1.SANTIAGO vs.

CF SHARP CREW DIGEST

FACTS:
Petitioner had been working as a seafarer for Smith Bell Management, Inc. (respondent) for about 5 yrs.
In February 3, 1998, petitioner signed a new contract of employment with respondent, with the
duration of 9 months. The contract was approved by POEA. Petitioner was to be deployed on board the
MSV Seaspread which was scheduled to leave the port of Manila for Canada on 13 February 1998.
A week before the date of departure, Capt. Pacifico Fernandez, respondents Vice President, sent a
facsimile message to the captain of MSV Seaspread,, saying that it received a phone call from
Santiagos wife and some other callers who did not reveal their identity and gave him some feedbacks
that Paul Santiago this time, if allowed to depart, will jump ship in Canada like his brother Christopher
Santiago. The captain of MSV Seaspread replied that it cancel plans for Santiago to return to Seaspread.
Petitioner thus told that he would not be leaving for Canada anymore. Petitioner filed a complaint for
illegal dismissal, damages, and attorneys fees against respondent and its foreign principal, Cable and
Wireless (Marine) Ltd. The Labor Arbiter (LA) favored petitioner and ruled that the employment contract
remained valid but had not commenced since petitioner was not deployed and that respondent violated
the rules and regulations governing overseas employment when it did not deploy petitioner, causing
petitioner to suffer actual damages. On appeal by respondent, NLRC ruled that there is no employer-
employee relationship between petitioner and respondent because the employment contract shall
commence upon actual departure of the seafarer from the airport or seaport at the point of hire and
with a POEA-approved contract. In the absence of an employer-employee relationship between the
parties, the claims for illegal dismissal, actual damages, and attorneys fees should be dismissed. But the
NLRC found respondents decision not to deploy petitioner to be a valid exercise of its management
prerogative. Petitioner filed MR but it was denied. He went to CA. CA affirmed the decision of NLRC.
Petitioners MR was denied. Hence this case.
ISSUE:
When does an employer- employee relationship begin in the case at bar.
RULING:
There is some merit in the petition. The parties entered into an employment contract whereby
petitioner was contracted by respondent to render services on board MSV Seaspread for the
consideration of US$515.00 per month for 9 months, plus overtime pay. However, respondent failed to
deploy petitioner from the port of Manila to Canada. Considering that petitioner was not able to depart
from the airport or seaport in the point of hire, the employment contract did not commence, and no
employer-employee relationship was created between the parties. However, a distinction must be made
between the perfection of the employment contract and the commencement of the employer-
employee relationship. The perfection of the contract, which in this case coincided with the date of
execution thereof, occurred when petitioner and respondent agreed on the object and the cause, as
well as the rest of the terms and conditions therein. The commencement of the employer-employee
relationship would have taken place had petitioner been actually deployed from the point of hire. Thus,
even before the start of any employer-employee relationship, contemporaneous with the perfection of
the employment contract was the birth of certain rights and obligations, the breach of which may give
rise to a cause of action against the erring party. Thus, if the reverse had happened, that is the seafarer
failed or refused to be deployed as agreed upon, he would be liable for damages.

Neither the manning agent nor the employer can simply prevent a seafarer from being deployed
without a valid reason. Respondents act of preventing petitioner from departing the port of Manila and
boarding MSV Seaspread constitutes a breach of contract, giving rise to petitioners cause of action.
Respondent unilaterally and unreasonably reneged on its obligation to deploy petitioner and must
therefore answer for the actual damages he suffered.
Despite the absence of an employer-employee relationship between petitioner and respondent, the
Court rules that the NLRC has jurisdiction over petitioners complaint. The jurisdiction of labor arbiters is
not limited to claims arising from employer-employee relationships. Section 10 of R.A. No. 8042
(Migrant Workers Act), provides that:

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

Since the present petition involves the employment contract entered into by petitioner for overseas
employment, his claims are cognizable by the labor arbiters of the NLRC.

Respondent is liable to pay petitioner only the actual damages in the form of the loss of nine (9) months
worth of salary as provided in the contract. He is not, however, entitled to overtime pay. While the
contract indicated a fixed overtime pay, it is not a guarantee that he would receive said amount
regardless of whether or not he rendered overtime work. Even though petitioner was prevented
without valid reason from rendering regular much less overtime service, the fact remains that there is
no certainty that petitioner will perform overtime work had he been allowed to board the vessel. The
amount stipulated in the contract will be paid only if and when the employee rendered overtime work.
Realistically speaking, a seaman, by the very nature of his job, stays on board a ship or vessel beyond the
regular eight-hour work schedule. For the employer to give him overtime pay for the extra hours when
he might be sleeping or attending to his personal chores or even just lulling away his time would be
extremely unfair and unreasonable.

The Court also holds that petitioner is entitled to attorneys fees in the concept of damages and
expenses of litigation. Respondents basis for not deploying petitioner is the belief that he will jump ship
just like his brother, a mere suspicion that is based on alleged phone calls of several persons whose
identities were not even confirmed. This Court has upheld management prerogatives so long as they are
exercised in good faith for the advancement of the employers interest and not for the purpose of
defeating or circumventing the rights of the employees under special laws or under valid agreements.
Respondents failure to deploy petitioner is unfounded and unreasonable However, moral damages
cannot be awarded in this case. because respondents action was not tainted with bad faith, or done
deliberately to defeat petitioners rights, as to justify the award of moral damages.

Seafarers are considered contractual employees and cannot be considered as regular employees under
the Labor Code. Their employment is governed by the contracts they sign every time they are rehired
and their employment is terminated when the contract expires. The exigencies of their work
necessitates that they be employed on a contractual basis.

WHEREFORE, petition is GRANTED IN PART.

2. JEBSENS MARITIME VS UNDAG

FACTS:
Respondent Enrique Undag was hired as Lead Operator on board the vessel owned by Alliance Marine
Services, Ltd. and managed by its local agent, Jebsens Maritime, Inc. (petitioners). Undags contract with
petitioners was for a period of four (4) months. He was deployed and eventually repatriated to the
Philippines after his contract with the petitioners had expired.

About two months after repatriation, he went to see a physician, Dr. Efren Vicaldo, for a physical check-
up and was diagnosed to have "Hypertensive cardiovascular disease, Atrial Fibrillation, Diabetes Mellitus
II, Impediment Grade X (20.15%)." According to Dr. Vicaldo, respondents ailment was aggravated by his
work as a seaman and that he was no longer fit for work. Respondent requested for financial assistance
from petitioners but the latter denied his request.

He filed a complaint for sickness benefits against petitioners before the NLRC, praying that petitioners
be ordered to reimburse him for his medical expenses and pay him sickness allowance amounting to
US$3,224.00, including damages and attorneys fees.

Petitioner s cont ent ion: Respondent was not entitled to disability benefits because his repatriation
was not due to medical reasons but due to the expiration of his employment contract.

ISSUE:
Whether or not the Court should award full disability benefits to Undag.

HELD:
No. The Court should not award full disability benefits to Undag.

Respondent failed to prove that his ailment was work-related and was acquired during his 4-month sea
deployment.

The oft-repeated rule is that whoever claims entitlement to the benefits provided by law should
establish his or her right thereto by substantial evidence.

Entitlement of seamen on overseas work to disability benefits is a matter governed, not only by medical
findings, but by law and by contract. The material statutory provisions are Articles 191 to 193 of the
Labor Code, in relation with Rule X of the Rules and Regulations Implementing Book IV of the Labor
Code. By contract, the POEA-SEC, as provided under Department Order No. 4, series of 2000 of the
Department of Labor and Employment, and the parties Collective Bargaining Agreement (CBA) bind the
seaman and his employer to each other.

Pursuant to the aforequoted provision, two elements must concur for an injury or illness to be
compensable. First, that the injury or illness must be work-related; and second,
that the work-related injury or illness must have existed during the term of the seafarers employment
contract. Respondent failed to prove that his ailment was work-related and was acquired during his 4-
month sea deployment.

Respondent failed to comply with the mandatory 3-day medical examination deadline provided in
Section 20(B), paragraph (3) of the 2000 Amended Standard Terms and Conditions Governing the
Employment of Filipino Seafarers on Board Ocean-Going Vessels to be entittled to the disability benefit.

More importantly, respondent failed to comply with the mandatory 3-day medical examination deadline
provided in Section 20(B), paragraph (3) of the 2000 Amended Standard Terms and Conditions
Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels to be entittled to the
disability benefit. Said rules provide that seafarer shall submit himself to a post-employment medical
examination by a company-designated physician within three working days upon his return except when
he is physically incapacitated to do so, in which case a written notice to the agency within the same
period is deemed as compliance. Failure of the seafarer to comply with the mandatory reporting
requirement shall result in his forfeiture of the right to claim the above benefits. It was only more than
two (2) months after his arrival in Manila, that he sought a medical opinion from Dr. Vicaldo who
declared him unfit to work

3. Flourish Maritime Shipping vs. Almanzor

Date: March 14, 2008
RATIO DECIDENDI: In case of unjust, invalid or unauthorized termination of overseas employment,
where the term of the employment contract is at least one year or more, the worker shall be entitled to
a salary of three months for ever year of the unexpired term, in accord with Section 10 of RA 8042.

QUICK FACTS:.Donato (respondent) was a fisherman illegally dismissed. The monetary award, which was
increased by the CA, is also questioned by the petitioner.

FACTS:
Name of Petitioner: Flourish Maritime Shipping and Lolita Uy
Name of Respondent: Donato Almanzor (employee)

49-yo Donato entered into a 2-year employment contract with petitioner Flourish Maritime Shipping as
a fisherman, with a monthly salary of NT15,8400 including free meals every day. However, when he was
deployed to Taipei as part of a crew of the fishing vessel FV Tsang Cheng 66, he found out that there
were only 5 crew members and that he had to buy food. Worse, the master of the vessel, gave orders
that Donato couldnt understandwhich caused the master to be enraged and to hit Donato. Lolita
talked to the master of the vessel and when they were docked at the airport, Donato was told that he
was going to eb repatriated. When Donato arrived at the Philippines, he reported to Fluorish Maritime
and was declared fit for work. He was promised that the was going to be redeployed, but it turned out
that it was no longer possible because he was 49 years oldallegedly no longer fit for work.

Donato filed a complaint for illegal dismissal for the unexpired portion of his employment contract,
earned wages, moral and exemplary damages, and attorneys fees. Petitioners, on the other hand, said
that Donato voluntarily resigned, that he failed to comply with the machinery and arbitration clause in
the employment contract, and that he failed to discharge the burden of proof of illegal dismissal.

Labor Arbiter NLRC CA Held that respondents were guilty of illegal dismissal and entitled to six months
total of salary (NT95,040,000). Affirmed in toto the Labor Arbiters decision Upheld the decision and
Labor Arbiter and the NLRC, and increased the monetary award, due to the interpretation of Section 10
of RA8042. Section 10, RA 8042 Money Claims. 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 his employment contract or for three (3) months for every year of the
unexpired term, whichever is less.

According to the NLRC and Labor Arbiter, Donato was entitled to six months because the contract
covered a two-year period and he was dismissed only after 26 days of actual work. The CA, on the other
hand, said that he actually worked for 26 days, so the unexpired portion of the contract was actually 1
yr, 11 months, and 4 days. The CA held that he was entitled to full compensation for 11 months and 4
days of the first year, with a total salary equivalent of 14 months and 4 days.

ISSUE: WON respondent was illegally dismissed from employment WON the award of the Court of
Appeals was correct
DECISION: The SC partially granted the petition in that the monetary award should be lessened.
HELD
1. The LA and the NLRC correctly concluded, as affirmed by the CA, that respondent was not actually
redeployed for work, in violation of their employment contract. The respondent failed give conclusive
evidence that respondent voluntarily resigned from employment, that respondent was not physically fit
to perform work due to his old age and that the employment contract provided a grievance machinery.
Therefore, the termination of respondents services was without valid cause. Further, the Court is not a
trier of facts, and factual issues have been resolved already by the Labor Arbiter and NLRC, as affirmed
by the CA.
2. The correct interpretation of Section 10, RA 802 has already been resolved in Marsaman Manning
Agency, Inc. vs. NLRC. The provision comes into play only when the employment contract has a term of
at least 1 year or more. In this case, the contract was for two years, and the overseas contract worker
actually worked for only 26 days prior to the dismissal. Thus, the three months salary rule applies.

4. People vs Nogra
5. People vs Ganigan
FACTS:
Ruth, Monchito, Eddie, Avelin Sulaiman, and Marcos (appellant), all surnamed Ganigan allegedly
represented themselves as recruitment agents and promised Mario Eusebio, Valentiino Crisostomo and
Leonora Domingo employment abroad the plaintiffs paid monetary considerations to the accused. The
latter even issued acknowledgement rceipts for the said payments. In relation to the future overseas
employment the accused also required the plaintiffs to attend bible study sessions misrepresenting that
their employer was a devout Christian Catholic. When the date of promised departure came, the
plaintiffs were not deployed but was told that the employer will come to the Philippines on a certain
date but when that day came, they were told that the employer fell off the stairway of the airplane.
Again on the scheduled date of interview with the employer, the latter failed to come, which prompted
the plaintiffs to check with thee POEA and found out that the Ganigans had no license to recruit for
overseas employment. A case was instituted against the Ganigans but only Marcos was arrested so the
case ensued only for Marcos. Based on the documentary and testimonial evidences presented by the
plaintiffs, the RTC found Marcos guilty of the crime illegal recruitment in large scale. The case forwarded
for automatic review to the Supreme Court but the latter resolved to transfer the case to the Court of
Appeals for intermediate review. The CA affirmed the decision of RTC. Hence, this appeal.

ISSUE:
Whether or not the averment of one of the accused that he did not participate in the recruitment and
that he was also a victim of the recruitment having also paid certain sums in consideration for
employment overseas for himself and his daughter, exempt him from an illegal recruitment case.

RULING:
The mere averment of the accused that he was also a victim of the recruitment for having also paid
certain amounts in consideration for a promise of overseas employment cannot acquit him from the
crime. His claim that his mere participation was to introduce the private complainants to Ruth, cannot
prevail against the clear, positive, straightforward and corroborated statements of the complainants
that appellant undertook to recruit them for a purported employment in New Zealand and in the
process collected various amounts from them as assurance fees related thereto. Moreover, the
appellant failed to counter the evidence presented by the prosecution consisting of a receipt of payment
signed by him. His flimsy denial that the signature on the receipt was not his own does not merit
consideration in light of the courts contrary finding. The Court finds the testimonies of the complainants
credible and convincing, enough to support the allegations that the appellant directly participated in the
illegal recruitment and convict him of the crime. Hence the decision of the Court of Appeals is affirmed.

6. People vs Jamilos

FACTS: Sometime in the months of January to February, 1996, 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, 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. Prosecution presented
three witnesses, namely Imelda Bamba, Geraldine Lagman and Alma Singh.

According to Bamba, she met the appellant on a bus. She was on her way to SM North Edsa where she
was a company nurse. Appellant introduced himself as a recruiter of workers for employment abroad.
Appellant told her he could help her get employed as nurse. Appellant gave his pager number and
instructed her to contact him is shes interested.

Sometime in January 1996, appellant fetched her at her office, went to her house and gave him the
necessary documents and handed to appellant the amount of US$300.00 and the latter showed her a
photocopy of her supposed US visa. However, the appellant did not issue a receipt for the said money.
Thereafter, appellant told her to resign from her work because she was booked with Northwest Airlines
and to leave for USA on Feb, 1996. On the scheduled departure, appellant failed to show up. Instead,
called and informed her that he failed to give the passport and US visa because she had to go to
province because his wife died. Trying to contact him to the supposed residence and hotel where he
temporarily resided, but to no avail.

Winess Lagman testified that she is a registered nurse. In January 1996, she went to SM North Edsa to
visit her cousin Bamba. At that time Bamba informed her that she was going to meet to appellant.
Bamba invited Lagman to go with her. The appellant convinced them of his ability to send them abroad.
On their next meeting, Lagman handed to the latter the necessary documents and an amount of
US$300.00 and 2 bottles of black label without any receipt issued by the appellant. Four days after their
meeting, a telephone company called her because her number was appearing in appellants cell phone
documents. The caller is trying to locate him as he was a swindler. She became suspicious and told
Bamba about the matter. One week before her scheduled flight, appellant told her he could not meet
them because his mother passed away. Lastly, Alma Singh, who is also a registered nurse, declared that
she first met the appellant at SM North Edsa when Imelda Bamba introduced the latter to her. Appellant
told her that he is an undercover agent of FBI and he could fix her US visa. On their next meeting, she
gave all the pertinent documents. Thereafter, she gave P10,000 to the appellant covering half price of
her plane ticket. They paged the appellant through his beeper to set up another appointment but the
appellant avoided them as he had many things to do.

The accused Jamilosa testified on direct examination that he never told Bamba that he could get her a
job in USA, the truth being that she wanted to leave SM as company nurse because she was having a
problem thereat. Bamba called him several times, seeking advices from him. He started courting Bamba
and went out dating until latter became his girlfriend. He met Lagman and Singh thru Bamba. As
complainants seeking advice on how to apply for jobs abroad, lest he be charged as a recruiter, he made
Bamba, Lagman and Singh sign separate certifications, all to effect that he never recruited them and no
money was involved. Bamba filed an illegal recruitment case against him because they quarreled and
separated. RTC rendered judgment finding accused guilty beyond reasonable doubt of illegal
recruitment in large scale.

ISSUE: W/N the trial court erred in convicting accused appellant of the crime of illegal recruitment in
large scale

HELD: 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. 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. Provided, That any such nonlicensee 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.

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.

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.

7. People vs Zenchiro
8. People vs Comilla
9. Marsaman Manning and Diamantides Maritime vs NLRC
FACTS
Labor Standards Standard Employment Contract POEA Mutual Consent Migrant Workers Act
Marsaman Manning was the local agency of Diamantides Maritime. In June 1995, Marsaman contracted
Cajeras to be a cook in one of the ships operated by Diamantides (MV Prigipos). The contract was for 10
months. But less than 2 months later, Cajeras was sent back home. The captain of the shop, in his entry
to the Deck Log, said that the dismissal of Cajeras was of mutual consent; that a certain Dr. Hoed
diagnosed Cajeras to be having some sort of a mental disorder. Cajeras subsequently sued Marsaman
for illegal dismissal. NLRC ruled in favor of Cajeras. Marsaman assailed the NLRC decision. Marsaman
further alleged that in awarding backpays to workers, the law applicable should be Sec. 10 or RA 8042
(or 3 months salary for every year of service).

ISSUE: Whether or not Cajeras was illegally dismissed.

HELD: Yes. There was no proof of the mutual consent between the captain and Cajeras. Under the
Standard Employment Contract by the POEA, mutual consent of leaving overseas employment should be
reduced in writing. There was no showing that Cajeras reduced his consent to writing. The captains
entry in the Deck Log is a mere unilateral act which does not bind Cajeras. Further, the Deck Log was not
properly produced and authenticated (unlike in a previous case Wallem Maritime Services, Inc. v. NLRC).

On the other hand, Dr. Hoed was not shown to be qualified to be making such diagnosis. The court
cannot take judicial notice of his findings without competent proof as to his qualification. Neither did Dr.
Hoed elaborate his findings which were mere sweeping statements as to Cajeras illness. It did not show
how such illness affected Cajeras function. In fact, as per the last rating of Cajeras, he was rated as a
Very Good cook.

Section 10 of RA 8042 (Migrant Workers Act) is indeed applicable but the assertion of Marsaman to pay
only 3 months of Cajerass salary is untenable. 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 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 year or more (Cajeras was contracted for 10 months only). 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 Marsamans thinking that Cajeras is entitled to three 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.

10. SERRANO V. GALLANT MARITIME SERVICES

FACTS:
Petitioner Antonio Serrano was hired by respondents Gallant Maritime Services, Inc. and Marlow
Navigation Co., Inc., under a POEA-approved contract of employment for 12 months, as Chief Officer,
with the basic monthly salary of US$1,400, plus $700/month overtime pay, and 7 days paid vacation
leave per month.

On the date of his departure, Serrano was constrained to accept a downgraded employment contract
upon the assurance and representation of respondents that he would be Chief Officer by the end of
April 1998.
Respondents did not deliver on their promise to make Serrano Chief Officer.

Hence, Serrano refused to stay on as second Officer and was repatriated to the Philippines, serving only
two months and 7 days, leaving an unexpired portion of nine months and twenty-three days.

Upon complaint filed by Serrano before the Labor Arbiter (LA), the dismissal was declared illegal.

On appeal, the NLRC modified the LA decision based on the provision of RA 8042.

Serrano filed a Motion for Partial Reconsideration, but this time he questioned the constitutionality of
the last clause in the 5th paragraph of Section 10 of RA 8042.

ISSUES:

1. Whether or not the subject clause violates Section 10, Article III of the Constitution on non-
impairment of contracts;

2. Whether or not 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.

HELD:

On the first issue.

The answer is in the negative. Petitioners 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 receive is
not tenable.

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.

On the second issue.

The answer is in the affirmative.

To Filipino workers, the rights guaranteed under the foregoing constitutional provisions translate to
economic security and parity.

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--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--vis local workers with fixed-period employment;

The subject clause singles out one classification of OFWs and burdens it with a peculiar disadvantage.

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.

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 DECLARED UNCONSTITUTIONAL.

11. PERT/CPM MANPOWER EXPONENT vs VINUYA

FACTS: On March 5, 2008, respondent Vinuya et al. filed a complaint for illegal dismissal against the
petitioner Pert/CPM and its President with labor arbiter alleging among others that the agency deployed
them to work as aluminium fabricator/installer for the agencys principal,
Modern Metal in Dubai, United Arab Emirates for a two-year employment whose contracts were
approved by the POEA providing for nine-hours working day, salary of 1,350 AED with overtime pay,
food allowance, free and suitable housing (four to a room), free transportation, free laundry and free
medical and dental services. However, on April 2, 2007, Modern Metal gave respondents, except Era,
appointment letters different from that of originally signed, increasing their employment terms and
reducing their salaries and allowances and removing certain benefits. Further, the working conditions
were not as promised and they repeatedly complained with their agency about their predicament but to
no avail. Respondents resigned from their job citing personal/family problems for their resignation
except for Era who mentioned the real reason which is due to the company policy.

After several weeks, petitioner repatriated the respondent to the Philippines who shouldered their own
airfare except for Ordovez and Enjambre. The agency countered that the respondents were not illegally
dismissed alleging that the respondents voluntarily resigned from their employment
to seek a better paying job. The agency furthered alleged that the respondents even voluntarily signed
affidavits of quitclaim and release.

Labor Arbiter dismissed the complaint finding that the respondent voluntarily resigned from their job.
Respondent appealed to the NLRC which reversed the decision of the Labor Arbiter and found that the
respondents were illegally dismissed. NLRC also pointed out that the signing of a different employment
contract in Dubai is illegal. Consequently NLRC ordered the agency and the principal to pay, jointly and
severally the respondents salary, placement fee, and exemplary damages. The petitioner filed a motion
for reconsideration which was denied by the NLRC but modified their judgment adjusting the awards
particularly the payment of their salaries in the light of the Courts ruling in Serrano striking down the
clause in Section 10, paragraph 5 of the RA
8042 which limits the entitlement of illegally dismissed OFW. The agency again moved for
reconsideration reiterating its earlier argument and questioned the applicability of the Serrano ruling
because it is not yet final and effective but was denied by the NLRC. Petitioner appealed with CA which
upheld the decision of the NLRC finding the resignation letter as dubious.

ISSUE: Whether or not the Serrano ruling which declared the subject Section 10 of RA
8042 unconstitutional can be given retroactive application in the present case

Whether or not RA 10022, which was enacted on March 8, 2010 restoring the subject clause in
Section 10 of RA 8042 being amendatory in nature can be applied retroactively

RULING: The SC held that the Serrano ruling can be given retroactive application as resolved in Yap
vs. Thenamaris Ships Management in the interest of equity and that the Serrano ruling is an exemption
to the doctrine of operative fact.

Moreover, the SC held that the amendment introduced by R.A. 10022 cannot be given retroactive effect
not only because there is no express declaration of retroactivity of the law, but because the retroactive
application will result in an impairment of right that had accrued to the respondents by virtue of the
Serrano Ruling. The SC reiterated that all statutes are to be construed as having
only a prospective application, unless the purpose and intention of the legislature to give them
retrospective effect are expressly declared or are necessarily implied from the language used.

HELD: The petition is DENIED. The assailed decision and resolution were AFFIRMED.

12. New Life v CA

Facts:
Julian Sy, owner of New Life, insured his building in 3 different insurance agencies for 350,000,
1,000,000, and 200,000. When his building and the goods inside burned down, he claimed for insurance
indemnities, but these were rejected by the three companies for violation of policy conditions.
Sy filed for 3 different suits in the trial court, where he won all suits against the insurance companies.
The court of appeals reversed the decision of the trial court.

Issue: Did the petitioner violate conditions 3 and 27 of the three insurance policies, thereby foreiting
collection of indemnities?

Held: Yes.

Ratio:
Condition 3. The insured shall give notice to the Company of any insurance or insurances already
effected, or which may subsequently be effected, covering any of the property or properties consisting
of stocks in trade, goods in process and/or inventories only hereby insured, and unless such notice be
given and the particulars of such insurance or insurances be stated therein or endorsed on this policy
pursuant to Section 50 of the Insurance Code, by or on behalf of the Company before the occurrence of
any loss or damage, all benefits under this policy shall be deemed forfeited, provided however, that this
condition shall not apply when the total insurance or insurances in force at the time of loss or damage
not more than P200,000.00.
Sy never disclosed co-insurance in the contracts he entered into with the three corporations. The
insured is specifically required to disclose the insurance that he had contracted with other companies.
Sy also contended that the insurance agents knew of the co-insurance. However, the theory of imputed
knowledge, that the knowledge of the agent is presumed to be known by the principal, is not enough.
When the words of the document are readily understandable by an ordinary reader, there is no need for
construction anymore.
The conformity of the insured to the terms of the policy is implied with his failure to disagree with the
terms of the contract.
Since Sy, was a businessman, it was incumbent upon him to read the contracts.
Pioneer Insurance and Surety Corporation vs. Yap- The obvious purpose of the aforesaid requirement in
the policy is to prevent over-insurance and thus avert the perpetration of fraud. The public, as well as
the insurer, is interested in preventing the situation in which a fire would be profitable to the insured.
Also, policy condition 15 was used. It stated: 15.. . . if any false declaration be made or used in support
thereof, . . . all benefits under this Policy shall be forfeited . . .
As for condition number 27, the stipulation read:
27. Action or suit clause. If a claim be made and rejected and an action or suit be not commenced
either in the Insurance Commission or any court of competent jurisdiction of notice of such rejection, or
in case of arbitration taking place as provided herein, within twelve (12) months after due notice of the
award made by the arbitrator or arbitrators or umpire, then the claim shall for all purposes be deemed
to have been abandoned and shall not thereafter be recoverable hereunder.
This is regarding Sys claim for one of the companies. Recovery was filed in court by petitioners only on
January 31, 1984, or after more than one (1) year had elapsed from petitioners' receipt of the insurers'
letter of denial on November 29, 1982. This made it void.

13. SUNACE INTERNATIONAL MANAGEMENT vs NLRC

FACTS: There is an implied revocation of an agency relationship when after the termination of the
original employment contract, the foreign principal directly negotiated with the employee and entered
into a new and separate employment contract.

Respondent Divina Montehermozo is a domestic helper deployed to Taiwan by Sunace International

Management Services (Sunace) under a 12-month contract. Such employment was made with the
assistance of Taiwanese broker Edmund Wang. After the expiration of the contract, Montehermozo
continued her employment with her Taiwanese employer for another 2 years.

When Montehermozo returned to the Philippines, she filed a complaint against Sunace, Wang, and her
Taiwanese employer before the National Labor Relations Commission (NLRC). She alleges that she was
underpaid and was jailed for three months in Taiwan. She further alleges that the 2-year extension of
her employment contract was with the consent and knowledge of Sunace. Sunace, on the other hand,
denied all the allegations.
The Labor Arbiter ruled in favor of Montehermozo and found Sunace liable thereof. The National Labor
Relations Commission and Court of Appeals affirmed the labor arbiters decision. Hence, the filing of this
appeal.

ISSUE:
Whether or not the 2-year extension of Montehermozos employment was made with the knowledge
and consent of Sunace

HELD:
Contrary to the Court of Appeals finding, the alleged continuous communication was with the Taiwanese
broker Wang, not with the foreign employer.

The finding of the Court of Appeals solely on the basis of the telefax message written by Wang to
Sunace, that Sunace continually communicated with the foreign principal (sic) and therefore was
aware of and had consented to the execution of the extension of the contract is misplaced. The message
does not provide evidence that Sunace was privy to the new contract executed after the expiration on
February 1, 1998 of the original contract. That Sunace and the Taiwanese broker communicated
regarding Montehermozos allegedly withheld savings does not necessarily mean that Sunace ratified
the extension of the contract.

As can be seen from that letter communication, it was just an information given to Sunace that
Montehermozo had taken already her savings from her foreign employer and that no deduction was
made on her salary. It contains nothing about the extension or Sunaces consent thereto.

Parenthetically, since the telefax message is dated February 21, 2000, it is safe to assume that it was
sent to enlighten Sunace who had been directed, by Summons issued on February 15, 2000, to appear
on February 28, 2000 for a mandatory conference following Montehermozos filing of the complaint on
February 14, 2000.

Respecting the decision of Court of Appeals following as agent of its foreign principal, [Sunace] cannot
profess ignorance of such an extension as obviously, the act of its principal extending [Montehermozos]
employment contract necessarily bound it, it too is a misapplication, a misapplication of the theory of
imputed knowledge.

The theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to the principal,
employer, not the other way around. The knowledge of the principal-foreign employer cannot,
therefore, be imputed to its agent Sunace.

There being no substantial proof that Sunace knew of and consented to be bound under the 2-year
employment contract extension, it cannot be said to be privy thereto. As such, it and its owner cannot
be held solidarily liable for any of Montehermozos claims arising from the 2-year employment
extension. As the New Civil Code provides, Contracts take effect only between the parties, their assigns,
and heirs, except in case where the rights and obligations arising from the contract are not transmissible
by their nature, or by stipulation or by provision of law.

Furthermore, as Sunace correctly points out, there was an implied revocation of its agency relationship
with its foreign principal when, after the termination of the original employment contract, the foreign
principal directly negotiated with Montehermozo and entered into a new and separate employment
contract in Taiwan. Article 1924 of the New Civil Code states that the agency is revoked if the principal
directly manages the business entrusted to the agent, dealing directly with third persons.

14. C.F. Sharp & Co. Inc. and John J. Rocha vs. Pioneer Insurance and Surety Corporation
Employment contract; stages. Contracts undergo three distinct stages, to wit: negotiation; perfection or
birth; and consummation. Negotiation begins from the time the prospective contracting parties
manifest their interest in the contract and ends at the moment of agreement of the parties. Perfection
or birth of the contract takes place when the parties agree upon the essential elements of the contract.
Consummation occurs when the parties fulfill or perform the terms agreed upon in the contract,
culminating in the extinguishment thereof. Under Article 1315 of the Civil Code, a contract is perfected
by mere consent and from that moment the parties are bound not only to the fulfillment of what has
been expressly stipulated but also to all the consequences which, according to their nature, may be in
keeping with good faith, usage and law. An employment contract, like any other contract, is perfected at
the moment (1) the parties come to agree upon its terms; and (2) concur in the essential elements
thereof: (a) consent of the contracting parties, (b) object certain which is the subject matter of the
contract and (c) cause of the obligation. In the present case, C.F. Sharp, on behalf of its principal,
International Shipping Management, Inc., hired Agustin and Minimo as Sandblaster/Painter for a 3-
month contract, with a basic monthly salary of US$450.00. Thus, the object of the contract is the service
to be rendered by Agustin and Minimo on board the vessel while the cause of the contract is the
monthly compensation they expect to receive. These terms were embodied in the Contract of
Employment which was executed by the parties. The agreement upon the terms of the contract was
manifested by the consent freely given by both parties through their signatures in the contract. Neither
parties disavow the consent they both voluntarily gave. Thus, there is a perfected contract of
employment.

15. CENTURY CANNING CORP V. CA

Facts

On 15 July 1997, Century Canning Corporation (petitioner) hired Gloria C. Palad (Palad) as fish cleaner
at petitioners tuna and sardines factory. Palad signed on 17 July 1997 an apprenticeship agreement
with petitioner. Palad received an apprentice allowance of P138.75 daily. On 25 July 1997, petitioner
submitted its apprenticeship program for approval to the Technical Education and Skills Development
Authority (TESDA) of the Department of Labor and Employment (DOLE). On 26 September 1997, the
TESDA approved petitioners apprenticeship program.

According to petitioner, a performance evaluation was conducted on 15 November 1997, where

petitioner gave Palad a rating of N.I. or needs improvement since she scored only 27.75% based on a
100% performance indicator. Furthermore, according to the performance evaluation, Palad incurred
numerous tardiness and absences. As a consequence, petitioner issued a termination notice5 dated 22
November 1997 to Palad, informing her of her termination effective at the close of business hours of 28
November 1997.

Palad then filed a complaint for illegal dismissal, underpayment of wages, and non-payment of pro-rated
13th month pay for the year 1997.

The Labor Arbiter dismissed the complaint for lack of merit but ordered petitioner to pay Palad her last
salary and her pro-rated 13th month pay.

On appeal, the National Labor Relations Commission (NLRC) affirmed with modification the Labor
Arbiters decision, thus:

WHEREFORE, premises considered, the decision of the Arbiter dated 25 February 1999 is hereby
MODIFIED in that, in addition, respondents are ordered to pay complainants backwages for two (2)
months in the amount of P7,176.00 (P138.75 x 26 x 2 mos.). All other dispositions of the Arbiter as
appearing in the dispositive portion of his decision are AFFIRMED.

Upon denial of Palads motion for reconsideration, Palad filed a special civil action for certiorari with the
Court of Appeals. On 12 November 2001, the Court of Appeals rendered a decision, the dispositive
portion of which reads:

WHEREFORE, in view of the foregoing, the questioned decision of the NLRC is hereby SET ASIDE and a
new one entered, to wit:

(a) finding the dismissal of petitioner to be illegal;

(b) ordering private respondent to pay petitioner her underpayment in wages;

(c) ordering private respondent to reinstate petitioner to her former position without loss of seniority
rights and to pay her full backwages computed from the time compensation was withheld from her up
to the time of her reinstatement;

(d) ordering private respondent to pay petitioner attorneys fees equivalent to ten (10%) per cent of the
monetary award herein; and

(e) ordering private respondent to pay the costs of the suit.

The Ruling of the Court of Appeals

The Court of Appeals held that the apprenticeship agreement which Palad signed was not valid and
binding because it was executed more than two months before the TESDA approved petitioners
apprenticeship program.

The Court of Appeals also held that petitioner illegally dismissed Palad. The Court of Appeals ruled that
petitioner failed to show that Palad was properly apprised of the required standard of performance. The
Court of Appeals likewise held that Palad was not afforded due process because petitioner did not
comply with the twin requirements of notice and hearing.

Issues
Petitioner raises the following issues:

WHETHER OR NOT THE PRIVATE RESPONDENT WAS AN APPRENTICE; and

WHETHER THERE WAS A VALID CAUSE IN TERMINATING THE SERVICE OF PRIVATE RESPONDENT.

HELD
The petition is without merit.

Registration and Approval by the TESDA of Apprenticeship Program Required Before Hiring of
Apprentices

In the case at bench, the apprenticeship agreement between petitioner and private respondent was
executed on May 28, 1990 allegedly employing the latter as an apprentice in the trade of care
maker/molder. On the same date, an apprenticeship program was prepared by petitioner and
submitted to the Department of Labor and Employment. However, the apprenticeship agreement was
filed only on June 7, 1990. Notwithstanding the absence of approval by the Department of Labor and
Employment, the apprenticeship agreement was enforced the day it was signed.

Prior approval by the Department of Labor and Employment of the proposed apprenticeship program is,
therefore, a condition sine qua non before an apprenticeship agreement can be validly entered into.

The act of filing the proposed apprenticeship program with the Department of Labor and Employment is
a preliminary step towards its final approval and does not instantaneously give rise to an employer-
apprentice relationship.
Hence, since the apprenticeship agreement between petitioner and private respondent has no force and
effect in the absence of a valid apprenticeship program duly approved by the DOLE, private
respondents assertion that he was hired not as an apprentice but as a delivery boy (kargador or
pahinante) deserves credence. He should rightly be considered as a regular employee of petitioner as
defined by Article 280 of the Labor Code x x x.

Republic Act No. 779615 (RA 7796), which created the TESDA, has transferred the authority over
apprenticeship programs from the Bureau of Local Employment of the DOLE to the TESDA. RA 7796
emphasizes TESDAs approval of the apprenticeship program as a pre-requisite for the hiring of
apprentices.

Since Palad is not considered an apprentice because the apprenticeship agreement was enforced before
the TESDAs approval of petitioners apprenticeship program, Palad is deemed a regular employee
performing the job of a fish cleaner. Clearly, the job of a fish cleaner is necessary in petitioners
business as a tuna and sardines factory. Under Article 28021 of the Labor Code, an employment is
deemed regular where the employee has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer.

Illegal Termination of Palad

To constitute valid dismissal from employment, two requisites must concur: (1) the dismissal must be
for a just or authorized cause; and (2) the employee must be afforded an opportunity to be heard and to
defend himself.

When the alleged valid cause for the termination of employment is not clearly proven, as in this case,
the law considers the matter a case of illegal dismissal.

Furthermore, Palad was not accorded due process. Even if petitioner did conduct a performance
evaluation on Palad, petitioner failed to warn Palad of her alleged poor performance. In fact, Palad
denies any knowledge of the performance evaluation conducted and of the result thereof. Petitioner
likewise admits that Palad did not receive the notice of termination because Palad allegedly stopped
reporting for work. The records are bereft of evidence to show that petitioner ever gave Palad the
opportunity to explain and defend herself. Clearly, the two requisites for a valid dismissal are lacking in
this case.

WHEREFORE, we AFFIRM the Decision and the Resolution of the Court of Appeals.

16. Bernardo vs NLRC

Facts:
Petitioners numbering 43 are deafmutes who were hired on various periods from 1988 to 1993 by
respondent Far East Bank and Trust Co. as Money Sorters and Counters through a uniformly worded
agreement called Employment Contract for Handicapped Workers. Subsequently, they are dismissed.

Petitioners maintain that they should be considered regular employees, because their task as money
sorters and counters was necessary and desirable to the business of respondent bank. They further
allege that their contracts served merely to preclude the application of Article 280 and to bar them from
becoming regular employees.
Private respondent, on the other hand, submits that petitioners were hired only as special workers and
should not in any way be considered as part of the regular complement of the Bank.[12] Rather, they
were special workers under Article 80 of the Labor Code.

Issue: WON petitioners have become regular employees.

Held:
The uniform employment contracts of the petitioners stipulated that they shall be trained for a period of
one month, after which the employer shall determine whether or not they should be allowed to finish
the 6-month term of the contract. Furthermore, the employer may terminate the contract at any time
for a just and reasonable cause. Unless renewed in writing by the employer, the contract shall
automatically expire at the end of the term.

Respondent bank entered into the aforesaid contract with a total of 56 handicapped workers and
renewed the contracts of 37 of them. In fact, two of them worked from 1988 to 1993. Verily, the
renewal of the contracts of the handicapped workers and the hiring of others lead to the conclusion that
their tasks were beneficial and necessary to the bank. More important, these facts show that they were
qualified to perform the responsibilities of their positions. In other words, their disability did not render
them unqualified or unfit for the tasks assigned to them.

In this light, the Magna Carta for Disabled Persons mandates that a qualified disabled employee should
be given the same terms and conditions of employment as a qualified able-bodied person. Section 5 of
the Magna Carta provides:

Section 5. Equal Opportunity for Employment.No disabled person shall be denied access to
opportunities for suitable employment. A qualified disabled employee shall be subject to the same
terms and conditions of employment and the same compensation, privileges, benefits, fringe benefits,
incentives or allowances as a qualified able bodied person.

The fact that the employees were qualified disabled persons necessarily removes the employment
contracts from the ambit of Article 80. Since the Magna Carta accords them the rights of qualified able-
bodied persons, they are thus covered by Article 280 of the Labor Code, which provides:

ART. 280. Regular and Casual Employment. The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to
be regular where the employee has been engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer, x x x

The primary standard, therefore, of determining regular employment is the reasonable connection
between the particular activity performed by the employee in relation to the usual trade or business of
the employer. The test is whether the former is usually necessary or desirable in the usual business or
trade of the employer. The connection can be determined by considering the nature of the work
performed and its relation to the scheme of the particular business or trade in its entirety. Also if the
employee has been performing the job for at least one year, even if the performance is not continuous
and merely intermittent, the law deems repeated and continuing need for its performance as sufficient
evidence of the necessity if not indispensability of that activity to the business. Hence, the employment
is considered regular, but only with respect to such activity, and while such activity exists.
Respondent bank entered into the aforesaid contract with a total of 56 handicapped workers and
renewed the contracts of 37 of them. In fact, two of them worked from 1988 to 1993. Verily, the
renewal of the contracts of the handicapped workers and the hiring of others lead to the conclusion that
their tasks were beneficial and necessary to the bank. More important, these facts show that they were
qualified to perform the responsibilities of their positions. In other words, their disability did not render
them unqualified or unfit for the tasks assigned to them.

Without a doubt, the task of counting and sorting bills is necessary and desirable to the business of
respondent bank. With the exception of sixteen of them, petitioners performed these tasks for more
than six months.

Petition granted