PRELIMINARY TITLE (MANAGEMENT PREROGRATIVE)

SECOND DIVISION

[G.R. No. 95449. August 18, 1997.]

PHILIPPINE-SINGAPORE TRANSPORT SERVICES, INC., Petitioner, v. NATIONAL LABOR RELATIONS COMMISSION and Capt. WENEFREDO N. ESTRADA, Respondents.

Eladio B. Samson for Petitioner.

Vernon O. Astilla for Private Respondents.

SYLLABUS 1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; TERMINATION OF EMPLOYMENT; THE DISMISSAL OF EMPLOYEES MUST BE MADE WITHIN THE PARAMETERS OF THE LAW AND PURSUANT TO THE BASIC TENETS OF EQUITY, JUSTICE AND FAIR PLAY. — The power to dismiss is a recognized prerogative that is inherent in the employer’s right to freely manage and regulate his business. Corollarily, an employer can not rationally be expected to retain the employment of a person whose lack of morals, respect and loyalty to his employer, regard for his employer’s rules and appreciation of the dignity and responsibility of his office, has so plainly and completely been bared. He may not be compelled to continue to employ such person whose continuance in the service will patently be inimical to his employer’s interest. The right of the company to dismiss an employee is a measure of self-protection. Such right, however, is subject to regulation by the State, basically in the exercise of its paramount police power. Thus, the dismissal of employees must be made within the parameters of the law and pursuant to the basic tenets of equity, justice and fair play. It must not be done arbitrarily and without just cause. 2. ID.; ID.; ID.; DUE PROCESS MUST BE OBSERVED BECAUSE THE DISMISSAL AFFECTS NOT ONLY THE EMPLOYEE’S POSITION BUT ALSO HIS MEANS OF LIVELIHOOD. — Due process must be observed because the dismissal affects not only the employee’s position but also his means of livelihood. Truly, unemployment brings untold misery and hardship not only to the working men but also to those who are dependent on the wage earners. When a person has no property, his job may possibly be his only possession or means of livelihood. Therefore he should be protected against arbitrary deprivation of his job. 3. ID.; ID.; ID.; TWO FACETS IN THE VALID TERMINATION OF AN EMPLOYEE. — No less than the Constitution recognizes and guarantees the labor’s right to security of tenure. Under the Labor Code of the Philippines, as amended, specifically, Article 279 of the said Code, the security of tenure has been construed to mean as that "the employer shall not terminate the services of an employee except for a just cause or when authorized" by the Code. The two facets of this legal provision are: (a) the legality of the act of dismissal; and (b) the legality in the manner of dismissal. The illegality of the act of dismissal constitutes discharge without just cause, while illegality in the manner of dismissal is dismissal without due process. If an employee is dismissed without just cause, he is entitled to reinstatement with backwages up to the time of his actual reinstatement, if the contract of employment is not for a definite period; or to the payment of his salaries corresponding to the unexpired portion of the employment contract, if the contract is for a definite period. If the dismissal is for a just cause but it was made without due process, the employee is entitled to the payment of an indemnity. 4. ID.; ID.; ID.; DISMISSAL OF PRIVATE RESPONDENT, IMPETUOUSLY MADE WITHOUT THE BENEFIT OF THE REQUIRED NOTICE AND HEARING; CASE AT BAR. — Before an employee can be dismissed, the Labor Code, as amended, requires the employer to furnish the employee a written notice containing a statement of the causes for termination and to afford said employee ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires. If the employer decides to terminate the services of the employee, the employer must notify the worker in writing of the decision to dismiss him, stating clearly the reasons therefor. The record of the instant case clearly shows that the foregoing requirements are not complied with.

Private respondent Estrada was caught by surprise when on January 21, 1988 he was told by the agent of the principal that he would be replaced as master of the vessel and would be repatriated to the Philippines. He was not given any explanation or reason for his dismissal. His replacement as master of the vessel came in the afternoon of the same day he was informed of his repatriation. He was thus forced to disembark from the vessel. Obviously, the dismissal of private respondent was impetuously made without the benefit of the required notice and hearing. 5. REMEDIAL LAW; CIVIL PROCEDURE; ISSUES NOT RAISED IN THE PROCEEDINGS BELOW CANNOT BE VENTILATED FOR THE FIRST TIME BEFORE THE COURT. — The contention of petitioner that Mr. Bala was not in any way connected with it or to its principal deserves scant consideration. Suffice it to say that during the proceedings below, petitioner did not raise this issue. It is only now when petitioner elevated the case to this Court that it is challenging the claim of private respondent that Mr. Bala was connected with the petitioner and its principal. Settled is the rule that issues not raised in the proceedings below can not be ventilated for the first time before this Court.

D E C I S I O N

TORRES, JR., J.: The instant case basically revolves around the issue of whether or not private respondent Wenefredo N. Estrada, the complainant in POEA Case No. M-88-02-102 entitled "Capt. Wenefredo N. Estrada v. Philippine-Singapore Transport Services, Inc., et. al.", is validly dismissed from the service on account of his alleged incompetence as the master/captain of the vessel "Sea Carrier I" . It appears that on November 24, 1987, herein petitioner Philippine-Singapore Transport Services, Inc. (PSTS, for brevity), a manning agency, hired private respondent Estrada as master of the vessel Sea Carrier I for its foreign principal, Intra-Oil Supplies Sbn Bhd (Intra-Oil, for brevity). Intra-Oil had a charter agreement, then, with a company, which was engaged in a project of oil drilling in the high seas of Bombay, India. cdtech On January 21, 1988 or barely two months following his employment, private respondent Estrada was informed by a representative of Modest Shipping, an agent of Intra-Oil that he would be relieved from his employment and repatriated back to the Philippines. He was not given any explanation or reason for his relief. On that same day, someone took over as captain of Sea Carrier I, which prompted Estrada to relinquish his post. On account of this unfortunate incident, he decided to return to Manila the following day. Upon his arrival, he readily went to petitioner PSTS to ask about his dismissal from employment and to claim for his unpaid salary and the sum corresponding to his plane fare which was deducted from his salary. Petitioner PSTS informed him that his service was terminated due to his incompetence. It also denied his claim for the sums of money. On February 10, 1988, private respondent Estrada filed with the POEA Adjudication Department a complaint against PSTS and Intra-Oil for illegal dismissal, docketed as POEA Case No. M-88-02-102. He asked for the reimbursement of his plane fare and payment of his leave pay and of the remaining salaries for the unexpired portion of his six-month contractual period. In its answer, PSTS alleged that the dismissal of private respondent Estrada was due to a valid cause, which is incompetency. It asserted that his incompetency is evidenced by the telexes of the charterer to PSTS complaining about the private respondent’s incompetency in handling the vessel for any tow or even approaching the oil drilling platforms, and informing about its (charterer’s) decision to terminate the services of private respondent as master of the vessel and to off-hire the Sea Carrier I due to private respondent’s incompetence. According to PSTS, it had no choice but to give its consent to the dismissal of private respondent by the charterer because the latter was in a best position to determine the qualification of the private Respondent. In his position paper, private respondent revealed that his termination from service was an offshoot of his justified refusal to obey the order of the charterer to tow another of its vessel. He explained that during the voyage from Singapore to Bombay, in the course of maneuvering the charterer’s barge, specifically alongside jetties, quays and in navigational channels, all the ropes on board the Sea Carrier I suffered extreme wear and tear that when the charterer ordered him to tow its barge, he refused to do so since the ropes were worn out and inadequate to maneuver a barge in close water situation and, in his professional opinion, damage would result from using inadequate ropes. This shortage of ropes was made known to Mr. Bala of Essar Shipping, who was asked by the private respondent to supply additional mooring ropes. According to the private respondent, the relationship

between him and the charterer degenerated rapidly following this particular incident. On June 7, 1989, the POEA Adjudication Department ruled in favor of the private respondent by holding that his dismissal from service was illegal, the dispositive portion of its decision states:jgc:chanrobles.com.ph "WHEREFORE, in view of all the foregoing circumstances, judgment is hereby rendered ordering respondent Philippine-Singapore Transport Services, its principal Intra-Oil Supplies SBN BHD and Fortune Life and General Insurance Co., Inc. (PSTSI’s surety) to pay complainant (Estrada) jointly and severally the sum of THIRTEEN THOUSAND FIVE HUNDRED THIRTY MALAYSIAN DOLLARS (M$13,530.00) or its peso equivalent at the time of payment (representing Estrada’s salaries covering the unexpired portion of his contract of employment) plus the sum of TEN THOUSAND PESOS (P10,000.00) as refund of airplane expenses." 1 Dissatisfied, PSTS appealed to the NLRC on July 12, 1989. The NLRC, however, through its questioned Resolution dated August 17, 1990, 2 held that the charge of private respondent’s incompetency was unmeritorious. The real reason to private respondent’s repatriation was not due to his incompetence but due to his refusal to tow another barge belonging to the charterer and which refusal had been shown to be justified and fully explained by the private Respondent. Thus, the NLRC affirmed the decision of the POEA and dismissed the appeal of petitioner for lack of merit. A motion for reconsideration dated September 14, 1990 was filed by petitioner, but the same was denied in a Resolution dated September 25, 1990. 3 Hence, this petition. 4 Petitioner argued that the private respondent’s inability to foresee and anticipate the quantity of ropes to be used during the voyage could only be attributed to his incompetency. As master of the vessel, he was required to see to it that the ship was suited will all the things necessary for its smooth operation. The fact that the shortage of ropes was made known by private respondent to Mr. Bala did not cure his incompetency. The request for fresh ropes should have been directed to his principal, and not to a third person (Mr. Bala) who was not even connected with the petitioner nor with its principal. Petitioner likewise asserted that in defying the charterer’s request to tow its barge, the private respondent failed to comply with his duty to maintain good relationship and cooperate with the charterer as laid down on his employment contract, an incident which led to the off-hiring of Sea Carrier I and the consequent cancellation of the charter agreement. And the cancellation of the charter agreement carried with it the dismissal from service of private respondent because he was a project employee whose employment was coterminous with the charter of Sea Carrier I. It could not therefore be said that the dismissal was not valid. As to the procedural aspect of private respondent’s dismissal, petitioner alleged that his termination was done pursuant to the terms of the employment contract, hence, with due regard to due process of law. We are not persuaded by the foregoing arguments of petitioner. It is noteworthy to state that an employer is free to manage and regulate, according to his own discretion and judgment, all phases of employment, which includes hiring, work assignments, working methods, time, place and manner of work, supervision of workers, working regulations, transfer of employees, lay-off of workers, and the discipline, dismissal and recall of work. 5 While the law recognizes 6 and safeguards 7 this right of an employer to exercise what are clearly management prerogatives, such right should not be abused and used as a tool of oppression against later. The company’s prerogatives must be exercised in good faith and with due regard to the rights of labor. A priori, they are not absolute prerogatives but are subject to legal limits, collective bargaining agreements and the general principles of fair play and justice. 8 The power to dismiss an employee is a recognized prerogative that is inherent in the employer’s right to freely manage and regulate his business. Corollarily, an employer can not rationally be expected to retain the employment of a person whose lack of morals, respect and loyalty to his employer, regard for his employer’s rules and appreciation of the dignity and responsibility of his office, has so plainly and completely been bared. 9 He may not be compelled to continue to employ such person whose continuance in the service will patently be inimical to his employer’s interest. 10 The right of the company to dismiss an employee is a measure of self-protection. 11 Such right, however, is subject to regulation by the State, basically in the exercise of its paramount police power. 12 Thus, the dismissal of employees must be made within the parameters of the law and pursuant to the basic tenets of equity, justice and fair play. It must not be done arbitrarily and without just cause. 13

Due process must be observed because the dismissal affects not only the employee’s position but also his means of livelihood. Truly, unemployment brings untold misery and hardship not only to the workingmen but also to those who are dependent on the wage earners. When a person has no property, his job may possibly be his only possession or means of livelihood. Therefore he should be protected against arbitrary deprivation of his job. 14 No less than the Constitution recognizes and guarantees the labor’s right to security of tenure. 15 Under the Labor Code of the Philippines, as amended, specifically, Article 279 of the said Code, the security of tenure has been construed to mean as that "the employer shall not terminate the services of an employee except for a just cause or when authorized" by the Code. 16 The two facets of this legal provision are: (a) the legality of the act of dismissal; and (b) the legality in the manner of dismissal. The illegality of the act of dismissal constitutes discharge without just cause, while illegality in the manner of dismissal is dismissal without due process. 17 If an employee is dismissed without just cause, he is entitled to reinstatement with backwages up to the time of his actual reinstatement, if the contract of employment is not for a definite period, or to the payment of his salaries corresponding to the unexpired portion of the employment contract, if the contract is for a definite period. If the dismissal is for a just cause but it was made without due process, the employee is entitled to the payment of an indemnity. 18chanroblesvirtual|awlibrary Guided by the foregoing rules and principles, this Court holds that the dismissal of private respondent from service is done without just cause, in apparent violation of Article 279 in relation to Article 282 of the Labor Code of the Philippines, as amended, and without due process, in obvious contravention of Article 277 (b) of the said Code. Petitioner’s imputation of incompetence on the part of the private respondent due to his lack of foresight to anticipate the number of mooring ropes to be used is unworthy of being given credence. As explained by private respondent, the Sea Carrier I was sufficiently furnished with mooring ropes prior to the voyage. It so happened that the ropes would later on "suffer(ed) extreme wear and tear" during its voyage from Singapore to Bombay especially along jetties and quays, and in navigational channels. Faced by such problem, he immediately reported the situation to, and at the same time, requested for new mooring ropes from Mr. Bala of Essar Shipping, a person whom the private respondent alleged to be connected with the petitioner and its principal. No new ropes came, however. So, when the charterer ordered private respondent to tow its barge, he explained that the ropes were worn out and, in his professional opinion, inadequate for maneuvering a barge in close water situation, hence, damage would result if towing of the barge would proceed. Evidently, as called for by the circumstances of the situation, the private respondent complied with his responsibility as master of the vessel. To ask for more from him is to require an undertaking that is beyond or in excess of the scope of his duty as master of the vessel. Even the NLRC belied the claim of petitioner that private respondent was incompetent, thus:jgc:chanrobles.com.ph "To our mind, respondent’s charge of incompetence is rather sweeping . . . Complainant’s refusal to carry out the towing order on the basis of his professional opinion that there was a shortage in towing ropes, a situation which was known to a certain ‘Mr. Bala of Essar Shipping’, or that they were inadequate and that it might result in an accident or cause damage certainly does not prove that he was incompetent. On the other hand, it would even show that he was very professional in his job as Master, regardless of the intrusions of the charterer into his area of responsibility. It would have been a different story had complainant refused the towing order simply because he didn’t know how to, in which case he could be said to be incompetent in that area of expertise." 19 The contention of petitioner that Mr. Bala was not in any way connected with it or to its principal deserves scant consideration. Suffice it to say that during the proceedings below, petitioner did not raise this issue. It is only now when petitioner elevated the case to this Court that it is challenging the claim of private respondent that Mr. Bala was connected with the petitioner and its principal. Settled is the rule that issues not raised in the proceedings below can not be ventilated for the first time before this Court. 20 Petitioners argued that private respondent is a project employee whose term of service depends upon the charter of Sea Carrier I, hence, the cancellation of the charter agreement carries with it the termination from service of the private Respondent. This argument has no leg to stand on because the cancellation of the charter agreement, which was the very basis for terminating the services of the private respondent, was unjustifiable. It must be pointed out that the charterer decided to off-hire the Sea Carrier I and eventually canceled the charter agreement because of the alleged incompetence of the master of the vessel. But as discussed earlier, the imputation of incompetence on the part of the private respondent is bereft of any basis. Thus, the alleged incompetence can not be utilized as a valid and justifiable reason to dismiss the private respondent from employment, much less, to cancel the charter agreement. In like manner, the procedural aspect of private respondent’s termination from employment leaves much to be desired. Before an employee can be dismissed, the Labor Code, as amended, requires the employer to furnish the employee a written notice containing a statement of the causes for termination and to afford said employee ample

opportunity to be heard and to defend himself with the assistance of his representative if he so desires. If the employer decides to terminate the services of the employee, the employer must notify the worker in writing of the decision to dismiss him, stating clearly the reasons therefor. 21 The record of the instant case clearly shows that the foregoing requirements are not complied with. Private respondent Estrada was caught by surprise when on January 21, 1988 he was told by the agent of the principal that he would be replaced as master of the vessel and would be repatriated to the Philippines. He was not given any explanation or reason for his dismissal. His replacement as master of the vessel came in the afternoon of the same day he was informed of his repatriation. He was thus forced to disembark from the vessel. Obviously, the dismissal of private respondent was impetuously made without the benefit of the required notice and hearing. Petitioner seeks to justify the absence of the said notice and hearing by invoking a provision in the contract of employment which authorizes the company to terminate the employment without notice. The pertinent provision of the said employment contract reads as follows:jgc:chanrobles.com.ph "However, in the event of serious misconduct or neglect of duty or breach by you of any rules or regulations imposed by the Company, the Company may without notice or payment in lieu of notice, terminate your employment and all expenses for your repatriation will be borne by you." 22 The foregoing contractual provision is inapplicable in the situation of private Respondent. The said provision applies only when the employee is liable for serious misconduct, neglect of duty or violation of company rules and regulations. Apparently, private respondent Estrada was not found guilty of any of these offenses. The allegation of petitioner that the private respondent committed neglect of duty or serious misconduct for refusing to obey the order of the charterer to tow the barge is unmeritorious. It was the professional opinion of private respondent that the mooring ropes which had been worn out during the vessel’s voyage were inadequate for maneuvering in close water situations and that an accident might result from using the said ropes. Thus, the private respondent, in refusing to tow the other vessel, wanted to secure the vessel of its safety and to save it from an impending peril. He simply did what a prudent and careful master of the vessel ought to do under the circumstances. By faithfully complying with his duty as master of the vessel, it would not be justified to punish him by terminating his employment for reasons not sanctioned by law and maritime usage. ACCORDINGLY, the instant petition is hereby DISMISSED for lack of merit. The Resolution of the NLRC dated August 17, 1990 and its Resolution dated September 25, 1990 are hereby AFFIRMED.chanrobles.com : virtual law library SO ORDERED. Regalado, Romero, Puno and Mendoza, JJ., concur.

FIRST DIVISION

[G.R. NO. 162053 : March 7, 2007]

ST. LUKE'S MEDICAL CENTER EMPLOYEE'S ASSOCIATION-AFW (SLMCEA-AFW) AND MARIBEL S. SANTOS, Petitioners, v. NATIONAL LABOR RELATIONS COMMISSION (NLRC) AND ST. LUKE'S MEDICAL

CENTER, INC., Respondents.

D E C I S I O N

AZCUNA, J.:

Challenged in this Petition for Review on Certiorari is the Decision1 of the Court of Appeals (CA) dated January 29, 2004 in CA-G.R. SP No. 75732 affirming the decision2 dated August 23, 2002 rendered by the National Labor Relations Commission (NLRC) in NLRC CA No. 026225-00.

The antecedent facts are as follows:

Petitioner Maribel S. Santos was hired as X-Ray Technician in the Radiology department of private respondent St. Luke's Medical Center, Inc. (SLMC) on October 13, 1984. She is a graduate of Associate in Radiologic Technology from The Family Clinic Incorporated School of Radiologic Technology.

On April 22, 1992, Congress passed and enacted Republic Act No. 7431 known as the "Radiologic Technology Act of 1992." Said law requires that no person shall practice or offer to practice as a radiology and/or x-ray technologist in the Philippines without having obtained the proper certificate of registration from the Board of Radiologic Technology.

On September 12, 1995, the Assistant Executive Director-Ancillary Services and HR Director of private respondent SLMC issued a final notice to all practitioners of Radiologic Technology to comply with the requirement of Republic Act No. 7431 by December 31, 1995; otherwise, the unlicensed employee will be transferred to an area which does not require a license to practice if a slot is available.

On March 4, 1997, the Director of the Institute of Radiology issued a final notice to petitioner Maribel S. Santos requiring the latter to comply with Republic Act. No. 7431 by taking and passing the forthcoming examination scheduled in June 1997; otherwise, private respondent SLMC may be compelled to retire her from employment should there be no other position available where she may be absorbed.

On May 14, 1997, the Director of the Institute of Radiology, AED-Division of Ancillary Services issued a memorandum to petitioner Maribel S. Santos directing the latter to submit her PRC Registration form/Examination Permit per Memorandum dated March 4, 1997.

On March 13, 1998, the Director of the Institute of Radiology issued another memorandum to petitioner Maribel S. Santos advising her that only a license can assure her of her continued employment at the Institute of Radiology of the private respondent SLMC and that the latter is giving her the last chance to take and pass the forthcoming board examination scheduled in June 1998; otherwise, private respondent SLMC shall be constrained to take action which may include her separation from employment.

On November 23, 1998, the Director of the Institute of Radiology issued a notice to petitioner Maribel S. Santos informing the latter that the management of private respondent SLMC has approved her retirement in lieu of separation pay.

On November 26, 1998, the Personnel Manager of private respondent SLMC issued a "Notice of Separation from the Company" to petitioner Maribel S. Santos effective December 30, 1998 in view of the latter's refusal to accept private respondent SLMC's offer for early retirement. The notice also states that while said private respondent exerted its efforts to transfer petitioner Maribel S. Santos to other position/s, her qualifications do not fit with any of the present vacant positions in the hospital.

In a letter dated December 18, 1998, a certain Jack C. Lappay, President of the Philippine Association of Radiologic Technologists, Inc., wrote Ms. Judith Betita, Personnel Manager of private respondent SLMC, requesting the latter to give "due consideration" to the organization's three (3) regular members of his organization (petitioner Maribel S. Santos included) "for not passing yet the Board of Examination for X-ray Technology," "by giving them an assignment in any department of your hospital awaiting their chance to pass the future Board Exam."

On January 6, 1999, the Personnel Manager of private respondent SLMC again issued a "Notice of Separation from the Company" to petitioner Maribel S. Santos effective February 5, 1999 after the latter failed to present/ submit her appeal for rechecking to the Professional Regulation Commission (PRC) of the recent board examination which she took and failed.

On March 2, 1999, petitioner Maribel S. Santos filed a complaint against private respondent SLMC for illegal dismissal and non-payment of salaries, allowances and other monetary benefits. She likewise prayed for the award of moral and exemplary damages plus attorney's fees.

In the meantime, petitioner Alliance of Filipino Workers (AFW), through its President and Legal Counsel, in a letter dated September 22, 1999 addressed to Ms. Rita Marasigan, Human Resources Director of private respondent SLMC, requested the latter to accommodate petitioner Maribel S. Santos and assign her to the vacant position of CSS Aide in the hospital arising from the death of an employee more than two (2) months earlier.

In a letter dated September 24, 1999, Ms. Rita Marasigan replied thus:

Gentlemen:

Thank you for your letter of September 22, 1999 formally requesting to fill up the vacant regular position of a CSS Aide in Ms. Maribel Santos' behalf.

The position is indeed vacant. Please refer to our Recruitment Policy for particulars especially on minimum requirements of the job and the need to meet said requirements, as well as other pre-employment requirements, in order to be considered for the vacant position. As a matter of fact, Ms. Santos is welcome to apply for any vacant position on the condition that she possesses the necessary qualifications.

As to the consensus referred to in your letter, may I correct you that the agreement is, regardless of the vacant position Ms. Santos decides to apply, she must go through the usual application procedures. The formal letter, I am afraid, will not suffice for purposes of recruitment processing. As you know, the managers requesting to fill any vacancy has a say on the matter and correctly so. The manager's inputs are necessarily factored into the standard recruitment procedures. Hence, the need to undergo the prescribed steps.

Indeed we have gone through the mechanics to accommodate Ms. Santos' transfer while she was employed with SLMC given the prescribed period. She was given 30 days from issuance of the notice of termination to look for appropriate openings which incidentally she wittingly declined to utilize. She did this knowing fully well that the consequences would be that her application beyond the 30-day period or after the effective date of her termination from SLMC would be considered a re-application with loss of seniority and shall be subjected to the pertinent application procedures.

Needless to mention, one of the 3 X-ray Technologists in similar circumstances as Ms. Santos at the time successfully managed to get herself transferred to E.R. because she opted to apply for the appropriate vacant position and qualified for it within the prescribed 30-day period. The other X-ray Technologist, on the other hand, as you may recall, was eventually terminated not just for his failure to comply with the licensure requirement of the law but for cause (refusal to serve a customer).

Why Ms. Santos opted to file a complaint before the Labor Courts and not to avail of the opportunity given her, or assuming she was not qualified for any vacant position even if she tried to look for one within the prescribed

period, I simply cannot understand why she also refused the separation pay offered by Management in an amount beyond the minimum required by law only to re-apply at SLMC, which option would be available to her anyway even (if she) chose to accept the separation pay!

Well, here's hoping that our Union can timely influence our employees to choose their options well as it has in the past.

(Signed) RITA MARASIGAN

Subsequently, in a letter dated December 27, 1999, Ms. Judith Betita, Personnel Manager of private respondent SLMC wrote Mr. Angelito Calderon, President of petitioner union as follows:

Dear Mr. Calderon:

This is with regard to the case of Ms. Maribel Santos. Please recall that last Oct. 8, 1999, Ms. Rita Marasigan, HR Director, discussed with you and Mr. Greg Del Prado the terms regarding the re-hiring of Ms. Maribel Santos. Ms. Marasigan offered Ms. Santos the position of Secretary at the Dietary Department. In that meeting, Ms. Santos replied that she would think about the offer. To date, we still have no definite reply from her. Again, during the conference held on Dec. 14, 1999, Atty. Martir promised to talk to Ms. Santos, and inform us of her reply by Dec. 21, 1999. Again we failed to hear her reply through him.

Please be informed that said position is in need of immediate staffing. The Dietary Department has already been experiencing serious backlog of work due to the said vacancy. Please note that more than 2 months has passed since Ms. Marasigan offered this compromise. Management cannot afford to wait for her decision while the operation of the said department suffers from vacancy.

Therefore, Management is giving Ms. Santos until the end of this month to give her decision. If we fail to hear from her or from you as her representatives by that time, we will consider it as a waiver and we will be forced to offer the position to other applicants so as not to jeopardize the Dietary Department's operation.

For your immediate action.

(Signed) JUDITH BETITA Personnel Manager

On September 5, 2000, the Labor Arbiter came out with a Decision ordering private respondent SLMC to pay petitioner Maribel S. Santos the amount of One Hundred Fifteen Thousand Five Hundred Pesos (P115,500.00) representing her separation pay. All other claims of petitioner were dismissed for lack of merit.

Dissatisfied, petitioner Maribel S. Santos perfected an appeal with the public respondent NLRC.

On August 23, 2002, public respondent NLRC promulgated its Decision affirming the Decision of the Labor Arbiter. It likewise denied the Motion for Reconsideration filed by petitioners in its Resolution promulgated on December 27, 2002.

Petitioner thereafter filed a petition for certiorari with the CA which, as previously mentioned, affirmed the decision of the NLRC.

Hence, this petition raising the following issues:

I. Whether the CA overlooked certain material facts and circumstances on petitioners' legal claim in relation to the complaint for illegal dismissal.

II. Whether the CA committed grave abuse of discretion and erred in not resolving with clarity the issues on the merit of petitioner's constitutional right of security of tenure.3

For its part, private respondent St. Luke's Medical Center, Inc. (SLMC) argues in its comment4 that: 1) the petition should be dismissed for failure of petitioners to file a motion for reconsideration; 2) the CA did not commit grave abuse of discretion in upholding the NLRC and the Labor Arbiter's ruling that petitioner was legally dismissed; 3) petitioner was legally and validly terminated in accordance with Republic Act Nos. 4226 and 7431; 4) private respondent's decision to terminate petitioner Santos was made in good faith and was not the result of unfair discrimination; and 5) petitioner Santos' non-transfer to another position in the SLMC was a valid exercise of management prerogative.

The petition lacks merit.

Generally, the Court has always accorded respect and finality to the findings of fact of the CA particularly if they coincide with those of the Labor Arbiter and the NLRC and are supported by substantial evidence.5 True this rule admits of certain exceptions as, for example, when the judgment is based on a misapprehension of facts, or the findings of fact are not supported by the evidence on record6 or are so glaringly erroneous as to constitute grave abuse of discretion.7 None of these exceptions, however, has been convincingly shown by petitioners to apply in the present case. Hence, the Court sees no reason to disturb such findings of fact of the CA.

Ultimately, the issue raised by the parties boils down to whether petitioner Santos was illegally dismissed by private respondent SLMC on the basis of her inability to secure a certificate of registration from the Board of Radiologic Technology.

The requirement for a certificate of registration is set forth under R.A. No. 74318 thus:

Sec. 15. Requirement for the Practice of Radiologic Technology and X-ray Technology. - Unless exempt from the examinations under Sections 16 and 17 hereof, no person shall practice or offer to practice as a radiologic and/or x-ray technologist in the Philippines without having obtained the proper certificate of registration from the Board.

It is significant to note that petitioners expressly concede that the sole cause for petitioner Santos' separation from work is her failure to pass the board licensure exam for X-ray technicians, a precondition for obtaining the certificate of registration from the Board. It is argued, though, that petitioner Santos' failure to comply with the certification requirement did not constitute just cause for termination as it violated her constitutional right to security of tenure. This contention is untenable.

While the right of workers to security of tenure is guaranteed by the Constitution, its exercise may be reasonably regulated pursuant to the police power of the State to safeguard health, morals, peace, education, order, safety, and the general welfare of the people. Consequently, persons who desire to engage in the learned professions requiring scientific or technical knowledge may be required to take an examination as a prerequisite to engaging in their chosen careers.9 The most concrete example of this would be in the field of medicine, the practice of which in all its branches has been closely regulated by the State. It has long been recognized that the regulation of this field is a reasonable method of protecting the health and safety of the public to protect the public from the potentially deadly effects of incompetence and ignorance among those who would practice medicine.10 The same rationale applies in the regulation of the practice of radiologic and x-ray technology. The clear and unmistakable intention of the legislature in prescribing guidelines for persons seeking to practice in this field is embodied in Section 2 of the law:

Sec. 2. Statement of Policy. - It is the policy of the State to upgrade the practice of radiologic technology in the Philippines for the purpose of protecting the public from the hazards posed by radiation as well as to ensure safe and proper diagnosis, treatment and research through the application of machines and/or equipment using radiation.11

In this regard, the Court quotes with approval the disquisition of public respondent NLRC in its decision dated August 23, 2002:

The enactment of R.A. (Nos.) 7431 and 4226 are recognized as an exercise of the State's inherent police power. It should be noted that the police power embraces the power to prescribe regulations to promote the health, morals, educations, good order, safety or general welfare of the people. The state is justified in prescribing the specific requirements for x-ray technicians and/or any other professions connected with the health and safety of its citizens. Respondent-appellee being engaged in the hospital and health care business, is a proper subject of the cited law; thus, having in mind the legal requirements of these laws, the latter cannot close its eyes and [let] complainant-appellant's private interest override public interest.

Indeed, complainant-appellant cannot insist on her "sterling work performance without any derogatory record" to make her qualify as an x-ray technician in the absence of a proper certificate of Registration from the Board of Radiologic Technology which can only be obtained by passing the required examination. The law is clear that the Certificate of Registration cannot be substituted by any other requirement to allow a person to practice as a Radiologic Technologist and/or X-ray Technologist (Technician).12

No malice or ill-will can be imputed upon private respondent as the separation of petitioner Santos was undertaken by it conformably to an existing statute. It is undeniable that her continued employment without the required Board certification exposed the hospital to possible sanctions and even to a revocation of its license to operate. Certainly, private respondent could not be expected to retain petitioner Santos despite the inimical threat posed by the latter to its business. This notwithstanding, the records bear out the fact that petitioner Santos was given ample opportunity to qualify for the position and was sufficiently warned that her failure to do so would result in her separation from work in the event there were no other vacant positions to which she could be transferred. Despite these warnings, petitioner Santos was still unable to comply and pass the required exam. To reiterate, the requirement for Board certification was set by statute. Justice, fairness and due process demand that an employer should not be penalized for situations where it had no participation or control.13

It would be unreasonable to compel private respondent to wait until its license is cancelled and it is materially injured before removing the cause of the impending evil. Neither can the courts step in to force private respondent to reassign or transfer petitioner Santos under these circumstances. Petitioner Santos is not in the position to demand that she be given a different work assignment when what necessitated her transfer in the first place was her own fault or failing. The prerogative to determine the place or station where an employee is best qualified to serve the interests of the company on the basis of the his or her qualifications, training and performance belongs solely to the employer.14 The Labor Code and its implementing Rules do not vest in the Labor Arbiters nor in the different Divisions of the NLRC (nor in the courts) managerial authority.15

While our laws endeavor to give life to the constitutional policy on social justice and the protection of labor, it does not mean that every labor dispute will be decided in favor of the workers. The law also recognizes that management has rights which are also entitled to respect and enforcement in the interest of fair play.16 Labor laws, to be sure, do not authorize interference with the employer's judgment in the conduct of the latter's business. Private respondent is free to determine, using its own discretion and business judgment, all elements of employment, "from hiring to firing" except in cases of unlawful discrimination or those which may be provided by law. None of these exceptions is present in the instant case.

The fact that another employee, who likewise failed to pass the required exam, was allowed by private respondent to apply for and transfer to another position with the hospital does not constitute unlawful discrimination. This was a valid exercise of management prerogative, petitioners not having alleged nor proven that the reassigned employee did not qualify for the position where she was transferred. In the past, the Court has ruled that an objection founded on the ground that one has better credentials over the appointee is frowned upon so long as the latter possesses the minimum qualifications for the position.17 Furthermore, the records show that Ms. Santos did not even seriously apply for another position in the company.

WHEREFORE, the petition is DENIED for lack of merit. Costs against petitioners.

SO ORDERED.

FIRST DIVISION

G. R. No. 155421 - July 7, 2004

ELMER M. MENDOZA, Petitioner, vs. RURAL BANK OF LUCBAN, Respondent.

D E C I S I O N

PANGANIBAN, J.:

The law protects both the welfare of employees and the prerogatives of management. Courts will not interfere with business judgments of employers, provided they do not violate the law, collective bargaining agreements, and general principles of fair play and justice. The transfer of personnel from one area of operation to another is inherently a managerial prerogative that shall be upheld if exercised in good faith -- for the purpose of advancing business interests, not of defeating or circumventing the rights of employees.

The Case

The Court applies these principles in resolving the instant Petition for Review1 under Rule 45 of the Rules of Court, assailing the June 14, 2002 Decision2 and September 25, 2002 Resolution3 of the Court of Appeals (CA) in CA-GR SP No. 68030. The assailed Decision disposed as follows:

"WHEREFORE, the petition for certiorari is hereby DISMISSED for lack of merit."4

The challenged Resolution denied petitioner's Motion for Reconsideration.

The Facts

On April 25, 1999, the Board of Directors of the Rural Bank of Lucban, Inc., issued Board Resolution Nos. 99-52 and 99-53, which read:

"Board Res. No. 99-52

"'RESOLVED AS IT IS HEREBY RESOLVED' that in line with the policy of the bank to familiarize bank employees with the various phases of bank operations and further strengthen the existing internal control system[,] all officers and employees are subject to reshuffle of assignments. Moreover, this resolution does not preclude the transfer of assignment of bank officers and employees from the branch office to the head office and vice-versa."

"Board Res. No. 95-53

"Pursuant to Resolution No. 99-52, the following branch employees are hereby reshuffled to their new assignments without changes in their compensation and other benefits.

NAME OF EMPLOYEES PRESENT ASSIGNMENT NEW ASSIGNMENT

JOYCE V. ZETA Bank Teller C/A Teller

CLODUALDO ZAGALA C/A Clerk Actg. Appraiser

ELMER L. MENDOZA Appraiser Clerk-Meralco Collection

CHONA R. MENDOZA Clerk-Meralco Collection Bank Teller"5

In a letter dated April 30, 1999, Alejo B. Daya, the bank's board chairman, directed Briccio V. Cada, the manager of the bank's Tayabas branch, to implement the reshuffle.6 The new assignments were to "be effective on May 1, 1999 without changes in salary, allowances, and other benefits received by the aforementioned employees."7

On May 3, 1999, in an undated letter addressed to Daya, Petitioner Elmer Mendoza expressed his opinion on the reshuffle, as follows:

"RE: The recent reshuffle of employees as per Board Resolution dated April 25, 1999

"Dear Sir:

"This is in connection with the aforementioned subject matter and which the undersigned received on April 25, 1999.

"Needless to state, the reshuffling of the undersigned from the present position as Appraiser to Clerk-Meralco Collection is deemed to be a demotion without any legal basis. Before this action on your part[,] the undersigned has been besieged by intrigues due to [the] malicious machination of a certain public official who is bruited to be your good friend. These malicious insinuations were baseless and despite the fact that I have been on my job as Appraiser for the past six (6) years in good standing and never involved in any anomalous conduct, my being reshuffled to [C]lerk-[M]eralco [C]ollection is a blatant harassment on your part as a prelude to my termination in due time. This will constitute an unfair labor practice.

"Meanwhile, may I beseech your good office that I may remain in my position as Appraiser until the reason [for] my being reshuffled is made clear.

"Your kind consideration on this request will be highly appreciated."8

On May 10, 1999, Daya replied:

"Dear Mr. Mendoza,

"Anent your undated letter expressing your resentment/comments on the recent management's decision to reshuffle the duties of bank employees, please be informed that it was never the intention (of management) to downgrade your position in the bank considering that your due compensation as Bank Appraiser is maintained and no future reduction was intended.

"Aside from giving bank employees a wider experience in various banking operations, the reshuffle will also afford management an effective tool in providing the bank a sound internal control system/check and balance and a basis in evaluating the performance of each employee. A continuing bankwide reshuffle of employees shall be made at the discretion of management which may include bank officers, if necessary as expressed in Board Resolution No. 99-53, dated April 25, 1999. Management merely shifted the duties of employees, their position title [may be] retained if requested formally.

"Being a standard procedure in maintaining an effective internal control system recommended by the Bangko Sentral ng Pilipinas, we believe that the conduct of reshuffle is also a prerogative of bank management."9

On June 7, 1999, petitioner submitted to the bank's Tayabas branch manager a letter in which he applied for a leave of absence from work:

"Dear Sir:

"I wish I could continue working but due to the ailment that I always feel every now and then, I have the honor to apply for at least ten (10) days sick leave effective June 7, 1999.

"Hoping that this request [merits] your favorable and kind consideration and understanding."10

On June 21, 1999, petitioner again submitted a letter asking for another leave of absence for twenty days effective on the same date.11

On June 24, 1999, while on his second leave of absence, petitioner filed a Complaint before Arbitration Branch No. IV of the National Labor Relations Commission (NLRC). The Complaint -- for illegal dismissal, underpayment, separation pay and damages -- was filed against the Rural Bank of Lucban and/or its president, Alejo B. Daya; and its Tayabas branch manager, Briccio V. Cada. The case was docketed as NLRC Case SRAB-IV-6-5862-99-Q.12

The labor arbiter's June 14, 2000 Decision upheld petitioner's claims as follows:

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

1. Declaring respondents guilty of illegal dismissal.

2. Ordering respondents to reinstate complainant to his former position without loss of seniority rights with full backwages from date of dismissal to actual reinstatement in the amount of P55,000.00 as of June 30, 2000.

3. Ordering the payment of separation pay if reinstatement is not possible in the amount ofP30,000.00 in addition to 13th month pay of P5,000.00 and the usual P10,000.00 annual bonus afforded the employees.

4. Ordering the payment of unpaid salary for the period covering July 1-30, 1999 in the amount of P5,000.00

5. Ordering the payment of moral damages in the amount of P50,000.00.

6. Ordering the payment of exemplary damages in the amount of P25,000.00

7. Ordering the payment of Attorney's fees in the amount of P18,000.00 which is 10% of the monetary award."13

On appeal, the NLRC reversed the labor arbiter.14 In its July 18, 2001 Resolution, it held:

"We can conceive of no reason to ascribe bad faith or malice to the respondent bank for its implementation of its Board Resolution directing the reshuffle of employees at its Tayabas branch to positions other than those they were occupying. While at first the employees thereby affected would experience difficulty in adjusting to their new jobs, it cannot be gainsaid that the objective for the reshuffle is noble, as not only would the employees obtain additional knowledge, they would also be more well-rounded in the operations of the bank and thus help the latter further strengthen its already existing internal control system.

"The only inconvenience, as [w]e see it, that the [petitioner] may have experienced is that from an appraiser he was made to perform the work of a clerk in the collection of Meralco payments, which he may have considered as beneath him and his experience, being a pioneer employee. But it cannot be discounted either that other employees at the Tayabas branch were similarly reshuffled. The only logical conclusion therefore is that the Board Resolution was not aimed solely at the [petitioner], but for all the other employees of the x x x bank as well. Besides, the complainant has not shown by clear, competent and convincing evidence that he holds a vested right to the position of Appraiser. x x x.

"How and by what manner a business concern conducts its affairs is not for this Commission to interfere with, especially so if there is no showing, as in the case at bar, that the reshuffle was motivated by bad faith or ill-will. x x x."15

After the NLRC denied his Motion for Reconsideration,16 petitioner brought before the CA a Petition for Certiorari17assailing the foregoing Resolution.

Ruling of the Court of Appeals

Finding that no grave abuse of discretion could be attributed to the NLRC, the CA Decision ruled thus:

"The so-called 'harassment' which Mendoza allegedly experienced in the aftermath of the reshuffling of employees at the bank is but a figment of his imagination as there is no evidence extant on record which substantiates the same. His alleged demotion, the 'cold shoulder' stance, the things about his chair and table, and the alleged reason for the harassment are but allegations bereft of proof and are perforce inadmissible as self-serving statements and can never be considered repositories of truth nor serve as foundations of court decisions anent the resolution of the litigants' rights.

"When Mendoza was reshuffled to the position of clerk at the bank, he was not demoted as there was no [diminution] of his salary benefits and rank. He could even retain his position title, had he only requested for it pursuant to the reply of the Chairman of the bank's board of directors to Mendoza's letter protesting the reshuffle. There is, therefore, no cause to doubt the reasons which the bank propounded in support of its move to reshuffle its employees, viz:

1. to 'familiarize bank employees with the various phases of bank operations,' and

2. to 'further strengthen the existing internal control system' of the bank.

"The reshuffling of its employees was done in good faith and cannot be made the basis of a finding of constructive dismissal.

"The fact that Mendoza was no longer included in the bank's payroll for July 1 to 15, 1999 does not signify that the bank has dismissed the former from its employ. Mendoza separated himself from the bank's employ when, on June 24, 1999, while on leave, he filed the illegal dismissal case against his employer for no apparent reason at all."18

Hence, this Petition.19

The Issues

Petitioner raises the following issues for our consideration:

"I. Whether or not the petitioner is deemed to have voluntarily separated himself from the service and/or abandoned his job when he filed his Complaint for constructive and consequently illegal dismissal;

"II. Whether or not the reshuffling of private respondent'[s] employees was done in good faith and cannot be made as the basis of a finding of constructive dismissal, even as the [petitioner's] demotion in rank is admitted by both parties;

"III. Whether or not the ruling in the landmark case of Ruben Serrano vs. NLRC [and Isetann Department Store (323 SCRA 445)] is applicable to the case at bar;

"IV. Whether or not the Court of Appeals erred in dismissing the petitioner's money claims, damages, and unpaid salaries for the period July 1-30, 1999, although this was not disputed by the private respondent; and

"V. Whether or not the entire proceedings before the Honorable Court of Appeals and the NLRC are a nullity since the appeal filed by private respondent before the NLRC on August 5, 2000 was on the 15th day or five (5) days beyond the reglem[e]ntary period of ten (10) days as provided for by law and the NLRC Rules of Procedure."20

In short, the main issue is whether petitioner was constructively dismissed from his employment.

The Court's Ruling

The Petition has no merit.

Main Issue: Constructive Dismissal

Constructive dismissal is defined as an involuntary resignation resorted to when continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution of pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee.21 Petitioner argues that he was compelled to file an action for constructive dismissal, because he had been demoted from appraiser to clerk and not given any work to do, while his table had been placed near the toilet and eventually removed.22 He adds that the reshuffling of employees was done in bad faith, because it was designed primarily to force him to resign.23

Management Prerogative to Transfer Employees

Jurisprudence recognizes the exercise of management prerogatives. For this reason, courts often decline to interfere in legitimate business decisions of employers.24 Indeed, labor laws discourage interference in employers' judgments concerning the conduct of their business.25 The law must protect not only the welfare of employees, but also the right of employers.

In the pursuit of its legitimate business interest, management has the prerogative to transfer or assign employees from one office or area of operation to another -- provided there is no demotion in rank or diminution of salary, benefits, and other privileges; and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause.26 This privilege is inherent in the right of employers to control and manage their enterprise effectively.27 The right of employees to security of tenure does not give them vested rights to their positions to the extent of depriving management of its prerogative to change their assignments or to transfer them.28

Managerial prerogatives, however, are subject to limitations provided by law, collective bargaining agreements, and general principles of fair play and justice.29 The test for determining the validity of the transfer of employees was explained in Blue Dairy Corporation v. NLRC30 as follows:

"[L]ike other rights, there are limits thereto. The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion, bearing in mind the basic elements of justice and fair play. Having the right should not be confused with the manner in which that right is exercised. Thus, it cannot be used as a subterfuge by the employer to rid himself of an undesirable worker. In particular, the employer must be able to show that the transfer is not unreasonable, inconvenient or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Should the employer fail to overcome this burden of proof, the employee's transfer shall be tantamount to constructive dismissal, which has been defined as a quitting because continued employment is rendered impossible, unreasonable or unlikely; as an offer involving a demotion in rank and diminution in pay. Likewise, constructive dismissal exists when an act of clear discrimination, insensibility or disdain by an employer has become so unbearable to the employee leaving him with no option but to forego with his continued employment."31

Petitioner's Transfer Lawful

The employer bears the burden of proving that the transfer of the employee has complied with the foregoing test. In the instant case, we find no reason to disturb the conclusion of the NLRC and the CA that there was no constructive dismissal. Their finding is supported by substantial evidence -- that amount of relevant evidence that a reasonable mind might accept as justification for a conclusion.32

Petitioner's transfer was made in pursuit of respondent's policy to "familiarize bank employees with the various phases of bank operations and further strengthen the existing internal control system"33 of all officers and employees. We have previously held that employees may be transferred -- based on their qualifications, aptitudes and competencies -- to positions in which they can function with maximum benefit to the company.34 There

appears no justification for denying an employer the right to transfer employees to expand their competence and maximize their full potential for the advancement of the establishment. Petitioner was not singled out; other employees were also reassigned without their express consent.

Neither was there any demotion in the rank of petitioner; or any diminution of his salary, privileges and other benefits. This fact is clear in respondent's Board Resolutions, the April 30, 1999 letter of Bank President Daya to Branch Manager Cada, and the May 10, 1999 letter of Daya to petitioner.

On the other hand, petitioner has offered no sufficient proof to support his allegations. Given no credence by both lower tribunals was his bare and self-serving statement that he had been positioned near the comfort room, made to work without a table, and given no work assignment.35 Purely conjectural is his claim that the reshuffle of personnel was a harassment in retaliation for an alleged falsification case filed by his relatives against a public official.36 While the rules of evidence prevailing in courts of law are not controlling in proceedings before the NLRC,37 parties must nonetheless submit evidence to support their contentions.

Secondary Issues:

Serrano v. NLRC Inapplicable

Serrano v. NLRC38 does not apply to the present factual milieu. The Court ruled therein that the lack of notice and hearing made the dismissal of the employee ineffectual, but not necessarily illegal.39 Thus, the procedural infirmity was remedied by ordering payment of his full back wages from the time of his dismissal.40 The absence of constructive dismissal in the instant case precludes the application of Serrano. Because herein petitioner was not dismissed, then he is not entitled to his claimed monetary benefits.

Alleged Nullity of NLRC and CA Proceedings

Petitioner argues that the proceedings before the NLRC and the CA were void, since respondent's appeal before the NLRC had allegedly been filed beyond the reglementary period.41 A careful scrutiny of his Petition for Review42 with the appellate court shows that this issue was not raised there. Inasmuch as the instant Petition challenges the Decision of the CA, we cannot rule on arguments that were not brought before it. This ruling is consistent with the due-process requirement that no question shall be entertained on appeal, unless it has been raised in the court below.43

WHEREFORE, this Petition is DENIED, and the June 14, 2002 Decision and the September 25, 2002 Resolution of the Court of Appeals are AFFIRMED. Costs against petitioner.

SO ORDERED.

BOOK ONE: PRE-EMPLOYMENT (RECRUITMENT AND

PLACEMENT OF WORKERS)

SECOND DIVISION

[G.R. No. 127195. August 25, 1999]

MARSAMAN MANNING AGENCY, INC. and DIAMANTIDES MARITIME, INC.,Petitioners, v. NATIONAL LABOR RELATIONS COMMISSION and WILFREDO T. CAJERAS, Respondents.

D E C I S I O N

BELLOSILLO, J.:

MARSAMAN MANNING AGENCY, INC. (MARSAMAN) and its foreign principal DIAMANTIDES MARITIME, INC. (DIAMANTIDES) assail the Decision of public respondent National Labor Relations Commission dated 16 September 1996 as well as its Resolution dated 12 November 1996 affirming the Labor Arbiter's decision finding them guilty of illegal dismissal and ordering them to pay respondent Wilfredo T. Cajeras salaries corresponding to the unexpired portion of his employment contract, plus attorney's fees.

Private respondent Wilfredo T. Cajeras was hired by petitioner MARSAMAN, the local manning agent of petitioner DIAMANTIDES, as Chief Cook Steward on the MV Prigipos, owned and operated by DIAMANTIDES, for a contract period of ten (10) months with a monthly salary of US$600.00, evidenced by a contract between the parties dated 15 June 1995. Cajeras started work on 8 August 1995 but less than two (2) months later, or on 28 September 1995, he was repatriated to the Philippines allegedly by mutual consent.

On 17 November 1995 private respondent Cajeras filed a complaint for illegal dismissal against petitioners with the NLRC National Capital Region Arbitration Branch alleging that he was dismissed illegally, denying that his repatriation was by mutual consent, and asking for his unpaid wages, overtime pay, damages, and attorneys fees.1 Cajeras alleged that he was assigned not only as Chief Cook Steward but also as assistant cook and messman in addition to performing various inventory and requisition jobs. Because of his additional assignments he began to feel sick just a little over a month on the job constraining him to request for medical attention. He was refused at first by Capt. Kouvakas Alekos, master of the MV Prigipos, who just ordered him to continue working. However a day after the ships arrival at the port of Rotterdam, Holland, on 26 September 1995 Capt. Alekos relented and had him examined at the Medical Center for Seamen. However, the examining physician, Dr. Wden Hoed, neither apprised private respondent about the diagnosis nor issued the requested medical certificate allegedly because he himself would forward the results to private respondents superiors. Upon returning to the vessel, private respondent was unceremoniously ordered to prepare for immediate repatriation the following day as he was said to be suffering from a disease of unknown origin.

On 28 September 1995 he was handed his Seaman's Service Record Book with the following entry: "Cause of discharge - Mutual Consent."2 Private respondent promptly objected to the entry but was not able to do anything more as he was immediately ushered to a waiting taxi which transported him to the Amsterdam Airport for the return flight to Manila. After his arrival in Manila on 29 September 1995 Cajeras complained to MARSAMAN but to no avail.3cräläwvirtualibräry

MARSAMAN and DIAMANTIDES, on the other hand, denied the imputation of illegal dismissal. They alleged that Cajeras approached Capt. Alekos on 26 September 1995 and informed the latter that he could not sleep at night because he felt something crawling over his body. Furthermore, Cajeras reportedly declared that he could no

longer perform his duties and requested for repatriation. The following paragraph in the vessel's Deck Log was allegedly entered by Capt. Alekos, to wit:

Cajeras approached me and he told me that he cannot sleep at night and that he feels something crawling on his body and he declared that he can no longer perform his duties and he must be repatriated.4

Private respondent was then sent to the Medical Center for Seamen at Rotterdam where he was examined by Dr. Wden Hoed whose diagnosis appeared in a Medical Report as paranoia and other mental problems.5 Consequently, upon Dr. Hoeds recommendation, Cajeras was repatriated to the Philippines on 28 September 1995.

On 29 January 1996 Labor Arbiter Ernesto S. Dinopol resolved the dispute in favor of private respondent Cajeras ruling that the latter's discharge from the MV Prigipos allegedly by mutual consent was not proved by convincing evidence. The entry made by Capt. Alekos in the Deck Log was dismissed as of little probative value because it was a mere unilateral act unsupported by any document showing mutual consent of Capt. Alekos, as master of the MV Prigipos, and Cajeras to the premature termination of the overseas employment contract as required by Sec. H of the Standard Employment Contract Governing the Employment of all Filipino Seamen on Board Ocean-Going Vessels. Dr. Hoeds diagnosis that private respondent was suffering from paranoia and other mental problems was likewise dismissed as being of little evidentiary value because it was not supported by evidence on how the paranoia was contracted, in what stage it was, and how it affected respondent's functions as Chief Cook Steward which, on the contrary, was even rated Very Good in respondent's Service Record Book. Thus, the Labor Arbiter disposed of the case as follows:

WHEREFORE, judgment is hereby rendered declaring the repatriation and dismissal of complaint Wilfredo T. Cajeras as illegal and ordering respondents Marsaman Manning Agency, Inc. and Diamantides Maritime, Inc. to jointly and severally pay complainant the sum of USD 5,100.00 or its peso equivalent at the time of payment plus USD 510.00 as 10% attorneys fees it appearing that complainant had to engage the service of counsel to protect his interest in the prosecution of this case.

The claims for nonpayment of wages and overtime pay are dismissed for having been withdrawn (Minutes, December 18, 1995). The claims for damages are likewise dismissed for lack of merit, since no evidence was presented to show that bad faith characterized the dismissal.6

Petitioners appealed to the NLRC.7 On 16 September 1996 the NLRC affirmed the appealed findings and conclusions of the Labor Arbiter.8 The NLRC subscribed to the view that Cajeras repatriation by alleged mutual consent was not proved by petitioners, especially after noting that private respondent did not actually sign his Seamans Service Record Book to signify his assent to the repatriation as alleged by petitioners. The entry made by Capt. Alekos in the Deck Log was not considered reliable proof that private respondent agreed to his repatriation because no opportunity was given the latter to contest the entry which was against his interest. Similarly, the Medical Report issued by Dr. Hoed of Holland was dismissed as being of dubious value since it contained only a sweeping statement of the supposed ailment of Cajeras without any elaboration on the factual basis thereof.

Petitioners' motion for reconsideration was denied by the NLRC in its Resolution dated 12 November 1996.9 Hence, this petition contending that the NLRC committed grave abuse of discretion: (a) in not according full faith and credit to the official entry by Capt. Alekos in the vessels Deck Log conformably with the rulings in Haverton Shipping Ltd. v. NLRC10and Wallem Maritime Services, Inc. v. NLRC;11 (b) in not appreciating the Medical Report issued by Dr. Wden Hoed as conclusive evidence that respondent Cajeras was suffering from paranoia and other mental problems; (c) in affirming the award of attorneys fees despite the fact that Cajeras' claim for exemplary damages was denied for lack of merit; and, (d) in ordering a monetary award beyond the maximum of three (3) months salary for every year of service set by RA 8042.

We deny the petition. In the Contract of Employment12 entered into with private respondent, petitioners convenanted strict and faithful compliance with the terms and conditions of the Standard Employment Contract approved by the POEA/DOLE13 which provides:

1. The employment of the seaman shall cease upon expiration of the contract period indicated in the Crew Contract unless the Master and the Seaman, by mutual consent, in writing, agree to an early termination x x x x (underscoring ours).

Clearly, under the foregoing, the employment of a Filipino seaman may be terminated prior to the expiration of the stipulated period provided that the master and the seaman (a) mutually consent thereto and (b) reduce their consent in writing.

In the instant case, petitioners do not deny the fact that they have fallen short of the requirement. No document exists whereby Capt. Alekos and private respondent reduced to writing their alleged mutual consent to the termination of their employment contract. Instead, petitioners presented the vessel's Deck Log wherein an entry unilaterally made by Capt. Alekos purported to show that private respondent himself asked for his repatriation. However, the NLRC correctly dismissed its evidentiary value. For one thing, it is a unilateral act which is vehemently denied by private respondent. Secondly, the entry in no way satisfies the requirement of a bilateral documentation to prove early termination of an overseas employment contract by mutual consent required by the Standard Employment Contract. Hence, since the latter sets the minimum terms and conditions of employment for the protection of Filipino seamen subject only to the adoption of better terms and conditions over and above the minimum standards,14 the NLRC could not be accused of grave abuse of discretion in not accepting anything less.

However petitioners contend that the entry should be considered prima facie evidence that respondent himself requested his repatriation conformably with the rulings in Haverton Shipping Ltd. v. NLRC15 and Abacast Shipping and Management Agency, Inc. v. NLRC.16Indeed, Haverton says that a vessels log book is prima facie evidence of the facts stated therein as they are official entries made by a person in the performance of a duty required by law. However, this jurisprudential principle does not apply to win the case for petitioners. In Wallem Maritime Services, Inc. v. NLRC17 the Haverton ruling was not given unqualified application because the log book presented therein was a mere typewritten collation of excerpts from what could be the log book.18 The Court reasoned that since the log book was the only piece of evidence presented to prove just cause for the termination of respondent therein, the log book had to be duly identified and authenticated lest an injustice would result from a blind adoption of its contents which were but prima facieevidence of the incidents stated therein.

In the instant case, the disputed entry in the Deck Log was neither authenticated nor supported by credible evidence. Although petitioners claim that Cajeras signed his Seamans Service Record Book to signify his conformity to the repatriation, the NLRC found the allegation to be actually untrue since no signature of private respondent appeared in the Record Book.

Neither could the Medical Report prepared by Dr. Hoed be considered corroborative and conclusive evidence that private respondent was suffering from paranoia and other mental problems, supposedly just causes for his repatriation. Firstly, absolutely no evidence, not even an allegation, was offered to enlighten the NLRC or this Court as to Dr. Hoed's qualifications to diagnose mental illnesses. It is a matter of judicial notice that there are various specializations in medical science and that a general practitioner is not competent to diagnose any and all kinds of illnesses and diseases. Hence, the findings of doctors who are not proven experts are not binding on this Court.19 Secondly, the Medical Report prepared by Dr. Hoed contained only a general statement that private respondent was suffering from paranoia and other mental problems without providing the details on how the diagnosis was arrived at or in what stage the illness was. If Dr. Hoed indeed competently examined private respondent then he would have been able to discuss at length the circumstances and precedents of his diagnosis. Petitioners cannot rely on the presumption of regularity in the performance of official duties to make the Medical Report acceptable because the presumption applies only to public officers from the highest to the lowest in the service of the Government, departments, bureaus, offices, and/or its political subdivisions,20 which Dr. Wden Hoed was not shown to be. Furthermore, neither did petitioners prove that private respondent was incompetent or continuously incapacitated for the duties for which he was employed by reason of his alleged mental state. On the contrary his ability as Chief Cook Steward, up to the very moment of his repatriation, was rated Very Good in his Seamans Service Record Book as correctly observed by public respondent.

Considering all the foregoing we cannot ascribe grave abuse of discretion on the part of the NLRC in ruling that petitioners failed to prove just cause for the termination of private respondent's overseas employment. Grave abuse of discretion is committed only when the judgment is rendered in a capricious, whimsical, arbitrary or despotic manner, which is not true in the present case.21cräläwvirtualibräry

With respect to attorneys fees, suffice it to say that in actions for recovery of wages or where an employee was forced to litigate and thus incurred expenses to protect his rights and interests, a maximum award of ten percent (10%) of the monetary award by way of attorneys fees is legally and morally justifiable under Art. 111 of the Labor Code,22 Sec. 8, Rule VIII, Book III of its Implementing Rules,23 and par. 7, Art. 220824 of the Civil Code.25 The case of Albenson Enterprises Corporation v. Court of Appeals26 cited by petitioners in arguing against the award of attorneys fees is clearly not applicable, being a civil action for damages which deals with only one of the eleven (11) instances when attorneys fees could be recovered under Art. 2208 of the Civil Code.

Lastly, on the amount of salaries due private respondent, the rule has always been that an illegally dismissed worker whose employment is for a fixed period is entitled to payment of his salaries corresponding to the unexpired portion of his employment.27 However on 15 July 1995, RA 8042 otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995 took effect, Sec. 10 of which provides:

Sec. 10. In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, the worker shall be entitled to the full reimbursement of his placement fee with interest at twelve percent (12%) per annum, plus his salaries for the unexpired portion of the employment contract or for three (3) months for every year of the unexpired term whichever is less (underscoring ours).

The Labor Arbiter, rationalizing that the aforesaid law did not apply since it became effective only one (1) month after respondent's overseas employment contract was entered into on 15 June 1995, simply awarded private respondent his salaries corresponding to the unexpired portion of his employment contract, i.e., for 8.6 months. The NLRC affirmed the award and the Office of the Solicitor General (OSG) fully agreed. But petitioners now insist that Sec. 10, RA 8042 is applicable because although private respondents contract of employment was entered into before the law became effective his alleged cause of action, i.e., his repatriation on 28 September 1995 without just, valid or authorized cause, occurred when the law was already in effect. Petitioners' purpose in so arguing is to invoke the law in justifying a lesser monetary award to private respondent, i.e., salaries for three (3) months only pursuant to the last portion of Sec. 10 as opposed to the salaries for 8.6 months awarded by the Labor Arbiter and affirmed by the NLRC.

We agree with petitioners that Sec. 10, RA 8042, applies in the case of private respondent and to all overseas contract workers dismissed on or after its effectivity on 15 July 1995 in the same way that Sec. 34,28 RA 6715,29 is made applicable to locally employed workers dismissed on or after 21 March 1989.30 However, we cannot subscribe to the view that private respondent is entitled to three (3) months salary only. A plain reading of Sec. 10 clearly reveals that the choice of which amount to award an illegally dismissed overseas contract worker, i.e., whether his salaries for the unexpired portion of his employment contract or three (3) months salary for every year of the unexpired term, whichever is less, comes into play only when the employment contract concerned has a term of at least one (1) year or more. This is evident from the words for every year of the unexpired term which follows the words salaries x x x for three months. To follow petitioners thinking that private respondent is entitled to three (3) months salary only simply because it is the lesser amount is to completely disregard and overlook some words used in the statute while giving effect to some. This is contrary to the well-established rule in legal hermeneutics that in interpreting a statute, care should be taken that every part or word thereof be given effect31 since the law-making body is presumed to know the meaning of the words employed in the statue and to have used them advisedly.32 Ut res magis valeat quam pereat.33cräläwvirtualibräry

WHEREFORE, the questioned Decision and Resolution dated 16 September 1996 and 12 November 1996, respectively, of public respondent National Labor Relations Commission are AFFIRMED. Petitioners MARSAMAN MANNING AGENCY, INC., and DIAMANTIDES MARITIME, INC., are ordered, jointly and severally, to pay private respondent WILFREDO T. CAJERAS his salaries for the unexpired portion of his employment contract or USD$5,100.00, reimburse the latter's placement fee with twelve percent (12%) interest per annum conformably with Sec. 10 of RA 8042, as well as attorney's fees of ten percent (10%) of the total monetary award. Costs against petitioners.

SO ORDERED.

EN BANC

[G.R. NO. 167614 : March 24, 2009]

ANTONIO M. SERRANO, Petitioner, v. Gallant MARITIME SERVICES, INC. and MARLOW NAVIGATION CO., INC., Respondents.

D E C I S I O N

AUSTRIA-MARTINEZ, J.:

For decades, the toil of solitary migrants has helped lift entire families and communities out of poverty. Their earnings have built houses, provided health care, equipped schools and planted the seeds of businesses. They have woven together the world by transmitting ideas and knowledge from country to country. They have provided the dynamic human link between cultures, societies and economies. Yet, only recently have we begun to understand not only how much international migration impacts development, but how smart public policies can magnify this effect.

United Nations Secretary-General Ban Ki-Moon Global Forum on Migration and Development Brussels, July 10, 20071

For Antonio Serrano (petitioner), a Filipino seafarer, the last clause in the 5th paragraph of Section 10, Republic Act (R.A.) No. 8042,2 to wit:

Sec. 10. Money Claims. - x x x 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 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.

x x x x (Emphasis and underscoring supplied)cralawlibrary

does not magnify the contributions of overseas Filipino workers (OFWs) to national development, but exacerbates the hardships borne by them by unduly limiting their entitlement in case of illegal dismissal to their lump-sum salary either for the unexpired portion of their employment contract "or for three months for every year of the unexpired term, whichever is less" (subject clause). Petitioner claims that the last clause violates the OFWs' constitutional rights in that it impairs the terms of their contract, deprives them of equal protection and denies them due process.

By way of Petition for Review under Rule 45 of the Rules of Court, petitioner assails the December 8, 2004 Decision3 and April 1, 2005 Resolution4 of the Court of Appeals (CA), which applied the subject clause, entreating this Court to declare the subject clause unconstitutional.

Petitioner was hired by Gallant Maritime Services, Inc. and Marlow Navigation Co., Ltd. (respondents) under a Philippine Overseas Employment Administration (POEA)-approved Contract of Employment with the following terms and conditions:

Duration of contract 12 months

Position Chief Officer

Basic monthly salary US$1,400.00

Hours of work 48.0 hours per week

Overtime US$700.00 per month

Vacation leave with pay 7.00 days per month5

On March 19, 1998, the date of his departure, petitioner was constrained to accept a downgraded employment contract for the position of Second Officer with a monthly salary of US$1,000.00, upon the assurance and representation of respondents that he would be made Chief Officer by the end of April 1998.6

Respondents did not deliver on their promise to make petitioner Chief Officer.7 Hence, petitioner refused to stay on as Second Officer and was repatriated to the Philippines on May 26, 1998.8

Petitioner's employment contract was for a period of 12 months or from March 19, 1998 up to March 19, 1999, but at the time of his repatriation on May 26, 1998, he had served only two (2) months and seven (7) days of his contract, leaving an unexpired portion of nine (9) months and twenty-three (23) days.

Petitioner filed with the Labor Arbiter (LA) a Complaint9 against respondents for constructive dismissal and for payment of his money claims in the total amount of US$26,442.73, broken down as follows:

May 27/31, 1998 (5 days) incl. Leave pay US$ 413.90

June 01/30, 1998 2,590.00

July 01/31, 1998 2,590.00

August 01/31, 1998 2,590.00

Sept. 01/30, 1998 2,590.00

Oct. 01/31, 1998 2,590.00

Nov. 01/30, 1998 2,590.00

Dec. 01/31, 1998 2,590.00

Jan. 01/31, 1999 2,590.00

Feb. 01/28, 1999 2,590.00

Mar. 1/19, 1999 (19 days) incl. leave pay 1,640.00

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

25,382.23

Amount adjusted to chief mate's salary

(March 19/31, 1998 to April 1/30, 1998) + 1,060.5010

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

TOTAL CLAIM US$ 26,442.7311

as well as moral and exemplary damages and attorney's fees.

The LA rendered a Decision dated July 15, 1999, declaring the dismissal of petitioner illegal and awarding him monetary benefits, to wit:

WHEREFORE, premises considered, judgment is hereby rendered declaring that the dismissal of the complainant (petitioner) by the respondents in the above-entitled case was illegal and the respondents are hereby ordered to pay the complainant [petitioner], jointly and severally, in Philippine Currency, based on the rate of exchange prevailing at the time of payment, the amount of EIGHT THOUSAND SEVEN HUNDRED SEVENTY U.S. DOLLARS (US $8,770.00), representing the complainant's salary for three (3) months of the unexpired portion of the aforesaid contract of employment.ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

The respondents are likewise ordered to pay the complainant [petitioner], jointly and severally, in Philippine Currency, based on the rate of exchange prevailing at the time of payment, the amount of FORTY FIVE U.S. DOLLARS (US$ 45.00),12 representing the complainant's claim for a salary differential. In addition, the respondents are hereby ordered to pay the complainant, jointly and severally, in Philippine Currency, at the exchange rate prevailing at the time of payment, the complainant's (petitioner's) claim for attorney's fees equivalent to ten percent (10%) of the total amount awarded to the aforesaid employee under this Decision.

The claims of the complainant for moral and exemplary damages are hereby DISMISSED for lack of merit.

All other claims are hereby DISMISSED.

SO ORDERED.13 (Emphasis supplied)cralawlibrary

In awarding petitioner a lump-sum salary of US$8,770.00, the LA based his computation on the salary period of three months only - - rather than the entire unexpired portion of nine months and 23 days of petitioner's employment contract - applying the subject clause. However, the LA applied the salary rate of US$2,590.00, consisting of petitioner's "[b]asic salary, US$1,400.00/month + US$700.00/month, fixed overtime pay, + US$490.00/month, vacation leave pay = US$2,590.00/compensation per month."14

Respondents appealed15 to the National Labor Relations Commission (NLRC) to question the finding of the LA that petitioner was illegally dismissed.

Petitioner also appealed16 to the NLRC on the sole issue that the LA erred in not applying the ruling of the Court in Triple Integrated Services, Inc. v. National Labor Relations Commission17 that in case of illegal dismissal, OFWs are entitled to their salaries for the unexpired portion of their contracts.18

In a Decision dated June 15, 2000, the NLRC modified the LA Decision, to wit:

WHEREFORE, the Decision dated 15 July 1999 is MODIFIED. Respondents are hereby ordered to pay complainant, jointly and severally, in Philippine currency, at the prevailing rate of exchange at the time of payment the following:

1. Three (3) months salary

$1,400 x 3 US$4,200.00

2. Salary differential 45.00

US$4,245.00

3. 10% Attorney's fees 424.50

TOTAL US$4,669.50

The other findings are affirmed.

SO ORDERED.19

The NLRC corrected the LA's computation of the lump-sum salary awarded to petitioner by reducing the applicable salary rate from US$2,590.00 to US$1,400.00 because R.A. No. 8042 "does not provide for the award of overtime pay, which should be proven to have been actually performed, and for vacation leave pay."20

Petitioner filed a Motion for Partial Reconsideration, but this time he questioned the constitutionality of the subject clause.21 The NLRC denied the motion.22

Petitioner filed a Petition for Certiorari23 with the CA, reiterating the constitutional challenge against the subject clause.24 After initially dismissing the petition on a technicality, the CA eventually gave due course to it, as directed by this Court in its Resolution dated August 7, 2003 which granted the Petition for Certiorari, docketed as G.R. No. 151833, filed by petitioner.

In a Decision dated December 8, 2004, the CA affirmed the NLRC ruling on the reduction of the applicable salary rate; however, the CA skirted the constitutional issue raised by petitioner.25

His Motion for Reconsideration26 having been denied by the CA,27 petitioner brings his cause to this Court on the following grounds:

I

The Court of Appeals and the labor tribunals have decided the case in a way not in accord with applicable decision of the Supreme Court involving similar issue of granting unto the migrant worker back wages equal to the unexpired portion of his contract of employment instead of limiting it to three (3) months

II

In the alternative that the Court of Appeals and the Labor Tribunals were merely applying their interpretation of Section 10 of Republic Act No. 8042, it is submitted that the Court of Appeals gravely erred in law when it failed to discharge its judicial duty to decide questions of substance not theretofore determined by the Honorable Supreme Court, particularly, the constitutional issues raised by the petitioner on the constitutionality of said law, which unreasonably, unfairly and arbitrarily limits payment of the award for back wages of overseas workers to three (3) months.

III

Even without considering the constitutional limitations [of] Sec. 10 of Republic Act No. 8042, the Court of Appeals gravely erred in law in excluding from petitioner's award the overtime pay and vacation pay provided in his contract since under the contract they form part of his salary.28

On February 26, 2008, petitioner wrote the Court to withdraw his petition as he is already old and sickly, and he intends to make use of the monetary award for his medical treatment and medication.29 Required to comment, counsel for petitioner filed a motion, urging the court to allow partial execution of the undisputed monetary award and, at the same time, praying that the constitutional question be resolved.30

Considering that the parties have filed their respective memoranda, the Court now takes up the full merit of the petition mindful of the extreme importance of the constitutional question raised therein.

On the first and second issues

The unanimous finding of the LA, NLRC and CA that the dismissal of petitioner was illegal is not disputed. Likewise not disputed is the salary differential of US$45.00 awarded to petitioner in all three fora. What remains disputed is only the computation of the lump-sum salary to be awarded to petitioner by reason of his illegal dismissal.

Applying the subject clause, the NLRC and the CA computed the lump-sum salary of petitioner at the monthly rate of US$1,400.00 covering the period of three months out of the unexpired portion of nine months and 23 days of his employment contract or a total of US$4,200.00.

Impugning the constitutionality of the subject clause, petitioner contends that, in addition to the US$4,200.00 awarded by the NLRC and the CA, he is entitled to US$21,182.23 more or a total of US$25,382.23, equivalent to his salaries for the entire nine months and 23 days left of his employment contract, computed at the monthly rate of US$2,590.00.31

The Arguments of Petitioner

Petitioner contends that the subject clause is unconstitutional because it unduly impairs the freedom of OFWs to negotiate for and stipulate in their overseas employment contracts a determinate employment period and a fixed salary package.32 It also impinges on the equal protection clause, for it treats OFWs differently from local Filipino workers (local workers) by putting a cap on the amount of lump-sum salary to which OFWs are entitled in case of illegal dismissal, while setting no limit to the same monetary award for local workers when their dismissal is declared illegal; that the disparate treatment is not reasonable as there is no substantial distinction between the two groups;33 and that it defeats Section 18,34 Article II of the Constitution which guarantees the protection of the rights and welfare of all Filipino workers, whether deployed locally or overseas.35

Moreover, petitioner argues that the decisions of the CA and the labor tribunals are not in line with existing jurisprudence on the issue of money claims of illegally dismissed OFWs. Though there are conflicting rulings on this, petitioner urges the Court to sort them out for the guidance of affected OFWs.36

Petitioner further underscores that the insertion of the subject clause into R.A. No. 8042 serves no other purpose but to benefit local placement agencies. He marks the statement made by the Solicitor General in his Memorandum, viz.:

Often, placement agencies, their liability being solidary, shoulder the payment of money claims in the event that jurisdiction over the foreign employer is not acquired by the court or if the foreign employer reneges on its obligation. Hence, placement agencies that are in good faith and which fulfill their obligations are unnecessarily penalized for the acts of the foreign employer. To protect them and to promote their continued helpful contribution in deploying Filipino migrant workers, liability for money claims was reduced under Section 10 of R.A. No. 8042. 37 (Emphasis supplied)cralawlibrary

Petitioner argues that in mitigating the solidary liability of placement agencies, the subject clause sacrifices the well-being of OFWs. Not only that, the provision makes foreign employers better off than local employers because in cases involving the illegal dismissal of employees, foreign employers are liable for salaries covering a maximum of only three months of the unexpired employment contract while local employers are liable for the full lump-sum salaries of their employees. As petitioner puts it:

In terms of practical application, the local employers are not limited to the amount of backwages they have to give their employees they have illegally dismissed, following well-entrenched and unequivocal jurisprudence on the matter. On the other hand, foreign employers will only be limited to giving the illegally dismissed migrant workers the maximum of three (3) months unpaid salaries notwithstanding the unexpired term of the contract that can be more than three (3) months.38

Lastly, petitioner claims that the subject clause violates the due process clause, for it deprives him of the salaries and other emoluments he is entitled to under his fixed-period employment contract.39

The Arguments of Respondents

In their Comment and Memorandum, respondents contend that the constitutional issue should not be entertained, for this was belatedly interposed by petitioner in his appeal before the CA, and not at the earliest opportunity, which was when he filed an appeal before the NLRC.40

The Arguments of the Solicitor General

The Solicitor General (OSG)41 points out that as R.A. No. 8042 took effect on July 15, 1995, its provisions could not have impaired petitioner's 1998 employment contract. Rather, R.A. No. 8042 having preceded petitioner's contract, the provisions thereof are deemed part of the minimum terms of petitioner's employment, especially on the matter of money claims, as this was not stipulated upon by the parties.42

Moreover, the OSG emphasizes that OFWs and local workers differ in terms of the nature of their employment, such that their rights to monetary benefits must necessarily be treated differently. The OSG enumerates the essential elements that distinguish OFWs from local workers: first, while local workers perform their jobs within Philippine territory, OFWs perform their jobs for foreign employers, over whom it is difficult for our courts to acquire jurisdiction, or against whom it is almost impossible to enforce judgment; and second, as held in Coyoca v. National Labor Relations Commission43 and Millares v. National Labor Relations Commission,44 OFWs are contractual employees who can never acquire regular employment status, unlike local workers who are or can become regular employees. Hence, the OSG posits that there are rights and privileges exclusive to local workers, but not available to OFWs; that these peculiarities make for a reasonable and valid basis for the differentiated treatment under the subject clause of the money claims of OFWs who are illegally dismissed. Thus, the provision does not violate the equal protection clause nor Section 18, Article II of the Constitution.45

Lastly, the OSG defends the rationale behind the subject clause as a police power measure adopted to mitigate the solidary liability of placement agencies for this "redounds to the benefit of the migrant workers whose welfare the government seeks to promote. The survival of legitimate placement agencies helps [assure] the government that migrant workers are properly deployed and are employed under decent and humane conditions."46

The Court's Ruling

The Court sustains petitioner on the first and second issues.

When the Court is called upon to exercise its power of judicial review of the acts of its co-equals, such as the Congress, it does so only when these conditions obtain: (1) that there is an actual case or controversy involving a conflict of rights susceptible of judicial determination;47 (2) that the constitutional question is raised by a proper party48 and at the earliest opportunity;49 and (3) that the constitutional question is the very lis mota of the case,50 otherwise the Court will dismiss the case or decide the same on some other ground.51

Without a doubt, there exists in this case an actual controversy directly involving petitioner who is personally aggrieved that the labor tribunals and the CA computed his monetary award based on the salary period of three months only as provided under the subject clause.

The constitutional challenge is also timely. It should be borne in mind that the requirement that a constitutional issue be raised at the earliest opportunity entails the interposition of the issue in the pleadings before acompetent court, such that, if the issue is not raised in the pleadings before that competent court, it cannot be considered at the trial and, if not considered in the trial, it cannot be considered on appeal.52 Records disclose that the issue on the constitutionality of the subject clause was first raised, not in petitioner's appeal with the NLRC, but in his Motion for Partial Reconsideration with said labor tribunal,53 and reiterated in his Petition forCertiorari before the CA.54 Nonetheless, the issue is deemed seasonably raised because it is not the NLRC but the CA which has the competence to resolve the constitutional issue. The NLRC is a labor tribunal that merely performs a quasi-judicial function - its function in the present case is limited to determining questions of fact to which the legislative policy of R.A. No. 8042 is to be applied and to resolving such questions in accordance with the standards laid down by the law itself;55 thus, its foremost function is to administer and enforce R.A. No. 8042, and not to inquire into the validity of its provisions. The CA, on the other hand, is vested with the power of judicial review or the power to declare unconstitutional a law or a provision thereof, such as the subject clause.56Petitioner's interposition of the constitutional issue before the CA was undoubtedly seasonable. The CA was therefore remiss in failing to take up the issue in its decision.

The third condition that the constitutional issue be critical to the resolution of the case likewise obtains because the monetary claim of petitioner to his lump-sum salary for the entire unexpired portion of his 12-month employment contract, and not just for a period of three months, strikes at the very core of the subject clause.

Thus, the stage is all set for the determination of the constitutionality of the subject clause.

Does the subject clause violate Section 10, Article III of the Constitution on non-impairment of contracts?

The answer is in the negative.

Petitioner's claim that the subject clause unduly interferes with the stipulations in his contract on the term of his employment and the fixed salary package he will receive57 is not tenable.

Section 10, Article III of the Constitution provides:

No law impairing the obligation of contracts shall be passed.

The prohibition is aligned with the general principle that laws newly enacted have only a prospective operation,58and cannot affect acts or contracts already perfected;59 however, as to laws already in existence, their provisions are read into contracts and deemed a part thereof.60 Thus, the non-impairment clause under Section 10, Article II is limited in application to laws about to be enacted that would in any way derogate from existing acts or contracts by enlarging, abridging or in any manner changing the intention of the parties thereto.

As aptly observed by the OSG, the enactment of R.A. No. 8042 in 1995 preceded the execution of the employment contract between petitioner and respondents in 1998. Hence, it cannot be argued that R.A. No. 8042, particularly the subject clause, impaired the employment contract of the parties. Rather, when the parties executed their 1998 employment contract, they were deemed to have incorporated into it all the provisions of R.A. No. 8042.

But even if the Court were to disregard the timeline, the subject clause may not be declared unconstitutional on the ground that it impinges on the impairment clause, for the law was enacted in the exercise of the police power of the State to regulate a business, profession or calling, particularly the recruitment and deployment of OFWs, with the noble end in view of ensuring respect for the dignity and well-being of OFWs wherever they may be employed.61 Police power legislations adopted by the State to promote the health, morals, peace, education, good order, safety, and general welfare of the people are generally applicable not only to future contracts but even to those already in existence, for all private contracts must yield to the superior and legitimate measures taken by the State to promote public welfare.62

Does the subject clause violate Section 1, Article III of the Constitution, and Section 18, Article II and Section 3, Article XIII on labor as a protected sector?

The answer is in the affirmative.

Section 1, Article III of the Constitution guarantees:

No person shall be deprived of life, liberty, or property without due process of law nor shall any person be denied the equal protection of the law.

Section 18,63 Article II and Section 3,64 Article XIII accord all members of the labor sector, without distinction as to place of deployment, full protection of their rights and welfare.

To Filipino workers, the rights guaranteed under the foregoing constitutional provisions translate to economic security and parity: all monetary benefits should be equally enjoyed by workers of similar category, while all monetary obligations should be borne by them in equal degree; none should be denied the protection of the laws which is enjoyed by, or spared the burden imposed on, others in like circumstances.65

Such rights are not absolute but subject to the inherent power of Congress to incorporate, when it sees fit, a system of classification into its legislation; however, to be valid, the classification must comply with these requirements: 1) it is based on substantial distinctions; 2) it is germane to the purposes of the law; 3) it is not limited to existing conditions only; and 4) it applies equally to all members of the class.66

There are three levels of scrutiny at which the Court reviews the constitutionality of a classification embodied in a law: a) the deferential or rational basis scrutiny in which the challenged classification needs only be shown to be rationally related to serving a legitimate state interest;67 b) the middle-tier or intermediate scrutiny in which the government must show that the challenged classification serves an important state interest and that the classification is at least substantially related to serving that interest;68 and c) strict judicial scrutiny69 in which a legislative classification which impermissibly interferes with the exercise of a fundamental right70 or operates to the peculiar disadvantage of a suspect class71 is presumed unconstitutional, and the burden is upon the government to prove that the classification is necessary to achieve a compelling state interest and that it is the least restrictive means to protect such interest.72

Under American jurisprudence, strict judicial scrutiny is triggered by suspect classifications73 based on race74 or gender75 but not when the classification is drawn along income categories.76

It is different in the Philippine setting. In Central Bank (now Bangko Sentral ng Pilipinas) Employee Association, Inc. v. Bangko Sentral ng Pilipinas,77 the constitutionality of a provision in the charter of the Bangko Sentral ng Pilipinas (BSP), a government financial institution (GFI), was challenged for maintaining its rank-and-file employees under the Salary Standardization Law (SSL), even when the rank-and-file employees of other GFIs had been exempted from the SSL by their respective charters. Finding that the disputed provision contained a suspect classification based on salary grade, the Court deliberately employed the standard of strict judicial scrutiny in its review of the constitutionality of said provision. More significantly, it was in this case that the Court revealed the broad outlines of its judicial philosophy, to wit:

Congress retains its wide discretion in providing for a valid classification, and its policies should be accorded recognition and respect by the courts of justice except when they run afoul of the Constitution. The deference stops where the classification violates a fundamental right, or prejudices persons accorded special protection by the Constitution. When these violations arise, this Court must discharge its primary role as the vanguard of constitutional guaranties, and require a stricter and more exacting adherence to constitutional limitations. Rational basis should not suffice.

Admittedly, the view that prejudice to persons accorded special protection by the Constitution requires a stricter judicial scrutiny finds no support in American or English jurisprudence. Nevertheless, these foreign decisions and authorities are not per se controlling in this jurisdiction. At best, they are persuasive and have been used to support many of our decisions. We should not place undue and fawning reliance upon them and regard them as indispensable mental crutches without which we cannot come to our own decisions through the employment of our own endowments. We live in a different ambience and must decide our own problems in the light of our own interests and needs, and of our qualities and even idiosyncrasies as a people, and always with our own concept of law and justice. Our laws must be construed in accordance with the intention of our own lawmakers and such intent may be deduced from the language of each law and the context of other local legislation related thereto. More importantly, they must be construed to serve our own public interest which is the be-all and the end-all of all our laws. And it need not be stressed that our public interest is distinct and different from others.

x x x

Further, the quest for a better and more "equal" world calls for the use of equal protection as a tool of effective judicial intervention.

Equality is one ideal which cries out for bold attention and action in the Constitution. The Preamble proclaims "equality" as an ideal precisely in protest against crushing inequities in Philippine society. The command to promote social justice in Article II, Section 10, in "all phases of national development," further explicitated in Article XIII, are clear commands to the State to take affirmative action in the direction of greater equality. x x x [T]here is thus in the Philippine Constitution no lack of doctrinal support for a more vigorous state effort towards achieving a reasonable measure of equality.

Our present Constitution has gone further in guaranteeing vital social and economic rights to marginalized groups of society, including labor. Under the policy of social justice, the law bends over backward to accommodate the interests of the working class on the humane justification that those with less privilege in life should have more in law. And the obligation to afford protection to labor is incumbent not only on the legislative and executive branches but also on the judiciary to translate this pledge into a living reality. Social justice calls for the humanization of laws and the equalization of social and economic forces by the State so that justice in its rational and objectively secular conception may at least be approximated.

x x x

Under most circumstances, the Court will exercise judicial restraint in deciding questions of constitutionality, recognizing the broad discretion given to Congress in exercising its legislative power. Judicial scrutiny would be based on the "rational basis" test, and the legislative discretion would be given deferential treatment.

But if the challenge to the statute is premised on the denial of a fundamental right, or the perpetuation of prejudice against persons favored by the Constitution with special protection, judicial scrutiny ought to be more strict. A weak and watered down view would call for the abdication of this Court's solemn duty to strike down any law repugnant to the Constitution and the rights it enshrines. This is true whether the actor committing the unconstitutional act is a private person or the government itself or one of its instrumentalities. Oppressive acts will be struck down regardless of the character or nature of the actor.

x x x

In the case at bar, the challenged proviso operates on the basis of the salary grade or officer-employee status. It is akin to a distinction based on economic class and status, with the higher grades as recipients of a benefit specifically withheld from the lower grades. Officers of the BSP now receive higher compensation packages that are competitive with the industry, while the poorer, low-salaried employees are limited to the rates prescribed by the SSL. The implications are quite disturbing: BSP rank-and-file employees are paid the strictly regimented rates of the SSL while employees higher in rank - possessing higher and better education and opportunities for career advancement - are given higher compensation packages to entice them to stay. Considering that majority, if not all, the rank-and-file employees consist of people whose status and rank in life are less and limited, especially in terms of job marketability, it is they - and not the officers - who have the real economic and financial need for the adjustment . This is in accord with the policy of the Constitution "to free the people from poverty, provide adequate social services, extend to them a decent standard of living, and improve the quality of life for all." Any act of Congress that runs counter to this constitutional desideratum deserves strict scrutiny by this Court before it can pass muster. (Emphasis supplied)cralawlibrary

Imbued with the same sense of "obligation to afford protection to labor," the Court in the present case also employs the standard of strict judicial scrutiny, for it perceives in the subject clause a suspect classification prejudicial to OFWs.

Upon cursory reading, the subject clause appears facially neutral, for it applies to all OFWs. However, a closer examination reveals that the subject clause has a discriminatory intent against, and an invidious impact on, OFWs at two levels:

First, OFWs with employment contracts of less than one year vis - Ã -vis OFWs with employment contracts of one year or more;

Second, among OFWs with employment contracts of more than one year; and

Third, OFWs vis - Ã -vis local workers with fixed-period employment;

OFWs with employment contracts of less than one year vis - Ã -vis OFWs with employment contracts of one year or more

As pointed out by petitioner,78 it was in Marsaman Manning Agency, Inc. v. National Labor Relations Commission79 (Second Division, 1999) that the Court laid down the following rules on the application of the periods prescribed under Section 10(5) of R.A. No. 804, to wit:

A plain reading of Sec. 10 clearly reveals that the choice of which amount to award an illegally dismissed overseas contract worker, i.e., whether his salaries for the unexpired portion of his employment contract or three (3) months' salary for every year of the unexpired term, whichever is less, comes into play only when the employment contract concerned has a term of at least one (1) year or more. This is evident from the words "for every year of the unexpired term" which follows the words "salaries x x x for three months."

To follow petitioners' thinking that private respondent is entitled to three (3) months salary only simply because it is the lesser amount is to completely disregard and overlook some words used in the statute while giving effect to some. This is contrary to the well-established rule in legal hermeneutics that in interpreting a statute, care should be taken that every part or word thereof be given effect since the law-making body is presumed to know the meaning of the words employed in the statue and to have used them advisedly. Ut res magis valeat quam pereat.80 (Emphasis supplied)cralawlibrary

In Marsaman, the OFW involved was illegally dismissed two months into his 10-month contract, but was awarded his salaries for the remaining 8 months and 6 days of his contract.

Prior to Marsaman, however, there were two cases in which the Court made conflicting rulings on Section 10(5). One was Asian Center for Career and Employment System and Services v. National Labor Relations Commission(Second Division, October 1998),81 which involved an OFW who was awarded a two-year employment contract,but was dismissed after working for one year and two months. The LA declared his dismissal illegal and awarded him SR13,600.00 as lump-sum salary covering eight months, the unexpired portion of his contract. On appeal, the Court reduced the award to SR3,600.00 equivalent to his three months' salary, this being the lesser value, to wit:

Under Section 10 of R.A. No. 8042, a worker dismissed from overseas employment without just, valid or authorized cause is entitled to his salary for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less.

In the case at bar, the unexpired portion of private respondent's employment contract is eight (8) months. Private respondent should therefore be paid his basic salary corresponding to three (3) months or a total of SR3,600.82

Another was Triple-Eight Integrated Services, Inc. v. National Labor Relations Commission (Third Division, December 1998),83 which involved an OFW (therein respondent Erlinda Osdana) who was originally granted a 12-month contract, which was deemed renewed for another 12 months. After serving for one year and seven-and-a-half months, respondent Osdana was illegally dismissed, and the Court awarded her salaries for the entire unexpired portion of four and one-half months of her contract.

The Marsaman interpretation of Section 10(5) has since been adopted in the following cases:

Case Title Contract Period Period of Service Unexpired Period Period Applied in the Computation of the

Monetary Award

Skippers v. Maguad84 6 months 2 months 4 months 4 months

Bahia Shipping v. Reynaldo Chua85

9 months 8 months 4 months 4 months

Centennial Transmarine v. dela

Cruz l86

9 months 4 months 5 months 5 months

Talidano v. Falcon87 12 months 3 months 9 months 3 months

Univan v. CA 88 12 months 3 months 9 months 3 months

Oriental v. CA 89 12 months more than 2 months

10 months 3 months

PCL v. NLRC90 12 months more than 2 months

more or less 9 months 3 months

Olarte v. Nayona91 12 months 21 days 11 months and 9 days 3 months

JSS v. .Ferrer92 12 months 16 days 11 months and 24 days 3 months

Pentagon v. Adelantar93

12 months 9 months and 7 days

2 months and 23 days 2 months and 23 days

Phil. Employ v. Paramio, et al.94

12 months 10 months 2 months Unexpired portion

Flourish Maritime v. Almanzor 95

2 years 26 days 23 months and 4 days 6 months or 3 months for each year of contract

Athenna Manpower v. Villanos 96

1 year, 10 months and 28

days

1 month 1 year, 9 months and 28 days

6 months or 3 months for each year of contract

As the foregoing matrix readily shows, the subject clause classifies OFWs into two categories. The first category includes OFWs with fixed-period employment contracts of less than one year; in case of illegal dismissal, they are entitled to their salaries for the entire unexpired portion of their contract. The second category consists of OFWs with fixed-period employment contracts of one year or more; in case of illegal dismissal, they are entitled to monetary award equivalent to only 3 months of the unexpired portion of their contracts.

The disparity in the treatment of these two groups cannot be discounted. In Skippers, the respondent OFW worked for only 2 months out of his 6-month contract, but was awarded his salaries for the remaining 4 months. In contrast, the respondent OFWs in Oriental and PCL who had also worked for about 2 months out of their 12-month contracts were awarded their salaries for only 3 months of the unexpired portion of their contracts. Even the OFWs involved in Talidano and Univan who had worked for a longer period of 3 months out of their 12-month contracts before being illegally dismissed were awarded their salaries for only 3 months.

To illustrate the disparity even more vividly, the Court assumes a hypothetical OFW-A with an employment contract of 10 months at a monthly salary rate of US$1,000.00 and a hypothetical OFW-B with an employment contract of 15 months with the same monthly salary rate of US$1,000.00. Both commenced work on the same day and under the same employer, and were illegally dismissed after one month of work. Under the subject clause, OFW-A will be entitled to US$9,000.00, equivalent to his salaries for the remaining 9 months of his contract, whereas OFW-B will be entitled to only US$3,000.00, equivalent to his salaries for 3 months of the unexpired portion of his contract, instead of US$14,000.00 for the unexpired portion of 14 months of his contract, as the US$3,000.00 is the lesser amount.

The disparity becomes more aggravating when the Court takes into account jurisprudence that, prior to the effectivity of R.A. No. 8042 on July 14, 1995,97 illegally dismissed OFWs, no matter how long the period of their employment contracts, were entitled to their salaries for the entire unexpired portions of their contracts. The matrix below speaks for itself:

Case Title Contract Period Period of Service Unexpired Period Period Applied in the Computation of the Monetary

Award

ATCI v. CA, et al.98 2 years 2 months 22 months 22 months

Phil. Integrated v. NLRC99

2 years 7 days 23 months and 23 days

23 months and 23 days

JGB v. NLC100 2 years 9 months 15 months 15 months

Agoy v. NLRC101 2 years 2 months 22 months 22 months

EDI v. NLRC, et al.102 2 years 5 months 19 months 19 months

Barros v. NLRC, et al.103

12 months 4 months 8 months 8 months

Philippine 12 months 6 months and 22 5 months and 18 5 months and 18 days

Transmarine v. Carilla104

days days

It is plain that prior to R.A. No. 8042, all OFWs, regardless of contract periods or the unexpired portions thereof, were treated alike in terms of the computation of their monetary benefits in case of illegal dismissal. Their claims were subjected to a uniform rule of computation: their basic salaries multiplied by the entire unexpired portion of their employment contracts.

The enactment of the subject clause in R.A. No. 8042 introduced a differentiated rule of computation of the money claims of illegally dismissed OFWs based on their employment periods, in the process singling out one category whose contracts have an unexpired portion of one year or more and subjecting them to the peculiar disadvantage of having their monetary awards limited to their salaries for 3 months or for the unexpired portion thereof, whichever is less, but all the while sparing the other category from such prejudice, simply because the latter's unexpired contracts fall short of one year.

Among OFWs With Employment Contracts of More Than One Year

Upon closer examination of the terminology employed in the subject clause, the Court now has misgivings on the accuracy of the Marsaman interpretation.

The Court notes that the subject clause "or for three (3) months for every year of the unexpired term, whichever is less" contains the qualifying phrases "every year" and "unexpired term." By its ordinary meaning, the word "term" means a limited or definite extent of time.105 Corollarily, that "every year" is but part of an "unexpired term" is significant in many ways: first, the unexpired term must be at least one year, for if it were any shorter, there would be no occasion for such unexpired term to be measured by every year; and second, the original term must be more than one year, for otherwise, whatever would be the unexpired term thereof will not reach even a year. Consequently, the more decisive factor in the determination of when the subject clause "for three (3) months for every year of the unexpired term, whichever is less" shall apply is not the length of the original contract period as held in Marsaman,106 but the length of the unexpired portion of the contract period - - the subject clause applies in cases when the unexpired portion of the contract period is at least one year, which arithmetically requires that the original contract period be more than one year.

Viewed in that light, 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 subject clause, and their monetary benefits limited to their salaries for three months only.

To concretely illustrate the application of the foregoing interpretation of the subject clause, the Court assumes hypothetical OFW-C and OFW-D, who each have a 24-month contract at a salary rate of US$1,000.00 per month. OFW-C is illegally dismissed on the 12th month, and OFW-D, on the 13th month. Considering that there is at least 12 months remaining in the contract period of OFW-C, the subject clause applies to the computation of the latter's monetary benefits. Thus, OFW-C will be entitled, not to US$12,000,00 or the latter's total salaries for the 12 months unexpired portion of the contract, but to the lesser amount of US$3,000.00 or the latter's salaries for 3 months out of the 12-month unexpired term of the contract. On the other hand, OFW-D is spared from the effects of the subject clause, for there are only 11 months left in the latter's contract period. Thus, OFW-D will be entitled to US$11,000.00, which is equivalent to his/her total salaries for the entire 11-month unexpired portion.

OFWs vis - Ã -vis Local Workers With Fixed-Period Employment

As discussed earlier, prior to R.A. No. 8042, a uniform system of computation of the monetary awards of illegally dismissed OFWs was in place. This uniform system was applicable even to local workers with fixed-term employment.107

The earliest rule prescribing a uniform system of computation was actually Article 299 of the Code of Commerce (1888),108 to wit:

Article 299. If the contracts between the merchants and their shop clerks and employees should have been made of a fixed period, none of the contracting parties, without the consent of the other, may withdraw from the fulfillment of said contract until the termination of the period agreed upon.

Persons violating this clause shall be subject to indemnify the loss and damage suffered, with the exception of the provisions contained in the following articles.

In Reyes v. The Compañia Maritima,109 the Court applied the foregoing provision to determine the liability of a shipping company for the illegal discharge of its managers prior to the expiration of their fixed-term employment. The Court therein held the shipping company liable for the salaries of its managers for theremainder of their fixed-term employment.

There is a more specific rule as far as seafarers are concerned: Article 605 of the Code of Commerce which provides:

Article 605. If the contracts of the captain and members of the crew with the agent should be for a definite period or voyage, they cannot be discharged until the fulfillment of their contracts, except for reasons of insubordination in serious matters, robbery, theft, habitual drunkenness, and damage caused to the vessel or to its cargo by malice or manifest or proven negligence.

Article 605 was applied to Madrigal Shipping Company, Inc. v. Ogilvie,110 in

which the Court held the shipping company liable for the salaries and subsistence allowance of its illegally dismissed employees for the entire unexpired portion of their employment contracts.

While Article 605 has remained good law up to the present,111 Article 299 of the Code of Commerce was replaced by Art. 1586 of the Civil Code of 1889, to wit:

Article 1586. Field hands, mechanics, artisans, and other laborers hired for a certain time and for a certain work cannot leave or be dismissed without sufficient cause, before the fulfillment of the contract. (Emphasis supplied.)

Citing Manresa, the Court in Lemoine v. Alkan112 read the disjunctive "or" in Article 1586 as a conjunctive "and" so as to apply the provision to local workers who are employed for a time certain although for no particular skill. This interpretation of Article 1586 was reiterated in Garcia Palomar v. Hotel de France Company.113 And in both Lemoine and Palomar, the Court adopted the general principle that in actions for wrongful discharge founded on Article 1586, local workers are entitled to recover damages to the extent of the amount stipulated to be paid to them by the terms of their contract. On the computation of the amount of such damages, the Court in Aldaz v. Gay114 held:

The doctrine is well-established in American jurisprudence, and nothing has been brought to our attention to the contrary under Spanish jurisprudence, that when an employee is wrongfully discharged it is his duty to seek other employment of the same kind in the same community, for the purpose of reducing the damages resulting from such wrongful discharge. However, while this is the general rule, the burden of showing that he failed to make an effort to secure other employment of a like nature, and that other employment of a like nature was obtainable, is upon the defendant. When an employee is wrongfully discharged under a contract of employment his prima facie damage is the amount which he would be entitled to had he continued in such employment until the termination of the period. (Howard v. Daly, 61 N. Y., 362; Allen v. Whitlark, 99 Mich., 492; Farrell v. School District No. 2, 98 Mich., 43.)115 (Emphasis supplied)cralawlibrary

On August 30, 1950, the New Civil Code took effect with new provisions on fixed-term employment: Section 2 (Obligations with a Period), Chapter 3, Title I, and Sections 2 (Contract of Labor) and 3 (Contract for a Piece of Work), Chapter 3, Title VIII, Book IV.116 Much like Article 1586 of the Civil Code of 1889, the new provisions of the Civil Code do not expressly provide for the remedies available to a fixed-term worker who is illegally discharged. However, it is noted that in Mackay Radio & Telegraph Co., Inc. v. Rich,117 the Court carried over the principles on the payment of damages underlying Article 1586 of the Civil Code of 1889 and applied the same to a case involving the illegal discharge of a local worker whose fixed-period employment contract was entered into in 1952, when the new Civil Code was already in effect.118

More significantly, the same principles were applied to cases involving overseas Filipino workers whose fixed-term employment contracts were illegally terminated, such as in First Asian Trans & Shipping Agency, Inc. v.

Ople,119 involving seafarers who were illegally discharged. In Teknika Skills and Trade Services, Inc. v. National Labor Relations Commission,120 an OFW who was illegally dismissed prior to the expiration of her fixed-period employment contract as a baby sitter, was awarded salaries corresponding to the unexpired portion of her contract. The Court arrived at the same ruling in Anderson v. National Labor Relations Commission,121 which involved a foreman hired in 1988 in Saudi Arabia for a fixed term of two years, but who was illegally dismissed after only nine months on the job - - the Court awarded him salaries corresponding to 15 months, the unexpired portion of his contract. In Asia World Recruitment, Inc. v. National Labor Relations Commission,122 a Filipino working as a security officer in 1989 in Angola was awarded his salaries for the remaining period of his 12-month contract after he was wrongfully discharged. Finally, in Vinta Maritime Co., Inc. v. National Labor Relations Commission,123 an OFW whose 12-month contract was illegally cut short in the second month was declared entitled to his salaries for the remaining 10 months of his contract.

In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-term employment who were illegally discharged were treated alike in terms of the computation of their money claims: they were uniformly entitled to their salaries for the entire unexpired portions of their contracts. But with the enactment of R.A. No. 8042, specifically the adoption of the subject clause, illegally dismissed OFWs with an unexpired portion of one year or more in their employment contract have since been differently treated in that their money claims are subject to a 3-month cap, whereas no such limitation is imposed on local workers with fixed-term employment.

The Court concludes that the subject clause contains a suspect classification in that, in the computation of the monetary benefits of fixed-term employees who are illegally discharged, it imposes a 3-month cap on the claim of OFWs with an unexpired portion of one year or more in their contracts, but none on the claims of other OFWs or local workers with fixed-term employment. The subject clause singles out one classification of OFWs and burdens it with a peculiar disadvantage.

There being a suspect classification involving a vulnerable sector protected by the Constitution, the Court now subjects the classification to a strict judicial scrutiny, and determines whether it serves a compelling state interest through the least restrictive means.

What constitutes compelling state interest is measured by the scale of rights and powers arrayed in the Constitution and calibrated by history.124 It is akin to the paramount interest of the state125 for which some individual liberties must give way, such as the public interest in safeguarding health or maintaining medical standards,126 or in maintaining access to information on matters of public concern.127

In the present case, the Court dug deep into the records but found no compelling state interest that the subject clause may possibly serve.

The OSG defends the subject clause as a police power measure "designed to protect the employment of Filipino seafarers overseas x x x. By limiting the liability to three months [sic], Filipino seafarers have better chance of getting hired by foreign employers." The limitation also protects the interest of local placement agencies, which otherwise may be made to shoulder millions of pesos in "termination pay."128

The OSG explained further:

Often, placement agencies, their liability being solidary, shoulder the payment of money claims in the event that jurisdiction over the foreign employer is not acquired by the court or if the foreign employer reneges on its obligation. Hence, placement agencies that are in good faith and which fulfill their obligations are unnecessarily penalized for the acts of the foreign employer. To protect them and to promote their continued helpful contribution in deploying Filipino migrant workers, liability for money are reduced under Section 10 of RA 8042.

This measure redounds to the benefit of the migrant workers whose welfare the government seeks to promote. The survival of legitimate placement agencies helps [assure] the government that migrant workers are properly deployed and are employed under decent and humane conditions.129 (Emphasis supplied)cralawlibrary

However, nowhere in the Comment or Memorandum does the OSG cite the source of its perception of the state interest sought to be served by the subject clause.

The OSG locates the purpose of R.A. No. 8042 in the speech of Rep. Bonifacio Gallego in sponsorship of House Bill No. 14314 (HB 14314), from which the law originated;130 but the speech makes no reference to the underlying

reason for the adoption of the subject clause. That is only natural for none of the 29 provisions in HB 14314 resembles the subject clause.

On the other hand, Senate Bill No. 2077 (SB 2077) contains a provision on money claims, to wit:

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 the complaint, the claim arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas employment including claims for actual, moral, exemplary and other forms of damages.

The liability of the principal and the recruitment/placement agency or any and all claims under this Section shall be joint and several.

Any compromise/amicable settlement or voluntary agreement on any money claims exclusive of damages under this Section shall not be less than fifty percent (50%) of such money claims: Provided, That any installment payments, if applicable, to satisfy any such compromise or voluntary settlement shall not be more than two (2) months. Any compromise/voluntary agreement in violation of this paragraph shall be null and void.

Non-compliance with the mandatory period for resolutions of cases provided under this Section shall subject the responsible officials to any or all of the following penalties:

(1) 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;

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

(3) 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 incurred under other existing laws or rules and regulations as a consequence of violating the provisions of this paragraph.

But significantly, Section 10 of SB 2077 does not provide for any rule on the computation of money claims.

A rule on the computation of money claims containing the subject clause was inserted and eventually adopted as the 5th paragraph of Section 10 of R.A. No. 8042. The Court examined the rationale of the subject clause in the transcripts of the "Bicameral Conference Committee (Conference Committee) Meetings on the Magna Carta on OCWs (Disagreeing Provisions of Senate Bill No. 2077 and House Bill No. 14314)." However, the Court finds no discernible state interest, let alone a compelling one, that is sought to be protected or advanced by the adoption of the subject clause.

In fine, the Government has failed to discharge its burden of proving the existence of a compelling state interest that would justify the perpetuation of the discrimination against OFWs under the subject clause.

Assuming that, as advanced by the OSG, the purpose of the subject clause is to protect the employment of OFWs by mitigating the solidary liability of placement agencies, such callous and cavalier rationale will have to be rejected. There 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 such as placement agencies, while the disadvantaged sector is composed of OFWs whose protection no less than the Constitution commands. The idea that private business interest can be elevated to the level of a compelling state interest is odious.

Moreover, even if the purpose of the subject clause is to lessen the solidary liability of placement agencies vis-a-vis their foreign principals, there are mechanisms already in place that can be employed to achieve that purpose without infringing on the constitutional rights of OFWs.

The POEA Rules and Regulations Governing the Recruitment and Employment of Land-Based Overseas Workers, dated February 4, 2002, imposes administrative disciplinary measures on erring foreign employers who default on their contractual obligations to migrant workers and/or their Philippine agents. These disciplinary measures range from temporary disqualification to preventive suspension. The POEA Rules and Regulations Governing the Recruitment and Employment of Seafarers, dated May 23, 2003, contains similar administrative disciplinary measures against erring foreign employers.

Resort to these administrative measures is undoubtedly the less restrictive means of aiding local placement agencies in enforcing the solidary liability of their foreign principals.

Thus, the subject clause in the 5th paragraph of Section 10 of R.A. No. 8042 is violative of the right of petitioner and other OFWs to equal protection.ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

Further, there would be certain misgivings if one is to approach the declaration of the unconstitutionality of the subject clause from the lone perspective that the clause directly violates state policy on labor under Section 3,131 Article XIII of the Constitution.

While all the provisions of the 1987 Constitution are presumed self-executing,132 there are some which this Court has declared not judicially enforceable, Article XIII being one,133 particularly Section 3 thereof, the nature of which, this Court, in Agabon v. National Labor Relations Commission,134 has described to be not self-actuating:

Thus, the constitutional mandates of protection to labor and security of tenure may be deemed as self-executing in the sense that these are automatically acknowledged and observed without need for any enabling legislation. However, to declare that the constitutional provisions are enough to guarantee the full exercise of the rights embodied therein, and the realization of ideals therein expressed, would be impractical, if not unrealistic. The espousal of such view presents the dangerous tendency of being overbroad and exaggerated. The guarantees of "full protection to labor" and "security of tenure", when examined in isolation, are facially unqualified, and the broadest interpretation possible suggests a blanket shield in favor of labor against any form of removal regardless of circumstance. This interpretation implies an unimpeachable right to continued employment-a utopian notion, doubtless-but still hardly within the contemplation of the framers. Subsequent legislation is still needed to define the parameters of these guaranteed rights to ensure the protection and promotion, not only the rights of the labor sector, but of the employers' as well. Without specific and pertinent legislation, judicial bodies will be at a loss, formulating their own conclusion to approximate at least the aims of the Constitution.

Ultimately, therefore, Section 3 of Article XIII cannot, on its own, be a source of a positive enforceable right to stave off the dismissal of an employee for just cause owing to the failure to serve proper notice or hearing. As manifested by several framers of the 1987 Constitution, the provisions on social justice require legislative enactments for their enforceability.135 (Emphasis added)

Thus, Section 3, Article XIII cannot be treated as a principal source of direct enforceable rights, for the violation of which the questioned clause may be declared unconstitutional. It may unwittingly risk opening the floodgates of litigation to every worker or union over every conceivable violation of so broad a concept as social justice for labor.

It must be stressed that Section 3, Article XIII does not directly bestow on the working class any actual enforceable right, but merely clothes it with the status of a sector for whom the Constitution urges protection through executive or legislative action and judicial recognition. Its utility is best limited to being an impetus not just for the executive and legislative departments, but for the judiciary as well, to protect the welfare of the working class.And it was in fact consistent with that constitutional agenda that the Court in Central Bank (now Bangko Sentral ng Pilipinas) Employee Association, Inc. v. Bangko Sentral ng Pilipinas, penned by then Associate Justice now Chief Justice Reynato S. Puno, formulated the judicial precept that when the challenge to a statute is premised on the perpetuation of prejudice against persons favored by the Constitution with special protection - - such as the working class or a section thereof - - the Court may recognize the existence of a suspect classification and subject the same to strict judicial scrutiny.

The view that the concepts of suspect classification and strict judicial scrutiny formulated in Central Bank Employee Association exaggerate the significance of Section 3, Article XIII is a groundless apprehension. Central Bank applied Article XIII in conjunction with the equal protection clause. Article XIII, by itself, without the application of the equal protection clause, has no life or force of its own as elucidated in Agabon.

Along the same line of reasoning, the Court further holds that the subject clause violates petitioner's right to substantive due process, for it deprives him of property, consisting of monetary benefits, without any existing valid governmental purpose.136

The argument of the Solicitor General, that the actual purpose of the subject clause of limiting the entitlement of OFWs to their three-month salary in case of illegal dismissal, is to give them a better chance of getting hired by foreign employers. This is plain speculation. As earlier discussed, there is nothing in the text of the law or the records of the deliberations leading to its enactment or the pleadings of respondent that would indicate that there is an existing governmental purpose for the subject clause, or even just a pretext of one.

The subject clause does not state or imply any definitive governmental purpose; and it is for that precise reason that the clause violates not just petitioner's right to equal protection, but also her right to substantive due process under Section 1,137 Article III of the Constitution.

The subject clause being unconstitutional, petitioner is entitled to his salaries for the entire unexpired period of nine months and 23 days of his employment contract, pursuant to law and jurisprudence prior to the enactment of R.A. No. 8042.

On the Third Issue

Petitioner contends that his overtime and leave pay should form part of the salary basis in the computation of his monetary award, because these are fixed benefits that have been stipulated into his contract.

Petitioner is mistaken.

The word salaries in Section 10(5) does not include overtime and leave pay. For seafarers like petitioner, DOLE Department Order No. 33, series 1996, provides a Standard Employment Contract of Seafarers, in which salary is understood as the basic wage, exclusive of overtime, leave pay and other bonuses; whereas overtime pay is compensation for all work "performed" in excess of the regular eight hours, and holiday pay is compensation for any work "performed" on designated rest days and holidays.

By the foregoing definition alone, there is no basis for the automatic inclusion of overtime and holiday pay in the computation of petitioner's monetary award, unless there is evidence that he performed work during those periods. As the Court held in Centennial Transmarine, Inc. v. Dela Cruz,138

However, the payment of overtime pay and leave pay should be disallowed in light of our ruling in Cagampan v. National Labor Relations Commission, to wit:

The rendition of overtime work and the submission of sufficient proof that said was actually performed are conditions to be satisfied before a seaman could be entitled to overtime pay which should be computed on the basis of 30% of the basic monthly salary. In short, the contract provision guarantees the right to overtime pay but the entitlement to such benefit must first be established.

In the same vein, the claim for the day's leave pay for the unexpired portion of the contract is unwarranted since the same is given during the actual service of the seamen.

WHEREFORE, the Court GRANTS the Petition. The subject clause "or for three months for every year of the unexpired term, whichever is less" in the 5th paragraph of Section 10 of Republic Act No. 8042 is DECLAREDUNCONSTITUTIONAL; and the December 8, 2004 Decision and April 1, 2005 Resolution of the Court of Appeals are MODIFIED to the effect that petitioner is AWARDED his salaries for the entire unexpired portion of his employment contract consisting of nine months and 23 days computed at the rate of US$1,400.00 per month.

No costs.

SO ORDERED.

THIRD DIVISION

[G.R. NO. 169076 : January 23, 2007]

PEOPLE OF THE PHILIPPINES, Appellee, v. JOSEPH JAMILOSA, Appellant.

D E C I S I O N

CALLEJO, SR., J.:

This is an appeal from the Decision1 of the Regional Trial Court (RTC) of Quezon City in Criminal Case No. Q-97-72769 convicting appellant Joseph Jamilosa of large scale illegal recruitment under Sections 6 and 7 of Republic Act (R.A.) No. 8042, and sentencing him to life imprisonment and to pay a P500,000.00 fine.

The Information charging appellant with large scale illegal recruitment was filed by the Senior State Prosecutor on August 29, 1997. The inculpatory portion of the Information reads:

That sometime in the months of January to February, 1996, or thereabout in the City of Quezon, Metro Manila, Philippines, and within the jurisdiction of this Honorable Court, representing to have the capacity, authority or license to contract, enlist and deploy or transport workers for overseas employment, did then and there, willfully, unlawfully and criminally recruit, contract and promise to deploy, for a fee the herein complainants, namely, Haide R. Ruallo, Imelda D. Bamba, Geraldine M. Lagman and Alma E. Singh, for work or employment in Los Angeles, California, U.S.A. in Nursing Home and Care Center without first obtaining the required license and/or authority from the Philippine Overseas Employment Administration (POEA).

Contrary to law.2

On arraignment, the appellant, assisted by counsel, pleaded not guilty to the charge.

The case for the prosecution, as synthesized by the Court of Appeals (CA), is as follows:

The prosecution presented three (3) witnesses, namely: private complainants Imelda D. Bamba, Geraldine M. Lagman and Alma E. Singh.

Witness Imelda D. Bamba testified that on January 17, 1996, she met the appellant in Cubao, Quezon City on board an aircon bus. She was on her way to Shoemart (SM), North EDSA, Quezon City where she was working as a company nurse. The appellant was seated beside her and introduced himself as a recruiter of workers for employment abroad. The appellant told her that his sister is a head nurse in a nursing home in Los Angeles, California, USA and he could help her get employed as a nurse at a monthly salary of Two Thousand US Dollars ($2,000.00) and that she could leave in two (2) weeks time. He further averred that he has connections with the US Embassy, being a US Federal Bureau of Investigation (FBI) agent on official mission in the Philippines for one month. According to the appellant, she has to pay the amount of US$300.00 intended for the US consul. The appellant gave his pager number and instructed her to contact him if she is interested to apply for a nursing job abroad.

On January 21, 1996, the appellant fetched her at her office. They then went to her house where she gave him the photocopies of her transcript of records, diploma, Professional Regulatory Commission (PRC) license and other credentials. On January 28 or 29, 1996, she handed to the appellant the amount of US$300.00 at the McDonalds outlet in North EDSA, Quezon City, and the latter showed to her a photocopy of her supposed US visa. The appellant likewise got several pieces of jewelry which she was then selling and assured her that he would sell the same at the US embassy. However, the appellant did not issue a receipt for the said money and

jewelry. Thereafter, the appellant told her to resign from her work at SM because she was booked with Northwest Airlines and to leave for Los Angeles, California, USA on February 25, 1996.

The appellant promised to see her and some of his other recruits before their scheduled departure to hand to them their visas and passports; however, the appellant who was supposed to be with them in the flight failed to show up. Instead, the appellant called and informed her that he failed to give the passport and US visa because he had to go to the province because his wife died. She and her companions were not able to leave for the United States. They went to the supposed residence of the appellant to verify, but nobody knew him or his whereabouts. They tried to contact him at the hotel where he temporarily resided, but to no avail. They also inquired from the US embassy and found out that there was no such person connected with the said office. Thus, she decided to file a complaint with the National Bureau of Investigation (NBI).

Prosecution witness Geraldine Lagman, for her part, testified that she is a registered nurse by profession. In the morning of January 22, 1996, she went to SM North EDSA, Quezon City to visit her cousin Imelda Bamba. At that time, Bamba informed her that she was going to meet the appellant who is an FBI agent and was willing to help nurses find a job abroad. Bamba invited Lagman to go with her. On the same date at about 2:00 o'clock in the afternoon, she and Bamba met the appellant at the SM Fast-Food Center, Basement, North EDSA, Quezon City. The appellant convinced them of his ability to send them abroad and told them that he has a sister in the United States. Lagman told the appellant that she had no working experience in any hospital but the appellant assured her that it is not necessary to have one. The appellant asked for US$300.00 as payment to secure an American visa and an additional amount of Three Thousand Four Hundred Pesos (P3,400.00) as processing fee for other documents.

On January 24, 1996, she and the appellant met again at SM North EDSA, Quezon City wherein she handed to the latter her passport and transcript of records. The appellant promised to file the said documents with the US embassy. After one (1) week, they met again at the same place and the appellant showed to her a photocopy of her US visa. This prompted her to give the amount of US$300.00 and two (2) bottles of Black Label to the appellant. She gave the said money and liquor to the appellant without any receipt out of trust and after the appellant promised her that he would issue the necessary receipt later. The appellant even went to her house, met her mother and uncle and showed to them a computer printout from Northwest Airlines showing that she was booked to leave for Los Angeles, California, USA on February 25, 1996.

Four days after their last meeting, Extelcom, a telephone company, called her because her number was appearing in the appellant's cellphone documents. The caller asked if she knew him because they were trying to locate him, as he was a swindler who failed to pay his telephone bills in the amount of P100,000.00. She became suspicious and told Bamba about the matter. One (1) week before her scheduled flight on February 25, 1996, they called up the appellant but he said he could not meet them because his mother passed away. The appellant never showed up, prompting her to file a complaint with the NBI for illegal recruitment.

Lastly, witness Alma Singh who is also a registered nurse, declared that she first met the appellant on February 13, 1996 at SM North EDSA, Quezon City when Imelda Bamba introduced the latter to her. The appellant told her that he is an undercover agent of the FBI and he could fix her US visa as he has a contact in the US embassy. The appellant told her that he could help her and her companions Haidee Raullo, Geraldine Lagman and Imelda Bamba find jobs in the US as staff nurses in home care centers.

On February 14, 1996 at about 6:30 in the evening, the appellant got her passport and picture. The following day or on February 15, 1996, she gave the appellant the amount of US$300.00 and a bottle of cognac as "grease money" to facilitate the processing of her visa. When she asked for a receipt, the appellant assured her that there is no need for one because she was being directly hired as a nurse in the United States.

She again met the appellant on February 19, 1996 at the Farmers Plaza and this time, the appellant required her to submit photocopies of her college diploma, nursing board certificate and PRC license. To show his sincerity, the appellant insisted on meeting her father. They then proceeded to the office of her father in Barrio Ugong, Pasig City and she introduced the appellant. Thereafter, the appellant asked permission from her father to allow her to go with him to the Northwest Airlines office in Ermita, Manila to reserve airline tickets. The appellant was able to get a ticket confirmation and told her that they will meet again the following day for her to give P10,000.00 covering the half price of her plane ticket. Singh did not meet the appellant as agreed upon. Instead, she went to Bamba to inquire if the latter gave the appellant the same amount and found out that Bamba has not yet given the said amount. They then paged the appellant through his beeper and told him that they wanted to see him. However, the appellant avoided them and reasoned out that he could not meet them as he had many things to do. When the appellant did not show up, they decided to file a complaint for illegal recruitment with the NBI.

The prosecution likewise presented the following documentary evidence:

Exh. "A" - Certification dated February 23, 1998 issued by Hermogenes C. Mateo, Director II, Licensing Branch, POEA.

Exh. "B" - Affidavit of Alma E. Singh dated February 23, 1996.3

On the other hand, the case for the appellant, as culled from his Brief, is as follows:

Accused JOSEPH JAMILOSA testified on direct examination that he got acquainted with Imelda Bamba inside an aircon bus bound for Caloocan City when the latter borrowed his cellular phone to call her office at Shoe Mart (SM), North Edsa, Quezon City. He never told Bamba that he could get her a job in Los Angeles, California, USA, the truth being that she wanted to leave SM as company nurse because she was having a problem thereat. Bamba called him up several times, seeking advice from him if Los Angeles, California is a good place to work as a nurse. He started courting Bamba and they went out dating until the latter became his girlfriend. He met Geraldine Lagman and Alma Singh at the Shoe Mart (SM), North Edsa, Quezon City thru Imelda Bamba. As complainants were all seeking advice on how they could apply for jobs abroad, lest he be charged as a recruiter, he made Imelda Bamba, Geraldine Lagman and Alma Singh sign separate certifications on January 17, 1996 (Exh. "2"), January 22, 1996 (Exh. "4"), and February 19, 1996 (Exh. "3"), respectively, all to the effect that he never recruited them and no money was involved. Bamba filed an Illegal Recruitment case against him because they quarreled and separated. He came to know for the first time that charges were filed against him in September 1996 when a preliminary investigation was conducted by Fiscal Dañosos of the Department of Justice. (TSN, October 13, 1999, pp. 3-9 and TSN, December 8, 1999, pp. 2-9)4

On November 10, 2000, the RTC rendered judgment finding the accused guilty beyond reasonable doubt of the crime charged.5 The fallo of the decision reads:

WHEREFORE, judgment is hereby rendered finding accused guilty beyond reasonable doubt of Illegal Recruitment in large scale; accordingly, he is sentenced to suffer the penalty of life imprisonment and to pay a fine of Five Hundred Thousand Pesos (P500,000.00), plus costs.

Accused is ordered to indemnify each of the complainants, Imelda Bamba, Geraldine Lagman and Alma Singh the amount of Three Hundred US Dollars ($300.00).

SO ORDERED.6

In rejecting the defenses of the appellant, the trial court declared:

To counter the version of the prosecution, accused claims that he did not recruit the complainants for work abroad but that it was they who sought his advice relative to their desire to apply for jobs in Los Angeles, California, USA and thinking that he might be charged as a recruiter, he made them sign three certifications, Exh. "2," "3" and "4," which in essence state that accused never recruited them and that there was no money involved.

Accused's contention simply does not hold water. Admittedly, he executed and submitted a counter-affidavit during the preliminary investigation at the Department of Justice, and that he never mentioned the aforesaid certifications, Exhibits 2, 3 and 4 in said counter-affidavit. These certifications were allegedly executed before charges were filed against him. Knowing that he was already being charged for prohibited recruitment, why did he not bring out these certifications which were definitely favorable to him, if the same were authentic. It is so contrary to human nature that one would suppress evidence which would belie the charge against him.

Denials of the accused can not stand against the positive and categorical narration of each complainant as to how they were recruited by accused who had received some amounts from them for the processing of their papers. Want of receipts is not fatal to the prosecution's case, for as long as it has been shown, as in this case, that accused had engaged in prohibited recruitment. (People v. Pabalan, 262 SCRA 574).

That accused is neither licensed nor authorized to recruit workers for overseas employment, is shown in the Certification issued by POEA, Exh. "A."

In fine, the offense committed by the accused is Illegal Recruitment in large scale, it having been committed against three (3) persons, individually.7

Appellant appealed the decision to this Court on the following assignment of error:

THE TRIAL COURT ERRED IN CONVICTING ACCUSED-APPELLANT OF THE CRIME OF ILLEGAL RECRUITMENT IN LARGE SCALE DESPITE THE FACT THAT THE LATTER'S GUILT WAS NOT PROVED BEYOND REASONABLE DOUBT BY THE PROSECUTION.8

According to appellant, the criminal Information charging him with illegal recruitment specifically mentioned the phrase "for a fee," and as such, receipts to show proof of payment are indispensable. He pointed out that the three (3) complaining witnesses did not present even one receipt to prove the alleged payment of any fee. In its eagerness to cure this "patent flaw," the prosecution resorted to presenting the oral testimonies of complainants which were "contrary to the ordinary course of nature and ordinary habits of life [under Section 3(y), Rule 131 of the Rules on Evidence] and defied credulity." Appellant also pointed out that complainants' testimony that they paid him but no receipts were issued runs counter to the presumption under Section [3](d), Rule 131 of the Rules on Evidence that persons take ordinary care of their concern. The fact that complainants were not able to present receipts lends credence to his allegation that it was they who sought advice regarding their desire to apply for jobs in Los Angeles, California, USA. Thus, thinking that he might be charged as a recruiter, he made them sign three (3) certifications stating that he never recruited them and there was no money involved. On the fact that the trial court disregarded the certifications due to his failure to mention them during the preliminary investigation at the Department of Justice (DOJ), appellant pointed out that there is no provision in the Rules of Court which bars the presentation of evidence during the hearing of the case in court. He also pointed out that the counter-affidavit was prepared while he was in jail "and probably not assisted by a lawyer."9

Appellee, through the Office of the Solicitor General (OSG), countered that the absence of receipts signed by appellant acknowledging receipt of the money and liquor from the complaining witnesses cannot defeat the prosecution and conviction for illegal recruitment. The OSG insisted that the prosecution was able to prove the guilt of appellant beyond reasonable doubt via the collective testimonies of the complaining witnesses, which the trial court found credible and deserving of full probative weight. It pointed out that appellant failed to prove any ill-motive on the part of the complaining witnesses to falsely charge him of illegal recruitment.

On appellant's claim that the complaining witness Imelda Bamba was his girlfriend, the OSG averred:

Appellant's self-serving declaration that Imelda is his girlfriend and that she filed a complaint for illegal recruitment after they quarreled and separated is simply preposterous. No love letters or other documentary evidence was presented by appellant to substantiate such claim which could be made with facility. Imelda has no reason to incriminate appellant except to seek justice. The evidence shows that Alma and Geraldine have no previous quarrel with appellant. Prior to their being recruited by appellant, Alma and Geraldine have never met appellant. It is against human nature and experience for private complainants to conspire and accuse a stranger of a most serious crime just to mollify their hurt feelings. (People v. Coral, 230 SCRA 499, 510 [1994])10

The OSG posited that the appellant's reliance on the certifications11 purportedly signed by the complaining witnesses is misplaced, considering that the certifications are barren of probative weight.

On February 23, 2005, the Court resolved to transfer the case to the CA.12 On June 22, 2005, the CA rendered judgment affirming the decision of the RTC.13

The OSG filed a Supplemental Brief, while the appellant found no need to file one.

The appeal has no merit.

Article 13(b) of the Labor Code of the Philippines defines recruitment and placement as follows:

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

Section 6 of R.A. No. 8042 defined when recruitment is illegal:

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. x x x

Any recruitment activities to be undertaken by non-licensee or non-holder of contracts shall be deemed illegal and punishable under Article 39 of the Labor Code of the Philippines.14 Illegal recruitment is deemed committed in large scale if committed against three (3) or more persons individually or as a group.15

To prove illegal recruitment in large scale, the prosecution is burdened to prove three (3) essential elements, to wit: (1) the person charged undertook a recruitment activity under Article 13(b) or any prohibited practice under Article 34 of the Labor Code; (2) accused did not have the license or the authority to lawfully engage in the recruitment and placement of workers; and (3) accused committed the same against three or more persons individually or as a group.16 As gleaned from the collective testimonies of the complaining witnesses which the trial court and the appellate court found to be credible and deserving of full probative weight, the prosecution mustered the requisite quantum of evidence to prove the guilt of accused beyond reasonable doubt for the crime charged. Indeed, the findings of the trial court, affirmed on appeal by the CA, are conclusive on this Court absent evidence that the tribunals ignored, misunderstood, or misapplied substantial fact or other circumstance.

The failure of the prosecution to adduce in evidence any receipt or document signed by appellant where he acknowledged to have received money and liquor does not free him from criminal liability. Even in the absence of money or other valuables given as consideration for the "services" of appellant, the latter is considered as being engaged in recruitment activities.

It can be gleaned from the language of Article 13(b) of the Labor Code that the act of recruitment may be for profit or not. It is sufficient that the accused promises or offers for a fee employment to warrant conviction for illegal recruitment.17 As the Court held in People v. Sagaydo:18

Such is the case before us. The complainants parted with their money upon the prodding and enticement of accused-appellant on the false pretense that she had the capacity to deploy them for employment abroad. In the end, complainants were neither able to leave for work abroad nor get their money back.

The fact that private complainants Rogelio Tibeb and Jessie Bolinao failed to produce receipts as proof of their payment to accused-appellant does not free the latter from liability. The absence of receipts cannot defeat a criminal prosecution for illegal recruitment. As long as the witnesses can positively show through their respective testimonies that the accused is the one involved in prohibited recruitment, he may be convicted of the offense despite the absence of receipts.19

Appellant's reliance on the certifications purportedly signed by the complaining witnesses Imelda Bamba, Alma Singh and Geraldine Lagman20 is misplaced. Indeed, the trial court and the appellate court found the certifications barren of credence and probative weight. We agree with the following pronouncement of the appellate court:

Anent the claim of the appellant that the trial court erred in not giving weight to the certifications (Exhs. "2," "3" & "4") allegedly executed by the complainants to the effect that he did not recruit them and that no money was involved, the same deserves scant consideration.

The appellant testified that he was in possession of the said certifications at the time the same were executed by the complainants and the same were always in his possession; however, when he filed his counter-affidavit during the preliminary investigation before the Department of Justice, he did not mention the said certifications nor attach them to his counter-affidavit.ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

We find it unbelievable that the appellant, a college graduate, would not divulge the said certifications which would prove that, indeed, he is not an illegal recruiter. By failing to present the said certifications prior to the trial, the appellant risks the adverse inference and legal presumption that, indeed, such certifications were not genuine. When a party has it in his possession or power to produce the best evidence of which the case in its nature is

susceptible and withholds it, the fair presumption is that the evidence is withheld for some sinister motive and that its production would thwart his evil or fraudulent purpose. As aptly pointed out by the trial court:

"x x x These certifications were allegedly executed before charges were filed against him. Knowing that he was already being charged for prohibited recruitment, why did he not bring out these certifications which were definitely favorable to him, if the same were authentic. It is so contrary to human nature that one would suppress evidence which would belie the charge against him." (Emphasis Ours)21

At the preliminary investigation, appellant was furnished with copies of the affidavits of the complaining witnesses and was required to submit his counter-affidavit. The complaining witnesses identified him as the culprit who "recruited" them. At no time did appellant present the certifications purportedly signed by the complaining witnesses to belie the complaint against him. He likewise did not indicate in his counter-affidavit that the complaining witnesses had executed certifications stating that they were not recruited by him and that he did not receive any money from any of them. He has not come forward with any valid excuse for his inaction. It was only when he testified in his defense that he revealed the certifications for the first time. Even then, appellant lied when he claimed that he did not submit the certifications because the State Prosecutor did not require him to submit any counter-affidavit, and that he was told that the criminal complaint would be dismissed on account of the failure of the complaining witnesses to appear during the preliminary investigation. The prevarications of appellant were exposed by Public Prosecutor Pedro Catral on cross-examination, thus:

Q Mr. Witness, you said that a preliminary investigation [was] conducted by the Department of Justice through State Prosecutor Dañosos. Right?cralaw library

A Yes, Sir.

Q Were you requested to file your Counter-Affidavit?cralaw library

A Yes, Sir. I was required.

Q Did you file your Counter-Affidavit?cralaw library

A Yes, Sir, but he did not accept it.

Q Why?cralaw library

A Because he said "never mind" because the witness is not appearing so he dismissed the case.

Q Are you sure that he did not accept your Counter-Affidavit, Mr. Witness?cralaw library

A I don't know of that, Sir.

Q If I show you that Counter-Affidavit you said you prepared, will you be able to identify the same, Mr. Witness?cralaw library

A Yes, Sir.

Q I will show you the Counter-Affidavit dated June 16, 1997 filed by one Joseph J. Jamilosa, will you please go over this and tell if this is the same Counter-Affidavit you said you prepared and you are going to file with the investigating state prosecutor?cralaw library

A Yes, Sir. This the same Counter-Affidavit.

Q There is a signature over the typewritten name Joseph J. Jamilosa, will you please go over this and tell this Honorable Court if this is your signature, Mr. Witness?cralaw library

A Yes, Sir. This is my signature.

Q During the direct examination you were asked to identify [the] Certification as Exh. "2" dated January 17, 1996, allegedly issued by Bamba, one of the complainants in this case, when did you receive this Certification issued by Imelda Bamba, Mr. Witness?cralaw library

A That is the date, Sir.

Q You mean the date appearing in the Certification.

A Yes, Sir.

Q Where was this handed to you by Imelda Bamba, Mr. Witness?cralaw library

A At SM North Edsa, Sir.

Q During the direct examination you were also asked to identify a Certification Exh. "3" for the defense dated February 19, 1996, allegedly issued by Alma Singh, one of the complainants in this case, will you please go over this and tell us when did Alma Singh allegedly issue to you this Certification?cralaw library

A On February 19, 1996, Sir.

Q And also during the direct examination, you were asked to identify a Certification which was already marked as Exh. "4" for the defense dated January 22, 1996 allegedly issued by Geraldine M. Lagman, one of the complainants in this case, will you please tell the court when did Geraldine Lagman give you this Certification?cralaw library

A January 22, 1996, Sir.

Q During that time, January 22, 1996, January 17, 1996 and February 19, 1996, you were in possession of all these Certification. Correct, Mr. Witness?cralaw library

A Yes, Sir.

Q These were always in your possession. Right?cralaw library

A Yes, Sir, with my papers.

Q Do you know when did the complainants file cases against you?cralaw library

A I don't know, Sir.

Q Alright. I will read to you this Counter-Affidavit of yours, and I quote "I, Joseph Jamilosa, of legal age, married and resident of Manila City Jail, after having duly sworn to in accordance with law hereby depose and states that: 1) the complainants sworn under oath to the National Bureau of Investigation that I recruited them and paid me certain sums of money assuming that there is truth in those allegation of this (sic) complainants. The charge filed by them should be immediately dismissed for certain lack of merit in their Sworn Statement to the NBI Investigator; 2) likewise, the complainants' allegation is not true and I never recruited them to work abroad and that they did not give me money, they asked me for some help so I [helped] them in assisting and processing the necessary documents, copies for getting US Visa; 3) the complainant said under oath that they can show a receipt to prove that they can give me sums or amount of money. That is a lie. They sworn (sic), under oath, that they can show a receipt that I gave to them to prove that I got the money from them. I asked the kindness of the state prosecutor to ask the complainants to show and produce the receipts that I gave to them that was stated in the sworn statement of the NBI; 4) the allegation of the complainants that the charges filed by them should be dismissed because I never [received] any amount from them and they can not show any receipt that I gave them," Manila City Jail, Philippines, June 16, 1997. So, Mr. Witness, June 16, 1997 is the date when you prepared this. Correct?cralaw library

A Yes, Sir.

Q Now, my question to you, Mr. Witness, you said that you have with you all the time the Certification issued by [the] three (3) complainants in this case, did you allege in your Counter-Affidavit that this Certification you said you claimed they issued to you?cralaw library

A I did not say that, Sir.

Q So, it is not here in your Counter-Affidavit?cralaw library

A None, Sir.

Q What is your educational attainment, Mr. Witness?cralaw library

A I am a graduate of AB Course Associate Arts in 1963 at the University of the East.

Q You said that the State Prosecutor of the Department of Justice did not accept your Counter-Affidavit, are you sure of that, Mr. Witness?cralaw library

A Yes, Sir.

Q Did you receive a copy of the dismissal which you said it was dismissed?cralaw library

A No, Sir. I did not receive anything.

Q Did you receive a resolution from the Department of Justice?cralaw library

A No, Sir.

Q Did you go over the said resolution you said you received here?cralaw library

A I just learned about it now, Sir.

Q Did you read the content of the resolution?cralaw library

A Not yet, Sir. It's only now that I am going to read.

COURT

Q You said it was dismissed. Correct?cralaw library

A Yes, Your Honor.

Q Did you receive a resolution of this dismissal?cralaw library

A No, Your Honor.

FISCAL CATRAL

Q What did you receive?cralaw library

A I did not receive any resolution, Sir. It's just now that I learned about the finding.

Q You said you learned here in court, did you read the resolution filed against you, Mr. Witness?cralaw library

A I did not read it, Sir.

Q Did you read by yourself the resolution made by State Prosecutor Dañosos, Mr. Witness?cralaw library

A Not yet, Sir.

Q What did you take, if any, when you received the subpoena from this court?cralaw library

A I was in court already when I asked Atty. Usita to investigate this case.

Q You said a while ago that your Affidavit was not accepted by State Prosecutor Dañosos. Is that correct?cralaw library

A Yes, Sir.

Q Will you please read to us paragraph four (4), page two (2) of this resolution of State Prosecutor Dañosos.

(witness reading par. 4 of the resolution)

Alright. What did you understand of this paragraph 4, Mr. Witness?cralaw library

A Probably, guilty to the offense charge.22

It turned out that appellant requested the complaining witnesses to sign the certifications merely to prove that he was settling the cases:

COURT

Q These complainants, why did you make them sign in the certifications?cralaw library

A Because one of the complainants told me to sign and they are planning to sue me.

Q You mean they told you that they are filing charges against you and yet you [made] them sign certifications in your favor, what is the reason why you made them sign?cralaw library

A To prove that I m settling this case.

Q Despite the fact that they are filing cases against you and yet you were able to make them sign certifications?cralaw library

A Only one person, Your Honor, who told me and he is not around.

Q But they all signed these three (3) certifications and yet they filed charges against you and yet you made them sign certifications in your favor, so what is the reason why you made them sign?cralaw library

(witness can not answer)23

The Court notes that the trial court ordered appellant to refund US$300.00 to each of the complaining witnesses. The ruling of the appellate court must be modified. Appellant must pay only the peso equivalent of US$300.00 to each of the complaining witnesses.

IN LIGHT OF ALL THE FOREGOING, the appeal is DISMISSED. The Decision of the Court of Appeals affirming the conviction of Joseph Jamilosa for large scale illegal recruitment under Sections 6 and 7 of Republic Act No. 8042 is AFFIRMED WITH MODIFICATION. The appellant is hereby ordered to refund to each of the complaining witnesses the peso equivalent of US$300.00. Costs against appellant.

SO ORDERED.

THIRD DIVISION

[G.R. No. 125903. November 15, 2000.]

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. ROMULO SAULO, AMELIA DE LA CRUZ, and CLODUALDO DE LA CRUZ, Accused.

ROMULO SAULO, Accused-Appellant.

D E C I S I O N

GONZAGA-REYES, J.: Accused-appellant, together with Amelia de la Cruz and Clodualdo de la Cruz, were charged with violation of Article 38 (b) of the Labor Code 1 for illegal recruitment in large scale in an information which states —chanrob1es virtua1 1aw 1ibrary CRIM. CASE NO. Q-91-21911 The undersigned Assistant City Prosecutor accuses ROMULO SAULO, AMELIA DE LA CRUZ and CLODUALDO DE LA CRUZ, of the crime of ILLEGAL RECRUITMENT IN LARGE SCALE (ART. 38(b) in relation to Art. 39(a) of the Labor Code of the Philippines, as amended by P.D. No. 2018, committed as follows:chanrob1es virtual 1aw library That on or about the period comprised from April 1990 to May 1990 in Quezon City, Philippines, and within the jurisdiction of the Honorable Court, the above-named accused, conspiring together, confederating with and mutually helping one another, by falsely representing themselves to have the capacity to contract, enlist and recruit workers for employment abroad, did, then and there, wilfully, unlawfully and feloniously for a fee, recruit and promise employment/job placement abroad to LEODEGARIO MAULLON, BENY MALIGAYA and ANGELES JAVIER, without first securing the required license or authority from the Department of Labor and Employment, in violation of said law. That the crime described above is committed in large scale as the same was perpetrated against three (3) persons individually or as [a] group penalized under Articles 38 and 39 as amended by PD 2018 of the Labor Code (P.D. 442).chanrob1es virtua1 1aw 1ibrary CONTRARY TO LAW. 2 In addition, Accused were charged with three counts of estafa (Criminal Case Nos. Q-91-21908, Q-91-21909 and Q-91-21910). Except for the names of the complainants, the dates of commission of the crime charged, and the amounts involved, the informations 3 were identical in their allegations — CRIM. CASE NO. Q-91-21908 The undersigned Assistant City Prosecutor accuses ROMULO SAULO, AMELIA DE LA CRUZ AND CLODUALDO DE LA CRUZ of the crime of ESTAFA (Art. 315, par. 2 (a) RPC), committed as follows:chanrob1es virtual 1aw library That on or about the period comprised from April 1990 to May 1990, in Quezon City, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, conspiring together, confederating with and mutually helping one another, with intent of gain, by means of false pretenses and/or fraudulent acts executed prior to or simultaneously with the commission of the fraud, did, then and there wilfully, unlawfully and feloniously

defraud one BENY MALIGAYA, in the following manner, to wit: on the date and in the place aforementioned, Accused falsely pretended to the offended party that they had connection and capacity to deploy workers for overseas employment and that they could secure employment/placement for said Beny Maligaya and believing said misrepresentations, the offended party was later induced to give accused, as in fact she did give the total amount of P35,000.00, Philippine Currency, and once in possession of the said amount and far from complying with their commitment and despite repeated demands made upon them to return said amount, did, then and there wilfully, unlawfully and feloniously and with intent to defraud, misappropriate, misapply and convert the same to their own personal use and benefit, to the damage and prejudice of said offended party in the aforementioned amount and in such amount as may be awarded under the provisions of the Civil Code.chanrob1es virtua1 1aw 1ibrary CONTRARY TO LAW. Upon arraignment, Accused-appellant pleaded not guilty to all the charges against him. Meanwhile accused Amelia de la Cruz and Clodualdo de la Cruz have remained at large. During trial, the prosecution sought to prove the following material facts and circumstances surrounding the commission of the crimes:chanrob1es virtual 1aw library Benny Maligaya, having learned from a relative of accused-appellant that the latter was recruiting workers for Taiwan, went to accused-appellant’s house in San Francisco del Monte, Quezon City, together with Angeles Javier and Amelia de la Cruz, in order to discuss her chances for overseas employment. During that meeting which took place sometime in April or May, 1990, Accused-appellant told Maligaya that she would be able to leave for Taiwan as a factory worker once she gave accused-appellant the fees for the processing of her documents. Sometime in May, 1990, Maligaya also met with Amelia de la Cruz and Clodualdo de la Cruz at their house in Baesa, Quezon City and they assured her that they were authorized by the Philippine Overseas Employment Administration (POEA) to recruit workers for Taiwan. Maligaya paid accused-appellant and Amelia de la Cruz the amount of P35,000.00, which is evidenced by a receipt dated May 21, 1990 signed by accused appellant and Amelia de la Cruz (Exhibit A in Crim. Case No. Q-91-21908). Seeing that he had reneged on his promise to send her to Taiwan, Maligaya filed a complaint against accused-appellant with the POEA. 4 Angeles Javier, a widow and relative by affinity of accused-appellant, was told by Ligaya, Accused-appellant’s wife, to apply for work abroad through Accused-Appellant. At a meeting in accused-appellant’s Quezon City residence, Javier was told by accused-appellant that he could get her a job in Taiwan as a factory worker and that she should give him P35,000.00 for purposes of preparing Javier’s passport. Javier gave an initial amount of P20,000;00 to accused-appellant, but she did not ask for a receipt as she trusted him. As the overseas employment never materialized, Javier was prompted to bring the matter before the POEA. 5 On April 19, 1990, Leodigario Maullon, upon the invitation of his neighbor Araceli Sanchez, went to accused-appellant’s house in order to discuss his prospects for gaining employment abroad. As in the case of Maligaya and Javier, Accused-appellant assured Maullon that he could secure him a job as a factory worker in Taiwan if he paid him P30,000.00 for the processing of his papers. Maullon paid P7,900.00 to accused-appellant’s wife, who issued a receipt dated April 21, 1990 (Exhibit A in Crim. Case No. Q-91-21910 hereafter, Maullon paid an additional amount of P6,800.00 in the presence of accused-appellant and Amelia de la Cruz, which payment is also evidenced by a receipt dated April 25, 1990 (Exhibit B in Crim. Case No. Q-91-21910). Finally, Maullon paid P15,700.00 to a certain Loreta Tumalig, a friend of accused-appellant, as shown by a receipt dated September 14, 1990 (Exhibit C in Crim. Case No. Q-91-21910). Again, Accused-appellant failed to deliver on the promised employment. Maullon thus filed a complaint with the POEA. 6 The prosecution also presented a certification dated July 26, 1994 issued by the POEA stating that accused are not licensed to recruit workers for overseas employment (Exhibit A in Crim. Case No. Q-91-21911). 7 In his defense, Accused-appellant claimed that he was also applying with Amelia de la Cruz for overseas employment. He asserts that it was for this reason that he met all three complainants as they all went together to Amelia de la Cruz’ house in Novaliches, Quezon City sometime in May, 1990 in order to follow up their applications. Accused-appellant flatly denied that he was an overseas employment recruiter or that he was working as an agent for one. He also denied having received any money from any of the complainants or having signed any of the receipts introduced by the prosecution in evidence. It is accused-appellant’s contention that the complainants were prevailed upon by accused-appellant’s mother-in-law, with whom he had a misunderstanding, to file the present cases against him. 8 The trial court found accused-appellant guilty of three counts of estafa and of illegal recruitment in large scale. It

adjudged:chanrob1es virtua1 1aw 1ibrary WHEREFORE, this Court finds the accused Romulo Saulo:chanrob1es virtual 1aw library A. In Criminal Case No. 0-91-21908, guilty beyond reasonable doubt of Estafa under Article 315, paragraph 2(a) of the Revised Penal Code as amended, without any mitigating or aggravating circumstances, and this Court hereby sentences the accused Romulo Saulo to suffer the indeterminate penalty of imprisonment of three (3) years, four (4) months and one (1) day of prision correccional as minimum to seven (7) years and one (1) day of prision mayor as maximum, and to indemnify the complainant Beny Maligaya in the amount of P35,000.00, with interest thereon at 12% per annum until the said amount is fully paid, with costs against the said accused. B. In Criminal Case No. 0-91-21909, guilty beyond reasonable doubt of Estafa under Article 315, paragraph 2(a) of the Revised Penal Code as amended, without any mitigating or aggravating circumstances, and this Court hereby sentences the accused Romulo Saulo to suffer the indeterminate penalty of imprisonment of two (2) years, four (4) months and one (1) day of prision correccional as minimum to six (6) years and one (1) day of prision mayor as maximum, and to indemnify the complainant Angeles Javier in the amount of P20,000.00 with interest thereon at 12% per annum until the said amount is fully paid, with costs against said accused. C. In Criminal Case No. 0-91-21910, guilty beyond reasonable doubt of Estafa under Article 315, paragraph 2(a) of the Revised Penal Code as amended, without any mitigating or aggravating circumstances, and this Court hereby sentences the accused Romulo Saulo to suffer the indeterminate penalty of imprisonment of two (2) years, four (4) months and one (1) day of prision correccional as minimum to six (6) years and one (1) day of prision mayor as maximum, and to indemnify the complainant Leodigario Maullon in the amount of P30,400.00 with interest thereon at 12% per annum until the said amount is fully paid, with costs against said accused. D. In Criminal Case No. 0-91-21911, guilty beyond reasonable doubt of Illegal Recruitment in Large Scale as defined and punished under Article 38 (b) in relation to Article 39 (a) of the Labor Code of the Philippines as amended, and this Court sentences the accused Romulo Saulo to suffer the penalty of life imprisonment and to pay a fine of One Hundred Thousand Pesos (P100,000.00). Being a detention prisoner, the accused Romulo Saulo shall be entitled to the benefits of Article 29 of the Revised Penal Code as amended.chanrob1es virtua1 1aw 1ibrary SO ORDERED. 9 The Court finds no merit in the instant appeal. The essential elements of illegal recruitment in large scale, as defined in Art. 38 (b) of the Labor Code and penalized under Art. 39 of the same Code, are as follows:chanrob1es virtual 1aw library (1) the accused engages in the recruitment and placement of workers, as defined under Article 13 (b) or in any prohibited activities under Article 34 of the Labor Code; (2) accused has not complied with the guidelines issued by the Secretary of Labor and Employment, particularly with respect to the securing of a license or an authority to recruit and deploy workers, whether locally or overseas; and (3) accused commits the same against three (3) or more persons, individually or as a group. 10 Under Art. 13 (b) of the Labor Code, recruitment and placement refers to "any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not; Provided, That any person or entity which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed engaged in recruitment and placement."cralaw virtua1aw library After a careful and circumspect review of the records, the Court finds that the trial court was justified in holding that accused-appellant was engaged in unlawful recruitment and placement activities. The prosecution clearly established that accused-appellant promised the three complainants — Benny Maligaya, Angeles Javier and Leodigario Maullon — employment in Taiwan as factory workers and that he asked them for money in order to process their papers and procure their passports. Relying completely upon such representations, complainants entrusted their hard-earned money to accused-appellant in exchange for what they would later discover to be a vain hope of obtaining employment abroad. It is not disputed that accused-appellant is not authorized 11 nor

licensed 12 by the Department of Labor and Employment to engage in recruitment and placement activities. The absence of the necessary license or authority renders all of accused-appellant’s recruitment activities criminal.chanrob1es virtua1 1aw 1ibrary Accused-appellant interposes a denial in his defense, claiming that he never received any money from the complainants nor processed their papers. Instead, Accused-appellant insists that he was merely a co-applicant of the complainants and similarly deceived by the schemes of Amelia and Clodualdo de la Cruz. He contends that the fact that Benny Maligaya and Angeles Javier went to the house of Amelia and Clodualdo de la Cruz in Novaliches, Quezon City, to get back their money and to follow-up their application proves that complainants knew that it was the de la Cruz’ who received the processing fees, and not Accused-Appellant. Further, Accused-appellant argues that complainants could not have honestly believed that he could get them their passports since they did not give him any of the necessary documents, such as their birth certificate, baptismal certificate, NBI clearance, and marriage contract. Accused-appellant’s asseverations are self-serving and uncorroborated by clear and convincing evidence. They cannot stand against the straightforward and explicit testimonies of the complainants, who have identified accused-appellant as the person who enticed them to part with their money upon his representation that he had the capability of obtaining employment for them abroad. 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. 13 The fact that accused-appellant did not sign all the receipts issued to complainants does not weaken the case of the prosecution. A person charged with illegal recruitment may be convicted on the strength of the testimonies of the complainants, if found to be credible and convincing. 14 The absence of receipts to evidence payment does not warrant an acquittal of the accused, and it is not necessarily fatal to the prosecution’s cause. 15 Accused-appellant contends that he could not have committed the crime of illegal recruitment in large scale since Nancy Avelino, a labor and employment officer at the POEA, testified that licenses for recruitment and placement are issued only to corporations and not to natural persons. This argument is specious and illogical. The Labor Code states 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." 16 Corrolarily, a nonlicensee or nonholder of authority is any person, corporation or entity which has not been issued a valid license or authority to engage in recruitment and placement by the Secretary of Labor, or whose license or authority has been suspended, revoked, or canceled by the POEA or the Secretary. 17 It also bears stressing that agents or representatives appointed by a licensee or a holder of authority but whose appointments are not previously authorized by the POEA fall within the meaning of the term nonlicensee or nonholder of authority. 18 Thus, any person, whether natural or juridical, that engages in recruitment activities without the necessary license or authority shall be penalized under Art. 39 of the Labor Code. It is well established in jurisprudence that a person may be charged and convicted for both illegal recruitment and estafa. The reason for this is that illegal recruitment is a malum prohibitum, whereas estafa is malum in se, meaning that the criminal intent of the accused is not necessary for conviction in the former, but is required in the latter. 19 The elements of estafa under Art. 315, paragraph 2 (a), of the Revised Penal Code are: (1) that the accused has defrauded another by abuse of confidence or by deceit, and (2) that damage or prejudice capable of pecuniary estimation is caused to the offended party or third person. 20 The trial court was correct in holding accused-appellant liable for estafa in the case at bench. Owing to accused-appellant’s false assurances that he could provide them with work in another country, complainants parted with their money, to their damage and prejudice, since the promised employment never materialized.chanrob1es virtua1 1aw 1ibrary Under Art. 315 of the Revised Penal Code, the penalty for the crime of estafa is as follows:chanrob1es virtual 1aw library 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 termed prision mayor or reclusion temporal, as the case may be.

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Under the Indeterminate Sentence Law, the maximum term of the penalty shall be that which, in view of the attending circumstances, could be properly imposed under the Revised Penal Code, and the minimum shall be within the range of the penalty next lower to that prescribed for the offense. Since the penalty prescribed by law for the estafa charge against accused-appellant is prision correccional maximum to prision mayor minimum, the penalty next lower in degree is prision correccional minimum to medium. Thus, the minimum term of the indeterminate sentence should be anywhere within six (6) months and one (1) day to four (4) years and two (2) months. In fixing the maximum term, the prescribed penalty of prision correccional maximum to prision mayor minimum should be divided into three equal portions of time, each of which portion shall be deemed to form one period, as follows — Minimum Period : From 4 years, 2 months and 1 day to 5 years, 5 months and 10 days Medium Period : From 5 years, 5 months and 11 days to 6 years, 8 months and 20 days Maximum Period : From 6 years, 8 months and 21 days to 8 years pursuant to Article 65, in relation to Article 64, of the Revised Penal Code. When the amounts involved in the offense exceeds P22,000, the penalty prescribed in Article 315 of the Revised Penal Code shall be imposed in its maximum period, adding one year for each additional P10,000.00, although the total penalty which may be imposed shall not exceed twenty (20) years. 21 Accordingly, the following penalties shall be imposed upon accused-appellant:chanrob1es virtual 1aw library In Criminal Case No. Q-91-21908 where accused-appellant defrauded Benny Maligaya in the amount of P35,000.00, one year for the additional amount of P13,000.00 in excess of P22,000.00 provided for in Article 315 shall be added to the maximum period of the prescribed penalty of prision correccional maximum to prision mayor minimum. Thus, Accused-appellant shall suffer the indeterminate penalty of four (4) years, and two (2) months of prision correccional medium, as minimum to nine (9) years of prision mayor as maximum. 22 Accused-appellant shall also pay Benny Maligaya P35,000.00 by way of actual damages.chanrob1es virtua1 1aw 1ibrary In Criminal Case No. Q-91-21909 where accused-appellant defrauded Angeles Javier in the amount of P20,000.00, Accused-appellant shall suffer the indeterminate penalty or one (1) year, eight (8) months and twenty-one (21) days of prision correccional minimum to five (5) years, five (5) months and eleven (11) days of prision correccional maximum. Accused-appellant shall also pay Angeles Javier P20,000.00 by way of actual damages. In Criminal Case No. Q-91-21910 where accused-appellant defrauded Leodigario Maullon in the amount of P30,400.00, Accused-appellant shall suffer the indeterminate penalty of four (4) years and two (2) months of prision correccional medium, as minimum to eight (8) years of prision mayor, as maximum. 23 Accused-appellant shall also pay Leodigario Maullon P30,400.00 by way of actual damages. In addition, for the crime of illegal recruitment in large scale (Criminal Case No. Q-91-21911) and pursuant to Article 39 (a) of the Labor Code, Accused-appellant shall suffer the penalty of life imprisonment and a fine of One Hundred Thousand Pesos (P100,000.00). WHEREFORE, the March 6, 1996 Decision of the trial court finding accused-appellant guilty beyond reasonable doubt of the crime of illegal recruitment in large scale and estafa is hereby AFFIRMED subject to the following modifications:chanrob1es virtua1 1aw 1ibrary In Criminal Case No. Q-91-21908 where accused-appellant defrauded Benny Maligaya in the amount of P35,000.00, one year for the additional amount of P13,000.00 in excess of P22,000.00 provided for in Article 315

shall be added to the maximum period of the prescribed penalty of prision correccional maximum to prision mayor minimum. Thus, Accused-appellant shall suffer the indeterminate penalty of four (4) years, and two (2) months of prision correccional medium, as minimum to nine (9) years of prision mayor as maximum. Accused-appellant shall also pay Benny Maligaya P35,000.00 by way of actual damages. In Criminal Case No. Q-91-21909 where accused-appellant defrauded Angeles Javier in the amount of P20,000.00, Accused-appellant shall suffer the indeterminate penalty of one (1) year, eight (8) months and twenty-one (21) days of prision correccional minimum to five (5) years, five (5) months and eleven (11) days of prision correccional maximum. Accused-appellant shall also pay Angeles Javier P20,000.00 by way of actual damages. In Criminal Case No. Q-91-21910 where accused-appellant defrauded Leodigario Maullon in the amount of P30,400.0(), Accused-appellant shall suffer the indeterminate penalty of four (4) years and two (2) months of prision correccional medium, as minimum to eight (8) years of prision mayor, as maximum. Accused-appellant shall also pay Leodigario Maullon P30,400.00 by way of actual damages. In addition, for the crime of illegal recruitment in large scale (Criminal Case No. Q-91-21911) and pursuant to Article 39 (a) of the Labor Code, Accused-appellant shall suffer the penalty of life imprisonment and a fine of One Hundred Thousand Pesos (P100,000.00). Costs against Accused-Appellant.chanrob1es virtua1 1aw 1ibrary SO ORDERED.