People v Panis (1988)

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.
 ELIZABETH M. GAGUI VS SIMEON DEJERO and TEODORO R. PERMEJO (2013)

Facts:
On 14 December 1993, respondents Simeon Dejero and Teodoro Permejo filed separate Complaints for
illegal dismissal, nonpayment of salaries and overtime pay, refund of transportation expenses, damages,
and attorney fees against PRO Agency Manila, Inc., and Abdul Rahman Al Mahwes.
The Labor Arbiter Pedro Ramos rendered a decision ordering respondents Pro Agecy Manila Inc., and
Abdul Rahman Al Mahwes to pay complainants. The LA also issued a Writ of Execution. When the writ
was returned unsatisfied, an Alias Writ of Execution was issued, but was also returned unsatisfied.
Respondents filed a Motion to Implead Respondent Pro Agency Manila, Inc. Corporate Officers and
Directors as Judgment Debtor. It included petitioner as the Vice-president/Stockholder/Director of PRO
Agenct, Manila, Inc. The LA granted the motion.
A 2nd Alias Writ of Execution was issued, which resulted in the garnishment of petitioner bank deposit
in the amount of P85,430.48. Since, judgment remained unsatisfied, respondents sought a 3rd alias writ
of execution. The motion was granted resulting in the levying of two parcels of lot owned by petitioner
located in San Fernando Pampanga.
Petitioner filed a Motion to Quash 3rd Alias Writ of Execution. Petitioner alleged that apart from not
being made aware that she was impleaded as one of the parties to the case, the LA decision did not hold
her liable in any form whatsoever. Executive Labor Arbiter denied the motion.
Upon appeal, NLRC denied the appeal for lack of merit. NLRC ruled that in so far as overseas migrant
workers are concerned, it is R.A. 8042 itself that describes the nature of the liability of the corporation
and its officers and directors. It is not essential that the individual officers and directors be impleaded as
party respondents to the case instituted by the worker. A finding of liability on the part of the
corporation will necessarily mean the liability of the corporate officers or directors.
The CA affirmed the NLRC decision. The two Motions for Reconsideration were denied.
Issue:
Whether or not petitioner may be held jointly and severally liable with PRO Agency Manila, Inc. in
accordance with Section 10 of R.A. 8042?
Held:
The Petitioner may not be held jointly and severally liable.
LABOR LAW: liability of corporate officers
The pertinent portion of Section 10, R.A. 8042 reads as follows: The liability of the principal/employer
and the recruitment/placement agency for any and all claims under this section shall be joint and
several. This provision shall be incorporated in the contract for overseas employment and shall be a
condition precedent for its approval.
In Sto. Tomas v. Salac, we had the opportunity to pass upon the constitutionality of this provision. We
have thus maintained: the Court has already held, pending adjudication of this case, that the liability of
corporate directors and officers is not automatic. To make them jointly and solidarily liable with their
company, there must be a finding that they were remiss in directing the affairs of that company, such as
sponsoring or tolerating the conduct of illegal activities.
Hence, for petitioner to be found jointly and solidarily liable, there must be a separate finding that she
was remiss in directing the affairs of the agency, resulting in the illegal dismissal of respondents.
Examination of the records would reveal that there was no finding of neglect on the part of the
petitioner in directing the affairs of the agency. In fact, respondents made no mention of any instance
when petitioner allegedly failed to manage the agency in accordance with law, thereby contributing to
their illegal dismissal.
Petition for review on certiorari is GRANTED.
 SANTIAGO vs. CF SHARP CREW (2016)

Facts:
Petitioner had been working as a seafarer for Smith Bell Management, Inc. (respondent) for about 5 yrs.
In February 3, 1998, petitioner signed a new contract of employment with respondent, with the
duration of 9 months. The contract was approved by POEA. Petitioner was to be deployed on board the
“MSV Seaspread” which was scheduled to leave the port of Manila for Canada on 13 February 1998.
A week before the date of departure, Capt. Pacifico Fernandez, respondent’s Vice President, sent a
facsimile message to the captain of “MSV Seaspread,”, saying that it received a phone call from
Santiago’s wife and some other callers who did not reveal their identity and gave him some feedbacks
that Paul Santiago this time, if allowed to depart, will jump ship in Canada like his brother Christopher
Santiago. The captain of “MSV Seaspread replied that it cancel plans for Santiago to return to Seaspread.
Petitioner thus told that he would not be leaving for Canada anymore. Petitioner filed a complaint for
illegal dismissal, damages, and attorney’s fees against respondent and its foreign principal, Cable and
Wireless (Marine) Ltd. The Labor Arbiter (LA) favored petitioner and ruled that the employment contract
remained valid but had not commenced since petitioner was not deployed and that respondent violated
the rules and regulations governing overseas employment when it did not deploy petitioner, causing
petitioner to suffer actual damages. On appeal by respondent, NLRC ruled that there is no employer-
employee relationship between petitioner and respondent because the employment contract shall
commence upon actual departure of the seafarer from the airport or seaport at the point of hire and
with a POEA-approved contract. In the absence of an employer-employee relationship between the
parties, the claims for illegal dismissal, actual damages, and attorney’s fees should be dismissed. But the
NLRC found respondent’s decision not to deploy petitioner to be a valid exercise of its management
prerogative. Petitioner filed MR but it was denied. He went to CA. CA affirmed the decision of NLRC.
Petitioner’s MR was denied. Hence this case.
Issue:
When does an employer- employee relationship begin in the case at bar.
Held:
There is some merit in the petition. The parties entered into an employment contract whereby
petitioner was contracted by respondent to render services on board “MSV Seaspread” for the
consideration of US$515.00 per month for 9 months, plus overtime pay. However, respondent failed to
deploy petitioner from the port of Manila to Canada. Considering that petitioner was not able to depart
from the airport or seaport in the point of hire, the employment contract did not commence, and no
employer-employee relationship was created between the parties. However, a distinction must be made
between the perfection of the employment contract and the commencement of the employer-
employee relationship. The perfection of the contract, which in this case coincided with the date of
execution thereof, occurred when petitioner and respondent agreed on the object and the cause, as
well as the rest of the terms and conditions therein. The commencement of the employer-employee
relationship would have taken place had petitioner been actually deployed from the point of hire. Thus,
even before the start of any employer-employee relationship, contemporaneous with the perfection of
the employment contract was the birth of certain rights and obligations, the breach of which may give
rise to a cause of action against the erring party. Thus, if the reverse had happened, that is the seafarer
failed or refused to be deployed as agreed upon, he would be liable for damages.

Neither the manning agent nor the employer can simply prevent a seafarer from being deployed
without a valid reason. Respondent’s act of preventing petitioner from departing the port of Manila and
boarding “MSV Seaspread” constitutes a breach of contract, giving rise to petitioner’s cause of action.
Respondent unilaterally and unreasonably reneged on its obligation to deploy petitioner and must
therefore answer for the actual damages he suffered.
Despite the absence of an employer-employee relationship between petitioner and respondent, the
Court rules that the NLRC has jurisdiction over petitioner’s complaint. The jurisdiction of labor arbiters is
not limited to claims arising from employer-employee relationships. Section 10 of R.A. No. 8042
(Migrant Workers Act), provides that:

Sec. 10. Money Claims. – Notwithstanding any provision of law to the contrary, the Labor Arbiters of the
NLR) shall have the original and exclusive jurisdiction to hear and decide, within 90 calendar days after
the filing of the complaint, the claims arising out of an employer-employee relationship or by virtue of
any law or contract involving Filipino workers for overseas deployment including claims for actual,
moral, exemplary and other forms of damages.”

Since the present petition involves the employment contract entered into by petitioner for overseas
employment, his claims are cognizable by the labor arbiters of the NLRC.

Respondent is liable to pay petitioner only the actual damages in the form of the loss of nine (9) months’
worth of salary as provided in the contract. He is not, however, entitled to overtime pay. While the
contract indicated a fixed overtime pay, it is not a guarantee that he would receive said amount
regardless of whether or not he rendered overtime work. Even though petitioner was prevented
without valid reason from rendering regular much less overtime service, the fact remains that there is
no certainty that petitioner will perform overtime work had he been allowed to board the vessel. The
amount stipulated in the contract will be paid only if and when the employee rendered overtime work.
Realistically speaking, a seaman, by the very nature of his job, stays on board a ship or vessel beyond the
regular eight-hour work schedule. For the employer to give him overtime pay for the extra hours when
he might be sleeping or attending to his personal chores or even just lulling away his time would be
extremely unfair and unreasonable.

The Court also holds that petitioner is entitled to attorney’s fees in the concept of damages and
expenses of litigation. Respondent’s basis for not deploying petitioner is the belief that he will jump ship
just like his brother, a mere suspicion that is based on alleged phone calls of several persons whose
identities were not even confirmed. This Court has upheld management prerogatives so long as they are
exercised in good faith for the advancement of the employer’s interest and not for the purpose of
defeating or circumventing the rights of the employees under special laws or under valid agreements.
Respondent’s failure to deploy petitioner is unfounded and unreasonable However, moral damages
cannot be awarded in this case. because respondent’s action was not tainted with bad faith, or done
deliberately to defeat petitioner’s rights, as to justify the award of moral damages.

Seafarers are considered contractual employees and cannot be considered as regular employees under
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. The exigencies of their work
necessitates that they be employed on a contractual basis.

WHEREFORE, petition is GRANTED IN PART.