2022 BAR REVIEW LABOR LAW

Handout No. 48
GENERAL PRINCIPLES
& RECRUITMENT AND PLACEMENT

GENERAL PRINCIPLES

A laborer does not lose his or her right to freedom of expression upon employment.

This Court notes that had petitioners been able to substantially prove their dismissal, it would
have been rendered invalid not only for having been made without just cause but also for being
in violation of their constitutional rights. A laborer does not lose his or her right to freedom of
expression upon employment. This is “[a] political [right] essential to man’s enjoyment of his [or
her] life, to his [or her] happiness, and to his [or her] full and complete fulfillment.” While the
Constitution and the courts recognize that employers have property rights that must also be
protected, the human rights of laborers are given primacy over these rights. Property rights may
prescribe. Human rights do not. Hubilla vs. HSY Marketing, Ltd., Co., 850 SCRA 372, G.R. No.
207354 January 10, 2018

Article XIII, Section 3 of the 1987 Constitution guarantees the right of workers to security of
tenure.

“One’s employment, profession, trade or calling is a ‘property right,’” of which a worker may be
deprived only upon compliance with due process requirements: It is the policy of the state to
assure the right of workers to “security of tenure” (Article XIII, Sec. 3 of the New Constitution,
Section 9, Article II of the 1973 Constitution). The guarantee is an act of social justice. When a
person has no property, his job may possibly be his only possession or means of livelihood.
Therefore, he should be protected against any arbitrary deprivation of his job. Article 280 of the
Labor Code has construed security of tenure as meaning that “the employer shall not terminate
the services of an employee except for a just cause or when authorized by” the code. Dismissal
is not justified for being arbitrary where the workers were denied due process and a clear denial
of due process, or constitutional right must be safeguarded against at all times. Rivera vs. Genesis
Transport Service, Inc., 764 SCRA 653, G.R. No. 215568 August 3, 2015

Security of tenure of workers is not only statutorily protected, it is also a constitutionally

guaranteed right.

Thus, any deprivation of this right must be attended by due process of law. This means that any
disciplinary action which affects employment must pass due process scrutiny in both its
substantive and procedural aspects. The constitutional protection for workers elevates their
work to the status of a vested right. It is a vested right protected not only against state action but
against the arbitrary acts of the employers as well. This court in Philippine Movie Pictures

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 2022 BAR REVIEW LABOR LAW
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GENERAL PRINCIPLES
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Workers’ Association v. Premier Productions, Inc., 92 Phil. 843 (1953), categorically stated that
“[t]he right of a person to his labor is deemed to be property within the meaning of constitutional
guarantees.” Montinola vs. Philippine Airlines, 734 SCRA 439, G.R. No. 198656 September 8,
2014

Social justice does not mandate that every dispute should be automatically decided in favor of
labor.

As a final word, while it is the state’s responsibility to afford protection to labor, this policy should
not be used as an instrument to oppress management and capital. In resolving disputes between
labor and capital, fairness and justice should always prevail. Social justice does not mandate that
every dispute should be automatically decided in favor of labor. Justice is to be granted to the
deserving and dispensed in the light of the established facts and the applicable law and doctrine.
Visayan Electric Company Employees Union-ALU-TUCP vs. Visayan Electric Company, Inc.
(VECO), 763 SCRA 566, G.R. No. 205575 July 22, 2015

As a measure of social justice, the award of separation pay/financial assistance has been
upheld in some cases even if there is no finding of illegal dismissal

In this case, there was no sufficient proof that respondents were actually laid off from work. Thus,
the CA had no basis in ruling that respondents’ employment was illegally terminated since the
fact of dismissal was not adequately supported by substantial evidence. There being no dismissal,
the status quo between respondents and Expedition should be maintained. However, it cannot
be denied that their relationship has already been ruptured in that respondents are no longer
willing to be reinstated anymore. Under the circumstances, the Court finds that the grant of
separation pay as a form of financial assistance is deemed equitable. As a measure of social
justice, the award of separation pay/financial assistance has been upheld in some cases even if
there is no finding of illegal dismissal. Expedition Construction Corporation, et al. vs. Alexander
M. Africa, et al., G.R. No. 228671, December 14, 2017

The relations between capital and labor are not merely contractual, impressed as they are with
so much public interest that the same should yield to the common good.

Parenthetically, the Civil Code provisions on the contract of labor state that the relations between
the parties, that is, of capital and labor, are not merely contractual, impressed as they are with

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 2022 BAR REVIEW LABOR LAW
Handout No. 48
GENERAL PRINCIPLES
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so much public interest that the same should yield to the common good. It goes on to intone that
neither capital nor labor should visit acts of oppression against the other, nor impair the interest
or convenience of the public. In the final reckoning, the danger of just such a policy against
marriage followed by petitioner PT&T is that it strikes at the very essence, ideals and purpose of
marriage as an inviolable social institution and, ultimately, of the family as the foundation of the
nation. That it must be effectively interdicted here in all its indirect, disguised or dissembled
forms as discriminatory conduct derogatory of the laws of the land is not only in order but
imperatively required. Philippine Telegraph and Telephone Company vs. National Labor
Relations Commission and Grace De Guzman, G.R. No. 118978, May 23, 1997

Under Article 4 of the Labor Code, “all doubts in the implementation and interpretation of the
provisions of this Code, including its implementing rules and regulations (IRR), shall be resolved
in favor of labor.”

In Peñaflor v. Outdoor Clothing Manufacturing Corporation, 618 SCRA 208 (2010), the Court
reiterated that the principle laid down in the law has been extended by jurisprudence to cover
doubts in the evidence presented by the employer and the employee. As discussed earlier, the
Union has raised serious doubt on the evidence relied on by the NLRC. Consistent with Article 4
of the Labor Code, we resolve the doubt in the Union’s favor. PMI-Faculty and Employees Union
vs. PMI Colleges Bohol, G.R. No. 211526, June 29, 2016

The Constitutional guarantee of security of tenure extends to Filipino overseas contract

workers.

The Constitutional guarantee of security of tenure extends to Filipino overseas contract workers
as the Court declared in Sameer Overseas Placement Agency, Inc. v. Cabiles, 732 SCRA 22 (2014):
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. Princess Talent
Center Production, Inc. vs. Desiree T. Masagca, G.R. No. 191310, April 11, 2018

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GENERAL PRINCIPLES
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Since the employment contracts of Overseas Filipino Workers (OFWs) are perfected in the
Philippines, and following the principle of lex loci contractus (the law of the place where the
contract is made), these contracts are governed by our laws, primarily the Labor Code of the
Philippines and its implementing rules and regulations (IRR); Thus, even if a Filipino is employed
abroad, he or she is entitled to security of tenure, among other constitutional rights.

Security of tenure remains even if employees, particularly the Overseas Filipino Workers (OFWs),
work in a different jurisdiction. Since the employment contracts of OFWs are perfected in the
Philippines, and following the principle of lex loci contractus (the law of the place where the
contract is made), these contracts are governed by our laws, primarily the Labor Code of the
Philippines and its implementing rules and regulations. At the same time, our laws generally apply
even to employment contracts of OFWs as our Constitution explicitly provides that the State shall
afford full protection to labor, whether local or overseas. Thus, even if a Filipino is employed
abroad, he or she is entitled to security of tenure, among other constitutional rights. Princess
Talent Center Production, Inc. vs. Desiree T. Masagca, G.R. No. 191310, April 11, 2018

Substantial evidence, or “such relevant evidence as a reasonable mind might accept as

adequate to support a conclusion,” is the quantum of evidence required in administrative
bodies such as the National Labor Relations Commission (NLRC).

Just cause has to be supported by substantial evidence. Substantial evidence, or “such relevant
evidence as a reasonable mind might accept as adequate to support a conclusion,” is the
quantum of evidence required in administrative bodies such as the National Labor Relations
Commission. It is reasonable to expect the employer to consider substantial evidence in
disciplinary proceedings against its employees. The employer’s decision will be subject to review
by the Labor Arbiter and National Labor Relations Commission. Montinola vs. Philippine Airlines,
734 SCRA 439, G.R. No. 198656 September 8, 2014

RECRUITMENT & PLACEMENT

“Illegal Recruitment” and “Illegal Recruitment in Large Scale,” Defined.

For purposes of this Act, illegal recruitment shall mean any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring, or procuring workers and includes referring, contact
services, promising or advertising for employment abroad, whether for profit or not, when
undertaken by a non-licensee or non-holder of authority contemplated under Article 13(f) of
Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines:

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GENERAL PRINCIPLES
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Provided, That any such non-licensee or non-holder who, in any manner, offers or promises for
a fee employment abroad to two or more persons shall be deemed so engaged. It shall likewise
include the following acts, whether committed by any person, whether a non-licensee, non-
holder, licensee or holder of authority: x x x x Illegal recruitment is deemed committed by a
syndicate if carried out by a group of three (3) or more persons conspiring or confederating with
one another. It is deemed committed in large scale if committed against three (3) or more
persons individually or as a group. People vs. Racho, 841 SCRA 449, G.R. No. 227505 October 2,
2017

A person or entity engaged in recruitment and placement activities without the requisite
authority is engaged in illegal recruitment.

The definition of “recruitment and placement” under Article 13(b) of the Labor Code includes
promising or advertising for employment, locally or abroad, whether for profit or not, provided,
that any person or entity which, in any manner, offers or promises for a fee, employment to two
or more persons shall be deemed engaged in recruitment and placement. Thus, Racho’s act of
offering and promising to deploy the complainants to East Timor for work and collecting
placement fees from more than three (3) persons, despite not being authorized to do so, renders
her liable for Illegal Recruitment in Large Scale. In this relation, her defense of denial cannot
overcome complainants’ categorical and positive testimonies against her. Therefore, the Court
finds no cogent reason to deviate from the lower courts’ findings on this score. Racho is therefore
sentenced to suffer the penalty of life imprisonment and penalized with a fine of P1,000,000.00.
People vs. Racho, 841 SCRA 449, G.R. No. 227505 October 2, 2017

Upon the cancellation of a license, persons, officers and directors of the concerned corporations
are automatically prohibited from engaging in recruiting and placement of land-based
overseas Filipino workers (OFWs).

The grant of a license is a privilege and not a right thus making it a proper subject of its regulatory
powers. If [we] are to protect the welfare of vulnerable overseas workers, then [we] must prevent
all instances wherein they may be taken advantage upon. This must be so since the rules must
be read as a whole to achieve its particular purpose. Particular words, clauses and phrases should
not be studied as detached and isolated expressions but as a whole and every part of the statute
must be considered in fixing the meaning of any of its parts and in order to produce a harmonious
whole. It is inconsequential therefore whether or not the POEA or the DOLE stated then in their
decision that persons, officers and directors are disqualified from participating in the
government’s overseas employment program. The law and rules implementing the same

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unequivocally state that once a recruitment license of an entity is cancelled, its officers and
directors are automatically prohibited from engaging in such activity. The failure of the POEA and
DOLE to indicate this fact cannot by any means indicate the contrary. Dura lex sed lex. Republic
vs. Humanlink Manpower Consultants, Inc., G.R. No. 205188, April 22, 2015.

The Supreme Court (SC) has held in several cases that an accused who represents to others that
he or she could send workers abroad for employment, even without the authority or license to
do so, commits illegal recruitment.

Under RA 8042, a non-licensee or non-holder of authority commits illegal recruitment for

overseas employment in two ways: (1) by any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring, or procuring workers, and includes referring, contract services,
promising or advertising for employment abroad, whether for profit or not; or (2) by undertaking
any of the acts enumerated under Section 6 of RA 8042.

In this case, Sison herself admits that she has no license or authority to undertake recruitment
and placement activities. The Court has held in several cases that an accused who represents to
others that he or she could send workers abroad for employment, even without the authority or
license to do so, commits illegal recruitment. It is the absence of the necessary license or
authority to recruit and deploy workers that renders the recruitment activity unlawful. To prove
illegal recruitment, it must be shown that “the accused gave the complainants the distinct
impression that she had the power or ability to deploy the complainants abroad in a manner that
they were convinced to part with their money for that end.” People vs. Erlinda A. Sison @
“Margarita S. Aguilar”, G.R. No. 187160, August 9, 2017

Even the mere employee of a company or corporation engaged in illegal recruitment could be
held liable, along with the employer, as a principal in illegal recruitment once it was shown that
he had actively and consciously participated in illegal recruitment.

In this case, the accused-appellant’s denial of her participation in the illegal recruitment activities
of Bermudez and Langreo did not gain traction from her charging her co-accused with the sole
responsibility for the illegal recruitment of the complainants. Based on the testimonial narration
of the complainants regarding their recruitment, she was unqualifiedly depicted as having the
primary and instrumental role in recruiting them for overseas placement from the inception.
Also, her claim of having been only casually associated with GNB Marketing did not preclude her
criminal liability for the crimes charged and proved. Even the mere employee of a company or
corporation engaged in illegal recruitment could be held liable, along with the employer, as a

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 2022 BAR REVIEW LABOR LAW
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GENERAL PRINCIPLES
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principal in illegal recruitment once it was shown that he had actively and consciously
participated in illegal recruitment. This is because recruitment and placement include any act of
canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, as well as
referrals, contract services, promising or advertising for employment, locally or abroad, whether
for profit or not. People vs. Marissa Bayker, G.R. No. 170192, February 10, 2016

Elements of Illegal Recruitment Committed by a Syndicate

Illegal recruitment committed by a syndicate, [as in the present case,] has the following elements:

a) the offender does not have the valid license or authority required by law to engage in
recruitment and placement of workers;
b) the offender undertakes any of the “recruitment and placement” activities defined in
Article 13(b) of the Labor Code, or engages in any of the prohibited practices enumerated
under now Section 6 of RA 8042; and

c) the illegal recruitment is “carried out by a group of three or more persons conspiring
and/or confederating with one another in carrying out any unlawful or illegal transaction,
enterprise or scheme.”

In the third element, it “is not essential that there be actual proof that all the conspirators took
a direct part in every act. It is sufficient that they acted in concert pursuant to the same
objective.” People vs. Erlinda A. Sison @ “Margarita S. Aguilar”, G.R. No. 187160, August 9,
2017

Elements of Illegal Recruitment in Large Scale

The offense of illegal recruitment in large scale has the following elements:
1) the person charged undertook any recruitment activity as defined under Section 6 of RA
8042;
2) accused did not have the license or the authority to lawfully engage in the recruitment of
workers; and
3) accused committed the same against three or more persons individually or as a group.
People vs. Merceditas Matheus y Delos Reyes, G.R. No. 198795, June 7, 2017

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It is settled that a person, for the same acts, may be convicted separately of illegal recruitment
under Republic Act (RA) No. 8042 or the Labor Code, and estafa under Article 315(2)(a) of the
Revised Penal Code (RPC).

The elements of estafa are: (1) the accused defrauded another by abuse of confidence or by
means of deceit; and (2) the offended party or a third party suffered damage or prejudice capable
of pecuniary estimation.

Here, the prosecution proved beyond reasonable doubt that accused-appellant deceived private
complainants into believing that she had the authority and capability to send them abroad for
employment, despite her not being licensed by the POEA to recruit workers for overseas
employment. Because of the assurances given by accused-appellant, the private complainants
parted with their hard-earned money for the payment of the agreed placement fee, for which
accused-appellant issued petty cash vouchers and used fictitious names evidencing her receipt
of the payments. People vs. Merceditas Matheus y Delos Reyes, G.R. No. 198795, June 7, 2017

Section 10 of Republic Act (RA) No. 8042, as amended, expressly provides for joint and solidary
liability of corporate directors and officers with the recruitment/placement agency for all
money claims or damages that may be awarded to Overseas Filipino Workers (OFWs).

While a corporate director, trustee, or officer who entered into contracts in behalf of the
corporation generally cannot be held personally liable for the liabilities of the latter, in deference
to the separate and distinct legal personality of a corporation from the persons composing it,
personal liability of such corporate director, trustee, or officer, along (although not necessarily)
with the corporation, may validly attach when he is made by a specific provision of law personally
answerable for his corporate action, as in this case. Gargallo vs. Dohle Seafront Crewing
(Manila), Inc., 801 SCRA 135, G.R. No. 215551 August 17, 2016

As the law provides, corporate directors and officers are themselves solidarily liable with the
recruitment/placement agency for all money claims or damages that may be awarded to
Overseas Filipino Workers (OFWs).

Section 10 of RA 8042, as amended, and the pertinent POEA Rules are deemed incorporated in
petitioner’s employment contract with respondents. These provisions are in line with the State’s
policy of affording protection to labor and alleviating the workers’ plight, and are meant to assure
OFWs immediate and sufficient payment of what is due them. Gargallo vs. Dohle Seafront
Crewing (Manila), Inc., 801 SCRA 135, G.R. No. 215551 August 17, 2016

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In the case of overseas employment, either the local agency or the foreign employer may be
sued for all claims arising from the foreign employer’s labor law violations.

The fundamental effect of joint and several liability is that “each of the debtors is liable for the
entire obligation.” A final determination may, therefore, be achieved even if only one of the joint
and several debtors are impleaded in an action. Hence, in the case of overseas employment,
either the local agency or the foreign employer may be sued for all claims arising from the foreign
employer’s labor law violations. This way, the overseas workers are assured that someone — the
foreign employer’s local agent — may be made to answer for violations that the foreign employer
may have committed. The Migrant Workers and Overseas Filipinos Act of 1995 ensures that
overseas workers have recourse in law despite the circumstances of their employment. By
providing that the liability of the foreign employer may be “enforced to the full extent” against
the local agent, the overseas worker is assured of immediate and sufficient payment of what is
due them. Sameer Overseas Placement Agency, Inc. vs. Cabiles, 732 SCRA 22, G.R. No. 170139
August 5, 2014

It must be emphasized that the local agency that is held to answer for the overseas worker’s
money claims is not left without remedy. The law does not preclude it from going after the
foreign employer for reimbursement of whatever payment it has made to the employee to
answer for the money claims against the foreign employer.

Corollary to the assurance of immediate recourse in law, the provision on joint and several
liability in the Migrant Workers and Overseas Filipinos Act of 1995 shifts the burden of going after
the foreign employer from the overseas worker to the local employment agency. However, it
must be emphasized that the local agency that is held to answer for the overseas worker’s money
claims is not left without remedy. The law does not preclude it from going after the foreign
employer for reimbursement of whatever payment it has made to the employee to answer for
the money claims against the foreign employer. A further implication of making local agencies
jointly and severally liable with the foreign employer is that an additional layer of protection is
afforded to overseas workers. Local agencies, which are businesses by nature, are inoculated
with interest in being always on the lookout against foreign employers that tend to violate labor
law. Lest they risk their reputation or finances, local agencies must already have mechanisms for
guarding against unscrupulous foreign employers even at the level prior to overseas employment
applications. Sameer Overseas Placement Agency, Inc. vs. Cabiles, 732 SCRA 22, G.R. No. 170139
August 5, 2014

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 2022 BAR REVIEW LABOR LAW
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The clause "or for three (3) months for every year of the unexpired term, whichever is less" as
reinstated in Section 7 of Republic Act No. 10022 is unconstitutional, and has no force and effect
of law. It violates due process as it deprives overseas workers of their monetary claims without
any discernable valid purpose.

In Serrano, this Court ruled that the clause "or for three (3) months for every year of the
unexpired term, whichever is less" under Section 10 of the Migrant Workers and Overseas
Filipinos Act is unconstitutional for violating the equal protection and substantive due process
clauses.

Later, however, this clause was kept when the law was amended by Republic Act No. 10022 in
2010. Section 7 of the new law mirrors the same clause.

In Sameer Overseas Placement Agency, Inc. v. Cabiles, this Court was confronted with the
question of the constitutionality of the reinstated clause in Republic Act No. 10022. Reiterating
our finding in Serrano, we ruled that "limiting wages that should be recovered by an illegally
dismissed overseas worker to three months is both a violation of due process and the equal
protection clauses of the Constitution." In striking down the clause, we ruled: Putting a cap on
the money claims of certain overseas workers does not increase the standard of protection
afforded to them. On the other hand, foreign employers are more incentivized by the reinstated
clause to enter into contracts of at least a year because it gives them more flexibility to violate
our overseas workers' rights. Their liability for arbitrarily terminating overseas workers is
decreased at the expense of the workers whose rights they violated. Meanwhile, these overseas
workers who are impressed with an expectation of a stable job overseas for the longer contract
period disregard other opportunities only to be terminated earlier. They are left with claims that
are less than what others in the same situation would receive. The reinstated clause, therefore,
creates a situation where the law meant to protect them makes violation of rights easier and
simply benign to the violator. Aldovino, et al. vs. Gold and Green Manpower Management and
Development Services, Inc. G.R. No. 200811 June 19, 2019

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