International Management Services/Marilyn Pascual v.

Roel Logarta
FACTS:
 Petitioner IMS, a recruitment agency, deployed respondent Logarta to work for
Petrocon Arabia Limited in Saudi Arabia. He was deployed for a period of 2 years, with a
monthly salary of 800 USD. Logarta was to work on the projects of Saudi Aramco.
 Saudi Aramco reduced the man-hours formerly allotted to Petrocon. Consequently,
Petrocon reduced its personnel and gave Logarta a written notice informing him that he
was given a 30-day notice of termination.
 Logarta and his co-employees requested Petrocon to issue them a letter of intent
stating that a No Objection Certificate will be issued to them once they leave Saudi
Arabia. It was granted.
 Upon Logarta’s return to the Philippines, he filed with the NLRC a petition against IMS
for the recovery of his unearned salaries on the ground that he was illegally dismissed.
 LA: decided in favor of Logarta.
 NLRC 4th Division: affirmed.
 CA: affirmed. It held that even if Logarto was given a 30-day notice, the copy of the
same was not sent to the DOLE and the requisites for a valid retrenchment were not
present.
ISSUE: WON the Labor Code is applicable to the case at bar.
HELD: YES.
 Retrenchment is the reduction of work personnel usually due to poor financial returns,
aimed to cut down costs for operation particularly on salaries and wages. It is one of the
economic grounds to dismiss employees and is resorted by an employer primarily to
avoid or minimize business losses.
 Despite the fact that Logarto was employed by Petrocon is Saudi Arabia, both he and his
employer are subject to the provisions of the Labor Code when applicable. All Filipino
workers, whether employed locally or overseas, enjoy the protective mantle of
Philippine labor and social legislations.
 Philippine Law recognizes retrenchment as a valid cause for the dismissal of a migrant or
overseas Filipino worker under Article 283 of the Labor Code.
 As for the notice requirement, however, contrary to petitioner’s contention, proper
notice to the DOLE within 30 days prior to the intended date of retrenchment is
necessary and must be complied with despite the fact that respondent is an overseas
Filipino worker.

Stolt Nielsen Transportation Group, Inc. et. al. v. Medequillo, Jr.

FACTS:
 Respondent Sulpecio Medequillo was hired by petitioner on behalf of its principal
Chung-Gai Ship Management of Panama as an engineer on the vessel Stolt Aspiration
for a period of 9 months.
 After 3 months on the vessel, respondent was ordered by the ship’s master to
disembark and was repatriated back to Manila for no reason or explanation.
  Upon his return to Manila, respondent went to the petitioner’s office and he was
transferred to another vessel the MV Stolt Pride. However, the petitioner did not deploy
him.
 The POEA, without knowledge that respondent was not deployed, certified a second
employment contract.
 Respondent filed before the POEA a complaint for illegal dismissal under the first
contract and failure to deploy under the second contract.
 The case was transferred to the LA of the DOLE upon the effectivity of the Migrant
Workers and Overseas Filipinos Act of 1995.
 LA: first contract was novated by the second contract. Petitioners are liable for breach
of contract.
 NLRC: affirmed.
 CA: affirmed.
ISSUE: WON the petitioner is liable for damages.
HELD: YES.
 The POEA Standard Employment Contract provides that employment shall commence
"upon the actual departure of the seafarer from the airport or seaport in the port of
hire.”
 Thus, even if by the standard contract employment commences only "upon actual
departure of the seafarer", this does not mean that the seafarer has no remedy in case
of non-deployment without any valid reason.
 Distinction must be made between the perfection of the employment contract and the
commencement of the employer-employee relationship. The perfection of the contract,
which in this case coincided with the date of execution thereof, occurred when
petitioner and respondent agreed on the object and the cause, as well as the rest of the
terms and conditions therein. The commencement of the employer-employee
relationship would have taken place had petitioner been actually deployed from the
point of hire.
o Thus, even before the start of any employer-employee relationship,
contemporaneous with the perfection of the employment contract was the birth
of certain rights and obligations, the breach of which may give rise to a cause of
action against the erring party. Thus, if the reverse had happened, that is the
seafarer failed or refused to be deployed as agreed upon, he would be liable for
damages.

Serrano v. Gallant Maritime Services

FACTS:
 Antonio Serrano was hired by Gallant Maritime Services, Inc. and Marlow Navigation
Co., Ltd. under a POEA-approved Contract of Employment as a Chief Officer on a vessel
for a period of 12 months and a monthly salary of 1400USD.
o On the date of his departure, Serrano was constrained to accept a downgrade to
Second Officer with 1000USD salary upon the assurance that he will be Chief
Officer by the end of April 1998.
  Respondents did not promote Serrano. Serrano refused to stay as Second Officer and
was repatriated to the Philippines.
o His contract was supposed to be from March 19, 1998 to March 19, 1999 but he
was repatriated on May 26, 1998 (9 months unexpired).
 Serrano filed with the LA a complaint for constructive dismissal and for the payment of
money claims
o The LA dismissed the constructive dismissal case, and awarded Serrano his salary
3 months of the unexpired portion of his contract.
 Serrano appealed to the NLRC, claiming that OFWs are entitled to the salaries of the
unexpired portion of their contracts.
o NLRC: only reduced salary rate.
 Serrano appealed to the CA on the ground that Sec. 10(5) of RA 8042 is unconstitutional.
o Sec. 10. Money Claims. - x x x 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.
o CA: affirmed NLRC, failed to answer constitutionality.
 Serrano contends that the subject clause is unconstitutional because it unduly impairs
the freedom of OFWs to negotiate for and stipulate in their overseas employment
contracts a determinate employment period and a fixed salary package. It also impinges
on the equal protection clause, for it treats OFWs differently from local Filipino workers
(local workers) by putting a cap on the amount of lump-sum salary to which OFWs are
entitled in case of illegal dismissal.
ISSUE: WON Serrano is entitled to the salaries of the unexpired portion of his contract.
WON subject clause Is unconstitutional.
HELD: Yes. Yes.
 The clause does not violate the non-impairment of contracts.
o The constitution contemplates a prospective application.
o The enactment of R.A. No. 8042 in 1995 preceded the execution of the
employment contract between petitioner and respondents in 1998. Hence, it
cannot be argued that R.A. No. 8042, particularly the subject clause, impaired
the employment contract of the parties.
 The clause violates the constitutional provisions on labor protected as a sector.
o To Filipino workers, the rights guaranteed under the constitution 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.
 The subject clause has a discriminatory intent against:
1. OFWs with employment contracts of less than one year vis-à-vis OFWs with
employment contracts of one year or more;
 2. OFWs with employment contracts of more than one year;
3. OFWs vis-à-vis local workers with fixed-period employment
 Prior to RA 8042, OFWs and local workers with fixed-term employment who were
illegally discharged were treated alike in terms of the computation of their money
claims: they were uniformly entitled to their salaries for the entire unexpired portions of
their contracts. But with the enactment of RA 8042, specifically the adoption of the
subject clause, illegally dismissed OFWs with an unexpired portion of one year or more
in their employment contract have since been differently treated in that their money
claims are subject to a 3-month cap, whereas no such limitation is imposed on local
workers with fixed-term employment.
 The subject clause contains a suspect classification in that, in the computation of the
monetary benefits of fixed-term employees who are illegally discharged, it imposes a 3-
month cap on the claim of OFWs with an unexpired portion of one year or more in their
contracts, but none on the claims of other OFWs or local workers with fixed-term
employment. The subject clause singles out one classification of OFWs and burdens it
with a peculiar disadvantage.

Pert/CPM Manpower Exponent Co. v. Vinuya

FACTS:
 Respondents alleged that petitioner agency deployed them to work as aluminum
fabricator/installer for the agency’s principal. Modern Metal in Dubai, UAE.
o The contract provided for a 2-year employment with a salary of 1350AED.
 Modern Metal gave respondents appointment letters with different terms from the
contract. Their employment was increased to 3 years at 1000-1200AED.
 The respondents’ living and working conditions in Dubai were shocking.
o Worked 6:30am to 6:30pm with 1 hour break
o Overtime work was underpaid or was not paid at all
o Housing was cramped, with 27 other occupants, and was far from the jobsite
 The called the agency and it assured that their concerns would be addressed, but
nothing happened.
 Modern Metal required respondents to sign new contracts. They raised the issue to the
agency, but it took no action.
 The respondents resigned from Modern Metal. It took the agency several weeks to
repatriate respondents to the Philippines. Respondents shouldered their own fare.
 Respondents filed a complaint for illegal dismissal.
 LA: dismissed; respondents voluntarily resigned.
 NLRC: reverse; illegal for employer to require new employment papers.
 CA: upheld NLRC.
ISSUE: WON respondents were illegally dismissed.
HELD: YES.
 The agency and its principal, Modern Metal, committed flagrant violations of the law on
overseas employment, as well as basic norms of decency and fair play in an employment
 relationship, pushing the respondents to look for a better employment and, ultimately,
to resign from their jobs.
 The agency and Modern Metal are guilty of contract substitution, contrary to Art. 34 of
the Labor Code.
 The agency and Modern Metal committed breach of contract, by providing working a
living conditions contrary to those stipulated in the contract.
 With their original contracts substituted and their oppressive working and living
conditions unmitigated or unresolved, the respondents’ decision to resign is not
surprising. They were compelled by the dismal state of their employment to give up
their jobs; effectively, they were constructively dismissed.
o A constructive dismissal or discharge is "a quitting because continued
employment is rendered impossible, unreasonable or unlikely, as, an offer
involving a demotion in rank and a diminution in pay."
 The agency contends that the Serrano ruling is not applicable because it cannot be given
retroactive effect for it is curative and remedial. It also says that the ruling was nullified
by RA 10022 which restored the clause nullified in Serrano.
o Untenable.
o “All statutes are to be construed as having only a prospective application, unless
the purpose and intention of the legislature to give them a retrospective effect
are expressly declared or are necessarily implied from the language used. We
thus see no reason to nullity the application of the Serrano ruling in the present
case. Whether or not R.A. 1 0022 is constitutional is not for us to rule upon in the
present case as this is an issue that is not squarely before us.”

Sameer Overseas Placement Agency v. Cabiles

FACTS:
 Joy Cabilles submitted her application for a quality control job in Taiwan in response to
an ad placed by petitioner agency.
 Joy was accepted and signed a contract for a monthly salary of 15,360 NT$ for one year.
 She was deployed to work for Taiwan Wacoal. Eventually, a certain Mr. Huang from
Wacoal informed Joy without prior notice that she was terminated.
o Joy claims that from June 26 to July 14, 1997 she only earned 9000NT$ and
Wacoal deducted 3000NT$ for her plane ticket.
 Joy filed a complaint for illegal dismissal.
 LA: dismissed; complaint was based on mere allegations.
 NLRC: Joy was illegally dismissed. No just cause.
 CA: illegally dismissed; awarded 3 months backwages.
ISSUE: WON Joy was illegally dismissed.
WON Joy is entitled to the salary for the unexpired portion of her contract.
HELD: Yes. Yes.
 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.
 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.
o 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.
 Petitioner’s allegation that respondent was inefficient in her work and negligent in her
duties may, therefore, constitute a just cause for termination under Art. 282, but it
failed to substantiate such allegation.
o 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.
o 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.
 Petitioner 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.
 Joy is entitled to her salary for the unexpired portion of her contract.
o Under the Serrano ruling, Sec. 10 of RA 8042 was declared unconstitutional. A
statute or provision which was declared unconstitutional is not a law and
imposes no rights or duties.
o RA 10022 reinstated the subject clause.
 RA 10022 violates the constitutional rights to equal protection and due process. Serrano
ruling is reiterated and reinstated.