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CMS ESTATE, INC.

V SOCIAL SECURITY SYSTEM


NATURE - Appeal by the CMS Estate, Inc.

FACTS

- Petitioner is a domestic corporation organized primarily for the purpose of engaging in real estate business. On December 1, 1952, it started doing
business with only six (6) employees. - January 28, 1957: petitioner entered into a contract of management with one Eufracio D. Rojas for the operation
and exploitation of the forest concession. The logging operation actually started on April 1, 1957 with four monthly-salaried employees.

As of September 1, 1957, petitioner had 89 employees and laborers in the logging operation.

- December 26, 1957: petitioner revoked its contract of management with Mr. Rojas.

-August 1, 1958: petitioner became a member of the Social Security System with respect to its real estate business.

On September 6, 1958, petitioner remitted to the System the sum of P203.13 representing the initial premium on the monthly salaries of the employees
in its logging business.

-October 9, 1958: petitioner demanded the refund of the said amount.

- On November 10, 1958, petitioner filed a petition with the Social Security Commission praying for the determination of the effectivity date of the
compulsory coverage of petitioner's logging business.

- January 14, 1960: the instant petition was denied and petitioner was adjudged to be subject to compulsory coverage as Sept. 1, 1957 and the Social
Security System was directed to effect such coverage of petitioner's employees in its logging and real estate business conformably to the provisions of
Rep. Act No. 1161, as amended. -

Petitioner’s Claim

CMS Estate, Inc. is not yet subject to compulsory coverage with respect to its logging business because it does not have the minimum required number
of employees (per company). -

Respondent’s Comments

The logging business was a mere expansion of petitioner's activities and for purposes of the Social Security Act, petitioner should be considered a
member of the System since December 1, 1952 when it commenced its real estate business.

ISSUES

1. WON the contributions required of employers and employees under our Social Security Act of 1954 are obligatory because the said Act was allegedly
enacted by Congress in the exercise of the police power of the State, not of its taxing power

2. WON a contractee-independent contractor relationship existed between petitioner and Eufracio Rojas. during the time that he was operating its
forest concession at Baganga, Davao

3. WON Section 9 of the Social Security Act on the question of compulsory membership and employers should be given a liberal interpretation

HELD

1. Ratio : The said enactment implements the general welfare mandate of the Constitution and constitutes a legitimate exercise of the police
power of the State.

Reasoning - The Social Security Law was enacted pursuant to the policy of the government "

to develop, establish gradually and perfect a social security system which shall be suitable to the needs of the people throughout the Philippines, and
shall provide protection against the hazards of disability, sickness, old age and death " (Sec. 2, RA 1161, as amended). - Membership in the SSS is not a
result of bilateral, concensual agreement where the rights and obligations of the parties are defined by and subject to their will , RA 1161 requires
compulsory coverage of employees and employers under the System. It is actually a legal imposition on said employers and employees, designed to
provide social security to the workingmen. The principle of non-impairment of the obligation of contract as provided in the Bill of Rights is not a proper
defense, the enactment being a lawful exercise of the police power of the State. - The taxing power of the State is exercised for the purpose of raising
revenues. However, under our Social Security Law, the emphasis is more on the promotion of the general welfare

. The Act is not part of out Internal Revenue Code nor are the contributions and premiums therein dealt with and provided for, collectible by the Bureau
of Internal Revenue. The funds contributed to the System belong to the members who will receive benefits, as a matter of right, whenever the hazards
provided by the law occur. - Together with the contributions imposed upon employees and the Government, they are intended for the protection of said
employees against the hazards of disability, sickness, old age and death in line with the constitutional mandate to promote social justice to insure the
well-being and economic security of all the people.

- It is the intention of the law to cover as many persons as possible so as to promote the constitutional objective of social justice. It is clear that a later
law prevails over a prior statute and moreover the legislative intent must be given effect.

2. Ratio : Rojas was not an independent contractor but merely an employee of the petitioner.

Reasoning - Rojas was appointed as operations manager of the logging concession; he has no power to appoint or hire employees; as the term implies,
he only manages the employees and it is petitioner who furnishes him the necessary equipment for use in the logging business; and he is not free from
the control and direction of his employer in matter connected with the performance of his work. Rojas should be entitled to the compulsory coverage
of the Act.

3. Ratio : Because of the broad social purpose of the Social Security Act, all doubts in construing the Act should favor coverage rather than exemption.

Reasoning - Prior to its amendment, Sec. 9 of the Act provides that before an employer could be compelled to become a member of the System, he must
have been in operation for at least two years and has at the time of admission at least six employees.

It should be pointed out that it is the employer, either natural, or judicial person, who is subject to compulsory coverage and not the business.

- It is the intention of the law to cover as many persons as possible so as to promote the constitutional objective of social justice. It is axiomatic that a
later law prevails over a prior statute and moreover the legislative in tent must be given effect.
Maternity Children’s Hospital vs. Secretary of Labor
Facts:

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

Issue:

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

Held:

This is a labor standards case, and is governed by Art. 128-b of the Labor Code, as amended by E.O. No. 111. Under the present rules, a Regional Director
exercises both visitorial and enforcement power over labor standards cases, and is therefore empowered to adjudicate money claims, provided there
still exists an employer-employee relationship, and the findings of the regional office is not contested by the employer concerned.

Labor standards refer to the minimum requirements prescribed by existing laws, rules, and regulations relating to wages, hours of work, cost of living
allowance and other monetary and welfare benefits, including occupational, safety, and health standards (Section 7, Rule I, Rules on the Disposition of
Labor Standards Cases in the Regional Office, dated September 16,1987).

Decision:

ACCORDINGLY, this petition should be dismissed, as it is hereby DISMISSED, as regards all persons still employed in the Hospital at the time of the filing
of the complaint, but GRANTED as regards those employees no longer employed at that time. SO ORDERED.

Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Cortes,Griño-Aquino and Regalado, JJ., concur
SAMEER OVERSEAS PLACEMENT AGENCY, INC., Petitioner,vs.JOY C. CABILES, Respondent.
G.R. No. 170139 August 5, 2014

TOPIC: Section 10 of RA 8042 vis-a-vis Section 7 of RA 10022

FACTS:

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

Respondent Joy Cabiles was hired thus signed a one-year employment contract for a monthly salary of NT$15,360.00. Joy was deployed to work
for Taiwan Wacoal, Co. Ltd. (Wacoal) on June 26, 1997. She alleged that in her employment contract, she agreed to work as quality control for one year.
In Taiwan, she was asked to work as a cutter.

Sameer claims that on July 14, 1997, a certain Mr. Huwang from Wacoal informed Joy, without prior notice, that she was terminated and that
“she should immediately report to their office to get her salary and passport.” She was asked to “prepare for immediate repatriation.” Joy claims that
she was told that from June 26 to July 14, 1997, she only earned a total of NT$9,000.15 According to her, Wacoal deducted NT$3,000 to cover her plane
ticket to Manila.

On October 15, 1997, Joy filed a complaint for illegal dismissal with the NLRC against petitioner and Wacoal. LA dismissed the complaint. NLRC
reversed LA’s decision. CA affirmed the ruling of the National Labor Relations Commission finding respondent illegally dismissed and awarding her three
months’ worth of salary, the reimbursement of the cost of her repatriation, and attorney’s fees

ISSUE:

Whether or not Cabiles was entitled to the unexpired portion of her salary due to illegal dismissal.

HELD:

YES. The Court held that the award of the three-month equivalent of respondent’s salary should be increased to the amount equivalent to the
unexpired term of the employment contract.

In Serrano v. Gallant Maritime Services, Inc. and Marlow Navigation Co., Inc., this court ruled that the clause “or for three (3) months for every
year of the unexpired term, whichever is less” is unconstitutional for violating the equal protection clause and substantive due process.

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

The Court said that they are aware that the clause “or for three (3) months for every year of the unexpired term, whichever is less” was reinstated
in Republic Act No. 8042 upon promulgation of Republic Act No. 10022 in 2010.

Ruling on the constitutional issue

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

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

The Court observed that the reinstated clause, this time as provided in Republic Act. No. 10022, violates the constitutional rights to equal
protection and due process.96 Petitioner as well as the Solicitor General have failed to show any compelling change in the circumstances that would
warrant us to revisit the precedent.

The Court declared, once again, the clause, “or for three (3) months for every year of the unexpired term, whichever is less” in Section 7 of
Republic Act No. 10022 amending Section 10 of Republic Act No. 8042 is declared unconstitutional and, therefore, null and void.
SAMEER OVERSEAS PLACEMENT AGENCY, INC. vs NLRC
JULY 11, 2015KNOWYERLAW

G.R. No. 132564 October 20, 1999

FACTS: Private respondent Endozo was employed as domestic helper in Taiwan. The employment contract was for a definite
period of one (1) year, with six (6) months probationary period. She stayed in Taiwan only for eleven (11)days as her employer
terminated her services, and sent her home for alleged incompetence. Hence, private respondent filed with the Philippine
Overseas Employment Administration a complaint against petitioner for illegal dismissal. Consequently, respondent’s claim
was transferred to the National Labor Relations Commission, Arbitration Branch, in San Pablo City.

ISSUE: Whether the employer in Taiwan could lawfully terminate private respondent’s employment as domestic helper for
incompetence during the probationary period of her employment.

HELD:It is an elementary rule in the law on labor relations that even a probationary employee is entitled to security of tenure.
A probationary employee can not be terminated, except for cause. In this case, the employment contract was for a definite
period of one (1) year, with six (6) months probationary period. After only eleven days of work, the employer dismissed
private respondent without just cause. A probationary employee may be terminated on two grounds: (a) for just cause or (b)
when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the
employee at the time of his engagement. Under the contract of employment, the employer may terminate the services of
private respondent during the probationary period for “being found losing ability to work.” However, “the power of the
employer to terminate a probationary employment contract is subject to limitations.

First

, it must be exercised in accordance with the specific requirements of the contract.

Secondly

, the dissatisfaction of the employer must be real and in good faith, not feigned so as to circumvent the contract or the law;
and

thirdly

, there must be no unlawful discrimination in the dismissal.” In termination cases, the burden of proving just or valid cause
for dismissing an employee rests on the employer. In this case, petitioner was not able to present convincing proof
establishing respondent Endozo’s alleged incompetence.
Calalang vs Williams

Facts: The National Traffic Commission recommended the Director of Public Works and to the Secretary of Public Works and
Communication that animal-drawn vehicles be prohibited from passing along Rosario St. extending from Plaza Calderon de
la Barca to Dasmarinas St. from 7:30 am to 12 pm and 1:30 pm to 5:30 pm and also along Rizal Avenue from 7 am to 11 pm
from a period of one year from the date of the opening of Colgante Bridge to traffic. It was subsequently passed and
thereafter enforce by Manila Mayor and the acting chief of police. Maximo Calalang then, as a citizen and a taxpayer
challenges its constitutionality.

Issue: Whether the rules and regulations promulgated by the Director of Public Works infringes upon the constitutional
precept regarding the promotion of social justice

Held: The promotion of social justice is to be achieved not through a mistaken sympathy towards any given group. It is the
promotion of the welfare of all people. It is neither communism, despotism, nor atomism, nor anarchy but the humanization
of laws and the equalization of social and economic forces by the state so that justice in its rational and objectively secular
conception may at least be approximated.
ANG TIBAY, REPRESENTED BY TORIBIO TEODORO, MANAGER AND PROPIETOR, AND
NATIONAL WORKERS BROTHERHOOD, PETITIONERS, VS. THE COURT OF INDUSTRIAL RELATIONS AND NATIONAL LABOR
UNION, INC., RESPONDENTS.

69 Phil. 635 – Political Law – Constitutional Law – Due Process in Administrative Bodies

Facts:

Teodoro Toribio owns and operates Ang Tibay, a leather company which supplies the Philippine Army. Due to alleged
shortage of leather, Toribio caused the lay off of a number of his employees. However, the National Labor Union, Inc. (NLU)
questioned the validity of said lay off as it averred that the said employees laid off were members of NLU while no members
of the rival labor union National Workers Brotherhood (NWB) were laid off. NLU claims that NWB is a company dominated
union and Toribio was merely busting NLU.

The case reached the Court of Industrial Relations (CIR) where Toribio and NWB won. Eventually, NLU went to the Supreme
Court invoking its right for a new trial on the ground of newly discovered evidence. The Supreme Court agreed with NLU. The
Solicitor General, arguing for the CIR, filed a motion for reconsideration.

ISSUE:

Whether or not the National Labor Union, Inc. is entitled to a new trial.

HELD:

Yes. The records show that the newly discovered evidence or documents obtained by NLU, which they attached to their
petition with the SC, were evidence so inaccessible to them at the time of the trial that even with the exercise of due diligence
they could not be expected to have obtained them and offered as evidence in the Court of Industrial Relations. Further, the
attached documents and exhibits are of such far-reaching importance and effect that their admission would necessarily mean
the modification and reversal of the judgment rendered (said newly obtained records include books of business/inventory
accounts by Ang Tibay which were not previously accessible but already existing).

The SC also outlined that administrative bodies, like the CIR, although not strictly bound by the Rules of Court must also make
sure that they comply to the requirements of due process. For administrative bodies, due process can be complied with by
observing the following:

The right to a hearing which includes the right of the party interested or affected to present his own case and submit evidence
in support thereof.

Not only must the party be given an opportunity to present his case and to adduce evidence tending to establish the rights
which he asserts but the tribunal must consider the evidence presented.

While the duty to deliberate does not impose the obligation to decide right, it does imply a necessity which cannot be
disregarded, namely, that of having something to support its decision. A decision with absolutely nothing to support it is a
nullity, a place when directly attached.

Not only must there be some evidence to support a finding or conclusion but the evidence must be “substantial.” Substantial
evidence is more than a mere scintilla It means such relevant evidence as a reasonable mind might accept as adequate to
support a conclusion.

The decision must be rendered on the evidence presented at the hearing, or at least contained in the record and disclosed
to the parties affected.

The administrative body or any of its judges, therefore, must act on its or his own independent consideration of the law and
facts of the controversy, and not simply accept the views of a subordinate in arriving at a decision.

The administrative body should, in all controversial questions, render its decision in such a manner that the parties to the
proceeding can know the various issues involved, and the reasons for the decisions rendered. The performance of this duty
is inseparable from the authority conferred upon it.
SERRANO V. GALLANT MARITIME
By way of Petition for Review under Rule 45 of the Rules of Court, petitioner assails the Decision and Resolution of the Court
of Appeals (CA).

FACTS:

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 month

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.

Respondents did not deliver on their promise to make petitioner Chief Officer. Hence, petitioner refused to stay on as Second
Officer and was repatriated to the Philippines on May 26, 1998.

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 Complaint against respondents for constructive dismissal and for payment of his
money claims in the total amount of US$26,442.73.

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.

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

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.”

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

The NLRC modified the LA Decision and 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.

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

Petitioner filed a Petition for Certiorari with the CA, reiterating the constitutional challenge against the subject clause. After
initially dismissing the petition on a technicality, the CA eventually gave due course to it, as directed by this Court in its
Resolution which granted the petition for certiorari,filed by petitioner.

The CA affirmed the NLRC ruling on the reduction of the applicable salary rate; however, the CA skirted the constitutional
issue raised by petitioner.

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

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.

The Court now takes up the full merit of the petition mindful of the extreme importance of the constitutional question raised
therein.

ISSUES:

Whether Section 10 (par 5) of RA 8042 is unconstitutional

Proper computation of the Lump-sum salary to be awarded to petitioner by reason of his illegal dismissal

Whether the overtime and leave pay should form part of the salary basis in the computation of his monetary award

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.

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

Arguments of the Petitioner

For Antonio Serrano (petitioner), a Filipino seafarer, the last clause in the 5th paragraph of Section 10, Republic Act (R.A.) No.
8042, violates the OFWs’ constitutional rights in that it impairs the terms of their contract, deprives them of equal protection
and denies them due process.

The Arguments of Respondents

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.

The Court’s Ruling:

First Issue

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 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, Article II and Section 3, 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.

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
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,
Article III of the Constitution.

Second Issue

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.

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.

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,
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.

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.

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 DECLARED UNCONSTITUTIONAL; 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
PEOPLE v. POMAR
November 3, 1924, G.R. No. L-22008, Johnson, J.

(Labor Standards: Police Power, basis of social legislation)

FACTS:

Julio Pomar is the manager and person in charge of La Flor de la Isabela, a tobacco factory pertaining to La Campania General
de Tabacos de Filipinas, a corporation duly authorized to transact business in the City of Manila. under his employ is Macaria
Fajardo, whom he granted vacation leave by reason of her pregnancy. However, Pomar did not pay her the wages she is
entitled to corresponding to 30 days before and 30 days after her delivery and confinement. Despite demands made by her,
Pomar still refused to pay Fajardo.

The CFI found Pomar guilty of violating section 13 in connection with section 15 of Act No. 3071. POmar appealed questioning
the constitutionality of the Act.

Said section 13 was enacted by the Legislature of the Philippine Islands in the exercise of its supposed police power, with the
praiseworthy purpose of safeguarding the health of pregnant women laborers in “factory, shop or place of labor of any
description,” and of insuring to them, to a certain extent, reasonable support for one month before and one month after
their delivery.

ISSUE:

Whether or not Act 3071 has been adopted in the reasonable and lawful exercise of the police power of the state.

RULING:

The police power of the state is a growing and expanding power. As civilization develops and public conscience becomes
awakened, the police power may be extended, as has been demonstrated in the growth of public sentiment with reference
to the manufacture and sale of intoxicating liquors. But that power cannot grow faster than the fundamental law of the state,
nor transcend or violate the express inhibition of the people’s law – the constitution. If the people desire to have the police
power extended and applied to conditions and things prohibited by the organic law, they must first amend that law.

It will also be noted from an examination of said section 13, that it takes no account of contracts for the employment of
women by the day nor by the piece. The law is equally applicable to each case. It will hardly be contended that the person,
firm or corporation owning or managing a factory, shop or place of labor, who employs women by the day or by the piece,
could be compelled under the law to pay for sixty days during which no services were rendered.

For all of the foregoing reasons, we are fully persuaded, under the facts and the law, that the provisions of section 13, of Act
No. 3071 of the Philippine Legislature, are unconstitutional and void.

Therefore, the sentence of the lower court is hereby revoked, the complaint is hereby dismissed.
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS VS. DRILON
FACTS: The Philippine Association of Service Exporters, Inc. (PASEI) challenges the Constitutional validity of Department Order
No. 1, Series of 1988, of the Department of Labor and Employment, in the character of "GUIDELINES GOVERNING THE
TEMPORARY SUSPENSION OF DEPLOYMENT OF FILIPINO DOMESTIC AND HOUSEHOLD WORKERS," in this petition for
certiorari and prohibition. Specifically, the measure is assailed for "discrimination against males or females;" that it "does not
apply to all Filipino workers but only to domestic helpers and females with similar skills;" and that it is violative of the right
to travel. It is held likewise to be an invalid exercise of the lawmaking power, police power being legislative, and not executive,
in character.

In its supplement to the petition, PASEI invokes Section 3, of Article XIII, of the Constitution, providing for worker participation
"in policy and decision-making processes affecting their rights and benefits as may be provided by law." Department Order
No. 1, it is contended, was passed in the absence of prior consultations. It is claimed, finally, to be in violation of the Charter's
non-impairment clause, in addition to the "great and irreparable injury" that PASEI members face should the Order be further
enforced.

ISSUE: Whether or not the Department Order No. 1 in nature of the police power is valid under the Constitution?

HELD: In the light of the foregoing, the petition must be dismissed.

As a general rule, official acts enjoy a presumed validity. In the absence of clear and convincing evidence to the contrary, the
presumption logically stands.

The petitioner has shown no satisfactory reason why the contested measure should be nullified. There is no question that
Department Order No. 1 applies only to "female contract workers," but it does not thereby make an undue discrimination
between the sexes. It is well-settled that "equality before the law" under the Constitution does not import a perfect Identity
of rights among all men and women. It admits of classifications, provided that (1) such classifications rest on substantial
distinctions; (2) they are germane to the purposes of the law; (3) they are not confined to existing conditions; and (4) they
apply equally to all members of the same class.

The Court is well aware of the unhappy plight that has befallen our female labor force abroad, especially domestic servants,
amid exploitative working conditions marked by physical and personal abuse. As precisely the caretaker of Constitutional
rights, the Court is called upon to protect victims of exploitation. In fulfilling that duty, the Court sustains the Government's
efforts.

The same, however, cannot be said of our male workers. In the first place, there is no evidence that, except perhaps for
isolated instances, our men abroad have been afflicted with an identical predicament. Suffice it to state, then, that insofar as
classifications are concerned, this Court is content that distinctions are borne by the evidence. Discrimination in this case is
justified.

There is likewise no doubt that such a classification is germane to the purpose behind the measure. Unquestionably, it is the
avowed objective of Department Order No. 1 to "enhance the protection for Filipino female overseas workers" this Court has
no quarrel that in the midst of the terrible mistreatment Filipina workers have suffered abroad, a ban on deployment will be
for their own good and welfare.

The Order does not narrowly apply to existing conditions. Rather, it is intended to apply indefinitely so long as those
conditions exist. This is clear from the Order itself ("Pending review of the administrative and legal measures, in the
Philippines and in the host countries . . ."), meaning to say that should the authorities arrive at a means impressed with a
greater degree of permanency, the ban shall be lifted.

It is incorrect to say that Department Order No. 1 prescribes a total ban on overseas deployment. From scattered provisions
of the Order, it is evident that such a total ban has not been contemplated.

The consequence the deployment ban has on the right to travel does not impair the right. The right to travel is subject, among
other things, to the requirements of "public safety," "as may be provided by law. Neither is there merit in the contention that
Department Order No. 1 constitutes an invalid exercise of legislative power. It is true that police power is the domain of the
legislature, but it does not mean that such an authority may not be lawfully delegated. As we have mentioned, the Labor
Code itself vests the Department of Labor and Employment with rule-making powers in the enforcement whereof.

The non-impairment clause of the Constitution, invoked by the petitioner, must yield to the loftier purposes targeted by the
Government. Freedom of contract and enterprise, like all other freedoms, is not free from restrictions, more so in this
jurisdiction, where laissez faire has never been fully accepted as a controlling economic way of life.

This Court understands the grave implications the questioned Order has on the business of recruitment. The concern of the
Government, however, is not necessarily to maintain profits of business firms. In the ordinary sequence of events, it is profits
that suffer as a result of Government regulation. The interest of the State is to provide a decent living to its citizens. The
Government has convinced the Court in this case that this is its intent. We do not find the impugned Order to be tainted with
a grave abuse of discretion to warrant the extraordinary relief prayed for.
PLDT vs BOLSO Written Digest
Heirs of Nicolas Jugalbot, et al. vs. Heirs of Virginia A. Roa,

TENANCY RELATIONSHIP; ALL REQUISITES MUST CONCUR IN ORDER TO CREATE A TENANCY RELATIONSHIP

Facts:

On September 28, 1997, an Emancipation Patent (EP) was issued to Nicolas Jugalbot based on the latter's claim that he was
the tenant of the subject property located at Brgy. Lapasan, Cagayan de Oro City, registered in the name of Virginia A. Roa
under TCT No. T-11543. The property was originally registered in the name of Marcelino Cabili from whom Virginia A. Roa
purchased the same sometime in 1966. On August 10, 1998, the heirs of Virginia A. Roa, herein private respondents, filed
before the DARAB Provincial Office of Misamis Oriental a Complaint for cancellation of title (TCT No. E103), Recovery of
Possession and Damages against Nicolas Jugalbot. On October 23, 1998, a Decision was rendered dismissing private
respondents' complaint and upholding the validity of the Emancipation Patent. Private respondent filed a motion for
reconsideration but was denied. On appeal, the DARAB Central Office affirmed the Provincial Adjudicator's decision on the
sole ground that private respondents' right to contest the validity of Nicolas Jugalbot's title was barred by prescription. On
November 10, 2003, the DARAB denied private respondents' motion for reconsideration, hence they filed a petition for
review before the Court of Appeals which was granted. The appellate court reversed the Decision and Resolution of the
DARAB Central Office on the following grounds: (1) the absence of a tenancy relationship; (2) lack of notice to Virginia Roa
by the DAR; (3) the area of the property which was less than one hectare and deemed swampy, rainfed and kangkong-
producing: and (4) the classification of the subject property as residential, which is outside the coverage of P.D. No. 27.

Issues:

Whether or not a tenancy relationship exists? Whether or not the petitioners are de jure tenants of private respondents?

Held:

The petitioners are not de jure tenants of private respondents under P.D. No. 27 due to the absence of the essential requisites
that establish a tenancy relationship between them. There is no concrete evidence on record sufficient to establish that the
petitioners personally cultivated the property under question or that there was sharing of harvests except for their selfserving
statements. The fact of sharing alone is not sufficient to establish a tenancy relationship. The taking of subject property was
done in violation of constitutional due process. The CA was correct in pointing out that Virginia A. Roa was denied due process
because the DAR failed to send notice of the impending land reform coverage to the proper party. Likewise, the property
under dispute is residential property and not agricultural property. Zoning Certification No. 98-094 issued on September 3,
1998 clearly shows that the subject property is located within the Residential 2 District in accordance with paragraph (b),
Section 9, Article IV of Zoning Ordinance No. 880, Series of 1979 issued by the City Planning and Development Office of
Cagayan de Oro City.
Agabon vs NLRC
Facts:

Virgilio and Jenny Agabon were cornice installers of Riviera Home Improvements, a company engaged in thebusiness of selling
ornamental construction materials.They were employed from January 2, 1992 until February 23, 1999, when they were
dismissed for abandonmentof work.The Agabons filed a complaint for illegal dismissal before the LA, who ruled in their favor.
The NLRC reversed on appeal.The CA sustained the NLRC’s decision. The Agabons further appealed to the SC, disputing the
finding of abandonment, and claiming that the company did notcomply with the twin requirements of notice and hearing.

Issue:

WON the Agabons were illegally dismissed

Held:

NO. SC upheld the finding of abandonment, because the act of the Agabons in seeking employment elsewhere clearly showed
a deliberate intent to severe the ER-EE relationship. Procedural due process (for just cause, there must be a written notice
informing him of grounds for termination, a hearing or opportunity to be heard, and a final notice of termination stating the
grounds therefore): There was no due process because ER did not send the requisite notices to the last known address of the
EEs. ER only gave a flimsy excuse that the notice would be useless because the EEs no longer lived there. This is not a valid
excuse, they should have still sent a notice as mandated by law. For not sending the requisite notices, the ER should be held
liable for non-compliance with the procedural requirements of due process.
PLDT vs. NLRC
G.R. No. 80609 August 23, 1988

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

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

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

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

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

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

Issue: WON Separation pay is proper.

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

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

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

Applying the above considerations, we hold that the grant of separation pay in the case at bar is unjustified. The private
respondent has been dismissed for dishonesty, as found by the labor arbiter and affirmed by the NLRC and as she herself has
impliedly admitted. The fact that she has worked with the PLDT for more than a decade, if it is to be considered at all, should
be taken against her as it reflects a regrettable lack of loyalty that she should have strengthened instead of betraying during
all of her 10 years of service with the company. If regarded as a justification for moderating the penalty of dismissal, it will
actually become a prize for disloyalty, perverting the meaning of social justice and undermining the efforts of labor to cleanse
its ranks of all undesirables. Petition granted
Union of Filipro Employees v. Benigno Vivar, Jr, et al.
We used to have ten (10) regular holidays. This is the reason for the 251 divisor, used by some companies in computing the
daily wage, which represents the 365 days of the year, less 52 Saturdays, 52 Sundays and the 10 legal holidays. The new law
added one more regular holiday – the Eid’l Fitr. We thus have eleven (11) regular holidays under R.A. 9492:

New Year’s Day (January 1)

Maundy Thursday (Movable date)

Good Friday (Movable date)

Eid’l Fitr (Movable date)

Araw ng Kagitingan – Bataaan and Corregidor Day (Monday nearest April 9)

Labor Day (Monday nearest May 1)

Independence Day (Monday nearest June 12)

National Heroes Day (Last Monday of August)

Bonifacio Day (Monday nearest November 30)

Christmas Day (December 25)

Rizal Day (Monday nearest December 30)

The Labor Code provides that every worker shall be paid his daily wage during regular holidays. Employers are now required
to pay for an extra regular holiday.

Facts:

On November 8, 1985, respondent Filipro, Inc. (now Nestle Philippines, Inc.) filed with the National Labor Relations
Commission (NLRC) a petition for claims of its monthly paid employees for holiday pay.

Abitrator Vivar: Filipro to pay its monthly paid employees holiday pay pursuant to Art 94 of Labor Code, subject to exclusions
and limitations in Art 82.

Filipro filed a motion for clarification seeking (1) the limitation of the award to three years, (2) the exclusion of salesmen,
sales representatives, truck drivers, merchandisers and medical representatives (hereinafter referred to as sales personnel)
from the award of the holiday pay, and (3) deduction from the holiday pay award of overpayment for overtime, night
differential, vacation and sick leave benefits due to the use of 251 divisor.

Petitioner UFE answered that the award should be made effective from the date of effectivity of the Labor Code, that their
sales personnel are not field personnel and are therefore entitled to holiday pay, and that the use of 251 as divisor is an
established employee benefit which cannot be diminished.

Arbitrator Vivar: On January 14, 1986, the respondent arbitrator issued an order declaring that the effectivity of the holiday
pay award shall retroact to November 1, 1974, the date of effectivity of the Labor Code. He adjudged, however, that the
company’s sales personnel are field personnel and, as such, are not entitled to holiday pay. He likewise ruled that with the
grant of 10 days’ holiday pay, the divisor should be changed from 251 to 261 and ordered the reimbursement of overpayment
for overtime, night differential, vacation and sick leave pay due to the use of 251 days as divisor.

Issues:

1) Whether or not Nestle’s sales personnel are entitled to holiday pay; and

2) Whether or not, concomitant with the award of holiday pay, the divisor should be changed from 251 to 261 days and
whether or not the previous use of 251 as divisor resulted in overpayment for overtime, night differential, vacation and sick
leave pay.

Held:

1. Sales personnel are not entitled to holiday pay.

Under Article 82, field personnel are not entitled to holiday pay. Said article defines field personnel as “non-agritultural
employees who regularly perform their duties away from the principal place of business or branch office of the employer and
whose actual hours of work in the field cannot be determined with reasonable certainty.”

The law requires that the actual hours of work in the field be reasonably ascertained. The company has no way of determining
whether or not these sales personnel, even if they report to the office before 8:00 a.m. prior to field work and come back at
4:30 p.m, really spend the hours in between in actual field work.
Moreover, the requirement that “actual hours of work in the field cannot be determined with reasonable certainty” must be
read in conjunction with Rule IV, Book III of the Implementing Rules which provides:

Rule IV Holidays with Pay

Sec. 1. Coverage — This rule shall apply to all employees except:

xxx xxx xxx

(e) Field personnel and other employees whose time and performance is unsupervised by the employer . . . (Emphasis
supplied)

Hence, in deciding whether or not an employee’s actual working hours in the field can be determined with reasonable
certainty, query must be made as to whether or not such employee’s time and performance is constantly supervised by the
employer.

2. The divisor in computing the award of holiday pay should still be 251 days.

While in that case the issue was whether or not salesmen were entitled to overtime pay, the same rationale for their exclusion
as field personnel from holiday pay benefits also applies.

The petitioner union also assails the respondent arbitrator’s ruling that, concomitant with the award of holiday pay, the
divisor should be changed from 251 to 261 days to include the additional 10 holidays and the employees should reimburse
the amounts overpaid by Filipro due to the use of 251 days’ divisor.

The 251 working days divisor is the result of subtracting all Saturdays, Sundays and the ten (10) legal holidays from the total
number of calendar days in a year. If the employees are already paid for all non-working days, the divisor should be 365 and
not 251.

In the petitioner’s case, its computation of daily ratio since September 1, 1980, is as follows:

monthly rate x 12 months / 251 days

The use of 251 days’ divisor by respondent Filipro indicates that holiday pay is not yet included in the employee’s salary,
otherwise the divisor should have been 261.

It must be stressed that the daily rate, assuming there are no intervening salary increases, is a constant figure for the purpose
of computing overtime and night differential pay and commutation of sick and vacation leave credits. Necessarily, the daily
rate should also be the same basis for computing the 10 unpaid holidays.

The respondent arbitrator’s order to change the divisor from 251 to 261 days would result in a lower daily rate which is
violative of the prohibition on non-diminution of benefits found in Article 100 of the Labor Code. To maintain the same daily
rate if the divisor is adjusted to 261 days, then the dividend, which represents the employee’s annual salary, should
correspondingly be increased to incorporate the holiday pay.

To illustrate, if prior to the grant of holiday pay, the employee’s annual salary is P25,100, then dividing such figure by 251
days, his daily rate is P100.00 After the payment of 10 days’ holiday pay, his annual salary already includes holiday pay and
totals P26,100 (P25,100 + 1,000). Dividing this by 261 days, the daily rate is still P100.00. There is thus no merit in respondent
Nestle’s claim of overpayment of overtime and night differential pay and sick and vacation leave benefits, the computation
of which are all based on the daily rate, since the daily rate is still the same before and after the grant of holiday pay.

SC Decision:

The Court thereby resolves that the grant of holiday pay be effective, not from the date of promulgation of the Chartered
Bank case nor from the date of effectivity of the Labor Code, but from October 23, 1984, the date of promulgation of the
IBAA case (Insular Bank of Asia and America Employees’ Union (IBAAEU) v. Inciong, where the court declared that Sec 2, Rule
IV, Book III of IRR which excluded monthly paid employees from holiday pay benefits, are null and void).

WHEREFORE, the order of the voluntary arbitrator in hereby MODIFIED. The divisor to be used in computing holiday pay shall
be 251 days. The holiday pay as above directed shall be computed from October 23, 1984. In all other respects, the order of
the respondent arbitrator is hereby AFFIRMED.

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