Labor Law Cases 1

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G.R. Nos. L-58674-77 July 11, 1990

PEOPLE OF THE PHILIPPINES, petitioner,vs.HON. DOMINGO PANIS, Presiding Judge of the Court of First Instance of Zambales & Olongapo City,Branch III and SERAPIO ABUG, respondents.

CRUZ, J:

The basic issue in this case is the correct interpretation of Article 13(b) of P.D. 442, otherwise known as the LaborCode, reading as follows:

(b) Recruitment and placement' refers to any act of canvassing, enlisting, contracting, transporting,hiring, or procuring workers, and includes referrals, contract services, promising or advertising foremployment, locally or abroad, whether for profit or not: Provided, That any person or entity which, inany manner, offers or promises for a fee employment to two or more persons shall be deemedengaged in recruitment and placement.

Four informations were filed on January 9, 1981, in the Court of First Instance of Zambales and Olongapo Cityalleging that Serapio Abug, private respondent herein, "without first securing a license from the Ministry of Labor asa holder of authority to operate a fee-charging employment agency, did then and there wilfully, unlawfully and

criminally operate a private fee charging employment agency by charging fees and expenses (from) and promisingemployment in Saudi Arabia" to four separate individuals named therein, in violation of Article 16 in relation to Article39 of the Labor Code. 1

Abug filed a motion to quash on the ground that the informations did not charge an offense because he wasaccused of illegally recruiting only one person in each of the four informations. Under the proviso in Article 13(b), heclaimed, there would be illegal recruitment only "whenever two or more persons are in any manner promised oroffered any employment for a fee. " 2

Denied at first, the motion was reconsidered and finally granted in the Orders of the trial court dated June 24 andSeptember 17, 1981. The prosecution is now before us on certiorari. 3

The posture of the petitioner is that the private respondent is being prosecuted under Article 39 in relation to Article16 of the Labor Code; hence, Article 13(b) is not applicable. However, as the first two cited articles penalize acts ofrecruitment and placement without proper authority, which is the charge embodied in the informations, application ofthe definition of recruitment and placement in Article 13(b) is unavoidable.

The view of the private respondents is that to constitute recruitment and placement, all the acts mentioned in thisarticle should involve dealings with two or m•re persons as an indispensable requirement. On the other hand, thepetitioner argues that the requirement of two or more persons is imposed only where the recruitment and placementconsists of an offer or promise of employment to such persons and always in consideration of a fee. The other actsmentioned in the body of the article may involve even only one person and are not necessarily for profit.

Neither interpretation is acceptable. We fail to see why the proviso should speak only of an offer or promise ofemployment if the purpose was to apply the requirement of two or more persons to all the acts mentioned in thebasic rule. For its part, the petitioner does not explain why dealings with two or more persons are needed where therecruitment and placement consists of an offer or promise of employment but not when it is done through"canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring (of) workers.

As we see it, the proviso was intended neither to impose a condition on the basic rule nor to provide an exceptionthereto but merely to create a presumption. The presumption is that the individual or entity is engaged in recruitmentand placement whenever he or it is dealing with two or more persons to whom, in consideration of a fee, an offer orpromise of employment is made in the course of the "canvassing, enlisting, contracting, transporting, utilizing, hiringor procuring (of) workers. "


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The number of persons dealt with is not an essential ingredient of the act of recruitment and placement of workers. Any of the acts mentioned in the basic rule in Article 13(b) win constitute recruitment and placement even if only oneprospective worker is involved. The proviso merely lays down a rule of evidence that where a fee is collected inconsideration of a promise or offer of employment to two or more prospective workers, the individual or entitydealing with them shall be deemed to be engaged in the act of recruitment and placement. The words "shall bedeemed" create that presumption.

This is not unlike the presumption in article 217 of the Revised Penal Code, for example, regarding the failure of apublic officer to produce upon lawful demand funds or property entrusted to his custody. Such failure shall be prima

facie evidence that he has put them to personal use; in other words, he shall be deemed to have malversed suchfunds or property. In the instant case, the word "shall be deemed" should by the same token be given the force of adisputable presumption or of prima facie evidence of engaging in recruitment and placement. (Klepp vs. Odin Tp.,McHenry County 40 ND N.W. 313, 314.)

It is unfortunate that we can only speculate on the meaning of the questioned provision for lack of records ofdebates and deliberations that would otherwise have been available if the Labor Code had been enacted as astatute rather than a presidential decree. The trouble with presidential decrees is that they could be, and sometimeswere, issued without previous public discussion or consultation, the promulgator heeding only his own counsel orthose of his close advisers in their lofty pinnacle of power. The not infrequent results are rejection, intentional or not,of the interest of the greater number and, as in the instant case, certain esoteric provisions that one cannot readagainst the background facts usually reported in the legislative journals.

At any rate, the interpretation here adopted should give more force to the campaign against illegal recruitment andplacement, which has victimized many Filipino workers seeking a better life in a foreign land, and investing hard-earned savings or even borrowed funds in pursuit of their dream, only to be awakened to the reality of a cynicaldeception at the hands of theirown countrymen.

WHEREFORE, the Orders of June 24, 1981, and September 17, 1981, are set aside and the four informationsagainst the private respondent reinstated. No costs.

SO ORDERED.


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G.R. No. 113161 August 29, 1995

PEOPLE OF THE PHILIPPINES, plaintiff-appellee,vs.LOMA GOCE y OLALIA, DAN GOCE and NELLY D. AGUSTIN, accused. NELLY D. AGUSTIN, accused-appellant.

REGALADO, J.:

On January 12, 1988, an information for illegal recruitment committed by a syndicate and in large scale, punishableunder Articles 38 and 39 of the Labor Code (Presidential Decree No. 442) as amended by Section 1(b) ofPresidential Decree No. 2018, was filed against spouses Dan and Loma Goce and herein accused-appellant Nelly

Agustin in the Regional Trial Court of Manila, Branch 5, alleging —

That in or about and during the period comprised between May 1986 and June 25, 1987, both datesinclusive, in the City of Manila, Philippines, the said accused, conspiring and confederating togetherand helping one another, representing themselves to have the capacity to contract, enlist andtransport Filipino workers for employment abroad, did then and there willfully and unlawfully, for afee, recruit and promise employment/job placement abroad, to (1) Rolando Dalida y Piernas, (2)

Ernesto Alvarez y Lubangco, (3) Rogelio Salado y Savillo, (4) Ramona Salado y Alvarez, (5)Dionisio Masaya y de Guzman, (6) Dave Rivera y de Leon, (7) Lorenzo Alvarez y Velayo, and (8)Nelson Trinidad y Santos, without first having secured the required license or authority from theDepartment of Labor. 1

On January 21, 1987, a warrant of arrest was issued against the three accused but not one of them wasarrested.2 Hence, on February 2, 1989, the trial court ordered the case archived but it issued a standing warrant of arrestagainst the accused. 3

Thereafter, on learning of the whereabouts of the accused, one of the offended parties, Rogelio Salado, requestedon March 17, 1989 for a copy of the warrant of arrest. 4 Eventually, at around midday of February 26, 1993, Nelly

Agustin was apprehended by the Parañaque police. 5 On March 8, 1993, her counsel filed a motion to revive the case andrequested that it be set for hearing "for purposes of due process and for the accused to immediately have her day incourt" 6 Thus, on April 15, 1993, the trial court reinstated the case and set the arraignment for May 3, 1993, 7 on whichdate of Agustin pleaded not guilty 8 and the case subsequently went to trial.

Four of the complainants testified for the prosecution. Rogelio Salado was the first to take the witness stand and hedeclared that sometime in March or April, 1987, he was introduced by Lorenzo Alvarez, his brother-in-law and a co-applicant, to Nelly Agustin in the latter's residence at Factor, Dongalo, Parañaque, Metro Manila. Representingherself as the manager of the Clover Placement Agency, Agustin showed him a job order as proof that he couldreadily be deployed for overseas employment. Salado learned that he had to pay P5,000.00 as processing fee,which amount he gave sometime in April or May of the same year. He was issued the corresponding receipt. 9

Also in April or May, 1987, Salado, accompanied by five other applicants who were his relatives, went to the office othe placement agency at Nakpil Street, Ermita, Manila where he saw Agustin and met the spouses Dan and Loma

Goce, owners of the agency. He submitted his bio-data and learned from Loma Goce that he had to giveP12,000.00, instead of the original amount of P5,000.00 for the placement fee. Although surprised at the new andhigher sum, they subsequently agreed as long as there was an assurance that they could leave for abroad. 10

Thereafter, a receipt was issued in the name of the Clover Placement Agency showing that Salado and hisaforesaid co-applicants each paid P2,000.00, instead of the P5,000.00 which each of them actually paid. Severalmonths passed but Salado failed to leave for the promised overseas employment. Hence, in October, 1987, alongwith the other recruits, he decided to go to the Philippine Overseas Employment Administration (POEA) to verify thereal status of Clover Placement Agency. They discovered that said agency was not duly licensed to recruit jobapplicants. Later, upon learning that Agustin had been arrested, Salado decided to see her and to demand thereturn of the money he had paid, but Agustin could only give him P500.00. 11


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Ramona Salado, the wife of Rogelio Salado, came to know through her brother, Lorenzo Alvarez, about Nelly Agustin. Accompanied by her husband, Rogelio, Ramona went to see Agustin at the latter's residence. Agustinpersuaded her to apply as a cutter/sewer in Oman so that she could join her husband. Encouraged by Agustin'spromise that she and her husband could live together while working in Oman, she instructed her husband to give

Agustin P2,000.00 for each of them as placement fee, or the total sum of P4,000.00. 12

Much later, the Salado couple received a telegram from the placement agency requiring them to report to its officebecause the "NOC" (visa) had allegedly arrived. Again, around February, or March, 1987, Rogelio gave P2,000.00as payment for his and his wife's passports. Despite follow-up of their papers twice a week from February to June,

1987, he and his wife failed to leave for abroad. 13

Complainant Dionisio Masaya, accompanied by his brother-in-law, Aquiles Ortega, applied for a job in Oman withthe Clover Placement Agency at Parañaque, the agency's former office address. There, Masaya met Nelly Agustin,who introduced herself as the manager of the agency, and the Goce spouses, Dan and Loma, as well as the latter'sdaughter. He submitted several pertinent documents, such as his bio-data and school credentials. 14

In May, 1986, Masaya gave Dan Goce P1,900.00 as an initial downpayment for the placement fee, and inSeptember of that same year, he gave an additional P10,000.00. He was issued receipts for said amounts and wasadvised to go to the placement office once in a while to follow up his application, which he faithfully did. Much to hisdismay and chagrin, he failed to leave for abroad as promised. Accordingly, he was forced to demand that hismoney be refunded but Loma Goce could give him back only P4,000.00 in installments. 15

As the prosecution's fourth and last witness, Ernesto Alvarez took the witness stand on June 7, 1993. He testifiedthat in February, 1987, he met appellant Agustin through his cousin, Larry Alvarez, at her residence in Parañaque.She informed him that "madalas siyang nagpapalakad sa Oman" and offered him a job as an ambulance driver atthe Royal Hospital in Oman with a monthly salary of about $600.00 to $700.00. 16

On March 10, 1987, Alvarez gave an initial amount of P3,000.00 as processing fee to Agustin at the latter'sresidence. In the same month, he gave another P3,000.00, this time in the office of the placement agency. Agustinassured him that he could leave for abroad before the end of 1987. He returned several times to the placementagency's office to follow up his application but to no avail. Frustrated, he demanded the return of the money he hadpaid, but Agustin could only give back P500.00. Thereafter, he looked for Agustin about eight times, but he could nolonger find her. 17

Only herein appellant Agustin testified for the defense. She asserted that Dan and Loma Goce were her neighborsat Tambo, Parañaque and that they were licensed recruiters and owners of the Clover Placement Agency.Previously, the Goce couple was able to send her son, Reynaldo Agustin, to Saudi Arabia. Agustin met theaforementioned complainants through Lorenzo Alvarez who requested her to introduce them to the Goce couple, towhich request she acceded. 18

Denying any participation in the illegal recruitment and maintaining that the recruitment was perpetrated only by theGoce couple, Agustin denied any knowledge of the receipts presented by the prosecution. She insisted that thecomplainants included her in the complaint thinking that this would compel her to reveal the whereabouts of theGoce spouses. She failed to do so because in truth, so she claims, she does not know the present address of thecouple. All she knew was that they had left their residence in 1987. 19

Although she admitted having given P500.00 each to Rogelio Salado and Alvarez, she explained that it was entirelyfor different reasons. Salado had supposedly asked for a loan, while Alvarez needed money because he was sick atthat time. 20

On November 19, 1993, the trial court rendered judgment finding herein appellant guilty as a principal in the crime ofillegal recruitment in large scale, and sentencing her to serve the penalty of life imprisonment, as well as to pay afine of P100,000.00. 21

In her present appeal, appellant Agustin raises the following arguments: (1) her act of introducing complainants tothe Goce couple does not fall within the meaning of illegal recruitment and placement under Article 13(b) in relationto Article 34 of the Labor Code; (2) there is no proof of conspiracy to commit illegal recruitment among appellant and


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the Goce spouses; and (3) there is no proof that appellant offered or promised overseas employment to thecomplainants. 22 These three arguments being interrelated, they will be discussed together.

Herein appellant is accused of violating Articles 38 and 39 of the Labor Code. Article 38 of the Labor Code, asamended by Presidential Decree No. 2018, provides that any recruitment activity, including the prohibited practicesenumerated in Article 34 of said Code, undertaken by non-licensees or non-holders of authority shall be deemedillegal and punishable under Article 39 thereof. The same article further provides that illegal recruitment shall beconsidered an offense involving economic sabotage if any of these qualifying circumstances exist, namely, (a) whenillegal recruitment is committed by a syndicate, i .e., if it is carried out by a group of three or more persons conspiring

and/or confederating with one another; or (b) when illegal recruitment is committed in large scale, i .e., if it iscommitted against three or more persons individually or as a group.

At the outset, it should be made clear that all the accused in this case were not authorized to engage in anyrecruitment activity, as evidenced by a certification issued by Cecilia E. Curso, Chief of the Licensing and RegulationOffice of the Philippine Overseas Employment Administration, on November 10, 1987. Said certification states thatDan and Loma Goce and Nelly Agustin are neither licensed nor authorized to recruit workers for overseasemployment. 23 Appellant does not dispute this. As a matter of fact her counsel agreed to stipulate that she was neitherlicensed nor authorized to recruit applicants for overseas employment. Appellant, however, denies that she was in anyway guilty of illegal recruitment. 24

It is appellant's defensive theory that all she did was to introduce complainants to the Goce spouses. Being a

neighbor of said couple, and owing to the fact that her son's overseas job application was processed and facilitatedby them, the complainants asked her to introduce them to said spouses. Allegedly out of the goodness of her heart,she complied with their request. Such an act, appellant argues, does not fall within the meaning of "referral" underthe Labor Code to make her liable for illegal recruitment.

Under said Code, recruitment and placement refers to any act of canvassing, enlisting, contracting, transporting,utilizing, hiring or procuring workers, and includes referrals, contract services, promising or advertising foremployment, 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 andplacement. 25 On the other hand, referral is the act of passing along or forwarding of an applicant for employment after aninitial interview of a selected applicant for employment to a selected employer, placement officer or bureau. 26

Hence, the inevitable query is whether or not appellant Agustin merely introduced complainants to the Goce couple

or her actions went beyond that. The testimonial evidence hereon show that she indeed further committed actsconstitutive of illegal recruitment. All four prosecution witnesses testified that it was Agustin whom they initiallyapproached regarding their plans of working overseas. It was from her that they learned about the fees they had topay, as well as the papers that they had to submit. It was after they had talked to her that they met the accusedspouses who owned the placement agency.

As correctly held by the trial court, being an employee of the Goces, it was therefore logical for appellant tointroduce the applicants to said spouses, they being the owners of the agency. As such, appellant was actuallymaking referrals to the agency of which she was a part. She was therefore engaging in recruitment activity. 27

Despite Agustin's pretensions that she was but a neighbor of the Goce couple, the testimonies of the prosecutionwitnesses paint a different picture. Rogelio Salado and Dionisio Masaya testified that appellant represented herself

as the manager of the Clover Placement Agency. Ramona Salado was offered a job as a cutter/sewer by Agustinthe first time they met, while Ernesto Alvarez remembered that when he first met Agustin, the latter representedherself as "nagpapaalis papunta sa Oman." 28 Indeed, Agustin played a pivotal role in the operations of the recruitmentagency, working together with the Goce couple.

There is illegal recruitment when one gives the impression of having the ability to send a worker abroad." 29 It isundisputed that appellant gave complainants the distinct impression that she had the power or ability to send peopleabroad for work such that the latter were convinced to give her the money she demanded in order to be so employed. 30

It cannot be denied that Agustin received from complainants various sums for purpose of their applications. Her actof collecting from each of the complainants payment for their respective passports, training fees, placement fees,medical tests and other sundry expenses unquestionably constitutes an act of recruitment within the meaning of the


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law. In fact, appellant demanded and received from complainants amounts beyond the allowable limit of P5,000.00under government regulations. It is true that the mere act of a cashier in receiving money far exceeding the amountallowed by law was not considered per se as "recruitment and placement" in contemplation of law, but that wasbecause the recipient had no other participation in the transactions and did not conspire with her co-accused indefrauding the victims. 31 That is not the case here.

Appellant further argues that "there is no evidence of receipts of collections/payments from complainants toappellant." On the contrary, xerox copies of said receipts/vouchers were presented by the prosecution. For instance,a cash voucher marked as Exhibit D, 32 showing the receipt of P10,000.00 for placement fee and duly signed by

appellant, was presented by the prosecution. Another receipt, identified as Exhibit E,33

was issued and signed byappellant on February 5, 1987 to acknowledge receipt of P4,000.00 from Rogelio and Ramona Salado for "processing ofdocuments for Oman." Still another receipt dated March 10, 1987 and presented in evidence as Exhibit F, shows thatappellant received from Ernesto Alvarez P2,000.00 for "processing of documents for Oman." 34

Apparently, the original copies of said receipts/vouchers were lost, hence only xerox copies thereof were presentedand which, under the circumstances, were admissible in evidence. When the original writing has been lost ordestroyed or cannot be produced in court, upon proof of its execution and loss or destruction, or unavailability, itscontents may be proved by a copy or a recital of its contents in some authentic document, or by the recollection ofwitnesses. 35

Even assuming arguendo that the xerox copies presented by the prosecution as secondary evidence are notallowable in court, still the absence thereof does not warrant the acquittal of appellant. In People vs. Comia, 36wherethis particular issue was involved, the Court held that the complainants' failure to ask for receipts for the fees they paid tothe accused therein, as well as their consequent failure to present receipts before the trial court as proof of the saidpayments, is not fatal to their case. The complainants duly proved by their respective testimonies that said accused wasinvolved in the entire recruitment process. Their testimonies in this regard, being clear and positive, were declaredsufficient to establish that factum probandum.

Indeed, the trial court was justified and correct in accepting the version of the prosecution witnesses, theirstatements being positive and affirmative in nature. This is more worthy of credit than the mere uncorroborated andself-serving denials of appellant. The lame defense consisting of such bare denials by appellant cannot overcomethe evidence presented by the prosecution proving her guilt beyond reasonable doubt. 37

The presence of documentary evidence notwithstanding, this case essentially involves the credibility of witnesses

which is best left to the judgment of the trial court, in the absence of abuse of discretion therein. The findings of factof a trial court, arrived at only after a hearing and evaluation of what can usually be expected to be conflictingtestimonies of witnesses, certainly deserve respect by an appellate court. 38 Generally, the findings of fact of the trialcourt on the matter of credibility of witnesses will not be disturbed on appeal. 39

In a last-ditch effort to exculpate herself from conviction, appellant argues that there is no proof of conspiracybetween her and the Goce couple as to make her liable for illegal recruitment. We do not agree. The evidencepresented by the prosecution clearly establish that appellant confabulated with the Goces in their plan to deceive thecomplainants. Although said accused couple have not been tried and convicted, nonetheless there is sufficient basisfor appellant's conviction as discussed above.

In People vs. Sendon, 40 we held that the non-prosecution of another suspect therein provided no ground for theappellant concerned to fault the decision of the trial court convicting her. The prosecution of other persons, equally ormore culpable than herein appellant, may come later after their true identities and addresses shall have been ascertainedand said malefactors duly taken into custody. We see no reason why the same doctrinal rule and course of procedureshould not apply in this case.

WHEREFORE, the appealed judgment of the court a quo is hereby AFFIRMED in toto, with costs against accused-appellant Nelly D. Agustin.

SO ORDERED.


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G.R. No. 110524 July 29, 2002

DOUGLAS MILLARES and ROGELIO LAGDA, petitioners,vs.NATIONAL LABOR RELATIONS COMMISSION, TRANS-GLOBAL MARITIME AGENCY, INC. and ESSOINTERNATIONAL SHIPPING CO., LTD. respondents.

R E S O L U T I O N

KAPUNAN, J .:

On March 14, 2000, the Court promulgated its decision in the above-entitled case, ruling in favor of the petitioners.The dispositive portion reads, as follows:

WHEREFORE, premises considered, the assailed Decision, dated June 1, 1993, of the National LaborRelations Commission is hereby REVERSED and SET ASIDE and a new judgment is hereby renderedordering the private respondents to:

(1) Reinstate petitioners Millares and Lagda to their former positions without loss of seniority rights, and topay full backwages computed from the time of illegal dismissal to the time of actual reinstatement;

(2) Alternatively, if reinstatement is not possible, pay petitioners Millares and Lagda separation payequivalent to one month's salary for every year of service; and,

(3) Jointly and severally pay petitioners One Hundred Percent (100%) of their total credited contributions asprovided under the Consecutive Enlistment Incentive Plan.

SO ORDERED.1

A motion for reconsideration was consequently filed2 by the private respondents to which petitioners filed anOpposition thereto.3 In a Minute Resolution dated June 28, 2000, the Court resolved to deny the motion forreconsideration with finality.4 Subsequently, the Filipino Association for Mariners Employment, Inc. (FAME) filed aMotion for Leave to Intervene and to Admit a Motion for Reconsideration in Intervention. Private respondents,

meanwhile, also filed a Motion for Leave to File a Second Motion for Reconsideration of our decision.

In both motions, the private respondents and FAME respectively pray in the main that the Court reconsider its rulingthat "Filipino seafarers are considered regular employees within the context of Article 280 of the Labor Code." Theyclaim that the decision may establish a precedent that will adversely affect the maritime industry.

The Court resolved to set the case for oral arguments to enable the parties to present their sides.

To recall, the facts of the case are, as follows:

Petitioner Douglas Millares was employed by private respondent ESSO International Shipping CompanyLTD. (Esso International, for brevity) through its local manning agency, private respondent Trans-Global

Maritime Agency, Inc. (Trans-Global, for brevity) on November 16, 1968 as a machinist. In 1975, he waspromoted as Chief Engineer which position he occupied until he opted to retire in 1989. He was thenreceiving a monthly salary of US $1,939.00.

On June 13, 1989, petitioner Millares applied for a leave of absence for the period July 9 to August 7, 1989.In a letter dated June 14, 1989, Michael J. Estaniel, President of private respondent Trans-Global, approvedthe request for leave of absence. On June 21, 1989, petitioner Millares wrote G.S. Hanly, OperationsManager of Exxon International Co., (now Esso International) through Michael J. Estaniel, informing him ofhis intention to avail of the optional retirement plan under the Consecutive Enlistment Incentive Plan (CEIP)considering that he had already rendered more than twenty (20) years of continuous service. On July 13,1989 respondent Esso International, through W.J. Vrints, Employee Relations Manager, denied petitionerMillares' request for optional retirement on the following grounds, to wit: (1) he was employed on a


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contractual basis; (2) his contract of enlistment (COE) did not provide for retirement before the age of sixty(60) years; and (3) he did not comply with the requirement for claiming benefits under the CEIP, i.e., tosubmit a written advice to the company of his intention to terminate his employment within thirty (30) daysfrom his last disembarkation date.

On August 9, 1989, petitioner Millares requested for an extension of his leave of absence from August 9 to24, 1989. On August 19, 1989, Roy C. Palomar, Crewing Manager, Ship Group A, Trans-global, wrotepetitioner Millares advising him that respondent Esso International "has corrected the deficiency in itsmanpower requirement specifically in the Chief Engineer rank by promoting a First Assistant Engineer to this

position as a result of (his) previous leave of absence which expired last August 8, 1989. The adjustment insaid rank was required in order to meet manpower schedules as a result of (his) inability."

On September 26, 1989, respondent Esso International, through H. Regenboog, Personnel Administrator,advised petitioner Millares that in view of his absence without leave, which is equivalent to abandonment ofhis position, he had been dropped from the roster of crew members effective September 1, 1989.

On the other hand, petitioner Lagda was employed by private respondent Esso International as wiper/oiler inJune 1969. He was promoted as Chief Engineer in 1980, a position he continued to occupy until his lastCOE expired on April 10, 1989. He was then receiving a monthly salary of US$1,939.00.

On May 16, 1989, petitioner Lagda applied for a leave of absence from June 19, 1989 up to the whole

month of August 1989. On June 14, 1989, respondent Trans-Global's President, Michael J. Estaniel,approved petitioner Lagda's leave of absence from June 22, 1989 to July 20, 1989 and advised him to reportfor re-assignment on July 21, 1989.

On June 26, 1989, petitioner Lagda wrote a letter to G.S. Stanley, Operations Manager of respondent EssoInternational, through respondent Trans-Global's President Michael J. Estaniel, informing him of his intentionto avail of the optional early retirement plan in view of his twenty (20) years continuous service in thecomplaint.

On July 13, 1989, respondent Trans-global denied petitioner Lagda's request for availment of the optionalearly retirement scheme on the same grounds upon which petitioner Millares request was denied.

On August 3, 1989, he requested for an extension of his leave of absence up to August 26, 1989 and thesame was approved. However, on September 27, 1989, respondent Esso International, through H.Regenboog, Personnel Administrator, advised petitioner Lagda that in view of his "unavailability forcontractual sea service," he had been dropped from the roster of crew members effective September 1,1989.

On October 5, 1989, petitioners Millares and Lagda filed a complaint-affidavit, docketed as POEA (M) 89-10-9671, for illegal dismissal and non-payment of employee benefits against private respondents EssoInternational and Trans-Global, before the POEA.5

On July 17, 1991, the POEA rendered a decision dismissing the complaint for lack of merit.

On appeal to the NLRC, the decision of the POEA was affirmed on June 1, 1993 with the following disquisition:

The first issue must be decided in the negative. Complainants-appellants, as seamen and overseas contractworkers are not covered by the term "regular employment" as defined under Article 280 of the Labor Code.The POEA, which is tasked with protecting the rights of the Filipino workers for overseas employment to fairand equitable recruitment and employment practices and to ensure their welfare, prescribes a standardemployment contract for seamen on board ocean-going vessels for a fixed period but in no case to exceedtwelve (12) months (Part 1, Sec. C). This POEA policy appears to be in consonance with the internationalmaritime practice. Moreover, the Supreme Court in Brent School, Inc. vs. Zamora, 181 SCRA 702, had heldthat a fixed term is essential and natural appurtenance of overseas employment contracts to which theconcept of regular employment with all that it implies is not applicable, Article 280 of the Labor Codenotwithstanding. There is, therefore, no reason to disturb the POEA Administrator's finding that


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complainants-appellants were hired on a contractual basis and for a definite period. Their employment isthus governed by the contracts they sign each time they are re-hired and is terminated at the expiration ofthe contract period.6

Undaunted, the petitioners elevated their case to this Court7 and successfully obtained the favorable action, which isnow vehemently being assailed.

At the hearing on November 15, 2000, the Court defined the issues for resolution in this case, namely:

I. ARE PETITIONERS REGULAR OR CONTRACTUAL EMPLOYEES WHOSE EMPLOYMENTS ARETERMINATED EVERYTIME THEIR CONTRACTS OF EMPLOYMENT EXPIRE?

II. ASSUMING THAT PETITIONERS ARE REGULAR EMPLOYEES, WERE THEY DISMISSED WITHOUTJUST CAUSE SO AS TO BE ENTITLED TO REINSTATEMENT AND BACKWAGES, INCLUDINGPAYMENT OF 100% OF THEIR TOTAL CREDITED CONTRIBUTIONS TO THE CONSECUTIVEENLISTMENT INCENTIVE PLAN (CEIP)?

III. DOES THE PROVISION OF THE POEA STANDARD CONTRACT FOR SEAFARERS ON BOARDFOREIGN VESSELS (SEC. C., DURATION OF CONTRACT) PRECLUDE THE ATTAINMENT BYSEAMEN OF THE STATUS OF REGULAR EMPLOYEES?

IV. DOES THE DECISION OF THE COURT IN G.R. NO. 110524 CONTRAVENE INTERNATIONALMARITIME LAW, ALLEGEDLY PART OF THE LAW OF THE LAND UNDER SECTION 2, ARTICLE II OFTHE CONSTITUTION?

V. DOES THE SAME DECISION OF THE COURT CONSTITUTE A DEPARTURE FROM ITS RULINGINCOYOCA VS. NLRC (G.R. NO. 113658, March 31, 1995)?8

In answer to the private respondents' Second Motion for Reconsideration and to FAME's Motion for Reconsiderationin Intervention, petitioners maintain that they are regular employees as found by the Court in the March 14, 2000Decision. Considering that petitioners performed activities which are usually necessary or desirable in the usualbusiness or trade of private respondents, they should be considered as regular employees pursuant to Article 280,Par. 1 of the Labor Code.9 Other justifications for this ruling include the fact that petitioners have rendered over

twenty (20) years of service, as admitted by the private respondents;10

that they were recipients of Merit Pay whichis an express acknowledgment by the private respondents that petitioners are regular and not just contractualemployees;11 that petitioners were registered under the Social Security System (SSS).

The petitioners further state that the case of Coyoca v. NLRC 12 which the private respondents invoke is notapplicable to the case at bar as the factual milieu in that case is not the same. Furthermore, private respondents'fear that our judicial pronouncement will spell the death of the manning industry is far from real. Instead, with thevaluable contribution of the manning industry to our economy, these seafarers are supposed to be considered as"Heroes of the Republic" whose rights must be protected.13 Finally, the first motion for reconsideration has alreadybeen denied with finality by this Court and it is about time that the Court should write finis to this case.

The private respondents, on the other hand, contend that: (a) the ruling holding petitioners as regular employeeswas not in accord with the decision in Coyoca v. NLRC, 243 SCRA 190; (b) Art. 280 is not applicable as whatapplies is the POEA Rules and Regulations Governing Overseas Employment; (c) seafarers are not regularemployees based on international maritime practice; (d) grave consequences would result on the future of seafarersand manning agencies if the ruling is not reconsidered; (e) there was no dismissal committed; (f) a dismissedseafarer is not entitled to back wages and reinstatement, that being not allowed under the POEA rules and theMigrant Workers Act; and, (g) petitioners are not entitled to claim the total amount credited to their account underthe CEIP.14

Meanwhile, Intervenor Filipino Association of Mariners Employment (FAME) avers that our decision, if notreconsidered, will have negative consequences in the employment of Filipino Seafarers overseas which, in turn,might lead to the demise of the manning industry in the Philippines. As intervenor FAME puts it:


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xxx

7.1 Foreign principals will start looking for alternative sources for seafarers to man their ships. AS reportedby the BIMCO/ISF study, "there is an expectancy that there will be an increasing demand for (and supply of)Chinese seafarers, with some commentators suggesting that this may be a long-term alternative to thePhilippines." Moreover, "the political changes within the former Eastern Bloc have made new sources ofsupply available to the international market." Intervenor's recent survey among its members shows that 50Philippine manning companies had already lost some 6,300 slots to other Asian, East Europe and Chinesecompetition for the last two years;

7.2 The Philippine stands to lose an annual foreign income estimated at U.S. DOLLARS TWO HUNDREDSEVENTY FOUR MILLION FIVE HUNDRED FORTY NINE THOUSAND (US$ 274,549,000.00) from themanning industry and another US DOLLARS FOUR BILLION SIX HUNDRED FIFTY MILLION SEVENHUNDRED SIX THOUSAND (US$ 4,650,760,000.00) from the land-based sector if seafarers and equallysituated land-based contract workers will be declared regular employees;

7.3 Some 195,917 (as of 1998) deployed overseas Filipino seafarers will be rendered jobless should we losethe market;

7.4 Some 360 manning agencies (as of 30 June 2000) whose principals may no longer be doing businesswith them will close their shops;

7.5 The contribution to the Overseas Worker's Welfare Administration by the sector, which is USD 25.00 percontract and translates to US DOLLARS FOUR MILLION (US$ 4,000,000.00)annually, will be drasticallyreduced. This is not to mention the processing fees paid to POEA, Philippine Regulatory Commission(PRC), Department of Foreign Affairs (DFA) and Maritime Industry Authority (MARINA) for thedocumentation of these seafarers;

7.6 Worst, some 195,917 (as of 1998) families will suffer socially and economically, as their breadwinnerswill be rendered jobless; and

7.7 It will considerably slow down the government's program of employment generation, considering that, asexpected foreign employers will now avoid hiring Filipino overseas contract workers as they will become

regular employees with all its concomitant effects.

15

Significantly, the Office of the Solicitor General, in a departure from its original position in this case, has now takenthe opposite view. It has expressed its apprehension in sustaining our decision and has called for a re-examinationof our ruling.16

Considering all the arguments presented by the private respondents, the Intervenor FAME and the OSG, we agreethat there is a need to reconsider our position with respect to the status of seafarers which we considered as regularemployees under Article 280 of the Labor Code. We, therefore, partially grant the second motion for reconsideration.

In Brent School Inc. v. Zamora,17 the Supreme Court stated that Article 280 of the Labor Code does not apply tooverseas employment.

In the light of the foregoing description of the development of the provisions of the Labor Code bearing onterm or fixed-period employment that the question posed in the opening paragraph of this opinion shouldnow be addressed. Is it then the legislative intention to outlaw stipulations in employment contracts layingdown a definite period therefor? Are such stipulations in essence contrary to public policy and should not onthis account be accorded legitimacy?

On the other hand, there is the gradual and progressive elimination of references to term or fixed-periodemployment in the Labor Code, and the specific statement of the rule that:

Regular and Casual Employment – The provisions of written agreement to the contrarynotwithstanding and regardless of the oral agreement of the parties, an employment shall be


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deemed to be regular where the employee has been engaged to perform activities which are usuallynecessary or desirable in the usual business or trade of the employer except where the employmenthas been fixed for a specific project or undertaking the completion or termination of which has beendetermined at the time of the engagement of the employee or where the work or service to beemployee is seasonal in nature and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph;provided that, any employee who has rendered at least one year of service, whether such service iscontinuous or broken, shall be considered a regular employee with respect to the activity in which he

is employed and his employment shall continue while such actually exists.

There is, on the other hand, the Civil Code, which has always recognized, and continues to recognize, thevalidity and propriety of contracts and obligations with a fixed or definite period, and imposes no restraintson the freedom of the parties to fix the duration of a contract, whatever its object, be it specific, goods orservices, except the general admonition against stipulations contrary to law, morals, good customs, publicorder or public policy. Under the Civil code, therefore, and as a general proposition, fixed-term employmentcontracts are not limited, as they are under the present Labor Code, to those by natural seasonal or forspecific projects with predetermined dates of completion; they also include those to which the parties by freechoice have assigned a specific date of termination.

Some familiar examples may be cited of employment contract which may be neither for seasonal

work nor for specific projects, but to which a fixed term is an essential and natural appurtenance:overseas employment contracts, for one, to which, whatever the nature of the engagement, theconcept of regular employment with all that it implies does not appear ever to have beenapplied. Article 280 of the Labor Code notwithstanding also appointments to the positions of dean, assistantdean, college secretary, principal, and other administrative offices in educational institutions, which are bypractice or tradition rotated among the faculty members, and where fixed terms are a necessity withoutwhich no reasonable rotation would be possible. Similarly, despite the provisions of Article 280, PolicyInstructions. No. 8 of the Minister of Labor implicitly recognize that certain company officials may be electedfor what would amount to fix periods, at the expiration of which they would have to stand down, in providingthat these officials, xxx may lose their jobs as president, executive vice-president or vice-president, etc.because the stockholders or the board of directors for one reason or another did not reelect them.

There can of course be no quarrel with the proposition that where from the circumstances it is apparent that

periods have been imposed to preclude acquisition of tenurial security by the employee, they should bestruck down or disregard as contrary to public policy, morals, etc. But where no such intent to circumvent thelaw is shown, or stated otherwise, where the reason for the law does not exists, e.g., where it is indeed theemployee himself who insists upon a period or where the nature of the engagement is such that, withoutbeing seasonal or for a specific project, a definite date of termination is a sine qua non, would an agreementfixing a period be essentially evil or illicit, therefore anathema? Would such an agreement come within thescope of Article 280 which admittedly was enacted "to prevent the circumvention of the right of the employeeto be secured in xxx his employment

As it is evident from even only the three examples already given that Article 280 of the Labor Code, under anarrow and literal interpretation, not only fails to exhaust the gamut of employment contracts to which thelack of a fixed period would be an anomaly, but would also appear to restrict, without reasonable

distinctions, the right of an employee to freely stipulate within his employer the duration of his engagement, itlogically follows that such a literal interpretation should be eschewed or avoided. The law must be given areasonable interpretation, to preclude absurdity in its application. Outlawing the whole concept of termemployment and subverting to boot the principle of freedom of contract to remedy the evil of employer'susing it as a means to prevent their employees from obtaining security of tenure is like cutting off the nose tospite the face or, more relevantly, curing a headache by lopping of the head.

It is a salutary principle in statutory construction that there exists a valid presumption thatundesirable consequences were never intended by a legislative measure, and that a construction ofwhich the statute is fairly susceptible is favored, which will avoid all objectionable, mischievous,indefensible, wrongful, evil, and injurious consequences."


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Nothing is better settled than that courts are not to give words a meaning which would lead to absurdor unreasonable consequences. That is a principle that goes back to In re Allen decided on October27, 1902, where it was held that a literal interpretation is to be rejected if it would be unjust or lead toabsurd results. That is a strong argument against its adoption. The words of Justice Laurel areparticularly apt. Thus: "the appellants would lead to an absurdity is another argument for rejecting it."

xxx We have, here, then a case where the true intent of the law is clear that calls for the applicationof the cardinal rule of statutory construction that such intent of spirit must prevail over the letterthereof, for whatever is within the spirit of a statute is within the statute, since adherence to the letter

would result in absurdity, injustice and contradictions and would defeat the plain and vital purpose ofthe statute.

Accordingly, and since the entire purpose behind the development of legislation culminating in thepresent Article 280 of the Labor code clearly appears to have been, as already observed, to preventcircumvention of the employee's right to be secure in his tenure, the clause in said articleindiscriminately and completely ruling out all written or oral agreements conflicting with the conceptof regular employment as defined therein should be construed to refer to the substantive evil thatthe Code itself has singled out; agreements entered into precisely to circumvent security of tenure.It should have no application to instances where a fixed period of employment was agreed uponknowingly and voluntarily by the parties, without any force, duress or improper pressure beingbrought to bear upon the employee and absent any other circumstances vitiating his consent, orwhere it satisfactorily appears that the employer and employee dealt with each other on more or lessequal terms with no moral dominance whatever being exercised by the former over the latter. Unlessthus limited in its purview, the law would be made to apply to purposes other than those explicitly stated byits framers; it thus becomes pointless and arbitrary, unjust in its effects and apt to lead to absurd andunintended consequences.

Again, in Pablo Coyoca v. NLRC ,18 the Court also held that a seafarer is not a regular employee and is not entitledto separation pay. His employment is governed by the POEA Standard Employment Contract for Filipino Seamen.

x x x. In this connection, it is important to note that neither does the POEA standard employment contract forFilipino seamen provide for such benefits.

As a Filipino seaman, petitioner is governed by the Rules and Regulations Governing Overseas

Employment and the said Rules do not provide for separation or termination pay. What is embodied inpetitioner's contract is the payment of compensation arising from permanent partial disability during theperiod of employment. We find that private respondent complied with the terms of contract when it paidpetitioner P42,315.00 which, in our opinion, is a reasonable amount, as compensation for his illness.

Lastly, petitioner claims that he eventually became a regular employee of private respondent and thus fallswithin the purview of Articles 284 and 95 of the Labor Code. In support of this contention, petitioner cites thecase of Worth Shipping Service, Inc., et al. v. NLRC, et al., wherein we held that the crew members of theshipping company had attained regular status and thus, were entitled to separation pay. However, the factsof said case differ from the present. In Worth, we held that the principal and agent had "operational controland management" over the MV Orient Carrier and thus, were the actual employers of their crew members.

From the foregoing cases, it is clear that seafarers are considered contractual employees. They can not beconsidered as regular employees under Article 280 of the Labor Code. Their employment is governed by thecontracts they sign everytime they are rehired and their employment is terminated when the contract expires. Theiremployment is contractually fixed for a certain period of time. They fall under the exception of Article 280 whoseemployment has been fixed for a specific project or undertaking the completion or termination of which has beendetermined at the time of engagement of the employee or where the work or services to be performed is seasonal innature and the employment is for the duration of the season. 19 We need not depart from the rulings of the Court inthe two aforementioned cases which indeed constitute stare decisis with respect to the employment status ofseafarers.

Petitioners insist that they should be considered regular employees, since they have rendered services which areusually necessary and desirable to the business of their employer, and that they have rendered more than


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twenty(20) years of service. While this may be true, the Brent case has, however, held that there are certain formsof employment which also require the performance of usual and desirable functions and which exceed one year butdo not necessarily attain regular employment status under Article 280. 20 Overseas workers including seafarers fallunder this type of employment which are governed by the mutual agreements of the parties.

In this jurisdiction and as clearly stated in the Coyoca case, Filipino seamen are governed by the Rules andRegulations of the POEA. The Standard Employment Contract governing the employment of All Filipino seamen onBoard Ocean-Going Vessels of the POEA, particularly in Part I, Sec. C specifically provides that the contract ofseamen shall be for a fixed period. And in no case should the contract of seamen be longer than 12 months. It

reads:

Section C. Duration of Contract

The period of employment shall be for a fixed period but in no case to exceed 12 months and shall be statedin the Crew Contract. Any extension of the Contract period shall be subject to the mutual consent of theparties.

Moreover, it is an accepted maritime industry practice that employment of seafarers are for a fixed period only.Constrained by the nature of their employment which is quite peculiar and unique in itself, it is for the mutual interestof both the seafarer and the employer why the employment status must be contractual only or for a certain period oftime. Seafarers spend most of their time at sea and understandably, they can not stay for a long and an indefinite

period of time at sea.21

Limited access to shore society during the employment will have an adverse impact on theseafarer. The national, cultural and lingual diversity among the crew during the COE is a reality that necessitates thelimitation of its period.22

Petitioners make much of the fact that they have been continually re-hired or their contracts renewed before thecontracts expired (which has admittedly been going on for twenty (20) years). By such circumstance they claim tohave acquired regular status with all the rights and benefits appurtenant to it.

Such contention is untenable. Undeniably, this circumstance of continuous re-hiring was dictated by practicalconsiderations that experienced crew members are more preferred. Petitioners were only given priority orpreference because of their experience and qualifications but this does not detract the fact that herein petitionersare contractual employees. They can not be considered regular employees. We quote with favor the explanation ofthe NLRC in this wise:

xxx The reference to "permanent" and "probationary" masters and employees in these papers is a misnomerand does not alter the fact that the contracts for enlistment between complainants-appellants andrespondent-appellee Esso International were for a definite periods of time, ranging from 8 to 12 months.

Although the use of the terms "permanent" and "probationary" is unfortunate, what is really meant is "eligiblefor-re-hire". This is the only logical conclusion possible because the parties cannot and should not violatePOEA's requirement that a contract of enlistment shall be for a limited period only; not exceeding twelve(12)months.23

From all the foregoing, we hereby state that petitioners are not considered regular or permanent employees under Article 280 of the Labor Code. Petitioners' employment have automatically ceased upon the expiration of theircontracts of enlistment (COE). Since there was no dismissal to speak of, it follows that petitioners are not entitled to

reinstatement or payment of separation pay or backwages, as provided by law.

With respect to the benefits under the Consecutive Enlistment Incentive Plan (CEIP), we hold that the petitioners arestill entitled to receive 100% of the total amount credited to him under the CEIP. Considering that we have declaredthat petitioners are contractual employees, their compensation and benefits are covered by the contracts theysigned and the CEIP is part and parcel of the contract.

The CEIP was formulated to entice seamen to stay long in the company. As the name implies, the program servesas an incentive for the employees to renew their contracts with the same company for as long as their services wereneeded. For those who remained loyal to them, they were duly rewarded with this additional remuneration under theCEIP, if eligible. While this is an act of benevolence on the part of the employer, it can not, however, be denied that


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this is part of the benefits accorded to the employees for services rendered. Such right to the benefits is vested uponthem upon their eligibility to the program.

The CEIP provides that an employee becomes covered under the Plan when he completes thirty-six (36) months oran equivalent of three (3) years of credited service with respect to employment after June 30, 1973.24 Uponeligibility, an amount shall be credited to his account as it provides, among others:

III. Distribution of Benefits

A. Retirement, Death and Disability

When the employment of an employee terminates because of his retirement, death or permanent and totaldisability, a percentage of the total amount credited to his account will be distributed to him (or his eligiblesurvivor(s) in accordance with the following:

Reason for Termination Percentage

a) Attainment of mandatory retirement age of 60. 100%

b) Permanent and total disability, while undercontract, that is not due to accident ormisconduct.

100%

c) Permanent and total disability, while undercontract, that is due to accident, and not due tomisconduct.

100%

xxx

B. Voluntary Termination

When an employee voluntary terminates his employment with at least 36 months of credited service withoutany misconduct on his part, 18 percent of the total amount credited to his account, plus an additional ½ ofone percent for each month (up to a maximum of 164 months of credited service in excess of 36, will bedistributed to him provided (1) the employee has completed his last Contract of Enlistment and (2) employee

advises the company in writing, within 30 days, from his last disembarkation date, of his intention toterminate his employment. (To advise the Company in writing means that the original letter must be sent tothe Company's agent in the Philippines, a copy sent to the Company in New York).

xxx

C. Other Terminations

When the employment of an employee is terminated by the Company for a reason other than one in A and Babove, without any misconduct on his part, a percentage of the total amount credited to his account will bedistributed to him in accordance with the following.

Credited Service Percentage

36 months 50%

48 " 75%

60 " 100%

When the employment of an employee is terminated due to his poor-performance, misconduct,unavailability, etc., or if employee is not offered re-engagement for similar reasons, no distribution of anyportion of employee's account will ever be made to him (or his eligible survivor[s]).


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It must be recalled that on June 21, 1989, Millares wrote a letter to his employer informing his intention to avail ofthe optional retirement plan under the CEIP considering that he has rendered more than twenty (20) years ofcontinuous service. Lagda, likewise, manifested the same intention in a letter dated June 26, 1989. Privaterespondent, however, denied their requests for benefits under the CEIP since: (1) the contract of enlistment (COE)did not provide for retirement before 60 years of age; and that (2) petitioners failed to submit a written notice of theirintention to terminate their employment within thirty (30) days from the last disembarkation date pursuant to theprovision on Voluntary Termination of the CEIP. Petitioners were eventually dropped from the roster of crewmembers and on grounds of "abandonment" and "unavailability for contractual sea service", respectively, they weredisqualified from receiving any benefits under the CEIP.25

In our March 14, 2000 Decision, we, however, found that petitioners Millares and Lagda were not guilty of"abandonment" or "unavailability for contractual sea service," as we have stated:

The absence of petitioners was justified by the fact that they secured the approval of private respondents totake a leave of absence after the termination of their last contracts of enlistment. Subsequently, petitionerssought for extensions of their respective leaves of absence. Granting arguendo that their subsequentrequests for extensions were not approved, it cannot be said that petitioners were unavailable or hadabandoned their work when they failed to report back for assignment as they were still questioning thedenial of private respondents of their desire to avail of the optional early retirement policy, which theybelieved in good faith to exist.26

Neither can we consider petitioners guilty of poor performance or misconduct since they were recipients of Merit Pay Awards for their exemplary performances in the company.

Anent the letters dated June 21, 1989 (for Millares) and June 26, 1989 (for Lagda) which private respondentconsidered as belated written notices of termination, we find such assertion specious. Notwithstanding, we couldconveniently consider the petitioners eligible under Section III-B of the CEIP (Voluntary Termination), but this would,however, award them only a measly amount of benefits which to our mind, the petitioners do not rightfully deserveunder the facts and circumstances of the case. As the CEIP provides:

III. Distribution of Benefits

xxx

E. Distribution of Accounts

When an employee terminates under conditions that would qualify for a distribution of more than onespecified in A, B or C above, the largest single amount, only, will be distributed.

Since petitioners' termination of employment under the CEIP do not fall under Section III-A (Retirement, Death andDisability) or Section III-B (Voluntary Termination), nor could they be they be considered under the secondparagraph of Section III-C, as earlier discussed; it follows that their termination falls under the first paragraph ofSection III-C for which they are entitled to 100% of the total amount credited to their accounts. The privaterespondents can not now renege on their commitment under the CEIP to reward deserving and loyal employees asthe petitioners in this case.

In taking cognizance of private respondent's Second Motion for Reconsideration, the Court hereby suspends therules to make them comformable to law and justice and to subserve an overriding public interest.

IN VIEW OF THE FOREGOING, the Court Resolved to Partially GRANT Private Respondent's Second Motion forReconsideration and Intervenor FAMES' Motion for Reconsideration in Intervention. The Decision of the NationalLabor Relations Commission dated June 1, 1993 is hereby REINSTATED with MODIFICATION. The PrivateRespondents, Trans-Global Maritime Agency, Inc. and Esso International Shipping Co., Ltd. are hereby jointly andseverally ORDERED to pay petitioners One Hundred Percent (100%) of their total credited contributions as providedunder the Consecutive Enlistment Incentive Plan(CEIP).

SO ORDERED.


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G.R. No. 127195 August 25, 1999

MARSAMAN MANNING AGENCY, INC. and DIAMANTIDES MARITIME, INC., petitioners,vs.NATIONAL LABOR RELATIONS COMMISSION and WILFREDO T. CAJERAS, respondents.

BELLOSILLO, J.:

MARSAMAN MANNING AGENCY, INC. (MARSAMAN) and its foreign principal DIAMANTIDES MARITIME, INC.(DIAMANTIDES) assail the Decision of public respondent National Labor Relations Commission dated 16September 1996 as well as its Resolution dated 12 November 1996 affirming the Labor Arbiter's decision findingthem guilty of illegal dismissal and ordering them to pay respondent Wilfredo T. Cajeras salaries corresponding tothe unexpired portion of his employment contract, plus attorney's fees.

Private respondent Wilfredo T. Cajeras was hired by petitioner MARSAMAN, the local manning agent of petitionerDIAMANTIDES, as Chief Cook Steward on the MV Prigipos, owned and operated by DIAMANTIDES, for a contractperiod of ten (10) months with a monthly salary of US$600.00, evidenced by a contract between the parties dated15 June 1995. Cajeras started work on 8 August 1995 but less than two (2) months later, or on 28 September 1995,he was repatriated to the Philippines allegedly by "mutual consent."

On 17 November 1995 private respondent Cajeras filed a complaint for illegal dismissal against petitioners with the

NLRC National Capital Region Arbitration Branch alleging that he was dismissed illegally, denying that hisrepatriation was by mutual consent, and asking for his unpaid wages, overtime pay, damages, and attorney'sfees.1 Cajeras alleged that he was assigned not only as Chief Cook Steward but also as assistant cook andmessman in addition to performing various inventory and requisition jobs. Because of his additional assignments hebegan to feel sick just a little over a month on the job constraining him to request for medical attention. He wasrefused at first by Capt. Kouvakas Alekos, master of the MV Prigipos, who just ordered him to continue working.However a day after the ship's arrival at the port of Rotterdam, Holland, on 26 September 1995 Capt. Alekosrelented and had him examined at the Medical Center for Seamen. However, the examining physician, Dr. WdenHoed, neither apprised private respondent about the diagnosis nor issued the requested medical certificate allegedlybecause he himself would forward the results to private respondent's superiors. Upon returning to the vessel, privaterespondent was unceremoniously ordered to prepare for immediate repatriation the following day as he was said tobe suffering from a disease of unknown origin. 1âwphi1.nêt

On 28 September 1995 he was handed his Seaman's Service Record Book with the following entry: "Cause ofdischarge — Mutual Consent."2 Private respondent promptly objected to the entry but was not able to do anythingmore as he was immediately ushered to a waiting taxi which transported him to the Amsterdam Airport for the returnflight to Manila. After his arrival in Manila on 29 September 1995. Cajeras complained to MARSAMAN but to noavail.3

MARSAMAN and DIAMANTIDES, on the other hand, denied the imputation of illegal dismissal. They alleged thatCajeras approached Capt. Alekos on 26 September 1995 and informed the latter that he could not sleep at nightbecause he felt something crawling over his body. Furthermore, Cajeras reportedly declared that he could no longerperform his duties and requested for repatriation. The following paragraph in the vessel's Deck Log was allegedlyentered by Capt. Alekos, to wit:

Cajeras approached me and he told me that he cannot sleep at night and that he feels something crawlingon his body and he declared that he can no longer perform his duties and he must be repatriated. 4

Private respondent was then sent to the Medical Center for Seamen at Rotterdam where he was examined by Dr.Wden Hoed whose diagnosis appeared in a Medical Report as "paranoia" and "other mentalproblems."5Consequently, upon Dr. Hoed's recommendation, Cajeras was repatriated to the Philippines on 28September 1995.

On 29 January 1996 Labor Arbiter Ernesto S. Dinopol resolved the dispute in favor of private respondent Cajerasruling that the latter's discharge from the MV Prigipos allegedly by "mutual consent" was not proved by convincingevidence. The entry made by Capt. Alekos in the Deck Log was dismissed as of little probative value because it wasa mere unilateral act unsupported by any document showing mutual consent of Capt. Alekos, as master of the MV


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Prigipos, and Cajeras to the premature termination of the overseas employment contract as required by Sec. H ofthe Standard Employment Contract Governing the Employment of all Filipino Seamen on Board Ocean-GoingVessels. Dr. Hoed's diagnosis that private respondent was suffering from "paranoia" and "other mental problems"was likewise dismissed as being of little evidentiary value because it was not supported by evidence on how theparanoia was contracted, in what stage it was, and how it affected respondent's functions as Chief Cook Stewardwhich, on the contrary, was even rated "Very Good" in respondent's Service Record Book. Thus, the Labor Arbiterdisposed of the case as follows:

WHEREFORE, judgment is hereby rendered declaring the repatriation and dismissal of complaint Wilfredo

T. Cajeras as illegal and ordering respondents Marsaman Manning Agency, Inc. and Diamantides Maritime,Inc. to jointly and severally pay complainant the sum of USD 5,100.00 or its peso equivalent at the time ofpayment plus USD 510.00 as 10% attorney's fees it appearing that complainant had to engage the serviceof counsel to protect his interest in the prosecution of this case.

The claims for nonpayment of wages and overtime pay are dismissed for having been withdrawn (Minutes,December 18, 1995). The claims for damages are likewise dismissed for lack of merit, since no evidencewas presented to show that bad faith characterized the dismissal.6

Petitioners appealed to the NLRC.7 On 16 September 1996 the NLRC affirmed the appealed findings andconclusions of the Labor Arbiter.8 The NLRC subscribed to the view that Cajeras' repatriation by alleged mutualconsent was not proved by petitioners, especially after noting that private respondent did not actually sign his

Seaman's Service Record Book to signify his assent to the repatriation as alleged by petitioners. The entry made byCapt. Alekos in the Deck Log was not considered reliable proof that private respondent agreed to his repatriationbecause no opportunity was given the latter to contest the entry which was against his interest. Similarly, theMedical Report issued by Dr. Hoed of Holland was dismissed as being of dubious value since it contained only asweeping statement of the supposed ailment of Cajeras without any elaboration on the factual basis thereof.

Petitioners' motion for reconsideration was denied by the NLRC in its Resolution dated 12 November 1996. 9Hence,this petition contending that the NLRC committed grave abuse of discretion: (a) in not according full faith and creditto the official entry by Capt. Alekos in the vessel's Deck Log conformably with the rulings in Haverton ShippingLtd . v . NLRC 10 and Wallem Maritime Services, Inc . v . NLRC;11 (b) in not appreciating the Medical Report issued byDr. Wden Hoed as conclusive evidence that respondent Cajeras was suffering from paranoia and other mentalproblems; (c) in affirming the award of attorney's fees despite the fact that Cajeras' claim for exemplary damageswas denied for lack of merit; and, (d) in ordering a monetary award beyond the maximum of three (3) months' salary

for every year of service set by RA 8042.

We deny the petition. In the Contract of Employment 12 entered into with private respondent, petitioners convenantedstrict and faithful compliance with the terms and conditions of the Standard Employment Contract approved by thePOEA/DOLE13 which provides:

1. The employment of the seaman shall cease upon expiration of the contract period indicated in the CrewContract unless the Master and the Seaman, by mutual consent , in writing agree to an early termination . . . (emphasis our).

Clearly, under the foregoing, the employment of a Filipino seaman may be terminated prior to the expiration of thestipulated period provided that the master and the seaman (a) mutually consent thereto and (b) reduce their

consent in writing .

In the instant case, petitioners do not deny the fact that they have fallen short of the requirement. No documentexists whereby Capt. Alekos and private respondent reduced to writing their alleged "mutual consent" to thetermination of their employment contract. Instead, petitioners presented the vessel's Deck Log wherein anentryunilaterally made by Capt. Alekos purported to show that private respondent himself asked for his repatriation.However, the NLRC correctly dismissed its evidentiary value. For one thing, it is a unilateral act which is vehementlydenied by private respondent. Secondly, the entry in no way satisfies the requirement of a bilateral documentation toprove early termination of an overseas employment contract by mutual consent required by the StandardEmployment Contract. Hence, since the latter sets the minimum terms and conditions of employment for theprotection of Filipino seamen subject only to the adoption of better terms and conditions over and above theminimum standards,14 the NLRC could not be accused of grave abuse of discretion in not accepting any thing less.


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However petitioners contend that the entry should be considered prima facie evidence that respondent himselfrequested his repatriation conformably with the rulings in Haverton Shipping Ltd . v . NLRC 15 and Abacast Shippingand Management Agency , Inc . v . NLRC.16 Indeed, Haverton says that a vessel's log book is prima facieevidence ofthe facts stated therein as they are official entries made by a person in the performance of a duty required by law.However, this jurisprudential principle does not apply to win the case for petitioners. In Wallem MaritimeServices, Inc . v . NLRC 17 the Haverton ruling was not given unqualified application because the log book presentedtherein was a mere typewritten collation of excerpts from what could be the log book.18 The Court reasoned thatsince the log book was the only piece of evidence presented to prove just cause for the termination of respondenttherein, the log book had to be duly identified and authenticated lest an injustice would result from a blind adoption

of its contents which were but prima facie evidence of the incidents stated therein.

In the instant case, the disputed entry in the Deck Log was neither authenticated nor supported by credibleevidence. Although petitioners claim that Cajeras signed his Seaman's Service Record Book to signify hisconformity to the repatriation, the NLRC found the allegation to be actually untrue since no signature of privaterespondent appeared in the Record Book.

Neither could the "Medical Report" prepared by Dr. Hoed be considered corroborative and conclusive evidence thatprivate respondent was suffering from "paranoia" and "other mental problems," supposedly just causes for hisrepatriation. Firstly, absolutely no evidence, not even an allegation, was offered to enlighten the NLRC or this Courtas to Dr. Hoed's qualifications to diagnose mental illnesses. It is a matter of judicial notice that there are variousspecializations in medical science and that a general practitioner is not competent to diagnose any and all kinds ofillnesses and diseases. Hence, the findings of doctors who are not proven experts are not binding on thisCourt.19 Secondly, the Medical Report prepared by Dr. Hoed contained only a general statement that privaterespondent was suffering from "paranoia" and "other mental problems" without providing the details on how thediagnosis was arrived at or in what stage the illness was. If Dr. Hoed indeed competently examined privaterespondent then he would have been able to discuss at length the circumstances and precedents of his diagnosis.Petitioners cannot rely on the presumption of regularity in the performance of official duties to make the MedicalReport acceptable because the presumption applies only to public officers from the highest to the lowest in theservice of the Government, departments, bureaus, offices, and/or its political subdivisions, 20 which Dr. Wden Hoedwas not shown to be. Furthermore, neither did petitioners prove that private respondent was incompetent orcontinuously incapacitated for the duties for which he was employed by reason of his alleged mental state. On thecontrary his ability as Chief Cook Steward, up to the very moment of his repatriation, was rated "Very Good" in hisSeaman's Service Record Book as correctly observed by public respondent.

Considering all the foregoing we cannot ascribe grave abuse of discretion on the part of the NLRC in ruling thatpetitioners failed to prove just cause for the termination of private respondent's overseas employment. Grave abuseof discretion is committed only when the judgment is rendered in a capricious, whimsical, arbitrary or despoticmanner, which is not true in the present case. 21

With respect to attorney's fees, suffice it to say that in actions for recovery of wages or where an employee wasforced to litigate and thus incurred expenses to protect his rights and interests, a maximum award of ten percent(10%) of the monetary award by way of attorney's fees is legally and morally justifiable under Art. 111 of the LaborCode,22 Sec. 8, Rule VIII, Book III of its Implementing Rules,23 and par. 7, Art. 220824 of the Civil Code.25The caseof Albenson Enterprises Corporation v . Court of Appeals26 cited by petitioners in arguing against the award ofattorney's fees is clearly not applicable, being a civil action for damages which deals with only one of the eleven (11)instances when attorney's fees could be recovered under Art. 2208 of the Civil Code.

Lastly, on the amount of salaries due private respondent, the rule has always been that an illegally dismissed workerwhose employment is for a fixed period is entitled to payment of his salaries corresponding to the unexpired portionof his employment.27 However on 15 July 1995, RA 8042 otherwise known as the "Migrant Workers and OverseasFilipinos Act of 1995" took effect, Sec. 10 of which provides:

Sec. 10. In case of termination of overseas employment without just, valid or authorized cause as defined bylaw or contract, the worker shall be entitled to the full reimbursement of his placement fee with interest attwelve percent (12%) per annum, plus his salaries for the unexpired portion of the employment contract orfor three (3) months for every year of the unexpired term whichever is less (emphasis ours).


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The Labor Arbiter, rationalizing that the aforesaid law did not apply since it became effective only one (1) monthafter respondent's overseas employment contract was entered into on 15 June 1995, simply awarded privaterespondent his salaries corresponding to the unexpired portion of his employment contract, i .e., for 8.6 months. TheNLRC affirmed the award and the Office of the Solicitor General (OSG) fully agreed. But petitioners now insist thatSec. 10, RA 8042 is applicable because although private respondent's contract of employment was entered intobefore the law became effective his alleged cause of action, i .e., his repatriation on 28 September 1995 without just,valid or authorized cause, occurred when the law was already in effect. Petitioners' purpose in so arguing is toinvoke the law in justifying a lesser monetary award to private respondent, i .e., salaries for three (3) months onlypursuant to the last portion of Sec. 10 as opposed to the salaries for 8.6 months awarded by the Labor Arbiter and

affirmed by the NLRC.

We agree with petitioners that Sec. 10, RA 8042, applies in the case of private respondent and to all overseascontract workers dismissed on or after its effectivity on 15 July 1995 in the same way that Sec. 34,28 RA 6715,29ismade applicable to locally employed workers dismissed on or after 21 March 1989. 30 However, we cannot subscribeto the view that private respondent is entitled to three (3) months' salary only. A plain reading of Sec. 10 clearlyreveals that the choice of which amount to award an illegally dismissed overseas contract worker, i .e., whether hissalaries for the unexpired portion of his employment contract or three (3) months' salary for every year of theunexpired term, whichever is less, comes into play only when the employment contract concerned has a term of atleast one (1) year or more. This is evident from the words "for every year of the unexpired term" which follows thewords "salaries . . . for three months." To follow petitioners' thinking that private respondent is entitled to three (3)months salary only simply because it is the lesser amount is to completely disregard and overlook some words usedin the statute while giving effect to some. This is contrary to the well-established rule in legal hermeneutics that ininterpreting a statute, care should be taken that every part or word thereof be given effect31 since the law-makingbody is presumed to know the meaning of the words employed in the statue and to have used them advisedly. 32 Utres magis valeat quam pereat .33

WHEREFORE, the questioned Decision and Resolution dated 16 September 1996 and 12 November 1996,respectively, of public respondent National Labor Relations Commission are AFFIRMED. Petitioners MARSAMANMANNING AGENCY, INC., and DIAMANTIDES MARITIME, INC., are ordered, jointly and severally, to pay privaterespondent WILFREDO T. CAJERAS his salaries for the unexpired portion of his employment contract orUSD$5,100.00, reimburse the latter's placement fee with twelve percent (12%) interest per annum conformably withSec. 10 of RA 8042, as well as attorney's fees of ten percent (10%) of the total monetary award. Costs againstpetitioners. 1âwphi 1.nêt

SO ORDERED.


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G.R. No. 167614 March 24, 2009

ANTONIO M. SERRANO, Petitioner,vs.Gallant MARITIME SERVICES, INC. and MARLOW NAVIGATION CO., INC., Respondents.

D E C I S I O N

AUSTRIA-MARTINEZ, J.:

For decades, the toil of solitary migrants has helped lift entire families and communities out of poverty. Theirearnings have built houses, provided health care, equipped schools and planted the seeds of businesses. Theyhave woven together the world by transmitting ideas and knowledge from country to country. They have providedthe dynamic human link between cultures, societies and economies. Yet, only recently have we begun tounderstand not only how much international migration impacts development, but how smart public policies canmagnify this effect.

United Nations Secretary-General Ban Ki-MoonGlobal Forum on Migration and DevelopmentBrussels, July 10, 20071

For Antonio Serrano (petitioner), a Filipino seafarer, the last clause in the 5th paragraph of Section 10, Republic Act(R.A.) No. 8042,2 to wit:

Sec. 10. Money Claims. - x x x In case of termination of overseas employment without just, valid or authorizedcause as defined by law or contract, the workers shall be entitled to the full reimbursement of his placement fee withinterest of twelve percent (12%) per annum, plus his salaries for the unexpired portion of his employment contract orfor th ree (3) months for every year of the unexpired term, wh ichever is less.

x x x x (Emphasis and underscoring supplied)

does not magnify the contributions of overseas Filipino workers (OFWs) to national development, but exacerbatesthe hardships borne by them by unduly limiting their entitlement in case of illegal dismissal to their lump-sum salary

either for the unexpired portion of their employment contract "or for three months for every year of the unexpiredterm, whichever is less" (subject clause). Petitioner claims that the last clause violates the OFWs' constitutionalrights in that it impairs the terms of their contract, deprives them of equal protection and denies them due process.

By way of Petition for Review under Rule 45 of the Rules of Court, petitioner assails the December 8, 2004Decision3 and April 1, 2005 Resolution4 of the Court of Appeals (CA), which applied the subject clause, entreatingthis Court to declare the subject clause unconstitutional.

Petitioner was hired by Gallant Maritime Services, Inc. and Marlow Navigation Co., Ltd. (respondents) under aPhilippine Overseas Employment Administration (POEA)-approved Contract of Employment with the following termsand conditions:

Duration of contract 12 months

Position Chief Officer

Basic monthly salary US$1,400.00

Hours of work 48.0 hours per week

Overtime US$700.00 per month

Vacation leave with pay 7.00 days per month5

http://www.lawphil.net/judjuris/juri2009/mar2009/gr_167614_2009.html#fnt1http://www.lawphil.net/judjuris/juri2009/mar2009/gr_167614_2009.html#fnt1http://www.lawphil.net/judjuris/juri2009/mar2009/gr_167614_2009.html#fnt2http://www.lawphil.net/judjuris/juri2009/mar2009/gr_167614_2009.html#fnt2http://www.lawphil.net/judjuris/juri2009/mar2009/gr_167614_2009.html#fnt2http://www.lawphil.net/judjuris/juri2009/mar2009/gr_167614_2009.html#fnt3http://www.lawphil.net/judjuris/juri2009/mar2009/gr_167614_2009.html#fnt3http://www.lawphil.net/judjuris/juri2009/mar2009/gr_167614_2009.html#fnt4http://www.lawphil.net/judjuris/juri2009/mar2009/gr_167614_2009.html#fnt4http://www.lawphil.net/judjuris/juri2009/mar2009/gr_167614_2009.html#fnt5http://www.lawphil.net/judjuris/juri2009/mar2009/gr_167614_2009.html#fnt5http://www.lawphil.net/judjuris/juri2009/mar2009/gr_167614_2009.html#fnt5http://www.lawphil.net/judjuris/juri2009/mar2009/gr_167614_2009.html#fnt5http://www.lawphil.net/judjuris/juri2009/mar2009/gr_167614_2009.html#fnt4http://www.lawphil.net/judjuris/juri2009/mar2009/gr_167614_2009.html#fnt3http://www.lawphil.net/judjuris/juri2009/mar2009/gr_167614_2009.html#fnt2http://www.lawphil.net/judjuris/juri2009/mar2009/gr_167614_2009.html#fnt1


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On March 19, 1998, the date of his departure, petitioner was constrained to accept a downgraded employmentcontract for the position of Second Officer with a monthly salary of US$1,000.00, upon the assurance andrepresentation of respondents that he would be made Chief Officer by the end of April 1998 .6

Respondents did not deliver on their promise to make petitioner Chief Officer .7 Hence, petitioner refused to stay onas Second Officer and was repatriated to the Philippines on May 26, 1998.8

Petitioner's employment contract was for a period of 12 months or from March 19, 1998 up to March 19, 1999, but atthe time of his repatriation on May 26, 1998, he had served only two (2) months and seven (7) days of his contract,

leaving an unexpired portion of nine (9) months and twenty-three (23) days.

Petitioner filed with the Labor Arbiter (LA) a Complaint9 against respondents for constructive dismissal and forpayment of his money claims in the total amount of US$26,442.73, broken down as follows:

May27/31,1998 (5days)incl.Leavepay

US$ 413.90

June01/30,1998

2,590.00

July01/31,1998

2,590.00

August01/31,1998

2,590.00

Sept.

01/30,1998

2,590.00

Oct.01/31,1998

2,590.00

Nov.01/30,1998

2,590.00

Dec.01/31,1998

2,590.00

Jan.01/31,1999

2,590.00

Feb.01/28,1999

2,590.00

Mar.1/19,1999(19

1,640.00

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days)incl.leavepay

--------------------------------------------------------------------------------

25,382.23

Amount

adjustedto chief

Documents

Labor Law Cases 1