ANTONIO SERRANO V.

GALLANT MARITIME SERVICE

G.R. No. 167614 March 24, 2009
Facts: Serrano was hired by Gallant Maritime Services, Inc. and Marlow Navigation Co.,
Ltd. (respondents) under a Philippine Overseas Employment Administration (POEA)-
approved Contract of Employment with the following terms and conditions:
1)Duration of contract: 12 months; 2) Position: Chief Officer; 3) Basic monthly
salary: US$1,400.00; 4) Hours of work: 48 hours per week 5)Overtime: US$700.00 per
month; 6) Vacation leave with pay 7 days per month

On March 19, 1998, the date of his departure, petitioner was constrained to accept
a downgraded employment contract for the position of Second Officer with a monthly
salary of US$1,000.00, upon the assurance and representation of respondents that he
would be made Chief Officer by the end of April 1998.
Respondents did not deliver on their promise to make petitioner Chief Officer. Hence,
petitioner refused to stay on as Second Officer and was repatriated to the Philippines
on May 26, 1998.
Petitioner’s employment contract was for a period of 12 months or from March 19, 1998
up to March 19, 1999, but at the time of his repatriation on May 26, 1998, he had served
only two (2) months and seven (7) days of his contract, leaving an unexpired portion of
nine (9) months and twenty-three (23) days. Serrano’s dismissal was declared illegal but
he was allowed only to receive 3 months’ worth of salary of the unexpired portion of his
contract as provided by Section 10 (par 5) of RA 8042.

Issue: Whether Section 10 (par 5) of RA 8042 is unconstitutional

Law: Section 1, Article III, Section 18,Article II and Section 3, Article XIII of the 1987
Constitution

Case History: The LA rendered a Decision dated July 15, 1999, declaring the dismissal of
petitioner illegal and awarding him monetary benefits (US $8,770.00), representing the
complainant’s salary for three (3) months of the unexpired portion of the aforesaid
contract of employment.

NLRC affirmed the ruling of the LA with modification, by reducing the applicable salary
rate from US$2,590.00 to US$1,400.00 but denied giving due course to the constitutional
challenge regarding Section 10 (par 5) of RA 8042

CA affirm the ruling of the NLRC but skirting the constitutional challenge of Section 10
(par 5) of RA 8042

Ruling: Unconstitutional. Section 18, Article II and Section 3, Article XIII accord all
members of the labor sector, without distinction as to place of deployment, full
protection of their rights and welfare.
A closer examination reveals that the subject clause has a discriminatory intent against,
and an invidious impact on OFWs The subject clause does not state or imply any
definitive governmental purpose; and it is for that precise reason that the clause
violates not just petitioner’s right to equal protection, but also her right to substantive
due process under Section 1, Article III of the Constitution.
Opinion: The court in granting Serrano’s petition rectifies one of the mistakes in our
history. In granting the petition, the Philippines will no longer be in a hypocritical
situation wherein the government place OFWs in pedestals, calling them “modern day
heroes” but at the same time maintaining such discriminatory law working against
them.

JOEB ALIVIADO ET. AL. VS. PROCTER AND GAMBLE

G.R. No. 160506 June 6, 2011
Facts: Petitioners worked as merchandisers of P&G. They all individually signed
employment contracts with either Promm-Gem or SAPS. They were assigned at different
outlets, supermarkets and stores where they handled all the products of
Procter&Gamble. They received their wages from Promm-Gem or SAPS.
SAPS and Promm-Gem imposed disciplinary measures on erring merchandisers for
reasons such as habitual absenteeism, dishonesty or changing day-off without prior
notice. To enhance consumer awareness and acceptance of the products, P&G
entered into contracts with Promm-Gem and SAPS for the promotion and
merchandising of its products.
In December 1991, petitioners filed a complaint against P&G for regularization, service
incentive leave pay and other benefits with damages.
Issue: Whether P&G is the employer of petitioners.

Laws: Art. 106 of the Labor Code and Rule VIII-A, Book III of the Omnibus Rules
Implementing the Labor Code, as amended by Department Order No. 18-02

Case History: Labor Arbiter dismissed the complaint for lack of merit and ruled that
there was no employer-employee relationship between petitioners and P&G.
NLRC affirmed the ruling of the LA.
CA modified the decision and ordered P&G to pay service incentive leave to the
petitioners

Ruling: Petition partially granted. In order to resolve the issue of whether P&G is the
employer of petitioners, it is necessary to first determine whether Promm-Gem and SAPS
are labor-only contractors or legitimate job contractors. In order for such outsourcing to
be valid, it must be made to an independent contractor because the current labor
rules expressly prohibit labor-only contracting.
To emphasize, there is labor-only contracting when the contractor or sub-contractor
merely recruits, supplies or places workers to perform a job, work or service for a
principal and any of the following elements are present:
1. i) The contractor or subcontractor does not have substantial capital or
investment which relates to the job, work or service to be performed and the
employees recruited, supplied or placed by such contractor or subcontractor
are performing activities which are directly related to the main business of the
principal; or
1. ii) The contractor does not exercise the right to control over the performance of
the work of the contractual
Under the circumstances, Promm-Gem cannot be considered as a labor-only
contractor. We find that it is a legitimate independent contractor.
Considering that SAPS has no substantial capital or investment and the workers it
recruited are performing activities which are directly related to the principal business of
P&G, we find that the former is engaged in “labor-only contracting”. The contractor is
considered merely an agent of the principal employer and the latter is responsible to
the employees of the labor-only contractor as if such employees had been directly
employed by the principal employer.

Opinion: Labor contracting is one of the most prostituted means employed by

scheming employers to evade labor standard laws, in our country. It is the reason why
calls to repeal or amend our labor laws permitting such is getting louder each day.
Unless the government finds a solution to that conundrum, unscrupulous employers will
take advantage of the system and labor will be at the receiving end of injustice.

Opinion SAMEER v.CABLES: The court in this case, proves the importance of having an
erudite league of justices in the Supreme Court. Its insulation from politics assured that
the high standard required of its members is never downgraded by democracy. Such
requirement is of the essence as mirrored by this case since, time and time again the
High Court is the shield of the people against unconstitutional laws and laws previously
declared unconstitutional but reinstated by dense lawmakers in new legislations.