G.R. No. 77279 April 15, 1988

MANUELA S. CATAN/M.S. CATAN PLACEMENT AGENCY, petitioners, vs.THE NATIONAL LABOR RELATIONS COMMISSION, PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION and FRANCISCO D. REYES, respondents.

Demetria Reyes, Merris & Associates for petitioners.

The Solicitor General for public respondents.

Bayani G. Diwa for private respondent.

CORTES, J.:

Petitioner, in this special civil action for certiorari, alleges grave abuse of discretion on the part of the National Labor Relations Commission in an effort to nullify the latters resolution and thus free petitioner from liability for the disability suffered by a Filipino worker it recruited to work in Saudi Arabia. This Court, however, is not persuaded that such an abuse of discretion was committed. This petition must fail.

The facts of the case are quite simple.

Petitioner, a duly licensed recruitment agency, as agent of Ali and Fahd Shabokshi Group, a Saudi Arabian firm, recruited private respondent to work in Saudi Arabia as a steelman.

The term of the contract was for one year, from May 15,1981 to May 14, 1982. However, the contract provided for its automatic renewal:

FIFTH: The validity of this Contract is for ONE YEAR commencing from the date the SECOND PARTY assumes hill port. This Contract is renewable automatically if neither of the PARTIES notifies the other PARTY of his wishes to terminate the Contract by at least ONE MONTH prior to the expiration of the contractual period. [Petition, pp. 6-7; Rollo, pp. 7-8].

The contract was automatically renewed when private respondent was not repatriated by his Saudi employer but instead was assigned to work as a crusher plant operator. On March 30, 1983, while he was working as a crusher plant operator, private respondent's right ankle was crushed under the machine he was operating.

On May 15, 1983, after the expiration of the renewed term, private respondent returned to the Philippines. His ankle was operated on at the Sta. Mesa Heights Medical Center for which he incurred expenses.

On September 9, 1983, he returned to Saudi Arabia to resume his work. On May 15,1984, he was repatriated.

Upon his return, he had his ankle treated for which he incurred further expenses.

On the basis of the provision in the employment contract that the employer shall compensate the employee if he is injured or permanently disabled in the course of employment, private respondent filed a claim, docketed as POEA Case No. 84-09847, against petitioner with respondent Philippine Overseas Employment Administration. On April 10, 1986, the POEA rendered judgment in favor of private respondent, the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of the complainant and against the respondent, ordering the latter to pay to the complainant:

1. SEVEN THOUSAND NINE HUNDRED EIGHTY-FIVE PESOS and 60/100 (P7,985.60), Philippine currency, representing disability benefits;

2. TWENTY-FIVE THOUSAND NINETY-SIX Philippine pesos and 20/100 (29,096.20) representing reimbursement for medical expenses;

3. Ten percent (10%) of the abovementioned amounts as and for attorney's fees. [NLRC Resolution, p. 1; Rollo, p. 16].

On appeal, respondent NLRC affirmed the decision of the POEA in a resolution dated December 12, 1986.

Not satisfied with the resolution of the POEA, petitioner instituted the instant special civil action for certiorari, alleging grave abuse of discretion on the part of the NLRC.

1. Petitioner claims that the NLRC gravely abused its discretion when it ruled that petitioner was liable to private respondent for disability benefits since at the time he was injured his original employment contract, which petitioner facilitated, had already expired. Further, petitioner disclaims liability on the ground that its agency agreement with the Saudi principal had already expired when the injury was sustained.

There is no merit in petitioner's contention.

Private respondents contract of employment can not be said to have expired on May 14, 1982 as it was automatically renewed since no notice of its termination was given by either or both of the parties at least a month before its expiration, as so provided in the contract itself. Therefore, private respondent's injury was sustained during the lifetime of the contract.

A private employment agency may be sued jointly and solidarily with its foreign principal for violations of the recruitment agreement and the contracts of employment:

Sec. 10. Requirement before recruitment.— Before recruiting any worker, the private employment agency shall submit to the Bureau the following documents:

(a) A formal appointment or agency contract executed by a foreign-based employer in favor of the license holder to recruit and hire personnel for the former ...

xxx xxx xxx

2. Power of the agency to sue and be sued jointly and solidarily with the principal or foreign-based employer for any of the violations of the recruitment agreement and the contracts of employment. [Section 10(a) (2) Rule V, Book I, Rules to Implement the Labor Code].

Thus, in the recent case of Ambraque International Placement & Services v. NLRC [G.R. No. 77970, January 28,1988], the Court ruled that a recruitment agency was solidarily liable for the unpaid salaries of a worker it recruited for employment in Saudi Arabia.

Even if indeed petitioner and the Saudi principal had already severed their agency agreement at the time private respondent was injured, petitioner may still be sued for a violation of the employment contract because no notice of the agency agreement's termination was given to the private respondent:

Art 1921. If the agency has been entrusted for the purpose of contra with specified persons, its revocation shall not prejudice the latter if they were not given notice thereof. [Civil Code].

In this connection the NLRC elaborated:

Suffice it to state that albeit local respondent M. S. Catan Agency was at the time of complainant's accident resulting in his permanent partial disability was (sic) no longer the accredited agent of its foreign principal, foreign respondent herein, yet its responsibility over the proper implementation of complainant's employment/service contract and the welfare of complainant himself in the foreign job site, still existed, the contract of employment in question not having expired yet. This must be so, because the obligations covenanted in the recruitment agreement entered into by and between the local agent and its foreign principal are not coterminus with the term of such agreement so that if either or both of the parties decide to end the agreement, the responsibilities of such parties towards the contracted employees under the agreement do not at all end, but the same extends up to and until the expiration of the employment contracts of the employees recruited and employed pursuant to the said recruitment agreement. Otherwise, this will render nugatory the very purpose for which the law governing the employment of workers for foreign jobs abroad was enacted. [NLRC Resolution, p. 4; Rollo, p. 18]. (Emphasis supplied).

2. Petitioner contends that even if it is liable for disability benefits, the NLRC gravely abused its discretion when it affirmed the award of medical expenses when the said expenses were the consequence of private respondent's negligence in returning to work in Saudi Arabia when he knew that he was not yet medically fit to do so.

Again, there is no merit in this contention.

No evidence was introduced to prove that private respondent was not medically fit to work when he returned to Saudi Arabia. Exhibit "B", a certificate issued by Dr. Shafquat Niazi, the camp doctor, on November 1, 1983, merely stated that private respondent was "unable to walk properly, moreover he is still complaining [of] pain during walking and different lower limbs movement" [Annex "B", Reply; Rollo, p. 51]. Nowhere does it say that he was not medically fit to work.

Further, since petitioner even assisted private respondent in returning to work in Saudi Arabia by purchasing his ticket for him [Exhibit "E"; Annex "A", Reply to Respondents' Comments], it is as if petitioner had certified his fitness to work. Thus, the NLRC found:

Furthermore, it has remained unrefuted by respondent that complainant's subsequent departure or return to Saudi Arabia on September 9, 1983 was with the full knowledge, consent and assistance of the former. As shown in Exhibit "E" of the record, it was respondent who facilitated the

travel papers of complainant. [NLRC Resolution, p. 5; Rollo, p. 19].

WHEREFORE, in view of the foregoing, the petition is DISMISSED for lack of merit, with costs against petitioner.

SO ORDERED.

Fernan, (Chairman), Gutierrez, Jr., Feliciano and Bidin, JJ., concur.

G.R. No. 90273-75 November 15, 1989

FINMAN GENERAL ASSURANCE CORP., petitioner, vs.WILLIAM INOCENCIO, ET AL. AND EDWIN CARDONES, THE ADMINISTRATOR, PHILIPPINE OVERSEAS AND EMPLOYMENT ADMINISTRATION, THE SECRETARY OF LABOR AND EMPLOYMENT, respondents.

David I. Unay, Jr. for petitioner.

R E S O L U T I O N

FELICIANO, J.:

Pan Pacific Overseas Recruiting Services, Inc. ("Pan Pacific") is a private, fee-charging, recruitment and employment agency. T in accordance with the requirements of Section 4, Rule II, Book II of the Rules and Regulations of the Philippine Overseas Employment Administration (POEA), Pan Pacific posted a surety bond issued by petitioner Finman General Assurance Corporation ("Finman") and was granted a license to operate by the POEA.

Private respondents William Inocencio, Perfecto Palero, Jr., Edwin Cardones and one Edwin Hernandez filed with the POEA separate complaints against Pan Pacific for violation of Articles 32 and 34 (a) of the Labor Code, as amended and for refund of placement fees paid to Pan Pacific. The complainants alleged that Pan Pacific charged and collected such fees from them but did not secure employment for them.

Acting on the complaints, the POEA Administrator motu proprio impleaded petitioner Finman as party respondent in its capacity as surety for Pan Pacific. Separate summonses were served upon Finman and Pan Pacific. The return of the summons served on Pan Pacific at its official address registered in the POEA records, showed that Pan Pacific had moved out therefrom; no prior notice of transfer or change of address was furnished

by Pan Pacific to the POEA as required under POEA rules. The POEA considered that constructive service of the complaints had been effected upon Pan Pacific and proceeded accordingly.

For its part, petitioner Finman filed an answer denying liability and pleading, by way of special and affirmative defenses, that: (1) the POEA had no "jurisdiction over surety bonds," that jurisdiction being vested in the Insurance Commission or the regular courts; (2) it (Finman) had not violated Articles 32 and 34 (a) of the Labor Code and complainants' claims had accrued during the suspension of the principal obligor, Pan Pacific; (3) complainants had no cause of action against Finman, since it was not privy to the transactions between them and Pan Pacific and had not received any moneys from them; and (4) the amounts claimed by complainants had been paid by them as deposits and not as placement fees.

A hearing was held by the POEA on 14 April 1988, at which time complainants presented their evidence. Petitioner Finman, though notified of this hearing, did not appear.

On 30 May 1989, the POEA Administrator issued an Order which, in its dispositive portion, said:

WHEREFORE, premises considered, respondents are hereby ordered to pay jointly and severally complainants' claims as follows:

1. William Inocencio P6,000 .00

2. Perfecto Palero, Sr. P5,500 .00

3. Edwin Cardones P2,000 .00

Respondent agency is ordered to release Cardones' passport, the expenses or obtaining the same of which (sic) shall be deducted from the amount of P2,000.00 as it appears that it was respondent agency who applied for the processing thereof. The claim of Edwin Hernandez is dismissed without prejudice.

For the established violations respondent agency is hereby imposed a penalty fine in the amount of P60,000.00. Further, the ban earlier imposed upon it is herein reiterated.

SO ORDERED.

Petitioner Finman went on appeal to the Secretary of Labor insisting that: (1) the POEA had no authority to implead petitioner as party respondent in the proceedings before the POEA; and that (2) the POEA had no authority to enforce directly the surety bond against petitioner. In an Order dated 3 August 1989, the Secretary of Labor upheld the POEA Order appealed from and denied the appeal for lack of merit.

Petitioner Finman now comes before this Court on a Petition for certiorari with prayer for preliminary injunction or temporary restraining order, raising much the same issues it had already ventilated before the POEA and the Secretary of Labor. It is contended once again by petitioner Finman that the POEA had no authority to implead petitioner in the proceedings commenced by private respondents: and that the POEA was not authorized to require, in those same proceedings, petitioner to pay private respondents' claims for refund against Pan Pacific on the basis of the surety bond issued by petitioner.

Petitioner's contentions are interrelated and will be dealt with together. They are, however, quite bereft of merit and must be rejected.

Petitioner cannot seriously dispute the direct and solidary nature of its obligations under its own surety bond. Under Section 176 of the Insurance Code, as amended, the liability of a surety in a surety bond is joint and several with the principal obligor. Petitioner's bond was posted by Pan Pacific in compliance with the requirements of Article 31 of the Labor Code, which states that —

Art. 31. Bonds. — All applicants for license or authority shall post such cash and surety bonds as determined by the Secretary of Labor to guarantee compliance with prescribed recruitment procedures, rules and regulations, and terms and, conditions of employment as appropriate.

The Secretary of Labor shall have the exclusive power to determine, decide, order or direct payment from, or application of, the cash and surety bond for any claim or injury covered and guaranteed by the bonds. (Emphasis supplied).

The tenor and scope of petitioner Finman's obligations under the bond it issued are set out in broad ranging terms by Section 4, Rule II, Book I of the POEA Rules and Regulations:

Section 4. Payment of Fees and Posting of Bonds. — Upon approval of the application by the Minister, the applicant shall pay an annual license fee of P6,000.00. It shall also post a cash bond of P100,000.00 and asurety bond of P150,000.00 from a bonding company acceptable to the Administration duly accredited by the Office of the

Insurance Commission. The bonds shall answer for all valid and legal claims arising from violations of the conditions for the grant and use of the license or authority and contracts of employment. The bonds shall likewise guarantee compliance with the provisions of the Labor Code and its implementing rules and regulations relating to recruitment and placement, the rules of the Administration and relevant issuances of the Ministry and all liabilities which the Administration may impose. The surety bonds shall include the condition that notice of garnishment to the principal is notice to the surety. 1 (Emphasis supplied).

While petitioner Finman has refrained from attaching a copy of the bond it had issued to its Petition for Certiorari, there can be no question that the conditions of the Finman surety bond Pan Pacific had posted with the POEA include the italicized portions of Section 4, Rule 11, Book I quoted above. It is settled doctrine that the conditions of a bond specified and required in the provisions of the statute or regulation providing for the submission of the bond, are incorporated or built into all bonds tendered under that statute or regulation, even though not there set out in printer's ink. 2

In the case at bar, the POEA held, and the Secretary of Labor affirmed, that Pan Pacific had violated Article 32 of the Labor Code, as amended

Article 32. Fees to be paid by workers. — Any person applying with a private fee charging employment agency for employment assistance shall not be charged any fee until he has obtained employment through its efforts or has actually commenced employment. Such fee shall be always covered with the approved receipt clearly showing the amount paid. The Secretary of Labor shall promulgate a schedule of allowable fees. (Emphasis supplied).

as well as Article 34 (a) of the same Code:

Article 34. Prohibited practices. — It shall be unlawful for any individual, entity, licensee, or holder of authority:

(a) To charge or accept, directly or indirectly, any amount than that specified in the schedule of allowable fees prescribed by the Secretary of Labor, or to make a worker pay any amount greater than actually received by him as a loan or advance. (Emphasis supplied)

There is, hence, no question that, both under the Labor Code 3 and the POEA Rules and Regulations, 4 Pan Pacific had violated at least one of the conditions for the grant and continued use of the recruitment license granted to it. There can, similarly, be no question that the POEA Administrator and the Secretary of Labor are authorized to require Pan

Pacific to refund the placement fees it had charged private respondents without securing employment for them and to impose the fine of P60,000.00 upon Pan Pacific. Article 36 of the Labor Code authorizes the Secretary of Labor "to restrict and regulate" the recruitment and placement activities of agencies like Pan Pacific and "to issue orders and promulgate rules and regulations to carry out the objectives and implement the provisions of [Title I on "Recruitment and Placement of Workers]," including of course, Article 32 on "Fees to be paid by workers," quoted earlier. Upon the other hand, Section 13 of Rule VI, Book I of the POEA Rules and Regulations expressly authorize the POEA Administrator or the Secretary of Labor to impose fines "in addition to or in lieu of the penalties of suspension or cancellation" of the violator recruitment agency's license.

If Pan Pacific is liable to private respondents for the refunds claimed by them and to the POEA for the fine of P60,000.00, and if petitioner Finman is solidarily liable with Pan Pacific under the operative terms of the bond, it must follow that Finman is liable both to the private respondents and to the POEA. Petitioner Finman asserts, however, that the POEA had no authority to implead it in the proceedings against Pan Pacific.

We are not persuaded by this assertion. Clearly, petitioner Finman is a party-in-interest in, certainly a proper party to, the proceedings private respondents had initiated against Pan Pacific the principal obligor. Since Pan Pacific had thoughtfully refrained from notifying the POEA of its new address and from responding to the complaints, petitioner Finman may well I be regarded as an indispensable party to the proceedings before the POEA. Whether Finman was an indepensable or merely a proper party to the proceedings, we believe and so hold that the POEA could properly implead it as party respondent either upon the request of the private respondents or, as it happened, motu propio. Such is the situation under the Revised Rules of Court 5 and the application thereof, directly or by analogy, by the POEA can certainly not be regarded as arbitrary, oppressive or capricious.

The fundamental argument of Finman is that its liability under its own bond must be determined and enforced, not by the POEA or the Secretary of Labor, but rather by the Insurance Commission or by the regular courts. Once more, we are not moved by petitioner's argument.

There appears nothing so special or unique about the determination of a surety's liability under its bond as to restrict that determination to the Office of the Insurance Commissioner and to the regular courts of justice exclusively. The exact opposite is strongly stressed by the second paragraph of Article 31 of the Labor Code:

Art. 31. Bonds. — ... ...

The secretary of Labor shall have the exclusive power to determine, decide, order or direct payment from, or application of, the cash or surety bond for any claim or injury covered and guaranteed by the bonds. (Emphasis supplied)

We believe and so hold that to compel the POEA and private respondents the beneficiaries of Finman's bond-to go to the Insurance Commissioner or to a regular court of law to enforce that bond, would be to collide with the public policy which requires prompt resolution of claims against private recruitment and placement agencies. The Court will take judicial notice of the appealing frequency with which some, perhaps many, of such agencies have cheated workers avid for overseas employment by, e.g., collecting placement fees without securing employment for them at all, extracting exorbitant fees or "kickbacks" from those for whom employment is actually obtained, abandoning hapless and unlettered workers to exploitative foreign principals, and so on. Cash and surety bonds are required by the POEA and its predecessor agencies from recruitment and employment companies precisely as a means of ensuring prompt and effective recourse against such companies when held liable for applicants or workers' claims. Clearly that public policy will be effectively negated if POEA and the Department of Labor and Employment were held powerless to compel a surety company to make good on its solidary undertaking in the same quasi-judicial proceeding where the liability of the principal obligor, the recruitment or employment agency, is determined and fixed and where the surety is given reasonable opportunity to present any defenses it or the principal obligor may be entitled to set up. Petitioner surety whose liability to private respondents and the POEA is neither more nor less than that of Pan Pacific, is not entitled to another or different procedure for determination or fixing of that liability than that which Pan Pacific is entitled and subject to.

WHEREFORE, the Petition for certiorari with prayer for preliminary injunction or temporary restraining order is hereby DISMISSED for lack of merit. Costs against petitioner. This Resolution is immediately executory.

Fernan, C.J., Gutierrez, Jr., Bidin and Cortes, JJ., concur.

 

G.R. No. 78409 September 14, 1989

NORBERTO SORIANO, petitioner, vs.OFFSHORE SHIPPING AND MANNING CORPORATION, KNUT KNUTSEN O.A.S., and NATIONAL LABOR RELATIONS COMMISSION (Second Division), respondents.

R. C. Carrera Law Firm for petitioner.

Elmer V. Pormento for private respondents.

FERNAN, C.J.:

This is a petition for certiorari seeking to annul and set aside the decision of public respondent National Labor Relations Commission affirming the decision of the Philippine Overseas Employment Administration in POEA

Case No. (M)85-12-0953 entitled "Norberto Soriano v. Offshore Shipping and Manning Corporation and Knut Knutsen O.A.S.", which denied petitioner's claim for salary differential and overtime pay and limited the reimbursement of his cash bond to P15,000.00 instead of P20,000.00.

In search for better opportunities and higher income, petitioner Norberto Soriano, a licensed Second Marine Engineer, sought employment and was hired by private respondent Knut Knutsen O.A.S. through its authorized shipping agent in the Philippines, Offshore Shipping and Manning Corporation. As evidenced by the Crew Agreement, petitioner was hired to work as Third Marine Engineer on board Knut Provider" with a salary of US$800.00 a month on a conduction basis for a period of fifteen (15) days. He admitted that the term of the contract was extended to six (6) months by mutual agreement on the promise of the employer to the petitioner that he will be promoted to Second Engineer. Thus, while it appears that petitioner joined the aforesaid vessel on July 23, 1985 he signed off on November 27, 1985 due to the alleged failure of private respondent-employer to fulfill its promise to promote petitioner to the position of Second Engineer and for the unilateral decision to reduce petitioner's basic salary from US$800.00 to US$560.00. Petitioner was made to shoulder his return airfare to Manila.

In the Philippines, petitioner filed with the Philippine Overseas Employment Administration (POEA for short), a complaint against private respondent for payment of salary differential, overtime pay, unpaid salary for November, 1985 and refund of his return airfare and cash bond allegedly in the amount of P20,000.00 contending therein that private respondent unilaterally altered the employment contract by reducing his salary of US$800.00 per month to US$560.00, causing him to request for his repatriation to the Philippines. Although repatriated, he claims that he failed to receive payment for the following:

1. Salary for November which is equivalent to US$800.00;

2. Leave pay equivalent to his salary for 16.5 days in the sum of US$440.00;

3. Salary differentials which is equivalent to US$240.00 a month for four (4) months and one (1) week in the total sum of US$1,020,00;

4. Fixed overtime pay equivalent to US$240.00 a month for four (4) months and one (1) week in the sum of US$1,020.00;

5. Overtime pay for 14 Sundays equivalent to US$484.99;

6. Repatriation cost of US$945.46;

7. Petitioner's cash bond of P20,000.00. 1

In resolving aforesaid case, the Officer-in-Charge of the Philippine Overseas Employment Administration or POEA found that petitioner-complainant's total monthly emolument is US$800.00 inclusive of fixed overtime as shown and proved in the Wage Scale submitted to the Accreditation Department of its Office which would therefore not entitle petitioner to any salary differential; that the version of complainant that there was in effect contract substitution has no grain of truth because although the Employment Contract seems to have corrections on it, said corrections or alterations are in conformity with the Wage Scale duly approved by the POEA; that the withholding of a certain amount due petitioner was justified to answer for his repatriation expenses which repatriation was found to have been requested by petitioner himself as shown in the entry in his Seaman's Book; and that petitioner deposited a total amount of P15,000.00 only instead of P20,000.00 cash bond. 2

Accordingly, respondent POEA ruled as follows:

VIEWED IN THE LIGHT OF THE FOREGOING, respondents are hereby ordered to pay complainant, jointly and severally within ten (10) days from receipt hereof the amount of P15,000.00 representing the reimbursement of the cash bond deposited by complainant less US$285.83 (to be converted to its peso equivalent at the time of actual payment).

Further, attorney's fees equivalent to 10 % of the aforesaid award is assessed against respondents.

All other claims are hereby dismissed for lack of merit.

SO ORDERED. 3

Dissatisfied, both parties appealed the aforementioned decision of the POEA to the National Labor Relations Commission. Complainant-petitioner's appeal was dismissed for lack of merit while respondents' appeal was dismissed for having been filed out of time.

Petitioner's motion for reconsideration was likewise denied. Hence this recourse.

Petitioner submits that public respondent committed grave abuse of discretion and/or acted without or in excess of jurisdiction by disregarding the alteration of the employment contract made by private respondent. Petitioner claims that the alteration by private respondent of his salary and overtime rate which is evidenced by the Crew Agreement and the exit pass constitutes a violation of Article 34 of the Labor Code of the Philippines. 6

On the other hand, public respondent through the Solicitor General, contends that, as explained by the POEA: "Although the employment contract seems to have corrections, it is in conformity with the Wage Scale submitted to said office. 7

Apparently, petitioner emphasizes the materiality of the alleged unilateral alteration of the employment contract as this is proscribed by the Labor Code while public respondent finds the same to be merely innocuous. We take a closer look at the effects of these alterations upon petitioner's right to demand for his differential, overtime pay and refund of his return airfare to Manila.

A careful examination of the records shows that there is in fact no alteration made in the Crew Agreement 8 or in the Exit Pass. 9 As the original data appear, the figures US$800.00 fall under the column salary, while the word "inclusive" is indicated under the column overtime rate. With the supposed alterations, the figures US$560.00 were handwritten above the figures US$800.00 while the figures US$240.00 were also written above the word "inclusive".

As clearly explained by respondent NLRC, the correction was made only to specify the salary and the overtime pay to which petitioner is entitled under the contract. It was a mere breakdown of the total amount into US$560.00 as basic wage and US$240.00 as overtime pay. Otherwise stated, with or without the amendments the total emolument that petitioner would receive under the agreement as approved by the POEA is US$800.00 monthly with wage differentials or overtime pay included. 10

Moreover, the presence of petitioner's signature after said items renders improbable the possibility that petitioner could have misunderstood the amount of compensation he will be receiving under the contract. Nor has petitioner advanced any explanation for statements contrary or inconsistent with what appears in the records. Thus, he claimed: [a] that private respondent extended the duration of the employment contract indefinitely, 11 but admitted in his Reply that his employment contract was extended for another six (6) months by agreement between private respondent and himself: 12 [b] that when petitioner demanded for his overtime pay, respondents repatriated him13 which again was discarded in his reply stating that he himself requested for his voluntary repatriation because of the bad faith and insincerity of private respondent; 14 [c] that he was required to post a cash bond in the amount of P20,000.00 but it was found that he deposited only the total amount of P15,000.00; [d] that his salary for November 1985 was not paid when in truth and in fact it was petitioner who owes private respondent US$285.83 for cash advances 15 and on November 27, 1985 the final pay slip was executed and signed; 16 and [e] that he finished his contract when on the contrary, despite proddings that he continue working until the renewed contract has expired, he adamantly insisted on his termination.

Verily, it is quite apparent that the whole conflict centers on the failure of respondent company to give the petitioner the desired promotion which appears to be improbable at the moment because the M/V Knut Provider continues to be laid off at Limassol for lack of charterers. 17

It is axiomatic that laws should be given a reasonable interpretation, not one which defeats the very purpose for which they were passed. This Court has in many cases involving the construction of statutes always cautioned against narrowly interpreting a statute as to defeat the purpose of the legislator and stressed that it is of the essence of judicial duty to construe statutes so as to avoid such a deplorable result (of injustice or absurdity) and that therefore "a literal interpretation is to be rejected if it would be unjust or lead to absurd results." 18

There is no dispute that an alteration of the employment contract without the approval of the Department of Labor is a serious violation of law.

Specifically, the law provides:

Article 34 paragraph (i) of the Labor Code reads:

Prohibited Practices. — It shall be unlawful for any individual, entity, licensee, or holder of authority:

x x x x

(i) To substitute or alter employment contracts approved and verified by the Department of Labor from the time of actual signing thereof by the parties up to and including the period of expiration of the same without the approval of the Department of Labor.

In the case at bar, both the Labor Arbiter and the National Labor Relations Commission correctly analyzed the questioned annotations as not constituting an alteration of the original employment contract but only a clarification thereof which by no stretch of the imagination can be considered a violation of the above-quoted law. Under similar circumstances, this Court ruled that as a general proposition, exceptions from the coverage of a statute are strictly construed. But such construction nevertheless must be at all times reasonable, sensible and fair. Hence, to rule out from the exemption amendments set forth, although they did not materially change the terms and conditions of the original letter of credit, was held to be unreasonable and unjust, and not in accord with the declared purpose of the Margin Law. 19

The purpose of Article 34, paragraph 1 of the Labor Code is clearly the protection of both parties. In the instant case, the alleged amendment served to clarify what was agreed upon by the parties and approved by the

Department of Labor. To rule otherwise would go beyond the bounds of reason and justice.

As recently laid down by this Court, the rule that there should be concern, sympathy and solicitude for the rights and welfare of the working class, is meet and proper. That in controversies between a laborer and his master, doubts reasonably arising from the evidence or in the interpretation of agreements and writings should be resolved in the former's favor, is not an unreasonable or unfair rule. 20 But to disregard the employer's own rights and interests solely on the basis of that concern and solicitude for labor is unjust and unacceptable.

Finally, it is well-settled that factual findings of quasi-judicial agencies like the National Labor Relations Commission which have acquired expertise because their jurisdiction is confined to specific matters are generally accorded not only respect but at times even finality if such findings are supported by substantial evidence. 21

In fact since Madrigal v. Rafferty 22 great weight has been accorded to the interpretation or construction of a statute by the government agency called upon to implement the same. 23

WHEREFORE, the instant petition is DENIED. The assailed decision of the National Labor Relations Commission is AFFIRMED in toto.

SO ORDERED.

Gutierrez, Jr., Bidin, and Cortes, JJ., concur.

Feliciano, J., is on leave.

G.R. No. L-79436-50 January 17, 1990

EASTERN ASSURANCE & SURETY CORPORATION, petitioner, vs.

SECRETARY OF LABOR, PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION, ELVIRA VENTURA, ESTER TRANGUILLAN, et al., respondents.

NARVASA, J.:

In connection with the application with the Philippine Overseas Employment Administration (POEA) of J & B Manpower Specialist, Inc. for a license to engage in business as a recruitment agency, a surety bond was filed on January 2, 1985 by the applicant and the Eastern Assurance and Surety Corporation, herein petitioner, in virtue of which they both held themselves —

. . . firmly bound unto (said) Philippine Overseas Employment Administration, Ministry of Labor in the penal sum of PESOS ONE HUNDRED FIFTY THOUSAND ONLY . . . (Pl50,000.00) for the payment of which will and truly to be made, . . . (they bound themselves, their) heirs, executors, administrators, successors and assigns, jointly and severally . .

The bond stipulated that:

a) it was "conditioned upon the true and faithful performance and observance of the . . . principal (J & B Manpower Specialist, Inc.) of its duties and obligations in accordance with all the rules and regulations promulgated by the Ministry of Labor Philippine Overseas Employment Administration and with the terms and conditions stipulated in the License;

b) the liability of the . . . Surety (petitioner) shall in no case exceed the sum of PESOS ONE HUNDRED FIFTY THOUSAND (P150,000.00) ONLY, PHILIPPINE CURRENCY; 1

c) notice to the Principal is also a notice to the Surety; and

d) LIABILITY of the surety . . . shall expire on JANUARY 02, 1986 and this bond shall be automatically cancelled ten (10) days after its expiration and the surety shall not be liable for any claim not discovered and presented to it in writing within said period of . . . from expiration and the obligee hereby expressly waives the rights to file any court action against the Surety after termination of said period of . . . . above cited. 2

As narrated by respondent Secretary of Labor, the facts are as follows: 3

From June 1983 to December 1985 . . . thirty three (33) . . . (persons) applied for overseas employment with . . . (J & B). In consideration of promised deployment, complainants paid respondent various amounts for various fees. Most of'

the receipts issued were sighed by Mrs. Baby Bundalian, Executive Vice-President of . . . (J & B).

Because of non-deployment . . . (the applicants) filed separate complaints with the Licensing and Regulation Office of POEA against . . . (J & B) for violation of Articles 32 and 34 (a) of the Labor Code between the months of April to October 1985.

Despite summons/notices of hearing,, . . . (J & B) failed to file Answer nor appear in the hearings conducted.

In its separate Answer, . . . EASCO essentially disclaimed liability on the ground that the claims were not expressly covered by the bond, that POEA had no jurisdiction to order forfeiture of the bond, that some of the claims were paid beyond or prior to the period of effectivity of the bond.

On September 8, 1986, the POEA Administrator issued the Order in favor of complainants ruling thus:

After careful evaluation, we find that the receipts and testimonies of complainants, in the absence of controverting evidence substantially establish that respondent charged and collected fees from them in amounts exceeding what is prescribed by this Administration. Complainants' non-deployment strongly indicates that there was no employment obtained for them. Hence, violation of Articles 32 and 34 (a) of the Labor Code, as amended, is established against respondent. The claims of complainants having arose (arisen) out of acts of the principal covered under the surety (bond), the respondent surety is equally liable therefor.

Except for complainants Ramos, Samson, de Leon and Rizada, whose claims were transacted prior to the effectivity of the bond, . . . EASCO was declared jointly and severally liable with . . . (J & B) to twenty-nine (29) complainants.

(The dispositive portion of the POEA Administrator's Order also contained the following statement and direction, viz.:

Respondent was suspended on May 23, 1985, June 26, 1985 and January 17, 1986 all for illegal exaction. Considering its track record of illegal exaction activities and considering further the gross violation of recruitment rules and regulations established against it in the instant cases, and the expiration of its license on February 15, 1985, it is hereby forever banned from participation in the overseas employment program. It is ordered to cease and desist from further engaging in recruitment activities otherwise it shall be prosecuted for illegal recruitment.')

(J & B filed a motion for reconsideration). On December 19, 1986, the then deputy Minister of Labor and Employment denied the . . . Motion for Reconsideration for lack of merit and affirmed the findings in the Order of the POEA Administrator finding no reversible error therein.

On appeal by EASCO — J & B having as aforestated taken no part in the proceeding despite due service of summons — the judgment was modified by the Secretary of Labor, by Order dated July 1, 1987, disposing as follows: 4

WHEREFORE, in view of the foregoing, the Resolution of the then Deputy Minister of Labor dated December 19, 1986 affirming the Order of the POEA Administrator dated September 8, 1986 is hereby MODIFIED. Respondent J & B Manpower Specialist is directed to refund all thirty-three (33) complainants as listed in the Order of September 8, 1986 in the amounts listed thereto with the modification that complainants Lucena Cabasal and Felix Rivero are both entitled only to P15,980 and not P15,980 each. Respondent Eastern Assurance and Surety Corporation is hereby found jointly and severally liable with respondent J & B Manpower Specialist to refund nineteen (19) complainants in the modified amounts . . . (particularly specified).

The other findings in the Order of the POEA Administrator dated September 8, 1986 affirmed in the Resolution of the then Deputy Minister . . . are also hereby AFFIRMED. This Order is FINAL. No further Motion for Reconsideration hereof shall be entertained.

It is noteworthy that EASCO's liability for the refund, jointly and severally with its principal, was limited to 19 named complainants (in contrast to

verdicts of the POEA and the Deputy Minister which both ordered payment to no less than 33 complainants) and was correspondingly reduced from P308,751.75 and US $ 400.00 5 to the aggregate amount of P 140,817.75. 6

The special civil action of certiorari at bar was thereafter instituted by EASCO 7 praying for the nullification of the POEA Administrator's Order of September 8, 1986, the Resolution of the Deputy Minister of Labor of' December 19, 1986, and the Order of the Secretary of Labor of July 1, 1987, It theorizes that:

1) the POEA had no jurisdiction over the claims for refund filed by non-employees;

2) neither did the Secretary of Labor have jurisdiction of the claims;

3) assuming they had jurisdiction, both the POEA and Secretary of Labor also committed legal errors and acted with grave abuse of discretion when they ruled that petitioner is liable on the claims.

EASCO contends that the POEA had no "adjudicatory jurisdiction" over the monetary claims in question because the same "did not arise from employer-employee relations." Invoked in support of the argument is Section 4 (a) of EO 797 providing in part 8 that the POEA has —

. . . original and exclusive jurisdiction over all cases, including money claims, involving employer-employee relations arising out of or by virtue of any law or contract involving Filipino workers for overseas employment including seamen . . .

The complaints are however for violation of Articles 32 and 34 a) of the Labor Code. Article 32 and paragraph (a) of Article 34 read as follows:

Art. 32. Fees to be paid by workers.—Any person applying with a private fee-charging employment agency for employment assistance shall not be charged any fee until he has obtained employment through its efforts or has actually commenced employment. Such fee shall be always covered with the approved receipt clearly showing the amount paid. The Secretary of Labor shall promulgate a schedule of allowable fees.

Art. 34. Prohibited practices.—It shall be unlawful for any individual, entity, licensee, or holder of authority:

a) To charge or accept, directly or indirectly, any amount greater than that specified in the schedule of allowable fees prescribed by the Secretary of Labor, or to make a worker pay any amount greater than actually received by him as a loan or advance; . . .

The penalties of suspension and cancellation of license or authority are prescribed for violations of the above quoted provisions, among others. And the Secretary of Labor has the power under Section 35 of the law to apply these sanctions, as well as the authority, conferred by Section 36, not only, to "restrict and regulate the recruitment and placement activities of all agencies," but also to "promulgate rules and regulations to carry out the objectives and implement the provisions" governing said activities. Pursuant to this rule-making power thus granted, the Secretary of Labor gave the POEA 9 "on its own initiative or upon filing of a complaint or report or upon request for investigation by any aggrieved person, . . . (authority to) conduct the necessary proceedings for the suspension or cancellation of the license or authority of any agency or entity" for certain enumerated offenses including —

1) the imposition or acceptance, directly or indirectly, of any amount of money, goods or services, or any fee or bond in excess of what is prescribed by the Administration, and

2) any other violation of pertinent provisions of the Labor Code and other relevant laws, rules and regulations. 10

The Administrator was also given the power to "order the dismissal of the case or the suspension of the license or authority of the respondent agency or contractor or recommend to the Minister the cancellation thereof." 11

Implicit in these powers is the award of appropriate relief to the victims of the offenses committed by the respondent agency or contractor, specially the refund or reimbursement of such fees as may have been fraudulently or otherwise illegally collected, or such money, goods or services imposed and accepted in excess of what is licitly prescribed. It would be illogical and absurd to limit the sanction on an offending recruitment agency or contractor to suspension or cancellation of its license, without the concomitant obligation to repair the injury caused to its victims. It would result either in rewarding unlawful acts, as it would leave the victims without recourse, or in compelling the latter to litigate in another forum, giving rise to that multiplicity of actions or proceedings which the law abhors.

Even more untenable is EASCO's next argument that the recruiter and its victims are in pari delicto — the former for having required payment, and the latter for having voluntarily paid, "prohibited recruitment fees" — and therefore, said victims are barred from obtaining relief. The sophistical, if

not callous, character of the argument is evident upon the most cursory reading thereof; it merits no consideration whatever.

The Court is intrigued by EASCO's reiteration of its argument that it should not be held liable for claims which accrued prior to or after the effectivity of its bond, considering that the respondent Secretary had conceded the validity of part of said argument, at least. The Secretary ruled that EASCO's "contention that it should not be held liable for claims/payments made to respondent agency before the effectivity of the surety bond on January 2, 1985 is well taken." According to the Secretary: 12

. . . A close examination of the records reveal(s) that respondent EASCO is not jointly and severally liable with respondent agency to refund complainants Lucena Cabasal, Felix Rivero, Romulo del Rosario, Rogelio Banzuela, Josefina Ogatis, Francisco Sorato, Sonny Quiazon, Josefina Dictado, Mario del Guzman and Rogelio Mercado (10 in all). These complainants paid respondent agency in 1984, or before the effectivity of the bond on January 2, 1985 as evidence by the reciept and their testimonies.

The related argument, that it is also not liable for claims filed after the expiry (on January 2, 1986) of the period stipulated in the surety bond for the filing of claims against the bond, must however be rejected, as the Secretary did. The Court discerns no grave abuse of discretion in the Secretary's statement of his reasons for doing so, to wit:

. . . While it may be true that respondent EASCO received notice of their claims after the ten (10) day expiration period from cancellation or after January 12, 1986 as provided in the surety bond, records show that . . . EASCO's principal, respondent agency, was notified/ summoned prior to the expiration period or before January 12, 1986. Respondent agency received summons on July 24, 1985 with respect to claims of complainants Penarroyo, dela Cruz and Canti. It also received summons on November 26, 1985 with respect to Giovanni Garbillons' claim. Respondent agency was likewise considered constructively notified of the claims of complainants Calayag, Danuco Domingo and Campena on October 6, 1985. In this connection, it may be stressed that the surety bond provides that notice to the principal is notice to the surety. Besides, it has been held that the contract of a compensated surety like respondent EASCO is to be interpreted liberally in the interest of the promises and beneficiaries rather than strictly in favor of the surety (Acoustics Inc. v. American Surety, 74 Nev-6, 320 P2d. 626, 74 Am. Jur. 2d).

So, too, EASCO's claim that it had not been properly served with summons as regards a few of the complaints must be rejected, the issue being factual, and the Court having been cited to no grave error invalidating the respondent Secretary's conclusion that summons had indeed been duly served.

Finally, EASCO's half-hearted argument that its liability should be limited to the maximum amount set in its surety bond, i.e., P150,000.00, is palpably without merit, since the aggregate liability imposed on it, P140,817.75, supra, does not in fact exceed that limit.

WHEREFORE, the petition is DISMISSED for lack of merit, and this decision is declared to be immediately executory. Costs against petitioner.

SO ORDERED. Cruz, Gancayco, Griño-Aquino and Medialdea, JJ., concur.

 G.R. No. 120353 February 12, 1998

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs.FLOR N. LAUREL, accused-appellant.

 

BELLOSILLO, J.:

This is an appeal from the decision of the Regional Trial Court of Manila finding accused-appellant Flor N. Laurel guilty of illegal recruitment in large scale penalized under Art. 38, par. (b), in relation to Art. 39, par. (a), of the Labor Code.

From 19 October 1991 to 25 May 1992 accused-appellant Flor N. Laurel promised employment abroad for a fee to complaining witnesses Ricardo San Felipe, Rosauro San Felipe, Juanito Cudal and Cenen Tambongco, Jr. However, after receiving P12,000.00 from Tambongco, Jr., P11,000.00 from each of the San Felipe brothers and P6,000.00 from Cudal, Laurel reneged on her promises and went into hiding. Verification with the Philippine Overseas Employment Administration (POEA) revealed that Laurel was neither licensed nor authorized to recruit workers for overseas employment. 1 Consequently, she was haled to court and charged with large scale illegal recruitment.

Accused Laurel did not deny the charge against her. Instead, when called to the witness stand, she presented an affidavit of desistance by Juanito Cudal as well as several receipts, Exhs. "2," "3," "4," "5" and "6," signed by the other private complainants acknowledging payment by her of the amounts taken from them in "full settlement" of her obligation. 2 Thus, on the basis of these documents, she moved to dismiss the case. But the

court a quodenied her motion on the ground that the elements of large scale illegal recruitment were established beyond reasonable doubt through the combined testimonies of the four (4) offended parties. The court a quo noted that the affidavit of desistance as well as the receipts for payments made were prepared and signed after the prosecution had already rested its case. Consequently, the trial judge rendered a decision convicting the accused Flor N. Laurel and sentenced her to life imprisonment and to pay a fine of P100,000.00 conformably with Art. 39, par. (a), of the Labor Code. In addition, the accused was ordered to return the balance of what she had received from each complainant. 3 Hence, this appeal.

As in the court below, accused-appellant does not deny the charge against her. She contends however that she should have been convicted only of simple illegal recruitment and not of large scale illegal recruitment.

She argues through counsel that since illegal recruitment in large scale is defined in Art. 38, par. (b), of the Labor Code immediately following the definition of illegal recruitment committed by a syndicate, it follows that for illegal recruitment to be considered committed in large scale it should have been committed by a syndicate. Hence, an individual who commits an act of illegal recruitment even if it be against three (3) or more persons cannot be charged with illegal recruitment in large scale.

The interpretation is completely erroneous. Article 38, par. (b), of the Labor Code reads:

Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic sabotage . . . .

Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring and/or confederating with one another in carrying out any unlawful or illegal transaction, enterprise or scheme defined under the first paragraph hereof.

Illegal recruitment is deemed committed in large scale if committed against three (3) or more persons individually or as a group (emphasis supplied).

The language of the law is very clear that illegal recruitment is committed in large scale if done against three or more persons individually or as a group. The number of offenders, whether an individual or a syndicate, is clearly not considered a factor in the determination of its commission. The rule is well-settled that when the language of the statute is clear, plain and free from ambiguity there is no room for attempted interpretation or extended court rationalization of the law. 4 The duty of the court is to apply it, not to interpret it. 5 Counsel for accused-appellant was misled by the

fact that illegal recruitment in large scale is defined immediately after illegal recruitment by a syndicate. However, the only reason therefor is that they are both considered offenses involving economic sabotage as the law itself so provides. Besides, we have affirmed time and again the conviction of an individual for large scale illegal recruitment. 6

As regards the alleged desistance by private complaints, we rule that although an affidavit of desistance may be given due course even if executed only on appeal, it may be given such credit only when special circumstances exist engendering doubt on the criminal liability of the accused. 7 Otherwise, without such special circumstances, courts look with disfavor on affidavits of retraction 8 considering them as exceedingly unreliable. 9

There is absolutely nothing in the affidavits of retraction executed by private complainants which creates doubt on the guilt of accused-appellant. The complainants merely allege that they made a mistake and "misunderstood the circumstances." 10 However, aside from such sweeping statement as "misunderstood the circumstances," no detail is given as to how their mistake or misapprehension of circumstances can indicate absence of or at least cast doubt on the guilt of accused-appellant. On the contrary, we have every reason to conclude that the affidavits of retraction were executed by private complainants only because accused-appellant returned the money taken from them as evidenced by the receipts marked as Exhs. "2," "3," "4," "5" and "6." 11 As complainant Ricardo San Felipe testified in court: "I will withdraw, if the payments is (sic) complete, sir." 12 Thus, given the reason for their desistance, the solemn testimonies given by private complainants shall not be disregarded for it is a matter of public interest that every crime must be prosecuted and the author thereof penalized. 13

WHEREFORE, the Decision of the Regional Trial Court of Manila convicting accused-appellant Flor N. Laurel of illegal recruitment in large scale penalized under Art. 38, par. (b), in relation to Art. 39, par. (a), of the Labor Code and sentencing her to life imprisonment is AFFIRMED. However, the portion of the appealed decision directing accused-appellant to pay the balance of what she had received from each of private complainants is DELETED in view of the full settlement of her civil liability as acknowledged by private complainants themselves.

SO ORDERED.

Davide, Jr., Vitug, Panganiban and Quisumbing, JJ., concur.

G.R. No. 81510 March 14, 1990

HORTENCIA SALAZAR, petitioner, vs.HON. TOMAS D. ACHACOSO, in his capacity as Administrator of the Philippine Overseas Employment Administration, and FERDIE MARQUEZ, respondents.

Gutierrez & Alo Law Offices for petitioner.

 

SARMIENTO, J.:

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

The facts are as follows:

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1. On October 21, 1987, Rosalie Tesoro of 177 Tupaz Street, Leveriza, Pasay City, in a sworn statement filed with

the Philippine Overseas Employment Administration (POEA for brevity) charged petitioner Hortencia Salazar, viz:

04. T: Ano ba ang dahilan at ikaw ngayon ay narito atnagbibigay ng salaysay.

S: Upang ireklamo sa dahilan ang aking PECC Card ay ayaw ibigay sa akin ng dati kong manager. — Horty Salazar — 615 R.O. Santos, Mandaluyong, Mla.

05. T: Kailan at saan naganap and ginawang panloloko sa iyo ng tao/mga taong inireklamo mo?

S. Sa bahay ni Horty Salazar.

06. T: Paano naman naganap ang pangyayari?

S. Pagkagaling ko sa Japan ipinatawag niya ako. Kinuha ang PECC Card ko at sinabing hahanapan ako ng booking sa Japan. Mag 9 month's na ako sa Phils. ayhindi pa niya ako napa-alis. So lumipat ako ng ibang company pero ayaw niyang ibigay and PECC Card ko.

2. On November 3, 1987, public respondent Atty. Ferdinand Marquez to whom said complaint was assigned, sent to the petitioner the following telegram:

YOU ARE HEREBY DIRECTED TO APPEAR BEFORE FERDIE MARQUEZ POEA ANTI ILLEGAL RECRUITMENT UNIT 6TH FLR. POEA BLDG. EDSA COR. ORTIGAS AVE.

MANDALUYONG MM ON NOVEMBER 6, 1987 AT 10 AM RE CASE FILED AGAINST YOU. FAIL NOT UNDER PENALTY OF LAW.

4. On the same day, having ascertained that the petitioner had no license to operate a recruitment agency, public respondent Administrator Tomas D. Achacoso issued his challenged CLOSURE AND SEIZURE ORDER NO. 1205 which reads:

HORTY SALAZARNo. 615 R.O. Santos St.Mandaluyong, Metro Manila

Pursuant to the powers vested in me under Presidential Decree No. 1920 and Executive Order No. 1022, I hereby order the CLOSURE of your recruitment agency being operated at No. 615 R.O. Santos St., Mandaluyong, Metro Manila and the seizure of the documents and paraphernalia being used or intended to be used as the means of committing illegal recruitment, it having verified that you have —

(1) No valid license or authority from the Department of Labor and Employment to recruit and deploy workers for overseas employment;

(2) Committed/are committing acts prohibited under Article 34 of the New Labor Code in relation to Article 38 of the same code.

This ORDER is without prejudice to your criminal prosecution under existing laws.

Done in the City of Manila, this 3th day of November, 1987.

5. On January 26, 1988 POEA Director on Licensing and Regulation Atty. Estelita B. Espiritu issued an office order designating respondents Atty. Marquez, Atty. Jovencio Abara and Atty. Ernesto Vistro as members of a team tasked to implement Closure and Seizure Order No. 1205. Doing so, the group assisted by Mandaluyong policemen and mediamen Lito Castillo of the People's Journal and Ernie Baluyot of News Today proceeded to the residence of the petitioner at 615 R.O. Santos St., Mandaluyong, Metro

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

6. On January 28, 1988, petitioner filed with POEA the following letter:

Gentlemen:

On behalf of Ms. Horty Salazar of 615 R.O. Santos, Mandaluyong, Metro Manila, we respectfully request that the personal properties seized at her residence last January 26, 1988 be immediately returned on the ground that said seizure was contrary to law and against the will of the owner thereof. Among our reasons are the following:

1. Our client has not been given any prior notice or hearing, hence the Closure and Seizure Order No. 1205 dated November 3, 1987 violates "due process of law" guaranteed under Sec. 1, Art. III, of the Philippine Constitution.

2. Your acts also violate Sec. 2, Art. III of the Philippine Constitution which guarantees right of the people "to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures of whatever nature and for any purpose."

3. The premises invaded by your Mr. Ferdi Marquez and five (5) others (including 2 policemen) are the private residence of the Salazar family, and the entry, search as well as the seizure of the personal properties belonging to our client were without her consent and were done with unreasonable force and intimidation,

together with grave abuse of the color of authority, and constitute robbery and violation of domicile under Arts. 293 and 128 of the Revised Penal Code.

Unless said personal properties worth around TEN THOUSAND PESOS (P10,000.00) in all (and which were already due for shipment to Japan) are returned within twenty-four (24) hours from your receipt hereof, we shall feel free to take all legal action, civil and criminal, to protect our client's interests.

We trust that you will give due attention to these important matters.

7. On February 2, 1988, before POEA could answer the letter, petitioner filed the instant petition; on even date, POEA filed a criminal complaint against her with the Pasig Provincial Fiscal, docketed as IS-88-836. 1

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

The Court finds that a lone issue confronts it: May the Philippine Overseas Employment Administration (or the Secretary of Labor) validly issue warrants of search and seizure (or arrest) under Article 38 of the Labor Code? It is also an issue squarely raised by the petitioner for the Court's resolution.

Under the new Constitution, which states:

. . . no search warrant or warrant of arrest shall issue except upon probable cause to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be searched and the persons or things to be seized. 2

it is only a judge who may issue warrants of search and arrest. 3 In one case, it was declared that mayors may not exercise this power:

xxx xxx xxx

But it must be emphasized here and now that what has just been described is the state of the law as it was in September, 1985. The law has since been altered. No longer does the mayor have at this time the power to conduct preliminary investigations, much less issue orders of arrest. Section 143 of the Local Government Code, conferring this power on the mayor has been abrogated, rendered functus officio by the 1987 Constitution which took effect on February 2, 1987, the date of its ratification by the Filipino people. Section 2, Article III of the 1987 Constitution pertinently provides that "no search warrant or warrant of arrest shall issue except upon probable cause to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be searched and the person or things to be seized." The constitutional proscription has thereby been manifested that thenceforth, the function of determining probable cause and issuing, on the basis thereof, warrants of arrest or search warrants, may be validly exercised only by judges, this being evidenced by the elimination in the present Constitution of the phrase, "such other responsible officer as may be authorized by law" found in the counterpart provision of said 1973 Constitution, who, aside from judges, might conduct preliminary investigations and issue warrants of arrest or search warrants. 4

Neither may it be done by a mere prosecuting body:

We agree that the Presidential Anti-Dollar Salting Task Force exercises, or was meant to exercise, prosecutorial powers, and on that ground, it cannot be said to be a neutral and detached "judge" to determine the existence of probable cause for purposes of arrest or search. Unlike a magistrate, a prosecutor is naturally interested in the success of his case. Although his office "is to see that justice is done and not necessarily to secure the conviction of the person accused," he stands, invariably, as the accused's adversary and his accuser. To permit him to issue search warrants and indeed, warrants of arrest, is to make him both judge and jury in his own right, when he is neither. That makes, to our mind and to that extent, Presidential Decree No. 1936 as amended by Presidential Decree No. 2002, unconstitutional. 5

Section 38, paragraph (c), of the Labor Code, as now written, was entered as an amendment by Presidential Decrees Nos. 1920 and 2018 of the late President Ferdinand Marcos, to Presidential Decree No. 1693, in the exercise of his legislative powers under Amendment No. 6 of the 1973

Constitution. Under the latter, the then Minister of Labor merely exercised recommendatory powers:

(c) The Minister of Labor or his duly authorized representative shall have the power to recommend the arrest and detention of any person engaged in illegal recruitment. 6

On May 1, 1984, Mr. Marcos promulgated Presidential Decree No. 1920, with the avowed purpose of giving more teeth to the campaign against illegal recruitment. The Decree gave the Minister of Labor arrest and closure powers:

(b) The Minister of Labor and Employment shall have the power to cause the arrest and detention of such non-licensee or non-holder of authority if after proper investigation it is determined that his activities constitute a danger to national security and public order or will lead to further exploitation of job-seekers. The Minister shall order the closure of companies, establishment and entities found to be engaged in the recruitment of workers for overseas employment, without having been licensed or authorized to do so. 7

On January 26, 1986, he, Mr. Marcos, promulgated Presidential Decree No. 2018, giving the Labor Minister search and seizure powers as well:

(c) The Minister of Labor and Employment or his duly authorized representatives shall have the power to cause the arrest and detention of such non-licensee or non-holder of authority if after investigation it is determined that his activities constitute a danger to national security and public order or will lead to further exploitation of job-seekers. The Minister shall order the search of the office or premises and seizure of documents, paraphernalia, properties and other implements used in illegal recruitment activities and the closure of companies, establishment and entities found to be engaged in the recruitment of workers for overseas employment, without having been licensed or authorized to do so. 8

The above has now been etched as Article 38, paragraph (c) of the Labor Code.

The decrees in question, it is well to note, stand as the dying vestiges of authoritarian rule in its twilight moments.

We reiterate that the Secretary of Labor, not being a judge, may no longer issue search or arrest warrants. Hence, the authorities must go through the judicial process. To that extent, we declare Article 38, paragraph (c), of the Labor Code, unconstitutional and of no force and effect.

The Solicitor General's reliance on the case of Morano v. Vivo 9 is not well-taken. Vivo involved a deportation case, governed by Section 69 of the defunct Revised Administrative Code and by Section 37 of the Immigration Law. We have ruled that in deportation cases, an arrest (of an undesirable alien) ordered by the President or his duly authorized representatives, in order to carry out a final decision of deportation is valid. 10 It is valid, however, because of the recognized supremacy of the Executive in matters involving foreign affairs. We have held: 11

xxx xxx xxx

The State has the inherent power to deport undesirable aliens (Chuoco Tiaco vs. Forbes, 228 U.S. 549, 57 L. Ed. 960, 40 Phil. 1122, 1125). That power may be exercised by the Chief Executive "when he deems such action necessary for the peace and domestic tranquility of the nation." Justice Johnson's opinion is that when the Chief Executive finds that there are aliens whose continued presence in the country is injurious to the public interest, "he may, even in the absence of express law, deport them". (Forbes vs. Chuoco Tiaco and Crossfield, 16 Phil. 534, 568, 569; In re McCulloch Dick, 38 Phil. 41).

The right of a country to expel or deport aliens because their continued presence is detrimental to public welfare is absolute and unqualified (Tiu Chun Hai and Go Tam vs. Commissioner of Immigration and the Director of NBI, 104 Phil. 949, 956). 12

The power of the President to order the arrest of aliens for deportation is, obviously, exceptional. It (the power to order arrests) can not be made to extend to other cases, like the one at bar. Under the Constitution, it is the sole domain of the courts.

Moreover, the search and seizure order in question, assuming, ex gratia argumenti, that it was validly issued, is clearly in the nature of a general warrant:

Pursuant to the powers vested in me under Presidential Decree No. 1920 and Executive Order No. 1022, I hereby order the CLOSURE of your recruitment agency being operated at No. 615 R.O. Santos St., Mandaluyong, Metro Manila and the seizure of the documents and paraphernalia being used or intended to be used as the means of

committing illegal recruitment, it having verified that you have —

(1) No valid license or authority from the Department of Labor and Employment to recruit and deploy workers for overseas employment;

(2) Committed/are committing acts prohibited under Article 34 of the New Labor Code in relation to Article 38 of the same code.

This ORDER is without prejudice to your criminal prosecution under existing laws. 13

We have held that a warrant must identify clearly the things to be seized, otherwise, it is null and void, thus:

xxx xxx xxx

Another factor which makes the search warrants under consideration constitutionally objectionable is that they are in the nature of general warrants. The search warrants describe the articles sought to be seized in this wise:

1) All printing equipment, paraphernalia, paper, ink, photo equipment, typewriters, cabinets, tables, communications/ recording equipment, tape recorders, dictaphone and the like used and/or connected in the printing of the "WE FORUM" newspaper and any and all documents/communications, letters and facsimile of prints related to the "WE FORUM" newspaper.

2) Subversive documents, pamphlets, leaflets, books, and other publications to promote the objectives and purposes of the subversive organizations known as Movement for Free Philippines, Light-a-Fire Movement and April 6 Movement; and

3) Motor vehicles used in the distribution/circulation of the "WE FORUM" and other subversive materials and propaganda, more particularly,

1) Toyota-Corolla, colored yellow with Plate No. NKA 892;

2) DATSUN, pick-up colored white with Plate No. NKV 969;

3) A delivery truck with Plate No. NBS 542;

4) TOYOTA-TAMARAW, colored white with Plate No. PBP 665; and

5) TOYOTA Hi-Lux, pick-up truck with Plate No. NGV 472 with marking "Bagong Silang."

In Stanford v. State of Texas, the search warrant which authorized the search for "books, records, pamphlets, cards, receipts, lists, memoranda, pictures, recordings and other written instruments concerning the Communist Parties of Texas, and the operations of the Community Party in Texas," was declared void by the U.S. Supreme Court for being too general. In like manner, directions to "seize any evidence in connection with the violation of SDC 13-3703 or otherwise" have been held too general, and that portion of a search warrant which authorized the seizure of any "paraphernalia which could be used to violate Sec. 54-197 of the Connecticut General Statutes (the statute dealing with the crime of conspiracy)" was held to be a general warrant, and therefore invalid. The description of the articles sought to be seized under the search warrants in question cannot be characterized differently.

In the Stanford case, the U.S. Supreme court calls to mind a notable chapter in English history; the era of disaccord between the Tudor Government and the English Press, when "Officers of the Crown were given roving commissions to search where they pleased in order to suppress and destroy the literature of dissent both Catholic and Puritan." Reference herein to such historical episode would not be relevant for it is not the policy of our government to suppress any newspaper or publication that speaks with "the voice of non-conformity" but poses no clear and imminent danger to state security. 14

For the guidance of the bench and the bar, we reaffirm the following principles:

1. Under Article III, Section 2, of the l987 Constitution, it is only judges, and no other, who may issue warrants of arrest and search:

2. The exception is in cases of deportation of illegal and undesirable aliens, whom the President or the Commissioner of Immigration may order arrested, following a final order of deportation, for the purpose of deportation.

WHEREFORE, the petition is GRANTED. Article 38, paragraph (c) of the Labor Code is declared UNCONSTITUTIONAL and null and void. The respondents are ORDERED to return all materials seized as a result of the implementation of Search and Seizure Order No. 1205.

No costs.

SO ORDERED.

Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Cortes, Griño-Aquino, Medialdea and Regalado, JJ., concur.

 

 

G.R. No. 100641 June 14, 1993

FARLE P. ALMODIEL, petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION (FIRST DIVISION), RAYTHEON PHILS., INC., respondents.

Apolinario Lomabao, Jr. for petitioner.

Vicente A. Cruz, Jr., for private respondent.

 

NOCON, J.:

Subject of this petition for certiorari is the decision dated March 21, 1991 of the National Labor Relations Commission in NLRC Case No. 00-00645-89 which reversed and set aside the Labor Arbiter's decision dated September 27, 1989 and ordered instead the payment of separation pay and financial assistance of P100,000.00. Petitioner imputes grave abuse of discretion on the part of the Commission and prays for the reinstatement of the Labor Arbiter's decision which declared his termination on the ground of redundancy illegal.

Petitioner Farle P. Almodiel is a certified public accountant who was hired in October, 1987 as Cost Accounting Manager of respondent Raytheon Philippines, Inc. through a reputable placement firm, John Clements Consultants, Inc. with a starting monthly salary of P18,000.00. Before said employment, he was the accounts executive of Integrated Microelectronics, Inc. for several years. He left his lucrative job therein in view of the promising career offered by Raytheon. He started as a probationary or temporary employee. As Cost Accounting Manager, his major duties were: (1) plan, coordinate and carry out year and physical inventory; (2) formulate and issue out hard copies of Standard Product

costing and other cost/pricing analysis if needed and required and (3) set up the written Cost Accounting System for the whole company. After a few months, he was given a regularization increase of P1,600.00 a month. Not long thereafter, his salary was increased to P21,600.00 a month.

On August 17, 1988, he recommended and submitted a Cost Accounting/Finance Reorganization, affecting the whole finance group but the same was disapproved by the Controller. However, he was assured by the Controller that should his position or department which was apparently a one-man department with no staff becomes untenable or unable to deliver the needed service due to manpower constraint, he would be given a three (3) year advance notice.

In the meantime, the standard cost accounting system was installed and used at the Raytheon plants and subsidiaries worldwide. It was likewise adopted and installed in the Philippine operations. As a consequence, the services of a Cost Accounting Manager allegedly entailed only the submission of periodic reports that would use computerized forms prescribed and designed by the international head office of the Raytheon Company in California, USA.

On January 27, 1989, petitioner was summoned by his immediate boss and in the presence of IRD Manager, Mr. Rolando Estrada, he was told of the abolition of his position on the ground of redundancy. He pleaded with management to defer its action or transfer him to another department, but he was told that the decision of management was final and that the same has been conveyed to the Department of Labor and Employment. Thus, he was constrained to file the complaint for illegal dismissal before the Arbitration Branch of the National Capital Region, NLRC, Department of Labor and Employment.

On September 27, 1989, Labor Arbiter Daisy Cauton-Barcelona rendered a decision, the dispositive portion of which reads as follows:

WHEREFORE, judgment is hereby rendered declaring that complainant's termination on the ground of redundancy is highly irregular and without legal and factual basis, thus ordering the respondents to reinstate complainant to his former position with full backwages without lost of seniority rights and other benefits. Respondents are further ordered to pay complainant P200,000.00 as moral damages and P20,000.00 as exemplary damages, plus ten percent (10%) of the total award as attorney's fees. 1

Raytheon appealed therefrom on the grounds that the Labor Arbiter committed grave abuse of discretion in denying its rights to dismiss petitioner on the ground of redundancy, in relying on baseless surmises and self-serving assertions of the petitioner that its act was tainted with

malice and bad faith and in awarding moral and exemplary damages and attorney's fees.

On March 21, 1991, the NLRC reversed the decision and directed Raytheon to pay petitioner the total sum of P100,000.00 as separation pay/financial assistance. The dispositive portion of which is hereby quoted as follows:

WHEREFORE, the appealed decision is hereby set aside. In its stead, Order is hereby issued directing respondent to pay complainant the total separation pay/financial assistance of One Hundred Thousand Pesos (P100,000.00).

SO ORDERED. 2

From this decision, petitioner filed the instant petition averring that:

The public respondent committed grave abuse of discretion amounting to (lack of) or in excess of jurisdiction in declaring as valid and justified the termination of petitioner on the ground of redundancy in the face of clearly established finding that petitioner's termination was tainted with malice, bad faith and irregularity. 3

Termination of an employee's services because of redundancy is governed by Article 283 of the Labor Code which provides as follows:

Art. 283. Closure of establishment and reduction of personnel. — The employer may also terminate the employment of any employee due to installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the worker and the Department of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closure or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to at least one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered as one (1) whole year.

There is no dispute that petitioner was duly advised, one (1) month before, of the termination of his employment on the ground of redundancy in a written notice by his immediate superior, Mrs. Magdalena B.D. Lopez sometime in the afternoon of January 27, 1989. He was issued a check for P54,863.00 representing separation pay but in view of his refusal to acknowledge the notice and the check, they were sent to him thru registered mail on January 30, 1989. The Department of Labor and Employment was served a copy of the notice of termination of petitioner in accordance with the pertinent provisions of the Labor Code and the implementing rules.

The crux of the controversy lies on whether bad faith, malice and irregularity crept in the abolition of petitioner's position of Cost Accounting Manager on the ground of redundancy. Petitioner claims that the functions of his position were absorbed by the Payroll/Mis/Finance Department under the management of Danny Ang Tan Chai, a resident alien without any working permit from the Department of Labor and Employment as required by law. Petitioner relies on the testimony of Raytheon's witness to the effect that corollary functions appertaining to cost accounting were dispersed to other units in the Finance Department. And granting that his department has to be declared redundant, he claims that he should have been the Manager of the Payroll/Mis/Finance Department which handled general accounting, payroll and encoding. As a B. S. Accounting graduate, a CPA with M.B.A. units, 21 years of work experience, and a natural born Filipino, he claims that he is better qualified than Ang Tan Chai, a B.S. Industrial Engineer, hired merely as a Systems Analyst Programmer or its equivalent in early 1987, promoted as MIS Manager only during the middle part of 1988 and a resident alien.

On the other hand, Raytheon insists that petitioner's functions as Cost Accounting Manager had not been absorbed by Ang Tan Chai, a permanent resident born in this country. It claims to have established below that Ang Tan Chai did not displace petitioner or absorb his functions and duties as they were occupying entirely different and distinct positions requiring different sets of expertise or qualifications and discharging functions altogether different and foreign from that of petitioner's abolished position. Raytheon debunks petitioner's reliance on the testimony of Mr. Estrada saying that the same witness testified under oath that the functions of the Cost Accounting Manager had been completely dispensed with and the position itself had been totally abolished.

Whether petitioner's functions as Cost Accounting Manager have been dispensed with or merely absorbed by another is however immaterial. Thus, notwithstanding the dearth of evidence on the said question, a resolution of this case can be arrived at without delving into this matter. For even conceding that the functions of petitioner's position were merely transferred, no malice or bad faith can be imputed from said act. A survey of existing case law will disclose that in Wiltshire File Co., Inc. v. NLRC, 4 the position of Sales Manager was abolished on the ground of redundancy as the duties previously discharged by the Sales Manager

simply added to the duties of the General Manager to whom the Sales Manager used to report. In adjudging said termination as legal, this Court said that redundancy, for purposes of our Labor Code, exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. The characterization of an employee's services as no longer necessary or sustainable, and therefore, properly terminable, was an exercise of business judgment on the part of the employer. The wisdom or soundness of such characterization or decision was not subject to discretionary review on the part of the Labor Arbiter nor of the NLRC so long, of course, as violation of law or merely arbitrary and malicious action is not shown.

In the case of International Macleod, Inc. v. Intermediate Appellate Court, 5 this Court also considered the position of Government Relations Officer to have become redundant in view of the appointment of the International Heavy Equipment Corporation as the company's dealer with the government. It held therein that the determination of the need for the phasing out of a department as a labor and cost saving device because it was no longer economical to retain said services is a management prerogative and the courts will not interfere with the exercise thereof as long as no abuse of discretion or merely arbitrary or malicious action on the part of management is shown.

In the same vein, this Court ruled in Bondoc v. People's Bank and Trust Co., 6 that the bank's board of directors possessed the power to remove a department manager whose position depended on the retention of the trust and confidence of management and whether there was need for his services. Although some vindictive motivation might have impelled the abolition of his position, this Court expounded that it is undeniable that the bank's board of directors possessed the power to remove him and to determine whether the interest of the bank justified the existence of his department.

Indeed, an employer has no legal obligation to keep more employees than are necessary for the operation of its business. Petitioner does not dispute the fact that a cost accounting system was installed and used at Raytheon subsidiaries and plants worldwide; and that the functions of his position involve the submission of periodic reports utilizing computerized forms designed and prescribed by the head office with the installation of said accounting system. Petitioner attempts to controvert these realities by alleging that some of the functions of his position were still indispensable and were actually dispersed to another department. What these indispensable functions that were dispersed, he failed however, to specify and point out. Besides, the fact that the functions of a position were simply added to the duties of another does not affect the legitimacy of the employer's right to abolish a position when done in the normal exercise of its prerogative to adopt sound business practices in the management of its affairs.

Considering further that petitioner herein held a position which was definitely managerial in character, Raytheon had a broad latitude of discretion in abolishing his position. An employer has a much wider discretion in terminating employment relationship of managerial personnel compared to rank and file employees. 7 The reason obviously is that officers in such key positions perform not only functions which by nature require the employer's full trust and confidence but also functions that spell the success or failure of an enterprise.

Likewise destitute of merit is petitioner's imputation of unlawful discrimination when Raytheon caused corollary functions appertaining to cost accounting to be absorbed by Danny Ang Tan Chai, a resident alien without a working permit. Article 40 of the Labor Code which requires employment permit refers to non-resident aliens. The employment permit is required for entry into the country for employment purposes and is issued after determination of the non-availability of a person in the Philippines who is competent, able and willing at the time of application to perform the services for which the alien is desired. Since Ang Tan Chai is a resident alien, he does not fall within the ambit of the provision.

Petitioner also assails Raytheon's choice of Ang Tan Chai to head the Payroll/Mis/Finance Department, claiming that he is better qualified for the position. It should be noted, however, that Ang Tan Chai was promoted to the position during the middle part of 1988 or before the abolition of petitioner's position in early 1989. Besides the fact that Ang Tan Chai's promotion thereto is a settled matter, it has been consistently held that an objection founded on the ground that one has better credentials over the appointee is frowned upon so long as the latter possesses the minimum qualifications for the position. In the case at bar, since petitioner does not allege that Ang Tan Chai does not qualify for the position, the Court cannot substitute its discretion and judgment for that which is clearly and exclusively management prerogative. To do so would take away from the employer what rightly belongs to him as aptly explained in National Federation of Labor Unions v. NLRC: 8

It is a well-settled rule that labor laws do not authorize interference with the employer's judgment in the conduct of his business. The determination of the qualification and fitness of workers for hiring and firing, promotion or reassignment are exclusive prerogatives of management. The Labor Code and its implementing Rules do not vest in the Labor Arbiters nor in the different Divisions of the NLRC (nor in the courts) managerial authority. The employer is free to determine, using his own discretion and business judgment, all elements of employment, "from hiring to firing" except in cases of unlawful discrimination or those which may be provided by law. There is none in the instant case.

Finding no grave abuse of discretion on the part of the National Labor Relations Commission in reversing and annulling the decision of the Labor Arbiter and that on the contrary, the termination of petitioner's employment was anchored on a valid and authorized cause under Article 283 of the Labor Code, the instant petition for certiorarimust fail.

SO ORDERED.

Narvasa, C.J., Padilla and Regalado, JJ., concur.

 

G.R. No. 93666 April 22, 1991

GENERAL MILLING CORPORATION and EARL TIMOTHY CONE, petitioners, vs.HON. RUBEN D. TORRES, in his capacity as Secretary of Labor and Employment, HON. BIENVENIDO E. LAGUESMA, in his capacity as Acting Secretary of Labor and Employment, and BASKETBALL COACHES ASSOCIATION OF THE PHILIPPINES, respondents.

Sobrevinas, Diaz, Hayudini & Bodegon Law Office for petitioners.

Rodrigo, Cuevas & De Borja for respondent BCAP.

R E S O L U T I O N

 

FELICIANO, J.:

On 1 May 1989, the National Capital Region of the Department of Labor and Employment issued Alien Employment Permit No. M-0689-3-535 in favor of petitioner Earl Timothy Cone, a United States citizen, as sports consultant and assistant coach for petitioner General Milling Corporation ("GMC").

On 27 December 1989, petitioners GMC and Cone entered into a contract of employment whereby the latter undertook to coach GMC's basketball team.

On 15 January 1990, the Board of Special Inquiry of the Commission on Immigration and Deportation approved petitioner Cone's application for a change of admission status from temporary visitor to pre-arranged employee.

On 9 February 1990, petitioner GMC requested renewal of petitioner Cone's alien employment permit. GMC also requested that it be allowed to employ Cone as full-fledged coach. The DOLE Regional Director, Luna Piezas, granted the request on 15 February 1990.

On 18 February 1990, Alien Employment Permit No. M-02903-881, valid until 25 December 1990, was issued.

Private respondent Basketball Coaches Association of the Philippines ("BCAP") appealed the issuance of said alien employment permit to the respondent Secretary of Labor who, on 23 April 1990, issued a decision ordering cancellation of petitioner Cone's employment permit on the ground that there was no showing that there is no person in the Philippines who is competent, able and willing to perform the services required nor that the hiring of petitioner Cone would redound to the national interest.

Petitioner GMC filed a Motion for Reconsideration and two (2) Supplemental Motions for Reconsideration but said Motions were denied by Acting Secretary of Labor Bienvenido E. Laguesma in an Order dated 8 June 1990.

Petitioners are now before the Court on a Petition for Certiorari, dated 14 June 1990, alleging that:

1. respondent Secretary of Labor gravely abused his discretion when he revoked petitioner Cone's alien employment permit; and

2. Section 6 (c), Rule XIV, Book I of the Omnibus Rules Implementing the Labor Code is null and void as it is in violation of the enabling law as the Labor Code does not empower respondent Secretary to determine if the employment of an alien would redound to national interest.

Deliberating on the present Petition for Certiorari, the Court considers that petitioners have failed to show any grave abuse of discretion or any act without or in excess of jurisdiction on the part of respondent Secretary of Labor in rendering his decision, dated 23 April 1990, revoking petitioner Cone's Alien Employment Permit.

The alleged failure to notify petitioners of the appeal filed by private respondent BCAP was cured when petitioners were allowed to file their Motion for Reconsideration before respondent Secretary of Labor. 1

Petitioner GMC's claim that hiring of a foreign coach is an employer's prerogative has no legal basis at all. Under Article 40 of the Labor Code, an employer seeking employment of an alien must first obtain an employment permit from the Department of Labor. Petitioner GMC's right to choose whom to employ is, of course, limited by the statutory requirement of an alien employment permit.

Petitioners will not find solace in the equal protection clause of the Constitution. As pointed out by the Solicitor-General, no comparison can be made between petitioner Cone and Mr. Norman Black as the latter is "a long time resident of the country," and thus, not subject to the provisions of Article 40 of the Labor Code which apply only to "non-resident aliens." In any case, the term "non-resident alien" and its obverse "resident alien," here must be given their technical connotation under our law on immigration.

Neither can petitioners validly claim that implementation of respondent Secretary's decision would amount to an impairment of the obligations of contracts. The provisions of the Labor Code and its Implementing Rules and Regulations requiring alien employment permits were in existence long before petitioners entered into their contract of employment. It is firmly settled that provisions of applicable laws, especially provisions relating to matters affected with public policy, are deemed written into contracts. 2 Private parties cannot constitutionally contract away the otherwise applicable provisions of law.

Petitioners' contention that respondent Secretary of Labor should have deferred to the findings of Commission on Immigration and Deportation as to the necessity of employing petitioner Cone, is, again, bereft of legal

basis. The Labor Code itself specifically empowers respondent Secretary to make a determination as to the availability of the services of a "person in the Philippines who is competent, able and willing at the time of application to perform the services for which an alien is desired." 3 In short, the Department of Labor is the agency vested with jurisdiction to determine the question of availability of local workers. The constitutional validity of legal provisions granting such jurisdiction and authority and requiring proof of non-availability of local nationals able to carry out the duties of the position involved, cannot be seriously questioned.

Petitioners apparently also question the validity of the Implementing Rules and Regulations, specifically Section 6 (c), Rule XIV, Book I of the Implementing Rules, as imposing a condition not found in the Labor Code itself. Section 6 (c), Rule XIV, Book I of the Implementing Rules, provides as follows:

Section 6. Issuance of Employment Permit –– the Secretary of Labor may issue an employment permit to the applicant based on:

a) Compliance by the applicant and his employer with the requirements of Section 2 hereof;

b) Report of the Bureau Director as to the availability or non-availability of any person in the Philippines who is competent and willing to do the job for which the services of the applicant are desired.

(c) His assessment as to whether or not the employment of the applicant will redound to the national interest;

(d) Admissibility of the alien as certified by the Commission on Immigration and Deportation;

(e) The recommendation of the Board of Investments or other appropriate government agencies if the applicant will be employed in preferred areas of investments or in accordance with the imperative of economic development;

xxx xxx xxx

(Emphasis supplied)

Article 40 of the Labor Code reads as follows:

Art. 40. Employment per unit of non-resident aliens. –– Any alien seeking admission to the Philippines for employment

purposes and any domestic or foreign employer who desires to engage an alien for employment in the Philippines shall obtain an employment permit from the Department of Labor.

The employment permit may be issued to a non-resident alien or to the applicant employer after a determination of the non-availability of a person in the Philippines who is competent, able and willing at the time of application to perform the services for which the alien is desired.

For an enterprise registered in preferred areas of investments, said employment permit may be issued upon recommendation of the government agency charged with the supervision of said registered enterprise. (Emphasis supplied)

Petitioners apparently suggest that the Secretary of Labor is not authorized to take into account the question of whether or not employment of an alien applicant would "redound to the national interest" because Article 40 does not explicitly refer to such assessment. This argument (which seems impliedly to concede that the relationship of basketball coaching and the national interest is tenuous and unreal) is not persuasive. In the first place, the second paragraph of Article 40 says: "[t]he employment permit may be issued to a non-resident alien or to the applicant employer after a determination of the non-availability of a person in the Philippines who is competent, able and willing at the time of application to perform the services for which the alien is desired." The permissive language employed in the Labor Code indicates that the authority granted involves the exercise of discretion on the part of the issuing authority. In the second place, Article 12 of the Labor Code sets forth a statement of objectives that the Secretary of Labor should, and indeed must, take into account in exercising his authority and jurisdiction granted by the Labor Code,

Art. 12. Statement of Objectives. –– It is the policy of the State:

a) To promote and maintain a state of full employment through improved manpower training, allocation and utilization;

xxx xxx xxx

c) To facilitate a free choice of available employment by persons seeking work in conformity with the national interest;

d) To facilitate and regulate the movement of workers in conformity with the national interest;

e) To regulate the employment of aliens, including the establishment of a registration and/or work permit system;

xxx xxx xxx

Thus, we find petitioners' arguments on the above points of constitutional law too insubstantial to require further consideration.

Petitioners have very recently manifested to this Court that public respondent Secretary of Labor has reversed his earlier decision and has issued an Employment Permit to petitioner Cone. Petitioners seek to withdraw their Petition for Certiorari on the ground that it has become moot and academic.

While ordinarily this Court would dismiss a petition that clearly appears to have become moot and academic, the circumstances of this case and the nature of the questions raised by petitioners are such that we do not feel justified in leaving those questions unanswered. 4 Moreover, assuming that an alien employment permit has in fact been issued to petitioner Cone, the basis of the reversal by the Secretary of Labor of his earlier decision does not appear in the record. If such reversal is based on some view of constitutional law or labor law different from those here set out, then such employment permit, if one has been issued, would appear open to serious legal objections.

ACCORDINGLY, the Court Resolved to DISMISS the Petition for certiorari for lack of merit. Costs against petitioners.

Fernan, C.J., Bidin and Davide, Jr., JJ., concur.

Gutierrez, Jr., J., in the result.

G.R. No. L-2216             January 31, 1950

DEE C. CHUAN & SONS, INC., petitioner, vs.THE COURT OF INDUSTRIAL RELATIONS, CONGRESS OF LABOR ORGANIZATIONS (CLO), KAISAHAN NG MGA MANGGAGAWA SA KAHOY SA PILIPINAS and JULIAN LUMANOG AND HIS WORK-CONTRACT LABORERS, respondents.

Quisumbing, Sycip and Quisumbing for petitioner.Lazatin and Caballero for respondents.Arsenio I. Martinez for the Court of Industrial Relations.

TUASON, J.:

Dee C. Chuan & Sons, Inc. assails the validity of an order of the Court of Industrial Relations. The order made upon petitioner's request for authority to hire" about twelve(12) more laborers from time to time and on a temporary basis," contains the proviso that "the majority of the laborers to be employed should be native." The petition was filed pending settlement by the court of a labor dispute between the petitioner and Kaisahan Ng Mga Manggagawa sa Kahoy sa Pilipinas.

At the outset, the appellant takes exception to the finding of the court below that Dee C. Chuan & Sons, Inc. is capitalized with foreign descent. This question has little or no bearing on the case and may well be passed over except incidentally as a point of argument in relation to the material issues.

It is next said that "The Court of Industrial Relations cannot intervene in questions of selection of employees and workers so as to impose unconstitutional restrictions," and that "The restrictions of the number of aliens that nay be employed in any business, occupation, trade or profession of any kind, is a denial of the equal protection of the laws." Although the brief does not name the persons who are supposed to be denied the equal protection of the laws, it is clearly to be inferred that aliens in general are in petitioner's mind. certainly, the order does not, directly or indirectly, immediately or remotely, discriminate against the petitioner on account of race or citizenship. The order could have been issued in a case in which the employer was a Filipino. As a matter of fact the petitioner insists that 75 % of its shares of stock are held by Philippine citizens, a statement which is here assumed to be correct.

But is petitioner entitled to challenge the constitutionality of a law or an order which does not adversely affect it, in behalf of aliens who are prejudiced thereby? The answer is not in doubt. An alien may question the constitutionality of a statute (or court order) only when and so far as it is being, or is about to be, applied to his disadvantage. (16 C.J.S. 157et seq.) The prospective employees whom the petitioner may contemplate employing have not come forward to seek redress; their identity has not even been revealed. Clearly the petitioner has no case in so far as it strives to protect the rights of others, much less others who are unknown and undetermined. U.S. vs. Wong Ku Ark, 169 U.S. 649; Truaxvs. Reich, 239 U.S. 39 60 Law ed., 131., and other American decisions cited do not support the petitioner for the very simple reasons that in those cases it was the persons themselves whose rights and immunities under the constitution were being violated that invoked the protection of the courts.

The petitioner is within its legitimate sphere of interest when it complains that the appealed order restrains it in its liberty to engage the men it pleases. This complaint merits a more detailed examination.

That the employer's right to hire labor is not absolute has to be admitted. "This privilege of hiring and firing ad libitum is, of course, being subjected to restraints today." Statutes are cutting in on it. And so does Commonwealth Act No. 103. The regulations of the hours of labor of employees and of the employment of women and children are familiar examples of the limitation of the employer's right in this regard. The petitioner's request for permission to employ additional; laborers is an implicit recognition of the correctness of the proposition. The power of the legislature to make regulations is subject only to the condition that they should be affected with public interest and reasonable under the circumstances. The power may be exercised directly by the law-making body or delegated by appropriate rules to the courts or administrative agencies.

We are of the opinion that the order under consideration meets the test of reasonableness and public interest. The passage of Commonwealth Act No. 103 was "in conformity with the constitutional objective and . . . the historical fact that industrial and agricultural disputes have given rise to disquietude, bloodshed and revolution in our country." (Antamok Goldfields Mining Co. vs. Court of Industrial Relations, 40 Off. Gaz., 8th Supp., 173.)1 "Commonwealth Act No. 103 has precisely vested the Court of Industrial Relations with authority to intervene in all disputes between employees or strikes arising from the difference as regards wages, compensation, and other labor conditions which it may take cognizance of." (Central Azucarera de Tarlac vs. Court of Industrial Relations, 40 Off. Gaz., 3rd Supp., 319, 324.)2 Thus it has jurisdiction to determine the number of men to be laid off during off-seasons. By the same token, the court may specify that a certain proportion of the additional laborers to be employed should be Filipinos, if such condition, in the court's opinion, "is necessary or expedient for the purpose of settling disputes or doing justice to the parties."

The order in question has that specific end in view. In parallel view the court observed: "Undoubtedly, without the admonition of the Court, nothing could prevent petitioner from hiring purely alien laborers, and there is no gainsaying the fact that further conflict or dispute would naturally ensue. To cope with this contingency, and acting within the powers granted by the organic law, the court, believing in the necessity and expediency of making patent its desire to avoid probable and possible further misunderstanding between the parties, issued the order."

We are not prepared to declare that the order is not conducive to the aim pursued. The question is a practical one depending on facts with which the court is best familiar. The fact already noted should not be lost sight of — that there is a pending strike and besides, that the employment of temporary laborers was opposed by the striking employees and was the subject of a protracted hearing.

We can not agree with the petitioner that the order constitutes an unlawful intrusion into the sphere of legislation, by attempting to lay down a public policy of the state or to settle a political question. In the first place, we believe, as we have already explained, that the court's action falls within the legitimate scope of its jurisdiction. In the second place, the order does not formulate a policy and is not political in character. It is not a permanent, all-embracing regulation. It is a compromise and emergency measure applicable only in this case and calculated to bridge a temporary gap and to adjust conflicting interests in an existing and menacing controversy. The hiring of Chinese laborers by the petitioner was rightly considered by the court likely to lead the parties away from the reconciliation which it was the function of the court to effectuate.

As far as the petitioner is concerned, the requirement that majority of the laborers to be employed should be Filipinos is certain not arbitrary, unreasonable or unjust. The petitioner's right to employ labor or to make contract with respect thereto is not unreasonably curtailed and its interest is not jeopardized. We take it that the nationality of the additional laborers to be taken in is immaterial to the petitioner. In its application for permission to employ twelve temporary laborers it expressly says that these could be Filipinos or Chinese. On the face of this statement, assuming the same to be sincere, the petitioner objection to the condition imposed by the court would appear to be academic and a trifle.

We should not close without adverting to the fact that the petitioner does not so much as pretend that the hiring of additional laborers is its prerogative as a matter of right. It seems to be conceded that during the pendency of the dispute the petitioner could employ temporary laborers only with the permission of the Court of Industrial Relations. The granting of the application thus lies within the sound judgment of the court, and if the court could turn it down entirely, as we think it could, its authority to quality the permission should be undeniable, provided only that the qualification is not arbitrary, against law, morals, or established public policy, which it is not; it is an expedient and emergency step designed to

relieve petitioner's own difficulties. Also important to remember is that it is not compulsory on petitioner's part to take advantage of the order. Being a permute petitioner is the sole judge of whether it should take the order as it is, or leave it if it does not suit its interest to hire new laborers other than Chinese.

The order appealed from is affirmed with costs to this appeal against the petitioner-appellant.

Moran, C.J., Pablo, Padilla, and Torres, JJ., concur.