BECMEN SERVICE EXPORTER AND PROMOTION V. SPS.

 CUARESMA
Ynares-Santiago, J.

FACTS: On January 6, 1997, Jasmin Cuaresma (Jasmin) was deployed by Becmen

Service Exporter and Promotion, Inc. (Becmen) to serve as assistant nurse in Al-Birk
Hospital in the Kingdom of Saudi Arabia (KSA), for a contract duration of three years,
with a corresponding salary of US$247.00 per month.

Over a year later, she died allegedly of poisoning.

Based on the police report and the medical report of the examining physician of the Al-
Birk Hospital, who conducted an autopsy of Jasmin’s body, the likely cause of her death
was poisoning.

Jasmin’s body was repatriated to Manila. The following day, the City Health Officer of
Cabanatuan City conducted an autopsy and the resulting medical report indicated that
Jasmin died under violent circumstances, and not poisoning as originally found by the
KSA examining physician. 

On March 11, 1999, Jasmin’s remains were exhumed and examined by the National
Bureau of Investigation (NBI). The toxicology report of the NBI, however, tested
negative for non-volatile, metallic poison and insecticides.

Simplicio and Mila Cuaresma (the Cuaresmas), Jasmin’s parents and her surviving
heirs, received from the Overseas Workers Welfare Administration (OWWA) the
following amounts: P50,000.00 for death benefits; P50,000.00 for loss of life;
P20,000.00 for funeral expenses; and P10,000.00 for medical reimbursement.

On November 22, 1999, the Cuaresmas filed a complaint against Becmen and its
principal in the KSA, Rajab & Silsilah Company (Rajab), claiming death and insurance
benefits, as well as moral and exemplary damages for Jasmin’s death.

Becmen filed a manifestation and motion for substitution alleging that Rajab terminated
their agency relationship and had appointed White Falcon Services, Inc. (White Falcon)
as its new recruitment agent in the Philippines. Thus, White Falcon was impleaded as
respondent as well, and it adopted and reiterated Becmen’s arguments in the position
paper it subsequently filed.

On February 28, 2001, the Labor Arbiter rendered a Decision dismissing the

complaint for lack of merit. Giving weight to the medical report of the Al-Birk Hospital
finding that Jasmin died of poisoning, the Labor Arbiter concluded that Jasmin
committed suicide. In any case, Jasmin’s death was not service-connected, nor was it
shown that it occurred while she was on duty; besides, her parents have received all
corresponding benefits they were entitled to under the law. In regard to damages, the
Labor Arbiter found no legal basis to warrant a grant thereof.

On appeal, the National Labor Relations Commission (Commission) reversed the

decision of the Labor Arbiter declared that, based on substantial evidence adduced,
Jasmin was the victim of compensable work-connected criminal aggression. It declared
that Jasmin’s death was the result of an “accident” occurring within the employer’s
premises that is attributable to her employment, or to the conditions under which she
lived, and thus arose out of and in the course of her employment as nurse. Thus, the
Cuaresmas are entitled to actual damages in the form of Jasmin’s lost earnings. The
NLRC likewise declared Becmen and White Falcon as solidarily liable for payment of
the award.

Becmen and White Falcon brought separate petitions for certiorari to the Court of
Appeals. The appellate court affirmed the NLRC’s findings that Jasmin’s death
was compensable, the same having occurred at the dormitory, which was
contractually provided by the employer. Thus her death should be considered to have
occurred within the employer’s premises, arising out of and in the course of her
employment. Hence, this petition.

ISSUE: Whether the Cuaresmas are entitled to monetary claims, by way of benefits
and damages, for the death of their daughter Jasmin.

RULING: YES. The relations between capital and labor are so impressed with public
interest, and neither shall act oppressively against the other, or impair the interest or
convenience of the public. In case of doubt, all labor legislation and all labor contracts
shall be construed in favor of the safety and decent living for the laborer.

The grant of moral damages to the employee by reason of misconduct on the part of
the employer is sanctioned by Article 2219 (10)35 of the Civil Code, which allows
recovery of such damages in actions referred to in Article 21 which provides

White Falcon’s assumption of Becmen’s liability does not automatically result in

Becmen’s freedom or release from liability. This has been ruled in a previous case.
Instead, both Becmen and White Falcon should be held liable solidarily, without
prejudice to each having the right to be reimbursed under the provision of the Civil
Code that whoever pays for another may demand from the debtor what he has paid.
MARIO HORNALES vs NLRC

Sandoval-Gutirrez, J.

FACTS:
SUNACE INTERNATIONAL MANAGEMENT SERVICES, INC. vs. NATIONAL
LABOR RELATIONS COMMISSION

Carpio Morales, J.

FACTS: Petitioner, Sunace International Management Services (Sunace), a

corporation duly organized and existing under the laws of the Philippines, deployed to
Taiwan Divina A. Montehermozo (Divina) as a domestic helper under a 12-month
contract effective February 1, 1997. The deployment was with the assistance of a
Taiwanese broker, Edmund Wang, President of Jet Crown International Co., Ltd.

After her 12-month contract expired on February 1, 1998, Divina continued working for
her Taiwanese employer, Hang Rui Xiong, for two more years, after which she returned
to the Philippines on February 4, 2000.

Shortly after her return or on February 14, 2000, Divina filed a complaint before the
National Labor Relations Commission (NLRC) against Sunace, one Adelaide Perez, the
Taiwanese broker, and the employer-foreign principal alleging that she was jailed for
three months and that she was underpaid. On April 6, 2000, Divina filed her Position
Paper claiming that under her original one-year contract and the 2-year extended
contract which was with the knowledge and consent of Sunace, the income tax and
savings for the years 1997 to 1998 were deducted in her salary. While the amounts
deducted in 1997 were refunded to her, those deducted in 1998 and 1999 were not.

The Labor Arbiter, rejected Sunace's claim that the extension of Divina's contract for
two more years was without its knowledge and consent. He also rejected Sunace's
argument that it is not liable on account of Divina's execution of a Waiver and Quitclaim
and an Affidavit of Desistance. He accordingly decided in favor of Divina.

On appeal of Sunace, the NLRC, by Resolution of April 30, 2002, affirmed the Labor
Arbiter's decision. Via petition for certiorari, Sunace elevated the case to the Court of
Appeals which dismissed it outright by Resolution of November 12, 2002. hence, this
petition.

ISSUE: Whether the Sunace knew and impliedly consent to the extension of Divina’s 2-
year contract

RULING: NO. The alleged continuous communication was with the Taiwanese broker
Wang, not with the foreign employer Xiong. The finding of the Court of Appeals solely
on the basis of telefax message, that Sunace continually communicated with the foreign
"principal" and therefore was aware of and had consented to the execution of the
extension of the contract is misplaced. The message does not provide evidence that
Sunace was privy to the new contract executed after the expiration on February 1, 1998
of the original contract. That Sunace and the Taiwanese broker communicated
regarding Divina's allegedly withheld savings does not necessarily mean that Sunace
ratified the extension of the contract.

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

There being no substantial proof that Sunace knew of and consented to be bound
under the 2-year employment contract extension, it cannot be said to be privy thereto.
As such, it and its "owner" cannot be held solidarily liable for any of Divina's claims
arising from the 2-year employment extension.

As the New Civil Code provides, Contracts take effect only between the parties, their
assigns, and heirs, except in case where the rights and obligations arising from the
contract are not transmissible by their nature, or by stipulation or by provision of law.

Furthermore, as Sunace correctly points out, there was an implied revocation of its
agency relationship with its foreign principal when, after the termination of the original
employment contract, the foreign principal directly negotiated with Divina and entered
into a new and separate employment contract in Taiwan.

Article 1924 of the New Civil Code provides: The agency is revoked if the principal
directly manages the business entrusted to the agent, dealing directly with third
persons. In light of the foregoing discussions, consideration of the validity of the Waiver
and Affidavit of Desistance which Divina executed in favor of Sunace is rendered
unnecessary.
CLAUDIO S. YAP vs. THENAMARIS SHIP'S MANAGEMENT

NACHURA, J.

FACTS:
SAMEER OVERSEAS PLACEMENT AGENCY, INC. vs. JOY C. CABILES

Leonen, J.

  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 Taiwanse $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. The Labor Arbiter ruled in favor of Sameer and held
that there was no illegal dismissal that took place because the termination of the
services of Cabiles was for a just cause. It gave credence to the contention of Sameer
that Cabiles was terminated from service because of her inefficiency. On appeal, the
NLRC ruled in favor of Cabiles and held that she is illegally dismissed. The Court of
Appeals affirmed the ruling of NLRC. Hence, the current petition. Sameer reiterates
that there was just cause for termination because there was a finding of Wacoal that
respondent was inefficient in her work. Therefore, it claims that respondent’s dismissal
was valid.

ISSUE: Whether or not respondent Cabiles was illegally dismissed

HELD: YES. Sameer Overseas Placement Agency failed to show that there was just
cause for causing Joy’s dismissal. The employer, Wacoal, also failed to accord her due
process of law.

Indeed, employers have the prerogative to impose productivity and quality standards at
work. They may also impose reasonable rules to ensure that the employees comply
with these standards. Failure to comply may be a just cause for their dismissal.
Employers cannot be compelled to retain the services of an employee who is guilty of
acts that are inimical to the interest of the employer. While the law acknowledges the
plight and vulnerability of workers, it does not "authorize the oppression or self-
destruction of the employer." Management prerogative is recognized in law and in our
jurisprudence.

This prerogative, however, should not be abused. It is "tempered with the employee’s
right to security of tenure." Workers are entitled to substantive and procedural due
process before termination. They may not be removed from employment without a valid
or just cause as determined by law and without going through the proper procedure.

Security of tenure for labor is guaranteed by our Constitution. Employees are not
stripped of their security of tenure when they move to work in a different jurisdiction.
With respect to the rights of overseas Filipino workers, we follow the principle of lex loci
contractus. First, established is the rule that lex loci contractus (the law of the place
where the contract is made) governs in this jurisdiction. There is no question that the
contract of employment in this case was perfected here in the Philippines. Therefore,
the Labor Code, its implementing rules and regulations, and other laws affecting labor
apply in this case. Herein the Philippines, employment agreements are more than
contractual in nature.

Sameer’s allegation that respondent was inefficient in her work and negligent in her
duties may, therefore, constitute a just cause for termination under Article 282(b), but
only if petitioner was able to prove it.

The burden of proving that there is just cause for termination is on the employer. "The
employer must affirmatively show rationally adequate evidence that the dismissal was
for a justifiable cause." Failure to show that there was valid or just cause for termination
would necessarily mean that the dismissal was illegal.

To show that dismissal resulting from inefficiency in work is valid, it must be

shown that: 1) the employer has set standards of conduct and workmanship
against which the employee will be judged; 2) the standards of conduct and
workmanship must have been communicated tothe employee; and 3) the
communication was made at a reasonable time prior to the employee’s
performance assessment.

In this case, Sameer merely alleged that Cabiles failed to comply with her foreign
employer’s work requirements and was inefficient in her work. No evidence was shown
to support such allegations. Sameer did not even bother to specify what requirements
were not met, what efficiency standards were violated, or what particular acts of
respondent constituted inefficiency.

There was also no showing that Cabiles was sufficiently informed of the standards
against which her work efficiency and performance were judged. The parties’ conflict as
to the position held by respondent showed that even the matter as basic as the job title
was not clear.The bare allegations of petitioner are not sufficient to support a claim that
there is just cause for termination. There is no proof that respondent was legally
terminated.

A valid dismissal requires both a valid cause and adherence to the valid procedure of
dismissal. The employer is required to give the charged employee at least two written
notices before termination. One of the written notices must inform the employee of the
particular acts that may cause his or her dismissal. The other notice must "[inform] the
employee of the employer’s decision." Aside from the notice requirement, the employee
must also be given "an opportunity to be heard."

Sameer failed to comply with the twin notices and hearing requirements. Respondent
started working on June 26, 1997. She was told that she was terminated on July 14,
1997 effective on the same day and barely a month from her first workday. She was
also repatriated on the same day that she was informed of her termination. The
abruptness of the termination negated any finding that she was properly notified and
given the opportunity to be heard. Her constitutional right to due process of law was
violated.

(REGARDING IF THEY CAN CLAIM THE UNEXPIRED PORTION OF THE SALARY)

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

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

A statute or provision which was declared unconstitutional is not a law. It “confers

no rights; it imposes no duties; it affords no protection; it creates no office; it is
inoperative as if it has not been passed at all.”

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

(Ruling on the constitutional issue)

                In the hierarchy of laws, the Constitution is supreme. No branch or office of

the government may exercise its powers in any manner inconsistent with the
Constitution, regardless of the existence of any law that supports such exercise. The
Constitution cannot be trumped by any other law. All laws must be read in light of the
Constitution. Any law that is inconsistent with it is a nullity.
                Thus, when a law or a provision of law is null because it is inconsistent
with the Constitution, the nullity cannot be cured by reincorporation or
reenactment of the same or a similar law or provision. A law or provision of law that
was already declared unconstitutional remains as such unless circumstances have so
changed as to warrant a reverse conclusion.

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

                The Court declared, once again, the clause, “or for three (3) months for every
year of the unexpired term, whichever is less” in Section 7 of Republic Act No. 10022
amending Section 10 of Republic Act No. 8042 is declared unconstitutional and,
therefore, null and void.
INDUSTRIAL PERSONNEL v. JOSE G. DE VERA
Mendoza, J.

FACTS: Petitioner Industrial Personnel & Management Services, Inc. (IPAMS) is a

local placement agency duly organized and existing under Philippine laws. Petitioner
SNC Lavalin Engineers & Contractors, Inc. (SNC-Lavalin) is the principal of IPAMS, a
Canadian company with business interests in several countries.

Respondent Alberto Arriola, a licensed general surgeon in the Philippines, was hired by
SNC-Lavalin, through its local manning agency, IPAMS, as a safety officer in its
Ambatovy Project site in Madagascar. After three months, Arriola received a notice of
pre-termination of employment due to diminishing workload in the area of his expertise
and the unavailability of alternative assignments. Consequently, Arriola was repatriated
and he filed a complaint against the petitioners for illegal dismissal and non-payment of
overtime pay, vacation leave and sick leave pay before the Labor Arbiter (LA).

He claimed that SNC-Lavalin still owed him unpaid salaries equivalent to the three-
month unexpired portion of his contract and asserted that the latter never offered any
valid reason for his early termination and that he was not given enough notice regarding
the same. He also insisted that the petitioners must prove the applicability of Canadian
law before the same could be applied to his employment contract.

The petitioner denied the charge of illegal dismissal against them. They relied on a
copy of the Employment Standards Act (ESA) of Ontario, which was duly authenticated
by the Canadian authorities and certified by the Philippine Embassy. They insisted that
all of Arriola's employment documents were processed in Canada, not to mention that
SNC Lavalin's office was in Ontario, the principle of lex loci celebrationis was
applicable. Hence, they insisted that Canadian laws governed the contract.

The said foreign law did not require any ground for early termination of employment,
and the only requirement was the written notice of termination. Even if Philippine laws
should apply, Arriola would still be validly dismissed because domestic law recognized
retrenchment and redundancy as legal grounds for termination.

The Labor Arbiter (LA) dismissed the complaint of Arriola, while the NLRC reversed the
LA's ruling stating the Filipino workers are protected by our labor laws wherever they
may be working. The petitioners filed a petition for certiorari before the CA arguing that
it should be the ESA, or the Ontario labor law, that should be applied in Arriola's
employment contract, but the Court of Appeals affirmed NLRC. Hence, this petition.

ISSUE Whether or not Canadian law shall be applied to this case.

RULING : No, the foreign law invoked is contrary to the Constitution and the Labor
Code. As a rule, Philippine laws apply even to overseas employment contracts. This
rule is rooted in the constitutional provision of Section 3, Article XIII that the State shall
afford full protection to labor, whether local or overseas. Hence, even if the OFW has
his employment abroad, it does not strip him of his rights to security of tenure, humane
conditions of work and a living wage under our Constitution. (As an exception, the
parties may agree that a foreign law shall govern the employment contract. A
synthesis of the existing laws and jurisprudence reveals that this exception is
subject to the following requisites:

1. That it is expressly stipulated in the overseas employment contract that a

specific foreign law shall govern;
2.That the foreign law invoked must be proven before the courts pursuant to the
Philippine rules on evidence;
3.That the foreign law stipulated in the overseas employment contract must not
be contrary to law, morals, good customs, public order, or public policy of the
Philippines; and
4.That the overseas employment contract must be processed through the POEA.)

The Court is of the view that these four (4) requisites must be complied with before the
employer could invoke the applicability of a foreign law to an overseas employment
contract. With these requisites, the State would be able to abide by its constitutional
obligation to ensure that the rights and well-being of our OFWs are fully protected.
Lacking any one of the four requisites would invalidate the application of the foreign
law, and the Philippine law shall govern the overseas employment contract.

In the present case, as correctly held by the CA, even though an authenticated copy of
the ESA was submitted, it did not mean that said foreign law could be automatically
applied to this case. The petitioners miserably failed to adhere to the two other
requisites. The petitioners failed to comply with the first requisite because no foreign
law was expressly stipulated in the overseas employment contract with Arriola. The
petitioners did not directly cite any specific provision or stipulation in the said labor
contract which indicated the applicability of the Canadian labor laws or the ESA. They
failed to show on the face of the contract that a foreign law was agreed upon by the
parties. Rather, they simply asserted that the terms and conditions of Arriola’s
employment were embodied in the Expatriate Policy, Ambatovy Project - Site, Long
Term.

The provisions of the ESA are patently inconsistent with the right to security of tenure.
Both the Constitution and the Labor Code provide that this right is available to any
employee. In a host of cases, the Court has upheld the employee's right to security of
tenure in the face of oppressive management behavior and management prerogative.
Security of tenure is a right which cannot be denied on mere speculation of any unclear
and nebulous basis. Furthermore, not only do these provisions collide with the right to
security of tenure, but they also deprive the employee of his constitutional right to due
process by denying him of any notice of termination and the opportunity to be heard.

In fine, as the petitioners failed to meet all the four (4) requisites on the applicability of a
foreign law, then the Philippine labor laws must govern the overseas employment
contract of Arriola.
AMELIA J. DELOS SANTOS vs. JEBSEN MARITIME, INC.

Garcia, J.

FACTS:
ANDRES E. DITAN vs. PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION
ADMINISTRATOR

Cruz, J.

Facts: 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.

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.

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.

Issue: Whether or not Ditan is entitled to any relief and his case is under the jurisdiction
of NLRC?

Held: Yes. 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.

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.

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.

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 worker. The choice is obvious. We find, considering the totality of
the circumstances attending this case, that the petitioner is entitled to relief. 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 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 contract. He was immediately repatriated
with the promise that he would be given priority in reemployment, which never came.
To rub salt on the wound, many of his co-hostages were re-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.
EDI-STAFFBUILDERS INTERNATIONAL, INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and ELEAZAR S.
GRAN, respondents.

VELASCO, JR., J.:

FACTS: Petitioner EDI is a corporation engaged in recruitment and placement of

OFWs.  ESI is another recruitment agency which collaborated with EDI to process the
documentation and deployment of private respondent to Saudi Arabia.

Private respondent Gran was an OFW recruited by EDI, and deployed by ESI to work
for OAB, in Riyadh, Kingdom of Saudi Arabia.

It appears that OAB asked EDI through its October 3, 1993 letter for curricula vitae of
9qualified applicants for the position of “Computer Specialist.”7 In a facsimile
transmission dated November 29, 1993, OAB informed EDI that, from the
applicants’ curricula vitae submitted to it for evaluation, it selected Gran for the position
of “Computer Specialist.” The faxed letter also stated that if Gran agrees to the terms
and conditions of employment contained in it, one of which was a monthly salary of SR
(Saudi Riyal) 2,250.00 (USD 600.00), EDI may arrange for Gran’s immediate dispatch.

After accepting OAB’s offer of employment, Gran signed an employment contract  that
granted him a monthly salary of USD 850.00 for a period of two years. Gran was then
deployed to Riyadh, Kingdom of Saudi Arabia on February 7, 1994.

Upon arrival in Riyadh, Gran questioned the discrepancy in his monthly salary—his
employment contract stated USD 850.00; while his POEA Information Sheet indicated
USD 600.00 only. However, through the assistance of the EDI office in Riyadh, OAB
agreed to pay Gran USD 850.00 a month.

After Gran had been working for about five months for OAB, his employment was
terminated through OAB’s July 9, 1994 letter,  on the following grounds:

1. Non-compliance to contract requirements by the recruitment agency primarily on

your salary and contract duration.

2. Non-compliance to pre-qualification requirements by the recruitment agency[,] vide

OAB letter ref. F-5751-93, dated October 3, 1993.
3. Insubordination or disobedience to Top Management Order and/or instructions (non-
submittal of daily activity reports despite several instructions).

On July 11, 1994, Gran received from OAB the total amount of SR 2,948.00
representing his final pay, and on the same day, he executed a Declaration  releasing
OAB from any financial obligation or otherwise, towards him.

After his arrival in the Philippines, Gran instituted a complaint, on July 21, 1994, against
ESI/EDI, OAB, Country Bankers Insurance Corporation, and Western Guaranty
Corporation with the NLRC, National Capital Region, Quezon City, for underpayment of
wages/salaries and illegal dismissal.

Issue: WON Gran’s dismissal is justifiable by reason of incompetence, insubordination,

and disobedience

Held: NO. In cases involving OFWs, the rights and obligations among and between the
OFW, the local recruiter/agent, and the foreign employer/principal are governed by the
employment contract. A contract freely entered into is considered law between the
parties; and hence, should be respected.

In the present case, the employment contract signed by Gran specifically states that
Saudi Labor Laws will govern matters not provided for in the contract (e.g. specific
causes for termination, termination procedures, etc.). Being the law intended by the
parties (lex loci intentiones) to apply to the contract, Saudi Labor Laws should govern
all matters relating to the termination of the employment of Gran.

In international law, the party who wants to have a foreign law applied to a dispute or
case has the burden of proving the foreign law. The foreign law is treated as a question
of fact to be properly pleaded and proved as the judge or labor arbiter cannot take
judicial notice of a foreign law. He is presumed to know only domestic or forum law.

Unfortunately for petitioner, it did not prove the pertinent Saudi laws on the matter; thus,
the International Law doctrine ofpresumed-identity approach or processual
presumption comes into play.  Where a foreign law is not pleaded or, even if pleaded, is
not proved, the presumption is that foreign law is the same as ours.  Thus, we apply
Philippine labor laws in determining the issue at bar.

In illegal dismissal cases, it has been established by Philippine law and jurisprudence
that the employer should prove that the dismissal of employees or personnel is legal
and just.
Petitioner’s imputation of incompetence on private respondent due to his “insufficient
knowledge in programming and zero knowledge of the ACAD system” without any other
evidence, cannot be given credence.

An allegation of incompetence should have a factual foundation. Incompetence may be

shown by weighing it against a standard, benchmark, or criterion. However, EDI failed
to establish any such bases to show how petitioner found Gran incompetent.

In addition, the elements that must concur for the charge of insubordination or willful
disobedience to prosper were not present.

For willful disobedience to be a valid cause for dismissal, the following twin
elements must concur: (1) the employee’s assailed conduct must have been
willful, that is, characterized by a wrongful and perverse attitude; and (2) the
order violated must have been reasonable, lawful, made known to the employee
and must pertain to the duties which he had been engaged to discharge.

EDI failed to discharge the burden of proving Gran’s insubordination or willful

disobedience.To justify willful disobedience, we must determine whether the order
violated by the employee is reasonable, lawful, made known to the employee, and
pertains to the duties which he had been engaged to discharge. In the case at bar,
petitioner failed to show that the order of the company which was violated—the
submission of “Daily Activity Reports”—was part of Gran’s duties as a Computer
Specialist. Before the Labor Arbiter, EDI should have provided a copy of the company
policy, Gran’s job description, or any other document that would show that the “Daily
Activity Reports” were required for submission by the employees, more particularly by a
Computer Specialist.

Even though EDI and/or ESI were merely the local employment or recruitment agencies
and not the foreign employer, they should have adduced additional evidence to
convincingly show that Gran’s employment was validly and legally terminated. The
burden devolves not only upon the foreign-based employer but also on the employment
or recruitment agency for the latter is not only an agent of the former, but is also
solidarily liable with the foreign principal for any claims or liabilities arising from the
dismissal of the worker.
RUTCHER T. DAGASDAS vs. GRAND PLACEMENT AND GENERAL SERVICES
CORPORATION

Del Castillo, J.
DIONELLA A. GOPIO, DOING BUSINESS UNDER THE NAME AND STYLE, JOB
ASIA MANAGEMENT SERVICES vs. SALVADOR B. BAUTISTA

JARDELEZA, J.:
HORTENCIA SALAZAR VS. HON. TOMAS D. ACHACOSO

Sarmiento, J.

FACTS: This concerns the validity of the power of the Secretary of Labor to issue
warrants of arrest and seizure under Article 38 of the Labor Code, prohibiting illegal
recruitment.

On October 21, 1987, Rosalie Tesoro filed with the POEA a complaint against
petitioner. Having ascertained that the petitioner had no license to operate a
recruitment agency, public respondent Administrator Tomas D. Achacoso issued his
challenged CLOSURE AND SEIZURE ORDER.

The POEA brought a team to the premises of Salazar to implement the order. There it
was found that petitioner was operating Hannalie Dance Studio. Before entering the
place, the team served said Closure and Seizure order on a certain Mrs. Flora Salazar
who voluntarily allowed them entry into the premises. Mrs. Flora Salazar informed the
team that Hannalie Dance Studio was accredited with Moreman Development (Phil.).
However, when required to show credentials, she was unable to produce any. Inside
the studio, the team chanced upon twelve talent performers — practicing a dance
number and saw about twenty more waiting outside, The team confiscated assorted
costumes which were duly receipted for by Mrs. Asuncion Maguelan and witnessed by
Mrs. Flora Salazar.

A few days after, petitioner filed a letter with the POEA demanding the return of the
confiscated properties. They alleged lack of hearing and due process, and that since
the house the POEA raided was a private residence, it was robbery.

On February 2, 1988, the petitioner filed this suit for prohibition. Although the acts
sought to be barred are already fait accompli, thereby making prohibition too late, we
consider the petition as one for certiorari in view of the grave public interest involved.

ISSUE: May the Philippine Overseas Employment Administration (or the Secretary of
Labor) validly issue warrants of search and seizure (or arrest) under Article 38 of the
Labor Code?

HELD: NO. it is only a judge who may issue warrants of search and arrest. Neither may
it be done by a mere prosecuting body.
We reiterate that the Secretary of Labor, not being a judge, may no longer issue search
or arrest warrants. Hence, the authorities must go through the judicial process. To that
extent, we declare Article 38, paragraph (c), of the Labor Code, unconstitutional and of
no force and effect.
Moreover, the search and seizure order in question, assuming, ex gratia argumenti, that
it was validly issued, is clearly in the nature of a general warrant. We have held that a
warrant must identify clearly the things to be seized, otherwise, it is null and void
For the guidance of the bench and the bar, we reaffirm the following principles:
1. Under Article III, Section 2, of the l987 Constitution, it is only judges, and no
other, who may issue warrants of arrest and search:
2. The exception is in cases of deportation of illegal and undesirable aliens,
whom the President or the Commissioner of Immigration may order arrested,
following a final order of deportation, for the purpose of deportation.
PAUL V. SANTIAGO, petitioner,
vs.
CF SHARP CREW MANAGEMENT, INC., respondent.

TINGA, J.:

FACTS: Petitioner had been working as a seafarer for Smith Bell Management, Inc.
(respondent) for about 5 yrs. In February 3, 1998, petitioner signed a new contract of
employment with respondent, with the duration of 9 months. The contract was approved
by POEA. Petitioner was to be deployed on board the “MSV Seaspread” which was
scheduled to leave the port of Manila for Canada on 13 February 1998.

A week before the date of departure, Capt. Pacifico Fernandez, respondent’s Vice
President, sent a facsimile message to the captain of “MSV Seaspread,”, saying that it
received a phone call from Santiago’s wife and some other callers who did not reveal
their identity and gave him some feedbacks that Paul Santiago this time, if allowed to
depart, will jump ship in Canada like his brother Christopher Santiago. The captain of
“MSV Seaspread replied that it cancel plans for Santiago to return to Seaspread.

Petitioner thus told that he would not be leaving for Canada anymore. Petitioner filed a
complaint for illegal dismissal, damages, and attorney’s fees against respondent and its
foreign principal, Cable and Wireless (Marine) Ltd. The Labor Arbiter (LA) favored
petitioner and ruled that the employment contract remained valid but had not
commenced since petitioner was not deployed and that respondent violated the rules
and regulations governing overseas employment when it did not deploy petitioner,
causing petitioner to suffer actual damages. On appeal by respondent, NLRC ruled that
there is no employer-employee relationship between petitioner and respondent
because the employment contract shall commence upon actual departure of the
seafarer from the airport or seaport at the point of hire and with a POEA-approved
contract. In the absence of an employer-employee relationship between the parties, the
claims for illegal dismissal, actual damages, and attorney’s fees should be dismissed.
But the NLRC found respondent’s decision not to deploy petitioner to be a valid
exercise of its management prerogative. Petitioner filed MR but it was denied. He went
to CA. CA affirmed the decision of NLRC. Petitioner’s MR was denied. Hence this case.

ISSUE: WON there is an employer- employee relationship begin in the case at bar.

RULING: NO. Considering that petitioner was not able to depart from the airport or
seaport in the point of hire, the employment contract did not commence, and no
employer-employee relationship was created between the parties. However, a
distinction must be made between the perfection of the employment contract and the
commencement of the employer-employee relationship. The perfection of the contract,
which in this case coincided with the date of execution thereof, occurred when
petitioner and respondent agreed on the object and the cause, as well as the rest of the
terms and conditions therein. The commencement of the employer-employee
relationship would have taken place had petitioner been actually deployed from the
point of hire. Thus, even before the start of any employer-employee relationship,
contemporaneous with the perfection of the employment contract was the birth of
certain rights and obligations, the breach of which may give rise to a cause of action
against the erring party. Thus, if the reverse had happened, that is the seafarer failed or
refused to be deployed as agreed upon, he would be liable for damages.

Neither the manning agent nor the employer can simply prevent a seafarer from being
deployed without a valid reason. Respondent’s act of preventing petitioner from
departing the port of Manila and boarding “MSV Seaspread” constitutes a breach of
contract, giving rise to petitioner’s cause of action. Respondent unilaterally and
unreasonably reneged on its obligation to deploy petitioner and must therefore answer
for the actual damages he suffered.

Despite the absence of an employer-employee relationship between petitioner

and respondent, the Court rules that the NLRC has jurisdiction over petitioner’s
complaint. The jurisdiction of labor arbiters is not limited to claims arising from
employer-employee relationships. Section 10 of R.A. No. 8042 (Migrant Workers
Act), provides that:

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

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

Respondent is liable to pay petitioner only the actual damages in the form of the
loss of nine (9) months’ worth of salary as provided in the contract. He is not,
however, entitled to overtime pay. While the contract indicated a fixed overtime pay,
it is not a guarantee that he would receive said amount regardless of whether or not he
rendered overtime work. The amount stipulated in the contract will be paid only if and
when the employee rendered overtime work. Realistically speaking, a seaman, by the
very nature of his job, stays on board a ship or vessel beyond the regular eight-hour
work schedule. For the employer to give him overtime pay for the extra hours when he
might be sleeping or attending to his personal chores or even just lulling away his time
would be extremely unfair and unreasonable.
The Court also holds that petitioner is entitled to attorney’s fees in the concept of
damages and expenses of litigation. Respondent’s basis for not deploying petitioner is
the belief that he will jump ship just like his brother, a mere suspicion that is based on
alleged phone calls of several persons whose identities were not even confirmed. This
Court has upheld management prerogatives so long as they are exercised in good faith
for the advancement of the employer’s interest and not for the purpose of defeating or
circumventing the rights of the employees under special laws or under valid
agreements. Respondent’s failure to deploy petitioner is unfounded and unreasonable
However, moral damages cannot be awarded in this case. because respondent’s
action was not tainted with bad faith, or done deliberately to defeat petitioner’s rights, as
to justify the award of moral damages.

Seafarers are considered contractual employees and cannot be considered as regular

employees under the Labor Code. Their employment is governed by the contracts they
sign every time they are rehired and their employment is terminated when the contract
expires. The exigencies of their work necessitates that they be employed on a
contractual basis.

WHEREFORE, petition is GRANTED IN PART.

SKIPPERS UNITED PACIFIC, INC.
vs.
NATIONAL LABOR RELATIONS COMMISSION.

AUSTRIA-MARTINEZ, J.:

FACTS:
FACILITIES MANAGEMENT CORPORATION
vs.
LEONARDO DE LA ROSA

MAKASIAR, J:

FACTS:
GENERAL MILLING CORPORATION and EARL TIMOTHY CONE, petitioners,
vs.
HON. RUBEN D. TORRES

FELICIANO, J.:

Facts:
May 1989, the NCR-Dept.Labor and Employment issued Alien Employment permit in
favor of petitioner Earl Cone, a US citizen as sports consultant and assistant coach for
GMC. Dec. 1989 then GMC and Cone entered into a contract of employment. Then
January 1990, the board of special inquiry of the commission and deportation approved
Cone's application for a change of admission status from temporary visitor to pre-
arranged employee. On Feb. 1990, GMC requested for renewal of Cone's alien
employment permit which was granted by DOLE regional director. The alien
employment is valid until December 1990.

Private respondent BCAP appealed the issuance of said alien employment permit to
the secretary of labor who issued a decision ordering the cancellation of Cone's
employment permit on the ground that there was no showing that there is no person in
the Philippines who is competent, able and willing to perform the services required nor
that the hiring of Cone redound to the national interest.

GMC filed a motion for reconsideration and 2 supplemental motions for reconsideration
but were bothe denied by acting secretary Laguesma.

Issue: WON Secretary of Labor gravely abused his discretion when he revoked the
alien employment permit

Ruling: NO. Court considers that petitioners have failed to show any grave abuse of
discretion on the part of secretary. The alleged failure to notify petitioners of the appeal
filed by BCAP was cured when petitioners were allowed to file their motion for
reconsideration before secretary of labor.

GMC's claim that hiring of a foreign coach is an employer's prerogative has no legal
basis at all. Under article 40 of labor code, an employment permit is required to hire a
foreigner, as it applies to "non-resident aliens".

GMS can't claim that Secretary's decision would amount to an impairment of the
obligations of contracts because Labor code requires alien employment permits to enter
a contract of employment for foreigners.

GMC's contention that Secretary of labor should have deferred to the findings of Comm.
On Immigration and Deportation as to the necessity of employing Cone is also without
basis. The labor code specifically empowers secretary to make a determination as to
the availability of the services of a person in the Philippines.