Ruling: In determining the existence of employer-employee relationship, the following elements are generally considered, 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 employees' conductalthough the latter is the most important element. On the other hand, an independent contractor is one who exercises independent employment and contracts to do a piece of work according to his own methods and without being subject to control of his employer except as to the result of the work. In the case at bench, under their peddling contracts Repomanta and Moralde were not employees of Mafinco but were independent contractors. They were distributors of Cosmos soft drinks with their own capital and employees. Ordinarily, an employee or a mere peddler does not execute a formal contract of employment. He is simply hired and he works under the direction and control of the employer. Repomanta and Moralde voluntarily executed with Mafinco formal peddling contracts which indicate the manner in which they would sell Cosmos soft drinks. That circumstance signifies that they were acting as independent businessmen. They were to sign or not to sign that contract. If they did not want to sell Cosmos products under the conditions defined in that contract; they were free to reject it. But having signed it, they were bound by its stipulations and the

consequences thereof under existing labor laws. One such stipulation is the right of the parties to terminate the contract upon five days' prior notice. Order appealed from is set aside. 4. Company and Collecting agents on commission basis SINGER SEWING MACHINE COMPANY vs. FRANKLIN M. DRILON and SINGER MACHINE COLLECTORS UNION G.R. No. 91307 January 24, 1991 GUTIERREZ Facts: Respondent union filed a petition for direct certification as the sole and exclusive bargaining agent of all collectors of the Singer Sewing Machine Company. The Company opposed the petition mainly on the ground that the union members are actually not employees but are independent contractors as evidenced by the collection agency agreement which they signed. The Med-Arbiter, finding that there exists an employer-employee relationship between the union members and the Company, granted the petition for certification election which was affirmed by the Secretary of Labor Franklin M. Drilon. Hence, this petition. Issue: WON there is employer-employee relationship between the company and the private respondent Union. Ruling:

The following elements are generally considered in the determination of the employer-employee relationship; (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's conduct although the latter is the most important element. In the case at bench, the Collection Agency Agreement defines the relationship between the Company and each of the union members who signed a contract. The Agreement confirms the status of the collecting agent in this case as an independent contractor not only because he is explicitly described as such but also because the provisions permit him to perform collection services for the company without being subject to the control of the latter except only as to the result of his work. The requirement that collection agents utilize only receipt forms and report forms issued by the Company and that reports shall be submitted at least once a week is not necessarily an indication of control over the means by which the job of collection is to be performed. The agreement itself specifically explains that receipt forms shall be used for the purpose of avoiding a co-mingling of personal funds of the agent with the money collected on behalf of the Company. Likewise, the use of standard report forms as well as the regular time within which to submit a report of collection are intended to facilitate order in office procedures. Even if the report requirements are to be called control measures, any control is only with respect to the end result of the collection since the

21 | B i n k y

requirements regulate the things to be done after the performance of the collection job or the rendition of the service. The monthly collection quota is a normal requirement found in similar contractual agreements and is so stipulated to encourage a collecting agent to report at least the minimum amount of proceeds. The plain language of the agreement reveals that the designation as collection agent does not create an employment relationship and that the applicant is to be considered at all times as an independent contractor. Order appealed from is reversed. 5. Sugar workers Central Company and farm

no employer-employee relationship between it and private respondent. The labor arbiter denied the motion which was affirmed by NLRC. Hence this petition. Issue: WON there is an employeremployee relationship between petitioner company and private respondent union. Ruling: In a decided case, it has been held that a sugar central does not have any privity of any kind with the sugar farm workers, to wit: from the very beginning of the sugar industry, the centrals have never had any privity of any kind with the plantation laborers, since they had their own laborers to take of. In other words, both the centrals and the planters have always been the one dealing with their respective laborers regarding the terms and conditions of their employment, particularly as to wages. Sugar farm workers/laborers were the direct responsibility of their respective planters and the central did not deal with the planter's workers but only with the planter. R.A. 809 did not create any employer-employee relationship between the planters' workers and the sugar centrals. In fact, the law affirmed the old practice of the central dealing only with the planter by directly issuing to it the planter's share of the unrefined sugar per their milling contracts. The planter's share included the workers' share such that if any increase was made on the planter's participation in the proceeds, it became the planter's obligation to pay his workers

their 60% share of such increase. Clearly, there is no privity between the sugar centrals and the sugar farm workers. The workers are not employees of the sugar central but of the planter. And R.A. 809 expressly recognizes the planter, not the central, as the employer of the farm workers by imposing on it the duty of paying its respective workers their share of the proceeds from the milled sugar. Petition is granted. 6. Schools and working scholars FILAMER CHRISTIAN INSTITUTE vs. IAC and POTENCIANO KAPUNAN, SR. G.R. No. 75112 August 17, 1992 GUTIERREZ, JR. Facts: The private respondents, heirs of the late Potenciano Kapunan, seek reconsideration of the decision rendered by the Supreme Court on October 16, 1990 in the case of Filamer Christian Institute v. Court of Appeals, in which SC ruled petitioner Filamer is not liable for the injuries caused by Funtecha on the grounds that the latter was not an authorized driver for whose acts the petitioner shall be directly and primarily answerable, and that Funtecha was merely a working scholar who, is not considered an employee of the petitioner. In that case, Funtecha was a working student, being a part-time janitor and a scholar of petitioner Filamer. He was assigned to clean the school premises for only 2 hours in the morning of each school

VICTORIAS MILLING CO. vs. NLRC and NATIONAL FEDERATION OF SUGAR WORKERS-FOOD G.R. No. 116236 October 2, 1996 PUNO Facts: Private respondent National Federation of Sugar Workers-Food, on behalf of "all workers of farm owners," instituted a suit against petitioner Victorias Milling Co., Inc., a sugar central in Victorias, before NLRC. Private respondent sought to recover the share of the workers in the increased deliveries enjoyed by the planter of unrefined sugar and by-products produced in petitioner's refinery from 1952 to crop year 1983-1984. Petitioner moved to dismiss the complaint for lack of jurisdiction on the ground that there was

22 | B i n k y

day. Having a student driver's license, Funtecha requested the driver, Allan Masa, and was allowed, to take over the vehicle while the latter was on his way home one late afternoon. The place where Allan lives is also the house of his father, the school president, Agustin Masa. Moreover, it is also the house where Funtecha was allowed free board while he was a student of Filamer Christian Institute. Allan Masa turned over the vehicle to Funtecha only after driving down a road, negotiating a sharp dangerous curb, and viewing that the road was clear. Thereupon, a fast moving truck with glaring lights nearly hit them so that they had to swerve to the right to avoid a collision. The vehicle hit Potenciano Kapunan which caused his death. Issue: WON Funtecha was an employee of Filamer Institute. Ruling: It is to be noted that the present case does not deal with a labor dispute on conditions of employment between an alleged employee and an alleged employer. It invokes a claim brought by one for damages for injury caused by the patently negligent acts of a person, against both doer-employee and his employer. Thus, it is the Civil Code on torts and damages that should be applied and not the Labor Code. Hence, in this case, the Supreme Court granted the MFR and held that Filamer Institute was an employer of Funtecha and as such, liable

for the injuries caused by Funtecha to Potenciano Kapunan. In learning how to drive while taking the vehicle home in the direction of Allan's house, Funtecha definitely was not having a joy ride. Funtecha was not driving for the purpose of his enjoyment or for a "frolic of his own" but ultimately, for the service for which the jeep was intended by the petitioner school. The Supreme Court is constrained to conclude that the act of Funtecha in taking over the steering wheel was one done for and in behalf of his employer for which act the petitionerschool cannot deny any responsibility by arguing that it was done beyond the scope of his janitorial duties. The clause "within the scope of their assigned tasks" for purposes of raising the presumption of liability of an employer, includes any act done by an employee, in furtherance of the interests of the employer or for the account of the employer at the time of the infliction of the injury or damage. Even if somehow, the employee driving the vehicle derived some benefit from the act, the existence of a presumptive liability of the employer is determined by answering the question of whether or not the servant was at the time of the accident performing any act in furtherance of his master's business. Funtecha is an employee of petitioner Filamer. He need not have an official appointment for a driver's position in order that the petitioner may be held responsible for his grossly negligent act, it being sufficient that the act of driving at the time of the incident was for the benefit

of the petitioner. Hence, the fact that Funtecha was not the school driver or was not acting within the scope of his janitorial duties does not relieve the petitioner of the burden of rebutting the presumption juris tantum that there was negligence on its part either in the selection of a servant or employee, or in the supervision over him. The petitioner has failed to show proof of its having exercised the required diligence of a good father of a family over its employees Funtecha and Allan. Petition is granted. 7. In contract of agency DR. CARLOS L. SEVILLA and LINA SEVILLA vs. CA and TOURIST WORLD SERVICE G.R. No. L-41182-3 April 16, 1988 SARMIENTO Facts: Segundina Noguera leased her property to the Tourist World Service, Inc., represented by Mr. Eliseo Canilao for the formers use as a branch office. In the said contract, Lina Sevilla held herself solidarily liable with the party of the part for the prompt payment of the monthly rental agreed on. When the branch office was opened, the same was run by Lina Sevilla payable to Tourist World Service Inc. by any airline for any fare brought in on the efforts of Mrs. Lina Sevilla, 4% was to go to Lina Sevilla and 3% was to be withheld by the Tourist World Service, Inc. Tourist World Service appears to have been informed that Lina Sevilla was connected

23 | B i n k y

with a rival firm, the Philippine Travel Bureau, and, since the branch office was anyhow losing, the Tourist World Service considered closing down its office. Because of this, and to comply with the mandate of the Tourist World Service, the corporate secretary Gabino Canilao went over to the branch office, and, finding the premises locked, and, being unable to contact Lina Sevilla, he padlocked the premises on June 4, 1962 to protect the interests of the Tourist World Service. When neither the appellant Lina Sevilla nor any of her employees could enter the locked premises, a complaint was filed by the herein appellants against the appellees with a prayer for the issuance of mandatory preliminary injunction which was dismissed by the trial court for failure to prosecute. Lina Sevilla refiled her case which was dismiss for lack of merit. Issue: WON there is an employeeemployer relationship between Tourist World and Sevilla. Ruling: In this jurisdiction, there has been no uniform test to determine the evidence of an employer-employee relation. The right of control test is where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end. Subsequently, however, in addition to the standard of right-of control, the existing economic conditions

prevailing between the parties, like the inclusion of the employee in the payrolls, in determining the existence of an employer-employee relationship. In the case at bench, the records show that the Lina Sevilla, was not subject to control by the private respondent Tourist World, either as to the result of the enterprise or as to the means used in connection therewith. In the first place, under the contract of lease covering the Tourist Worlds Ermita office, she had bound herself in solidum as and for rental payments, an arrangement that would be like claims of a master-servant relationship. In the second place, when the branch office was opened, the same was run by Lina Sevilla payable to Tourist World Service, Inc. by any airline for any fare brought in on the effort of Mrs. Lina Sevilla. Under these circumstances, it cannot be said that Sevilla was under the control of Tourist World Service, Inc. "as to the means used." Sevilla in pursuing the business, obviously relied on her own gifts and capabilities. It is further admitted that Sevilla was not in the company's payroll. For her efforts, she retained 4% in commissions from airline bookings, the remaining 3% going to Tourist World. Unlike an employee then, who earns a fixed salary usually, she earned compensation in fluctuating amounts depending on her booking successes. The fact that Sevilla had been designated 'branch manager" does not make her Tourist World's employee. Employment is determined by the right-of-control test and

certain economic parameters. But titles are weak indicators. The Supreme Court is of the opinion, that when the petitioner, Lina Sevilla, agreed to man the Tourist World Service, Inc.'s Ermita office, she must have done so pursuant to a contract of agency. It is the essence of this contract that the agent renders services "in representation or on behalf of another. In the case at bench, Sevilla solicited airline fares, but she did so for and on behalf of her principal, Tourist World Service, Inc. As compensation, she received 4% of the proceeds in the concept of commissions. Sevilla herself based on her letter of preassumed her principal's authority as owner of the business undertaking. Thus, the relationship between Sevilla and Tourist World is one of principal-agent relationship, rather than a joint managament or a partnership. CA is reversed. d. Contractor or SubContractor (Art. 106)

i. Types of Contractor 1. Labor-only Contractor 2. Job Contractor Labor-only Contracting- Where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work, premises, among others, and the

24 | B i n k y

workers recruited and placed by such persons are performing activities which are directly related to the principal business of such employer. NOTE: Labor-only contracting is prohibited and the person acting as contractor shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him. job Contracting- An arrangement whereby a principal agrees to put out or farm out with a contractor or series of contractor the performance or completion of a specific job, work or service within a definite or predetermined period, regardless of whether such job, work, or service is to be performed or completed within or outside the premises of the principal. Independent Contractor- One who carries on a distinct and independent business and undertakes to perform the job on to do a piece of work on its own account and under its own manner and methods and free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof. A mere statement in a contract with a company that laborers who are paid according to the amount and quality of work are independent contractors does not change their status s mere employees in contemplation of labor laws. i. Elements of Job Contracting:

1. the contractor or subcontractor carries on a distinct and independent business and undertakes to perform the job on his own account and under his own responsibility, according to its own manner and method and free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof; 2. the contractor or subcontractor has substantial capital or investment; and 3. the agreement between the principal and contractor or subcontractor assures the contractual employees entitlement to all labor and occupational safety and health standards, free exercise of the right to self-organization, security of tenure and social and welfare benefits. Substantial Capital- refers to the adequacy of resources actually or directly used by the contractor or subcontractor in the performance or completion of the job, work, service contracted out. Substantial capital need not be coupled with investment in tools or equipment. This is clear from the use of the conjunction or. ii. Scope of Liability in Contracting or Subcontracting When a contractor fails to pay the wage of his employees in accordance with the Labor Code the employer who contracted out the job becomes jointly and severally liable with the contractor to the extent of the work performed under the contractors employees.

The law itself establishes an employeremployee relationship between the employer and the job contractors employee for a limited purpose, i.e. in order to ensure the latter get paid the wages due to them. Working Conditions- refers to the terms and circumstances affecting the employment of an employee, including policies, programs, and regulations governing his employment status, work, and work relationships. They are, as a rule, determined by the employer. JOB CONTRACTING No ER-EER except when the contractor or subcontractor fails to pay the wages of the workers. Liability is limited. It shall be solidarily liable with the employer when the employer fails to comply with requirements at to unpaid wages and other labor standards violations. Permissible Presence of substantial capital or investment LABOR ONLY CONTRACTING Employer is treated as direct employer of the person (contractor is deemed agent of the employer) Liability extends to all rights, duties and liabilities under labor standard laws including the right to self-organization

Prohibited by law Absence of substantial capital or investment

LAPANDAY AGRICULTURAL vs. CA and COMMANDO SECURITY SERVICE

25 | B i n k y

AGENCY G.R. No. 112139 January 31, 2000 GONZAGA-REYES Facts: Commando Security Service Agency, Inc., and defendant Lapanday Agricultural Development Corporation entered into a Guard Service Contract. Plaintiff provided security guards in defendant's banana plantation. The contract called for the payment to a guard of P754.28 on a daily 8-hour basis and an additional P565.72 for a four hour overtime while the shift-incharge was to be paid P811.40 on a daily 8-hour basis and P808.60 for the 4-hour overtime. Wage Orders increasing the minimum wage in 1983 were complied with by the defendant. On June 16, 1984, Wage Order No. 5 was promulgated directing an increase of P3.00 per day on the minimum wage of workers in the private sector and a P5.00 increase on the ECOLA. This was followed on November 1, 1984 by Wage Order No. 6 which further increased said minimum wage by P3.00 on the ECOLA. Both Wage Orders contain the following provision: "In the case of contract for construction projects and for security, janitorial and similar services, the increase in the minimum wage and allowances rates of the workers shall be borne by the principal or client of the construction/service contractor xxx. Plaintiff demanded that its Guard Service Contract with defendant be upgraded in compliance with Wage Order Nos. 5 and 6. Defendant refused. Private respondent filed a suit before RTC for the purpose of securing the upgrading of the Guard

Service Contract entered into by herein petitioner and private respondent. Petitioner assailed the jurisdiction of RTC arguing that it is the NLRC that has jurisdiction to resolve the issue involved in this case for it refers to the enforcement of wage adjustment and other benefits due to private respondent's security guards mandated under Wage Order Nos. 5 and 6. Issue: WON RTC has jurisdiction over the case at bench. Ruling: RTC has jurisdiction over the subject matter of the present case. It is well settled in law and jurisprudence that where no employer-employee relationship exists between the parties and no issue is involved which may be resolved by reference to the Labor Code, other labor statutes or any collective bargaining agreement, it is the Regional Trial Court that has jurisdiction. In its complaint, private respondent is not seeking any relief under the Labor Code but seeks payment of a sum of money and damages on account of petitioner's alleged breach of its obligation under their Guard Service Contract. The action is within the realm of civil law hence jurisdiction over the case belongs to the regular courts. While the resolution of the issue involves the application of labor laws, reference to the labor code was only for the determination of the solidary liability of the petitioner to the respondent where no employer-employee relation exists.

As regards the issue on whether or not petitioner is liable to the private respondent for the wage adjustments provided under Wage Order Nos. 5 and, private respondent admits that there is no employer-employee relationship between it and the petitioner. The private respondent is an independent/job contractor who assigned security guards at the petitioner's premises for a stipulated amount per guard per month. The Contract of Security Services expressly stipulated that the security guards are employees of the Agency and not of the petitioner. In a decided case, it has been held that that the joint and several liability of the contractor and the principal is mandated by the Labor Code to assure compliance with the provisions therein including the minimum wage. The contractor is made liable by virtue of his status as direct employer. The principal, on the other hand, is made the indirect employer of the contractor's employees to secure payment of their wages should the contractor be unable to pay them. Even in the absence of an employeremployee relationship, the law itself establishes one between the principal and the employees of the agency for a limited purpose i.e. in order to ensure that the employees are paid the wages due them.

III. EMANCIPATION OF TENANTS

26 | B i n k y

a. Agricultural or Farm Workers- employed in an agricultural or farm tasks which are directly related to the agricultural activities of the employer, such as cultivation and tillage of the soil, dairying, growing and harvesting of any agricultural and horticultural commodities, the raising of livestock or poultry, and any activities performed by a farmer as an incident to or in conjunction with such farming operations. b. Purpose of the ProvisionsIntended to encourage workers to seek employment in agricultural enterprise instead of migrating to already overcrowded urban areas to find work in industrial establishment. Farm EmployerFarm Worker Relationship Tenancy Relationship
It is the landowner who is the lessor and the tenant as the lessee of agricultural land. The tenant derives his income from the agricultural produce or harvest.

The lease is one of labor with the agricultural laborer as the lessor of his services and the farm employer as the lessee. The agricultural worker works for the farm employer. He receives a salary/wage, whether the employer makes a profit or not.

stead agricultural leasehold system. Under Article 8, the land covered by operation of land transfer must be private agricultural land, tenanted, primarily devoted to rice and/or corn, and more than 7 hectares in area. Emancipation Patent- the title issued to the tenant upon compliance with all the requirements of the government. It represents the full emancipation of the tenant from the bandage of the soil. Prohibition against Alienation- of land is intended to: 1. Preserve the landholding in the hands of the owner-tiller and his heirs; 2. Minimize land speculation; and 3. Prevent a return to the regime of land ownership by a few. Land Reform- distribution of land to farmer beneficiaries. Land Reform Code (RA 3844)abolished the Share-Tenancy and replaced it with the Leasehold- Tenancy System. Share Tenancy- agrarian system where the partition between the landowner-lessor and the farmer-lessee on the land is in halves. d. Comprehensive Agrarian Reform Law- land reform program of the government where support services are provided to farmers.

c. Share Tenancy has been abolished placing in the

Agricultural Tenancy- The physical possession by a person of land possessed by another for the purpose of production through the labor of the

former and of the members of his immediate farm household in consideration of which the former agrees to share the harvest with the latter or to pay a price certain or ascertainable, whether in produce or in money, or both. (RA 1199, Sec.3) Elements of Agricultural Tenancy a. The parties are the landholder and tenant: Tenanta person who by himself, or with the aid available form his immediate household, cultivates the land belonging to or possessed by another, with the latters consent for purposes of production, sharing the produce of the landholder or for a price certain or ascertainable in produce or in money, or both, under the leasehold tenancy system. (RA 1199, Sec.5 (a)) Landholder-lessor- any person, natural or juridical, either as owner, lessee, usufructuary or legal possessor of agricultural land, who lets leases or rents to another said property for purposes of agricultural production and for an price a certain or ascertainable either in an amount of money or produce. (RA 1199, Sec. 42) b. The subject is agricultural land; Agricultural Land- a land devoted to agricultural activity as defined, and not classified as mineral, forest, residential, commercial or industrial land. (RA 6657) Land devoted to any growth, including but not limited to crop lands, salt beds, fish ponds, idle land and abandoned land. (RA 3844) The area of agricultural land that a lessee may

27 | B i n k y

cultivate has no limit, but he should cultivate the entire area leased. The 3 hectare limit under RA 6657 applies only to the award that may be given to the agrarian reform beneficiary. c. There is consent by the landholder for the tenant to work on the land, given either orally or in writing, expressly or impliedly; NOTE: The tenancy relation does not exist where a usurper cultivates the land. (Hilario vs. IAC 148 S 573) Successors-in-interest of the true and lawful landholder/owner who gave the consent are bound to recognize the tenancy established before they acquire the agricultural land. (Endaya vs. CA, 215 S 109) d. The purpose is agricultural production: Tenancy status arises only if an occupant of a parcel of land has been given its possession for the primary purpose of agricultural production. The fact of sharing alone is not sufficient to establish a tenancy relationship. e. There is a personal cultivation or with the help of immediate farm household. (Evangelista vs. CA, 158 S 41) Cultivation is not limited to the plowing and harrowing of the land, but also the husbanding of the ground to forward the products of the earth by general industry, the taking care of the lands and fruits growing thereon, fencing of certain areas, and the clearing thereof by gathering dried leaves and cutting of grasses. f. There is compensation in terms of payment of a fixed amount in money and/or produce. (Qua vs. CA, 198 S 236)

NOTE: All requisites must concur in order to create a tenancy relationship between the parties. The absence of one does not make an occupant of a parcel of land, or a cultivator thereof, or a planter thereon, a de jure tenant. (Caballes vs. DAR, 168 S 254)
Retention Limit Benefits Land owners: 7 hecs. Children (15 y/o): 3 hecs. 5 hecs. If not irrigated 3 hecs. If irrigated

PD 27

5 hectares

RA 6657

5 hectares

Disposition of lands through hereditary or government succession Lands not covered

Can be disposed within 10 years from award

The tenant has the right to continue working on the land except when he is ejected therefrom for cause as provided by law. (De Jesus vs. IAC, 175 S 559) Transfer of ownership or legal possession does not affect security of tenure. (Tanpingco vs. IAC, 207 S 653) Pursuant to PD 27, a farmer-beneficiary cannot make any valid form of transfer of the land adjudicated to him, except to the government or by hereditary succession to his respective successors. The purpose of the agrarian reform law is to ensure the farmer-beneficiarys continued possession, cultivation and enjoyment of the land he tills. (Toralba vs. Mercado, GR No. 146480, July 14, 2004) f. Rights and Responsibilities of the Parties

Homesteads, residential lands, ponds, and those devoted in livestock and poulty.

Residential lands, commercial lands, industrial lands and homesteads

e. Security of Tenure Under RA 1199, Sec. 7, the agricultural leasehold relation, once established, shall confer upon the agricultural lessee the right to continue working on the landholding until such leasehold relation is extinguished. The agricultural lessee shall be entitled to security of tenure on his landholding and cannot be ejected therefrom unless authorized by the Court causes provided therein.

i. The Lessee shall have the following rights (RA 3844, Secs. 11, 12, 23-25, 36): 1. To have possession and peaceful enjoyment of the land. 2. To manage and work on the land in a manner and method of cultivation and harvest which conform to the proven farm practices. 3. To mechanize all or any phase of his farm work. 4. To deal with millers and processors and attend to the issuance of quedans and warehouse receipts of the produce due him/her. 5. To continue in the exclusive possession and enjoyment of any homelot the lessee

28 | B i n k y

may have occupied upon the effectivity of RA 3844. 6. To be indemnified for the costs and expenses incurred in the cultivation and for other expenses incidental to the improvement of the crop in case the lessee surrenders, abandons or is ejected from the landholding. 7. To have the right of pre-emption and redemption. 8. To be paid disturbance compensation in case of conversion of the farmholding has been approved. ii. The Lessee shall have the following responsibilities (RA 3844, Sec 29): 1. Cultivate and take care of the farm, growing crops and other improvements on the land and perform all the work therein in accordance with proven farm practices. 2. Inform the lessor within a reasonable time of any trespass committed by third persons on the farm without prejudice to his direct action against the trespasser. 3. Take reasonable care of the work animals and farm implements delivered to him by the lessor and see to it that they are not used for other purposes other than those intended, or used by another without the knowledge and consent of the lessor. 4. Keep the farm and growing crops attended to during the work season. 5. To pay the lease rental to the lessor when it falls due. (RA 3844, Sec. 26) iii. The Lessor shall have the following rights: 1. To inspect and observe the extent of compliance with the terms and conditions of the leasehold contract.

2. To propose a change in the use of the landholding to other agricultural purposes or in the kind of crop planted. 3. To require the lessee, taking into consideration his financial capacity and the credit facilities available to him, to adopt proven farm practices necessary to the conservation of the land, improvement of the fertility and increase in productivity. 4. To mortgage expected rentals. iv. The Lessor shall have the following obligations (RA 3844, Sec. 30): 1. To keep the lessee in peaceful possession and cultivation of the land; and 2. To keep intact such permanent useful improvements existing on the landholding at the start of the leasehold relation. v. Prohibited Acts of the Lessor (DAR A.O. Leasehold Relations, RA 3844, Sec. 8): 1. To dispossess the lessee of his landholding except upon authorization by the Court; 2. To require the lessee to assume, directly or indirectly, the payment of taxes or part thereof levied by the government on the land; 3. To require the lessee to assume, directly or indirectly, any rent or obligation of the lessor to a third party; 4. To deal with millers or processors without written authorization of the lessee in cases where the crop has to be sold in processed form before payment of the lessee rental; 5. To discourage, directly or indirectly, the formation, maintenance or growth of

unions or organizations of lessees in his landholding; and 6. For coconut lands, indiscriminate cutting of coconut trees will be deemed prima facie evidence to dispose the tenants of his landholdings unless there is written consent of the lessee and there is PCA certification, copy of the findings and recommendations of which shall be furnished to affected tenants or lessees. g. i. Termination Relations of Tenancy

Causes for Termination of Leasehold Relations: 1. Abandonment of the landholding without the knowledge of the agricultural lessor; Abandon means the giving up absolutely, with intent never again to resume or claim ones right or interest. The act of abandonment constitutes actual, absolute and irrevocable desertion of ones right or property. Failure to cultivate the land by reason of the forcible prohibition to do so by a third party cannot also amount to abandonment, for abandonment presupposes free will. (Teodoro vs. Macaraeg) 2. Voluntary surrender of the landholding by the agricultural lessee, written notice of which shall be served 3 months in advance; The tenants intention to surrender landholding cannot be presumed, much less determined by mere implication, but must be convincingly and sufficiently proved. (Nisnisan vs. CA, 294 S 173)

29 | B i n k y

3. Absence of an heir to succeed the lessee in the events of his death or permanent incapacity. In case of death or permanent incapacity, the leasehold relation continues between the lessor and the person who can cultivate the land personally, chosen by the lessor within one month from such death or incapacity, from among the following: 1. the surviving spouse; 2. the eldest direct descendant by consanguinity 3. the next eldest direct descendant/s in the order of age (RA 3844, Sec. 9) The leasehold relation is not terminated by death or permanent incapacity of the landholder-lessor. It binds his legal heirs. (RA 3944, Sec. 9). NOTE: Conversion of a land to non-agricultural uses also extinguished the leasehold relations because the subject land is no longer agricultural land and the purpose is no longer agricultural production. However, under Sec. 16 of DAR AO 1, the tenant affected by the conversion is entitled to disturbance compensation which must be paid within 60 days from the issuance of the order of conversion. RA 6657 (CARL) Implementation: 1. Letter of Coverage (Given by DAR to landowners to identify the subject land) 2. Letter of Acquisition (Land Bank of the Philippines may require bonds) Just Compensationfair and reasonable value of the land.

If acceptedthe government makes the necessarily process. After the documents are surrendered, the TCT will be issued. If refused upon- the government will deposit the amount to the Land Bank, and it will have the right to occupy the land. IV. PRE- EMPLOYMENT a. Definition of Terms (Art. 13) 1. Worker- means any member of the labor force, whether employed or unemployed. 2. 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. NOTE: The number of persons dealt with is not an essential factor of the act of recruitment and placement of workers. The proviso merely creates the presumption. 3. Private fee-charging employment agency- means any person or entity engaged in recruitment and placement of workers for a fee which is charged,

4.

5.

6.

7. 8. 9.

directly or indirectly, from the workers or employers or both. License- means a document issued by the Department of Labor authorizing a person or entity to operate a private employment agency. Private recruitment entity- means any person or association engaged in the recruitment and placement of workers, locally or overseas, without charging, directly or indirectly, any fee from the workers or employers. Authority- means a document issued by the Department of Labor authorizing a person or association to engage in recruitment and placement activities as a private recruitment entity. Seaman means any person employed in a vessel engaged in maritime navigation. Overseas employmentmeans employment of a worker outside the Philippines. Emigrant- means any person, worker or otherwise, who immigrates to a foreign country by virtue of an immigrant visa or resident permit or its equivalent in the country of destination. b. Private Recruitment (Art. 16)

General Rule- No person or entity other than the public employment offices shall engage in the recruitment and placement of workers. ExceptionPursuant to national development objectives and in order to harness and maximize the use of private sector resources and initiative

30 | B i n k y

in the development and implementation of a comprehensive employment program, the private employment sector shall participate in the recruitment and placement of workers, locally and overseas, under such guidelines, rules and regulations as may be issued by the Secretary of Labor. (Art. 25) Entities Authorized to Recruit: 1. Public employment offices; 2. Private recruitment entities or private employment agencies; 3. Shipping or manning agents or representatives; 4. Philippine Overseas Employment Agency; 5. Construction contractors if authorized by the DOLE and the Construction Industry Authority; 6. Members of the diplomatic corps (but all hiring must pass through the POEA); and 7. Other persons or entities as may be authorized by the DOLE Secretary. Documentation of Workers: 1. Contract Processing- workers hired through the POEA shall issue the individual employment contract and such other documents as may be necessary for travel. 2. Passport Documentation 3. Visa Arrangement Recruitment and Placement by Private Sectors i. Qualifications: 1. Filipino citizens, partnerships, or corporations at least 75% of the authorized and voting capital stock

2.

3.

4. 1. 2.

3.

4. 5.

6.

of which is owned and controlled by Filipino citizens. Minimum capitalization of P1M in case of single proprietorship or partnership and a minimum of P1M paid-up capital for corporations; and Not otherwise disqualified by law or these guidelines to engage in the recruitment and placement of workers for overseas employment. Cash and Surety Bond ii. Disqualifications: Travel agencies and sales agencies of airline companies; Officers or members of the board of any corporation or members in a partnership engaged in the business of a travel agency; Corporations and partnerships, when any of its officers, members of the board or partners, is also an officer, member of the board of a corporation engaged in the business of a travel agency; Persons, partnerships, or corporations which have derogatory records; Persons employed in the DOLE or in other government agencies directly involved in overseas employment program and their relatives within the 4th degree of consanguinity or affinity; or Those whose license has been previously cancelled or revoked. No license or authority shall be transferred, conveyed, or assigned to any other person or entity. Any violation shall

result to automatic revocation of the license. Non-licensee or Non-Holder of Authority- any person, entity, or corporation which has not been issued a valid license or authority to engage in recruitment and placement of workers by the Secretary of Labor, or whose license or authority has been suspended, revoked, or cancelled by the POEA and the Secretary. c. Migrant Workers and Overseas Filipinos Act (RA 8042) It institutes the policies of overseas employment and establishes a higher standard of protection and promotion of the welfare of migrant workers, their families, and of overseas Filipinos in distress. The Supreme Court had the occasion to rule on conflicts of jurisdiction between the courts and the labor agencies arising from the amendments to PD 1367 by PD 1691. The later law, PD 1691, is a curative statute which corrected the lack of jurisdiction of the labor arbiters at the start of the proceedings and therefore should be given retroactive application vis--vis pending proceedings. It was intended to correct a situation where two different tribunals had jurisdiction over separate issues arising from the same labor conflict. (UST vs. CA, GR No. 124350, Oct. 18, 2004) NOTE: Repatriation of Workers- The primary responsibility to repatriate a

31 | B i n k y

worker, including his remains and personal effects, belongs to the principal or the agency that recruited or deployed the worker. The principal of agency has to advance the air transport fare and immediately repatriate the worker, as needed, without determining the cause of termination of employment. If the cause of the termination is due solely to the fault of the worker, the principal or agency may recover the cost of repatriation from the worker after return to the country. Such obligation of the principal/agency to advance the plane fare and of the worker to refund the cost should be stipulated in every contract for overseas employment. In no case shall an employment agency require any bond or cash deposit from the worker to guarantee performance under the contract of his repatriation. The mandatory repatriation bond is abolished as of June 17, 1995 under RA 8042. Grounds for Disciplinary Action Under Migrant Workers Act: 1. Commission of a felony punished under Philippine laws or by the host country; 2. Drug addiction or possession or trafficking of prohibited drugs; 3. Desertion or abandonment; 4. Drunkenness, especially where the laws of the host country prohibit the same; 5. Gambling, especially when the laws of the host country prohibit the same; 6. Initiating or joining a strike or work stoppage where laws of host country prohibit the same;

7. Creating trouble at the worksite or in the vessel; 8. Embezzlement of company funds or of money and properties of a fellow worker entrusted for delivery to kins or relatives in the Philippines; 9. Theft or robbery; 10.Prostitution; 11.Vandalism; 12.Gunrunning or possession of deadly weapons; 13.Unjust refusal to depart from the worksite after all employment and travel documents have been duly approved by the appropriate government agency; and 14.Violation of the laws and sacred practices of the host country and unjustified breach of governmentapproved employment contract by a worker. d. Ban on Direct- Hiring (Art. 18) General Rule- Direct hiring of Filipino workers by a foreign employer is NOT allowed. Exceptions: 1. Name hirees-individual workers who are able to secure contracts for overseas employment on their own efforts and representation without the assistance or participation of any agency but subject to POEA processing; 2. By members of diplomatic corps; 3. By international organizations; and 4. By such other employers as may be allowed by the DOLE.

1.

2. 3. 4. 5. 6. 7. 8.

i. Minimum Conditions of Overseas Employment: Guaranteed wages for regular working hours and overtime pay for services rendered beyond regular working hours in accordance with the established standards; Free transportation from point of hire to the site of employment and return; Free emergency medical and dental treatment facilities; Just causes for termination of the contract or of the services of the workers; Workmens compensation benefits and war hazard protection. Repatriation of workers remains and properties in case of death at the point of hire; Assistance on remittance of salaries, allowance, or allotments to the beneficiaries; and Free and adequate board and lodging facilities or compensatory food allowance at the prevailing cost of living standards at the job site. e. Mandatory Remittance of Foreign Exchange Earnings (Art. 22)

Requirements: 1. Seamen or mariners: 80% of the basic salary;

32 | B i n k y

2. Workers for Filipino Contractors and Construction Companies: 70% of the basic salary; 3. Doctors, engineers, teachers, nurses and other professionals whose employment contract provide for lodging facilities: 70% of the basic salary; 4. All other professionals without board and lodging facilities: 50% of the basic salary; and 5. Domestic and other service workers: 50% of the basic salary. f. Non-Transferability of License or Authority (Art. 29) No License or authority shall be: 1. used directly or indirectly by any person other that those in whose favor it was issued or at any place other than that stated in the license or authority; 2. transferred, conveyed, assigned to any other person or entity. Effects of Violation: 1. Automatic revocation of the license. 2. Only at their authorized official addresses may licensees and holders of authority or their duly authorized representatives undertake recruitment and placement activities. g. Fees to be Paid Workers (Art. 32) by

Any person applying with the private fee-charging employment agency for employment assistance shall not be charged any fee until he has obtained employment through its efforts or has actually commenced employment. h. Prohibited Practices in Recruitment and Placement (Art. 34) 1. To charge or accept amount beyond the amount allowed by law; 2. To furnish or publish false notice or information in relation to recruitment and placement; 3. To give any false notice or information or commit any act of misrepresentation to secure license or authority; 4. To induce or attempt to induce workers to quit employment in order to offer him another: Exceptif transfer is to liberate a worker form oppressive terms and conditions of employment. NOTE: It is not necessary that the worker is actually induced or did quit employment. 5. To influence or attempt to influence any person or entity not to employ any person who has not applied employment in his agency; 6. To engage in the recruitment and placement of workers in jobs harmful to public health or morality or to the dignity of the Philippines; 7. To obstruct or attempt to obstruct inspections by the Secretary; 8. To fail to file reports; 9. To substitute or alter employment contracts;

10.To become an officer or board member of a corporation engaged in the travel agency business; 11.To withhold or deny travel documents before departure for monetary or financial considerations other than those authorized by the Code; 12.To fail to actually deploy without valid reason as determined by the DOLE; 13.To fail to reimburse expenses incurred by the worker in connection with his documentation and processing for purposes of employment, in cases where the deployment does not actually take place without the workers fault. i. Suspension and/or Cancellation of License or Authority (Art. 36) Authority- document issued by DOLE authorizing a person or association to engage in recruitment and placement activities as a private recruitment entity. License- a document issued by the DOLE authorizing a person or entity to operate a private employment agency. Non-licensee or non-holder of authority- any person, entity, or corporation which has not been issued a valid license or authority to engage in recruitment and placement of workers by the Secretary of Labor, or whose license or authority has been suspended, revoked, or cancelled by the POEA and the Secretary. i. Grounds for Revocation of License:

33 | B i n k y

1. Incurring an accumulated three counts of suspension by an agency based on final and executory orders within the validity period of its license; 2. Violations/s of the conditions of license; 3. Engaging in act/s of misrepresentation for the purpose of securing a license or renewal thereof; 4. Engaging in the recruitment or placement of workers to jobs harmful to the public health or morality or to the dignity of the Republic of the Philippines. (POEA 2000 Rules) ii. Grounds for Suspension/Cancellation of License: 1. Charging a fee before the worker is employed or in excess of the authorized amount. 2. Doing recruitment in places outside its authorized area; 3. Deploying workers without processing through the POEA; 4. Substituting or altering employment contracts; and 5. Publishing job announcements without the POEAs prior approval. (Sec. 4, Rule 2, Book IV, POEA Rules) j. Illegal Recruitment Illegal Recruitment- refers to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers and includes referring contract services, promising or advertising for employment abroad, whether for profit or not when undertaken by a non-license or a non-

holder of authority. Provided, any such non-licensee or non-holder of authority who, in any manner, offers or promises for a fee employment abroad to two or more persons shall be deemed so engaged. It shall likewise include the commission of prohibited acts whether committed by a non-licensee or a nonholder of authority. i. Elements of Illegal Recruitment: 1. The offender is a non-holder of authority to lawfully engage in recruitment and placement of workers; 2. Offender undertakes either any recruitment activities under Article 13(6) or Article 34 of the Labor Code. It is incorrect to maintain that to be liable for illegal recruitment, one must present himself to the victims as a duly licensed recruiter. (People vs. Duque, 212 S 607) Persons who may be held liable for illegal recruitment are the principals, accomplices and accessories. An employee of a company or corporation engaged in illegal recruitment may be held liable as principal, together with his employer, it if is shown that he actively and consciously participated in illegal recruitment. The existence of the corporate entity does not shield from prosecution the corporate agent who knowingly and intentionally causes the corporation to commit a crime. (Executive Secretary vs. CA GR. No. 131718, May 25, 2004) ii. Venue of Illegal Recruitment Case 1. RTC of the province where the illegal recruitment was committed; or

2. RTC of the province where complainant resides; NOTE: The first RTC to take jurisdiction over the case excludes the others. iii. Acts of Illegal RecruitmentArticle 34 (supra.) Illegal recruitment as a crime involving economic sabotage: 1. By a syndicate- if carried out by a group of at least 3 persons conspiring and confederating with one another; or 2. In a Large Scale- if committed against at least 3 persons, individually or as a group. (People vs. Bodozo, 215 S 33) k. Employment of NonResident Aliens (Art. 40) When it is allowed: 1. Upon determination by DOLE of the non-availability of a person in the Philippines who is competent, able, and willing at the time of the application to perform the services for which the alien is desired to be employed; 2. Employment permit from DOLE; 3. Employment will not be in certain nationalized business; 4. The non-resident alien worker and the employer shall bind themselves to train at least 2 Filipino understudies. Prohibition against Employment of Aliens: General Rule: No alien shall be employed in establishments where or entities which have under their name or control a right, franchise, privilege, property, or business; the exercise or enjoyment of which is

34 | B i n k y

expressly reserved by the Constitution or the laws to citizens of the Philippines, or to corporations or associations at least 60% of the capital of which is owned by such citizens, (Anti-Dummy Law, Sec.2-A). Exceptions: 1. Where the Secretary of Justice specifically authorizes the employment of technical personnel; and 2. Where the aliens are elected members of the board of directors or governing body of corporations or associations in proportion to their allowable participation in the capital of such entities. Prohibition against transfer of employment (Art. 41) a. After the issuance of an employment permit, the alien shall not transfer to another job or change his employer without prior approval of the Secretary of Labor. b. Any non-resident alien who shall take up employment in violation of the provision of this Title and its implementing rules and regulations shall be punished in accordance with the provisions of Articles 289 and 290 of the Labor Code. In addition, the alien worker shall be subject to deportation after service of his sentence.

1. Formulation, implementation, and monitoring of overseas employment of Filipino workers. 2. Protection of their rights to fair and equitable employment practices. 3.Deployment of Filipino Workers through government-to-government hiring. ii. Regulatory Function of the POEA Regulates private sector participation in the recruitment and overseas placement of workers through its licensing and registration system. iii. Adjudicatory Functions of the POEA 1. All cases which are administrative in character, involving or arising out of violations of rules and regulations relating to licensing and registration or recruitment and employment agencies or entities; and 2. Disciplinary action cases and other special cases which are administrative in character, involving employers, principals, contracting partners and Filipino migrant workers. CASES: PEOPLE OF THE PHILIPPINES vs. CAROL M. DELA PIEDRA G.R. No. 121777. January 24, 2001 KAPUNAN Facts: Accused Carol M. dela Piedra was charged before RTC in an information alleging: That on accused, without having previously obtained from the Philippine Overseas Employment Administration, a license or authority to engage in

recruitment and overseas placement of workers, did then and there, wilfully, unlawfully and feloniously, offer and promise for a fee employment abroad particularly in Singapore thus causing Maria Lourdes Modesto et.al, all qualified to apply, in fact said Maria Lourdes Modesto had already advanced the amount of P2,000.00 to the accused for and in consideration of the promised employment which did not materialized thus causing damage and prejudice to the latter in the said sum; furthermore, the acts complained of herein tantamount to economic sabotage in that the same were committed in large scale. The trial court convicted the accused. Hence, this appeal by the accused questioning her conviction for illegal recruitment in large scale and assailing the constitutionality of the law defining and penalizing said crime. Issue: WON the law defining recruitment and placement violates due process is void for vagueness. Ruling: A criminal statute that fails to give a person of ordinary intelligence fair notice that his contemplated conduct is forbidden by the statute, or is so indefinite that it encourages arbitrary and erratic arrests and convictions, is void for vagueness. However, the act must be utterly vague on its face, that is to say, it cannot be clarified by either a saving clause or by construction. It is to be distinguished, however, from legislation couched in imprecise languagebut which

l. i.

Philippine Overseas Employment Agency Functions of the

POEA

Principal

35 | B i n k y

nonetheless specifies a standard though defectively phrasedin which case, it may be saved by proper construction. Under Section 13 (b) Labor Code, Recruitment and placement refers to any act of canvassing, enlisting, contracting, xxx 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. When undertaken by non-licensees or non-holders of authority, recruitment activities are punishable as follows: (a) Any recruitment activities, including the prohibited practices enumerated under Article 34 of this Code, xxx (b) Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic sabotage xxx. Illegal recruitment is deemed committed by a syndicate if carried out by a group of three or more persons conspiring and/or confederating with one another in carrying out any unlawful or illegal transaction, enterprise or scheme defined under the first paragraph hereof. Illegal recruitment is deemed committed in large scale if committed against three or more persons individually or as a group. The proviso was intended neither to impose a condition on the basic rule nor to provide an exception thereto

but merely to create a presumption. The presumption is that the individual or entity is engaged in recruitment and placement whenever he or it is dealing with two or more persons to whom, in consideration of a fee, an offer or promise of employment is made in the course of the canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring of workers. The number of persons dealt with is not an essential ingredient of the act of recruitment and placement of workers. Any of the acts mentioned in the basic rule in Article 13(b) will constitute recruitment and placement even if only one prospective worker is involved. The proviso merely lays down a rule of evidence that where a fee is collected in consideration of a promise or offer of employment to two or more prospective workers, the individual or entity dealing with them shall be deemed to be engaged in the act of recruitment and placement. The words shall be deemed create that presumption. The word shall be deemed should by the same token be given the force of a disputable presumption or of prima facie evidence of engaging in recruitment and placement. In this case, Section 13 (b) Labor Code, therefore, is not a perfectly vague act whose obscurity is evident on its face. If at all, the proviso therein is merely couched in imprecise language that was salvaged by proper construction. It is not void for vagueness.

Neither Section 13 (b), Labor Code is void for overbreadth. A statute may be said to be overbroad where it operates to inhibit the exercise of individual freedoms affirmatively guaranteed by the Constitution, such as the freedom of speech or religion. A generally worded statute, when construed to punish conduct which cannot be constitutionally punished is unconstitutionally vague to the extent that it fails to give adequate warning of the boundary between the constitutionally permissible and the constitutionally impermissible applications of the statute. In the present case, however, appellant did not even specify what constitutionally protected freedoms are embraced by the definition of recruitment and placement that would render the same constitutionally overbroad. Issue: WON petitioner committed illegal recruitment. Ruling: Illegal recruitment is committed when two elements concur. First, the offender has no valid license or authority required by law to enable one to lawfully engage in recruitment and placement of workers. Second, he or she undertakes either any activity within the meaning of recruitment and placement defined under Article 13 (b), or any prohibited practices enumerated under Article 34 of the Labor Code. In case of illegal recruitment in large scale, a third element is added: that the accused

36 | B i n k y

commits said acts against three or more persons, individually or as a group. In this case, the first element is present. The certification of POEA Officer-in-Charge Macarulay states that appellant is not licensed or authorized to engage in recruitment and placement. The second element is also present. Appellant is presumed engaged in recruitment and placement under Article 13 (b) of the Labor Code. Both Nancy Araneta and Lourdes Modesto testified that appellant promised them employment for a fee. That appellant did not receive any payment for the promised or offered employment is of no moment. From the language of the statute, the act of recruitment may be for profit or not; it suffices that the accused promises or offers for a fee employment to warrant conviction for illegal recruitment. Issue: WON appellant committed illegal recruitment if large scale. Ruling: A conviction for large scale illegal recruitment must be based on a finding in each case of illegal recruitment of three or more persons whether individually or as a group. In this case, only two persons, Araneta and Modesto, were proven to have been recruited by appellant. The third person named in the complaint as having been promised employment for a fee, Jennelyn

Baez, was not presented in court to testify. It is true that law does not require that at least three victims testify at the trial; nevertheless, it is necessary that there is sufficient evidence proving that the offense was committed against three or more persons. In this case, evidence that appellant likewise promised her employment for a fee is sketchy. The only evidence that tends to prove this fact is the testimony of Nancy Araneta, who said that she and her friends, Baez and Sandra Aquino, came to the briefing and that they filled up application forms. The affidavit Baez executed jointly with Araneta cannot support Aranetas testimony. The affidavit was neither identified, nor its contents affirmed, by Baez. Insofar as it purports to prove that appellant recruited Baez, therefore, the affidavit is hearsay and inadmissible. In any case, hearsay evidence, such as the said affidavit, has little probative value. RTC is modified. PHILSA INTERNATIONAL PLACEMENT vs. SECRETARY OF LABOR AND VIVENCIO DE MESA G.R. No. 103144. April 4, 2001 GONZAGA-REYES Facts: Petitioner Philsa International Placement is a domestic corporation engaged in the recruitment of workers for overseas employment. Private respondents, who were recruited by petitioner for employment in Saudi Arabia, were

required to pay placement fees. After the execution of their respective work contracts, private respondents left for Saudi Arabia. They then began work for Al-Hejailan Consultants A/E, the foreign principal of petitioner. While in Saudi Arabia, private respondents were allegedly made to sign a second contract which changed some of the provisions of their original contract resulting in the reduction of some of their benefits and privileges. When they refused to sign this third contract, their services terminated by AlHejailan and they were repatriated to the Philippines. Upon their arrival in the Philippines, private respondents demanded from petitioner Philsa the return of their placement fees and for the payment of their salaries for the unexpired portion of their contract. When petitioner refused, they filed a case before the POEA against petitioner Philsa and its foreign principal, Al-Hejailan with illegal dismissal and payment of salary differentials. Under POEA Rules dated May 21, 1985, complaints involving employer-employee relations arising out of or by virtue of any law or contract involving Filipino workers for overseas employment, including money claims, are adjudicated by the Workers Assistance and Adjudication Office (WAAO). On the other hand, complaints involving recruitment violations warranting suspension or cancellation of the license of recruiting agencies are cognizable by the POEA thru its Licensing and Recruitment Office (LRO). In cases where a complaint partakes of the nature of both an employer-employee relationship case and

37 | B i n k y

a recruitment regulation case, the POEA Hearing Officer shall act as representative of both the WAAO and the LRO and both cases shall be heard simultaneously. On the aspects of the case involving money claims arising from the employeremployee relations and illegal dismissal, the POEA ordered respondent PHILSA to pay complainants, jointly and severally with its principal Al-Hejailan. Under the Rules and Regulations of the POEA, the decision of the POEA-Adjudication Office on matters involving money claims arising from the employer-employee relationship of overseas Filipino workers may be appealed to NLRC. Thus, as both felt aggrieved by the said POEA Decision, petitioner and private respondents filed separate appeals to NLRC, which modified the award granted by the POEA. Private respondents then elevated the decision of the NLRC to the Supreme Court which was dismissed by the Court. POEA also found petitioner guilty of illegal exaction, contract substitution, and unlawful deduction. Petitioner is ordered to refund the placement fees. Moreover, petitioners license is suspended. Under the POEA Rules and Regulations, the decision of the POEA thru the LRO suspending or canceling a license or authority to act as a recruitment agency may be appealed to the Ministry (now Department) of Labor. The Secretary of Labor affirmed in toto the POEA. PETITIONERs CONTENTION: The Secretary of Labor committed grave abuse

of discretion in holding petitioner liable for illegal deductions/withholding of salaries. The Decision of the NLRC absolving it from private respondent de Mesas claim for salary deduction has already attained finality by reason of the dismissal of private respondents petition for certiorari of the said NLRC decision by the Supreme Court. Issue: WON petitioner may still be held liable for illegal deduction or withholding of salaries despite the finality of NLRCs decision absolving the former from de Mesas claim for salary deduction. Ruling: Petitioner is correct in stating that the Decision of the NLRC has attained finality by reason of the dismissal of the petition for certiorari assailing the same. However, the said NLRC Decision dealt only with the money claims of private respondents arising from employer-employee relations and illegal dismissal and as such, it is only for the payment of the said money claims that petitioner is absolved. The administrative sanctions, which are distinct and separate from the money claims of private respondents, may still be properly imposed by the POEA. The NLRC Decision absolving petitioner from paying private respondent de Mesas claim for salary deduction based its ruling on a finding that the said money claim was not raised in the complaint. But the fact that the claim for salary deduction was not raised by private respondents in their complaint will not bar the POEA from holding petitioner liable for

illegal deduction or withholding of salaries as a ground for the suspension or cancellation of petitioners license. Under the POEA Rules and Regulations, the POEA, on its own initiative, may conduct the necessary proceeding for the suspension or cancellation of the license of any private placement agency on any of the grounds mentioned therein. As such, even without a written complaint from an aggrieved party, the POEA can initiate proceedings against an erring private placement agency and, if the result of its investigation so warrants, impose the corresponding administrative sanction thereof. Moreover, the POEA, in an investigation of an employeremployee relationship case, may still hold a respondent liable for administrative sanctions if, in the course of its investigation, violations of recruitment regulations are uncovered. It is thus clear that even if recruitment violations were not included in a complaint for money claims initiated by a private complainant, the POEA, under its rules, may still take cognizance of the same and impose administrative sanctions if the evidence so warrants. As such, the fact that petitioner has been absolved by final judgment for the payment of the money claim to private respondent de Mesa does not mean that it is likewise absolved from the administrative sanctions which may be

38 | B i n k y

imposed as a result of the unlawful deduction or withholding of private respondents salary. The POEA thus committed no grave abuse of discretion in finding petitioner administratively liable of one count of unlawful deduction/withholding of salary. Decision appealed from is modified. MANUELA S. CATAN/M.S. CATAN PLACEMENT AGENCY vs. NLRC and AMELIA DE PEREIRA G.R. No. 74218 December 14, 1987 NARVASA Facts: Eduardo de Pereira was recruited by M.S. Catan Placement Agency on September 4, 1979 to work as an electrical maintenance operator for Al Gihaz Establishment Power Plant in Saudi Arabia. His employment contract (and the supplement thereto) provided inter alia that: 1. his term of employment was for 2 years or 24 months; 2. he was entitled to a thirty-day paid vacation leave upon completion of 12 months of continuous service, but the precise time of enjoyment of the leave would be determined by Al Gihaz in "accordance with work convenience. He claims that after completing a year's continuous service at the Al Gihaz Power Plant, he requested for his thirty-day paid vacation leave pursuant to his contract, but the response of his employer, a Mr. Abusame, was utterly unexpected and grossly oppressive, for what Abusame did was to put them on jail and to force him to sign another 2 year contract written in

Arabicand that he refused because he could not understand the contents but he had no choice but to sign the contract as a condition of their release from jail. Forthwith, Pereira sought the assistance of the Philippine Embassy for his repatriation but was only able to return to the Philippines after paying the sum of US$950.00 for his plane fare and other processing fees to M.S. Catan, who was then in Saudi Arabia. Once back in Manila, Pereira lost no time in lodging a complaint with the Bureau of Employment Services of the Ministry of Labor and Employment against M.S. Catan Placement Agency and/or Manuela S. Catan, for recovery of damages arising from breach of contract. After due proceedings, the POEA-Worker's Assistance and Adjudication Office rendered a decision in Pereira's favor, ordering Manuela S. Catan to pay him. NLRC affirmed the decision appealed from. Issue: WON Catan is liable for damages. Ruling: An analysis of Pereira's sworn declarations generates perplexing questions. If Pereira could not understand the document that he was being forced to sign because it was written in Arabic, how could he assert that it was in truth another two-year employment contract? No answer can be given on the face of the record. Again, if Pereira had indeed sabotaged the operations of the power plant as was the belief, according to Pereira, entertained by his employer, Abusame why would Abusame be so eager and so insistent to

sign them up for another two-year employment contract? This simply makes no sense, especially if it be considered that their original contract still had one year to run, as is the uncontroverted fact. The patently illogical and unnatural features of Pereira's evidence make it undeserving of credence; and that they were apparently ignored and not taken into account in the general assessment of the proofs presented by the parties indicates capriciousness and whimsicality constituting grave abuse of discretion on the part of the Labor Arbiter and the NLRC. These unprepossessing features infest and taint the very facts which form the foundation of Pereira's cause of action; hence, the conclusions of the POEA based on those facts must be set aside. Unfortunately, this leaves Pereira with no other evidence to adequately make out a cause of action against petitioner Catan. Petition is granted. PEOPLE OF THE PHILIPPINES vs. CORAZON NAVARRA G.R. No. 119361. February 19, 2001 PARDO Facts: Job and Rodolfo Navarra, along with Rodolfos wife Corazon Navarra, operated an agency which purported to have the authority to recruit and place workers for employment in Taiwan. The agency was named Rodolfo Navarras Travel Consultant and General Services (RNTCGS), which in the course of its operation was able to victimize several

39 | B i n k y

hapless victims who never left Philippine soil, and in due time, filed complaints with the Philippine Overseas Employment Agency (POEA) against accused for illegal recruitment. Neither RNTCGS nor Rodolfo, Corazon or Job in their personal capacities were licensed or authorized by the POEA to recruit workers for overseas employment. An information against accused for illegal recruitment committed in a large scale provides: That the accused conspiring, confederating and mutually helping one another, representing themselves to have the capacity to contract, enlist and transport workers for employment abroad, did then and there willfully, unlawfully and for a fee, recruit and promise employment/job placement to Merlie Villesca, Gliceria Marinas, Jose Lloret, Beinvenida Amutan, Melba Yacas, Marites De Sagun, Vilma Marana, Ernesto Amutan, Florie Rose Ramos, Ronald Allan Santos And Henry Dela Cruz without first securing the required license and/or authority from POEA. RTC convicted Rodolfo and job for Illegal Recruitment Committed in a Large Scale Resulting to Economic Sabotage. Hence, this appeal. Issue: WON the accused committed illegal recruitment committed in a large scale resulting to economic sabotage. Ruling: Illegal recruitment has two essential elements: First, the offender has no valid license or authority required by law to enable him to lawfully engage

in the recruitment and placement of workers. Second, the offender undertakes any activity within the meaning of recruitment and placement defined under Article 13 (b), or any prohibited practices enumerated under Article 34 of the Labor Code. A nonlicensee or nonholder of authority means any person, corporation or entity without a valid license or authority to engage in recruitment or placement from the Secretary of Labor, or whose license or authority has been suspended, revoked or cancelled by the POEA or the Secretary of Labor. Under Article 13(b) of the Labor Code, recruitment and placement refer 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. In the case at bench, from the evidence adduced, accused-appellants committed acts of recruitment and placement, such as promises to the complainants of profitable employment abroad and acceptance of placement fees. Accusedappellants gave the impression that they had the power to send the complainants to Taiwan for employment. With the certification from DOLE stating that RNTCGS was not authorized to recruit

workers for overseas employment, and promises by the accused of employment abroad for complainants on payment of placements fees, the conclusion is inescapable that accused are liable for illegal recruitment. Article 38 (b) of the Labor Code, as amended by P. D. No. 2018 provides that illegal recruitment shall be considered an offense involving economic sabotage if any of the following qualifying circumstances exists: First, when illegal recruitment is committed by a syndicate. For purposes of the law, a syndicate exists when three or more persons conspire or confederate with one another in carrying out any unlawful or illegal transaction, enterprise or scheme. Second, there is economic sabotage when illegal recruitment is committed in a large scale, as when it is committed against three or more persons individually or as a group. In this case, even assuming that there was no conspiracy, the record clearly shows illegal recruitment committed in a large scale, since at least 6 complainants were victims, which is more than the minimum number of persons required by law to constitute illegal recruitment in a large scale, resulting in economic sabotage. RTC is affirmed. ESALYN CHAVEZ vs. EDNA BONTOPEREZ and CENTRUM PROMOTIONS

40 | B i n k y