WHAT IS THE EFFECT IF REINSTATEMENT IS NO LONGER PRACTICABLE?

After reading What is the effect if reinstatement is no longer practicable?, read also Is an employee who was
illegally dismissed from employment automatically entitled to reinstatement?
 An employee who is unjustly dismissed from work shall be entitled to reinstatement
 The entitlement to reinstatement shall be without loss of seniority rights and other privileges
 If reinstatement is no longer possible, the unjustly dismissed employee is entitled to separation pay
Is it possible that an illegally dismissed employee would be entitled to separation pay rather than reinstatement?
For a better understanding, let us take the case of Dumapis vs. Lepanto Consolidated Mining Company, G.R. No. 204060, September
15, 2020
In this case, the employees are lead miners, muckers and LHD (load, haul, dump) operators. They were given the proper equipment
and tolls including machineries for use in the mining activity. Hence, they do not need to handle with their bare hands the ores they are
mining. Admittedly, their only assigned task is to drill, bardown, rockbolt, blast and haul. Hence, the mere act said employees in
handling highgrading ores, i.e., washing, segregating and the like, are the acts contrary to their normal activity and against the Code of
Conduct of their employer, Lepanto Consolidated Mining Company which they violated. 
Accordingly, said employees were accused of highgrading based on hearsay and were dismissed from employment on that basis. As a
consequence, the employees filed a complaint for illegal dismissal. 
What are the effects if an employee were found to be illegally dismissed?
The Supreme Court said:
An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other
privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the
time his compensation was withheld from him up to the time of his actual reinstatement. 
However, there are instances where reinstatement may no longer be practicable due to the strained relationship of the parties or that
the former position no longer exists. 
What is the effect if reinstatement is no longer practicable?
The Supreme Court said:
If reinstatement is no longer practicable, the illegally dismissed employee is entitled to separation pay and backwages. 
In case separation pay is awarded and reinstatement is no longer possible, backwages shall be computed from the time of illegal
dismissal up to the finality of the decision should separation pay not be paid in the meantime. It is the employee’s actual receipt of the
full amount of his separation pay that will effectively terminate the employment of an illegally dismissed employee. Otherwise, the
employer-employee relationship subsists.

Dumapis v. Lepanto Consolidated Mining Co.

Facts: In NLRC Case No. RAB-CAR-11-0607-00, LA Tabingan dismissed the complaint for illegal dismissal. NLRC reversed the
decision insofar as to Dumapis, Tundagui, and Liagao. These three were illegally dismissed. The dismissal of the other 9 were affirmed
as having committed highgrading. CA affirmed the decision. SC affirmed the decision in 2008 and in addition, required Lepanto to pay
double costs. 

The LA issued the corresponding writ of execution. Petitioners thens ought a recomputation of this award. Lepanto moved to quash the
writ of execution. Meantime, petitioners moved for another recomputation of the monetary award to include the salary increases
allegedly granted them per the CBA. The LA recomputed the award of backwages and separation pay to include the incremental salary
increase pursuant to the CBA but only until the date when the CA issued its decision. 

In their Partial Motion for Reconsideration/Memorandum of Appeal, petitioners asserted that the cut-off date for the computation of the
award was when the SC’s decision  in 2008 became final and executory. NLRC directed LA to compute petitioners' backwages and
separation pay from the date they were illegally dismissed up to the finality of SC’s decision. CA nullified the NLRC ruling and ordered
the reinstatement of the earlier NLRC decision.

Issue: What is the correct formula for computing the award of separation pay and backwages to petitioners?

Held: In CICM Mission Seminaries, et al. v. Perez citing Bani Rural Bank, Inc. v. De Guzman, the Court through the Second Division
laid down the rule that the award of separation pay and backwages for illegally dismissed employees should be computed from the time
they got illegally dismissed until the finality of the decision ordering payment of their separation pay, in lieu of reinstatement. Plainly, it
does not matter if the delay caused by an appeal was brought about by the employer or by the employee. The rule is, if the LA's
decision, which granted separation pay in lieu of reinstatement, is appealed by any party, the employer-employee relationship subsists
and until such time when decision becomes final and executory, the employee is entitled to all the monetary awards awarded by the LA.

The award shall be computed from September 22, 2000, when they were illegally dismissed up to November 25, 2008, when this
Court's Decision dated August 13, 2008 in G.R. No. 163210 became final and executory. The amount of P75,000.00 which petitioners
had already received shall be deducted from the total amount due them.
IMASEN PHILIPPINE MANUFACTURING CORPORATION, Petitioner,vs
RAMONCHITO T. ALCON and JOANN S. PAPA, Respondents.
G.R. No. 194884               October 22, 2014
PONENTE: Brion
TOPIC: Sexual intercourse in workplace during work hours as serious misconduct
FACTS:

                Petitioner Imasen Philippine Manufacturing Corporation is a domestic corporation engaged in the manufacture
of auto seat-recliners and slide-adjusters. It hired the respondents as manual welders in 2001.

                On October 5, 2002, the respondents reported for work on the second shift – from 8:00 pm to 5:00 am of the
following day. At around 12:40 am, Cyrus A. Altiche, Imasen’s security guard on duty, went to patrol and inspect the
production plant’s premises. When Altiche reached Imasen’s Press Area, he heard the sound of a running industrial fan.
Intending to turn the fan off, he followed the sound that led him to the plant’s “Tool and Die” section.

                At the “Tool and Die” section, Altiche saw the respondents having sexual intercourse on the floor, using a piece of
carton as mattress. Altiche immediately went back to the guard house and relayed what he saw to Danilo S. Ogana,
another security guard on duty.

                Respondent’s defense: they claimed that they were merely sleeping in the “Tool and Die” section at the time of the
incident. They also claimed that other employees were near the area, making the commission of the act charged
impossible.

                Both LA and NLRC held that the dismissal was valid. CA however nullified NLRC’s decision and held that sexual
intercourse inside company premises is not serious misconduct.

ISSUE:

                Whether the respondents’ infraction – engaging in sexual intercourse inside company premises during work
hours – amounts to serious misconduct justifying their dismissal. 

HELD:

                YES. Sexual acts and intimacies between two consenting adults belong, as a principled ideal, to the realm of
purely private relations. Whether aroused by lust or inflamed by sincere affection, sexual acts should be carried out at such
place, time and circumstance that, by the generally accepted norms of conduct, will not offend public decency nor disturb
the generally held or accepted social morals. Under these parameters, sexual acts between two consenting adults do not
have a place in the work environment.

                Indisputably, the respondents engaged in sexual intercourse inside company premises and during work hours.
These circumstances, by themselves, are already punishable misconduct. Added to these considerations, however, is the
implication that the respondents did not only disregard company rules but flaunted their disregard in a manner that could
reflect adversely on the status of ethics and morality in the company.

                Additionally, the respondents engaged in sexual intercourse in an area where co-employees or other company
personnel have ready and available access. The respondents likewise committed their act at a time when the employees
were expected to be and had, in fact, been at their respective posts, and when they themselves were supposed to be, as all
other employees had in fact been, working.

                The Court also considered the respondents’ misconduct to be of grave and aggravated character so that the
company was justified in imposing the highest penalty available ― dismissal.

                Their infraction transgressed the bounds of socially and morally accepted human public behavior, and at the
same time showed brazen disregard for the respect that their employer expected of them as employees. By their
misconduct, the respondents, in effect, issued an open invitation for others to commit the same infraction, with like
disregard for their employer’s rules, for the respect owed to their employer, and for their co-employees’ sensitivities.
G.R. No. 194884 October 22, 2014
SECOND DIVISION
BRION, J.:
For misconduct or improper behavior to be a just cause for dismissal, the following elements must concur: (a) the
misconduct must be serious; (b) it must relate to the performance of the employee’s duties showing that the employee
has become unfit to continue working for the employer; and (c) it must have been performed with wrongful intent.
FACTS:
Petitioner Imasen Philippine Manufacturing Corporation is a domestic corporation engaged in the manufacture of auto
seat-recliners and slide-adjusters. It hired the respondents as manual welders in 2001.

On October 5, 2002, the respondents reported for work on the second shift – from 8:00 pm to 5:00 am of the following
day. At around 12:40
am, Cyrus A. Altiche, Imasen’s security guard on duty, went to patrol and inspect the production plant’s premises. When
Altiche reached Imasen’s Press Area, he heard the sound of a running industrial fan.

Intending to turn the fan off, he followed the sound that led him to the plant’s “Tool and Die” section.

At the “Tool and Die” section, Altiche saw the respondents having sexual intercourse on the floor, using a piece of carton
as mattress. Altiche immediately went back to the guard house and relayed what he saw to Danilo S. Ogana, another
security guard on duty.
On Altiche’s request, Ogana madea follow-up inspection. Ogana went to the “Tool and Die” section and saw several
employees, including the respondents, already leaving the area. He noticed, however, that Alcon picked up the carton that
Altiche claimed the respondents used as mattress during their sexual act, and returned it to the place where the cartons
were kept. Altiche then submitted a handwritten report of the incident to Imasen’s Finance and Administration Manager.

On October 14, 2002, Imasen issued the respondents separate interoffice memoranda informing them of Altiche’s report
on the October 5, 2002 incident and directing them to submit their individual explanation. The respondents complied with
the directive; they
claimed that they were merely sleeping in the “Tool and Die” section at the time of the incident. They also claimed that
other employees were near the area, making the commission of the act charged impossible.
On December 4, 2002, Imasen issued the respondents separate interoffice memoranda terminating their services. It found
the respondents guilty of the act charged which it considered as “gross misconduct contrary to the existing policies, rules
and regulations of the company.”

On December 5, 2002, the respondents filed before the LA the Complaint for illegal dismissal. The respondents maintained
their version of the incident.

LA Ruling

In the December 10, 2004 decision, the LA dismissed the respondents’ complaint for lack of merit. The LA found the
respondents’ dismissal valid, i.e., for the just cause of gross misconduct and with due process.

NLRC Ruling

In its December 24, 2008 decision, the NLRC dismissed the respondents’ appeal14 for lack of merit.

CA Ruling

In its June 9, 2010 decision, the CA nullified the NLRC’s ruling. To the CA, the penalty of dismissal is not commensurate to
the respondents’ act, considering especially that the respondents had not committed any infraction in the past.
Petitioner Contends

Imasen argues in this petition that the act of engaging in sexual intercourse inside company premises during work hours is
serious misconduct by whatever standard it is measured. According to Imasen, the respondents’ infraction is an affront to
its core values and high ethical work standards, and justifies the dismissal.

Respondent Contends

The respondents argue in their comment that the elements of serious misconduct that justifies an employee’s dismissal
are absent in this case, adopting thereby the CA’s ruling.

ISSUE:
Whether or not sexual intercourse inside the company premises is a ground for dismissal of service.

RULING:
Yes. The just causes for dismissing an employee are provided under Article 282 (now Article 296) of the Labor Code. Under
Article 282(a), serious misconduct by the employee justifies the employer in terminating his or her employment.

Misconduct is defined as an improper or wrong conduct. It is a transgression of some established and definite rule of
action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in
judgment.

To constitute a valid cause for the dismissal within the text and meaning of Article 282 of the Labor Code, the employee’s
misconduct must be serious, i.e., of such grave and aggravated character and not merely trivial or
unimportant.

For misconduct or improper behavior to be a just cause for dismissal, the following elements must concur: (a) the
misconduct must be serious; (b) it must relate to the performance of the employee’s duties showing that the employee
has become unfit to continue working for the employer; and (c) it must have been performed with wrongful intent.

The respondents’ infraction amounts to serious misconduct within the terms of Article 282 (now Article296) of the Labor
Code justifying their dismissal.

Dismissal situations (on the ground of serious misconduct) involving sexual acts, particularly sexual intercourse committed
by employees
inside company premises and during work hours, are not usual violations and are not found in abundance under
jurisprudence. Thus, in resolving the present petition, we are largely guided by the principles we discussed above, as
applied to the totality of the circumstances that surrounded the petitioners’ dismissal.

Sexual acts and intimacies between two consenting adults belong, as a principled ideal, to the realm of purely private
relations. Whether aroused by lust or inflamed by sincere affection, sexual acts should be carried out at such place, time
and circumstance that, by the generally accepted norms of conduct, will not offend public decency nor disturb the
generally held or accepted social morals. Under these parameters, sexual acts between two consenting adults do not have
a place in the work environment.

Indisputably, the respondents engaged in sexual intercourse inside company premises and during work hours. These
circumstances, by themselves, are already punishable misconduct. Added to these considerations, however, is the
implication that the respondents did not only disregard company rules but flaunted their disregard in a manner that could
reflect adversely on the status of ethics and morality in the company.

Additionally, the respondents engaged in sexual intercourse in an area where co-employees or other company personnel
have ready and available access. The respondents likewise committed their act at a time when the employees were
expected to be and had, in fact, been at their respective posts, and when they themselves were supposed to be, as all
other employees had in fact been, working.

Under these factual premises and in the context of legal parameters we discussed, we cannot help but consider the
respondents’ misconduct to be of grave and aggravated character so that the company was justified
in imposing the highest penalty available ― dismissal. Their infraction transgressed the bounds of socially and morally
accepted human public behavior, and at the same time showed brazen disregard for the respect that their employer
expected of them as employees. By their misconduct, the respondents, in effect, issued an open invitation for others to
commit the same infraction, with like disregard for their employer’s rules, for the respect owed to their employer, and for
their co-employees’ sensitivities. Taken together, these considerations reveal a depraved disposition that the Court cannot
but consider as a valid
cause for dismissal.

All told, the respondents’ misconduct, under the circumstances of this case, fell within the terms of Article 282 (now Article
296) of the Labor Code. Consequently, we reverse the CA’s decision for its failure to recognize that no grave abuse of
discretion attended the NLRC’s decision to support the respondents’ dismissal for serious misconduct.

Disposition of the SC:

WHEREFORE, in light of these considerations, we hereby GRANT the petition. We REVERSE the decision dated June 9, 2010
and the resolution dated December 22, 2010 of the Court of Appeals in CA-G.R. SP No. 110327 and REINSTATE the
decision dated December 24, 2008 of the National Labor Relations Commission in NLRC CA No.
043915-05 (NLRC Case No. RAB IV-12-1661-02-L).
HACIENDA LUISITA, INCORPORATED  vs.
PRESIDENTIAL AGRARIAN REFORM COUNCIL 
G.R. No. 171101,  Case Digest September 12, 2020
Hacienda Luisita de Tarlac, once a 6,443 hectare mixed agricultural-industrial-
residential expanse several municipalities of Tarlac and owned by Compania
General de Tabacos de Filipinas (Tabacalera). Tarlac Development Corporation
(Tadeco) then owned and controllec by Jose Cojuangco Sr. Group.

On May 9, 1989, some 93% of the then farmworker-beneficiaries (FWBs) complement

of Hacienda Luisita signified in a referendum their acceptance of the proposed
HLI’s Stock Distribution Option Plan. On May 11, 1989, the Stock Distribution
Option Agreement (SDOA), styled as a Memorandum of Agreement (MOA), was entered
into by Tadeco, HLI, and the 5,848 qualified FWBs and attested to by then DAR
Secretary Philip Juico. The SDOA embodied the basis and mechanics of the SDP,
which would eventually be submitted to the PARC for approval.
On December 22, 2005, the PARC issued the assailed Resolution No. 2005-32-01,
approve and confirm the recommendation of the PARC Executive Committee adopting
in toto the report of the PARC ExCom Validation Committee affirming the
recommendation of the DAR to recall/revoke the SDO plan of Tarlac Development
Corporation/Hacienda Luisita Incorporated.

On August 31, 2010, the Court, in a bid to resolve the dispute through an
amicable settlement, issued a Resolution84 creating a Mediation Panel composed of
then Associate Justice Ma. Alicia Austria-Martinez, as chairperson, and former CA
Justices Hector Hofileña and Teresita Dy-Liacco Flores, as members. Meetings on
five (5) separate dates, i.e., September 8, 9, 14, 20, and 27, 2010, were
conducted. Despite persevering and painstaking efforts on the part of the panel,
mediation had to be discontinued when no acceptable agreement could be reached.
Issues:

1. WON the PARC’s has the authority to revoke the Stock Distribution Plan
2. WON Section.31 of RA 6657 is unconstitutional
3. WON the operative act is applicable in the instant case
Held:
I
Yes, PARC has the authority to revoke the Stock Distribution Plan.

Under Sec. 31 of RA 6657, as implemented by DAO 10, the authority to approve the
plan for stock distribution of the corporate landowner belongs to PARC. However,
contrary to petitioner HLI’s posture, PARC also has the power to revoke the SDP
which it previously approved. It may be, as urged, that RA 6657 or other
executive issuances on agrarian reform do not explicitly vest the PARC with the
power to revoke/recall an approved SDP. Such power or authority, however, is
deemed possessed by PARC under the principle of necessary implication, a basic
postulate that what is implied in a statute is as much a part of it as that which
is expressed.

The court explained that “every statute is understood, by implication, to contain

all such provisions as may be necessary to effectuate its object and purpose, or
to make effective rights, powers, privileges or jurisdiction which it grants,
including all such collateral and subsidiary consequences as may be fairly and
logically inferred from its terms.” Further, “every statutory grant of power,
right or privilege is deemed to include all incidental power, right or privilege.
II.
The court answer is negative. The instant challenge on the constitutionality of
Sec. 31 of RA 6657 and necessarily its counterpart provision in EO 229. It is not
the lis mota of the case and it was not property raised and presented.

The Court cannot be goaded into resolving a constitutional issue that FARM failed
to assail after the lapse of a long period of time and the occurrence of numerous
events and activities which resulted from the application of an alleged
unconstitutional legal provision.

It has been emphasized in a number of cases that the question of

constitutionality will not be passed upon by the Court unless it is properly
raised and presented in an appropriate case at the first opportunity. FARM is,
therefore, remiss in belatedly questioning the constitutionality of Sec. 31 of RA
6657. The second requirement that the constitutional question should be raised at
the earliest possible opportunity is clearly wanting.

The last but the most important requisite that the constitutional issue must be
the very lis mota of the case does not likewise obtain. The lis mota aspect is
not present, the constitutional issue tendered not being critical to the
resolution of the case. The unyielding rule has been to avoid, whenever
plausible, an issue assailing the constitutionality of a statute or governmental
act.
III
The “operative fact” doctrine is  a legislative or executive act, prior to its
being declared as unconstitutional by the courts, is valid and must be complied
with.

This doctrine was reiterated in the more recent case of City of Makati v. Civil
Service Commission, wherein we ruled that: Moreover, we certainly cannot nullify
the City Government’s order of suspension, as we have no reason to do so, much
less retroactively apply such nullification to deprive private respondent of a
compelling and valid reason for not filing the leave application. For as we have
held, a void act though in law a mere scrap of paper nonetheless confers
legitimacy upon past acts or omissions done in reliance thereof. Consequently,
the existence of a statute or executive order prior to its being adjudged void is
an operative fact to which legal consequences are attached. It would indeed be
ghastly unfair to prevent private respondent from relying upon the order of
suspension in lieu of a formal leave application.

In the instant case, although the assailed Resolution No. 2005-32-01 states that
it revokes or recalls the SDP, what it actually revoked or recalled was the
PARC’s approval of the SDP embodied in Resolution No. 89-12-2. Consequently, what
was actually declared null and void was an executive act, PARC Resolution No. 89-
12-2, and not a contract (SDOA). It is, therefore, wrong to say that it was the
SDOA which was annulled.

Hacienda Luisita, Inc. (HLI) vs. Presidential Agrarian Reform Council

(PARC), et al. - GR No. 171101 Case Digest
I. THE FACTS

On July 5, 2011, the Supreme Court en banc voted unanimously (11-0) to DISMISS/DENY the petition filed by
HLI and AFFIRM with MODIFICATIONS the resolutions of the PARC revoking HLI’s Stock Distribution Plan
(SDP) and placing the subject lands in Hacienda Luisita under compulsory coverage of the Comprehensive
Agrarian Reform Program (CARP) of the government.

The Court however did not order outright land distribution. Voting 6-5, the Court noted that there are operative
facts that occurred in the interim and which the Court cannot validly ignore. Thus, the Court declared that the
revocation of the SDP must, by application of the operative fact principle, give way to the right of the original
6,296 qualified farmworkers-beneficiaries (FWBs) to choose whether they want to remain as HLI stockholders
or [choose actual land distribution]. It thus ordered the Department of Agrarian Reform (DAR) to “immediately
schedule meetings with the said 6,296 FWBs and explain to them the effects, consequences and legal or
practical implications of their choice, after which the FWBs will be asked to manifest, in secret voting, their
choices in the ballot, signing their signatures or placing their thumbmarks, as the case may be, over their
printed names.”

The parties thereafter filed their respective motions for reconsideration of the Court decision.

II. THE ISSUES

(1) Is the operative fact doctrine available in this case?

(2) Is Sec. 31 of RA 6657 unconstitutional?

(3) Can’t the Court order that DAR’s compulsory acquisition of Hacienda Lusita cover the full 6,443 hectares
allegedly covered by RA 6657 and previously held by Tarlac Development Corporation (Tadeco), and not just
the 4,915.75 hectares covered by HLI’s SDP?

(4) Is the date of the “taking” (for purposes of determining the just compensation payable to HLI) November 21,
1989, when PARC approved HLI’s SDP?

(5) Has the 10-year period prohibition on the transfer of awarded lands under RA 6657 lapsed on May 10,
1999 (since Hacienda Luisita were placed under CARP coverage through the SDOA scheme on May 11,
1989), and thus the qualified FWBs should now be allowed to sell their land interests in Hacienda Luisita to
third parties, whether they have fully paid for the lands or not?

(6) THE CRUCIAL ISSUE: Should the ruling in the July 5, 2011 Decision that the qualified FWBs be given an
option to remain as stockholders of HLI be reconsidered?

III. THE RULING

[The Court PARTIALLY GRANTED the motions for reconsideration of respondents PARC, et al. with respect to
the option granted to the original farmworkers-beneficiaries (FWBs) of Hacienda Luisita to remain with
petitioner HLI, which option the Court thereby RECALLED and SET ASIDE. It reconsidered its earlier decision
that the qualified FWBs should be given an option to remain as stockholders of HLI, and UNANIMOUSLY
directed immediate land distribution to the qualified FWBs.]

1. YES, the operative fact doctrine is applicable in this case.

[The Court maintained its stance that the operative fact doctrine is applicable in this case since, contrary to the
suggestion of the minority, the doctrine is not limited only to invalid or unconstitutional laws but also applies to
decisions made by the President or the administrative agencies that have the force and effect of laws. Prior to
the nullification or recall of said decisions, they may have produced acts and consequences that must be
respected. It is on this score that the operative fact doctrine should be applied to acts and consequences that
resulted from the implementation of the PARC Resolution approving the SDP of HLI. The majority stressed that
the application of the operative fact doctrine by the Court in its July 5, 2011 decision was in fact favorable to
the FWBs because not only were they allowed to retain the benefits and homelots they received under the
stock distribution scheme, they were also given the option to choose for themselves whether they want to
remain as stockholders of HLI or not.]

2. NO, Sec. 31 of RA 6657 NOT unconstitutional.

[The Court maintained that the Court is NOT compelled to rule on the constitutionality of Sec. 31 of RA 6657,
reiterating that it was not raised at the earliest opportunity and that the resolution thereof is not the lis mota of
the case. Moreover, the issue has been rendered moot and academic since SDO is no longer one of the
modes of acquisition under RA 9700. The majority clarified that in its July 5, 2011 decision, it made no ruling in
favor of the constitutionality of Sec. 31 of RA 6657, but found nonetheless that there was no apparent grave
violation of the Constitution that may justify the resolution of the issue of constitutionality.]

3. NO, the Court CANNOT order that DAR’s compulsory acquisition of Hacienda Lusita cover the full 6,443
hectares and not just the 4,915.75 hectares covered by HLI’s SDP.

[Since what is put in issue before the Court is the propriety of the revocation of the SDP, which only involves
4,915.75 has. of agricultural land and not 6,443 has., then the Court is constrained to rule only as regards the
4,915.75 has. of agricultural land. Nonetheless, this should not prevent the DAR, under its mandate under the
agrarian reform law, from subsequently subjecting to agrarian reform other agricultural lands originally held by
Tadeco that were allegedly not transferred to HLI but were supposedly covered by RA 6657.

However since the area to be awarded to each FWB in the July 5, 2011 Decision appears too restrictive –
considering that there are roads, irrigation canals, and other portions of the land that are considered
commonly-owned by farmworkers, and these may necessarily result in the decrease of the area size that may
be awarded per FWB – the Court reconsiders its Decision and resolves to give the DAR leeway in adjusting
the area that may be awarded per FWB in case the number of actual qualified FWBs decreases. In order to
ensure the proper distribution of the agricultural lands of Hacienda Luisita per qualified FWB, and considering
that matters involving strictly the administrative implementation and enforcement of agrarian reform laws are
within the jurisdiction of the DAR, it is the latter which shall determine the area with which each qualified FWB
will be awarded.

On the other hand, the majority likewise reiterated its holding that the 500-hectare portion of Hacienda Luisita
that have been validly converted to industrial use and have been acquired by intervenors Rizal Commercial
Banking Corporation (RCBC) and Luisita Industrial Park Corporation (LIPCO), as well as the separate 80.51-
hectare SCTEX lot acquired by the government, should be excluded from the coverage of the assailed PARC
resolution. The Court however ordered that the unused balance of the proceeds of the sale of the 500-hectare
converted land and of the 80.51-hectare land used for the SCTEX be distributed to the FWBs.]

4. YES, the date of “taking” is November 21, 1989, when PARC approved HLI’s SDP.

[For the purpose of determining just compensation, the date of “taking” is November 21, 1989 (the date when
PARC approved HLI’s SDP) since this is the time that the FWBs were considered to own and possess the
agricultural lands in Hacienda Luisita. To be precise, these lands became subject of the agrarian reform
coverage through the stock distribution scheme only upon the approval of the SDP, that is, on November 21,
1989. Such approval is akin to a notice of coverage ordinarily issued under compulsory acquisition. On the
contention of the minority (Justice Sereno) that the date of the notice of coverage [after PARC’s revocation of
the SDP], that is, January 2, 2006, is determinative of the just compensation that HLI is entitled to receive, the
Court majority noted that none of the cases cited to justify this position involved the stock distribution scheme.
Thus, said cases do not squarely apply to the instant case.  The foregoing notwithstanding, it bears stressing
that the DAR's land valuation is only preliminary and is not, by any means, final and conclusive upon the
landowner. The landowner can file an original action with the RTC acting as a special agrarian court to
determine just compensation. The court has the right to review with finality the determination in the exercise of
what is admittedly a judicial function.]

5. NO, the 10-year period prohibition on the transfer of awarded lands under RA 6657 has NOT lapsed on May
10, 1999; thus, the qualified FWBs should NOT yet be allowed to sell their land interests in Hacienda Luisita to
third parties.

[Under RA 6657 and DAO 1, the awarded lands may only be transferred or conveyed after 10 years from the
issuance and registration of the emancipation patent (EP) or certificate of land ownership award (CLOA).
Considering that the EPs or CLOAs have not yet been issued to the qualified FWBs in the instant case, the 10-
year prohibitive period has not even started. Significantly, the reckoning point is the issuance of the EP or
CLOA, and not the placing of the agricultural lands under CARP coverage. Moreover, should the FWBs be
immediately allowed the option to sell or convey their interest in the subject lands, then all efforts at agrarian
reform would be rendered nugatory, since, at the end of the day, these lands will just be transferred to persons
not entitled to land distribution under CARP.]

6. YES, the ruling in the July 5, 2011 Decision that the qualified FWBs be given an option to remain as
stockholders of HLI should be reconsidered.

[The Court reconsidered its earlier decision that the qualified FWBs should be given an option to remain as
stockholders of HLI, inasmuch as these qualified FWBs will never gain control [over the subject lands] given
the present proportion of shareholdings in HLI. The Court noted that the share of the FWBs in the HLI capital
stock is [just] 33.296%. Thus, even if all the holders of this 33.296% unanimously vote to remain as HLI
stockholders, which is unlikely, control will never be in the hands of the FWBs.  Control means the majority of
[sic] 50% plus at least one share of the common shares and other voting shares.  Applying the formula to the
HLI stockholdings, the number of shares that will constitute the majority is 295,112,101 shares (590,554,220
total HLI capital shares divided by 2 plus one [1] HLI share).  The 118,391,976.85 shares subject to the SDP
approved by PARC substantially fall short of the 295,112,101 shares needed by the FWBs to acquire control
over HLI.]

Hacienda Luisita Inc. (HLI)

vs
PARC
G.R. No. 171101
April 24, 2012
670 SCRA 392 (2012)

Facts:
Before the Court are the Motion to Clarify and Reconsider Resolution of November 22, 2011 dated
December 16, 2011 filed by petitioner Hacienda Luisita, Inc. (HLI) and the Motion for
Reconsideration/Clarification dated December 9, 2011 filed by private respondents.
Hacienda Luisita Inc. maintains that the Notice of Coverage issued on January 2, 2006 may, at the
very least, be considered as the date of "taking" as this was the only time that the agricultural lands of
Hacienda Luisita were placed under compulsory acquisition in view of its failure to perform certain
obligations under the SDP. January 2, 2006, was the date when the Notice of Coverage was issued by
the DAR pursuant to PARC Resolution No. 2006-34-01 recalling/revoking the approval of the Stock
Distribution Plan(DSP).
Alyansa ng mga Manggagawang Bukid sa Hacienda Luisita (AMBALA) contends that if HLI or Tadeco
is, at all, entitled to just compensation, the "taking" should be reckoned as of November 21, 1989, the
date when the SDP was approved, and the amount of compensation should be PhP 40,000 per
hectare as this was the same value declared in 1989 by Tadeco to ensure that the FWBs will not
control the majority stockholdings in HLI.

Issue:
Whether or not in determining the just compensation, the date of "taking" is November 21, 1989,
when PARC approved HLI’s SDP [stock distribution plan] "in view of the fact that this is the time that
the FWBS were considered to own and possess the agricultural lands in Hacienda Luisita"

Held:
We maintain that the date of "taking" is November 21, 1989, the date when PARC approved HLI’s
SDP per PARC Resolution No. 89-12-2, in view of the fact that this is the time that the FWBs were
considered to own and possess the agricultural lands in Hacienda Luisita. To be precise, these lands
became subject of the agrarian reform coverage through the stock distribution scheme only upon the
approval of the SDP, that is, November 21, 1989. Thus, such approval is akin to a notice of coverage
ordinarily issued under compulsory acquisition.
In Land Bank of the Philippines v. Livioco, the Court held that "the ‘time of taking’ is the time when the
landowner was deprived of the use and benefit of his property, such as when title is transferred to the
Republic." It should be noted, however, that "taking" does not only take place upon the issuance of
title either in the name of the Republic or the beneficiaries of the Comprehensive Agrarian Reform
Program (CARP). "Taking" also occurs when agricultural lands are voluntarily offered by a landowner
and approved by PARC for CARP coverage through the stock distribution scheme, as in the instant
case. Thus, HLI’s submitting its SDP for approval is an acknowledgment on its part that the agricultural
lands of Hacienda Luisita are covered by CARP. However, it was the PARC approval which should be
considered as the effective date of "taking" as it was only during this time that the government
officially confirmed the CARP coverage of these lands.
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs.
LOMA GOCE y OLALIA, DAN GOCE and NELLY D. AGUSTIN, accused. NELLY D. AGUSTIN,accusedappellant.
GR No 113161 August 29, 1995
FACTS: On January 12, 1988, an information for illegal recruitment committed by a syndicate and in large scale,
punishable under Articles 38 and 39 of the Labor Code as amended by Section 1(b) of Presidential Decree No. 2018, was
filed against spouses Dan and Loma Goce and herein accused-appellant Nelly Agustin in the Regional Trial Court of
Manila, Branch 5. On January 21, 1987, a warrant of arrest was issued against the three accused but not one of them was
arrested. Hence, on February 2, 1989, the trial court ordered the case archived but it issued a standing warrant of arrest
against the accused.Thereafter, on learning of the whereabouts of the accused, at around midday of February 26, 1993,
Nelly Agustin was apprehended by the Parañaque police. On November 19, 1993, the trial court rendered judgment
finding herein appellant guilty as a principal in the crime of illegal recruitment in large scale, and sentencing her to serve
the penalty of life imprisonment, as well as to pay a fine of P100,000.00. In her appeal, appellant Agustin raises the
following arguments: (1) her act of introducing complainants to the Goce couple does not fall within the meaning of
illegal recruitment and placement under Article 13(b) in relation to Article 34 of the Labor Code; (2) there is no proof of
conspiracy to commit illegal recruitment among appellant and the Goce spouses; and (3) there is no proof that appellant
offered or promised overseas employment to the complainants. Appellant counsel agreed to stipulate that she was neither
licensed nor authorized to recruit applicants for overseas employment. Appellant, however, denies that she was in any
way guilty of illegal recruitment. It is appellant's defensive theory that all she did was to introduce complainants to the
Goce spouses. Being a neighbor of said couple, and owing to the fact that her son's overseas job application was processed
and facilitated by them, the complainants asked her to introduce them to said spouses. Allegedly out of the goodness of
her heart, she complied with their request.
ISSUES: Whether or not appellant Agustin actions in relation with the Goce couple constitute illegal recruitment.
HELD: Appellant is accused of violating Articles 38 and 39 of the Labor Code. Article 38 of the Labor Code, as amended
by Presidential Decree No. 2018, provides that any recruitment activity, including the prohibited practices enumerated in
Article 34 of said Code, undertaken by non-licensees or non-holders of authority shall be deemed illegal and punishable
under Article 39 thereof. The same article further provides that illegal recruitment shall be considered an offense
involving economic sabotage if any of these qualifying circumstances exist, namely, (a) when illegal recruitment is
committed by a syndicate,i.e., if it is carried out by a group of three or more persons conspiring and/or confederating with
one another; or (b) when illegal recruitment is committed in large scale, i.e., if it is committed against three or more
persons individually or as a group. Recruitment and placement refers to any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or advertising for
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. On the
other hand, referral is the act of passing along or forwarding of an applicant for employment after an initial interview of a
selected applicant for employment to a selected employer, placement officer or bureau. There is illegal recruitment when
one gives the impression of having the ability to send a worker abroad." It is undisputed that appellant gave complainants
the distinct impression that she had the power or ability to send people abroad for work such that the latter were convinced
to give her the money she demanded in order to be so employed.

G.R. No. 113161 Case Digest

G.R. No. 113161, August 29, 1995
People of the Phil., plaintiff-appellee
vs Loma Goce, et. al., accused-appellant
Ponente: Regalado
Facts:
On January 1988, an information for illegal recruitment committed by a
syndicate nd in large scale, punishable under Articles 38 and 39 of the labor
code as amended by PD 2018, filed against Dan and Loma Goce and Nelly Agustin
in the RTC of Manila, alleging that in or about during the period comprised
between May 1986 and June 25, 1987, both dates inclusive in the City of
Manila, the accused conspired and represent themsleves to have the capacity to
recruit Filipino workers for employment abroad.
January 1987, a warrant of arrest was issued against the 3 accused bot none of
them was arrested. Hence, on February 1989, the RTC prdered the case archived
but issued a standing warrant os arrest against the accused.
Thereafter, knowing the whereabouts of the accused, Rogelio Salado requested
for a copy of the warrant of arrest and eventually Nelly Agustin was
apprehended by the Paranaque Police. Agustin's counsel filed a motion to
revive the case and requested to set a hearing for purpose of due process and
for accused to immediately have her day in court. On the arraignment, Agustin
pleaded not guilty and the trial went on with four complainants testified for
the prosecution and reciepts of the processing fees they paid.
Agustin for the defense asserted that Goce couple were licensed recruiters but
denied her participation in the recruitment and denied knowledge of the
receipts as well.
On November 1993, trial court rendered judgment finding that Agustin as a
principal in the crime of illegal recruitment in large scale with sentence of
life imprisonment and pay P100,000.00.
Issues:
Agustin appealed witht the follwing arguments: (1) her act of introducing the
complainants to the couple does not fall within the meaning of illegal
recruitment and placement under Article 13 in relation to Article 34 of the
labor code; (2) there is no proof of conspiracy and (3) there is no proof that
appellant offered/promised overseas employment to the complainants.
Ruling:
The testimonial evidence shows that Agustin indeed further committted acts
constitutive of illegal recruitment because, the complainants had a previous
interview with Agustin (as employee of the Goce couple) about fees and papers
to submit that may constitute as referral. Agustin collected the payments of
the complainants as well as their passports, trainning fees, medical tests and
other expenses.On the issue of proof, the court held that the receipts
exhibited by the claimants are clear enough to prove the payments and
transaction made.

G.R. No. 109808 – 242 SCRA 73 (312 Phil. 88) – Labor Law – Pre-Employment – Liability of
Local Recruitment Agency – Standard Employment Contract for Entertainers – Laches

Esalyn Chavez is a dancer who was contracted by Centrum Placement & Promotions
Corporation to perform in Japan for 6 months. The contract was for $1.5k a month,
which was approved by the Philippine Overseas Employment Administration. After
the approval of said contract, Chavez entered into a side contract reducing her salary
with her Japanese employer through her local manager-agency (Jaz Talents
Promotion). The salary was reduced to $500 and $750 was to go to Jaz Talents. In
February 1991 (two years after the expiration of her contract), Chavez sued Centrum
Placement and Jaz Talents for underpayment of wages before the POEA.

The POEA ruled against her. POEA stated that the side agreement entered into by
Chavez with her Japanese employer superseded the Standard Employment Contract;
that POEA had no knowledge of such side agreement being entered into; that Chavez
is barred by laches for sleeping on her right for two years. Chavez elevated the issue
to the National Labor Relations Commission but the latter, chaired by Edna Bonto-
Perez, affirmed the POEA.

ISSUE: Whether or not Chavez is entitled to relief.

HELD: Yes. The SC ruled that the managerial commission agreement executed by

Chavez to authorize her Japanese Employer to deduct her salary is void because it is
against our existing laws, morals and public policy. It cannot supersede the standard
employment contract approved by the POEA with the following stipulation appended
thereto:

It is understood that the terms and conditions stated in this Employment Contract are
in conformance with the Standard Employment Contract for Entertainers prescribed
by the POEA under Memorandum Circular No. 2, Series of 1986. Any alterations or
changes made in any part of this contract without prior approval by the POEA shall be
null and void;

The side agreement which reduced Chavez’s basic wage is void for violating the
POEA’s minimum employment standards, and for not having been approved by the
POEA. Here, both Centrum Placement and Jaz Talents are solidarily liable.

Laches does not apply in the case at bar. In this case, Chavez filed her claim well
within the three-year prescriptive period for the filing of money claims set forth in
Article 291 of the Labor Code.  For this reason, laches did not set in.

ESALYN CHAVEZ vs. HON. EDNA BONTO-PEREZ G.R. No. 109808 (March 1, 1995)

FACTS:

Chavez is a dancer who was contracted by Centrum Placement & Promotions Corporation to perform in Japan for 6
months. The contract was for $1.5k a month, which was approved by POEA. After the approval of said contract, Chavez
entered into a side contract reducing her salary with her Japanese employer through her local manager-agency (Jaz Talents
Promotion). The salary was reduced to $500 and $750 was to go to Jaz Talents. In February 1991 (two years after the
expiration of her contract), Chavez sued Centrum Placement and Jaz Talents for underpayment of wages before the
POEA. The POEA ruled against her. POEA stated that the side agreement entered into by Chavez with her Japanese
employer superseded the Standard Employment Contract; that POEA had no knowledge of such side agreement being
entered into; that Chavez is barred by laches for sleeping on her right for two years.

ISSUE: Whether or not Chavez is entitled to relief.

HELD: Yes. The SC ruled that the managerial commission agreement executed by Chavez to authorize her Japanese
Employer to deduct her salary is void because it is against our existing laws, morals and public policy. It cannot supersede
the standard employment contract approved by the POEA with the following stipulation appended thereto: It is
understood that the terms and conditions stated in this Employment Contract are in conformance with the Standard
Employment Contract for Entertainers prescribed by the POEA under Memorandum Circular No. 2, Series of 1986. Any
alterations or changes made in any part of this contract without prior approval by the POEA shall be null and void; The
side agreement which reduced Chavez’s basic wage is null and void for violating the POEA’s minimum employment
standards, and for not having been approved by the POEA. Here, both Centrum Placement and Jaz Talents are solidarily
liable. Laches does not apply in the case at bar. In this case, Chavez filed her claim well within the three-year prescriptive
period for the filing of money claims set forth in Article 291 of the Labor Code. For this reason, laches is not applicable.
SUNACE INTERNATIONAL MANAGEMENT SERVICES, INC. v. NLRC
G.R. No. 161757; January 25, 2006
Ponente: J. Carpio-Morales

FACTS:

Petitioner, Sunace International Management Services (Sunace), deployed to Taiwan Divina A. Montehermozo (Divina) as
a domestic helper under a 12-month contract effective February 1, 1997.  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
Rui Xiong, for two more years, after which she returned to the Philippines on February 4, 2000.
Shortly after her return or on February 14, 2000, Divina filed a complaint before the National Labor Relations Commission
(NLRC) against Sunace, one Adelaide Perez, the Taiwanese broker, and the employer-foreign principal alleging that she
was jailed for three months and that she was underpaid

Reacting to Divina's Position Paper, Sunace filed on April 25, 2000 an ". . . ANSWER TO COMPLAINANT'S POSITION
PAPER" alleging that Divina's 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, copy of each document was annexed to said

The Labor Arbiter, rejected Sunace's claim that the extension of Divina's contract for two more years was without its
knowledge and consent.

ISSUE:
Whether the act of the foreigner-principal in renewing the contract of Divina be attributable to Sunace

HELD:

No, the act of the foreigner-principal in renewing the contract of Divina is not attributable to 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
Divina's 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.
 ANTONIO M. SERRANO, petitioner, vs.

GALLANT MARITIME SERVICES, INC. and MARLOW NAVIGATION CO., INC., respondents

G. R. No. 167614               March 24, 2009 

FACTS:

Serrano signed a Contract of Employment for Chief Officer, with basic monthly salary of US$1,400, with Gallant Maritime Services,
Inc. and Marlow Navigation Co., Ltd for 12 months.

However on the date of his departure, March 19, 1998, petitioner was constrained to accept a downgraded employment contract for
the position of Second Officer with a monthly salary of US$1,000, 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. Hence, petitioner refused to stay on as Second Officer and was repatriated to the
Philippines on May 26, 1998. Petitioner had only served 2 months and 7 days of his contract, leaving an unexpired portion of 9
months and 23 days.
Petitioner filed with the Labor Arbiter a complaint against respondents for constructive dismissal and for payment of his money
claims, for the unexpired portion of his contract plus adjustments to chief mate’s salary, totaling US$26,442.73.

The last clause in paragraph 10 of RA 8042 states that “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.”

Relying on this, the LA based his computation on the salary period of 3 months only rather than the entire unexpired portion of 9
months and 23 days of the petitioner’s employment contract. Thus, the LA awarded petitioner monetary benefits in the sum $8,770.00.

ISSUE(S):

What is the source of authority of the state to protect seafarers?

Why is there a need to protect workers and eliminate discrimination?

Who bears the burden of evidence in proving some labor standards claims?

RULING:

Equality is one ideal which cries out for bold attention and action in the Constitution. The Preamble proclaims "equality" as an ideal
precisely in protest against crushing inequities in Philippine society. To address these inequities, our Constitution, has adopted the
policy of social justice to guarantee social and economic rights to marginalized groups of society, including labor. Under the policy of
social justice, the law bends over backward to accommodate the interests of the working class on the humane justification that those
with less privilege in life should have more in law.

While these provisions on social justice are described as nonself-executing and does not directly bestow on the working class any
actual enforceable rights, the provisions urges not only on the legislative and executive branches but also on the judiciary to translate
this pledge into a living reality.

The law guarantees equal protection to all – that no person shall be deprived of life, liberty, or property without due process of law nor
shall any person be denied the EQUAL PROTECTION OF THE LAW.

Section 18,63 Article II and Section 3,64 Article XIII accord all members of the labor sector, without distinction as to place of
deployment, full protection of their rights and welfare. To Filipino workers, the rights guaranteed under the foregoing constitutional
provisions translate to economic security and parity: all monetary benefits should be equally enjoyed by workers of similar category,
while all monetary obligations should be borne by them in equal degree; none should be denied the protection of the laws which is
enjoyed by, or spared the burden imposed on, others in like circumstances.

Laws are presumed constitutional until they are proclaimed by the court to be otherwise. Generally, the petitioner has the burden of
proof in proving that a statute is unconstitutional. But 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, it is incumbent upon the government
to prove that there is a compelling state interest for the denial of such right.

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

G.R. No. 170139, EN BANC, August 5, 2014, Leonen, J.
The Sameer alleges that the respondent was not illegally dismissed. The Supreme Court ruled that a valid dismissal requires both a
valid cause and adherence to the valid procedure of dismissal. The employer is required to give the charged employee at least two
written notices before termination. One of the written notices must inform the employee of the particular acts that may cause his or
her dismissal. The other notice must “[inform] the employee of the employer’s decision.” Aside from the notice requirement, the
employee must also be given “an opportunity to be heard.
FACTS:
Respondent Joy Cabiles was hired by Wacoal Taiwan, Inc., through petitioner agency Sameer Overseas Placement Agency
as a cutter. Subsequently, Cabiles was informed that her services are already terminated and that she must report to their
head office for her immediate repatriation. Because of this, Cabiles filed a complaint for illegal dismissal against Sameer
and Wacoal. The Labor Arbiter ruled in favor of Sameer and held that there was no illegal dismissal that took place
because the termination of the services of Cabiles was for a just cause. It gave credence to the contention of Sameer that
Cabiles was terminated from service because of her inefficiency. On appeal, the NLRC ruled in favor of Cabiles and held
that she is illegally dismissed. The Court of Appeals affirmed the ruling of NLRC. Hence, the current petition.

Sameer reiterates that there was just cause for termination because there was a finding of Wacoal that respondent was
inefficient in her work. Therefore, it claims that respondent’s dismissal was valid.

ISSUE:

Whether or not respondent Cabiles was illegally dismissed.

RULING:

Yes. The Supreme Court affirmed the decision of the Court of Appeals and ruled that the respondent was illegally
dismissed. Sameer Overseas Placement Agency failed to show that there was just cause for causing Joy’s dismissal. The
employer, Wacoal, also failed to accord her due process of law. Indeed, employers have the prerogative to impose
productivity and quality standards at work. They may also impose reasonable rules to ensure that the employees comply
with these standards. Failure to comply may be a just cause for their dismissal. Certainly, employers cannot be compelled
to retain the services of an employee who is guilty of acts that are inimical to the interest of the employer. While the law
acknowledges the plight and vulnerability of workers, it does not “authorize the oppression or self-destruction of the
employer.” Management prerogative is recognized in law and in our jurisprudence.

This prerogative, however, should not be abused. It is “tempered with the employee’s right to security of tenure.” Workers
are entitled to substantive and procedural due process before termination. They may not be removed from employment
without a valid or just cause as determined by law and without going through the proper procedure.

Security of tenure for labor is guaranteed by our Constitution. Employees are not stripped of their security of tenure when
they move to work in a different jurisdiction. With respect to the rights of overseas Filipino workers, we follow the principle
of lex loci contractus. First, established is the rule that lex loci contractus (the law of the place where the contract is made)
governs in this jurisdiction. There is no question that the contract of employment in this case was perfected here in the
Philippines. Therefore, the Labor Code, its implementing rules and regulations, and other laws affecting labor apply in this
case. Furthermore, settled is the rule that the courts of the forum will not enforce any foreign claim obnoxious to the
forum’s public policy. Herein the Philippines, employment agreements are more than contractual in nature.

Sameer’s allegation that respondent was inefficient in her work and negligent in her duties may, therefore, constitute a
just cause for termination under Article 282(b), but only if petitioner was able to prove it.

The burden of proving that there is just cause for termination is on the employer. “The employer must affirmatively show
rationally adequate evidence that the dismissal was for a justifiable cause.” Failure to show that there was valid or just
cause for termination would necessarily mean that the dismissal was illegal.

To show that dismissal resulting from inefficiency in work is valid, it must be shown that: 1) the employer has set standards
of conduct and workmanship against which the employee will be judged; 2) the standards of conduct and workmanship
must have been communicated to the employee; and 3) the communication was made at a reasonable time prior to the
employee’s performance assessment.

In this case, Sameer merely alleged that Cabiles failed to comply with her foreign employer’s work requirements and was
inefficient in her work. No evidence was shown to support such allegations. Sameer did not even bother to specify what
requirements were not met, what efficiency standards were violated, or what particular acts of respondent constituted
inefficiency.

There was also no showing that Cabiles was sufficiently informed of the standards against which her work efficiency and
performance were judged. The parties’ conflict as to the position held by respondent showed that even the matter as basic
as the job title was not clear. The bare allegations of petitioner are not sufficient to support a claim that there is just cause
for termination. There is no proof that respondent was legally terminated.

A valid dismissal requires both a valid cause and adherence to the valid procedure of dismissal. The employer is required
to give the charged employee at least two written notices before termination. One of the written notices must inform the
employee of the particular acts that may cause his or her dismissal. The other notice must “[inform] the employee of the
employer’s decision.” Aside from the notice requirement, the employee must also be given “an opportunity to be heard.”

Sameer failed to comply with the twin notices and hearing requirements. Respondent started working on June 26, 1997.
She was told that she was terminated on July 14, 1997 effective on the same day and barely a month from her first
workday. She was also repatriated on the same day that she was informed of her termination. The abruptness of the
termination negated any finding that she was properly notified and given the opportunity to be heard. Her constitutional
right to due process of law was violated.

SAMEER OVERSEAS PLACEMENT AGENCY, INC., Petitioner,vs.

JOY C. CABILES, Respondent.

G.R. No. 170139               August 5, 2014

PONENTE: Leonen

TOPIC:  Section 10 of RA 8042 vis-a-vis Section 7 of RA 10022

FACTS:

                Petitioner, Sameer Overseas Placement Agency, Inc., is a recruitment and placement agency.

                Respondent Joy Cabiles was hired thus signed a one-year employment contract for a monthly salary of
NT$15,360.00. 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 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 for illegal dismissal with the NLRC against petitioner and Wacoal. LA
dismissed the complaint. NLRC reversed LA’s decision. CA affirmed the ruling of the National Labor Relations
Commission finding respondent illegally dismissed and awarding her three months’ worth of salary, the reimbursement of
the cost of her repatriation, and attorney’s fees

ISSUE:
                Whether or not Cabiles was entitled to the unexpired portion of her salary due to illegal dismissal.

HELD:

                YES. The Court held that the award of the three-month equivalent of respondent’s salary should 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.

                A statute or provision which was declared unconstitutional is not a law. It “confers no rights; it imposes no duties;
it affords no protection; it creates no office; it is inoperative as if it has not been passed at all.”

                The Court said that they 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.

Ruling on the constitutional issue

                In the hierarchy of laws, the Constitution is supreme. No branch or office of the government may exercise its
powers in any manner inconsistent with the Constitution, regardless of the existence of any law that supports such
exercise. The Constitution cannot be trumped by any other law. All laws must be read in light of the Constitution. Any law
that is inconsistent with it is a nullity.

                Thus, when a law or a provision of law is null because it is inconsistent with the Constitution,
the nullity cannot be cured by reincorporation or reenactment of the same or a similar law or
provision. A law or provision of law that was already declared unconstitutional remains as such unless circumstances
have so changed as to warrant a reverse conclusion.

                The Court observed that the reinstated clause, this time as provided in Republic Act. No. 10022, violates the
constitutional rights to equal protection and due process.96 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.

                The Court declared, once again, the clause, “or for three (3) months for every year of the unexpired term,
whichever is less” in Section 7 of Republic Act No. 10022 amending Section 10 of Republic Act No. 8042 is declared
unconstitutional and, therefore, null and void.

Darvin v Court of Appeals & People of RP

Darvin v Court of Appeals
G.R. No. 125044
July 13, 1998

Facts:

Imelda Darvin was convicted of simple illegal recruitment under the Labor Code by the RTC. It stemmed from a complaint of one
Macaria Toledo who was convinced by the petitioner that she has the authority to recruit workers for abroad and can facilitate the
necessary papers in connection thereof. In view of this promise, Macaria gave her P150,000 supposedly intended for US Visa and air
fare.

On appeal, the CA affirmed the decision of the trial court in toto, hence this petition.

Issue:

Whether or not appellant is guilty beyond reasonable doubt of illegal recruitment.

Held:

Art. 13 of the Labor Code provides the definition of recruitment and placement as:

...b.) any act of canvassing, enlisting, contracting, transporting, utilizing, 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 reason 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.

Art. 38 of the Labor Code provides:

a.)Any recruitment activities, including the prohibited practices enumerated under Article 43 of the Labor Code, to be undertaken by
non-licensees or non-holders of authority shall be deemed illegal and punishable under Article 39 of the Labor Code.

Applied to the present case, to uphold the conviction of accused-appellant, two elements need to be shown: (1) the person charged
with the crime must have undertaken recruitment activities: and (2) the said person does not have a license or authority to do so.

In the case, the Court found no sufficient evidence to prove that accused-appellant offered a job to private respondent. It is not clear
that accused gave the impression that she was capable of providing the private respondent work abroad. What is established, however,
is that the private respondent gave accused-appellant P150,000.

By themselves, procuring a passport, airline tickets and foreign visa for another individual, without more, can hardly qualify as
recruitment activities. Aside from the testimony of private respondent, there is nothing to show that appellant engaged in recruitment
activities.

At best, the evidence proffered by the prosecution only goes so far as to create a suspicion that appellant probably perpetrated the
crime charged. But suspicion alone is insufficient, the required quantum of evidence being proof beyond reasonable doubt. When the
People’s evidence fail to indubitably prove the accused’s authorship of the crime of which he stand accused, then it is the Court’s duty,
and the accused’s right, to proclaim his innocence.

WHEREFORE, the appeal is hereby granted and the decision of the CA is REVERSED and SET ASIDE. Appellant is hereby
ACQUITTED on ground of reasonably doubt. The accused is ordered immediately released from her confinement.

DARVIN VS CA G.R. No. 125044 July 13, 1998

FACTS: Imelda Darvin was convicted of simple illegal recruitment under the Labor Code by the RTC. It stemmed from a
complaint of one Macaria Toledo who was convinced by the petitioner that she has the authority to recruit workers for
abroad and can facilitate the necessary papers in connection thereof. In view of this promise, Macaria gave her P150,000
supposedly intended for US Visa and air fare. On appeal, the CA affirmed the decision of the trial court in toto, hence this
petition.
ISSUE:WON appellant is guilty beyond reasonable doubt of illegal recruitment.

HELD: Art. 38 of the Labor Code provides:

a.)Any recruitment activities, including the prohibited practices enumerated under Article 43 of the Labor Code,
to be undertaken by non-licensees or non-holders of authority shall be deemed illegal and punishable under Article 39 of
the Labor Code. Applied to the present case, to uphold the conviction of accused-appellant, two elements need to be
shown:
(1) the person charged with the crime must have undertaken recruitment activities: and
(2) the said person does not have a license or authority to do so.
In the case, the Court found no sufficient evidence to prove that accused-appellant offered a job to private
respondent. It is not clear that accused gave the impression that she was capable of providing the private respondent work
abroad. What is established, however, is that the private respondent gave accused-appellant P150,000.By themselves,
procuring a passport, airline tickets and foreign visa for another individual, without more, can hardly qualify as
recruitment activities. Aside from the testimony of private respondent, there is nothing to show that appellant engaged in
recruitment activities. At best, the evidence proffered by the prosecution only goes so far as to create a suspicion that
appellant probably perpetrated the crime charged. But suspicion alone is insufficient, the required

quantum of evidence being proof beyond reasonable doubt. When the People’s evidence fail to indubitably prove the
accused’s authorship of the crime of which he stand accused, then it is the Court’s duty, and the accused’s right, to
proclaim his innocence. 
 G.R. No. L-79436-50 – 181 SCRA 110 (260 Phil. 115) – Labor Law – Pre-Employment – Liability of Sureties – POEA Rules –
Overseas Employment

J & B Manpower Specialist, Inc. is an overseas employment agency registered with the Philippine Overseas
Employment Administration and Eastern Assurance & Surety Corporation was its surety beginning January 1985.
From 1983 to December 1985, J & B recruited 33 persons but none of them were ever deployed. These 33 persons
sued J & B. The POEA as well as the Secretary of Labor ruled in favor of the 33 workers and ordered J & B to refund
them (with Eastern Assurance being solidarily liable). Eastern Assurance assailed the ruling claiming that POEA and
the Secretary of Labor have no jurisdiction over non-employees (since the 33 were never employed, in short, no
employer-employee relations).

ISSUE: Whether or not Eastern Assurance can be held liable in the case at bar.

HELD: Yes. But only for the period covering from January 1985 when the surety took effect (as already held by the
Labor Secretary). The Secretary of Labor was given power by Article 34 (Labor Code) and Section 35 and 36 of EO
797 (POEA Rules) to “restrict and regulate the recruitment and placement activities of all agencies,” but also to
“promulgate rules and regulations to carry out the objectives and implement the provisions” governing said
activities.

Implicit in these powers is the award of appropriate relief to the victims of the offenses committed by the
respondent agency or contractor, specially the refund or reimbursement of such fees as may have been
fraudulently or otherwise illegally collected, or such money, goods or services imposed and accepted in excess of
what is licitly prescribed. It would be illogical and absurd to limit the sanction on an offending recruitment agency or
contractor to suspension or cancellation of its license, without the concomitant obligation to repair the injury
caused to its victims.

Though some of the cases were filed after the expiration of the surety bond agreement between J & B and Eastern
Assurance, notice was given to J & B of such anomalies even before said expiration. In this connection, it may be
stressed that the surety bond provides that notice to the principal is notice to the surety. Besides, it has been held
that the contract of a compensated surety like respondent Eastern Assurance is to be interpreted liberally in the
interest of the promises and beneficiaries rather than strictly in favor of the surety.

EASTERN ASSURANCE AND SURETY CORP vs. SECRETARY OF LABORG.R. No. L-79436-50 January 17, 1990
FACTS: J&B Manpower is an overseas employment agency registered with the POEA and Eastern Assurance wasits surety beginning
January 1985. From 1983 to December 1985, J&B recruited 33 persons but none ofthem were ever deployed. These 33 persons
sued J&B and the POEA as well as the Secretary of Labor ruled in favor of the 33 workers and ordered J&B to refund them
(with Eastern Assurance being solidarilyliable). Eastern Assurance assailed the ruling claiming that POEA and the
Secretary of Labor have no  jurisdiction over non-employees (since the 33 were never employed, in short, no employer-
employeerelationship).
ISSUE: Whether or not Eastern Assurance can be held liable in the case at bar
.HELD:Yes. But only for the period covering from January 1985 when the surety took effect (as already held bythe Labor Secretary).
The Secretary of Labor was given power by Article 34 (Labor Code) and Section 35and 36 of EO 797 (POEA Rules) to “restrict and
regulate the recruitment and placement activities of allagencies,” but also to “promulgate rules and regulations to carry out the
objectives and implement theprovisions” governing said activities.

 
Implicit in these powers is the award of appropriate relief to the victims of the offenses committed by therespondent agency or
contractor, specially the refund or reimbursement of such fees as may have beenfraudulently or otherwise illegally collected, or such
money, goods or services imposed and accepted inexcess of what is licitly prescribed. It would be illogical and absurd to limit the
sanction on an offendingrecruitment agency or contractor to suspension or cancellation of its license, without the
concomitantobligation to repair the injury caused to its victims.Though some of the cases were filed after the expiration of the surety
bond agreement between J&B andEastern Assurance, notice was given to J&B of such anomalies even before said
expiration. In thisconnection, it may be stressed that the surety bond provides that notice to the principal is notice to thesurety.
Besides, it has been held that the contract of a compensated surety like respondent Eastern Assurance is to be
interpreted liberally in the interest of the promises and beneficiaries rather than strictlyin favor of the surety
SALAZAR vs. ACHACOSO AND MARQUEZ
G.R. No. 81510 March 14, 1990
HORTENCIA SALAZAR, petitioner, 
vs.
HON. TOMAS D. ACHACOSO, in his capacity as Administrator of the Philippine Overseas Employment Administration, and
FERDIE MARQUEZ, respondents.
FACTS: This concerns the validity of the power of the Secretary of Labor to issue warrants of arrest and seizure under Article 38 of
the Labor Code, prohibiting illegal recruitment.
On October 21, 1987, Rosalie Tesoro filed with the POEA a complaint against petitioner. Having ascertained that the petitioner had no
license to operate a recruitment agency, public respondent Administrator Tomas D. Achacoso issued his challenged CLOSURE AND
SEIZURE ORDER.

The POEA brought a team to the premises of Salazar to implement the order. There it was found that petitioner was operating
Hannalie Dance Studio. Before entering the place, the team served said Closure and Seizure order on a certain Mrs. Flora Salazar who
voluntarily allowed them entry into the premises. Mrs. Flora Salazar informed the team that Hannalie Dance Studio was accredited
with Moreman Development (Phil.). However, when required to show credentials, she was unable to produce any. Inside the studio,
the team chanced upon twelve talent performers — practicing a dance number and saw about twenty more waiting outside, The team
confiscated assorted costumes which were duly receipted for by Mrs. Asuncion Maguelan and witnessed by Mrs. Flora Salazar.

A few days after, petitioner filed a letter with the POEA demanding the return of the confiscated properties. They alleged lack of
hearing and due process, and that since the house the POEA raided was a private residence, it was robbery.
On February 2, 1988, the petitioner filed this suit for prohibition. Although the acts sought to be barred are already fait accompli,
thereby making prohibition too late, we consider the petition as one for certiorari in view of the grave public interest involved.

ISSUE: May the Philippine Overseas Employment Administration (or the Secretary of Labor) validly issue warrants of search and
seizure (or arrest) under Article 38 of the Labor Code?

HELD: PETITION GRANTED. it is only a judge who may issue warrants of search and arrest. Neither may it be done by a mere
prosecuting body.
We reiterate that the Secretary of Labor, not being a judge, may no longer issue search or arrest warrants. Hence, the authorities must
go through the judicial process. To that extent, we declare Article 38, paragraph (c), of the Labor Code, unconstitutional and of no
force and effect.

Moreover, the search and seizure order in question, assuming, ex gratia argumenti, that it was validly issued, is clearly in the nature of
a general warrant. We have held that a warrant must identify clearly the things to be seized, otherwise, it is null and void
For the guidance of the bench and the bar, we reaffirm the following principles:
1. Under Article III, Section 2, of the l987 Constitution, it is only judges, and no other, who may issue warrants of arrest
and search:
2. The exception is in cases of deportation of illegal and undesirable aliens, whom the President or the Commissioner of
Immigration may order arrested, following a final order of deportation, for the purpose of deportation.

G.R. No. 81510 Case Digest

G.R. NO. 81510, March 14, 1990

Hortencia Salazar, petitioner

vs Hon. Tomas Achaoso as Administrator of POEA and Ferdie Marquez, respondents

Ponente: Sarmiento

Facts:

Concerns the validity of the power of Secretary of Labor to issue of warrants of arrest
and seizure under Article 38 of the Labor Code, prohibiting illegal recruitment

On October 1987, Rosalie Tesoro of Pasay City in a sworn statement filed with POEA charged
Hortencia Salazar of illegally taking her PECC Card thus prohibiting her to be employed.

On November 1987, Atty. Marquez telegram the petitioner to report to the anti-illegal
recruitment unit of PEOA, but on the same day, having ascertained that the petitioner had
no license to operate a recruitment agency, Achaoso issued his challenged Closure and
Seizure Order stating that pursuant to PD No. 1920, the recruitment agency ordered be for
closure and seizure of the documents having verified that it has (1) no valid license from
DOLE to recruit and deploy workers for overseas employment (2) committed acts prohibited
under Article 34 of Labor Code in relation to Article 38.

On January 26, 1988, POEA director on Licensing and Regulation Atty. Espiritu issued an
office order designating the Atty Marquez and other members of a team tasked to implement
closure and seizure.

On January 28, 1988, petitioner filed a petition with POEA that the personal properties
seized at her residence be immediately returned on the ground that it was contrary to law
because: (1) client was not given prior notice or hearing, (2) violates section 2 of
constitution (3)  the premises invaded were the private residence of the Salazar family
and it was without consent.

On February 2, 1988 before POEA could answer the letter, petitioner filed the instant
petition, on even date, POEA filed a criminal complaint against her with the Pasig
Provincial Fiscal

Issue: May POEA validly issue warrants of search and seizure under Article 38 of the Labor
Code?

Ruling: 

Under new constitution, only a judge may issue warrants of search and arrest, however in
the amended RA 8042, the minister of labor shall have the power to cause the arrest and
detention of non-licensee of authority if after proper investigation.

Petition is granted, Article 38 of the Labor code is declared unconstitutional and null
and void. 
 People v. Estrada (G.R. No. 225730) |Illegal recruitment committed in large scale, ELEMENTS

FACTS

This case is an appeal to the decision of CA convicting Julia Regalado Estrada (Estrada) guilty beyond reasonable doubt
for Illegal Recruitment in Large Scale under Republic Act (R.A.) No. 8042, otherwise known as the Migrant Workers and
Overseas Filipinos Act of 1995, and for three (3) counts of Estafa under Article 315(2)(a) of the Revised Penal Code
(RPC). The indictment was based on four (4) separate information: 1. Criminal Case No. 10-278205 Defrauding Noel
Sevillena to the effect that she had the power and capacity to recruit and deploy the latter as Master Baker in Dubai, and
could facilitate the processing of pertinent papers if given the necessary amount to meet the requirements thereof
(P61,500). 2. Criminal Case No. 10-278206 Defrauding Janice Antonio to the effect that she had the power and capacity
to recruit and deploy the latter as Service Crew in Dubai, and could facilitate the processing of pertinent papers if given
the necessary amount to meet the requirements thereof (P25,000). 3. Criminal Case No. 10-278207 Defrauding Albert
Cortez to the effect that she had the power and capacity to recruit and deploy the latter as waiter in Dubai, and could
facilitate the processing of pertinent papers if given the necessary amount to meet the requirements thereof (P37,000). 4.
Criminal Case No. 10-278208 (Large Scale Illegal Recruitment) By representing herself to have the capacity to contract,
enlist and transport Filipino workers for employment abroad, did then and there willfully and unlawfully for a fee, recruit
and promise employment/job placement abroad without first having secured the required license or authority from the
Department of Labor and Employment

ISSUES WHETHER OR NOT THE TRIAL AND APPELLATE COURTS ERRED IN FINDING ESTRADA GUILTY
OF ILLEGAL RECRUITMENT IN LARGE SCALE AND THREE (3) COUNTS OF ESTAFA DESPITE THE
PROSECUTION'S FAILURE TO PROVE THE ESSENTIAL ELEMENTS OF THESE CRIMES BY PROOF BEYOND
REASONABLE DOUBT. NO
RULING

Appeal lacks merit and elements constituting illegal recruitment in large scale sufficiently was established

DOCTRINE

Under Section 6 of R.A. No. 8042, illegal recruitment, when undertaken by a non-licensee or non-holder of authority as
contemplated under Article 13(f) of the Labor Code, shall mean any act of canvassing, enlisting, contracting, transporting,
utilizing, hiring, procuring workers, and including referring, contract services, promising or advertising for employment
abroad, whether for profit or not. Further, to sustain a conviction for illegal recruitment under R.A. No. 8042 in relation to
the Labor Code, the prosecution must establish two (2) elements: 1. The offender has no valid license or authority
required by law to enable one to lawfully engage in the recruitment and placement of workers; and 2. The offender
undertakes any of the activities within the meaning of recruitment and placement defined in Article 13(b) of the Labor
Code, or any of the prohibited practices enumerated under Section 6 of R.A. No. 8042 Further, in case the illegal
recruitment was committed in large scale, a third element must be established, that is, the offender commits the illegal
recruitment activities against three or more persons, individually or as a group. DIGEST BY: Kent Tan
G.R. Nos. 178034 & 178117/G.R. Nos. 186984-85 : OCTOBER 17, 2013

ANDREW JAMES MCBURNIE, Petitioner, v. EULALIO GANZON, EGI-MANAGERS, INC. and E. GANZON,
INC., Respondents.

REYES, J.:

FACTS:

On October 4, 2002, Andrew James McBurnie (McBurnie), an Australian national, instituted a complaint for illegal
dismissal and other monetary claims against Eulalio Ganzon, EGI-Managers, Inc., and E. Ganzon, Inc., (respondents).
McBurnie claimed that on May 11, 1999, he signed a 5-year employment agreement with the company EGI as an Executive
Vice-President who shall oversee the management of the company hotels and resorts within the Philippines. He
performed work for the company until sometime in November 1999, when he figured in an accident that compelled him to
go back to Australia while recuperating from his injuries. While in Australia, he was informed by respondent Ganzon that
his services were no longer needed because their intended project would no longer push through.

The respondents contend that their agreement with McBurnie was to jointly invest in and establish a company for the
management of the hotels. They did not intend to create an employer-employee relationship, and the execution of the
employment contract that was being invoked by McBurnie was solely for the purpose of allowing McBurnie to obtain an
alien work permit in the Philippines, and that McBurnie had not obtained a work permit.

On September 30, 2004, the Labor Arbiter (LA) declared McBurnie as having been illegally dismissed from employment.
The respondents filed their Memorandum of Appeal and Motion to Reduce Bond, and posted an appeal bond in the
amount of P100,000.00. They claimed that an award of more than P60 Million Pesos to a single foreigner who had no
work permit and who left the country for good one month after the purported commencement of his employment was a
patent nullity.

On March 31, 2005, the NLRC denied the motion to reduce bond explaining that in cases involving monetary award, an
employer seeking to appeal the LA decision to the Commission is unconditionally required by Art. 223, Labor Code to post
bond equivalent to the monetary award.

The motion for reconsideration was denied, the respondents appealed to the CA via a Petition for Certiorari and
Prohibition (with extremely urgent prayer for the issuance of a Preliminary Injunction and/or Temporary Restraining
Order) docketed as CA-G.R. SP No. 90845.

The NLRC dismissed their appeal due to respondent's failure to post the required additional bond. The respondents
motion for reconsideration was denied on June 30, 2006. This prompted respondents to filed with the CA the Petition for
Certiorari docketed as CA-G.R SP No. 95916, which was later consolidated with CA-G.R. SP No. 90845

The CA granted the respondent's application for a writ of preliminary injunction on February 16, 2007. It directed the
NLRC, McBurnie, and all persons acting for and under their authority to refrain from causing the execution and
enforcement of the LA decision in favor of McBurnie, conditioned upon the respondents posting of a bond in the amount
of P10,000,000.00. The reconsideration of issuance of the writ of preliminary injunction sought by McBurnie was denied
by the CA.

McBurnie filed with the Supreme Court a Petition for Review on Certiorari (G.R. Nos. 178034 and 178117) assailing the CA
resolutions that granted the respondent's; application for the injunctive writ. On July 4, 2007, the Court denied the
petition. A motion for reconsideration was denied with a finality on October 7, 2007.

McBurnie filed a Motion for Leave (1) To File Supplemental Motion for Reconsideration and (2) to Admit the Attached
Supplemental Motion for Reconsideration, a prohibited pleading under Section 2, Rule 56 of the Rules of Court. Thus, the
motion for leave was denied by the Court and the July 4, 2007 became final and executor on November 13, 2007.

On October 27, 2008, the CA ruled on the merits of CA-G.R. SP No. 90845 and CA-G.R. SP No. 95916 and rendered a
decision allowing the respondent's motion to reduce appeal bond and directing the NLRC to give due course to their
appeal. The CA also ruled that the NLRC committed grave abuse of discretion in immediately denying the motion without
fixing an appeal bond in an amount that was reasonable, as it denied the respondents of their right to appeal from the
decision of the LA.

McBurnie filed a motion for reconsideration. The respondents moved that the appeal be resolved on the merits by the CA.
The CA denied both motions. McBurnie then filed with the Supreme Court the Petition for Review on Certiorari (G.R. Nos.
186984-85)

The NLRC, acting on the CA order of remand, accepted the appeal from the LA decision and reversed and set aside the
decision of the LA, and entered a new on dismissing McBurnie complaint.

On September 18, 2009, the third division of this court rendered its decision granting respondents motion to reduce
appeal bond. This Court also reinstated and affirmed the NLRC decision dismissing respondent's appeal for failure to
perfect an appeal and denying their motion for reconsideration. The aforementioned decision became final and executor
on March 14, 2012.

The respondents filed a Motion for Leave to File Attached Third Motion for Reconsideration, with an attached Motion for
Reconsideration with Motion to Refer These Cases to the Honorable Court En Banc. The Court En Banc accepted the case
from the third division and issued a temporary restraining order (TRO) enjoining the implementation of the LA Decision.
McBurnie filed a Motion for Reconsideration where he invoked that the Court September 18, 2009 decision had become
final and executor.

ISSUE: Whether or not McBurnie was illegally dismissed?

HELD: There was no employer-employee relationship.

REMEDIAL LAW: second motion for reconsideration

At the outset, the Court emphasizes that second and subsequent motions for reconsideration are, as a general rule,
prohibited.Section 2, Rule 52 of the Rules of Court provides that n]o second motion for reconsideration of a judgment or
final resolution by the same party shall be entertained. The rule rests on the basic tenet of immutability of judgments.t
some point, a decision becomes final and executory and, consequently, all litigations must come to an end./span>

The general rule, however, against second and subsequent motions for reconsideration admits of settled exceptions. In a
line of cases, the Court has then entertained and granted second motions for reconsideration n the higher interest of
substantial justice,as allowed under the Internal Rules when the assailed decision is legally erroneous,patently unjust and
potentially capable of causing unwarranted and irremediable injury or damage to the parties. In Tirazona v. Philippine
EDS Techno-Service, Inc. (PET, Inc.), we also explained that a second motion for reconsideration may be allowed in
instances of xtraordinarily persuasive reasons and only after an express leave shall have been obtained.In Apo Fruits
Corporation v. Land Bank of the Philippines, we allowed a second motion for reconsideration as the issue involved therein
was a matter of public interest, as it pertained to the proper application of a basic constitutionally-guaranteed right in the
government implementation of its agrarian reform program.In San Miguel Corporation v. NLRC, the Court set aside the
decisions of the LA and the NLRC that favored claimants-security guards upon the Court review of San Miguel
Corporation second motion for reconsideration.In Vir-Jen Shipping and Marine Services, Inc. v. NLRC, et al., the Court en
banc reversed on a third motion for reconsideration the ruling of the Court Division on therein private respondentsclaim
for wages and monetary benefits.

The instant case qualifies as an exception to, first, the proscription against second and subsequent motions for
reconsideration, and second, the rule on immutability of judgments; a reconsideration of the Decision dated September
18, 2009, along with the Resolutions dated December 14, 2009 and January 25, 2012, is justified by the higher interest of
substantial justice.

In League of Cities of the Philippines (LCP) v. Commission on Elections, we reiterated a ruling that when a motion for
leave to file and admit a second motion for reconsideration is granted by the Court, the Court therefore allows the filing of
the second motion for reconsideration.In such a case, the second motion for reconsideration is no longer a prohibited
pleading. Similarly in this case, there was then no reason for the Court to still consider the respondent's second motion for
reconsideration as a prohibited pleading, and deny it plainly on such ground.The Court intends to remedy such error
through this resolution.

Upon review, the Court is constrained to rule differently on the petitions.We have determined the grave error in affirming
the NLRC rulings, promoting results that are patently unjust for the respondents, as we consider the facts of the case,
pertinent law, jurisprudence, and the degree of the injury and damage to the respondents that will inevitably result from
the implementation of the Court Decision dated September 18, 2009.
LABOR LAW: rule on appeal bonds

The crucial issue in this case concerns the sufficiency of the appeal bond that was posted by the respondents. The present
rule on the matter is Section 6, Rule VI of the 2011 NLRC Rules of Procedure, which was substantially the same provision
in effect at the time of the respondents appeal to the NLRC, and which reads: No motion to reduce bond shall be
entertained except on meritorious grounds and upon the posting of a bond in a reasonable amount in relation to the
monetary award. The filing of the motion to reduce bond without compliance with the requisites in the preceding
paragraph shall not stop the running of the period to perfect an appeal.

While the CA, in this case, allowed an appeal bond in the reduced amount of P10,000,000.00 and then ordered the case
remand to the NLRC, this Court Decision dated September 18, 2009 provides otherwise, as it reads in part: While the
bond may be reduced upon motion by the employer, this is subject to the conditions that (1) the motion to reduce the bond
shall be based on meritorious grounds; and (2) a reasonable amount in relation to the monetary award is posted by the
appellant, otherwise the filing of the motion to reduce bond shall not stop the running of the period to perfect an
appeal.The qualification effectively requires that unless the NLRC grants the reduction of the cash bond within the 10-day
reglementary period, the employer is still expected to post the cash or surety bond securing the full amount within the said
10-day period.If the NLRC does eventually grant the motion for reduction after the reglementary period has elapsed, the
correct relief would be to reduce the cash or surety bond already posted by the employer within the 10-day period.

To begin with, the Court rectifies its prior pronouncement the unqualified statement that even an appellant who seeks a
reduction of an appeal bond before the NLRC is expected to post a cash or surety bond securing the full amount of the
judgment award within the 10-day reglementary period to perfect the appeal.

LABOR LAW: suspension of the period to perfect the appeal upon the filing of a motion to reduce bond

To clarify, the prevailing jurisprudence on the matter provides that the filing of a motion to reduce bond, coupled with
compliance with the two conditions emphasized in Garcia v. KJ Commercial for the grant of such motion, namely, (1) a
meritorious ground, and (2) posting of a bond in a reasonable amount, shall suffice to suspend the running of the period
to perfect an appeal from the labor arbiter decision to the NLRC. To require the full amount of the bond within the 10-day
reglementary period would only render nugatory the legal provisions which allow an appellant to seek a reduction of the
bond.

The rule that the filing of a motion to reduce bond shall not stop the running of the period to perfect an appeal is not
absolute. The Court may relax the rule. In Intertranz Container Lines, Inc. v. Bautista, the Court held: Jurisprudence tells
us that in labor cases, an appeal from a decision involving a monetary award may be perfected only upon the posting of
cash or surety bond.The Court, however, has relaxed this requirement under certain exceptional circumstances in order to
resolve controversies on their merits.These circumstances include: (1) fundamental consideration of substantial justice;
(2) prevention of miscarriage of justice or of unjust enrichment; and (3) special circumstances of the case combined with
its legal merits, and the amount and the issue involved.

A serious error of the NLRC was its outright denial of the motion to reduce the bond, without even considering the
respondent's arguments and totally unmindful of the rules and jurisprudence that allow the bond reduction.Instead of
resolving the motion to reduce the bond on its merits, the NLRC insisted on an amount that was equivalent to the
monetary award.

When the respondents sought to reconsider, the NLRC still refused to fully decide on the motion.It refused to at least
make a preliminary determination of the merits of the appeal.

LABOR LAW: allowance of the reduction of appeal bonds

Time and again, the Court has cautioned the NLRC to give Article 223 of the Labor Code, particularly the provisions
requiring bonds in appeals involving monetary awards, a liberal interpretation in line with the desired objective of
resolving controversies on the merits.

Although the general rule provides that an appeal in labor cases from a decision involving a monetary award may be
perfected only upon the posting of a cash or surety bond, the Court has relaxed this requirement under certain exceptional
 circumstances in order to resolve controversies on their merits.These circumstances include: (1) the fundamental
consideration of substantial justice; (2) the prevention of miscarriage of justice or of unjust enrichment; and (3) special
circumstances of the case combined with its legal merits, and the amount and the issue involved. Guidelines that are
applicable in the reduction of appeal bonds were also explained in Nicol v. Footjoy Industrial Corporation. The bond
requirement in appeals involving monetary awards has been and may be relaxed in meritorious cases, including instances
in which (1) there was substantial compliance with the Rules, (2) surrounding facts and circumstances constitute
meritorious grounds to reduce the bond, (3) a liberal interpretation of the requirement of an appeal bond would serve the
desired objective of resolving controversies on the merits, or (4) the appellants, at the very least, exhibited their
willingness and/or good faith by posting a partial bond during the reglementary period.

It is in this light that the Court finds it necessary to set a parameter for the litigantsand the NLRC guidance on the amount
of bond that shall hereafter be filed with a motion for a bond reduction.To ensure that the provisions of Section 6, Rule VI
of the NLRC Rules of Procedure that give parties the chance to seek a reduction of the appeal bond are effectively carried
out, without however defeating the benefits of the bond requirement in favor of a winning litigant, all motions to reduce
bond that are to be filed with the NLRC shall be accompanied by the posting of a cash or surety bond equivalent to 10% of
the monetary award that is subject of the appeal, which shall provisionally be deemed the reasonable amount of the bond
in the meantime that an appellant motion is pending resolution by the Commission.In conformity with the NLRC Rules,
the monetary award, for the purpose of computing the necessary appeal bond, shall exclude damages and attorney fees.
Only after the posting of a bond in the required percentage shall an appellant period to perfect an appeal under the NLRC
Rules be deemed suspended.

The foregoing shall not be misconstrued to unduly hinder the NLRC exercise of its discretion, given that the percentage of
bond that is set by this guideline shall be merely provisional. The NLRC retains its authority and duty to resolve the
motion and determine the final amount of bond that shall be posted by the appellant, still in accordance with the
standards of meritorious grounds and reasonable amount Should the NLRC, after considering the motion merit,
determine that a greater amount or the full amount of the bond needs to be posted by the appellant, then the party shall
comply accordingly.The appellant shall be given a period of 10 days from notice of the NLRC order within which to perfect
the appeal by posting the required appeal bond.

LABOR LAW: employment permit for non-resident aliens; illegal dismissal

Considering that McBurnie, an Australian, alleged illegal dismissal and sought to claim under our labor laws, it was
necessary for him to establish, first and foremost, that he was qualified and duly authorized to obtain employment within
our jurisdiction.A requirement for foreigners who intend to work within the country is an employment permit, as provided
under Article 40, Title II of the Labor Code.

In WPP Marketing Communications, Inc. v. Galera, we held that a foreign national failure to seek an employment permit
prior to employment poses a serious problem in seeking relief from the Court.

Clearly, this circumstance on the failure of McBurnie to obtain an employment permit, by itself, necessitates the dismissal
of his labor complaint.

McBurnie failed to present any employment permit which would have authorized him to obtain employment in the
Philippines.This circumstance negates McBurnie claim that he had been performing work for the respondents by virtue of
an employer-employee relationship.The absence of the employment permit instead bolsters the claim that the supposed
employment of McBurnie was merely simulated, or did not ensue due to the non-fulfillment of the conditions that were set
forth in the letter of May 11, 1999.

McBurnie failed to present other competent evidence to prove his claim of an employer-employee relationship. iven the
partiesconflicting claims on their true intention in executing the agreement, it was necessary to resort to the established
criteria for the determination of an employer-employee relationship, namely: (1) the selection and engagement of the
employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee conduct. The
rule of thumb remains: the onus probandi falls on the claimant to establish or substantiate the claim by the requisite
quantum of evidence.Whoever claims entitlement to the benefits provided by law should establish his or her right thereto.
McBurnie failed in this regard.As previously observed by the NLRC, McBurnie even failed to show through any document
 such as payslips or vouchers that his salaries during the time that he allegedly worked for the respondents were paid by
the company. In the absence of an employer-employee relationship between McBurnie and the respondents, McBurnie
could not successfully claim that he was dismissed, much less illegally dismissed, by the latter.Even granting that there
was such an employer-employee relationship, the records are barren of any document showing that its termination was by
the respondentsdismissal of McBurnie.