and for the benefit of the petitioner. Funtecha allegedly did
not steal the school jeep nor use it for a joy ride without the knowledge of
the school authorities.
After a re-examination of the laws relevant to the facts found by the trial
court and the appellate court, the Court reconsiders its decision. We
reinstate the Court of Appeals' decision penned by the late Justice
Desiderio Jurado and concurred in by Justices Jose C. Campos, Jr. and
Serafin E. Camilon. Applying Civil Code provisions, the appellate court
affirmed the trial court decision which ordered the payment of the
P20,000.00 liability in the Zenith Insurance Corporation policy,
P10,000.00 moral damages, P4,000.00 litigation and actual expenses, and
P3,000.00 attorney's fees.
It is undisputed that Funtecha was a working student, being a part-time
janitor and a scholar of petitioner Filamer. He was, in relation to the
school, an employee even if he was assigned to clean the school premises
for only two (2) hours in the morning of each school day.
Having a student driver's license, Funtecha requested the driver, Allan
Masa, and was allowed, to take over the vehicle while the latter was on
his way home one late afternoon. It is significant to note that the place
where Allan lives is also the house of his father, the school president,
Agustin Masa. Moreover, it is also the house where Funtecha was allowed
free board while he was a student of Filamer Christian Institute.
Allan Masa turned over the vehicle to Funtecha only after driving down a
road, negotiating a sharp dangerous curb, and viewing that the road was
clear. (TSN, April 4, 1983, pp. 78-79) According to Allan's testimony, a
fast moving truck with glaring lights nearly hit them so that they had to
swerve to the right to avoid a collision. Upon swerving, they heard a
sound as if something had bumped against the vehicle, but they did not
stop to check. Actually, the Pinoy jeep swerved towards the pedestrian,
Potenciano Kapunan who was walking in his lane in the direction against
vehicular traffic, and hit him. Allan affirmed that Funtecha followed his
advise to swerve to the right. (Ibid., p. 79) At the time of the incident
(6:30 P.M.) in Roxas City, the jeep had only one functioning headlight.
Allan testified that he was the driver and at the same time a security
guard of the petitioner-school. He further said that there was no specific
time for him to be off-duty and that after driving the students home at
5:00 in the afternoon, he still had to go back to school and then drive
home using the same vehicle.
Driving the vehicle to and from the house of the school president where
both Allan and Funtecha reside is an act in furtherance of the interest of
the petitioner-school. Allan's job demands that he drive home the school
jeep so he can use it to fetch students in the morning of the next school
day.
It is indubitable under the circumstances that the school president had
knowledge that the jeep was routinely driven home for the said purpose.
Moreover, it is not improbable that the school president also had
knowledge of Funtecha's possession of a student driver's license and his
desire to undergo driving lessons during the time that he was not in his
classrooms.
In learning how to drive while taking the vehicle home in the direction of
Allan's house, Funtecha definitely was not having a joy ride. Funtecha
was not driving for the purpose of his enjoyment or for a "frolic of his
own" but ultimately, for the service for which the jeep was intended by
the petitioner school. (See L. Battistoni v. Thomas, Can SC 144, 1 D.L.R.
577, 80 ALR 722 [1932]; See also Association of Baptists for World
Evangelism, Inc. v. Fieldmen's Insurance Co., Inc. 124 SCRA 618 [1983]).
Therefore, the Court is constrained to conclude that the act of Funtecha
in taking over the steering wheel was one done for and in behalf of his
employer for which act the petitioner-school cannot deny any
responsibility by arguing that it was done beyond the scope of his
janitorial duties. The clause "within the scope of their assigned tasks" for
48
purposes of raising the presumption of liability of an employer, includes
any act done by an employee, in furtherance of the interests of the
employer or for the account of the employer at the time of the infliction of
the injury or damage. (Manuel Casada, 190 Va 906, 59 SE 2d 47 [1950])
Even if somehow, the employee driving the vehicle derived some benefit
from the act, the existence of a presumptive liability of the employer is
determined by answering the question of whether or not the servant was
at the time of the accident performing any act in furtherance of his
master's business. (Kohlman v. Hyland, 210 NW 643, 50 ALR 1437
[1926]; Jameson v. Gavett, 71 P 2d 937 [1937])
Section 14, Rule X, Book III of the Rules implementing the Labor Code,
on which the petitioner anchors its defense, was promulgated by the
Secretary of Labor and Employment only for the purpose of administering
and enforcing the provisions of the Labor Code on conditions of
employment. Particularly, Rule X of Book III provides guidelines on the
manner by which the powers of the Labor Secretary shall be exercised; on
what records should be kept; maintained and preserved; on payroll; and
on the exclusion of working scholars from, and inclusion of resident
physicians in the employment coverage as far as compliance with the
substantive labor provisions on working conditions, rest periods, and
wages, is concerned.
In other words, Rule X is merely a guide to the enforcement of the
substantive law on labor. The Court, thus, makes the distinction and so
holds that Section 14, Rule X, Book III of the Rules is not the decisive law
in a civil suit for damages instituted by an injured person during a
vehicular accident against a working student of a school and against the
school itself.
The present case does not deal with a labor dispute on conditions of
employment between an alleged employee and an alleged employer. It
invokes a claim brought by one for damages for injury caused by the
patently negligent acts of a person, against both doer-employee and his
employer. Hence, the reliance on the implementing rule on labor to
disregard the primary liability of an employer under Article 2180 of the
Civil Code is misplaced. An implementing rule on labor cannot be used by
an employer as a shield to avoid liability under the substantive provisions
of the Civil Code.
There is evidence to show that there exists in the present case an extra-
contractual obligation arising from the negligence or reckless imprudence
of a person "whose acts or omissions are imputable, by a legal fiction, to
other(s) who are in a position to exercise an absolute or limited control
over (him)." (Bahia v. Litonjua and Leynes, 30 Phil. 624 [1915])
Funtecha is an employee of petitioner Filamer. He need not have an
official appointment for a driver's position in order that the petitioner
may be held responsible for his grossly negligent act, it being sufficient
that the act of driving at the time of the incident was for the benefit of the
petitioner. Hence, the fact that Funtecha was not the school driver or was
not acting within the scope of his janitorial duties does not relieve the
petitioner of the burden of rebutting the presumption juris tantum that
there was negligence on its part either in the selection of a servant or
employee, or in the supervision over him. The petitioner has failed to
show proof of its having exercised the required diligence of a good father
of a family over its employees Funtecha and Allan.
The Court reiterates that supervision includes the formulation of suitable
rules and regulations for the guidance of its employees and the issuance
of proper instructions intended for the protection of the public and
persons with whom the employer has relations through his employees.
(Bahia v. Litonjua and Leynes, supra, at p. 628; Phoenix Construction, v.
Intermediate Appellate Court, 148 SCRA 353 [1987])
An employer is expected to impose upon its employees the necessary
discipline called for in the performance of any act indispensable to the
business and beneficial to their employer.
In the present case, the petitioner has not shown that it has set forth
such rules and guidelines as would prohibit any one of its employees from
taking control over its vehicles if one is not the official driver or
prohibiting the driver and son of the Filamer president from authorizing
another employee to drive the school vehicle. Furthermore, the petitioner
has failed to prove that it had imposed sanctions or warned its employees
against the use of its vehicles by persons other than the driver.
The petitioner, thus, has an obligation to pay damages for injury arising
from the unskilled manner by which Funtecha drove the vehicle. (Cangco
v. Manila Railroad Co., 38 Phil. 768, 772 [1918]). In the absence of
evidence that the petitioner had exercised the diligence of a good father of
a family in the supervision of its employees, the law imposes upon it the
vicarious liability for acts or omissions of its employees. (Umali v. Bacani,
69 SCRA 263 [1976]; Poblete v. Fabros, 93 SCRA 200 [1979]; Kapalaran
Bus Liner v. Coronado, 176 SCRA 792 [1989]; Franco v. Intermediate
49
Appellate Court, 178 SCRA 331 [1989]; Pantranco North Express, Inc. v.
Baesa, 179 SCRA 384 [1989]) The liability of the employer is, under
Article 2180, primary and solidary. However, the employer shall have
recourse against the negligent employee for whatever damages are paid
to the heirs of the plaintiff.

It is an admitted fact that the actual driver of the school jeep, Allan
Masa, was not made a party defendant in the civil case for damages. This
is quite understandable considering that as far as the injured pedestrian,
plaintiff Potenciano Kapunan, was concerned, it was Funtecha who was
the one driving the vehicle and presumably was one authorized by the
school to drive. The plaintiff and his heirs should not now be left to suffer
without simultaneous recourse against the petitioner for the consequent
injury caused by a janitor doing a driving chore for the petitioner even for
a short while. For the purpose of recovering damages under the
prevailing circumstances, it is enough that the plaintiff and the private
respondent heirs were able to establish the existence of employer-
employee relationship between Funtecha and petitioner Filamer and the
fact that Funtecha was engaged in an act not for an independent purpose
of his own but in furtherance of the business of his employer. A position of
responsibility on the part of the petitioner has thus been satisfactorily
demonstrated.

WHEREFORE, the motion for reconsideration of the decision dated

October 16, 1990 is hereby GRANTED. The decision of the respondent
appellate court affirming the trial court decision is REINSTATED.

SO ORDERED.

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