***SOCIAL JUSTICE*** On January 31, 1984, Labor Arbiter Bienvenido Hermogenes rendered a decision dismissing the

complaint as well as the counterclaim but without prejudice as to the latter. 1 Petitioner’s appeal to
the NLRC was dismissed for lack of merit 2 and her motion for reconsideration was denied. 3 Hence,
Republic of the Philippines
this petition.
SUPREME COURT
Manila
The issue in this case is whether petitioner’s dismissal on the ground of gross negligence was justified
under Art. 282 of the Labor Code.
THIRD DIVISION

Upon a thorough consideration of the facts of this case, the Court finds no cogent reason for reversing
G.R. No. 75955 October 28, 1988
the conclusion of the Labor Arbiter and the NLRC that petitioner was grossly negligent in the
performance of her duties as a teller, which negligence resulted in the loss of P50,000.00.
MARIA LINDA FUENTES, petitioner,
vs.
Applying the test of negligence, we ask: did the petitioner in doing the alleged negligent act use
NATIONAL LABOR RELATIONS COMMISSION (NLRC), PHILIPPINE BANKING CORPORATION and JOSE
reasonable care and caution which an ordinarily prudent person would have used in the same
LAUREL IV, as its President, respondents.
situation? If not, she is guilty of negligence.

Pedro S. Ravelo for petitioner.

The circumstances surrounding the loss in question lend us no sympathy for the petitioner. It was
established that petitioner simply left the pile of money within the easy reach of the crowd milling in
The Solicitor General for public respondent. front of her cage, instead of putting it in her drawer as required under the private respondent bank’s
General Memorandum No. 211 (Teller’s Manual of Operations) which she was expected to know by
Laurel Law Offices for private respondents. heart. 4 Moreover, she left the P200,000.00 on two occasions. 5

FERNAN, C.J.: Her irresponsibility is nowhere made apparent than in her response to the following question:

Petitioner Maria Linda Fuentes seeks to set aside the resolution dated November 28, 1985 of the
National Labor Relations Commission (NLRC for brevity) affirming the Labor Arbiter’s dismissal of her
complaint for illegal dismissal against private respondent Philippine Banking Corporation (Philbanking
for brevity).
Petitioner was employed as a teller at the Philbanking’s office at Ayala Avenue, Makati, Metro Manila.
On May 28, 1982, at about 10:30 a.m., petitioner, who was acting as an overnight teller, received a
cash deposit of P200,000.00. She counted the money with the assistance of a co-teller, finishing the
task at 10:40 a.m. or ten (10) minutes after her closing time. Before she could start balancing her
transactions, the Chief Teller handed her several payroll checks for validation. Finding the checks to be
incomplete, petitioner left her cage to get other checks, without, however, bothering to put the
P200,000.00 cash on her counter inside her drawer. When she returned to her cubicle after three (3)
to five (5) minutes, she found that the checks for validation were still lacking, so she went out of her
cubicle again to get the rest of the checks. On her way to a co-teller’s cubicle, she noticed that the
P200,000.00 pile on her counter had been re-arranged. She thus returned to her cage, counted the
money and discovered that one (1) big bundle worth P50,000.00 was missing therefrom. She
immediately asked her co-teller about it and getting a negative reply, she reported the matter to the
Chief Teller. A search for the P50,000.00 having proved unavailing, petitioner was asked to explain
why she should not be held liable for the loss. She submitted her explanation on June 24, 1982.
Subsequently, on June 3, 1983, petitioner was dismissed for gross negligence. On June 21, 1983, she
filed a complaint for illegal dismissal with reinstatement and backwages.
Q Noong lumabas ka sa iyong cage para pumunta sa iyong Chief Teller, hindi ba ipinagbilin itong pera
sa iyong kasamahan?
A Hindi ko na ho ipinagbilin kasi masyadong maraming tao noon, at iyong aking teller’s counter ay
nilagyan ko ng sign na nakasulat ng ‘next teller please’ na ang ibig sabihin ay kung meron mang mga
cliente doon sa akin ay doon muna sila maki-pagtransact ng negosyo sa kabilang teller o kung sino
man ang bakante kasi busy ako. 6
As a teller, petitioner must realize that the amount of care demanded by reasonable conduct is that
proportionate to the apparent risk. Since it was payday and depositors were milling around, petitioner
should have been extra cautious. At no time than the occasion under consideration was the need to
be extra careful more obvious. It was certainly not the time to breach the standard operating
procedure of keeping one’s cash in the drawer as a precautionary and security measure.
“A teller’s relationship with the bank is necessarily one of trust and confidence. The teller as a trustee
is expected to possess a high degree of fidelity to trust and must exercise utmost diligence and care in
handling cash. A teller cannot afford to relax vigilance in the performance of his duties.” 7
Petitioner argues that there was contributor negligence on the part of private respondent bank
consisting in its failure to conduct an investigation minutes after the loss. We do not agree with
petitioner. The failure of private respondent bank to conduct an investigation minutes after the loss
was totally distinct and independent of, as well as remotely related to the fact of loss itself.

Private respondent bank seasonably filed an answer with counterclaim that petitioner be ordered to
restitute the amount of P50,000.
Petitioner Fuentes cannot invoke private respondent’s alleged contributory negligence as there was Gutierrez, Jr., Feliciano, Bidin and Cortes, JJ., concur.
no direct causal connection between the negligence of the bank in not conducting the investigation
and the loss complained of. In a legal sense, negligence is contributory only when it contributes
Footnotes
proximately to the injury, and not simply a condition for its occurrence.

1 Annex “B,” Petition, pp. 47-52, Rollo.

In the case at bar, the bank’s inaction merely created a condition under which the loss was sustained.
Regardless of whether there was a failure to investigate, the fact is that the money was lost in the first
place due to petitioner’s gross negligence. Such gross negligence was the immediate and determining 2 Annex “F,” Petition, pp. 76-81, Rollo.
factor in the loss.
3 Annex “H,” P. 85, Rollo.
Besides, the petitioner’s position is anathema to banking operations. By conducting an instant search
on its depositors for every loss that occurs, management holds suspect each depositor within its 4 P. 51, Rollo.
premises. Considering that currency in the form of money bills bears no distinct earmarks which
would distinguish it from other similar bills of similar denominations except as to its serial numbers,
any innocent depositor with P50,000 in his possession would be a likely suspect. Such act would do 5 P. 50 and 79, Ibid.
violence to the fiduciary relationship between a bank and its depositors. Ultimately it will result in the
loss of valued depositors. 6 P. 62, Rollo.

Petitioner argues further that the NLRC failed to consider that petitioner left her cage at the instance 7 Galsim v. PNB, G.R. No. 23921, August 24,1969,29 SCRA 293; Allied Banking Corporation v. Castro, et
of the Chief Teller. Again we are not persuaded. The findings of the NLRC are clear. Petitioner left at al., G.R. No. 70608, December 22,1987.
her own volition to approach her Chief Teller to ask for the remaining checks to ascertain their
authenticity and completeness. Besides, irrespective of who summoned her, her responsibility over
the cash entrusted to her remained. 8 Supra.

Although petitioner’s infraction was not habitual, we took into account the substantial amount lost. 9 P. 97, Rollo.
Since the deposit slip for P200,000.00 had already been validated prior to the loss, the act of
depositing had already been complete and from thereon, the bank had already assumed the deposit 10 Manila Trading Supply v. Zulueta, 69 Phil. 435.
as a liability to its depositors. Cash deposits are not assets to banks but are recognized as current
liabilities in its balance sheet.
FIRST DIVISION

It would be most unfair to compel the bank to continue employing petitioner. In Galsim v. PNB, 8 we
[G.R. No. 79560 : December 3, 1990.]
upheld the dismissal of a bank teller who was found to have given money to a co-employee in
violation of bank rules and regulations. Said act, which caused prejudice to the bank, was a justifiable
basis for the bank to lose confidence in the employee. 191 SCRA 823

Similarly, in the case at bar, petitioner, as aforesaid, violated private respondent bank’s General
Memorandum, No. 211 (Teller’s Manual of Operations) which strictly says:
Cash should never be left exposed. The coins and currencies should be kept in drawers where they are
not accessible to someone through the windows with the aid of a stick or other devices. 9
ANDRES E. DITAN, Petitioner, vs. PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION
ADMINISTRATOR, NATIONAL LABOR RELATIONS COMMISSION, ASIAWORLD RECRUITMENT, INC.,
AND/OR INTRACO SALES CORPORATION, Respondents.

An employer cannot legally be compelled to continue with the employment of a person admittedly DECISION
guilty of gross negligence in the performance of his duties and whose continuance in his office is
patently inimical to the employer’s interest. “For the law in protecting the rights of the
CRUZ, J.:
employee/laborer authorizes neither oppression nor self-destruction of the employer. 10

The petitioner had the rare experience of being taken hostage in 1984, along with a number of his co-
WHEREFORE, the instant petition is hereby DISMISSED. The assailed decision dated November
workers, by the rebels in Angola. His captivity for more than two months and the events that followed
28,1985 of the National Labor Relations Commission is affirmed in toto.
his release are the subject of the present petition.

Andres E. Ditan was recruited by private respondent Intraco Sales Corporation, through its local agent,
Asia World, the other private respondent, to work in Angola as a welding supervisor. The contract was
for nine months, at a monthly salary of US$1,100.00 or US$275.00 weekly, and contained the required
standard stipulations for the protection of our overseas workers.
Arriving on November 30, 1984, in Luanda, capital of Angola, the petitioner was assigned as an
ordinary welder in the INTRACO central maintenance shop from December 2 to 25, 1984. On
December 26, 1984, he was informed, to his distress, that would be transferred to Kafunfo, some 350
kilometers east of Luanda. This was the place where, earlier that year, the rebels had attacked and
kidnapped expatriate workers, killing two Filipinos in the raid. Naturally, Ditan was reluctant to go.
However, he was assured by the INTRACO manager that Kafunfo was safe and adequately protected
by government troops; moreover — and this was more persuasive — he was told he would be sent
home if he refused the new assignment. In the end, with much misgiving, he relented and agreed.:
nad
On December 29, 1984, his fears were confirmed. The Unita rebels attacked the diamond mining site
where Ditan was working and took him and sixteen other Filipino hostages, along with other foreign
workers. The rebels and their captives walked through jungle terrain for 31 days to the Unita
stronghold near the Namibian border. They trekked for almost a thousand kilometers. They subsisted
on meager fare. Some of them had diarrhea. Their feet were blistered. It was only on March 16, 1985,
that the hostages were finally released after the intercession of their governments and the
International Red Cross. Six days later, Ditan and the other Filipino hostages were back in the
Philippines. 1
The repatriated workers had been assured by INTRACO that they would be given priority in re-
employment abroad, and eventually eleven of them were taken back. Ditan having been excluded, he
filed in June 1985 a complaint against the private respondents for breach of contract and various
other claims. Specifically, he sought the amount of US$4,675.00, representing his salaries for the
unexpired 17 weeks of his contract; US$25,000.00 as war risk bonus; US$2,196.50 as the value of his
lost belongings; US$1,100 for unpaid vacation leave; and moral and exemplary damages in the sum of
US$50,000.00, plus attorney’s fees.
All these claims were dismissed by POEA Administrator Tomas D. Achacoso in a decision dated
January 27, 1987. 2 This was affirmed in toto by respondent NLRC in a resolution dated July 14, 1987,
3 which is now being challenged in this petition.
Going over the record, we find that the public respondent correctly rejected the petitioner’s claim for
paid vacation leave. The express stipulation in Clause 5 of the employment contract reads:
Should the Employee enter into a further 9 to 12 months contract at the completion contract, he will
be entitled to one month’s paid vacation before commencement of his second or subsequent
contract.
It appears that the petitioner had not entered into a second contract with the employer after the
expiration of the first. Such re-employment was not a matter of right on the part of the petitioner but
dependent on the need for his skills in another project the employer might later be undertaking.
As regards the cost of his belongings, the evidence shows that they were not really lost but in fact
returned to him by the rebels prior to their release. If he had other properties that were not
recovered, there was no proof of their loss that could support his allegations. They were therefore
also properly rejected.:-cralaw
We find, though, that the claims for breach of contract and war risk bonus deserve a little more
reflection in view of the peculiar circumstances of this case.
The fact that stands out most prominently in the record is the risk to which the petitioner was
subjected when he was assigned, after his reluctant consent, to the rebel-infested region of Kafunfo.
This was a dangerous area. This same place had earlier been the target of a rebel attack that had
resulted in the death of two Filipino workers and the capture of several others. Knowing all this,
INTRACO still pressured Ditan into agreeing to be transferred to that place, dismissing his initial
objection and, more important, threatening to send him home if he refused.
We feel that in failing to provide for the safety of the petitioner, the private respondents were clearly
remiss in the discharge of one of the primary duties of the employer. Worse, they not only neglected
that duty but indeed deliberately violated it by actually subjecting and exposing Ditan to a real and
demonstrated danger. It does not help to argue that he was not forced to go to Kafunfo and had the
option of coming home. That was a cruel choice, to say the least. The petitioner had gone to that
foreign land in search of a better life that he could share with his loved ones after his stint abroad.
That choice would have required him to come home empty-handed to the disappointment of an
expectant family.
It is not explained why the petitioner was not paid for the unexpired portion of his contract which had
17 more weeks to go. The hostages were immediately repatriated after their release, presumably so
they could recover from their ordeal. The promise of INTRACO was that they would be given priority
in re-employment should their services be needed. In the particular case of the petitioner, the
promise was not fulfilled. It would seem that his work was terminated, and not again required,
because it was really intended all along to assign him only to Kafunfo.:-cralaw
The private respondents stress that the contract Ditan entered into called for his employment in
Angola, without indication of any particular place of assignment in the country. This meant he agreed
to be assigned to work anywhere in that country, including Kafunfo. When INTRACO assigned Ditan to
that place in the regular course of its business, it was merely exercising its rights under the
employment contract that Ditan had freely entered into. Hence, it is argued, he cannot now complain
that there was a breach of that contract for which he is entitled to monetary redress.
The private respondents also reject the claim for war risk bonus and point out that POEA
Memorandum Circular No. 4, issued pursuant to the mandatory war risk coverage provision in Section
2, Rule VI, of the POEA Rules and Regulations on Overseas Employment, categorizing Angola as a war
risk took effect only on February 6, 1985, “after the petitioner’s deployment to Angola on November
27, 1984.” Consequently, the stipulation could not be applied to the petitioner as it was not supposed
to have a retroactive effect.
A strict interpretation of the cold facts before us might support the position taken by the respondents.
However, we are dealing here not with an ordinary transaction but with a labor contract which
deserves special treatment and a liberal interpretation in favor of the worker. As the Solicitor General
observes in his Comment supporting the petitioner, the Constitution mandates the protection of labor
and the sympathetic concern of the State for the working class conformably to the social justice 3. Id., pp. 65-69.
policy. This is a command we cannot disregard in the resolution of the case before us.
***PRE-TERMINATION OF CONTRACT***
The paramount duty of this Court is to render justice through law. The law in this case allows two
opposite interpretations, one strictly in favor of the employers and the other liberally in favor of the
SERRANO V. GALLANT MARITIME SERVICES,INC.
worker. The choice is obvious. We find, considering the totality of the circumstances attending this
case, that the petitioner is entitled to relief.
By way of Petition for Review under Rule 45 of the Rules of Court, petitioner assails the Decision
and Resolution of the Court of Appeals (CA).
The petitioner went to Angola prepared to work as he had promised in accordance with the
employment contract he had entered into in good faith with the private respondents. Over his
objection, he was sent to a dangerous assignment and as he feared was taken hostage in a rebel FACTS:
attack that prevented him from fulfilling his contract while in captivity. Upon his release, he was
immediately sent home and was not paid the salary corresponding to the unexpired portion of his Petitioner was hired by Gallant Maritime Services, Inc. and Marlow Navigation Co., Ltd.
contract. He was immediately repatriated with the promise that he would be given priority in re- (respondents) under a Philippine Overseas Employment Administration (POEA)-approved Contract
employment, which never came. To rub salt on the wound, many of his co-hostages were re- of Employment with the following terms and conditions:
employed as promised. The petitioner was left only with a bleak experience and nothing to show for it
except dashed hopes and a sense of rejection.
Duration of contract 12 months

In these circumstances, the Court feels that the petitioner should be paid the salary corresponding to
the 17 unserved weeks of his contract, which was terminated by the private respondents despite his Position Chief Officer
willingness to work out the balance of his term. In addition, to assuage the ordeal he underwent while
in captivity by the rebels, the Court has also decided in its discretion to award him nominal damages Basic monthly salary US$1,400.00
in the sum of P20,000.00. This is not payment of the war risk claim which, as earlier noted, was not
provided for in the employment contract in question, or indemnification for any loss suffered by him.
This is but a token of the tenderness of the law towards the petitioning workman vis-à-vis the private Hours of work 48.0 hours per week
respondents and their more comfortable resources.: nad
Overtime US$700.00 per month
Under the policy of social justice, the law bends over backward to accommodate the interests of the
working class on the humane justification that those with less privileges in life should have more Vacation leave with pay 7.00 days per month
privileges in law. That is why our judgment today must be for the petitioner.
On March 19, 1998, the date of his departure, petitioner was constrained to accept
WHEREFORE, the challenged resolution of the NLRC is hereby MODIFIED. The private respondents are a downgraded employment contract for the position of Second Officer with a monthly salary of
hereby DIRECTED jointly and severally to pay the petitioner: a) the current equivalent in Philippine US$1,000.00, upon the assurance and representation of respondents that he would be made Chief
pesos of US$4,675.00, representing his unpaid salaries for the balance of the contract term; b) Officer by the end of April 1998.
nominal damages in the amount of P20,000.00; and c) 10% attorney’s fees. No costs.
Respondents did not deliver on their promise to make petitioner Chief Officer. Hence, petitioner
SO ORDERED. refused to stay on as Second Officer and wasrepatriated to the Philippines on May 26, 1998.

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

Endnotes
Petitioner filed with the Labor Arbiter (LA) a Complaint against respondents for constructive
dismissal and for payment of his money claims in the total amount of US$26,442.73.
3. Rollo, p. 47.
The LA rendered a Decision dated July 15, 1999, declaring the dismissal of petitioner illegal and
2. Ibid., pp. 46-54. awarding him monetary benefits, to wit:
WHEREFORE, premises considered, judgment is hereby rendered declaring that the dismissal of the
complainant (petitioner) by the respondents in the above-entitled case was illegal and the
respondents are hereby ordered to pay the complainant [petitioner], jointly and severally, in
Philippine Currency, based on the rate of exchange prevailing at the time of payment, the amount
of EIGHT THOUSAND SEVEN HUNDRED SEVENTY U.S. DOLLARS (US $8,770.00), representing the
complainant’s salary for three (3) months of the unexpired portion of the aforesaid contract of
employment.
The claims of the complainant for moral and exemplary damages are hereby DISMISSED for lack of
merit.
In awarding petitioner a lump-sum salary of US$8,770.00, the LA based his computation on the
salary period of three months only — rather than the entire unexpired portion of nine months and
23 days of petitioner’s employment contract – applying the subject clause. However, the LA applied
the salary rate of US$2,590.00, consisting of petitioner’s “[b]asic salary, US$1,400.00/month +
US$700.00/month, fixed overtime pay, + US$490.00/month, vacation leave pay =
US$2,590.00/compensation per month.”
Respondents appealed to the National Labor Relations Commission (NLRC) to question the finding
of the LA that petitioner was illegally dismissed.
The NLRC modified the LA Decision and corrected the LA’s computation of the lump-sum salary
awarded to petitioner by reducing the applicable salary rate from US$2,590.00 to
US$1,400.00 because R.A. No. 8042 “does not provide for the award of overtime pay, which should
be proven to have been actually performed, and for vacation leave pay.
Petitioner filed a Motion for Partial Reconsideration, but this time he questioned the
constitutionality of the subject clause. The NLRC denied the motion.
Petitioner filed a Petition for Certiorari with the CA, reiterating the constitutional challenge against
the subject clause. After initially dismissing the petition on a technicality, the CA eventually gave
due course to it, as directed by this Court in its Resolution which granted the petition for
certiorari,filed by petitioner.
The CA affirmed the NLRC ruling on the reduction of the applicable salary rate; however, the CA
skirted the constitutional issue raised by petitioner.
His Motion for Reconsideration having been denied by the CA, petitioner brings his cause to this
Court on the following grounds:
The Court of Appeals and the labor tribunals have decided the case in a way not in accord with
applicable decision of the Supreme Court involving similar issue of granting unto the migrant
worker back wages equal to the unexpired portion of his contract of employment instead of limiting
it to three (3) months.
Even without considering the constitutional limitations [of] Sec. 10 of Republic Act No. 8042,
the Court of Appeals gravely erred in law in excluding from petitioner’s award the overtime pay and
vacation pay provided in his contract since under the contract they form part of his salary.
The Court now takes up the full merit of the petition mindful of the extreme importance of the
constitutional question raised therein.
ISSUES:
Whether Section 10 (par 5) of RA 8042 is unconstitutional
 Proper computation of the Lump-sum salary to be awarded to petitioner by reason of his
illegal dismissal
 Whether the overtime and leave pay should form part of the salary basis in the
computation of his monetary award
The unanimous finding of the LA, NLRC and CA that the dismissal of petitioner was illegal is not
disputed. Likewise not disputed is the salary differential of US$45.00 awarded to petitioner in all
three fora.
Applying the subject clause, the NLRC and the CA computed the lump-sum salary of petitioner at
the monthly rate of US$1,400.00 covering the period of three months out of the unexpired portion
of nine months and 23 days of his employment contract or a total of US$4,200.00.
Impugning the constitutionality of the subject clause, petitioner contends that, in addition to the
US$4,200.00 awarded by the NLRC and the CA, he is entitled to US$21,182.23 more or a total of
US$25,382.23, equivalent to his salaries for the entire nine months and 23 days left of his
employment contract, computed at the monthly rate of US$2,590.00.31
Arguments of the Petitioner
For Antonio Serrano (petitioner), a Filipino seafarer, the last clause in the 5th paragraph of Section
10, Republic Act (R.A.) No. 8042, violates the OFWs’ constitutional rights in that it impairs the terms
of their contract, deprives them of equal protection and denies them due process.
The Arguments of Respondents
Respondents contend that the constitutional issue should not be entertained, for this was belatedly
interposed by petitioner in his appeal before the CA, and not at the earliest opportunity, which was
when he filed an appeal before the NLRC.40
The Arguments of the Solicitor General
The Solicitor General (OSG)41 points out that as R.A. No. 8042 took effect on July 15, 1995, its
provisions could not have impaired petitioner’s 1998 employment contract. Rather, R.A. No. 8042
having preceded petitioner’s contract, the provisions thereof are deemed part of the minimum
terms of petitioner’s employment, especially on the matter of money claims, as this was not
stipulated upon by the parties.
 The Court’s Ruling: sparing the other category from such prejudice, simply because the latter’s unexpired contracts fall
short of one year.
First Issue
Prior to R.A. No. 8042, a uniform system of computation of the monetary awards of illegally
dismissed OFWs was in place. This uniform system was applicable even to local workers with fixed-
Does the subject clause violate Section 1, Article III of the Constitution, and Section 18, Article II and
term employment.
Section 3, Article XIII on Labor as protected sector?

The subject clause does not state or imply any definitive governmental purpose; and it is for that
The answer is in the affirmative.
precise reason that the clause violates not just petitioner’s right to equal protection, but also her
right to substantive due process under Section 1, Article III of the Constitution.
Section 1, Article III of the Constitution guarantees:
The subject clause being unconstitutional, petitioner is entitled to his salaries for the entire
No person shall be deprived of life, liberty, or property without due process of law nor shall any unexpired period of nine months and 23 days of his employment contract, pursuant to law and
person be denied the equal protection of the law. jurisprudence prior to the enactment of R.A. No. 8042.

Section 18, Article II and Section 3, Article XIII accord all members of the labor sector, without Third Issue
distinction as to place of deployment, full protection of their rights and welfare.
Petitioner contends that his overtime and leave pay should form part of the salary basis in the
To Filipino workers, the rights guaranteed under the foregoing constitutional provisions translate to computation of his monetary award, because these are fixed benefits that have been stipulated
economic security and parity: all monetary benefits should be equally enjoyed by workers of similar into his contract.
category, while all monetary obligations should be borne by them in equal degree; none should be
denied the protection of the laws which is enjoyed by, or spared the burden imposed on, others in
Petitioner is mistaken.
like circumstances.

The word salaries in Section 10(5) does not include overtime and leave pay. For seafarers like
Imbued with the same sense of “obligation to afford protection to labor,” the Court in the present
petitioner, DOLE Department Order No. 33, series 1996, provides a Standard Employment Contract
case also employs the standard of strict judicial scrutiny, for it perceives in the subject clause a
of Seafarers, in which salary is understood as the basic wage, exclusive of overtime, leave pay and
suspect classification prejudicial to OFWs.
other bonuses; whereas overtime pay is compensation for all work “performed” in excess of the
regular eight hours, and holiday pay is compensation for any work “performed” on designated rest
Upon cursory reading, the subject clause appears facially neutral, for it applies to all OFWs. days and holidays.
However, a closer examination reveals that the subject clause has a discriminatory intent against,
and an invidious impact on OFWs
In the same vein, the claim for the day’s leave pay for the unexpired portion of the contract is
unwarranted since the same is given during the actual service of the seamen.
The subject clause does not state or imply any definitive governmental purpose; and it is for that
precise reason that the clause violates not just petitioner’s right to equal protection, but also her
WHEREFORE, the Court GRANTS the Petition. The subject clause “or for three months for every year
right to substantive due process under Section 1, Article III of the Constitution.
of the unexpired term, whichever is less” in the 5th paragraph of Section 10 of Republic Act No.
8042 is DECLARED UNCONSTITUTIONAL; and the December 8, 2004 Decision and April 1, 2005
Second Issue Resolution of the Court of Appeals are MODIFIED to the effect that petitioner is AWARDED his
salaries for the entire unexpired portion of his employment contract consisting of nine months and
It is plain that prior to R.A. No. 8042, all OFWs, regardless of contract periods or the unexpired 23 days computed at the rate of US$1,400.00 per month.
portions thereof, were treated alike in terms of the computation of their monetary benefits in case
of illegal dismissal. Their claims were subjected to a uniform rule of computation: their basic SAMEER OVERSEAS PLACEMENT AGENCY, INC., Petitioner,
salaries multiplied by the entire unexpired portion of their employment contracts.
vs.
The enactment of the subject clause in R.A. No. 8042 introduced a differentiated rule of
computation of the money claims of illegally dismissed OFWs based on their employment periods,
JOY C. CABILES, Respondent.
in the process singling out one category whose contracts have an unexpired portion of one year or
more and subjecting them to the peculiar disadvantage of having their monetary awards limited to
their salaries for 3 months or for the unexpired portion thereof, whichever is less, but all the while G.R. No. 170139 August 5, 2014
 A statute or provision which was declared unconstitutional is not a law. It “confers no
rights; it imposes no duties; it affords no protection; it creates no office; it is inoperative as if it has
not been passed at all.”
PONENTE: Leonen

TOPIC: Section 10 of RA 8042 vis-a-vis Section 7 of RA 10022
FACTS:
Petitioner, Sameer Overseas Placement Agency, Inc., is a recruitment and placement
agency.
Respondent Joy Cabiles was hired thus signed a one-year employment contract for
a monthly salary of NT$15,360.00. Joy was deployed to work for Taiwan Wacoal, Co. Ltd. (Wacoal)
on June 26, 1997. She alleged that in her employment contract, she agreed to work as quality
control for one year. In Taiwan, she was asked to work as a cutter.
Sameer claims that on July 14, 1997, a certain Mr. Huwang from Wacoal informed Joy,
without prior notice, that she was terminated and that “she should immediately report to their
office to get her salary and passport.” She was asked to “prepare for immediate repatriation.” Joy
claims that she was told that from June 26 to July 14, 1997, she only earned a total of NT$9,000.15
According to her, Wacoal deducted NT$3,000 to cover her plane ticket to Manila.
On October 15, 1997, Joy filed a complaint for illegal dismissal with the NLRC against
petitioner and Wacoal. LA dismissed the complaint. NLRC reversed LA’s decision. CA affirmed the
ruling of the National Labor Relations Commission finding respondent illegally dismissed and
awarding her three months’ worth of salary, the reimbursement of the cost of her repatriation, and
attorney’s fees
ISSUE:
The Court said that they are aware that the clause “or for three (3) months for every year
of the unexpired term, whichever is less” was reinstated in Republic Act No. 8042 upon
promulgation of Republic Act No. 10022 in 2010.
Ruling on the constitutional issue
In the hierarchy of laws, the Constitution is supreme. No branch or office of the
government may exercise its powers in any manner inconsistent with the Constitution, regardless of
the existence of any law that supports such exercise. The Constitution cannot be trumped by any
other law. All laws must be read in light of the Constitution. Any law that is inconsistent with it is a
nullity.
Thus, when a law or a provision of law is null because it is inconsistent with the
Constitution, the nullity cannot be cured by reincorporation or reenactment of the same or a similar
law or provision. A law or provision of law that was already declared unconstitutional remains as
such unless circumstances have so changed as to warrant a reverse conclusion.
The Court observed that the reinstated clause, this time as provided in Republic Act. No.
10022, violates the constitutional rights to equal protection and due process.96 Petitioner as well as
the Solicitor General have failed to show any compelling change in the circumstances that would
warrant us to revisit the precedent.
The Court declared, once again, the clause, “or for three (3) months for every year of the
unexpired term, whichever is less” in Section 7 of Republic Act No. 10022 amending Section 10 of
Republic Act No. 8042 is declared unconstitutional and, therefore, null and void.

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

HELD:

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

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