G.R. No.

187320               January 26, 2011

ATLANTA INDUSTRIES, INC. and/or ROBERT CHAN, Petitioners,

vs.
APRILITO R. SEBOLINO, KHIM V. COSTALES, ALVIN V. ALMOITE, and JOSEPH S. SAGUN, Respondents.

DECISION

BRION, J.:

For resolution is the petition for review on certiorari 1 assailing the decision2 and the resolution3 of the Court of
Appeals (CA) rendered on November 4, 2008 and March 25, 2009, respectively, in CA-G.R. SP. No. 99340.4

The Antecedents

The facts are summarized below.

In the months of February and March 2005, complainants Aprilito R. Sebolino, Khim V. Costales, Alvin V.
Almoite, Joseph S. Sagun, Agosto D. Zaño, Domingo S. Alegria, Jr., Ronie Ramos, Edgar Villagomez, Melvin
Pedregoza, Teofanes B. Chiong, Jr., Leonardo L. dela Cruz, Arnold A. Magalang, and Saturnino M. Mabanag
filed several complaints for illegal dismissal, regularization, underpayment, nonpayment of wages and other
money claims, as well as claims for moral and exemplary damages and attorney’s fees against the petitioners
Atlanta Industries, Inc. (Atlanta) and its President and Chief Operating Officer Robert Chan. Atlanta is a
domestic corporation engaged in the manufacture of steel pipes.

The complaints were consolidated and were raffled to Labor Arbiter Daniel Cajilig, but were later transferred to
Labor Arbiter Dominador B. Medroso, Jr.

The complainants alleged that they had attained regular status as they were allowed to work with Atlanta for
more than six (6) months from the start of a purported apprenticeship agreement between them and the
company. They claimed that they were illegally dismissed when the apprenticeship agreement expired.

In defense, Atlanta and Chan argued that the workers were not entitled to regularization and to their money
claims because they were engaged as apprentices under a government-approved apprenticeship program. The
company offered to hire them as regular employees in the event vacancies for regular positions occur in the
section of the plant where they had trained. They also claimed that their names did not appear in the list of
employees (Master List)5 prior to their engagement as apprentices.

On May 24, 2005, dela Cruz, Magalang, Zaño and Chiong executed a Pagtalikod at Pagwawalang Saysay
before Labor Arbiter Cajilig.

The Compulsory Arbitration Rulings

On April 24, 2006, Labor Arbiter Medroso dismissed the complaint with respect to dela Cruz, Magalang, Zaño
and Chiong, but found the termination of service of the remaining nine to be illegal. 6 Consequently, the arbiter
awarded the dismissed workers backwages, wage differentials, holiday pay and service incentive leave pay
amounting to ₱1,389,044.57 in the aggregate.

Atlanta appealed to the National Labor Relations Commission (NLRC). In the meantime, or on October 10, 2006,
Ramos, Alegria, Villagomez, Costales and Almoite allegedly entered into a compromise agreement with
Atlanta.7 The agreement provided that except for Ramos, Atlanta agreed to pay the workers a specified amount
as settlement, and to acknowledge them at the same time as regular employees.

On December 29, 2006,8 the NLRC rendered a decision, on appeal, modifying the ruling of the labor arbiter, as
follows: (1) withdrawing the illegal dismissal finding with respect to Sagun, Mabanag, Sebolino and Pedregoza;
(2) affirming the dismissal of the complaints of dela Cruz, Zaño, Magalang and Chiong; (3) approving the
compromise agreement entered into by Costales, Ramos, Villagomez, Almoite and Alegria, and (4) denying all
other claims.

Sebolino, Costales, Almoite and Sagun moved for the reconsideration of the decision, but the NLRC denied the
motion in its March 30, 20079 resolution. The four then sought relief from the CA through a petition for certiorari
under Rule 65 of the Rules of Court. They charged that the NLRC committed grave abuse of discretion in: (1)
failing to recognize their prior employment with Atlanta; (2) declaring the second apprenticeship agreement valid;
(3) holding that the dismissal of Sagun, Mabanag, Sebolino and Melvin Pedregoza is legal; and (4) upholding the
compromise agreement involving Costales, Ramos, Villagomez, Almoite and Alegria.

The CA Decision

The CA granted the petition based on the following findings:10

1. The respondents were already employees of the company before they entered into the first and
second apprenticeship agreements – Almoite and Costales were employed as early as December 2003
and, subsequently, entered into a first apprenticeship agreement from May 13, 2004 to October 12,
2004; before this first agreement expired, a second apprenticeship agreement, from October 9, 2004 to
March 8, 2005 was executed. The same is true with Sebolino and Sagun, who were employed by Atlanta
as early as March 3, 2004. Sebolino entered into his first apprenticeship agreement with the company
from March 20, 2004 to August 19, 2004, and his second apprenticeship agreement from August 20,
2004 to January 19, 2005. Sagun, on the other hand, entered into his first agreement from May 28, 2004
to October 8, 2004, and the second agreement from October 9, 2004 to March 8, 2005.

2. The first and second apprenticeship agreements were defective as they were executed in violation of
the law and the rules.11 The agreements did not indicate the trade or occupation in which the apprentice
would be trained; neither was the apprenticeship program approved by the Technical Education and
Skills Development Authority (TESDA).

3. The positions occupied by the respondents – machine operator, extruder operator and scaleman – are
usually necessary and desirable in the manufacture of plastic building materials, the company’s main
business. Costales, Almoite, Sebolino and Sagun were, therefore, regular employees whose dismissals
were illegal for lack of a just or authorized cause and notice.

4. The compromise agreement entered into by Costales and Almoite, together with Ramos, Villagomez
and Alegria, was not binding on Costales and Almoite because they did not sign the agreement.

The petitioners themselves admitted that Costales and Almoite were initially planned to be a part of the
compromise agreement, but their employment has been regularized as early as January 11, 2006; hence, the
company did not pursue their inclusion in the compromise agreement.12

The CA faulted the NLRC for failing to appreciate the evidence regarding the respondents’ prior employment
with Atlanta. The NLRC recognized the prior employment of Costales and Almoite on Atlanta’s monthly report for
December 2003 for the CPS Department/Section dated January 6, 2004. 13 This record shows that Costales and
Almoite were assigned to the company’s first shift from 7:00 a.m. to 3:00 p.m. The NLRC ignored Sebolino and
Sagun’s prior employment under the company’s Production and Work Schedule for March 7 to 12, 2005 dated
March 3, 2004,14 as they had been Atlanta’s employees as early as March 3, 2004, with Sebolino scheduled to
work on March 7-12, 2005 at 7:00 a.m. to 7:00 p.m., while Sagun was scheduled to work for the same period but
from 7:00 p.m. to 7:00 a.m. The CA noted that Atlanta failed to challenge the authenticity of the two documents
before it and the labor authorities.

Atlanta and Chan moved for reconsideration, but the CA denied the motion in a resolution rendered on March
25, 2009.15 Hence, the present petition.

The Petition

Atlanta seeks a reversal of the CA decision, contending that the appellate court erred in (1) concluding that
Costales, Almoite, Sebolino and Sagun were employed by Atlanta before they were engaged as apprentices; (2)
ruling that a second apprenticeship agreement is invalid; (3) declaring that the respondents were illegally
dismissed; and (4) disregarding the compromise agreement executed by Costales and Almoite. It submits the
following arguments:

First. The CA’s conclusion that the respondent workers were company employees before they were engaged as
apprentices was primarily based on the Monthly Report16 and the Production and Work Schedule for March 7-12,
2005,17 in total disregard of the Master List18 prepared by the company accountant, Emelita M. Bernardo. The
names of Costales, Almoite, Sebolino and Sagun do not appear as employees in the Master List which
"contained the names of all the persons who were employed by and at petitioner."19

Atlanta faults the CA for relying on the Production and Work Schedule and the Monthly Report which were not
sworn to, and in disregarding the Master List whose veracity was sworn to by Bernardo and by Alex Go who
headed the company’s accounting division. It maintains that the CA should have given more credence to the
Master List.

Second. In declaring invalid the apprenticeship agreements it entered into with the respondent workers, the CA
failed to recognize the rationale behind the law on apprenticeship. It submits that under the law,20 apprenticeship
agreements are valid, provided they do not exceed six (6) months and the apprentices are paid the appropriate
wages of at least 75% of the applicable minimum wage.

The respondents initially executed a five-month apprenticeship program with Atlanta, at the end of which, they
"voluntarily and willingly entered into another apprenticeship agreement with the petitioner for the training of a
second skill"21 for five months; thus, the petitioners committed no violation of the apprenticeship period laid down
by the law.

Further, the apprenticeship agreements, entered into by the parties, complied with the requisites under Article 62
of the Labor Code; the company’s authorized representative and the respondents signed the agreements and
these were ratified by the company’s apprenticeship committee. The apprenticeship program itself was approved
and certified by the TESDA.22 The CA, thus, erred in overturning the NLRC’s finding that the apprenticeship
agreements were valid.

Third. There was no illegal dismissal as the respondent workers’ tenure ended with the expiration of the
apprenticeship agreement they entered into. There was, therefore, no regular employer-employee relationship
between Atlanta and the respondent workers.

The Case for Costales, Almoite, Sebolino and Sagun

In a Comment filed on August 6, 2009,23 Costales, Almoite, Sebolino and Sagun pray for a denial of the petition
for being procedurally defective and for lack of merit.

The respondent workers contend that the petition failed to comply with Section 4, Rule 45 of the Rules of Court
which requires that the petition be accompanied by supporting material portions of the records. The petitioners
failed to attach to the petition a copy of the Production and Work Schedule despite their submission that the CA
relied heavily on the document in finding the respondent workers’ prior employment with Atlanta. They also did
not attach a copy of the compromise agreement purportedly executed by Costales and Almoite. For this reason,
the respondent workers submit that the petition should be dismissed.

The respondents posit that the CA committed no error in holding that they were already Atlanta’s employees
before they were engaged as apprentices, as confirmed by the company’s Production and Work
Schedule.24 They maintain that the Production and Work Schedule meets the requirement of substantial
evidence as the petitioners failed to question its authenticity. They point out that the schedule was prepared by
Rose A. Quirit and approved by Adolfo R. Lope, head of the company’s PE/Spiral Section. They argue that it
was highly unlikely that the head of a production section of the company would prepare and assign work to the
complainants if the latter had not been company employees.

The respondent workers reiterate their mistrust of the Master List25 as evidence that they were not employees of
the company at the time they became apprentices. They label the Master List as "self-serving, dubious and even
if considered as authentic, its content contradicts a lot of petitioner’s claim and allegations,"26 thus -

1. Aside from the fact that the Master List is not legible, it contains only the names of inactive employees.
Even those found by the NLRC to have been employed in the company (such as Almoite, Costales and
Sagun) do not appear in the list. If Costales and Almoite had been employed with Atlanta since January
11, 2006, as the company claimed,27 their names would have been in the list, considering that the Master
List accounts for all employees "as of May 2006" – the notation carried on top of each page of the
document.
 2. There were no entries of employees hired or resigned in the years 2005 and 2006 despite the "as of
May 2006" notation; several pages making up the Master List contain names of employees for the years
1999 - 2004.

3. The fact that Atlanta presented the purported Master List instead of the payroll raised serious doubts
on the authenticity of the list.

In sum, the respondent workers posit that the presentation of the Master List revealed the "intention of the herein
petitioner[s] to perpetually hide the fact of [their] prior employment."28

On the supposed apprenticeship agreements they entered into, Costales, Almoite, Sebolino and Sagun refuse to
accept the agreements’ validity, contending that the company’s apprenticeship program is merely a ploy "to
continually deprive [them] of their rightful wages and benefits which are due them as regular employees." 29 They
submit the following "indubitable facts and ratiocinations:"30

1. The apprenticeship agreements were submitted to TESDA only in 2005 (with dates of receipt on
"1/4/05" & "2/22/05"31 ), when the agreements were supposed to have been executed in April or May
2004. Thus, the submission was made long after the starting date of the workers’ apprenticeship or even
beyond the agreement’s completion/termination date, in violation of Section 23, Rule VI, Book II of the
Labor Code.

2. The respondent workers were made to undergo apprenticeship for occupations different from those
allegedly approved by TESDA. TESDA approved Atlanta’s apprenticeship program on "Plastic
Molder"32 and not for extrusion molding process, engineering, pelletizing process and mixing process.

3. The respondents were already skilled workers prior to the apprenticeship program as they had been
employed and made to work in the different job positions where they had undergone training. Sagun and
Sebolino, together with Mabanag, Pedregoza, dela Cruz, Chiong, Magalang and Alegria were even
given production assignments and work schedule at the PE/Spiral Section from May 11, 2004 to March
23, 2005, and some of them were even assigned to the 3:00 p.m. – 11:00 p.m. and graveyard shifts
(11:00 p.m. – 7:00 a.m.) during the period.33

4. The respondent workers were required to continue as apprentices beyond six months. The TESDA
certificate of completion indicates that the workers’ apprenticeship had been completed after six months.
Yet, they were suffered to work as apprentices beyond that period.

Costales, Almoite, Sebolino and Sagun resolutely maintain that they were illegally dismissed, as the reason for
the termination of their employment – notice of the completion of the second apprenticeship agreement – did not
constitute either a just or authorized cause under Articles 282 and 283 of the Labor Code.

Finally, Costales and Almoite refuse to be bound by the compromise agreement34 that Atlanta presented to
defeat the two workers’ cause of action. They claim that the supposed agreement is invalid as against them,
principally because they did not sign it.

The Court’s Ruling

The procedural issue

The respondent workers ask that the petition be dismissed outright for the petitioners’ failure to attach to the
petition a copy of the Production and Work Schedule and a copy of the compromise agreement Costales and
Almoite allegedly entered into — material portions of the record that should accompany and support the petition,
pursuant to Section 4, Rule 45 of the Rules of Court.

In Mariners Polytechnic Colleges Foundation, Inc. v. Arturo J. Garchitorena 35 where the Court addressed
essentially the same issue arising from Section 2(d), Rule 42 of the Rules of Court,36 we held that the phrase "of
the pleadings and other material portions of the record xxx as would support the allegation of the petition clearly
contemplates the exercise of discretion on the part of the petitioner in the selection of documents that are
deemed to be relevant to the petition. The crucial issue to consider then is whether or not the documents
accompanying the petition sufficiently supported the allegations therein."37
As in Mariners, we find that the documents attached to the petition sufficiently support the petitioners’
allegations. The accompanying CA decision38 and resolution,39 as well as those of the labor arbiter40 and the
NLRC,41 referred to the parties’ position papers and even to their replies and rejoinders. Significantly, the CA
decision narrates the factual antecedents, defines the complainants’ cause of action, and cites the arguments,
including the evidence the parties adduced. If any, the defect in the petition lies in the petitioners’ failure to
provide legible copies of some of the material documents mentioned, especially several pages in the decisions
of the labor arbiter and of the NLRC. This defect, however, is not fatal as the challenged CA decision clearly
summarized the labor tribunal’s rulings. We, thus, find no procedural obstacle in resolving the petition on the
merits.

The merits of the case

We find no merit in the petition. The CA committed no reversible error in nullifying the NLRC decision 42 and in
affirming the labor arbiter’s ruling,43 as it applies to Costales, Almoite, Sebolino and Sagun. Specifically, the CA
correctly ruled that the four were illegally dismissed because (1) they were already employees when they were
required to undergo apprenticeship and (2) apprenticeship agreements were invalid.

The following considerations support the CA ruling.

First. Based on company operations at the time material to the case, Costales, Almoite, Sebolino and Sagun
were already rendering service to the company as employees before they were made to undergo
apprenticeship. The company itself recognized the respondents’ status through relevant operational records – in
the case of Costales and Almoite, the CPS monthly report for December 200344 which the NLRC relied upon
and, for Sebolino and Sagun, the production and work schedule for March 7 to 12, 200545 cited by the CA.

Under the CPS monthly report, Atlanta assigned Costales and Almoite to the first shift (7:00 a.m. to 3:00 p.m.) of
the Section’s work. The Production and Work Schedules, in addition to the one noted by the CA, showed that
Sebolino and Sagun were scheduled on different shifts vis-à-vis the production and work of the company’s
PE/Spiral Section for the periods July 5-10, 2004;46 October 25-31, 2004;47 November 8-14, 2004;48 November
16-22, 2004;49 January 3-9, 2005;50 January 10-15, 2005;51 March 7-12, 200552 and March 17-23, 2005.53

We stress that the CA correctly recognized the authenticity of the operational documents, for the failure of
Atlanta to raise a challenge against these documents before the labor arbiter, the NLRC and the CA itself. The
appellate court, thus, found the said documents sufficient to establish the employment of the respondents before
their engagement as apprentices.

Second. The Master List54 (of employees) that the petitioners heavily rely upon as proof of their position that the
respondents were not Atlanta’s employees, at the time they were engaged as apprentices, is unreliable and
does not inspire belief.

The list, consisting of several pages, is hardly legible. It requires extreme effort to sort out the names of the
employees listed, as well as the other data contained in the list. For this reason alone, the list deserves little or
no consideration. As the respondents also pointed out, the list itself contradicts a lot of Atlanta’s claims and
allegations, thus: it lists only the names of inactive employees; even the names of those the NLRC found to have
been employed by Atlanta, like Costales and Almoite, and those who even Atlanta claims attained regular status
on January 11, 2006,55 do not appear in the list when it was supposed to account for all employees "as of May 6,
2006." Despite the "May 6, 2006" cut off date, the list contains no entries of employees who were hired or who
resigned in 2005 and 2006. We note that the list contains the names of employees from 1999 to 2004.

We cannot fault the CA for ignoring the Master List even if Bernardo, its head office accountant, swore to its
correctness and authenticity.56 Its substantive unreliability gives it very minimal probative value. Atlanta would
have been better served, in terms of reliable evidence, if true copies of the payroll (on which the list was based,
among others, as Bernardo claimed in her affidavit) were presented instead. 1âwphi1

Third. The fact that Costales, Almoite, Sebolino and Sagun were already rendering service to the company when
they were made to undergo apprenticeship (as established by the evidence) renders the apprenticeship
agreements irrelevant as far as the four are concerned. This reality is highlighted by the CA finding that the
respondents occupied positions such as machine operator, scaleman and extruder operator - tasks that are
usually necessary and desirable in Atlanta’s usual business or trade as manufacturer of plastic building
materials.57 These tasks and their nature characterized the four as regular employees under Article 280 of the
Labor Code. Thus, when they were dismissed without just or authorized cause, without notice, and without the
opportunity to be heard, their dismissal was illegal under the law.58

Even if we recognize the company’s need to train its employees through apprenticeship, we can only consider
the first apprenticeship agreement for the purpose. With the expiration of the first agreement and the retention of
the employees, Atlanta had, to all intents and purposes, recognized the completion of their training and their
acquisition of a regular employee status. To foist upon them the second apprenticeship agreement for a second
skill which was not even mentioned in the agreement itself,59 is a violation of the Labor Code’s implementing
rules60 and is an act manifestly unfair to the employees, to say the least. This we cannot allow.

Fourth. The compromise agreement61 allegedly entered into by Costales and Almoite, together with Ramos,
Villagomez and Alegria, purportedly in settlement of the case before the NLRC, is not binding on Costales and
Almoite because they did not sign it. The company itself admitted62 that while Costales and Almoite were initially
intended to be a part of the agreement, it did not pursue their inclusion "due to their regularization as early as
January 11, 2006."63

WHEREFORE, premises considered, we hereby DENY the petition for lack of merit.  The assailed decision and
1âwphi1

resolution of the Court of Appeals are AFFIRMED. Costs against the petitioner Atlanta Industries, Inc.

SO ORDERED.
G.R. No. 182232             October 6, 2008

PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
NENITA B. HU, accused-appellant.

DECISION

CHICO-NAZARIO, J.:

This is a Petition for Review on Certiorari filed by accused-appellant Nenita B. Hu (Hu) seeking to reverse and
set aside the Decision1 of the Court of Appeals dated 9 October 2007 in CA-G.R.-CR.-H.C. No. 02243, affirming
with modification the Decision2 dated 4 January 2005 of the Regional Trial Court (RTC) of Makati City, Branch
66, in Criminal Case No. 03-356. The RTC in its Decision found Hu guilty beyond reasonable doubt of the crime
of illegal recruitment in large scale, as defined and penalized under Section 7(b) of Republic Act No. 8042, 3 and
accordingly, sentenced her to suffer the penalty of life imprisonment, to pay the fine of P500,000.00, and to
indemnify private complainants Paul Abril (Abril), Joel Panguelo (Panguelo) and Evangeline Garcia (Garcia) in
the amounts of P44,000.00, P50,000 and P50,000, respectively. The decretal part of the assailed Court of
Appeals Decision reads:

Wherefore, in the light of the foregoing disquisitions, the decision of the Regional Trial Court of Makati
City, Branch 66, in Criminal Case No. 03-856, finding appellant Nenita B. Hu, guilty beyond reasonable
doubt of the crime charged, is hereby AFFIRMED with MODIFICATION.

As modified, the award of actual damages in the amount of P50,000 in favor of Evangeline Garcia,
is DELETED.4

The antecedent facts are as follows:

An Information5 for Illegal Recruitment in Large Scale was filed against Hu and Ethel V. Genoves (Genoves)
which reads:

The undersigned Prosecutor accuses Ethel V. Genoves a.k.a. Merry Ann Genoves and Nenita B. Hu, of
the crime of Violation of Section 6 penalized under Section 7(b) of RA 8042 6 (Illegal Recruitment in Large
Scale) committed as follows:

That on or about the 9th day of October 2001, in the City of Makati, Philippines and within the jurisdiction
of this Honorable Court, the above-named accused, conspiring and confederating together and both of
them helping and aiding one another, did then and there willfully, unlawfully and feloniously recruit,
promise employment/job placement abroad for an overseas employment and collect fees from the
following persons to wit:

NOEL P. DELAYUN JOEY F. SILAO

JOEL U. PANGUELO PAUL C. ABRIL
EVANGELINE E. GARCIA ERIC V. ORILLANO

thus in large scale amounting to economic sabotage without any license or authorized by the POEA of
the Department of Labor and Employment to recruit workers for an overseas employment.

Upon arraignment, Hu assisted by counsel entered a plea of not guilty while Genoves remained at
large.7 Subsequently, trial on the merits ensued. While the Information for illegal recruitment named several
persons as having been promised jobs by Hu and Genoves, only four of them - Panguelo, Garcia, Abril and
Orillano -- testified.
Hu was the President of Brighturn International Services, Inc. (Brighturn), a land-based recruitment agency duly
licensed by the Philippine Overseas Employment Agency (POEA) to engage in the business of recruitment and
placement of workers abroad, with principal address at No. 1916 San Marcelino St., Malate, Manila. Brighturn
was authorized by the POEA to recruit, process and deploy land-based workers for the period 18 December
1999 to 17 December 2001.8

Genoves worked as a consultant and marketing officer of Brighturn. Aside from her stint at Brighturn, Genoves
was also connected with Riverland Consultancy Service (Riverland), another recruitment agency located at
Room No. 210, LPL Building, Sen. Gil Puyat Avenue, Makati City.

Private complainants Orillano, Panguelo, Abril and Garcia sought employment at Brighturn for the positions of
factory worker and electronic operator in Taiwan.9 Notwithstanding private complainants' compliance with all of
the pre-employment requirements, including the payment of placement fees, they were not able to leave the
country to work abroad.

Sometime in June 2001, Panguelo was informed by a friend that Brighturn was hiring factory workers for Taiwan.
When Panguelo went to Brighturn, he was promised employment abroad by Hu for P50,000.00. Upon Hu's
instruction, Panguelo paid in full the placement fee in the amount of P50,000.00 to Genoves. The payment was
evidenced by an Official Receipt dated 16 October 2001 bearing Genoves' signature. Panguelo waited for three
years to be deployed to Taiwan. His waiting was all for naught. Thus, Panguelo decided to abort his application
and demanded from Hu the return of the amount he paid for the placement fee, but Hu could no longer return
the money.10

Also sometime in September 2001, Abril went to Brighturn to apply as a factory worker in Taiwan. At Brighturn,
Abril was entertained by Hu who oriented him on the necessary requirements for application which included a
valid passport, National Bureau of Investigation (NBI) Clearance and ID pictures. After complying with the
documentary requirements, Abril was required by Hu to pay the placement fee to Genoves in the amount
of P44,000.00. As shown in Official Receipts dated 9 October 2001 and 26 October 2000, which were signed by
Genoves, Abril paid the whole amount of P44,000.00 as placement fee. Abril was assured by Hu that he would
be deployed to Taiwan by December 2001 which was subsequently reset to April 2002. Despite several
postponements, Abril was not able to leave the country.11

For his part, Orillano came to know of Brighturn thru Genoves. Orillano was interviewed at Brighturn by a
Taiwanese principal in October 2001. After the interview, Hu informed Orillano to submit a medical certificate,
NBI clearance and passport; and to pay the requisite placement fee in the amount of P50,000.00. Believing that
Hu could send him abroad, Orillano faithfully complied with these requirements including the placement fee, the
payment of which was made to Genoves at Brighturn's office. Despite such payment, however, Orillano was not
able to leave the country.12

Garcia suffered the same fate as her co-applicants. In April 2002, Garcia applied as Electronic Operator at
Brighturn wherein she was entertained by Hu who informed her that Brighturn's license was suspended. Garcia
was then referred by Hu to Best One International (Best One), another recruitment agency likewise located in
Malate, Manila. While Garcia was told by Hu that the processing of her documents would be done at Best One,
the placement fee, however, should be paid at Brighturn. Accordingly, the amount of P60,000.00 was paid by
Garcia to Hu and Genoves as placement fee upon Hu's instruction. Almost predictably, the promise of an
employment abroad never came to pass.13

When Hu was not able to refund the amounts paid as placement fees upon demand, private complainants went
to NBI to file a complaint for illegal recruitment against Hu and Genoves.

For her defense, Hu claimed that she was the President of Brighturn, a duly authorized land-based recruitment
agency. Brighturn had foreign principals in Taiwan who were looking for skilled individuals willing to work in a
foreign country. Hu alleged that Brighturn had an established recruitment procedure wherein applicants were
only required to pay the corresponding placement fees after the POEA had already approved their employment
contracts. According to Hu, announcements were posted all over Brighturn's premises warning job applicants to
pay placement fees only to the cashier. After the expiration of its license issued by the POEA on 18 December
1999, Brighturn failed to pursue its application for renewal due its inability to post the required cash bond.
Brighturn was thus constrained to refer all pending applications to Best One. 14

Hu admitted knowing the private complainants because these individuals went to her office demanding the
return of their placement fees by showing their official receipts. Hu averred that when she examined such
receipts, she found that private complainants paid their placement fees to Riverland and not to Brighturn as
shown in the heading of the said receipts which bore the name and address of Riverland and its proprietress,
Genoves. Hu denied knowing Genoves.15

On 4 January 2005, the trial court rendered a Decision16 finding Hu guilty beyond reasonable doubt of the crime
of illegal recruitment in large scale, the dispositive portion of which reads:

WHEREFORE, the Court finds the accused Nenita Hu guilty beyond reasonable doubt of the crime of
illegal recruitment in large scale under Section 6 and 7(b) of Republic Act No. 8042, and, accordingly,
sentences the accused to suffer the penalty of life imprisonment, pay the fine of P500,000.00 and to
indemnify private complainants Paul Abril in the amount of P44,000.00, Joel Panguelo in the amount
of P50,000.00 and Evangeline Garcia in the amount of P50,000.00.

The Court of Appeals, in its Decision17 dated 9 October 2007, confirmed the presence of all the elements of
illegal recruitment in large scale, and thereby affirmed the conviction of Hu with the modification that the amount
of actual damages awarded to Garcia in the amount of P50,000.00 be deleted.

Hence, this Petition raising the sole issue of:

WHETHER OR NOT THE LOWER COURT ERRED IN FINDING HU GUILTY BEYOND REASONABLE
DOUBT OF ILLEGAL RECRUITMENT IN LARGE SCALE.

Hu was charged with and convicted by the trial court of the crime of Illegal Recruitment in Large Scale, which
conviction was affirmed by the Court of Appeals. The appellate court found that Hu made enticing, albeit empty
promises, which moved private complainants to part with their money and pay the placement fee.

For its part, the Solicitor General joined the lower courts in finding that Hu was indeed guilty of Illegal
Recruitment in Large Scale. According to the Solicitor General, all the elements of illegal recruitment in large
scale had been established beyond reasonable doubt.18

We cannot sustain the conviction for illegal recruitment in large scale.

Illegal recruitment is committed when two elements concur, namely: (1) the offender has no valid license or
authority required by law to enable him to lawfully engage in the recruitment and placement of workers; and (2)
he undertakes any activity within the meaning of "recruitment and placement" defined under Article 13(b) of the
Labor Code.19 Recruitment and placement is "any act of canvassing, enlisting, contracting, transporting, utilizing,
hiring or procuring workers; and includes referrals, contact 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."20

The crime becomes Illegal Recruitment in Large Scale when the foregoing two elements concur, with the
addition of a third element - the recruiter committed the same against three or more persons, individually or as
group.21

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. While it is true that the law does not require that at
least three victims testify at the trial, nevertheless, it is necessary that there is sufficient evidence proving that
the offense was committed against three or more persons.22

In the appreciation of evidence in criminal cases, it is a basic tenet that the prosecution has the burden of proof
in establishing the guilt of the accused for the offense with which he is charged. Ei incumbit probation qui dicit
non qui negat; i.e., "he who asserts, not he who denies, must prove." The conviction of appellant must rest not
on the weakness of his defense, but on the strength of the prosecution's evidence.23

In the case at bar, the prosecution failed to adduce sufficient evidence to prove that illegal recruitment was
committed against three or more persons. What we have uncovered upon careful scrutiny of the records was the
fact that illegal recruitment was committed against only one person; that is, against Garcia alone. Illegal
recruitment cannot successfully attach to the allegations of Panguelo, Abril and Orillano, since they
testified that they accomplished their pre-employment requirements through Brighturn from June 2001
up to October of the same year,24 a period wherein Brighturn's license to engage in recruitment and
placement was still in full force and effect. 25
While there were six private complainants in this case, four of whom were presented during the trial, the
prosecution, nonetheless, failed to establish that Hu engaged in illegal recruitment acts against at least three of
these complainants. In offenses in which the number of victims is essential, such as in the present petition,
failure of the prosecution to prove by convincing evidence that the offense is committed against the minimum
number of persons required by law is fatal to its cause of action. Underscoring the significance of the number of
victims was the disquisition of Justice Florenz Regalado in People v. Ortiz-Miyake26:

It is evident that in illegal recruitment cases, the number of persons victimized is

determinative. Where illegal recruitment is committed against a lone victim, the accused may be
convicted of simple illegal recruitment which is punishable with a lower penalty under Article
39(c)27 of the Labor Code. Corollarily, where the offense is committed against three or more persons, it
is qualified to illegal recruitment in large scale which provides a higher penalty under Article 39(a)28 of the
same Code. (Emphasis supplied.)

Regrettably, we cannot affirm the conviction of Hu for the offense of illegal recruitment in large scale. While we
strongly condemn the pervasive proliferation of illegal job recruiters and syndicates preying on innocent people
anxious to obtain employment abroad, nevertheless, we find the pieces of evidence insufficient to prove the guilt
of Hu beyond reasonable doubt. It is unfortunate that the prosecution evidence did not pass the test of
reasonable doubt, since the testimonies of its witnesses unveil a contradicting inference -- that the recruitment of
Panguelo, Abril and Orillano was undertaken by Hu with the required authority from the POEA.

Failure of the prosecution to prove the guilt of Hu beyond reasonable doubt does not absolve her of her civil
obligation to return the money she collected from private complaints Panguelo, Abril and Orillano, plus legal
interest in accordance with our ruling in Domagsang v. Court of Appeals.29 There, the prosecution failed to
sufficiently establish a case to warrant a conviction, but clearly proved a just debt owed to the private
complainant. Thus, the accused was ordered to pay the face value of the check with 12% legal interest per
annum, reckoned from the filing of the information until the finality of the judgment. It is well settled that acquittal
based on reasonable doubt does not preclude an award for civil damages. The judgment of acquittal
extinguishes the liability of the accused only when it includes a declaration that the facts from which the civil
liability might arise did not exist. Thus, civil liability is not extinguished where the acquittal is based on lack of
proof beyond reasonable doubt, since only preponderance of evidence is required in civil cases. There appears
to be no sound reason to require that a separate action be still filed considering that the facts to be proved in the
civil case have already been established in the criminal proceedings.30 In the present case, the prosecution
explicitly proved that private complainants parted with substantial amounts of money upon the prodding and
enticement of Hu on the false pretense that she had the capacity to deploy them for employment abroad. In the
end, private complainants were not able to leave for work abroad or get their money back.

Neither does her acquittal herein exempt Hu from subsequent criminal prosecution for estafa31 provided that
deceit, which is an essential element of estafa, be proven by the prosecution. 32 Apparently, Hu deluded private
complainants into believing that she had the capacity to send them abroad for employment. Through this hoax,
she was able to convince private complainants to surrender their money to her in the vain hope, as it turned out,
of securing employment abroad.

This leaves us a case of simple illegal recruitment committed against Garcia.

Garcia testified that she applied for employment in Taiwan for the position of Electronic Operator thru Brighturn
in April 2002. Due to the alleged suspension of Brighturn's license, Hu referred her to a neighboring agency
(Best One), but Hu continued collecting placement fees from her.

The act of referral, which means the act of passing along or forwarding an applicant after an initial interview to a
selected employer, placement or bureau, is included in recruitment. 33 Undoubtedly, the act of Hu in referring
Garcia to another recruitment agency squarely fell within the purview of recruitment that was undertaken by Hu
after her authority to recruit and place workers already expired on 17 December 2001.

Failure of Garcia to present proof of payment is irrelevant. The absence of receipts in the case of illegal
recruitment does not warrant the acquittal of the appellant and is not fatal to the prosecution's case. As long as
the prosecution is able to establish through credible and testimonial evidence, as in the case at bar, that the
appellant had engaged in illegal recruitment, a conviction for the offense can be very well justified.34

Irrefragably, the prosecution has proven beyond reasonable doubt the guilt of Hu of the charge of illegal
recruitment against Garcia when the former referred the latter to another agency without the license or authority
to do so. The trial court gave full credence to the testimony of Garcia, which unmistakably demonstrated how Hu
successfully enticed her to part with a considerable amount of money in exchange for an employment abroad
which was never realized. This finding was adopted by the appellate court, considering that that the trial court
was in the best position to ascertain credibility issues, having heard the witnesses themselves and observed
their deportment and manner of testifying during trial.

Aptly, the bare denials of Hu have no probative value when ranged against the affirmative declarations of
Garcia, even if the latter failed to present receipts for the payments she had made. In People v. Villas,35 this
Court affirmed the conviction of the appellant for illegal recruitment even if private complaints were not able to
present any receipt that they paid appellant anything, thus:

Neither is there merit in the contention of the defense that appellant should be exonerated for failure of
the prosecution to present any receipt proving that private complainants paid her anything. The defense
argues that a receipt is the best evidence to prove delivery of money and the absence thereof shows that
no payment was made.

This argument is not novel. The Court has previously ruled that the absence of receipts evidencing
payment does not defeat a criminal prosecution for illegal recruitment. In People vs. Pabalan [262 SCRA
574, 30 September 1996], this Court ruled:

"x x x the absence of receipts in a criminal case for illegal recruitment does not warrant the
acquittal of the accused and is not fatal to the case of the prosecution. As long as the witnesses
had positively shown through their respective testimonies that the accused is the one involved in
the prohibited recruitment, he may be convicted of the offense despite the want of receipts.

"The Statute of Frauds and the rules of evidence do not require the presentation of receipts in
order to prove the existence of recruitment agreement and the procurement of fees in illegal
recruitment cases. The amounts may consequently be proved by the testimony of witnesses."

The private complainants have convincingly testified that the accused enticed them to apply and, in
actual fact, received payments from them. And to these testimonies, the trial court accorded credence.
On the other hand, appellant has not shown any reason to justify a modification or reversal of the trial
court's finding.

Our ruling in People v. Villas36 that the absence of receipts in illegal recruitment case does not warrant the
acquittal of the accused has been reiterated in several cases.37 We are not unaware of the proliferation of these
scheming illegal recruiters who cunningly rob Filipino workers, desperate to work abroad, of their money in
exchange of empty promises. This Court cannot be drawn to the ingenious ploy of these illegal recruiters in
withholding receipts from their victims in their vain attempt to evade liability.

In fine, the Court will have to discard the conviction for illegal recruitment in large scale meted out by the RTC,
since only one applicant abroad was recruited by Hu without license and authority from the POEA. Accordingly,
Hu should be held responsible for simple illegal recruitment only. Hu's unsuccessful indictment for illegal
recruitment in large scale, however, does not discharge her from her civil obligation to return the placement fees
paid by private complainants.

Under Section 7(a) of Republic Act No. 8042, 38 simple illegal recruitment is punishable by imprisonment of not
less than six (6) years and one (1) day but not more than twelve years and a fine of not less than two hundred
thousand pesos (P200,000.00) nor more than five hundred thousand pesos (P500,000.00).

Section 1 of the Indeterminate Sentence Law provides that if the offense is punishable by a special law, as in
this case, the court shall impose on the accused an indeterminate sentence, the maximum term of which shall
not exceed the maximum fixed by the said law and the minimum of which shall not be less than the minimum
term prescribed by the same. Accordingly, a penalty of eight (8) to twelve (12) years of imprisonment should be
meted out to Hu. In addition, a fine in the amount of P500,000.00; and indemnity to private complainants -- Abril
in the amount of P44,000.00, Panguelo in the amount of P50,000.00, Garcia in the amount of P60,000.00 and
Orillano in the amount of P50,000.00, with 12% legal interest per annum, reckoned from the filing of the
information until the finality of the judgment - is imposed.

WHEREFORE, IN VIEW OF THE FOREGOING, the instant petition is PARTIALLY GRANTED. The Decision
dated 9 October 2007 of the Court of Appeals in CA-G.R.-CR.-H.C. No. 02243 affirming the conviction of the
accused-appellant Nenita B. Hu for the offense of Illegal Recruitment in Large Scale and sentencing her to life
imprisonment is hereby VACATED. A new Decision is hereby entered convicting the accused-appellant of the
offense of Simple Illegal Recruitment committed against private complainant Evangeline Garcia. She is
sentenced to suffer the indeterminate penalty of eight (8) years to twelve (12) years of imprisonment. She is
ordered to pay a fine in the amount of P500,000.00 and to indemnify private complainant Evangeline Garcia in
the amount of P60,000.00, with 12% interest per annum, reckoned from the filing of the information until the
finality of the judgment.

Accused-appellant Nenita B. Hu is likewise ordered to indemnify private complainants Paul Abril in the amount
of P44,000.00, Joel Panguelo in the amount of P50,000.00, and Eric Orillano in the amount of P50,000.00, with
12% interest per annum, as reckoned above.

SO ORDERED.
G.R. No. 170139               August 5, 2014

SAMEER OVERSEAS PLACEMENT AGENCY, INC., Petitioner,

vs.
JOY C. CABILES, Respondent.

DECISION

LEONEN, J.:

This case involves an overseas Filipino worker with shattered dreams. It is our duty, given the facts and the law,
to approximate justice for her.

We are asked to decide a petition for review  on certiorari assailing the Court of Appeals’ decision  dated June
1 2

27, 2005. This decision partially affirmed the National Labor RelationsCommission’s resolution dated March 31,
2004,  declaring respondent’s dismissal illegal, directing petitioner to pay respondent’s three-month salary
3

equivalent to New Taiwan Dollar (NT$) 46,080.00, and ordering it to reimburse the NT$3,000.00 withheld from
respondent, and pay her NT$300.00 attorney’s fees. 4

Petitioner, Sameer Overseas Placement Agency, Inc., is a recruitment and placement agency.  Responding to 5

an ad it published, respondent, Joy C. Cabiles, submitted her application for a quality control job in Taiwan. 6

Joy’s application was accepted.  Joy was later asked to sign a oneyear employment contract for a monthly salary
7

of NT$15,360.00.  She alleged that Sameer Overseas Agency required her to pay a placement fee of
8

₱70,000.00 when she signed the employment contract. 9

Joy was deployed to work for TaiwanWacoal, Co. Ltd. (Wacoal) on June 26, 1997.  She alleged that in her 10

employment contract, she agreed to work as quality control for one year.  In Taiwan, she was asked to work as
11

a cutter.12

Sameer Overseas Placement Agencyclaims that on July 14, 1997, a certain Mr. Huwang from Wacoal
informedJoy, without prior notice, that she was terminated and that "she should immediately report to their office
to get her salary and passport."  She was asked to "prepare for immediate repatriation."
13 14

Joy claims that she was told that from June 26 to July 14, 1997, she only earned a total of NT$9,000.  According 15

to her, Wacoal deducted NT$3,000 to cover her plane ticket to Manila. 16

On October 15, 1997, Joy filed a complaint  with the National Labor Relations Commission against petitioner
17

and Wacoal. She claimed that she was illegally dismissed.  She asked for the return of her placement fee, the
18

withheld amount for repatriation costs, payment of her salary for 23 months as well as moral and exemplary
damages.  She identified Wacoal as Sameer Overseas Placement Agency’s foreign principal.
19 20

Sameer Overseas Placement Agency alleged that respondent's termination was due to her inefficiency,
negligence in her duties, and her "failure to comply with the work requirements [of] her foreign [employer]."  The 21

agency also claimed that it did not ask for a placement fee of ₱70,000.00.  As evidence, it showedOfficial
22

Receipt No. 14860 dated June 10, 1997, bearing the amount of ₱20,360.00.  Petitioner added that Wacoal's
23

accreditation with petitioner had already been transferred to the Pacific Manpower & Management Services, Inc.
(Pacific) as of August 6, 1997.  Thus, petitioner asserts that it was already substituted by Pacific Manpower.
24 25

Pacific Manpower moved for the dismissal of petitioner’s claims against it.  It alleged that there was no
26

employer-employee relationship between them.  Therefore, the claims against it were outside the jurisdiction of
27

the Labor Arbiter.  Pacific Manpower argued that the employment contract should first be presented so that the
28

employer’s contractual obligations might be identified.  It further denied that it assumed liability for petitioner’s
29

illegal acts. 30

On July 29, 1998, the Labor Arbiter dismissed Joy’s complaint.  Acting Executive Labor Arbiter Pedro C.Ramos
31

ruled that her complaint was based on mereallegations.  The Labor Arbiter found that there was no excess
32

payment of placement fees, based on the official receipt presented by petitioner.  The Labor Arbiter found
33

unnecessary a discussion on petitioner’s transfer of obligations to Pacific  and considered the matter immaterial
34

in view of the dismissal of respondent’s complaint. 35

Joy appealed  to the National Labor Relations Commission.
36

In a resolution  dated March 31, 2004, the National Labor Relations Commission declared that Joy was illegally
37

dismissed.  It reiterated the doctrine that the burden of proof to show that the dismissal was based on a just or
38

valid cause belongs to the employer.  It found that Sameer Overseas Placement Agency failed to prove that
39

there were just causes for termination.  There was no sufficient proofto show that respondent was inefficient in
40

her work and that she failed to comply with company requirements.  Furthermore, procedural dueprocess was
41

not observed in terminating respondent. 42

The National Labor Relations Commission did not rule on the issue of reimbursement of placement fees for lack
of jurisdiction.  It refused to entertain the issue of the alleged transfer of obligations to Pacific.  It did not acquire
43 44

jurisdiction over that issue because Sameer Overseas Placement Agency failed to appeal the Labor Arbiter’s
decision not to rule on the matter. 45

The National Labor Relations Commission awarded respondent only three (3) months worth of salaryin the
amount of NT$46,080, the reimbursement of the NT$3,000 withheld from her, and attorney’s fees of NT$300. 46

The Commission denied the agency’s motion for reconsideration  dated May 12, 2004 through a
47

resolution  dated July 2, 2004.

48

Aggrieved by the ruling, Sameer Overseas Placement Agency caused the filing of a petition  for certiorari with
49

the Court of Appeals assailing the National Labor Relations Commission’s resolutions dated March 31, 2004 and
July 2, 2004.

The Court of Appeals  affirmed the decision of the National Labor Relations Commission with respect to the
50

finding of illegal dismissal, Joy’s entitlement to the equivalent of three months worth of salary, reimbursement of
withheld repatriation expense, and attorney’s fees.  The Court of Appeals remanded the case to the National
51

Labor Relations Commission to address the validity of petitioner's allegations against Pacific.  The Court of
52

Appeals held, thus:

Although the public respondent found the dismissal of the complainant-respondent illegal, we should
point out that the NLRC merely awarded her three (3) months backwages or the amount of
NT$46,080.00, which was based upon its finding that she was dismissed without due process, a finding
that we uphold, given petitioner’s lack of worthwhile discussion upon the same in the proceedings below
or before us. Likewise we sustain NLRC’s finding in regard to the reimbursement of her fare, which is
squarely based on the law; as well as the award of attorney’s fees.

But we do find it necessary to remand the instant case to the public respondent for further proceedings,
for the purpose of addressing the validity or propriety of petitioner’s third-party complaint against the
transferee agent or the Pacific Manpower & Management Services, Inc. and Lea G. Manabat. We should
emphasize that as far as the decision of the NLRC on the claims of Joy Cabiles, is concerned, the same
is hereby affirmed with finality, and we hold petitioner liable thereon, but without prejudice to further
hearings on its third party complaint against Pacific for reimbursement.

WHEREFORE, premises considered, the assailed Resolutions are hereby partly AFFIRMED in
accordance with the foregoing discussion, but subject to the caveat embodied inthe last sentence. No
costs.

SO ORDERED. 53

Dissatisfied, Sameer Overseas Placement Agency filed this petition. 54

We are asked to determine whether the Court of Appeals erred when it affirmed the ruling of the National Labor
Relations Commission finding respondent illegally dismissed and awarding her three months’ worth of salary, the
reimbursement of the cost ofher repatriation, and attorney’s fees despite the alleged existence of just causes of
termination.

Petitioner reiterates that there was just cause for termination because there was a finding of Wacoal that
respondent was inefficient in her work. 55

Therefore, it claims that respondent’s dismissal was valid. 56

Petitioner also reiterates that since Wacoal’s accreditation was validly transferred to Pacific at the time
respondent filed her complaint, it should be Pacific that should now assume responsibility for Wacoal’s
contractual obligations to the workers originally recruited by petitioner. 57

Sameer Overseas Placement Agency’spetition is without merit. We find for respondent.

Sameer Overseas Placement Agency failed to show that there was just cause for causing Joy’s dismissal. The
employer, Wacoal, also failed to accord her due process of law.

Indeed, employers have the prerogative to impose productivity and quality standards at work.  They may also
58

impose reasonable rules to ensure that the employees comply with these standards.  Failure to comply may be
59

a just cause for their dismissal.  Certainly, employers cannot be compelled to retain the services of anemployee
60

who is guilty of acts that are inimical to the interest of the employer.  While the law acknowledges the plight and
61

vulnerability of workers, it does not "authorize the oppression or self-destruction of the employer."  Management
62

prerogative is recognized in law and in our jurisprudence.

This prerogative, however, should not be abused. It is "tempered with the employee’s right to security of
tenure."  Workers are entitled to substantive and procedural due process before termination. They may not be
63

removed from employment without a validor just cause as determined by law and without going through the
proper procedure.

Security of tenure for labor is guaranteed by our Constitution. 64

Employees are not stripped of their security of tenure when they move to work in a different jurisdiction. With
respect to the rights of overseas Filipino workers, we follow the principle of lex loci contractus.Thus, in Triple
Eight Integrated Services, Inc. v. NLRC,  this court noted:
65

Petitioner likewise attempts to sidestep the medical certificate requirement by contending that since
Osdana was working in Saudi Arabia, her employment was subject to the laws of the host country.
Apparently, petitioner hopes tomake it appear that the labor laws of Saudi Arabia do not require any
certification by a competent public health authority in the dismissal of employees due to illness.

Again, petitioner’s argument is without merit.

First, established is the rule that lex loci contractus (the law of the place where the contract is
made) governs in this jurisdiction. There is no question that the contract of employment in this
case was perfected here in the Philippines. Therefore, the Labor Code, its implementing rules
and regulations, and other laws affecting labor apply in this case. Furthermore, settled is the rule
that the courts of the forum will not enforce any foreign claim obnoxious to the forum’s public policy.
Herein the Philippines, employment agreements are more than contractual in nature. The Constitution
itself, in Article XIII, Section 3, guarantees the special protection of workers, to wit:

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.

It shall guarantee the rights of all workers to selforganization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in accordance with
law. They shall be entitled to security of tenure, humane conditions of work, and a living wage.
Theyshall also participate in policy and decision-making processes affecting their rights and
benefits as may be provided by law.

....

This public policy should be borne in mind in this case because to allow foreign employers to determine
for and by themselves whether an overseas contract worker may be dismissed on the ground of illness
would encourage illegal or arbitrary pretermination of employment contracts.  (Emphasis supplied,
66

citation omitted)
Even with respect to fundamental procedural rights, this court emphasized in PCL Shipping Philippines, Inc. v.
NLRC,  to wit:
67

Petitioners admit that they did notinform private respondent in writing of the charges against him and that
they failed to conduct a formal investigation to give him opportunity to air his side. However, petitioners
contend that the twin requirements ofnotice and hearing applies strictly only when the employment is
within the Philippines and that these need not be strictly observed in cases of international maritime or
overseas employment.

The Court does not agree. The provisions of the Constitution as well as the Labor Code which
afford protection to labor apply to Filipino employees whether working within the Philippines or
abroad. Moreover, the principle of lex loci contractus (the law of the place where the contract is
made) governs in this jurisdiction. In the present case, it is not disputed that the Contract of
Employment entered into by and between petitioners and private respondent was executed here in the
Philippines with the approval of the Philippine Overseas Employment Administration (POEA). Hence, the
Labor Code together with its implementing rules and regulations and other laws affecting labor apply in
this case.  (Emphasis supplied, citations omitted)
68

By our laws, overseas Filipino workers (OFWs) may only be terminated for a just or authorized cause and after
compliance with procedural due process requirements.

Article 282 of the Labor Code enumerates the just causes of termination by the employer. Thus:

Art. 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 representatives; and

(e) Other causes analogous to the foregoing.

Petitioner’s allegation that respondentwas inefficient in her work and negligent in her duties  may, therefore,
69

constitute a just cause for termination under Article 282(b), but only if petitioner was able to prove it.

The burden of proving that there is just cause for termination is on the employer. "The employer must
affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause."  Failure to show
70

that there was valid or just cause for termination would necessarily mean that the dismissal was illegal.
71

To show that dismissal resulting from inefficiency in work is valid, it must be shown that: 1) the employer has set
standards of conduct and workmanship against which the employee will be judged; 2) the standards of conduct
and workmanship must have been communicated tothe employee; and 3) the communication was made at a
reasonable time prior to the employee’s performance assessment.

This is similar to the law and jurisprudence on probationary employees, which allow termination ofthe employee
only when there is "just cause or when [the probationary employee] fails to qualify as a regular employee in
accordance with reasonable standards made known by the employer to the employee at the time of his [or her]
engagement." 72

However, we do not see why the application of that ruling should be limited to probationary employment. That
rule is basic to the idea of security of tenure and due process, which are guaranteed to all employees, whether
their employment is probationary or regular.
The pre-determined standards that the employer sets are the bases for determining the probationary employee’s
fitness, propriety, efficiency, and qualifications as a regular employee. Due process requires that the
probationary employee be informed of such standards at the time of his or her engagement so he or she can
adjusthis or her character or workmanship accordingly. Proper adjustment to fit the standards upon which the
employee’s qualifications will be evaluated will increase one’s chances of being positively assessed for
regularization by his or her employer.

Assessing an employee’s work performance does not stop after regularization. The employer, on a regular
basis, determines if an employee is still qualified and efficient, based on work standards. Based on that
determination, and after complying with the due process requirements of notice and hearing, the employer may
exercise its management prerogative of terminating the employee found unqualified.

The regular employee must constantlyattempt to prove to his or her employer that he or she meets all the
standards for employment. This time, however, the standards to be met are set for the purpose of retaining
employment or promotion. The employee cannot be expected to meet any standard of character or workmanship
if such standards were not communicated to him or her. Courts should remain vigilant on allegations of the
employer’s failure to communicatework standards that would govern one’s employment "if [these are] to
discharge in good faith [their] duty to adjudicate." 73

In this case, petitioner merely alleged that respondent failed to comply with her foreign employer’s work
requirements and was inefficient in her work.  No evidence was shown to support such allegations. Petitioner
74

did not even bother to specify what requirements were not met, what efficiency standards were violated, or what
particular acts of respondent constituted inefficiency.

There was also no showing that respondent was sufficiently informed of the standards against which her work
efficiency and performance were judged. The parties’ conflict as to the position held by respondent showed
that even the matter as basic as the job title was not clear.

The bare allegations of petitioner are not sufficient to support a claim that there is just cause for termination.
There is no proof that respondent was legally terminated.

Petitioner failed to comply with

the due process requirements

Respondent’s dismissal less than one year from hiring and her repatriation on the same day show not onlyfailure
on the partof petitioner to comply with the requirement of the existence of just cause for termination. They
patently show that the employersdid not comply with the due process requirement.

A valid dismissal requires both a valid cause and adherence to the valid procedure of dismissal.  The employer
75

is required to give the charged employee at least two written notices before termination.  One of the written
76

notices must inform the employee of the particular acts that may cause his or her dismissal.  The other notice
77

must "[inform] the employee of the employer’s decision."  Aside from the notice requirement, the employee must
78

also be given "an opportunity to be heard."79

Petitioner failed to comply with the twin notices and hearing requirements. Respondent started working on June
26, 1997. She was told that she was terminated on July 14, 1997 effective on the same day and barely a month
from her first workday. She was also repatriated on the same day that she was informed of her termination. The
abruptness of the termination negated any finding that she was properly notified and given the opportunity to be
heard. Her constitutional right to due process of law was violated.

II

Respondent Joy Cabiles, having been illegally dismissed, is entitled to her salary for the unexpired portion ofthe
employment contract that was violated together with attorney’s fees and reimbursement of amounts withheld
from her salary.

Section 10 of Republic Act No. 8042,otherwise known as the Migrant Workers and Overseas Filipinos Act
of1995, states thatoverseas workers who were terminated without just, valid, or authorized cause "shall be
entitled to the full reimbursement of his placement fee with interest of twelve (12%) per annum, plus his salaries
for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term,
whichever is less."
 Sec. 10. MONEY CLAIMS. – Notwithstanding any provision of law to the contrary, the Labor Arbiters of
the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to
hear and decide, within ninety (90) calendar days after filing of the complaint, the claims arising out of an
employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas
deployment including claims for actual, moral, exemplary and other forms of damages.

The liability of the principal/employer and the recruitment/placement agency for any and all claims under
this section shall be joint and several. This provisions [sic] shall be incorporated in the contract for
overseas employment and shall be a condition precedent for its approval. The performance bond to be
filed by the recruitment/placementagency, as provided by law, shall be answerable for all money claims
or damages that may be awarded to the workers. If the recruitment/placement agency is a juridical
being, the corporate officers and directors and partners as the case may be, shall themselves be jointly
and solidarily liable with the corporation orpartnership for the aforesaid claims and damages.

Such liabilities shall continue during the entire period or duration of the employment contract and shall
not be affected by any substitution, amendment or modification made locally or in a foreign country of the
said contract.

Any compromise/amicable settlement or voluntary agreement on money claims inclusive of damages

under this section shall be paid within four (4) months from the approval of the settlement by the
appropriate authority.

In case of termination of overseas employment without just, valid or authorized cause as defined by law
or contract, the workers shall be entitled to the full reimbursement of his placement fee with interest of
twelve (12%) per annum, plus his salaries for the unexpired portion of his employment contract or for
three (3) months for every year of the unexpired term, whichever is less.

....

(Emphasis supplied)

Section 15 of Republic Act No. 8042 states that "repatriation of the worker and the transport of his [or her]
personal belongings shall be the primary responsibility of the agency which recruited or deployed the worker
overseas." The exception is when "termination of employment is due solely to the fault of the worker,"  which as
80

we have established, is not the case. It reads:

SEC. 15. REPATRIATION OF WORKERS; EMERGENCY REPATRIATION FUND. – The repatriation of

the worker and the transport of his personal belongings shall be the primary responsibility of the agency
which recruited or deployed the worker overseas. All costs attendant to repatriation shall be borne by or
charged to the agency concerned and/or its principal. Likewise, the repatriation of remains and transport
of the personal belongings of a deceased worker and all costs attendant thereto shall be borne by the
principal and/or local agency. However, in cases where the termination of employment is due solely to
the fault of the worker, the principal/employer or agency shall not in any manner be responsible for the
repatriation of the former and/or his belongings.

....

The Labor Code  also entitles the employee to 10% of the amount of withheld wages as attorney’s feeswhen the
81

withholding is unlawful.

The Court of Appeals affirmedthe National Labor Relations Commission’s decision to award respondent
NT$46,080.00 or the threemonth equivalent of her salary, attorney’s fees of NT$300.00, and the reimbursement
of the withheld NT$3,000.00 salary, which answered for her repatriation.

We uphold the finding that respondent is entitled to all of these awards. The award of the three-month
equivalent of respondent’s salary should, however, be increased to the amount equivalent to the
unexpired term of the employment contract.

In Serrano v. Gallant Maritime Services, Inc. and Marlow Navigation Co., Inc.,  this court ruled that the clause
82

"or for three (3) months for every year of the unexpired term, whichever is less"  is unconstitutional for violating
83

the equal protection clause and substantive due process. 84

A statute or provision which was declared unconstitutional is not a law. It "confers no rights; it imposes no duties;
it affords no protection; it creates no office; it is inoperative as if it has not been passed at all."
85

We are aware that the clause "or for three (3) months for every year of the unexpired term, whichever is
less"was reinstated in Republic Act No. 8042 upon promulgation of Republic Act No. 10022 in 2010. Section 7 of
Republic Act No. 10022 provides:

Section 7.Section 10 of Republic Act No. 8042, as amended, is hereby amended to read as follows:

SEC. 10. Money Claims.– Notwithstanding any provision of law to the contrary, the Labor
Arbiters of the National Labor Relations Commission (NLRC) shall have the original and
exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the
complaint, the claims arising out of an employer-employee relationship or by virtue of any law or
contract involving Filipino workers for overseas deployment including claims for actual, moral,
exemplary and other forms of damage. Consistent with this mandate, the NLRC shall endeavor
to update and keep abreast with the developments in the global services industry.

The liability of the principal/employer and the recruitment/placement agency for any and all
claims under this section shall be joint and several. This provision shall be incorporated in the
contract for overseas employment and shall be a condition precedent for its approval. The
performance bond to de [sic] filed by the recruitment/placement agency, as provided by law, shall
be answerable for all money claims or damages that may be awarded to the workers. If the
recruitment/placement agency is a juridical being, the corporate officers and directors and
partners as the case may be, shall themselves be jointly and solidarily liable with the corporation
or partnership for the aforesaid claims and damages.

Such liabilities shall continue during the entire period or duration of the employment contract and
shall not be affected by any substitution, amendment or modification made locally or in a foreign
country of the said contract.

Any compromise/amicable settlement or voluntary agreement on money claims inclusive of

damages under this section shall be paid within thirty (30) days from approval of the settlement
by the appropriate authority.

In case of termination of overseas employment without just, valid or authorized cause as defined
by law or contract, or any unauthorized deductions from the migrant worker’s salary, the worker
shall be entitled to the full reimbursement if [sic] his placement fee and the deductions made with
interest at twelve percent (12%) per annum, plus his salaries for the unexpired portion of his
employment contract or for three (3) months for every year of the unexpired term, whichever is
less.

In case of a final and executory judgement against a foreign employer/principal, it shall be

automatically disqualified, without further proceedings, from participating in the Philippine
Overseas Employment Program and from recruiting and hiring Filipino workers until and unless it
fully satisfies the judgement award.

Noncompliance with the mandatory periods for resolutions of case providedunder this section
shall subject the responsible officials to any or all of the following penalties:

(a) The salary of any such official who fails to render his decision or resolution within the
prescribed period shall be, or caused to be, withheld until the said official complies
therewith;

(b) Suspension for not more than ninety (90) days; or

(c) Dismissal from the service with disqualification to hold any appointive public office for
five (5) years.

Provided, however,That the penalties herein provided shall be without prejudice to any liability
which any such official may have incured [sic] under other existing laws or rules and regulations
as a consequence of violating the provisions of this paragraph. (Emphasis supplied)
Republic Act No. 10022 was promulgated on March 8, 2010. This means that the reinstatement of the clause in
Republic Act No. 8042 was not yet in effect at the time of respondent’s termination from work in 1997.  Republic
86

Act No. 8042 before it was amended byRepublic Act No. 10022 governs this case.

When a law is passed, this court awaits an actual case that clearly raises adversarial positions in their proper
context before considering a prayer to declare it as unconstitutional.

However, we are confronted with a unique situation. The law passed incorporates the exact clause already
declared as unconstitutional, without any perceived substantial change in the circumstances.

This may cause confusion on the part of the National Labor Relations Commission and the Court of Appeals.At
minimum, the existence of Republic Act No. 10022 may delay the execution of the judgment in this case, further
frustrating remedies to assuage the wrong done to petitioner.

Hence, there is a necessity to decide this constitutional issue.

Moreover, this court is possessed with the constitutional duty to "[p]romulgate rules concerning the protection
and enforcement of constitutional rights."  When cases become mootand academic, we do not hesitate to
87

provide for guidance to bench and bar in situations where the same violations are capable of repetition but will
evade review. This is analogous to cases where there are millions of Filipinos working abroad who are bound to
suffer from the lack of protection because of the restoration of an identical clause in a provision previously
declared as unconstitutional.

In the hierarchy of laws, the Constitution is supreme. No branch or office of the government may exercise its
powers in any manner inconsistent with the Constitution, regardless of the existence of any law that supports
such exercise. The Constitution cannot be trumped by any other law. All laws must be read in light of the
Constitution. Any law that is inconsistent with it is a nullity.

Thus, when a law or a provision of law is null because it is inconsistent with the Constitution,the nullity cannot be
cured by reincorporation or reenactment of the same or a similar law or provision. A law or provision of law that
was already declared unconstitutional remains as such unless circumstances have sochanged as to warrant a
reverse conclusion.

We are not convinced by the pleadings submitted by the parties that the situation has so changed so as to cause
us to reverse binding precedent.

Likewise, there are special reasons of judicial efficiency and economy that attend to these cases. The new law
puts our overseas workers in the same vulnerable position as they were prior to Serrano. Failure to reiterate the
very ratio decidendi of that case will result in the same untold economic hardships that our reading of the
Constitution intended to avoid. Obviously, we cannot countenance added expenses for further litigation thatwill
reduce their hardearned wages as well as add to the indignity of having been deprived of the protection of our
laws simply because our precedents have not been followed. There is no constitutional doctrine that causes
injustice in the face of empty procedural niceties. Constitutional interpretation is complex, but it is never
unreasonable.

Thus, in a resolution  dated October 22, 2013, we ordered the parties and the Office of the Solicitor General to
88

comment on the constitutionality of the reinstated clause in Republic Act No. 10022.

In its comment,  petitioner argued that the clause was constitutional.  The legislators intended a balance
89 90

between the employers’ and the employees’ rights by not unduly burdening the local recruitment
agency.  Petitioner is also of the view that the clause was already declared as constitutional in Serrano.
91 92

The Office of the Solicitor General also argued that the clause was valid and constitutional.  However, since the
93

parties never raised the issue of the constitutionality of the clause asreinstated in Republic Act No. 10022, its
contention is that it is beyond judicial review. 94

On the other hand, respondentargued that the clause was unconstitutional because it infringed on workers’ right
to contract. 95
We observe that the reinstated clause, this time as provided in Republic Act. No. 10022, violates the
constitutional rights to equal protection and due process.  Petitioner as well as the Solicitor General have failed
96

to show any compelling changein the circumstances that would warrant us to revisit the precedent.

We reiterate our finding in Serrano v. Gallant Maritime that limiting wages that should be recovered by
anillegally dismissed overseas worker to three months is both a violation of due process and the equal
protection clauses of the Constitution.

Equal protection of the law is a guarantee that persons under like circumstances and falling within the same
class are treated alike, in terms of "privileges conferred and liabilities enforced."  It is a guarantee against
97

"undue favor and individual or class privilege, as well as hostile discrimination or the oppression of inequality." 98

In creating laws, the legislature has the power "to make distinctions and classifications." 99

In exercising such power, it has a wide discretion. 100

The equal protection clause does not infringe on this legislative power.  A law is void on this basis, only if
101

classifications are made arbitrarily.  There is no violation of the equal protection clause if the law applies equally
102

to persons within the same class and if there are reasonable grounds for distinguishing between those falling
within the class and those who do not fall within the class.  A law that does not violate the equal protection
103

clause prescribesa reasonable classification. 104

A reasonable classification "(1) must rest on substantial distinctions; (2) must be germane to the purposes of the
law; (3) must not be limited to existing conditions only; and (4) must apply equally to all members of the same
class." 105

The reinstated clause does not satisfy the requirement of reasonable classification.

In Serrano, we identified the classifications made by the reinstated clause. It distinguished between fixed-period
overseas workers and fixedperiod local workers.  It also distinguished between overseas workers with
106

employment contracts of less than one year and overseas workers with employment contracts of at least one
year.  Within the class of overseas workers with at least one-year employment contracts, there was a distinction
107

between those with at least a year left in their contracts and those with less than a year left in their contracts
when they were illegally dismissed. 108

The Congress’ classification may be subjected to judicial review. In Serrano, there is a "legislative classification
which impermissibly interferes with the exercise of a fundamental right or operates to the peculiar disadvantage
of a suspect class." 109

Under the Constitution, labor is afforded special protection.  Thus, this court in Serrano, "[i]mbued with the
110

same sense of ‘obligation to afford protection to labor,’ . . . employ[ed] the standard of strict judicial scrutiny, for it
perceive[d] in the subject clause a suspect classification prejudicial to OFWs." 111

We also noted in Serranothat before the passage of Republic Act No. 8042, the money claims of illegally
terminated overseas and local workers with fixed-term employment werecomputed in the same manner.  Their 112

money claims were computed based onthe "unexpired portions of their contracts."  The adoption of the 113

reinstated clause in Republic Act No. 8042 subjected the money claims of illegally dismissed overseas workers
with an unexpired term of at least a year to a cap of three months worth of their salary.  There was no such 114

limitation on the money claims of illegally terminated local workers with fixed-term employment. 115

We observed that illegally dismissed overseas workers whose employment contracts had a term of less than
one year were granted the amount equivalent to the unexpired portion of their employment
contracts.  Meanwhile, illegally dismissed overseas workers with employment terms of at least a year were
116

granted a cap equivalent to three months of their salary for the unexpired portions of their contracts. 117

Observing the terminologies used inthe clause, we also found that "the subject clause creates a sub-layer of
discrimination among OFWs whose contract periods are for more than one year: those who are illegally
dismissed with less than one year left in their contracts shall be entitled to their salaries for the entire unexpired
portion thereof, while those who are illegally dismissed with one year or more remaining in their contracts shall
be covered by the reinstated clause, and their monetary benefits limited to their salaries for three months only." 118
We do not need strict scrutiny to conclude that these classifications do not rest on any real or substantial
distinctions that would justify different treatments in terms of the computation of money claims resulting from
illegal termination.

Overseas workers regardless of their classifications are entitled to security of tenure, at least for the period
agreed upon in their contracts. This means that they cannot be dismissed before the end of their contract terms
without due process. If they were illegally dismissed, the workers’ right to security of tenure is violated.

The rights violated when, say, a fixed-period local worker is illegally terminated are neither greater than norless
than the rights violated when a fixed-period overseas worker is illegally terminated. It is state policy to protect the
rights of workers withoutqualification as to the place of employment.  In both cases, the workers are deprived of
119

their expected salary, which they could have earned had they not been illegally dismissed. For both workers, this
deprivation translates to economic insecurity and disparity.  The same is true for the distinctions between
120

overseas workers with an employment contract of less than one year and overseas workers with at least one
year of employment contract, and between overseas workers with at least a year left in their contracts and
overseas workers with less than a year left in their contracts when they were illegally dismissed.

For this reason, we cannot subscribe to the argument that "[overseas workers] are contractual employeeswho
can never acquire regular employment status, unlike local workers"  because it already justifies differentiated
121

treatment in terms ofthe computation of money claims. 122

Likewise, the jurisdictional and enforcement issues on overseas workers’ money claims do not justify a
differentiated treatment in the computation of their money claims.  If anything, these issues justify an equal, if
123

not greater protection and assistance to overseas workers who generally are more prone to exploitation given
their physical distance from our government.

We also find that the classificationsare not relevant to the purpose of the law, which is to "establish a higher
standard of protection and promotion of the welfare of migrant workers, their families and overseas Filipinos in
distress, and for other purposes."  Further, we find specious the argument that reducing the liability of
124

placement agencies "redounds to the benefit of the [overseas] workers." 125

Putting a cap on the money claims of certain overseas workers does not increase the standard of protection
afforded to them. On the other hand, foreign employers are more incentivizedby the reinstated clause to enter
into contracts of at least a year because it gives them more flexibility to violate our overseas workers’ rights.
Their liability for arbitrarily terminating overseas workers is decreased at the expense of the workers whose
rights they violated. Meanwhile, these overseas workers who are impressed with an expectation of a stable job
overseas for the longer contract period disregard other opportunities only to be terminated earlier. They are left
with claims that are less than what others in the same situation would receive. The reinstated clause, therefore,
creates a situation where the law meant to protect them makes violation of rights easier and simply benign to the
violator.

As Justice Brion said in his concurring opinion in Serrano:

Section 10 of R.A. No. 8042 affects these well-laid rules and measures, and in fact provides a hidden
twist affecting the principal/employer’s liability. While intended as an incentive accruing to
recruitment/manning agencies, the law, as worded, simply limits the OFWs’ recovery in
wrongfuldismissal situations. Thus, it redounds to the benefit of whoever may be liable, including the
principal/employer – the direct employer primarily liable for the wrongful dismissal. In this sense, Section
10 – read as a grant of incentives to recruitment/manning agencies – oversteps what it aims to do by
effectively limiting what is otherwise the full liability of the foreign principals/employers. Section 10, in
short, really operates to benefit the wrong party and allows that party, without justifiable reason, to
mitigate its liability for wrongful dismissals. Because of this hidden twist, the limitation ofliability under
Section 10 cannot be an "appropriate" incentive, to borrow the term that R.A. No. 8042 itself uses to
describe the incentive it envisions under its purpose clause.

What worsens the situation is the chosen mode of granting the incentive: instead of a grant that, to
encourage greater efforts at recruitment, is directly related to extra efforts undertaken, the law simply
limits their liability for the wrongful dismissals of already deployed OFWs. This is effectively a legally-
imposed partial condonation of their liability to OFWs, justified solely by the law’s intent to encourage
greater deployment efforts. Thus, the incentive,from a more practical and realistic view, is really part of a
scheme to sell Filipino overseas labor at a bargain for purposes solely of attracting the market. . . .
 The so-called incentive is rendered particularly odious by its effect on the OFWs — the benefits accruing
to the recruitment/manning agencies and their principals are takenfrom the pockets of the OFWs to
whom the full salaries for the unexpired portion of the contract rightfully belong. Thus, the
principals/employers and the recruitment/manning agencies even profit from their violation of the security
of tenure that an employment contract embodies. Conversely, lesser protection is afforded the OFW, not
only because of the lessened recovery afforded him or her by operation of law, but also because this
same lessened recovery renders a wrongful dismissal easier and less onerous to undertake; the lesser
cost of dismissing a Filipino will always bea consideration a foreign employer will take into account in
termination of employment decisions. . . . 126

Further, "[t]here can never be a justification for any form of government action that alleviates the burden of one
sector, but imposes the same burden on another sector, especially when the favored sector is composed of
private businesses suchas placement agencies, while the disadvantaged sector is composed ofOFWs whose
protection no less than the Constitution commands. The idea thatprivate business interest can be elevated to the
level of a compelling state interest is odious."
127

Along the same line, we held that the reinstated clause violates due process rights. It is arbitrary as it deprives
overseas workers of their monetary claims without any discernable valid purpose. 128

Respondent Joy Cabiles is entitled to her salary for the unexpired portion of her contract, in accordance with
Section 10 of Republic Act No. 8042. The award of the three-month equivalence of respondent’s salary must be
modified accordingly. Since she started working on June 26, 1997 and was terminated on July 14, 1997,
respondent is entitled to her salary from July 15, 1997 to June 25, 1998. "To rule otherwise would be iniquitous
to petitioner and other OFWs, and would,in effect, send a wrong signal that principals/employers and
recruitment/manning agencies may violate an OFW’s security of tenure which an employment contract embodies
and actually profit from such violation based on an unconstitutional provision of law." 129

III

On the interest rate, the Bangko Sentral ng Pilipinas Circular No. 799 of June 21, 2013, which revised the
interest rate for loan or forbearance from 12% to 6% in the absence of stipulation,applies in this case. The
pertinent portions of Circular No. 799, Series of 2013, read:

The Monetary Board, in its Resolution No. 796 dated 16 May 2013, approved the following revisions
governing the rate of interest in the absence of stipulation in loan contracts, thereby amending Section 2
of Circular No. 905, Series of 1982:

Section 1. The rate of interest for the loan or forbearance of any money, goods or credits and the rate
allowed in judgments, in the absence of an express contract as to such rateof interest, shall be six
percent (6%) per annum.

Section 2. In view of the above, Subsection X305.1 of the Manual of Regulations for Banks and Sections
4305Q.1, 4305S.3 and 4303P.1 of the Manual of Regulations for Non-Bank Financial Institutions are
hereby amended accordingly.

This Circular shall take effect on 1 July 2013.

Through the able ponencia of Justice Diosdado Peralta, we laid down the guidelines in computing legal interest
in Nacar v. Gallery Frames: 130

II. With regard particularly to an award of interest in the concept of actual and compensatory damages,
the rate of interest, as well as the accrual thereof, is imposed, as follows:

1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan
or forbearance of money, the interest due should be that which may have been stipulated in
writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially
demanded. In the absence of stipulation, the rate of interest shall be 6% per annum to be
computed from default, i.e., from judicial or extrajudicial demand under and subject to the
provisions of Article 1169 of the Civil Code.
 2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest
on the amount of damages awarded may be imposed at the discretion of the court at the rate of
6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages,
except when or until the demand can be established with reasonable certainty. Accordingly,
where the demand is established with reasonable certainty, the interest shall begin to run from
the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code), but when such
certainty cannot be so reasonably established at the time the demand is made, the interest shall
begin to run only from the date the judgment of the court is made (at which time the quantification
of damages may be deemed to have been reasonably ascertained). The actual base for the
computation of legal interest shall, in any case, be on the amount finally adjudged. 3. When the
judgment of the court awarding a sum of money becomes final and executory, the rate of legal
interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 6% per annum
from such finality until its satisfaction, this interim period being deemed to be by then an
equivalent to a forbearance of credit.

And, in addition to the above, judgments that have become final and executory prior to July 1, 2013,
shall not be disturbed and shall continue to be implemented applying the rate of interest fixed therein. 131

Circular No. 799 is applicable only in loans and forbearance of money, goods, or credits, and in judgments when
there is no stipulation on the applicable interest rate. Further, it is only applicable if the judgment did not become
final and executory before July 1, 2013. 132

We add that Circular No. 799 is not applicable when there is a law that states otherwise. While the Bangko
Sentral ng Pilipinas has the power to set or limit interest rates,  these interest rates do not apply when the law
133

provides that a different interest rate shall be applied. "[A] Central Bank Circular cannot repeal a law. Only a law
can repeal another law." 134

For example, Section 10 of Republic Act No. 8042 provides that unlawfully terminated overseas workers are
entitled to the reimbursement of his or her placement fee with an interest of 12% per annum. Since Bangko
Sentral ng Pilipinas circulars cannotrepeal Republic Act No. 8042, the issuance of Circular No. 799 does not
have the effect of changing the interest on awards for reimbursement of placement fees from 12% to 6%. This is
despite Section 1 of Circular No. 799, which provides that the 6% interest rate applies even to judgments.

Moreover, laws are deemed incorporated in contracts. "The contracting parties need not repeat them. They do
not even have to be referred to. Every contract, thus, contains not only what has been explicitly stipulated, but
the statutory provisions that have any bearing on the matter."  There is, therefore, an implied stipulation in
135

contracts between the placement agency and the overseasworker that in case the overseas worker is adjudged
as entitled to reimbursement of his or her placement fees, the amount shall be subject to a 12% interest per
annum. This implied stipulation has the effect of removing awards for reimbursement of placement fees from
Circular No. 799’s coverage.

The same cannot be said for awardsof salary for the unexpired portion of the employment contract under
Republic Act No. 8042. These awards are covered by Circular No. 799 because the law does not provide for a
specific interest rate that should apply.

In sum, if judgment did not become final and executory before July 1, 2013 and there was no stipulation in the
contract providing for a different interest rate, other money claims under Section 10 of Republic Act No. 8042
shall be subject to the 6% interest per annum in accordance with Circular No. 799.

This means that respondent is also entitled to an interest of 6% per annum on her money claims from the finality
of this judgment.

IV

Finally, we clarify the liabilities ofWacoal as principal and petitioner as the employment agency that facilitated
respondent’s overseas employment.

Section 10 of the Migrant Workers and Overseas Filipinos Act of 1995 provides that the foreign employer and
the local employment agency are jointly and severally liable for money claims including claims arising out of an
employer-employee relationship and/or damages. This section also provides that the performance bond filed by
the local agency shall be answerable for such money claims or damages if they were awarded to the employee.
This provision is in line with the state’s policy of affording protection to labor and alleviating workers’ plight. 136

In overseas employment, the filing of money claims against the foreign employer is attended by practical and
legal complications.  The distance of the foreign employer alonemakes it difficult for an overseas worker to reach
1âwphi1

it and make it liable for violations of the Labor Code. There are also possible conflict of laws, jurisdictional
issues, and procedural rules that may be raised to frustrate an overseas worker’sattempt to advance his or her
claims.

It may be argued, for instance, that the foreign employer must be impleaded in the complaint as an
indispensable party without which no final determination can be had of an action. 137

The provision on joint and several liability in the Migrant Workers and Overseas Filipinos Act of 1995 assures
overseas workers that their rights will not be frustrated with these complications. The fundamental effect of joint
and several liability is that "each of the debtors is liable for the entire obligation."  A final determination may,
138

therefore, be achieved even if only oneof the joint and several debtors are impleaded in an action. Hence, in the
case of overseas employment, either the local agency or the foreign employer may be sued for all claims arising
from the foreign employer’s labor law violations. This way, the overseas workers are assured that someone —
the foreign employer’s local agent — may be made to answer for violationsthat the foreign employer may have
committed.

The Migrant Workers and Overseas Filipinos Act of 1995 ensures that overseas workers have recourse in law
despite the circumstances of their employment. By providing that the liability of the foreign employer may be
"enforced to the full extent"  against the local agent,the overseas worker is assured of immediate and
139

sufficientpayment of what is due them. 140

Corollary to the assurance of immediate recourse in law, the provision on joint and several liability in the Migrant
Workers and Overseas Filipinos Act of 1995 shifts the burden of going after the foreign employer from the
overseas worker to the local employment agency. However, it must be emphasized that the local agency that is
held to answer for the overseas worker’s money claims is not leftwithout remedy. The law does not preclude it
from going after the foreign employer for reimbursement of whatever payment it has made to the employee to
answer for the money claims against the foreign employer.

A further implication of making localagencies jointly and severally liable with the foreign employer is thatan
additional layer of protection is afforded to overseas workers. Local agencies, which are businesses by nature,
are inoculated with interest in being always on the lookout against foreign employers that tend to violate labor
law. Lest they risk their reputation or finances, local agenciesmust already have mechanisms for guarding
against unscrupulous foreign employers even at the level prior to overseas employment applications.

With the present state of the pleadings, it is not possible to determine whether there was indeed a transfer of
obligations from petitioner to Pacific. This should not be an obstacle for the respondent overseas worker to
proceed with the enforcement of this judgment. Petitioner is possessed with the resources to determine the
proper legal remedies to enforce its rights against Pacific, if any.

Many times, this court has spoken on what Filipinos may encounter as they travel into the farthest and
mostdifficult reaches of our planet to provide for their families. In Prieto v. NLRC: 141

The Court is not unaware of the many abuses suffered by our overseas workers in the foreign land
where they have ventured, usually with heavy hearts, in pursuit of a more fulfilling future. Breach of
contract, maltreatment, rape, insufficient nourishment, sub-human lodgings, insults and other forms of
debasement, are only a few of the inhumane acts towhich they are subjected by their foreign employers,
who probably feel they can do as they please in their own country. Whilethese workers may indeed have
relatively little defense against exploitation while they are abroad, that disadvantage must not continue to
burden them when they return to their own territory to voice their muted complaint. There is no reason
why, in their very own land, the protection of our own laws cannot be extended to them in full measure
for the redress of their grievances. 142

But it seems that we have not said enough.

We face a diaspora of Filipinos. Their travails and their heroism can be told a million times over; each of their
stories as real as any other. Overseas Filipino workers brave alien cultures and the heartbreak of families left
behind daily. They would count the minutes, hours, days, months, and years yearning to see their sons and
daughters. We all know of the joy and sadness when they come home to see them all grown up and, being so,
they remember what their work has cost them. Twitter accounts, Facetime, and many other gadgets and online
applications will never substitute for their lost physical presence.

Unknown to them, they keep our economy afloat through the ebb and flow of political and economic crises. They
are our true diplomats, they who show the world the resilience, patience, and creativity of our people. Indeed, we
are a people who contribute much to the provision of material creations of this world.

This government loses its soul if we fail to ensure decent treatment for all Filipinos. We default by limiting the
contractual wages that should be paid to our workers when their contracts are breached by the foreign
employers. While we sit, this court will ensure that our laws will reward our overseas workers with what they
deserve: their dignity.

Inevitably, their dignity is ours as weil.

WHEREFORE, the petition is DENIED. The decision of the Court of Appeals is AFFIRMED with modification.
Petitioner Sameer Overseas Placement Agency is ORDERED to pay respondent Joy C. Cabiles the amount
equivalent to her salary for the unexpired portion of her employment contract at an interest of 6% per annum
from the finality of this judgment. Petitioner is also ORDERED to reimburse respondent the withheld
NT$3,000.00 salary and pay respondent attorney's fees of NT$300.00 at an interest of 6% per annum from the
finality of this judgment.

The clause, "or for three (3) months for every year of the unexpired term, whichever is less" in Section 7 of
Republic Act No. 10022 amending Section 10 of Republic Act No. 8042 is declared unconstitutional and,
therefore, null and void.

SO ORDERED.
G.R. No. 197005               June 4, 2014

PRINCESS JOY PLACEMENT AND GENERAL SERVICES, INC., Petitioner,

vs.
GERMAN A. BINALLA, Respondent.

RESOLUTION

BRION, J.:

We resolve the motion for reconsideration  of the Court's Resolution  dated August 8, 2011 denying the petition
1 2

for review on certiorari  filed by Princess Joy Placement and General Services, Inc. (Princess Joy) for failure to
3

sufficiently show any reversible error in the decision  dated May 6, 2010 and resolution  dated May 23, 2011 of
4 5

the Court of Appeals in CA-G.R. SP No. 102285.

The Antecedents

On August 9, 2004, respondent German A. Binalla filed a complaint  against local manning agent CBM Business
6

Management and Manpower Services (CBM)and/or Princess Joy/Al Adwani General Hospital (Al Adwani) for
various money claims arising from his employment with Al Adwani, in Taif, Saudi Arabia from April 19, 2002 to
April 28, 2004.

Binalla, a registered nurse, alleged that in April 2002, he applied for employment with Princess Joy who referred
him to Reginaldo Paguio and Cynthia Latea for processing of his papers. After completing his documentary
requirements, he was toldthat he would be deployed to Al Adwani. On April 12, 2002, he signed a four-year
contract  with Al Adwani as staff nurse. He paid Latea ₱4,500.00 and Paguio, ₱3,000.00, although no receipts
7

were issued to him. Later, he was given a telegram notifying him of his departure on April 19, 2002.

Binalla further alleged that on the day of his departure, Paguio met him at the airport and gave him a copy of his
employment contract, plane ticket, passport, a copy of his Overseas Employment Certificate from the Philippine
Overseas Employment Administration (POEA) and other documents. It was only after boarding his Saudi Arabia
Airlines plane that he examined his papers and discovered that CBM was his deploying agency. Under the
contract certified by the POEA,  his salary was supposed to be US$550.00 for twenty-four (24) months or for two
8

years.

Binalla also saw that under the four-year contract he signed, his monthly salary was only 1,500 Saudi Riyals
(SR) equivalent to $400. Left with no choice as he was then already bound for Saudi Arabia, he worked under
his contract for only two years and returned to the Philippines in April 2004 after posting a bond of SR 3,000.00,
supposedly to guarantee that he would come back to finish his contract.

Upon his return to the Philippines, Binalla verified his employment contract with the POEA. He learned that the
POEA indeed certified a different contract for him, with CBM as his recruiting or deploying agency. He disowned
the contract, claiming that his supposed signature appearing in the document was a forgery. Out of frustration,
he opted not to return to Saudi Arabia to complete his four-year contract.

Binalla argued before the labor arbiter that he was "re-processed" – an arrangement where Princess Joy
recruited and deployed him, but made it appear that it was undertaken by CBM under a different contract
submitted to and certified by the POEA. He complained that he was made to work under an inferior contract and
that Al Adwani itself violated the terms of his four-year contract as follows: (1) withholding his initial salary of
SR1,500 purportedly as a bond to ensure the completion of the contract; (2) deducting SR 250 from his salary
for six months as reimbursement for his placement fee of SR1,500; (3) non-payment of his overtime pay for his
two years work; (4) refusal to allow him to avail of his 15-day vacation leave and 15-day sick leave equivalent to
one month’s salary; (5) deduction of SR 50 a month (total of SR 1,200) for board and lodging and food
allowance which were supposed to be free; and (6) requiring him to post a bond equivalent to three months
salary to guarantee that he would return (to complete his contract) when he applied for a vacation leave after two
years of work.

Despite the service of summons to Princess Joy and CBM, it was only Princess Joy which made submissions to
the labor arbiter. It denied that it recruited and deployed Binalla for overseas employment, repudiating the
involvement of Paguio and Lateo in Binalla’s engagement by Al Adwani. It claimed that the two were not among
its officers, employees and representatives registered with the POEA. It alleged that it was not Al Adwani’s
Philippine agent, but CBM. It likewise denied that it participated in the four-year contract presented in evidence
by Binalla, claiming that it was not even an employment contract as it was only Binalla who signed it; neither did
it "re-process" him. If at all, it argued, the "repro-scheme" committed by Paguio and Lateo constituted a
prohibited recruitment practice outside the labor arbiter’s jurisdiction.

The Compulsory Arbitration Rulings

In his decision  dated October 28, 2005, Labor Arbiter (LA) Fructuoso T. Aurellano of the National Labor
9

Relations Commission’s Regional Arbitration Branch No. V found merit in the complaint. LA Aurellano
considered the complaint a money claim and therefore within his jurisdiction under the law.  LA Aurellano found
10

that Princess Joy and CBM jointly undertook Binalla’s recruitment and deployment in Saudi Arabia through
"reprocessing." He found credible Binalla’s contention that Paguio and Lateo, who processed his papers, were
working for Princess Joy, taking special note of the "ticket/telegram/advise"  (with mention of "Princess Joy" and
11

"Regie" [Paguio]),handed by Paguio to Binalla.

LA Aurellano declared CBM and Princess Joy jointly and severally liable to pay Binalla (1) US$3,500.00 in salary
differentials for two years; (2) SR 1,500.00 or $400.00 representing six months’ salary deduction as bond to
ensure completion of Binalla’s four-year contract; (3) $9,900.00 in overtime pay; (4) $550 in vacation leave and
sick leave credits; (5) SR 1,200 in reimbursement of monthly deductions for board and lodging; (6) SR 3,000.00
in reimbursement of the vacation bond; (7) ₱500,000.00 in moral damages; (8) ₱500,000.00 in exemplary
damages; and (9) 10 % in attorney’s fees. 12

Princess Joy appealed the LA’sruling by filing with the NLRC a Notice of Appeal,  a Memorandum of
13

Appeal,  and a Motion to Reduce and Fix Bond,  all dated November 24, 2005, accompanied by a surety bond
14 15

of ₱250,000.00 for LA Aurellano’s monetary award of ₱800,875.00, exclusive of damages. Binalla opposed the
motion, contending that the appeal was made in violation of the NLRC rules.

On May 12, 2006, the NLRC issued an order  allowing Princess Joy to post the balance of the appeal bond to
16

make it equal to ₱800,875.00. Binalla moved for reconsideration and opposed the posting of the additional bond.
Through a Compliance  dated July 21, 2006, Princess Joy posted with the NLRC the required additional bond of
17

₱550,875.00. The NLRC then acted on the appeal and issued a resolution  dated July 27, 2007 reversing LA
18

Aurellano’s decision.

The NLRC ruled that the facts and evidence of the case do not establish "reprocessing" as the means for
Binalla’s deployment to Saudi Arabia. It declared that, on the contrary, substantial evidence existed pointing to
CBM’s sole liability as the recruiting and deploying agent of Binalla. It refused to give credit to the ticket
telegram/advice Binalla submitted in evidence to establish Princess Joy’s liability as it was merely an unsigned
and unauthenticated printout with no indication of its source, purpose, or the entity to whom it is addressed.

In the matter of CBM’s liability, the NLRC stressed that while the agency waived its right to present evidence for
its non-appearance, it can be held liable – together with Al Adwani– only for causes of action raised in the
complaint and were duly proven. It pointed out that the complaint (the standard form) filed by Binalla mentioned
only non-payment of salaries, overtime pay, vacation/sick leave pay and refund of alleged salary deductions,
including placement fee, plus attorney’s fees. The NLRC thus deleted the award to Binalla of salary differentials,
food allowance, and moral and exemplary damages. Accordingly, it awarded Binalla $2,200.00 in unpaid
salaries for four months; $550.00 for unused vacation and sick leave credits, plus 10% attorney’s fees.

Binalla moved for reconsideration, but the NLRC denied the motion,  prompting him to seek relief from the CA
19

through a petition for certiorari under Rule 65 of the Rules of Court. He charged the NLRC of grave abuse of
discretion in (1) entertaining Princess Joy’s appeal despite its failure to post an appeal bond within the ten-day
appeal period; and (2) not appreciating the "reprocessing scheme" employed by Princess Joy in his deployment
to Al Adwani.

The CA Decision

In its decision of May 6, 2010,  the CA granted the petition and set aside the NLRC rulings. It found that the
20

NLRC committed grave abuse of discretion when it decided the appeal on the merits despite Princess Joy’s
failure "to comply with the essential requirement to perfect an appeal."  It emphasized that under the law (Article
21

223 of the Labor Code) and the NLRC rules (Rule VI, Section 6 of the NLRC 2005 Revised Rules of Procedure),
in case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the
posting of a cash or surety bond equivalent in amount to the monetary award, exclusive of damages and
attorney’s fees, within the ten-day appeal period.

The CA found the ₱250,000.00 posted by Princess Joy insufficient in relation to the monetary award of
₱800,875.00. While it acknowledged that Princess Joy moved for a reduction of the bond, it stressed that the
employer must post the bond within the 10-day period for appeal inasmuch as the motion does not stop the
running of the reglementary period; otherwise, the appeal is not deemed perfected. It noted that the NLRC did
not act on Princess Joy’s motion to reduce and fix bond within the 10-day period. There being no perfected
appeal, it opined, the labor arbiter’s judgment had become final and executory.

Princess Joy moved for reconsideration, but the CA denied the motion; thus the petition.

The Petition

Princess Joy prays for the reversal of the CA decision on the ground that the appellate court committed a
serious reversible error in ruling that it failed to perfect its appeal. It argued that it complied with the requirements
of the NLRC rules for perfection of the appeal, including the filing of a motion to reduce bond and the posting of
a reasonable amount (₱250,000.00) in relation to the monetary award.

Princess Joy maintains that when the NLRC required the posting of an additional bond in its order of May 12,
2006, within ten days from receipt of the order, it timely posted the additional bond of ₱550,875.00 with
supporting documents,  thus completing the required bond. It took exception to the CA’s opinion that the
22

granting of the motion to reduce bond, as well as the posting of the additional bond set by the NLRC, must be
made within the ten-day period. It regarded the CA opinion incorrect, pointing out that this Court had recognized
situations where the bond has been validly posted after the ten-day period. 23

On the merits of the case, Princess Joy insisted that the NLRC correctly ruled that it should be dropped as a
party respondent and absolved of liability in the case considering that Binalla’s alleged "re-processing" had not
been proven. It argued that the individuals he mentioned as having recruited and facilitated his employment
abroad were not its employees or agents; also, evidence showed that it was CBM who deployed Binalla to Saudi
Arabia.

Further, Princess Joy maintains that even assuming that it is liable, its liability to Binalla should be limited only to
validly substantiated claims under the two-year POEA-approved contract. If the claims were under the four-year
contract, there is no showing that it was the contract that had been implemented in the jobsite; furthermore, it
was not a party to this four-year contract. Lastly, it took exception to the exorbitant award of damages to Binalla
– ₱500,000.00 each for moral and exemplary damages.

The Court’s Action on the Petition and Related Incidents

In a Resolution  dated August 8, 2011, the Court denied the petition for failure to sufficiently show any reversible
24

error in the assailed judgment of the CA. This prompted Princess Joy to move for reconsideration  based on the
25

same arguments in support of the petition. The Court then required Binalla to comment on the motion for
reconsideration. 26

Binalla’s Comment

In his Comment  filed without the assistance of counsel, Binalla stands firm on his position that Princess Joy’s
27

appeal to the NLRC was not perfected as it failed to post a bond equivalent in amount to the labor arbiter’s
award within the ten-day appeal period.

On the merits of the case, Binalla takes exception to the claim that Princess Joy has been a "victim of gross and
manifest injustice."  He submits that on the contrary, he was a victim to the kind of injustice Princess Joy speaks
28

about. He reiterates his deep misgivings over what happened to his employment in Saudi Arabia where he was
made to work with a monthly salary of US$400, which to his knowledge was for four years, only to find out that
he was entitled to $550 and just for two years. He laments that not only was he made to work under a contract
inferior to that certified by the POEA; his employer even violated the contract in terms of withholding or non-
payment of employee benefits due him. He thus entreats the Court to deny Princess Joy’s motion for
reconsideration.

The Court’s Ruling

We partially grant the motion for reconsideration.

The appeal bond issue

The NLRC committed no grave abuse of discretion in taking cognizance of and acting on Princess Joy’s motion
to reduce the appeal bond as it is allowed under Rule VI, Section 6 of the NLRC 2005 Revised Rules of
Procedure,  and the motion was filed within the ten-day appeal period, together with the notice of appeal and the
29

memorandum of appeal. Also, the motion was accompanied by a surety bond of ₱250,000.00, an indication of a
genuine effort on the part of the agency to comply with the bond requirement.

Compared with LA Aurellano’s award of ₱800,875.00 to Binalla, we find the initial bond posted by Princess Joy
reasonable, considering that it is questioning the unusually large amount of the awarded damages. Significantly,
the agency posted an additional bond as required by the NLRC in its May 12, 2006 order,  thus, bringing the
30

amount equal to the labor arbiter’s monetary award. We take this occasion to impress upon the parties that the
Court takes a liberal approach on the appeal bond requirement in "the broader interest of justice and with the
desired objective of deciding cases on the merits."  In Intertranz Container Lines, Inc. v. Bautista,  the Court
31 32

reiterated its call for a liberal application of the law and the rules on the appeal bond requirement "with an eye on
the interest of substantial justice and the merits of the case." 33

In this light, the CA committed a reversible error in imputing grave abuse of discretion on the NLRC for acting on
the motion to reduce bond even beyond the ten-day appeal period.

The merits of the case

We now proceed to the substantive aspect of the case which the CA did not pass upon in light of its ruling that
the NLRC had lost jurisdiction over the labor dispute for Princess Joy’s failure to perfect its appeal. The CA thus
was unable to determine whether the NLRC ruling on the merits was tainted with grave abuse of discretion.
Under this situation, do we now remand the case to the CA for a review of the NLRC’s disposition of the merits
of the case or conduct the review ourselves, considering that the case is already almost a decade old counted
from the filing of the complaint? 34

In the course of determining the presence of grave abuse of discretion – a recourse the CA failed to undertake –
we believe we can and now should rule on the merits to lay the issues posed finally to rest. Incidentally, in Metro
Eye Security, Inc. v. Salsona,  we emphasized that a remand should be avoided if the ends of justice would not
35

be served. In Intertranz Container Lines, Inc. v. Bautista,  we expressed the same concern over a more than
36

five-year old illegal dismissal case. As matters now stand, a remand would definitely be a disservice to the ends
of justice as it would only prolong the disposition of the case. Significantly, we note that Princess Joy filed a
Comment  on Binalla’s petition for certiorari before the CA.  Thus, the issues have been joined and are ready for
37 38

adjudication and should forthwith be resolved in the interest of speedy justice.39

Is Princess Joy liable under the complaint?

After an examination of the facts, we find, contrary to the NLRC ruling, substantial evidence showing that Binalla
was employed by Al Adwani in Saudi Arabia through a fraudulent scheme or arrangement, called "reprocessing"
or otherwise, participated in by Princess Joy and CBM, as well as by Paguio and Lateo (who worked on the
processing and documentation of Binalla’s deployment papers to Al Adwani). Although the scheme enabled
Binalla to be employed overseas, his two-year employment was marred from the start by violations of the law on
overseas employment.

First. Binalla was a victim of contract substitution. He worked under an employment contract whose terms were
inferior to the terms certified by the POEA. Under the four-year contract he signed and implemented by his
employer, Al Adwani, he was paid only SR1500.00 or US$400 a month; whereas, under the POEA- certified two-
year contract, he was to be paid $550.00. The POEA-certified contract – for all intents and purposes and despite
his claim that his signature on the certified contract was forged – was the contract that governed Binalla’s
employment with Al Adwani as it was the contract that the Philippine government officially recognized and which
formed the basis of his deployment to Saudi Arabia. Clearly, the four-year contract signed by Binalla substituted
for the POEA-certified contract.

Under Article 34 (i) of the Labor Code on prohibited practices, "it shall be unlawful for any individual, entity,
licensee, or holder of authority to substitute or alter employment contracts approved and verified by the
Department of Labor and Employment from the time of actual signing thereof by the parties up to and including
the periods of expiration of the same without the approval of the Secretary of Labor." Further, contract
substitution constitutes "illegal recruitment" under Article 38 (I) of the Code.

Under the circumstances, Princess Joy is as liable as CBM and Al Adwani for the contract substitution, no matter
how it tries to avoid liability by disclaiming any participation in the recruitment and deployment of Binalla to Al
Adwani. Before the laborarbiter, Princess Joy claimed that Paguio and Lateo werenot its
employees/representatives or that the principal piece of evidence relied upon by the labor arbiter, the
"ticket/telegram/advise (sic)"  handed to Binallaby Paguio had no probative value as it was merely an unsigned
40

and unauthenticated printout or that the four-year employment contract was signed only by Binalla and there
was no showing that it was the contract implemented by Al Adwani.

Princess Joy’s protestations fail to convince us. We believe, as the labor arbiter did, that the ticket
telegram/advice is proof enough that Princess Joy recruited Binalla. We quote with approval LA Aurellano’s
observation on the matter:

In the instant case, however, it was fortunate that the complainant was able to hold onto the ticket
telegram/advise handed to him by Reginaldo Paguio. Clearly shown thereat, it carried the names
"PRINCESS JOY" and "REGIE." It would not be an unreasonable [presumption] that indeed xxx Princess
Joy recruited complainant and that the latter had been transacting with Reginaldo Paguio (REGIE). 41

The same thing is true with the four-year contract Binalla signed. Again, we quote LA Aurellano’s observation on
why Princess Joy’s participation was not indicated in the contract:

We are prepared to accept the postulation that in order to evade possible liability by way of
"reprocessing scheme," the recruiting or referring agency would as much as possible avoid any
documents that would show that it recruited the referred overseas contract worker to another agency for
deployment. Thus, the employment contract signed by the overseas contract worker and other
documents related to [the] departure would not naturally bear any reference to the referring agency. 42

Significantly, there is evidence on record that belied Princess Joy’s submission that it was not an agent of Al
Adwani. We refer to a nine-page Annex "A"  to Binalla’s motion for reconsideration with the NLRC,  showing that
43 44

Princess Joy entered into recruitment contracts, hired and placed Filipino workers for Al Adwani, through Glenda
Chua, Princess Joy’s President, Reginaldo Paguio and Cynthia Lateo in 2003 to 2004 which covered the period
when Binalla was working for Al Adwani. We consider this evidence relevant—even if it was submitted only on
motion for reconsideration with the NLRC-- as it supports LA Aurellano’s conclusion that Princess Joy was
involved in Binalla’s recruitment and deployment to Al Adwani. In Clarion Printing House, Inc., et al. v.
NLRC,  we reiterated the settled rule that the NLRC is not precluded from receiving evidence on appeal as
45

technical rules of evidence are not binding in labor cases. In an earlier case,  we allowed the submission of
46

additional evidence in support of the employee’s appeal as it did not prejudice the employer since it could submit
counter evidence.

In these lights, we find that the NLRC gravely abused its discretion in ignoring the presence of
substantial evidence in the records indicating that Princess Joy is as responsible and, therefore, as
liable as CBM in Binalla’s fraudulent deployment to Saudi Arabia.

Second. The substitution of Binalla’s contract imposed upon him terms and conditions of employment inferior to
those provided in the POEA certified contract, especially in relation to his monthly salary and the term of his
contract. This should be rectified. There were also Binalla’s claims of non-payment or withholding of
contractual employee benefits by Al Adwani and imposition of unreasonable financial burden or obligations in the
course of his two-year employment. These claims, it bears stressing, had not been disproved by Princess Joy,
CBM or Al Adwani. The claims should be satisfied. We thus find that, except for the award of damages, all the
other items awarded by LA Aurellano are in order. He, however, omitted the reimbursement of Binalla’s
placement fee. This must also be rectified.

The award of moral and exemplary damages/attorney’s fees

We find the award to Binalla of ₱500,000.00 in moral damages and ₱500,000.00 in exemplary damages
excessive. While Princess Joy, CBM and Al Adwani were complicit in the substitution of Binalla’s employment
contract which resulted in the violation of his rights as an overseas Filipino worker, the award of damages is
unusually high, an award that even this Court "does not mete out in labor cases" as we said in the Intertranz
case.  Under the circumstances, we deem an award of ₱50,000.00 in moral damages and ₱50,000.00 in
47

exemplary damages to Binalla to be appropriate.

We affirm the award of attorney’s fees to Binalla as he was forced to litigate to vindicate and protect his rights.

WHEREFORE, premised considered, we grant the petition in part. We SET ASIDE the CA rulings and MODIFY
the resolution of the National Labor Relations Commission dated July 27, 2007. Accordingly, petitioners Princess
Joy Placement and General Services and CBM Business Management and Manpower Services are hereby
ordered to pay, jointly and severally, German A. Binalla, the following:

1. US$ 3,600.00 or its Philippine peso equivalent in salary differentials for two (2) years based on the
difference between his salary under the four-year contract he signed and his salary under the two-year
standard employment contract certified by the POEA;

2. SR 1,500 or its Philippine peso equivalent in reimbursement of salary deduction for six (6) months
representing the bond to guarantee the completion of his four-year contract;

3. US$9,900.00 or its Philippine peso equivalent in overtime pay for two years overtime work at four (4)
hours/shift at 150% for regular working hours in accordance with the POEA-certified contract;

4. US$550.00 or its Philippine peso equivalent in unused vacation and sick leave credits;

5. SRl,200 or its Philippine peso equivalent in reimbursement of monthly deductions for board and
lodging;

6. SR 3,000.00 or its Philippine peso equivalent in reimbursement of vacation leave bond;

7. SR 1,500.00 or its Philippines peso equivalent in reimbursement of placement fee;

8. P.50,000.00 in moral damages;

9. P.50,000.00 in exemplary damages; and

10. Ten percent (10%) attorney's fees.

SO ORDERED.
G.R. No. 187160

PEOPLE OF THE PHILIPPINES, Appellee,

vs.
ERLINDA A. SISON@ "MARGARITA S. AGUILAR,", Appellant.

DECISION

CARPIO, J.:

The Case

Before the Court is an appeal by Erlinda A. Sison (Sison) from the 6 November 2008 Decision  of the Court of
1

Appeals irtcA-G.R. CR-H.C. No. 02833. The Court of Appeals affirmed the 8 May 2007 Joint Decision  of the2

Regional Trial Court of Mandaluyong City, Branch 211 (RTC) finding Sison guilty beyond reasonable doubt of (1)
violation of Section 6, in relation to Section 7, of Republic Act No. 8042 (RA 8042), or illegal recruitment
involving economic sabotage, and (2) estafa under Article 315 of the Revised Penal Code (RPC).

The Facts

Sometime in November or December 1999, Darvy  M. Castuera (Castuera) was introduced to Sison by her
3

husband, a certain Col. Alex Sison (Col. Sison), a police officer assigned at Camp Crame, Quezon City.
Castuera's aunt, Edna Magalona, was then teaching police officers at Camp Crame and Col. Sison was one of
her students. Col. Sison happened to mention that his wife can facilitate papers for workers in Australia.
Castuera and Magalona then proceeded to Col. Sison's home in Las Piñas. There, they met Sison and she
briefed Castuera on the requirements for working as a fruit picker in Australia.
4

During that meeting, Sison introduced Castuera to another man who related that he was able to go to Australia
with Sison's help. She also showed Castuera pictures of other people she had supposedly helped to get
employment in Australia. Sison further narrated that a couple she had helped had given her their car as
payment. Because of Sison's representations, Castuera believed in her promise that she could send him to
Australia.
5

Sison asked Castuera for ₱180,000 for processing his papers. After some negotiations, Sison agreed to lower
the fee to ₱160,000. Castuera was to pay half before he leaves the Philippines and the other half will be taken
from his salary in Australia.
6

On 16 June 2000, Castuera met Sison at McDonald's in SM Megamall to give the ₱80,000 down payment. Sison
issued a signed document as proof of payment. Castuera's companions, his aunt Edna Magalona and cousin
Mark Magalona, also signed the document as witnesses. Sison promised Castuera that she would personally
process his visa application. 7

Sison, however, failed to secure an Australian visa for Castuera. She told him that it was difficult to get an
Australian visa in the Philippines so they had to go to Malaysia to get one. She also said that Castuera's
Australian visa was already in Malaysia and his personal appearance was required there. 8

On 28 June 2008, Sison and Castuera left Manila for Zamboanga City by plane and from there, rode a boat to
Sandakan, Malaysia. Sison told Castuera that he only needed to stay in Malaysia for a week then he would
proceed to Australia.
9

Twice, they nearly overstayed in Malaysia. Each time, Sison and Castuera would leave for Brunei, stay there for
three days, and then go back to Malaysia. The second time they returned to Malaysia, they met several of
Sison's other recruits - other Filipinos who have come in through Thailandas well as Sison' s co-accused, Rea
Dedales (Dedales) and Leonardo Bacomo (Bacomo). Castuera was told that the group would be proceeding to
Indonesia to process their Australian visas there. The group then left for Indonesia.However, the day after
arriving in Indonesia, Sison went back to the Philippines, leaving Castuera and the other recruits with Dedales
and Bacomo. 10

Subsequently, Castuera's application for an Australian visa in Indonesia was denied.  Dedales said it was harder
11

to get an Australian visa from Indonesia and told Castuera to apply for a U.S. visa instead. Dedales asked for
US$1,000 for the processing of his U.S. visa, which he paid.  However, when his U.S. visa came, Castuera saw
12

that it was in an Indonesian passport bearing an Indonesian name. Because of this, Castuera decided to just
return to the Philippines. He asked for his US$1,000 back but Dedales would not return it. His Philippine
passport was also not returned immediately causing him to overstay in Indonesia. He found out then that the
extension papers that Dedales and Bacomo procured for him were fake. 13

Castuera sought the help of the Philippine Embassy in Indonesia and was able to return to the Philippines using
his own funds.14

Upon returning to the Philippines, Castuera filed a complaint against Sison, Dedales, and Bacomo at the
Philippine Overseas Employment Administration (POEA). The agency verified that Sison, Dedales, and Bacomo
did not have any license or permit to hire and recruit for overseas employment. 15

During the trial, Sison denied that she recruited Castuera for employment. She maintained she was also a victim
of illegal recruitment by Dedales.  She claimed that it was Dedales, then working for a travel agency, who was
16

processing her visa and ticket to Australia. She further claimed that she accepted the down payment money
from Castuera because Dedales was already in Malaysia at that time. When she and Castuera arrived in
Malaysia, she gave the money to Dedales. Like Castuera, she found out when they arrived in Malaysia that her
Australian visa application had been denied. She also said that Dedales asked her for an additional US$ l,000,
which she gave.

However, upon learning that it was difficult to get an Australian visa, Sison opted to go back to the Philippines.
When Dedales and Bacomo informed her that Castuera had been issued a U.S. visa, Sison supposedly told
them to apply the US$1,000 she paid to Castuera's payment.

The RTC's Joint Decision

In its 8 May 2007 Joint Decision, the RTC found Sison guilty of illegal recruitment constituting economic
sabotage and estafa:

WHEREFORE, the court finds the accused ERLINDA SISON guilty beyond reasonable doubt of the
offenses charged and hereby sentences her, thus:

1) In Criminal Case No. MCOl-4035-H for Violation of Section 6 in relation to Section 7 of R.A.
8042 (Illegal Recruitment-Economic Sabotage) to suffer the penalty of life imprisonment pursuant
to Section 6 (m) of R.A. 8042 in relation to Section 7 (b) thereof and to pay a fine of One Million
Pesos (Php1,000,000.00) as the illegal recruitment constitutes economic sabotage;

2) In Criminal Case No. MCOl-4036 for Estafa under Article 315 (2) (a) of the Revised Penal
Code (RPC), to suffer the penalty of four years, two (2) months of prision correccional as
minimum to eight (8) years of prision mayor as maximum.

The accused is ordered to indemnify the victim, Darby Castuera, the sum of Php160,000.00 as actual
damages.

In so far as accused Rea Dedales and Leonardo Bacomo are concerned, who have been fugitives from
justice and are not yet arraigned, let bench warrants issue against them. Accordingly, the cases against
them are ordered archived until such time that they shall have been arrested and arraigned.

SO ORDERED. 17

The RTC stated it was clear that Sison convinced Castuera to apply for employment as fruit picker in Australia
and induced him to pay the fees needed for overseas employment. 18

The RTC also held that Castuera was indeed "a victim of illegal recruitment committed by a syndicate"  since it
19

was committed by a group of three persons acting "in conspiracy" with one another. 20

According to the RTC, the conduct of Sison and her co-accused showed that they acted "in concert towards the
accomplishment of a common felonious purpose which was to recruit [Castuera] for overseas employment even
though they had no license to do so." 21
As to the estafa charge, the RTC held that Sison and her co-accused were also guilty of the same. The RTC
pointed out that the element of deceit was evident in the "false pretenses by which accused deluded [Castuera]
into believing that they ha[ve] the power and qualifications to send people abroad for employment" and which
induced him to pay them Pll0,000 and us$1,000. 22

The RTC also rejected Sison's claim that she was also a victim like Castuera. The RTC stated that if that were
true, then Sison should have filed a case against the illegal recruiter, but she did not. It also held that Castuera's
positive and categorical testimony prevailed over Sison's mere denials. 23

The Decision of the Court of Appeals

Sison appealed the joint decision of the RTC to the Court of Appeals.

She maintained that she was also a victim of her co-accused Dedales  and that there was "no material and
24

concrete proof that indeed [she] offered or promised for a fee employment abroad to two (2) or more
persons."  According to Sison, Castuera merely sought her out to "enable him to transact with accused
25

Dedales"  who would facilitate his application for an Australian visa. She claimed that there was no proof beyond
26

reasonable doubt that her transaction with Castuera was for recruitment or deployment to Australia. 27

Sison did not dispute her lack of license or authority to conduct recruitment activities. However, she maintained
that the transaction she facilitated between Castuera and Dedales was "only for the former to secure a visa, not
a working visa." Further, she argued that the procurement of a visa did not qualify as a "recruitment activity." 28

Sison also contested the ruling that she was guilty of estafa, claiming that she "did not fraudulently or falsely
[represent] herself to possess the power, capacity or authority to recruit and deploy [Castuera] for overseas
employment." 29

In its assailed decision, the Court of Appeals upheld the RTC's joint decision:

WHEREFORE, the instant appeal is DISMISSED for lack of merit. The decision of the court a quo dated
May 8, 2007 is AFFIRMED. Costs against the accused-appellant.

SO ORDERED. 30

The Court of Appeals held that all the elements of illegal recruitment were sufficiently proven in the case.

First, Sison herself did not dispute that she is not licensed or authorized to engage in recruitment or placement
activities. This fact was unknown to Castuera at the time of their transaction. 31

Second, the Court of Appeals held that even if Sison did not directly recruit Castuera, her actions led him to
believe that she was engaged in the recruitment business.  Castuera was able to prove that it was Sison who
32

promised him a job as fruit picker in Australia and even accompanied him to Malaysia, Brunei, and Indonesia in
the guise of processing his visa application. However, the Court of Appeals noted that this process was actually
part of "defrauding [Castuera] and inveigling him with false or fraudulent promises of employment in a foreign
land."
33

Further, the Court of Appeals found that Sison made representations about her purported power and authority to
recruit for employment in Australia and, in the process, collected various. amounts of money from Castuera as
placement and processing fees.  The Court of Appeals stated that it was "enough that these recruiters give the
34

impression that they have the ability to enlist workers for job placement abroad in order to induce the latter to
tender payment of fees." 35

The Court of Appeals further held that the illegal recruitment activities of Sison and her co-accused constituted
economic sabotage. It underscored that "active participation of each [accused] in the various phases of the
recruitment scam formed part of a series of machinations" which lured Castuera to part with his hard earned
money in exchange for guaranteed employment in Australia.  The Court of Appeals noted that Castuera would
36

not have gone along with traveling to Malaysia, Brunei, and Indonesia and complying with Sison's further
demands without the repeated assurances of the latter. 37

The Court of Appeals also affirmed Sison's conviction for estafa. It held that the two elements of estafa were
proven in the case. The Court of Appeals found that Sison's misrepresentations facilitated the commission of the
crime. Sison deliberately misrepresented that she had the power, capacity, or means to send Castuera to
Australia. The Court of Appeals concluded that Sison defrauded Castuera through deceit. 38

Sison appealed the Court of Appeals' decision to this Court via a Notice of Appeal dated 25 November 2008. 39

The Issue

The lone issue in this case is whether the guilt of Sison was established beyond reasonable doubt.

The Court's Ruling

The appeal has no merit. The assailed decision of the Court of Appeals is affirmed, with modification as to the
penalty imposed in the estafa case.

Illegal Recruitment by a Syndicate - Economic Sabotage

Under Article 13(b) of Presidential Decree No. 442, as amended, also known as the Labor Code of the
Philippines, recruitment and placement refers to "any act of canvassing, enlisting, contracting, transporting,
utilizing, hiring, or procuring workers, and includes referrals, contact 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."

Illegal recruitment, on the other hand, is defined in Article 38:

Article 38. ILLEGAL RECRUITMENT. - (a) Any recruitment activities, including the prohibited practices
enumerated under Article 34 of this Code, to be undertaken by non-licensees or non-holders of authority
shall be deemed illegal and punishable under Article 39 of this Code. The Department of Labor and
Employment or any law enforcement officer may initiate complaints under this Article.

xxxx

RA 8042 or the Migrant Workers and Overseas Filipinos Act of 1995, approved on 7 June 1995, further
strengthened the protection extended to those seeking overseas employment. Section 6, in particular, extended
the activities covered under the term illegal recruitment:

II. ILLEGAL RECRUITMENT

Sec. 6. DEFINITIONS. - For purposes of this Act, illegal recruitment shall mean any act of canvassing,
enlisting, contracting, transporting, utilizing, hiring, procuring workers and includes referring, contact
services, promising or advertising for employment abroad, whether for profit or not, when undertaken by
a non-license or non-holder of authority contemplated under Article 13(f) of Presidential Decree No. 442,
as amended, otherwise known as the Labor Code of the Philippines. Provided, that such non-license or
non-holder, who, in any manner, offers or promises for a fee employment abroad to two or more
persons shall be deemed so engaged. It shall likewise include the following acts, whether committed
by any persons, whether a non-licensee, non-holder, licensee or holder of authority.

(a) To charge or accept directly or indirectly any amount greater than the specified in the
schedule of allowable fees prescribed by the Secretary of Labor and Employment, or to make a
worker pay any amount greater than that actually received by him as a loan or advance;

(b) To furnish or publish any false notice or information or document in relation to recruitment or
employment;

(c) To give any false notice, testimony, information or document or commit any act of
misrepresentation for the purpose of securing a license or authority under the Labor Code;

(d) To induce or attempt to induce a worker already employed to quit his employment in order to
offer him another unless the transfer is designed to liberate a worker from oppressive terms and
conditions of employment;
 (e) To influence or attempt to influence any persons or entity not to employ any worker who has
not applied for employment through his agency;

(f) To engage in the recruitment of placement of workers in jobs harmful to public health or
morality or to dignity of the Republic of the Philippines;

(g) To obstruct or attempt to obstruct inspection by the Secretary of Labor and Employment or by
his duly authorized representative;

(h) To fail to submit reports on the status of employment, placement vacancies, remittances of
foreign exchange earnings, separations from jobs, departures and such other matters or
information as may be required by the Secretary of Labor and Employment;

(i) To substitute or alter to the prejudice of the worker, employment contracts approved and
verified by the Department of Labor and Employment from the time of actual signing thereof by
the parties up to and including the period of the expiration of the same without the approval of
the Department of Labor and Employment;

(j) For an officer or agent of a recruitment or placement agency to become an officer or member
of the Board of any corporation engaged in travel agency or to be engaged directly on indirectly
in the management of a travel agency;

(k) To withhold or deny travel documents from applicant workers before departure for monetary
or financial considerations other than those authorized under the Labor Code and its
implementing rules and regulations;

(1) Failure to actually deploy without valid reasons as determined by the Department of Labor
and Employment; and

(m) Failure to reimburse expenses incurred by the workers in connection with his documentation
and processing for purposes of deployment, in cases where the deployment does not actually
take place without the worker's fault. Illegal recruitment when committed by a syndicate or in
large scale shall be considered as offense involving economic sabotage.

Illegal recruitment is deemed committed by a syndicate carried out by a group of three (3)
or more persons conspiring or confederating with one another. It is deemed committed in
large scale if committed against three (3) or more persons individually or as a group.

The persons criminally liable for the above offenses are the principals, accomplices and
accessories. In case of juridical persons, the officers having control, management or direction of
their business shall be liable. (Emphasis supplied)

Simply put, illegal recruitment is "committed by persons who, without authority from the government, give the
impression that they have the power to send workers abroad for employment purposes." 40

Illegal recruitment may be undertaken by either non-license or license holders. Non-license holders are liable by
the simple act of engaging in recruitment and placement activities, while license holders may also be held liable
for committing the acts prohibited under Section 6 of RA 8042.

Under RA 8042, a non-licensee or non-holder of authority commits illegal recruitment for overseas employment
in two ways: (1) by any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring
workers, and includes referring, contract services, promising or advertising for employment abroad, whether for
profit or not; or (2) by undertaking any of the acts enumerated under Section 6 of RA 8042. 41

In this case, Sison herself admits that she has no license or authority to undertake recruitment and placement
activities'. The Court has held in several cases that an accused who represents to others that he or she could
send workers abroad for employment, even without the authority or license to do so, commits illegal
recruitment.42

It is the absence of the necessary license or authority to recruit and deploy workers that renders the recruitment
activity unlawful. To prove illegal recruitment, it must be shown that "the accused gave the complainants the
distinct impression that she had the power or ability to deploy the complainants abroad in a manner that they
were convinced to part with their money for that end." 43

On the other hand, illegal recruitment committed by a syndicate, as in the present case, has the following
elements: (a) the offender does not have the valid license or authority required by law to engage in recruitment
and placement of workers; (b) the offender undertakes any of the "recruitment and placement" activities defined
in Article 13(b) of the Labor Code, or engages in any of the prohibited practices enumerated under now Section
6 of RA 8042; and (c) the illegal recruitment is "carried out by a group of three or more persons conspiring and/or
confederating with one another in carrying out any unlawful or illegal transaction, enterprise or scheme."  In the
44

third element, it "is not essential that there be actual proof that all the conspirators took a direct part in every act.
It is sufficient that they acted in concert pursuant to the same objective." 45

The acts of Sison, Dedales, and Bacomo show a common purpose and and each undertook a part to reach their
objective. Their concerted action is evident in that either Sison or Dedales was receiving payments from the
recruits; that Dedales signed the acknowledgment receipt from Sison; and that the three accompanied their
recruits together in seeking out their visas in Malaysia and Indonesia. Further, the impression given to Castuera
and other recruits was that the three were indeed working together.

Since it was proven that the three accused were acting in concert and conspired with one another, their illegal
recruitment activity is considered done by a syndicate, making the offense illegal recruitment involving economic
sabotage.

Section 7 of RA 8042 sets out the penalty for illegal recruitment involving economic sabotage:

SEC. 7. PENALTIES -

(a) Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of not less than
six (6) years and one (1) day but not more than twelve (12) years and a fine not less than two hundred
thousand pesos (₱200,000.00) nor more than five hundred thousand pesos (₱500,000.00).

(b) The penalty of life imprisonment and a fine of not less than five hundred thousand pesos
(₱500,000.00) nor more than one million pesos (₱1,000,000.00) shall be imposed if illegal
recruitment constitutes economic sabotage as defined herein.

Provided, however, that the maximum penalty shall be imposed if the person illegally recruited is less
than eighteen (18) years of age or committed by a non-licensee or non-holder of authority. (Emphasis
supplied)

The RTC rejected Sison's claim that she was also a victim of illegal recruitment. The courts do not look favorably
at denial as a defense since "[d]enial, same as an alibi, if not substantiated by clear and convincing evidence, is
negative and self-serving evidence undeserving of weight in law. It is considered with suspicion and always
received with caution, not only because it is inherently weak and unreliable but also because it is easily
fabricated and concocted."  Denial "does not prevail over an affirmative assertion of the fact."
46 47

Sison's defense of denial is merely an atte.mpt to avoid liability. The Court agrees with the RTC's assessment
that Sison's claim that she is also a victim of illegal recruitment has no credence.

It is hard to believe that Castuera would deal with Sison in the manner that he had if he believed that she was
also a mere recruit like himself. For one thing, there is no proof of Sison' s transactions with Dedales, except for
a handwritten acknowledgment receipt,  which is only backed up by her own testimony.
48

Also, if she were a victim, she would have taken action against Dedales and Bacomo herself. Her husband was
a member of the Philippine National Police. It would have been easy to seek help in apprehending the illegal
recruiters. Sison also failed to explain why she took no action to recover the ₱100,000 she allegedly paid for her
Australian visa, as well as the money to travel and stay in Malaysia, Brunei, and Indonesia. >>

Lastly, why would she have allowed, as she claims, the US$1,000 she allegedly paid to be applied to the U.S.
visa application of Castuera, someone she says she hardly knows, instead of trying to recover the same,
considering that Dedales failed to procure the visa for which she ·paid? All these cast doubt on her claim of
being only a victim of Dedales.
At the very least, Sison gave the impression that she had some sort of authority, whether or not Dedales is
indeed the principal, which is enough to amount to illegal recruitment. In any case, the acknowledgment
receipts  only serve to strengthen the case of conspiracy among Sison and her coaccused.
49

Estafa

We affirm Sison's conviction for estafa under Article 315(2)(a) of the RPC. It is settled that a person, for the
same acts, may be convicted separately for illegal recruitment under RA 8042 and estafa under Article 315(2)
(a) of the RPC. In People v. Daud, the Court explained:

In this jurisdiction, it is settled that a person who commits illegal recruitment may be charged and
convicted separately of illegal recruitment under the Labor Code and estafa under par. 2(a) of Art. 315 of
the Revised Penal Code. The offense of illegal recruitment is malum prohibitum where the criminal intent
of the accused is not necessary for conviction, while estafa is malum in se where the criminal intent of
the accused is crucial for conviction. Conviction for offenses under the Labor Code does not bar
conviction for offenses punishable by other laws. Conversely, conviction for estafa under par. 2(a) of Art.
315 of the Revised Penal Code does not bar a conviction for illegal recruitment under the Labor Code. It
follows that one's acquittal of the crime of estafa will not necessarily result in his acquittal of the crime of
illegal recruitment in large scale, and vice versa.  (Citations omitted)
50

The elements of estafa by means of deceit under Article 3 l 5(2)(a) of the RPC are:

(a) that there must be a false pretense or fraudulent representation as to his power, influence,
qualifications, property, credit, agency, business or imaginary transactions; (b) that such false pretense
or fraudulent representation was made or executed prior to or simultaneously with the commission of the
fraud; (c) that the offended party relied on the false pretense, fraudulent act, or fraudulent means and
was induced to part with his money or property; and (d) that, as a result thereof, the offended party
suffered damage. 51

All these elements are present in this case.

First, Sison misrepresented her qualifications and authority to send Castuera to work in Australia. She actively
made Castuera believe that she had the ability to do so - she showed pictures of her "recruits," had one of them
give a testimonial, and told him stories to convince him of such ability. It did not matter that "they had no
agreement"  that their transaction was for recruitment or deployment. All her acts were calculated to convince
52

Castuera that Sison was qualified to send him abroad for employment. It is enough that she "gave the
impression that [she] had the power to send workers abroad for employment purposes." 53

Second, Sison's false representation was made prior to or simultaneous to the commission of the fraud. Sison
used these false representations to convince Castuera that he would be able to go to Australia and be a fruit
picker, just like her other recruits. These representations were clearly mere devices to convince Castuera, whom
she only met at that time, that she was a legitimate recruiter.

Third, Castuera relied on Sison's representations. He believed that she could send him to Australia because of
the pictures and testimonials she showed him. He also relied on the fact that his aunt knew Sison's husband, a
police officer, adding to her trustworthiness. Sison banked on that trust to convince Castuera to part with his
money and be "recruited" into overseas employment. Castuera believed that Sison had the same ability to send
him to Australia. He did not even ask for her authority or check for himself with the POEA, relying instead on her
word. This tells us that he was fully convinced based on Sison's representations.

Fourth, Sison' s misrepresentation resulted in damage to Castuera. He paid the ₱80,000 down payment that
Sison required of him as processing fee, but the purpose for which it was paid never materialized. Likewise, said
amount was never reimbursed to Castuera despite his demands for its return.

Penalty

The penalty for illegal recruitment is correct based on Section 7 of RA 8042. Since the illegal recruitment was
committed by a non-licensee or non- holder of authority, the RTC may rightfully mete out the maximum penalty.
Thus, the penalty imposed by the RTC stands.

The penalty for estafa, however, needs to be modified. Article 315 of the RPC provides:
 Art. 315. Swindling (estafa). -Any person who shall defraud another by any of the means mentioned
hereinbelow shall be punished by:

1st. The penalty of prision correccional in its maximum period to prision mayor in its minimum period, if
the amount of the fraud is over 12,000 pesos but does not exceed 22,000 pesos, and if such amount
exceeds the latter sum, the penalty provided in this paragraph shall be imposed in its maximum period,
adding one year for each additional 10,000 pesos; but the total penalty which may be imposed shall not
exceed twenty years. In such cases, and in connection with the accessory penalties which may be
imposed under the provisions of this Code, the penalty shall be tenned prision mayor or reclusion
temporal, as the case may be.

The Indeterminate Sentence Law should be applied in determining the penalty for estafa. Under this law, the
maximum term is "that which, in view of the attending circumstances, could be properly imposed under [the
RPC]" and the minimum shall be "within the range of the penalty next lower to that prescribed by the [RPC] for
the offense."
54

Applying the Indeterminate Sentence Law, "the minimum term is taken from the penalty next lower or anywhere
within prision correccional minimum and medium (i.e., from 6 months and 1 day to 4 years and 2 months). On
the other hand, the maximum term is taken from the prescribed penalty of prision correccional maximum
to prision mayor minimum in its maximum period, adding 1 year of imprisonment for every ₱10,000.00 in excess
of ₱22,000.00, provided that the total penalty shall not exceed 20 years."
55

In People v. Tolentino, the Court further explained:

The range of penalty under Article 315 is composed of only two periods. To compute the maximum
period of the indeterminate sentence, the total number of years included in the two periods should be
divided into three equal portions, with each portion forming a period. Following this computation, the
minimum, medium, and maximum periods of the prescribed penalty are:

1. Minimum Period - 4 years, 2 months and 1 day to 5 years, 5 months and 10 days;

2. Medium Period - 5 years, 5 months and 11 days to 6 years, 8 months and 20 days;

3. Maximum Period - 6 years, 8 months and 21 days to 8 years.

Any incremental penalty, i.e. one year for every P10,000 in excess of ₱22,000, shall be added to
anywhere from 6 years, 8 months and 21 days to 8 years, at the court's discretion, provided the total
penalty does not exceed 20 years. 56

To arrive at the correct penalty, the Court must determine the actual amount defrauded from the victim.

Actual damages must be proven, not presumed.  It should be "actually proven with a reasonable degree of
57

certainty, premised upon competent proof or the best evidence obtainable." 58

Based on the evidence and testimony of Castuera, he only paid ₱80,000 as down payment because, under their
agreement, the balance of the placement fee was to be deducted from his salary when he starts working in
Australia. Thus, there is no basis for the ₱160,000. awarded by the RTC.

Based on the foregoing, the minimum penalty should be anywhere from 6 months and 1 day of prision
correccional in its minimum period to 4 years and 2 months of prision correccional in its medium period. Thus,
the R TC was correct in imposing the minimum penalty of 4 years and 2 months of prision correccional.

However, the maximum period should be computed as the maximum period that could be properly imposed
under the RPC, plus the incremental penalty resulting from each additional ₱10,000 in excess of ₱22,000 that
was defrauded from the victim.

In this case, the amount is ₱80,000, which means that there must be five more years of imprisonment added to
the maximum period imposed by the RPC.  Thus, the maximum period should be 13 years of reclusion
1âwphi1

temporal.
Lastly, Sison is ordered to pay legal interest of 6% per annum on the amount adjudicated, to be reckoned from
the finality of this Decision until full payment.

WHEREFORE, the appeal is DISMISSED. The Decision of the Court of Appeals in CA-G.R. CR-H.C. No. 02833
is AFFIRMED with MODIFICATION. In Criminal Case No. MCOl-4036 for Estafa under A1iicle 315(2)(a) of the
Revised Penal Code, appellant Erlinda A. Sison is sentenced to suffer the penalty of four (4) years and two (2)
months of prision correccional as minimum to thirteen (13) years of reclusion temporal as maximum. Sison is
also ORDERED to pay Darvy M. Castuera the amount of ₱80,000 as actual damages, with legal interest at the
rate of 6% per annum from the finality of this Decision until the amount is fully paid.

SO ORDERED.
G.R. No. 173198               June 1, 2011

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,

vs.
DOLORES OCDEN, Accused-Appellant.

DECISION

LEONARDO-DE CASTRO, J.:

For Our consideration is an appeal from the Decision1 dated April 21, 2006 of the Court of Appeals in CA-G.R.
CR.-H.C. No. 00044, which affirmed with modification the Decision2 dated July 2, 2001 of the Regional Trial
Court (RTC), Baguio City, Branch 60, in Criminal Case No. 16315-R. The RTC found accused-appellant Dolores
Ocden (Ocden) guilty of illegal recruitment in large scale, as defined and penalized under Article 13(b), in
relation to Articles 38(b), 34, and 39 of Presidential Decree No. 442, otherwise known as the New Labor Code of
the Philippines, as amended, in Criminal Case No. 16315-R; and of the crime of estafa under paragraph 2(a),
Article 315 of the Revised Penal Code, in Criminal Case Nos. 16316-R, 16318-R, and 16964-R.3 The Court of
Appeals affirmed Ocden’s conviction in all four cases, but modified the penalties imposed in Criminal Case Nos.
16316-R, 16318-R, and 16964-R,

The Amended Information4 for illegal recruitment in large scale in Criminal Case No. 16315-R reads:

That during the period from May to December, 1998, in the City of Baguio, Philippines, and within the
jurisdiction of this Honorable Court, the above-named accused, did then and there willfully, unlawfully
and feloniously for a fee, recruit and promise employment as factory workers in Italy to more than three
(3) persons including, but not limited to the following: JEFFRIES C. GOLIDAN, HOWARD C. GOLIDAN,
KAREN M. SIMEON, JEAN S. MAXIMO, NORMA PEDRO, MARYLYN MANA-A, RIZALINA FERRER,
and MILAN DARING without said accused having first secured the necessary license or authority from
the Department of Labor and Employment.

Ocden was originally charged with six counts of estafa in Criminal Case Nos. 16316-R, 16318-R, 16350-R,
16369-R, 16964-R, and 16966-R.

The Information in Criminal Case No. 16316-R states:

That sometime during the period from October to December, 1998 in the City of Baguio, Philippines and
within the jurisdiction of this Honorable Court, the above-named accused, did then and there willfully,
unlawfully and feloniously defraud JEFFRIES C. GOLIDAN, by way of false pretenses, which are
executed prior to or simultaneous with the commission of the fraud, as follows, to wit: the accused
knowing fully well that she is not (sic) authorized job recruiter for persons intending to secure work
abroad convinced said Jeffries C. Golidan and pretended that she could secure a job for him/her abroad,
for and in consideration of the sum of ₱70,000.00 when in truth and in fact they could not; the
said Jeffries C. Golidan deceived and convinced by the false pretenses employed by the accused parted
away the total sum of ₱70,000.00, in favor of the accused, to the damage and prejudice of the said
Jeffries C. Golidan in the aforementioned amount of SEVENTY THOUSAND PESOS (₱70,000,00),
Philippine Currency.5

The Informations in the five other cases for estafa contain substantially the same allegations as the one above-
quoted, except for the private complainants’ names, the date of commission of the offense, and the amounts
defrauded, to wit:

Case No. Name of the Private Date of Commission of the Amount Defrauded
Complainant Offense

16318-R Howard C. Golidan Sometime during the period ₱70,000.00

from October to December
1998

16350-R Norma Pedro Sometime in May, 1998 ₱65,000.00

 16369-R Milan O. Daring Sometime during the period ₱70.000.00
from November 13, 1998 to
December 10, 1998

16964-R Rizalina Ferrer Sometime in September ₱70,000.00

16966-R Marilyn Mana-a Sometime in September 1998 ₱70,000.006

All seven cases against Ocden were consolidated on July 31, 2000 and were tried jointly after Ocden pleaded
not guilty.

The prosecution presented three witnesses namely: Marilyn Mana-a (Mana-a) and Rizalina Ferrer (Ferrer),
complainants; and Julia Golidan (Golidan), mother of complainants Jeffries and Howard Golidan.

Mana-a testified that sometime in the second week of August 1998, she and Isabel Dao-as (Dao-as) went to
Ocden’s house in Baguio City to apply for work as factory workers in Italy with monthly salaries of US$1,200.00.
They were required by Ocden to submit their bio-data and passports, pay the placement fee of ₱70,000.00, and
to undergo medical examination.

Upon submitting her bio-data and passport, Mana-a paid Ocden ₱500.00 for her certificate of employment and
₱20,000.00 as down payment for her placement fee. On September 8, 1998, Ocden accompanied Mana-a and
20 other applicants to Zamora Medical Clinic in Manila for their medical examinations, for which each of the
applicants paid ₱3,000.00. Mana-a also paid to Ocden ₱22,000.00 as the second installment on her placement
fee. When Josephine Lawanag (Lawanag), Mana-a’s sister, withdrew her application, Lawanag’s ₱15,000.00
placement fee, already paid to Ocden, was credited to Mana-a.7

Mana-a failed to complete her testimony, but the RTC considered the same as no motion to strike the said
testimony was filed.

Ferrer narrated that she and her daughter Jennilyn were interested to work overseas. About the second week of
September 1998, they approached Ocden through Fely Alipio (Alipio). Ocden showed Ferrer and Jennilyn a
copy of a job order from Italy for factory workers who could earn as much as $90,000.00 to $100,000.00.8 In the
first week of October 1998, Ferrer and Jennilyn decided to apply for work, so they submitted their passports and
pictures to Ocden. Ferrer also went to Manila for medical examination, for which she spent ₱3,500.00. Ferrer
paid to Ocden on November 20, 1998 the initial amount of ₱20,000.00, and on December 8, 1998 the balance of
her and Jennilyn’s placement fees. All in all, Ferrer paid Ocden ₱140,000.00, as evidenced by the receipts
issued by Ocden.9

Ferrer, Jennilyn, and Alipio were supposed to be included in the first batch of workers to be sent to Italy. Their
flight was scheduled on December 10, 1998. In preparation for their flight to Italy, the three proceeded to Manila.
In Manila, they were introduced by Ocden to Erlinda Ramos (Ramos). Ocden and Ramos then accompanied
Ferrer, Jennilyn, and Alipio to the airport where they took a flight to Zamboanga. Ocden explained to Ferrer,
Jennilyn, and Alipio that they would be transported to Malaysia where their visa application for Italy would be
processed.

Sensing that they were being fooled, Ferrer and Jennilyn decided to get a refund of their money, but Ocden was
nowhere to be found. Ferrer would later learn from the Baguio office of the Philippine Overseas Employment
Administration (POEA) that Ocden was not a licensed recruiter.

Expecting a job overseas, Ferrer took a leave of absence from her work. Thus, she lost income amounting to
₱17,700.00, equivalent to her salary for one and a half months. She also spent ₱30,000.00 for transportation
and food expenses.10

According to Golidan, the prosecution’s third witness, sometime in October 1998, she inquired from Ocden about
the latter’s overseas recruitment. Ocden informed Golidan that the placement fee was ₱70,000.00 for each
applicant, that the accepted applicants would be sent by batches overseas, and that priority would be given to
those who paid their placement fees early. On October 30, 1998, Golidan brought her sons, Jeffries and
Howard, to Ocden. On the same date, Jeffries and Howard handed over to Ocden their passports and
₱40,000.00 as down payment on their placement fees. On December 10, 1998, Jeffries and Howard paid the
balance of their placement fees amounting to ₱100,000.00. Ocden issued receipts for these two
payments.11 Ocden then informed Golidan that the first batch of accepted applicants had already left, and that
Jeffries would be included in the second batch for deployment, while Howard in the third batch.

In anticipation of their deployment to Italy, Jeffries and Howard left for Manila on December 12, 1998 and
December 18, 1998, respectively. Through a telephone call, Jeffries informed Golidan that his flight to Italy was
scheduled on December 16, 1998. However, Golidan was surprised to again receive a telephone call from
Jeffries saying that his flight to Italy was delayed due to insufficiency of funds, and that Ocden went back to
Baguio City to look for additional funds. When Golidan went to see Ocden, Ocden was about to leave for Manila
so she could be there in time for the scheduled flights of Jeffries and Howard.

On December 19, 1998, Golidan received another telephone call from Jeffries who was in Zamboanga with the
other applicants. Jeffries informed Golidan that he was stranded in Zamboanga because Ramos did not give him
his passport. Ramos was the one who briefed the overseas job applicants in Baguio City sometime in November
1998. Jeffries instructed Golidan to ask Ocden’s help in looking for Ramos. Golidan, however, could not find
Ocden in Baguio City.

On December 21, 1998, Golidan, with the other applicants, Mana-a and Dao-as, went to Manila to meet Ocden.
When Golidan asked why Jeffries was in Zamboanga, Ocden replied that it would be easier for Jeffries and the
other applicants to acquire their visas to Italy in Zamboanga. Ocden was also able to contact Ramos, who
assured Golidan that Jeffries would be able to get his passport. When Golidan went back home to Baguio City,
she learned through a telephone call from Jeffries that Howard was now likewise stranded in Zamboanga.

By January 1999, Jeffries and Howard were still in Zamboanga. Jeffries refused to accede to Golidan’s prodding
for him and Howard to go home, saying that the recruiters were already working out the release of the funds for
the applicants to get to Italy. Golidan went to Ocden, and the latter told her not to worry as her sons would
already be flying to Italy because the same factory owner in Italy, looking for workers, undertook to shoulder the
applicants’ travel expenses. Yet, Jeffries called Golidan once more telling her that he and the other applicants
were still in Zamboanga.

Golidan went to Ocden’s residence. This time, Ocden’s husband gave Golidan ₱23,000.00 which the latter could
use to fetch the applicants, including Jeffries and Howard, who were stranded in Zamboanga. Golidan traveled
again to Manila with Mana-a and Dao-as. When they saw each other, Golidan informed Ocden regarding the
₱23,000.00 which the latter’s husband gave to her. Ocden begged Golidan to give her the money because she
needed it badly. Of the ₱23,000.00, Golidan retained ₱10,000.00, Dao-as received ₱3,000.00, and Ocden got
the rest. Jeffries was able to return to Manila on January 16, 1999. Howard and five other applicants,
accompanied by Ocden, also arrived in Manila five days later.

Thereafter, Golidan and her sons went to Ocden’s residence to ask for a refund of the money they had paid to
Ocden. Ocden was able to return only ₱50,000.00. Thus, out of the total amount of ₱140,000.00 Golidan and
her sons paid to Ocden, they were only able to get back the sum of ₱60,000.00. After all that had happened,
Golidan and her sons went to the Baguio office of the POEA, where they discovered that Ocden was not a
licensed recruiter.12

The defense presented the testimony of Ocden herself.

Ocden denied recruiting private complainants and claimed that she was also an applicant for an overseas job in
Italy, just like them. Ocden identified Ramos as the recruiter.

Ocden recounted that she met Ramos at a seminar held in St. Theresa’s Compound, Navy Base, Baguio City,
sometime in June 1998. The seminar was arranged by Aida Comila (Comila), Ramos’s sub-agent. The seminar
was attended by about 60 applicants, including Golidan. Ramos explained how one could apply as worker in a
stuff toys factory in Italy. After the seminar, Comila introduced Ocden to Ramos. Ocden decided to apply for the
overseas job, so she gave her passport and pictures to Ramos. Ocden also underwent medical examination at
Zamora Medical Clinic in Manila, and completely submitted the required documents to Ramos in September
1998.

After the seminar, many people went to Ocden’s house to inquire about the jobs available in Italy. Since most of
these people did not attend the seminar, Ocden asked Ramos to conduct a seminar at Ocden’s house. Two
seminars were held at Ocden’s house, one in September and another in December 1998. After said seminars,
Ramos designated Ocden as leader of the applicants. As such, Ocden received her co-applicants’ applications
and documents; accompanied her co-applicants to Manila for medical examination because she knew the
location of Zamora Medical Clinic; and accepted placement fees in the amount of ₱70,000.00 each from Mana-a
and Ferrer and from Golidan, the amount of ₱140,000.00 (for Jeffries and Howard).

Ramos instructed Ocden that the applicants should each pay ₱250,000.00 and if the applicants could not pay
the full amount, they would have to pay the balance through salary deductions once they start working in Italy.
Ocden herself paid Ramos ₱50,000.00 as placement fee and executed a promissory note in Ramos’s favor for
the balance, just like any other applicant who failed to pay the full amount. Ocden went to Malaysia with
Ramos’s male friend but she failed to get her visa for Italy.

Ocden denied deceiving Mana-a and Ferrer. Ocden alleged that she turned over to Ramos the money Mana-a
and Ferrer gave her, although she did not indicate in the receipts she issued that she received the money for
and on behalf of Ramos.

Ocden pointed out that she and some of her co-applicants already filed a complaint against Ramos before the
National Bureau of Investigation (NBI) offices in Zamboanga City and Manila.13

On July 2, 2001, the RTC rendered a Decision finding Ocden guilty beyond reasonable doubt of the crimes of
illegal recruitment in large scale (Criminal Case No. 16315-R) and three counts of estafa (Criminal Case Nos.
16316-R, 16318-R, and 16964-R). The dispositive portion of said decision reads:

WHEREFORE, premises considered, judgment is hereby rendered as follows:

1. In Criminal Case No. 16315-R, the Court finds the accused, DOLORES OCDEN, GUILTY beyond
reasonable doubt of the crime of Illegal Recruitment committed in large scale as defined and penalized
under Article 13(b) in relation to Article 38(b), 34 and 39 of the Labor Code as amended by P.D. Nos.
1693, 1920, 2018 and R.A. 8042. She is hereby sentenced to suffer the penalty of life imprisonment and
to pay a fine of ₱100,000.00;

2. In Criminal Case No. 16316-R, the Court finds the accused, DOLORES OCDEN, GUILTY beyond
reasonable doubt of the crime of estafa and sentences her to suffer an indeterminate penalty ranging
from two (2) years, eleven (11) months and ten (10) days of prision correccional, as minimum, up to nine
(9) years and nine (9) months of prision mayor, as maximum, and to indemnify the complainant Jeffries
Golidan the amount of ₱40,000.00;

3. In Criminal Case No. 16318-R, the Court finds the accused, DOLORES OCDEN, GUILTY beyond
reasonable doubt of the crime of estafa and sentences her to suffer an indeterminate penalty ranging
from two (2) years, eleven (11) months and ten (10) days of prision correccional, as minimum, up to nine
(9) years and nine (9) months of prision mayor, as maximum, and to indemnify Howard Golidan the
amount of ₱40,000.00;

4. In Criminal Case No. 16350-R, the Court finds the accused, DOLORES OCDEN, NOT GUILTY of the
crime of estafa for lack of evidence and a verdict of acquittal is entered in her favor;

5. In Criminal Case No. 16369-R, the Court finds the accused, DOLORES OCDEN, NOT GUILTY of the
crime of estafa for lack of evidence and a verdict of acquittal is hereby entered in her favor;

6. In Criminal Case No. 16964-R, the Court finds the accused, DOLORES OCDEN, GUILTY beyond
reasonable doubt of the crime of estafa and sentences her to suffer an indeterminate penalty of Four (4)
years and Two (2) months of prision correccional, as minimum, up to Twelve (12) years and Nine (9)
months of reclusion temporal, as maximum, and to indemnify Rizalina Ferrer the amount of ₱70,000.00;
and

7. In Criminal Case No. 16966-R, the Court finds the accused, DOLORES OCDEN, NOT GUILTY of the
crime of estafa for insufficiency of evidence and a verdict of acquittal is hereby entered in her favor.

In the service of her sentence, the provisions of Article 70 of the Penal Code shall be observed.14

Aggrieved by the above decision, Ocden filed with the RTC a Notice of Appeal on August 15, 2001. 15 The RTC
erroneously sent the records of the cases to the Court of Appeals, which, in turn, correctly forwarded the said
records to us.
In our Resolution16 dated May 6, 2002, we accepted the appeal and required the parties to file their respective
briefs. In the same resolution, we directed the Superintendent of the Correctional Institute for Women to confirm
Ocden’s detention thereat.

Ocden filed her Appellant's Brief on August 15, 2003,17 while the People, through the Office of the Solicitor
General, filed its Appellee's Brief on January 5, 2004.18

Pursuant to our ruling in People v. Mateo,19 we transferred Ocden’s appeal to the Court of Appeals. On April 21,
2006, the appellate court promulgated its Decision, affirming Ocden’s conviction but modifying the penalties
imposed upon her for the three counts of estafa, viz:

[T]he trial court erred in the imposition of accused-appellant’s penalty.

Pursuant to Article 315 of the RPC, the penalty for estafa is prision correccional in its maximum period to
prision mayor in its minimum period. If the amount of the fraud exceeds ₱22,000.00, the penalty
provided shall be imposed in its maximum period (6 years, 8 months and 21 days to 8 years), adding 1
year for each additional ₱10,000.00; but the total penalty which may be imposed shall not exceed 20
years.

Criminal Case Nos. 16316-R and 16318-R involve the amount of ₱40,000.00 each. Considering that
₱18,000.00 is the excess amount, only 1 year should be added to the penalty in its maximum period or 9
years. Also, in Criminal Case No. 16964-R, the amount involved is ₱70,000.00. Thus, the excess
amount is ₱48,000.00 and only 4 years should be added to the penalty in its maximum period.

WHEREFORE, the instant appeal is DISMISSED. The assailed Decision, dated 02 July 2001, of the
Regional Trial Court (RTC) of Baguio City, Branch 60 is hereby AFFIRMED with the following
MODIFICATIONS:

1. In Criminal Case No. 16316-R, accused-appellant is sentenced to 2 years, 11 months, and 10

days of prision correccional, as minimum to 9 years of prision mayor, as maximum and to
indemnify Jeffries Golidan the amount of ₱40,000.00;

2. In Criminal Case No. 16318-R, accused-appellant is sentenced to 2 years, 11 months, and 10

days of prision correccional, as minimum to 9 years of prision mayor, as maximum and to
indemnify Howard Golidan the amount of ₱40,000.00; and

3. In Criminal Case No. 16964-R, accused-appellant is sentenced to 4 years and 2 months

of prision correccional, as minimum to 12 years of prision mayor, as maximum and to indemnify
Rizalina Ferrer the amount of ₱70,000.00.20

Hence, this appeal, in which Ocden raised the following assignment of errors:

THE TRIAL COURT ERRED IN CONVICTING ACCUSED-APPELLANT OF ILLEGAL RECRUITMENT

COMMITTED IN LARGE SCALE ALTHOUGH THE CRIME WAS NOT PROVEN BEYOND
REASONABLE DOUBT.

II

THE TRIAL COURT ERRED IN CONVICTING ACCUSED-APPELLANT OF ESTAFA IN CRIMINAL

CASES NOS. 16316-R, 16318-R AND 16[9]64-R.21

After a thorough review of the records of the case, we find nothing on record that would justify a reversal of
Ocden’s conviction.

Illegal recruitment in large scale

Ocden contends that the prosecution failed to prove beyond reasonable doubt that she is guilty of the crime of
illegal recruitment in large scale. Other than the bare allegations of the prosecution witnesses, no evidence was
adduced to prove that she was a non-licensee or non-holder of authority to lawfully engage in the recruitment
and placement of workers. No certification attesting to this fact was formally offered in evidence by the
prosecution.

Ocden’s aforementioned contentions are without merit.

Article 13, paragraph (b) of the Labor Code defines and enumerates the acts which constitute recruitment and
placement:

(b) "Recruitment and placement" refers to any act of canvassing, enlisting, contracting, transporting,
utilizing, hiring, or procuring workers, and includes referrals, contract services, promising for advertising
for employment locally or abroad, whether for profit or not: Provided, That any person or entity which, in
any manner, offers or promises for a fee employment to two or more persons shall be deemed engaged
in recruitment and placement.

The amendments to the Labor Code introduced by Republic Act No. 8042, otherwise known as the Migrant
Workers and Overseas Filipinos Act of 1995, broadened the concept of illegal recruitment and provided stiffer
penalties, especially for those that constitute economic sabotage, i.e., illegal recruitment in large scale and illegal
recruitment committed by a syndicate. Pertinent provisions of Republic Act No. 8042 are reproduced below:

SEC. 6. Definition. - For purposes of this Act, illegal recruitment shall mean any act of canvassing,
enlisting, contracting, transporting, utilizing, hiring, or procuring workers and includes referring, contract
services, promising or advertising for employment abroad, whether for profit or not, when undertaken by
a non-licensee or non-holder of authority contemplated under Article 13(f) of Presidential Decree No.
442, as amended, otherwise known as the Labor Code of the Philippines: Provided, That any such non-
licensee or non-holder who, in any manner, offers or promises for a fee employment abroad to two or
more persons shall be deemed so engaged. It shall likewise include the following acts, whether
committed by any person, whether a non-licensee, non-holder, licensee or holder of authority:

(a) To charge or accept directly or indirectly any amount greater than that specified in the
schedule of allowable fees prescribed by the Secretary of Labor and Employment, or to make a
worker pay any amount greater than that actually received by him as a loan or advance;

(b) To furnish or publish any false notice or information or document in relation to recruitment or
employment;

(c) To give any false notice, testimony, information or document or commit any act of
misrepresentation for the purpose of securing a license or authority under the Labor Code;

(d) To induce or attempt to induce a worker already employed to quit his employment in order to
offer him another unless the transfer is designed to liberate a worker from oppressive terms and
conditions of employment;

(e) To influence or attempt to influence any person or entity not to employ any worker who has
not applied for employment through his agency;

(f) To engage in the recruitment or placement of workers in jobs harmful to public health or
morality or to the dignity of the Republic of the Philippines;

(g) To obstruct or attempt to obstruct inspection by the Secretary of Labor and Employment or by
his duly authorized representative;

(h) To fail to submit reports on the status of employment, placement vacancies, remittance of
foreign exchange earnings, separation from jobs, departures and such other matters or
information as may be required by the Secretary of Labor and Employment;

(i) To substitute or alter to the prejudice of the worker, employment contracts approved and
verified by the Department of Labor and Employment from the time of actual signing thereof by
the parties up to and including the period of the expiration of the same without the approval of
the Department of Labor and Employment;
 (j) For an officer or agent of a recruitment or placement agency to become an officer or member
of the Board of any corporation engaged in travel agency or to be engaged directly or indirectly in
the management of a travel agency;

(k) To withhold or deny travel documents from applicant workers before departure for monetary
or financial considerations other than those authorized under the Labor Code and its
implementing rules and regulations;

(l) Failure to actually deploy without valid reason as determined by the Department of Labor and
Employment; and

(m) Failure to reimburse expenses incurred by the worker in connection with his
documentation and processing for purposes of deployment, in cases where the
deployment does not actually take place without the worker's fault. Illegal recruitment
when committed by a syndicate or in large scale shall be considered an offense involving
economic sabotage.

Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more
persons conspiring or confederating with one another. It is deemed committed in large scale if committed
against three (3) or more persons individually or as a group.

xxxx

Sec. 7. Penalties. –

(a) Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of not
less than six (6) years and one (1) day but not more than twelve (12) years and a fine of Two
hundred thousand pesos (₱200,000.00) nor more than Five hundred thousand pesos
(₱500,000.00).

(b) The penalty of life imprisonment and a fine of not less than Five hundred thousand pesos
(₱500,000.00) nor more than One million pesos (₱1,000,000.00) shall be imposed if illegal
recruitment constitutes economic sabotage as defined herein.

Provided, however, That the maximum penalty shall be imposed if the person illegally recruited is less
than eighteen (18) years of age or committed by a non-licensee or non-holder of authority. (Emphasis
ours.)

It is well-settled that to prove illegal recruitment, it must be shown that appellant gave complainants the distinct
impression that he had the power or ability to send complainants abroad for work such that the latter were
convinced to part with their money in order to be employed. 22 As testified to by Mana-a, Ferrer, and Golidan,
Ocden gave such an impression through the following acts: (1) Ocden informed Mana-a, Ferrer, and Golidan
about the job opportunity in Italy and the list of necessary requirements for application; (2) Ocden required
Mana-a, Ferrer, and Golidan’s sons, Jeffries and Howard, to attend the seminar conducted by Ramos at
Ocden’s house in Baguio City; (3) Ocden received the job applications, pictures, bio-data, passports, and the
certificates of previous employment (which was also issued by Ocden upon payment of ₱500.00), of Mana-a,
Ferrer, and Golidan’s sons, Jeffries and Howard; (4) Ocden personally accompanied Mana-a, Ferrer, and
Golidan’s sons, Jeffries and Howard, for their medical examinations in Manila; (5) Ocden received money paid
as placement fees by Mana-a, Ferrer, and Golidan’s sons, Jeffries and Howard, and even issued receipts for the
same; and (6) Ocden assured Mana-a, Ferrer, and Golidan’s sons, Jeffries and Howard, that they would be
deployed to Italy.

It is not necessary for the prosecution to present a certification that Ocden is a non-licensee or non-holder of
authority to lawfully engage in the recruitment and placement of workers. Section 6 of Republic Act No. 8042
enumerates particular acts which would constitute illegal recruitment "whether committed by any person,
whether a non-licensee, non-holder, licensee or holder of authority." Among such acts, under Section 6(m) of
Republic Act No. 8042, is the "[f]ailure to reimburse expenses incurred by the worker in connection with his
documentation and processing for purposes of deployment, in cases where the deployment does not actually
take place without the worker’s fault."
Since illegal recruitment under Section 6(m) can be committed by any person, even by a licensed recruiter, a
certification on whether Ocden had a license to recruit or not, is inconsequential. Ocden committed illegal
recruitment as described in said provision by receiving placement fees from Mana-a, Ferrer, and Golidan’s two
sons, Jeffries and Howard, evidenced by receipts Ocden herself issued; and failing to reimburse/refund to Mana-
a, Ferrer, and Golidan’s two sons the amounts they had paid when they were not able to leave for Italy, through
no fault of their own.

Ocden questions why it was Golidan who testified for private complainants Jeffries and Howard. Golidan had no
personal knowledge of the circumstances proving illegal recruitment and could not have testified on the same.
Also, Jeffries and Howard already executed an affidavit of desistance. All Golidan wants was a reimbursement of
the placement fees paid.

Contrary to Ocden’s claims, Golidan had personal knowledge of Ocden’s illegal recruitment activities, which she
could competently testify to. Golidan herself had personal dealings with Ocden as Golidan assisted her sons,
Jeffries and Howard, in completing the requirements for their overseas job applications, and later on, in getting
back home from Zamboanga where Jeffries and Howard were stranded, and in demanding a refund from Ocden
of the placement fees paid. That Golidan is seeking a reimbursement of the placement fees paid for the failed
deployment of her sons Jeffries and Howard strengthens, rather than weakens, the prosecution’s case. Going
back to illegal recruitment under Section 6(m) of Republic Act No. 8042, failure to reimburse the expenses
incurred by the worker when deployment does not actually take place, without the worker’s fault, is illegal
recruitment.

The affidavit of desistance purportedly executed by Jeffries and Howard does not exonerate Ocden from criminal
liability when the prosecution had successfully proved her guilt beyond reasonable doubt. In People v.
Romero,23 we held that:

The fact that complainants Bernardo Salazar and Richard Quillope executed a Joint Affidavit of
Desistance does not serve to exculpate accused-appellant from criminal liability insofar as the case for
illegal recruitment is concerned since the Court looks with disfavor the dropping of criminal complaints
upon mere affidavit of desistance of the complainant, particularly where the commission of the offense,
as is in this case, is duly supported by documentary evidence.

Generally, the Court attaches no persuasive value to affidavits of desistance, especially when it is
executed as an afterthought. 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 trial a mockery and place the
investigation of truth at the mercy of unscrupulous witness.

Complainants Bernardo Salazar and Richard Quillope may have a change of heart insofar as the offense
wrought on their person is concerned when they executed their joint affidavit of desistance but this will
not affect the public prosecution of the offense itself. It is relevant to note that "the right of prosecution
and punishment for a crime is one of the attributes that by a natural law belongs to the sovereign power
instinctly charged by the common will of the members of society to look after, guard and defend the
interests of the community, the individual and social rights and the liberties of every citizen and the
guaranty of the exercise of his rights." This cardinal principle which states that to the State belongs the
power to prosecute and punish crimes should not be overlooked since a criminal offense is an outrage to
the sovereign State.24

In her bid to exculpate herself, Ocden asserts that she was also just an applicant for overseas employment; and
that she was receiving her co-applicants’ job applications and other requirements, and accepting her co-
applicants’ payments of placement fees, because she was designated as the applicants’ leader by Ramos, the
real recruiter.

Ocden’s testimony is self-serving and uncorroborated. Ocden’s denial of any illegal recruitment activity cannot
stand against the prosecution witnesses’ positive identification of her in court as the person who induced them to
part with their money upon the misrepresentation and false promise of deployment to Italy as factory workers.
Besides, despite several opportunities given to Ocden by the RTC, she failed to present Ramos, who Ocden
alleged to be the real recruiter and to whom she turned over the placement fees paid by her co-applicants.

Between the categorical statements of the prosecution witnesses, on the one hand, and the bare denial of
Ocden, on the other, the former must perforce prevail. An affirmative testimony is far stronger than a negative
testimony especially when the former comes from the mouth of a credible witness. Denial, same as an alibi, if
not substantiated by clear and convincing evidence, is negative and self-serving evidence undeserving of weight
in law. It is considered with suspicion and always received with caution, not only because it is inherently weak
and unreliable but also because it is easily fabricated and concocted.25

Moreover, in the absence of any evidence that the prosecution witnesses were motivated by improper motives,
the trial court’s assessment of the credibility of the witnesses shall not be interfered with by this Court. 26 It is a
settled rule that factual findings of the trial courts, including their assessment of the witnesses’ credibility, are
entitled to great weight and respect by the Supreme Court, particularly when the Court of Appeals affirmed such
findings. After all, the trial court is in the best position to determine the value and weight of the testimonies of
witnesses. The absence of any showing that the trial court plainly overlooked certain facts of substance and
value that, if considered, might affect the result of the case, or that its assessment was arbitrary, impels the
Court to defer to the trial court’s determination according credibility to the prosecution evidence.27

Ocden further argues that the prosecution did not sufficiently establish that she illegally recruited at least three
persons, to constitute illegal recruitment on a large scale. Out of the victims named in the Information, only
Mana-a and Ferrer testified in court. Mana-a did not complete her testimony, depriving Ocden of the opportunity
to cross-examine her; and even if Mana-a’s testimony was not expunged from the record, it was insufficient to
prove illegal recruitment by Ocden. Although Ferrer testified that she and Mana-a filed a complaint for illegal
recruitment against Ocden, Ferrer’s testimony is competent only as to the illegal recruitment activities committed
by Ocden against her, and not against Mana-a. Ocden again objects to Golidan’s testimony as hearsay, not
being based on Golidan’s personal knowledge.

Under the last paragraph of Section 6, Republic Act No. 8042, illegal recruitment shall be considered an offense
involving economic sabotage if committed in a large scale, that is, committed against three or more persons
individually or as a group.

In People v. Hu,28 we held that 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. While it is true that the
law does not require that at least three victims testify at the trial, nevertheless, it is necessary that there is
sufficient evidence proving that the offense was committed against three or more persons. In this case, there is
conclusive evidence that Ocden recruited Mana-a, Ferrer, and Golidan’s sons, Jeffries and Howard, for
purported employment as factory workers in Italy. As aptly observed by the Court of Appeals:

Mana-a’s testimony, although not completed, sufficiently established that accused-appellant promised
Mana-a a job placement in a factory in Italy for a fee with accused-appellant even accompanying her for
the required medical examination. Likewise, Julia Golidan’s testimony adequately proves that accused-
appellant recruited Jeffries and Howard Golidan for a job in Italy, also for a fee. Contrary to the accused-
appellant’s contention, Julia had personal knowledge of the facts and circumstances surrounding the
charges for illegal recruitment and estafa filed by her sons. Julia was not only privy to her sons’
recruitment but also directly transacted with accused-appellant, submitting her sons’ requirements and
paying the placement fees as evidenced by a receipt issued in her name. Even after the placement did
not materialize, Julia acted with her sons to secure the partial reimbursement of the placement fees.29

And even though only Ferrer and Golidan testified as to Ocden’s failure to reimburse the placements fees paid
when the deployment did not take place, their testimonies already established the fact of non-reimbursement as
to three persons, namely, Ferrer and Golidan’s two sons, Jeffries and Howard.

Section 7(b) of Republic Act No. 8042 prescribes a penalty of life imprisonment and a fine of not less than
₱500,000.00 nor more than ₱1,000,000.00 if the illegal recruitment constitutes economic sabotage. The RTC, as
affirmed by the Court of Appeals, imposed upon Ocden the penalty of life imprisonment and a fine of only
₱100,000.00. Since the fine of ₱100,000 is below the minimum set by law, we are increasing the same to
₱500,000.00.

Estafa

We are likewise affirming the conviction of Ocden for the crime of estafa. The very same evidence proving
Ocden’s liability for illegal recruitment also established her liability for estafa.

It is settled that a person may be charged and convicted separately of illegal recruitment under Republic Act No.
8042 in relation to the Labor Code, and estafa under Article 315, paragraph 2(a) of the Revised Penal Code. We
explicated in People v. Yabut30 that:
 In this jurisdiction, it is settled that a person who commits illegal recruitment may be charged and
convicted separately of illegal recruitment under the Labor Code and estafa under par. 2(a) of Art. 315 of
the Revised Penal Code. The offense of illegal recruitment is malum prohibitum where the criminal intent
of the accused is not necessary for conviction, while estafa is malum in se where the criminal intent of
the accused is crucial for conviction. Conviction for offenses under the Labor Code does not bar
conviction for offenses punishable by other laws. Conversely, conviction for estafa under par. 2(a) of Art.
315 of the Revised Penal Code does not bar a conviction for illegal recruitment under the Labor Code. It
follows that one’s acquittal of the crime of estafa will not necessarily result in his acquittal of the crime of
illegal recruitment in large scale, and vice versa.31

Article 315, paragraph 2(a) of the Revised Penal Code defines estafa as:

Art. 315. Swindling (estafa). - Any person who shall defraud another by any of the means mentioned
hereinbelow x x x:

xxxx

2. By means of any of the following false pretenses or fraudulent acts executed prior to or simultaneously
with the commission of the fraud:

(a) By using fictitious name, or falsely pretending to possess power, influence, qualifications,
property, credit, agency, business or imaginary transactions; or by means of other similar
deceits.

The elements of estafa are: (a) that the accused defrauded another by abuse of confidence or by means of
deceit, and (b) that damage or prejudice capable of pecuniary estimation is caused to the offended party or third
person.32

Both these elements are present in the instant case. Ocden represented to Ferrer, Golidan, and Golidan’s two
sons, Jeffries and Howard, that she could provide them with overseas jobs. Convinced by Ocden, Ferrer,
Golidan, and Golidan’s sons paid substantial amounts as placement fees to her. Ferrer and Golidan’s sons were
never able to leave for Italy, instead, they ended up in Zamboanga, where, Ocden claimed, it would be easier to
have their visas to Italy processed. Despite the fact that Golidan’s sons, Jeffries and Howard, were stranded in
Zamboanga for almost a month, Ocden still assured them and their mother that they would be able to leave for
Italy. There is definitely deceit on the part of Ocden and damage on the part of Ferrer and Golidan’s sons, thus,
justifying Ocden’s conviction for estafa in Criminal Case Nos. 16316-R, 16318-R, and 16964-R.

The penalty for estafa depends on the amount of defraudation. According to Article 315 of the Revised Penal
Code:

Art. 315. Swindling (estafa). – Any person who shall defraud another by any of the means mentioned
hereinbelow shall be punished by:

1st. The penalty of prision correccional in its maximum period to prision mayor in its minimum period, if
the amount of the fraud is over 12,000 pesos but does not exceed 22,000 pesos; and if such amount
exceeds the latter sum, the penalty provided in this paragraph shall be imposed in its maximum period,
adding one year for each additional 10,000 pesos; but the total penalty which may be imposed shall not
exceed twenty years. In such cases, and in connection with the accessory penalties which may be
imposed and for the purpose of the other provisions of this Code, the penalty shall be termed prision
mayor or reclusion temporal, as the case may be.

The prescribed penalty for estafa under Article 315 of the Revised Penal Code, when the amount of fraud is over
₱22,000.00, is prision correccional maximum to prision mayor minimum, adding one year to the maximum period
for each additional ₱10,000.00, provided that the total penalty shall not exceed 20 years.

Applying the Indeterminate Sentence Law, we take the minimum term from the penalty next lower than the
minimum prescribed by law, or anywhere within prision correccional minimum and medium (i.e., from 6 months
and 1 day to 4 years and 2 months).33 Consequently, both the RTC and the Court of Appeals correctly fixed the
minimum term in Criminal Case Nos. 16316-R and 16318-R at 2 years, 11 months, and 10 days of prision
correccional; and in Criminal Case No. 16964-R at 4 years and 2 months of prision correccional, since these are
within the range of prision correccional minimum and medium. 1avvphi1
As for the maximum term under the Indeterminate Sentence Law, we take the maximum period of the prescribed
penalty, adding 1 year of imprisonment for every ₱10,000.00 in excess of ₱22,000.00, provided that the total
penalty shall not exceed 20 years. To compute the maximum period of the prescribed penalty, the time included
in prision correccional maximum to prision mayor minimum shall be divided into three equal portions, with each
portion forming a period. Following this computation, the maximum period for prision correccional maximum to
prision mayor minimum is from 6 years, 8 months, and 21 days to 8 years. The incremental penalty, when
proper, shall thus be added to anywhere from 6 years, 8 months, and 21 days to 8 years, at the discretion of the
court.34

In computing the incremental penalty, the amount defrauded shall be substracted by ₱22,000.00, and the
difference shall be divided by ₱10,000.00. Any fraction of a year shall be discarded as was done starting with
People v. Pabalan.35

In Criminal Case Nos. 16316-R and 16318-R, brothers Jeffries and Howard Golidan were each defrauded of the
amount of ₱40,000.00, for which the Court of Appeals sentenced Ocden to an indeterminate penalty of 2 years,
11 months, and 10 days of prision correccional as minimum, to 9 years of prision mayor as maximum. Upon
review, however, we modify the maximum term of the indeterminate penalty imposed on Ocden in said criminal
cases. Since the amount defrauded exceeds ₱22,000.00 by ₱18,000.00, 1 year shall be added to the maximum
period of the prescribed penalty (anywhere between 6 years, 8 months, and 21 days to 8 years). There being no
aggravating circumstance, we apply the lowest of the maximum period, which is 6 years, 8 months, and 21 days.
Adding the one year incremental penalty, the maximum term of Ocden’s indeterminate sentence in these two
cases is only 7 years, 8 months, and 21 days of prision mayor.

In Criminal Cases No. 19694-R, Ferrer was defrauded of the amount of ₱70,000.00, for which the Court of
Appeals sentenced Ocden to an indeterminate penalty of 4 years and 2 months of prision correccional, as
minimum, to 12 years of prision mayor, as maximum. Upon recomputation, we also have to modify the maximum
term of the indeterminate sentence imposed upon Ocden in Criminal Case No. 19694-R. Given that the amount
defrauded exceeds ₱22,000.00 by ₱48,000.00, 4 years shall be added to the maximum period of the prescribed
penalty (anywhere between 6 years, 8 months, and 21 days to 8 years). There likewise being no aggravating
circumstance in this case, we add the 4 years of incremental penalty to the lowest of the maximum period, which
is 6 years, 8 months, and 21 days. The maximum term, therefor, of Ocden’s indeterminate sentence in Criminal
Case No. 19694-R is only 10 years, 8 months, and 21 days of prision mayor.

WHEREFORE, the instant appeal of accused-appellant Dolores Ocden is DENIED. The Decision dated April 21,
2006 of the Court of Appeals in CA-G.R. CR.-H.C. No. 00044 is AFFIRMED with MODIFICATION to read as
follows:

1. In Criminal Case No. 16315-R, the Court finds the accused, Dolores Ocden, GUILTY beyond
reasonable doubt of the crime of Illegal Recruitment committed in large scale as defined and penalized
under Article 13(b) in relation to Articles 38(b), 34 and 39 of the Labor Code, as amended. She is hereby
sentenced to suffer the penalty of life imprisonment and to pay a fine of ₱500,000.00;

2. In Criminal Case No. 16316-R, the Court finds the accused, Dolores Ocden, GUILTY beyond
reasonable doubt of the crime of estafa and sentences her to an indeterminate penalty of 2 years, 11
months, and 10 days of prision correccional, as minimum, to 7 years, 8 months, and 21 days of prision
mayor, as maximum, and to indemnify Jeffries Golidan the amount of ₱40,000.00;

3. In Criminal Case No. 16318-R, the Court finds the accused, Dolores Ocden, GUILTY beyond
reasonable doubt of the crime of estafa and sentences her to an indeterminate penalty of 2 years, 11
months, and 10 days of prision correccional, as minimum, to 7 years, 8 months, and 21 days of prision
mayor, as maximum, and to indemnify Howard Golidan the amount of ₱40,000.00; and

4. In Criminal Case No. 16964-R, the Court finds the accused, Dolores Ocden, GUILTY beyond
reasonable doubt of the crime of estafa and sentences her to an indeterminate penalty of 4 years and 2
months of prision correccional, as minimum, to 10 years, 8 months, and 21 days of prision mayor, as
maximum, and to indemnify Rizalina Ferrer the amount of ₱70,000.00.

SO ORDERED.
G.R. No. 178551               October 11, 2010

ATCI OVERSEAS CORPORATION, AMALIA G. IKDAL and MINISTRY OF PUBLIC HEALTH-KUWAIT Petitioners,

vs.
MA. JOSEFA ECHIN, Respondent.
DECISION

CARPIO MORALES, J.:

Josefina Echin (respondent) was hired by petitioner ATCI Overseas Corporation in behalf of its principal-co-petitioner,
the Ministry of Public Health of Kuwait (the Ministry), for the position of medical technologist under a two-year contract,
denominated as a Memorandum of Agreement (MOA), with a monthly salary of US$1,200.00.

Under the MOA,1 all newly-hired employees undergo a probationary period of one (1) year and are covered by
Kuwait’s Civil Service Board Employment Contract No. 2.

Respondent was deployed on February 17, 2000 but was terminated from employment on February 11, 2001, she not
having allegedly passed the probationary period.

As the Ministry denied respondent’s request for reconsideration, she returned to the Philippines on March 17, 2001,
shouldering her own air fare.

On July 27, 2001, respondent filed with the National Labor Relations Commission (NLRC) a complaint2 for illegal
dismissal against petitioner ATCI as the local recruitment agency, represented by petitioner, Amalia Ikdal (Ikdal), and
the Ministry, as the foreign principal.

By Decision3 of November 29, 2002, the Labor Arbiter, finding that petitioners neither showed that there was just
cause to warrant respondent’s dismissal nor that she failed to qualify as a regular employee, held that respondent was
illegally dismissed and accordingly ordered petitioners to pay her US$3,600.00, representing her salary for the three
months unexpired portion of her contract.

On appeal of petitioners ATCI and Ikdal, the NLRC affirmed the Labor Arbiter’s decision by Resolution 4 of January 26,
2004. Petitioners’ motion for reconsideration having been denied by Resolution5 of April 22, 2004, they appealed to
the Court of Appeals, contending that their principal, the Ministry, being a foreign government agency, is immune from
suit and, as such, the immunity extended to them; and that respondent was validly dismissed for her failure to meet
the performance rating within the one-year period as required under Kuwait’s Civil Service Laws. Petitioners further
contended that Ikdal should not be liable as an officer of petitioner ATCI.

By Decision6 of March 30, 2007, the appellate court affirmed the NLRC Resolution.

In brushing aside petitioners’ contention that they only acted as agent of the Ministry and that they cannot be held
jointly and solidarily liable with it, the appellate court noted that under the law, a private employment agency shall
assume all responsibilities for the implementation of the contract of employment of an overseas worker, hence, it can
be sued jointly and severally with the foreign principal for any violation of the recruitment agreement or contract of
employment.

As to Ikdal’s liability, the appellate court held that under Sec. 10 of Republic Act No. 8042, the "Migrant and Overseas
Filipinos’ Act of 1995," corporate officers, directors and partners of a recruitment agency may themselves be jointly
and solidarily liable with the recruitment agency for money claims and damages awarded to overseas workers.

Petitioners’ motion for reconsideration having been denied by the appellate court by Resolution 7 of June 27, 2007, the
present petition for review on certiorari was filed.

Petitioners maintain that they should not be held liable because respondent’s employment contract specifically
stipulates that her employment shall be governed by the Civil Service Law and Regulations of Kuwait. They thus
conclude that it was patent error for the labor tribunals and the appellate court to apply the Labor Code provisions
governing probationary employment in deciding the present case.

Further, petitioners argue that even the Philippine Overseas Employment Act (POEA) Rules relative to master
employment contracts (Part III, Sec. 2 of the POEA Rules and Regulations) accord respect to the "customs, practices,
company policies and labor laws and legislation of the host country."
Finally, petitioners posit that assuming arguendo that Philippine labor laws are applicable, given that the foreign
principal is a government agency which is immune from suit, as in fact it did not sign any document agreeing to be
held jointly and solidarily liable, petitioner ATCI cannot likewise be held liable, more so since the Ministry’s liability had
not been judicially determined as jurisdiction was not acquired over it.

The petition fails.

Petitioner ATCI, as a private recruitment agency, cannot evade responsibility for the money claims of Overseas
Filipino workers (OFWs) which it deploys abroad by the mere expediency of claiming that its foreign principal is a
government agency clothed with immunity from suit, or that such foreign principal’s liability must first be established
before it, as agent, can be held jointly and solidarily liable.

In providing for the joint and solidary liability of private recruitment agencies with their foreign principals, Republic Act
No. 8042 precisely affords the OFWs with a recourse and assures them of immediate and sufficient payment of what
is due them. Skippers United Pacific v. Maguad8 explains:

. . . [T]he obligations covenanted in the recruitment agreement entered into by and between the local
agent and its foreign principal are not coterminous with the term of such agreement so that if either or
both of the parties decide to end the agreement, the responsibilities of such parties towards the contracted
employees under the agreement do not at all end, but the same extends up to and until the expiration of the
employment contracts of the employees recruited and employed pursuant to the said recruitment
agreement. Otherwise, this will render nugatory the very purpose for which the law governing the
employment of workers for foreign jobs abroad was enacted. (emphasis supplied)

The imposition of joint and solidary liability is in line with the policy of the state to protect and alleviate the plight of the
working class.9 Verily, to allow petitioners to simply invoke the immunity from suit of its foreign principal or to wait for
the judicial determination of the foreign principal’s liability before petitioner can be held liable renders the law on joint
and solidary liability inutile.

As to petitioners’ contentions that Philippine labor laws on probationary employment are not applicable since it was
expressly provided in respondent’s employment contract, which she voluntarily entered into, that the terms of her
engagement shall be governed by prevailing Kuwaiti Civil Service Laws and Regulations as in fact POEA Rules
accord respect to such rules, customs and practices of the host country, the same was not substantiated.

Indeed, a contract freely entered into is considered the law between the parties who can establish stipulations,
clauses, terms and conditions as they may deem convenient, including the laws which they wish to govern their
respective obligations, as long as they are not contrary to law, morals, good customs, public order or public policy.

It is hornbook principle, however, that the party invoking the application of a foreign law has the burden of proving the
law, under the doctrine of processual presumption which, in this case, petitioners failed to discharge. The Court’s
ruling in EDI-Staffbuilders Int’l., v. NLRC10 illuminates:

In the present case, the employment contract signed by Gran specifically states that Saudi Labor Laws will
govern matters not provided for in the contract (e.g. specific causes for termination, termination procedures,
etc.). Being the law intended by the parties (lex loci intentiones) to apply to the contract, Saudi Labor Laws
should govern all matters relating to the termination of the employment of Gran.

In international law, the party who wants to have a foreign law applied to a dispute or case has the burden of
proving the foreign law. The foreign law is treated as a question of fact to be properly pleaded and proved as
the judge or labor arbiter cannot take judicial notice of a foreign law. He is presumed to know only domestic or
forum law.

Unfortunately for petitioner, it did not prove the pertinent Saudi laws on the matter; thus, the International Law
doctrine of presumed-identity approach or processual presumption comes into play. Where a foreign law is
not pleaded or, even if pleaded, is not proved, the presumption is that foreign law is the same as ours. Thus,
we apply Philippine labor laws in determining the issues presented before us. (emphasis and underscoring
supplied)

The Philippines does not take judicial notice of foreign laws, hence, they must not only be alleged; they must be
proven. To prove a foreign law, the party invoking it must present a copy thereof and comply with Sections 24 and 25
of Rule 132 of the Revised Rules of Court which reads:

SEC. 24. Proof of official record. — The record of public documents referred to in paragraph (a) of Section 19,
when admissible for any purpose, may be evidenced by an official publication thereof or by a copy attested by
 the officer having the legal custody of the record, or by his deputy, and accompanied, if the record is not kept
in the Philippines, with a certificate that such officer has the custody. If the office in which the record is kept is
in a foreign country, the certificate may be made by a secretary of the embassy or legation, consul general,
consul, vice consul, or consular agent or by any officer in the foreign service of the Philippines stationed in the
foreign country in which the record is kept, and authenticated by the seal of his office. (emphasis supplied)

SEC. 25. What attestation of copy must state. — Whenever a copy of a document or record is attested for the
purpose of the evidence, the attestation must state, in substance, that the copy is a correct copy of the
original, or a specific part thereof, as the case may be. The attestation must be under the official seal of the
attesting officer, if there be any, or if he be the clerk of a court having a seal, under the seal of such court.

To prove the Kuwaiti law, petitioners submitted the following: MOA between respondent and the Ministry, as
represented by ATCI, which provides that the employee is subject to a probationary period of one (1) year and that the
host country’s Civil Service Laws and Regulations apply; a translated copy11 (Arabic to English) of the termination
letter to respondent stating that she did not pass the probation terms, without specifying the grounds therefor, and a
translated copy of the certificate of termination,12 both of which documents were certified by Mr. Mustapha Alawi, Head
of the Department of Foreign Affairs-Office of Consular Affairs Inslamic Certification and Translation Unit; and
respondent’s letter13 of reconsideration to the Ministry, wherein she noted that in her first eight (8) months of
employment, she was given a rating of "Excellent" albeit it changed due to changes in her shift of work schedule.

These documents, whether taken singly or as a whole, do not sufficiently prove that respondent was validly terminated
as a probationary employee under Kuwaiti civil service laws. Instead of submitting a copy of the pertinent Kuwaiti
labor laws duly authenticated and translated by Embassy officials thereat, as required under the Rules, what
petitioners submitted were mere certifications attesting only to the correctness of the translations of the MOA
and the termination letter which does not prove at all that Kuwaiti civil service laws differ from Philippine laws
and that under such Kuwaiti laws, respondent was validly terminated. Thus the subject certifications read:

xxxx

This is to certify that the herein attached translation/s from Arabic to English/Tagalog and or vice versa
was/were presented to this Office for review and certification and the same was/were found to be in
order. This Office, however, assumes no responsibility as to the contents of the document/s.

This certification is being issued upon request of the interested party for whatever legal purpose it may serve.
(emphasis supplied)1avvphi1

Respecting Ikdal’s joint and solidary liability as a corporate officer, the same is in order too following the express
provision of R.A. 8042 on money claims, viz:

SEC. 10. Money Claims.—Notwithstanding any provision of law to the contrary, the Labor Arbiters of the
National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and
decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-
employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment
including claims for actual moral, exemplary and other forms of damages.

The liability of the principal/employer and the recruitment/placement agency for any and all claims under this
section shall be joint and several. This provision shall be incorporated in the contract for overseas
employment and shall be a condition precedent for its approval. The performance bond to be filed by the
recruitment/placement agency, as provided by law, shall be answerable for all money claims or damages that
may be awarded to the workers. If the recruitment/placement agency is a juridical being, the corporate officers
and directors and partners as the case may be, shall themselves be jointly and solidarily liable with the
corporation or partnership for the aforesaid claims and damages. (emphasis and underscoring supplied)

WHEREFORE, the petition is DENIED.

SO ORDERED.
G.R. No. 157010               June 21, 2005

PHILIPPINE NATIONAL BANK, petitioner,

vs.
FLORENCE O. CABANSAG, respondent.

DECISION

PANGANIBAN, J.:

The Court reiterates the basic policy that all Filipino workers, whether employed locally or overseas, enjoy the
protective mantle of Philippine labor and social legislations. Our labor statutes may not be rendered ineffective
by laws or judgments promulgated, or stipulations agreed upon, in a foreign country.

The Case

Before us is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court, seeking to reverse and set
aside the July 16, 2002 Decision2 and the January 29, 2003 Resolution3 of the Court of Appeals (CA) in CA-GR
SP No. 68403. The assailed Decision dismissed the CA Petition (filed by herein petitioner), which had sought to
reverse the National Labor Relations Commission (NLRC)’s June 29, 2001 Resolution,4 affirming Labor Arbiter
Joel S. Lustria’s January 18, 2000 Decision.5

The assailed CA Resolution denied herein petitioner’s Motion for Reconsideration.

The Facts

The facts are narrated by the Court of Appeals as follows:

"In late 1998, [herein Respondent Florence Cabansag] arrived in Singapore as a tourist. She applied for
employment, with the Singapore Branch of the Philippine National Bank, a private banking corporation organized
and existing under the laws of the Philippines, with principal offices at the PNB Financial Center, Roxas
Boulevard, Manila. At the time, the Singapore PNB Branch was under the helm of Ruben C. Tobias, a lawyer, as
General Manager, with the rank of Vice-President of the Bank. At the time, too, the Branch Office had two (2)
types of employees: (a) expatriates or the regular employees, hired in Manila and assigned abroad including
Singapore, and (b) locally (direct) hired. She applied for employment as Branch Credit Officer, at a total monthly
package of $SG4,500.00, effective upon assumption of duties after approval. Ruben C. Tobias found her
eminently qualified and wrote on October 26, 1998, a letter to the President of the Bank in Manila,
recommending the appointment of Florence O. Cabansag, for the position.

xxxxxxxxx

"The President of the Bank was impressed with the credentials of Florence O. Cabansag that he approved the
recommendation of Ruben C. Tobias. She then filed an ‘Application,’ with the Ministry of Manpower of the
Government of Singapore, for the issuance of an ‘Employment Pass’ as an employee of the Singapore PNB
Branch. Her application was approved for a period of two (2) years.

"On December 7, 1998, Ruben C. Tobias wrote a letter to Florence O. Cabansag offering her a temporary
appointment, as Credit Officer, at a basic salary of Singapore Dollars 4,500.00, a month and, upon her
successful completion of her probation to be determined solely, by the Bank, she may be extended at the
discretion of the Bank, a permanent appointment and that her temporary appointment was subject to the
following terms and conditions:

‘1. You will be on probation for a period of three (3) consecutive months from the date of your
assumption of duty.

‘2. You will observe the Bank’s rules and regulations and those that may be adopted from time to time.

‘3. You will keep in strictest confidence all matters related to transactions between the Bank and its
clients.
 ‘4. You will devote your full time during business hours in promoting the business and interest of the
Bank.

‘5. You will not, without prior written consent of the Bank, be employed in anyway for any purpose
whatsoever outside business hours by any person, firm or company.

‘6. Termination of your employment with the Bank may be made by either party after notice of one (1)
day in writing during probation, one month notice upon confirmation or the equivalent of one (1) day’s or
month’s salary in lieu of notice.’

"Florence O. Cabansag accepted the position and assumed office. In the meantime, the Philippine Embassy in
Singapore processed the employment contract of Florence O. Cabansag and, on March 8, 1999, she was issued
by the Philippine Overseas Employment Administration, an ‘Overseas Employment Certificate,’ certifying that
she was a bona fide contract worker for Singapore.

xxxxxxxxx

"Barely three (3) months in office, Florence O. Cabansag submitted to Ruben C. Tobias, on March 9, 1999, her
initial ‘Performance Report.’ Ruben C. Tobias was so impressed with the ‘Report’ that he made a notation and,
on said ‘Report’: ‘GOOD WORK.’ However, in the evening of April 14, 1999, while Florence O. Cabansag was in
the flat, which she and Cecilia Aquino, the Assistant Vice-President and Deputy General Manager of the Branch
and Rosanna Sarmiento, the Chief Dealer of the said Branch, rented, she was told by the two (2) that Ruben C.
Tobias has asked them to tell Florence O. Cabansag to resign from her job. Florence O. Cabansag was
perplexed at the sudden turn of events and the runabout way Ruben C. Tobias procured her resignation from the
Bank. The next day, Florence O. Cabansag talked to Ruben C. Tobias and inquired if what Cecilia Aquino and
Rosanna Sarmiento had told her was true. Ruben C. Tobias confirmed the veracity of the information, with the
explanation that her resignation was imperative as a ‘cost-cutting measure’ of the Bank. Ruben C. Tobias,
likewise, told Florence O. Cabansag that the PNB Singapore Branch will be sold or transformed into a
remittance office and that, in either way, Florence O. Cabansag had to resign from her employment. The more
Florence O. Cabansag was perplexed. She then asked Ruben C. Tobias that she be furnished with a ‘Formal
Advice’ from the PNB Head Office in Manila. However, Ruben C. Tobias flatly refused. Florence O. Cabansag
did not submit any letter of resignation.

"On April 16, 1999, Ruben C. Tobias again summoned Florence O. Cabansag to his office and demanded that
she submit her letter of resignation, with the pretext that he needed a Chinese-speaking Credit Officer to
penetrate the local market, with the information that a Chinese-speaking Credit Officer had already been hired
and will be reporting for work soon. She was warned that, unless she submitted her letter of resignation, her
employment record will be blemished with the notation ‘DISMISSED’ spread thereon. Without giving any
definitive answer, Florence O. Cabansag asked Ruben C. Tobias that she be given sufficient time to look for
another job. Ruben C. Tobias told her that she should be ‘out’ of her employment by May 15, 1999.

"However, on April 19, 1999, Ruben C. Tobias again summoned Florence O. Cabansag and adamantly ordered
her to submit her letter of resignation. She refused. On April 20, 1999, she received a letter from Ruben C.
Tobias terminating her employment with the Bank.

xxxxxxxxx

"On January 18, 2000, the Labor Arbiter rendered judgment in favor of the Complainant and against the
Respondents, the decretal portion of which reads as follows:

‘WHEREFORE, considering the foregoing premises, judgment is hereby rendered finding respondents
guilty of Illegal dismissal and devoid of due process, and are hereby ordered:

1. To reinstate complainant to her former or substantially equivalent position without loss of seniority
rights, benefits and privileges;

2. Solidarily liable to pay complainant as follows:

a) To pay complainant her backwages from 16 April 1999 up to her actual reinstatement. Her
backwages as of the date of the promulgation of this decision amounted to SGD 40,500.00 or its
equivalent in Philippine Currency at the time of payment;
 b) Mid-year bonus in the amount of SGD 2,250.00 or its equivalent in Philippine Currency at the
time of payment;

c) Allowance for Sunday banking in the amount of SGD 120.00 or its equivalent in Philippine
Currency at the time of payment;

d) Monetary equivalent of leave credits earned on Sunday banking in the amount of SGD
1,557.67 or its equivalent in Philippine Currency at the time of payment;

e) Monetary equivalent of unused sick leave benefits in the amount of SGD 1,150.60 or its
equivalent in Philippine Currency at the time of payment.

f) Monetary equivalent of unused vacation leave benefits in the amount of SGD 319.85 or its
equivalent in Philippine Currency at the time of payment.

g) 13th month pay in the amount of SGD 4,500.00 or its equivalent in Philippine Currency at the
time of payment;

3. Solidarily to pay complainant actual damages in the amount of SGD 1,978.00 or its equivalent in
Philippine Currency at the time of payment, and moral damages in the amount of PhP 200,000.00,
exemplary damages in the amount of PhP 100,000.00;

4. To pay complainant the amount of SGD 5,039.81 or its equivalent in Philippine Currency at the time of
payment, representing attorney’s fees.

SO ORDERED." 6 [Emphasis in the original.]

PNB appealed the labor arbiter’s Decision to the NLRC. In a Resolution dated June 29, 2001, the Commission
affirmed that Decision, but reduced the moral damages to ₱100,000 and the exemplary damages to ₱50,000. In
a subsequent Resolution, the NLRC denied PNB’s Motion for Reconsideration.

Ruling of the Court of Appeals

In disposing of the Petition for Certiorari, the CA noted that petitioner bank had failed to adduce in evidence the
Singaporean law supposedly governing the latter’s employment Contract with respondent. The appellate court
found that the Contract had actually been processed by the Philippine Embassy in Singapore and approved by
the Philippine Overseas Employment Administration (POEA), which then used that Contract as a basis for
issuing an Overseas Employment Certificate in favor of respondent.

According to the CA, even though respondent secured an employment pass from the Singapore Ministry of
Employment, she did not thereby waive Philippine labor laws, or the jurisdiction of the labor arbiter or the NLRC
over her Complaint for illegal dismissal. In so doing, neither did she submit herself solely to the Ministry of
Manpower of Singapore’s jurisdiction over disputes arising from her employment. The appellate court further
noted that a cursory reading of the Ministry’s letter will readily show that no such waiver or submission is stated
or implied.

Finally, the CA held that petitioner had failed to establish a just cause for the dismissal of respondent. The bank
had also failed to give her sufficient notice and an opportunity to be heard and to defend herself. The CA ruled
that she was consequently entitled to reinstatement and back wages, computed from the time of her dismissal
up to the time of her reinstatement.

Hence, this Petition.7

Issues

Petitioner submits the following issues for our consideration:

"1. Whether or not the arbitration branch of the NLRC in the National Capital Region has jurisdiction over
the instant controversy;
 "2. Whether or not the arbitration of the NLRC in the National Capital Region is the most convenient
venue or forum to hear and decide the instant controversy; and

"3. Whether or not the respondent was illegally dismissed, and therefore, entitled to recover moral and
exemplary damages and attorney’s fees."8

In addition, respondent assails, in her Comment, 9 the propriety of Rule 45 as the procedural mode for seeking a
review of the CA Decision affirming the NLRC Resolution. Such issue deserves scant consideration.
Respondent miscomprehends the Court’s discourse in St. Martin Funeral Home v. NLRC, 10 which has indeed
affirmed that the proper mode of review of NLRC decisions, resolutions or orders is by a special civil action
for certiorari under Rule 65 of the Rules of Court. The Supreme Court and the Court of Appeals
have concurrent original jurisdiction over such petitions for certiorari. Thus, in observance of the doctrine on the
hierarchy of courts, these petitions should be initially filed with the CA.11

Rightly, the bank elevated the NLRC Resolution to the CA by way of a Petition for Certiorari. In seeking a review
by this Court of the CA Decision -- on questions of jurisdiction, venue and validity of employment termination --
petitioner is likewise correct in invoking Rule 45.12

It is true, however, that in a petition for review on certiorari, the scope of the Supreme Court’s judicial review of
decisions of the Court of Appeals is generally confined only to errors of law. It does not extend to questions of
fact. This doctrine applies with greater force in labor cases. Factual questions are for the labor tribunals to
resolve. 13 In the present case, the labor arbiter and the NLRC have already determined the factual issues. Their
findings, which are supported by substantial evidence, were affirmed by the CA. Thus, they are entitled to great
respect and are rendered conclusive upon this Court, absent a clear showing of palpable error or arbitrary
disregard of evidence.14

The Court’s Ruling

The Petition has no merit.

First Issue:

Jurisdiction

The jurisdiction of labor arbiters and the NLRC is specified in Article 217 of the Labor Code as follows:

"ART. 217. 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, within thirty (30)
calendar days after the submission of the case by the parties for decision without extension, even in the absence
of stenographic notes, 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 wage, rates
of pay, hours of work and other terms and conditions of employment

4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee
relations;

5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality
of strikes and lockouts; and

6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all
other claims, arising from employer-employee relations, including those of persons in domestic or
household service, involving an amount of exceeding five thousand pesos (₱5,000.00) regardless of
whether accompanied with a claim for reinstatement.

(b) The commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.
x x x x x x x x x."

More specifically, Section 10 of RA 8042 reads in part:

"SECTION 10. Money Claims. — Notwithstanding any provision of law to the contrary, the Labor Arbiters of the
National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and
decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-
employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment
including claims for actual, moral, exemplary and other forms of damages.

x x x x x x x x x"

Based on the foregoing provisions, labor arbiters clearly have original and exclusive jurisdiction over claims
arising from employer-employee relations, including termination disputes involving all workers, among whom are
overseas Filipino workers (OFW).15

We are not unmindful of the fact that respondent was directly hired, while on a tourist status in Singapore, by the
PNB branch in that city state. Prior to employing respondent, petitioner had to obtain an employment pass for
her from the Singapore Ministry of Manpower. Securing the pass was a regulatory requirement pursuant to the
immigration regulations of that country.16

Similarly, the Philippine government requires non-Filipinos working in the country to first obtain a local work
permit in order to be legally employed here. That permit, however, does not automatically mean that the non-
citizen is thereby bound by local laws only, as averred by petitioner. It does not at all imply a waiver of one’s
national laws on labor. Absent any clear and convincing evidence to the contrary, such permit simply means that
its holder has a legal status as a worker in the issuing country.1avvphil.zw+

Noteworthy is the fact that respondent likewise applied for and secured an Overseas Employment Certificate
from the POEA through the Philippine Embassy in Singapore. The Certificate, issued on March 8, 1999,
declared her a bona fide contract worker for Singapore. Under Philippine law, this document authorized her
working status in a foreign country and entitled her to all benefits and processes under our statutes. Thus, even
assuming arguendo that she was considered at the start of her employment as a "direct hire" governed by and
subject to the laws, common practices and customs prevailing in Singapore 17 she subsequently became a
contract worker or an OFW who was covered by Philippine labor laws and policies upon certification by the
POEA. At the time her employment was illegally terminated, she already possessed the POEA employment
Certificate.

Moreover, petitioner admits that it is a Philippine corporation doing business through a branch office in
Singapore.18 Significantly, respondent’s employment by the Singapore branch office had to be approved by
Benjamin P. Palma Gil,19 the president of the bank whose principal offices were in Manila. This circumstance
militates against petitioner’s contention that respondent was "locally hired"; and totally "governed by and subject
to the laws, common practices and customs" of Singapore, not of the Philippines. Instead, with more reason
does this fact reinforce the presumption that respondent falls under the legal definition of migrant worker, in this
case one deployed in Singapore. Hence, petitioner cannot escape the application of Philippine laws or the
jurisdiction of the NLRC and the labor arbiter.

In any event, we recall the following policy pronouncement of the Court in Royal Crown Internationale v. NLRC:20

"x x x. Whether employed locally or overseas, all Filipino workers enjoy the protective mantle of Philippine labor
and social legislation, contract stipulations to the contrary notwithstanding. This pronouncement is in keeping
with the basic public policy of the State to afford protection to labor, promote full employment, ensure equal work
opportunities regardless of sex, race or creed, and regulate the relations between workers and employers.  For 1awphi1.net

the State assures the basic rights of all workers to self-organization, collective bargaining, security of tenure, and
just and humane conditions of work [Article 3 of the Labor Code of the Philippines; See also Section 18, Article II
and Section 3, Article XIII, 1987 Constitution]. This ruling is likewise rendered imperative by Article 17 of the Civil
Code which states that laws ‘which have for their object public order, public policy and good customs shall not
be rendered ineffective by laws or judgments promulgated, or by determination or conventions agreed upon in a
foreign country.’"
Second Issue:

Proper Venue

Section 1(a) of Rule IV of the NLRC Rules of Procedure reads:

"Section 1. Venue – (a) All cases which Labor Arbiters have authority to hear and decide may be filed in the
Regional Arbitration Branch having jurisdiction over the workplace of the complainant/petitioner; Provided,
however that cases of Overseas Filipino Worker (OFW) shall be filed before the Regional Arbitration Branch
where the complainant resides or where the principal office of the respondent/employer is situated, at the option
of the complainant.

"For purposes of venue, workplace shall be understood as the place or locality where the employee is regularly
assigned when the cause of action arose. It shall include the place where the employee is supposed to report
back after a temporary detail, assignment or travel. In the case of field employees, as well as ambulant or
itinerant workers, their workplace is where they are regularly assigned, or where they are supposed to regularly
receive their salaries/wages or work instructions from, and report the results of their assignment to their
employers."

Under the "Migrant Workers and Overseas Filipinos Act of 1995" (RA 8042), a migrant worker "refers to a person
who is to be engaged, is engaged or has been engaged in a remunerated activity in a state of which he or she is
not a legal resident; to be used interchangeably with overseas Filipino worker."21 Undeniably, respondent was
employed by petitioner in its branch office in Singapore. Admittedly, she is a Filipino and not a legal resident of
that state. She thus falls within the category of "migrant worker" or "overseas Filipino worker."

As such, it is her option to choose the venue of her Complaint against petitioner for illegal dismissal. The law
gives her two choices: (1) at the Regional Arbitration Branch (RAB) where she resides or (2) at the RAB where
the principal office of her employer is situated. Since her dismissal by petitioner, respondent has returned to the
Philippines -- specifically to her residence at Filinvest II, Quezon City. Thus, in filing her Complaint before the
RAB office in Quezon City, she has made a valid choice of proper venue.

Third Issue:

Illegal Dismissal

The appellate court was correct in holding that respondent was already a regular employee at the time of her
dismissal, because her three-month probationary period of employment had already ended. This ruling is in
accordance with Article 281 of the Labor Code: "An employee who is allowed to work after a probationary period
shall be considered a regular employee." Indeed, petitioner recognized respondent as such at the time it
dismissed her, by giving her one month’s salary in lieu of a one-month notice, consistent with provision No. 6 of
her employment Contract.

Notice and Hearing Not Complied With

As a regular employee, respondent was entitled to all rights, benefits and privileges provided under our labor
laws. One of her fundamental rights is that she may not be dismissed without due process of law. The twin
requirements of notice and hearing constitute the essential elements of procedural due process, and neither of
these elements can be eliminated without running afoul of the constitutional guarantee.22

In dismissing employees, the employer must furnish them two written notices: 1) one to apprise them of the
particular acts or omissions for which their dismissal is sought; and 2) the other to inform them of the decision to
dismiss them. As to the requirement of a hearing, its essence lies simply in the opportunity to be heard.23

The evidence in this case is crystal-clear. Respondent was not notified of the specific act or omission for which
her dismissal was being sought. Neither was she given any chance to be heard, as required by law. At any rate,
even if she were given the opportunity to be heard, she could not have defended herself effectively, for she knew
no cause to answer to.

All that petitioner tendered to respondent was a notice of her employment termination effective the very same
day, together with the equivalent of a one-month pay. This Court has already held that nothing in the law gives
an employer the option to substitute the required prior notice and opportunity to be heard with the mere payment
of 30 days’ salary.24

Well-settled is the rule that the employer shall be sanctioned for noncompliance with the requirements of, or for
failure to observe, due process that must be observed in dismissing an employee.25

No Valid Cause for Dismissal

Moreover, Articles 282,26 28327 and 28428 of the Labor Code provide the valid grounds or causes for an
employee’s dismissal. The employer has the burden of proving that it was done for any of those just or
authorized causes. The failure to discharge this burden means that the dismissal was not justified, and that the
employee is entitled to reinstatement and back wages.29

Notably, petitioner has not asserted any of the grounds provided by law as a valid reason for terminating the
employment of respondent. It merely insists that her dismissal was validly effected pursuant to the provisions of
her employment Contract, which she had voluntarily agreed to be bound to.

Truly, the contracting parties may establish such stipulations, clauses, terms and conditions as they want, and
their agreement would have the force of law between them. However, petitioner overlooks the qualification that
those terms and conditions agreed upon must not be contrary to law, morals, customs, public policy or public
order.30 As explained earlier, the employment Contract between petitioner and respondent is governed by
Philippine labor laws. Hence, the stipulations, clauses, and terms and conditions of the Contract must not
contravene our labor law provisions.

Moreover, a contract of employment is imbued with public interest. The Court has time and time again reminded
parties that they "are not at liberty to insulate themselves and their relationships from the impact of labor laws
and regulations by simply contracting with each other."31 Also, while a contract is the law between the parties, the
provisions of positive law that regulate such contracts are deemed included and shall limit and govern the
relations between the parties.32

Basic in our jurisprudence is the principle that when there is no showing of any clear, valid, and legal cause for
the termination of employment, the law considers the matter a case of illegal dismissal.33

Awards for Damages Justified

Finally, moral damages are recoverable when the dismissal of an employee is attended by bad faith or
constitutes an act oppressive to labor or is done in a manner contrary to morals, good customs or public
policy.34 Awards for moral and exemplary damages would be proper if the employee was harassed and arbitrarily
dismissed by the employer.35

In affirming the awards of moral and exemplary damages, we quote with approval the following ratiocination of
the labor arbiter:

"The records also show that [respondent’s] dismissal was effected by [petitioners’] capricious and high-handed
manner, anti-social and oppressive, fraudulent and in bad faith, and contrary to morals, good customs and public
policy. Bad faith and fraud are shown in the acts committed by [petitioners] before, during and after
[respondent’s] dismissal in addition to the manner by which she was dismissed. First, [respondent] was
pressured to resign for two different and contradictory reasons, namely, cost-cutting and the need for a
Chinese[-]speaking credit officer, for which no written advice was given despite complainant’s request. Such
wavering stance or vacillating position indicates bad faith and a dishonest purpose. Second, she was employed
on account of her qualifications, experience and readiness for the position of credit officer and pressured to
resign a month after she was commended for her good work. Third, the demand for [respondent’s] instant
resignation on 19 April 1999 to give way to her replacement who was allegedly reporting soonest, is whimsical,
fraudulent and in bad faith, because on 16 April 1999 she was given a period of [sic] until 15 May 1999 within
which to leave. Fourth, the pressures made on her to resign were highly oppressive, anti-social and caused her
absolute torture, as [petitioners] disregarded her situation as an overseas worker away from home and family,
with no prospect for another job. She was not even provided with a return trip fare. Fifth, the notice of termination
is an utter manifestation of bad faith and whim as it totally disregards [respondent’s] right to security of tenure
and due process. Such notice together with the demands for [respondent’s] resignation contravenes the
fundamental guarantee and public policy of the Philippine government on security of tenure.
"[Respondent] likewise established that as a proximate result of her dismissal and prior demands for resignation,
she suffered and continues to suffer mental anguish, fright, serious anxiety, besmirched reputation, wounded
feelings, moral shock and social humiliation. Her standing in the social and business community as well as
prospects for employment with other entities have been adversely affected by her dismissal. [Petitioners] are
thus liable for moral damages under Article 2217 of the Civil Code.

xxxxxxxxx

"[Petitioners] likewise acted in a wanton, oppressive or malevolent manner in terminating [respondent’s]

employment and are therefore liable for exemplary damages. This should served [sic] as protection to other
employees of [petitioner] company, and by way of example or correction for the public good so that persons
similarly minded as [petitioners] would be deterred from committing the same acts."36

The Court also affirms the award of attorney’s fees. It is settled that when an action is instituted for the recovery
of wages, or when employees are forced to litigate and consequently incur expenses to protect their rights and
interests, the grant of attorney’s fees is legally justifiable.37

WHEREFORE, the Petition is DENIED and the assailed Decision and Resolution AFFIRMED. Costs against
petitioner.

SO ORDERED.
G.R. No. 208686               July 1, 2015

PEOPLE OF THE PHILIPPINES, Appellee,

vs.
ALELIE TOLENTINO a.k.a. "Alelie Tolentino y Hernandez," Appellant.

DECISION

CARPIO, J.:

This is an appeal from the 29 November 2012 Decision  of the Court of Appeals in CA-G.R. CR-HC No. 04558,
1

affirming the trial court's decision, finding appellant Alelie Tolentino (appellant) guilty beyond reasonable doubt of
illegal recruitment and estafa.

The Facts

Appellant was charged with illegal recruitment and five (5) counts of estafa under Article 315, paragraph 2(a) of
the Revised Penal Code. The Informations against appellant read:

CRIM. CASE NO. 02-755

The undersigned Assistant City Prosecutor accuses ALELIE TOLENTINO of the crime of Illegal
Recruitment committed as follows:

That on or about [or sometime in] the last week of August, 2001 and 1st week of November, 2001 and
thereafter, in the City of Muntinlupa, Philippines and within the jurisdiction of this Honorable Court, the
above-named accused jointly with NARCISA SANTOS did then and there willfully, unlawfully and
feloniously advertise for employment, enlist, contract and promise employment to the following persons:
LEDERLE PANESA, ORLANDO LAYOSO, JIMMY LEJOS, MARCELINO LEJOS and DONNA
MAGBOO for a fee without first securing license and/or permit from the government agency concerned.

Contrary to law. 2

CRIM. CASE NO. 02-756

The undersigned Assistant City Prosecutor accuses ALELIE TOLENTINO of the crime of Estafa under
Art. 315 Par. 2(a) of the Revised Penal Code, as amended, committed as follows:

That on or about or sometime in the first week of August 2001 and thereafter, in the City of Muntinlupa,
Philippines and within the jurisdiction of this Honorable Court, the above-named accused, by means of
deceit, fraudulent acts and false pretenses executed prior to or simultaneously with the commission of
the fraud, did [then] and there willfully, unlawfully and feloniously defraud one LEDERLE PANESA, in the
following manner: accused represented to the said complainant that she could secure work for the said
complainant at Korea and she is capable of processing the travel visa and other documents for her travel
and employment at Korea and demanded from the said complainant to pay the amount of ₱75,000.00 as
placement fee; accused well knew that such representations were false and made only to induce
complainant to part with her money as in fact complainant gave and delivered the amount of ₱15,000.00
as partial payment to the accused; and accused once in possession of the said amount, did then and
there willfully, unlawfully and feloniously misappropriate, misapply and convert the same to her own
personal use and benefit to the damage and prejudice of the said complainant in the amount of
₱15,000.00.

Contrary to law. 3

CRIM. CASE NO. 02-757

The undersigned Assistant City Prosecutor accuses ALELIE TOLENTINO of the crime of Estafa under
Art. 315 Par. 2(a) of the Revised Penal Code, as amended, committed as follows:
That on or about or sometime in the first week of November, 2001 and thereafter, in the City of
Muntinlupa, Philippines and within the jurisdiction of this Honorable Court, the above-named accused
conspiring and confederating with NARCISA SANTOS, and both of them mutually helping and aiding
one another, by means of deceit, fraudulent acts and false pretenses executed prior to or simultaneously
with the commission of the fraud, did [then] and there willfully, unlawfully and feloniously defraud one
ORLANDO LAYOSO, in the following manner: accused represented to the said complainant that she
could secure work for the said complainant at Korea and she is capable of processing the travel visa and
other documents for [his] travel and employment at Korea and demanded from the said complainant to
pay the amount of ₱80,000.00 as placement fee; accused well knew that such representations were
false and made only to induce complainant to part with [his] money as in fact complainant gave and
delivered the amount of ₱35,000.00 as partial payment to the accused; and accused once in possession
of the said amount, did then and there willfully, unlawfully and feloniously misappropriate, misapply and
convert the same to her own personal use and benefit to the damage and prejudice of the said
complainant in the amount of ₱35,000.00.

Contrary to law. 4

CRIM. CASE NO. 02-758

The undersigned Assistant City Prosecutor accuses ALELIE TOLENTINO of the crime of Estafa under
Art. 315 Par. 2(a) of the Revised Penal Code, as amended, committed as follows:

That on or about or sometime in the first week of November, 2001 and thereafter, in the City of
Muntinlupa, Philippines and within the jurisdiction of this Honorable Court, the above-named accused
conspiring and confederating with NARCISA SANTOS, and both of them mutually helping and aiding
one another, by means of deceit, fraudulent acts and false pretenses executed prior to or simultaneously
with the commission of the fraud, did [then] and there willfully, unlawfully and feloniously defraud one
DONNA MAGBOO, in the following manner: accused represented to the said complainant that she could
secure work for the said complainant at Korea and she is capable of processing the travel visa and other
documents for her travel and employment at Korea and demanded from the said complainant to pay the
amount of ₱80,000.00 as placement fee; accused well knew that such representations were false and
made only to induce complainant to part with her money as in fact complainant gave and delivered the
amount of ₱35,000.00 as partial payment to the accused; and accused once in possession of the said
amount, did then and there willfully, unlawfully and feloniously misappropriate, misapply and convert the
same to her own personal use and benefit to the damage and prejudice of the said complainant in the
amount of ₱35,000.00.

Contrary to law. 5

CRIM. CASE NO. 02-759

The undersigned Assistant City Prosecutor accuses ALELIE TOLENTINO of the crime of Estafa under
Art. 315 Par. 2(a) of the Revised Penal Code, as amended, committed as follows: That on or about or
sometime in the first week of November, 2001 and thereafter, in the City of Muntinlupa, Philippines and
within the jurisdiction of this Honorable Court, the above-named accused conspiring and confederating
with NARCISA SANTOS, and both of them mutually helping and aiding one another, by means of deceit,
fraudulent acts and false pretenses executed prior to or simultaneously with the commission of the fraud,
did [then] and there willfully, unlawfully and feloniously defraud one JIMMY LEJOS, in the following
manner: accused represented to the said complainant that she could secure work for the said
complainant at Korea and she is capable of processing the travel visa and other documents for [his]
travel and employment at Korea and demanded from the said complainant to pay the amount of
₱80,000.00 as placement fee; accused well knew that such representations were false and made only to
induce complainant to part with [his] money as in fact complainant gave and delivered the amount of
₱35,000.00 as partial payment to the accused; and accused once in possession of the said amount, did
then and there willfully, unlawfully and feloniously misappropriate, misapply and convert the same to her
own personal use and benefit to the damage and prejudice of the said complainant in the amount of
₱35,000.00.

Contrary to law. 6

CRIM. CASE NO. 02-760

 The undersigned Assistant City Prosecutor accuses ALELIE TOLENTINO of the crime of Estafa under
Art. 315 Par. 2(a) of the Revised Penal Code, as amended, committed as follows:

That on or about or sometime in the first week of November, 2001 and thereafter, in the City of
Muntinlupa, Philippines and within the jurisdiction of this Honorable Court, the above-named accused
conspiring and confederating with NARCISA SANTOS, and both of them mutually helping and aiding
one another, by means of deceit, fraudulent acts and false pretenses executed prior to or simultaneously
with the commission of the fraud, did [then] and there willfully, unlawfully and feloniously defraud one
MARCELINO LEJOS, in the following manner: accused represented to the said complainant that she
could secure work for the said complainant at Korea and she is capable of processing the travel visa and
other documents for [his] travel and employment at Korea and demanded from the said complainant to
pay the amount of ₱80,000.00 as placement fee; accused well knew that such representations were
false and made only to induce complainant to part with [his] money as in fact complainant gave and
delivered the amount of ₱20,000.00 as partial payment to the accused; and accused once in possession
of the said amount, did then and there willfully, unlawfully and feloniously misappropriate, misapply and
convert the same to her own personal use and benefit to the damage and prejudice of the said
complainant in the amount of ₱20,000.00.

Contrary to law. 7

Private complainants Orlando Layoso, Donna Magboo, Jimmy Lejos, and Marcelino Lejos  alleged that 8

sometime in the first week of November 2001, they had a meeting with appellant Alelie Tolentino (appellant) in
her office at the 3rd floor, Arevalo Building, Alabang, Muntinlupa City. Appellant told them the procedure for
overseas employment and offered them assistance to find work abroad for a fee of ₱80,000. Appellant showed
them pictures of those she allegedly helped find work abroad and told them that they would be earning $630
monthly as factory workers in Korea. When asked about her license to recruit overseas workers, appellant told
private complainants that she would show it to them at some other time. On 14 November 2001, private
complainants again met with appellant at her office and each of them gave appellant ₱20,000 as partial payment
of the agreed fee, which included expenses for medical examination and processing of their documents for work
in Korea. Appellant promised to secure their visas and employment contracts within three months.

On 30 January 2002, private complainants met with appellant, who was accompanied by a certain Narcisa
Santos, at Wendy’s in Arquiza Street, Manila for signing of contract. However, the names written on the
employment contracts were not private complainants’ names. Appellant explained that the contracts were
supposedly for other applicants who sought her services but later backed out. Appellant assured them that
original contracts bearing their names would subsequently be provided. Private complainants signed the
contracts and paid ₱15,000 each as their second partial payment.

On 7 February 2002, private complainants received information that the Criminal Investigation and Detection
Group arrested appellant for illegal recruitment. When private complainants confronted appellant at the Manila
City Hall where she was held, they demanded the return of their payments amounting to ₱35,000 each, except
for Marcelino Lejos whose total payment only amounted to ₱20,000. Appellant denied the charges against her
and promised them that they would get their money back. Subsequently, private complainants were able to
secure a certification from the Philippine Overseas Employment Administration (POEA) that appellant was not
licensed to recruit workers for overseas employment.

Another complainant, Lederle Panesa, alleged that in August 2001, she met with appellant, who offered her work
in Korea for a placement fee of ₱75,000. On 7 September 2001, Panesa gave appellant ₱15,000 as initial
payment. Appellant assured Panesa that she would be leaving for Korea on the second week of November 2001
and that the balance of the placement fee could be paid upon her receipt of the visa. However, after said
meeting, Panesa no longer heard from appellant, which prompted Panesa to visit appellant’s office. Appellant
informed Panesa that there were no job openings in Korea at that time. Appellant offered Panesa employment in
other countries such as Malaysia and Palau, but Panesa refused the offer and demanded the return of her
money. Nevertheless, appellant was able to persuade Panesa to wait until December 2001. Appellant never
contacted Panesa thereafter. On 7 February 2002,Panesa was informed that appellant was apprehended for
illegal recruitment. Panesa proceeded to the Office of the City Prosecutor in Manila, but failed to confront
appellant. It was only then that Panesa learned about appellant not being authorized by the POEA to recruit
workers for overseas employment.

For the defense, appellant was presented as the lone witness. Appellant denied the charges against her. She
testified that she was introduced to private complainants by a certain Cezar Manonson and that the owner of the
office she is renting is her relative. Private complainants allegedly sought her help regarding possible work in
Korea and that she merely explained the procedure for overseas employment to them. She was hesitant to help
them because she does not recruit workers as she herself was also applying for work as factory worker through
Narcisa Santos. She admitted having received money from private complainants and issuing receipts for the
payments, upon instructions from Narcisa Santos. She confirmed her signature on the petty cash vouchers she
issued to private complainants, evidencing their payments. She testified that she gave the payments to Narcisa
Santos. However, she admitted that she does not have proof that she indeed turned over the money to Narcisa
Santos.

On 9 June 2010, the trial court rendered a decision, the dispositive portion of which reads:

WHEREFORE, the Court finds accused Alelie (also known as Alelie Tolentino) guilty beyond reasonable
doubt of the offense of large scale illegal recruitment, which constitutes economic sabotage in Criminal
Case Case No. 02-755 and sentences her to life imprisonment and to pay a fine of ₱500,000.00; and
five counts of estafa under Article 315 2(a) of the Revised Penal Code, as amended, in the following
criminal cases and sentences her, as follows:

In Criminal Case No. 02-756, an indeterminate penalty of six months of arresto mayor in its maximum to
four years two months and one day of prision correccional in its maximum as the maximum period, and
to pay the private complainant the amount of ₱5,000.00 as and for moral damages. Accused is further
ordered to return the amount of ₱15,000.00 she illegally collected from the private complainant.

In Criminal Case Nos. 02-757, 02-758 and 02-759, an indeterminate penalty [of] six months of arresto
mayor in its maximum to twelve years of prision mayor in its maximum, and to pay the private
complainants individually each in the amount of ₱15,000.00 as and for moral damages. Accused is
further ordered to return the amount of ₱35,000.00 she illegally collected each from the private
complainants.

In Criminal Case No. 02-760, an indeterminate penalty of six months of arresto mayor in its maximum as
the minimum period to six years and one day of prision mayor in its minimum as the maximum period,
and to pay the private complainant the amount of ₱8,000.00 as and for moral damages. Accused is
further ordered to return the amount of ₱20,000.00 she illegally collected from the private complainant.

Her full period of preventive imprisonment shall be credited in her favor in accordance with Article 29 of
the Revised Penal Code.

SO ORDERED. 9

The Ruling of the Court of Appeals

On appeal, the Court of Appeals affirmed the trial court’s decision. The Court of Appeals held that the
prosecution adequately proved that appellant engaged in illegal recruitment in large scale. The Court of Appeals
noted that appellant admitted that she had no authority or valid license to engage in recruitment and placement
of workers. The testimonies and the documentary evidence submitted by the prosecution showed that appellant
led complainants to believe that she had the power or ability to send private complainants to Korea to work as
factory workers and that the latter were convinced to give their payment to appellant in order to be employed.
Appellant even issued petty cash vouchers acknowledging receipt of private complainants’ payment and she
made them sign Trainee Agreements, which were purportedly their contract with their Korean employer. Based
on the facts and evidence presented, the Court of Appeals concluded that appellant clearly engaged in illegal
recruitment activities. Appellant’s claim that it was Narcisa Santos who recruited the private complainants and
who profited from the illegal transaction was disregarded by the Court of Appeals for lack of evidence. The Court
of Appeals noted that it was appellant who dealt directly with private complainants.

On the charge of estafa, the Court of Appeals likewise upheld appellant’s conviction for said crime. The evidence
presented to prove appellant’s liability for illegal recruitment also established her liability for estafa. The Court of
Appeals ruled that a person may be charged and convicted separately of illegal recruitment under Republic Act
No. 8042 (RA 8042) in relation to the Labor Code, and estafa under Article 315, paragraph 2(a) of the Revised
Penal Code.

Hence, this appeal.

 The Court's Ruling

We find the appeal without merit. The Court of Appeals was correct in affirming the ruling of the trial court that
the appellant’s guilt of the crimes she was accused of was clearly established by the witnesses and the evidence
of the prosecution.

Illegal Recruitment in Large Scale

Article 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."

Illegal recruitment, on the other hand is defined under Article 38 of the Labor Code as follows:

ART. 38. Illegal Recruitment

(a) Any recruitment activities, including the prohibited practices enumerated under Article 34of
this Code, to be undertaken by non-licensees or non-holders of authority shall be deemed illegal
and punishable under Article 39 of this Code. The Department of Labor and Employment or any law
enforcement officer may initiate complaints under this Article.

(b) Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense
involving economic sabotage and shall be penalized in accordance with Article 39 hereof. 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 hereof. Illegal recruitment is deemed committed
in large scale if committed against three (3) or more persons individually or as a group.

(c) The Secretary of Labor and Employment or his duly authorized representatives shall have the power
to cause the arrest and detention of such non-licensee or non-holder of authority if after investigation it is
determined that his activities constitute a danger to national security and public order or will lead to
further exploitation of job-seekers. The Secretary shall order the search of the office or premises and
seizure of documents, paraphernalia, properties and other implements used in illegal recruitment
activities and the closure of companies, establishments and entities found to be engaged in the
recruitment of workers for overseas employment, without having been licensed or authorized to do so.
(Emphases supplied)

Illegal recruitment, as defined under Article 38 of the Labor Code, encompasses recruitment activities for both
local and overseas employment. However, illegal recruitment under this article is limited to recruitment activities
undertaken by non-licensees or non-holders of authority.  Thus, under the Labor Code, to constitute illegal
10

recruitment in large scale, three elements must concur:

1. The accused undertook any recruitment activity defined under Art. 13 (b) or any prohibited practice
enumerated under Art. 34 of the Labor Code.

2. He did not have the license or the authority to lawfully engage in the recruitment and placement of
workers.

3. He committed the same against three or more persons, individually or as a group. 11

RA 8042,  otherwise known as the "Migrant Workers and Overseas Filipinos Act of 1995," established a higher
12

standard of protection and promotion of the welfare of the migrant workers, their families and overseas Filipinos
in distress. RA 8042 also broadened the concept of illegal recruitment for overseas employment and increased
the penalties, especially for Illegal Recruitment in Large Scale and Illegal Recruitment Committed by a
Syndicate, which are considered offenses involving economic sabotage.  Part II of RA 8042 defines and
13

penalizes illegal recruitment for employment abroad, whether undertaken by a non-licensee or non-holder of
authority or by a licensee or holder of authority.
Section 6 of RA 8042 provides for the definition of illegal recruitment, while Section 7 enumerates the penalties
therefor, thus:

SEC. 6. Definition. – For purposes of this Act, illegal recruitment shall mean any act of canvassing,
enlisting, contracting, transporting, utilizing, hiring, or procuring workers and includes referring,
contract services, promising or advertising for employment abroad, whether for profit or not, when
undertaken by a non-licensee or non-holder of authority contemplated under Article 13(f) of Presidential
Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines: Provided, That any such
non-licensee or non-holder who, in any manner, offers or promises for a fee employment abroad for two or more
persons shall be deemed so engaged. It shall likewise include the following acts, whether committed by
any person, whether a non-licensee, non-holder, licensee or holder of authority:

(a) To charge or accept directly or indirectly any amount greater than that specified in the schedule of
allowable fees prescribed by the Secretary of Labor and Employment, or to make a worker pay any
amount greater than that actually received by him as a loan or advance;

(b) To furnish or publish any false notice or information or document in relation to recruitment or
employment;

(c) To give any false notice, testimony, information or document or commit any act of misrepresentation
for the purpose of securing a license or authority under the Labor Code;

(d) To induce or attempt to induce a worker already employed to quit his employment in order to offer
him another unless the transfer is designed to liberate a worker from oppressive terms and conditions of
employment;

(e) To influence or attempt to influence any person or entity not to employ any worker who has not
applied for employment through his agency;

(f) To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to
the dignity of the Republic of the Philippines;

(g) To obstruct or attempt to obstruct inspection by the Secretary of Labor and Employment or by his
duly authorized representative;

(h) To fail to submit reports on the status of employment, placement vacancies, remittance of foreign
exchange earnings, separation from jobs, departures and such other matters or information as may be
required by the Secretary of Labor and Employment;

(i) To substitute or alter to the prejudice of the worker, employment contracts approved and verified by
the Department of Labor and Employment from the time of actual signing thereof by the parties up to and
including the period of the expiration of the same without the approval of the Department of Labor and
Employment;

(j) For an officer or agent of a recruitment or placement agency to become an officer or member of the
Board of any corporation engaged in travel agency or to be engaged directly or indirectly in the
management of a travel agency;

(k) To withhold or deny travel documents from applicant workers before departure for monetary or
financial considerations other than those authorized under the Labor Code and its implementing rules
and regulations;

(l) Failure to actually deploy without valid reason as determined by the Department of Labor and
Employment; and

(m) Failure to reimburse expenses incurred by the worker in connection with his documentation and
processing for purposes of deployment, in cases where the deployment does not actually take place
without the worker’s fault. Illegal recruitment when committed by a syndicate or in large scale shall be
considered an offense involving economic sabotage.
Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons
conspiring or confederating with one another. It is deemed committed in large scale if committed against
three (3) or more persons individually or as a group.

The persons liable for the above offenses are the principals, accomplices and accessories. In case of juridical
persons, the officers having control, management or direction of their business shall be liable.

SEC. 7. Penalties. –

(a) Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of not less than
six (6) years and one (1) day but not more than twelve (12) years and a fine of not less than Two
hundred thousand pesos (₱200,000.00) nor more than Five hundred thousand pesos (₱500,000.00).

(b) The penalty of life imprisonment and a fine of not less than Five hundred thousand pesos
(₱500,000.00) nor more than One million pesos (₱1,000,000.00) shall be imposed if illegal
recruitment constitutes economic sabotage as defined herein.

Provided, however, That the maximum penalty shall be imposed If the person illegally recruited is less than
eighteen (18) years of age or committed by a non-licensee or non-holder of authority. (Emphases supplied)

Unlike illegal recruitment as defined under the Labor Code which is limited to recruitment activities undertaken
by non-licensees or non-holders of authority, under Article 6 of RA 8042, illegal recruitment (for overseas
employment) may be committed not only by non-licensees or non-holders of authority but also by licensees or
holders of authority. Article 6 enumerates thirteen acts or practices [(a) to (m)] which constitute illegal
recruitment, whether committed by any person, whether a non-licensee, non-holder, licensee or holder of
authority. Except for the last two acts [(l) and (m)] on the list under Article 6 of RA8042, the first eleven acts or
practices are also listed in Article 34  of the Labor Code under the heading "Prohibited practices." Thus, under
14

Article 34 of the Labor Code, it is unlawful for any individual, entity, licensee or holder of authority to engage in
any of the enumerated prohibited practices, but such acts or practices do not constitute illegal recruitment when
undertaken by a licensee or holder of authority. However, under Article 38(A) of the Labor Code, when a non-
licensee or non-holder of authority undertakes such "prohibited practices," he or she is liable for illegal
recruitment. RA 8042 broadened the definition of illegal recruitment for overseas employment by including
thirteen acts or practices which now constitute as illegal recruitment, whether committed by a non-licensee, non-
holder, licensee or holder of authority.

Under RA 8042, a non-licensee or non-holder of authority commits illegal recruitment for overseas employment
in two ways: (1) by any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring
workers, and includes referring, contract services, promising or advertising for employment abroad, whether for
profit or not; and (2) by undertaking any of the acts enumerated under Section 6 of RA 8042. On the other hand,
a licensee or holder of authority is also liable for illegal recruitment for overseas employment when he or she
undertakes any of the thirteen acts or practices [(a) to (m)] listed under Section 6 of RA 8042. To constitute
illegal recruitment in large scale, the offense of illegal recruitment must be committed against three or more
persons, individually or as a group.

In this case, the prosecution sufficiently proved that appellant engaged in large-scale illegal recruitment.

First, appellant is a non-licensee or non-holder of authority. Part of the evidence submitted by the prosecution is
a POEA Certification  dated 10 March 2003, stating that appellant is not licensed by the POEA to recruit workers
15

for overseas employment. Appellant admitted that she has no valid license or authority required by law to
lawfully engage in recruitment and placement of workers.

Second, despite the absence of a license or authority to undertake recruitment activities, appellant gave the
impression that she has the power or ability to secure work for private complainants in Korea. Private
complainants Orlando Layoso, Donna Magboo, and Jimmy Lejos all testified that appellant promised them work
as factory workers in Korea and induced them to pay placement fees, which included the expenses for medical
examination and the processing of their documents for work in Korea. Appellant even showed pictures of
previous applicants, whom she allegedly helped find work abroad. Appellant also explained to them the
procedure for overseas employment and promised them that she would secure their visas and employment
contracts within three months. The testimonies of Orlando Layoso, Donna Magboo, and Jimmy Lejos were
corroborated by private respondents Marcelino Lejos and Lederle Panesa, whose Affidavits of Complaint were
adopted as their direct testimonies.
This Court has held in several cases that an accused who represents to others that he could send workers
abroad for employment, even without the authority or license to do so, commits illegal recruitment. 16

Third, there are at least three victims in this case which makes appellant liable for large-scale illegal recruitment.

Appellant denies that she gave private complainants the distinct impression that she had the power or ability to
send them abroad for work. She insists that she herself had been applying then as a factory worker in Korea
through Narcisa Santos, who had previously deployed her as domestic helper in Hongkong. Although appellant
admits having received payments from private complainants and issuing receipts, she submits that she did so
only upon the instructions of Narcisa Santos, to whom she turned over the money collected from private
complainants.

The Court is not swayed by appellant’s contentions. As found by the trial court and the appellate court, it was
clearly established that appellant dealt directly with the private complainants: she explained to them the
procedure for overseas employment; she charged them placement fees to cover their medical examination and
the processing of their travel documents; she issued petty cash vouchers with her signature, acknowledging
receipts of their payments; she promised the eventual release of their visas and employment contracts; and she
made them sign Trainee Agreements, purportedly their contract with their Korean employer. Clearly, appellant,
despite being a non-licensee or non-holder of authority, engaged in recruitment activities, making her liable for
illegal recruitment.

Well-settled is the rule that the trial court, having the opportunity to observe the witnesses and their demeanor
during the trial, can best assess the credibility of the witnesses and their testimonies.  Appellant’s mere denial
17

cannot prevail over the positive and categorical testimonies of the complainants.  The trial court’s findings are
18

accorded great respect unless the trial court has overlooked or misconstrued some substantial facts, which if
considered might affect the result of the case.  Furthermore, factual findings of the trial court, when affirmed by
19

the Court of Appeals, are deemed binding and conclusive. 20

Thus, we affirm the finding of both the trial court and the appellate court that appellant is guilty beyond
reasonable doubt of illegal recruitment in large scale. However, we modify the penalty imposed.

The penalty imposed by the trial court in this case for large-scale illegal recruitment, which constitutes economic
sabotage, is life imprisonment and a fine of ₱500,000. Section 7 of RA 8042 provides that the penalty of life
imprisonment and a fine of not less than ₱500,000 nor more than ₱1,000,000 shall be imposed if illegal
recruitment constitutes economic sabotage. Said article further provides that the maximum penalty shall be
imposed if committed by a non-licensee or non-holder of authority. Thus, the proper penalty in this case is
life imprisonment and a fine of ₱1,000,000.

Estafa

We likewise affirm appellant’s conviction for five counts of estafa under Article 315(2)(a) of the Revised Penal
Code. It is settled that a person, for the same acts, may be convicted separately for illegal recruitment under RA
8042 (or the Labor Code), and estafa under Article 315(2)(a)  of the Revised Penal Code.
21 22

The elements of estafa are: (1) the accused defrauded another by abuse of confidence or by means of deceit;
and (2) the offended party or a third party suffered damage or prejudice capable of pecuniary estimation.  In this
23

case, the prosecution proved beyond reasonable doubt that appellant deceived private complainants into
believing that she had the authority and capability to send them to Korea for employment, despite her not being
licensed by the POEA to recruit workers for overseas employment. She even showed them pictures of past
applicants whom she allegedly sent abroad for work. She also assured them that she would be able to secure
their visas and employment contracts once they pay the placement fee. Because of the assurances given by
appellant, private complainants paid appellant a portion of the agreed placement fee, for which appellant issued
petty cash vouchers  with her signature, evidencing her receipt of the payments. Clearly, these acts of appellant
24

constitute estafa punishable under Article 315 (2)(a) of the Revised Penal Code.

The penalty for estafa depends on the amount defrauded. Article 315 of the Revised Penal Code provides:

ART. 315. Swindling (estafa). – Any person who shall defraud another by any of the means mentioned
hereinbelow shall be punished by:
 1st. The penalty of prision correccional in its maximum period to prision mayor in its minimum
period, if the amount of the fraud is over 12,000 pesos but does not exceed 22,000 pesos, and if
such amount exceeds the latter sum, the penalty provided in this paragraph shall be imposed in
its maximum period, adding one year for each additional 10,000 pesos; but the total penalty
which may be imposed shall not exceed twenty years. In such cases, and in connection with the
accessory penalties which may be imposed and for the purpose of the other provisions of this
Code, the penalty shall be termed prision mayor or reclusion temporal, as the case may be;

xxxx

Thus, when the amount of fraud is over ₱12,000 but not exceeding ₱22,000, the penalty imposed is prision
correccional in its maximum period to prision mayor in its minimum period, i.e., from 4 years, 2 months and 1
day to 8 years. Under the Indeterminate Sentence Law, the minimum term shall be within the range of the
penalty next lower to that prescribed by the Revised Penal Code, which is prision correccional in its minimum to
medium period. The time included in this penalty is from 6 months and 1 day to 4 years and 2 months.

When the amount of fraud exceeds ₱22,000, the penalty shall be imposed in its maximum period, and adding
one year for every ₱10,000 in excess of ₱22,000. But, the total penalty imposed should not exceed 20 years.
The maximum term under the Indeterminate Sentence Law is that which, in view of the attending circumstances,
could be properly imposed under the Revised Penal Code. The range of penalty under Article 315 is composed
of only two periods. To compute the maximum period of the indeterminate sentence, the total number of years
included in the two periods should be divided into three equal portions, with each portion forming a period.
Following this computation, the minimum, medium, and maximum periods of the prescribed penalty are:

1. Minimum Period – 4 years, 2 months and 1 day to 5 years, 5 months and 10 days;

2. Medium Period – 5 years, 5 months and 11 days to 6 years, 8 months and 20 days;

3. Maximum Period – 6 years, 8 months and 21 days to 8 years.

Any incremental penalty, i.e. one year for every ₱10,000 in excess of ₱22,000, shall be added to anywhere
from6 years, 8 months and 21 days to 8 years, at the court’s discretion, provided the total penalty does not
exceed 20 years. 25

We find that the penalty imposed by the trial court, and affirmed by the appellate court, is not in accord with the
penalty prescribed.  The trial court erroneously imposed the minimum period of "six months of arresto mayor in
1âwphi1

its maximum." Hence, we modify the penalty imposed on the five counts of estafa and we delete the moral
damages awarded for having no basis in law. Considering the number of victims defrauded, we find that a
minimum period of 2 years of prision correccional is appropriate.

In Criminal Case No. 02-756, where the amount defrauded is ₱15,000, and in the absence of any mitigating or
aggravating circumstance, the maximum term shall be taken from the medium period of the penalty prescribed
(i.e. 5 years, 5 months and 11 days to 6 years, 8 months and 20 days). Appellant should be sentenced to 2
years of prision correccional as minimum to 6 years and 1 day of prision mayor as maximum.

In Criminal Case Nos. 02-757, 02-758, and 02-759, where the amount defrauded is ₱35,000 each, the maximum
period (anywhere from 6 years, 8 months and 21 days to 8 years) shall be imposed, plus the incremental penalty
of one year (additional 1 year imprisonment for the ₱10,000 in excess of ₱22,000). We fix the maximum term at
7 years of prision mayor. Adding the incremental penalty of 1 year to the maximum term, appellant should be
sentenced in each of these cases to 2 years of prision correccional as minimum to 8 years of prision mayor as
maximum.

In Criminal Case No. 02-760, where the amount defrauded is ₱20,000, appellant should be sentenced to 2 years
of prision correccional as minimum to 6 years and 1 day of prision mayor as maximum.

Furthermore, appellant should indemnify private complainants for the amounts paid to her, with legal interest at
the rate of 6% per annum, from the time of demand, which shall be deemed as the same day the Informations
were filed against appellant, until the amounts are fully paid.  
26

WHEREFORE, we AFFIRM WITH MODIFICATIONS the Decision dated 29 November 2012 of the Court of
Appeals in CA-G.R. CRHC No. 04558 to read as follows:
 1. In Criminal Case No. 02-755, appellant Alelie Tolentino is found GUILTY beyond reasonable doubt of
illegal recruitment in large scale, constituting economic sabotage, as defined and penalized in Section 6
and Section 7(b) of RA 8042. She is sentenced to suffer the penalty of life imprisonment and is ordered
to pay a fine of One Million Pesos (₱1,000,000).

2. In Criminal Case No. 02-756, appellant Alelie Tolentino is found GUILTY beyond reasonable doubt of
estafa, as defined and penalized in Article 315(2)(a) of the Revised Penal Code. She is sentenced to
suffer the indeterminate penalty of 2 years of prision correccional as minimum to 6 years and 1 day of
prision mayor as maximum. She is ordered to indemnify private complainant Lederle Panesa in the
amount of Fifteen Thousand Pesos (₱15,000) as actual damages, with legal interest of six percent (6%)
per annum from 28 June 2002, until the said amount is fully paid.

3. In Criminal Case No. 02-757, appellant Alelie Tolentino is found GUILTY beyond reasonable doubt of
estafa, as defined and penalized in Article 315(2)(a) of the Revised Penal Code. She is sentenced to
suffer the indeterminate penalty of 2 years of prision correccional as minimum to 8 years of prision
mayor as maximum. She is ordered to indemnify private complainant Orlando Layoso in the amount of
Thirty Five Thousand Pesos (₱35,000) as actual damages, with legal interest of six percent (6%) per
annum from 28 June 2002, until the said amount is fully paid.

4. In Criminal Case No. 02-758,appellant Alelie Tolentino is found GUILTY beyond reasonable doubt of
estafa, as defined and penalized in Article 315(2)(a) of the Revised Penal Code. She is sentenced to
suffer the indeterminate penalty of 2 years of prision correccional as minimum to 8 years of prision
mayor as maximum. She is ordered to indemnify private complainant Donna Magboo in the amount of
Thirty Five Thousand Pesos (₱35,000) as actual damages, with legal interest of six percent (6%) per
annum from 28 June 2002, until the said amount is fully paid.

5. In Criminal Case No. 02-759, appellant Alelie Tolentino is found GUILTY beyond reasonable doubt of
estafa, as defined and penalized in Article 315(2)(a) of the Revised Penal Code. She is sentenced to
suffer the indeterminate penalty of 2 years of prision correccional as minimum to 8 years of prision
mayor as maximum. She is ordered to indemnify private complainant Jimmy Lejos in the amount of
Thirty Five Thousand Pesos (₱35,000) as actual damages, with legal interest of six percent (6%) per
annum from 28 June 2002, until the said amount is fully paid.

6. In Criminal Case No. 02-760, appellant Alelie Tolentino is found GUILTY beyond reasonable doubt of
estafa, as defined and penalized in Article 315(2)(a) of the Revised Penal Code. She is sentenced to
suffer the indeterminate penalty of 2 years of prision correccional as minimum to 6 years and 1 day of
prision mayor as maximum. She is ordered to indemnify private complainant Marcelino Lejos in the
amount of Twenty Thousand Pesos (₱20,000) as actual damages, with legal interest of six percent (6%)
per annum from 28 June 2002, until the said amount is fully paid.

SO ORDERED.
G.R. No. 152642               November 13, 2012

HON. PATRICIA A. STO.TOMAS, ROSALINDA BALDOZ and LUCITA LAZO, Petitioners,

vs.
REY SALAC, WILLIE D. ESPIRITU, MARIO MONTENEGRO, DODGIE BELONIO, LOLIT SALINEL and
BUDDY BONNEVIE, Respondents.

x-----------------------x

G.R. No. 152710

HON. PATRICIA A. STO. TOMAS, in her capacity as Secretary of Department of Labor and Employment
(DOLE), HON. ROSALINDA D. BALDOZ, in her capacity as Administrator, Philippine Overseas
Employment Administration (POEA), and the PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION
GOVERNING BOARD, Petitioners,
vs.
HON. JOSE G. PANEDA, in his capacity as the Presiding Judge of Branch 220, Quezon City, ASIAN
RECRUITMENT COUNCIL PHILIPPINE CHAPTER, INC. (ARCOPHIL), for itself and in behalf of its
members: WORLDCARE PHILIPPINES SERVIZO INTERNATIONALE, INC., STEADFAST INTERNATIONAL
RECRUITMENT CORP., VERDANT MANPOWER MOBILIZATION CORP., BRENT OVERSEAS
PERSONNEL, INC., ARL MANPOWER SERVICES, INC., DAHLZEN INTERNATIONAL SERVICES, INC.,
INTERWORLD PLACEMENT CENTER, INC., LAKAS TAO CONTRACT SERVICES LTD. CO., SSC MULTI-
SERVICES, DMJ INTERNATIONAL, and MIP INTERNATIONAL MANPOWER SERVICES, represented by
its proprietress, MARCELINA I. PAGSIBIGAN, Respondents.

x-----------------------x

G.R. No. 167590

REPUBLIC OF THE PHILIPPINES, represented by the HONORABLE EXECUTIVE SECRETARY, the

HONORABLE SECRETARY OF LABOR AND EMPLOYMENT (DOLE), the PHILIPPINE OVERSEAS
EMPLOYMENT ADMINISTRATION (POEA), the OVERSEAS WORKERS WELFARE ADMINISTRATION
(OWWA), the LABOR ARBITERS OF THE NATIONAL LABOR RELATIONS COMMISSION (NLRC), the
HONORABLE SECRETARY OF JUSTICE, the HONORABLE SECRETARY OF FOREIGN AFFAIRS and the
COMMISSION ON AUDIT (COA), Petitioners,
vs.
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC. (P ASEI), Respondent.

x-----------------------x

G.R. Nos. 182978-79

BECMEN SERVICE EXPORTER AND PROMOTION, INC., Petitioner,

vs.
SPOUSES SIMPLICIO AND MILA CUARESMA (for and in behalf of daughter, Jasmin G. Cuaresma),
WHITE FALCON SERVICES, INC., and JAIME ORTIZ (President of White Falcon Services,
Inc.), Respondents.

x-----------------------x

G.R. Nos. 184298-99

SPOUSES SIMPLICIO AND MILA CUARESMA (for and in behalf of deceased daughter, Jasmin G.
Cuaresma), Petitioners,
vs.
WHITE FALCON SERVICES, INC. and BECMEN SERVICES EXPORTER AND PROMOTION,
INC., Respondents.
 DECISION

ABAD, J.:

These consolidated cases pertain to the constitutionality of certain provisions of Republic Act 8042, otherwise
known as the Migrant Workers and Overseas Filipinos Act of 1995.

The Facts and the Case

On June 7, 1995 Congress enacted Republic Act (R.A.) 8042 or the Migrant Workers and Overseas Filipinos Act
of 1995 that, for among other purposes, sets the Government’s policies on overseas employment and
establishes a higher standard of protection and promotion of the welfare of migrant workers, their families, and
overseas Filipinos in distress.

G.R. 152642 and G.R. 152710

(Constitutionality of Sections 29 and 30, R.A. 8042)

Sections 29 and 30 of the Act commanded the Department of Labor and Employment (DOLE) to begin
1 

deregulating within one year of its passage the business of handling the recruitment and migration of overseas
Filipino workers and phase out within five years the regulatory functions of the Philippine Overseas Employment
Administration (POEA).

On January 8, 2002 respondents Rey Salac, Willie D. Espiritu, Mario Montenegro, Dodgie Belonio, Lolit Salinel,
and Buddy Bonnevie (Salac, et al.) filed a petition for certiorari, prohibition and mandamus with application for
temporary restraining order (TRO) and preliminary injunction against petitioners, the DOLE Secretary, the POEA
Administrator, and the Technical Education and Skills Development Authority (TESDA) Secretary-General
before the Regional Trial Court (RTC) of Quezon City, Branch 96. 2

Salac, et al. sought to: 1) nullify DOLE Department Order 10 (DOLE DO 10) and POEA Memorandum Circular
15 (POEA MC 15); 2) prohibit the DOLE, POEA, and TESDA from implementing the same and from further
issuing rules and regulations that would regulate the recruitment and placement of overseas Filipino workers
(OFWs); and 3) also enjoin them to comply with the policy of deregulation mandated under Sections 29 and 30
of Republic Act 8042.

On March 20, 2002 the Quezon City RTC granted Salac, et al.’s petition and ordered the government agencies
mentioned to deregulate the recruitment and placement of OFWs. The RTC also annulled DOLE DO 10, POEA
3 

MC 15, and all other orders, circulars and issuances that are inconsistent with the policy of deregulation under
R.A. 8042.

Prompted by the RTC’s above actions, the government officials concerned filed the present petition in G.R.
152642 seeking to annul the RTC’s decision and have the same enjoined pending action on the petition.

On April 17, 2002 the Philippine Association of Service Exporters, Inc. intervened in the case before the Court,
claiming that the RTC March 20, 2002 Decision gravely affected them since it paralyzed the deployment abroad
of OFWs and performing artists. The Confederated Association of Licensed Entertainment Agencies,
Incorporated (CALEA) intervened for the same purpose. 4

On May 23, 2002 the Court issued a TRO in the case, enjoining the Quezon City RTC, Branch 96, from
5 

enforcing its decision.

In a parallel case, on February 12, 2002 respondents Asian Recruitment Council Philippine Chapter, Inc. and
others (Arcophil, et al.) filed a petition for certiorari and prohibition with application for TRO and preliminary
injunction against the DOLE Secretary, the POEA Administrator, and the TESDA Director-General, before the
6 

RTC of Quezon City, Branch 220, to enjoin the latter from implementing the 2002 Rules and Regulations
Governing the Recruitment and Employment of Overseas Workers and to cease and desist from issuing other
orders, circulars, and policies that tend to regulate the recruitment and placement of OFWs in violation of the
policy of deregulation provided in Sections 29 and 30 of R.A. 8042.
On March 12, 2002 the Quezon City RTC rendered an Order, granting the petition and enjoining the government
agencies involved from exercising regulatory functions over the recruitment and placement of OFWs. This
prompted the DOLE Secretary, the POEA Administrator, and the TESDA Director-General to file the present
action in G.R. 152710. As in G.R. 152642, the Court issued on May 23, 2002 a TRO enjoining the Quezon City
RTC, Branch 220 from enforcing its decision.

On December 4, 2008, however, the Republic informed the Court that on April 10, 2007 former President Gloria
7 

Macapagal-Arroyo signed into law R.A. 9422 which expressly repealed Sections 29 and 30 of R.A. 8042 and
8 

adopted the policy of close government regulation of the recruitment and deployment of OFWs. R.A. 9422
pertinently provides:

xxxx

SEC. 1. Section 23, paragraph (b.1) of Republic Act No. 8042, otherwise known as the "Migrant Workers
and Overseas Filipinos Act of 1995" is hereby amended to read as follows:

(b.1) Philippine Overseas Employment Administration – The Administration shall regulate private sector
participation in the recruitment and overseas placement of workers by setting up a licensing and
registration system. It shall also formulate and implement, in coordination with appropriate entities
concerned, when necessary, a system for promoting and monitoring the overseas employment of Filipino
workers taking into consideration their welfare and the domestic manpower requirements.

In addition to its powers and functions, the administration shall inform migrant workers not only of their
rights as workers but also of their rights as human beings, instruct and guide the workers how to assert
their rights and provide the available mechanism to redress violation of their rights.

In the recruitment and placement of workers to service the requirements for trained and competent
Filipino workers of foreign governments and their instrumentalities, and such other employers as public
interests may require, the administration shall deploy only to countries where the Philippines has
concluded bilateral labor agreements or arrangements: Provided, That such countries shall guarantee to
protect the rights of Filipino migrant workers; and: Provided, further, That such countries shall observe
and/or comply with the international laws and standards for migrant workers.

SEC. 2. Section 29 of the same law is hereby repealed.

SEC. 3. Section 30 of the same law is also hereby repealed.

xxxx

On August 20, 2009 respondents Salac, et al. told the Court in G.R. 152642 that they agree with the Republic’s
9 

view that the repeal of Sections 29 and 30 of R.A. 8042 renders the issues they raised by their action moot and
academic. The Court has no reason to disagree. Consequently, the two cases, G.R. 152642 and 152710, should
be dismissed for being moot and academic.

G.R. 167590

(Constitutionality of Sections 6, 7, and 9 of R.A. 8042)

On August 21, 1995 respondent Philippine Association of Service Exporters, Inc. (PASEI) filed a petition for
declaratory relief and prohibition with prayer for issuance of TRO and writ of preliminary injunction before the
RTC of Manila, seeking to annul Sections 6, 7, and 9 of R.A. 8042 for being unconstitutional. (PASEI also sought
to annul a portion of Section 10 but the Court will take up this point later together with a related case.)

Section 6 defines the crime of "illegal recruitment" and enumerates the acts constituting the same. Section 7
provides the penalties for prohibited acts. Thus:

SEC. 6. Definition. – For purposes of this Act, illegal recruitment shall mean any act of canvassing,
enlisting, contracting, transporting, utilizing, hiring, procuring workers and includes referring, contract
services, promising or advertising for employment abroad, whether for profit or not, when undertaken by
a non-license or non-holder of authority contemplated under Article 13(f) of Presidential Decree No. 442,
as amended, otherwise known as the Labor Code of the Philippines: Provided, That such non-license or
 non-holder, who, in any manner, offers or promises for a fee employment abroad to two or more persons
shall be deemed so engaged. It shall likewise include the following acts, whether committed by any
person, whether a non-licensee, non-holder, licensee or holder of authority:

xxxx

SEC. 7. Penalties. –

(a) Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of not
less than six (6) years and one (1) day but not more than twelve (12) years and a fine not less
than two hundred thousand pesos (₱200,000.00) nor more than five hundred thousand pesos
(₱500,000.00).

(b) The penalty of life imprisonment and a fine of not less than five hundred thousand pesos
(₱500,000.00) nor more than one million pesos (₱1,000,000.00) shall be imposed if illegal
recruitment constitutes economic sabotage as defined herein.

Provided, however, That the maximum penalty shall be imposed if the person illegally recruited is less
than eighteen (18) years of age or committed by a non-licensee or non-holder of authority.10

Finally, Section 9 of R.A. 8042 allowed the filing of criminal actions arising from "illegal recruitment" before the
RTC of the province or city where the offense was committed or where the offended party actually resides at the
time of the commission of the offense.

The RTC of Manila declared Section 6 unconstitutional after hearing on the ground that its definition of "illegal
recruitment" is vague as it fails to distinguish between licensed and non-licensed recruiters and for that reason
11 

gives undue advantage to the non-licensed recruiters in violation of the right to equal protection of those that
operate with government licenses or authorities.

But "illegal recruitment" as defined in Section 6 is clear and unambiguous and, contrary to the RTC’s finding,
actually makes a distinction between licensed and non-licensed recruiters. By its terms, persons who engage in
"canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers" without the appropriate
government license or authority are guilty of illegal recruitment whether or not they commit the wrongful acts
enumerated in that section. On the other hand, recruiters who engage in the canvassing, enlisting, etc. of OFWs,
although with the appropriate government license or authority, are guilty of illegal recruitment only if they commit
any of the wrongful acts enumerated in Section 6.

The Manila RTC also declared Section 7 unconstitutional on the ground that its sweeping application of the
penalties failed to make any distinction as to the seriousness of the act committed for the application of the
penalty imposed on such violation. As an example, said the trial court, the mere failure to render a report under
Section 6(h) or obstructing the inspection by the Labor Department under Section 6(g) are penalized by
imprisonment for six years and one day and a minimum fine of ₱200,000.00 but which could unreasonably go
even as high as life imprisonment if committed by at least three persons.

Apparently, the Manila RTC did not agree that the law can impose such grave penalties upon what it believed
were specific acts that were not as condemnable as the others in the lists. But, in fixing uniform penalties for
each of the enumerated acts under Section 6, Congress was within its prerogative to determine what individual
acts are equally reprehensible, consistent with the State policy of according full protection to labor, and
deserving of the same penalties. It is not within the power of the Court to question the wisdom of this kind of
choice. Notably, this legislative policy has been further stressed in July 2010 with the enactment of R.A.
10022 which increased even more the duration of the penalties of imprisonment and the amounts of fine for the
12 

commission of the acts listed under Section 7.

Obviously, in fixing such tough penalties, the law considered the unsettling fact that OFWs must work outside
the country’s borders and beyond its immediate protection. The law must, therefore, make an effort to somehow
protect them from conscienceless individuals within its jurisdiction who, fueled by greed, are willing to ship them
out without clear assurance that their contracted principals would treat such OFWs fairly and humanely.

As the Court held in People v. Ventura, the State under its police power "may prescribe such regulations as in
13 

its judgment will secure or tend to secure the general welfare of the people, to protect them against the
consequence of ignorance and incapacity as well as of deception and fraud." Police power is "that inherent and
plenary power of the State which enables it to prohibit all things hurtful to the comfort, safety, and welfare of
society."
14

The Manila RTC also invalidated Section 9 of R.A. 8042 on the ground that allowing the offended parties to file
the criminal case in their place of residence would negate the general rule on venue of criminal cases which is
the place where the crime or any of its essential elements were committed. Venue, said the RTC, is jurisdictional
in penal laws and, allowing the filing of criminal actions at the place of residence of the offended parties violates
their right to due process. Section 9 provides:

SEC. 9. Venue. – A criminal action arising from illegal recruitment as defined herein shall be filed with
the Regional Trial Court of the province or city where the offense was committed or where the offended
party actually resides at the time of the commission of the offense: Provided, That the court where the
criminal action is first filed shall acquire jurisdiction to the exclusion of other courts: Provided, however,
That the aforestated provisions shall also apply to those criminal actions that have already been filed in
court at the time of the effectivity of this Act.

But there is nothing arbitrary or unconstitutional in Congress fixing an alternative venue for violations of
Section 6 of R.A. 8042 that differs from the venue established by the Rules on Criminal Procedure.
Indeed, Section 15(a), Rule 110 of the latter Rules allows exceptions provided by laws. Thus:

SEC. 15. Place where action is to be instituted.— (a) Subject to existing laws, the criminal action
shall be instituted and tried in the court of the municipality or territory where the offense was
committed or where any of its essential ingredients occurred. (Emphasis supplied)

xxxx

Section 9 of R.A. 8042, as an exception to the rule on venue of criminal actions is, consistent with that law’s
declared policy of providing a criminal justice system that protects and serves the best interests of the victims of
15 

illegal recruitment.

G.R. 167590, G.R. 182978-79, and G.R. 184298-99

16  17

(Constitutionality of Section 10, last sentence of 2nd paragraph)

G.R. 182978-79 and G.R. 184298-99 are consolidated cases. Respondent spouses Simplicio and Mila
Cuaresma (the Cuaresmas) filed a claim for death and insurance benefits and damages against petitioners
Becmen Service Exporter and Promotion, Inc. (Becmen) and White Falcon Services, Inc. (White Falcon) for the
death of their daughter Jasmin Cuaresma while working as staff nurse in Riyadh, Saudi Arabia.

The Labor Arbiter (LA) dismissed the claim on the ground that the Cuaresmas had already received insurance
benefits arising from their daughter’s death from the Overseas Workers Welfare Administration (OWWA). The
LA also gave due credence to the findings of the Saudi Arabian authorities that Jasmin committed suicide.

On appeal, however, the National Labor Relations Commission (NLRC) found Becmen and White Falcon jointly
and severally liable for Jasmin’s death and ordered them to pay the Cuaresmas the amount of US$113,000.00
as actual damages. The NLRC relied on the Cabanatuan City Health Office’s autopsy finding that Jasmin died of
criminal violence and rape.

Becmen and White Falcon appealed the NLRC Decision to the Court of Appeals (CA). On June 28, 2006 the
18 

CA held Becmen and White Falcon jointly and severally liable with their Saudi Arabian employer for actual
damages, with Becmen having a right of reimbursement from White Falcon. Becmen and White Falcon appealed
the CA Decision to this Court.

On April 7, 2009 the Court found Jasmin’s death not work-related or work-connected since her rape and death
did not occur while she was on duty at the hospital or doing acts incidental to her employment. The Court
deleted the award of actual damages but ruled that Becmen’s corporate directors and officers are solidarily liable
with their company for its failure to investigate the true nature of her death. Becmen and White Falcon
abandoned their legal, moral, and social duty to assist the Cuaresmas in obtaining justice for their daughter.
Consequently, the Court held the foreign employer Rajab and Silsilah, White Falcon, Becmen, and the latter’s
corporate directors and officers jointly and severally liable to the Cuaresmas for: 1) P2,500,000.00 as moral
damages; 2) P2,500,000.00 as exemplary damages; 3) attorney’s fees of 10% of the total monetary award; and
4) cost of suit.

On July 16, 2009 the corporate directors and officers of Becmen, namely, Eufrocina Gumabay, Elvira Taguiam,
Lourdes Bonifacio and Eddie De Guzman (Gumabay, et al.) filed a motion for leave to Intervene. They
questioned the constitutionality of the last sentence of the second paragraph of Section 10, R.A. 8042 which
holds the corporate directors, officers and partners jointly and solidarily liable with their company for money
claims filed by OFWs against their employers and the recruitment firms. On September 9, 2009 the Court
allowed the intervention and admitted Gumabay, et al.’s motion for reconsideration.

The key issue that Gumabay, et al. present is whether or not the 2nd paragraph of Section 10, R.A. 8042, which
holds the corporate directors, officers, and partners of recruitment and placement agencies jointly and solidarily
liable for money claims and damages that may be adjudged against the latter agencies, is unconstitutional.

In G.R. 167590 (the PASEI case), the Quezon City RTC held as unconstitutional the last sentence of the 2nd
paragraph of Section 10 of R.A. 8042. It pointed out that, absent sufficient proof that the corporate officers and
directors of the erring company had knowledge of and allowed the illegal recruitment, making them automatically
liable would violate their right to due process of law.

The pertinent portion of Section 10 provides:

SEC. 10. Money Claims. – x x x

The liability of the principal/employer and the recruitment/placement agency for any and all claims under
this section shall be joint and several. This provision shall be incorporated in the contract for overseas
employment and shall be a condition precedent for its approval. The performance bond to be filed by the
recruitment/placement agency, as provided by law, shall be answerable for all money claims or damages
that may be awarded to the workers. If the recruitment/placement agency is a juridical being, the
corporate officers and directors and partners as the case may be, shall themselves be jointly and
solidarily liable with the corporation or partnership for the aforesaid claims and damages. (Emphasis
supplied)

But the Court has already held, pending adjudication of this case, that the liability of corporate directors and
officers is not automatic. To make them jointly and solidarily liable with their company, there must be a finding
that they were remiss in directing the affairs of that company, such as sponsoring or tolerating the conduct of
illegal activities. In the case of Becmen and White Falcon, while there is evidence that these companies were at
19  20 

fault in not investigating the cause of Jasmin’s death, there is no mention of any evidence in the case against
them that intervenors Gumabay, et al., Becmen’s corporate officers and directors, were personally involved in
their company’s particular actions or omissions in Jasmin’s case.

As a final note, R.A. 8042 is a police power measure intended to regulate the recruitment and deployment of
OFWs. It aims to curb, if not eliminate, the injustices and abuses suffered by numerous OFWs seeking to work
abroad. The rule is settled that every statute has in its favor the presumption of constitutionality. The Court
cannot inquire into the wisdom or expediency of the laws enacted by the Legislative Department. Hence, in the
absence of a clear and unmistakable case that the statute is unconstitutional, the Court must uphold its validity.

WHEREFORE, in G.R. 152642 and 152710, the Court DISMISSES the petitions for having become moot and
academic. 1âwphi1

In G.R. 167590, the Court SETS ASIDE the Decision of the Regional Trial Court ofManila dated December 8,
2004 and DECLARES Sections 6, 7, and 9 of Republic Act 8042 valid and constitutional.

In G.R. 182978-79 and G.R. 184298-99 as well as in G.R. 167590, the Court HOLDS the last sentence of the
second paragraph of Section 10 of Republic Act 8042 valid and constitutional. The Court, however,
RECONSIDERS and SETS ASIDE the portion of its Decision in G.R. 182978-79 and G.R. 184298-99 that held
intervenors Eufrocina Gumabay, Elvira Taguiam, Lourdes Bonifacio, and Eddie De Guzman jointly and solidarily
liable with respondent Becmen Services Exporter and Promotion, Inc. to spouses Simplicia and Mila Cuaresma
for lack of a finding in those cases that such intervenors had a part in the act or omission imputed to their
corporation.

SO ORDERED.
G.R. No. 169207               March 25, 2010

WPP MARKETING COMMUNICATIONS, INC., JOHN STEEDMAN, MARK WEBSTER, and NOMINADA
LANSANG, Petitioners,
vs.
JOCELYN M. GALERA, Respondent.

x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 169239

JOCELYN M. GALERA, Petitioner,
vs.
WPP MARKETING COMMUNICATIONS, INC., JOHN STEEDMAN, MARK WEBSTER, and NOMINADA
LANSANG, Respondents.

DECISION

CARPIO, Acting C.J.:

The Case

G.R. Nos. 169207 and 169239 are petitions for review 1 assailing the Decision2 promulgated on 14 April 2005 as
well as the Resolution3 promulgated on 1 August 2005 of the Court of Appeals (appellate court) in CA-G.R. SP
No. 78721. The appellate court granted and gave due course to the petition filed by Jocelyn M. Galera (Galera).
The appellate court’s decision reversed and set aside that of the National Labor Relations Commission (NLRC),
and directed WPP Marketing Communications, Inc. (WPP) to pay Galera backwages, separation pay, unpaid
housing benefit, unpaid personal and accident insurance benefits, cash value under the company’s pension
plan, 30 days paid holiday benefit, moral damages, exemplary damages, 10% of the total judgment award as
attorney’s fees, and costs of the suit.

The Facts

The appellate court narrated the facts as follows:

Petitioner is Jocelyn Galera (GALERA), a [sic] American citizen who was recruited from the United States of
America by private respondent John Steedman, Chairman-WPP Worldwide and Chief Executive Officer of
Mindshare, Co., a corporation based in Hong Kong, China, to work in the Philippines for private respondent
WPP Marketing Communications, Inc. (WPP), a corporation registered and operating under the laws of
Philippines. GALERA accepted the offer and she signed an Employment Contract entitled "Confirmation of
Appointment and Statement of Terms and Conditions" (Annex B to Petition for Certiorari). The relevant portions
of the contract entered into between the parties are as follows:

Particulars:

Name : Jocelyn M. Galera

Address : 163 Mediterranean Avenue

Hayward, CA 94544

Position : Managing Director

Mindshare Philippines

Annual Salary : Peso 3,924,000

Start Date : 1 September 1999

Commencement Date : 1 September 1999

(for continuous service)

Office : Mindshare Manila

6. Housing Allowance

The Company will provide suitable housing in Manila at a maximum cost (including management fee and
other associated costs) of Peso 576,000 per annum.

7. Other benefits.

The Company will provide you with a fully maintained company car and a driver.

The Company will continue to provide medical, health, life and personal accident insurance plans, to an
amount not exceeding Peso 300,000 per annum, in accordance with the terms of the respective plans,
as provided by JWT Manila.

The Company will reimburse you and your spouse one way business class air tickets from USA to
Manila and the related shipping and relocation cost not exceeding US$5,000 supported by proper
documentation. If you leave the Company within one year, you will reimburse the Company in full for all
costs of the initial relocation as described therein.

You will participate in the JWT Pension Plan under the terms of this plan, the Company reserves the
right to transfer this benefit to a Mindshare Pension Plan in the future, if so required.

8. Holidays

You are entitled to 20 days paid holiday in addition to public holidays per calendar year to be taken at
times agreed with the Company. Carry-over of unused accrued holiday entitlement into a new holiday
year will not normally be allowed. No payment will be made for holidays not taken. On termination of
your employment, unless you have been summarily dismissed, you will be entitled to receive payment
for unused accrued holiday pay. Any holiday taken in excess of your entitlement shall be deducted from
your final salary payment.

9. Leave Due to Sickness or Injury

The maximum provision for sick leave is 15 working days per calendar year.

12. Invention/Know-How

Any discovery, invention, improvement in procedure, trademark, trade name, designs, copyrights or get-
ups made, discovered or created by you during the continuance of your employment hereunder relating
to the business of the Company shall belong to and shall be the absolute property of the Company. If
required to do so by the Company (whether during or after the termination of your employment) you shall
at the expense of the company execute all instruments and do all things necessary to vest in ownership
for all other rights, title and interests (including any registered rights therein) in such discovery, invention,
improvement in procedure, trademark, trade name, design, copyright or get-up in the Company (or its
Nominee) absolutely and as sole beneficial owner.

14. Notice.

The first three months of your employment will be a trial period during which either you or the Company
may terminate your employment on one week’s notice. If at the end of that period, the Company is
satisfied with your performance, you will become a permanent employee. Thereafter you will give
Company and the Company will give you three months notice of termination of employment. The above
is always subject to the following: (1) the Company’s right to terminate the contract of employment on no
or short notice where you are in breach of contract; (2) your employment will at any event cease without
notice on your retirement date when you are 60 years of age.

SIGNED JOCELYN M. GALERA 8-16-99

Date of Birth [sic] 12-25-55

Employment of GALERA with private respondent WPP became effective on September 1, 1999 solely on the
instruction of the CEO and upon signing of the contract, without any further action from the Board of Directors of
private respondent WPP.
Four months had passed when private respondent WPP filed before the Bureau of Immigration an application for
petitioner GALERA to receive a working visa, wherein she was designated as Vice President of WPP. Petitioner
alleged that she was constrained to sign the application in order that she could remain in the Philippines and
retain her employment.

Then, on December 14, 2000, petitioner GALERA alleged she was verbally notified by private respondent
STEEDMAN that her services had been terminated from private respondent WPP. A termination letter followed
the next day.4

On 3 January 2001, Galera filed a complaint for illegal dismissal, holiday pay, service incentive leave pay, 13th
month pay, incentive plan, actual and moral damages, and attorney’s fees against WPP and/or John Steedman
(Steedman), Mark Webster (Webster) and Nominada Lansang (Lansang). The case was docketed as NLRC
NCR Case No. 30-01-00044-01.

The Labor Arbiter’s Ruling

In his Decision dated 31 January 2002, Labor Arbiter Edgardo M. Madriaga (Arbiter Madriaga) held WPP,
Steedman, Webster, and Lansang liable for illegal dismissal and damages. Arbiter Madriaga stated that Galera
was not only illegally dismissed but was also not accorded due process. Arbiter Madriaga explained, thus:

[WPP] failed to observe the two-notice rule. [WPP] through respondent Steedman for a five (5) minute
meeting on December 14, 2000 where she was verbally told that as of that day, her employment was
being terminated. [WPP] did not give [Galera] an opportunity to defend herself and explain her side.
[Galera] was even prohibited from reporting for work that day and was told not to report for work the next
day as it would be awkward for her and respondent Steedman to be in the same premises after her
termination. [WPP] only served [Galera] her written notice of termination only on 15 December 2001, one
day after she was verbally apprised thereof.

The law mandates that the dismissal must be properly done otherwise, the termination is gravely
defective and may be declared unlawful as we hereby hold [Galera’s] dismissal to be illegal and
unlawful. Where there is no showing of a clear, valid and legal cause for the termination of employment,
the law considers the matter a case of illegal dismissal and the burden is on the employer to prove that
the termination was for a valid or authorized cause. The law mandates that both the substantive and
procedural aspects of due process should be observed. The facts clearly show that respondents were
remiss on both aspects. Perforce, the dismissal is void and unlawful.

xxxx

Considering the work performance and achievements of [Galera] for the year 2000, we do not find any
basis for the alleged claim of incompetence by herein respondents. Had [Galera] been really
incompetent, she would not have been able to generate enormous amounts [sic] of revenues and
business for [WPP]. She also appears to be well liked as a leader by her subordinates, who have come
forth in support of [Galera]. These facts remain undisputed by respondents.

A man’s job being a property right duly protected by our laws, an employer who deprives an employee
[of] the right to defend himself is liable for damages consistent with Article 32 of the Civil Code. To allow
an employer to terminate the employment of his worker based merely on allegations without proof places
the [employee] in an uncertain situation. The unflinching rule in illegal dismissal cases is that the
employer bears the burden of proof.

In the instant case, respondents have not been able to muster evidence to counter [Galera’s] allegations.
[Galera’s] allegations remain and stand absent proof from respondents rebutting them. Hence, our
finding of illegal dismissal against respondents who clearly have conspired in bad faith to deprive
[Galera] of her right to substantive and procedural due process.5

The dispositive portion of Arbiter Madriaga’s decision reads as follows:

WHEREFORE, premises considered, we hereby hold herein respondents liable for illegal dismissal and
damages, and award to [Galera], by virtue of her expatriate status, the following:

a. Reinstatement without loss of seniority rights.

 b. Backwages amounting to $120,000 per year at ₱50.00 to US $1 exchange rate, 13th month
pay, transportation and housing benefits.

c. Remuneration for business acquisitions amounting to Two Million Eight Hundred Fifty
Thousand Pesos (₱2,850,000.00) and Media Plowback Incentive equivalent to Three Million
Pesos (₱3,000,000.00) or a total of not less than One Hundred Thousand US Dollars
($100,000.00).

d. US Tax Protection of up to 35% coverage equivalent to Thirty Eight Thousand US Dollars

($38,000).

e. Moral damages including implied defamation and punitive damages equivalent to Two Million
Dollars (US$2,000,000.00).

f. Exemplary damages equivalent to One Million Dollars ($1,000,000.00).

g. Attorney’s fees of 10% of the total award herein.

SO ORDERED.6

The Ruling of the NLRC

The First Division of the NLRC reversed the ruling of Arbiter Madriaga. In its Decision 7 promulgated on 19
February 2003, the NLRC stressed that Galera was WPP’s Vice-President, and therefore, a corporate officer at
the time she was removed by the Board of Directors on 14 December 2000. The NLRC stated thus:

It matters not that her having been elected by the Board to an added position of being a member of the
Board of Directors did not take effect as her May 31, 2000 election to such added position was
conditioned to be effective upon approval by SEC of the Amended By-Laws, an approval which took
place only in February 21, 2001, i.e., after her removal on December 14, 2000. What counts is, at the
time of her removal, she continued to be WPP’s Vice-President, a corporate officer, on hold over
capacity.

Ms. Galera’s claim that she was not a corporate officer at the time of her removal because her May 31,
2000 election as Vice President for Media, under WPP’s Amended By-Laws, was subject to the approval
by the Securities and Exchange Commission and that the SEC approved the Amended By-Laws only in
February 2001. Such claim is unavailing. Even if Ms. Galera’s subsequent election as Vice President for
Media on May 31, 2000 was subject to approval by the SEC, she continued to hold her previous position
as Vice President under the December 31, 1999 election until such time that her successor is duly
elected and qualified. It is a basic principle in corporation law, which principle is also embodied in WPP’s
by-laws, that a corporate officer continues to hold his position as such until his successor has been duly
elected and qualified. When Ms. Galera was elected as Vice President on December 31, 1999, she was
supposed to have held that position until her successor has been duly elected and qualified. The record
shows that Ms. Galera was not replaced by anyone. She continued to be Vice President of WPP with the
same operational title of Managing Director for Mindshare and continued to perform the same functions
she was performing prior to her May 31, 2000 election.

In the recent case of Dily Dany Nacpil v. International Broadcasting Corp., the definition of corporate
officer for purposes of intra-corporate controversy was even broadened to include a
Comptroller/Assistant Manager who was appointed by the General Manager, and whose appointment
was later approved by the Board of Directors. In this case, the position of comptroller was not even
expressly mentioned in the By-Laws of the corporation, and yet, the Supreme Court found him to be a
corporate officer. The Court ruled that —

(since) petitioner’s appointment as comptroller required the approval and formal action of IBC’s
Board of Directors to become valid, it is clear therefore that petitioner is a corporate officer whose
dismissal may be the subject of a controversy cognizable by the SEC... Had the petitioner been
an ordinary employee, such board action would not have been required.

Such being the case, the imperatives of law require that we hold that the Arbiter below had no
jurisdiction over Galera’s case as, again, she was a corporate officer at the time of her removal.
 WHEREFORE, the appeals of petitioner from the Decision of Labor Arbiter Edgardo Madriaga dated
January 31, 2002 and his Order dated March 21, 2002, respectively, are granted. The January 31, 2002
decision of the Labor Arbiter is set aside for being null and void and the temporary restraining order we
issued on April 24, 2002 is hereby made permanent. The complaint of Jocelyn Galera is dismissed for
lack of jurisdiction.

SO ORDERED.8

In its Resolution9 promulgated on 4 June 2003, the NLRC further stated:

We are fully convinced that this is indeed an intra-corporate dispute which is beyond the labor arbiter’s
jurisdiction. These consolidated cases clearly [involve] the relationship between a corporation and its
officer and is properly within the definition of an intra-corporate relationship which, under P.D. No. 902-A,
is within the jurisdiction of the SEC (now the commercial courts). Such being the case, We are
constrained to rule that the Labor Arbiter below had no jurisdiction over Ms. Galera’s complaint for illegal
dismissal.

WHEREFORE, the motion for reconsideration filed by Ms. Galera is hereby denied for lack of merit. We
reiterate our February 19, 2003 Decision setting aside the Labor Arbiter’s Decision dated January 31,
2002 for being null and void.

SO ORDERED.10

Galera assailed the NLRC’s decision and resolution before the appellate court and raised a lone assignment of
error.

The National Labor Relations Commission acted with grave abuse of discretion amounting to lack or
excess of jurisdiction when it reversed the decision of the Labor Arbiter not on the merits but for alleged
lack of jurisdiction.11

The Decision of the Appellate Court

The appellate court reversed and set aside the decision of the NLRC. The appellate court ruled that the NLRC’s
dismissal of Galera’s appeal is not in accord with jurisprudence. A person could be considered a "corporate
officer" only if appointed as such by a corporation’s Board of Directors, or if pursuant to the power given them by
either the Articles of Incorporation or the By-Laws.12

The appellate court explained:

A corporation, through its board of directors, could only act in the manner and within the formalities, if any,
prescribed by its charter or by the general law. If the action of the Board is ultra vires such is motu proprio void
ab initio and without legal effect whatsoever. The by-laws of a corporation are its own private laws which
substantially have the same effect as the laws of the corporation. They are, in effect, written into the charter. In
this sense, they beome part of the fundamental law of the corporation with which the corporation and its
directors and officers must comply.

Even if petitioner GALERA had been appointed by the Board of Directors on December 31, 1999, private
respondent WPP’s By-Laws provided for only one Vice-President, a position already occupied by private
respondent Webster. The same defect also stains the Board of Directors’ appointment of petitioner GALERA as
a Director of the corporation, because at that time the By-Laws provided for only five directors. In addition, the
By-laws only empowered the Board of Directors to appoint a general manager and/or assistant general manager
as corporate officers in addition to a chairman, president, vice-president and treasurer. There is no mention of a
corporate officer entitled "Managing Director."

Hence, when the Board of Directors enacted the Resolutions of December 31, 1999 and May 31, 2000, it
exceeded its authority under the By-Laws and are, therefore, ultra vires. Although private respondent WPP
sought to amend these defects by filing Amended By-Laws with the Securities and Exchange Commission, they
did not validate the ultra vires resolutions because the Amended By-Laws did not take effect until February 16,
2001, when it was approved by the SEC. Since by-laws operate only prospectively, they could not validate
the ultra vires resolutions.13
The dispositive portion of the appellate court’s decision reads:

WHEREFORE, the petition is hereby GRANTED and GIVEN DUE COURSE. The assailed Decision of
the National Labor Relations Commission is hereby REVERSED and SET ASIDE and a new one is
entered DIRECTING private respondent WPP MARKETING COMMUNICATIONS, INC. to:

1. Pay [Galera] backwages at the peso equivalent of US$120,000.00 per annum plus three
months from her summary December 14, 2000 dismissal up to March 14, 2001 because three
months notice is required under the contract, plus 13th month pay, bonuses and general
increases to which she would have been normally entitled, had she not been dismissed and had
she not been forced to stop working, including US tax protection of up to 35% coverage which
she had been enjoying as an expatriate;

2. Pay x x x GALERA the peso equivalent of US$185,000.00 separation pay (1 ½ years);

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

4. Pay x x x GALERA the reduced amount of PhP2,000,000.00 as moral damages;

5. Pay [Galera] the reduced amount of PhP1,000,000.00 as exemplary damages;

6. Pay [Galera] an amount equivalent to 10% of the judgment award as attorney’s fees;

7. Pay the cost of the suit.

SO ORDERED.14

Respondents filed a motion for reconsideration on 5 May 2005. Galera filed a motion for partial reconsideration
and/or clarification on the same date. The appellate court found no reason to revise or reverse its previous
decision and subsequently denied the motions in a Resolution promulgated on 1 August 2005.15

The Issues

WPP, Steedman, Webster, and Lansang raised the following grounds in G.R. No. 169207:

I. The Court of Appeals seriously erred in ruling that the NLRC has jurisdiction over [Galera’s] complaint
because she was not an employee. [Galera] was a corporate officer of WPP from the beginning of her
term until her removal from office.

II. Assuming arguendo that the Court of Appeals correctly ruled that the NLRC has jurisdiction over
[Galera’s] complaint, it should have remanded the case to the Labor Arbiter for reception of evidence on
the merits of the case.

III. [Galera] is an alien, hence, can never attain a regular or permanent working status in the Philippines.

IV. [Galera] is not entitled to recover backwages, other benefits and damages from WPP.16

On the other hand, in G.R. No. 169239, Galera raised the following grounds in support of her petition:

The CA decision should be consistent with Article 279 of the Labor Code and applicable jurisprudence,
that full backwages and separation pay (when in lieu of reinstatement), should be reckoned from time of
dismissal up to time of reinstatement (or payment of separation pay, in case separation instead of
reinstatement is awarded).
 Accordingly, petitioner Galera should be awarded full backwages and separation pay for the period from
14 December 2000 until the finality of judgment by the respondents, or, at the very least, up to the
promulgation date of the CA decision.

The individual respondents Steedman, Webster and Lansang must be held solidarily liable with
respondent WPP for the wanton and summary dismissal of petitioner Galera, to be consistent with law
and jurisprudence as well as the specific finding of the CA of bad faith on the part of respondents.17

This Court ordered the consolidation of G.R. Nos. 169207 and 169239 in a resolution dated 16 January 2006.18

The Ruling of the Court

In its consolidated comment, the Office of the Solicitor General (OSG) recommended that (A) the Decision dated
14 April 2005 of the appellate court finding (1) Galera to be a regular employee of WPP; (2) the NLRC to have
jurisdiction over the present case; and (3) WPP to have illegally dismissed Galera, be affirmed; and (B) the case
remanded to the Labor Arbiter for the computation of the correct monetary award. Despite the OSG’s
recommendations, we see that Galera’s failure to seek an employment permit prior to her employment poses a
serious problem in seeking relief before this Court. Hence, we settle the various issues raised by the parties for
the guidance of the bench and bar.

Whether Galera is an Employee or a Corporate Officer

Galera, on the belief that she is an employee, filed her complaint before the Labor Arbiter. On the other hand,
WPP, Steedman, Webster and Lansang contend that Galera is a corporate officer; hence, any controversy
regarding her dismissal is under the jurisdiction of the Regional Trial Court. We agree with Galera.

Corporate officers are given such character either by the Corporation Code or by the corporation’s by-laws.
Under Section 25 of the Corporation Code, the corporate officers are the president, secretary, treasurer and
such other officers as may be provided in the by-laws.19 Other officers are sometimes created by the charter or
by-laws of a corporation, or the board of directors may be empowered under the by-laws of a corporation to
create additional offices as may be necessary.

An examination of WPP’s by-laws resulted in a finding that Galera’s appointment as a corporate officer (Vice-
President with the operational title of Managing Director of Mindshare) during a special meeting of WPP’s Board
of Directors is an appointment to a non-existent corporate office. WPP’s by-laws provided for only one Vice-
President. At the time of Galera’s appointment on 31 December 1999, WPP already had one Vice-President in
the person of Webster. Galera cannot be said to be a director of WPP also because all five directorship positions
provided in the by-laws are already occupied. Finally, WPP cannot rely on its Amended By-Laws to support its
argument that Galera is a corporate officer. The Amended By-Laws provided for more than one Vice-President
and for two additional directors. Even though WPP’s stockholders voted for the amendment on 31 May 2000, the
SEC approved the amendments only on 16 February 2001. Galera was dismissed on 14 December 2000. WPP,
Steedman, Webster, and Lansang did not present any evidence that Galera’s dismissal took effect with the
action of WPP’s Board of Directors.1avvphi1

The appellate court further justified that Galera was an employee and not a corporate officer by subjecting WPP
and Galera’s relationship to the four-fold test: (a) the selection and engagement of the employee; (b) the
payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the employee with respect
to the means and methods by which the work is to be accomplished. The appellate court found:

x x x Sections 1 and 4 of the employment contract mandate where and how often she is to perform her
work; sections 3, 5, 6 and 7 show that wages she receives are completely controlled by x x x WPP; and
sections 10 and 11 clearly state that she is subject to the regular disciplinary procedures of x x x WPP.

Another indicator that she was a regular employee and not a corporate officer is Section 14 of the
contract, which clearly states that she is a permanent employee — not a Vice-President or a member of
the Board of Directors.

xxxx

Another indication that the Employment Contract was one of regular employment is Section 12, which
states that the rights to any invention, discovery, improvement in procedure, trademark, or copyright
 created or discovered by petitioner GALERA during her employment shall automatically belong to private
respondent WPP. Under Republic Act 8293, also known as the Intellectual Property Code, this condition
prevails if the creator of the work subject to the laws of patent or copyright is an employee of the one
entitled to the patent or copyright.

Another convincing indication that she was only a regular employee and not a corporate officer is the
disciplinary procedure under Sections 10 and 11 of the Employment Contract, which states that her right
of redress is through Mindshare’s Chief Executive Officer for the Asia-Pacific. This implies that she was
not under the disciplinary control of private respondent WPP’s Board of Directors (BOD), which should
have been the case if in fact she was a corporate officer because only the Board of Directors could
appoint and terminate such a corporate officer.

Although petitioner GALERA did sign the Alien Employment Permit from the Department of Labor and
Employment and the application for a 9(g) visa with the Bureau of Immigration – both of which stated
that she was private respondent’s WPP’ Vice President – these should not be considered against her.
Assurming arguendo that her appointment as Vice-President was a valid act, it must be noted that these
appointments occurred afater she was hired as a regular employee. After her appointments, there was
no appreciable change in her duties.20

Whether the Labor Arbiter and the NLRC

have jurisdiction over the present case

Galera being an employee, then the Labor Arbiter and the NLRC have jurisdiction over the present case. Article
217 of the Labor Code provides:

Jurisdiction of Labor Arbiters and the Commission. — (a) Except as otherwise provided under this Code,
the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide x x x the following
cases involving all workers, whether agricultural or non-agricultural:

1. Unfair labor practice cases;

2. Termination disputes;

3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages,
rates of pay, hours of work and other terms and conditions of employment;

4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee
relations;

5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality
of strikes and lockouts;

6. Except claims for Employees Compensation, Social Security, Medicare and other maternity benefits,
all other claims, arising from employer-employee relations, including those of persons in domestic or
household service, involving an amount exceeding five thousand pesos (₱5,000.00) regardless of
whether accompanied with a claim for reinstatement.

(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor
Arbiters.

(c) Cases arising from the interpretation of collective bargaining agreements and those arising
from the interpretation or enforcement of company personnel policies shall be disposed of by the
Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may
be provided in said agreements.

In contrast, Section 5.2 of Republic Act No. 8799, or the Securities Regulation Code, states:

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

The pertinent portions of Section 5 of Presidential Decree No. 902-A, mentioned above, states:

b) Controversies arising out of intra-corporate or partnership relations, between and among

stockholders, members or associates; between any or all of them and the corporation, partnership or
association of which they are stockholders, members or associates, respectively; and between such
corporation, partnership or association and the state insofar as it concerns their individual franchise or
right to exist as such entity;

c) Controversies in the election or appointments of directors, trustees, officers or managers of such

corporations, partnerships or associations.

Whether WPP illegally dismissed Galera

WPP’s dismissal of Galera lacked both substantive and procedural due process.

Apart from Steedman’s letter dated 15 December 2000 to Galera, WPP failed to prove any just or authorized
cause for Galera’s dismissal. Steedman’s letter to Galera reads:

The operations are currently in a shamble. There is lack of leadership and confidence in your abilities
from within, our agency partners and some clients.

Most of the staff I spoke with felt they got more guidance and direction from Minda than yourself. In your
role as Managing Director, that is just not acceptable.

I believe your priorities are mismanaged. The recent situation where you felt an internal strategy meeting
was more important than a new business pitch is a good example.

You failed to lead and advise on the two new business pitches. In both cases, those involved sort (sic)
Minda’s input. As I discussed with you back in July, my directive was for you to lead and review all
business pitches. It is obvious [that] confusion existed internally right up until the day of the pitch.

The quality output is still not to an acceptable standard, which was also part of my directive that you
needed to focus on back in July.

I do not believe you understand the basic skills and industry knowledge required to run a media special
operation.21

WPP, Steedman, Webster, and Lansang, however, failed to substantiate the allegations in Steedman’s letter.
Galera, on the other hand, presented documentary evidence22 in the form of congratulatory letters, including one
from Steedman, which contents are diametrically opposed to the 15 December 2000 letter.

The law further requires that the employer must furnish the worker sought to be dismissed with two written
notices before termination of employment can be legally effected: (1) notice which apprises the employee of the
particular acts or omissions for which his dismissal is sought; and (2) the subsequent notice which informs the
employee of the employer’s decision to dismiss him. Failure to comply with the requirements taints the dismissal
with illegality.23 WPP’s acts clearly show that Galera’s dismissal did not comply with the two-notice rule.

Whether Galera is entitled to the monetary award

WPP, Steedman, Webster, and Lansang argue that Galera is not entitled to backwages because she is an alien.
They further state that there is no guarantee that the Bureau of Immigration and the Department of Labor and
Employment will continue to grant favorable rulings on the applications for a 9(g) visa and an Alien Employment
Permit after the expiry of the validity of Galera’s documents on 31 December 2000. WPP’s argument is a circular
argument, and assumes what it attempts to prove. Had WPP not dismissed Galera, there is no doubt in our
minds that WPP would have taken action for the approval of documents required for Galera’s continued
employment.
This is Galera’s dilemma: Galera worked in the Philippines without a proper work permit but now wants to claim
employee’s benefits under Philippine labor laws.

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.