Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 78909 June 30, 1989
MATERNITY CHILDRENS HOSPITAL, !e"!e#en$e% &' ANTERA L.
DORADO, P!e#(%en$, petitioner,
vs.
THE HONORA)LE SECRETARY O* LA)OR AND THE REGIONAL
D+RECTOR O* LA)OR, REGION ,,respondents.

MEDIALDEA, J.:
This is a petition for certiorari seeking the annulent of the !ecision of the
respondent "ecretar# of $abor dated "epteber %&, '()*, affiring +ith
odification the ,rder of respondent Regional !irector of $abor, Region -, dated
August &, '()*, a+arding salar# differentials and eergenc# cost of living
allo+ances .EC,$A"/ to eplo#ees of petitioner, and the ,rder den#ing
petitioner0s otion for reconsideration dated Ma# '1, '()2, on the ground of grave
abuse of discretion.
Petitioner is a sei3governent hospital, anaged b# the Board of !irectors of the
Caga#an de ,ro 4oen0s Club and Puericulture Center, headed b# Mrs. Antera
!orado, as holdover President. The hospital derives its finances fro the club itself
as +ell as fro pa#ing patients, averaging '15 per onth. 6t is also partl#
subsidi7ed b# the Philippine Charit# "+eepstakes ,ffice and the Caga#an !e ,ro
Cit# governent.
Petitioner has fort#3one .&'/ eplo#ees. Aside fro salar# and living allo+ances,
the eplo#ees are given food, but the aount spent therefor is deducted fro their
respective salaries .pp. 2232), Rollo/.
,n Ma# %1, '()*, ten .'5/ eplo#ees of the petitioner eplo#ed in different
capacities8positions filed a coplaint +ith the ,ffice of the Regional !irector of
$abor and Eplo#ent, Region -, for underpa#ent of their salaries and
EC,$A", +hich +as docketed as R,- Case No. C432'3)*.
,n 9une '*, '()*, the Regional !irector directed t+o of his $abor "tandard and
4elfare ,fficers to inspect the records of the petitioner to ascertain the truth of the
allegations in the coplaints .p. (), Rollo/. Pa#rolls covering the periods of Ma#,
'(2&, 9anuar#, '():, Noveber, '(): and Ma#, '()*, +ere dul# subitted for
inspection.
,n 9ul# '2, '()*, the $abor "tandard and 4elfare ,fficers subitted their report
confiring that there +as underpa#ent of +ages and EC,$As of all the
eplo#ees b# the petitioner, the dispositive portion of +hich reads;
6N <6E4 ,= T>E =,RE?,6N?, deficienc# on +age and ecola as
verified and confired per revie+ of the respondent pa#rolls and
intervie+s +ith the coplainant +orkers and all other inforation
gathered b# the tea, it is respectfull# recoended to the >onorable
Regional !irector, this office, that Antera !orado, President be
,R!ERE! to pa# the aount of "6- >@N!RE! =6=TA =,@R
T>,@"AN! "E<EN >@N!RE! =6=TA "6- B 5'8'55
.P*:&,2:*.5'/, representing underpa#ent of +ages and ecola to the
T>6RTA "6- .1*/ eplo#ees of the said hospital as appearing in the
attached AnneC D=D +orksheets and8or +hatever action eEuitable
under the preises. .p. ((, Rollo/
Based on this inspection report and recoendation, the Regional !irector issued
an ,rder dated August &, '()*, directing the pa#ent of P2%1,))).:), representing
underpa#ent of +ages and EC,$As to all the petitioner0s eplo#ees, the
dispositive portion of +hich reads;
4>ERE=,RE, preises considered, respondent Maternit# and
Children >ospital is hereb# ordered to pa# the above3listed
coplainants the total aount indicated opposite each nae, thru this
,ffice +ithin ten .'5/ da#s fro receipt thereof. Thenceforth, the
respondent hospital is also ordered to pa# its eplo#ees8+orkers the
prevailing statutor# iniu +age and allo+ance.
", ,R!ERE!. .p. 1&, Rollo/
Petitioner appealed fro this ,rder to the Minister of $abor and Eplo#ent,
>on. Augusto ". "anche7, +ho rendered a !ecision on "epteber %&, '()*,
odif#ing the said ,rder in that deficienc# +ages and EC,$As should be
coputed onl# fro Ma# %1, '()1 to Ma# %1, '()*, the dispositive portion of
+hich reads;
4>ERE=,RE, the August %(, '()* order is hereb# M,!6=6E! in
that the deficienc# +ages and EC,$As should onl# be coputed
fro Ma# %1, '()1 to Ma# %1, '()*. The case is reanded to the
Regional !irector, Region -, for recoputation specif#ing the
aounts due each the coplainants under each of the applicable
Presidential !ecrees. .p. &5, Rollo/
,n ,ctober %&, '()*, the petitioner filed a otion for reconsideration +hich +as
denied b# the "ecretar# of $abor in his ,rder dated Ma# '1, '()2, for lack of
erit .p. &1 Rollo/.
The instant petition Euestions the all3ebracing applicabilit# of the a+ard
involving salar# differentials and EC,$A", in that it covers not onl# the hospital
eplo#ees +ho signed the coplaints, but also those .a/ +ho are not signatories to
the coplaint, and .b/ those +ho +ere no longer in the service of the hospital at the
tie the coplaints +ere filed.
Petitioner like+ise aintains that the ,rder of the respondent Regional !irector of
$abor, as affired +ith odifications b# respondent "ecretar# of $abor, does not
clearl# and distinctl# state the facts and the la+ on +hich the a+ard +as based. 6n
its DReFoinder to CoentD, petitioner further Euestions the authorit# of the
Regional !irector to a+ard salar# differentials and EC,$As to private
respondents, .rel#ing on the case of Encarnacion vs. Balta7ar, ?.R. No. $3'*))1,
March %2, '(*', ' "CRA )*5, as authorit# for raising the additional issue of lack
of Furisdiction at an# stage of the proceedings, p. :%, Rollo/, alleging that the
original and eCclusive Furisdiction over one# clais is properl# lodged in the
$abor Arbiter, based on Article %'2, paragraph 1 of the $abor Code.
The priar# issue here is +hether or not the Regional !irector had Furisdiction
over the case and if so, the eCtent of coverage of an# a+ard that should be
forthcoing, arising fro his visitorial and enforceent po+ers under Article '%)
of the $abor Code. The atter of +hether or not the decision states clearl# and
distinctl# stateent of facts as +ell as the la+ upon +hich it is based, becoes
relevant after the issue on Furisdiction has been resolved.
This is a labor standards case, and is governed b# Art. '%)3b of the $abor Code, as
aended b# E.,. No. '''. $abor standards refer to the iniu reEuireents
prescribed b# eCisting la+s, rules, and regulations relating to +ages, hours of
+ork, cost of living allo+ance and other onetar# and +elfare benefits, including
occupational, safet#, and health standards ."ection 2, Rule 6, Rules on the
!isposition of $abor "tandards Cases in the Regional ,ffice, dated "epteber '*,
'()2/.
1
@nder the present rules, a Regional !irector eCercises both visitorial and
enforceent po+er over labor standards cases, and is therefore epo+ered to
adFudicate one# clais, provided there stillexists an eplo#er3eplo#ee
relationship, and the findings of the regional office is not contested b# the
eplo#er concerned.
Prior to the proulgation of E.,. No. ''' on !eceber %&, '()*, the Regional
!irector0s authorit# over one# clais +as unclear. The coplaint in the present
case +as filed on Ma# %1, '()* +hen E.,. No. ''' +as not #et in effect, and the
prevailing vie+ +as that stated in the case of Antonio Ong, Sr. vs. Henry M. Parel,
et al., ?.R. No. 2*2'5, dated !eceber %', '()2, thus;
. . . the Regional !irector, in the eCercise of his visitorial and
enforceent po+ers under Article '%) of the $abor Code, has no
authorit# to a+ard one# clais, properl# falling +ithin the
Furisdiction of the labor arbiter. . . .
. . . 6f the inspection results in a finding that the eplo#er has violated
certain labor standard la+s, then the regional director ust order the
necessar# rectifications. >o+ever, this does not include adFudication
of one# clais, clearl# +ithin the abit of the labor arbiter0s
authorit# under Article %'2 of the Code.
The ,ng case relied on the ruling laid do+n in Zambales Base Metals nc. vs. !he
Minister o" #abor, et al., .?.R. Nos. 21')&3)), Noveber %*, '()*, '&* "CRA :5/
that the DRegional !irector +as not epo+ered to share in the original and
eCclusive Furisdiction conferred on $abor Arbiters b# Article %'2.D
4e believe, ho+ever, that even in the absence of E. ,. No. ''', Regional !irectors
alread# had enforceent po+ers over one# clais, effective under P.!. No. ):5,
issued on !eceber '*, '(2:, +hich transferred labor standards cases fro the
arbitration s#ste to the enforceent s#ste.
To clarif# atters, it is necessar# to enuerate a series of rules and provisions of
la+ on the disposition of labor standards cases.
Prior to the proulgation of P! ):5, labor standards cases +ere an eCclusive
function of labor arbiters, under Article %'* of the then $abor Code .P! No. &&%,
as aended b# P! :253a/, +hich read in part;
Art. %'*. $%risdiction o" the &ommission. G The Coission shall
have eCclusive appellate Furisdiction over all cases decided b# the
$abor Arbiters and copulsor# arbitrators.
The $abor Arbiters shall have excl%sive '%risdiction to hear and decide
the follo+ing cases involving all +orkers +hether agricultural or non3
agricultural.
CCC CCC CCC
.c/ All one# clais of +orkers, involving non3pa#ent
or underpa#ent of +ages, overtie copensation,
separation pa#, aternit# leave and other one# clais
arising fro eplo#ee3eplo#er relations, eCcept clais
for +orken0s copensation, social securit# and
edicare benefitsH
.d/ (iolations o" labor standard la)sH
CCC CCC CCC
.Ephasis supplied/
The Regional !irector eCercised visitorial rights onl# under then Article '%2 of the
Code as follo+s;
ART. '%2. (isitorial Po)ers. G The "ecretar# of $abor or his dul#
authori7ed representatives, including, but not restricted, to the labor
inspectorate, shall have access to eplo#ers0 records and preises at
an# tie of the da# or night +henever +ork is being undertaken
therein, and the right to cop# therefro, to Euestion an# eplo#ee and
investigate an# fact, condition or atter +hich a# be necessar# to
deterine violations or in aid in the enforceent of this Title and of
an# 4age ,rder or regulation issued pursuant to this Code.
4ith the proulgation of P! ):5, Regional !irectors +ere given enforceent
po+ers, in addition to visitorial po+ers. Article '%2, as aended, provided in part;
"EC. '5. Article '%2 of the Code is hereb# aended to read as
follo+s;
Art. '%2. (isitorial and en"orcement po)ers. G
CCC CCC CCC
.b/ The "ecretar# of $abor or his dul#
authori7ed representatives shall have the
po)er to order and administer, after due
notice and hearing, compliance )ith the
labor standards provisions of this Code
based on the findings of labor regulation
officers or industrial safet# engineers ade
in the course of inspection, and to issue
+rits of eCecution to the appropriate
authorit# for the enforceent of their order.
CCC CCC CCC
$abor Arbiters, on the other hand, lost Furisdiction over labor standards cases.
Article %'*, as then aended b# P! ):5, provided in part;
"EC. %%. Article %'* of the Code is hereb# aended to read as
follo+s;
Art. %'*. $%risdiction o" #abor Arbiters and the
&ommission. G .a/ The $abor Arbiters shall
have excl%sive '%risdiction to hear and decide the
follo+ing cases involving all +orkers, +hether
agricultural or non3agricultural;
CCC CCC CCC
.1/ All one# clais of +orkers involving
non3pa#ent or underpa#ent of +ages,
overtie or preiu copensation,
aternit# or service incentive leave,
separation pa# and other one# clais
arising fro eplo#er3eplo#ee relations,
eCcept clais for eplo#ee0s copensation,
social securit# and edicare benefits and as
other)ise provided in Article *+, o" this
&ode.
CCC CCC CCC
.Ephasis supplied/
@nder the then $abor Code therefore .P! &&% as aended b# P! :253a, as further
aended b# P! ):5/, there +ere three adFudicator# units; The Regional !irector,
the Bureau of $abor Relations and the $abor Arbiter. 6t becae necessar# to clarif#
and consolidate all governing provisions on Furisdiction into one docuent.
-
,n
April %1, '(2*, M,$E Polic# 6nstructions No. * +as issued, and provides in part
.on labor standards cases/ as follo+s;
P,$6CA 6N"TR@CT6,N" N,. *
T,; All Concerned
"@B9ECT; !6"TR6B@T6,N ,= 9@R6"!6CT6,N ,<ER $AB,R
CA"E"
CCC CCC CCC
'. The follo+ing cases are under the excl%sive original
'%risdiction o" the Regional -irector.
a/ $abor standards cases arising fro
violations of labor standard la+sdiscovered
in the co%rse o" inspection or complaints
)here employer.employee relations still
existH
CCC CCC CCC
%. The follo+ing cases are under the excl%sive original
'%risdiction of the &onciliation Section of the Regional
,ffice;
a/ $abor standards cases +here eplo#er3
eplo#ee relations no longer exist/
CCC CCC CCC
*. The follo+ing cases are certi"iable to the $abor
Arbiters;
a/ Cases not settled b# the Conciliation
"ection of the Regional ,ffice, nael#;
'/ labor standard cases +here eplo#er3
eplo#ee relations no longer existH
CCC CCC CCC
.Ephasis supplied/
M,$E Polic# 6nstructions No. 2 .undated/ +as like+ise subseEuentl# issued,
enunciating the rationale for, and the scope of, the enforceent po+er of the
Regional !irector, the first and second paragraphs of +hich provide as follo+s;
P,$6CA 6N"TR@CT6,N" N,. 2
T,; All Regional !irectors
"@B9ECT; $AB,R "TAN!AR!" CA"E"
0nder P- 123, labor standards cases have been taken fro the
arbitration s#ste and placed %nder the en"orcement system, eCcept
+here a/ Euestions of la+ are involved as deterined b# the Regional
!irector, b/ the aount involved eCceeds P'55,555.55 or over &5I of
the eEuit# of the eplo#er, +hichever is lo+er, c/ the case reEuires
evidentiar# atters not disclosed or verified in the noral course of
inspection, or d/ there is no more employer.employee relationship.
The purpose is clear; to assure the +orker the rights and benefits due
to hi under labor standards la+s )itho%t having to go thro%gh
arbitration. !he )or4er need not litigate to get )hat legally belongs
to him. The +hole enforceent achiner# of the !epartent of $abor
eCists to insure its eCpeditious deliver# to hi free of charge.
.Ephasis supplied/
@nder the foregoing, a coplaining eplo#ee +ho +as denied his rights and
benefits due hi under labor standards la+ need not litigate. The Regional
!irector, b# virtue of his enforceent po+er, assured DeCpeditious deliver# to hi
of his rights and benefits free of chargeD, provided o" co%rse, he )as still in the
employ o" the "irm.
After P! ):5, Article %'* under+ent a series of aendents .aside fro being re3
nubered as Article %'2/ and +ith it a corresponding change in the Furisdiction of,
and supervision over, the $abor Arbiters;
'. P! '1*2 .:3'32)/ G gave $abor Arbiters eCclusive
Furisdiction over %nresolved issues in collective
bargaining, etc., and those cases arising fro eplo#er3
eplo#ee relationsd%ly indorsed b# the Regional
!irectors. .6t also reoved his Furisdiction over oral or
other daages/ 6n other +ords, the $abor Arbiter
entertained cases certi"ied to hi. .Article %%), '(2)
$abor Code./
%. P! '1(' .:3%(32)/ G all regional units of the National
$abor Relations Coission .N$RC/ +ere integrated
into the Regional ,ffices Proper of the Ministr# of
$aborH effectivel# transferring direct adinistrative
control and supervision over the Arbitration Branch to
the !irector of the Regional ,ffice of the Ministr# of
$abor. DConciliable casesD +hich +ere thus previousl#
under the Furisdiction of the defunct Conciliation "ection
of the Regional ,ffice for purposes of conciliation or
aicable settleent, becae iediatel# assignable to
the Arbitration Branch for Foint conciliation and
comp%lsory arbitration. 6n addition, the $abor Arbiter
had Furisdiction even over terination and labor3
standards cases that may be assigned to the for
copulsor# arbitration b# the !irector of the Regional
,ffice. P! '1(' erged conciliation and copulsor#
arbitration functions in the person of the $abor Arbiter.
The procedure governing the disposition of cases at the
Arbitration Branch paralleled those in the "pecial Task
=orce and =ield "ervices !ivision, +ith one aFor
eCception; the $abor Arbiter eCercised full and
untraelled authorit# in the disposition of the case,
particularl# in the substantive aspect, his decisions and
orders subFect to revie+ onl# on appeal to the N$RC.
3
1. M,$E Polic# 6nstructions No. 12 G Because of the
seeingl# overlapping functions as a result of P! '1(',
M,$E Polic# 6nstructions No. 12 +as issued on ,ctober
2, '(2), and provided in part;
P,$6CA 6N"TR@CT6,N" N,. 12
T,; All Concerned
"@B9ECT; A""6?NMENT ,= CA"E" T, $AB,R ARB6TER"
Pursuant to the provisions of Presidential !ecree No.
'1(' and to insure speed# disposition of labor cases, the
follo+ing guidelines are hereb# established for the
inforation and guidance of all concerned.
'. Conciliable Cases.
Cases +hich are conciliable per se i.e., .a/ labor
standards cases +here eplo#er3eplo#ee
relationship no longer existsH .b/ cases involving
deadlock in collective bargaining, eCcept those falling
under P.!. )%1, as aendedH .c/ unfair labor practice
casesH and .d/ overseas eplo#ent cases, eCcept those
involving overseas seaen, shall be assigned b# the
Regional !irector to the $abor Arbiter "or conciliation
and arbitration )itho%t co%rsing them thro%gh the
conciliation section o" the Regional O""ice.
%. $abor "tandards Cases.
Cases involving violation of labor standards la+s +here
eplo#er3 eplo#ee relationshipstill exists shall be
assigned to the $abor Arbiters +here;
a/ intricate Euestions of la+ are involvedH or
b/ evidentiar# atters not disclosed or
verified in the noral course of inspection
b# labor regulations officers are reEuired for
their proper disposition.
1. !isposition of Cases.
4hen a case is assigned to a $abor Arbiter, all issues
raised therein shall be resolved b# hi including those
+hich are originall# cogni7able b# the Regional !irector
to avoid ultiplicit# of proceedings. 6n other +ords, the
+hole case, and not erel# issues involved therein, shall
be assigned to and resolved b# hi.
CCC CCC CCC
.Ephasis supplied/
&. P! '*('.:3'3)5/ G original and eCclusive Furisdiction
over %nresolved issues in collective bargaining and
one# clais, +hich incl%des oral or other daages.
!espite the original and eCclusive Furisdiction of labor arbiters over
one# clais, ho+ever, the Regional !irector
nonetheless retained his enforceent po+er, and reained
epo+ered to adFudicate %ncontested one# clais.
:. BP '15 .)3%'3)l/ G strengthened voluntar#
arbitration. The decree also returned the $abor Arbiters
as part of the N$RC, operating as Arbitration Branch
thereof.
*. BP %%2.*3'3 )%/ G original and eCclusive Furisdiction
over Euestions involving legalit# of strikes and lock3outs.
The present petition Euestions the authorit# of the Regional !irector to issue the
,rder, dated August &, '()*, on the basis of his visitorial and enforceent po+ers
under Article '%) .forerl# Article '%2/ of the present $abor Code. 6t is contended
that based on the rulings in the Ong vs. Parel 5s%pra6 and the Zambales Base
Metals, nc. vs. !he Minister o" #abor 5s%pra6 cases, a Regional !irector is
precluded fro adFudicating one# clais on the ground that this is an eCclusive
function of the $abor Arbiter under Article %'2 of the present Code.
,n August &, '()*, +hen the order +as issued, Article '%).b/
.
read as follo+s;
.b/ The Minister of $abor or his dul# authori7ed
representatives shall have the po+er to order and
adinister, after due notice and hearing, copliance +ith
the labor standards provisions of this Code based on the
findings of labor regulation officers or industrial safet#
engineers ade in the course of inspection, and to issue
+rits of eCecution to the appropriate authorit# for the
enforceent of their order, except in cases )here the
employer contests the "indings of the labor regulations
officer and raises issues +hich cannot be resolved
+ithout considering evidentiar# atters that are not
verifiable in the noral course of inspection. .Ephasis
supplied/
,n the other hand, Article %'2 of the $abor Code as aended b# P.!. '*(',
effective Ma# ', '()5H Batas Pabansa Blg. '15, effective August %', '()'H and
Batas Pabansa Blg. %%2, effective 9une ', '()%, inter alia, provides;
ART. %'2. $%risdiction o" #abor Arbiters and the &ommission. G .a/
The $abor Arbiters shall have theoriginal and excl%sive Furisdiction to
hear and decide +ithin thirt# .15/ +orking da#s after subission of
the case b# the parties for decision, the follo+ing cases involving all
+orkers, +hether agricultural or non3agricultural;
'. @nfair labor practice casesH
%. Those that +orkers a# file involving +ages, hours of
+ork and other ters and conditions of eplo#entH
1. All one# clais of +orkers, including those based on
non3pa#ent or underpa#ent of +ages, overtie
copensation, separation pa# and other benefits provided
b# la+ or appropriate agreeent, eCcept clais for
eplo#ees0 copensation, social securit#, edicare and
aternit# benefitsH
&. Cases involving household servicesH and
:. Cases arising fro an# violation of Article %*: of this
Code, including Euestions involving the legalit# of
strikes and lock3outs. .Ephasis supplied/
The ,ng and Jabales cases involved +orkers )ho )ere still connected )ith the
company. >o+ever, in the ,ng case, the eplo#er disputed the adeEuac# of the
evidentiar# foundation .eplo#ees0 affidavits/ of the findings of the labor
standards inspectors +hile in the Jabales case, the one# clais +hich arose
fro alleged violations of labor standards provisions +ere not discovered in the
course of noral inspection. Thus, the provisions of M,$E Polic# 6nstructions
Nos. *, .!istribution of 9urisdiction ,ver $abor Cases/ and 12 .Assignent of
Cases to $abor Arbiters/ giving Regional !irectors adFudicator# po+ers over
uncontested one# clais discovered in the course of noral inspection, provided
an eplo#er3eplo#ee relationship still eCists, are inapplicable.
6n the present case, petitioner aditted the charge of underpa#ent of +ages to
+orkers still in its employH in fact, it pleaded for tie to raise funds to satisf# its
obligation. There )as th%s no contest against the "indings of the labor inspectors.
Barel# less than a onth after the proulgation on Noveber %*, '()* of the
Jabales Base Metals case, ECecutive ,rder No. ''' +as issued on !eceber %&,
'()*,
/
aending Article '%).b/ of the $abor Code, to read as follo+s;
.b/ T>E PR,<6"6,N" ,= ART6C$E %'2 ,= T>6"
C,!E T, T>E C,NTRARA N,T46T>"TAN!6N?
AN! 6N CA"E" 4>ERE T>E RE$AT6,N">6P ,=
EMP$,AER3EMP$,AEE "T6$$ E-6"T", the Minister
of $abor and Eplo#ent or his dul# authori7ed
representatives shall have the po+er to order and
adinister, after due notice and hearing, copliance +ith
the labor standards provisions of this Code AN! ,T>ER
$AB,R $E?6"$AT6,N based on the findings of labor
regulation officers or industrial safet# engineers ade in
the course of inspection, and to issue +rits of eCecution
to the appropriate authorit# for the enforceent of their
orders, eCcept in cases +here the eplo#er contests the
findings of the labor regulation officer and raises issues
+hich cannot be resolved +ithout considering
evidentiar# atters that are not verifiable in the noral
course of inspection. .Ephasis supplied/
As seen fro the foregoing, E, ''' authori7es a Regional !irector to order
copliance b# an eplo#er +ith labor standards provisions of the $abor Code and
other legislation. 6t is ,ur considered opinion ho+ever, that the inclusion of the
phrase, D The provisions of Article %'2 of this Code to the contrar#
not+ithstanding and in cases +here the relationship of eplo#er3eplo#ee still
eCistsD ... in Article '%).b/, as aended, above3cited, erel#con"irms8reiterates the
enforceent adFudication authorit# of the Regional !irector
over %ncontested one# claisin cases )here an employer.employee relationship
still exists.
0
<ie+ed in the light of P! ):5 and read in coordination +ith M,$E Polic#
6nstructions Nos. *, 2 and 12, it is clear that it has al+a#s been the intention of our
labor authorities to provide our +orkers iediate access .+hen still feasible, as
+here an eplo#er3eplo#ee relationship still eCists/ to their rights and benefits,
+ithout being inconvenienced b# arbitration8litigation processes that prove to be
not onl# nerve3+racking, but financiall# burdensoe in the long run.
Note further the second paragraph of Polic# 6nstructions No. 2 indicating that the
transfer of labor standards cases fro the arbitration s#ste to the enforceent
s#ste is
. . to assure the +orkers the rights and benefits due to hi under labor
standard la+s, +ithout having to go through arbitration. . .
so that
. . the +orkers +ould not litigate to get +hat legall# belongs to hi. ..
ensuring deliver# . . free of charge.
"ocial Fustice legislation, to be trul# eaningful and re+arding to our +orkers,
ust not be hapered in its application b# long3+inded arbitration and litigation.
Rights ust be asserted and benefits received +ith the least inconvenience. $abor
la+s are eant to proote, not defeat, social Fustice.
This vie+ is in consonance +ith the present DRules on the !isposition of $abor
"tandard Cases in the Regional ,ffices D
7
issued b# the "ecretar# of $abor,
=ranklin M. !rilon on "epteber '*, '()2.
Thus, "ections % and 1 of Rule 66 on DMone# Clais Arising fro Coplaint
Routine 6nspectionD, provide as follo+s;
"ection %. &omplaint inspection. G All such coplaints shall
iediatel# be for+arded to the Regional !irector +ho shall refer the
case to the appropriate unit in the Regional ,ffice for assignent to a
$abor "tandards and 4elfare ,fficer .$"4,/ for field inspection.
4hen the field inspection does not produce the desired results, the
Regional !irector shall suon the parties for suar# investigation
to eCpedite the disposition of the case. . . .
"ection 1. &omplaints )here no employer.employee relationship
act%ally exists. G 4here eplo#er3eplo#ee relationship no longer
eCists b# reason of the fact that it has alread# been severed, clais for
pa#ent of onetar# benefits "all )ithin the excl%sive and original
'%risdiction o" the labor arbiters. . . . .Ephasis supplied/
$ike+ise, it is also clear that the liitation ebodied in M,$E Polic# 6nstructions
No. 2 to aounts not eCceeding P'55,555.55 has been dispensed +ith, in vie+ of
the follo+ing provisions of pars. .b/ and .c/, "ection 2 on DRestitutionD, the sae
Rules, thus;
CCC CCC CCC
.b/ Plant3level restitutions a# be effected for one#
clais not eCceeding =ift# Thousand .P:5,555.55/. . . .
.c/ Restitutions in eCcess of the aforeentioned aount
shall be effected at the Regional ,ffice or at the +orksite
subFect to the prior approval of the Regional !irector.
+hich indicate the intention to epo+er the Regional !irector to a+ard one#
clais in excess of P'55,555.55Hprovided of course the eplo#er does not contest
the findings ade, based on the provisions of "ection ) thereof;
"ection ). &ompromise agreement. G "hould the parties arrive at an
agreeent as to the +hole or part of the dispute, said agreeent shall
be reduced in +riting and signed b# the parties in the presence of the
Regional !irector or his dul# authori7ed representative.
E.,. No. ''' +as issued on !eceber %&, '()* or three .1/ onths after the
proulgation of the "ecretar# of $abor0s decision upholding private respondents0
salar# differentials and EC,$As on "epteber %&, '()*. The aendent of the
visitorial and enforceent po+ers of the Regional !irector .Article '%)3b/ b# said
E.,. ''' reflects the intention enunciated in Polic# 6nstructions Nos. * and 12 to
epo+er the Regional !irectors to resolve%ncontested money claims in cases
)here an employer.employee relationship still exists. This intention ust be given
+eight and entitled to great respect. As held in Progressive 7or4ers8 0nion, et. al.
vs. 9.P. Ag%as, et. al. ?.R. No. :(2''3'%, Ma# %(, '():, ':5 "CRA &%(;
. . The interpretation b# officers of la+s +hich are entrusted to their
adinistration is entitled to great respect. 4e see no reason to detract
fro this rudientar# rule in adinistrative la+, particularl# +hen
later events have proved said interpretation to be in accord +ith the
legislative intent. ..
The proceedings before the Regional !irector ust, perforce, be upheld on the
basis of Article '%).b/ as aended b# E.,. No. ''', dated !eceber %&, '()*, this
eCecutive order Dto be considered in the nature of a curative statute +ith
retrospective application.D .Progressive 4orkers0 @nion, et al. vs. >on. =.P. Aguas,
et al. .S%pra/H M. ?arcia vs. 9udge A. Martine7, et al., ?.R. No. $3 &2*%(, Ma# %),
'(2(, (5 "CRA 11'/.
4e no+ coe to the Euestion of +hether or not the Regional !irector erred in
eCtending the a+ard to all hospital eplo#ees. 4e ans+er in the affirative.
The Regional !irector correctl# applied the a+ard +ith respect to those eplo#ees
+ho signed the coplaint, as +ell as those +ho did not sign the coplaint, b%t
)ere still connected )ith the hospital at the time the complaint )as "iled ."ee
,rder, p. 11 dated August &, '()* of the Regional !irector, Pedrito de "usi, p.
11, Rollo/.
The Fustification for the a+ard to this group of eplo#ees +ho +ere not signatories
to the coplaint is that the visitorial and enforceent po+ers given to the
"ecretar# of $abor is relevant to, and eCercisable over establishents, not over the
individual ebers8eplo#ees, because +hat is sought to be achieved b# its
eCercise is the observance of, and8or copliance b#, such fir8establishent +ith
the labor standards regulations. Necessaril#, in case of an a+ard resulting fro a
violation of labor legislation b# such establishent, the entire ebers8eplo#ees
should benefit therefro. As aptl# stated b# then Minister of $abor Augusto ".
"anche7;
. . 6t +ould be highl# derogator# to the rights of the +orkers, if after
categoricall# finding the respondent hospital guilt# of underpa#ent
of +ages and EC,$As, +e liit the a+ard to onl# those +ho signed
the coplaint to the eCclusion of the aForit# of the +orkers +ho are
siilarl# situated. 6ndeed, this +ould be not onl# render the
enforceent po+er of the Minister of $abor and Eplo#ent
nugator#, but +ould be the pinnacle of inFustice considering that it
+ould not onl# discriinate but also deprive the of legislated
benefits.
. . . .pp. 1)31(, Rollo/.
This vie+ is further bolstered b# the provisions of "ec. *, Rule 66 of the DRules on
the !isposition of $abor "tandards cases in the Regional ,fficesD .s%pra/ presentl#
enforced, vi7;
"ECT6,N *. Coverage of coplaint inspection. G A coplaint
inspection shall not be liited to the specific allegations or violations
raised b# the coplainants8+orkers but shall be a thorough inEuir#
into and verification of the copliance b# eplo#er +ith eCisting
labor standards and shall cover all )or4ers similarly sit%ated.
.Ephasis supplied/
>o+ever, there is no legal Fustification for the a+ard in favor of those eplo#ees
+ho )ere no longer connected+ith the hospital at the tie the coplaint +as filed,
having resigned therefro in '()&, vi7;
1. 9ean .9oan/ <en7on ."ee ,rder, p. 11, Rollo/
%. Rosario PacliFan
1. Adela Peralta
&. Mauricio Nagales
:. Consesa Bautista
*. Teresita Agcopra
2. =eliC Monleon
). Teresita "alvador
(. Edgar CatalunaH and
'5. Ra#ond ManiFa . p.2, Rollo/
The enforceent po+er of the Regional !irector cannot legall# be upheld in cases
of separated eplo#ees. Article '%( of the $abor Code, cited b# petitioner .p.
:&, Rollo/ is not applicable as said article is in aid o" the en"orcement po)er of the
Regional !irectorH hence, not applicable +here the eplo#ee seeking to be paid
underpa#ent of +ages is alread# separated fro the service. >is clai is purel# a
one# clai that has to be the subFect of arbitration proceedings and therefore
+ithin the original and eCclusive Furisdiction of the $abor Arbiter.
Petitioner has like+ise Euestioned the order dated August &, '()* of the Regional
!irector in that it does not clearl# and distinctl# state the facts and the la+ on
+hich the a+ard is based.
4e invite attention to the Minister of $abor0s ruling thereon, as follo+s;
=inall#, the respondent hospital assails the order under appeal as null
and void because it does not clearl# and distinctl# state the facts and
the la+ on +hich the a+ards +ere based. Contrar# to the pretensions
of the respondent hospital, +e have carefull# revie+ed the order on
appeal and +e found that the sae contains a brief stateent of the .a/
facts of the caseH .b/ issues involvedH .c/ applicable la+sH .d/
conclusions and the reasons thereforH .e/ specific reed# granted
.aount a+arded/. .p. &5, Rollo/
ACC,R!6N?$A, this petition should be disissed, as it is hereb# !6"M6""E!,
as regards all persons still eplo#ed in the >ospital at the tie of the filing of the
coplaint, but ?RANTE! as regards those eplo#ees no longer eplo#ed at that
tie.
", ,R!ERE!.
9ernan, &.$., :arvasa, ;%tierre<, $r., &r%<, Paras, 9eliciano, ;ancayco, Padilla,
Bidin, &ortes, ;ri=o.A>%ino and Regalado, $$., conc%r.


Se"1!1$e O"(n(on#

SARMIENTO, J., concurring;
"ubFect to # opinion in ?.R. Nos. )%)5: and )1%5:.
MELENCIO2HERRERA, J., concurring;
6 concur, +ith the observation that even as reconciled, it +ould see inevitable to
state that the conclusion in the Jabales and ,ng cases that, prior to ECecutive
,rder No. ''', Regional !irectors +ere not epo+ered to share the original and
eCclusive Furisdiction conferred on $abor Arbiters over one# clais, is no+
deeed odified, if not superseded.
6t a# not be aiss to state either that under "ection %, Republic Act No. *2':,
+hich aends further the $abor Code of the Philippines .P! No. &&%/, Regional
!irectors have also been granted adFudicative po+ers, albeit liited, over
onetar# clais and benefits of +orkers, thereb# settling an# abiguit# on the
atter. Thus;
"EC. %. Article '%( of the $abor Code of the Philippines, as aended,
is hereb# further aended to read as follo+s;
Art. '%(. Recovery o" )ages, simple money claims and
other bene"its. G @pon coplaint of an# interested part#,
the Regional !irector of the !epartent of $abor and
Eplo#ent or an# of the dul# authori7ed hearing
officers of the !epartent is epo+ered, through
suar# proceeding and after due notice, to hear and
decide an# atter involving the recover# of +ages and
other onetar# clais and benefits, including legal
interest, o+ing to an eplo#ee or person eplo#ed in
doestic or household service or househelper under this
Code, arising fro eplo#er3eplo#ee relations;
Provided, That such coplaint does not include a clai
for reinstateent; Provided, further, That the aggregate
one# clais of each eplo#ee or househelper do not
eCceed five thousand pesos .P:,555.55/. The Regional
!irector or hearing officer shall decide or resolve the
coplaint +ithin thirt# .15/ calendar da#s fro the date
of the filing of the sae. ...


Se"1!1$e O"(n(on#
SARMIENTO, J., concurring;
"ubFect to # opinion in ?.R. Nos. )%)5: and )1%5:.
MELENCIO2HERRERA, J., concurring;
6 concur, +ith the observation that even as reconciled, it +ould see inevitable to
state that the conclusion in the Jabales and ,ng cases that, prior to ECecutive
,rder No. ''', Regional !irectors +ere not epo+ered to share the original and
eCclusive Furisdiction conferred on $abor Arbiters over one# clais, is no+
deeed odified, if not superseded.
6t a# not be aiss to state either that under "ection %, Republic Act No. *2':,
+hich aends further the $abor Code of the Philippines .P! No. &&%/, Regional
!irectors have also been granted adFudicative po+ers, albeit liited, over
onetar# clais and benefits of +orkers, thereb# settling an# abiguit# on the
atter. Thus;
"EC. %. Article '%( of the $abor Code of the Philippines, as aended,
is hereb# further aended to read as follo+s;
Art. '%(. Recovery o" )ages, simple money claims and other bene"its. G @pon
coplaint of an# interested part#, the Regional !irector of the !epartent of
$abor and Eplo#ent or an# of the dul# authori7ed hearing officers of the
!epartent is epo+ered, through suar# proceeding and after due notice, to
hear and decide an# atter involving the recover# of +ages and other onetar#
clais and benefits, including legal interest, o+ing to an eplo#ee or person
eplo#ed in doestic or household service or househelper under this Code, arising
fro eplo#er3eplo#ee relations; Provided, That such coplaint does not
include a clai for reinstateent; Provided, further, That the aggregate one#
clais of each eplo#ee or househelper do not eCceed five thousand pesos
.P:,555.55/. The Regional !irector or hearing officer shall decide or resolve the
coplaint +ithin thirt# .15/ calendar da#s fro the date of the filing of the
sae. ...
Maternit# ChildrenKs >ospital vs. "ecretar# of $abor
&hester &abal<a recommends his visitors to please read the original ? "%ll text o"
the case cited. @ie CieL
M1$e!n($' C3(+%!en4# Ho#"($1+ 5#. Se6!e$1!' o7 L1&o!
G.R. No. 78909
June 30 198.
L1&o! L18 De7(ne%
*16$#9
Petitioner is a sei3governent hospital, anaged b# the Board of !irectors of the
Caga#an de ,ro 4oen0s Club and Puericulture Center, headed b# Mrs. Antera
!orado, as holdover President. The hospital derives its finances fro the club itself
as +ell as fro pa#ing patients, averaging '15 per onth. 6t is also partl#
subsidi7ed b# the Philippine Charit# "+eepstakes ,ffice and the Caga#an !e ,ro
Cit# governent.
Petitioner has fort#3one .&'/ eplo#ees. Aside fro salar# and living allo+ances,
the eplo#ees are given food, but the aount spent therefor is deducted fro their
respective salaries .pp. 2232), Rollo/.
,n Ma# %1, '()*, ten .'5/ eplo#ees of the petitioner eplo#ed in different
capacities8positions filed a coplaint +ith the ,ffice of the Regional !irector of
$abor and Eplo#ent, Region -, for underpa#ent of their salaries and
EC,$A", +hich +as docketed as R,- Case No. C432'3)*.
The Regional !irector issued and order based on the reports of the $abor "tandard
and 4elfare ,fficers, directing pa#ent of P2%1, ))).:) representing
underpa#ent of +ages and EC,$As to all the petitionerKs eplo#ees. Petitioner
appealed to the Minister of $abor and Eplo#ent +hich odified the decision as
to the period for the pa#ent EC,$As onl#. A otion for reconsideration +as
filed b# petitioner and +as denied b# the "ecretar# of $abor.
He+%9
$abor standards refer to the iniu reEuireents prescribed b# eCisting la+s,
rules, and regulations relating to +ages, hours of +ork, cost of living allo+ance
and other onetar# and +elfare benefits, including occupational, safet#, and health
standards ."ection 2, Rule 6, Rules on the !isposition of $abor "tandards Cases in
the Regional ,ffice, dated "epteber '*, '()2/.



THIRD DI:ISION


*EDERICO M. LEDESMA, JR.,
Petitioner,

3 vers%s 3

NATIONAL LA)OR
RELATIONS COMMISSION
;NLRC2SECOND DI:ISION<
HONS. RAUL T. A=UINO,
:ICTORIANO R. CALAYCAY
1n% ANGELITA A. GACUTAN
ARE THE COMMISSIONERS,
PHILIPPINE NAUTICAL
TRAINING INC., ATTY.
HERNANI *A)IA, RIC>Y TY,
PA)LO MANOLO, C. DE LEON
1n% TREENA CUE:A,
Respondents.
G.R. No. 17./8/

Present;
ANARE"3"ANT6A?,, $.,
Chairperson,
A@"TR6A3MART6NEJ,
C,R,NA,
C>6C,3NAJAR6,, and
NAC>@RA, $$.


Proulgated;

,ctober '(, %552
C3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3C

D E C I S I O N

C>6C,3NAJAR6,, $.;

This a Petition for Revie+ on &ertiorari under Rule &: of the Revised Rules
of Court, filed b# petitioner =ederico $edesa, 9r., seeking to reverse and set aside
the !ecision,
M'N
dated %) Ma# %55:, and the Resolution,
M%N
dated 2 "epteber %55*,
of the Court of Appeals in CA3?.R. "P No. 2(2%&. The appellate court, in its
assailed !ecision and Resolution, affired the !ecision dated ': April %551, and
Resolution dated ( 9une %551, of the National $abor Relations Coission
.N$RC/, disissing petitionerKs coplaint for illegal disissal and ordering the
private respondent Philippine National Training 6nstitute .PNT6/ to reinstate
petitioner to his forer position +ithout loss of seniorit# rights.

The factual and procedural antecedents of the instant petition are as follo+s;

,n & !eceber '((), petitioner +as eplo#ed as a bus8service driver b# the
private respondent on probationar# basis, as evidenced b# his appointent.
M1N
As
such, he +as reEuired to report at private respondentKs training site
in !asariOas, Cavite, under the direct supervision of its site adinistrator,
Pablo Manolo de $eon .de $eon/.
M&N

,n '' Noveber %555, petitioner filed a coplaint against de $eon for
allegedl# abusing his authorit# as site adinistrator b# using the private
respondentKs vehicles and other facilities for personal ends. 6n the sae coplaint,
petitioner also accused de $eon of ioral conduct allegedl# carried out +ithin
the private respondentKs preises. A cop# of the coplaint +as dul# received b#
private respondentKs Chief Accountant, Nita A7arcon .A7arcon/.
M:N

,n %2 Noveber %555, de $eon filed a +ritten report against the petitioner
addressed to private respondentKs <ice3President for Adinistration,
Rick# T# .T#/, citing his suspected drug use.

6n vie+ of de $eonKs report, private respondentKs >uan Resource
Manager, Trina Cueva .>R Manager Cueva/, on %( Noveber %555, served a cop#
of a Notice to petitioner reEuiring hi to eCplain +ithin %& hours +h# no
disciplinar# action should be iposed on hi for allegedl# violating "ection '&,
Article 6< of the private respondentKs Code of Conduct.
M*N

,n 1 !eceber %555, petitioner filed a coplaint for illegal disissal
against private respondent before the $abor Arbiter.

6n his Position Paper,
M2N
petitioner averred that in vie+ of the coplaint he
filed against de $eon for his abusive conduct as site adinistrator, the latter
retaliated b# falsel# accusing petitioner as a drug user. <P for Adinistration T#,
ho+ever, instead of verif#ing the veracit# of de $eonKs report, readil# believed his
allegations and together +ith >R Manager Cueva, verball# disissed petitioner
fro service on%( Noveber %555.

Petitioner alleged that he +as asked to report at private respondentKs ain
office in EspaOa, Manila, on %( Noveber %555. There, petitioner +as served b#
>R Manager Cueva a cop# of the Notice to ECplain together +ith the cop# of de
$eonKs report citing his suspected drug use. After he +as ade to receive the
copies of the said notice and report, >R Manager Cueva +ent inside the office of
<P for Adinistration T#. After a +hile, >R Manager Cueva cae out of the
office +ith <P for Adinistration T#. To petitionerKs surprise, >R
Manager Cueva took back the earlier Notice to ECplain given to hi and flatl#
declared that there +as no ore need for the petitioner to eCplain since his drug
test result revealed that he +as positive for drugs. 4hen petitioner, ho+ever, asked
for a cop# of the said drug test result, >R Manager Cueva told hi that it +as +ith
the copan#Ks president, but she +ould also later clai that the drug test result +as
alread# +ith the proper authorities at Cap Crae.
M)N


Petitioner +as then asked b# >R Manager Cueva to sign a resignation letter
and also rearked that +hether or not petitioner +ould resign +illingl#, he +as no
longer considered an eplo#ee of private respondent. All these events transpired
in the presence of <P for Adinistration T#, +ho even convinced petitioner to Fust
voluntaril# resign +ith the assurance that he +ould still be given separation
pa#. Petitioner did not #et sign the resignation letter repl#ing that he needed tie to
think over the offers. 4hen petitioner +ent back to private respondentKs training
site in !asariOas, Cavite, to get his bic#cle, he +as no longer allo+ed b# the
guard to enter the preises.
M(N

,n the follo+ing da#, petitioner iediatel# +ent to "t. !oinic Medical
Center for a drug test and he +as found negative for an# drug substance. 4ith his
drug result on hand, petitioner +ent back to private respondentKs ain office
in Manila to talk to <P for Adinistration T# and >R Manager Cueva and to sho+
to the his drug test result. Petitioner then told <P for Adinistration T# and >R
ManagerCueva that since his drug test proved that he +as not guilt# of the drug use
charge against hi, he decided to continue to +ork for the private respondent.
M'5N

,n % !eceber %555, petitioner reported for +ork but he +as no longer
allo+ed to enter the training site for he +as allegedl# banned therefro according
to the guard on dut#. This incident propted the petitioner to file the coplaint for
illegal disissal against the private respondent before the $abor Arbiter.

=or its part, private respondent countered that petitioner +as never disissed
fro eplo#ent but erel# served a Notice to ECplain +h# no disciplinar#
action should be filed against hi in vie+ of his superiorKs report that he +as
suspected of using illegal drugs. 6nstead of filing an ans+er to the said notice,
ho+ever, petitioner preaturel# lodged a coplaint for illegal disissal against
private respondent before the $abor Arbiter.
M''N

Private respondent like+ise denied petitionerKs allegations that it banned the
latter fro entering private respondentKs preises. Rather, it +as petitioner +ho
failed or refused to report to +ork after he +as ade to eCplain his alleged drug
use. 6ndeed, on 1 !eceber %555, petitioner +as able to clai at the training site
his salar# for the period of '*315 Noveber %555, as evidenced b# a cop# of the
pa# voucher bearing petitionerKs signature. PetitionerKs accusation that he +as no
longer allo+ed to enter the training site +as further belied b# the fact that he +as
able to clai his '1
th
onth pa# thereat on ( !eceber %555, supported b# a cop#
of the pa# voucher signed b# petitioner.
M'%N

,n %* 9ul# %55%, the $abor Arbiter rendered a !ecision,
M'1N
in favor of the
petitioner declaring illegal his separation fro eplo#ent. The $abor Arbiter,
ho+ever, did not order petitionerKs reinstateent for the sae +as no longer
practical, and onl# directed private respondent to pa# petitioner
back+ages. The dispositive portion of the $abor ArbiterKs !ecision reads;

4>ERE=,RE, preises considered, the disissal of the
MpetitionerN is herein declared to be illegal. MPrivate respondentN is
directed to pa# the coplainant back+ages and separation pa# in the
total aount of ,ne >undred Eight# =our Thousand Eight >undred
"iCt# ,ne Pesos and =ift# Three Centavos .P')&, )*'.:1/.
M'&N


Both parties Euestioned the $abor ArbiterKs !ecision before the
N$RC. Petitioner assailed the portion of the $abor ArbiterKs !ecision den#ing his
pra#er for reinstateent, and arguing that the doctrine of strained relations is
applied onl# to confidential eplo#ees and his position as a driver +as not covered
b# such prohibition.
M':N
,n the other hand, private respondent controverted the
$abor ArbiterKs finding that petitioner +as illegall# disissed fro eplo#ent,
and insisted that petitioner +as never disissed fro his Fob but failed to report to
+ork after he +as asked to eCplain regarding his suspected drug use.
M'*N

,n ': April %551, the N$RC granted the appeal raised b# both parties and
reversed the $abor ArbiterKs !ecision.
M'2N
The N$RC declared that petitioner failed
to establish the fact of disissal for his clai that he +as banned fro entering the
training site +as rendered ipossible b# the fact that he +as able to subseEuentl#
clai his salar# and '1
th
onth pa#. PetitionerKs clai for reinstateent +as,
ho+ever, granted b# the N$RC. The decretal part of the N$RC !ecision reads;

4>ERE=,RE, preises considered, the decision under revie+
is, hereb# RE<ER"E! and "ET A"6!E, and another entered,
!6"M6""6N? the coplaint for lack of erit.

MPetitionerN is ho+ever, ordered RE6N"TATE! to his forer
position +ithout loss of seniorit# rights, but 46T>,@T
BACP4A?E".
M')N


The Motion for Reconsideration filed b# petitioner +as like+ise denied b#
the N$RC in its Resolution dated %( August %551.
M'(N

The Court of Appeals disissed petitionerKs Petition for &ertiorari under
Rule *: of the Revised Rules of Court, and affired the N$RC !ecision giving
ore credence to private respondentKs stance that petitioner +as not disissed
fro eplo#ent, as it is ore in accord +ith the evidence on record and the
attendant circustances of the instant case.
M%5N
"iilarl# ill3fated +as petitionerKs
Motion for Reconsideration, +hich +as denied b# the Court of Appeals in its
Resolution issued on 2 "epteber %55*.
M%'N

>ence, this instant Petition for Revie+ on &ertiorari
[22]
under Rule &: of the
Revised Rules of Court, filed b# petitioner assailing the foregoing Court of
Appeals !ecision and Resolution on the follo+ing grounds;

6.

4>ET>ER, T>E >,N. C,@RT ,= APPEA$" C,MM6TTE! A
M6"APPRE>EN"6,N ,= =ACT", AN! T>E A""A6$E!
!EC6"6,N 6" N,T "@PP,RTE! BA T>E E<6!ENCE ,N
REC,R!. PET6T6,NERK" !6"M6""A$ 4A" E"TAB$6">E! BA
T>E @NC,NTRA!6CTE! E<6!ENCE" ,N REC,R!, 4>6C>
4ERE M6"APPREC6ATE! BA P@B$6C RE"P,N!ENT N$RC,
AN! >A! T>E"E BEEN C,N"6!ERE! T>E 6NE<6TAB$E
C,NC$@"6,N 4,@$! BE T>E A==6RMAT6,N ,= T>E
$AB,R ARB6TERK" !EC6"6,N =6N!6N? 6$$E?A$ !6"M6""A$

66.

4>ET>ER, T>E >,N. C,@RT ,= APPEA$" "@B<ERTE! !@E
PR,CE"" ,= $A4 4>EN 6T !6! N,T C,N"6!ER T>E
E<6!ENCE ,N REC,R! ">,46N? T>AT T>ERE 4A" N,
9@"T CA@"E =,R !6"M6""A$ A" PET6T6,NER 6" N,T A
!R@? @"ER AN! T>ERE 6" N, E<6!ENCE T, "@PP,RT T>6"
?R,@N! =,R !6"M6""A$.

666.

4>ET>ER, T>E >,N. C,@RT ,= APPEA$" C,MM6TTE!
RE<ER"6B$E ERR,R ,= $A4 6N N,T =6N!6N? T>AT
RE"P,N!ENT" "@B<ERTE! PET6T6,NERK" R6?>T T, !@E
PR,CE"" ,= T>E $A4.
M%1N


Before +e delve into the erits of this case, it is best to stress that the issues
raised b# petitioner in this instant petition are factual in nature +hich is not +ithin
the office of a Petition for Revie+.
[24]
Theraison dAetre for this rule is that, this
Court is not a trier of facts and does not routinel# undertake the re3eCaination of
the evidence presented b# the contending parties for the factual findings of the
labor officials +ho have acEuired eCpertise in their o+n fields are accorded not
onl# respect but even finalit#, and are binding upon this Court.
M%:N

>o+ever, +hen the findings of the $abor Arbiter contradict those of the
N$RC, departure fro the general rule is +arranted, and this Court ust of
necessit# ake an infinitesial scrunit# and eCaine the records all over again
including the evidence presented b# the opposing parties to deterine +hich
findings should be preferred as ore conforable +ith evidentiar# facts.
M%*N

The priordial issue in the petition at bar is +hether the petitioner +as
illegall# disissed fro eplo#ent.

The $abor Arbiter found that the petitioner +as illegall# disissed fro
eplo#ent +arranting the pa#ent of his back+ages. The N$RC and the Court
of Appeals found other+ise.

6n reversing the $abor ArbiterKs !ecision, the N$RC underscored the settled
evidentiar# rule that before the burden of proof shifts to the eplo#er to prove the
validit# of the eplo#eeKs disissal, the eplo#ee ust first sufficientl# establish
that he +as indeed disissed fro eplo#ent. The petitioner, in the present
case, failed to establish the fact of his disissal. The N$RC did not give credence
to petitionerKs allegation that he +as banned b# the private respondent fro
entering the +orkplace, opining that had it been true that petitioner +as no longer
allo+ed to enter the training site +hen he reported for +ork thereat on % !eceber
%555, it is Euite a +onder he +as able to do so the ver# neCt da#, on 1 !eceber
%555, to clai his salar#.
M%2N

The Court of Appeals validated the above conclusion reached b# the N$RC
and further rationated that petitionerKs positive allegations that he +as disissed
fro service +as negated b# substantial evidence to the contrar#. PetitionerKs
averents of +hat transpired inside private respondentKs ain office on %(
Noveber %555, +hen he +as allegedl# alread# disissed fro service, and his
clai that he +as effectivel# banned fro private respondentKs preises are belied
b# the fact that he +as able to clai his salar# for the period of '*315 Noveber
%555 at private respondentKs training site.

Petitioner, therefore, is no+ before this Court assailing the !ecisions handed
do+n b# the N$RC and the Court of Appeals, and insisting that he +as illegall#
disissed fro his eplo#ent. Petitioner argues that his receipt of his earned
salar# for the period of '*315 Noveber %555, and his '1
th
onth pa#, is neither
inconsistent +ith nor a negation of his allegation of illegal disissal. Petitioner
aintains that he received his salar# and benefit onl# fro the guardhouse, for he
+as alread# banned fro the +ork preises.

4e are not persuaded.

4ell3entrenched is the principle that in order to establish a case before
Fudicial and Euasi3adinistrative bodies, it is necessar# that allegations ust be
supported b# substantial evidence.
M%)N
"ubstantial evidence is ore than a ere
scintilla. 6t eans such relevant evidence as a reasonable ind ight accept as
adeEuate to support a conclusion.
M%(N

6n the present case, there is hardl# an# evidence on record so as to eet the
Euantu of evidence reEuired, i.e., substantial evidence. PetitionerKs clai of
illegal disissal is supported b# no other than his o+n bare, uncorroborated and,
thus, self3serving allegations, +hich are also incoherent, inconsistent and
contradictor#.

Petitioner hiself narrated that +hen his presence +as reEuested on %(
Noveber %555 at the private respondentKs ain office +here he +as served +ith
the Notice to ECplain his superiorKs report on his suspected drug use, <P for
Adinistration T# offered hi separation pa# if he +ill Fust voluntaril# resign fro
eplo#ent. 4hile +e do not condone such an offer, neither can +e construe that
petitioner +as disissed at that instance. Petitioner +as onl# being given the
option to either resign and receive his separation pa# or not to resign but face the
possible disciplinar# charges against hi. The final decision, therefore, +hether to
voluntaril# resign or to continue +orking still, ultiatel# rests +ith the
petitioner. 6n fact, b# petitonerKs o+n adission, he reEuested fro <P for
Adinistration T# ore tie to think over the offer.

Moreover, the petitioner alleged that he +as not allo+ed to enter the training
site b# the guard on dut# +ho told hi that he +as alread# banned fro the
preises. "ubseEuentl#, ho+ever, petitioner aditted in his "uppleental
Affidavit that he +as able to return to the said site on 1 !eceber %555, to
clai his '*315 Noveber %555 salar#, and again on ( !eceber %555, to
receive his '1
th
onth pa#. The fact alone that he +as able to return to the training
site to clai his salar# and benefits raises doubt as to his purported ban fro the
preises.

=inall#, petitionerKs stance that he +as disissed b# private respondent +as
further +eakened +ith the presentation of private respondentKs pa#roll bearing
petitionerKs nae proving that petitioner reained as private respondentKs
eplo#ee up to !eceber %555. Again, petitionerKs assertion that the pa#roll +as
erel# fabricated for the purpose of supporting private respondentKs case before
the N$RC cannot be given credence. Entries in the pa#roll, being entries in the
course of business, enFo# the presuption of regularit# under Rule '15, "ection &1
of the Rules of Court. 6t is therefore incubent upon the petitioner to adduce clear
and convincing evidence in support of his clai of fabrication and to overcoe
such presuption of regularit#.
M15N
@nfortunatel#, petitioner again failed in such
endeavor.

,n these scores, there is a dearth of evidence to establish the fact of
petitionerKs disissal. 4e have scrupulousl# eCained the records and +e found
no evidence presented b# petitioner, other than his o+n contentions that he +as
indeed disissed b# private respondent.

4hile this Court is not unindful of the rule that in cases of illegal
disissal, the eplo#er bears the burden of proof to prove that the terination +as
for a valid or authori7ed cause in the case at bar, ho+ever, the facts and the
evidence did not establish a prima "acie case that the petitioner +as disissed fro
eplo#ent.
M1'N
Before the private respondent ust bear the burden of proving
that the disissal +as legal, petitioner ust first establish b# substantial evidence
the fact of his disissal fro service. $ogicall#, if there is no disissal, then there
can be no Euestion as to the legalit# or illegalit# thereof.

6n Machica v. Roosevelt Services &enter, nc.,
[32]
+e had underscored that the
burden of proving the allegations rest upon the part# alleging, to +it;

The rule is that one 83o 1++e?e# 1 716$ 31# $3e &u!%en o7
"!o5(n? ($H thus, petitioners +ere burdened to prove their allegation
that respondents disissed the fro their eplo#ent. I$ @u#$ &e
#$!e##e% $31$ $3e e5(%en6e $o "!o5e $3(# 716$ @u#$ &e 6+e1!, "o#($(5e
1n% 6on5(n6(n?. The rule that the eplo#er bears the burden of proof
in illegal disissal cases finds no application here because the
respondents den# having disissed the petitioners.
M11N


6n R%"ina Patis 9actory v. Al%sitain,
[34]
this Court took the occasion to
ephasi7e;

6t is a basic rule in evidence, ho+ever, that the burden of proof
is on the part of the part# +ho akes the allegations
Q ei inc%mbit probatio, >%i dicit, non >%i negat. I7 3e 6+1(@# 1 !(?3$
?!1n$e% &' +18, 3e @u#$ "!o5e 3(# 6+1(@ &' 6o@"e$en$ e5(%en6e,
!e+'(n? on $3e #$!en?$3 o7 3(# o8n e5(%en6e 1n% no$ u"on $3e
8e1Ane## o7 $31$ o7 3(# o""onen$.
B3/C



6t is true that the Constitution affords full protection to labor, and that in
light of this Constitutional andate, +e ust be vigilant in striking do+n an#
attept of the anageent to eCploit or oppress the +orking class. >o+ever, it
does not ean that +e are bound to uphold the +orking class in ever# labor dispute
brought before this Court for our resolution.

The la+ in protecting the rights of the eplo#ees, authori7es neither
oppression nor self3destruction of the eplo#er. 6t should be ade clear that +hen
the la+ tilts the scales of Fustice in favor of labor, it is in recognition of the inherent
econoic ineEualit# bet+een labor and anageent. The intent is to balance the
scales of FusticeH to put the t+o parties on relativel# eEual positions. There a# be
cases +here the circustances +arrant favoring labor over the interests of
anageent but never should the scale be so tilted if the result is an inFustice to
the eplo#er. $%stitia nemini neganda est 33 Fustice is to be denied to none.
M1*N

DHERE*ORE, preises considered, the instant Petition
is DENIED. The Court of Appeals !ecision dated %) Ma# %55: and its
Resolution dated 2 "epteber %55* in CA3?.R. "P No. 2(2%& are
hereb# A**IRMED. Costs against the petitioner.



SO ORDERED.



M:!A (. &H&O.:AZARO
Associate 9ustice
C1+1+1n? 5#. D(++(1@#, 70 P3(+ 7-0
*16$#9 Pursuant to the po+er delegated to it b# the $egislature, the !irector of
Public 4orks proulgated rules and regulations pertaining to the closure of
Rosario "treet and Ri7al Avenue to traffic of anial3dra+n vehicles for a #ear in
prohibition against respondent3public officers. Aong others, the petitioners aver
that the rules and regulations coplained of infringe upon constitutionalprecept on
the prootion of social Fustice to insure the +ell being and econoic securit# of all
people.
I##ue9 4hether or not the rules and regulation proote social Fustice.
He+%9 Aes. The prootion of "ocial 9ustice is to be adhered not through a
istaken s#path# to+ards an# given group.
"ocial Fustice is Dneither counis, nor despotis, nor atois, nor anarch#,D
but the huani7ation of la+s and the eEuali7ation of social and econoic force b#
the "tate so that Fustice in its rational and obFectivel# secular conception a# at
least be approCiated. "ocial Fustice eans the prootion of the +elfare of all the
people, the adoption b# the ?overnent of easures calculated to insure econoic
stabilit# of all the copetent eleents of societ#, through the aintenance of a
proper econoic and social eEuilibriu in the interrelations of the ebers of the
counit#, constitutionall#, through the adoption of easures legall# Fustifiable,
or eCtra3constitutionall#, through the eCercise of po+ers underl#ing the eCistence
of all governents on the tie3honored principle of salus populi est suprea leC.
"ocial Fustice, therefore, ust be founded on the recognition of the necessit# of
interdependence aong divers and diverse units of a societ# and of the protection
that should be eEuall# and evenl# eCtended to all groups as a cobined force in our
social and econoic life, consistent +ith the fundaental and paraount obFective
of the state of prooting the health, cofort and Euiet of all persons, and of
bringing about Dthe greatest good to the greatest nuber.D
CA$A$AN? v. 46$$6AM", 25 P>6$ 2%*, ?R No. &2)55, !eceber %, '(&5

=ACT"; The National Traffic Coission resolved that anial3dra+n vehicles be
prohibited fro passing along soe aFor streets such a Ri7al Ave. in Manila for a
period of one #ear fro the date of the opening of the Colgante Bridge to traffic.
The "ecretar# of Public 4orks approved the resolution on August '5,'(&5. The
Ma#or of Manila and the Acting Chief of Police of Manila have enforced the rules
and regulation. As a conseEuence, all anial3dra+n vehicles are not allo+ed to
pass and pick up passengers in the places above entioned to the detrient not
onl# of their o+ners but of the riding public as +ell.

6""@E; !oes the rule infringe upon the constitutional precept regarding the
prootion of social FusticeR 4hat is "ocial 9usticeR

>E$!; No. The regulation ais to proote safe transit and avoid obstructions on
national roads in the interest and convenience of the public. Persons and propert#
a# be subFect to all kinds of restraints and burdens in order to secure the general
cofort, health, and prosperit# of the "tate. To this fundaental ais of the
governent, the rights of the individual are subordinated.
"ocial Fustice is Sneither counis, nor despotis, nor atois, nor anarch#,T
but the huani7ation of la+s and the eEuali7ation of social and econoic forces b#
the "tate so that Fustice in its rational and obFectivel# secular conception a# at
least be approCiated. "ocial Fustice eans the prootion of the +elfare of all the
people, the adoption b# the ?overnent of easures calculated to insure econoic
stabilit# of all the copetent eleents of societ#, through the aintenance of a
proper econoic and social eEuilibriu in the interrelations of the ebers of the
counit#, constitutionall#, through the adoption of easures legall# Fustifiable,
or eCtra3constitutionall#, through the eCercise of po+ers underl#ing the eCistence
of all governents on the tie3honored principles of Sal%s Pop%li est S%prema
#ex..9ustice $aurel/
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L2.0.90 *e&!u1!' -7, 19.0
ANG TI)AY, !e"!e#en$e% &' TORI)IO TEODORO, @1n1?e! 1n% "!o"(e$o!,
1n%
NATIONAL DOR>ERS )ROTHERHOOD, petitioners,
vs.
THE COURT O* INDUSTRIAL RELATIONS 1n% NATIONAL LA)OR
UNION, INC., respondents.
O""ice o" the Solicitor.;eneral O<aeta and Assistant Attorney Barcelona "or the
&o%rt o" nd%strial Relations.
Antonio -. Pag%ia "or :ational #abor 0non.
&laro M. Recto "or petitioner BAng !ibayB.
$ose M. &asal "or :ational 7or4ers8 Brotherhood.
LAUREL, J.:
The "olicitor3?eneral in behalf of the respondent Court of 6ndustrial Relations in
the above3entitled case has filed a otion for reconsideration and oves that, for
the reasons stated in his otion, +e reconsider the follo+ing legal conclusions of
the aForit# opinion of this Court;
'. Uue un contrato de trabaFo, asi individual coo colectivo, sin terino fiFo
de duracion o Eue no sea para una deterinada, terina o bien por voluntad
de cualEuiera de las partes o cada ve7 Eue ilega el pla7o fiFado para el pago
de los salarios segun costubre en la localidad o cunado se terine la obraH
%. Uue los obreros de una epresa fabril, Eue han celebrado contrato, #a
individual #a colectivaente, con ell, sin tiepo fiFo, # Eue se han visto
obligados a cesar en sus tarbaFos por haberse declarando paro for7oso en la
fabrica en la cual tarbaFan, deFan de ser epleados u obreros de la isaH
1. Uue un patrono o sociedad Eue ha celebrado un contrato colectivo de
trabaFo con sus osbreros sin tiepo fiFo de duracion # sin ser para una obra
deteriinada # Eue se niega a readitir a dichos obreros Eue cesaron coo
consecuencia de un paro for7oso, no es culpable de practica inFusta in
incurre en la sancion penal del articulo : de la $e# No. %'1 del
Coon+ealth, aunEue su negativa a readitir se deba a Eue dichos
obreros pertenecen a un deterinado organiso obrero, puesto Eue tales #a
han deFado deser epleados su#os por terinacion del contrato en virtud del
paro.
The respondent National $abor @nion, 6nc., on the other hand, pra#s for the
vacation of the Fudgeent rendered b# the aForit# of this Court and the
reanding of the case to the Court of 6ndustrial Relations for a ne+ trial, and
avers;
'. That Toribio Teodoro0s clai that on "epteber %*, '(1), there +as
shortage of leather soles in AN? T6BAA aking it necessar# for hi to
teporaril# la# off the ebers of the National $abor @nion 6nc., is entirel#
false and unsupported b# the records of the Bureau of Custos and the
Books of Accounts of native dealers in leather.
%. That the supposed lack of leather aterials claied b# Toribio Teodoro
+as but a schee to s#steaticall# prevent the forfeiture of this bond
despite the breach of his C,NTRACT +ith the Philippine Ar#.
1. That Toribio Teodoro0s letter to the Philippine Ar# dated "epteber %(,
'(1), .re supposed dela# of leather soles fro the "tates/ +as but a schee
to s#steaticall# prevent the forfeiture of this bond despite the breach of his
C,NTRACT +ith the Philippine Ar#.
&. That the National 4orker0s Brotherhood of AN? T6BAA is a copan# or
eplo#er union doinated b# Toribio Teodoro, the eCistence and functions
of +hich are illegal. .%)' @."., :&), petitioner0s printed eorandu, p.
%:./
:. That in the eCercise b# the laborers of their rights to collective bargaining,
aForit# rule and elective representation are highl# essential and
indispensable. ."ections % and :, Coon+ealth Act No. %'1./
*. That the centur# provisions of the Civil Code +hich had been .the/
principal source of dissensions and continuous civil +ar in "pain cannot and
should not be ade applicable in interpreting and appl#ing the salutar#
provisions of a odern labor legislation of Aerican origin +here the
industrial peace has al+a#s been the rule.
2. That the eplo#er Toribio Teodoro +as guilt# of unfair labor practice for
discriinating against the National $abor @nion, 6nc., and unFustl# favoring
the National 4orkers0 Brotherhood.
). That the eChibits hereto attached are so inaccessible to the respondents
that even +ith the eCercise of due diligence the# could not be eCpected to
have obtained the and offered as evidence in the Court of 6ndustrial
Relations.
(. That the attached docuents and eChibits are of such far3reaching
iportance and effect that their adission +ould necessaril# ean the
odification and reversal of the Fudgent rendered herein.
The petitioner, Ang Tiba#, has filed an opposition both to the otion for
reconsideration of the respondent National $abor @nion, 6nc.
6n vie+ of the conclusion reached b# us and to be herein after stead +ith reference
to the otion for a ne+ trial of the respondent National $abor @nion, 6nc., +e are
of the opinion that it is not necessar# to pass upon the otion for reconsideration
of the "olicitor3?eneral. 4e shall proceed to dispose of the otion for ne+ trial of
the respondent labor union. Before doing this, ho+ever, +e dee it necessar#, in
the interest of orderl# procedure in cases of this nature, in interest of orderl#
procedure in cases of this nature, to ake several observations regarding the nature
of the po+ers of the Court of 6ndustrial Relations and ephasi7e certain guiding
principles +hich should be observed in the trial of cases brought before it. 4e have
re3eCained the entire record of the proceedings had before the Court of 6ndustrial
Relations in this case, and +e have found no substantial evidence that the
eCclusion of the )( laborers here +as due to their union affiliation or activit#. The
+hole transcript taken contains +hat transpired during the hearing and is ore of a
record of contradictor# and conflicting stateents of opposing counsel, +ith
sporadic conclusion dra+n to suit their o+n vie+s. 6t is evident that these
stateents and eCpressions of vie+s of counsel have no evidentiar# value.
The Court of 6ndustrial Relations is a special court +hose functions are specificall#
stated in the la+ of its creation .Coon+ealth Act No. '51/. 6t is ore an
adinistrative than a part of the integrated Fudicial s#ste of the nation. 6t is not
intended to be a ere receptive organ of the ?overnent. @nlike a court of Fustice
+hich is essentiall# passive, acting onl# +hen its Furisdiction is invoked and
deciding onl# cases that are presented to it b# the parties litigant, the function of
the Court of 6ndustrial Relations, as +ill appear fro perusal of its organic la+, is
ore active, affirative and d#naic. 6t not onl# eCercises Fudicial or Euasi3
Fudicial functions in the deterination of disputes bet+een eplo#ers and
eplo#ees but its functions in the deterination of disputes bet+een eplo#ers
and eplo#ees but its functions are far ore coprehensive and eCpensive. 6t has
Furisdiction over the entire Philippines, to consider, investigate, decide, and settle
an# Euestion, atter controvers# or dispute arising bet+een, and8or affecting
eplo#ers and eplo#ees or laborers, and regulate the relations bet+een the,
subFect to, and in accordance +ith, the provisions of Coon+ealth Act No. '51
.section '/. 6t shall take cogni7ance or purposes of prevention, arbitration, decision
and settleent, of an# industrial or agricultural dispute causing or likel# to cause a
strike or lockout, arising fro differences as regards +ages, shares or
copensation, hours of labor or conditions of tenanc# or eplo#ent, bet+een
landlords and tenants or far3laborers, provided that the nuber of eplo#ees,
laborers or tenants of far3laborers involved eCceeds thirt#, and such industrial or
agricultural dispute is subitted to the Court b# the "ecretar# of $abor or b# an#
or both of the parties to the controvers# and certified b# the "ecretar# of labor as
eCisting and proper to be b# the "ecretar# of $abor as eCisting and proper to be
dealth +ith b# the Court for the sake of public interest. ."ection &, ibid./ 6t shall,
before hearing the dispute and in the course of such hearing, endeavor to reconcile
the parties and induce the to settle the dispute b# aicable agreeent. .Paragraph
%, section &, ibid./ 4hen directed b# the President of the Philippines, it shall
investigate and stud# all industries established in a designated localit#, +ith a vie+
to deterinating the necessit# and fairness of fiCing and adopting for such industr#
or localit# a iniu +age or share of laborers or tenants, or a aCiu DcanonD
or rental to be paid b# the DinEuilinosD or tenants or less to lando+ners. ."ection
:, ibid./ 6n fine, it a# appeal to voluntar# arbitration in the settleent of industrial
disputesH a# eplo# ediation or conciliation for that purpose, or recur to the
ore effective s#ste of official investigation and copulsor# arbitration in order
to deterine specific controversies bet+een labor and capital industr# and in
agriculture. There is in realit# here a ingling of eCecutive and Fudicial functions,
+hich is a departure fro the rigid doctrine of the separation of governental
po+ers.
6n the case of ;oseco vs. &o%rt o" nd%strial Relations et al., ?.R. No. &**21,
proulgated "epteber '1, '(1(, +e had occasion to Foint out that the Court of
6ndustrial Relations et al., ?. R. No. &**21, proulgated "epteber '1, '(1(, +e
had occasion to point out that the Court of 6ndustrial Relations is not narro+l#
constrained b# technical rules of procedure, and the Act reEuires it to Dact
according to Fustice and eEuit# and substantial erits of the case, +ithout regard to
technicalities or legal fors and shall not be bound b# an# technicalities or legal
fors and shall not be bound b# an# technical rules of legal evidence but a#
infor its ind in such anner as it a# dee Fust and eEuitable.D ."ection %5,
Coon+ealth Act No. '51./ 6t shall not be restricted to the specific relief claied
or deands ade b# the parties to the industrial or agricultural dispute, but a#
include in the a+ard, order or decision an# atter or deterination +hich a# be
deeed necessar# or eCpedient for the purpose of settling the dispute or of
preventing further industrial or agricultural disputes. .section '1, ibid./ And in the
light of this legislative polic#, appeals to this Court have been especiall# regulated
b# the rules recentl# proulgated b# the rules recentl# proulgated b# this Court
to carr# into the effect the avo+ed legislative purpose. The fact, ho+ever, that the
Court of 6ndustrial Relations a# be said to be free fro the rigidit# of certain
procedural reEuireents does not ean that it can, in Fustifiable cases before it,
entirel# ignore or disregard the fundaental and essential reEuireents of due
process in trials and investigations of an adinistrative character. There are
priar# rights +hich ust be respected even in proceedings of this character;
.'/ The first of these rights is the right to a hearing, +hich includes the right
of the part# interested or affected to present his o+n case and subit
evidence in support thereof. 6n the language of Chief >ughes, in Morgan v.
0.S., 15& @.". ', :) ". Ct. 221, (((, )% $a+. ed. ''%(, Dthe libert# and
propert# of the citi7en shall be protected b# the rudientar# reEuireents of
fair pla#.
.%/ Not onl# ust the part# be given an opportunit# to present his case and
to adduce evidence tending to establish the rights +hich he asserts but the
tribunal m%st consider the evidence presented. .Chief 9ustice >ughes in
Morgan v. @.". %() @.". &*), :* ". Ct. (5*, )5 la+. ed. '%))./ 6n the
language of this court inCd)ards vs. Mc&oy, %% Phil., :(), Dthe right to
adduce evidence, +ithout the corresponding dut# on the part of the board to
consider it, is vain. "uch right is conspicuousl# futile if the person or
persons to +ho the evidence is presented can thrust it aside +ithout notice
or consideration.D
.1/ D4hile the dut# to deliberate does not ipose the obligation to decide
right, it does ipl# a necessit# +hich cannot be disregarded, nael#, that of
having soething to support it is a nullit#, a place +hen directl# attached.D
.Ed+ards vs. McCo#, s%pra./ This principle eanates fro the ore
fundaental is contrar# to the vesting of unliited po+er an#+here. $a+ is
both a grant and a liitation upon po+er.
.&/ Not onl# ust there be soe evidence to support a finding or conclusion
.Cit# of Manila vs. Agustin, ?.R. No. &:)&&, proulgated Noveber %(,
'(12, ---<6 ,. ?. '11:/, but the evidence ust be Dsubstantial.D
.4ashington, <irginia and Mar#land Coach Co. v. national labor Relations
Board, 15' @.". '&%, '&2, :2 ". Ct. *&), *:5, )' $a+. ed. (*:./ 6t eans
such relevant evidence as a reasonable ind accept as adeEuate to support a
conclusion.D .Appalachian Electric Po+er v. National $abor Relations
Board, & Cir., (1 =. %d ():, ()(H National $abor Relations Board v.
Thopson Products, * Cir., (2 =. %d '1, ':H Ballston3"till+ater Pnitting Co.
v. National $abor Relations Board, % Cir., () =. %d 2:), 2*5./ . . . The statute
provides that Dthe rules of evidence prevailing in courts of la+ and eEuit#
shall not be controlling.0 The obvious purpose of this and siilar provisions
is to free adinistrative boards fro the copulsion of technical rules so
that the ere adission of atter +hich +ould be deeed incopetent inn
Fudicial proceedings +ould not invalidate the adinistrative order. .6nterstate
Coerce Coission v. Baird, '(& @.". %:, &&, %& ". Ct. :*1, :*), &)
$a+. ed. )*5H 6nterstate Coerce Coission v. $ouisville and Nashville
R. Co., %%2 @.". )), (1 11 ". Ct. '):, ')2, :2 $a+. ed. &1'H @nited "tates v.
Abilene and "outhern R#. Co. ". Ct. %%5, %%:, 2& $a+. ed. *%&./ But this
assurance of a desirable fleCibilit# in adinistrative procedure does not go
far as to Fustif# orders +ithout a basis in evidence having rational probative
force. Mere uncorroborated hearsa# or ruor does not constitute substantial
evidence. .Consolidated Edison Co. v. National $abor Relations Board, :(
". Ct. %5*, )1 $a+. ed. No. &, Adv. ,p., p. '1'./D
.:/ The decision ust be rendered on the evidence presented at the hearing,
or at least contained in the record and disclosed to the parties affected.
.6nterstate Coence Coission vs. $. B N. R. Co., %%2 @.". )), 11 ".
Ct. '):, :2 $a+. ed. &1'./ ,nl# b# confining the adinistrative tribunal to
the evidence disclosed to the parties, can the latter be protected in their right
to kno+ and eet the case against the. 6t should not, ho+ever, detract fro
their dut# activel# to see that the la+ is enforced, and for that purpose, to use
the authori7ed legal ethods of securing evidence and inforing itself of
facts aterial and relevant to the controvers#. Boards of inEuir# a# be
appointed for the purpose of investigating and deterining the facts in an#
given case, but their report and decision are onl# advisor#. ."ection (,
Coon+ealth Act No. '51./ The Court of 6ndustrial Relations a# refer
an# industrial or agricultural dispute or an# atter under its consideration or
adviseent to a local board of inEuir#, a provincial fiscal. a Fustice of the
peace or an# public official in an# part of the Philippines for investigation,
report and recoendation, and a# delegate to such board or public
official such po+ers and functions as the said Court of 6ndustrial Relations
a# dee necessar#, but such delegation shall not affect the eCercise of the
Court itself of an# of its po+ers. ."ection '5, ibid./
.*/ The Court of 6ndustrial Relations or an# of its Fudges, therefore, ust act
on its or his o+n independent consideration of the la+ and facts of the
controvers#, and not sipl# accept the vie+s of a subordinate in arriving at a
decision. 6t a# be that the volue of +ork is such that it is literall#
Relations personall# to decide all controversies coing before the. 6n the
@nited "tates the difficult# is solved +ith the enactent of statutor#
authorit# authori7ing eCainers or other subordinates to render final
decision, +ith the right to appeal to board or coission, but in our case
there is no such statutor# authorit#.
.2/ The Court of 6ndustrial Relations should, in all controversial Euestions,
render its decision in such a anner that the parties to the proceeding can
kno+ the various issues involved, and the reasons for the decision rendered.
The perforance of this dut# is inseparable fro the authorit# conferred
upon it.
6n the right of the foregoing fundaental principles, it is sufficient to observe here
that, eCcept as to the alleged agreeent bet+een the Ang Tiba# and the National
4orker0s Brotherhood .appendiC A/, the record is barren and does not satisf# the
thirst for a factual basis upon +hich to predicate, in a national +a#, a conclusion of
la+.
This result, ho+ever, does not no+ preclude the concession of a ne+ trial pra#ed
for the b# respondent National $abor @nion, 6nc., it is alleged that Dthe supposed
lack of aterial claied b# Toribio Teodoro +as but a schee adopted to
s#steaticall# discharged all the ebers of the National $abor @nion 6nc., fro
+orkD and this avernent is desired to be proved b# the petitioner +ith the
Drecords of the Bureau of Custos and the Books of Accounts of native dealers in
leatherDH that Dthe National 4orkers Brotherhood @nion of Ang Tiba# is a
copan# or eplo#er union doinated b# Toribio Teodoro, the eCistence and
functions of +hich are illegal.D Petitioner further alleges under oath that the
eChibits attached to the petition to prove his substantial avernentsD are so
inaccessible to the respondents that even +ithin the eCercise of due diligence the#
could not be eCpected to have obtained the and offered as evidence in the Court
of 6ndustrial RelationsD, and that the docuents attached to the petition Dare of
such far reaching iportance and effect that their adission +ould necessaril#
ean the odification and reversal of the Fudgent rendered herein.D 4e have
considered the repl# of Ang Tiba# and its arguents against the petition. B# and
large, after considerable discussions, +e have coe to the conclusion that the
interest of Fustice +ould be better served if the ovant is given opportunit# to
present at the hearing the docuents referred to in his otion and such other
evidence as a# be relevant to the ain issue involved. The legislation +hich
created the Court of 6ndustrial Relations and under +hich it acts is ne+. The failure
to grasp the fundaental issue involved is not entirel# attributable to the parties
adversel# affected b# the result. Accordingl#, the otion for a ne+ trial should be
and the sae is hereb# granted, and the entire record of this case shall be reanded
to the Court of 6ndustrial Relations, +ith instruction that it reopen the case, receive
all such evidence as a# be relevant and other+ise proceed in accordance +ith the
reEuireents set forth hereinabove. "o ordered.
Avance=a, &. $., (illa.Real, mperial, -ia<, &oncepcion and Moran, $$., conc%r.
*16$#9 Ang Tiba# +as a anufacturer of rubber slippers.
There +as a shortage of leather soles, and it +as necessar# to teporaril# la# off
ebers of the National $abor @nion.
According to the @nion ho+ever, this +as erel# a schee to s#steaticall#
terinate the eplo#ees fro +ork, and that the shortage of soles is unsupported.
6t clais that Ang Tiba# is guilt# of @$P because the o+ner, Teodoro, is
discriinating against theNational $abor @nion, and unFustl# favoring the
National 4orkersBrotherhood, +hich +as allegedl# s#pathetic to the eplo#er.
The petitioner, Ang Tiba#, has filed an opposition both to the otionfor
reconsideration of the respondent Court of 6ndustrial Relations and to the
otion for ne+ trial of the respondent National $abor @nion, 6nc.
I##ue9 4hether or not special courts like Court of 6ndustrial Relations should
observe due process.
He+%9 Aes. The Court of 6ndustrial Relations is not narro+l# constrained b#
technical rules of procedure, and Coon+ealth Act No. '51 reEuires it to act
according to Fustice and eEuit# and substantial erits of the case, +ithout regard to
technicalities or legal evidence but a# infor its ind in such anner as it a#
dee Fust and eEuitable.
There are cardinal priar# rights +hich ust be respected even in proceedings of
this character. The first of these rights is the right to a hearing, +hich includes the
right of the part# interested or affected to present his o+n case and subit evidence
in support thereof. Not onl# ust the part# be given an opportunit# to present his
case and to adduce evidence tending to establish the rights +hich he asserts but the
tribunal ust consider the evidence presented. 4hile the dut# to deliberate does
not ipose the obligation to decide right, it does ipl# a necessit# +hich cannot be
disregarded, nael#, that of having soething to support its decision. Not onl#
ust there be soe evidence to support a finding or conclusion, but the evidence
ust be substantial. The decision ust be rendered on the evidence presented at
the hearing, or at least contained in the record and disclosed to the parties affected.
The Court of 6ndustrial Relations or an# of its Fudges, therefore, ust act on its or
his o+n independent consideration of the la+ and facts of the controvers#, and not
sipl# accept the vie+s of a subordinate in arriving at a decision. The Court of
6ndustrial Relations should, in all controversial Euestions, render its decision in
such a anner that the parties to the proceeding can kno+ the various issues
involved, and the reasons for the decisions rendered. The perforance of this dut#
is inseparable fro the authorit# conferred upon it.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 819/8 June 30, 1988
PHILIPPINE ASSOCIATION O* SER:ICE E,PORTERS, INC., petitioner,
vs.
HON. *RAN>LIN M. DRILON 1# Se6!e$1!' o7 L1&o! 1n% E@"+o'@en$, 1n%
TOMAS D. ACHACOSO, 1# A%@(n(#$!1$o! o7 $3e P3(+(""(ne O5e!#e1#
E@"+o'@en$ A%@(n(#$!1$(on, respondents.
;%tierre< ? Alo #a) O""ices "or petitioner.

SARMIENTO, J.:
The petitioner, Philippine Association of "ervice ECporters, 6nc. .PA"E6, for short/,
a fir Dengaged principall# in the recruitent of =ilipino +orkers, ale and
feale, for overseas placeent,D
1
challenges the Constitutional validit# of
!epartent ,rder No. ', "eries of '()), of the !epartent of $abor and
Eplo#ent, in the character of D?@6!E$6NE" ?,<ERN6N? T>E
TEMP,RARA "@"PEN"6,N ,= !EP$,AMENT ,= =6$6P6N, !,ME"T6C
AN! >,@"E>,$! 4,RPER",D in this petition for certiorari and prohibition.
"pecificall#, the easure is assailed for Ddiscriination against ales or
fealesHD
-
that it Ddoes not appl# to all =ilipino +orkers but onl# to doestic
helpers and feales +ith siilar skillsHD
3
and that it is violative of the right to
travel. 6t is held like+ise to be an invalid eCercise of the la+aking po+er, police
po+er being legislative, and not eCecutive, in character.
6n its suppleent to the petition, PA"E6 invokes "ection 1, of Article -666, of the
Constitution, providing for +orker participation Din polic# and decision3aking
processes affecting their rights and benefits as a# be provided b#
la+.D
.
!epartent ,rder No. ', it is contended, +as passed in the absence of prior
consultations. 6t is claied, finall#, to be in violation of the Charter0s non3
ipairent clause, in addition to the Dgreat and irreparable inFur#D that PA"E6
ebers face should the ,rder be further enforced.
,n Ma# %:, '()), the "olicitor ?eneral, on behalf of the respondents "ecretar# of
$abor and Adinistrator of the Philippine ,verseas Eplo#ent Adinistration,
filed a Coent inforing the Court that on March ), '()), the respondent $abor
"ecretar# lifted the deplo#ent ban in the states of 6raE, 9ordan, Uatar, Canada,
>ongkong, @nited "tates, 6tal#, Nor+a#, Austria, and "+it7erland. E 6n subitting
the validit# of the challenged Dguidelines,D the "olicitor ?eneral invokes the police
po+er of the Philippine "tate.
6t is aditted that !epartent ,rder No. ' is in the nature of a police po+er
easure. The onl# Euestion is +hether or not it is valid under the Constitution.
The concept of police po+er is +ell3established in this Furisdiction. 6t has been
defined as the Dstate authorit# to enact legislation that a# interfere +ith personal
libert# or propert# in order to proote the general +elfare.D
/
As defined, it
consists of .'/ an iposition of restraint upon libert# or propert#, .%/ in order to
foster the coon good. 6t is not capable of an eCact definition but has been,
purposel#, veiled in general ters to underscore its all3coprehensive ebrace.
D6ts scope, ever3eCpanding to eet the eCigencies of the ties, even to anticipate
the future +here it could be done, provides enough roo for an efficient and
fleCible response to conditions and circustances thus assuring the greatest
benefits.D
0
6t finds no specific Constitutional grant for the plain reason that it does not o+e its
origin to the Charter. Along +ith the taCing po+er and einent doain, it is inborn
in the ver# fact of statehood and sovereignt#. 6t is a fundaental attribute of
governent that has enabled it to perfor the ost vital functions of governance.
Marshall, to +ho the eCpression has been credited,
7
refers to it succinctl# as the
plenar# po+er of the "tate Dto govern its citi7ens.D
8
DThe police po+er of the "tate ... is a po+er coeCtensive +ith self3 protection, and
it is not inaptl# tered the Dla+ of over+heling necessit#.D 6t a# be said to be
that inherent and plenar# po+er in the "tate +hich enables it to prohibit all things
hurtful to the cofort, safet#, and +elfare of societ#.D
9
6t constitutes an iplied liitation on the Bill of Rights. According to =ernando, it
is Drooted in the conception that en in organi7ing the state and iposing upon its
governent liitations to safeguard constitutional rights did not intend thereb# to
enable an individual citi7en or a group of citi7ens to obstruct unreasonabl# the
enactent of such salutar# easures calculated to ensure counal peace, safet#,
good order, and +elfare.D
10
"ignificantl#, the Bill of Rights itself does not purport
to be an absolute guarant# of individual rights and liberties DEven libert# itself, the
greatest of all rights, is not unrestricted license to act according to one0s +ill.D
11
6t
is subFect to the far ore overriding deands and reEuireents of the greater
nuber.
Not+ithstanding its eCtensive s+eep, police po+er is not +ithout its o+n
liitations. =or all its a+esoe conseEuences, it a# not be eCercised arbitraril#
or unreasonabl#. ,ther+ise, and in that event, it defeats the purpose for +hich it is
eCercised, that is, to advance the public good. Thus, +hen the po+er is used to
further private interests at the eCpense of the citi7enr#, there is a clear isuse of the
po+er.
1-
6n the light of the foregoing, the petition ust be disissed.
As a general rule, official acts enFo# a presued vahdit#.
13
6n the absence of clear
and convincing evidence to the contrar#, the presuption logicall# stands.
The petitioner has sho+n no satisfactor# reason +h# the contested easure should
be nullified. There is no Euestion that !epartent ,rder No. ' applies onl# to
Dfeale contract +orkers,D
1.
but it does not thereb# ake an undue discriination
bet+een the seCes. 6t is +ell3settled that DeEualit# before the la+D under the
Constitution
1/
does not iport a perfect 6dentit# of rights aong all en and
+oen. 6t adits of classifications, provided that .'/ such classifications rest on
substantial distinctionsH .%/ the# are gerane to the purposes of the la+H .1/ the#
are not confined to eCisting conditionsH and .&/ the# appl# eEuall# to all ebers
of the sae class.
10
The Court is satisfied that the classification ade3the preference for feale
+orkers G rests on substantial distinctions.
As a atter of Fudicial notice, the Court is +ell a+are of the unhapp# plight that
has befallen our feale labor force abroad, especiall# doestic servants, aid
eCploitative +orking conditions arked b#, in not a fe+ cases, ph#sical and
personal abuse. The sordid tales of altreatent suffered b# igrant =ilipina
+orkers, even rape and various fors of torture, confired b# testionies of
returning +orkers, are copelling otives for urgent ?overnent action. As
precisel# the caretaker of Constitutional rights, the Court is called upon to protect
victis of eCploitation. 6n fulfilling that dut#, the Court sustains the ?overnent0s
efforts.
The sae, ho+ever, cannot be said of our ale +orkers. 6n the first place, there is
no evidence that, eCcept perhaps for isolated instances, our en abroad have been
afflicted +ith an 6dentical predicaent. The petitioner has proffered no arguent
that the ?overnent should act siilarl# +ith respect to ale +orkers. The Court,
of course, is not ipressing soe ale chauvinistic notion that en are superior to
+oen. 4hat the Court is sa#ing is that it +as largel# a atter of evidence .that
+oen doestic +orkers are being ill3treated abroad in assive instances/ and not
upon soe fanciful or arbitrar# #ardstick that the ?overnent acted in this case. 6t
is evidence capable indeed of unEuestionable deonstration and evidence this
Court accepts. The Court cannot, ho+ever, sa# the sae thing as far as en are
concerned. There is sipl# no evidence to Fustif# such an inference. "uffice it to
state, then, that insofar as classifications are concerned, this Court is content that
distinctions are borne b# the evidence. !iscriination in this case is Fustified.
As +e have furtherore indicated, eCecutive deterinations are generall# final on
the Court. @nder a republican regie, it is the eCecutive branch that enforces
polic#. =or their part, the courts decide, in the proper cases, +hether that polic#, or
the anner b# +hich it is ipleented, agrees +ith the Constitution or the la+s,
but it is not for the to Euestion its +isdo. As a co3eEual bod#, the Fudiciar# has
great respect for deterinations of the Chief ECecutive or his subalterns, especiall#
+hen the legislature itself has specificall# given the enough roo on ho+ the la+
should be effectivel# enforced. 6n the case at bar, there is no gainsa#ing the fact,
and the Court +ill deal +ith this at greater length shortl#, that !epartent ,rder
No. ' ipleents the rule3aking po+ers granted b# the $abor Code. But +hat
should be noted is the fact that in spite of such a fiction of finalit#, the Court is on
its o+n persuaded that prevailing conditions indeed call for a deplo#ent ban.
There is like+ise no doubt that such a classification is gerane to the purpose
behind the easure. @nEuestionabl#, it is the avo+ed obFective of !epartent
,rder No. ' to Denhance the protection for =ilipino feale overseas
+orkersD
17
this Court has no Euarrel that in the idst of the terrible istreatent
=ilipina +orkers have suffered abroad, a ban on deplo#ent +ill be for their o+n
good and +elfare.
The ,rder does not narro+l# appl# to eCisting conditions. Rather, it is intended to
appl# indefinitel# so long as those conditions eCist. This is clear fro the ,rder
itself .DPending revie+ of the adinistrative and legal easures, in the Philippines
and in the host countries . . .D
18
/, eaning to sa# that should the authorities arrive
at a eans ipressed +ith a greater degree of peranenc#, the ban shall be lifted.
As a stop3gap easure, it is possessed of a necessar# alleabilit#, depending on
the circustances of each case. Accordingl#, it provides;
(. $6=T6N? ,= "@"PEN"6,N. G The "ecretar# of $abor and
Eplo#ent .!,$E/ a#, upon recoendation of the Philippine
,verseas Eplo#ent Adinistration .P,EA/, lift the suspension in
countries +here there are;
'. Bilateral agreeents or understanding +ith the Philippines, and8or,
%. ECisting echaniss providing for sufficient safeguards to ensure
the +elfare and protection of =ilipino +orkers.
19
The Court finds, finall#, the ipugned guidelines to be applicable to all feale
doestic overseas +orkers. That it does not appl# to Dall =ilipina +orkersD
-0
is not
an arguent for unconstitutionalit#. >ad the ban been given universal applicabilit#,
then it +ould have been unreasonable and arbitrar#. =or obvious reasons, not all of
the are siilarl# circustanced. 4hat the Constitution prohibits is the singling
out of a select person or group of persons +ithin an eCisting class, to the preFudice
of such a person or group or resulting in an unfair advantage to another person or
group of persons. To appl# the ban, sa# eCclusivel# to +orkers deplo#ed b# A, but
not to those recruited b# B, +ould obviousl# clash +ith the eEual protection clause
of the Charter. 6t +ould be a classic case of +hat Chase refers to as a la+ that
Dtakes propert# fro A and gives it to B.D
-1
6t +ould be an unla+ful invasion of
propert# rights and freedo of contract and needless to state, an invalid
act.
--
.=ernando sa#s; D4here the classification is based on such distinctions that
ake a real difference as infanc#, seC, and stage of civili7ation of inorit# groups,
the better rule, it +ould see, is to recogni7e its validit# onl# if the #oung, the
+oen, and the cultural inorities are singled out for favorable treatent. There
+ould be an eleent of unreasonableness if on the contrar# their status that calls
for the la+ inistering to their needs is ade the basis of discriinator# legislation
against the. 6f such be the case, it +ould be difficult to refute the assertion of
denial of eEual protection.D
-3
6n the case at bar, the assailed ,rder clearl# accords
protection to certain +oen +orkers, and not the contrar#./
6t is incorrect to sa# that !epartent ,rder No. ' prescribes a total ban on overseas
deplo#ent. =ro scattered provisions of the ,rder, it is evident that such a total
ban has hot been conteplated. 4e Euote;
:. A@T>,R6JE! !EP$,AMENT3The deplo#ent of doestic
helpers and +orkers of siilar skills defined herein to the follo+ing
MsicN are authori7ed under these guidelines and are eCepted fro the
suspension.
:.' >irings b# iediate ebers of the fail# of
>eads of "tate and ?overnentH
:.% >irings b# Minister, !eput# Minister and the other
senior governent officialsH and
:.1 >irings b# senior officials of the diploatic corps
and dul# accredited international organi7ations.
:.& >irings b# eplo#ers in countries +ith +ho the
Philippines have MsicN bilateral labor agreeents or
understanding.
CCC CCC CCC
2. <ACAT6,N6N? !,ME"T6C >E$PER" AN! 4,RPER" ,=
"6M6$AR "P6$$"33<acationing doestic helpers and8or +orkers of
siilar skills shall be allo+ed to process +ith the P,EA and leave for
+orksite onl# if the# are returning to the sae eplo#er to finish an
eCisting or partiall# served eplo#ent contract. Those +orkers
returning to +orksite to serve a ne+ eplo#er shall be covered b# the
suspension and the provision of these guidelines.
CCC CCC CCC
(. $6=T6N? ,= "@"PEN"6,N3The "ecretar# of $abor and
Eplo#ent .!,$E/ a#, upon recoendation of the Philippine
,verseas Eplo#ent Adinistration .P,EA/, lift the suspension in
countries +here there are;
'. Bilateral agreeents or understanding +ith the
Philippines, and8or,
%. ECisting echaniss providing for sufficient
safeguards to ensure the +elfare and protection of
=ilipino +orkers.
-.
CCC CCC CCC
The conseEuence the deplo#ent ban has on the right to travel does not ipair the
right. The right to travel is subFect, aong other things, to the reEuireents of
Dpublic safet#,D Das a# be provided b# la+.D
-/
!epartent ,rder No. ' is a valid
ipleentation of the $abor Code, in particular, its basic polic# to Dafford
protection to labor,D
-0
pursuant to the respondent !epartent of $abor0s rule3
aking authorit# vested in it b# the $abor Code.
-7
The petitioner assues that it is
unreasonable sipl# because of its ipact on the right to travel, but as +e have
stated, the right itself is not absolute. The disputed ,rder is a valid Eualification
thereto.
Neither is there erit in the contention that !epartent ,rder No. ' constitutes an
invalid eCercise of legislative po+er. 6t is true that police po+er is the doain of
the legislature, but it does not ean that such an authorit# a# not be la+full#
delegated. As +e have entioned, the $abor Code itself vests the !epartent of
$abor and Eplo#ent +ith ruleaking po+ers in the enforceent +hereof.
-8
The petitioners0s reliance on the Constitutional guarant# of +orker participation Din
polic# and decision3aking processes affecting their rights and benefitsD
-9
is not
+ell3taken. The right granted b# this provision, again, ust subit to the deands
and necessities of the "tate0s po+er of regulation.
The Constitution declares that;
"ec. 1. The "tate shall afford full protection to labor, local and
overseas, organi7ed and unorgani7ed, and proote full eplo#ent
and eEualit# of eplo#ent opportunities for all.
30
DProtection to laborD does not signif# the prootion of eplo#ent alone. 4hat
concerns the Constitution ore paraountl# is that such an eplo#ent be above
all, decent, Fust, and huane. 6t is bad enough that the countr# has to send its sons
and daughters to strange lands because it cannot satisf# their eplo#ent needs at
hoe. @nder these circustances, the ?overnent is dut#3bound to insure that our
toiling eCpatriates have adeEuate protection, personall# and econoicall#, +hile
a+a# fro hoe. 6n this case, the ?overnent has evidence, an evidence the
petitioner cannot seriousl# dispute, of the lack or inadeEuac# of such protection,
and as part of its dut#, it has precisel# ordered an indefinite ban on deplo#ent.
The Court finds furtherore that the ?overnent has not indiscriinatel# ade
use of its authorit#. 6t is not contested that it has in fact reoved the prohibition
+ith respect to certain countries as anifested b# the "olicitor ?eneral.
The non3ipairent clause of the Constitution, invoked b# the petitioner, ust
#ield to the loftier purposes targetted b# the ?overnent.
31
=reedo of contract
and enterprise, like all other freedos, is not free fro restrictions, ore so in this
Furisdiction, +here laisse< "aire has never been full# accepted as a controlling
econoic +a# of life.
This Court understands the grave iplications the Euestioned ,rder has on the
business of recruitent. The concern of the ?overnent, ho+ever, is not
necessaril# to aintain profits of business firs. 6n the ordinar# seEuence of
events, it is profits that suffer as a result of ?overnent regulation. The interest of
the "tate is to provide a decent living to its citi7ens. The ?overnent has
convinced the Court in this case that this is its intent. 4e do not find the ipugned
,rder to be tainted +ith a grave abuse of discretion to +arrant the eCtraordinar#
relief pra#ed for.
4>ERE=,RE, the petition is !6"M6""E!. No costs.
", ,R!ERE!.
Dap, &.$., 9ernan, :arvasa, Melencio.Herrera, &r%<, Paras, 9eliciano, ;ancayco,
Padilla, Bidin, &ortes and ;ri=o.A>%ino, $$., conc%r.
;%tierre<, $r. and Medialdea, $$., are on leave.
PA"E6 MPhilippine Association of "ervice ECporters 6ncN v. !rilon M?R $3)'(:),
15 9une '())N
En Banc, "ariento .9/; '% concur, % on leave
=acts; The Philippine Association of "ervice ECporters, 6nc. .PA"E6/ is a fir
Dengaged principall# in the
recruitent of =ilipino +orkers, ale and feale, for overseas placeent.D 6t
challenged the Constitutional
validit# of !,$EKs !epartent ,rder ' .series of '())/, in the character of
D?uidelines ?overning the
Teporar# "uspension of !eplo#ent of =ilipino !oestic and >ousehold
4orkers,D in a petition for
certiorari and prohibition. The easure is assailed .'/ for Ddiscriination against
ales or fealesHD that it
Ddoes not appl# to all =ilipino +orkers but onl# to doestic helpers and feales
+ith siilar skillsHD .%/ for
being violative of the right to travel, and .1/ for being an invalid eCercise of the
la+aking po+er, police
po+er being legislative, and not eCecutive, in character. PA"E6 also invoked
"ection 1 of Article -666 of the
Constitution providing for +orker participation Din polic# and decision3aking
processes affecting their rights
and benefits as a# be provided b# la+ as !epartent ,rder No. ', as contended,
+as passed in the absence
of prior consultations. 6t also claied that it violated the Charter0s non3ipairent
clause, in addition to the
Dgreat and irreparable inFur#D that PA"E6 ebers face should the ,rder be further
enforced. ,n %: Ma#
'()), the "olicitor ?eneral, on behalf of the "ecretar# of $abor and Adinistrator
of the P,EA, filed a
Coent inforing the Court that on ) March '()), the $abor "ecretar# lifted the
deplo#ent ban in the
states of 6raE, 9ordan, Uatar, Canada, >ongkong, @nited "tates, 6tal#, Nor+a#,
Austria, and "+it7erland. 6n
subitting the validit# of the challenged Dguidelines,D the "olicitor ?eneral
invokes the police po+er of the
Philippine "tate.
6ssue; 4hether !epartent ,rder ' undul# discriinates against +oen.
>eld; !epartent ,rder ' applies onl# to Dfeale contract +orkers,D but it does
not thereb# ake an undue
discriination bet+een the seCes. VEEualit# before the la+D under the Constitution
does not iport a perfect
identit# of rights aong all en and +oen. 6t adits of classifications, provided
that .'/ such classifications
rest on substantial distinctionsH .%/ the# are gerane to the purposes of the la+H .1/
the# are not confined to
eCisting conditionsH and .&/ the# appl# eEuall# to all ebers of the sae class.
The classification ade G
the preference for feale +orkers G rests on substantial distinctions. The sordid
tales of altreatent
suffered b# igrant =ilipina +orkers, even rape and various fors of torture,
confired b# testionies of
returning +orkers, are copelling otives for urgent ?overnent action. As
precisel# the caretaker of
Constitutional rights, the Court is called upon to protect victis of eCploitation. 6n
fulfilling that dut#, the
Court sustains the ?overnent0s efforts. There is no evidence that, eCcept perhaps
for isolated instances,
=ilipino en abroad have been afflicted +ith an identical predicaent.
!iscriination in this case is Fustified.
=urther, the ipugned guidelines are applicable to all feale doestic overseas
+orkers, not all =ilipina
+orkers. >ad the ban been given universal applicabilit#, then it +ould have been
unreasonable and arbitrar#,
due to the fact that not all of the are siilarl# circustanced. 4hat the
Constitution prohibits is the singling
out of a select person or group of persons +ithin an eCisting class, to the preFudice
of such a person or group
or resulting in an unfair advantage to another person or group of persons. 4here
the classification is based on
such distinctions that ake a real difference as infanc#, seC, and stage of
civili7ation of inorit# groups, the
better rule is to recogni7e its validit# onl# if the #oung, the +oen, and the cultural
inorities are singled out
for favorable treatent.
*16$#9 The petitioner, Philippine Association of "ervice ECporters, 6nc. .PA"E6, for
short/, a fir Dengaged principall# in the recruitent of =ilipino +orkers, ale and
feale, for overseas placeent,D challenges the Constitutional validit# of
!epartent ,rder No. ', "eries of '()), of the !epartent of $abor and
Eplo#ent, in the character of D?@6!E$6NE" ?,<ERN6N? T>E
TEMP,RARA "@"PEN"6,N ,= !EP$,AMENT ,= =6$6P6N, !,ME"T6C
AN! >,@"E>,$! 4,RPER",D in this petition for certiorari and prohibition.
The easure is assailed for Ddiscriination against ales or feales,D that it 0does
not appl# to all =ilipino +orkers but onl# to doestic helpers and feales +ith
siilar skills,D and that it is violative of the right to travel. 6t +as like+ise held to
be an invalid eCercise of the la+aking po+er, police po+er being legislative, and
not eCecutive, in character.
6n its suppleent to the petition, PA"E6 invokes "ection 1, of Article -666, of the
Constitution, providing for +orker participation Din polic# and decision3aking
processes affecting their rights and benefits as a# be provided b# la+.D 6n
addition, it +as contended that !epartent ,rder No. ' +as passed in the absence
of prior consultations. 6t +as claied to be in violation of the Charter0s non3
ipairent clause, in addition to the Dgreat and irreparable inFur#D that PA"E6
ebers face should the ,rder be further enforced.
The "olicitor ?eneral, on behalf of the respondent "ecretar# of $abor and
Adinistrator of the Philippine ,verseas Eplo#ent Adinistration, invokes the
police po+er of the Philippine "tate.
I##ue9 4hether or not deplo#ent ban for feale doestic helpers is valid under
our Constitution.
He+%9 Aes. 6t is a valid eCercise of police po+er. The concept of police po+er is
+ell3established in this Furisdiction. 6t has been defined as the Dstate authorit# to
enact legislation that a# interfere +ith personal libert# or propert# in order to
proote the general +elfare.D As defined, it consists of .'/ an iposition of
restraint upon libert# or propert#, .%/ in order to foster the coon good. 6t is not
capable of an eCact definition but has been, purposel#, veiled in general ters to
underscore its all3coprehensive ebrace.
D6ts scope, ever3eCpanding to eet the eCigencies of the ties, even to anticipate
the future +here it could be done, provides enoughroo for an efficient and
fleCible response to conditions and circustances thus assuring the greatest
benefits.D
6t constitutes an iplied liitation on the Bill of Rights. According to =ernando, it
is Drooted in the conception that en in organi7ing the state and iposing upon its
governent liitations to safeguard constitutional rights did not intend thereb# to
enable an individual citi7en or a group of citi7ens to obstruct unreasonabl# the
enactent of such salutar# easures calculated to ensure counal peace, safet#,
good order, and +elfare.D "ignificantl#, the Bill of Rights itself does not purport to
be an absolute guarant# of individual rights and liberties DEven libert# itself, the
greatest of all rights, is not unrestricted license to act according to one0s +ill.D 6t is
subFect to the far ore overriding deands and reEuireents of the greater
nuber.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 10701. M1!63 -., -009
ANTONIO M. SERRANO, Petitioner,
vs.
G1++1n$ MARITIME SER:ICES, INC. 1n% MARLOD NA:IGATION CO.,
INC., Respondents.
! E C 6 " 6 , N
AUSTRIA2MARTINEF, J.:
=or decades, the toil of solitar# igrants has helped lift entire failies and
counities out of povert#. Their earnings have built houses, provided health care,
eEuipped schools and planted the seeds of businesses. The# have +oven together
the +orld b# transitting ideas and kno+ledge fro countr# to countr#. The# have
provided the d#naic huan link bet+een cultures, societies and econoies. Aet,
onl# recentl# have +e begun to understand not onl# ho+ uch international
igration ipacts developent, but ho+ sart public policies can agnif# this
effect.
@nited Nations "ecretar#3?eneral Ban Pi3Moon
?lobal =oru on Migration and !evelopent
Brussels, 9ul# '5, %552
'
=or Antonio "errano .petitioner/, a =ilipino seafarer, the last clause in the :th
paragraph of "ection '5, Republic Act .R.A./ No. )5&%,
%
to +it;
"ec. '5. Money &laims. 3 C C C 6n case of terination of overseas eplo#ent
+ithout Fust, valid or authori7ed cause as defined b# la+ or contract, the +orkers
shall be entitled to the full reiburseent of his placeent fee +ith interest of
t+elve percent .'%I/ per annu, plus his salaries for the uneCpired portion of his
eplo#ent contract or for three (3) months for every year of the unexpired
term, whichever is ess.
C C C C .Ephasis and underscoring supplied/
does not agnif# the contributions of overseas =ilipino +orkers .,=4s/ to
national developent, but eCacerbates the hardships borne b# the b# undul#
liiting their entitleent in case of illegal disissal to their lup3su salar# either
for the uneCpired portion of their eplo#ent contract Dor for three onths for
ever# #ear of the uneCpired ter, +hichever is lessD .subFect clause/. Petitioner
clais that the last clause violates the ,=4s0 constitutional rights in that it ipairs
the ters of their contract, deprives the of eEual protection and denies the due
process.
B# +a# of Petition for Revie+ under Rule &: of the Rules of Court, petitioner
assails the !eceber ), %55& !ecision
1
and April ', %55: Resolution
&
of the Court
of Appeals .CA/, +hich applied the subFect clause, entreating this Court to declare
the subFect clause unconstitutional.
Petitioner +as hired b# ?allant Maritie "ervices, 6nc. and Marlo+ Navigation
Co., $td. .respondents/ under a Philippine ,verseas Eplo#ent Adinistration
.P,EA/3approved Contract of Eplo#ent +ith the follo+ing ters and
conditions;
!uration of contract '% onths
Position Chief ,fficer
Basic onthl# salar# @"W',&55.55
>ours of +ork &).5 hours per +eek
,vertie @"W255.55 per onth
<acation leave +ith pa# 2.55 da#s per onth
:
,n March '(, '((), the date of his departure, petitioner +as constrained to accept
a do+ngraded eplo#ent contract for the position of "econd ,fficer +ith a
onthl# salar# of @"W',555.55, upon the assurance and representation of
respondents that he +ould be ade Chief ,fficer b# the end of April '(().
*
Respondents did not deliver on their proise to ake petitioner Chief
,fficer.
2
>ence, petitioner refused to sta# on as "econd ,fficer and +as repatriated
to the Philippines on Ma# %*, '(().
)
Petitioner0s eplo#ent contract +as for a period of '% onths or fro March '(,
'(() up to March '(, '(((, but at the tie of his repatriation on Ma# %*, '((), he
had served onl# t+o .%/ onths and seven .2/ da#s of his contract, leaving an
uneCpired portion of nine .(/ onths and t+ent#3three .%1/ da#s.
Petitioner filed +ith the $abor Arbiter .$A/ a Coplaint
(
against respondents for
constructive disissal and for pa#ent of his one# clais in the total aount of
@"W%*,&&%.21, broken do+n as follo+s;
Ma# %281', '(() .: da#s/ incl. $eave
pa#
@"W &'1.(5
9une 5'815, '(() %,:(5.55
9ul# 5'81', '(() %,:(5.55
August 5'81', '(() %,:(5.55
"ept. 5'815, '(() %,:(5.55
,ct. 5'81', '(() %,:(5.55
Nov. 5'815, '(() %,:(5.55
!ec. 5'81', '(() %,:(5.55
9an. 5'81', '((( %,:(5.55
=eb. 5'8%), '((( %,:(5.55
Mar. '8'(, '((( .'( da#s/ incl. leave
pa#
',*&5.55
33333333333333333333
33333333333333333333
33333333333333333333
33333333333333333333
%:,1)%.%1
Aount adFusted to chief ate0s salar#
.March '(81', '(() to April '815, '(()/
X
',5*5.:5
'5
33333333333333333333
33333333333333333333
33333333333333333333
33333333333333333333
33333333333333
T,TA$ C$A6M @"W %*,&&%.21
''
as +ell as oral and eCeplar# daages and attorne#0s fees.
The $A rendered a !ecision dated 9ul# ':, '(((, declaring the disissal of
petitioner illegal and a+arding hi onetar# benefits, to +it;
4>ERE=,RE, preises considered, Fudgent is hereb# rendered declaring
that the disissal of the coplainant .petitioner/ b# the respondents in the
above3entitled case +as illegal and the respondents are hereb# ordered to
pa# the coplainant MpetitionerN, Fointl# and severall#, in Philippine
Currenc#, based on the rate of eCchange prevailing at the tie of pa#ent,
the aount of !"#$% %$&'()*+ (!,!* $'*+-!+ (!,!*%. '.(.
+&//)-( ('( 01,223.33), representin4 the compainant5s saary for
three (3) months of the unexpired portion of the aforesaid contract of
empoyment.*avvphi*
The respondents are like+ise ordered to pa# the coplainant MpetitionerN,
Fointl# and severall#, in Philippine Currenc#, based on the rate of eCchange
prevailing at the tie of pa#ent, the aount of =,RTA =6<E @.".
!,$$AR" .@"W &:.55/,
'%
representing the coplainantKs clai for a salar#
differential. 6n addition, the respondents are hereb# ordered to pa# the
coplainant, Fointl# and severall#, in Philippine Currenc#, at the eCchange
rate prevailing at the tie of pa#ent, the coplainantKs .petitioner0s/ clai
for attorne#Ks fees eEuivalent to ten percent .'5I/ of the total aount
a+arded to the aforesaid eplo#ee under this !ecision.
The clais of the coplainant for oral and eCeplar# daages are hereb#
!6"M6""E! for lack of erit.
All other clais are hereb# !6"M6""E!.
", ,R!ERE!.
'1
.Ephasis supplied/
6n a+arding petitioner a lup3su salar# of @"W),225.55, the $A based his
coputation on the salar# period of three onths onl# 33 rather than the
entire uneCpired portion of nine onths and %1 da#s of petitioner0s
eplo#ent contract 3 appl#ing the subFect clause. >o+ever, the $A applied
the salar# rate of @"W%,:(5.55, consisting of petitioner0s DMbNasic salar#,
@"W',&55.558onth X @"W255.558onth, fiCed overtie pa#, X
@"W&(5.558onth, vacation leave pa# Y @"W%,:(5.558copensation per
onth.D
'&
Respondents appealed
':
to the National $abor Relations Coission
.N$RC/ to Euestion the finding of the $A that petitioner +as illegall#
disissed.
Petitioner also appealed
'*
to the N$RC on the sole issue that the $A erred in
not appl#ing the ruling of the Court in !riple ntegrated Services, nc. v.
:ational #abor Relations &ommission
'2
that in case of illegal disissal,
,=4s are entitled to their salaries for the uneCpired portion of their
contracts.
')
6n a !ecision dated 9une ':, %555, the N$RC odified the $A !ecision, to
+it;
4>ERE=,RE, the !ecision dated ': 9ul# '((( is M,!6=6E!.
Respondents are hereb# ordered to pa# coplainant, Fointl# and severall#, in
Philippine currenc#, at the prevailing rate of eCchange at the tie of
pa#ent the follo+ing;
'. Three .1/ onths salar#
W',&55 C 1 @"W&,%55.55
%. "alar# differential &:.55
@"W&,%&:.55
1. '5I Attorne#Ks fees &%&.:5
T,TA$ @"W&,**(.:5
The other findings are affired.
", ,R!ERE!.
'(
The N$RC corrected the $A0s coputation of the lup3su salar# a+arded to
petitioner b# reducing the applicable salar# rate fro @"W%,:(5.55 to @"W',&55.55
because R.A. No. )5&% Ddoes not provide for the a+ard of overtie pa#, +hich
should be proven to have been actuall# perfored, and for vacation leave pa#.D
%5
Petitioner filed a Motion for Partial Reconsideration, but this tie he Euestioned
the constitutionalit# of the subFect clause.
%'
The N$RC denied the otion.
%%
Petitioner filed a Petition for &ertiorari
%1
+ith the CA, reiterating the constitutional
challenge against the subFect clause.
%&
After initiall# disissing the petition on a
technicalit#, the CA eventuall# gave due course to it, as directed b# this Court in its
Resolution dated August 2, %551 +hich granted the petition for certiorari,
docketed as ?.R. No. ':')11, filed b# petitioner.
6n a !ecision dated !eceber ), %55&, the CA affired the N$RC ruling on the
reduction of the applicable salar# rateH ho+ever, the CA skirted the constitutional
issue raised b# petitioner.
%:
>is Motion for Reconsideration
%*
having been denied b# the CA,
%2
petitioner brings
his cause to this Court on the follo+ing grounds;
6
The Court of Appeals and the labor tribunals have decided the case in a +a# not in
accord +ith applicable decision of the "upree Court involving siilar issue of
granting unto the igrant +orker back +ages eEual to the uneCpired portion of his
contract of eplo#ent instead of liiting it to three .1/ onths
66
6n the alternative that the Court of Appeals and the $abor Tribunals +ere erel#
appl#ing their interpretation of "ection '5 of Republic Act No. )5&%, it is
subitted that the Court of Appeals gravel# erred in la+ +hen it failed to discharge
its Fudicial dut# to decide Euestions of substance not theretofore deterined b# the
>onorable "upree Court, particularl#, the constitutional issues raised b# the
petitioner on the constitutionalit# of said la+, +hich unreasonabl#, unfairl# and
arbitraril# liits pa#ent of the a+ard for back +ages of overseas +orkers to three
.1/ onths.
666
Even +ithout considering the constitutional liitations MofN "ec. '5 of Republic
Act No. )5&%, the Court of Appeals gravel# erred in la+ in eCcluding fro
petitionerKs a+ard the overtie pa# and vacation pa# provided in his contract since
under the contract the# for part of his salar#.
%)
,n =ebruar# %*, %55), petitioner +rote the Court to +ithdra+ his petition as he is
alread# old and sickl#, and he intends to ake use of the onetar# a+ard for his
edical treatent and edication.
%(
ReEuired to coent, counsel for petitioner
filed a otion, urging the court to allo+ partial eCecution of the undisputed
onetar# a+ard and, at the sae tie, pra#ing that the constitutional Euestion be
resolved.
15
Considering that the parties have filed their respective eoranda, the Court no+
takes up the full erit of the petition indful of the eCtree iportance of the
constitutional Euestion raised therein.
&n the first and second issues
The unanious finding of the $A, N$RC and CA that the disissal of petitioner
+as illegal is not disputed. $ike+ise not disputed is the salar# differential of
@"W&:.55 a+arded to petitioner in all three fora. 4hat reains disputed is onl# the
coputation of the lup3su salar# to be a+arded to petitioner b# reason of his
illegal disissal.
Appl#ing the subFect clause, the N$RC and the CA coputed the lup3su salar#
of petitioner at the onthl# rate of @"W',&55.55 covering the period of three
onths out of the uneCpired portion of nine onths and %1 da#s of his
eplo#ent contract or a total of @"W&,%55.55.
6pugning the constitutionalit# of the subFect clause, petitioner contends that, in
addition to the @"W&,%55.55 a+arded b# the N$RC and the CA, he is entitled to
@"W%',')%.%1 ore or a total of @"W%:,1)%.%1, eEuivalent to his salaries for the
entire nine onths and %1 da#s left of his eplo#ent contract, coputed at the
onthl# rate of @"W%,:(5.55.
1'
T3e A!?u@en$# o7 Pe$($(one!
Petitioner contends that the subFect clause is unconstitutional because it undul#
ipairs the freedo of ,=4s to negotiate for and stipulate in their overseas
eplo#ent contracts a deterinate eplo#ent period and a fiCed salar#
package.
1%
6t also ipinges on the eEual protection clause, for it treats ,=4s
differentl# fro local =ilipino +orkers .local +orkers/ b# putting a cap on the
aount of lup3su salar# to +hich ,=4s are entitled in case of illegal disissal,
+hile setting no liit to the sae onetar# a+ard for local +orkers +hen their
disissal is declared illegalH that the disparate treatent is not reasonable as there
is no substantial distinction bet+een the t+o groupsH
11
and that it defeats "ection
'),
1&
Article 66 of the Constitution +hich guarantees the protection of the rights and
+elfare of all =ilipino +orkers, +hether deplo#ed locall# or overseas.
1:
Moreover, petitioner argues that the decisions of the CA and the labor tribunals are
not in line +ith eCisting Furisprudence on the issue of one# clais of illegall#
disissed ,=4s. Though there are conflicting rulings on this, petitioner urges the
Court to sort the out for the guidance of affected ,=4s.
1*
Petitioner further underscores that the insertion of the subFect clause into R.A. No.
)5&% serves no other purpose but to benefit local placeent agencies. >e arks the
stateent ade b# the "olicitor ?eneral in his Meorandu, vi<.;
,ften, placeent agencies, their liabilit# being solidar#, shoulder the pa#ent of
one# clais in the event that Furisdiction over the foreign eplo#er is not
acEuired b# the court or if the foreign eplo#er reneges on its obligation. >ence,
placeent agencies that are in good faith and +hich fulfill their obligations are
unnecessaril# penali7ed for the acts of the foreign eplo#er. !o protect them and
to promote their contin%ed help"%l contrib%tion in deploying 9ilipino migrant
)or4ers, liability "or money claims )as red%ced %nder Section *3 o" R.A. :o.
13E+.
12
.Ephasis supplied/
Petitioner argues that in itigating the solidar# liabilit# of placeent agencies, the
subFect clause sacrifices the +ell3being of ,=4s. Not onl# that, the provision
akes foreign eplo#ers better off than local eplo#ers because in cases
involving the illegal disissal of eplo#ees, foreign eplo#ers are liable for
salaries covering a aCiu of onl# three onths of the uneCpired eplo#ent
contract +hile local eplo#ers are liable for the full lup3su salaries of their
eplo#ees. As petitioner puts it;
6n ters of practical application, the local eplo#ers are not liited to the aount
of back+ages the# have to give their eplo#ees the# have illegall# disissed,
follo+ing +ell3entrenched and uneEuivocal Furisprudence on the atter. ,n the
other hand, foreign eplo#ers +ill onl# be liited to giving the illegall# disissed
igrant +orkers the aCiu of three .1/ onths unpaid salaries not+ithstanding
the uneCpired ter of the contract that can be ore than three .1/ onths.
1)
$astl#, petitioner clais that the subFect clause violates the due process clause, for
it deprives hi of the salaries and other eoluents he is entitled to under his
fiCed3period eplo#ent contract.
1(
T3e A!?u@en$# o7 Re#"on%en$#
6n their Coent and Meorandu, respondents contend that the constitutional
issue should not be entertained, for this +as belatedl# interposed b# petitioner in
his appeal before the CA, and not at the earliest opportunit#, +hich +as +hen he
filed an appeal before the N$RC.
&5
T3e A!?u@en$# o7 $3e So+(6($o! Gene!1+
The "olicitor ?eneral .,"?/
&'
points out that as R.A. No. )5&% took effect on 9ul#
':, '((:, its provisions could not have ipaired petitioner0s '(() eplo#ent
contract. Rather, R.A. No. )5&% having preceded petitioner0s contract, the
provisions thereof are deeed part of the iniu ters of petitioner0s
eplo#ent, especiall# on the atter of one# clais, as this +as not stipulated
upon b# the parties.
&%
Moreover, the ,"? ephasi7es that ,=4s and local +orkers differ in ters of the
nature of their eplo#ent, such that their rights to onetar# benefits ust
necessaril# be treated differentl#. The ,"? enuerates the essential eleents that
distinguish ,=4s fro local +orkers; first, +hile local +orkers perfor their Fobs
+ithin Philippine territor#, ,=4s perfor their Fobs for foreign eplo#ers, over
+ho it is difficult for our courts to acEuire Furisdiction, or against +ho it is
alost ipossible to enforce FudgentH and second, as held in Co#oca v. National
$abor Relations Coission
&1
and Millares v. National $abor Relations
Coission,
&&
,=4s are contractual eplo#ees +ho can never acEuire regular
eplo#ent status, unlike local +orkers +ho are or can becoe regular
eplo#ees. >ence, the ,"? posits that there are rights and privileges eCclusive to
local +orkers, but not available to ,=4sH that these peculiarities ake for a
reasonable and valid basis for the differentiated treatent under the subFect clause
of the one# clais of ,=4s +ho are illegall# disissed. Thus, the provision
does not violate the eEual protection clause nor "ection '), Article 66 of the
Constitution.
&:
$astl#, the ,"? defends the rationale behind the subFect clause as a police po+er
easure adopted to itigate the solidar# liabilit# of placeent agencies for this
Dredounds to the benefit of the igrant +orkers +hose +elfare the governent
seeks to proote. The survival of legitiate placeent agencies helps MassureN the
governent that igrant +orkers are properl# deplo#ed and are eplo#ed under
decent and huane conditions.D
&*
T3e Cou!$# Ru+(n?
The Court sustains petitioner on the first and second issues.
4hen the Court is called upon to eCercise its po+er of Fudicial revie+ of the acts
of its co3eEuals, such as the Congress, it does so onl# +hen these conditions
obtain; .'/ that there is an actual case or controvers# involving a conflict of rights
susceptible of Fudicial deterinationH
&2
.%/ that the constitutional Euestion is raised
b# a proper part#
&)
and at the earliest opportunit#H
&(
and .1/ that the constitutional
Euestion is the ver# lis ota of the case,
:5
other+ise the Court +ill disiss the case
or decide the sae on soe other ground.
:'
4ithout a doubt, there eCists in this case an actual controvers# directl# involving
petitioner +ho is personall# aggrieved that the labor tribunals and the CA
coputed his onetar# a+ard based on the salar# period of three onths onl# as
provided under the subFect clause.
The constitutional challenge is also tiel#. 6t should be borne in ind that the
reEuireent that a constitutional issue be raised at the earliest opportunit# entails
the interposition of the issue in the pleadings before acompetent court, such that, if
the issue is not raised in the pleadings before that copetent court, it cannot be
considered at the trial and, if not considered in the trial, it cannot be considered on
appeal.
:%
Records disclose that the issue on the constitutionalit# of the subFect
clause +as first raised, not in petitioner0s appeal +ith the N$RC, but in his Motion
for Partial Reconsideration +ith said labor tribunal,
:1
and reiterated in his Petition
for&ertiorari before the CA.
:&
Nonetheless, the issue is deeed seasonabl# raised
because it is not the N$RC but the CA +hich has the copetence to resolve the
constitutional issue. The N$RC is a labor tribunal that erel# perfors a Euasi3
Fudicial function Q its function in the present case is liited to deterining
Euestions of fact to +hich the legislative polic# of R.A. No. )5&% is to be applied
and to resolving such Euestions in accordance +ith the standards laid do+n b# the
la+ itselfH
::
thus, its foreost function is to adinister and enforce R.A. No. )5&%,
and not to inEuire into the validit# of its provisions. The CA, on the other hand, is
vested +ith the po+er of Fudicial revie+ or the po+er to declare unconstitutional a
la+ or a provision thereof, such as the subFect clause.
:*
Petitioner0s interposition of
the constitutional issue before the CA +as undoubtedl# seasonable. The CA +as
therefore reiss in failing to take up the issue in its decision.
The third condition that the constitutional issue be critical to the resolution of the
case like+ise obtains because the onetar# clai of petitioner to his lup3su
salar# for the entire uneCpired portion of his '%3onth eplo#ent contract, and
not Fust for a period of three onths, strikes at the ver# core of the subFect clause.
Thus, the stage is all set for the deterination of the constitutionalit# of the subFect
clause.
-oes the s%b'ect cla%se violate Section *3,
Article o" the &onstit%tion on non.impairment
o" contractsF
The ans+er is in the negative.
Petitioner0s clai that the subFect clause undul# interferes +ith the stipulations in
his contract on the ter of his eplo#ent and the fiCed salar# package he +ill
receive
:2
is not tenable.
"ection '5, Article 666 of the Constitution provides;
No la+ ipairing the obligation of contracts shall be passed.
The prohibition is aligned +ith the general principle that la+s ne+l# enacted have
onl# a prospective operation,
:)
and cannot affect acts or contracts alread#
perfectedH
:(
ho+ever, as to la+s alread# in eCistence, their provisions are read into
contracts and deeed a part thereof.
*5
Thus, the non3ipairent clause under
"ection '5, Article 66 is liited in application to la+s about to be enacted that
+ould in an# +a# derogate fro eCisting acts or contracts b# enlarging, abridging
or in an# anner changing the intention of the parties thereto.
As aptl# observed b# the ,"?, the enactent of R.A. No. )5&% in '((: preceded
the eCecution of the eplo#ent contract bet+een petitioner and respondents in
'((). >ence, it cannot be argued that R.A. No. )5&%, particularl# the subFect
clause, ipaired the eplo#ent contract of the parties. Rather, +hen the parties
eCecuted their '(() eplo#ent contract, the# +ere deeed to have incorporated
into it all the provisions of R.A. No. )5&%.
But even if the Court +ere to disregard the tieline, the subFect clause a# not be
declared unconstitutional on the ground that it ipinges on the ipairent clause,
for the la+ +as enacted in the eCercise of the police po+er of the "tate to regulate
a business, profession or calling, particularl# the recruitent and deplo#ent of
,=4s, +ith the noble end in vie+ of ensuring respect for the dignit# and +ell3
being of ,=4s +herever the# a# be eplo#ed.
*'
Police po+er legislations
adopted b# the "tate to proote the health, orals, peace, education, good order,
safet#, and general +elfare of the people are generall# applicable not onl# to future
contracts but even to those alread# in eCistence, for all private contracts ust #ield
to the superior and legitiate easures taken b# the "tate to proote public
+elfare.
*%
-oes the s%b'ect cla%se violate Section *,
Article o" the &onstit%tion, and Section *1,
Article and Section G, Article @ on labor
as a protected sectorF
The ans+er is in the affirative.
"ection ', Article 666 of the Constitution guarantees;
No person shall be deprived of life, libert#, or propert# +ithout due process of la+
nor shall an# person be denied the eEual protection of the la+.
"ection '),
*1
Article 66 and "ection 1,
*&
Article -666 accord all ebers of the
labor sector, +ithout distinction as to place of deplo#ent, full protection of their
rights and +elfare.
To =ilipino +orkers, the rights guaranteed under the foregoing constitutional
provisions translate to econoic securit# and parit#; all onetar# benefits should
be eEuall# enFo#ed b# +orkers of siilar categor#, +hile all onetar# obligations
should be borne b# the in eEual degreeH none should be denied the protection of
the la+s +hich is enFo#ed b#, or spared the burden iposed on, others in like
circustances.
*:
"uch rights are not absolute but subFect to the inherent po+er of Congress to
incorporate, +hen it sees fit, a s#ste of classification into its legislationH ho+ever,
to be valid, the classification ust copl# +ith these reEuireents; '/ it is based
on substantial distinctionsH %/ it is gerane to the purposes of the la+H 1/ it is not
liited to eCisting conditions onl#H and &/ it applies eEuall# to all ebers of the
class.
**
There are three levels of scrutin# at +hich the Court revie+s the constitutionalit#
of a classification ebodied in a la+; a/ the deferential or rational basis scrutin# in
+hich the challenged classification needs onl# be sho+n to be rationall# related to
serving a legitiate state interestH
*2
b/ the iddle3tier or interediate scrutin# in
+hich the governent ust sho+ that the challenged classification serves an
iportant state interest and that the classification is at least substantiall# related to
serving that interestH
*)
and c/ strict Fudicial scrutin#
*(
in +hich a legislative
classification +hich iperissibl# interferes +ith the eCercise of a fundaental
right
25
or operates to the peculiar disadvantage of a suspect class
2'
is presued
unconstitutional, and the burden is upon the governent to prove that the
classification is necessar# to achieve a compein4 state interest and that it is
the east restrictive means to protect such interest.
2%
@nder Aerican Furisprudence, strict Fudicial scrutin# is triggered b# suspect
classifications
21
based on race
2&
or gender
2:
but not +hen the classification is dra+n
along incoe categories.
2*
6t is different in the Philippine setting. 6n Central Bank .no+ Bangko "entral ng
Pilipinas/ Eplo#ee Association, 6nc. v. Bangko "entral ng Pilipinas,
22
the
constitutionalit# of a provision in the charter of the Bang4o Sentral ng
Pilipinas .B"P/, a governent financial institution .?=6/, +as challenged for
aintaining its rank3and3file eplo#ees under the "alar# "tandardi7ation $a+
.""$/, even +hen the rank3and3file eplo#ees of other ?=6s had been eCepted
fro the ""$ b# their respective charters. =inding that the disputed provision
contained a suspect classification based on salar# grade, the Court deliberatel#
eplo#ed the standard of strict Fudicial scrutin# in its revie+ of the
constitutionalit# of said provision. More significantl#, it +as in this case that the
Court revealed the broad outlines of its Fudicial philosoph#, to +it;
Congress retains its +ide discretion in providing for a valid classification, and its
policies should be accorded recognition and respect b# the courts of Fustice eCcept
+hen the# run afoul of the Constitution. The deference stops +here the
classification violates a fundaental right, or "!eGu%(6e# "e!#on# 166o!%e%
#"e6(1+ "!o$e6$(on &' $3e Con#$($u$(on. 4hen these violations arise, this Court
ust discharge its priar# role as the vanguard of constitutional guaranties, and
reEuire a stricter and ore eCacting adherence to constitutional liitations.
Rational basis should not suffice.
Adittedl#, the vie+ that preFudice to persons accorded special protection b# the
Constitution reEuires a stricter Fudicial scrutin# finds no support in Aerican or
English Furisprudence. Nevertheless, these foreign decisions and authorities are not
per se controlling in this Furisdiction. At best, the# are persuasive and have been
used to support an# of our decisions. 4e should not place undue and fa+ning
reliance upon the and regard the as indispensable ental crutches +ithout
+hich +e cannot coe to our o+n decisions through the eplo#ent of our o+n
endo+ents. 4e live in a different abience and ust decide our o+n probles in
the light of our o+n interests and needs, and of our Eualities and even
idios#ncrasies as a people, and al+a#s +ith our o+n concept of la+ and Fustice.
,ur la+s ust be construed in accordance +ith the intention of our o+n
la+akers and such intent a# be deduced fro the language of each la+ and the
conteCt of other local legislation related thereto. More iportantl#, the# ust be
construed to serve our o+n public interest +hich is the be3all and the end3all of all
our la+s. And it need not be stressed that our public interest is distinct and different
fro others.
C C C C
=urther, the Euest for a better and ore DeEualD +orld calls for the use of eEual
protection as a tool of effective Fudicial intervention.
EEualit# is one ideal +hich cries out for bold attention and action in the
Constitution. The Preable proclais DeEualit#D as an ideal precisel# in protest
against crushing ineEuities in Philippine societ#. The coand to proote social
Fustice in Article 66, "ection '5, in Dall phases of national developent,D further
eCplicitated in Article -666, are clear coands to the "tate to take affirative
action in the direction of greater eEualit#. C C C MTNhere is thus in the Philippine
Constitution no lack of doctrinal support for a ore vigorous state effort to+ards
achieving a reasonable easure of eEualit#.
,ur present Constitution has gone further in guaranteeing vital social and
econoic rights to arginali7ed groups of societ#, including labor. @nder the
polic# of social Fustice, the la+ bends over back+ard to accoodate the interests
of the +orking class on the huane Fustification that those +ith less privilege in
life should have ore in la+. And the obligation to afford protection to labor is
incubent not onl# on the legislative and eCecutive branches but also on the
Fudiciar# to translate this pledge into a living realit#. "ocial Fustice calls for the
huani7ation of la+s and the eEuali7ation of social and econoic forces b# the
"tate so that Fustice in its rational and obFectivel# secular conception a# at least
be approCiated.
C C C C
@nder ost circustances, the Court +ill eCercise Fudicial restraint in deciding
Euestions of constitutionalit#, recogni7ing the broad discretion given to Congress
in eCercising its legislative po+er. 9udicial scrutin# +ould be based on the Drational
basisD test, and the legislative discretion +ould be given deferential treatent.
But if the challenge to the statute is preised on the denial of a fundaental right,
or $3e "e!"e$u1$(on o7 "!eGu%(6e 1?1(n#$ "e!#on# 715o!e% &' $3e Con#$($u$(on
8($3 #"e6(1+ "!o$e6$(on, Gu%(6(1+ #6!u$(n' ou?3$ $o &e @o!e #$!(6$. A +eak and
+atered do+n vie+ +ould call for the abdication of this CourtKs solen dut# to
strike do+n an# la+ repugnant to the Constitution and the rights it enshrines. This
is true +hether the actor coitting the unconstitutional act is a private person or
the governent itself or one of its instruentalities. ,ppressive acts +ill be struck
do+n regardless of the character or nature of the actor.
C C C C
6n the case at bar, the challenged proviso operates on the basis of the salar# grade
or officer3eplo#ee status. 6t is akin to a distinction based on econoic class and
status, +ith the higher grades as recipients of a benefit specificall# +ithheld fro
the lo+er grades. ,fficers of the B"P no+ receive higher copensation packages
that are copetitive +ith the industr#, +hile the poorer, lo+3salaried eplo#ees are
liited to the rates prescribed b# the ""$. The iplications are Euite disturbing;
B"P rank3and3file eplo#ees are paid the strictl# regiented rates of the ""$
+hile eplo#ees higher in rank 3 possessing higher and better education and
opportunities for career advanceent 3 are given higher copensation packages to
entice the to sta#. Considering that aForit#, if not all, the rank3and3file
eplo#ees consist of people +hose status and rank in life are less and liited,
especiall# in ters of Fob arketabilit#, it is the# 3 and not the officers 3 +ho have
the real econoic and financial need for the adFustent . This is in accord +ith the
polic# of the Constitution Dto free the people fro povert#, provide adeEuate social
services, eCtend to the a decent standard of living, and iprove the Eualit# of life
for all.D An# act of Congress that runs counter to this constitutional desideratu
deserves strict scrutin# b# this Court before it can pass uster. .Ephasis
supplied/
6bued +ith the sae sense of Dobligation to afford protection to labor,D the Court
in the present case also eplo#s the standard of strict Fudicial scrutin#, for it
perceives in the subFect clause a suspect classification preFudicial to ,=4s.
@pon cursor# reading, the subFect clause appears faciall# neutral, for it applies to
all ,=4s. >o+ever, a closer eCaination reveals that the subFect clause has a
discriinator# intent against, and an invidious ipact on, ,=4s at t+o levels;
=irst, ,=4s +ith eplo#ent contracts of less than one #ear vis3Z3vis
,=4s +ith eplo#ent contracts ofone #ear or oreH
"econd, aong ,=4s +ith eplo#ent contracts of ore than one #earH
and
Third, ,=4s vis3Z3vis local +orkers +ith fiCed3period eplo#entH
O*D# 8($3 e@"+o'@en$ 6on$!16$# o7 +e## $31n one 'e1! vis676vis O*D# 8($3
e@"+o'@en$ 6on$!16$# o7 one 'e1! o! @o!e
As pointed out b# petitioner,
2)
it +as in Marsaman Manning Agency, nc. v.
:ational #abor Relations &ommission
2(
."econd !ivision, '(((/ that the Court
laid do+n the follo+ing rules on the application of the periods prescribed under
"ection '5.:/ of R.A. No. )5&, to +it;
) pain readin4 of (ec. 83 ceary reveas that the choice of which amount to
award an ie4ay dismissed overseas contract wor9er, i.e., whether his saaries
for the unexpired portion of his empoyment contract or three (3) months5 saary
for every year of the unexpired term, whichever is ess, comes into pay ony
when the empoyment contract concerned has a term of at east one (8) year or
more. %his is evident from the words :for every year of the unexpired term:
which foows the words :saaries x x x for three months.:To follo+ petitionersK
thinking that private respondent is entitled to three .1/ onths salar# onl# sipl#
because it is the lesser aount is to copletel# disregard and overlook soe +ords
used in the statute +hile giving effect to soe. This is contrar# to the +ell3
established rule in legal hereneutics that in interpreting a statute, care should be
taken that ever# part or +ord thereof be given effect since the la+3aking bod# is
presued to kno+ the eaning of the +ords eplo#ed in the statue and to have
used the advisedl#. @t res agis valeat Eua pereat.
)5
.Ephasis supplied/
6n Marsaan, the ,=4 involved +as illegall# disissed t+o onths into his '53
onth contract, but +as a+arded his salaries for the reaining ) onths and *
da#s of his contract.
Prior to Marsaman, ho+ever, there +ere t+o cases in +hich the Court ade
conflicting rulings on "ection '5.:/. ,ne +as Asian &enter "or &areer and
Cmployment System and Services v. :ational #abor Relations &ommission."econd
!ivision, ,ctober '(()/,
)'
+hich involved an ,=4 +ho +as a+arded a t+o3#ear
eplo#ent contract,but +as disissed after +orking for one #ear and t+o
onths. The $A declared his disissal illegal and a+arded hi "R'1,*55.55 as
lup3su salar# covering eight onths, the uneCpired portion of his contract. ,n
appeal, the Court reduced the a+ard to "R1,*55.55 eEuivalent to his three onthsK
salar#, this being the lesser value, to +it;
@nder "ection '5 of R.A. No. )5&%, a +orker disissed fro overseas
eplo#ent +ithout Fust, valid or authori7ed cause is entitled to his salar# for the
uneCpired portion of his eplo#ent contract or for three .1/ onths for ever#
#ear of the uneCpired ter, +hichever is less.
6n the case at bar, the uneCpired portion of private respondentKs eplo#ent
contract is eight .)/ onths. Private respondent should therefore be paid his basic
salar# corresponding to three .1/ onths or a total of "R1,*55.
)%
Another +as !riple.Cight ntegrated Services, nc. v. :ational #abor Relations
&ommission .Third !ivision, !eceber '(()/,
)1
+hich involved an ,=4 .therein
respondent Erlinda ,sdana/ +ho +as originall# granted a '%3onth contract,
+hich +as deeed rene+ed for another '% onths. After serving for one #ear and
seven3and3a3half onths, respondent ,sdana +as illegall# disissed, and the
Court a+arded her salaries for the entire uneCpired portion of four and one3half
onths of her contract.
The Marsaman interpretation of "ection '5.:/ has since been adopted in the
follo+ing cases;
C1#e T($+e Con$!16$
Pe!(o%
Pe!(o% o7
Se!5(6e
UneH"(!e%
Pe!(o%
Pe!(o% A""+(e%
(n $3e
Co@"u$1$(on o7
$3e Mone$1!'
A81!%
"kippers v.
Maguad
)&
* onths % onths & onths & onths
Bahia
"hipping v.
Re#naldo
Chua
):
( onths ) onths & onths & onths
Centennial
Transarine
v. dela Cru7
l
)*
( onths & onths : onths : onths
Talidano v.
=alcon
)2
'%
onths
1 onths ( onths 1 onths
@nivan v.
CA
))
'%
onths
1 onths ( onths 1 onths
,riental v.
CA
)(
'%
onths
ore than
% onths
'5 onths 1 onths
PC$ v.
N$RC
(5
'%
onths
ore than
% onths
ore or less (
onths
1 onths
,larte v.
Na#ona
('
'%
onths
%' da#s '' onths and
( da#s
1 onths
9""
v.=errer
(%
'%
onths
'* da#s '' onths and
%& da#s
1 onths
Pentagon v.
Adelantar
(1
'%
onths
( onths
and 2 da#s
% onths and
%1 da#s
% onths and %1
da#s
Phil. Eplo#
v. Paraio,
et al.
(&
'%
onths
'5 onths % onths @neCpired
portion
=lourish
Maritie v.
Alan7or
(:
% #ears %* da#s %1 onths and
& da#s
* onths or 1
onths for each
#ear of contract
Athenna
Manpo+er v.
<illanos
(*
' #ear, '5
onths
and %)
da#s
' onth ' #ear, (
onths and %)
da#s
* onths or 1
onths for each
#ear of contract
As the foregoing atriC readil# sho+s, the subFect clause classifies ,=4s into t+o
categories. The first categor# includes ,=4s +ith fiCed3period eplo#ent
contracts of less than one #earH in case of illegal disissal, the# are entitled to their
salaries for the entire uneCpired portion of their contract. The second categor#
consists of ,=4s +ith fiCed3period eplo#ent contracts of one #ear or oreH in
case of illegal disissal, the# are entitled to onetar# a+ard eEuivalent to onl# 1
onths of the uneCpired portion of their contracts.
The disparit# in the treatent of these t+o groups cannot be discounted.
6n S4ippers, the respondent ,=4 +orked for onl# % onths out of his *3onth
contract, but +as a+arded his salaries for the reaining & onths. 6n contrast, the
respondent ,=4s in Oriental and P&# +ho had also +orked for about % onths
out of their '%3onth contracts +ere a+arded their salaries for onl# 1 onths of
the uneCpired portion of their contracts. Even the ,=4s involved
in !alidano and 0nivan +ho had +orked for a longer period of 1 onths out of
their '%3onth contracts before being illegall# disissed +ere a+arded their
salaries for onl# 1 onths.
To illustrate the disparit# even ore vividl#, the Court assues a h#pothetical
,=43A +ith an eplo#ent contract of '5 onths at a onthl# salar# rate of
@"W',555.55 and a h#pothetical ,=43B +ith an eplo#ent contract of ':
onths +ith the sae onthl# salar# rate of @"W',555.55. Both coenced +ork
on the sae da# and under the sae eplo#er, and +ere illegall# disissed after
one onth of +ork. @nder the subFect clause, ,=43A +ill be entitled to
@"W(,555.55, eEuivalent to his salaries for the reaining ( onths of his contract,
+hereas ,=43B +ill be entitled to onl# @"W1,555.55, eEuivalent to his salaries for
1 onths of the uneCpired portion of his contract, instead of @"W'&,555.55 for the
uneCpired portion of '& onths of his contract, as the @"W1,555.55 is the lesser
aount.
The disparit# becoes ore aggravating +hen the Court takes into account
Furisprudence that, prior to the effectivity of -.). *o. 1342 on Juy 84,
8;;<,
(2
illegall# disissed ,=4s, no atter ho+ long the period of their
eplo#ent contracts, +ere entitled to their salaries for the entire uneCpired
portions of their contracts. The atriC belo+ speaks for itself;
C1#e T($+e Con$!16$
Pe!(o%
Pe!(o% o7
Se!5(6e
UneH"(!e%
Pe!(o%
Pe!(o% A""+(e% (n
$3e Co@"u$1$(on
o7 $3e Mone$1!'
A81!%
ATC6 v. CA,
et al.
()
% #ears - @on$3# %% onths %% onths
Phil.
6ntegrated v.
N$RC
((
% #ears 2 da#s %1 onths
and %1
da#s
%1 onths and %1
da#s
9?B v.
N$C
'55
% #ears ( onths ': onths ': onths
Ago# v.
N$RC
'5'
% #ears % onths %% onths %% onths
E!6 v.
N$RC, et
al.
'5%
% #ears : onths '( onths '( onths
Barros v.
N$RC, et
al.
'51
'% onths & onths ) onths ) onths
Philippine
Transarine
v. Carilla
'5&
'% onths * onths
and %%
da#s
: onths
and ')
da#s
: onths and ')
da#s
t is plain that prior to R.A. :o. 13E+, all O97s, regardless o" contract periods or
the %nexpired portions thereo", )ere treated ali4e in terms o" the comp%tation o"
their monetary bene"its in case o" illegal dismissal. !heir claims )ere s%b'ected to
a %ni"orm r%le o" comp%tationH their basic salaries m%ltiplied by the entire
%nexpired portion o" their employment contracts.
The enactent of the subFect clause in R.A. No. )5&% introduced a differentiated
rule of coputation of the one# clais of illegall# disissed ,=4s based on
their eplo#ent periods, in the process sin4in4 out one categor# +hose
contracts have an uneCpired portion of one #ear or ore and subFecting the to the
peculiar disadvantage of having their onetar# a+ards liited to their salaries for
1 onths or for the uneCpired portion thereof, +hichever is less, but all the +hile
sparing the other categor# fro such preFudice, sipl# because the latter0s
uneCpired contracts fall short of one #ear.
A@on? O*D# D($3 E@"+o'@en$ Con$!16$# o7 Mo!e T31n One Ye1!
@pon closer eCaination of the terinolog# eplo#ed in the subFect clause, the
Court no+ has isgivings on the accurac# of the Marsaman interpretation.
The Court notes that the subFect clause Dor for three .1/ onths for ever# #ear of
the uneCpired ter, +hichever is lessD contains the Eualif#ing phrases Dever# #earD
and DuneCpired ter.D B# its ordinar# eaning, the +ord DterD eans a liited or
definite eCtent of tie.
'5:
Corollaril#, that Dever# #earD is but part of an DuneCpired
terD is significant in an# +a#s; first, the uneCpired ter ust be at least one
#ear, "or i" it )ere any shorter, there )o%ld be no occasion "or s%ch %nexpired term
to be meas%red by every yearH and second, the original ter ust be ore than one
#ear, for other+ise, +hatever +ould be the uneCpired ter thereof +ill not reach
even a #ear. ConseEuentl#, the ore decisive factor in the deterination of +hen
the subFect clause Dfor three .1/ onths forever# #ear of the uneCpired
ter, +hichever is lessD shall appl# is not the length of the original contract period
as held in Marsaman,
'5*
but the length of the uneCpired portion of the contract
period 33 the subFect clause applies in cases +hen the uneCpired portion of the
contract period is at least one #ear, +hich aritheticall# reEuires that the original
contract period be ore than one #ear.
<ie+ed in that light, the subFect clause creates a sub3la#er of discriination aong
,=4s +hose contract periods are for ore than one #ear; those +ho are illegall#
disissed +ith less than one #ear left in their contracts shall be entitled to their
salaries for the entire uneCpired portion thereof, +hile those +ho are illegall#
disissed +ith one #ear or ore reaining in their contracts shall be covered b#
the subFect clause, and their onetar# benefits liited to their salaries for three
onths onl#.
To concretel# illustrate the application of the foregoing interpretation of the subFect
clause, the Court assues h#pothetical ,=43C and ,=43!, +ho each have a %&3
onth contract at a salar# rate of @"W',555.55 per onth. ,=43C is illegall#
disissed on the '%th onth, and ,=43!, on the '1th onth. Considering that
there is at least '% onths reaining in the contract period of ,=43C, the subFect
clause applies to the coputation of the latter0s onetar# benefits. Thus, ,=43C
+ill be entitled, not to @"W'%,555,55 or the latter0s total salaries for the '% onths
uneCpired portion of the contract, but to the lesser aount of @"W1,555.55 or the
latter0s salaries for 1 onths out of the '%3onth uneCpired ter of the contract.
,n the other hand, ,=43! is spared fro the effects of the subFect clause, for
there are onl# '' onths left in the latter0s contract period. Thus, ,=43! +ill be
entitled to @"W'',555.55, +hich is eEuivalent to his8her total salaries for the entire
''3onth uneCpired portion.
O*D# vis676vis Lo61+ Do!Ae!#
D($3 *(He%2Pe!(o% E@"+o'@en$
As discussed earlier, prior to R.A. No. )5&%, a unifor s#ste of coputation of
the onetar# a+ards of illegall# disissed ,=4s +as in place. This unifor
s#ste +as applicable even to local +orkers +ith fiCed3ter eplo#ent.
'52
The earliest rule prescribing a unifor s#ste of coputation +as actuall# Article
%(( of the Code of Coerce .')))/,
'5)
to +it;
Article %((. 6f the contracts bet+een the erchants and their shop clerks and
eplo#ees should have been ade of a fiCed period, none of the contracting
parties, +ithout the consent of the other, a# +ithdra+ fro the fulfillent of said
contract until the terination of the period agreed upon.
Persons violating this clause shall be subFect to indenif# the loss and daage
suffered, +ith the eCception of the provisions contained in the follo+ing articles.
6n Re#es v. The CopaOia Maritia,
'5(
the Court applied the foregoing provision
to deterine the liabilit# of a shipping copan# for the illegal discharge of its
anagers prior to the eCpiration of their fiCed3ter eplo#ent. The Court therein
held the shipping copan# liable for the salaries of its anagers for
the reainder of their fiCed3ter eplo#ent.
There is a ore specific rule as far as seafarers are concerned; Article *5: of the
Code of Coerce +hich provides;
Article *5:. 6f the contracts of the captain and ebers of the cre+ +ith the agent
should be for a definite period or vo#age, the# cannot be discharged until the
fulfillent of their contracts, eCcept for reasons of insubordination in serious
atters, robber#, theft, habitual drunkenness, and daage caused to the vessel or to
its cargo b# alice or anifest or proven negligence.
Article *5: +as applied to Madrigal "hipping Copan#, 6nc. v. ,gilvie,
''5
in
+hich the Court held the shipping copan# liable for the salaries and subsistence
allo+ance of its illegall# disissed eplo#ees for the entire uneCpired portion of
their eplo#ent contracts.
4hile Article *5: has reained good la+ up to the present,
'''
Article %(( of the
Code of Coerce +as replaced b# Art. ':)* of the Civil Code of '))(, to +it;
Article ':)*. =ield hands, echanics, artisans, and other laborers hired for a
certain tie and for a certain +ork cannot leave or be disissed +ithout sufficient
cause, before the fulfillent of the contract. .Ephasis supplied./
Citing Manresa, the Court in $eoine v. Alkan
''%
read the disFunctive DorD in
Article ':)* as a conFunctive DandD so as to appl# the provision to local +orkers
+ho are eplo#ed for a tie certain although for no particular skill. This
interpretation of Article ':)* +as reiterated in ?arcia Paloar v. >otel de =rance
Copan#.
''1
And in both $eoine and Paloar, the Court adopted the general
principle that in actions for +rongful discharge founded on Article ':)*, local
+orkers are entitled to recover daages to the eCtent of the aount stipulated to be
paid to the b# the ters of their contract. ,n the coputation of the aount of
such daages, the Court in Alda7 v. ?a#
''&
held;
The doctrine is +ell3established in Aerican Furisprudence, and nothing has been
brought to our attention to the contrar# under "panish Furisprudence, that +hen an
eplo#ee is +rongfull# discharged it is his dut# to seek other eplo#ent of the
sae kind in the sae counit#, for the purpose of reducing the daages
resulting fro such +rongful discharge. >o+ever, +hile this is the general rule, the
burden of sho+ing that he failed to ake an effort to secure other eplo#ent of a
like nature, and that other eplo#ent of a like nature +as obtainable, is upon the
defendant. 7hen an employee is )rong"%lly discharged %nder a contract o"
employment his prima "acie damage is the amo%nt )hich he )o%ld be entitled to
had he contin%ed in s%ch employment %ntil the termination o" the period. .>o+ard
vs. !al#, *' N. A., 1*%H Allen vs. 4hitlark, (( Mich., &(%H =arrell vs. "chool
!istrict No. %, () Mich., &1./
'':
.Ephasis supplied/
,n August 15, '(:5, the Ne+ Civil Code took effect +ith ne+ provisions on fiCed3
ter eplo#ent; "ection % .,bligations +ith a Period/, Chapter 1, Title 6, and
"ections % .Contract of $abor/ and 1 .Contract for a Piece of 4ork/, Chapter 1,
Title <666, Book 6<.
''*
Much like Article ':)* of the Civil Code of '))(, the ne+
provisions of the Civil Code do not eCpressl# provide for the reedies available to
a fiCed3ter +orker +ho is illegall# discharged. >o+ever, it is noted that in
Macka# Radio B Telegraph Co., 6nc. v. Rich,
''2
the Court carried over the
principles on the pa#ent of daages underl#ing Article ':)* of the Civil Code of
'))( and applied the sae to a case involving the illegal discharge of a local
+orker +hose fiCed3period eplo#ent contract +as entered into in '(:%, +hen
the ne+ Civil Code +as alread# in effect.
'')
More significantl#, the sae principles +ere applied to cases involving overseas
=ilipino +orkers +hose fiCed3ter eplo#ent contracts +ere illegall#
terinated, such as in =irst Asian Trans B "hipping Agenc#, 6nc. v.
,ple,
''(
involving seafarers +ho +ere illegall# discharged. 6n Teknika "kills and
Trade "ervices, 6nc. v. National $abor Relations Coission,
'%5
an ,=4 +ho +as
illegall# disissed prior to the eCpiration of her fiCed3period eplo#ent contract
as a bab# sitter, +as a+arded salaries corresponding to the uneCpired portion of her
contract. The Court arrived at the sae ruling in Anderson v. National $abor
Relations Coission,
'%'
+hich involved a forean hired in '()) in "audi Arabia
for a fiCed ter of t+o #ears, but +ho +as illegall# disissed after onl# nine
onths on the Fob 33 the Court a+arded hi salaries corresponding to ': onths,
the uneCpired portion of his contract. 6n Asia 4orld Recruitent, 6nc. v. National
$abor Relations Coission,
'%%
a =ilipino +orking as a securit# officer in '()( in
Angola +as a+arded his salaries for the reaining period of his '%3onth contract
after he +as +rongfull# discharged. =inall#, in (inta Maritime &o., nc. v. :ational
#abor Relations &ommission,
'%1
an ,=4 +hose '%3onth contract +as illegall#
cut short in the second onth +as declared entitled to his salaries for the reaining
'5 onths of his contract.
n s%m, prior to R.A. :o. 13E+, O97s and local )or4ers )ith "ixed.term
employment )ho )ere illegally discharged )ere treated ali4e in terms o" the
comp%tation o" their money claimsH they )ere %ni"ormly entitled to their salaries
"or the entire %nexpired portions o" their contracts. But +ith the enactent of R.A.
No. )5&%, specificall# the adoption of the subFect clause, illegall# disissed ,=4s
+ith an uneCpired portion of one #ear or ore in their eplo#ent contract have
since been differentl# treated in that their one# clais are subFect to a 13onth
cap, +hereas no such liitation is iposed on local +orkers +ith fiCed3ter
eplo#ent.
%he =ourt concudes that the su>?ect cause contains a suspect cassification in
that, in the computation of the monetary >enefits of fixed6term empoyees who
are ie4ay dischar4ed, it imposes a 36month cap on the caim of &@As with an
unexpired portion of one year or more in their contracts, >ut none on the caims
of other &@As or oca wor9ers with fixed6term empoyment. %he su>?ect cause
sin4es out one cassification of &@As and >urdens it with a pecuiar
disadvanta4e.
There being a suspect classification involving a vulnerable sector protected b# the
Constitution, the Court no+ subFects the classification to a strict Fudicial scrutin#,
and deterines +hether it serves a copelling state interest through the least
restrictive eans.
4hat constitutes copelling state interest is easured b# the scale of rights and
po+ers arra#ed in the Constitution and calibrated b# histor#.
'%&
6t is akin to the
paraount interest of the state
'%:
for +hich soe individual liberties ust give
+a#, such as the public interest in safeguarding health or aintaining edical
standards,
'%*
or in aintaining access to inforation on atters of public
concern.
'%2
6n the present case, the Court dug deep into the records but found no copelling
state interest that the subFect clause a# possibl# serve.
The ,"? defends the subFect clause as a police po+er easure Ddesigned to
protect the eplo#ent of =ilipino seafarers overseas C C C. B# liiting the
liabilit# to three onths MsicN, =ilipino seafarers have better chance of getting hired
b# foreign eplo#ers.D The liitation also protects the interest of local placeent
agencies, +hich other+ise a# be ade to shoulder illions of pesos in
Dterination pa#.D
'%)
The ,"? eCplained further;
,ften, placeent agencies, their liabilit# being solidar#, shoulder the pa#ent of
one# clais in the event that Furisdiction over the foreign eplo#er is not
acEuired b# the court or if the foreign eplo#er reneges on its obligation. >ence,
placeent agencies that are in good faith and +hich fulfill their obligations are
unnecessaril# penali7ed for the acts of the foreign eplo#er. To protect the and to
proote their continued helpful contribution in deplo#ing =ilipino igrant
+orkers, liabilit# for one# are reduced under "ection '5 of RA )5&%.
This easure redounds to the benefit of the igrant +orkers +hose +elfare the
governent seeks to proote. The survival of legitiate placeent agencies helps
MassureN the governent that igrant +orkers are properl# deplo#ed and are
eplo#ed under decent and huane conditions.
'%(
.Ephasis supplied/
>o+ever, no+here in the Coent or Meorandu does the ,"? cite the source
of its perception of the state interest sought to be served b# the subFect clause.
The ,"? locates the purpose of R.A. No. )5&% in the speech of Rep. Bonifacio
?allego in sponsorship of >ouse Bill No. '&1'& .>B '&1'&/, fro +hich the la+
originatedH
'15
but the speech akes no reference to the underl#ing reason for the
adoption of the subFect clause. That is onl# natural for none of the %( provisions in
>B '&1'& resebles the subFect clause.
,n the other hand, "enate Bill No. %522 ."B %522/ contains a provision on one#
clais, to +it;
"ec. '5. Money &laims. 3 Not+ithstanding an# provision of la+ to the contrar#, the
$abor Arbiters of the National $abor Relations Coission .N$RC/ shall have the
original and eCclusive Furisdiction to hear and decide, +ithin ninet# .(5/ calendar
da#s after the filing of the coplaint, the clais arising out of an eplo#er3
eplo#ee relationship or b# virtue of the coplaint, the clai arising out of an
eplo#er3eplo#ee relationship or b# virtue of an# la+ or contract involving
=ilipino +orkers for overseas eplo#ent including clais for actual, oral,
eCeplar# and other fors of daages.
The liabilit# of the principal and the recruitent8placeent agenc# or an# and all
clais under this "ection shall be Foint and several.
An# coproise8aicable settleent or voluntar# agreeent on an# one#
clais eCclusive of daages under this "ection shall not be less than fift# percent
.:5I/ of such one# clais; Provided, That an# installent pa#ents, if
applicable, to satisf# an# such coproise or voluntar# settleent shall not be
ore than t+o .%/ onths. An# coproise8voluntar# agreeent in violation of
this paragraph shall be null and void.
Non3copliance +ith the andator# period for resolutions of cases provided under
this "ection shall subFect the responsible officials to an# or all of the follo+ing
penalties;
.'/ The salar# of an# such official +ho fails to render his decision or
resolution +ithin the prescribed period shall be, or caused to be, +ithheld
until the said official coplies there+ithH
.%/ "uspension for not ore than ninet# .(5/ da#sH or
.1/ !isissal fro the service +ith disEualification to hold an# appointive
public office for five .:/ #ears.
Provided, ho+ever, That the penalties herein provided shall be +ithout preFudice to
an# liabilit# +hich an# such official a# have incurred under other eCisting la+s
or rules and regulations as a conseEuence of violating the provisions of this
paragraph.
But significantl#, "ection '5 of "B %522 does not provide for an# rule on the
coputation of one# clais.
A rule on the coputation of one# clais containing the subFect clause +as
inserted and eventuall# adopted as the :th paragraph of "ection '5 of R.A. No.
)5&%. The Court eCained the rationale of the subFect clause in the transcripts of
the DBicaeral Conference Coittee .Conference Coittee/ Meetings on the
Magna Carta on ,C4s .!isagreeing Provisions of "enate Bill No. %522 and
>ouse Bill No. '&1'&/.D >o+ever, the Court finds no discernible state interest, let
alone a copelling one, that is sought to be protected or advanced b# the adoption
of the subFect clause.
6n fine, the ?overnent has failed to discharge its burden of proving the eCistence
of a copelling state interest that +ould Fustif# the perpetuation of the
discriination against ,=4s under the subFect clause.
Assuing that, as advanced b# the ,"?, the purpose of the subFect clause is to
protect the eplo#ent of ,=4s b# itigating the solidar# liabilit# of placeent
agencies, such callous and cavalier rationale +ill have to be reFected. There can
never be a Fustification for an# for of governent action that alleviates the
burden of one sector, but iposes the sae burden on another sector, especiall#
+hen the favored sector is coposed of private businesses such as placeent
agencies, +hile the disadvantaged sector is coposed of ,=4s +hose protection
no less than the Constitution coands. The idea that private business interest can
be elevated to the level of a copelling state interest is odious.
Moreover, even if the purpose of the subFect clause is to lessen the solidar# liabilit#
of placeent agencies vis.a.vis their foreign principals, there are echaniss
alread# in place that can be eplo#ed to achieve that purpose +ithout infringing on
the constitutional rights of ,=4s.
The P,EA Rules and Regulations ?overning the Recruitent and Eplo#ent of
$and3Based ,verseas 4orkers, dated =ebruar# &, %55%, iposes adinistrative
disciplinar# easures on erring foreign eplo#ers +ho default on their contractual
obligations to igrant +orkers and8or their Philippine agents. These disciplinar#
easures range fro teporar# disEualification to preventive suspension. The
P,EA Rules and Regulations ?overning the Recruitent and Eplo#ent of
"eafarers, dated Ma# %1, %551, contains siilar adinistrative disciplinar#
easures against erring foreign eplo#ers.
Resort to these adinistrative easures is undoubtedl# the less restrictive eans of
aiding local placeent agencies in enforcing the solidar# liabilit# of their foreign
principals.
Thus, the subFect clause in the :th paragraph of "ection '5 of R.A. No. )5&% is
violative of the right of petitioner and other ,=4s to eEual protection.*avvphi*
=urther, there +ould be certain isgivings if one is to approach the declaration of
the unconstitutionalit# of the subFect clause fro the lone perspective that the
clause directl# violates state polic# on labor under "ection 1,
'1'
Article -666 of the
Constitution.
4hile all the provisions of the '()2 Constitution are presued self3
eCecuting,
'1%
there are soe +hich this Court has declared not ?udiciay
enforcea>e, Article -666 being one,
'11
particularl# "ection 1 thereof, the nature of
+hich, this Court, in Agabon v. :ational #abor Relations &ommission,
'1&
has
described to be not self3actuating;
Thus, the constitutional andates of protection to labor and securit# of tenure a#
be deeed as self3eCecuting in the sense that these are autoaticall#
ackno+ledged and observed +ithout need for an# enabling legislation. >o+ever, to
declare that the constitutional provisions are enough to guarantee the full eCercise
of the rights ebodied therein, and the reali7ation of ideals therein eCpressed,
+ould be ipractical, if not unrealistic. The espousal of such vie+ presents the
dangerous tendenc# of being overbroad and eCaggerated. The guarantees of Dfull
protection to laborD and Dsecurit# of tenureD, +hen eCained in isolation, are
faciall# unEualified, and the broadest interpretation possible suggests a blanket
shield in favor of labor against an# for of reoval regardless of circustance.
This interpretation iplies an unipeachable right to continued eplo#ent3a
utopian notion, doubtless3but still hardl# +ithin the conteplation of the fraers.
"ubseEuent legislation is still needed to define the paraeters of these guaranteed
rights to ensure the protection and prootion, not onl# the rights of the labor
sector, but of the eplo#ers0 as +ell. 4ithout specific and pertinent legislation,
Fudicial bodies +ill be at a loss, forulating their o+n conclusion to approCiate
at least the ais of the Constitution.
'timatey, therefore, (ection 3 of )rtice B""" cannot, on its own, >e a source of
a positive enforcea>e ri4htto stave off the disissal of an eplo#ee for Fust cause
o+ing to the failure to serve proper notice or hearing. As anifested b# several
fraers of the '()2 Constitution, the provisions on social Fustice reEuire legislative
enactents for their enforceabilit#.
'1:
.Ephasis added/
Thus, "ection 1, Article -666 cannot be treated as a principal source of direct
enforceable rights, for the violation of +hich the Euestioned clause a# be
declared unconstitutional. 6t a# un+ittingl# risk opening the floodgates of
litigation to ever# +orker or union over ever# conceivable violation of so broad a
concept as social Fustice for labor.
6t ust be stressed that "ection 1, Article -666 does not directl# besto+ on the
+orking class an# actual enforceable right, but erel# clothes it +ith the status of a
sector for +ho the Constitution urges protection through eCecutive or legislative
action and ?udicia reco4nition. 6ts utilit# is best liited to being an ipetus not
Fust for the eCecutive and legislative departents, but for the Fudiciar# as +ell, to
protect the +elfare of the +orking class. And it +as in fact consistent +ith that
constitutional agenda that the Court in &entral Ban4 5no) Bang4o Sentral ng
Pilipinas6 Cmployee Association, nc. v. Bang4o Sentral ng Pilipinas, penned b#
then Associate 9ustice no+ Chief 9ustice Re#nato ". Puno, forulated the Fudicial
precept that +hen the challenge to a statute is preised on the perpetuation of
preFudice against persons favored b# the Constitution +ith special protection 33
such as the +orking class or a section thereof 33 the Court a# recogni7e the
eCistence of a suspect classification and subFect the sae to strict Fudicial scrutin#.
The vie+ that the concepts of suspect classification and strict Fudicial scrutin#
forulated in &entral Ban4 Cmployee Association eCaggerate the significance of
"ection 1, Article -666 is a groundless apprehension. &entral Ban4 applied Article
-666 in conFunction +ith the eEual protection clause. Article -666, b# itself, +ithout
the application of the eEual protection clause, has no life or force of its o+n as
elucidated in Agabon.
Along the sae line of reasoning, the Court further holds that the subFect clause
violates petitioner0s right to substantive due process, for it deprives hi of
propert#, consisting of onetar# benefits, +ithout an# eCisting valid governental
purpose.
'1*
The arguent of the "olicitor ?eneral, that the actual purpose of the subFect clause
of liiting the entitleent of ,=4s to their three3onth salar# in case of illegal
disissal, is to give the a better chance of getting hired b# foreign eplo#ers.
This is plain speculation. As earlier discussed, there is nothing in the teCt of the la+
or the records of the deliberations leading to its enactent or the pleadings of
respondent that +ould indicate that there is an eCisting governental purpose for
the subFect clause, or even Fust a preteCt of one.
The subFect clause does not state or ipl# an# definitive governental purposeH
and it is for that precise reason that the clause violates not Fust petitioner0s right to
eEual protection, but also her right to substantive due process under "ection
',
'12
Article 666 of the Constitution.
The subFect clause being unconstitutional, petitioner is entitled to his salaries for
the entire uneCpired period of nine onths and %1 da#s of his eplo#ent
contract, pursuant to la+ and Furisprudence prior to the enactent of R.A. No.
)5&%.
&n the %hird "ssue
Petitioner contends that his overtie and leave pa# should for part of the salar#
basis in the coputation of his onetar# a+ard, because these are fiCed benefits
that have been stipulated into his contract.
Petitioner is istaken.
The +ord salaries in "ection '5.:/ does not include overtie and leave pa#. =or
seafarers like petitioner, !,$E !epartent ,rder No. 11, series '((*, provides a
"tandard Eplo#ent Contract of "eafarers, in +hich salar# is understood as the
basic +age, eCclusive of overtie, leave pa# and other bonusesH +hereas overtie
pa# is copensation for all +ork DperforedD in eCcess of the regular eight hours,
and holida# pa# is copensation for an# +ork DperforedD on designated rest da#s
and holida#s.
B# the foregoing definition alone, there is no basis for the autoatic inclusion of
overtie and holida# pa# in the coputation of petitioner0s onetar# a+ard, unless
there is evidence that he perfored +ork during those periods. As the Court held
in &entennial !ransmarine, nc. v. -ela &r%<,
'1)
>o+ever, the pa#ent of overtie pa# and leave pa# should be disallo+ed in light
of our ruling in Cagapan v. National $abor Relations Coission, to +it;
The rendition of overtie +ork and the subission of sufficient proof that said
+as actuall# perfored are conditions to be satisfied before a seaan could be
entitled to overtie pa# +hich should be coputed on the basis of 15I of the
basic onthl# salar#. 6n short, the contract provision guarantees the right to
overtie pa# but the entitleent to such benefit ust first be established.
6n the sae vein, the clai for the da#0s leave pa# for the uneCpired portion of the
contract is un+arranted since the sae is given during the actual service of the
seaen.
DHERE*ORE, the Court GRANTS the Petition. The subFect clause Dor for three
onths for ever# #ear of the uneCpired ter, +hichever is lessD in the :th
paragraph of "ection '5 of Republic Act No. )5&%
is DECLAREDUNCONSTITUTIONALH and the !eceber ), %55& !ecision
and April ', %55: Resolution of the Court of Appeals are MODI*IED to the effect
that petitioner is ADARDED his salaries for the entire uneCpired portion of his
eplo#ent contract consisting of nine onths and %1 da#s coputed at the rate
of @"W',&55.55 per onth.
No costs.
SO ORDERED.
MA. ALICIA AUSTRIA2MARTINEF
Associate 9ustice
ANT,N6, M. "ERRAN, <". ?A$$ANT MAR6T6ME "ER<6CE", 6NC. AN!
MAR$,4 NA<6?AT6,N C,., 6NC.
?R No. '*2*'& Q March %&, %55(
En banc
=ACT";
Petitioner Antonio "errano +as hired b# respondents ?allant Maritie "ervices,
6nc. and Marlo+ Navigation Co., 6nc., under a P,EA3approved contract of
eplo#ent for '% onths, as Chief ,fficer, +ith the basic onthl# salar# of
@"W',&55, plus W2558onth overtie pa#, and 2 da#s paid vacation leave per
onth.
,n March '(, '((), the date of his departure, "errano +as constrained to accept a
do+ngraded eplo#ent contract for the position of "econd ,fficer +ith a
onthl# salar# of @"W',555 upon the assurance and representation of respondents
that he +ould be Chief ,fficer b# the end of April '(().
Respondents did not deliver on their proise to ake "errano Chief ,fficer.
>ence, "errano refused to sta# on as second ,fficer and +as repatriated to the
Philippines on Ma# %*, '((), serving onl# t+o .%/ onths and seven .2/ da#s of
his contract, leaving an uneCpired portion of nine .(/ onths and t+ent#3three .%1/
da#s.
"errano filed +ith the $abor Arbiter .$A/ a Coplaint against respondents for
constructive disissal and for pa#ent of his one# clais in the total aount of
@"W%*,&&%.21 .based on the coputation of W%:(58onth fro 9une '(() to
=ebruar# '((, W&'1.(5 for March '((), and W'*&5 for March '(((/ as +ell as
oral and eCeplar# daages.
The $A declared the petitionerKs disissal illegal and a+arded hi @"W),225,
representing his salara# for three .1/ onths of the uneCpired portion of the
aforesaid contract of eplo#ent, plus W&: for salar# differential and for attorne#Ks
fees eEuivalent to '5I of the total aountH ho+ever, no copensation for daages
as pra#ed +as a+arded.
,n appeal, the N$RC odified the $A decision and a+arded "errano W&**(.:5,
representing three .1/ onths salar# at W'&558onth, plus &&: salar# differential
and '5I for attorne#Ks fees. This decision +as based on the provision of RA )5&%,
+hich +as ade into la+ on 9ul# ':, '((:.
"errano filed a Motion for Partial Reconsideration, but this tie he Euestioned the
constitutionalit# of the last clause in the :th paragraph of "ection '5 of RA )5&%,
+hich reads;
"ec. '5. Mone# Clais. Q C C C 6n case of terination of overseas eplo#ent
+ithout Fust, valid or authori7ed cause as defined b# la+ or contract, the +orkers
shall be entitled to the full reiburseent of his placeent fee +ith interest of
t+elve percent .'%I/ per annu, plus his salaries for the uneCpired portion of his
eplo#ent contract or for three .1/ onths for ever# #ear of the uneCpired ter,
+hichever is less.
The N$RC denied the MotionH hence, "errano filed a Petition for Certiorari +ith
the Court of Appeals .CA/, reiterating the constitutional challenge against the
subFect clause. The CA affired the N$RC ruling on the reduction of the
applicable salar# rate, but skirted the constitutional issue raised b# herein petitioner
"errano.
6""@E";
'. 4hether or not the subFect clause violates "ection '5, Article 666 of the
Constitution on non3ipairent of contractsH
%. 4hether or not the subFect clause violate "ection ', Article 666 of the
Constitution, and "ection '), Article 66 and "ection 1, Article -666 on labor as a
protected sector.
>E$!;
,n the first issue.
The ans+er is in the negative. PetitionerKs clai that the subFect clause undul#
interferes +ith the stipulations in his contract on the ter of his eplo#ent and
the fiCed salar# package he +ill receive is not tenable.
"ection '5, Article 666 of the Constitution provides; No la+ ipairing the
obligation of contracts shall be passed.
The prohibition is aligned +ith the general principle that la+s ne+l# enacted have
onl# a prospective operation, and cannot affect acts or contracts alread# perfectedH
ho+ever, as to la+s alread# in eCistence, their provisions are read into contracts
and deeed a part thereof. Thus, the non3ipairent clause under "ection '5,
Article 66 is liited in application to la+s about to be enacted that +ould in an#
+a# derogate fro eCisting acts or contracts b# enlarging, abridging or in an#
anner changing the intention of the parties thereto.
As aptl# observed b# the ,"?, the enactent of R.A. No. )5&% in '((: preceded
the eCecution of the eplo#ent contract bet+een petitioner and respondents in
'((). >ence, it cannot be argued that R.A. No. )5&%, particularl# the subFect
clause, ipaired the eplo#ent contract of the parties. Rather, +hen the parties
eCecuted their '(() eplo#ent contract, the# +ere deeed to have incorporated
into it all the provisions of R.A. No. )5&%.
But even if the Court +ere to disregard the tieline, the subFect clause a# not be
declared unconstitutional on the ground that it ipinges on the ipairent clause,
for the la+ +as enacted in the eCercise of the police po+er of the "tate to regulate
a business, profession or calling, particularl# the recruitent and deplo#ent of
,=4s, +ith the noble end in vie+ of ensuring respect for the dignit# and +ell3
being of ,=4s +herever the# a# be eplo#ed. Police po+er legislations
adopted b# the "tate to proote the health, orals, peace, education, good order,
safet#, and general +elfare of the people are generall# applicable not onl# to future
contracts but even to those alread# in eCistence, for all private contracts ust #ield
to the superior and legitiate easures taken b# the "tate to proote public
+elfare.
,n the second issue.
The ans+er is in the affirative.
"ection ', Article 666 of the Constitution guarantees; No person shall be deprived of
life, libert#, or propert# +ithout due process of la+ nor shall an# person be denied
the eEual protection of the la+.
"ection '), Article 66 and "ection 1, Article -666 accord all ebers of the labor
sector, +ithout distinction as to place of deplo#ent, full protection of their rights
and +elfare.
To =ilipino +orkers, the rights guaranteed under the foregoing constitutional
provisions translate to econoic securit# and parit#; all onetar# benefits should
be eEuall# enFo#ed b# +orkers of siilar categor#, +hile all onetar# obligations
should be borne b# the in eEual degreeH none should be denied the protection of
the la+s +hich is enFo#ed b#, or spared the burden iposed on, others in like
circustances.
"uch rights are not absolute but subFect to the inherent po+er of Congress to
incorporate, +hen it sees fit, a s#ste of classification into its legislationH ho+ever,
to be valid, the classification ust copl# +ith these reEuireents; '/ it is based
on substantial distinctionsH %/ it is gerane to the purposes of the la+H 1/ it is not
liited to eCisting conditions onl#H and &/ it applies eEuall# to all ebers of the
class.
There are three levels of scrutin# at +hich the Court revie+s the constitutionalit#
of a classification ebodied in a la+; a/ the deferential or rational basis scrutin# in
+hich the challenged classification needs onl# be sho+n to be rationall# related to
serving a legitiate state interestH b/ the iddle3tier or interediate scrutin# in
+hich the governent ust sho+ that the challenged classification serves an
iportant state interest and that the classification is at least substantiall# related to
serving that interestH and c/ strict Fudicial scrutin# in +hich a legislative
classification +hich iperissibl# interferes +ith the eCercise of a fundaental
right or operates to the peculiar disadvantage of a suspect class is presued
unconstitutional, and the burden is upon the governent to prove that the
classification is necessar# to achieve a copelling state interest and that it is the
least restrictive eans to protect such interest.
@pon cursor# reading, the subFect clause appears faciall# neutral, for it applies to
all ,=4s. >o+ever, a closer eCaination reveals that the subFect clause has a
discriinator# intent against, and an invidious ipact on, ,=4s at t+o levels;
=irst, ,=4s +ith eplo#ent contracts of less than one #ear vis3Z3vis ,=4s +ith
eplo#ent contracts of one #ear or oreH
"econd, aong ,=4s +ith eplo#ent contracts of ore than one #earH and
Third, ,=4s vis3Z3vis local +orkers +ith fiCed3period eplo#entH
6n su, prior to R.A. No. )5&%, ,=4s and local +orkers +ith fiCed3ter
eplo#ent +ho +ere illegall# discharged +ere treated alike in ters of the
coputation of their one# clais; the# +ere uniforl# entitled to their salaries
for the entire uneCpired portions of their contracts. But +ith the enactent of R.A.
No. )5&%, specificall# the adoption of the subFect clause, illegall# disissed ,=4s
+ith an uneCpired portion of one #ear or ore in their eplo#ent contract have
since been differentl# treated in that their one# clais are subFect to a 13onth
cap, +hereas no such liitation is iposed on local +orkers +ith fiCed3ter
eplo#ent.
The Court concludes that the subFect clause contains a suspect classification in that,
in the coputation of the onetar# benefits of fiCed3ter eplo#ees +ho are
illegall# discharged, it iposes a 13onth cap on the clai of ,=4s +ith an
uneCpired portion of one #ear or ore in their contracts, but none on the clais of
other ,=4s or local +orkers +ith fiCed3ter eplo#ent. The subFect clause
singles out one classification of ,=4s and burdens it +ith a peculiar disadvantage.
There being a suspect classification involving a vulnerable sector protected b# the
Constitution, the Court no+ subFects the classification to a strict Fudicial scrutin#,
and deterines +hether it serves a copelling state interest through the least
restrictive eans.
4hat constitutes copelling state interest is easured b# the scale of rights and
po+ers arra#ed in the Constitution and calibrated b# histor#. 6t is akin to the
paraount interest of the state for +hich soe individual liberties ust give +a#,
such as the public interest in safeguarding health or aintaining edical standards,
or in aintaining access to inforation on atters of public concern.
6n the present case, the Court dug deep into the records but found no copelling
state interest that the subFect clause a# possibl# serve.
6n fine, the ?overnent has failed to discharge its burden of proving the eCistence
of a copelling state interest that +ould Fustif# the perpetuation of the
discriination against ,=4s under the subFect clause.
Assuing that, as advanced b# the ,"?, the purpose of the subFect clause is to
protect the eplo#ent of ,=4s b# itigating the solidar# liabilit# of placeent
agencies, such callous and cavalier rationale +ill have to be reFected. There can
never be a Fustification for an# for of governent action that alleviates the
burden of one sector, but iposes the sae burden on another sector, especiall#
+hen the favored sector is coposed of private businesses such as placeent
agencies, +hile the disadvantaged sector is coposed of ,=4s +hose protection
no less than the Constitution coands. The idea that private business interest can
be elevated to the level of a copelling state interest is odious.
Moreover, even if the purpose of the subFect clause is to lessen the solidar# liabilit#
of placeent agencies vis3a3vis their foreign principals, there are echaniss
alread# in place that can be eplo#ed to achieve that purpose +ithout infringing on
the constitutional rights of ,=4s.
The P,EA Rules and Regulations ?overning the Recruitent and Eplo#ent of
$and3Based ,verseas 4orkers, dated =ebruar# &, %55%, iposes adinistrative
disciplinar# easures on erring foreign eplo#ers +ho default on their contractual
obligations to igrant +orkers and8or their Philippine agents. These disciplinar#
easures range fro teporar# disEualification to preventive suspension. The
P,EA Rules and Regulations ?overning the Recruitent and Eplo#ent of
"eafarers, dated Ma# %1, %551, contains siilar adinistrative disciplinar#
easures against erring foreign eplo#ers.
Resort to these adinistrative easures is undoubtedl# the less restrictive eans of
aiding local placeent agencies in enforcing the solidar# liabilit# of their foreign
principals.
Thus, the subFect clause in the :th paragraph of "ection '5 of R.A. No. )5&% is
violative of the right of petitioner and other ,=4s to eEual protection.
The subFect clause Sor for three onths for ever# #ear of the uneCpired ter,
+hichever is lessT in the :th paragraph of "ection '5 of Republic Act No. )5&% is
!EC$ARE! @NC,N"T6T@T6,NA$.