1. Maternity Children’s Hospital vs.

Secretary of Labor
G.R. No. 78909 June 30, 1989
Facts:

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

deOro Women’s Club and Puericulture Center, headed by Mrs. Antera Dorado, as
holdover President. The hospital derives its finances from the club itself as well as from paying
patients,averaging 130 per month. It is also partly subsidized by the Philippine Charity
SweepstakesOffice and the Cagayan De Oro City government.Petitioner has forty-one (41)
employees. Aside from salary and living allowances, theemployees are given food, but the
amount spent therefor is deducted from their respectivesalariesOn May 23, 1986, ten (10)
employees of the petitioner employed in different capacities/positionsfiled a complaint with the
Office of the Regional Director of Labor and Employment, Region X,for underpayment of their
salaries and ECOLAS, which was docketed as ROX Case No. CW-71-86.On June 16, 1986, the
Regional Director directed two of his Labor Standard and WelfareOfficers to inspect the records
of the petitioner to ascertain the truth of the allegations in thecomplaints. Based on their
inspection report and recommendation, the Regional Director issuedan Order dated August 4,
1986, directing the payment of P723,888.58, representingunderpayment of wages and ECOLAs
to all the petitioner’s employees.Petitioner appealed from this Order to the Minister of Labor and
Employment, Hon. Augusto S.Sanchez, who rendered a Decision on September 24, 1986,
modifying the said Order in thatdeficiency wages and ECOLAs should be computed only from
May 23, 1983 to May 23, 1986,On October 24, 1986, the petitioner filed a motion for
reconsideration which was denied by theSecretary of Labor in his Order dated May 13, 1987, for
lack of merit.
Issue:

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

Held:

This is a labor standards case, and is governed by Art. 128-b of the Labor Code, as amendedby
E.O. No. 111. Under the present rules, a Regional Director exercises both visitorial
andenforcement power over labor standards cases, and is therefore empowered to
adjudicatemoney claims, provided there still exists an employer-employee relationship, and the
findings of the regional office is not contested by the employer concerned.
Labor standards refer to the minimum requirements prescribed by existing laws, rules,
andregulations relating to wages, hours of work, cost of living allowance and other monetary
andwelfare benefits, including occupational, safety, and health standards (Section 7, Rule I,
Ruleson the Disposition of Labor Standards Cases in the Regional Office, dated September
16,1987).
Decision:
ACCORDINGLY, this petition should be dismissed, as it is hereby DISMISSED, as regards
allpersons still employed in the Hospital at the time of the filing of the complaint, but
GRANTED asregards those employees no longer employed at that time. SO ORDERED
 2. 2. Employers Confederation of the Philippines. v. National Wages and Productivity Commission

GR No. 96169 (24 September 1991)

Sarmiento J. kmd
SUBJECT MATTER: Minimum wages; wage fixing machinery; wage order; salary-ceiling method
CASE SUMMARY:
ECOP is assailing Wage Order No. NCR01-A issued by Regional Board of the National Capital Region which decreed
an across-the-board wage hike. ECOP argued that such issuance is in excess of authority as the board may only
prescribe “minimum wages” and not determine “salary ceilings”. Nonetheless, the SC is not convinced that the
regional Board of the NCR performed an unlawful act of legislation in decreeing the across-the-board hike. The SC
reasoned that the Congress may delegate the power to fix rates provided that the Congress leaves sufficient
standards, and the SC found that RA 6727 has provided sufficient standards. RA 6727 is meant to rationalize wages;
that is, by having permanent boards to decide wages rather than leaving wage determination to Congress year
after year and law after law.
DOCTRINES:
The National Wages and Productivity Commission noted that the determination of wages has generally involved
true methods, the “floor-wage” method and the “salary-ceiling” method.
The increasing trend is toward the second mode, the salary-cap method, which has reduced disputes arising from
wage distortions (brought about, apparently, by the floor-wage method).
“Minimum wages” underlies the effort of the State, as Republic Act No. 6727 expresses it, “to promote
productivity-improvement and gain-sharing measures to ensure a decent standard of living for the workers and
their families; to guarantee the rights of labor to its just share in the fruits of production; to enhance employment
generation in the countryside through industry dispersal; and to allow business and industry reasonable returns on
investment, expansion and growth," and as the Constitution expresses it, to affirm “labor as a primary social
economic force."
PARTIES:
Petitioner Employers Confederation of the Philippines (ECOP)
Respondent National Wages and Productivity Commission and Regional Tripartite Wages
and Productivity Board-NCR,
Trade Union Congress of the Philippines

FACTS:
On October 23, 1990, the Regional Board of the National Capital Region issued Wage Order No. NCR-01-A,
amending Wage Order No. NCR-011, pursuant to RA 67272 or Wage Rationalization Act.
Wage Order No. NCR01-A, Section 1.
Upon the effectivity of this Wage Order, all workers and employees in the private sector in the National
Capital Region already receiving wages above the statutory minimum wage rates up to one hundred and
twenty- five pesos (P 125.00) per day shall also receive an increase of seventeen pesos (P17.00) per day.
[A.K.A Across-the-board hike]

1
On Oct. 15, 1990, Regional Board of the NCR issued Wage Order No. NCR-01, increasing the minimum wage by P17.00 daily in
NCR.
2
RA 6727 or “Wage Rationalization Act”, aside from providing new wage rates, provides for various Regional Tripartite Wages
and Productivity Boards in charge of prescribing minimum wage rates for all workers in the various regions, and for a National
Wages and Productivity Commission to review, among other functions, wage levels determined by the boards.
ECOP appealed to the National Wages‘ and Productivity Commission. However, the Commission promulgated an
Order, dismissing the appeal for lack of merit.
Hence, in this petition, ECOP is questioning the validity of Wage Order No. NCR-01-A of the Regional Tripartite
Wages and Productivity Board – NCR.
a. According to ECOP, the board’s grant of an “across-the- board” wage increase to workers already being
paid more than existing minimum wage rates (up to P125.00 a day) is an alleged excess of authority,
b. ECOP also alleges that under the Republic Act No. 6727, the boards may only prescribe “minimum
wages,” not determine “salary ceilings”.
c. ECOP likewise claims that RA 6727 is meant to promote collective bargaining as the primary mode of
settling wages, and the boards cannot preempt collective bargaining agreements by establishing ceilings.
ECOP prays for the nullification of Wage Order No. NCR01-A and for the “reinstatement” of Wage Order
No. NCR-01.
On the other hand, the Solicitor General argues that the Board, in prescribing an across-the-board hike, did not, in
reality, “grant additional or other benefits to workers and employees, such as the extension of wage increases to
employees and workers already receiving more than minimum wages . . ."but rather, fixed minimum wages
according to the “salary-ceiling method3”. It also argued that Republic Act No. 6727 is intended to correct “wage
distortions” and the salary-ceiling method (of determining wages) is meant, precisely, to rectify wage distortions.

ISSUE/S:
1. WON the Regional Board of the NCR performed an unlawful act of legislation in decreeing an across-the-
board hike. (NO)
HOLDING/RATIO:
1. No, The Regional Board of the National Capital Region, in decreeing an across-the-board hike, did not perform
an unlawful act of legislation.

 The determination of wages has generally involved two methods, the “floor-wage” method and the
“salary-ceiling” method.
Floor-wage method: involves the fixing of determinate amount that would be added to the prevailing
statutory minimum wage.
The salary-ceiling method whereby the wage adjustment is applied to employees receiving a certain
denominated salary ceiling.
The increasing trend is toward the second mode, the salary-cap method, which has reduced disputes
arising from wage distortions (brought about, apparently, by the floor-wage method). It was also noted
that collective bargaining has helped very little in correcting wage distortions.
o RA 6727 was intended to rationalize wages, first, by providing for full-time boards to police
wages round-the-clock, and second, by giving the boards enough powers to achieve this
objective.

 It is true that wage-fixing, like rate- fixing, constitutes an act Congress. It is also true, however, that
Congress may delegate the power to fix rates provided that, as in all delegations cases, Congress leaves
sufficient standards.

3
Determination of wages has generally involved two methods, the “floor-wage” method and the “salary-ceiling”
method. The first method involves the fixing of determinate amount that would be added to the prevailing
statutory minimum wage. The other involves “the salary-ceiling method” whereby the wage adjustment is applied
to employees receiving a certain denominated salary ceiling.
 o The SC found that the standards provided in RA 6727 Art. 124 4 are sufficient, and in the light of
the floor- wage method’s failure, the Court believes that the Commission correctly upheld the
Regional Board of the National Capital Region.

o The Court found ECOP to be of the mistaken impression that Republic Act No. 6727 is meant to
“get the Government out of the industry” and leave labor and management alone in deciding
wages.
o The Court does not think that the law intended to deregulate the relation between labor and
capital for several reasons:
(1) The Constitution calls upon the State to protect the rights of workers and promote
their welfare; (2) the Constitution also makes it a duty of the State “to intervene when
the common goal so demands” in regulating property and property relations;
(3) the Charter urges Congress to give priority to the enactment of measures, among
other things, to diffuse the wealth of the nation and to regulate the use of property;
(4) the Charter recognizes the “just share of labor in the fruits of production;"
(5) under the Labor Code, the State shall regulate the relations between labor and
management;
(6) under Republic Act No. 6727 itself, the State is interested in seeing that workers
receive fair and equitable wages; and
(7) the Constitution is primarily a document of social justice, and although it has
recognized the importance of the private sector, it has not embraced fully the concept
of laissez faire or otherwise, relied on pure market forces to govern the economy;
 The Act cannot be given a meaning or intent that will conflict with these basic principles. The Court
believe that the Act is meant to rationalize wages; that is, by having permanent boards to decide wages
rather than leaving wage determination to Congress year after year and law after law.

 Also, the concept of “minimum wage” is more than setting a floor wage to upgrade existing wages, as
ECOP takes it to mean. “Minimum wages” underlies the effort of the State “to promote productivity-
improvement and gain-sharing measures to ensure a decent standard of living for the workers and their
families; to guarantee the rights of labor to its just share in the fruits of production; to enhance
employment generation in the countryside through industry dispersal; and to allow business and
industry reasonable returns on investment, expansion and growth," and as the Constitution expresses it,
to affirm “labor as a primary social economic force."

4
ART. 124. Standards/Criteria for Minimum Wage Fixing.—The regional minimum wages to be established by the
Regional Board shall be as nearly adequate as is economically feasible to maintain the minimum standards of living
necessary for the health, efficiency and general well-being of the employees within the framework of the national
economic and social development program. In the determination of such regional minimum wages, the Regional
Board shall, among other relevant factors, consider the following:
1. "(a)  The demand for living wages;
2. "(b)  Wage adjustment vis-a-vis the consumer price index;
3. "(c)  The cost of living and changes or increases therein;
4. "(d)  The needs of workers and their families;
5. "(e)  The need to induce industries to invest in the countryside;
6. "(f)  Improvements in standards of living;
7. "(g)  The prevailing wage levels;
8. "(h)  Fair return of the capital invested and capacity to pay of employers;
9. "(i)  Effects of employment generation and family income; and
10. "(j)  The equitable12 distribution of income and wealth along the imperatives of economic and social
development."
 o As the Court indicated, the statute would have no need for a board if the question were simply
“how much”. The State is concerned, in addition, that wages are not distributed unevenly, and
more important, that social justice is subserved.

WHEREFORE, premises considered, the petition is DENIED. No pronouncement as to costs. IT IS SO ORDERED.

 3. DIGEST: COLGATE PALMOLIVE PHILIPPINES,
INC. VS. OPLE. G.R. NO. 73681. JUNE 30, 1988
FACTS:
The respondent Union filed a Notice of Strike with the Bureau of Labor
Relations against petitioner for unfair labor practice consisting of alleged
refusal to bargain, dismissal of union officers, members, and coercing
employees to retract their membership with the union and retraining non-
union members from joining the union. Failure to amicably settle the dispute,
the Ministry of Labor and Employment (MOLE) assumed the jurisdiction over
the dispute.

In its position paper to MOLE, Petitioner denied accusations and contended

that the union is not the certified agent of the company salesman; that its
legitimate status is in question and that the dismissal of three salesmen is with
just cause.

ISSUE:
Whether the MOLE committed error in reinstating the three salesmen despite
its own finding that there is indeed a just cause in dismissing them.

RULING:
Yes, the order of the respondent Minister to reinstate the employees despite a
clear finding of guilt on their part is not in conformity with law. Reinstatement
is simply incompatible with a finding of guilt. Where the totality of the
evidence was sufficient to warrant the dismissal of the employees, the law
warrants their dismissal without making any distinction between a first
offender and a habitual delinquent. Under the law, respondent Minister is
duly mandated to equally protect and respect not only the labor or worker's
side but also the management and/or employer's side. The law, in protecting
the rights of the laborer, authorizes neither oppression nor self-destruction of
the employer. To order the reinstatement of the erring employees would in
effect encourage unequal protection of the laws.
4 China Banking Corporation v Borromeo
G.R. No. 156515

Facts:

Respondent Mariano Borromeo was Assistant Vice-President of the Branch Banking Group of
China Banking Corporation for the Mindanao Area.

Without authority from the Executive Committee or Board of Directors of the bank, he approved
several DAUD/BP (Drawn Against Uncollected Deposits/Bills Purhcased) accommodations
amounting to P2,441,375 in favour of Joel Maniwan. Such checks, which are not sufficiently
funded by cash, are generally not honoured by banks. This came to the knowledge of the bank
authorities. A memorandum was issued to the Mariano seeking clarification relative to the
matter. The respondent accepted full responsibility for committing an error in judgment and
abuse of discretion.

Mariano resigned from the Bank and apologized “for all the trouble I have caused because of
the Maniwan case.” The respondent, however, vehemently denied benefitting therefrom.

His acts having constituted violation of the Bank’s Code of Ethics, the respondent was directed
to restitute the amount of P1,507,736.79 representing 90% of the total loss of P1,675,263.10
incurred by the Bank. However, in view of his resignation and considering the years of service in
the Bank, the management earmarked only P836,637.08 from the respondent’s total separation
benefits or pay. The said amount would be released upon recovery of the sums demanded from
Maniwan in a civil case filed against him by the bank with the RTC in Cagayan de Oro City.

The respondent made a demand on the bank for the payment of his separation pay and other
benefits, but the bank maintained its position to withhold the sum of P836,637.08. Thus,
Mariano filed with the NLRC a complaint for payment of separation pay, mid-year bonus, profit
share and damages against the bank.

The Labor Arbiter ruled in favour of the bank. Respondent appealed to the NLRC but it affirmed
in toto the findings of the Labor Arbiter. The CA, however, alleging that respondent was denied
his right to due process, set aside the NLRC decision and ordered that the records of the case be
remanded to the Labor Arbiter for further hearings on the factual issues involved.

The bank filed a motion for reconsidered but denied the same. Hence, this petition.

Issue:

Whether or not the bank has the prerogative/right to impose on the respondent what it
considered the appropriate penalty under the circumstances pursuant to its company rules and
regulations.

Held:

The petition is meritorious.

The bank was left with no other course but to impose the ancillary penalty of restitution. It was
certainly within the bank’s prerogative to impose on the respondent what it considered the
appropriate penalty under the circumstances pursuant to its company rules and regulations.

The petitioner’s bank business is essentially imbued with public interest and owes great fidelity
to the public it deals with. It is expected to exercise the highest degree of diligence in the
selection and supervision of their employees. As a corollary, and like all other business
enterprises, its prerogative to discipline its employees and to impose appropriate penalties on
erring workers pursuant to company rules and regulations must be respected. The law, in
protecting the rights of labor, authorized neither oppression nor self-destruction of an employer
company which itself is possessed of rights that must be entitled to recognition and respect.

Significantly, the respondent is not wholly deprived of his separation benefits. As the Labor
Arbiter stressed in his decision, “the separation benefits due the complainant were merely
withheld. Even the petitioner bank itself gives “the assurance that as soon as the bank has
satisfied a judgment in the civil case, the earmarked portion of his benefits will be released
without delay.

WHEREFORE, the petition is granted. The decision of the CA is reversed and set aside. The
Resolution of the NLRC is reinstated.
 5. G.R. No. L-79436-50 – 181 SCRA 110 (260 Phil. 115) – Labor Law – Pre-
Employment – Liability of Sureties – POEA Rules – Overseas Employment

J & B Manpower Specialist, Inc. is an overseas employment agency

registered with the Philippine Overseas Employment Administration and
Eastern Assurance & Surety Corporation was its surety beginning January
1985. From 1983 to December 1985, J & B recruited 33 persons but none
of them were ever deployed. These 33 persons sued J & B. The POEA as
well as the Secretary of Labor ruled in favor of the 33 workers and
ordered J & B to refund them (with Eastern Assurance being solidarily
liable). Eastern Assurance assailed the ruling claiming that POEA and the
Secretary of Labor have no jurisdiction over non-employees (since the 33
were never employed, in short, no employer-employee relations).

ISSUE: Whether or not Eastern Assurance can be held liable in the case at

bar.

HELD: Yes. But only for the period covering from January 1985 when the
surety took effect (as already held by the Labor Secretary). The Secretary
of Labor was given power by Article 34 (Labor Code) and Section 35 and
36 of EO 797 (POEA Rules) to “restrict and regulate the recruitment and
placement activities of all agencies,” but also to “promulgate rules and
regulations to carry out the objectives and implement the provisions”
governing said activities.

Implicit in these powers is the award of appropriate relief to the victims of

the offenses committed by the respondent agency or contractor, specially
the refund or reimbursement of such fees as may have been fraudulently
or otherwise illegally collected, or such money, goods or services imposed
and accepted in excess of what is licitly prescribed. It would be illogical
and absurd to limit the sanction on an offending recruitment agency or
contractor to suspension or cancellation of its license, without the
concomitant obligation to repair the injury caused to its victims.
Though some of the cases were filed after the expiration of the surety
bond agreement between J & B and Eastern Assurance, notice was given
to J & B of such anomalies even before said expiration. In this connection,
it may be stressed that the surety bond provides that notice to the
principal is notice to the surety. Besides, it has been held that the contract
of a compensated surety like respondent Eastern Assurance is to be
interpreted liberally in the interest of the promises and beneficiaries
rather than strictly in favor of the surety.
6. Eastern Mediterranean Maritime Ltd. and Agemar Manning Agency, Inc. vs Estanislao Surio, et
al
GR No. 154213

Facts:

MT Seadance is a vessel owned by Eastern Mediterranean Maritime Ltd and manned and
operated by Agemar Manning Agency. The same was not in a good working condition and the
payment of wages, remittance of allotments, as well as the payment for extra work and extra
overtime work were delayed. As MT Seadance docked at a port in Sweden, representatives of
International Transport Federation boarded the same. They have found out that wages of its
crew members were below the prevailing rates. As a result, they have moved to increase the
wages of the said crewmembers. On Dec 23, 1993, the petitioners filed a complaint against the
crew members and claimed reimbursement for the increase of wages received.

Issue:

Whether or not it is under the jurisdiction of NLRC to review cases on appeal decided by POEA.

Held:

No, the NLRC has no jurisdiction to review an appeal case decided by POEA. According to Section
28 (b) of the Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas
Filipinos Act of 1995, the POEA shall exercise original and exclusive jurisdiction to hear and
decide disciplinary action cases and other special cases, which are administrative in character,
involving employers, principals, contracting partners and Filipino migrant workers. Since RA No
8042 has been passed into a law after the filing of charges by the petitioner to the respondents,
the rule on retroactivity of the laws shall be observed.

As a rule, all laws are prospective in application unless the contrary is expressly provided, or
unless the law is procedural or curative in nature. Thus, such law stating that the POEA has the
jurisdiction to decide on disciplinary cases shall be observed in the case at bar.
7. Calalang vs. Williams G.R. No. 47800 December 2, 1940
Doctrine: Social Justice                   
LAUREL, J.:

Facts:
 
The National Traffic Commission, in its resolution of July 17, 1940, resolved to recommend to
the Director of the Public Works and to the Secretary of Public Works and Communications
that animal-drawn vehicles be prohibited from passing along the following for a period of one
year from the date of the opening of the Colgante Bridge to traffic:

1) Rosario Street extending from Plaza Calderon de la Barca to Dasmariñas

Street from 7:30Am to 12:30 pm and from 1:30 pm to 530 pm; and

2)  along Rizal Avenue extending from the railroad crossing at Antipolo Street to

Echague Street from 7 am to 11pm

The Chairman of the National Traffic Commission on July 18, 1940 recommended to the
Director of Public Works with the approval of the Secretary of Public Works the adoption of
thethemeasure proposed in the resolution aforementioned in pursuance of the provisions of theCo
mmonwealth Act No. 548 which authorizes said Director with the approval from the
Secretary of the Public Works and Communication to promulgate rules and regulations to
regulate and control the use of and traffic on national roads.

On August 2, 1940, the Director recommended to the Secretary the approval of the
recommendations made by the Chairman of the National Traffic Commission with
modifications. The Secretary of Public Works approved the recommendations on August
10,1940. The Mayor of Manila and the Acting Chief of Police of Manila have enforced and
caused to be enforced the rules and regulation. As a consequence, all animal-drawn vehicles are
not allowed to pass and pick up passengers in the places above mentioned to the detriment not
only of their owners but of the riding public as well.

Issues:
1) Whether the rules and regulations promulgated by the respondents pursuant to the provisions
of Commonwealth Act NO. 548 constitute an unlawful inference with legitimate business or
trade and abridged the right to personal liberty and freedom of locomotion?

2) Whether the rules and regulations complained of infringe upon the constitutional
precept regarding the promotion of social justice to insure the well-being and economic security
of all the people?
Held:
1) No. The promulgation of the Act aims to promote safe transit upon and avoid obstructions on
national roads in the interest and convenience of the public. In enacting said law, the National
Assembly was prompted by considerations of public convenience and welfare. It was inspired by
the desire to relieve congestion of traffic, which is a menace to the public safety. Public welfare
lies at the bottom of the promulgation of the said law and the state in order to promote the
general welfare may interfere with personal liberty, with property, and with business and
occupations. Persons and property may be subject to all kinds of restraints and burdens in order
to secure the general comfort, health, and prosperity of the State. To this fundamental aims of the
government, the rights of the individual are subordinated. Liberty is a blessing which should not
be made to prevail over authority because society will fall into anarchy. Neither should authority
be made to prevail over liberty because then the individual will fall into slavery. The paradox lies
in the fact that the apparent curtailment of liberty is precisely the very means of insuring its
preserving.

2) No. Social justice is “neither communism, nor despotism, nor atomism, nor anarchy,” but the
humanization of laws and the equalization of social and economic forces by the State so that
justice in its rational and objectively secular conception may  at least be approximated. Social
justice means the promotion of the welfare of all the people, the adoption by the Government of
measures calculated to insure economic stability of all the competent elements of society,
through the maintenance of a proper economic and social equilibrium in the interrelations of the
members of the community, constitutionally, through the adoption of measures legally
justifiable, or extra-constitutionally, through the exercise of powers underlying the existence of
all governments on the time-honored principles of salus populi estsuprema lex.

Social justice must be founded on the recognition of the necessity of interdependence among
divers and diverse units of a society and of the protection that should be equally and evenly
extended to all groups as a combined force in our social and economic life, consistent with the
fundamental and paramount objective of the state of promoting health, comfort and quiet of all
persons, and of bringing about “the greatest good to the greatest number.
8. PLDT vs. NLRC

G.R. No. 80609 August 23, 1988

Facts:

Abucay, a traffic operator of the PLDT, was accused by two complainants of having demanded
and received from them the total amount of P3,800.00 in consideration of her promise to
facilitate approval of their applications for telephone installation. Investigated and heard, she
was found guilty as charged and accordingly separated from the service. She went to the
Ministry of Labor and Employment claiming she had been illegally removed. After consideration
of the evidence and arguments of the parties, the company was sustained and the complaint
was dismissed for lack of merit. Nevertheless, the dispositive portion of labor arbiter’s decision
declared:

WHEREFORE, the instant complaint is dismissed for lack of merit.

Considering that Dr. Bangayan and Mrs. Martinez are not totally blameless in the light of the fact
that the deal happened outhide the premises of respondent company and that their act of
giving P3,800.00 without any receipt is tantamount to corruption of public officers, complainant
must be given one month pay for every year of service as financial assistance.

Both the petitioner and the private respondent appealed to the National Labor Relations Board,
which upheld the said decision in toto and dismissed the appeals. The private respondent took
no further action, thereby impliedly accepting the validity of her dismissal. The petitioner,
however, is now before us to question the affirmance of the above- quoted award as having
been made with grave abuse of discretion.

The position of the petitioner is simply stated: It is conceded that an employee illegally
dismissed is entitled to reinstatement and backwages as required by the labor laws. However,
an employee dismissed for cause is entitled to neither reinstatement nor backwages and is not
allowed any relief at all because his dismissal is in accordance with law. In the case of the private
respondent, she has been awarded financial assistance equivalent to ten months pay
corresponding to her 10 year service in the company despite her removal for cause. She is,
therefore, in effect rewarded rather than punished for her dishonesty, and without any legal
authorization or justification. The award is made on the ground of equity and compassion, which
cannot be a substitute for law. Moreover, such award puts a premium on dishonesty and
encourages instead of deterring corruption.

For its part, the public respondent claims that the employee is sufficiently punished with her
dismissal. The grant of financial assistance is not intended as a reward for her offense but
merely to help her for the loss of her employment after working faithfully with the company for
ten years. In support of this position, the Solicitor General cites the cases of Firestone Tire and
Rubber Company of the Philippines v. Lariosa and Soco v. Mercantile Corporation of Davao,
where the employees were dismissed for cause but were nevertheless allowed separation pay
on grounds of social and compassionate justice.

Issue: WON Separation pay is proper.

Held:

We hold that henceforth separation pay shall be allowed as a measure of social justice only in
those instances where the employee is validly dismissed for causes other than serious
misconduct or those reflecting on his moral character. Where the reason for the valid dismissal
is, for example, habitual intoxication or an offense involving moral turpitude, like theft or illicit
sexual relations with a fellow worker, the employer may not be required to give the dismissed
employee separation pay, or financial assistance, or whatever other name it is called, on the
ground of social justice.

A contrary rule would, as the petitioner correctly argues, have the effect, of rewarding rather
than punishing the erring employee for his offense. And we do not agree that the punishment is
his dismissal only and that the separation pay has nothing to do with the wrong he has
committed. Of course it has. Indeed, if the employee who steals from the company is granted
separation pay even as he is validly dismissed, it is not unlikely that he will commit a similar
offense in his next employment because he thinks he can expect a like leniency if he is again
found out. This kind of misplaced compassion is not going to do labor in general any good as it
will encourage the infiltration of its ranks by those who do not deserve the protection and
concern of the Constitution.

The policy of social justice is not intended to countenance wrongdoing simply because it is
committed by the underprivileged. At best it may mitigate the penalty but it certainly will not
condone the offense. Compassion for the poor is an imperative of every humane society but
only when the recipient is not a rascal claiming an undeserved privilege. Social justice cannot be
permitted to be refuge of scoundrels any more than can equity be an impediment to the
punishment of the guilty. Those who invoke social justice may do so only if their hands are clean
and their motives blameless and not simply because they happen to be poor. This great policy of
our Constitution is not meant for the protection of those who have proved they are not worthy
of it, like the workers who have tainted the cause of labor with the blemishes of their own
character.

Applying the above considerations, we hold that the grant of separation pay in the case at bar is
unjustified. The private respondent has been dismissed for dishonesty, as found by the labor
arbiter and affirmed by the NLRC and as she herself has impliedly admitted. The fact that she has
worked with the PLDT for more than a decade, if it is to be considered at all, should be taken
against her as it reflects a regrettable lack of loyalty that she should have strengthened instead
of betraying during all of her 10 years of service with the company. If regarded as a justification
for moderating the penalty of dismissal, it will actually become a prize for disloyalty, perverting
the meaning of social justice and undermining the efforts of labor to cleanse its ranks of all
undesirables.

Petition granted.
9. SOCIAL SECURITY SYSTEM EMPLOYEES ASSOCIATION (SSSEA), DIONISION T. BAYLON,
RAMON MODESTO, JUANITO MADURA, REUBEN ZAMORA, VIRGILIO DE ALDAY, SERGIO
ARANETA, PLACIDO AGUSTIN, VIRGILIO MAGPAYO, petitioner,
vs.
THE COURT OF APPEALS, SOCIAL SECURITY SYSTEM (SSS), HON. CEZAR C. PERALEJO, RTC,
BRANCH 98, QUEZON CITY, respondents.

G.R. No. 85279

July 28, 1989

Facts:

On June 11, 1987, the SSS filed with the Regional Trial Court of Quezon City a complaint for
damages with a prayer for a writ of preliminary injunction against petitioners, alleging that on
June 9, 1987, the officers and members of SSSEA staged an illegal strike and baricaded the
entrances to the SSS Building, preventing non-striking employees from reporting for work and
SSS members from transacting business with the SSS; that the strike was reported to the Public
Sector Labor - Management Council, which ordered the strikers to return to work; that the
strikers refused to return to work; and that the SSS suffered damages as a result of the strike.
The complaint prayed that a writ of preliminary injunction be issued to enjoin the strike and that
the strikers be ordered to return to work; that the defendants (petitioners herein) be ordered to
pay damages; and that the strike be declared illegal.

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

Issue:

Whether or not employees of the Social Security System (SSS) have the right to strike.

Held:

The 1987 Constitution, in the Article on Social Justice and Human Rights, provides that the State
"shall guarantee the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in accordance with
law" [Art. XIII, Sec. 31].
Resort to the intent of the framers of the organic law becomes helpful in understanding the
meaning of these provisions. A reading of the proceedings of the Constitutional Commission
that drafted the 1987 Constitution would show that in recognizing the right of government
employees to organize, the commissioners intended to limit the right to the formation of unions
or associations only, without including the right to strike.

Considering that under the 1987 Constitution "the civil service embraces all branches,
subdivisions, instrumentalities, and agencies of the Government, including government-owned
or controlled corporations with original charters" [Art. IX(B), Sec. .2(l) see also Sec. 1 of E.O. No.
180 where the employees in the civil service are denominated as "government employees"] and
that the SSS is one such government-controlled corporation with an original charter, having
been created under R.A. No. 1161, its employees are part of the civil service [NASECO v. NLRC,
G.R. Nos. 69870 & 70295, November 24,1988] and are covered by the Civil Service Commission's
memorandum prohibiting strikes. This being the case, the strike staged by the employees of the
SSS was illegal.
10. People v Goce

RECRUITMENT AND PLACEMENT 

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. LOMA GOCE y OLALIA, DAN GOCE and NELLY D.
AGUSTIN, accused, NELLY D. AGUSTIN, accused-appellant.

G.R. No. 113161

August 29, 1995

Facts:

On January 12, 1988, an information for illegal recruitment committed by a syndicate and in large scale,
punishable under Articles 38 and 39 of the Labor Code (Presidential Decree No. 442) as amended by
Section 1(b) of Presidential Decree No. 2018, was filed against spouses Dan and Loma Goce and herein
accused-appellant Nelly Agustin in the Regional Trial Court of Manila, Branch 5, alleging —

That in or about and during the period comprised between May 1986 and June 25, 1987, both dates
inclusive, in the City of Manila, Philippines, the said accused, conspiring and confederating together and
helping one another, representing themselves to have the capacity to contract, enlist and transport
Filipino workers for employment abroad, did then and there willfully and unlawfully, for a fee, recruit
and promise employment/job placement abroad, to (1) Rolando Dalida y Piernas, (2) Ernesto Alvarez y
Lubangco, (3) Rogelio Salado y Savillo, (4) Ramona Salado y Alvarez, (5) Dionisio Masaya y de Guzman,
(6) Dave Rivera y de Leon, (7) Lorenzo Alvarez y Velayo, and (8) Nelson Trinidad y Santos, without first
having secured the required license or authority from the Department of Labor. 

Four of the complainants testified for the prosecution. Rogelio Salado was the first to take the witness
stand and he declared that sometime in March or April, 1987 he was introduced by Lorenzo Alvarez, his
brother-in-law and a co-applicant, to Nelly Agustin in the latter's residence at Factor, Dongalo,
Parañaque, Metro Manila. Representing herself as the manager of the Clover Placement Agency, Agustin
showed him a job order as proof that he could readily be deployed for overseas employment. Salado
learned that he had to pay P5,000.00 as processing fee, which amount he gave sometime in April or May
of the same year. He was issued the corresponding receipt. 

Also in April or May, 1987, Salado, accompanied by five other applicants who were his relatives, went to
the office of the placement agency at Nakpil Street, Ermita, Manila where he saw Agustin and met the
spouses Dan and Loma Goce, owners of the agency. He submitted his bio-data and learned from Loma
Goce that he had to give P12,000.00, instead of the original amount of P5,000.00 for the placement fee.
Although surprised at the new and higher sum, they subsequently agreed as long as there was an
assurance that they could leave for abroad. 

Thereafter, a receipt was issued in the name of the Clover Placement Agency showing that Salado and
his aforesaid co-applicants each paid P2,000.00, instead of the P5,000.00 which each of them actually
paid. Several months passed but Salado failed to leave for the promised overseas employment. Hence,
in October, 1987, along with the other recruits, he decided to go to the Philippine Overseas Employment
Administration (POEA) to verify the real status of Clover Placement Agency. They discovered that said
agency was not duly licensed to recruit job applicants. Later, upon learning that Agustin had been
arrested, Salado decided to see her and to demand the return of the money he had paid, but Agustin
could only give him P500.00.

Ramona Salado, the wife of Rogelio Salado, came to know through her brother, Lorenzo Alvarez, about
Nelly Agustin. Accompanied by her husband, Rogelio, Ramona went to see Agustin at the latter's
residence. Agustin persuaded her to apply as a cutter/sewer in Oman so that she could join her
husband. Encouraged by Agustin's promise that she and her husband could live together while working
in Oman, she instructed her husband to give Agustin P2,000.00 for each of them as placement fee, or
the total sum of P4,000.00. 

Much later, the Salado couple received a telegram from the placement agency requiring them to report
to its office because the "NOC" (visa) had allegedly arrived. Again, around February, or March, 1987,
Rogelio gave P2,000.00 as payment for his and his wife's passports. Despite follow-up of their papers
twice a week from February to June, 1987, he and his wife failed to leave for abroad.

Complainant Dionisio Masaya, accompanied by his brother-in-law, Aquiles Ortega, applied for a job in
Oman with the Clover Placement Agency at Parañaque, the agency's former office address. There,
Masaya met Nelly Agustin, who introduced herself as the manager of the agency, and the Goce spouses,
Dan and Loma, as well as the latter's daughter. He submitted several pertinent documents, such as his
bio-data and school credentials. 

In May, 1986, Masaya gave Dan Goce P1,900.00 as an initial downpayment for the placement fee, and in
September of that same year, he gave an additional P10,000.00. He was issued receipts for said amounts
and was advised to go to the placement office once in a while to follow up his application, which he
faithfully did. Much to his dismay and chagrin, he failed to leave for abroad as promised. Accordingly, he
was forced to demand that his money be refunded but Loma Goce could give him back only P4,000.00 in
installments. 

As the prosecution's fourth and last witness, Ernesto Alvarez took the witness stand on June 7, 1993. He
testified that in February, 1987, he met appellant Agustin through his cousin, Larry Alvarez, at her
residence in Parañaque. She informed him that "madalas siyang nagpapalakad sa Oman" and offered
him a job as an ambulance driver at the Royal Hospital in Oman with a monthly salary of about $600.00
to $700.00.

On March 10, 1987, Alvarez gave an initial amount of P3,000.00 as processing fee to Agustin at the
latter's residence. In the same month, he gave another P3,000.00, this time in the office of the
placement agency. Agustin assured him that he could leave for abroad before the end of 1987. He
returned several times to the placement agency's office to follow up his application but to no avail.
Frustrated, he demanded the return of the money he had paid, but Agustin could only give back
P500.00. Thereafter, he looked for Agustin about eight times, but he could no longer find her. 

Only herein appellant Agustin testified for the defense. She asserted that Dan and Loma Goce were her
neighbors at Tambo, Parañaque and that they were licensed recruiters and owners of the Clover
Placement Agency. Previously, the Goce couple was able to send her son, Reynaldo Agustin, to Saudi
Arabia. Agustin met the aforementioned complainants through Lorenzo Alvarez who requested her to
introduce them to the Goce couple, to which request she acceded. 

Denying any participation in the illegal recruitment and maintaining that the recruitment was
perpetrated only by the Goce couple, Agustin denied any knowledge of the receipts presented by the
prosecution. She insisted that the complainants included her in the complaint thinking that this would
compel her to reveal the whereabouts of the Goce spouses.

On November 19, 1993, the trial court rendered judgment finding herein appellant guilty as a principal
in the crime of illegal recruitment. 

Issue:

Whether or not Agustin’s act of introducing couple Goce falls within the meaning of illegal recruitment
and placement under Art 13(b) in relation to Art 34 of the Labor Code. 

Held:

The testimonial evidence hereon show that she indeed further committed acts constitutive of illegal
recruitment.

All four prosecution witnesses testified that it was Agustin whom they initially approached regarding
their plans of working overseas. It was from her that they learned about the fees they had to pay, as
well as the papers that they had to submit. It was after they had talked to her that they met the accused
spouses who owned the placement agency.

As correctly held by the trial court, being an employee of the Goces, it was therefore logical for
appellant to introduce the applicants to said spouses, they being the owners of the agency. As such,
appellant was actually making referrals to the agency of which she was a part. She was therefore
engaging in recruitment activity. 

There is illegal recruitment when one gives the impression of having the ability to send a worker abroad.
It is undisputed that appellant gave complainants the distinct impression that she had the power or
ability to send people abroad for work such that the latter were convinced to give her the money she
demanded in order to be so employed. 
WHEREFORE, the appealed judgment of the court a quo is hereby AFFIRMED in toto, with costs against
accused-appellant Nelly D. Agustin.
SO ORDERED.
 11.
12.

13. PEOPLE OF THE PHILIPPINES v. HON. SIMEON FERRER et.al

48 SCRA 382| December 27, 1972

Castro, J.

Doctrine: A person convicted for illegal recruitment under the Labor Code can be
convicted for violation of the Revised Penal Code provisions on estafa provided the
elements of the crime are present.

FACTS
A criminal complaint for violation of section 4 of the Anti-Subversion Act was filed
against respondent Feliciano Co. It is alleged in the information that the accused was an
instructor in the training school of recruits and was an officer and/or ranking leader of the
Communist Party of the Philippines, an illegal organization aimed to overthrow the Government
of the Philippines. On the same manner, an information for the violation of the same law was
also filed against respondents Tayag and 5 others which alleged that the respondents were
members of Kabataang Makabayan which is a subversive organization and, on several occasions,
conducted meetings and seminars wherein they delivered speeches instigating and inciting
people to overthrow the government.
In response, both Co and Tayag moved to quash, arguing that the Anti-Subversion Act is
a bill of attainder. Thereinafter, the trial court rendered its assailed decision which declared the
statute void on the ground that it is a bill of attainder and it is vague and overboard.

ISSUES AND HOLDING

1. W/N the Anti-Subversion Act is a bill of attainder?

A bill of attainder is defined as a legislative act which inflicts punishment without
trial, effectively substituting the judicial determination of guilt. The constitutional ban
against the same serves to implement the principle of separation of powers 5 confining
legislatures to rule-making and thereby forestalling legislative usurpation of the judicial
function. In the case at bar, the trial court held that the Anti-Subversion Act was in fact, a
bill of attainder because it treats the Communist Party of the Philippines as a continuing
danger to the freedom and security of our country which tantamount to a declaration of
guilt of the CCP without any forms or safeguards of a judicial trial. The trial court also
faults the same law for automatically punishing members of the organization without
regard as to whether they are a voluntary member or not.
However, a careful perusal of the actual operation of the Act will show that
nowhere in the law that it specified the Communist Party or members thereof for the
purpose of punishment. It merely declared the party as an organized conspiracy for the
overthrow of the government. It is undeniably applicable to any organization with the
purpose of overthrowing the government, its focus is not on individuals but on the
 punishable conduct. Moreover, the fact that the government still charges an accused
before the Court for the violation of the said law supports the fact that it is not a bill of
attainder. The government still needs to establish the guilt of the accused before the
Court.

WHEREFORE, the judgment appealed from finding accused-appellant Tan Tiong Meng alias
"Tommy Tan" guilty of illegal recruitment in large scale and six (6) counts of estafa, is hereby
AFFIRMED. Costs against accused-appellant.
 14.
15.

16. People vs Hernandez

Facts:
THE CHARGE: syndicated and large scale illegal recruitment
In April 1993, eight (8) informations for syndicated and large scale illegal recruitment and eight (8) informations for estafa
were filed against accused-appellants, spouses Karl and Yolanda Reichl, together with Francisco Hernandez. Only the Reichl
spouses were tried and convicted by the trial court as Francisco Hernandez remained at large.

Private Respondents’ claims were based on the following:

1. Francisco Hernandez, Karl Reichl and Yolanda Gutierrez Reichl in their personal capacities were neither licensed nor
authorized by the POEA to recruit workers for overseas employment
2. documents signed by the Reichl spouses where they admitted that they promised to secure Austrian tourist visas for
private complainants and that they would return all the expenses incurred by them if they are not able to leave;
3. The Reichls promised to take care of all the papers and to secure a job (domestic helper) for each of them abroad if
they can pay of P150,000.00 for the processing of her papers and travel documents.
4. Each of the PR gave money in various installment plans but the departure was again and again rescheduledon
multiple dates and still did not push through.
5. They (Reichls) gave various excuses for their failure to depart, until finally the Reichls told the applicants that Karl
Reichl had so many business transactions in the Philippines that they would not be able to send them abroad and that
they would refund their payment instead. The Reichls vowed to return the payment if they fail on their promise.

All the private respondents (Narcisa Hernandez ,Melanie Bautista, Estela Manalo, Edwin Coleng, Anicel Umahon, Analiza Perez
and Maricel Matira, Charito Balmes) related similar situations premised under the same facts.

Karl Reichl denied any knowledge about Francisco Hernandez's recruitment activities. He further denied that he promised
private complainants that he would give them overseas employment. As regards the document where Mr. Reichl undertook to
pay P1,388,924.00 to private complainants, he claimed that he signed said document under duress. Francisco Hernandez
allegedly told him that private complainants would harm him and his family if he refused to sign it. He signed the document as
he felt he had no other option. Yolanda Gutierrez de Reichl corroborated the testimony of her husband and denied the charges
against her.

RTC rendered a decision convicting accused-appellants of one (1) count of illegal recruitment in large scale and six (6) counts of
estafa. (Please take note: NOT GUILTY of the crime of syndicated and large-scale illegal recruitment as charged in the above-
mentioned Criminal Cases Nos. 6435, 6437 and 6529; one count of illegal recruitment lang!)

ISSUE: WON the trial court erred in convicting accused-appellants of illegal recruitment in large scale by cummulating the
individual informations filed by private complainants?

RULING:
NO.
We note that each information was filed by only one complainant. We agree with accused-appellants that they could not be
convicted for illegal recruitment committed in large scale based on several informations filed by only one complainant.

When the Labor Code speaks of illegal recruitment committed against three (3) or more persons individually or as a group, it
must be understood as referring to the number of complainants in each case who are complainants therein, otherwise,
prosecutions for single crimes of illegal recruitment can be cummulated to make out a case of large scale illegal recruitment. In
other words, a conviction for large scale illegal recruitment must be based on a finding in each case of illegal recruitment of
three or more persons whether individually or as a group.

REMEMBER: CHARGE INCLUDES ILLEGAL RECRUITMENT by SYNDICATE

This, however, does not serve to lower the penalty imposed upon accused-appellants. The charge was not only for illegal
recruitment committed in large scale but also for illegal recruitment committed by a syndicate.
Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons
conspiring and/or confederating with one another in carrying out any unlawful or illegal transaction, enterprise or
scheme defined under the first paragraph of Article 38 of the Labor Code.
 It has been shown that Karl Reichl, Yolanda Reichl and Francisco Hernandez conspired with each other in convincing
private complainants to apply for an overseas job and giving them the guaranty that they would be hired as domestic
helpers in Italy although they were not licensed to do so.

Thus, we hold that accused-appellants should be held liable for illegal recruitment committed by a syndicate which is
also punishable by life imprisonment and a fine of one hundred thousand pesos (P100,000.00) under Article 39 of
the Labor Code.

ADDED DISCUSSION: WHAT IS ILLEGAL RECRUITMENT?

Article 38 of the Labor Code defines illegal recruitment as "any recruitment activities, including the prohibited practices enumerated under
Article 34 of (the Labor Code), to be undertaken by non-licensees or non-holders of authority."

The term "recruitment and placement" refers to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers,
including referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not, provided that any
person or entity which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed engaged in
recruitment and placement.

HIGHER PENALTY BECAUSE ECONOMIC SABOTAGE

The law imposes a higher penalty when the illegal recruitment is committed by a syndicate or in large scale as they are considered an offense
involving economic sabotage.

WHEN IS IT COMMITTED BY A SYNDICATE?

Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring and/or confederating
with one another in carrying out any unlawful or illegal transaction, enterprise or scheme.
WHEN IS IT COMMITTED IN LARGE SCALE?
It is deemed committed in large scale if committed against three (3) or more persons individually or as a group.[24]

In the case at bar, the prosecution was able to prove beyond reasonable doubt that accused-appellants engaged in activities that fall within the
definition of recruitment and placement under the Labor Code. The evidence on record shows that they promised overseas employment to
private complainants and required them to prepare the necessary documents and to pay the placement fee, although they did not have any
license to do so. There is illegal recruitment when one who does not possess the necessary authority or license gives the impression of having
the ability to send a worker abroad.
17.
18.
19. Songco, et al. vs. National Labor Relations Commission
G.R. Nos. 50999-51000
(March 23, 1990)

FACTS:  Zuelig filed an application for clearance to terminate the services of Songco, and others,
on the ground of retrenchment due to financial losses.  During the hearing, the parties agreed
that the sole issue to be resolved was the basis of the separation pay due.  The salesmen
received monthly salaries of at least P400.00 and commission for every sale they made.

The Collective Bargaining Agreements between Zuelig and the union of which Songco, et al.
were members contained the following provision:  "Any employee who is separated from
employment due to old age, sickness, death or permanent lay-off, not due to the fault of said
employee, shall receive from the company a retirement gratuity in an amount equivalent to one
(1) month's salary per year of service."

The Labor Arbiter ordered Zuelig to pay Songco et al., separation pay equivalent to their one
month salary (exclusive of commissions, allowances, etc.) for every year of service with the
company.

The National Labor Relations Commission sustained the Arbiter.

ISSUE:  Whether or not earned sales commissions and allowances should be included in the
monthly salary of Songco, et al. for the purpose of computing their separation pay.

RULING:

In the computation of backwages and separation pay, account must be taken not only of the
basic salary of the employee, but also of the transportation and emergency living allowances.

Even if the commissions were in the form of incentives or encouragement, so that the salesman
would be inspired to put a little more industry on jobs particularly assigned to them, still these
commissions are direct remunerations for services rendered which contributed to the increase
of income of the employee.  Commission is the recompense compensation or reward of an
agent, salesman, executor, trustee, receiver, factor, broker or bailee, when the same is
calculated as a percentage on the amount of his transactions or on the profit to the principal.
The nature of the work of a salesman and the reason for such type of remuneration for services
rendered demonstrate that commissions are part of Songco, et al's wage or salary.
The Court takes judicial notice of the fact that some salesmen do not receive any basic salary,
but depend on commissions and allowances or commissions alone, although an employer-
employee relationships exists.

If the opposite view is adopted, i.e., that commissions do not form part of the wage or salary,
then in effect, we will be saying that this kind of salesmen do not receive any salary and,
therefore, not entitled to separation pay in the event of discharge from employment.  This
narrow interpretation is not in accord with the liberal spirit of the labor laws, and considering
the purpose of separation pay which is, to alleviate the difficulties which confront a dismissed
employee thrown to the streets to face the harsh necessities of life.

In Soriano vs. NLRC (155 SCRA 124), we held that the commissions also claimed by the employee
(override commission plus net deposit incentive) are not properly includible in such base figure
since such commissions must be earned by actual market transactions attributable to the
petitioner [salesman].  Since the commissions in the present case were earned by actual
transactions attributable to Song, et al., these should be included in their separation pay.  In the
computation thereof, what should be taken into account is the average commission earned
during their last year of employment.
20. G.R. No. 76633 October 18, 1988
EASTERN SHIPPING LINES, INC., petitioner,
vs.
PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA), MINISTER OF LABOR AND
EMPLOYMENT, HEARING OFFICER ABDUL BASAR and KATHLEEN D. SACO, respondents.
FACTS:
A Chief Officer of a ship was killed in an accident in Japan. The widow filed a complaint for
charges against the Eastern Shipping Lines with POEA, based on a Memorandum Circular No. 2,
issued by the POEA which stipulated death benefits and burial for the family of overseas
workers. ESL questioned the validity of the memorandum circular as violative of the principle of
non-delegation of legislative power. It contends that no authority had been given the POEA to
promulgate the said regulation; and even with such authorization, the regulation represents an
exercise of legislative discretion which, under the principle, is not subject to delegation.
Nevertheless, POEA assumed jurisdiction and decided the case.
ISSUE:
Whether or not the Issuance of Memorandum Circular No. 2 is a violation of non-delegation of
powers.
HELD:
No. SC held that there was a valid delegation of powers.
The authority to issue the said regulation is clearly provided in Section 4(a) of Executive Order
No. 797. … “The governing Board of the Administration (POEA), as hereunder provided shall
promulgate the necessary rules and regulations to govern the exercise of the adjudicatory
functions of the Administration (POEA).”
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It is true that legislative discretion as to the substantive contents of the law cannot be
delegated. What can be delegated is the discretion to determine how the law may be enforced,
not what the law shall be. The ascertainment of the latter subject is a prerogative of the
legislature. This prerogative cannot be abdicated or surrendered by the legislature to the
delegate.
The reasons given above for the delegation of legislative powers in general are particularly
applicable to administrative bodies. With the proliferation of specialized activities and their
attendant peculiar problems, the national legislature has found it more and more necessary to
entrust to administrative agencies the authority to issue rules to carry out the general provisions
of the statute. This is called the “power of subordinate legislation.”
With this power, administrative bodies may implement the broad policies laid down in a statute
by “filling in’ the details which the Congress may not have the opportunity or competence to
provide. This is effected by their promulgation of what are known as supplementary regulations,
such as the implementing rules issued by the Department of Labor on the new Labor Code.
These regulations have the force and effect of law.
There are two accepted tests to determine whether or not there is a valid delegation of
legislative power:
1. Completeness test – the law must be complete in all its terms and conditions when it leaves
the legislature such that when it reaches the delegate the only thing he will have to do is
enforce it.
2. Sufficient standard test – there must be adequate guidelines or stations in the law to map out
the boundaries of the delegate’s authority and prevent the delegation from running riot.
Both tests are intended to prevent a total transference of legislative authority to the delegate,
who is not allowed to step into the shoes of the legislature and exercise a power essentially
legislative.
 21.

22. G.R. No. 172933             October 6, 2008

JESUS E. VERGARA, petitioner, vs. HAMMONIA MARITIME SERVICES, INC. and

ATLANTIC MARINE LTD., respondents.

BRION, J.:

FACTS:

Petitioner Jesus Vergara was hired by respondent Hammonia Maritime Services for its
foreign principal, respondent Atlantic Marine. He was hired for a contract of nine months and a
basic monthly salary of USD 642.00 as a pumpman. Vergara is a member of AMOSUP, a union
which has a CBA with Atlantic Marine, represented by Hammonia. While on work, he felt he
was losing his vision and according to the medical log in the vessel, it was glaucoma. Upon
landing on Texas, he consulted a physician who advised him to see an ophthalmologist upon his
return to the Philippines. He was sent home where the company-designated physician confirmed
the diagnosis of the Texas-based doctor. Upon undergoing two treatments, he was declared fit to
resume his seafaring duties.

Claiming he was still experiencing gradual visual loss, he sought the opinion of another
doctor not designated by his company, who pronounced that although he was fit to word, he is
suffering from a permanent partial disability (Grade X). Then, he claimed payment of disability
and sickness benefits pursuant to the POEA Standard Employment Contract and the existing
CBA in the company. Hammonia denied the claim, prompting Vergara to file a complaint before
the NLRC. The LA favored the petitioner Vergara but was reversed on appeal before the NLRC.
Vergara then filed a petition for certiorari under Rule 65 before the CA but was dismissed, even
on reconsideration. Hence, this petition.

ISSUE:

WON the claims of Vergara for sickness and disability benefits have merit.

RULING:

NO. Petition denied.

The seafarer, upon sign-off from his vessel, must report to the company-designated
physician within three (3) days from arrival for diagnosis and treatment. For the duration of the
treatment but in no case to exceed 120 days, the seaman is on temporary total disability as he is
totally unable to work. He receives his basic wage during this period until he is declared fit to
work or his temporary disability is acknowledged by the company to be permanent, either
partially or totally, as his condition is defined under the POEA Standard Employment Contract
and by applicable Philippine laws. If the 120 days initial period is exceeded and no such
declaration is made because the seafarer requires further medical attention, then the temporary
total disability period may be extended up to a maximum of 240 days, subject to the right of the
employer to declare within this period that a permanent partial or total disability already
exists. The seaman may of course also be declared fit to work at any time such declaration is
justified by his medical condition. 

Thus, upon petitioner's return to the country for medical treatment, both he and the respondent
company acted correctly in accordance with the terms of the POEA Standard Employment Contract and
the CBA; he reported to the company-designated doctor for treatment and the latter properly referred him
to an ophthalmologist at the Chinese General Hospital. No dispute existed on the medical treatment the
petitioner received, to the point that the petitioner executed a "certificate of fitness for work" based on the
assessment/certification by the company-designated physician.

Problems only arose when despite the certification, the petitioner sought second and third
opinions from his own doctors, one of whom opined that he could no longer resume work as a pumpman
while the other recognized a Grade X (20.15%) partial permanent disability. Based on these opinions, the
petitioner demanded that he be paid disability and sickness benefits; when the company refused, the
demand metamorphosed into an actual case before the NLRC Arbitration Branch.

As we outlined above, a temporary total disability only becomes permanent when so declared by
the company physician within the periods he is allowed to do so, or upon the expiration of the maximum
240-day medical treatment period without a declaration of either fitness to work or the existence of a
permanent disability. In the present case, while the initial 120-day treatment or temporary total disability
period was exceeded, the company-designated doctor duly made a declaration well within the extended
240-day period that the petitioner was fit to work. Viewed from this perspective, both the NLRC and CA
were legally correct when they refused to recognize any disability because the petitioner had already been
declared fit to resume his duties. In the absence of any disability after his temporary total disability was
addressed, any further discussion of permanent partial and total disability, their existence, distinctions and
consequences, becomes a surplusage that serves no useful purpose. 
23. CaseDigest: 115 S.C.R.A. 374: Vir-jen Shipping and Marine
Services Vs. NLRC
FACTS: 
Seamen namely Rogelio Bisula, Ruben Arroza, Juan Gacutno, Leonilo Atok, Nilo Cruz, Alvaro Andrada,
Nemesio Adug, Simplicio Bautista, Romeo Acosta, and Jose Encabo had breached their contract with the
Vir-Jen Shipping and Marine Services Inc. when they demanded a salary increase of 50% and that they
connoted a threat in the said cablegram that they sent to the shipping company. The Vir-Jen Shipping and
Marine Services Inc. denied, as decided by the Prinicipal, Messrs. Kyoei Tanker Company Limited, the
said demand of the seamen and wrote the National Seamen Board (NSB) asking permission to cancel the
manning contract of the seamen.
 The National Seamen Board (NSB), through its Executive Director Cresencio C. Dayao, authorized the
Vir-Jen Shipping to cancel the manning contracts of the seamen, and that they may disembark the whole
compliment/crewmembers of the vessel M/T ‘’Jannu’’. Upon the disembarkation of the seamen in Japan
and repartriated to Manila, they filed a complaint against Vir-Jen with the NSB for the illegal dismissal and
non-payment of the wages.
The seamen appealed the decision of the NSB to the National Labor Relations Commision (NLRC). The
NLRC reversed the decision of the NSB on the ground that the termination of the contract was without
valid cause. Also, the NLRC required the Vir-Jen Shipping Inc. to pay the wages and other monetary
benefits corresponding to the unexpired portion of the employment contract.

 The Vir-jen Shipping Inc. submitted a petition to the Supreme Court for its resolution on the issue that
NLRC acted without or in excess of its jurisdiction and that it acted with the grave abuse of discretion. The
petitioner maintains that the Minister of Labor may not, under the guise of issuing implementing rules of
law, go beyond the clear and unmistakable language of the law and expand it at his discretion.

ISSUE:
 Whether or not that the respondent NLRC acted with grave abuse of discretion, or in excess of its
jurisdiction, or contrary to law, and the evidence when it reversed the decision of the NSB

DECISION: 
the petition herein is granted and the decision of the NLRC complained of hereby set aside; the decision
of the NSB should stand.
 SALAZAR vs. ACHACOSO
24.

AND MARQUEZ
DECEMBER 20, 2016 ~ VBDIAZ

G.R. No. 81510 March 14, 1990

HORTENCIA SALAZAR, petitioner, 
vs.
HON. TOMAS D. ACHACOSO, in his capacity as Administrator of the
Philippine Overseas Employment Administration, and FERDIE
MARQUEZ, respondents.
FACTS: This concerns the validity of the power of the Secretary of Labor to issue
warrants of arrest and seizure under Article 38 of the Labor Code, prohibiting illegal
recruitment.
On October 21, 1987, Rosalie Tesoro filed with the POEA a complaint against
petitioner. Having ascertained that the petitioner had no license to operate a
recruitment agency, public respondent Administrator Tomas D. Achacoso issued his
challenged CLOSURE AND SEIZURE ORDER.
The POEA brought a team to the premises of Salazar to implement the order. There it
was found that petitioner was operating Hannalie Dance Studio. Before entering the
place, the team served said Closure and Seizure order on a certain Mrs. Flora Salazar
who voluntarily allowed them entry into the premises. Mrs. Flora Salazar informed
the team that Hannalie Dance Studio was accredited with Moreman Development
(Phil.). However, when required to show credentials, she was unable to produce any.
Inside the studio, the team chanced upon twelve talent performers — practicing a
dance number and saw about twenty more waiting outside, The team confiscated
assorted costumes which were duly receipted for by Mrs. Asuncion Maguelan and
witnessed by Mrs. Flora Salazar.
A few days after, petitioner filed a letter with the POEA demanding the return of the
confiscated properties. They alleged lack of hearing and due process, and that since
the house the POEA raided was a private residence, it was robbery.
On February 2, 1988, the petitioner filed this suit for prohibition. Although the acts
sought to be barred are already fait accompli, thereby making prohibition too late, we
consider the petition as one for certiorari in view of the grave public interest
involved.
ISSUE: May the Philippine Overseas Employment Administration (or the Secretary
of Labor) validly issue warrants of search and seizure (or arrest) under Article 38 of
the Labor Code?
HELD: PETITION GRANTED. it is only a judge who may issue warrants of search
and arrest. Neither may it be done by a mere prosecuting body.
We reiterate that the Secretary of Labor, not being a judge, may no longer issue search
or arrest warrants. Hence, the authorities must go through the judicial process. To that
extent, we declare Article 38, paragraph (c), of the Labor Code, unconstitutional and
of no force and effect.
Moreover, the search and seizure order in question, assuming, ex gratia argumenti,
that it was validly issued, is clearly in the nature of a general warrant. We have held
that a warrant must identify clearly the things to be seized, otherwise, it is null and
void
For the guidance of the bench and the bar, we reaffirm the following principles:
1. Under Article III, Section 2, of the l987 Constitution, it is only judges, and no
other, who may issue warrants of arrest and search:
2. The exception is in cases of deportation of illegal and undesirable aliens, whom
the President or the Commissioner of Immigration may order arrested, following a
final order of deportation, for the purpose of deportation.
25.