g.

Migrant workers/OFW

i. Commencement of employer-employee relationship

33 Abosta Ship Management v. Hilario, G.R.No. 195792, Nov. 24, 2014

G.R. No. 195792 November 24, 2014

ABOSTA SHIP MANAGEMENT and/or ARTEMIO CORBILLA, Petitioners, vs. WILHILM M.

HILARIO, Respondent.

Ponente: SERENO, CJ:

Doctrine: The contract was already perfected on the date of its execution, which occurred
when petitioner and respondent agreed on the object and the cause, as well as on the rest of
the terms and conditions therein. Naturally, contemporaneous with the perfection of the
employment contract was the birth of certain rights and obligations, a breach of which may give
rise to a cause of action against the erring party. Also, the POEA Standard Contract must be
recognized and respected. Thus, neither the manning agent nor the employer can simply
prevent a seafarer from being deployed without a valid reason.

Facts:
On 24 October 2002, an employment contract was executed by petitioner, on behalf of its
foreign principal Panstar Shipping Co., Ltd., and respondent. In this contract, the latter was
hired as a bosun (boatswain) of the foreign vessel Grand Mark for a period of nine months, with
a monthly salary of USD566. The contract was duly approved by the Philippine Overseas
Employment Agency (POEA) on 25 October 2002.

On 27 November 2002, upon reporting to the office of petitioner, respondent was informed that
the latter’s deployment had been postponed due to shifting demands of the foreign principal. It
appears, though, that the foreign principal decided to promote an able seaman on board the
vessel instead of hiring respondent. Petitioner thus requested respondent to wait for another
two to three months for a vacancy to occur. In the meantime, respondent was allowed to make
cash advances7 as financial assistance.

Eventually, respondent filed a Complaint with the POEA against petitioner for on the ground of
failing to deploy respondent within the prescribed period without any valid reason. Respondent
likewise filed a Complaint with the Labor Arbiter.

The Labor Arbiter ordered petitioner to pay respondent his salary for nine months. The Labor
Arbiter found that the contract executed between the parties and the non-fulfillment thereof
entitled respondent to his salary for the whole duration of the contract.

This Decision prompted petitioner to appeal to the NLRC, which reversed the LA’s decision.
Dissatisfied with the NLRC’s ruling, respondent filed a Petition for Certiorari with the CA, which
overturned the NLRC.
Thus, this appeal by the petitioner.
Issue: whether or not there was already employer-employee relationship then existing despite
non-deployment of respondent

Held: YES!!!

Based on a communication sent by a certain M.K. Jin dated 10 October 2002, the foreign
principal had already chosen respondent from among the other candidates as BSN (bosun or
boatswain). Pursuant to this communication, petitioner entered into an employment contract
and hired respondent on 24 October 2002. Subsequent communications, though, show that the
foreign principal approved a different candidate for the position of BSN.

Thus, petitioner did not deploy respondent.

There was an apparent violation of the contract at the time that the foreign principal decided to
promote another person as expressed in its communications dated 10 November 2002 and 14
November 2002. The vacancy for the position of boatswain ceased to exist upon the execution
of the contract between petitioner and respondent on 24 October 2002, a contract subsequently
approved by the POEA on 25 October 2002. Clearly, there was no vacancy when the foreign
principal changed its mind, since the position of boatswain had already been filled up by
respondent.

The contract was already perfected on the date of its execution, which occurred when petitioner
and respondent agreed on the object and the cause, as well as on the rest of the terms and
conditions therein. Naturally, contemporaneous with the perfection of the employment contract
was the birth of certain rights and obligations, a breach of which may give rise to a cause of
action against the erring party. Also, the POEA Standard Contract must be recognized and
respected. Thus, neither the manning agent nor the employer can simply prevent a seafarer
from being deployed without a valid reason.

WHEREFORE, premises considered, the instant Petition is DENIED.

34 Santiago v. C.F. Sharp Crew Management , G.R. No. 162419, July 10, 2007

GIST:whether the seafarer, who was prevented from leaving the port of Manila and
refused deployment without valid reason but whose POEA-approved employment
contract provides that the employer-employee relationship shall commence only
upon the seafarer’s actual departure from the port in the point of hire, is entitled to
relief?
DOCTRINE: 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, as earlier discussed, 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.

FACTS: Petitioner had been working as a seafarer for Smith Bell Management, Inc.
(respondent) for about five (5) years.2On 3 February 1998, petitioner signed a new
contract of employment with respondent, with the duration of nine (9) months. He
was assured of a monthly salary of US$515.00, overtime pay and other benefits. The following
day or on 4 February 1998, the contract was approved by the Philippine Overseas Employment
Administration (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 scheduled date of departure, Capt. Pacifico Fernandez, respondent’s Vice
President, sent a facsimile message to the captain of "MSV Seaspread," which reads:

I received a phone call today from the wife of Paul Santiago in Masbate asking
me not to send her husband to MSV Seaspread anymore. Other callers who did
not reveal their identity gave me some feedbacks that Paul Santiago this time if
allowed to depart will jump ship in Canada like his brother Christopher Santiago,
O/S who jumped ship from the C.S. Nexus in Kita-kyushu, Japan last December,
1997.

To this message the captain of "MSV Seaspread" replied:

Many thanks for your advice concerning P. Santiago, A/B. Please cancel plans for him to
return to Seaspread.4
On 9 February 1998, petitioner was thus told that he would not be leaving for Canada anymore,
but he was reassured that he might be considered for deployment at some future date.

Petitioner filed a complaint for illegal dismissal, damages, and attorney's fees
against respondent and its foreign principal, Cable and Wireless (Marine) Ltd.
…. On appeal by respondent, the National Labor Relations Commission
(NLRC) ruled that there is no employer-employee relationship between
petitioner and respondent because under the Standard Terms and Conditions
Governing the Employment of Filipino Seafarers on Board Ocean Going
Vessels (POEA Standard Contract), 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…..
Respondent argues…. His employment with respondent did not commence because
his deployment was withheld for a valid reason…..
ISSUE: Is Santiago entitled to relief?

HELD: 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. 26

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, as earlier discussed,
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.
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.
ii. Section 10, R.A. 8042; Section 7, R.A. 10022

35 Serrano v. Gallant Maritime Services, G.R. No. 167614, March 24, 2009

G.R. No. 167614 March 24, 2009

ANTONIO M. SERRANO, Petitioner,
vs.
Gallant MARITIME SERVICES, INC. and MARLOW NAVIGATION CO., INC.,
Respondents
For handwritten digest

Facts
Petitioner was employed by respondent to work as chief officer abroad
Respondent had to work for a month but he was repatriated because the job that he was given
was the position of a second officer with lower pay and he didn’t accept it.
Respondent asked for the pay for the unexpired term of the contract
Ca and rtc gave him only 3 mo pay based on Sec 10 of RA 8042 which states that OFWs with
an unexpired term of 1 yr or above will only get 3 mo pay if dismissed prematurely
Petitioner asked the SC to invalidate sec 10 because it violates EQ protection clause

Issue: does it violate Equal protection clause.

Yes
Violative of EQ protection clause. Test used is strict scrutiny test to protect rights of subjects
that constitution grants
There was discrimination against ofw’swith remaining 1 yr contract and higher and against
OFWs in general. OFWs with unexpired term of 1 yr get only 3 months pay while local workers
get the pay for the unexpired term.
No compelling interest to satisfy the strict scrutiny test

FOR RECIT/TEST
Facts
Petitioner 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:
Duration of 12
contract mon
ths

Position Chie
f
Offic
 er

Basic US$
monthly 1,40
salary 0.00
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. 7 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.
Petitioner filed with the Labor Arbiter (LA) a Complaint 9 against respondents for constructive
dismissal and for payment of his money claims in the total amount of US$26,442.73,

LA rendered a decision granting 8.7k dollars representing complainant’s salary for three (3)
months of the unexpired portion of the aforesaid contract of employment . This was
based on5th paragraph of Section 10, Republic Act (R.A.) No. 8042, 2 to wit:
Sec. 10. Money Claims. - x xx In case of termination of overseas employment
without just, valid or authorized cause as defined by law or contract, the workers
shall be entitled to the full reimbursement of his placement fee with interest of
twelve percent (12%) per annum, plus his salaries for the unexpired portion of his
employment contract or for three (3) months for every year of the unexpired term,
whichever is less. (this is the provision the petitioner wants to invalidate)
Petitioner appealed to the NLRC which grantly him 4.6k dollars only.
Petitioner filed an appeal with the SC
Petitioner contends that the subject clause is unconstitutional because it unduly impairs the
freedom of OFWs to negotiate for and stipulate in their overseas employment contracts a
determinate employment period and a fixed salary package. 32 It also impinges on the equal
protection clause, for it treats OFWs differently from local Filipino workers (local workers) by
putting a cap on the amount of lump-sum salary to which OFWs are entitled in case of illegal
dismissal, while setting no limit to the same monetary award for local workers when their
dismissal is declared illegal; that the disparate treatment is not reasonable as there is no
substantial distinction between the two groups

ISSUE
1.Whether the law violates the impairment clause- NO
2.Whether the law violates the equal protection clause- YES
3.Whether it violates substantial due process-YES
 HELD/RATIO
1.The prohibition is aligned with the general principle that laws newly enacted have only a
prospective operation,58and cannot affect acts or contracts already perfected; however, as to
laws already in existence, their provisions are read into contracts and deemed a part thereof.
Thus, the non-impairment clause under Section 10, Article II is limited in application to laws
about to be enacted that would in any way derogate from existing acts or contracts by
enlarging, abridging or in any manner changing the intention of the parties thereto. Here, the
law was in force even before the contract was entered into
But even if the Court were to disregard the timeline, the subject clause may not be declared
unconstitutional on the ground that it impinges on the impairment clause, for the law was
enacted in the exercise of the police power of the State
2.It violates the equal protection clause because it discriminates against OFWs who were dismissed
with a one year or more unexpired term
3.Equal protection clause

Such rights are not absolute but subject to the inherent power of Congress to incorporate,
when it sees fit, a system of classification into its legislation; however, to be valid, the
classification must comply with these requirements: 1) it is based on substantial distinctions; 2)
it is germane to the purposes of the law; 3) it is not limited to existing conditions only; and 4) it
applies equally to all members of the class. 66
There are three levels of scrutiny at which the Court reviews the constitutionality of a
classification embodied in a law: a) the deferential or rational basis scrutiny in which the
challenged classification needs only be shown to be rationally related to serving a legitimate
state interest;67 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; 68 and c) strict judicial scrutiny69 in which a
legislative classification which impermissibly interferes with the exercise of a fundamental right 70
or operates to the peculiar disadvantage of a suspect class 71 is presumed unconstitutional, and
the burden is upon the government to prove that the classification is necessary to achieve a
compelling state interest and that it is the least restrictive means to protect such
interest.72
4.Strict judicial scrutiny is applied when it prejudices persons accorded special protection by the
constitution Basis:Central Bank [now BangkoSentral ng Pilipinas] Employee Association, Inc. v.
BangkoSentral ng Pilipinas

The deference stops where the classification violates a fundamental right, or prejudices
persons accorded special protection by the Constitution. When these violations arise,
this Court must discharge its primary role as the vanguard of constitutional guaranties, and
require a stricter and more exacting adherence to constitutional limitations. Rational basis
should not suffice.
5.Court explained the previous incorrect interpretation by the SC of sec 10 RA 8042 . (not included
in digest)
6.It is discriminatory against OFW’s whose unexpired term is 1 yr or more because those with an
unexpired term of 1 yr or more only get 3 months pay while those with an unexpired term of
less than 1 yr get the pay for the unexpired portion of his employment contract

The Court notes that the subject clause "or for three (3) months for every year of the unexpired
term, whichever is less" contains the qualifying phrases "every year" and "unexpired term." By
its ordinary meaning, the word "term" means a limited or definite extent of time. 105Corollarily,
that "every year" is but part of an "unexpired term" is significant in many ways: first, the
unexpired term must be at least one year, for if it were any shorter, there would be no occasion
for such unexpired term to be measured by every year ; and second, the original term must be
more than one year, for otherwise, whatever would be the unexpired term thereof will not
reach even a year. Consequently, the more decisive factor in the determination of when the
subject clause "for three (3) monthsforevery year of the unexpired term, whichever is less" shall
apply is not the length of the original contract period as held in Marsaman,106 but the length of
the unexpired portion of the contract period -- the subject clause applies in cases when the
unexpired portion of the contract period is at least one year, which arithmetically requires that
the original contract period be more than one year.
Viewed in that light, the subject clause creates a sub-layer of discrimination among OFWs
whose contract periods are for more than one year: those who are illegally dismissed with less
than one year left in their contracts shall be entitled to their salaries for the entire unexpired
portion thereof, while those who are illegally dismissed with one year or more remaining in their
contracts shall be covered by the subject clause, and their monetary benefits limited to their
salaries for three months only
7. it is discriminatory against OFW vis-à-vis Local Workers
With Fixed-Period Employment
As discussed earlier, prior to R.A. No. 8042, a uniform system of computation of the monetary
awards of illegally dismissed OFWs was in place. This uniform system was applicable even to
local workers with fixed-term employment. 107
it is noted that in Mackay Radio & Telegraph Co., Inc. v. Rich, 117 the Court carried over the
principles on the payment of damages underlying Article 1586 of the Civil Code of 1889 and
applied the same to a case involving the illegal discharge of a local worker whose fixed-period
employment contract was entered into in 1952, when the new Civil Code was already in
effect.118
In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-term employment who were
illegally discharged were treated alike in terms of the computation of their money claims: they
were uniformly entitled to their salaries for the entire unexpired portions of their contracts. But
with the enactment of R.A. No. 8042, specifically the adoption of the subject clause, illegally
dismissed OFWs with an unexpired portion of one year or more in their employment contract
have since been differently treated in that their money claims are subject to a 3-month cap,
whereas no such limitation is imposed on local workers with fixed-term employment.
 The Court concludes that the subject clause contains a suspect classification in that,
in the computation of the monetary benefits of fixed-term employees who are
illegally discharged, it imposes a 3-month cap on the claim of OFWs with an
unexpired portion of one year or more in their contracts, but none on the claims of
other OFWs or local workers with fixed-term employment. The subject clause
singles out one classification of OFWs and burdens it with a peculiar disadvantage.
7.There is no compelling interest here to satisfy the strict scrutiny test

What constitutes compelling state interest is measured by the scale of rights and powers
arrayed in the Constitution and calibrated by history. 124 It is akin to the paramount interest of
the state125 for which some individual liberties must give way, such as the public interest in
safeguarding health or maintaining medical standards,126 or in maintaining access to information
on matters of public concern.127
In the present case, the Court dug deep into the records but found no compelling state interest
that the subject clause may possibly serve.
, the Government has failed to discharge its burden of proving the existence of a compelling
state interest that would justify the perpetuation of the discrimination against OFWs under the
subject clause
Assuming that, as advanced by the OSG, the purpose of the subject clause is to protect the
employment of OFWs by mitigating the solidary liability of placement agencies, such callous and
cavalier rationale will have to be rejected. There can never be a justification for any form of
government action that alleviates the burden of one sector, but imposes the same burden on
another sector, especially when the favored sector is composed of private businesses such as
placement agencies, while the disadvantaged sector is composed of OFWs whose protection no
less than the Constitution commands. The idea that private business interest can be elevated to
the level of a compelling state interest is odious.
Moreover, even if the purpose of the subject clause is to lessen the solidary liability of
placement agencies vis-a-vistheir foreign principals, there are mechanisms already in place that
can be employed to achieve that purpose without infringing on the constitutional rights of
OFWs.
8. Along the same line of reasoning, the Court further holds that the subject clause violates
petitioner's right to substantive due process, for it deprives him of property, consisting of
monetary benefits, without any existing valid governmental purpose. 136
36 Sameer Overseas Placement v. Cabiles, G.R. No. 170139, Aug. 5, 2014

TOPIC: Section 10, R.A. 8042; Section 7, R.A. 10022

G.R. No. 170139 August 5, 2014

SAMEER OVERSEAS PLACEMENT AGENCY, INC., Petitioner,
vs.
JOY C. CABILES, Respondent.

FACTS:
Petitioner, Sameer Overseas Placement Agency, Inc. is a recruitment and placement agency.
Responding to an ad it published, respondent, Joy C. Cabiles, submitted her application for a
quality control job in Taiwan. Joy’s application was accepted. Joy was later asked to sign a one
year employment contract for a monthly salary of NT$15,360.00. She alleged that Sameer
Overseas Agency required her to pay a placement fee of P70,000.00 when she signed the
employment contract.
Joy was deployed to work for Taiwan Wacoal, Co. Ltd. (Wacoal) on June 26, 1997. She alleged
that in her employment contract, she agreed to work as quality control for one year. In Taiwan,
she was asked to work as a cutter.
Sameer Overseas Placement Agency claims that on July 14, 1997, a certain Mr. Huwang from
Wacoal informed Joy, without prior notice, that she was terminated and that "she should
immediately report to their office to get her salary and passport." She was asked to "prepare for
immediate repatriation." Joy claims that she was told that from June 26 to July 14, 1997, she
only earned a total of NT$9,000.15 According to her, Wacoal deducted NT$3,000 to cover her
plane ticket to Manila.
On October 15, 1997, Joy filed a complaint with the National Labor Relations Commission
against petitioner and Wacoal.
LA: dismissed Joy’s complaint
NLRC: declared that Joy was illegally dismissed.
CA: affirmed the decision of the NLRC with respect to the finding of illegal dismissal, Joy’s
entitlement to the equivalent of three months’ worth of salary, reimbursement of withheld
repatriation expense, and attorney’s fees
ISSUE:
Whether the award of 3 months’ worth salary is proper. NO.
Whether the employment agency and the foreign principal is solidarily liable. YES
HELD:
Section 10 of Republic Act No. 8042,otherwise known as the Migrant Workers and Overseas
Filipinos Act of1995, states that overseas workers who were terminated without just, valid, or
authorized cause "shall be entitled to the full reimbursement of his placement fee with interest
of twelve (12%) per annum, plus his salaries for the unexpired portion of his employment
contract or for three (3) months for every year of the unexpired term, whichever is less."
The CA affirmed the NLRC’S decision to award respondent NT$46,080.00 or the three month
equivalent of her salary, attorney’s fees of NT$300.00, and the reimbursement of the withheld
NT$3,000.00 salary, which answered for her repatriation.
We uphold the finding that respondent is entitled to all of these awards. The award of the
three-month equivalent of respondent’s salary should, however, be increased to the amount
equivalent to the unexpired term of the employment contract.

In Serrano v. Gallant Maritime Services, Inc. and Marlow Navigation Co., Inc., this court ruled
that the clause "or for three (3) months for every year of the unexpired term, whichever is less"
is unconstitutional for violating the equal protection clause and substantive due process.

We are aware that the clause "or for three (3) months for every year of the unexpired term,
whichever is less" was reinstated in Republic Act No. 8042 upon promulgation of Republic Act
No. 10022 in 2010.

Republic Act No. 10022 was promulgated on March 8, 2010. This means that the reinstatement
of the clause in Republic Act No. 8042 was not yet in effect at the time of respondent’s
termination from work in 1997. Republic Act No. 8042 before it was amended by Republic Act
No. 10022 governs this case.

Respondent argued that the clause was unconstitutional because it infringed on workers’ right
to contract. We observe that the reinstated clause, this time as provided in Republic Act. No.
10022, violates the constitutional rights to equal protection and due process. Petitioner as well
as the Solicitor General have failed to show any compelling change in the circumstances that
would warrant us to revisit the precedent.
We reiterate our finding in Serrano v. Gallant Maritime that limiting wages that
should be recovered by an illegally dismissed overseas worker to three months is
both a violation of due process and the equal protection clauses of the Constitution.
As Justice Brion said in his concurring opinion in Serrano:
Section 10 of R.A. No. 8042 affects these well-laid rules and measures, and in fact provides a
hidden twist affecting the principal/employer’s liability. While intended as an incentive accruing
to recruitment/manning agencies, the law, as worded, simply limits the OFWs’ recovery in
wrongful dismissal situations. Thus, it redounds to the benefit of whoever may be liable,
including the principal/employer – the direct employer primarily liable for the wrongful
dismissal. In this sense, Section 10 – read as a grant of incentives to recruitment/manning
agencies – oversteps what it aims to do by effectively limiting what is otherwise the full liability
of the foreign principals/employers. Section 10, in short, really operates to benefit the wrong
party and allows that party, without justifiable reason, to mitigate its liability for wrongful
dismissals. Because of this hidden twist, the limitation of liability under Section 10 cannot be an
"appropriate" incentive, to borrow the term that R.A. No. 8042 itself uses to describe the
incentive it envisions under its purpose clause.
Finally, we clarify the liabilities of Wacoal as principal and petitioner as the employment agency
that facilitated respondent’s overseas employment.

Section 10 of the Migrant Workers and Overseas Filipinos Act of 1995 provides that the foreign
employer and the local employment agency are jointly and severally liable for money claims
including claims arising out of an employer-employee relationship and/or damages. This section
also provides that the performance bond filed by the local agency shall be answerable for such
money claims or damages if they were awarded to the employee.
This provision is in line with the state’s policy of affording protection to labor and alleviating
workers’ plight.

The provision on joint and several liability in the Migrant Workers and Overseas Filipinos Act of
1995 assures overseas workers that their rights will not be frustrated with these complications.
The fundamental effect of joint and several liability is that "each of the debtors is liable for the
entire obligation." A final determination may, therefore, be achieved even if only one of the
joint and several debtors are impleaded in an action. Hence, in the case of overseas
employment, either the local agency or the foreign employer may be sued for all claims arising
from the foreign employer’s labor law violations. This way, the overseas workers are assured
that someone — the foreign employer’s local agent — may be made to answer for violations
that the foreign employer may have committed.

However, it must be emphasized that the local agency that is held to answer for the overseas
worker’s money claims is not left without remedy. The law does not preclude it from going after
the foreign employer for reimbursement of whatever payment it has made to the employee to
answer for the money claims against the foreign employer.

A further implication of making local agencies jointly and severally liable with the foreign
employer is thatan additional layer of protection is afforded to overseas workers. Local
agencies, which are businesses by nature, are inoculated with interest in being always on the
lookout against foreign employers that tend to violate labor law. Lest they risk their reputation
or finances, local agenciesmust already have mechanisms for guarding against unscrupulous
foreign employers even at the level prior to overseas employment applications.

[With the present state of the pleadings, it is not possible to determine whether there was
indeed a transfer of obligations from petitioner to Pacific. This should not be an obstacle for the
respondent overseas worker to proceed with the enforcement of this judgment. Petitioner is
possessed with the resources to determine the proper legal remedies to enforce its rights
against Pacific, if any.]
 iii. Liability of principal/agent for damages; theory of imputed knowledge

37 Becmen Service Exporter and Promotions, Inc. v. Sps. Cuaresma, G.R. Nos.
182978-79, April 27, 2009

BECMEN SERVICE EXPORTER VS SPS. CUARESMA (2009)

Jasmine Cuaresma was an assistant nurse in Al-Birk Hospital in Saudi Arabia and a year after
she started working, she died. The authorities in KSA [Kingdom of Saudi Arabia] claimed that
she died of poisoning. When her body arrived here in the Philippines, another autopsy was
conducted and it revealed that she was not poisoned, rather she died under violent
circumstances as shown by the wounds all over her body. In fact, from the second autopsy
[third autopsy including the one conducted by KSA] conducted by the NBI, the latter even
suggested in the result that she was raped prior to her death.
Parents of Jasmine filed a complaint against Becmen [placement agency] and Rajab [principal in
KSA] claiming death and insurance benefits. Cuaresmas claim that Jasmine’s death was work
related and under her contract she was entitled to “iqama insurance” and damages.
LA: dismissed complaint
NLRC: reversed LA decision; believed that her death was a work-connected criminal aggression
CA: affirmed NLRC’s decision finding her death compensable, no damages.

ISSUE: Whether or not parents of Jasmine are entitled to receive insurance pay and damages?
ONLY DAMAGES.

HELD:
Petitioners insist that Jasmine died for having committed suicide in Saudi. Based on Jasmine’s
employment contract, no provision for insurance or for accident, death or other benefits were
present.
Evidence dictates that her death was not work-connected. She was not on duty, neither was
she within hospital premises at the time. Instead sge was at her dormitory room on personal
time when she died. The evidence also does not suggest that she was performing an act
reasonably necessary or incidental to her employment as nurse when she died. The court
cannot expect that the foreign employer can ensure her safety even while she is not on duty.
SC also concluded that Jasmine did not commit suicide. No valid or acceptable reason was
present to conclude that she would take her own life.

Under Republic Act No. 8042 (R.A. 8042), or the Migrant Workers and Overseas Filipinos Act of
1995,22 the State shall, at all times, uphold the dignity of its citizens whether in country or
overseas, in general, and Filipino migrant workers, in particular. The State shall provide
adequate and timely social, economic and legal services to Filipino migrant workers. The rights
and interest of distressed overseas Filipinos, in general, and Filipino migrant workers, in
particular, documented or undocumented, are adequately protected and safeguarded.
Becmen and White Falcon, as licensed local recruitment agencies, miserably failed to abide by
the provisions of R.A. 8042. Recruitment agencies are expected to extend assistance to their
deployed OFWs, especially those in distress. Instead, they abandoned Jasmin’s case and
allowed it to remain unsolved to further their interests and avoid anticipated liability which
parents or relatives of Jasmin would certainly exact from them. They willfully refused to protect
and tend to the welfare of the deceased Jasmin, treating her case as just one of those unsolved
crimes that is not worth wasting their time and resources on. The evidence does not even show
that Becmen and Rajab lifted a finger to provide legal representation and seek an investigation
of Jasmin’s case. Worst of all, they unnecessarily trampled upon the person and dignity of
Jasmin by standing pat on the argument that Jasmin committed suicide, which is a grave
accusation given its un-Christian nature.

Rajab, Becmen and White Falcon’s acts and omissions are against public policy because they
undermine and subvert the interest and general welfare of our OFWs abroad, who are entitled
to full protection under the law. They set an awful example of how foreign employers and
recruitment agencies should treat and act with respect to their distressed employees and
workers abroad.
Thus, in view of the foregoing, the Court holds that the Cuaresmas are entitled to moral
damages, which Becmen and White Falcon are jointly and solidarily liable to pay, together with
exemplary damages for wanton and oppressive behavior, and by way of example for the public
good.

Private employment agencies are held jointly and severally liable with the foreign-based
employer for any violation of the recruitment agreement or contract of employment. This joint
and solidary liability imposed by law against recruitment agencies and foreign employers is
meant to assure the aggrieved worker of immediate and sufficient payment of what is due him.
If the recruitment/placement agency is a juridical being, the corporate officers and directors
and partners as the case may be, shall themselves be jointly and solidarily liable with the
corporation or partnership for the aforesaid claims and damages.
38 Sunace International Manpower Services v. NLRC, G.R. No. 161757, January 25,
2006

DOCTRINE: The knowledge of the principal-foreign employer cannot, therefore, be

imputed to its agent.
FACTS:
· Petitioner, Sunace International Management Services (Sunace) deployed to Taiwan
Divina A. Montehermozo (Divina) as a domestic helper under a 12-month contract. The
deployment was with the assistance of a Taiwanese broker, Edmund Wang, President of Jet
Crown International Co., Ltd.
· After her 12-month contract expired on February 1, 1998, Divina continued working for
her Taiwanese employer, Hang RuiXiong, for two more years, after which she returned to the
Philippines.
· Shortly after her return Divina filed a complaintbefore the National Labor
Relations Commission (NLRC) against Sunace alleging that she was jailed for three months and
that she was underpaid. Labor Arbitration Associate Gavin issued Summons.
· Divina claimed that under her original one-year contract and the 2-year extended
contract which was with the knowledge and consent of Sunace, amounts were deducted for
those three years from her salary representing income tax and deduction for savings. Although
the one for her first year was refunded, the deductions for the other two years were not.
· Petitioner alleges that Divinas 2-year extension of her contract was without its
knowledge and consent, hence, it had no liability attaching to any claim arising therefrom, and
Divina in fact executed a Waiver/Quitclaim and Release of Responsibility and an Affidavit of
Desistance.
· The Labor Arbiter rejected Petitioner’s claims that they had no knowledge of the contract
extension as they are still in contact with Divina’s foreign employer. Also, they rejected the
quitclaim signed by Divina as it did not have any consideration written therein.
· The NLRC upheld the decision of the Labor Arbiter. The CA also upheld the Labor
Arbiter’s decision, stating that Sunace knew of and impliedly consented to the extension of
Divinas 2-year contract. It went on to state that It is undisputed that Sunace was continually
communicating with Divina’s foreign employer. It thus concluded that [a]s agent of the foreign
principal, petitioner cannot profess ignorance of such extension as obviously, the act of the
principal extending complainant employment contract necessarily bound it.
ISSUE: Whether or not Sunace should be liable for the refund of the deductions
HELD: No, Sunace should not be liable.
· The finding of the Court of Appeals solely on the basis of a telefax message, thatSunace
continually communicated with the foreign principal and therefore was aware of and had
consented to the execution of the extension of the contract is misplaced.
· The message does not provide evidence that Sunace was privy to the new contract
executed after the expirationof the original contract. That Sunace and the Taiwanese broker
communicated regarding Divina’s allegedly withheld savings does not necessarily mean that
Sunace ratified the extension of the contract.
· The theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to the
principal, employer Xiong, not the other way around. The knowledge of the principal-
foreign employer cannot, therefore, be imputed to its agent Sunace.
· There being no substantial proof that Sunace knew of and consented to be bound under
the 2-year employment contract extension, it cannot be said to be privy thereto. As such, it and
its owner cannot be held solidarily liable for any of Divinas claims arising from the 2-year
employment extension
· Furthermore, as Sunace correctly points out, there was an implied revocation of its
agency relationship with its foreign principal when, after the termination of the original
employment contract, the foreign principal directly negotiated with Divina and entered into a
new and separate employment contract in Taiwan.
39 Century Canning Corp. v. Court of Appeals , G.R. No. 152894, August 17, 2007

DOCTRINE: The TESDA’s approval of the employer’s apprenticeship program is required before
the employer is allowed to hire apprentices. Prior approval from the TESDA is necessary to
ensure that only employers in the highly technical industries may employ apprentices and only
in apprenticeable occupations.

FACTS:
Century Canning hired Gloria Palad as a “fish cleaner” at petitioner’s tuna and sardines factory.
On July 17, 1997, Palad signed an apprenticeship agreement with petitioner. Palad received an
apprenticeship allowance of P138.75 daily. On July 25, 1997, Century Canning submitted its
apprenticeship agreement for approval to the Technical Education and Skills Development
Authority (TESDA) of the DOLE. On Sept. 26, 1997, TESDA approved such apprenticeship
program.

According to Century Canning, a performance evaluation was conducted on November 15, 1997
where it gave Palad a rating of N.I. or “needs improvement” since she scored only 27.75%
based on a 100% performance indicator. Century also noted Palad’s numerous tardiness and
absences. Thus, it issued a termination notice to Palad.

Palad then filed a complaint for illegal dismissal. LA dismissed the complaint for lack of merit
but ordered petitioner to pay Palad her salary and her pro-rated 13 th month pay. NLRC affirmed
with modication. Palad filed a MR which was denied. Palad filed a petition for certiorari with the
CA. CA found that there was illegal dismissal. It held that the apprenticeship agreement which
Palad signed was not valid and binding because it was executed more than two months before
the TESDA approved Century’s apprenticeship program.

ISSUE: Whether or not the subject apprenticeship program is valid? NO

RULING:
The apprenticeship agreement was entered into between the parties before Century Canning
filed its apprenticeship program with the TESDA for approval. Century Canning and Palad
executed the apprenticeship agreement on 17 July 1997 wherein it was stated that the training
would start on 17 July 1997 and would end approximately in December 1997. On 25 July 1997,
petitioner submitted for approval its apprenticeship program, which the TESDA subsequently
approved on 26 September 1997. Clearly, the apprenticeship agreement was enforced even
before the TESDA approved petitioner’s apprenticeship program. Thus, the apprenticeship
agreement is void because it lacked prior approval from the TESDA.

The TESDA’s approval of the employer’s apprenticeship program is required before

the employer is allowed to hire apprentices. Prior approval from the TESDA is necessary
to ensure that only employers in the highly technical industries may employ apprentices and
only in apprenticeable occupations. Thus, under RA 7796, employers can only hire apprentices
for apprenticeable occupations, which must be officially endorsed by a tripartite body and
approved for apprenticeship by the TESDA. This is to ensure the protection of apprentices and
to obviate possible abuses by prospective employers who may want to take advantage of the
lower wage rates for apprentices and circumvent the right of the employees to be secure in
their employment.

The requisite TESDA approval of the apprenticeship program prior to the hiring of apprentices
was further emphasized by the DOLE D.O. No. 68-04, which provides the guidelines in the
implementation of the Apprenticeship and Employment Program of the government, specifically
states that no enterprise shall be allowed to hire apprentices unless its
apprenticeship program is registered and approved by TESDA.

Since Palad is not considered an apprentice because the apprenticeship agreement

was enforced before the TESDA’s approval of petitioner’s apprenticeship program,
Palad is deemed a regular employee performing the job of a "fish cleaner." Clearly,
the job of a "fish cleaner" is necessary in petitioner’s business as a tuna and sardines factory.
Under Article 280 of the Labor Code, an employment is deemed regular where the employee
has been engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer.

40 Atlanta Industries , Inc. v. Sebolino, G.R. No. 187320, January 26, 2011

Doctrine:
The fact that employees were already rendering service to the company when they were made
to undergo apprenticeship renders the apprenticeship agreements irrelevant.

Facts:

In the months of February and March 2005, thirteen employees, allegedly apprentices, of
Atlanta Industries, Inc. (Atlanta) filed complaints for illegal dismissal, regularization,
underpayment, nonpayment of wages and other money claims, as well as claims for moral and
exemplary damages and attorney’s fees against Atlanta and its President and Chief Operating
Officer Robert Chan.

Upon compulsory arbitration, Labor Arbiter (LA) DominadorMedroso dismissed the complaint
with respect to dela Cruz, Magalang, Zaño and Chiong after the said individuals executed a
“Pagtalikod at PagwawalangSaysay before LA Cajilig, but found the termination of service of the
remaining nine to be illegal.
Thereafter, Atlanta appealed to the National Labor Relations Commission (NLRC). In the
meantime, or on 10 October 2006, Ramos, Alegria, Villagomez, Costales and Almoite allegedly
entered into a compromise agreement with Atlanta. The agreement provided that except for
Ramos, Atlanta agreed to pay the workers a specified amount as settlement, and to
acknowledge them at the same time as regular employees. The NLRC, in its decision, withdrew
the illegal dismissal finding with respect to Sagun, Mabanag, Sebolino and Pedregoza and
approved the compromise agreement entered into by Costales, Ramos, Villagomez, Almoite and
Alegria.

Sebolino, Costales, Almoite and Sagun sought relief from the CA through a petition for certiorari
under Rule 65 of the Rules of Court. The CA granted the petition based on the following
grounds: (a) the four individuals were already employees of the company before they entered
into the first and second apprenticeship agreements based on the company’s Monthly Report
and Production and Work Schedule; (b) The first and second apprenticeship agreements were
defective because the agreements did not indicate the trade or occupation in which the
apprentice would be trained and neither was the apprenticeship program approved by the
TESDA; (c) the positions occupied by the individuals – machine operator, extruder operator and
scaleman – are usually necessary and desirable in the manufacture of plastic building materials,
the company’s main business; and (d) the compromise agreement entered into by Costales and
Almoite, together with Ramos, Villagomez and Alegria, was not binding on Costales and Almoite
because they did not sign the agreement.

Issue/s:
(1)Whether Costales, Alomite, Sebolino, and Sagun were already regular employees of Atlanta.
YES.
(2)Whether the apprenticeship agreements are valid. NO
(3)Whether the compromise agreement executed are valid and binding as against Costales and
Almoite. NO

Held:

(1)Costales, Almoite, Sebolino and Sagun were already regular employees of Atlanta

Based on company operations at the time material to the case, Costales, Almoite, Sebolino and
Sagun were already rendering service to the company as employees before they were made to
undergo apprenticeship. The CA correctly recognized the authenticity of the operational
documents, for the failure of Atlanta to raise a challenge against these documents before the
labor arbiter, the NLRC and the CA itself. The Master List of employees that Atlanta heavily rely
upon as proof of their position that the individuals were not Atlanta’s employees, at the time
they were engaged as apprentices, is unreliable and does not inspire belief. The Master List lists
only the names of inactive employees. Despite the "May 6, 2006" cut off date indicated in the
Master List, the list contains no entries of employees who were hired or who resigned in 2005
and 2006 which means that the list contains the names of employees from 1999 to 2004.
(2)The apprenticeship agreements are invalid with respect to Costales, Alomite,
Sebolino and Sagun.

The fact that Costales, Almoite, Sebolino and Sagun were already rendering service to the
company when they were made to undergo apprenticeship renders the apprenticeship
agreements irrelevant as far as the four are concerned. This reality is highlighted by the CA
finding that said individuals occupied positions such as machine operator, scaleman and
extruder operator - tasks that are usually necessary and desirable in Atlanta’s usual business or
trade as manufacturer of plastic building materials. These tasks and their nature characterized
the four as regular employees under Article 280 of the Labor Code.

Even if we recognize the company’s need to train its employees through apprenticeship, we can
only consider the first apprenticeship agreement for the purpose. With the expiration of the
first agreement and the retention of the employees, Atlanta had, to all intents and
purposes, recognized the completion of their training and their acquisition of a
regular employee status. To foist upon them the second apprenticeship agreement for a
second skill which was not even mentioned in the agreement itself, is a violation of the
Labor Code’s implementing rules and is an act manifestly unfair to the employees, to say the
least.

(3)The compromise agreement is not binding to Costales and Almoite.

The compromise agreement allegedly entered into by Costales and Almoite, together with
Ramos, Villagomez and Alegria is not binding on Costales and Almoite because they did not sign
it. The company itself admitted that while Costales and Almoite were initially intended to be a
part of the agreement, it did not pursue their inclusion "due to their regularization as early as
January 11, 2006."

Other notes (Not used by the Court in deciding the case but important and related to
the topic):
·According to the facts, it was only the four individuals (Costales, Almoite, Sebolino, and Sagun)
who had this first and second apprenticeship agreements. The case was silent as to the rest of
the employees.
·Under Article 61 of the Labor Code,apprenticeship agreements are valid, provided they do not
exceed six (6) months and the apprentices are paid the appropriate wages of at least 75% of
the applicable minimum wage.
·Under Article 62 of the Labor Code, the company’s authorized representative and the
apprentice should sign the agreements which should be ratified by the company’s
apprenticeship committee. In this case, TESDA even approved and certified the apprenticeship
agreement.
Dispositive Portion: WHEREFORE, premises considered, we hereby DENY the petition for lack of
merit.1âwphi1The assailed decision and resolution of the Court of Appeals are AFFIRMED. Costs
against the petitioner Atlanta Industries, Inc.
 a. Test of managerial/supervisory status

41 Clientlogic Philippines, Inc. v. Castro, G.R. No. 186070, April 11, 2011
TOPIC: Test of Managerial/Supervisory Employee
PONENTE: Nachura, J.

The test of supervisory or managerial status depends on whether a person possesses authority
to act in the interest of his employer and whether such authority is not merely routinary or
clerical in nature, but requires the use of independent judgment.

FACTS:
Respondent was employed by petitioner ClientLogic Philippines, Inc. (now known and shall
hereafter be referred to as SITEL) as a call center agent for its Bell South Account. After six (6)
months, he was promoted to the Mentor position, and thereafter to the Coach position. A Coach
is a team supervisor who is in charge of dealing with customer complaints which cannot be
resolved by call center agents. In June 2006, he was transferred to the Dot Green Account.

During respondents stint at the Dot Green Account, respondent noticed that some of the call
center agents under him would often make excuses to leave their work stations. Their most
common excuse was that they would visit the company’s medical clinic. To verify that they were
not using the clinic as an alibi to cut their work hours, respondent sent an e-mail to the clinics
personnel requesting for the details of the agents alleged medical consultation. His request was
denied on the ground that medical records of employees are highly confidential and can only be
disclosed in cases involving health issues, and not to be used to build any disciplinary case
against them.

Respondent received a notice requiring him to explain why he should not be penalized for: (1)
violating Green Dot Companys Policy and Procedure for Direct Deposit Bank Info Request when
he accessed a customers online account and then gave the latters routing and reference
numbers for direct deposit; and (2) gravely abusing his discretion when he requested for the
medical records of his team members. Respondent did not deny the infractions imputed against
him. He, however, justified his actuations by explaining that the customer begged him to access
the account because she did not have a computer or an internet access and that he merely
requested for a patient tracker, not medical records.

Subsequently, a poster showing SITELs organizational chart was posted on the company’s
bulletin board, but respondents name and picture were conspicuously missing, and the name
and photo of another employee appeared in the position which respondent was supposedly
occupying.

SITEL posted a notice of vacancy for respondents position and he received a Notice of
Termination. These events prompted him to file a complaint for illegal dismissal; non-payment
of overtime pay, rest day pay, holiday pay, service incentive leave pay; full backwages;
damages; and attorneys fees before the Labor Arbiter (LA) against herein petitioners SITEL and
its officers, Joseph Velasquez (Velasquez), Irene Roa (Roa), and Rodney Spires (Spires).

SITEL’S Contention: Petitioners averred that respondent was dismissed on account of valid and
justifiable causes. He committed serious misconduct which breached the trust and confidence
reposed in him by the company. He was duly furnished the twin notices required by the Labor
Code. Further, he is not entitled to overtime pay, rest day pay, night shift differential, holiday
pay, and service incentive leave pay because he was a supervisor, hence, a member of the
managerial staff.

LA: ruled in favor of respondent by declaring him illegally dismissed and ordering petitioners to
pay his full backwages and, in lieu of reinstatement, his separation pay.

NLRC: reversed and set aside the decision of the LA by dismissing the complaint for lack of
merit on the ground that respondents employment was terminated for a just cause. The NLRC
failed to discuss the money claims.

CA: Affirmed the NLRCs finding that there was no illegal dismissal. Anent the money claims,
however, the CA concurred with the LAs ruling.
ISSUE(S): W/N the petitioners’ argument in the main that, as a team supervisor, respondent
was a member of the managerial staff; hence, he is not entitled to overtime pay, rest day pay,
holiday pay, and service incentive leave pay is meritorious.

HELD: No, the petition is dismissed. The petitioner’s contention is unmeritorious.

RATIO:
In his Position Paper, (respondent) states that he worked from 8:00 p.m. to 10:00 a.m. or 4
p.m. to 12:00 p.m. of the following day; he was also required to work during his restdays and
during holidays but he was not paid; he was also not paid overtime pay; night shift differentials,
and service incentive leave. He was employed as call center agent on 14 February 2005, then
promoted as Mentor in August 2005, and again promoted to Coach position in September 2005,
which was the position he had when he was terminated. A coach is a team supervisor who is in
charge of dealing with customer complaints which could not be dealt with by call center agents,
and if a call center agent could not meet the needs of a customer, he passes the customers call
to the coach. Clearly, (respondent) is not a managerial employee as defined by law. Thus, he is
entitled to his money claims.

As correctly found by Executive Labor Arbiter Bose:

Employees are considered occupying managerial positions if they meet all of the following
conditions, namely:
1) Their primary duty consists of management of the establishment in which they are employed
or of a department or subdivision thereof;

2) They customarily and regularly direct the work of two or more employees therein;

3) They have the authority to hire or fire other employees of lower rank; or their suggestions
and recommendations as to the hiring and firing and as to the promotion or any other change
of status of other employees are given particular weight.

They are considered as officers or members of a managerial staff if they perform the following
duties and responsibilities:

1) The primary duty consists of the performance of work directly related to management of
policies of their employer;

2) Customarily and regularly exercise discretion and independent judgment;

3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty
consists of management of the establishment in which he is employed or subdivision thereof; or
(ii) execute under general supervision work along specialized or technical lines requiring special
training, experience, or knowledge; or (iii) execute, under general supervision, special
assignment and tasks xxx.

(Respondents) duties do not fall under any of the categories enumerated above. His work is not
directly related to management policies. Even the circumstances shown by the instant case
reveal that (respondent) does not regularly exercise discretion and independent judgment.
(Petitioners) submitted a list of the responsibilities of HR Manager/Supervisor and Division
Manager/Department Manager/Supervisors but these do not pertain to (respondent) who does
not have any of the said positions. He was just a team Supervisor and not (an) HR or
Department Supervisor.

The position held by respondent and its concomitant duties failed to hurdle this test.

As a coach or team supervisor, respondents main duty was to deal with customer complaints
which could not be handled or solved by call center agents. If the members of his team could
not meet the needs of a customer, they passed the customers call to respondent. This job
description does not indicate that respondent can exercise the powers and prerogatives
equivalent to managerial actions which require the customary use of independent judgment.
There is no showing that he was actually conferred or was actually exercising the following
duties attributable to a member of the managerial staff, viz.:

1) The primary duty consists of the performance of work directly related to management of
policies of their employer;
2) Customarily and regularly exercise discretion and independent judgment

3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty
consists of management of the establishment in which he is employed or subdivision thereof; or
(ii) execute under general supervision work along specialized or technical lines requiring special
training, experience, or knowledge; or (iii) execute, under general supervision, special
assignment and tasks; and

4) Who do not devote more than 20 percent of their hours worked in a workweek to activities
which are not directly and closely related to the performance of the work described in
paragraphs (1), (2), and (3) above.

According to petitioners, respondent also performed the following duties, as shown in the
companys Statement of Policy on Discipline:

a. Know and understand in full the Policy on Discipline including their underlying
reasons.

b. Implement strictly and consistently the Policy on Discipline.

c. Ensure that the said Policy on Discipline is communicated to and understood by all
employees.

d. Monitor compliance by employees with the said Policy.

e. Advise HR Manager on the state of discipline in their respective departments;

problems, if any, and recommend solution(s) and corrective action(s).

As correctly observed by the CA and the LA, these duties clearly pertained to Division
Managers/Department Managers/ Supervisors, which respondent was not, as he was merely a
team supervisor. Petitioners themselves described respondent as the superior of a call center
agent; he heads and guides a specific number of agents, who form a team.

From the foregoing, respondent is thus entitled to his claims for holiday pay, service incentive
leave pay, overtime pay and rest day pay, pursuant to Book Three of the Labor Code.
42 Cruz v. BPI, G.R. No. 173357, February 13, 2013

DOCTRINE:
Petitioner holds a managerial status since she is tasked to act in the interest of her employer as
she exercises independent judgment when she approves pre-termination of USD CDs or
the withdrawal of deposits.

FACTS:
Upon merger of FEBTC with BPI, Rowena automatically became and employee of BPI as
Assistant Branch Manager of its Ayala Avenue Branch. She was in charge of the Trading
Section.

On July 12, 2002, after 13 years of continuous service, respondent terminated petitioner on
grounds of gross negligence and breach of trust

Defrauded Clients: Uymatiao – USD CD account was pre-terminated and the proceeds was
credited to an account opened in the name Uymatiao by means of an instruction. It was not
Uymatiao who pre-terminated but Rowena still approved. He also had an existing UDS account
which was reactivated and an amount was withdrawn without his consent; Caluag – pre-
terminated and withdrawn also like the first case of Uymatiao; Avila – illegal withdrawal of US
account. All of the transactions were approved by Rowena.

She filed a Complaint for illegal dismissal with the Arbitral Office of the NLRC. She alleged that
when the incidents took place, she was barely two months as Service Officer of the Ayala
Avenue Branch's Trading Section, and she was hardly familiar with any bank client, not to
mention the enormous volume of transactions handled by the said BPI branch.

Labor Arbiter: dismissal was illegal. Petitioner cannot be considered a managerial employee,
and that her dismissal on grounds of gross negligence and breach of trust was unjustified.

NLRC: Reversed LA. According to the NLRC, the banking industry is such a sensitive one that
the trust given by a bank's depositors must be protected at all times even by the lowest-ranking
employee.

CA: Affirmed NLRC. Her termination was grossly disproportionate to the omission she
committed. It stressed that petitioner was holding a highly confidential position, as Assistant
Branch Manager, in the banking industry, which required extraordinary diligence among its
employees. If petitioner was still unfamiliar with the terrain of her position, she should not have
accepted it.

In this case, BPI avers that she held position of Assistant Manager (managerial). Rowena
contends that her position was only Cashier II Officer (supervisory).
ISSUE: W/N she is supervisorial or managerial? And the difference in
HELD: Managerial.

BPI stated that the responsibility of Rowena, among others, were as follows: (1) to maintain the
integrity of the signature card files of certificates of deposits and/or detect spurious signature
cards in the same files; (2) to ensure that releases of original CDS are done only against valid
considerations and made only to the legitimate depositors or their duly authorized
representatives; (3) to approve payments or withdrawals of deposits by clients to ensure that
such withdrawals are valid transactions of the bank; and (4) to supervise the performance of
certain rank-and-file employees of the branch.

Petitioner holds a managerial status since she is tasked to act in the interest of her employer as
she exercises independent judgment when she approves pre-termination of USD CDs or the
withdrawal of deposits. In fact, petitioner admitted the exercise of independent judgment when
she explained that as regards the pre-termination of the USD CDs of Uymatiao and Caluag, the
transactions were approved on the basis of her independent judgment that the signatures
in all the documents presented to her by the traders matched.

As a general rule. employers are allowed a wider latitude of discretion in terminating the
services of employees who perform functions by which their nature require the employer's full
trust and confidence. Mere existence of basis for believing that the employee has breached the
trust and confidence of the employer is sufficient and does not require proof beyond reasonable
doubt. Thus. when an employee has been guilty of breach of trust or his employer has ample
reason to distrust him. a labor tribunal cannot deny the employer the authority to dismiss him.
ii. Field Personnel

a. Actual hours of work cannot be determined with reasonable certainty

43 Mercidar Fishing Corp. v. NLRC, G.R. No. 112574, October 8, 1998

DOCTRINE:Employees under the supervision of the employer throughout the course of their
work (like fishermen) are not considered field personnel.

FACTS:
Respondent FerminAgao Jr. had been employed as a “bodegero” or ship’s quartermaster by
Petitioner Mercidar Fishing.

Agao alleged that he had been sick. He was allowed to go on leave without pay for one month
from April 28, 1990 but that when he reported to work with a health clearance, he was told to
come back another time as he could not be reinstated immediately. Thereafter, petitioner
refused to give him work. Agao asked for a certificate of employment from petitioner on
September 6, 1990. However, when he came back for the certificate on September 10, Mercidar
refused to issue the certificate unless he submitted his resignation. Agao refused to submit such
letter unless he was given separation pay. Mercidar prevented him from entering the premises.

Mercidar, on the other hand, alleged that it was Agao who actually abandoned his work. Agao
failed to report for work after his leave had expired. In fact, Agao was absent without leave for
three months until August 28, 1998. Nonetheless, Mercidar assigned Agao to another vessel,
but Agao was left behind on September 1, 1990. Thereafter, Agao asked for a certificate of
employment on September 6 on the pretext that he was applying to another fishing company.
On September 10, 1990, he refused to get the certificate and resign unless he was given
separation pay.

LA - reinstate Agaobackwages, pay him his 13th month pay and incentive leave pay for 1990.

NLRC – dismissed the appeal. Dismissed also Mercidar’s claim that it cannot be held liable for
service incentive leave pay by fishermen in its employ as the latter supposedly are "field
personnel" and thus not entitled to such pay under the Labor Code.

ISSUE: Whether fishing crew members can be classified as field personnel under Art. 82 of the
Labor Code.

HELD: NO. Throughout the duration of their (fishermen) work they are under the effective
control and supervision of petitioner (Mercidar) through the vessel's patron or master. Thus,
they are not considered field personnel.
RATIO:
Art. 82. Coverage. — The provisions of this Title [Working Conditions and Rest Periods] shall
apply to employees in all establishments and undertakings whether for profit or not, but not to
government employees, field personnel, members of the family of the employer who are
dependent on him for support, domestic helpers, persons in the personal service of another,
and workers who are paid by results as determined by the Secretary of Labor in appropriate
regulations.

"Field personnel" shall refer to non-agricultural employees who regularly perform their duties
away from the principal place of business or branch office of the employer and whose actual
hours of work in the field cannot be determined with reasonable certainty.

The Court, citing Union of Pilipro Employees (UFE) v. Vicar, explained that “actual hours of work
in the field cannot be determined with reasonable certainty" must be read in conjunction with
Rule IV, Book III of the Implementing Rules which provides:

Rule IV Holidays with Pay

Sec. 1. Coverage — This rule shall apply to all employees except:

(e) Field personnel and other employees whose time and performance is unsupervised by the
employer . . .

The petitioner in that case contended that such rule added another element not found in the
law. It made mention that its sales personnel are strictly supervised by the supervisor of the
day. The Court finds that the aforementioned rule did not add another element to the Labor
Code definition of field personnel. The clause "whose time and performance is unsupervised by
the employer" did not amplify but merely interpreted and expounded the clause "whose actual
hours of work in the field cannot be determined with reasonable certainty." The former clause is
still within the scope and purview of Article 82 which defines field personnel. Hence, in deciding
whether or not an employee's actual working hours in the field can be determined with
reasonable certainty, query must be made as to whether or not such employee's time and
performance is constantly supervised by the employer.

In another case involving salesmen of Nestle Philippines Inc., the sales personnel would report
to the office at 8am, go to field work, come back to the office at 4:30pm. The petitioner in that
case maintains that its personnel’s working time can be determined with reasonable certainty.
The Court does not agree. The company has no way of determining whether these sales
personnel really spend the hours in the field work.

In contrast, herein fishermen have no choice but to remain in the vessel for the entire course.
Although they perform non-agricultural work away from petitioner's business offices, the fact
remains that throughout the duration of their work they are under the effective control and
supervision of petitioner through the vessel's patron or master as the NLRC correctly held.
DISPOSITVE: WHEREFORE, the petition is DISMISSED. SO ORDERED.