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Labor Standards Case Digest Matrix 4 – Stef Macapagal

Title Facts Issue/s Ruling Doctrine

Serrano v. Gallant Maritime Services Antonio Serrano was hired by W/N the clause “or for three months NO. The clause violates Section 1, Congress retains its wide discretion
GR No. 167614 Gallant Maritime Services, Inc. and for every year of the unexpired term, Article III; Section 18, Article II; and in providing for a valid classification,
24 March 2009 Marlow Navigation Co., Ltd. under a whichever is less” found in Section Section 3, Article XIII of the and its policies should be accorded
Austria-Martinez, J. POEA-approved Contract of 10 of RA 8042 is constitutionally Constitution. Section 10 of RA 8042 recognition and respect by the courts
Employment which stated that he valid. contains a suspect classification in of justice except when they run afoul
would be taking on the position of that, in the computation of the of the Constitution. The deference
Chief Officer with a salary of $1,400 monetary benefits of fixed-term stops where the classification violates
per month. However, on the date of employees who are illegally a fundamental right, or prejudices
his departure, or on 19 March 1998, discharged, it imposes a 3-month cap persons accorded special protection
he had to accept a downgraded on the claim of OFWs with an by the Constitution. When these
employment contract for the position unexpired portion of one year or violations arise, this Court must
of Second Officer with a salary of more in their contracts, but none on discharge its primary role as the
$1,000 with the assurance by Gallant the claims of other OFWs or local vanguard of constitutional guaranties,
and Marlow that he would be made workers with fixed-term and require a stricter and more
Chief Officer by the end of April employment. The subject clause exacting adherence to constitutional
1998. singles out one classification of limitations. Rational basis should not
OFWs and burdens it with a peculiar suffice.
When Serrano was not promoted as disadvantage. It violates Serrano’s
promised, he refused to stay on as a right to substantive due process, for it There can never be a justification for
Second Officer and was repatriated deprives him of property, consisting any form of government action that
to the Philippines on 26 May 1998. of monetary benefits, without any alleviates the burden of one sector,
The unexpired term on his contract existing valid governmental purpose. but imposes the same burden on
was 9 months and 23 days. Serrano The subject clause being another sector, especially when the
then filed a Complaint with the Labor unconstitutional, Serrano is entitled favored sector is composed of private
Arbiter against Gallant and Marlow to his salaries for the entire businesses such as placement
for constructive dismissal and for unexpired period of nine months and agencies, while the disadvantaged
payment of his money claims for the 23 days of his employment contract, sector is composed of OFWs whose
total amount of $26,442.73— pursuant to law and jurisprudence protection no less than the
covering his salary for the entire prior to the enactment of RA 8042. Constitution commands. The idea
unexpired term of his contract. that private business interest can be
Upon cursory reading, the subject elevated to the level of a compelling
The Labor Arbiter ruled in favor of clause appears facially neutral, for it state interest is odious.
Serrano, declaring his dismissal as applies to all OFWs. However, a
illegal and awarding him monetary closer examination reveals that the The rendition of overtime work and
benefits to the tune of $8,770— subject clause has a discriminatory the submission of sufficient proof
representing his salary for three intent against, and an invidious that said work was actually
months of the unexpired portion of impact on, OFWs at two levels: performed are conditions to be
his contract. The LA applied Section (a) OFWs with employment satisfied before a seaman could be
10 of RA 8042. contracts of less than one entitled to overtime pay.
year vis-à-vis OFWs with
Upon appeal to the NLRC, the employment contracts of Obiter:
damages awarded by the LA were one year or more; Under the policy of social justice, the
lowered because RA 8042 does not (b) OFWs with employment law bends over backward to
provide for the award of overtime contracts of more than accommodate the interests of the
pay, which should be proven to have one year; working class on the humane
been actually performed, and for (c) OFWs vis-à-vis local justification that those with less
vacation leave pay. workers with fixed period privilege in life should have more in
employment. law.
Labor Standards Case Digest Matrix 4 – Stef Macapagal

NO. By definition of “salaries” in There are three levels of scrutiny at

Section 10(5), there is no basis for which the Court reviews the
the automatic inclusion of overtime constitutionality of a classification
W/N overtime and leave pay should and holiday pay in the computation embodied in a law:
form part of the salary basis in the of the monetary award, unless there (a) The deferential or rational
computation of monetary award for is evidence that work had been basis scrutiny in which the
being fixed benefits. performed during those periods. challenged classification
needs only be shown to be
rationally related to
serving a legitimate state
(b) The middle-tier or
intermediate scrutiny in
which the government
must show that the
challenged classification
serves an important state
interest and that the
classification is at least
substantially related to
serving that interest; and
(c) The strict judicial scrutiny
in which a legislative
classification which
impermissibly interferes
with the exercise of a
fundamental right or
operates to the peculiar
disadvantage of a suspect
class is presumed
unconstitutional, and the
burden is upon the
government to prove that
classification is necessary
to achieve a compelling
state interest and that it is
the least restrictive means
to protect such interest.

If the challenge to the statute is

premised on the denial of a
fundamental right, or the
perpetuation of prejudice against
persons favored by the Constitution
with special protection, judicial
scrutiny ought to be more strict.

When the Court is called upon to

exercise its power of judicial review
of the acts of its co-equals, such as
Labor Standards Case Digest Matrix 4 – Stef Macapagal

Congress, it does so only when these

conditions obtain:
(1) That there is an actual
case or controversy
involving a conflict of
rights susceptible of
judicial determination;
(2) That the constitutional
question is raised by a
proper party at the earliest
opportunity; and
(3) That the constitutional
question is the very lis
mota of the case.