Placement Fee; proof of excessive collection.

Petitioner filed a complaint against respondent for collection of excess placement fee defined in Article
34(a) of the Labor Code. Petitioner presented as her evidence a promissory note reflecting excessive
fees and testified as to the deductions made by her foreign employer. On the other hand, respondent
presented an acknowledgment receipt reflecting collection of an amount authorized by POEA.
The Court held that the pieces of evidence presented by petitioner are not substantial enough to show
that the respondent collected from her more than the allowable placement fee.
In proceedings before administrative and quasi-judicial agencies, the quantum of evidence required to
establish a fact is substantial evidence, or that level of relevant evidence which a reasonable mind
might accept as adequate to justify a conclusion.
The Court gave more credence to respondents evidence consisting of the acknowledgment receipt
showing the amount paid by petitioner and received by respondent.
A receipt is a written and signed acknowledgment that money or goods have been delivered. Although
a receipt is not conclusive evidence, an exhaustive review of the records of the case fails to disclose
any other evidence sufficient and strong enough to overturn the acknowledgment embodied in
respondents receipt as to the amount it actually received from petitioner. Having failed to adduce
sufficient rebuttal evidence, petitioner is bound by the contents of the receipt issued by respondent. The
subject receipt remains as the primary or best evidence.
The promissory note presented by petitioner cannot be considered as adequate evidence to show the
excessive placement fee. It must be emphasized that a promissory note is a solemn acknowledgment of
a debt and a formal commitment to repay it on the date and under the conditions agreed upon by the
borrower and the lender.
A person who signs such an instrument is bound to honor it as a legitimate obligation duly assumed by
him through the signature he affixes thereto as a token of his good faith. The fact that respondent is not
a lending company does not preclude it from extending a loan to petitioner for her personal use. As for
the deductions purportedly made by petitioners foreign employer, the Court noted that there is no
single piece of document or receipt showing that deductions have in fact been made, or is there any
proof that these deductions from the salary formed part of the subject placement fee. To be sure, mere
general allegations of payment of excessive placement fees cannot be given merit as the charge of
illegal exaction is considered a grave offense which could cause the suspension or cancellation of the
agencys license. They should be proven and substantiated by clear, credible, and competent evidence.
Avelina F. Sagun v. Sunace International Management Services, Inc.,

SECOND DIVISION
AVELINA F. SAGUN,
Petitioner,
- versus -

SUNACE INTERNATIONAL MANAGEMENT SERVICES, INC.,

Respondent.
G.R. No. 179242
Present:
CARPIO, J.,
Chairperson,
NACHURA,
PERALTA,
ABAD, and
MENDOZA, JJ.
Promulgated:
February 23, 2011
x------------------------------------------------------------------------------------x
RESOLUTION
NACHURA, J.:
This is a Petition for Review on certiorari under Rule 45 of the Rules of Court, seeking to reverse and
set aside the Court of Appeals (CA) Decision[1] dated March 23, 2007 and Resolution[2] dated August
16, 2007 in CA-G.R. SP No. 89298.
The case arose from a complaint for alleged violation of Article 32 and Article 34(a) and (b) of the
Labor Code, as amended, filed by petitioner Avelina F. Sagun against respondent Sunace International
Management Services, Inc. and the latters surety, Country Bankers Insurance Corporation, before the
Philippine Overseas Employment Administration (POEA). The case was docketed as POEA Case No.
RV 00-03-0261.[3]
Petitioner claimed that sometime in August 1998, she applied with respondent for the position of
caretaker in Taiwan. In consideration of her placement and employment, petitioner allegedly paid
P30,000.00 cash, P10,000.00 in the form of a promissory note, and NT$60,000.00 through salary
deduction, in violation of the prohibition on excessive placement fees. She also claimed that respondent
promised to employ her as caretaker but, at the job site, she worked as a domestic helper and, at the
same time, in a poultry farm.[4]

Respondent, however, denied petitioners allegations and maintained that it only collected P20,840.00,
the amount authorized by the POEA and for which the corresponding official receipt was issued. It also
stressed that it did not furnish or publish any false notice or information or document in relation to
recruitment or employment as it was duly received, passed upon, and approved by the POEA.[5]
On December 27, 2001, POEA Administrator Rosalinda Dimapilis-Baldoz dismissed[6] the complaint
for lack of merit. Specifically, the POEA Administrator found that petitioner failed to establish facts
showing a violation of Article 32, since it was proven that the amount received by respondent as
placement fee was covered by an official receipt; or of Article 34(a) as it was not shown that
respondent charged excessive fees; and of Article 34(b) simply because respondent processed
petitioners papers as caretaker, the position she applied and was hired for.
Aggrieved, petitioner filed a Motion for Reconsideration[7] with the Office of the Secretary of Labor.
The Secretary treated the motion as a Petition for Review. On January 13, 2004, then Secretary of
Labor Patricia A. Sto. Tomas partially granted[8] petitioners motion, the pertinent portion of which
reads:
WHEREFORE, premises considered, the Motion for Reconsideration, herein treated as a petition for
review, is PARTIALLY GRANTED. The Order dated December 27, 2001 of the POEA Administrator
is partially MODIFIED, and SUNACE International Management Services, Inc. is held liable for
collection of excessive placement fee in violation of Article 34 (a) of the Labor Code, as amended. The
penalty of suspension of its license for two (2) months, or in lieu thereof, the penalty of fine in the
amount of Twenty Thousand Pesos (P20,000.00) is hereby imposed upon SUNACE. Further, SUNACE
and its surety, Country Bankers Insurance Corporation, are ordered to refund the petitioner the amounts
of Ten Thousand Pesos (P10,000.00) and NT$65,000.00, representing the excessive placement fee
exacted from her.
SO ORDERED.[9]
On appeal by respondent, the Office of the President (OP) affirmed[10] the Order of the Secretary of
Labor. In resolving the case for petitioner, the OP emphasized the States policy on the full protection to
labor, local and overseas, organized and unorganized. It also held that it was impossible for respondent
to have extended a loan to petitioner since it was not in the business of lending money. It likewise
found it immaterial that no evidence was presented to show the overcharging since the issuance of a
receipt could not be expected.
Respondents motion for reconsideration was denied in an Order[11] dated March 21, 2005, which
prompted respondent to elevate the matter to the CA via a petition for review under Rule 43 of the
Rules of Court.
On March 23, 2007, the CA decided in favor of respondent, disposing, as follows:
WHEREFORE, premises considered, the instant petition is GRANTED and the decision of the Office
of the President dated 07 January 2005 is REVERSED and SET ASIDE for lack of sufficient evidence.
The Order of the POEA Administrator dismissing the complaint of respondent for violation of Article
34(a) and (b) of the Labor Code is hereby AFFIRMED.
SO ORDERED.[12]

The appellate court reversed the rulings of the Secretary of Labor and the OP mainly because their
conclusions were based not on evidence but on speculation, conjecture, possibilities, and probabilities.
Hence, this petition filed by petitioner, raising the sole issue of:
WHETHER THE COURT OF APPEALS ERRED IN GRANTING THE RESPONDENTS PETITION
FOR REVIEW REVERSING THE DECISION AND ORDER [OF THE] OFFICE OF THE
PRESIDENT.[13]
The petition is without merit.
Respondent was originally charged with violation of Article 32 and Article 34(a) and (b) of the Labor
Code, as amended. The pertinent provisions read:
ART. 32. Fees to be Paid by Workers. - Any person applying with a private fee charging employment
agency for employment assistance shall not be charged any fee until he has obtained employment
through its efforts or has actually commenced employment. Such fee shall be always covered with the
appropriate receipt clearly showing the amount paid. The Secretary of Labor shall promulgate a
schedule of allowable fees.
ART. 34. Prohibited Practices. - It shall be unlawful for any individual, entity, licensee, or holder of
authority:
(a)
To charge or accept, directly or indirectly, any amount greater than that specified in the
schedule of allowable fees prescribed by the Secretary of Labor; or to make a worker pay any amount
greater than that actually received by him as a loan or advance;
(b)
To furnish or publish any false notice or information or document in relation to recruitment
or employment.
The POEA, the Secretary of Labor, the OP, and the CA already absolved respondent of liability under
Articles 32 and 34(b). As no appeal was interposed by petitioner when the Secretary of Labor freed
respondent of said liabilities, the only issue left for determination is whether respondent is liable for
collection of excess placement fee defined in Article 34(a) of the Labor Code, as amended.
Although initially, the POEA dismissed petitioners complaint for lack of merit, the Secretary of Labor
and the OP reached a different conclusion. On appeal to the CA, the appellate court, however, reverted
to the POEA conclusion. Following this turn of events, we are constrained to look into the records of
the case and weigh anew the evidence presented by the parties.
We find and so hold that the POEA and the CA are correct in dismissing the complaint for illegal
exaction filed by petitioner against respondent.
In proceedings before administrative and quasi-judicial agencies, the quantum of evidence required to
establish a fact is substantial evidence, or that level of relevant evidence which a reasonable mind
might accept as adequate to justify a conclusion.[14]

In this case, are the pieces of evidence presented by petitioner substantial to show that respondent
collected from her more than the allowable placement fee? We answer in the negative.
To show the amount it collected as placement fee from petitioner, respondent presented an
acknowledgment receipt showing that petitioner paid and respondent received P20,840.00. This
notwithstanding, petitioner claimed that she paid more than this amount. In support of her allegation,
she presented a photocopy of a promissory note she executed, and testified on the purported deductions
made by her foreign employer. In the promissory note, petitioner promised to pay respondent the
amount of P10,000.00 that she borrowed for only two weeks.[15] Petitioner also explained that her
foreign employer deducted from her salary a total amount of NT$60,000.00. She claimed that the
P10,000.00 covered by the promissory note was never obtained as a loan but as part of the placement
fee collected by respondent. Moreover, she alleged that the salary deductions made by her foreign
employer still formed part of the placement fee collected by respondent.
We are inclined to give more credence to respondents evidence, that is, the acknowledgment receipt
showing the amount paid by petitioner and received by respondent. A receipt is a written and signed
acknowledgment that money or goods have been delivered.[16] Although a receipt is not conclusive
evidence, an exhaustive review of the records of this case fails to disclose any other evidence sufficient
and strong enough to overturn the acknowledgment embodied in respondents receipt as to the amount it
actually received from petitioner. Having failed to adduce sufficient rebuttal evidence, petitioner is
bound by the contents of the receipt issued by respondent. The subject receipt remains as the primary or
best evidence.[17]
The promissory note presented by petitioner cannot be considered as adequate evidence to show the
excessive placement fee. It must be emphasized that a promissory note is a solemn acknowledgment of
a debt and a formal commitment to repay it on the date and under the conditions agreed upon by the
borrower and the lender. A person who signs such an instrument is bound to honor it as a legitimate
obligation duly assumed by him through the signature he affixes thereto as a token of his good faith.
[18] Moreover, as held by the CA, the fact that respondent is not a lending company does not preclude
it from extending a loan to petitioner for her personal use. As for the deductions purportedly made by
petitioners foreign employer, we reiterate the findings of the CA that there is no single piece of
document or receipt showing that deductions have in fact been made, nor is there any proof that these
deductions from the salary formed part of the subject placement fee.[19]
At this point, we would like to emphasize the well-settled rule that the factual findings of quasi-judicial
agencies, like the POEA, which have acquired expertise because their jurisdiction is confined to
specific matters, are generally accorded not only respect, but at times even finality if such findings are
supported by substantial evidence.[20] While the Constitution is committed to the policy of social
justice and to the protection of the working class, it should not be presumed that every dispute will
automatically be decided in favor of labor.[21]
To be sure, mere general allegations of payment of excessive placement fees cannot be given merit as
the charge of illegal exaction is considered a grave offense which could cause the suspension or
cancellation of the agencys license. They should be proven and substantiated by clear, credible, and
competent evidence.[22]
WHEREFORE, premises considered, the petition is DENIED for lack of merit. The Court of Appeals
Decision dated March 23, 2007 and Resolution dated August 16, 2007 in CA-G.R. SP No. 89298 are

AFFIRMED.
SO ORDERED.

FIRST DIVISION
LEOPOLDO ABANTE,
Petitioner,
- versus KJGS FLEET MANAGEMENT MANILA and/or GUY DOMINGO A. MACAPAYAG, KRISTIAN
GERHARD JEBSENS SKIPSRENDERI A/S,
Respondents.
G.R. No. 182430
Present:
PUNO, C.J., Chairperson,
CARPIO MORALES,
LEONARDO-DE CASTRO,
BERSAMIN, and
VILLARAMA, JR., JJ.
Promulgated:
_____________________December 4, 2009
x-------------------------------------------x
DECISION
CARPIO MORALES, J.:
On January 4, 2000, Leopoldo Abante (petitioner) was hired by respondent KJGS Fleet Management
Manila (KJGS) to work as ablebodied seaman aboard M/T Rathboyne, for a period of nine months and
with a basic salary of US$535.00 per month.
Sometime in June, 2000, while carrying equipment on board the vessel, petitioner slipped and hurt his
back. Upon the vessels arrival in Kaohsiung, Taiwan on July 4, 2000, petitioner was brought to a
hospital whereupon he was diagnosed to be suffering from lower back pain r/o old fracture lesion 4th
lumbar body. Nevertheless, he was still declared to be fit for restricted work and was advised to see
another doctor in the next port of call. Unable to bear the pain, petitioner was, on his request,
repatriated to the Philippines on July 19, 2000.
On July 21, 2000, petitioner reported to KJGS and was referred to a company-designated physician, Dr.
Roberto D. Lim (Dr. Lim), at the Metropolitan Hospital. After a series of tests, he was diagnosed to be
suffering from Foraminal stenosis L3-L14 and central disc protrusion L4-L5 on account of which he
underwent Laminectomy and Discectomy on August 18, 2000, the cost of which was borne by KJGS.
He was discharged from the hospital 10 days later, but was advised to continue physical therapy. He
was seen by Dr. Lim around 10 times from the time he was discharged until February 20, 2001 when he
was pronounced fit to resume sea duties. He, however, refused to sign his Certificate of Fitness for
Work.[1]

Petitioner later sought the opinion of another doctor, Dr. Jocelyn Myra R. Caja, who diagnosed him to
have failed back syndrome and gave a grade 6 disability rating[2] --- which rating rendered him
medically unfit to work again as a seaman and called for the award of US$25,000.00 disability benefits
--- drawing him to file on April 27, 2001 a Complaint[3] before the National Labor Relations
Commission (NLRC), docketed as NLRC OFW Case No. 01-04-0736-00, for disability compensation
in the amount of US$25,000.00, moral and exemplary damages and attorneys fees.
By Decision[4] of July 24, 2003, Labor Arbiter Jovencio Ll. Mayor, Jr. dismissed the complaint,
holding that under Philippine Overseas Employment Administration (POEA) Memo Circular No. 9,
series of 2000, in the event of conflict between the assessment of the company-designated physician
and the doctor chosen by the seafarer, the opinion of a third doctor
agreed on by both the employer and the seafarer should be sought. Hence, the Labor Arbiter held that
petitioners immediate filing of the complaint, insisting on his own physicians assessment, was
premature and, therefore, the assessment of the company-designated physician that he is still fit to work
prevails.
On petitioners appeal, the NLRC, by Decision[5] of January 31, 2005, ordered the remand of the case
to the Labor Arbiter for further proceedings. It held that since there were two conflicting diagnoses as
to petitioners fitness to work, the matter must be referred to a third doctor to determine his entitlement
to disability benefits under the new POEA Standard Employment Contract for seafarers. KJGSs Motion
for Reconsideration of said Decision was denied by Resolution[6] of November 3, 2006, hence, it
appealed to the Court of Appeals.
By Decision[7] of December 10, 2007, the appellate court reversed and set aside the NLRC ruling and
reinstated the Labor Arbiters Decision. It held that Sec. 20 (B) of POEA Memo Circular No. 9, series of
2000, which requires a third doctor in case of conflicting assessments, is inapplicable.
Noting that the employment contract between KJGS and petitioner was executed on January 4, 2000,
the appellate court held that the contract is governed by Memo Circular No. 55, series of 1996, which
did not have a similar provision, hence, it is the determination or assessment of the companydesignated physician which is deemed controlling. Petitioners motion for reconsideration having been
denied by Resolution[8] of April 1, 2008, he interposed the present petition, insisting that he is entitled
to Grade 6 disability benefits under the new POEA Standard Employment Contract.
The petition is meritorious.
Section 20 (B) (3) of the POEA Standard Employment Contract of 2000 provides:
SECTION 20. COMPENSATION AND BENEFITS FOR INJURY AND ILLNESS
The liabilities of the employer when the seafarer suffers work-related injury or illness during the term
of his contract are as follows:
xxxx
3. Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness allowance
equivalent to his basic wage until he is declared fit to work or the degree of permanent disability has
been assessed by the company-designated physician but in no case shall this period exceed one hundred
twenty (120) days.

For this purpose, the seafarer shall submit himself to a post-employment medical examination by a
company-designated physician within three working days upon his return except when he is physically
incapacitated to do so, in which case, a written notice to the agency within the same period is deemed
as compliance. Failure of the seafarer to comply with the mandatory reporting requirement shall result
in his forfeiture of the right to claim the above benefits.
If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be agreed jointly
between the Employer and the seafarer. The third doctors decision shall be final and binding on both
parties. (emphasis supplied)
Clearly, the above provision does not preclude the seafarer from getting a second opinion as to his
condition for purposes of claiming disability benefits, for as held in NYK-Fil Ship Management v.
Talavera::[9]
This provision substantially incorporates the 1996 POEA Standard Employment Contract. Passing on
the 1996 POEA Standard Employment Contract, this Court held that [w]hile it is the companydesignated physician who must declare that the seaman suffers a permanent disability during
employment, it does not deprive the seafarer of his right to seek a second opinion, hence, the Contract
recognizes the prerogative of the seafarer to request a second opinion and, for this purpose, to consult a
physician of his choice. (emphasis and underscoring supplied)
In the present case, it is undisputed that petitioner immediately consulted with a physician of his choice
after initially having been seen and operated on by a company-designated physician. It was after he got
a second opinion and a finding that he is unfit for further work as a seaman that he filed the claim for
disability benefits.
Respecting the appellate courts ruling that it is POEA Memo Circular No. 55, series of 1996 which is
applicable and not Memo Circular No. 9, series of 2000, apropos is the ruling in Seagull Maritime
Corporation v. Dee[10] involving employment contract entered into in 1999, before the promulgation
of POEA Memo Circular No. 9, series of 2000 or the use of the new POEA Standard Employment
Contract, like that involved in the present case. In said case, the Court applied the 2000 Circular in
holding that while it is the company-designated physician who must declare that the seaman suffered
permanent disability during employment, it does not deprive the seafarer of his right to seek a second
opinion which can then be used by the labor tribunals in awarding disability claims.
Courts are called upon to be vigilant in their time-honored duty to protect labor, especially in cases of
disability or ailment. When applied to Filipino seamen, the perilous nature of their work is considered
in determining the proper benefits to be awarded. These benefits, at the very least, should approximate
the risks they brave on board the vessel every single day.
Accordingly, if serious doubt exists on the company-designated physicians declaration of the nature of
a seamans injury and its corresponding impediment grade, resort to prognosis of other competent
medical professionals should be made. In doing so, a seaman should be given the opportunity to assert
his claim after proving the nature of his injury. These evidences will in turn be used to determine the
benefits rightfully accruing to him. (emphasis and underscoring supplied)

It bears noting that Dr. Lims medical findings did not significantly differ from those of Dr. Cajas. In
essence, even if Dr. Lim declared petitioner to be fit to resume sea duties, still, the final diagnosis of
foraminal stenosis and central disc protrusion remained six months post-surgery.[11] It is
understandable that a company-designated physician is more positive than that of a physician of the
seafarers choice. It is on this account that a seafarer is given the option by the POEA Standard
Employment Contract to seek a second opinion from his preferred physician.
Petitioners are, at this point, reminded that the POEA standard employment contract for seamen was
designed primarily for the protection and benefit of Filipino seamen in the pursuit of their employment
on board ocean-going vessels. Its provisions must be construed and applied fairly, reasonably and
liberally in their favor. Only then can its beneficent provisions be fully carried into effect. (emphasis
and underscoring supplied)[12]
In HFS Philippines v. Pilar,[13] where the findings of the independent physicians were given more
credence than those of the company-designated physicians, the Court held:
The bottomline is this: the certification of the company-designated physician would defeat respondents
claim while the opinion of the independent physicians would uphold such claim. In such a situation, we
adopt the findings favorable to respondent.
The law looks tenderly on the laborer. Where the evidence may be reasonably interpreted in two
divergent ways, one prejudicial and the other favorable to him, the balance must be tilted in his favor
consistent with the principle of social justice. (emphasis and underscoring supplied)
As to whether petitioner can claim disability benefits, the Court rules in the affirmative. Permanent
disability refers to the inability of a worker to perform his job for more than 120 days, regardless of
whether he loses the use of any part of his body. What determines petitioners entitlement to permanent
disability benefits is his inability to work for more than 120 days.[14] In the case at bar, it was only on
February 20, 2001 that the Certificate of Fitness for Work was issued by Dr. Lim, more than 6 months
from the time he was initially evaluated by the doctor on July 24, 2000 and after he underwent
operation on August 18, 2000.
It is gathered[15] from the documents emanating from the Office of Dr. Lim that petitioner was seen by
him from July 24, 2000 up to February 20, 2001 or a total of 13 times; and except for the medical
reports dated February 5, 2001 and February 20, 2001 (when the doctor finally pronounced petitioner
fit to work), Dr. Lim consistently recommended that petitioner continue his physical
rehabilitation/therapy and revisit clinic on specific dates for re-evaluation, thereby implying that
petitioner was not yet fit to work.
Given a seafarers entitlement to permanent disability benefits when he is unable to work for more than
120 days, the failure of the company-designated physician to pronounce petitioner fit to work within
the 120-day period entitles him to permanent total disability benefit in the amount of US$60,000.00.
[16]

Respecting the claim for moral and exemplary damages, the same cannot be granted, there being no
concrete showing of bad faith or malice on the part of KJGS. The records show that it shouldered all
the expenses incurred in petitioners surgery and subsequent rehabilitation. And it regularly inquired
from Dr. Lim about petitioners condition.
The claim for attorneys fees is granted following Article 2208 of the New Civil Code which allows its
recovery in actions for recovery of wages of laborers and actions for indemnity under the employer's
liability laws. The same fees are also recoverable when the defendant's act or omission has compelled
the plaintiff to incur expenses to protect his interest[17] as in the present case following the refusal by
respondent to settle his claims. Pursuant to prevailing jurisprudence, petitioner is entitled to attorneys
fees of ten percent (10%) of the monetary award.
WHEREFORE, the decision and resolution of the Court of Appeals dated December 10, 2007, and
April 1, 2008, respectively, are REVERSED and SET ASIDE. Respondents are held jointly and
severally liable to pay petitioner the following: a) permanent total disability benefits of US$60,000.00
at its peso equivalent at the time of actual payment; and b) attorney's fees of ten percent (10%) of the
total monetary award at its peso equivalent at the time of actual payment.
SO ORDERED.
CONCHITA CARPIO MORALES
Associate Justice

WE CONCUR:

Attorneys fees; actions for indemnity under employer liability laws. The claim for attorneys fees
is granted following Article 2208 of the New Civil Code which allows its recovery in actions for
recovery of wages of laborers and actions for indemnity under the employers liability laws. The same
fees are also recoverable when the defendants act or omission has compelled the plaintiff to incur
expenses to protect his interest as in the present case following the refusal by the employer to settle the
employees claims. Pursuant to prevailing jurisprudence, petitioner is entitled to attorneys fees of ten
percent (10%) of the monetary award. Leopoldo Abante vs. KJGS Fleet Management Manila and/or
Guy Domingo A. Macapayag, Kristian Gerhard Jebsens Skipsrenderi A/S, G.R. No. 182430, December
4, 2009.
Employee disability benefits. Permanent disability refers to the inability of a worker to perform his
job for more than 120 days, regardless of whether he loses the use of any part of his body. What
determines the employees entitlement to permanent disability benefits is his inability to work for more
than 120 days. In the case at bar, it was only on February 20, 2001 that the Certificate of Fitness for
Work was issued by Dr. Lim, more than 6 months from the time he was initially evaluated by the doctor
on July 24, 2000 and after he underwent operation on August 18, 2000.
It is gathered from the documents emanating from the Office of Dr. Lim that the employee was seen by
him from July 24, 2000 up to February 20, 2001 or a total of 13 times; and except for the medical
reports dated February 5, 2001 and February 20, 2001 (when the doctor finally pronounced petitioner
fit to work), Dr. Lim consistently recommended that the employee continue his physical
rehabilitation/therapy and revisit clinic on specific dates for re-evaluation, thereby implying that the
employee was not yet fit to work.
Given a seafarers entitlement to permanent disability benefits when he is unable to work for more than
120 days, the failure of the company-designated physician to pronounce the employee fit to work
within the 120-day period entitles him to permanent total disability benefit in the amount of
US$60,000.00. Leopoldo Abante vs. KJGS Fleet Management Manila and/or Guy Domingo A.
Macapayag, Kristian Gerhard Jebsens Skipsrenderi A/S, G.R. No. 182430, December 4, 2009.
Regulations; retroactivity of POEA Circular. Respecting the appellate courts ruling that it is POEA
Memo Circular No. 55, series of 1996 which is applicable and not Memo Circular No. 9, series of
2000, apropos is the ruling in Seagull Maritime Corporation v. Dee [G.R. No. 165156, April 2, 2007]
involving employment contract entered into in 1999, before the promulgation of POEA Memo Circular
No. 9, series of 2000 or the use of the new POEA Standard Employment Contract, like that involved in
the present case. In said case, the Court applied the 2000 Circular in holding that while it is the
company-designated physician who must declare that the seaman suffered permanent disability during
employment, it does not deprive the seafarer of his right to seek a second opinion which can then be
used by the labor tribunals in awarding disability claims. Leopoldo Abante vs. KJGS Fleet
Management Manila and/or Guy Domingo A. Macapayag, Kristian Gerhard Jebsens Skipsrenderi A/S,
G.R. No. 182430, December 4, 2009.

THIRD DIVISION
[G.R. No. 138193. March 5, 2003]
OSM SHIPPING PHILIPPINES, INC., petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION (Third Division) and FERMIN F. GUERRERO, respondents.
DECISION
PANGANIBAN, J.:
The Rules of Court do not require that all supporting papers and documents accompanying a petition
for certiorari should be duplicate originals or certified true copies. Furthermore, unilateral decisions to
alter the use of a vessel from overseas service to coastwise shipping will not affect the validity of an
existing employment contract validly executed. Workers should not be prejudiced by actions done
solely by employers without the formers consent or participation.
The Case
Before us is a Petition for Review on Certiorari[1] under Rule 45 of the Rules of Court, seeking to set
aside the February 11, 1999 and the March 26, 1999 Resolutions of the Court of Appeals (CA) in CAGR SP No. 50667. The assailed Resolutions dismissed a Petition filed in the CA, challenging an
adverse ruling of the National Labor Relations Commission (NLRC). The first Resolution disposed as
follows:
We resolve to OUTRIGHTLY DISMISS the petition.[2]
The second Resolution[3] denied petitioners Motion for Reconsideration.
On the other hand, the NLRC Decision disposed in this wise:
WHEREFORE, premises considered, the Decision appealed from is hereby MODIFIED in that
respondents OSM Shipping Phils. Inc. and its principal, Philippine Carrier Shipping Agency Services
Co. are jointly and severally ordered to pay complainant the sum of ELEVEN THOUSAND THREE
HUNDRED FIFTY NINE and 65/100 [US dollars] (US$11,359.65) or its peso equivalent at the time of
payment representing complainants unpaid salaries, accrued fixed overtime pay, allowance, vacation
leave pay and termination pay.[4]
The Facts
This case originated from a Complaint filed by Fermin F. Guerrero against OSM Shipping Philippines,
Inc.; and its principal, Philippine Carrier Shipping Agency Services Co. The Complaint was for illegal
dismissal and non-payment of salaries, overtime pay and vacation pay. The facts are summarized in the
NLRC Decision as follows:
[Private respondent] was hired by [Petitioner] OSM for and in behalf of its principal, Phil Carrier
Shipping Agency Services Co. (PC-SLC) to board its vessel M/V [Princess] Hoa as a Master Mariner
for a contract period of ten (10) months. Under the said contract, his basic monthly salary is
US$1,070.00, US$220.00 allowance, US$321.00 fixed overtime, US$89 vacation leave pay per month
for x x x 44 hours f] work per week. He boarded the vessel on July 21, 1994 and complied faithfully
with the duties assigned to him.

[Private respondent] alleged that from the start of his work with M/V Princess Hoa, he was not paid
any compensation at all and was forced to disembark the vessel sometime in January 1995 because he
cannot even buy his basic personal necessities. For almost seven (7) months, i.e. from July 1994 to
January 1995, despite the services he rendered, no compensation or remuneration was ever paid to him.
Hence, this case for illegal dismissal, [non-payment] of salaries, overtime pay and vacation pay.
[Petitioner] OSM, for its part, alleged that on July 26, 1994, Concorde Pacific, an American company
which owns M/V Princess Hoa, then a foreign registered vessel, appointed x x x Philippine Carrier
Shipping Agency Services Co. (PC-SASCO) as ship manager particularly to negotiate, transact and
deal with any third persons, entities or corporations in the planning of crewing selection or
determination of qualifications of Filipino Seamen. On the same date, [Petitioner] OSM entered into a
Crew Agreement with x x x PC-SASCO for the purpose of processing the documents of crew members
of M/V Princess Hoa. The initial plan of the [s]hip-owner was to use the vessel in the overseas trade,
particularly the East Asian Growth Area. Thereafter, the contract of [private respondent] was processed
before the POEA on September 20, 1994.
OSM alleged further that the shipowner changed its plans on the use of the vessel. Instead of using it
for overseas trade, it decided to use it in the coastwise trade, thus, the crewmembers hired never left the
Philippines and were merely used by the shipowner in the coastwise trade. Considering that the M/V
Princess Hoa was a foreign registered vessel and could not be used in the coastwise trade, the
shipowner converted the vessel to Philippine registry on September 28, 1994 by way of bareboat
chartering it out to another entity named Philippine Carrier Shipping Lines Co. (PCSLC). To do this,
the shipowner through Conrado V. Tendido had to terminate its management agreement with x x x PCSASCO on September 28, 1994 by a letter of termination dated September 20, 1994. In the same letter
of termination, the ship owner stated that it has bareboat chartered out the vessel to said [PCSLC] and
converted it into Philippine registry. Consequently, x x x PC-SASCO terminated its crew agreement
with OSM in a letter dated December 5, 1994. Because of the bareboat charter of the vessel to PCSLC
and its subsequent conversion to Philippine registry and use in coastwise trade as well as to the
termination of the management agreement and crew agency agreement, a termination of contract
ensued whereby PCSLC, the bareboat charterer, became the disponent owner/employer of the crew.
As a disponent owner/employer, PCSLC is now responsible for the payment of complainants wages. x
x x. [5]
Labor Arbiter (LA) Manuel R. Caday rendered a Decision[6] in favor of Private Respondent Guerrero.
Petitioner and its principal, Philippine Carrier Shipping Agency Services, Co. (PC-SASCO), were
ordered to jointly and severally pay Guerrero his unpaid salaries and allowances, accrued fixed
overtime pay, vacation leave pay and termination pay. The Decision held that there was a constructive
dismissal of private respondent, since he had not been paid his salary for seven months. It also
dismissed petitioners contention that there was a novation of the employment contract.
On appeal, the NLRC (Third Division) affirmed the LAs Decision, with a modification as to the
amount of liability. On January 28, 1999, petitioner filed with the CA a Petition[7] to set aside the
NLRC judgment. The petition was dismissed, because petitioner had allegedly failed to comply with
the requirements of Section 3 of Rule 46 of the Rules of Court. Specifically, petitioner had attached to
its Petition, not a duplicate original or a certified true copy of the LAs Decision, but a mere machine
copy thereof. Further, it had not indicated the actual address of Private Respondent Fermin F. Guerrero.
[8]

Hence, this Petition.[9]

The Issues
In its Memorandum, petitioner raises the following issues for the Courts consideration:
1. Did not the Court of Appeals err in interpreting and applying the 1997 Rules when it required as
attachment to the Petition for Certiorari the duplicate original of another Decision which is not-the
subject of the said Petition?
2. Did not the Court of Appeals err in interpreting and applying the 1997 Rules when it disregarded the
subsequent compliance made by petitioner?
3. Did not the Court of Appeals err in interpreting and applying the 1997 Rules when it did not consider
the Notice to private respondent Guerrero through his counsel as Notice to Guerrero himself?[10]
The foregoing issues all refer to the question of whether, procedurally, petitioner has complied with
Section 3 of Rule 46 of the Rules of Court. Additionally and in the interest of speedy justice, this Court
will also resolve the substantive issue brought before the CA: did the NLRC commit grave abuse of
discretion in ruling in favor of private respondent?
The Courts Ruling
While petitioner is procedurally correct, the case should nonetheless be decided on the merits in favor
of private respondent.
Procedural Issue:
Compliance with the Rules of Court
Petitioner puts at issue the proper interpretation of Section 3 of Rule 46 of the Rules of Court.[11]
Specifically, was petitioner required to attach a certified true copy of the LAs Decision to its Petition
for Certiorari challenging the NLRC judgment?
Section 3 of Rule 46 does not require that all supporting papers and documents accompanying a
petition be duplicate originals or certified true copies. Even under Rule 65 on certiorari and prohibition,
petitions need to be accompanied only by duplicate originals or certified true copies of the questioned
judgment, order or resolution. Other relevant documents and pleadings attached to it may be mere
machine copies thereof.[12] Numerous decisions issued by this Court emphasize that in appeals under
Rule 45 and in original civil actions for certiorari under Rule 65 in relation to Rules 46 and 56, what is
required to be certified is the copy of the questioned judgment, final order or resolution.[13] Since the
LAs Decision was not the questioned ruling, it did not have to be certified. What had to be certified
was the NLRC Decision. And indeed it was.
As to the alleged missing address of private respondent, the indication by petitioner that Guerrero could
be served with process care of his counsel was substantial compliance with the Rules.
This Court has held that the sending of pleadings to a party is not required, provided that the party is
represented by counsel.[14] This rule is founded on considerations of fair play, inasmuch as an attorney

of record is engaged precisely because a party does not feel competent to deal with the intricacies of
law and procedure.[15] Both jurisprudence[16] and the basics of procedure[17] provide that when a
party has appeared through counsel, service is to be made upon the latter, unless the court specifically
orders that it be upon the party.
We also note that from the inception of the case at the LAs office, all pleadings addressed to private
respondent had always been sent to his counsel, Atty. Danilo G. Macalino. Note that private
respondent, who was employed as a seaman, was often out of his home. The service of pleadings and
other court processes upon him personally would have been futile, as he would not have been around to
receive them.
This Court has repeatedly held that while courts should meticulously observe the Rules, they should not
be overly strict about procedural lapses that do not impair the proper administration of justice.[18]
Rather, procedural rules should be liberally construed to secure the just, speedy and inexpensive
disposition of every action and proceeding.[19]
Substantive Issue:
Liability of Petitioner for Unpaid Salaries
It is worthwhile to note that what is involved in this case is the recovery of unpaid salaries and other
monetary benefits. The Court is mindful of the plight of private respondent and, indeed, of workers in
general who are seeking to recover wages that are being unlawfully withheld from them. Such recovery
should not be needlessly delayed at the expense of their survival. This case is now on its ninth year
since its inception at the LAs office. Its remand to the CA will only unduly delay its disposition. In the
interest of substantial justice,[20] this Court will decide the case on the merits based upon the records
of the case, particularly those relating to the OSM Shipping Philippines Petition before the CA.
On behalf of its principal, PC-SASCO, petitioner does not deny hiring Private Respondent Guerrero as
master mariner. However, it argues that since he was not deployed overseas, his employment contract
became ineffective, because its object was allegedly absent. Petitioner contends that using the vessel in
coastwise trade and subsequently chartering it to another principal had the effect of novating the
employment contract. We are not persuaded.
As approved by the Philippine Overseas Employment Agency (POEA), petitioner was the legitimate
manning agent of PC-SASCO.[21] As such, it was allowed to select, recruit, hire and deploy seamen on
board the vessel M/V Princess Hoa, which was managed by its principal, PC-SASCO.[22] It was in this
capacity that petitioner hired private respondent as master mariner. They then executed and agreed
upon an employment contract.
An employment contract, like any other contract, is perfected at the moment (1) the parties come to
agree upon its terms; and (2) concur in the essential elements thereof: (a) consent of the contracting
parties, (b) object certain which is the subject matter of the contract and (c) cause of the obligation.[23]
Based on the perfected contract, Private Respondent Guerrero complied with his obligations thereunder
and rendered his services on board the vessel. Contrary to petitioners contention, the contract had an
object, which was the rendition of service by private respondent on board the vessel. The nondeployment of the ship overseas did not affect the validity of the perfected employment contract. After
all, the decision to use the vessel for coastwise shipping was made by petitioner only and did not bear
the written conformity of private respondent. A contract cannot be novated by the will of only one

party.[24] The claim of petitioner that it processed the contract of private respondent with the POEA
only after he had started working is also without merit. Petitioner cannot use its own misfeasance to
defeat his claim.
Petitioner, as manning agent, is jointly and severally liable with its principal,[25] PC-SASCO, for
private respondents claim. This conclusion is in accordance with Section 1 of Rule II of the POEA
Rules and Regulations.[26] Joint and solidary liability is meant to assure aggrieved workers of
immediate and sufficient payment of what is due them.[27] The fact that petitioner and its principal
have already terminated their agency agreement does not relieve the former of its liability. The reason
for this ruling was given by this Court in Catan National Labor Relations Commission,[28] which we
reproduce in part as follows:
This must be so, because the obligations covenanted in the [manning] agreement between the local
agent and its foreign principal are not coterminus with the term of such agreement so that if either or
both of the parties decide to end the agreement, the responsibilities of such parties towards the
contracted employees under the agreement do not at all end, but the same extends up to and until the
expiration of the, employment contracts of the employees recruited and employed pursuant to the said
recruitment agreement. Otherwise, this will render nugatory the very purpose for which the law
governing the employment of workers for foreign jobs abroad was enacted.[29]
WHEREFORE, the assailed Resolutions are hereby SET ASIDE, and the September 10, 1998 NLRC
Decision REINSTATED and AFFIRMED. Costs against petitioner.
SO ORDERED.

ANTONIO M. SERRANO VS. GALLANT MARITIME SERVICES, INC. AND MARLOW

NAVIGATION CO., INC.
GR No. 167614 - March 24, 2009
En banc
FACTS:
Petitioner Antonio Serrano was hired by respondents Gallant Maritime Services, Inc. and Marlow
Navigation Co., Inc., under a POEA-approved contract of employment for 12 months, as Chief Officer,
with the basic monthly salary of US$1,400, plus $700/month overtime pay, and 7 days paid vacation
leave per month.
On March 19, 1998, the date of his departure, Serrano was constrained to accept a downgraded
employment contract for the position of Second Officer with a monthly salary of US$1,000 upon the
assurance and representation of respondents that he would be Chief Officer by the end of April 1998.
Respondents did not deliver on their promise to make Serrano Chief Officer. Hence, Serrano refused to
stay on as second Officer and was repatriated to the Philippines on May 26, 1998, serving only two (2)
months and seven (7) days of his contract, leaving an unexpired portion of nine (9) months and twentythree (23) days.
Serrano 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 (based on the computation
of $2590/month from June 1998 to February 199, $413.90 for March 1998, and $1640 for March 1999)
as well as moral and exemplary damages.
The LA declared the petitioner's dismissal illegal and awarded him US$8,770, representing his salaray
for three (3) months of the unexpired portion of the aforesaid contract of employment, plus $45 for
salary differential and for attorney's fees equivalent to 10% of the total amount; however, no
compensation for damages as prayed was awarded.
On appeal, the NLRC modified the LA decision and awarded Serrano $4669.50, representing three (3)
months salary at $1400/month, plus 445 salary differential and 10% for attorney's fees. This decision
was based on the provision of RA 8042, which was made into law on July 15, 1995.
Serrano filed a Motion for Partial Reconsideration, but this time he questioned the constitutionality of
the last clause in the 5th paragraph of Section 10 of RA 8042, which reads:
Sec. 10. Money Claims. - x x x In case of termination of overseas employment without just, valid or
authorized cause as defined by law or contract, the workers shall be entitled to the full reimbursement
of his placement fee with interest of twelve percent (12%) per annum, plus his salaries for the
unexpired portion of his employment contract or for three (3) months for every year of the unexpired
term, whichever is less.
The NLRC denied the Motion; hence, Serrano filed a Petition for Certiorari with the Court of Appeals
(CA), reiterating the constitutional challenge against the subject clause. The CA affirmed the NLRC
ruling on the reduction of the applicable salary rate, but skirted the constitutional issue raised by herein
petitioner Serrano.

ISSUES:
1. Whether or not the subject clause violates Section 10, Article III of the Constitution on nonimpairment of contracts;
2. Whether or not the subject clause violate Section 1, Article III of the Constitution, and Section 18,
Article II and Section 3, Article XIII on labor as a protected sector.
HELD:
On the first issue.
The answer is in the negative. Petitioner's claim that the subject clause unduly interferes with the
stipulations in his contract on the term of his employment and the fixed salary package he will receive
is not tenable.
Section 10, Article III of the Constitution provides: No law impairing the obligation of contracts shall
be passed.
The prohibition is aligned with the general principle that laws newly enacted have only a prospective
operation, and cannot affect acts or contracts already perfected; however, as to laws already in
existence, their provisions are read into contracts and deemed a part thereof. Thus, the non-impairment
clause under Section 10, Article II is limited in application to laws about to be enacted that would in
any way derogate from existing acts or contracts by enlarging, abridging or in any manner changing the
intention of the parties thereto.
As aptly observed by the OSG, the enactment of R.A. No. 8042 in 1995 preceded the execution of the
employment contract between petitioner and respondents in 1998. Hence, it cannot be argued that R.A.
No. 8042, particularly the subject clause, impaired the employment contract of the parties. Rather,
when the parties executed their 1998 employment contract, they were deemed to have incorporated into
it all the provisions of R.A. No. 8042.
But even if the Court were to disregard the timeline, the subject clause may not be declared
unconstitutional on the ground that it impinges on the impairment clause, for the law was enacted in the
exercise of the police power of the State to regulate a business, profession or calling, particularly the
recruitment and deployment of OFWs, with the noble end in view of ensuring respect for the dignity
and well-being of OFWs wherever they may be employed. Police power legislations adopted by the
State to promote the health, morals, peace, education, good order, safety, and general welfare of the
people are generally applicable not only to future contracts but even to those already in existence, for
all private contracts must yield to the superior and legitimate measures taken by the State to promote
public welfare.
On the second issue.
The answer is in the affirmative.
Section 1, Article III of the Constitution guarantees: No person shall be deprived of life, liberty, or
property without due process of law nor shall any person be denied the equal protection of the law.

Section 18, Article II and Section 3, Article XIII accord all members of the labor sector, without
distinction as to place of deployment, full protection of their rights and welfare.
To Filipino workers, the rights guaranteed under the foregoing constitutional provisions translate to
economic security and parity: all monetary benefits should be equally enjoyed by workers of similar
category, while all monetary obligations should be borne by them in equal degree; none should be
denied the protection of the laws which is enjoyed by, or spared the burden imposed on, others in like
circumstances.
Such rights are not absolute but subject to the inherent power of Congress to incorporate, when it sees
fit, a system of classification into its legislation; however, to be valid, the classification must comply
with these requirements: 1) it is based on substantial distinctions; 2) it is germane to the purposes of the
law; 3) it is not limited to existing conditions only; and 4) it applies equally to all members of the class.
There are three levels of scrutiny at which the Court reviews the constitutionality of a classification
embodied in a law: a) the deferential or rational basis scrutiny in which the challenged classification
needs only be shown to be rationally related to serving a legitimate state interest; b) the middle-tier or
intermediate scrutiny in which the government must show that the challenged classification serves an
important state interest and that the classification is at least substantially related to serving that interest;
and c) strict judicial scrutiny in which a legislative classification which impermissibly interferes with
the exercise of a fundamental right or operates to the peculiar disadvantage of a suspect class is
presumed unconstitutional, and the burden is upon the government to prove that the classification is
necessary to achieve a compelling state interest and that it is the least restrictive means to protect such
interest.
Upon cursory reading, the subject clause appears facially neutral, for it applies to all OFWs. However,
a closer examination reveals that the subject clause has a discriminatory intent against, and an invidious
impact on, OFWs at two levels:
First, OFWs with employment contracts of less than one year vis--vis OFWs with employment
contracts of one year or more;
Second, among OFWs with employment contracts of more than one year; and
Third, OFWs vis--vis local workers with fixed-period employment;
In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-term employment who were
illegally discharged were treated alike in terms of the computation of their money claims: they were
uniformly entitled to their salaries for the entire unexpired portions of their contracts. But with the
enactment of R.A. No. 8042, specifically the adoption of the subject clause, illegally dismissed OFWs
with an unexpired portion of one year or more in their employment contract have since been differently
treated in that their money claims are subject to a 3-month cap, whereas no such limitation is imposed
on local workers with fixed-term employment.
The Court concludes that the subject clause contains a suspect classification in that, in the computation
of the monetary benefits of fixed-term employees who are illegally discharged, it imposes a 3-month
cap on the claim of OFWs with an unexpired portion of one year or more in their contracts, but none on
the claims of other OFWs or local workers with fixed-term employment. The subject clause singles out
one classification of OFWs and burdens it with a peculiar disadvantage.

There being a suspect classification involving a vulnerable sector protected by the Constitution, the
Court now subjects the classification to a strict judicial scrutiny, and determines whether it serves a
compelling state interest through the least restrictive means.
What constitutes compelling state interest is measured by the scale of rights and powers arrayed in the
Constitution and calibrated by history. It is akin to the paramount interest of the state for which some
individual liberties must give way, such as the public interest in safeguarding health or maintaining
medical standards, or in maintaining access to information on matters of public concern.
In the present case, the Court dug deep into the records but found no compelling state interest that the
subject clause may possibly serve.
In fine, the Government has failed to discharge its burden of proving the existence of a compelling state
interest that would justify the perpetuation of the discrimination against OFWs under the subject
clause.
Assuming that, as advanced by the OSG, the purpose of the subject clause is to protect the employment
of OFWs by mitigating the solidary liability of placement agencies, such callous and cavalier rationale
will have to be rejected. There can never be a justification for any form of government action that
alleviates the burden of one sector, but imposes the same burden on another sector, especially when the
favored sector is composed of private businesses such as placement agencies, while the disadvantaged
sector is composed of OFWs whose protection no less than the Constitution commands. The idea that
private business interest can be elevated to the level of a compelling state interest is odious.
Moreover, even if the purpose of the subject clause is to lessen the solidary liability of placement
agencies vis-a-vis their foreign principals, there are mechanisms already in place that can be
employed to achieve that purpose without infringing on the constitutional rights of OFWs.
The POEA Rules and Regulations Governing the Recruitment and Employment of Land-Based
Overseas Workers, dated February 4, 2002, imposes administrative disciplinary measures on erring
foreign employers who default on their contractual obligations to migrant workers and/or their
Philippine agents. These disciplinary measures range from temporary disqualification to preventive
suspension. The POEA Rules and Regulations Governing the Recruitment and Employment of
Seafarers, dated May 23, 2003, contains similar administrative disciplinary measures against erring
foreign employers.
Resort to these administrative measures is undoubtedly the less restrictive means of aiding local
placement agencies in enforcing the solidary liability of their foreign principals.
Thus, the subject clause in the 5th paragraph of Section 10 of R.A. No. 8042 is violative of the right of
petitioner and other OFWs to equal protection.
The subject clause or for three months for every year of the unexpired term, whichever is less in the
5th paragraph of Section 10 of Republic Act No. 8042 is DECLARED UNCONSTITUTIONAL
Note:
When the Court is called upon to exercise its power of judicial review of the acts of its co-equals, such
as the Congress, it does so only when these conditions obtain: (1) that there is an actual case or

controversy involving a conflict of rights susceptible of judicial determination; (2) that the
constitutional question is raised by a proper party and at the earliest opportunity; and (3) that the
constitutional question is the very lis mota of the case, otherwise the Court will dismiss the case or
decide the same on some other ground.
---As discussed earlier, prior to R.A. No. 8042, a uniform system of computation of the monetary awards
of illegally dismissed OFWs was in place. This uniform system was applicable even to local workers
with fixed-term employment.
Article 605 of the Code of Commerce provides:
Article 605. If the contracts of the captain and members of the crew with the agent should be for a
definite period or voyage, they cannot be discharged until the fulfillment of their contracts, except for
reasons of insubordination in serious matters, robbery, theft, habitual drunkenness, and damage caused
to the vessel or to its cargo by malice or manifest or proven negligence.
Article 605 was applied to Madrigal Shipping Company, Inc. v. Ogilvie, in which the Court held the
shipping company liable for the salaries and subsistence allowance of its illegally dismissed employees
for the entire unexpired portion of their employment contracts.
While Article 605 has remained good law up to the present, Article 299 of the Code of Commerce was
replaced by Art. 1586 of the Civil Code of 1889, to wit:
Article 1586. Field hands, mechanics, artisans, and other laborers hired for a certain time and for a
certain work cannot leave or be dismissed without sufficient cause, before the fulfillment of the
contract.