Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. Nos. L-58674-77 July 11, 1990
PEOPLE OF THE PHILIPPINES, petitioner,
vs.
HON. DOMINGO PANIS, Presiding Judge of the Court of First Instance of Zambales &
Olongapo City, Branch III and SERAPIO ABUG, respondents.

CRUZ, J:
The basic issue in this case is the correct interpretation of Article 13(b) of P.D. 442, otherwise
known as the Labor Code, reading as follows:
(b) Recruitment and placement' refers to any act of canvassing, enlisting,
contracting, transporting, hiring, or procuring workers, and includes referrals,
contract services, promising or advertising for employment, locally or abroad,
whether for profit or not: Provided, That any person or entity which, in any
manner, offers or promises for a fee employment to two or more persons
shall be deemed engaged in recruitment and placement.
Four informations were filed on January 9, 1981, in the Court of First Instance of Zambales
and Olongapo City alleging that Serapio Abug, private respondent herein, "without first
securing a license from the Ministry of Labor as a holder of authority to operate a feecharging employment agency, did then and there wilfully, unlawfully and criminally operate a
private fee charging employment agency by charging fees and expenses (from) and
promising employment in Saudi Arabia" to four separate individuals named therein, in
violation of Article 16 in relation to Article 39 of the Labor Code. 1
Abug filed a motion to quash on the ground that the informations did not charge an offense
because he was accused of illegally recruiting only one person in each of the four
informations. Under the proviso in Article 13(b), he claimed, there would be illegal
recruitment only "whenever two or more persons are in any manner promised or offered any
employment for a fee. " 2
Denied at first, the motion was reconsidered and finally granted in the Orders of the trial
court dated June 24 and September 17, 1981. The prosecution is now before us on
certiorari. 3
The posture of the petitioner is that the private respondent is being prosecuted under Article
39 in relation to Article 16 of the Labor Code; hence, Article 13(b) is not applicable. However,
as the first two cited articles penalize acts of recruitment and placement without proper
authority, which is the charge embodied in the informations, application of the definition of
recruitment and placement in Article 13(b) is unavoidable.
The view of the private respondents is that to constitute recruitment and placement, all the
acts mentioned in this article should involve dealings with two or mre persons as an
indispensable requirement. On the other hand, the petitioner argues that the requirement of
two or more persons is imposed only where the recruitment and placement consists of an
offer or promise of employment to such persons and always in consideration of a fee. The
other acts mentioned in the body of the article may involve even only one person and are not
necessarily for profit.
Neither interpretation is acceptable. We fail to see why the proviso should speak only of an
offer or promise of employment if the purpose was to apply the requirement of two or more
persons to all the acts mentioned in the basic rule. For its part, the petitioner does not
explain why dealings with two or more persons are needed where the recruitment and
placement consists of an offer or promise of employment but not when it is done through
"canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring (of) workers.
As we see it, the proviso was intended neither to impose a condition on the basic rule nor to
provide an exception thereto but merely to create a presumption. The presumption is that the
individual or entity is engaged in recruitment and placement whenever he or it is dealing with

two or more persons to whom, in consideration of a fee, an offer or promise of employment is

made in the course of the "canvassing, enlisting, contracting, transporting, utilizing, hiring or
procuring (of) workers. "
The number of persons dealt with is not an essential ingredient of the act of recruitment and
placement of workers. Any of the acts mentioned in the basic rule in Article 13(b) win
constitute recruitment and placement even if only one prospective worker is involved. The
proviso merely lays down a rule of evidence that where a fee is collected in consideration of
a promise or offer of employment to two or more prospective workers, the individual or entity
dealing with them shall be deemed to be engaged in the act of recruitment and placement.
The words "shall be deemed" create that presumption.
This is not unlike the presumption in article 217 of the Revised Penal Code, for example,
regarding the failure of a public officer to produce upon lawful demand funds or property
entrusted to his custody. Such failure shall beprima facie evidence that he has put them to
personal use; in other words, he shall be deemed to have malversed such funds or property.
In the instant case, the word "shall be deemed" should by the same token be given the force
of a disputable presumption or of prima facie evidence of engaging in recruitment and
placement. (Klepp vs. Odin Tp., McHenry County 40 ND N.W. 313, 314.)
It is unfortunate that we can only speculate on the meaning of the questioned provision for
lack of records of debates and deliberations that would otherwise have been available if the
Labor Code had been enacted as a statute rather than a presidential decree. The trouble
with presidential decrees is that they could be, and sometimes were, issued without previous
public discussion or consultation, the promulgator heeding only his own counsel or those of
his close advisers in their lofty pinnacle of power. The not infrequent results are rejection,
intentional or not, of the interest of the greater number and, as in the instant case, certain
esoteric provisions that one cannot read against the background facts usually reported in the
legislative journals.
At any rate, the interpretation here adopted should give more force to the campaign against
illegal recruitment and placement, which has victimized many Filipino workers seeking a
better life in a foreign land, and investing hard- earned savings or even borrowed funds in
pursuit of their dream, only to be awakened to the reality of a cynical deception at the hands
of theirown countrymen.
WHEREFORE, the Orders of June 24, 1981, and September 17, 1981, are set aside and the
four informations against the private respondent reinstated. No costs.
SO ORDERED.
Teehankee, CJ, Abad Santos, Feria, Yap, Fernan, Narvasa, Melencio-Herrera, Alampay,
Gutierrez, Jr. and Paras, JJ., concur.
Footnotes
1 Rollo, p. 25
2 Rollo, p. 11.
3 Rollo, p.1, pp. 20-21, p. 24.

People v Panis
142 SCRA 664 (1986)
Facts:
Four informations were filed on January 9, 1981, in the Court of First Instance of Zambales and
Olongapo City alleging that Serapio Abug, private respondent herein, "without first securing a
license from the Ministry of Labor as a holder of authority to operate a fee-charging employment
agency, did then and there wilfully, unlawfully and criminally operate a private fee-charging
employment agency by charging fees and expenses (from) and promising employment in Saudi
Arabia" to four separate individuals named therein, in violation of Article 16 in relation to Article 39
of the Labor Code.
Abug filed a motion to quash on the ground that the informations did not charge an offense
because he was accused of illegally recruiting only one person in each of the four informations.
Under the proviso in Article 13(b), he claimed, there would be illegal recruitment only "whenever

two or more persons are in any manner promised or offered any employment for a fee."
The posture of the petitioner is that the private respondent is being prosecuted under Article 39 in
relation to Article 16 of the Labor Code; hence, Article 13(b) is not applicable. However, as the
first two cited articles penalize acts of recruitment and placement without proper authority, which
is the charge embodied in the informations, application of the definition of recruitment and
placement in Article 13(b) is unavoidable.
Issue:
Whether or not the petitioner is guilty of violating Article 13(b) of P. D. 442, otherwise known as
the Labor Code.
Held:
Article 13(b) of P. D. 442, otherwise known as the Labor Code, states that, "(b) 'Recruitment and
placement' refers to any act of canvassing, 'enlisting, contracting, transporting, hiring, or
procuring workers, and includes referrals, contract services, promising or advertising for
employment, locally or abroad, whether for profit or not: Provided, That any person or entity
which, in any manner, offers or promises for a fee employment to two or more persons shall be
deemed engaged in recruitment and placement."
As we see it, the proviso was intended neither to impose a condition on the basic rule nor to
provide an exception thereto but merely to create a presumption. The presumption is that the
individual or entity is engaged in recruitment and placement whenever he or it is dealing with two
or more persons to whom, in consideration of a fee, an offer or promise of employment is made in
the course of the "canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring (of)
workers."
At any rate, the interpretation here adopted should give more force to the campaign against illegal
recruitment and placement, which has victimized many Filipino workers seeking a better life in a
foreign land, and investing hard-earned savings or even borrowed funds in pursuit of their dream,
only to be awakened to the reality of a cynical deception at the hands of their own countrymen.
People of the Philippines vs. Domingo Panis
GR No. L5867477, July 11, 1990
FACTS:
On January 9, 1981, four information were filed in the in the Court of First Instance (CFI) of
Zambales and Olongapo City alleging that herein private respondent Serapio Abug, "without
first securing a license from the Ministry of Labor as a holder of authority to operate a feecharging employment agency, did then and there wilfully, unlawfully and criminally operate a
private fee charging employment agency by charging fees and expenses (from) and promising
employment in Saudi Arabia" to four separate individuals. Abug filed a motion to quash
contending that he cannot be charged for illegal recruitment because according to him, Article
13(b) of the Labor Code says there would be illegal recruitment only "whenever two or more
persons are in any manner promised or offered any employment for a fee.
Denied at first, the motion to quash was reconsidered and granted by the Trial Court in its
Orders dated June 24, 1981, and September 17, 1981. In the instant case, the view of the
private respondents is that to constitute recruitment and placement, all the acts mentioned in
this article should involve dealings with two or more persons as an indispensable requirement.
On the other hand, the petitioner argues that the requirement of two or more persons is
imposed only where the recruitment and placement consists of an offer or promise of
employment to such persons and always in consideration of a fee.
ISSUE:
Whether or not Article 13(b) of the Labor Code provides for the innocence or guilt of the
private respondent of the crime of illegal recruitment
COURT RULING:
The Supreme Court reversed the CFIs Orders and reinstated all four information filed against
private respondent.
The Article 13(b) of the Labor Code was merely intended to create a presumption, and not to
impose a condition on the basic rule nor to provide an exception thereto.
Where a fee is collected in consideration of a promise or offer of employment to two or more
prospective workers, the individual or entity dealing with them shall be deemed to be engaged
in the act of recruitment and placement. The words "shall be deemed" create the said
presumption

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION

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.
Tanjuatco, Oreta, Tanjuatco, Berenguer & San Vicente for petitioner.

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:

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' nondeployment 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 nonemployees;
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 feecharging 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 rulemaking 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, Grio-Aquino and Medialdea, JJ., concur.

Footnotes

1 This limitation is stated no less than three (3) times in the surety bond.
2 The blanks were not filed up by the parties.
3 Rollo, pp. 48-49; parenthetical statements supplied.
4 Emphasis supplied.
5 Rollo, pp. 41-42 being pp. 1 and 2 of the Resolution of the Deputy Minister
dated Dec. 19, 1986, in which are enumerated the complainants entitled to
refund the amounts individually due to them.
6 The list of complainants entitled to refund and the amounts respectively
due them are set forth at pages 10 and 11 of the Order of the respondent
Secretary: Rollo, pp. 54-55.
7 Id., pp. 9-34. The petition is dated September 12, 1987.
8 Emphasis supplied.
9 Sec. 3 of Rule VI, Book II of the New Rules on Overseas Employment
10 Sec. 2 (a) and (2), id.
11 Sec. 10, id.
12 Underscoring in quotation, in original.

Labor Standards Liability of Sureties POEA Rules Overseas Employment

J&B Manpower is an overseas employment agency registered with the POEA and
Eastern Assurance was its surety beginning January 1985. From 1983 to December
1985, J&B recruited 33 persons but none of them were ever deployed. These 33
persons sued J&B and the POEA as well as the Secretary of Labor ruled in favor of
the 33 workers and ordered J&B to refund them (with Eastern Assurance being
solidarily liable). Eastern Assurance assailed the ruling claiming that POEA and the
Secretary of Labor have no jurisdiction over non-employees (since the 33 were
never employed, in short, no employer-employee relations).
ISSUE: Whether or not Eastern Assurance can be held liable in the case at bar.
HELD: Yes. But only for the period covering from January 1985 when the surety took
effect (as already held by the Labor Secretary). The Secretary of Labor was given
power by Article 34 (Labor Code) and Section 35 and 36 of EO 797 (POEA Rules) 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.
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.
Though some of the cases were filed after the expiration of the surety bond
agreement between J&B and Eastern Assurance, notice was given to J&B of such
anomalies even before said expiration. 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 Eastern
Assurance is to be interpreted liberally in the interest of the promises and
beneficiaries rather than strictly in favor of the surety.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 104995 August 26, 1993

PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
BALTAZAR DE LEON and MARIETTA DE LEON @ "BENJIE," accused. BALTAZAR DE
LEON, accused-appellant.
The Solicitor General for plaintiff-appellee.
Reynaldo S. Fajardo, Al A. Cosata & Bartolome P. Reus for accused-appellant.

DAVIDE, JR., J.:

This case, involves the crime of illegal recruitment. At its bottom are the hapless citizens in
search of a better life who still fall victim to the false promise of employment in foreign lands
and the inhumanity of illegal recruiters who prey upon the misfortunes of the former and
make a mockery of the law.
In an information filed on 28 February 1991 by the Office of the Provincial Prosecutor of Rizal
with the Regional Trial Court (RTC) of Pasig, Metro Manila, and assigned to Branch
156 1 thereof, the accused Baltazar de Leon and Marietta de Leon, alias "Benjie," who are
husband and wife, were charged with "the crime of Illegal Recruitment under P.D. No. 2018
(Large Scale)" in that:
. . . on or about the period comprised of the month of August and September,
1990 in the Municipality of Taguig, Metro Manila, Philippines, and within the
jurisdiction of this Honorable Court the above-named accused, representing
themselves to have the capacity to contract, enlist and transport Filipino
workers [for] employment abroad conspiring and confederating together and
mutually helping and aiding with one another, did then and there willfully,
unlawfully and feloniously, for a fee recruit and promise employment/job
placement abroad [to] the following persons to wit:
Francisco Beo P6,380.00
Lourdes Raya Bernabe P6,700.00
Cesar Cortez P4,505.00
Eugenia Panganiban Cruz P6,380.00
Alfredo Gutierrez P4,505.00
Daniel Perez P6,380.00
Lourdes Perez P3,000.00
without first securing the required license or authority from the Department of
Labor and Employment, by falsely representing to the said persons that they
were in a position to obtain overseas jobs from them and in violation of the
aforementioned law against Illegal Recruitment committed in large scale and
amounting to economic sabotage.
CONTRARY TO LAW." 2
Only Baltazar de Leon was arrested. Marietta de Leon remains at large up to the present.
The former entered a plea of not guilty at his arraignment on 2 April 1991 3 and the trial on the
merits proceeded with respect to him.

In its decision promulgated on 7 April 1992, the trial court 4 found Baltazar de Leon guilty as
charged and decreed as follows:
WHEREFORE, premises considered, the Court finds the accused
BALTAZAR DE LEON guilty beyond reasonable doubt of the crime of Illegal
Recruitment (in Large Scale) constituting economic sabotage and hereby
sentences said accused BALTAZAR DE LEON to suffer the penalty of life
imprisonment,to pay a fine of ONE HUNDRED THOUSAND PESOS
(P100,000.00), to reimburse the complainant-victims, namely: Francisco Beo
through Flordeliza Beo in the amount of P6,380.00; Lourdes Raya-Bernabe
in the amount of P6,700.00; Cesar Cortez in the amount of P3,505.00;
Eugenia Panganiban-Cruz in the amount of P6,380.00; Alfredo Gutierrez in
the amount of P3,500.00; Daniel and Lourdes Perez in the amount of
P5,000.00 plus P1,380.00 through Noeta Perez and to pay the costs.
In the service of his sentence, the accused shall be credited in full with the
period of his preventive imprisonment.
Let alias warrant be issued for the arrest of accused MARIETTA DE LEON
alias "Benjie", the same to be served by the NBI, PNP/CIS and other national
police agencies.
SO ORDERED. 5
The judgment of conviction is based upon the following findings and conclusion of the trial
court:
Clearly accused Baltazar de Leon is neither authorized nor licensed to recruit
workers for overseas jobs and yet he and his wife recruited workers, talked to
the applicants and collected fees for requirements that each applicant had to
comply with in order that their applications may be processed. Although Mrs.
De Leon was more active in the recruitment, accused Baltazar played an
important part as both spouses convincingly played out their roles resulting in
the applicants' reposing their trust and belief in them. It is of little surprise that
the complaining witnesses conclusively identified accused Baltazar as the
man who recruited them or their relatives. Said witnesses even gave in
evidence the list of requirements and fees that they were told to pay. Said
lists clearly show that a great deal of money was involved and received by
the accused. The charade played by both accused show a unity of purpose
and unity in execution of their unlawful objective establishing the existence of
a conspiracy for which both accused must suffer the same penalty. (People
vs. Talla, 181 SCRA 133)." 6
The summary by the People of the prosecution's evidence concerning the recruitment of the
appellant is hereby adopted, it being fully supported by the testimonies of the complaining
witnesses:
Camila del Rosario, who was a neighbor of appellant, told Noeta Perez,
Eugene Panganiban, Elvira Alonzo, Lourdes Bernabe, and one Ador, all of
whom were working for the same employer, that del Rosario's daughter was
able to work abroad through the efforts of appellant and his wife. (TSN, N.
Perez, June 26, 1991, p. 4).
On September 16, 1990 del Rosario, together with Noeta Perez and the
latter's sister, Lourdes and brother Daniel, went to appellant's house in
Pateros, Rizal. Noeta Perez's purpose in going to appellant's house was to
apply for overseas jobs for her brother Daniel and sister Lourdes. When del
Rosario, Noeta Perez and her brother reached appellant's house, they met
appellant and his wife who informed them that they have already sent
persons to Micronesia who were hired as chambermaids and roomboys.
Noeta Perez then asked her sister and brother to apply, and she gave
P1,380.00 to appellant's wife (Id., pp. 5-6).
The following day, September 17, 1990, appellant's wife asked Daniel to go
back together with Lourdes to file their application and to undergo medical
examination. On the same day, Daniel and Lourdes gave appellant and his
wife P2,500.00 for the passport, and, in addition, they paid P5,000.00 to
appellant. For helping Daniel and Lourdes get jobs abroad, appellant
demanded P6,380.00 from each of the applicants allegedly for the

processing of the papers, medical examination, pictures and passport. Noeta

Perez was able top give P3,000.00 to appellant for her sister Lourdes'
application, but she was unable to give any amount for Daniel's application
(Id., pp. 6-9).
Sometime in November, 1990, Noeta Perez received a letter from the
National Bureau of Investigation ("NBI") saying that the applications for
overseas jobs sent to Micronesia were sent to the NBI because there were
no such job orders from Micronesia. Upon getting this information, Noeta,
together with her sister Lourdes and brother Daniel could not have gone to
Micronesia since the alleged jobs offered to them by appellant never existed
(Id., pp. 9-11).
Cesar Cortez suffered a similar fate as that of Daniel and Lourdes Perez.
Cortez came to know appellant through a friend, Alfredo Gutierrez, who
applied with appellant for an overseas job in Micronesia. Because his friend
applied, Cortez also applied with appellant for a job as roomboy in
Micronesia. When Cortez filed his application, appellant immediately required
him to give P680.00 for alleged medical fee, which Cortez paid. After paying
the medical fee, appellant's wife asked Cortez to pay P175.00 as
transportation fee for securing the passport. Then appellant asked P1,000.00
as downpayment for the passport, which amount was paid to and received by
appellant's wife. In addition, Cortez paid P1,650.00, which was received by
appellant's wife in the presence of the appellant, for full payment of the
passport. Cortez gave these amounts to appellant or his wife between the
second week of August, 1990 and second week of September, 1990.
Appellant promised Cortez that he could leave for Micronesia in the month of
September, 1990, and when this did not materialize, appellant promised
again that Cortez could leave by November, 1990. Cortez, however, was
unable to leave for Micronesia for it turned out that appellant had no business
partner in Micronesia (TSN, C. Cortez, October 29, 1991, pp. 2-4).
Alfredo Gutierrez, a friend of Cortez, also applied with appellant for the job of
driver in Guam. Gutierrez knew appellant because a certain Mila introduced
him to appellant who represented that he could send workers abroad. The
introduction occurred at appellant's house in the first week of August, 1990.
Appellant asked for P680.00 allegedly for medical fee and pictures, which
Gutierrez paid. Gutierrez was required to give additional amounts, and the
total amount he paid reached P3,500.00. He paid this amount to appellant for
the promised job as driver in Guam. Gutierrez, however, was unable to leave
for Guam because it turned out that there was no such job order in Guam
(TSN, A. Gutierrez, October 21, 1991, pp. 2-4). 7
The prosecution further proved through the unrebutted testimony of Elisa Roque, Senior
Officer of the Licensure Division of the Philippine Overseas Employment Administration
(POEA), that the appellant does not have
any license or authority from the POEA to recruit workers for overseas employment. 8
On the other hand, there is nothing in the appellant's brief testimony except the denial of the
separate accusations of the complaining witnesses and the assertion that he does not know
anything about the transactions between the complainants and his co-accused as he was
always out of his residence at daytime. He declared that he was employed as a driver by
Reymar Advertising, which is owned by Mr. Reynaldo Bucsit. He served as such daily from
8:00 a.m. to 5:00 p.m. and oftentimes worked from 6:30 p.m. to midnight as a driver of a
passenger jeepney. 9 Mr. Bucsit testified that the appellant was his driver from July 1987 to 22
November 1990 and that the latter worked "[s]ometimes four or five days in a week because he
had to rest after driving the whole
day." 10
Immediately after the promulgation of the judgment, Baltazar de Leon (hereinafter referred to
as the appellant) filed his notice of appeal 11 and, in his main brief 12 filed on 27 November 1992,
raised this sole error allegedly committed by the trial court:
THE COURT A QUO ERRED IN HOLDING THAT THE GUILT OF ACCUSED
BALTAZAR DE LEON FOR THE CRIME CHARGED WAS PROVEN
BEYOND REASONABLE DOUBT.
We find no merit in this appeal.
Before proceeding any further, some observations on the information filed are in order.

The information charges the appellant with "the crime of Illegal Recruitment under P.D. No.
2018 (Large Scale)." However, this decree merely further amended Articles 38 and 39 of the
Labor Code 13 by making large-scale illegal recruitment, i.e., committed against three or more
persons individually or collectively, a crime of economic sabotage and punishable with life
imprisonment. More precisely then, the information should have been for the violation of Article 38
in relation to Article 39 of the Labor Code, as amended. Although this error seems to be
innocuous since the body of the complaint recites the elements of large-scale illegal recruitment,
proof beyond reasonable doubt of which would sustain a conviction under Articles 38 and 39 of
the said Code, we, nevertheless, make these observations by way of advice to prosecutors to
exercise the greatest care in the preparation of informations.
The pertinent portions of Articles 38 and 39 of the Labor Code, as amended by P.D. No.
2018, read as follows:
Art. 38. Illegal Recruitment. (a) Any recruitment activities, including the
prohibited practices enumerated under Article 34 of this Code, to be
undertaken by non-licensees or non-holders of authority shall be deemed
illegal and punishable under Article 39 of this Code. The Ministry of Labor
and Employment or any law enforcement officer may initiate complaints
under this Article.
(b) Illegal recruitment when committed by a syndicate or in large scale shall
be considered an offense involving economic sabotage and shall be
penalized in accordance with Article 39 hereof.
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.
xxx xxx xxx
Art. 39. Penalties. (a) The penalty of life imprisonment and a fine of One
Hundred Thousand Pesos (P100,000) shall be imposed if illegal recruitment
constitutes economic sabotage as defined herein:"
xxx xxx xxx
Article 13(b) the same Code defines recruitment as follows:
"Recruitment and placement" refers to any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring or procuring workers, and includes
referrals, contract services, promising or advertising for for employment,
locally or abroad, whether for profit or not: Provided, That any person or
entity which, in any manner, offers or promises for a fee employment to two
or more persons shall be deemed engaged in recruitment and placement.
While among the prohibited practices enumerated in Article 34 of the said Code is:
(b) To furnish or publish any false notice or information or document in
relation to recruitment or employment.
And now to the merits of this appeal.
In support of the assigned error, the appellant contends that: (a) he did not transact business
with any one of the complaining witnesses nor did he receive any monetary consideration
from them; (b) granting for the sake of argument that his wife was engaged in illegal
recruitment, there is no sufficient evidence to prove that he acted in conspiracy with his wife;
(c) he had no opportunity to engage in recruitment because he was then employed as a
driver by one Reynaldo Bucsit with a work schedule from 8:00 a.m. to 5:00 p.m. and likewise
worked as a driver of a passenger jeepney until midnight or the morning of the following day;
and (d) the complaining witnesses implicated him because he is the husband of Marietta de
Leon who allegedly recruited them but who is now at large.
Our own reading and evaluation of the testimonies of the complaining witnesses lead to no
other conclusion than that the appellant and his wife were co-conspirators in the illegal
recruitment business conducted in their residence with each contributing coordinative and

cooperative acts to insure the success of an enterprise that provided them with income for
their mutual benefit and advantage. The complainants separately came to the appellant's
residence on various dates because they were informed by their co-workers that he and his
wife were known to be recruiting for employment in Micronesia, Guam and Singapore. In all
the occasions when they came to his house, the appellant was always there. Complainant
Noeta Perez categorically declared that the appellant and his wife told her and her
companions that "they sent people abroad, in Micronesia, hired [sic] there as chambermaid
and roomboy" and that she gave the money demanded in connection with the application of
her brother and sister to Marietta in the presence of the appellant. 14 Complainant Eugenia
Cruz declared that when she and her companions, Elma Conde and Adelaida Cabungkay, were
in the house of the appellant filling up the papers in connection with their application for
employment abroad, the latter help [sic] us how to file the papers given to" them and told them
that they "would be receiving salary of $2.15/hour," and that she gave P6,380.00 to Marietta in
the presence of the appellant. 15 Complainant Flordeliza Beo testified that when she accompanied
her husband to apply for employment, the appellant explained to them the terms of employment
and was present when she gave the amount of P6,380.00 to Marietta. 16 Complainant Alfredo
Gutierrez was directly introduced to the appellant by Mila and the appellant himself asked from
him various sums, amounting to P3,500.00, ostensibly in connection with his application for
employment, and personally received it from Alfredo. 17 Complainant Cesar Cortes was also
directly introduced to the appellant and paid the various sums demanded from him to Marietta in
the presence of the appellant. 18 Complainant Lourdes Bernabe testified that the appellant offered
her the job of domestic helper in Singapore, informed her of the requirements for her application,
and, together with his wife, received her payment of P2,500.00 purportedly for the processing of
her papers. 19
All these acts of the appellant and his wife conclusively established a common criminal
design mutually deliberated upon and accomplished through coordinated moves.
Such acts constitute enlisting, contracting or procuring workers for or promising them
overseas employment, which are among the acts of recruitment embraced in Article 13(b) of
the Labor Code, as amended. The furnishing of the victims with certain documents which
they were required to fill up allegedly in connection with their overseas employment, which
actually did not exist, also constitutes the violation of paragraph (b), Article 34 of the same
Code. Since the appellant does not have the license or authority to recruit and he committed
the said acts against at least three individuals, he is guilty of large-scale illegal recruitment
under Article 38, which offense is penalized with life imprisonment and a fine of P100,000.00
in the succeeding Article 39.
We are not persuaded by the appellant's contention that he could not have transacted
business with the complainants and participated in the activities of his wife because he was
not in his residence during the daytime in view of his employment at Reymar Advertising and
his driving of a passenger jeepney after working hours until midnight. He sets up, in effect,
the defense of alibi. We have carefully searched for a statement in his testimony in court as
to the specific dates he was employed by Reymar Advertising. We found none. Rather, it was
his witness, Mr. Reynaldo Bucsit, who attempted to do so by claiming that the appellant was
his personal driver from July 1987 to 22 November 1990. 20 We then have a situation where a
party who claimed that it was impossible for him to have committed a crime because he was
somewhere else at the time of its commission did not even specifically and explicitly testify that
the dates when he was allegedly somewhere else coincided with the dates specified in the
information and proven by the evidence as the dates when the crime was committed. This is
rather strange and only manifests the weakness of his plea. In any case, the trial court
disregarded the testimony of Mr. Bucsit. Settled is the rule that a trial court's finding on the
credibility of a witness is entitled to the highest degree of respect and will not be disturbed on
appeal in the absence of any showing that the said court overlooked, misunderstood or
misapplied some facts or circumstances of weight and substance which would have affected the
result of the case. 21 But even if Mr. Bucsit's testimony were to be given full faith, it discloses that it
was not at all impossible for the appellant to have met and transacted business with the
complainants or to have participated in the business of his wife since he drove for Mr. Bucsit for
only four or five days a week. The latter declared:
Q In a week, how many days did he perform his job?
A Sometimes four or five days in a week because he had to
rest after driving the whole day, sir. 22
Moreover, the appellant was positively identified by the complainants. It is axiomatic that alibi
cannot prevail over the positive identification of the accused. 23
Appellant's final argument that the complainants filed the case against him in order to harass
him and compel him "to answer their money claims, after failing to recover from the real
culprit," 24 is nothing but a flimsy excuse which we cannot accept. As previously discussed, the

appellant is a co-conspirator in the crime of illegal recruitment, and in conspiracy the act of one is
the act of
all. 25

The decision appealed from is therefore fully supported by facts which established the guilt
of the appellant beyond reasonable doubt.
We cannot end this case without some parting thoughts to conclude what we had stated at
the beginning. Something must be wrong somewhere if, in spite of the stiff penalties for
illegal recruitment, some still brazenly take advantage of the misery of others and profit from
their misfortunes while many still fall for the false promises of illegal recruiters despite the
painful lessons the experiences of others have taught. What is clear to us is that illegal
recruiters cannot flout our laws and prey on the hard lot of others if the Government had the
will to resolutely enforce the laws against illegal recruitment and to be merciless against the
violators. They do not deserve any mercy. Large-scale illegal recruitment is a crime which is
not difficult to discover, prosecute and prove, for it cannot be done in absolute secrecy. That
there must be an end to illegal recruitment is a matter of public policy for not only must the
State protect those who, because of economic difficulties or lack of employment
opportunities in the country, seek greener pastures in foreign lands and from whose earnings
the State itself benefits, it must also punish to the fullest extent of the law illegal recruiters,
especially those engaged in syndicated or large-scale illegal recruitment, who continue to
wreak havoc on our economy. It is thus earnestly wished that the Government flex its
muscles to eradicate this pernicious evil.
WHEREFORE, the judgment appealed from is hereby AFFIRMED in toto.
Costs against the appellant.
SO ORDERED.
Cruz, Grio-Aquino, Bellosillo and Quiason, JJ., concur.

# Footnotes
1 Designated as a Special Criminal Court.
2 Original Records (OR), 1; Rollo, 9.
3 OR, 14.
4 Id., 220-228. Per Judge Martin S. Villarama, Jr.
5 OR, 227-228.
6 Or, 226.
7 Appellee's Brief, 4-8.
8 TSN, 6 January 1992, 3; see also Exhibit "H".
9 TSN, 6 March 1992, 3-6.
10 TSN, 27 January 1992, 3-4.
11 OR, 232.
12 Rollo, 43-56.
13 P.D. No. 442, as amended.
14 TSN, 26 June 1991, 5-6.
15 TSN, 19 July 1991, 4-6.
16 TSN, 23 July 1991, 7-8.

17 TSN, 21 October 1991, 3-4.

18 TSN, 29 October 1991, 3-4.
19 TSN, 29 October 1991, 8-9.
20 TSN, 27 January 1992, 3.
21 People vs. Florida, 214 SCRA 227 [1992].
22 TSN, 27 January 1992, 3-4.
23 People vs. Mercado, 97 SCRA 232 [1980]; People vs. Clores, 184 SCRA
638 [1990]; People vs. Arceo, 187 SCRA 265 [1990]; People vs. Beringuel,
192 SCRA 561 [1990].
24 Brief for Appellant, 11; Rollo, 55.
25 People vs. Alvarez, 201 SCRA 364 [1991]; People vs. Buligon, 205 SCRA
766 [1992]; People vs. Ocinar, 212 SCRA 646 [1992].

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
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.

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 him 13 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:
xxxx
(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.

Footnotes
1 Rollo, p. 109.
2 POEA Decision, Rollo, pp. 11-16.
3 Rollo, p. 16.
4 Rollo, p. 44.
5 Rollo, p. 45.
6 Rollo, p. 6.
7 Rollo, p. 15.
8 Rollo, p. 44.
9 Rollo, p. 45.
10 Rollo, p. 9.
11 Rollo, p. 12.
12 Rollo, p. 95.
13 Rollo, p. 12.
14 Rollo, p. 96.

15 Rollo, p. 15.
16 Rollo, p. 13.
17 Rollo, p. 13.
18 Bello v. C.A., 56 SCRA 518 (1974).
19 Filipino Pipe and Foundry Corporation v. Central Bank, 23 SCRA 10531054 (1968).
20 Stanford Microsystems, inc. v. NLRC, 157 SCRA 415 (1988).
21 Baby Bus v. Minister of Labor, 158 SCRA 225 (1988); Manila Mandarin
Employees Union v. NLRC, et al., 154 SCRA 369 (1987).
22 38 Phil. 414 (1918).
23 Philippine Apparel Workers Union v. National Labor Relations
Commission, 106 SCRA 474 (1981), Melencio- Herrera, J., dissenting.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-58011-12 July 20, 1982
VIR-JEN SHIPPING AND MARINE SERVICES, INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, ROGELIO BISULA, RUBEN ARROZA,
JUAN GACUTNO, LEONILO ATOK, NILO CRUZ, ALVARO ANDRADA, NEMESIO ADUG,
SIMPLICIO BAUTISTA, ROMEO ACOSTA, and JOSE ENCABO, respondents.
Maximo A. Savellano, Jr., for petitioner.
Solicitor General and Romeo M. Devera for respondents.

BARREDO, J.:
Petition for certiorari seeking the annulment or setting aside, on the grounds of excess of
jurisdiction and grave abuse of discretion, of the decision of the National Labor Relations
Commission in consolidated NSB Cases Nos. 2250-79 and 2252-79 thereof, 1 the dispositive
portion of which reads thus:
WHEREFORE, the Decision appealed from should be, as it is hereby
modified in this wise:
Respondent Vir-jen Shipping and Marine Services, Inc., is hereby ordered to
pay the following to the complainant Seamen who have not withdrawn from
the case, namely: Capt. Rogelio H. Bisula, Ruben Arroza, Juan Gacutno,
Leonilo Atok, Nilo Cruz, Alvaro Andrada, Nemesio Adug, Simplicio Bautista,
Romeo Acosta and Jose Encabo:
1. their earned wages corresponding to the period from 16 to
19 April 1979;
2. the wages corresponding to the unexpired portion of their
contracts, as adjusted by the respondent Company effective 1
March 1979;

3. the adjusted representation allowances of the complainant

Seamen who served as officers and who have not withdrawn
from the case, namely: Capt. Rogelio Bisula, Ruben Arroza,
Juan Gacutno, Leonilo Atok and Nilo Cruz;
4. their vacation pay equivalent to one-half () month's pay
after six (6) months of service and another one-half ()
month's pay after the completion of the one-year contract;
5. their tanker service bonus equivalent to one-half ()
month's pay; and
6. their earned overtime pay from l to l9 April 1979.
The Secretariat of the National Seamen Board is also hereby directed to
issue within five (5) days from receipt of this Decision the necessary
clearances to the suspended Seamen. (pp. 86-87, Record.)
The factual and legal background of these cases is related most comprehensively in the
"Manifestation and Comment" filed by the Solicitor General. It is as follows:
The records show that private respondents have a manning contract for a
period of one (1) year with petitioner in representation of its principal Kyoei
Tanker Co. Ltd. The terms and conditions of said contract were based on the
standard contract of the NSB. The manning contract was approved by the
NSB. Aware of the problem that vessels not paying rates imposed by the
International Transport Workers Federation (ITF) would be detained or
interdicted in foreign ports controlled by the ITF, petitioner and private
respondents executed a side contract to the effect that should the vessel M/T
Jannu be required to pay ITF rates when it calls on any ITF controlled foreign
port, private respondents would return to petitioner the amounts so paid to
them.
On March 23, 1979, the master of the vessel who is one of the private
respondents sent a cable to petitioner, while said vessel was en route to
Australia which is an ITF controlled port, stating that private respondents
were not contented with the salary and benefits stipulated in the manning
contract, and demanded that they be given 50% increase thereof, as the
"best and only solution to solve ITF problem." Apparently, reference to "ITF"
in private respondents' cable made petitioner apprehensive since the vessel
at that time was en route to Australia, an ITF port, and would be interdicted
and detained thereat, should private respondents denounce the existing
manning contract to the ITF and should petitioner refuse or be unable to pay
the ITF rates, which represent more than 100% of what is stipulated in the
manning contract. Placed under such situation, petitioner replied by cable
dated March 24, 1979 to private respondents, as follows:
... WE ARE SURPRISED WITH THIS SUDDEN CHANGE OF
ATTITUDE AND DEMANDS FOR WE HAVE THOROUGHLY
EXPLAINED AND DISCUSSED ALL MATTERS PERTAINING
TO YOUR PRESENT EMPLOYMENT AND BELIEVED THAT
WE FULLY UNDERSTOOD EACH OTHER ... WE SHALL
SUFFER AND ABSORB CONSIDERABLE AMOUNT OF
LOSSES WITH YOUR DEMAND OF FIFTY PERCENT AS
WE ARE ALREADY COMMITTED TO PRINCIPALS
THEREFORE TO MINIMIZE OUR LOSSES WE PROPOSE
AN INCREASE OF TWENTY FIVE PERCENT ON YOUR
BASIC PAYS PLUS THE SPECIAL COMPENSATION FOR
THIS PARTICULAR VOYAGE ... (p. 7 Comment)
On March 26, 1979, petitioner wrote a letter to the NSB denouncing the
conduct of private respondents as follows:
This is to inform you that on March 24, 1979, we received a cable from Capt.
Rogelio Bisula, Master of the above-reference vessel reading as follows:
URINFO ENTIRE JANNU OFFICERS AND CREW NOT
CONTENTED WITH PRESENT SALARY BASED ON
VOLUME OF WORK TYPE OF SHIP WITH HAZARDOUS

CARGO AND REGISTERED IN A WORLDWIDE TRADE

STOP WHAT WE DEMAND IS ONLY FIFTY PERCENT
INCREASE BASED ON PRESENT BASIC SALARY STOP
THIS DEMAND THE BEST AND ONLY SOLUTION TO
SOLVE PROBLEM DUE YOUR PRESENT RATES
ESPECIALLY TANKERS VERY FAR IN COMPARISON WITH
OTHER SHIPPING AGENCIES IN MANILA.
to which we replied on March 24, 1979, as follows:
WE ARE SURPRISED WITH SUDDEN CHANGE, OF
ATTITUDE AND DEMANDS FOR WE HAVE THOROUGHLY
EXPLAINED AND DISCUSSED ALL MATTERS PERTAINING
TO YOUR PRESENT EMPLOYMENT AND BELIEVED THAT
WE FULLY UNDERSTOOD EACH OTHER STOP FRANKLY
SPEAKING WE SHALL SUFFER AND ABSORB
CONSIDERABLE AMOUNT OF LOSSES WITH YOUR
DEMAND OF FIFTY PERCENT AS WE ARE COMMITTED
TO PRINCIPALS THEREFORE TO MINIMIZE OUR LOSSES
WE PROPOSE AN INCREASE OF TWENTY FIVE
PERCENT ON YOUR BASIC PAY STOP YOUR
UNDERSTANDING AND FULL COOPERATION WILL BE
VERY MUCH APPRECIATED STOP PLS CONFIRM
SOONEST.
On March 25, 1979 we received the following communication from the
Master of said vessel:
OFFICERS AND CREW HESITATING TO GIVE UP DEMAND
OF FIFTY PERCENT INCREASE BUT FOR THE GOOD AND
HARMONIOUS RELATIONSHIP ON BOARD AND
RECONSIDERING YOUR SUPPOSED TO BE LOSSES IN
CASE WE CONDITIONALLY COOPERATE WITH YOUR
PROPOSED INCREASE AND TWENTY FIVE PERCENT
BASED ON INDIVIDUAL BASIC PAY WITH THE
FOLLOWING TERMS AND CONDITION STOP
EFFECTIVITY OF TWENTY FIVE PERCENT INCREASE
MUST BE MARCH/79 STOP INCREASE MUST BE
COLLECTIBLE ON BOARD EFFECTIVE ABOVE DATE
UNTIL DISEMBARKATION STOP ALLOTMENT TO
ALLOTEES REMAIN AS IS STOP REASONABLE
REPALLOWS FOR ALL OFFICERS BE GIVEN EFFECTIVE
MARCH/79 STOP BONUS FOR 6 MONTHS SERVICES
RENDERED BE COLLECTIBLE ON BOARD STOP
OFFICERS/CREW 30PCT O/T SHUD BE BASED NEW
UPGRADED SALARY SCALE STOP
MASTER/CHENGR/CHMATE SPECIAL COMPENSATION
GIVE BY YOUR COMPANY PRIOR DEPARTURE MANILA
REMAIN AS IS.
to which we replied on March 25, 1979, as follows:
WE AGREE ALL CONDITIONS AND CONFIRM IT SHALL BE
PROPERLY ENFORCED STOP WILL PREPARE ALL
REQUIRED DOCUMENTS AND WILL BE DELIVERED ON
BOARD.
For your further information and guidance, the abovementioned demands of
the officers and crew (25% increase in basic pay, increase in overtime pay
and increase in representation allowance) involve an additional amount of
US$3,096.50 per month, which our company is not in a position to shoulder.
We are, therefore, negotiating with our Principals, Messrs. Kyoei Tanker
Company, Limited, for the amendment of our agency agreement in the sense
that our monthly fee be increased correspondingly. We have sent our
Executive Vice-President, Mr. Ericson M. Marquez, to Japan to represent us
in said negotiation and we will inform you of the results thereof. (Annex "E" of
Petition)

In view of private respondents' conduct and breach of contract, petitioner's

principal, Kyoei Tanker Co., Ltd. terminated the manning contract in a letter
dated April 4, 1979, which reads in part;
This is with reference to your letter of March 26, 1979 and our
conference with Mr. Ericson Marquez in Tokyo on March 29,
1979, regarding the unexpected and unreasonable demand
for salary increase of your officers and crew on the above
vessel.
Frankly speaking, we fully agree with you that this action
taken by your officers and crew in demanding increase in
their salaries and overtime after being on board for only three
months was very unreasonable. Considering the
circumstances when the demand was made, we believe that
their action was definitely abusive and plain blackmail.
We regret to advise you that since this vessel is only under
our management, we also cannot afford to grant your request
for an increase of US$3,096.50 effective March 1, 1979, as
demanded by your crew. Your crew should respect their
employment contracts which was approved by your
government and your National Seamen Board should make
sure that all seamen should follow their contracts.
For your information, we have discussed this matter with the
owners of the vessel, particularly the attitude and mentality of
your crew on board. Our common and final decision is not to
grant your request but also to terminate our Manning
Agreement effective upon crew's change when the vessel
arrives at Japan or at any possible port about end April, 1979.
We regret that we have to take this drastic step in order to
protect ourselves from further problem if we continue with
your present officers and crew because if their demand is
granted, there is no guarantee that they will not demand
further increase in salaries in the future when they have
chance. Also, as you know the present freight market is very
bad and we cannot afford an unexpected increase in cost of
operations and more so with a troublesome and unreliable
crew that you have on board.
In view of the circumstances mentioned above, please
consider this letter as our official notice of cancellation of our
Manning Agreement effective upon the date of crew's change.
(Annex "F" of Petition).
On April 6, 1979, petitioner wrote the NSB asking permission to cancel the
manning contract with petitioner, said letter reading as follows:
This is with reference to our letter of March 26, 1979,
informing you of the sudden and unexpected demands of the
officers and crew of the above vessel for a twenty five percent
(25%) increase in their basic salaries and overtime, plus an
increase of the officers' representation allowances, involving a
total of US$3,096.50 per month.
As we have advised in our afore-mentioned letter, we have
negotiated with our Principals, Messrs. Kyoei Tanker Co.,
Ltd., to amend our Agency Agreement by increasing our
monthly fee by US$3,096.50, and attached herewith is copy
of our letter dated March 26, 1979 duly received by our
Principals on March 31, 1979.
In this connection, we wish to inform your good office that our
Principals have refused to consider our request for an
increase and have also advised us of their final decision to
terminate our Manning Agreement effective upon vessel's
arrival in Japan on or about April 17, 1979.

For your further information, we enclose herewith xerox copy

of the Kyoei Tanker Co., Ltd. letter dated April 4, 1979, which
we just received today via airfreight.
This is the first time that a cancellation of this nature has been
made upon us, and needless to say, we feel very
embarrassed and disappointed but we have no other
alternative but to accept the said cancellation.
In view of the foregoing, we respectfully request your
authority to cancel our Contracts of Employment and to
disembark the entire officers and crew upon vessel's arrival in
Japan on or about 17th April, 1979. (Annex "G", of Petition).
On April 10, 1979, the NSB through its Executive Director Cresencio C.
Dayao wrote petitioner authorizing it to cancel the manning contract. The
NSB letter to petitioner reads:
We have for acknowledgment your letter of 6 April 1979 in
connection with the above-captioned subject.
Considering the circumstances enumerated in your letter
under reply (and also in your letter of March 1979), we
authorize you to cancel your contracts of employment with the
crew/members of the M/T "Jannu" and you may now
disembark the whole compliment upon the vessel's arrival in
Japan on or about April 17, 1979.
We trust that you will not encounter any difficulty in
connection with the disembarkation of the crew/members.
(Annex "H" of Petition).
The seamen were accordingly disembarked in Japan and repatriated to
Manila. They then filed a complaint with the NSB for illegal dismissal and
non-payment of wages. After trial, the NSB found that the termination of the
services of the seamen before the expiration of their employment contract
was justified "when they demanded and in fact received from the company
wages over and above the contracted rates which in effect was an alteration
and modification of a valid and existing contract ..." (Annex "D", Petition). The
seamen appealed the decision to the NLRC which reversed the decision of
the NSB and required the petitioner to pay the wages and other monetary
benefits corresponding to the unexpired portion of the manning contract on
the ground that the termination of the said contract by petitioner was without
valid cause. Hence, the present petition. (Pp. 2-9, Manifestation & Comment)
In its petition which contains practically the same facts and circumstances above-quoted,
petitioner submits for Our resolution the following issues:
I. That the respondent NLRC acted without or in excess of its jurisdiction, or
with grave abuse of discretion in said NSB Cases Nos. 2250-79 and 2252-79
when it adjudged the petitioner Vir-jen liable to the respondents-seamen for
terminating its employment contracts with them despite the fact that prior
authorization to terminate or cancel said employment contracts and to
disembark the said respondents was first secured from and was granted by,
the National Seamen Board, the government agency primarily charged with
the supervision and discipline of seamen and the approval and enforcement
of employment contracts;
II. That the respondent NLRC acted with grave abuse of discretion, or without
or in excess of its jurisdiction, or contrary to law and the evidence when it
concluded that "there is nothing on record to show that respondents-seamen
made any threat that they would complain or report to the ITF their low wage
rates if their demand or proposal for a wage increase was not met", despite
the fact that in their cable of March 23, 1979 to the petitioner, the said
respondents made the following threats and impositions: "WHAT
WE DEMAND IS ONLY 50 PERCENT INCREASE BASED ON PRESENT
BASIC SALARY STOP THIS DEMAND THE BEST AND ONLY SOLUTION
TO SOLVE ITF PROBLEMS", that there are other substantial and conclusive
evidence to support the existence of such threats and intimidation which the

respondent NLRC failed and refused to consider; and that the evidence
substantially and conclusively shows that the petitioner Vir-jen was, in fact,
threatened and intimidated into giving such salary increases due to such
cabled threats and intimidation of the private respondents;
III. That the respondent NLRC acted with grave abuse of discretion or without
or in excess of jurisdiction when it concluded, in effect, that the respondentsseamen acted within their rights when they imposed upon their employer, the
herein petitioner, their demands for salary and wages increases, in disregard
of their existing NSB-approved contracts of employment, notwithstanding the
substantial and conclusive findings of the NSB, the trier of facts which is in
the best position to assess the special circumstances of the case, that the
said respondents breached their respective contracts of employment with the
petitioner, without securing the prior approval of the NSB as required by the
New Labor Code, as amended, and with the use of threats, intimidation and
coercion, when they demanded and, in fact, received from the petitioner
salaries or wages over and above their contracted rates which the petitioner
was "constrained to make" in order "to prevent the vessel from being
interdicted and/or detained by the ITF because at the time the demand for
salary increase was made the vessel was en route to Kwinana, Australia (via
Senipah, Indonesia), a port were the ITF is strong and militant," "for in the
event the vessel would be detained and/or interdicted the company
(petitioner) would suffer more losses than paying the seamen 25 % increase
of their salary";
IV. That respondent NLRC committed a grave abuse of discretion or
exceeded its jurisdiction or acted contrary to law when it failed and refused to
admit and take into account the ADDENDUM AGREEMENT, dated
December 27, 1978, entered into between the petitioner and the private
respondents, which would have further enlightened the respondent NLRC on
the "ITF PROBLEMS" insinuated by the private respondents in their cable of
March 23, 1979 to threaten and intimidate the petitioner into granting the
salary increases in question;
V. That respondent NLRC committed a grave abuse of discretion or acted
without or in excess of its jurisdiction or contrary to law when it ordered the
petitioner Vir-jen to pay, among others, to the private respondents their
"wages corresponding to the unexpired portion of their contracts" the said
petitioner having already lost its trust and confidence on the private
respondents; that the employer cannot be legally compelled to continue with
the employment of persons in whom it has already lost its trust and
confidence; that payment to the private respondents of their wages
corresponding to the unexpired portion of their contract would be tantamount
to retaining their services after their employer, petitioner herein, had already
lost its faith and trust in them;
VI. That the respondent NLRC committed a grave abuse of discretion or
exceeded its jurisdiction in still including and considering ROMEO ACOSTA
as one of the appellants in the two (2) aforementioned NSB cases and
making him a beneficiary of its decision, dated July 8, 1981, modifying the
NSB decision, dated July 2, 1980, despite the fact that way back on October
23, 1980, Acosta had already filed in said NSB cases a pleading, entitled
"SATISFACTION OF JUDGMENT" in which he manifested that he was not
appealing the NSB decision anymore as the judgment in his favor was
already fully satisfied by the petitioner Vir-jen;
VII. That the respondent NLRC had no more jurisdiction to entertain private
respondents' appeal because the NSB decision became final and executory
for failure of said respondents to serve on he petitioner a copy of their
"APPEAL AND MEMORANDUM OF APPEAL" within the ten (10) day
reglementary period for appeal and even after the expiration of said period;
VIII. That the respondent NLRC had no jurisdiction to entertain the appeal by
the private respondents based on the supposedly verified "APPEAL AND
MEMORANDUM OF APPEAL" because the supposed signature of the
person purportedly verifying the same is forged; and that the new counsel
appearing for the private respondents on appeal was not even authorized by
some of the private respondents to appear for them;

IX. That the respondent NLRC committed a grave abuse of discretion or

acted without or in excess of jurisdiction or contrary to law when it
misconstrued, misinterpreted and misapplied to the instant case the ruling of
this Honorable Supreme Court in Wallem Philippines Shipping, Inc. vs. The
Hon. Minister of Labor, et al., G.R No. 50734, prom. February 20, 1981,
despite distinct and fundamental differences in facts between the Wallem
Case and the instant case;
X. That the respondent NLRC committed a grave abuse of discretion or acted
without or in excess of its jurisdiction or acted contrary to law when it failed
and refused to consider and pass upon the substantial issues of jurisdiction,
law and facts and matters of public interests raised by the petitioner in its
URGENT MOTION/APPELLEE'S MEMORANDUM ON APPEAL, dated April
24, 1981, and in its MOTION FOR RECONSIDERATION AND/OR NEW
TRIAL, dated July 20, 1981, filed in the two (2) cases;
XI. That the respondent NLRC committed a grave abuse of discretion or
acted without or in excess of jurisdiction or contrary to law when it failed and
refused to reconsider and set aside its decision subject-matter of this petition
for certiorari, considering Chat if allowed to stand, the said decision will open
the floodgates for Filipino seamen to disregard NSB-approved contracts of
employment with impunity, leading to the destruction of the Philippine
manning industry, which is a substantial source of revenue for the Philippine
government, as well as the image of the Filipino seamen who will
undoubtedly become known far and wide as one prone to violate the
solemnity of employment contracts, compounded with the use of threats,
intimidation and blackmail, thereby necessitating a policy decision by this
Honorable Supreme Court on the matter for the survival of the manning
industry. (Pp. 5-9, Record.)
We shall deal first with the jurisdictional issue (No. VII above) to the effect that the appeal of
private respondents from the decision of the National Seamen's Board against them was
filed out of time, considering that copy of said decision was received by them on July 9, 1980
and they filed their memorandum of appeal only on July 23, 1980 or fourteen (14) days later,
whereas under article 223 of the Labor Code which governs appeals from the National
Seamen's Board to the National Labor Relations Commission per Article 20(b) of the Code
provides that such appeals must be made within ten (10) days.
In this connection, it is contended in the comment of private respondents that petitioner has
overlooked that under Section 7, Rule XIII,, Book V of the Implementing Rules of the Labor
Code, the ten-day period specified in Article 223 refers to working days and that this Court
has already upheld such construction and manner of computation in Fabula vs. NLRC, G.R.
No. 54247, December 19, 1980. Now, computing the number of working days from July 9 to
July 23, 1980 We find that there were exactly ten (10) days, hence, if We adhere to Fabula,
the appeal in question must be held to have been made on time.
But petitioner herein maintains that the Minister of Labor may not, under the guise of issuing
implementing rules of a law as authorized by the law itself, go beyond the clear and
unmistakable language of the law and expand it at his discretion. In other words, since Article
223 of the Labor Code literally provides thus:
Appeal. Decisions, awards, or orders of the Labor Arbiters or compulsory
arbitrators are final and executory unless appealed to the Commission by any
or both of the parties within ten (10) days from receipt of such awards,
orders, or decisions. Such appeal may be entertained only on any of the
following grounds:
(a) If there is a prima facie evidence of abuse of discretion on the part of the
labor Arbiter or compulsory arbitrator;
(b) If the decision, order, or award was secured through fraud or coercion,
including graft and corruption;
(c) If made purely on questions of law; and
(d) If serious errors in the findings of facts are raised which would cause
grave or irreparable damage or injury to the appellant.

To discourage frivolous or dilatory appeals, the Commission or the Labor

Arbiter shall impose reasonable penalty, including fines or censures, upon
the erring parties.
the implementing rules may not provide that the said period should be computed on the
basis of working days. This, indeed, is a legal issue not brought up nor passed upon
squarely in Fabula, and petitioner prays that this Court rule on the point once and for all.
After mature and careful deliberation, We have arrived at the conclusion that the shortened
period of ten (10) days fixed by Article 223 contemplates calendar days and not working
days. We are persuaded to this conclusion, if only because We believe that it is precisely in
the interest of labor that the law has commanded that labor cases be promptly, if not
peremptorily, dispose of. Long periods for any acts to be done by the contending parties can
be taken advantage of more by management than by labor. Most labor claims are decided in
their favor and management is generally the appellant. Delay, in most instances, gives the
employers more opportunity not only to prepare even ingenious defenses, what with wellpaid talented lawyers they can afford, but even to wear out the efforts and meager resources
of the workers, to the point that not infrequently the latter either give up or compromise for
less than what is due them.
All the foregoing notwithstanding, and bearing in mind the peculiar circumstances of this
case, particularly, the fact that private respondents must have been misled by the
implementing rules aforementioned. We have opted to just the same pass on the merits of
the substantial issues herein, even as We admonish all concerned to henceforth act in
accordance with our foregoing view. Verily, the Minister of Labor has no legal power to
amend or alter in any material sense whatever the law itself unequivocally specifies or fixes.
We need not ponder long on the contention of petitioner regarding the alleged forgery of the
signature of respondent Rogelio Bisula and the alleged lack of authority of the new counsel
of respondents, Atty. B. C. Gonzales, to appear for them. Resolution of these minor points,
considering their highly controversial nature, so much so that they could rationally to our
mind, be decided either way, may be dispensed with in order that We may go to the more
transcendentally important main issues before Us.
As far as issue No. VI above regarding the inclusion of Romeo Acosta among the
beneficiaries of the decision herein in question, there can be no reason why petitioner should
not be sustained. It is undenied that Acosta has filed a formal satisfaction of judgment.
Indeed, it is quite relevant to mention at this point that originally, there were twenty-eight (28)
claimants against petitioner, This number was first reduced to fifteen (15) then to ten (10)
and finally to nine (9) now, by withdrawal of the claimants themselves. These series of
withdrawals lend no little degree to added enlightenment of the discussion hereunder of the
adverse positions of the remaining claimants, on the one hand, and the petitioner, on the
other.
To begin with, let it be borne in mind that seamen's contracts of the nature We have before
Us now are not ordinary ones. There are specie, laws and rules governing them precisely
due to the peculiar circumstances that surround them. Relatedly, We quote from the
Manifestation and Comment of the Solicitor General:
The employment contract in question is unlike any ordinary contract of
employment, for the reason that a manning contract involves the interests not
only of the signatories thereto, such as the local Filipino recruiting agent
(herein petitioner), the foreign owner of the vessel, and the Filipino crew
members (private respondents), but also those of other Filipino seamen in
general as well as the country itself. Accordingly, Article 12 of the Labor Code
provides that it is the policy of the State not only "to insure and regulate the
movement of workers in conformity with the national interest" but also "to
insure careful selection of Filipino workers for overseas employment in order
to protect the good name of the Philippines abroad". The National Seamen
Board (NSB), which is the agency created to implement said state policies, is
thus empowered pursuant to Article 20 of the Labor Code "to secure the best
possible terms and conditions of employment for seamen, and to insure
compliance thereof" not only on the part of the owners of the vessel but also
on the part of the crew members themselves.
Conformably to the power vested in the NSB, the law requires that all
manning contracts shall be approved by said agency. It likewise provides that
"it shall be unlawful to substitute or alter any previously approved and
certified employment contract without the approval of NSB" (Section 35,
Rules and Regulations in the recruitment and placement of Filipino seamen

aboard foreign going ships) and authorizes the employer or owner of the
vessel to terminate such contract for just causes (Section 32, Ibid). Among
such just causes for termination are "bad conduct and unwanted presence
prejudicial to the safety of the ship" (Guidebook for shipping employers, page
8) and material breach of said contract.
The stringent rules governing Filipino seamen aboard foreign, going ships
are dictated by national interest. There are about 120,000 registered seamen
with the NSB. Only about 50,000 of them are employed and 70,000 or so are
still hoping to be employed. Those Filipino seamen already employed on
board foreign-going ships should accordingly conduct themselves with
utmost propriety and abide strictly with the terms and conditions of their
employment contract, and the NSB should see to that, in order that owners of
foreignowned vessels will not only be encouraged to renew their employment
contract but will moreover be induced to hire other Filipino seamen as
against other competing foreign sailors. (Pp. 15-17, Manifestation &
Comment of the Solicitor General)
Pertinently, the Labor Code of the Philippines provides for the creation of a National Seamen
Board (NSB) thus:
ART. 20. National Seamen Board.(a) A National Seamen Board is hereby
created which shall developed and maintain a comprehensive program for
Filipino seamen employed overseas. It shall have the power and duty:
(1) To provide free placement services for seamen;
(2) To regulate and supervise the activities of agents or
representatives of shipping companies in the hiring of
seamen for overseas employment; and secure the best
possible terms of employment for contract seamen workers
and secure compliance therewith; and
(3) To maintain a complete registry of all Filipino seamen.
(b) The Board shall have original and exclusive jurisdiction over all matters or
cases including money claims, involving employer-employee relations,
arising out of or by virtue of any law or contracts involving Filipino seamen for
overseas employment. The decision of the Board shall be appealable to the
National Labor Relations Commission upon the same grounds provided in
Article 223 hereof. The decisions of the National Labor Relations
Commission shall be final and inappealable.
The finality and unappealability of the decisions of the National Labor Relations Commission
conferred by the above provisions in cases of the nature now before Us necessarily limits
Our power in the premises to the exercise of Our plenary certiorari jurisdiction. And under the
scheme of said Article 20, in relation to Article 223 of the same Code, the reviewing authority
of the Commission is limited only to the following instances:
Appeal.Decisions, awards, or orders of the Labor Arbiters or compulsory
arbitrators are final and executory unless appealed to the Commission by any
or both of the parties within ten (10) days from receipt of such awards,
orders, or decisions. Such appeal may be entertained only on any of the
following grounds:
(a) If there is prima facie evidence of abuse of discretion on the part of the
Labor Arbiter or compulsory arbitrator;
(b) If the decision, order or award was secured through fraud or coercion,
including graft and corruption;
(c) If made purely on questions of law;and
(d) If serious errors in the findings of facts are raised which would cause
grave or irreparable damage or injury to the appellant.
To discourage frivolous or dilatory appeals, the Commission or the Labor
Arbiter shall impose reasonable penalty, including fines or censures, upon
the erring parties.

In all cases, the appellant shall furnish a copy of the memorandum of appeals
to the other party who shall file an answer not later than ten (10) days from
receipt thereof.
xxx xxx xxx
In the light of the foregoing perspective of law and policy, all the other issues raised by
petitioner may be disposed of together. Anyway they revolve basically around the following
questions:
1. In the event of conflict in the conclusions of the National Seamen Board, on the one hand,
and the National Labor Relations Commission on the other, on a matter that is fundamentally
an issue of fact, which one should prevail?
2. Under the facts of this case, was it legally proper for the Commission to disregard the
permission granted by the NSB to the petitioner to disembark and discontinue the
employment of herein respondents?
3. As a matter of fact, did respondent breach their contract with petitioner, so as to entitle the
latter to take the punitive action herein complained of?
4. Was the conformity of petitioner to pay respondents additional compensation of 25%
secured by said respondents thru threats of grave injury to petitioner who, therefore,
acceded to such increase involuntarily?
We feel that the resolution of the instant controversy hinges on whether or not it was violative
of law and policy in the light of the peculiar nature of the contracts in question as already
explained at the outset of this opinion, for the respondents to make the demand for an
increase of 50% of their respective wages stipulated in their NSB approved contracts while
they were already in the midst of the voyage to Kwinana, Australia (an ITF controlled post),
pointedly mentioning in their cablegram that such "demand (was) the best and only solution
to solve ITF problem"?
On these questions, the NSB found and held:
1. Whether or not the Seamen breached their respective employment
contracts;
2. Whether or not the Seamen were illegally dismissed by the Company;
3. Whether or not the monetary claims of the seamen are valid and
meritorious;
4. Whether or not the monetary claims of the Company are valid and
meritorious;
5. Whether or not disciplinary action should be taken against the Seamen.
With respect to the first issue, the Board believes that the answer should be
in the affirmative. This is so for the Seamen demanded and in fact received
from the Company wages over and above their contracted rates, which in
effect is an alteration or modification of a valid and subsisting contract; and
the same not having been done thru mutual consent and without the prior
approval of the Board the alteration or modification is contrary to the
provisions of the New Labor Code, as amended, more particularly Art. 34 (i)
thereof which states that:
Art. 34. Prohibited practices.It shall be unlawful for any individual, entity,
licensee or holder of authority:
xxx xxx xxx
(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;
xxx xxx xxx

The revision of the contract was not done thru mutual consent for the
Company did not voluntarily agree to an increase of wage, but was only
constrained to make a counter-proposal of 25% increase to prevent the
vessel from being interdicted and/or detained by the ITF because at the time
the demand for salary increase was made the vessel was enroute to
Kwinana, Australia (via Senipah, Indonesia), a port where the ITF is strong
and militant. However, a perusal of the Cables (Exhs. "D" & "F", "3" & "5")
coming from the Seamen addressed to the Company would show the
threatening manner by which the desire for a salary increase was
manifested, contrary to their claim that it was merely a request. Aforesaid
cables are hereby quoted for ready reference:
RYCV-11-12-13-14 RECEIVED URINFO ENTIRE JANNU OFFICERS AND
CREW NOT AGREEABLE WITH YOUR SUGGESTIONS THEY ARE NOT
CONTENTED WITH PRESENT SALARY BASED IN VOLUME OF WORKS
TYPE OF SHIP WITH HAZARDOUS CARGO AND REGISTERED IN A
WORLD WIDE TRADE STOP REGARDING URCABV-14 OFFICERS AND
CREW NOT INTERESTED IN ITF MEMBERSHIP IF NOT ACTUALLY PAID
WITH ITF RATE STOP WHAT WE DEMAND IS ONLY 50 PERCENT
INCREASE BASED ON PRESENT BASIC SALARY STOP THIS DEMAND
THE BEST AND ONLY SOLUTION TO SOLVE ITF PROBLEM DUE YOUR
PRESENT RATE ESPECIALLY IN TANKERS VERY FAR IN COMPARISON
WITH OTHER SHIPPING AGENCIES IN MANILA STOP LET US SHARE
EQUALLY THE FRUITS OF LONELINESS SACRIFICES AND HARDSHIP
WE ARE ENCOUNTERING ON BOARD WE REMAIN ...
REURVIR-JEN-15 OFFICERS AND CREW HESITATING TO
GIVE UP DEMAND OF 50 PERCENT INCREASE BUT FOR
GOOD AND HARMONIOUS RELATIONSHIP ONBOARD
AND RECONSIDERING YOUR SUPPOSE TO BE LOSSES
IN CASE WE CONDITIONALLY COOPERATE WITH YOUR
PROPOSE INCREASE OF 25 PERCENT BASED ON
INDIVIDUAL MONTHLY BASIC PAY WITH FOLLOWING
TERMS AND CONDITIONS AA EFFECTIVITY OF 25
PERCENT INCREASE MUST BE MARCH/79 PLUS
SPECIAL COMPENSATION MENTIONED URCAB VIRJEN14 BB NEW COMPANY CIRCULAR ON UPGRADED NEW
SALARY SCALE DULY SIGNED AND APPROVED BE
FORWARDED KWINANA AUSTRALIA OR HANDCARRIED
BY YOUR REPRESENTATIVE TO DISCUSS MATTERS
OFFICIALLY CC 25 PERCENT INCREASE MUST BE
COLLECTABLE ONBOARD EFFECTIVE ABOVE DATE
UNTIL DISEMBARKATION STOP ALLOTMENT TO
ALLOTTEES REMAIN AS IS DD REASONABLE
REPALLOWS FOR ALL OFFICERS BE GIVEN EFFECTIVE
MARCH/79 EE BONUS FOR 6 MONTHS SERVICE
RENDERED BE COLLECTIBLE ONBOARD FF
OFFICERS/CREW 30 PERCENT' OT SHOULD BE BASED
NEW UPGRADED SALARY SCALE GG
MASTER/CHENGR/CHMATE SPECIAL COMPENSATION
GIVE BY YOUR COMPANY PRIOR DEPARTURE MANILA
BE REMAIN AS IS STOP THE ABOVE TERMS AND
CONDITIONS SHOULD BE PROPERLY ENFORCE AND
DOCUMENTED ALSO COPIES AND FORWARDED
ONBOARD ON ARRIVAL KWINANA AUSTRALIA
CONFIRM ...
While the Board recognizes the rights of the Seamen to seek higher wages
provided the increase is arrived at thru mutual consent, it could not however,
sanction the same if the consent of the employer is secured thru threats,
intimidation or force. In the case at bar, the Company was compelled to
accede to the demand of the Seamen for a salary increase to forestall the
possibility of the vessel being interdicted by the ITF at Kwinana, Australia, for
in the event the vessel would be detained and/or interdicted the Company
would suffer more losses than paying the Seamen 25% increase of their
With respect to the second issue, the Board believes that the termination of
the services of the Seamen was legal and in accordance with the provisions
of their respective employment contracts. Considering the findings of the
Board that the Seamen breached their contracts, their subsequent

repatriation was justified. While it may be true that the Seamen were hired for
a definite period their services could be terminated prior to the completion of
the fun term thereof for a just and valid cause.
It may be stated in passing that Vir-jen Shipping & Marine Services, Inc.,
despite the fact that it was compelled to accede to a 25% salary increase for
the Seamen, tried to convince its principal Kyoei Tanker, Ltd. to an
adjustment in their agency fee to answer for the 25% increase, but the latter
not only denied the request but likewise terminated their Manning,
Agreement. The Seamen's breach of their employment contracts and the
subsequent termination of the Manning Agreement of Vir-jen Shipping &
Marine Services, Inc. with the Kyoei Tanker, Ltd., justified the termination of
the Seamen's services.
With respect to the third issue the following are the findings of the Board:
As regards the claim of the Seamen for the payment of their salaries for the
unexpired portion of their employment contracts the same should be denied.
This is so because of the findings of the Board that their dismissal was legal
and for a just cause. Awards of this nature is proper only in cases where a
seafarer is illegally dismissed. (Pp. 148-151, Record)
Disagreeing with the foregoing findings of the NSB, the NLRC held:
The more important issue to be resolved in this case, however, is the
question of whether the Seamen violated their employment contracts when
they demanded or proposed and in fact accepted wages over and above
their contracted rates. Stated otherwise, could the Seamen rightfully demand
or propose the revision of their employment contracts? While they concede
that they are bound by their contracts, the Seamen claim that their cable
asking for the revision of their contract rates was a valid exercise of their right
to grievance.
The right to grievance is recognized in this jurisdiction even if there is a valid
and subsisting contract, especially where there are supervening facts or
events of which a party to the contract was not apprised at the time of its
conclusion. As pointed out by the Supreme Court in the Wallem case, supra,
it "is a basic right of all working men to seek greater benefits not only for
themselves but for their families as well ..." and the "Constitution itself
guarantees the promotion of social welfare and protection to labor." In this
care, records show that it was impressed on the Seamen that their vessel
would be trading only in Caribbean ports. This was admitted by the Company
in its cable to the Seamen on 10 January 1979. After the conclusion of their
contracts, however, and after they had boarded the vessel, the principals of
the Company directed the vessel to can at different ports or to engage in
"worldwide trade" which is admittedly more difficult and hazardous than
trading in only one maritime area. This is a substantial change in the original
understanding of the parties. Thus, in their cable asking for a wage increase,
the Seamen expressed their dissatisfaction by informing the Company that
they were "not contented with (their) present salary based on volume of work,
type of ship with hazardous cargo and registered in world wide
trade."(emphasis supplied.) With such change in the original agreement of
the parties, we find that the Seamen were well within their rights in
demanding for the revision of their contract rates.
We also note that the Company was not exactly in good faith in contracting
the service of the Seamen. During his briefing in Manila, the Company
instructed the master of the vessel, complainant Bisula, to prepare two (2)
sets of payrolls, one set reflecting the actual salary rates of the Seamen and
the other showing higher rates based on Panamanian Shipping articles which
approximate those prescribed by ITF for its member seafarers. In compliance
with this instruction, Bisula prepared the latter payrolls. These payrolls were
intended for the consumption of ITF if and when the vessel called on ports
where ITF rates were operational, the evident purpose being to show ITF that
the Company was paying the same rates prescribed by said labor federation
and thereby prevent the interdiction of the vessel. And when the vessel was
en route to Australia, an ITF-controlled port, the Company arranged for the
Seamen's membership with ITF and actually paid their membership fees
without their knowledge and consent, thereby exposing them to the danger of
being disciplined by the NSB Secretariat for having affiliated with ITF. All

these have to be mentioned here to better understand the feelings of the

Seamen when they asked for the revision of their wage rates. 2 (Pp. 83-85,
Record)
Comparing these two decisions, We do not hesitate to hold that the NLRC overstepped the
boundaries of its reviewing authority and was overlenient. Whether or not respondents had
breached their contract wit petitioner is a factual issue, the peculiar nuances of which were
better known to the NSB, the fact-finding authority. Indeed, even if it was nothing more than
the interpretation of the cablegram sent by respondents to petitioner on March 23, 1979 that
were the only question to be resolved, that is, whether or not it carried with it or connoted a
threat which naturally panicked petitioner, which, to be sure, could be a question of law, still,
as We see it, the conclusion of the NLRC cannot be justified.
The NLRC ruled that in the exercise of their right to present any grievances they had and in
their desire to alleviate their condition, it was but well and proper for respondents to make a
proposal for increase of their wages, which petitioner could accept or reject. We do not see it
that way.
Definitely, the reference in the cablegram to the conformity of petitioner to respondents'
demand was "the best and only solution to ITF problem" had an undertone which naturally
placed petitioner hardly in a position to answer them with a flat denial. It would be the acme
of naivete for Us to go along with the contention that the cablegram of March 23, 1979 was a
mere proposal and had no trace nor tint of threat at all. Indeed, it is alleged in the petition
and there is no denial thereof that on April 23, 1979, Chief Mate Jacobo Catabay of the M/T
Jannu, who was among the claimants at first, revealed that:
On April 23, 1979, Chief Mate Jacobo H. Catabay of the M/T Jannu, in a
signed statement-report to the petitioner, marked and admitted in evidence
as Exh. "10-A" during the trial stated, as follows:
On our departure at Keelung, we did not have destination
until three (3) days later that Harman cabled us to proceed to
Senipah, Indonesia to load fun cargo to be discharged at
Kwinana , Australia. Captain told everyone that if only we
stayed so long with the ship, he will report to ITF personally in
order to get back wages. In view that we only worked for
three months so the back wages is so small and does not
worth. From that time on, Chief Engr. and Captain have a
nightly closed door conference they arrived at the conclusion
to ask for 50% salary increase and they have modified a
certain platforms. They certainly believe that Vir-jen have no
choice because the vessel is going to ITF port so they called
a general meeting conducted at the bridge during my duty
hours in the afternoon. All engine and deck personnel were
present in that meeting. (Pp. 19-20, Record.)
Well taken, indeed, is the Solicitor General's observation that:
Private respondents'conduct is uncalled for. While employees may be free to
request their employers to increase their wages, they should not use threat of
such a nature and in such a situation as to put the employer at their complete
mercy and with no choice but to accede to their demands or to face
bankruptcy. This is what private respondents did, which is an act of bad
conduct prejudicial to the vessel, and a material breach of the existing
manning contract. It has adverse consequences that led not only to the
termination of the existing manning contract but to the rejection by Kyoei
Tanker Co. Ltd. of petitioner's offer to supply crew members to three other
vessels, thereby depriving unemployed Filipino seamen of the opportunity to
work on said vessels. Thus, in a letter dated May 17, 1979, Kyoei Tanker Co.
Ltd. wrote petitioner as follows:
This is with reference to your letter of Feb. 23, 1979, submitting your
manning offers on our three (3) managed vessels for delivery as follows:
1. M/V "Maya" crew,delivery end May, 1979,
2. M/T "Cedar" 28 crew, delivery end June, 1979,
3. M/T "Global Oath" 30 crew, delivery end, June 1979.

In this connection, we wish to advise you that, as a result of our unpleasant

experience with your crew on the M/T "Jannu", owners have decided to give
the manning contracts on the above three vessels to other foreign crew
instead of your company.
We deeply regret that although your crew performance on our other four (4)
vessels have been satisfactory, we were unable to persuade owners to
consider your Philippine crew because of the bad attitude and actuation of
your crew manned on board M/T "Jannu".
As we have already advised you, owners have spent more than
US$30,000.00 to replace the crew of M/T "Jannu" in Japan last April 19, 1979
which would have been saved if your crew did not violate their employment
contracts.(Annex "K"of Petition),
In the light of all the foregoing and the law and policy on the matter, it is
submitted that there was valid justification on the part of petitioner and/or its
principal to terminate the manning contract. (Pp. 12-14, Manifestation and
Comment of the Solicitor General.)
At first glance it might seem that the judgment of the NLRC should have more weight than
that of NSB. Having in view, however, the set up and relationship of these two entities
framed by the Labor Code, the NSB is not only charged directly with the administration of
shipping companies in the hiring of seamen for overseas employment by seeing to it that our
seamen "secure the best possible terms of employment for contract seamen workers and
secure compliance therewith." Its composition as of the time this controversy arose is worth
notingfor it is made up of the Minister of Labor as Chairman, the Deputy Minister as Vice
Chairman, and a representative each of the Ministries of Foreign Affairs, National Defense,
Education and Culture, the Central Bank, the Bureau of Employment Service, a worker's
organization and an employee's organization and the Executive Director of the Overseas
Employment Development Board. (Article 23, Labor Code) It is such a board that has to
approve all contracts of Filipino seamen (Article 18, Labor Code). And after such approval,
the contract becomes unalterable, it being "unlawful" under Article 34 of the Code "for any
individual, entity, licensee or holder of authority: (i) to substitute or alter employment
contracts approved and verified by 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 other words, it is not only that contracts may not be
altered or modified or amended without mutual consent of the parties thereto; it is further
necessary to have the change approved by the Department, otherwise, the guilty parties
would be penalized.
The power of the NLRC in relation to the works and actuations of the NSB is only appellate,
according to Article 20 (b), read in relation to Article 223, principally, over questions of law,
since as to factual matters, it may exercise such appellate jurisdiction only "if errors in the
findings of fact are raised which would cause grave or irreparable damage or injury to the
appellant." (par. d)
The NLRC has noted in its decision that respondents were originally made to believe that
their ship would go only to the Caribbean ports and yet after completing trips to Inchon,
Korea and Kuwait and Keelung, Taiwan, it was suddenly directed to call at Kwinana,
Australia, an ITF controlled port. The record shows that this imputation is more apparent than
real, for respondents knew from the very moment they were hired that world-wide voyages or
destinations were contemplated in their agreement. So much so that corresponding steps
had to be taken to avoid interference of or trouble about the ITF upon the ship's arrival at ITF
controlled ports. As already stated earlier, the ITF requires the seamen working on any
vessel calling at ports controlled by them to be paid the rates fixed by the ITF which are
much higher than those provided in the contract's signed here, to the extent of causing
tremendous loss if not bankruptcy of the employer.
And so, as revealed to the NLRC later, in anticipation precisely of such peril to the employer
and ultimate unemployment of the seamen, in the instant case, the usual procedure
undeniably known to respondents of having two payroll's, one containing the actually agreed
rates and the other ITF rates, the latter to be shown to the ITF in order that the ship may not
be detained or interdicted in Kwinana, was followed. But according to the NLRC, this practice
constitutes deception and bad faith, and worse, it is an effect within the prohibition against
alteration of contracts approved by the NSB, considering there is nothing to show that NSB
was made aware of the so-called addendum or side agreement to the effect that should the
ship manned by respondents be made to call an any ITF controlled port, the contract with
ITF rates would be shown and, if for any reason, the respondents are required to be actually

paid higher rates and they are so paid, the excess over the rates agreed in the NSB contract
shall be returned to petitioner later.
It is of insubstantial moment that the side agreement or addendum was not made known to
or presented as evidence before the NSB. We are persuaded that more or less the NSB
knows that the general practice is to have such side contracts. More importantly, the said
side contracts are not meant at all to alter or modify the contracts approved by the NSB.
Rather, they are precisely purported to enforce them to the letter, making it clearer that even
if the ships have to call at ITF controlled ports, the same shall remain to be the real and
binding agreement between the parties, in intentional disregard of whatever the ITF may
exact.
We hold that there was no bad faith in having said side contracts, the intent thereof being to
put into effect the NSB directed arrangements that would protect the ship manning industry
from unjust and ruinning effects of ITF intervention. Indeed, examining the said side
agreements, it is not correct to say that the respondents were caught unaware, or by
surprise when they were advised that the ship would proceed to Kwinana, Australia, even
assuming they had been somehow informed that they would sail to the Caribbean. Said side
agreements textually provide:
KNOW ALL MEN BY THESE PRESENTS:
This Addendum Agreement entered into by and between KYOEI TANKER
CO., LTD., Principals, of the vessel M.T. "JANNU", represented herein by
VIR-JEN SHIPPING & MARINE SERVICES, INC., Manila, Philippines, as
Manning Agents (hereinafter referred to as the Company),
and
The herein-mentioned officers and crew, and engaged by the Company as
crewmembers of the vessel M/T "JANNU" with their positions, seaman
certificate numbers and signatures (hereinafter referred to as the
Crewmember), hereunder shown:
W I T N E S S E T H that:
1. WHEREAS, the Crewmember is hired and recruited as a member of the
crew on board the vessel M/T "JANNU" with the corresponding Contracts of
Employment submitted to, verified and duly approved by the National
Seamen Board; that the employment contract referred to, has clearly defined
the rate of salary, wages, and/or employment benefits for a period of one (1)
year (or twelve (12) months), and any extension thereof.
2. WHEREAS, the parties hereby further agree and covenant that should the
above-mentioned vessel enter, dock or drop anchor in ports of other
countries, the Crewmember shall not demand, ask or receive, and the
Company shall have no obligation to pay the Crewmember, salaries,, wages
and/or benefits over and above those provided for in the employment
contract submitted to, verified and approved by the National Seamen Board,
which shall remain in full force and effect between the parties. The Company
as well as the Owners,, Charterers, Agents shall neither be held accountable
nor liable for any amount other than what is agreed upon and stipulated in
the aforesaid NSB-approved Contracts of Employment.
3. WHEREAS, the parties likewise agree that should the vessel enter, dock
or drop anchor in any foreign port, and in the event that the Company (and/or
its Owners, Charterers, Agents), are forced, pressured, coerced or
compelled, in any way and for whatever cause or reason, to pay the
Crewmember either directly or thru their respective allottees or other
persons, salaries and benefits higher than those rates imposed in the NSBapproved contract, the Crewmember hereby agrees and binds himself to
receive the said payment in behalf of, and in trust for, the Company (and/or
its Owners, Charterers, Agents), and to return the said amount in full to the
Company or to its agent/s in Manila, Philippines immediately upon his and/or
his allottees receipt thereof; the Crewmember hereby waives formal written
demand by the Company or its agent/s for the return thereof. The
Crewmember hereby fully understands that failure or refusal by him to return
to the Company the said amount, will render him criminally liable for Estafa,
as provided for in the Revised Penal Code of the Philippines, and in such

case, the parties hereby agree that any criminal and/or civil action in
connection therewith shall be within the exclusive jurisdiction of Philippine
Courts.
4. WHEREAS, if, in order to avoid delays to the vessels, the Company is
forced, pressured, coerced or compelled to sign a Collective Bargaining
Agreement or any other Agreement with any foreign union, particularly ITF or
ITF affiliated unions, and to sign new crews' contract of employment
stipulating higher wages, salaries or benefits than the NSB-approved
contract, the said agreements and contracts shall be void from the beginning
and the Crewmember shall be deemed to have automatically waived the
increased salaries and benefits stipulated in the said agreements and
employment contracts unto and in favor of the Company, and shall remain
unalterably bound by the rates, terms, and conditions of the NSB-approved
contract.
5. WHEREAS, the parties also agree that should the Company, as a
precautionary or anticipatory measure for the purpose of avoiding costly
delays to the vessel prejudicial to its own interest, decide to negotiate and/or
enter into any agreement in advance with any foreign based union,
particularly ITF or ITF affiliated unions, in any foreign port where the vessel
involved herein may enter, dock or drop anchor, whatever increases in
salaries or benefits to the Crewmember that the Company may be compelled
to give, over and above those stipulated in the NSB-approved employment
contracts of the Crewmember, shag, likewise, be deemed ineffective or void
from the beginning as far as the Crewmember is concerned, and any such
increases in salaries or benefits which the Crewmember shall receive
pursuant thereto shall be held by the Crewmembers in trust for the Company
with the obligation to return the same immediately upon receipt thereof, at the
Company's or its agent's office at Manila, Philippines. It is fully understood
that the rates of pay and all other terms and conditions embodied in the NSBapproved employment contracts shall be of continuing validity and effectivity
between the parties, irrespective of the countries or ports where the said
vessel shall enter, dock or drop anchor, and irrespective of any agreement
which the Company may enter or may have entered into with any union,
particularly ITF or ITF affiliated unions.
6. WHEREAS, it is likewise agreed that any undertaking made by the
Company and/or the National Seamen Board upon the request of the
Company, imposed by any foreign union, particularly ITF or ITF affiliated
unions, which will negate or render in effective any provisions of this
agreement, shall also be considered null and void from the beginning.
7. WHEREAS, lastly, this Addendum Agreement is entered into for the mutual
interest of both parties in line with the Company's desire to continue the
service of the Filipino crewmembers on board their vessel and the
Crewmembers'desire to keep their employment on board the subject vessel,
thus maintaining the good image of the Filipino seamen and contributing to
the development of the Philippine manning industry.
8. That both the Company and the Crewmember agree and bind themselves
that this Agreement shall be considered an addendum to, or as part of, the
NSB-approved employment contract entered into by the Company and the
Crewmember.
IN WITNESS WHEREOF, we have hereunto affixed our signatures this
December 28, 1978 at Manila, Philippines.
THE COMPANY
VIR-JEN SHIPPING & MARINE SERVICES, INC.
By:
(SGD.) CAPT. RUBEN R. BALTAZAR
Operations Dept.
THE CREWMEMBERS

Position

SC#

Signatur
e

Name

1.

Ruben
Arroza

2nd Mate

104728

SGD.

2.

Cresencian
o Abrazaldo

3rd Mate

91663

SGD.

3.

Salvador
Caunan

Third
Engr.

84995

SGD.

4.

Nilo Cruz

4th Engr.

157762

SGD.

5.

Pacifico
Labios

A/B

139045

SGD.

6.

Ramon
Javier

A/B

170545

SGD.

7.

Joaquin
Cordero

A/B

96556

SGD.

8.

Rodolfo
Crisostomo

O/S

162121

SGD.

9.

Renato
Oliveros

O/S

137132

SGD.

10
.

Rogelio
Saraza

O/S

149635

SGD.

11.

Nemesio
Adug

Pumpman

157215

SGD.

12
.

Francisco
Benemerito

Oiler

89467

SGD.

13
.

Rufino
Gutierrez

Oiler

173663

SGD.

14
.

Juol Ram
Maul

Oiler

84934

SGD.

15
.

Steve
Mario

Wiper

146096

SGD.

16
.

Simplicio
Bautista

Chief
Cook

169142

SGD.

17
.

Romeo
Acosta

Second
Cook

159960

SGD.

18
.

Delfin
Dagohoy

Messman

144096

SGD.

19
.

Jose
Encabo

Messman

179551

SGD.

(Pp. 99-103, Annex D-1 of Petition)

The NLRC has cited Wallem Philippine Shipping Inc. vs. The Minister of Labor, G. R. No.
50734-37, February 20, 1981 (102 SCRA 835). No less than the Solicitor General maintains
that said cited case is not controlling:
A careful examination of Wallem Philippine Shipping Inc. vs. The Minister of
Labor, G. R. No. 50734-37, February, 20, 1981 shows that the same is
dissimilar to the case at bar. In the Wallem case, there was an express
agreement between the employer and the ITF representative, under which
said employer bound itself to pay the crew members salary rates similar to
those of ITF. When the crew members in the Wallem case demanded that
they be paid ITF rates, they were merely asking their employer to comply
with what had been agreed upon with the ITF representative, which conduct
on their part cannot be said to be a violation of contract but an effort to urge
performance thereof. Such is not the situation in the case at bar. In the case
at bar, petitioner and private respondents had a side agreement, whereby
private respondents agreed to return to petitioner whatever amounts
petitioner would be required to pay under ITF rates. In other words, petitioner
and private respondents agreed that petitioner would not pay the ITF rate.
When private respondents used ITF as threat to secure increase in salary,
they violated the manning contract. Moreover, in the case at bar, petitioner
terminated the manning contract only after the NSB authorized it to do so,
after it found the grounds therefor to be valid. On the other hand, the
termination of the manning contract in the Wallem case was without prior
authorization from the NSB.
It will be noted that private respondents sent a cable to petitioner demanding
an increase of 50% of their basic salary as the only solution to the ITF
problem at a time when the vessel M/T JANNU was enroute to Australia, an
ITF port. The fact that private respondents mentioned ITF in their cable
clearly shows that if petitioner would not accede to their demands, they would
denounce petitioner to ITF. Thus, Chief Mate Jacobo Catabay in his report
dated April 23, 1979 (Exh. 10-A) stated:
On our departure at Keelung, we did not have destination
until three days later that Harman cabled us to proceed to
Senipah, Indonesia to load fun cargo to be discharged at
Kwinana, Australia. Captain told everyone that if only we
stayed so long with the ship, he will report to ITF personally in
order to get back wages. In view that we only worked for
three months so the back wages is so small and does not
worth. From that time on, Chief Engr. and Captain have a
nightly closed door conference until they arrived at the
conclusion to ask for 50% salary increase and they have
modified a certain platforms. They certainly believe that Virjen have no choice because the vessel is going to ITF port so
they called a general meeting conducted at the bridge during
my duty hours in the afternoon. All engines and deck
personnel were present in that meeting. (Emphasis supplied)
Reporting the wage scheme to the ITF would mean that the vessel would be
interdicted and detained in Australia unless petitioner pay the ITF rates,
which represent more than 100% of what is stipulated in the manning
contract. Petitioner was thus forced to grant private respondents an increase
of 25% in their basic salary. That such grant of a 25% increase was not
voluntary is shown by the fact that petitioner immediately denounced the

seamen's conduct to NSB and subsequently asked said agency authority to

terminate the manning contract. (Pp. 10-12, Manifestation & Comment of
Solicitor General)
Summarizing, We are convinced that since the NSB, considering its official role in matters
like those now before Us, is the fact-finding body, and there is no sufficient cogency in the
NLRC's finding that there was no threat employed by respondents on petitioner, and, it
appearing further that the well prepared Manifestation and Comment of the Solicitor General
supports the decision of the NSB, which body, to Our mind, was in a better position than the
NLRC to appraise the relevant nuances of the actuations of both parties, We are of the
considered view that the decision of the NLRC under question constitutes grave abuse of
discretion and should be set aside in favor of the NSB's decision.
In El Hogar Filipino Mutual Building and Loan Association vs. Building Employees Inc., 107
Phil. 473, citing San Miguel Brewery vs. National Labor Union, 97 Phil. 378, We emphasized:
Much as we should expand beyond economic orthodoxy, we hold that an
employer cannot be legally compelled to continue with the employment of a
person who admittedly was guilty of misfeasance or malfeasance towards his
employer, and whose continuance in the service of the latter is patently
inimical to his interest. The law in protecting the rights of the laborer,
authorizes neither the oppression nor self-destruction of the employer. (Page
3, Record) (Emphasis supplied)
It is timely to add here in closing that situations wherein employers are practically laid in
ambush or placed in a position not unlike those in a highjack whether in the air, land or
midsea must be considered to be what they really are: acts of coercion, threat and
intimidation against which the victim has generally no recourse but to yield at the peril of
irreparable loss. And when such happenings affect the national economy, as pointed out by
the Solicitor General, they must be treated to be in the nature of economic sabotage. They
should not be tolerated. This Court has to be careful not to sanction them.
WHEREFORE, the petition herein is granted and the decision of the NLRC complained of
hereby set aside; the decision of the NSB should stand.
No costs.
Concepcion, Jr., Guerrero, Abad Santos, De Castro and Escolin, JJ., concur.
Aquino, J., concur in the result.

Footnotes
1 NSB Case No. 2250-79 is a complaint for illegal dismissal and nonpayment of earned wages filed by 27 officers and crew/members of the
vessel M/T "Jannu" against herein petitioner while NSB2252-79 is a
complaint for breach of contract and recovery of excess salaries, overtime
pay filed by petitioner against the complainants in the other case.
2 Please see clarification of the point that respondents were misled as to
whether they were hired for worldwide voyages or not in the latter part of this
opinion.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-58011 & L-58012 November 18, 1983
VIR-JEN SHIPPING AND MARINE SERVICES, INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, ROGELIO BISULA RUBEN ARROZA

JUAN GACUTNO LEONILO ATOK, NILO CRUZ, ALVARO ANDRADA, NEMESIO ADUG
SIMPLICIO BAUTISTA, ROMEO ACOSTA, and JOSE ENCABO respondents.
Antonio R. Atienza for petitioner.
The Solicitor General for respondent NLRC,
Quasha, Asperilia, Ancheta &- Valmonte Pena Marcos Law Offices for private respondents.
RESOLUTION

GUTIERREZ, JR., J.:

+.wph!1

Before the Court en banc is a motion to reconsider the decision promulgated on July 20,
1982 which set aside the decision of respondent National Labor Relations Commission and
reinstated the decision of the National Seamen Board.
To better understand the issues raised in the motion for reconsideration, we reiterate the
background facts of the case, Taken from the decision of the National Labor Relations
Commission:
t.hqw

It appears that on different dates in December, 1978 and January, 1979, the
Seamen entered into separate contracts of employment with the Company,
engaging them to work on board M/T' Jannu for a period of twelve (12)
months. After verification and approval of their contracts by the NSB, the
Seamen boarded their vessel in Japan.
On 10 January 1919, the master of the vessel complainant Rogelio H. Bisula,
received a cable from the Company advising him of the possibility that the
vessel might be directed to call at ITF-controlled ports said at the same time
informing him of the procedure to be followed in the computation of the
special or additional compensation of crew members while in said ports. ITF
is the acronym for the International Transport Workers Federation, a militant
international labor organization with affiliates in different ports of the world,
which reputedly can tie down a vessel in a port by preventing its loading or
unloading, This is a sanction resorted to by ITF to enforce the payment of its
wages rates for seafarers the so-called ITF rates, if the wages of the crew
members of a vessel who have affiliated with it are below its prescribed
rates.) In the same cable of the Company, the expressed its regrets for hot
clarifying earlier the procedure in computing the special compensation as it
thought that the vessel would 'trade in Caribbean ports only.
On 22 March 1979, the Company sent another cable to complainant Bisula,
this time informing him of the respective amounts each of the officers and
crew members would receive as special compensation when the vessel
called at the port of Kwinana Australia, an ITF-controlled port. This was
followed by another cable on 23 March 1979, informing him that the officers
and crew members had been enrolled as members of the ITF in Sidney,
Australia, and that the membership fee for the 28 personnel complement of
the vessel had already been paid.
In answer to the Company's cable last mentioned, complainant Bisula, in
representation of the other officers and crew members, sent on 24 March
1979 a cable informing the Company that the officers and crew members
were not agreeable to its 'suggestion'; that they were not contented with their
present salaries 'based on the volume of works, type of ship with hazardous
cargo and registered in a world wide trade': that the 'officers and crew (were)
not interested in ITF membership if not actually paid with ITF rate that their
'demand is only 50% increase based on present basic salary and that the
proposed wage increase is the 'best and only solution to solve ITF problem'
since the Company's salary rates 'especially in tankers (are) very far in
comparison with other shipping agencies in Manila ...
In reply, the Company proposed a 25% increase in the basic pay of the
complainant crew members, although it claimed, that it would "suffer and
absorb considerable amount of losses." The proposal was accepted by the
Seamen with certain conditions which were accepted by the Company.

Conformably with the agreement of the parties which was effected through
the cables abovementioned, the Seamen were paid their new salary rates.
Subsequently, the Company sought authority from the NSB to cancel the
contracts of employment of the Seamen, claiming that its principals had
terminated their manning agreement because of the actuations of the
Seamen. The request was granted by the NSB Executive Director in a letter
dated 10 April 1979. Soon thereafter, the Company cabled the Seamen
informing them that their contracts would be terminated upon the vessel's
arrival in Japan. On 19 April 1979 they Arere asked to disembark from the
vessel, their contracts were terminated, and they were repatriated to Manila.
There is no showing that the Seamen were given the opportunity to at least
comment on the Company's request for the cancellation of their contracts,
although they had served only three (3) out of the twelve (12) months'
duration of their contracts.
The private respondents filed a complaint for illegal dismissal and non-payment of earned
wages with the National Seamen Board. The Vir-jen Shipping and Marine Services Inc. in
turn filed a complaint for breach of contract and recovery of excess salaries and overtime
pay against the private respondents. On July 2, 1980, the NSB rendered a decision declaring
that the seamen breached their employment contracts when they demanded and received
from Vir-jen Shipping wages over and above their contracted rates. The dismissal of the
seamen was declared legal and the seamen were ordered suspended.
The seamen appealed the decision to the NLRC which reversed the decision of the NSB and
required the petitioner to pay the wages and other monetary benefits corresponding to the
unexpired portion of the manning contract on the ground that the termination of the contract
by the petitioner was without valid cause. Vir-jen Shipping filed the present petition.
The private respondents submit the following issues in their motion for reconsideration:

t.hqw

A. THIS HONORABLE COURT DID VIOLENCE TO LAW AND

JURISPRUDENCE WHEN IT HELD THAT THE FINDING OF FACT OF THE
NATIONAL SEAMEN BOARD THAT THE SEAMEN VIOLATED THEIR
CONTRACTS IS MORE CREDIBLE THAN THE FINDING OF FACT OF THE
NATIONAL LABOR RELATIONS COMMISSION THAT THE SEAMEN DID
NOT VIOLATE THEIR CONTRACT.
B. THIS HONORABLE COURT ERRED IN FINDING THAT VIR-JEN'S
HAVING AGREED TO A 25% INCREASE OF THE SEAMEN'S BASIC WAGE
WAS NOT VOLUNTARY BUT WAS DUE TO THREATS.
C. THIS HONORABLE COURT ERRED WHEN IT TOOK COGNIZANCE OF
THE ADDENDUM AGREEMENT; ASSUMING THAT THE ADDENDUM
AGREEMENT COULD BE TAKEN COGNIZANCE OF, THIS HONORABLE
COURT ERRED WHEN' IT FOUND THAT PRIVATE RESPONDENTS HAD
VIOLATED THE SAME.
D, THIS HONORABLE COURT ERRED WHEN IT DID NOT FIND
PETITIONER VIRJEN LIABLE FOR HAVING TERMINATED BEFORE
EXPIRY DATE THE EMPLOYMENT CONTRACTS OF PRIVATE
RESPONDENTS, THERE BEING NO LEGAL AND JUSTIFIABLE GROUND
FOR SUCH TERMINATION.
E. THIS HONORABLE COURT ERRED IN FINDING THAT THE
PREPARATION BY PETITIONER OF THE TWO PAYROLLS AND THE
EXECUTION OF THE SIDE CONTRACT WERE NOT MADE IN BAD FAITH.
F. THIS HONORABLE COURT INADVERTENTLY DISCRIMINATED
AGAINST PRIVATE RESPONDENTS.
At the outset, we are faced with the question whether or not the Court en banc should give
due course to the motion for reconsideration inspite of its having been denied twice by the
Court's Second Division. The case was referred to and accepted by the Court en banc
because of the movants' contention that the decision in this case by the Second Division
deviated from Wallem Phil. Shipping Inc. v. Minister of Labor (L-50734-37, February 20,
1981), a First Division case with the same facts and issues. We are constrained to answer
the initial question in the affirmative.

A fundamental postulate of Philippine Constitutional Law is the fact, that there is only one
Supreme Court from whose decisions all other courts are required to take their bearings.
(Albert v. Court of First Instance, 23 SCRA 948; Barrera v. Barrera, 34 SCRA 98; Tugade v.
Court of Appeals, 85 SCRA 226). The majority of the Court's work is now performed by its
two Divisions, but the Court remains one court, single, unitary, complete, and supreme.
Flowing from this nature of the Supreme Court is the fact that, while ' individual Justices may
dissent or partially concur with one another, when the Court states what the law is, it speaks
with only one voice. And that voice being authoritative should be a clear as possible.
Any doctrine or principle of law laid down by the Court, whether en banc or in Division, may
be modified or reversed only by the Court en banc. (Section 2(3), Article X, Constitution.) In
the rare instances when one Division disagrees in its views with the other Division, or the
necessary votes on an issue cannot be had in a Division, the case is brought to the Court en
banc to reconcile any seeming conflict, to reverse or modify an earlier decision, and to
declare the Court's doctrine. This is what has happened in this case.
The decision sought to be reconsidered appears to be a deviation from the Court's decision,
speaking through the First Division, in Wallem Shipping, Inc. v. Hon. Minister of Labor (102
SCRA 835). Faced with two seemingly conflicting resolutions of basically the same issue by
its two Divisions, the Court. therefore, resolved to transfer the case to the Court en banc.
Parenthetically, the petitioner's comment on the third motion for reconsideration states that
the resolution of the motion might be the needed vehicle to make the ruling in the Wallem
case clearer and more in time with the underlying principles of the Labor Code. We agree
with the petitioner.
After an exhaustive, painstaking, and perspicacious consideration of the motions for
reconsideration and the comments, replies, and other pleadings related thereto, the Court en
banc is constrained to grant the motions. To grant the motion is to keep faith with the
constitutional mandate to afford protection to labor and to assure the rights of workers to selforganization and to just and humane conditions of work. We sustain the decision of the
respondent National labor Relations Commission.
There are various arguments raised by the petitioners but the common thread running
through all of them is the contention, if not the dismal prophecy, that if the respondent
seamen are sustained by this Court, we would in effect "kill the en that lays the golden egg."
In other words, Filipino seamen, admittedly among the best in the world, should remain
satisfied with relatively lower if not the lowest, international rates of compensation, should
not agitate for higher wages while their contracts of employment are subsisting, should
accept as sacred, iron clad, and immutable the side contracts which require them to falsely
pretend to be members of international labor federations, pretend to receive higher salaries
at certain foreign ports only to return the increased pay once the ship leaves that port, should
stifle not only their right to ask for improved terms of employment but their freedom of
speech and expression, and should suffer instant termination of employment at the slightest
sign of dissatisfaction with no protection from their Government and their courts. Otherwise,
the petitioners contend that Filipinos would no longer be accepted as seamen, those
employed would lose their jobs, and the still unemployed would be left hopeless.
This is not the first time and it will not be the last where the threat of unemployment and loss
of jobs would be used to argue against the interests of labor; where efforts by workingmen to
better their terms of employment would be characterized as prejudicing the interests of labor
as a whole.
In 1867 or one hundred sixteen years ago. Chief Justice Beasley of the Supreme Court of
New Jersey was ponente of the court's opinion declaring as a conspiracy the threat of
workingmen to strike in connection with their efforts to promote unionism,
t.hqw

It is difficult to believe that a right exists in law which we can scarcely

conceive can produce, in any posture of affairs, other than injuriois results. It
is simply the right of workmen, by concert of action, and by taking advantage
of their position, to control the business of another, I am unwilling to hold that
a right which cannot, in any, event, be advantageous to the employee, and
which must always be hurtful to the employer, exists in law. In my opinion this
indictment sufficiently shows that the force of the confederates was brought
to bear upon their employer for the purpose of oppression and mischief and
that this amounts to a conspiracy, (State v. Donaldson, 32 NJL 151, 1867.
Cited in Chamberlain, Sourcebook on Labor, p. 13. Emphasis supplied)
The same arguments have greeted every major advance in the rights of the
workingman. And they have invariably been proved unfounded and false.

Unionism, employers' liability acts, minimum wages, workmen's compensation, social

security and collective bargaining to name a few were all initially opposed by employers and
even well meaning leaders of government and society as "killing the hen or goose which lays
the golden eggs." The claims of workingmen were described as outrageously injurious not
only to the employer but more so to the employees themselves before these claims or
demands were established by law and jurisprudence as "rights" and before these were
proved beneficial to management, labor, and the nation as a whole beyond reasonable
doubt.
The case before us does not represent any major advance in the rights of labor and the
workingmen. The private respondents merely sought rights already established. No matter
how much the petitioner-employer tries to present itself as speaking for the entire industry,
there is no evidence that it is typical of employers hiring Filipino seamen or that it can speak
for them.
The contention that manning industries in the Philippines would not survive if the instant
case is not decided in favor of the petitioner is not supported by evidence. The Wallem case
was decided on February 20, 1981. There have been no severe repercussions, no drying up
of employment opportunities for seamen, and none of the dire consequences repeatedly
emphasized by the petitioner. Why should Vir-jen be all exception?
The wages of seamen engaged in international shipping are shouldered by the foreign
principal. The local manning office is an agent whose primary function is recruitment and
who .usually gets a lump sum from the shipowner to defray the salaries of the crew. The
hiring of seamen and the determination of their compensation is subject to the interplay of
various market factors and one key factor is how much in terms of profits the local manning
office and the foreign shipowner may realize after the costs of the voyage are met. And costs
include salaries of officers and crew members.
Filipino seamen are admittedly as competent and reliable as seamen from any other country
in the world. Otherwise, there would not be so many of them in the vessels sailing in every
ocean and sea on this globe. It is competence and reliability, not cheap labor that makes our
seamen so greatly in demand. Filipino seamen have never demanded the same high
salaries as seamen from the United States, the United Kingdom, Japan and other developed
nations. But certainly they are entitled to government protection when they ask for fair and
decent treatment by their employer.-, and when they exercise the right to petition for
improved terms of employment, especially when they feel that these are sub-standard or are
capable of improvement according to internationally accepted rules. In the domestic scene,
there are marginal employers who prepare two sets of payrolls for their employees one in
keeping with minimum wages and the other recording the sub-standard wages that the
employees really receive, The reliable employers, however, not only meet the minimums
required by fair labor standards legislation but even go way above the minimums while
earning reasonable profits and prospering. The same is true of international employment.
There is no reason why this Court and the Ministry of Labor and. Employment or its agencies
and commissions should come out with pronouncements based on the standards and
practices of unscrupulous or inefficient shipowners, who claim they cannot survive without
resorting to tricky and deceptive schemes, instead of Government maintaining labor law and
jurisprudence according to the practices of honorable, competent, and law-abiding
employers, domestic or foreign.
If any minor advantages given to Filipino seamen may somehow cut into the profits of local
manning agencies and foreign shipowners, that is not sufficient reason why the NSB or the
ILRC should not stand by the former instead of listening to unsubstantiated fears that they
would be killing the hen which lays the golden eggs.
Prescinding from the above, we now hold that neither the National Seamen Board nor the
National Labor Relations Commission should, as a matter of official policy, legitimize and
enforce cubious arrangements where shipowners and seamen enter into fictitious contracts
similar to the addendum agreements or side contracts in this case whose purpose is to
deceive. The Republic of the Philippines and its ministries and agencies should present a
more honorable and proper posture in official acts to the whole world, notwithstanding our
desire to have as many job openings both here and abroad for our workers. At the very least,
such as sensitive matter involving no less than our dignity as a people and the welfare of our
workingmen must proceed from the Batasang Pambansa in the form of policy legislation, not
from administrative rule making or adjudication
Another issue raised by the movants is whether or not the seamen violated their contracts of
employment.

The form contracts approved by the National Seamen Board are designed to protect Filipino
seamen not foreign shipowners who can take care of themselves. The standard forms
embody' the basic minimums which must be incorporated as parts of the employment
contract. (Section 15, Rule V, Rules and Regulations Implementing the Labor Code.) They
are not collective bargaining agreements or immutable contracts which the parties cannot
improve upon or modify in the course of the agreed period of time. To state, therefore, that
the affected seamen cannot petition their employer for higher salaries during the 12 months
duration of the contract runs counter to established principles of labor legislation. The
National Labor Relations Commission, as the appellate tribunal from decisions of the
National Seamen Board, correctly ruled that the seamen did not violate their contracts to
warrant their dismissal.
The respondent Commission ruled:

t.hqw

In the light of all the foregoing facts, we find that the cable of the seamen
proposing an increase in their wage rates was not and could not have been
intended as a threat to comp el the Company to accede to their proposals.
But even assuming, if only for the sake of argument, that the demand or
proposal for a wage increase was accompanied by a threat that they would
report to ITF if the Company did not accede to the contract revision although there really was no such threat as pointed out earlier the
Seamen should not be held at fault for asking such a demand. In the same
case cited above, the Supreme Court held:
t.hqw

Petitioner claims that the dismissal of private respondents

was justified because the latter threatened the ship authorities
in acceding to their demands, and this constitutes serious
misconduct as contemplated by the Labor Code. This
contention is not well-taken. But even if there had been such
a threat, respondents' behavior should not be censured
because it is but natural for them to employ some means of
pressing their demands for petitioner, the refusal to abide with
the terms of the Special Agreement, to honor and respect the
same, They were only acting in the exercise of their rights,
and to deprive them of their freedom of expression is contrary
to law and public policy. There is no serious misconduct to
speak of in the case at bar which would justify respondents'
dismissal just because of their firmness in their demand for
the fulfillment by petitioner of its obligation it entered into
without any coercion, specially on the part of private
respondents. (Emphasis supplied).
The above citation is from Wallem.
The facts show that when the respondents boarded the M/T Jannu there was no intention to
send their ship to Australia. On January 10, 1979, the petitioner sent a cable to respondent
shipmaster Bisula informing him of the procedure to be followed in the computation of
special compensation of crewmembers while in ITF controlled ports and expressed regrets
for not having earlier clarified the procedure as it thought that the vessel would trade in
Carribean ports only.
On March 22, 1979, the petitioner sent another cable informing Bisula of the special
compensation when the ship would call at Kwinana Australia.
The following day, shipmaster Bisula cabled Vir-jen stating that the officers and crews were
not interested in ITF membership if not paid ITF rates and that their only demand was a 50
percent increase based on their then salaries. Bisula also pointed out that Vir-jen rates were
"very far in comparison with other shipping agencies in Manila."
In reply, Vir-jen counter proposed a 25 percent increase. Only after Kyoei Tanker Co., Ltd.,
declined to increase the lumps sum amount given monthly to Vir-jen was the decision to
terminate the respondents' employment formulated.
The facts show that Virjen Initiated the discussions which led to the demand for increased .
The seamen made a proposal and the petitioner organized with a counter-proposal. The ship
had not vet gone to Australia or any ITF controlled port. There was absolutely no mention of
any strike. much less a threat to strike. The seamen had done in act which under Philippine
law or any other civilized law would be termed illegal, oppressive, or malicious. Whatever
pressure existed, it was mild compared to accepted valid modes of labor activity.

We reiterate our ruling in Wallem.

t.hqw

Petitioner claims that the dismissal of private respondents

was justified because the latter threatened the ship authorities
in acceding to their demands, and this constitutes serious
misconduct as contemplated by the Labor Code. This
contention is not well-taken. The records fail to establish
clearly the commission of any threat, But even if there had
been such a threat, respondents' behavior should not be
censured because it is but natural for them to employ some
means of pressing their demands for petitioner, who refused
to abide with the terms of the Special Agreement, to honor
and respect the same, They were only acting in the exercise
of their rights, and to deprive them of their form of expression
is contrary to law and public policy. ...
Our dismissing the petition is premised on the assumption that the Ministry of Labor and
Employment and all its agencies exist primarily for the workinginan's interests and, of course,
the nation as a whole. The points raised by the Solicitor-General in his comments refer to the
issue of allowing what the petitioner importunes under the argument of "killing the hen which
lays the golden eggs." This is one of policy which should perhaps be directed to the
Batasang Pambansa and to our country's other policy makers for more specific legislation on
the matter, subject to the constitutional provisions protecting labor, promoting social justice,
and guaranteeing non-abridgement of the freedom of speech, press, peaceable assembly
and petition. We agree with the movants that there is no showing of any cause, which under
the Labor Code or any current applicable law, would warrant the termination of the
respondents' services before the expiration of their contracts. The Constitution guarantees
State assurance of the rights of workers to security of tenure. (Sec. 9, Article II, Constitution).
Presumptions and provisions of law, the evidence on record, and fundamental State policy
all dictate that the motions for reconsideration should be granted.
WHEREFORE, the motions for reconsideration are hereby GRANTED. The petition is
DISMISSED for lack of merit. The decision of the National Labor Relations Commission is
AFFIRMED. No costs.
SO ORDERED.

1wph1.t

Fernando, C.J., Guerrero, Abad Santos, Plana, Escolin and Relova, JJ., concur.

Separate Opinions

DE CASTRO, J., concurring:

Being the ponente of the Wallem case, upon whose ruling the decision of the Court en banc
in this case is mainly made to rest, at least insofar as said Court now finds that the
respondent seamen have not committed any misconduct which would constitute a just cause
for the termination of their services just after three months of the 12-month term of their
contract, a brief explanation why I voted in the Second Division in favor of the petitioner
company in the instant case, and not the respondent seamen, as I did in the Wallem case, is
obviously called for.
During our deliberations in the Division, it was made clear that in the instant case,' threat was
employed by the seamen against the company or shipowners to obtain consent to the 50%
raise of wages as proposed by the seamen upon being informed that they would touch on
ITF-controlled ports. I joined my colleagues in the Second Division in concurring in the
decision penned by Justice Barredo, now retired, in the belief that threat was indeed
committed, constituting a just cause for termination of the services of the seamen with still
nine months to go of their 12-month contract with the petitioner. As the facts are more
thoroughly and accurately presented and discussed in the decision so brilliantly written by
Justice Gutierrez, I am persuaded that on the basis of the ruling of the Wallem case, a
mistake was committed in finding the existence of a just cause for the instant and
unexpected termination of the services of the seamen.

The facts of this case show that to the proposal of the seamen for a 50% increase, made
because they were informed that they would touch on ITF-controlled ports, the company
countered with an offer of only 25% raised The proposal of 5% was much lower than the
rates which the ITF would surely force upon the company When the company made a
counter proposal of 25% raise the seamen accepted. The trip went on smoothly until upon
arriving at a port which afforded haven and safety to the shipowner, the latter suddenly, and
with imperious finality, terminated the services of the seamen and repatriated them to Manila.
These are the simple facts that call for the application of the law, mainly the provisions of the
Labor Code. That law is none other than what is indicated in how the Walem case was
decided in vindication of how the Seamen were given a raw deal in being lulled into a
false sense of security in their employment contract only to be rudely terminated and ordered
repatriated.
In the Wallem case, the seamen pressed their demand for the enforcement of a special
agreement entered into by the shipowner or company with the ITF. For this act, their services
were terminated and they were repatriated by their employer shipping company. What the
First Division said in favor of the seamen, is in my opinion, the correct ruling which We
should reaffirm in the instant case. Thus
t.hqw

Petitioner claims that the dismissal of private respondent was justified

because the latter threatened the ship authorities in acceding to their
demands, and this constitutes serious misconduct as contemplated by the
Labor Code. This contention is not welltaken. But even en if there had been
such a threat, respondents' behavior should not be censured because it is
but natural for them to employ some means of pressing their demands on
petitioner, who refused to abide with the terms of the Special Agreement, to
honor and respect the same. They were only acting in the exercise of their
rights, and to deprive them of their freedom of expression is contrary to law
and public policy. There is no serious misconduct to speak of in the case at
bar which would justify respondents' dismissal just because of their firmness
in their demand for the fulfillment by petitioner of its obligation it entered into
without any coercion, specially on the part of private respondents. (Emphasis
supplied).
This above ruling is the law on the matter and, in my opinion. controlling on the case at bar.
Whatever policy may prove more beneficial to the cause of labor in general, as is sought to
be offered as argument in support of the Second Division decision, is not a proper ground for
making said policy prevail over the applicable law or jurisprudence, Questions of policy are
better left to the Batasan Pambansa. We should confine ourselves to applying the law as it
is. In so doing, We are not allowed to apply it to suit, or to respond to, the demands of what
We may deem the better policy than what the law clearly intends. The policy is the law, and
the law is the policy. We might be treading on forbidden ground to bend the law to what We
perceive to be a desirable policy.
Courts are called upon only to apply the law. Does the law permit the termination of the
services of the seamen in violation of their contract except only upon a just cause? This is
the only question to be answered in this case. The answer is given with eloquent
persuasiveness in the decision in which I concur wholeheartedly.
Teehankee, Makasiar, Aquino, ,Concepcion, Jr. and Melencio-Herrera, JJ., took no part.

Separate Opinions

DE CASTRO, J., concurring:

Being the ponente of the Wallem case, upon whose ruling the decision of the Court en banc
in this case is mainly made to rest, at least insofar as said Court now finds that the
respondent seamen have not committed any misconduct which would constitute a just cause
for the termination of their services just after three months of the 12-month term of their
contract, a brief explanation why I voted in the Second Division in favor of the petitioner

company in the instant case, and not the respondent seamen, as I did in the Wallem case, is
obviously called for.
During our deliberations in the Division, it was made clear that in the instant case,' threat was
employed by the seamen against the company or shipowners to obtain consent to the 50%
raise of wages as proposed by the seamen upon being informed that they would touch on
ITF-controlled ports. I joined my colleagues in the Second Division in concurring in the
decision penned by Justice Barredo, now retired, in the belief that threat was indeed
committed, constituting a just cause for termination of the services of the seamen with still
nine months to go of their 12-month contract with the petitioner. As the facts are more
thoroughly and accurately presented and discussed in the decision so brilliantly written by
Justice Gutierrez, I am persuaded that on the basis of the ruling of the Wallem case, a
mistake was committed in finding the existence of a just cause for the instant and
unexpected termination of the services of the seamen.
The facts of this case show that to the proposal of the seamen for a 50% increase, made
because they were informed that they would touch on ITF-controlled ports, the company
countered with an offer of only 25% raised The proposal of 5% was much lower than the
rates which the ITF would surely force upon the company When the company made a
counter proposal of 25% raise the seamen accepted. The trip went on smoothly until upon
arriving at a port which afforded haven and safety to the shipowner, the latter suddenly, and
with imperious finality, terminated the services of the seamen and repatriated them to Manila.
These are the simple facts that call for the application of the law, mainly the provisions of the
Labor Code. That law is none other than what is indicated in how the Walem case was
decided in vindication of how the Seamen were given a raw deal in being lulled into a
false sense of security in their employment contract only to be rudely terminated and ordered
repatriated.
In the Wallem case, the seamen pressed their demand for the enforcement of a special
agreement entered into by the shipowner or company with the ITF. For this act, their services
were terminated and they were repatriated by their employer shipping company. What the
First Division said in favor of the seamen, is in my opinion, the correct ruling which We
should reaffirm in the instant case. Thus
t.hqw

Petitioner claims that the dismissal of private respondent was justified

because the latter threatened the ship authorities in acceding to their
demands, and this constitutes serious misconduct as contemplated by the
Labor Code. This contention is not welltaken. But even en if there had been
such a threat, respondents' behavior should not be censured because it is
but natural for them to employ some means of pressing their demands on
petitioner, who refused to abide with the terms of the Special Agreement, to
honor and respect the same. They were only acting in the exercise of their
rights, and to deprive them of their freedom of expression is contrary to law
and public policy. There is no serious misconduct to speak of in the case at
bar which would justify respondents' dismissal just because of their firmness
in their demand for the fulfillment by petitioner of its obligation it entered into
without any coercion, specially on the part of private respondents. (Emphasis
supplied).
This above ruling is the law on the matter and, in my opinion. controlling on the case at bar.
Whatever policy may prove more beneficial to the cause of labor in general, as is sought to
be offered as argument in support of the Second Division decision, is not a proper ground for
making said policy prevail over the applicable law or jurisprudence, Questions of policy are
better left to the Batasan Pambansa. We should confine ourselves to applying the law as it
is. In so doing, We are not allowed to apply it to suit, or to respond to, the demands of what
We may deem the better policy than what the law clearly intends. The policy is the law, and
the law is the policy. We might be treading on forbidden ground to bend the law to what We
perceive to be a desirable policy.
Courts are called upon only to apply the law. Does the law permit the termination of the
services of the seamen in violation of their contract except only upon a just cause? This is
the only question to be answered in this case. The answer is given with eloquent
persuasiveness in the decision in which I concur wholeheartedly.

Separate Opinions
DE CASTRO, J., concurring:

Being the ponente of the Wallem case, upon whose ruling the decision of the Court en banc
in this case is mainly made to rest, at least insofar as said Court now finds that the
respondent seamen have not committed any misconduct which would constitute a just cause
for the termination of their services just after three months of the 12-month term of their
contract, a brief explanation why I voted in the Second Division in favor of the petitioner
company in the instant case, and not the respondent seamen, as I did in the Wallem case, is
obviously called for.
During our deliberations in the Division, it was made clear that in the instant case,' threat was
employed by the seamen against the company or shipowners to obtain consent to the 50%
raise of wages as proposed by the seamen upon being informed that they would touch on
ITF-controlled ports. I joined my colleagues in the Second Division in concurring in the
decision penned by Justice Barredo, now retired, in the belief that threat was indeed
committed, constituting a just cause for termination of the services of the seamen with still
nine months to go of their 12-month contract with the petitioner. As the facts are more
thoroughly and accurately presented and discussed in the decision so brilliantly written by
Justice Gutierrez, I am persuaded that on the basis of the ruling of the Wallem case, a
mistake was committed in finding the existence of a just cause for the instant and
unexpected termination of the services of the seamen.
The facts of this case show that to the proposal of the seamen for a 50% increase, made
because they were informed that they would touch on ITF-controlled ports, the company
countered with an offer of only 25% raised The proposal of 5% was much lower than the
rates which the ITF would surely force upon the company When the company made a
counter proposal of 25% raise the seamen accepted. The trip went on smoothly until upon
arriving at a port which afforded haven and safety to the shipowner, the latter suddenly, and
with imperious finality, terminated the services of the seamen and repatriated them to Manila.
These are the simple facts that call for the application of the law, mainly the provisions of the
Labor Code. That law is none other than what is indicated in how the Walem case was
decided in vindication of how the Seamen were given a raw deal in being lulled into a
false sense of security in their employment contract only to be rudely terminated and ordered
repatriated.
In the Wallem case, the seamen pressed their demand for the enforcement of a special
agreement entered into by the shipowner or company with the ITF. For this act, their services
were terminated and they were repatriated by their employer shipping company. What the
First Division said in favor of the seamen, is in my opinion, the correct ruling which We
should reaffirm in the instant case. Thus
t.hqw

Petitioner claims that the dismissal of private respondent was justified

because the latter threatened the ship authorities in acceding to their
demands, and this constitutes serious misconduct as contemplated by the
Labor Code. This contention is not welltaken. But even en if there had been
such a threat, respondents' behavior should not be censured because it is
but natural for them to employ some means of pressing their demands on
petitioner, who refused to abide with the terms of the Special Agreement, to
honor and respect the same. They were only acting in the exercise of their
rights, and to deprive them of their freedom of expression is contrary to law
and public policy. There is no serious misconduct to speak of in the case at
bar which would justify respondents' dismissal just because of their firmness
in their demand for the fulfillment by petitioner of its obligation it entered into
without any coercion, specially on the part of private respondents. (Emphasis
supplied).
This above ruling is the law on the matter and, in my opinion. controlling on the case at bar.
Whatever policy may prove more beneficial to the cause of labor in general, as is sought to
be offered as argument in support of the Second Division decision, is not a proper ground for
making said policy prevail over the applicable law or jurisprudence, Questions of policy are
better left to the Batasan Pambansa. We should confine ourselves to applying the law as it
is. In so doing, We are not allowed to apply it to suit, or to respond to, the demands of what
We may deem the better policy than what the law clearly intends. The policy is the law, and
the law is the policy. We might be treading on forbidden ground to bend the law to what We
perceive to be a desirable policy.
Courts are called upon only to apply the law. Does the law permit the termination of the
services of the seamen in violation of their contract except only upon a just cause? This is
the only question to be answered in this case. The answer is given with eloquent
persuasiveness in the decision in which I concur wholeheartedly.

VirJen Shipping and Marine Services vs. NLRC

125 SCRA 577 (1983)

Ma. Cristina Ramos (OAS)
Facts: Certain seamen entered into a contract of employment for a 12-month period.
Some three months after the
commencement of their employment, the seamen demanded a 50% increase of their
salaries and benefits. The
seamen demanded this increase while their vessel was on route to a port in Australia
controlled by the International
Transport Federation (ITP) where the ITF could detain the vessels unless it paid its
season ITF rates.
The agent of the owner of the vessel agreed to a 25% increase, but when the vessel
arrived in Japan shortly
afterwards, the seamen were repatriated to Manila and their contract terminated.
Two motions for reconsideration filed with Second Division were denied by said
Division. Another motion for
reconsideration was filed with the Supreme Court en banc which gave its due course,
after finding that there was a
need to reconcile the decision of the Second Division with that of the First Division with
the Wallen Decision. In that
decision, the First Division had ruled that the termination of the seamen was illegal.
Issue: Whether or not the termination of the seamen was illegal.
Held: The termination of the contract of the seamen was illegal. A manning contract
involves the interests not only of
the signatories thereto, such as the local Filipino recruiting agent, the foreign owner of
vessel and the Filipino seamen
in general as well as the country itself. Conformably to the power vested in the NSB, the
law requires that all manning
contracts shall be approved by said agency. The stringent rules governing Filipino
seamen abroad foreign ships are
dictated by national interest

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. Nos. L-57999, 58143-53 August 15, 1989
RESURRECCION SUZARA, CESAR DIMAANDAL, ANGELITO MENDOZA, ANTONIO
TANEDO, AMORSOLO CABRERA, DOMINADOR SANTOS, ISIDRO BRACIA, RAMON
DE BELEN, ERNESTO SABADO, MARTIN MALABANAN, ROMEO HUERTO and
VITALIANO PANGUE, petitioners,
vs.
THE HON. JUDGE ALFREDO L. BENIPAYO and MAGSAYSAY LINES, INC., respondents.
G.R. Nos. L-64781-99 August 15, 1989
RESURRECCION SUZARA, CESAR DIMAANDAL, ANGELITO MENDOZA, ANTONIO
TANEDO, RAYMUNDO PEREZ, AMORSOLO CABRERA, DOMINADOR SANTOS, ISIDRO
BRACIA, CATALINO CASICA, VITALIANO PANGUE, RAMON DE BELEN, EDUARDO
PAGTALUNAN, ANTONIO MIRANDA, RAMON UNIANA, ERNESTO SABADO, MARTIN
MALABANAN, ROMEO HUERTO and WILFREDO CRISTOBAL, petitioners,
vs.
THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION, THE NATIONAL
SEAMEN BOARD (now the Philippine Overseas Employment Administration), and
MAGSAYSAY LINES, INC., respondents.
Quasha, Asperilla, Ancheta, Pe;a and Nolasco for petitioners.

Samson S. Alcantara for private respondent.

GUTIERREZ, JR., J.:

These petitions ask for a re-examination of this Court's precedent setting decision in VirJen Shipping and Marine Services Inc. v. National Labor Relations Commission, et al. (125
SCRA 577 [1983]). On constitutional, statutory, and factual grounds, we find no reason to
disturb the doctrine in Vir-Jen Shipping and to turn back the clock of progress for sea-based
overseas workers. The experience gained in the past few years shows that, following said
doctrine, we should neither deny nor diminish the enjoyment by Filipino seamen of the same
rights and freedoms taken for granted by other working-men here and abroad.
The cases at bar involve a group of Filipino seamen who were declared by the defunct
National Seamen Board (NSB) guilty of breaching their employment contracts with the
private respondent because they demanded, upon the intervention and assistance of a third
party, the International Transport Worker's Federation (ITF), the payment of wages over and
above their contracted rates without the approval of the NSB. The petitioners were ordered
to reimburse the total amount of US$91,348.44 or its equivalent in Philippine Currency
representing the said over-payments and to be suspended from the NSB registry for a period
of three years. The National Labor Relations Commission (NLRC) affirmed the decision of
the NSB.
In a corollary development, the private respondent, for failure of the petitioners to return the
overpayments made to them upon demand by the former, filed estafa charges against some
of the petitioners. The criminal cases were eventually consolidated in the sala of then
respondent Judge Alfredo Benipayo. Hence, these consolidated petitions, G.R. No. 6478199 and G.R. Nos. 57999 and 58143-53, which respectively pray for the nullification of the
decisions of the NLRC and the NSB, and the dismissal of the criminal cases against the
petitioners.
The facts are found in the questioned decision of the NSB in G.R. No. 64781-99.
From the records of this case it appears that the facts established and/or
admitted by the parties are the following: that on different dates in 1977 and
1978 respondents entered into separate contracts of employment (Exhs. "B"
to "B-17", inclusive) with complainant (private respondent) to work aboard
vessels owned/operated/manned by the latter for a period of 12 calendar
months and with different rating/position, salary, overtime pay and allowance,
hereinbelow specified: ...; that aforesaid employment contracts were verified
and approved by this Board; that on different dates in April 1978 respondents
(petitioners) joined the M/V "GRACE RIVER"; that on or about October 30,
1978 aforesaid vessel, with the respondents on board, arrived at the port of
Vancouver, Canada; that at this port respondent received additional wages
under rates prescribed by the Intemational Transport Worker's Federation
(ITF) in the total amount of US$98,261.70; that the respondents received the
amounts appearing opposite their names, to wit: ...; that aforesaid amounts
were over and above the rates of pay of respondents as appearing in their
employment contracts approved by this Board; that on November 10, 1978,
aforesaid vessel, with respondent on board, left Vancouver, Canada for
Yokohama, Japan; that on December 14, 1978, while aforesaid vessel, was
at Yura, Japan, they were made to disembark. (pp. 64-66, Rollo)
Furthermore, according to the petitioners, while the vessel was docked at Nagoya, Japan, a
certain Atty. Oscar Torres of the NSB Legal Department boarded the vessel and called a
meeting of the seamen including the petitioners, telling them that for their own good and
safety they should sign an agreement prepared by him on board the vessel and that if they
do, the cases filed against them with NSB on November 17, 1978 would be dismissed. Thus,
the petitioners signed the. "Agreement" dated December 5, 1978. (Annex C of Petition)
However, when they were later furnished xerox copies of what they had signed, they noticed
that the line "which amount(s) was/were received and held by CREWMEMBERS in trust for
SHIPOWNERS" was inserted therein, thereby making it appear that the amounts given to
the petitioners representing the increase in their wages based on ITF rates were only
received by them in trust for the private respondent.
When the vessel reached Manila, the private respondent demanded from the petitioners the
"overpayments" made to them in Canada. As the petitioners refused to give back the said
amounts, charges were filed against some of them with the NSB and the Professional

Regulations Commission. Estafa charges were also filed before different branches of the
then Court of First Instance of Manila which, as earlier stated, were subsequently
consolidated in the sala of the respondent Judge Alfredo Benipayo and which eventually led
to G.R. Nos. 57999 and 58143-53.
In G.R. Nos. 64781-99, the petitioners claimed before the NSB that contrary to the private
respondent's allegations, they did not commit any illegal act nor stage a strike while they
were on board the vessel; that the "Special Agreement" entered into in Vancouver to pay
their salary differentials is valid, having been executed after peaceful negotiations.
Petitioners further argued that the amounts they received were in accordance with the
provision of law, citing among others, Section 18, Rule VI, Book I of the Rules and
Regulations Implementing the Labor Code which provides that "the basic minimum salary of
seamen shall not be less than the prevailing minimum rates established by the International
Labor Organization (ILO) or those prevailing in the country whose flag the employing vessel
carries, whichever is higher ..."; and that the "Agreement" executed in Nagoya, Japan had
been forced upon them and that intercalations were made to make it appear that they were
merely trustees of the amounts they received in Vancouver.
On the other hand, the private respondent alleged that the petitioners breached their
employment contracts when they, acting in concert and with the active participations of the
ITF while the vessel was in Vancouver, staged an illegal strike and by means of threats,
coercion and intimidation compelled the owners of the vessel to pay to them various sums
totalling US$104,244.35; that the respondent entered into the "Special Agreement" to pay the
petitioners' wage differentials because it was under duress as the vessel would not be
allowed to leave Vancouver unless the said agreement was signed, and to prevent the
shipowner from incurring further delay in the shipment of goods; and that in view of
petitioners' breach of contract, the latter's names must be removed from the NSB's Registry
and that they should be ordered to return the amounts they received over and above their
contracted rates.
The respondent NSB ruled that the petitioners were guilty of breach of contract because
despite subsisting and valid NSB-approved employment contracts, the petitioners sought the
assistance of a third party (ITF) to demand from the private respondent wages in accordance
with the ITF rates, which rates are over and above their rates of pay as appearing in their
NSB-approved contracts. As bases for this conclusion, the NSB stated:
1) The fact that respondents sought the aid of a third party (ITF) and
demanded for wages and overtime pay based on ITF rates is shown in the
entries of their respective Pay-Off Clearance Slips which were marked as
their Exhs. "1" to "18", and we quote "DEMANDED ITF WAGES, OVERTIME,
DIFFERENTIALS APRIL TO OCTOBER 1978". Respondent Suzara admitted
that the entries in his Pay-Off Clearance Slip (Exh. "1") are correct (TSN., p.
16, Dec. 6, 1979). Moreover, it is the policy (reiterated very often) by the ITF
that it does not interfere in the affairs of the crewmembers and masters
and/or owners of a vessel unless its assistance is sought by the
crewmembers themselves. Under this pronounced policy of the ITF, it is
reasonable to assume that the representatives of the ITF in Vancouver,
Canada assisted and intervened by reason of the assistance sought by the
latter.
lwph1.t

2) The fact that the ITF assisted and intervened for and in behalf of the
respondents in the latter's demand for higher wages could be gleaned from
the answer of the respondents when they admitted that the ITF acted in their
behalf in the negotiations for increase of wages. Moreover, respondent Cesar
Dimaandal admitted that the ITF differential pay was computed by the ITF
representative (TSN, p. 7, Dec. 12, 1979)
3) The fact that complainant and the owner/operator of the vessel were
compelled to sign the Special Agreement (Exh. "20") and to pay ITF
differentials to respondents in order not to delay the departure of the vessel
and to prevent further losses is shown in the "Agreement" (Exhs. "R-21") ...
(pp. 69-70, Rollo)
The NSB further said:
While the Board recognizes the rights of the respondents to demand for
higher wages, provided the means are peaceful and legal, it could not,
however, sanction the same if the means employed are violent and illegal. In
the case at bar, the means employed are violent and illegal for in demanding
higher wages the respondents sought the aid of a third party and in turn the

latter intervened in their behalf and prohibited the vessel from sailing unless
the owner and/or operator of the vessel acceded to respondents' demand for
higher wages. To avoid suffering further incalculable losses, the owner and/or
operator of the vessel had no altemative but to pay respondents' wages in
accordance with the ITF scale. The Board condemns the act of a party who
enters into a contract and with the use of force/or intimidation causes the
other party to modify said contract. If the respondents believe that they have
a valid ground to demand from the complainant a revision of the terms of
their contracts, the same should have been done in accordance with law and
not thru illegal means. (at p. 72, Rollo).
Although the respondent NSB found that the petitioners were entitled to the payment of
earned wages and overtime pay/allowance from November 1, 1978 to December 14, 1978, it
nevertheless ruled that the computation should be based on the rates of pay as appearing in
the petitioners' NSB-approved contracts. It ordered that the amounts to which the petitioners
are entitled under the said computation should be deducted from the amounts that the
petitioners must return to the private respondent.
On appeal, the NLRC affirmed the NSB's findings. Hence, the petition in G.R. Nos. 6478199.
Meanwhile, the petitioners in G.R. Nos. 57999 and 58143-53 moved to quash the criminal
cases of estafa filed against them on the ground that the alleged crimes were committed, if
at all, in Vancouver, Canada and, therefore, Philippine courts have no jurisdiction. The
respondent judge denied the motion. Hence, the second petition.
The principal issue in these consolidated petitions is whether or not the petitioners are
entitled to the amounts they received from the private respondent representing additional
wages as determined in the special agreement. If they are, then the decision of the NLRC
and NSB must be reversed. Similarly, the criminal cases of estafa must be dismissed
because it follows as a consequence that the amounts received by the petitioners belong to
them and not to the private respondent.
In arriving at the questioned decision, the NSB ruled that the petitioners are not entitled to
the wage differentials as determined by the ITF because the means employed by them in
obtaining the same were violent and illegal and because in demanding higher wages the
petitioners sought the aid of a third party, which, in turn, intervened in their behalf and
prohibited the vessel from sailing unless the owner and/or operator of the vessel acceded to
respondents' demand for higher wages. And as proof of this conclusion, the NSB cited the
following: (a) the entries in the petitioners Pay-Off Clearance Slip which contained the phrase
"DEMANDED ITF WAGES ..."; (b) the alleged policy of the ITF in not interfering with
crewmembers of a vessel unless its intervention is sought by the crewmembers themselves;
(c), the petitioners' admission that ITF acted in their behalf; and (d) the fact that the private
respondent was compelled to sign the special agreement at Vancouver, Canada.
There is nothing in the public and private respondents' pleadings, to support the allegations
that the petitioners used force and violence to secure the special agreement signed in
Vancouver. British Columbia. There was no need for any form of intimidation coming from the
Filipino seamen because the Canadian Brotherhood of Railways and Transport Workers
(CBRT), a strong Canadian labor union, backed by an international labor federation was
actually doing all the influencing not only on the ship-owners and employers but also against
third world seamen themselves who, by receiving lower wages and cheaper
accommodations, were threatening the employment and livelihood of seamen from
developed nations.
The bases used by the respondent NSB to support its decision do not prove that the
petitioners initiated a conspiracy with the ITF or deliberately sought its assistance in order to
receive higher wages. They only prove that when ITF acted in petitioners' behalf for an
increase in wages, the latter manifested their support. This would be a logical and natural
reaction for any worker in whose benefit the ITF or any other labor group had intervened.
The petitioners admit that while they expressed their conformity to and their sentiments for
higher wages by means of placards, they, nevertheless, continued working and going about
their usual chores. In other words, all they did was to exercise their freedom of speech in a
most peaceful way. The ITF people, in turn, did not employ any violent means to force the
private respondent to accede to their demands. Instead, they simply applied effective
pressure when they intimated the possibility of interdiction should the shipowner fail to heed
the call for an upward adjustment of the rates of the Filipino seamen. Interdiction is nothing
more than a refusal of ITF members to render service for the ship, such as to load or unload
its cargo, to provision it or to perform such other chores ordinarily incident to the docking of

the ship at a certain port. It was the fear of ITF interdiction, not any action taken by the
seamen on board the vessel which led the shipowners to yield.
The NSB's contusion that it is ITF's policy not to intervene with the plight of crewmembers of
a vessel unless its intervention was sought is without basis. This Court is cognizant of the
fact that during the period covered by the labor controversies in Wallem Philippines
Shipping, Inc. v. Minister of Labor (102 SCRA 835 [1981]; Vir-Jen Shipping and Marine
Services, Inc. v. NLRC (supra) and these consolidated petitions, the ITF was militant
worldwide especially in Canada, Australia, Scandinavia, and various European countries,
interdicting foreign vessels and demanding wage increases for third world seamen. There
was no need for Filipino or other seamen to seek ITF intervention. The ITF was waiting on its
own volition in all Canadian ports, not particularly for the petitioners' vessel but for all ships
similarly situated. As earlier stated, the ITF was not really acting for the petitioners out of
pure altruism. The ITF was merely protecting the interests of its own members. The
petitioners happened to be pawns in a higher and broader struggle between the ITF on one
hand and shipowners and third world seamen, on the other. To subject our seamen to
criminal prosecution and punishment for having been caught in such a struggle is out of the
question.
As stated in Vir-Jen Shipping (supra):
The seamen had done no act which under Philippine law or any other
civilized law would be termed illegal, oppressive, or malicious. Whatever
pressure existed, it was mild compared to accepted and valid modes of labor
activity. (at page 591)
Given these factual situations, therefore, we cannot affirm the NSB and NLRC's finding that
there was violence, physical or otherwise employed by the petitioners in demanding for
additional wages. The fact that the petitioners placed placards on the gangway of their ship
to show support for ITF's demands for wage differentials for their own benefit and the
resulting ITF's threatened interdiction do not constitute violence. The petitioners were
exercising their freedom of speech and expressing sentiments in their hearts when they
placed the placard We Want ITF Rates." Under the facts and circumstances of these
petitions, we see no reason to deprive the seamen of their right to freedom of expression
guaranteed by the Philippine Constitution and the fundamental law of Canada where they
happened to exercise it.
As we have ruled in Wallem Phil. Shipping Inc. v. Minister of Labor, et al. supra:
Petitioner claims that the dismissal of private respondents was justified
because the latter threatened the ship authorities in acceding to their
demands, and this constitutes serious misconduct as contemplated by the
Labor Code. This contention is now well-taken. The records fail to establish
clearly the commission of any threat. But even if there had been such a
threat, respondents' behavior should not be censured because it is but
natural for them to employ some means of pressing their demands for
petitioner, who refused to abide with the terms of the Special Agreement, to
honor and respect the same. They were only acting in the exercise of their
rights, and to deprive them of their freedom of expression is contrary to law
and public policy. ... (at page 843)
We likewise, find the public respondents' conclusions that the acts of the petitioners in
demanding and receiving wages over and above the rates appearing in their NSB-approved
contracts is in effect an alteration of their valid and subsisting contracts because the same
were not obtained through. mutual consent and without the prior approval of the NSB to be
without basis, not only because the private respondent's consent to pay additional wages
was not vitiated by any violence or intimidation on the part of the petitioners but because the
said NSB-approved form contracts are not unalterable contracts that can have no room for
improvement during their effectivity or which ban any amendments during their term.
For one thing, the employer can always improve the working conditions without violating any
law or stipulation.
We stated in the Vir-Jen case (supra) that:
The form contracts approved by the National Seamen Board are designed to
protect Filipino seamen not foreign shipowners who can take care of
themselves. The standard forms embody the basic minimums which must be
incorporated as parts of the employment contract. (Section 15, Rule V, Rules

and Regulations Implementing the Labor Code). They are not collective
bargaining agreements or immutable contracts which the parties cannot
improve upon or modify in the course of the agreed period of time. To state,
therefore, that the affected seamen cannot petition their employer for higher
salaries during the 12 months duration of the contract runs counter to
estabhshed principles of labor legislation. The National Labor Relations
Commission, as the appellate tribunal from the decisions of the National
Seamen Board, correctly ruled that the seamen did not violate their contracts
to warrant their dismissal. (at page 589)
lwph1.t

It is impractical for the NSB to require the petitioners, caught in the middle of a labor struggle
between the ITF and owners of ocean going vessels halfway around the world in Vancouver,
British Columbia to first secure the approval of the NSB in Manila before signing an
agreement which the employer was willing to sign. It is also totally unrealistic to expect the
petitioners while in Canada to exhibit the will and strength to oppose the ITF's demand for an
increase in their wages, assuming they were so minded.
An examination of Annex C of the petition, the agreement signed in Japan by the
crewmembers of the M/V Grace River and a certain M. Tabei, representative of the Japanese
shipowner lends credence to the petitioners' claim that the clause "which amount(s) was
received and held by CREWMEMBERS in trust for SHIPOWNER" was an intercalation
added after the execution of the agreement. The clause appears too closely typed below the
names of the 19 crewmen and their wages with no similar intervening space as that which
appears between all the paragraphs and the triple space which appears between the list of
crewmembers and their wages on one hand and the paragraph above which introduces the
list, on the other. The verb "were" was also inserted above the verb "was" to make the clause
grammatically correct but the insertion of "were" is already on the same line as "Antonio
Miranda and 5,221.06" where it clearly does not belong. There is no other space where the
word "were" could be intercalated. (See Rollo, page 80).
At any rate, the proposition that the petitioners should have pretended to accept the
increased wages while in Vancouver but returned them to the shipowner when they reached
its country, Japan, has already been answered earlier by the Court:
Filipino seamen are admittedly as competent and reliable as seamen from
any other country in the world. Otherwise, there would not be so many of
them in the vessels sailing in every ocean and sea on this globe. It is
competence and reliability, not cheap labor that makes our seamen so
greatly in demand. Filipino seamen have never demanded the same high
salaries as seamen from the United States, the United Kingdom, Japan and
other developed nations. But certainly they are entitled to government
protection when they ask for fair and decent treatment by their employer and
when they exercise the right to petition for improved terms of employment,
especially when they feel that these are sub-standard or are capable of
improvement according to internationally accepted rules. In the domestic
scene, there are marginal employers who prepare two sets of payrolls for
their employees one in keeping with minimum wages and the other
recording the sub-standard wages that the employees really receive. The
reliable employers, however, not only meet the minimums required by fair
labor standards legislation but even go away above the minimums while
earning reasonable profits and prospering. The same is true of international
employment. There is no reason why this court and the Ministry of Labor and
Employment or its agencies and commissions should come out with
pronouncements based on the standards and practices of unscrupulous or
inefficient shipowners, who claim they cannot survive without resorting to
tricky and deceptive schemes, instead of Government maintaining labor law
and jurisprudence according to the practices of honorable, competent, and
law-abiding employers, domestic or foreign. (Vir-Jen Shipping, supra, pp.
587-588)
It is noteworthy to emphasize that while the Intemational Labor Organization (ILO) set the
minimum basic wage of able seamen at US$187.00 as early as October 1976, it was only in
1979 that the respondent NSB issued Memo Circular No. 45, enjoining all shipping
companies to adopt the said minimum basic wage. It was correct for the respondent NSB to
state in its decision that when the petitioners entered into separate contracts between 19771978, the monthly minimum basic wage for able seamen ordered by NSB was still fixed at
US$130.00. However, it is not the fault of the petitioners that the NSB not only violated the
Labor Code which created it and the Rules and Regulations Implementing the Labor Code
but also seeks to punish the seamen for a shortcoming of NSB itself.

Article 21(c) of the Labor Code, when it created the NSB, mandated the Board to "(O)btain
the best possible terms and conditions of employment for seamen."
Section 15, Rule V of Book I of the Rules and Regulations Implementing the Labor Code
provides:
Sec. 15. Model contract of employment. The NSB shall devise a model
contract of employment which shall embody all the requirements of pertinent
labor and social legislations and the prevailing standards set by applicable
International Labor Organization Conventions. The model contract shall set
the minimum standards of the terms and conditions to govern the
employment of Filipinos on board vessels engaged in overseas trade. All
employers of Filipinos shall adopt the model contract in connection with the
hiring and engagement of the services of Filipino seafarers, and in no case
shall a shipboard employment contract be allowed where the same provides
for benefits less than those enumerated in the model employment contract,
or in any way conflicts with any other provisions embodied in the model
contract.
Section 18 of Rule VI of the same Rules and Regulations provides:
Sec. 18. Basic minimum salary of able-seamen. The basic minimum
salary of seamen shall be not less than the prevailing minimxun rates
established by the International Labor Organization or those prevailing in the
country whose flag the employing vessel carries, whichever is higher.
However, this provision shall not apply if any shipping company pays its crew
members salaries above the minimum herein provided.
Section 8, Rule X, Book I of the Omnibus Rules provides:
Section 8. Use of standard format of service agreement. The Board shall
adopt a standard format of service agreement in accordance with pertinent
labor and social legislation and prevailing standards set by applicable
International Labor Organization Conventions. The standard format shall set
the minimum standard of the terms and conditions to govern the employment
of Filipino seafarers but in no case shall a shipboard employment contract
(sic), or in any way conflict with any other provision embodied in the standard
format.
It took three years for the NSB to implement requirements which, under the law, they were
obliged to follow and execute immediately. During those three years, the incident in
Vancouver happened. The terms and conditions agreed upon in Vancouver were well within
ILO rates even if they were above NSB standards at the time.
The sanctions applied by NSB and affirmed by NLRC are moreover not in keeping with the
basic premise that this Court stressed in the Vir-Jen Shipping case (supra) that the Ministry
now the Department of Labor and Employment and all its agencies exist primarily for the
workingman's interest and the nation's as a whole.
Implicit in these petitions and the only reason for the NSB to take the side of foreign
shipowners against Filipino seamen is the "killing the goose which lays the golden eggs"
argument. We reiterate the ruling of the Court in Vir-Jen Shipping (supra)
There are various arguments raised by the petitioners but the common
thread running through all of them is the contention, if not the dismal
prophecy, that if the respondent seamen are sustained by this Court, we
would in effect "kill the hen that lays the golden egg." In other words, Filipino
seamen, admittedly among the best in the world, should remain satisfied with
relatively lower if not the lowest, international rates of compensation, should
not agitate for higher wages while their contracts of employment are
subsisting, should accept as sacred, iron clad, and immutable the side
contracts which require: them to falsely pretend to be members of
international labor federations, pretend to receive higher salaries at certain
foreign ports only to return the increased pay once the ship leaves that port,
should stifle not only their right to ask for improved terms of employment but
their freedom of speech and expression, and should suffer instant termination
of employment at the slightest sign of dissatisfaction with no protection from
their Government and their courts. Otherwise, the petitioners contend that

Filipinos would no longer be accepted as seamen, those employed would

lose their jobs, and the still unemployed would be left hopeless.
This is not the first time and it will not be the last where the threat of unemployment and loss
of jobs would be used to argue against the interests of labor; where efforts by workingmen to
better their terms of employment would be characterized as prejudicing the interests of labor
as a whole.
xxx xxx xxx
Unionism, employers' liability acts, minimum wages, workmen's
compensation, social security and collective bargaining to name a few were
all initially opposed by employers and even well meaning leaders of
government and society as "killing the hen or goose which lays the golden
eggs." The claims of workingmen were described as outrageously injurious
not only to the employer but more so to the employees themselves before
these claims or demands were established by law and jurisprudence as
"rights" and before these were proved beneficial to management, labor, and
the national as a whole beyond reasonable doubt.
The case before us does not represent any major advance in the rights of
labor and the workingmen. The private respondents merely sought rights
already established. No matter how much the petitioner-employer tries to
present itself as speaking for the entire industry, there is no evidence that it is
typical of employers hiring Filipino seamen or that it can speak for them.
The contention that manning industries in the Philippines would not survive if
the instant case is not decided in favor of the petitioner is not supported by
evidence. The Wallem case was decided on February 20, 1981. There have
been no severe repercussions, no drying up of employment opportunities for
seamen, and none of the dire consequences repeatedly emphasized by the
petitioner. Why should Vir-Jen be an exception?
The wages of seamen engaged in international shipping are shouldered by
the foreign principal. The local manning office is an agent whose primary
function is recruitment and who usually gets a lump sum from the shipowner
to defray the salaries of the crew. The hiring of seamen and the
determination of their compensation is subject to the interplay of various
market factors and one key factor is how much in terms of profits the local
manning office and the foreign shipowner may realize after the costs of the
voyage are met. And costs include salaries of officers and crew members. (at
pp. 585-586)
The Wallem Shipping case, was decided in 1981. Vir-Jen Shipping was decided in 1983. It is
now 1989. There has'been no drying up of employment opportunities for Filipino seamen.
Not only have their wages improved thus leading ITF to be placid and quiet all these years
insofar as Filipinos are concerned but the hiring of Philippine seamen is at its highest level
ever.
Reporting its activities for the year 1988, the Philippine Overseas Employment Administration
(POEA) stated that there will be an increase in demand for seamen based overseas in 1989
boosting the number to as high as 105,000. This will represent a 9.5 percent increase from
the 1988 aggregate. (Business World, News Briefs,January 11, 1989 at page 2) According to
the POEA, seabased workers numbering 95,913 in 1988 exceeded by a wide margin of
28.15 percent the year end total in 1987. The report shows that sea-based workers posted
bigger monthly increments compared to those of landbased workers. (The Business
Star, Indicators, January 11, 1988 at page 2)
Augmenting this optimistic report of POEA Administrator Tomas Achacoso is the statement of
Secretary of Labor Franklin M. Drilon that the Philippines has a big jump over other crewing
nations because of the Filipinos' abilities compared with any European or westem crewing
country. Drilon added that cruise shipping is also a growing market for Filipino seafarers
because of their flexibility in handling odd jobs and their expertise in handling almost all
types of ships, including luxury liners. (Manila Bulletin, More Filipino Seamen Expected
Development,December 27, 1988 at page 29). Parenthetically, the minimum monthly salary
of able bodied seamen set by the ILO and adhered to by the Philippines is now $276.00 (id.)
more than double the $130.00 sought to be enforced by the public respondents in these
petitions.
lwph1.t

The experience from 1981 to the present vindicates the finding in Vir-Jen Shipping that a
decision in favor of the seamen would not necessarily mean severe repercussions, drying up
of employment opportunities for seamen, and other dire consequences predicted by
manning agencies and recruiters in the Philippines.
From the foregoing, we find that the NSB and NLRC committed grave abuse of discretion in
finding the petitioners guilty of using intimidation and illegal means in breaching their
contracts of employment and punishing them for these alleged offenses. Consequently, the
criminal prosecutions for estafa in G.R. Nos. 57999 and 58143-53 should be dismissed.
WHEREFORE, the petitions are hereby GRANTED. The decisions of the National Seamen
Board and National Labor Relations Commission in G. R. Nos. 64781-99 are REVERSED
and SET ASIDE and a new one is entered holding the petitioners not guilty of the offenses
for which they were charged. The petitioners' suspension from the National Seamen Board's
Registry for three (3) years is LIFTED. The private respondent is ordered to pay the
petitioners their earned but unpaid wages and overtime pay/allowance from November 1,
1978 to December 14, 1978 according to the rates in the Special Agreement that the parties
entered into in Vancouver, Canada.
The criminal cases for estafa, subject matter of G. R. Nos. 57999 and 58143-53, are ordered
DISMISSED.
SO ORDERED.
Narvasa, Melencio-Herrera, Cruz, Paras, Gancayco, Padilla, Bidin, Sarmiento, Cortes,
Gri;o-Aquino, Medialdea and Regalado, JJ., concur.
Fernan, C.J., is on leave.
Feliciano, J., took no part.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 82252 February 28, 1989
SEAGULL MARITIME CORP. AND PHILIMARE SHIPPING & EQUIPMENT
SUPPLY, petitioners
vs.
NERRY D. BALATONGAN, NATIONAL LABOR RELATIONS COMMISSION AND
PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION, respondents.
Tanjuatco, Oreta, Tanjuatco, Berenguer & San Vicente for petitioners.
The Solicitor General for public respondent.
Benjamin B. Vergara for private respondent

GANCAYCO, J.:
On November 2, 1982, a "crew Agreement" was entered into by private respondent Nerry D.
Balatongan and Philimare Shipping and Equipment Supply (hereinafter called Philimare)
whereby the latter employed the former as able seaman on board its vessel "Santa Cruz"
(renamed "Turtle Bay") with a monthly salary of US $ 300.00. Said agreement was
processed and approved by the National Seaman's Board (NSB) on November 3, 1982. 1
While on board said vessel the said parties entered into a supplementary contract of
employment on December 6, 1982 2 which provides among others:
1. The employer shall be obliged to insure the employee during his
engagement against death or permanent invalidity caused by accident on
board up to:

US $ 40,000 - for death caused by accident

US $ 50,000 - for permanent total disability caused by
accident. 3
On October 6, 1983 Balatongan met an accident in the Suez Canal, Egypt as a result of
which he was hospitalized at the Suez Canal Authority Hospital. Later, he was repatriated to
the Philippines and was hospitalized at the Makati Medical Center from October 23, 1983 to
March 27, 1984. On August 19, 1985 the medical certificate was issued describing his
disability as "permanent in nature."
Balatongan demanded payment for his claim for total disability insurance in the amount of
US $ 50,000.00 as provided for in the contract of employment but his claim was denied for
having been submitted to the insurers beyond the designated period for doing so.
Thus, Balatongan filed on June 21, 1985 a complaint against Philimare and Seagull Maritime
Corporation (hereinafter called Seagull) in the Philippine Overseas Employment
Administration (POEA) for non-payment of his claim for permanent total disability with
damages and attorney's fees.
After the parties submitted their respective position papers with the corresponding
documentary evidence, the officer-in-charge of the Workers Assistance and Adjudication
Office of the POEA rendered a decision on May 2, 1986, the dispositive part of which reads
as follows:
WHEREFORE, premises considered, respondents are hereby ordered to pay
complainant the amount of US $ 50,000.00 representing permanent total
disability insurance and attorney's fees at 10% of the award. Payment should
be made in this Office within ten (10) days from receipt hereof at the
prevailing rate of exchange. This Office cannot however rule on damages,
having no jurisdiction on the matter.
SO ORDERED. 4
Seagull and Philimare appealed said decision to the National Labor Relations Commission
(NLRC) on June 4, 1986. Pending resolution of their appeal because of the alleged transfer
of the agency of Seagull to Southeast Asia Shipping Corporation, Seagull filed on April 28,
1987 a Motion For Substitution/Inclusion of Party Respondent which was opposed by
Balatongan. 5 This was followed by an ex-parte motion for leave to file third party complaint on
June 4, 1987 by Seagull. A decision was promulgated on December 7, 1987 denying both
motions and dismissing the appeal for lack of merit. 6 A motion for reconsideration of said decision
was denied for lack of merit in a resolution dated February 26, 1988. 7
Hence, Seagull and Philimare filed this petition for certiorari with a prayer for the issuance of
a temporary restraining order based on the following grounds:
1. Respondent POEA erred in applying the Supplemental Contract;
2. Respondents POEA and NLRC acted with grave abuse of discretion in
holding that the Supplemental Contract was signed on board MV Santa Cruz
by and between private respondent and your petitioner; and
3. Respondent NLRC acted with grave abuse of discretion in not giving due
course to your petitioners' Motion for Leave to File Third Party Complaint as
well as their Motion for Inclusion/Substitution of respondents. 8
On March 21, 1988, the Court issued a temporary restraining order enjoining respondents
from enforcing the questioned decision and resolution of public respondents.
Petitioners argue that prior to private respondent's departure he executed a crew agreement
on November 2, 1982 which was duly approved by the POEA; that the supplementary
contract of employment that was entered into on board the vessel "Turtle Bay" which
provides for a US $ 50,000.00 insurance benefit in case of permanent disability was neither
approved nor verified by respondent POEA; and that the same violates Article 34(i) of the
Labor Code, as amended, which provides as follows:
Art. 34. Prohibited Practices. - It shall be unlawful for any individual, entity,
licensee, or holder of authority:

xxx xxx xxx

xxx xxx xxx
(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.
Petitioners also call attention to Article VIII, paragraph 2 of the Supplementary Contract
which provides as follows:
2. Notwithstanding his claim against the insurers the employee hereby
expressly waives all claims of his own or his heirs for compensation of
damages due to death or permanent invalidity which he suffered during his
engagement against the employers ... unless his death or permanent
invalidity has been caused by willful act of any of the above-named persons.

Petitioners stress that while public respondents upheld the applicability of said
supplementary contract insofar as it increased the benefits to private respondent, public
respondents considered the provision on the waiver against all claims by private respondent
to be contrary to public policy.
In its questioned decision dated December 7, 1987, the respondent NLRC made the
following disquisition:
The focal issue for determination is the validity and enforceability of the
second contract of employment entered into by and between complainant
and respondents on board the vessel where the former had served as a
member of its complement despite the absence of NSB verification or
approval. With respect to the findings of facts in the appealed decision, We
consider the same as duly supported by substantial evidence and the
admissions of the parties in their pleadings.
Much stress and emphasis are made by the respondents in their appeal that
this claim has no legal basis or footing inasmuch as the second contract of
employment containing a total disability insurance benefit of US $ 50,000.00,
much more than that embodied in the first contract of employment which was
approved by the defunct NSB, was not verified or approved by the latter.
Accordingly, the respondents posit the argument that subject claim may not
prosper pursuant to the provisions of Art. 34(i) of the Labor Code, as
amended, which provides that it shall be unlawful for any individual, entity,
licensee, or holder of authority '(T)o 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.
Did the POEA commit a reversible error when it considered the second
contract of employment as valid sans any verification or approval thereof by
the NSB? Our answer to this query is in the negative. Apparently, the
intention of the law when Art. 34 of the Labor Code was enacted is to provide
for the prohibited and unlawful practices relative to recruitment and
placement. As shown in the 'Explanatory Note' of Parliamentary Bill No.
4531, pertaining to Art. 34 (supra), thus:
Many of the provisions are already existing and were simply restated. Some
however were restated with modifications and new ones were introduced to
reflect what in the past have been noted to be pernicious practices which
tend to place workers at a disadvantage.'
it is indubitably clear that the purpose of having overseas contracts of
employment approved by the NSB(POEA) is whether or not such contracts
conform to the minimum terms and conditions prescribed by the NSB
(POEA). In other words, the law did not at all prohibit any alteration which
provided for increases in wages or other benefits voluntarily granted by the
employer. Precisely, under Section 2, Rule 1, Book V of the Rules and
Regulations of the POEA, '(t)he standard format of employment contracts
shall set the minimum standards of the terms and conditions of employment.
All employers and principals shall adopt the model contract in connection

with the hiring of workers without prejudice to their adopting other terms and
conditions of employment over and above the minimum standards of the
Administration.' Where, as here, it is admitted that the second contract
although not verified or approved by the NSB (POEA) granted more benefits
by way of total disability insurance to the complainant, the respondents may
not be allowed to disvow their own voluntary acts by insisting that such
beneficial contract in favor of the seaman is null and void. (Emphasis
supplied.)10
We agree.
The supplementary contract of employment was entered into between petitioner and private
respondent to modify the original contract of employment The reason why the law requires
that the POEA should approve and verify a contract under Article 34(i) of the Labor Code is
to insure that the employee shall not thereby be placed in a disadvantageous position and
that the same are within the minimum standards of the terms and conditions of such
employment contract set by the POEA. This is why a standard format for employment
contracts has been adopted by the Department of Labor. However, there is no prohibition
against stipulating in a contract more benefits to the employee than those required by law.
Thus, in this case wherein a "supplementary contract" was entered into affording greater
benefits to the employee than the previous one, and although the same was not submitted
for the approval of the POEA, the public respondents properly considered said contract to be
valid and enforceable. Indeed, said pronouncements of public respondents have the effect of
an approval of said contract. Moreover, as said contract was voluntarily entered into by the
parties the same is binding between them. 11 Not being contrary to law, morals, good customs,
public policy or public order, its validity must be sustained. 12 By the same token, the court
sustains the ruling of public respondents that the provision in the supplementary contract whereby
private respondent waives any claim against petitioners for damages arising from death or
permanent disability is against public policy, oppressive and inimical to the rights of private
respondent. The said provision defeats and is inconsistent with the duty of petitioners to insure
private respondent against said contingencies as clearly stipulated in the said contract.
Petitioners however argue that they could not have entered into said supplementary contract
of employment as Philimare was a mere manning agent in the Philippines of the shipping
company managed by Navales Shipping Management and Marine Consultant (Pte) Ltd., its
principal. Petitioners assert that the said supplementary contract was entered into by private
respondent with their principal, Navales Shipping Management and Marine Consultant (Pte)
Ltd. on board the vessel Turtle Bay so petitioners cannot be held responsible thereunder.
This Court is not a trier of facts and the findings of the public respondents are conclusive in
this proceeding. Public respondents found that petitioner Philimare and private respondent
entered into said supplementary contract of employment on December 6, 1982. Assuming
for the sake of argument that it was petitioners' principal which entered into said contract with
private respondent, nevertheless petitioner, as its manning agent in the Philippines, is jointly
responsible with its principal thereunder. 13
There is no question that under the said supplementary contract of employment, it is the duty
of the employer, petitioners herein, to insure the employee, during his engagement, against
death and permanent invalidity caused by accident on board up to $ 50,000.00.
Consequently, it is also its concomitant obligation to see to it that the claim against the
insurance company is duly filed by private respondent or in his behalf, and within the time
provided for by the terms of the insurance contract.
In this case, the private respondent met the accident on October 6, 1983. Since then, he was
hospitalized at the Suez Canal Authority Hospital and thereafter be was repatriated to the
Philippines wherein he was also hospitalized from October 22, 1983 to March 27, 1984. It
was only on August 19, 1985 that he was issued a medical certificate describing his disability
to be permanent in nature. It was not possible for private respondent to file a claim for
permanent disability with the insurance company within the one-year period from the time of
the injury, as his disability was ascertained to be permanent only thereafter. Petitioners did
not exert any effort to assist private respondent to recover payment of his claim from the
insurance company. They did not even care to dispute the finding of the insurer that the
claim was not flied on time. 14 Petitioners must, therefore, be held responsible for its omission, if
not negligence, by requiring them to pay the claim of private respondent.
The Court finds that the respondent NLRC did not commit a grave abuse of discretion in
denying petitioners, motion for leave to file third-party complaint and substitution inclusion of
party respondent. Such motion is largely addressed to the discretion of the said Commission.
Inasmuch as the alleged transfer of interest took place only after the POEA had rendered its
decision, the denial of the motion so as to avoid further delay in the settlement of the claim of

private respondent was well-taken. At any rate, petitioners may pursue their claim against
their alleged successor-in-interest in a separate suit.
WHEREFORE, the petition is hereby DISMISSED for lack of merit and the temporary
restraining order issued by this Court on March 21, 1988 is hereby LIFTED. No costs. This
decision is immediately executory.
SO ORDERED.
Narvasa, Cruz, Grio-Aquino and Medialdea, JJ., concur.

Footnotes
1 Annex 1 to Annex D of the Petition, Page 31, Rollo.
2 Annex R of the Petition, Page 105 Rollo.
3 Page 163, Rollo.
4 Annex G to the Petition, pages 48 to 49, Rollo.
5 Annexes K to L to the Petition, pages 58 to 68, Rollo.
6 Annex O to the Petition, pages 82 to 96, Rollo.
7 Annex T to the Petition, page 120, Rollo.
8 Page 9, Rollo.
9 Page 12, Rollo. +
10 Pages 87 to 89, Rollo.
11 Ramos vs. Central Bank of the Philippines, 41 SCRA 565 (1971).
12 Castro vs. Court of Appeals, 99 SCRA 722 (1980); Philippine American
General Insurance Company, Inc. vs. Mutuc, 61 SCRA 22 (1974); Article
1306 and 1356, Civil Code.
13 Hydro Resources Contractors Corporation vs. NLRC, et al., G.R. Nos.
80143-44, December 8, 1988.
14 Annexes 2 and 1-A to Annex D the Petition, pages 33 to 35, Rollo.

SECOND DIVISION

[G.R. No. 158324. March 14, 2005]

ROBERTO RAVAGO, petitioner, vs. ESSO EASTERN MARINE,

LTD.
and
TRANS-GLOBAL
MARITIME
AGENCY,
INC., respondents.
DECISION
CALLEJO, SR., J.:

Before us is a petition for review on certiorari under Rule 45 of the 1997

Rules of Court, as amended, of the Decision [1] of the Court of Appeals (CA) as
well as its Resolution in CA-G.R. SP No. 66234 which denied the motion for
reconsideration thereof.

The Factual Antecedents

The Esso Eastern Marine Ltd. (EEM), now the Petroleum Shipping Ltd., is a
foreign company based in Singapore and engaged in maritime commerce. It is
represented in the Philippines by its manning agent and co-respondent TransGlobal Maritime Agency, Inc. (Trans-Global), a corporation organized under the
Philippine laws.
Roberto Ravago was hired by Trans-Global to work as a seaman on board
various Esso vessels. On February 13, 1970, Ravago commenced his duty as
S/N wiper on board the Esso Bataan under a contract that lasted until February
10, 1971. Thereafter, he was assigned to work in different Esso vessels where he
was designated diverse tasks, such as oiler, then assistant engineer. He was
employed under a total of 34 separate and unconnected contracts, each for a
fixed period, by three different companies, namely, Esso Tankers, Inc. (ETI), EEM
and Esso International Shipping (Bahamas) Co., Ltd. (EIS), Singapore Branch.
Ravago worked with Esso vessels until August 22, 1992, a period spanning more
than 22 years, thus:
CONTRACT
FROM

DURATION TO POSITION

VESSEL

COMPANY

13 Feb 70

10 Feb 71

SN/Wiper

Esso Bataan

ETI[2]

07 May 71

27 May 72

Wiper

Esso Yokohama

EEM[3]

07 Aug 72

02 Jul 73

Oiler

Esso Kure

EEM

03 Oct 73

30 Jun 74

Oiler

Esso Bangkok

ETI

18 Sep 74

26 July 75

Oiler

Esso Yokohama

EEM

23 Oct 75

22 Jun 76

Oiler

Esso Port
Dickson

EEM

10 Sep 76

26 Dec 76

Oiler

Esso Bangkok

ETI

27 Dec 76

29 Apr 77

Temporary Jr.
3AE

Esso Bangkok

ETI

08 Jul 77

15 Mar 78

Jr. 3AE

Esso Bombay

ETI

03 Jun 78

03 Feb 79

Temporary 3AE Esso Hongkong

ETI

04 Apr 79

24 Jun 79

3AE

Esso Orient

EEM

25 Jun 79

16 Jul 79

3AE

Esso Yokohama

EEM

17 Jul 79

05 Dec 79

3AE

Esso Orient

EEM

10 Feb 80

25 Oct 80

3AE

Esso Orient

EEM

19 Jan 81

03 Jun 81

3AE

Esso Port
Dickson

EEM

04 Jun 81

11 Sep 81

3AE

Esso Orient

EEM

06 Dec 81

20 Apr 82

3AE

Esso Chawan

EEM

21 Apr 82

01 Aug 82

Temporary 2AE Esso Chawan

EEM*

03 Nov 82

06 Feb 83

2AE

Esso Jurong

EEM

07 Feb 83

10 Jul 83

2AE

Esso Yokohama

EEM

31 Aug 83

13 Mar 84

2AE

Esso Tumasik

EEM

04 May 84

08 Jan 85

2AE

Esso Port
Dickson

EEM

13 Mar 85

31 Oct 85

2AE

Esso Castellon

EEM

29 Dec 85

22 Jul 86

2AE

Esso Jurong

EIS[4]

13 Sep 86

09 Jan 87

2AE

Esso Orient

EIS

21 Mar 87

15 Oct 87

2AE

Esso Port
Dickson

EIS

20 Nov 87

18 Dec 87
Temporary

1AE

Esso Chawan

EIS

19 Dec 87

25 Jun 88

2AE

Esso Melbourne EIS

04 Aug 88

19 Mar 89

Temporary 1AE Esso Port

Dickson

EIS

20 Mar 89

19 May 89

1AE

Esso Port
Dickson

EIS*

28 Jul 89

17 Feb 90

1AE

Esso Melbourne EIS

16 Apr 90

11 Dec 90

1AE

Esso Orient

09 Feb 91

06 Oct 91

1AE

Esso Melbourne EIS

16 Dec 91

22 Aug 92

1AE

Esso Orient

* Upgraded/Confirmed on regular rank on board.

EIS

EIS

[5]

On August 24, 1992, or shortly after completing his latest contract with EIS,
Ravago was granted a vacation leave with pay from August 23, 1992 until
October 28, 1992. Preparatory to his embarkation under a new contract, he was
ordered to report, on September 28, 1992, for a Medical Pre-Employment
Examination.[6] The Pre-Employment Physical Examination Record shows that
Ravago passed the medical examination conducted by the O.P. Jacinto Medical
Clinic, Inc. on October 6, 1992. [7] He, likewise, attended a Pre-Departure
Orientation Seminar conducted by the Capt. I.P. Estaniel Training Center, a
division of Trans-Global, on October 7, 1992. [8]
On the night of October 12, 1992, a stray bullet hit Ravago on the left leg
while he was waiting for a bus ride in Cubao, Quezon City. He fractured his left
proximal tibia and was hospitalized at the Philippine Orthopedic Hospital.
Ravagos wife, Lolita, informed Trans-Global and EIS of the incident on October
13, 1992 for purposes of availing medical benefits. As a result of his injury,
Ravagos doctor opined that he would not be able to cope with the job of a
seaman and suggested that he be given a desk job. [9] Ravagos left leg had
become apparently shorter, making him walk with a limp. For this reason, the
company physician, Dr. Virginia G. Manzo, found him to have lost his dexterity,
making him unfit to work once again as a seaman. [10] Citing the opinion of
Ravagos doctor, Dr. Manzo wrote:

Because of his unsteady gait, pronounced limp, and loss of normal dexterity of
his leg and foot, we doubted whether Mr. Ravago can physically tackle the
usual activities of a seaman in the course of his work without any added risk
over and above the ordinary or standard risk inherent to his job. These activities
include climbing up and down the engine room through a long flight of iron
stairs with narrow steps which could be slippery at times due to grease or oil,
jumping from an unsteady and floating motor launch or boat to board or alight
a tanker through a flight of steps or climbing up and down a pilot ladder,
wearing of heavy safety shoes, etc.
Mr. Ravagos doctor replied that, after being informed about the nature of the
job, he believes that Mr. Ravago would not be able to cope with these kinds of
activities. In effect, the Orthopedic doctor said Mr. Ravago is not fit to go back
to his work as a seaman.
We concur with the opinion of the doctor that Mr. Ravago is not fit to go back
to his job as a seaman in view of the risk of physical injury to himself as result
of the deformity and loss of dexterity of his injured leg.
As a seaman, we consider his inability partial permanent. His injury
corresponds to Grade 13 in the Schedule of Disability of the Standard
Employment Contract. [11]
Consequently, instead of rehiring Ravago, EIS paid him his Career
Employment Incentive Plan (CEIP) [12] as of March 1, 1993 and his final tax refund
for 1992. After deducting his Social Security System and medical contributions
from November 1992 to February 1993, EIS remitted the net amount
of P162,232.65, following Ravagos execution of a Deed of Quitclaim and/or
Release.[13]
However, on March 22, 1993, Ravago filed a complaint [14] for illegal dismissal
with prayer for reinstatement, backwages, damages and attorneys fees against
Trans-Global and EIS with the Philippine Overseas Employment Administration
Adjudication Office.
In their Answer dated April 14, 1993, respondents denied that Ravago was
dismissed without notice and just cause. Rather, his services were no longer
engaged in view of the disability he suffered which rendered him unfit to work as
a seafarer. This fact was further validated by the company doctor and Ravagos
attending physician. They averred that Ravago was a contractual employee and
was hired under 34 separate contracts by different companies.
In his position paper, Ravago insisted that he was fit to resume pre-injury
activities as evidenced by the certification [15] issued by Dr. Marciano Foronda
M.D., one of his attending physicians at the Philippine Orthopedic Hospital, that
at present, fracture of tibia has completely healed and patient is fit to resume preinjury activities anytime.[16] Ravago, likewise, asserted that he was not a mere
contractual employee because the respondents regularly and continuously
rehired him for 23 years and, for his continuous service, was awarded a CEIP
payment upon his termination from employment.
On December 15, 1996, Labor Arbiter Ramon Valentin C. Reyes rendered a
decision in favor of Ravago, the complainant. He ruled that Ravago was a regular
employee because he was engaged to perform activities which were usually
necessary or desirable in the usual trade or business of the employer. The Labor
Arbiter noted that Ravagos services were repeatedly contracted; he was even
given several promotions and was paid a monthly service experience bonus. This
was in keeping with the increasing number of long term careers established with
the respondents. Finally, the Labor Arbiter resolved that an employer cannot
terminate a workers employment on the ground of disease unless there is a
certification by a competent public health authority that the said disease is of
such nature or at such a stage that it cannot be cured within a period of six

months even with proper medical treatment. He concluded that Ravago was
illegally dismissed. The decretal portion of the Labor Arbiters decision reads:

WHEREFORE, premises considered, judgment is hereby rendered finding the

dismissal illegal and ordering respondents to reinstate complainant to his
former position without loss of seniority rights and other benefits. Further, the
respondents are jointly and severally liable to pay complainant backwages from
the time of his dismissal up to the promulgation of this decision. Such
backwages is provisionally fixed at US$96,285.00 less the P162,285.83 (sic)
paid to the complainant as Career Employment Incentive Plan. And ordering
respondents to pay complainant 10% of the total monetary award as attorneys
fees.
All other claims are dismissed for lack of merit.
SO ORDERED.[17]
Aggrieved, the respondents appealed the decision to the National Labor
Relations Commission (NLRC) on July 3, 1997, raising the following grounds:

THE DECISION IS VITIATED BY SERIOUS ERRORS IN THE FINDINGS

OF FACT WHICH, IF NOT CORRECTED, WOULD CAUSE GRAVE OR
IRREPARABLE DAMAGE OR INJURY TO THE RESPONDENTS. THESE
FINDINGS ARE:
(A) THAT COMPLAINANT WAS A REGULAR EMPLOYEE BECAUSE HE WAS
HIRED AND REHIRED IN VARIOUS CAPACITIES ON BOARD
ESSO VESSELS IN A SPAN OF 23 YEARS;
(B) THAT COMPLAINANT WAS A REGULAR EMPLOYEE BECAUSE HE WAS
ENGAGED IN THE SERVICES INDISPENSABLE IN THE
OPERATION OF THE VARIOUS VESSELS OF RESPONDENTS;
(C) THAT COMPLAINANT WAS FIT TO RESUME PRE-INJURY ACTIVITIES
AND
HIS
FRACTURE
COMPLETELY
HEALED
NOTWITHSTANDING A CONTRARY MEDICAL OPINION OF
COMPLAINANTS OWN PHYSICIAN AND RESPONDENTS
COMPANY PHYSICIAN; AND
(D)

THAT
COMPLAINANT
RESPONDENTS.[18]

WAS

ILLEGALLY

DISMISSED

BY

On April 26, 2001, the NLRC rendered a decision affirming that of the Labor
Arbiter. The NLRC based its decision in the case of Millares v. National Labor
Relations Commission,[19]wherein it was held that:

It is, likewise, clear that petitioners had been in the employ of the private
respondents for 20 years. The records reveal that petitioners were repeatedly rehired by private respondents even after the expiration of their respective eightmonth contracts. Such repeated re-hiring which continued for 20 years, cannot
but be appreciated as sufficient evidence of the necessity and indispensability
of petitioners service to the private respondents business or trade.
Verily, as petitioners had rendered 20 years of service, performing activities
which were necessary and desirable in the business or trade of private
respondents, they are, by express provision of Article 280 of the Labor Code,
considered regular employees.[20]
The NLRC, likewise, declared that Ravago was illegally dismissed and that
the quitclaim executed by him could not be considered as a waiver of his right to
question the validity of his dismissal and seek reinstatement and other reliefs.
According to the NLRC, such quitclaim is against public policy, considering the

economic disadvantage of the employee and the inevitable pressure brought

about by financial capacity.
The respondents filed a motion for reconsideration of the decision, claiming
that the ruling of the Court in Millares v. NLRC[21] had not yet become final and
executory. However, the NLRC denied the motion.
Thereafter, the respondents filed a petition for certiorari before the CA on the
following grounds: (a) the ruling in Millares v. NLRC had not yet acquired finality,
nor has it become a law of the case or stare decisis because the Court was still
resolving the pending motion for reconsideration; (b) Ravago was not illegally
dismissed because after the expiration of his contract, there was no obligation on
the part of the respondents to rehire him; and (c) the quitclaim signed by Ravago
was voluntarily entered into and represented a reasonable settlement of the
account due him.
On August 29, 2001, the respondents filed an Urgent Application for the
Issuance of a Temporary Restraining Order and Writ of Preliminary Injunction to
enjoin and restrain the Labor Arbiter from enforcing his decision. On September
5, 2001, the CA issued a Resolution [22] temporarily restraining NLRC Sheriff
Manolito Manuel from enforcing and/or implementing the decision of the Labor
Arbiter as affirmed by the NLRC.
On November 14, 2001, the CA granted the application for preliminary
injunction upon filing by the respondents of a bond in the amount of P500,000.00.
Thus, the respondents filed the surety bond as directed by the appellate court.
Before the approval thereof, however, Ravago filed a motion to set aside the
Resolution dated November 14, 2001, principally arguing that the instant case
was a labor dispute, wherein an injunction is proscribed under Article 254 [23] of
the Labor Code of the Philippines.
In their comment on Ravagos motion, the respondents professed that the
case before the CA did not involve a labor dispute within the meaning of Article
212(l)[24] of the Labor Code of the Philippines, but a money claim against the
employer as a result of termination of employment.
On August 28, 2002, the CA rendered a decision in favor the respondents.
The fallo of the decision reads:

WHEREFORE, the petition is GRANTED. The assailed decisions of the

NLRC are hereby REVERSED and SET ASIDE and the injunctive writ issued
on November 14, 2001, is hereby madePERMANENT.
SO ORDERED.[25]
The CA ratiocinated as follows:

The employment, deployment, rights and obligation of Filipino seafarers are

particularly set forth under the rules and regulations governing overseas
employment promulgated by the POEA. Section C, Part I of the Standard
Employment Contract Governing the Employment of All Filipino Seamen on
Board Ocean-Going Vessels emphatically provides the following:
SECTION C. DURATION OF CONTRACT
The period of employment shall be for a fix (sic) period but in no case to
exceed 12 months and shall be stated in the Crew Contract. Any extension of
the Contract period shall be subject to the mutual consent of the parties.
It is clear from the foregoing that seafarers are contractual employees whose
terms of employment are fixed for a certain period of time. A fixed term is an
essential and natural appurtenance of seamens employment contracts to which,
whatever the nature of the engagement, the concept of regular employment

under Article 280 of the Labor Code does not find application. The contract
entered into by a seafarer with his employer sets in detail the nature of his job,
the amount of his wage and, foremost, the duration of his employment. Only a
satisfactory showing that both parties dealt with each other on more or less
equal terms with no dominance exercised by the employer over the seafarer is
necessary to sustain the validity of the employment contract. In the absence of
duress, as it is in this case, the contract constitutes the law between the parties.
[26]

The CA noted that the employment status of seafarers has been established
with finality by the Courts reconsideration of its decision in Millares v. National
Labor Relations Commission,[27] wherein it was ruled that seamen are contractual
employees. According to the CA, the fact that Ravago was not rehired upon the
completion of his contract did not result in his illegal dismissal; hence, he was not
entitled to reinstatement or payment of separation pay. The CA, likewise, affirmed
the writ of preliminary injunction it earlier issued, declaring that an injunction is a
preservative remedy issued for the protection of a substantive right or interest, an
antidote resorted to only when there is a pressing necessity to avoid injurious
consequences which cannot be rendered under any standard compensation.
Hence, the present recourse.
Ravago, now the petitioner, has raised the following issues:
I.

[WHETHER OR NOT] THE COURT OF APPLEALS GRAVELY ERRED

AND VIOLATED THE LABOR CODE WHEN IT ISSUED A
RESTRAINING ORDER AND THEREAFTER A WRIT OF PRELIMINARY
INJUNCTION IN CA-G.R. SP NO. 66234.
II.

[WHETHER OR NOT] THE COURT OF APPEALS GRAVELY ERRED,

[AND] BLATANTLY DISREGARDED THE CONSTITUTIONAL
MANDATE ON PROTECTION TO FILIPINO OVERSEAS WORKERS,
AND COUNTENANCED UNWARRANTED DISCRIMINATION WHEN IT
RULED THAT PETITIONER CANNOT BECOME A REGULAR
EMPLOYEE.[28]
On the first issue, the petitioner asserts that the CA violated Article 254 of the
Labor Code when it issued a temporary restraining order, and thereafter a writ of
preliminary injunction, to derail the enforcement of the final and executory
judgment of the Labor Arbiter as affirmed by the NLRC. On the other hand, the
respondents contend that the issue has become academic since the CA had
already decided the case on its merits.
The contention of the petitioner does not persuade.
The petitioners reliance on Article 254 [29] of the Labor Code is misplaced. The
law proscribes the issuance of injunctive relief only in those cases involving or
growing out of a labor dispute. The case before the NLRC neither involves nor
grows out of a labor dispute. It did not involve the fixing of terms or conditions of
employment or representation of persons with respect thereto. In fact, the
petitioners complaint revolves around the issue of his alleged dismissal from
service and his claim for backwages, damages and attorneys fees. Moreover,
Article 254 of the Labor Code specifically provides that the NLRC may grant
injunctive relief under Article 218 thereof.
Besides, the anti-injunction policy of the Labor Code, basically, is freedom at
the workplace. It is more appropriate in the promotion of the primacy of free
collective bargaining and negotiations, including voluntary arbitration, mediation
and conciliation, as modes of settling labor and industrial disputes. [30]

Generally, an injunction is a preservative remedy for the protection of a

persons substantive rights or interests. It is not a cause of action in itself but a
mere provisional remedy, an appendage to the main suit. Pressing necessity
requires that it should be resorted to only to avoid injurious consequences which
cannot be remedied under any measure of consideration. The application of an
injunctive writ rests upon the presence of an exigency or of an exceptional
reason before the main case can be regularly heard. The indispensable
conditions for granting such temporary injunctive relief are: (a) that the complaint
alleges facts which appear to be satisfactory to establish a proper basis for
injunction, and (b) that on the entire showing from the contending parties, the
injunction is reasonably necessary to protect the legal rights of the plaintiff
pending the litigation.[31]
It bears stressing that in the present case, the respondents petition contains
facts sufficient to warrant the issuance of an injunction under Article 218,
paragraph (e) of the Labor Code of the Philippines. [32] Further, respondents had
already posted a surety bond more than adequate to cover the judgment award.
On the second issue, the petitioner earnestly urges this Court to re-examine
its Resolution dated July 29, 2002 in Millares v. National Labor Relations
Commission[33] and reinstate the doctrine laid down in its original decision
rendered on March 14, 2000, wherein it was initially determined that a seafarer is
a regular employee. The petitioner asserts that the decision of the CA and,
indirectly, that of the Resolution of this Court dated July 29, 2002, are violative of
the constitutional mandate of full protection to labor, [34] whether local or overseas,
because it deprives overseas Filipino workers, such as seafarers, an opportunity
to become regular employees without valid and serious reasons. The petitioner
maintains that the decision is discriminatory and violates the constitutional
provision on equal protection of the laws, in addition to being partial to and overly
protective of foreign employers.
The respondents, on the other hand, asseverate that there is no law or
administrative rule or regulation imposing an obligation to rehire a seafarer upon
the completion of his contract. Their refusal to secure the services of the
petitioner after the expiration of his contract can never be tantamount to a
termination. The respondents aver that the petitioner is not entitled to
backwages, not only because it is without factual justification but also because it
is not warranted under the law. Furthermore, the respondents assert that the
rulings in the Coyoca v. NLRC,[35] and the latest Millares case remain good and
valid precedents that need to be reaffirmed. The respondents cited the ruling of
the Court in Coyoca case where the Court ruled that a Filipino seamans contract
does not provide for separation or termination pay because it is governed by the
Rules and Regulations Governing Overseas Employment.
The contention of the respondents is correct.
In a catena of cases, this Court has consistently ruled that seafarers are
contractual, not regular, employees.
In Brent School, Inc. v. Zamora,[36] the Court ruled that seamen and overseas
contract workers are not covered by the term regular employment as defined in
Article 280 of the Labor Code. The Court said in that case:

The question immediately provoked ... is whether or not a voluntary agreement

on a fixed term or period would be valid where the employee has been engaged
to perform activities which are usually necessary or desirable in the usual
business or trade of the employer. The definition seems non sequitur. From the
premise that the duties of an employee entail activities which are usually
necessary or desirable in the usual business or trade of the employer the
conclusion does not necessarily follow that the employer and employee should
be forbidden to stipulate any period of time for the performance of those
activities. There is nothing essentially contradictory between a definite period
of an employment contract and the nature of the employees duties set down in
that contract as being usually necessary or desirable in the usual business or

trade of the employer. The concept of the employees duties as being usually
necessary or desirable in the usual business or trade of the employer is not
synonymous with or identical to employment with a fixed term. Logically, the
decisive determinant in term employment should not be the activities that the
employee is called upon to perform, but the day certain agreed upon by the
parties for the commencement and termination of their employment
relationship, a day certain being understood to be that which must necessarily
come, although it may not be known when. Seasonalemployment, and
employment for a particular project are merely instances of employment in
which a period, were not expressly set down, is necessarily implied. [37]
...
Some familiar examples may be cited of employment contracts which may be
neither for seasonal work nor for specific projects, but to which a fixed term is
an essential and natural appurtenance: overseas employment contracts, for one,
to which, whatever the nature of the engagement, the concept of regular
employment with all that it implies does not appear ever to have been applied,
Article 280 of the Labor Code notwithstanding; also appointments to the
positions of dean, assistant dean, college secretary, principal, and other
administrative offices in educational institutions, which are by practice or
tradition rotated among the faculty members, and where fixed terms are a
necessity without which no reasonable rotation would be possible. ... [38]
...
Accordingly, and since the entire purpose behind the development of legislation
culminating in the present Article 280 of the Labor Code clearly appears to
have been, as already observed, to prevent circumvention of the employees
right to be secure in his tenure, the clause in said article indiscriminately and
completely ruling out all written or oral agreements conflicting with the
concept of regular employment as defined therein should be construed to refer
to the substantive evil that the Code itself has singled out: agreements entered
into precisely to circumvent security of tenure. It should have no application to
instances where a fixed period of employment was agreed upon knowingly and
voluntarily by the parties, without any force, duress or improper pressure being
brought to bear upon the employee and absent any other circumstances
vitiating his consent, or where it satisfactorily appears that the employer and
employee dealt with each other on more or less equal terms with no moral
dominance whatever being exercised by the former over the latter. Unless, thus,
limited in its purview, the law would be made to apply to purposes other than
those explicitly stated by its framers; it thus becomes pointless and arbitrary,
unjust in its effects and apt to lead to absurd and unintended consequences. [39]
The Court made the same ruling in Coyoca v. National Labor Relations
Commission[40] and declared that a seafarer, not being a regular employee, is not
entitled to separation or termination pay.

Furthermore, petitioners contract did not provide for separation benefits. In this
connection, it is important to note that neither does the POEA standard
employment contract for Filipino seamen provide for such benefits.
As a Filipino seaman, petitioner is governed by the Rules and Regulations
Governing Overseas Employment and the said Rules do not provide for
separation or termination pay. ...

...
Therefore, although petitioner may not be a regular employee of private
respondent, the latter would still have been liable for payment of the benefits
had the principal failed to pay the same. [41]
In the July 29, 2002 Resolution of this Court in Millares v. National Labor
Relations Commission,[42] it reiterated its ruling that seafarers are contractual
employees and, as such, are not covered by Article 280 of the Labor Code of the
Philippines:

From the foregoing cases, it is clear that seafarers are considered contractual
employees. They cannot be considered as regular employees under Article 280
of the Labor Code. Their employment is governed by the contracts they sign
every time they are rehired and their employment is terminated when the
contract expires. Their employment is contractually fixed for a certain period
of time. They fall under theexception of Article 280 whose employment has
been fixed for a specific project or undertaking the completion or termination
of which has been determined at the time of engagement of the employee or
where the work or services to be performed is seasonal in nature and the
employment is for the duration of the season. We need not depart from the
rulings of the Court in the two aforementioned cases which indeed
constitute stare decisis with respect to the employment status of seafarers.
...
... The Standard Employment Contract governing the Employment of All
Filipino Seamen on Board Ocean-Going Vessels of the POEA, particularly in
Part I, Sec. C, specifically provides that the contract of seamen shall be for a
fixed period. And in no case should the contract of seamen be longer than 12
months. It reads:
Section C. Duration of Contract
The period of employment shall be for a fixed period but in no case to exceed
12 months and shall be stated in the Crew Contract. Any extension of the
Contract period shall be subject to the mutual consent of the parties.
Petitioners make much of the fact that they have been continually re-hired or
their contracts renewed before the contracts expired (which has admittedly been
going on for twenty [20] years). By such circumstance they claim to have
acquired regular status with all the rights and benefits appurtenant to it.
Such contention is untenable. Undeniably, this circumstance of continuous rehiring was dictated by practical considerations that experienced crew members
are more preferred. Petitioners were only given priority or preference because
of their experience and qualifications but this does not detract the fact that
herein petitioners are contractual employees. They can not be considered
regular employees. We quote with favor the explanation of the NLRC in this
wise:
xxx The reference to permanent and probationary masters and employees in
these papers is a misnomer and does not alter the fact that the contracts for
enlistment between complainants-appellants and respondent-appellee Esso
International were for a definite periods of time, ranging from 8 to 12 months.
Although the use of the terms permanent and probationary is unfortunate, what
is really meant is eligible for-re-hire. This is the only logical conclusion

possible because the parties cannot and should not violate POEAs requirement
that a contract of enlistment shall be for a limited period only; not exceeding
twelve (12) months.
From all the foregoing, we hereby state that petitioners are not considered
regular or permanent employees under Article 280 of the Labor
Code. Petitioners employment have automatically ceased upon the expiration
of their contracts of enlistment (COE). Since there was no dismissal to speak
of, it follows that petitioners are not entitled to reinstatement or payment of
separation pay or backwages, as provided by law. [43]
The Court ruled that the employment of seafarers for a fixed period is not
discriminatory against seafarers and in favor of foreign employers. As explained
by this Court in its July 29, 2002 Resolution in Millares:

Moreover, it is an accepted maritime industry practice that employment of

seafarers are for a fixed period only. Constrained by the nature of their
employment which is quite peculiar and unique in itself, it is for the mutual
interest of both the seafarer and the employer why the employment status must
be contractual only or for a certain period of time. Seafarers spend most of
their time at sea and understandably, they can not stay for a long and an
indefinite period of time at sea. Limited access to shore society during the
employment will have an adverse impact on the seafarer. The national, cultural
and lingual diversity among the crew during the COE is a reality that
necessitates the limitation of its period. [44]
In Pentagon International Shipping, Inc. v. William B. Adelantar,[45] the Court
cited its rulings in Millares and Coyoca and reiterated that a seafarer is not a
regular employee entitled to backwages and separation pay:

Therefore, Adelantar, a seafarer, is not a regular employee as defined in Article

280 of the Labor Code. Hence, he is not entitled to full backwages and
separation pay in lieu of reinstatement as provided in Article 279 of the Labor
Code. As we held in Millares, Adelantar is a contractual employee whose rights
and obligations are governed primarily by [the] Rules and Regulations of the
POEA and, more importantly, by R.A. 8042, or the Migrant Workers and
Overseas Filipinos Act of 1995.
The latest ruling of the Court in Marcial Gu-Miro v. Rolando C. Adorable and
Bergesen D.Y. Manila[46] reaffirmed yet again its rulings that a seafarer is
employed only on a contractual basis:

Clearly, petitioner cannot be considered as a regular employee notwithstanding

that the work he performs is necessary and desirable in the business of
respondent company. As expounded in the abovementioned Millares Resolution, an exception is made in the situation of
seafarers. The exigencies of their work necessitates that they be employed on a
contractual basis.
Thus, even with the continued re-hiring by respondent company of petitioner to
serve as Radio Officer onboard Bergesens different vessels, this should be
interpreted not as a basis for regularization but rather a series of contract
renewals sanctioned under the doctrine set down by the
second Millares case. If at all, petitioner was preferred because of practical
considerations namely, his experience and qualifications. However, this does
not alter the status of his employment from being contractual.

The petitioner failed to convince the Court why it should restate its decision
in Millares and reverse its July 29, 2002 Resolution in the same case.
IN LIGHT OF ALL THE FOREGOING, the petition is hereby DENIED. The
assailed Decision dated August 28, 2002 of the Court of Appeals is hereby
AFFIRMED. No pronouncement as to costs.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.

[1]

Penned by Associate Justice Oswaldo D. Agcaoili (retired), with Associate Justices Eliezer R.
de los Santos and Danilo B. Pine, concurring.

[2]

Esso Tankers, Inc.

[3]

Esso Eastern Marine Ltd.

[4]

Esso International Shipping (Bahamas) Co. Ltd., Singapore Branch.

[5]

Rollo, p. 53.

[6]

POEA Records, p. 142.

[7]

Id. at 140-141.

[8]

Id. at 138.

[9]

Id. at 243.

[10]

Id. at 242.

[11]

Rollo, p. 54.

[12]

NLRC Records, p. 136.

[13]

CA Rollo, p. 133.

[14]

POEA Records, p. 56.

[15]

Id. at 137.

[16]

Id.

[17]

Id. at 288.

[18]

NLRC Records, pp. 6-7.

[19]

328 SCRA 79 (2000).

[20]

Id. at 90.

[21]

Supra.

[22]

CA Rollo, p. 209.

[23]

ART. 254. INJUNCTION PROHIBITED No temporary or permanent injunction or restraining

order in any case involving or growing out of labor disputes shall be issued by any court
or other entity, except as otherwise provided in Articles 218 and 264 of this Code.

[24]

Labor dispute includes any controversy or matter concerning terms or conditions of

employment or the association or representation of persons in negotiating, fixing,
maintaining, changing or arranging the terms and conditions of employment, regardless
of whether the disputants stand in the proximate relation of employer and employee.

[25]

CA Rollo, p. 350.

[26]

Id. at 346.

[27]

385 SCRA 306 (2002).

[28]

Rollo, pp. 14-15.

[29]

ART. 254. Injunction prohibited. No temporary or permanent injunction or restraining order in

any case involving or growing out of Labor disputes shall be issued by any court or other
entity, except as, otherwise, provided in Articles 218 and 264 of this Code.

[30]

Azucena, Cesario Alvero, Jr., The Labor Code With Comments and Cases, Vol. II, 1999 ed., p.
300.

[31]

Philippine Airlines, Inc. v. NLRC, 287 SCRA 672, 680 (1998), citing Del Rosario v. Court of
Appeals, 255 SCRA 152 (1996).

[32]

ART. 218. Powers of the Commission. The Commission shall have the power and authority:

(e) To enjoin or restrain any actual or threatened commission of any or all prohibited or unlawful
acts or to require the performance of a particular act in any labor dispute which, if not
restrained or performed forthwith, may cause grave or irreparable damage to any party or
render ineffectual any decision in favor of such party: Provided, That no temporary or
permanent injunction in any case involving or growing out of a labor dispute as defined in
this Code shall be issued except after hearing the testimony of witnesses, with
opportunity for cross-examination, in support of the allegations of a complaint made
under oath, and testimony in opposition thereto, if offered, and only after a finding of fact
by the Commission, to the effect:
(1) That prohibited or unlawful acts have been threatened and will be committed and will be
continued unless restrained, but no injunction or temporary restraining order shall be
issued on account of any threat prohibited or unlawful act, except against the person or
persons, association or organization making the threat or committing the prohibited or
unlawful act or actually authorizing or ratifying the same after actual knowledge thereof;
(2) That substantial and irreparable injury to complainants property will follow;
(3) That as to each item of relief to be granted, greater injury will be inflicted upon complainant by
the denial of relief than will be inflicted upon defendants by the granting of relief;
(4) That complainant has no adequate remedy at law; and
(5) That the public officers charged with the duty to protect complainants property are unable or
unwilling to furnish adequate protection.
[33]

Supra.

[34]

The 1987 Philippine Constitution: Article XIII, Section 3. The State shall afford full protection to
labor, local and overseas, organized and unorganized, and promote full employment and
equality of employment opportunities for all. ...

[35]

243 SCRA 190 (1995).

[36]

181 SCRA 702 (1990).

[37]

Id. at 711. (Emphasis supplied)

[38]

Id. at 714.

[39]

Id. at 716. (Emphasis supplied)

[40]

Supra.

[41]

Id. at 194-195.

[42]

Supra.

[43]

Id. at 318-320. (Emphasis supplied)

[44]

Id. at 319.

[45]

G.R. No. 157373, July 27, 2004.

[46]

G.R. No. 160952, August 20, 2004. (Emphasis supplied)