FERNANDO G.

MANAYA,
Petitioner,

G.R. No. 168988

Present:

- versus -

YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
CHICO-NAZARIO, and
NACHURA, JJ.

Promulgated:
ALABANG
COUNTRY
CLUB
INCORPORATED,
Respondent.
June 19, 2007
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure filed by
Fernando G. Manaya (petitioner) assailing: (1) the Decision1[1] of the Court of Appeals in CA-G.R. SP No. 75417,
dated 9 May 2005, granting the Petition of Alabang Country Club Inc. (respondent) and setting aside the Resolutions
dated 30 August 2002 and 30 October 2002 of the National Labor Relations Commission (NLRC); and (2) the
Resolution2[2] of the Court of Appeals dated 21 July 2005 denying petitioners Motion for Reconsideration of its
earlier Decision.
The assailed decision of the Court of Appeals reversed the Resolution of the NLRC dismissing the appeal
of the respondent for failure to perfect its appeal within the statutory period. Instead, the Court of Appeals ordered
the NLRC to give due course to the appeal of the respondent.
The antecedent facts are:
Petitioner alleged that on 21 August 1989, he was initially hired by the respondent as a maintenance
helper3[3] receiving a salary of P198.00 per day. He was later designated as company electrician. He continued to
work for the respondent until 22 August 1998 when the latter, through its Engineering and Maintenance Department
Manager, Engr. Ronnie B. de la Cruz, informed him that his services were no longer required by the company.4[4]
Petitioner alleged that he was forcibly and illegally dismissed without cause and without due process on 22 August
1998.5[5] Hence, he filed a Complaint6[6] before the Labor Arbiter. He claimed that he had not committed any

infraction of company policies or rules and that he was not paid his service incentive leave pay, holiday pay and 13 th
month pay. He further asserted that with his more or less nine years of service with the respondent, he had become a
regular employee. He, therefore, demanded his reinstatement without loss of seniority rights with full backwages
and all monetary benefits due him.7[7]
In its Answer, respondent denied that petitioner was its employee. It countered by saying that petitioner
was employed by First Staffing Network Corporation (FSNC), with which respondent had an existing Memorandum
of Agreement dated 21 August 1989. Thus, by virtue of a legitimate job contracting, petitioner, as an employee of
FSNC, came to work with respondent, first, as a maintenance helper, and subsequently as an electrician. Respondent
prayed for the dismissal of the complaint insisting that petitioner had no cause of action against it.
In a Decision, dated 20 November 2000, the Labor Arbiter held:
WHEREFORE, premises considered, complainant Fernando G. Manaya is hereby found
to be a regular employee of respondent Alabang Country Club, Inc., as aforediscussed. His
dismissal from the service having been effected without just and valid cause and without the due
observance of due process is hereby declared illegal. Consequently, respondent Alabang Country
Club, Inc. is hereby ordered to reinstate complainant to his former position without loss of
seniority rights and other benefits appurtenant thereto with full backwages in the partial amount of
P160,724.48 as computed by Ms. Ma. Concepcion Manliclic and duly noted by Ms. Ma. Elena L.
Estadilla, OIC-CEU, NCR-South Sector which computation has been made part of the records.
Furthermore, respondent Alabang Country Club, Inc. and First Staffing Network
Corporation are hereby ordered to pay complainant, jointly and severally the following amounts
by way of the following:
1.
2.
3.

Service Incentive Leave

2,961.75
13th Month Pay
15,401.10, and
Attorneys fees of ten (10%) percent of the total

monetary award herein adjudged due him, within ten (10) days from receipt hereof.8[8]

Respondent filed an Appeal with the NLRC which dismissed the same.9[9] In a Resolution dated 30
August 2002, the NLRC held:
PREMISES CONSIDERED, instant appeal from the Decision of November 20, 2000 is
hereby DISMISSED for failure to perfect appeal within the statutory period of appeal. The
Decision is now final and executory.10[10]

The NLRC found that respondents counsel of record Atty. Angelina A. Mailon of Monsod, Valencia and
Associates received a copy of the Labor Arbiters Decision on or before 11 December 2000 as shown by the postal

stamp or registry return card.11[11] Said counsel did not file a withdrawal of appearance. Instead, a Memorandum
of Appeal12[12] dated 26 December 2000 was filed by the respondents new counsel, Atty. Arizala of Tierra and
Associates Law Office. Reckoned from 11 December 2000, the date of receipt of the Decision by respondents
previous counsel, the filing of the Memorandum of Appeal by its new counsel on 26 December 2000 was clearly
made beyond the reglementary period. The NLRC held that the failure to perfect an appeal within the statutory
period is not only mandatory but jurisdictional. The appeal having been belatedly filed, the Decision of the Labor
Arbiter had become final and executory.13[13]
Respondent filed a Motion for Reconsideration,14[14] which the NLRC denied in a Resolution dated 30
October 2002.15[15] The NLRC held that the decision of the Labor Arbiter has become final and executory on 28
November 2002; thus, Entry of Judgment, dated 8 January 200316[16] was issued.
Respondent filed a Petition for Certiorari17[17] under Rule 65 of the Rules of Court before the Court of
Appeals. In a Decision dated 9 May 2005,18[18] the Court of Appeals granted the petition and ordered the NLRC to
give due course to respondents appeal of the Labor Arbiters Decision. Petitioner filed a Motion for Reconsideration
which was denied by the Court of Appeals in a Resolution19[19] dated 21 July 2005.
Not to be dissuaded, petitioner filed the instant petition before this Court.
The issue for resolution:
WHETHER OR NOT THE COURT OF APPEALS COMMITTED AN ERROR WHEN IT
ORDERED THE NLRC TO GIVE DUE COURSE TO THE APPEAL OF RESPONDENT
ALABANG COUNTRY CLUB, INCORPORATED EVEN IF THE SAID APPEAL WAS FILED
BEYOND THE REGLEMENTARY PERIOD OF TEN (10) DAYS FOR PERFECTING AN
APPEAL.20[20]

Essentially, the issue raised by the respondent before the NLRC in assailing the decision of the Labor
Arbiter pertains to the finding of the Labor Arbiter that petitioner was a regular employee of the respondent.

In granting the petition, the Court of Appeals relied mainly on the case of Aguam v. Court of
Appeals,21[21] where this Court held that litigation must be decided on the merits and not on technicalities. The
appellate court further justified the grant of respondents petition by saying that the negligence of its counsel should
not bind the respondent.22[22]
The Court of Appeals gave credence to respondents claim that its lawyer abandoned the case; hence, they
were not effectively represented by a competent counsel. It further held that the respondent, upon its receipt of the
Decision of the Labor Arbiter on 15 December 2000, filed its appeal on 26 December 2000 through a new lawyer.
The appeal filed by respondent through its new lawyer on 26 December 2000 was well within the reglementary
period, 25 December 2000 being a holiday.
It is axiomatic that when a client is represented by counsel, notice to counsel is notice to client. In the
absence of a notice of withdrawal or substitution of counsel, the Court will rightly assume that the counsel of record
continues to represent his client and receipt of notice by the former is the reckoning point of the reglementary
period.23[23] As heretofore adverted, the original counsel did not file any notice of withdrawal. Neither was there
any intimation by respondent at that time that it was terminating the services of its counsel.
For negligence not to be binding on the client, the same must constitute gross negligence as to amount to a
deprivation of property without due process.24[24] This does not exist in the case at bar. Notice sent to counsel of
record is binding upon the client and the neglect or failure of counsel to inform him of an adverse judgment resulting
in the loss of his right to appeal is not a ground for setting aside a judgment, valid and regular on its face.25[25]
Even more, it is respondents duty as a client to be in touch with his counsel so as to be constantly posted
about the case. It is mandated to inquire from its counsel about the status and progress of the case from time to time
and cannot expect that all it has to do is sit back, relax and await the outcome of the case.26[26]
On this score, we hold that the notice to respondents counsel, Atty. Angelina A. Mailon on 11 December
2000 is the controlling date of the receipt of the decision.
We now come to the issue of whether or not the Court of Appeals properly gave due course to the petition
of the respondent before it.
Of relevance is Section 1, Rule VI of the 2005 Revised Rules of the NLRC
Section 1. PERIODS OF APPEAL. Decisions, resolutions or orders of the Labor Arbiter
shall be final and executory unless appealed to the Commission by any or both parties within ten
(10) calendar days from receipt thereof; and in case of decisions, resolutions or orders of the
Regional Director of the Department of Labor and Employment pursuant to Article 129 of the
Labor Code, within five (5) calendar days from receipt thereof. If the 10 th or 5th day, as the case
may be, falls on a Saturday, Sunday or holiday, the last day to perfect the appeal shall be the first
working day following such Saturday, Sunday or holiday.

No motion or request for extension of the period within which to perfect an appeal shall
be allowed.
Remarkably, in highly exceptional instances, we have allowed the relaxing of the rules on the application
of the reglementary periods of appeal.27[27] Thus:
In Ramos v. Bagasao, 96 SCRA 395, we excused the delay of four days in the filing of a notice of
appeal because the questioned decision of the trial court was served upon appellant Ramos at a
time when her counsel of record was already dead. Her new counsel could only file the appeal four
days after the prescribed reglementary period was over. In Republic v. Court of Appeals, 83 SCRA
453, we allowed the perfection of an appeal by the Republic despite the delay of six days to
prevent a gross miscarriage of justice since the Republic stood to lose hundreds of hectares of land
already titled in its name and had since then been devoted for educational purposes. In Olacao v.
National Labor Relations Commission, 177 SCRA 38, 41, we accepted a tardy appeal considering
that the subject matter in issue had theretofore been judicially settled, with finality, in another
case. The dismissal of the appeal would have had the effect of the appellant being ordered twice to
make the same reparation to the appellee.28[28]
We pronounced in those cases that technicality should not be allowed to stand in the way of equitably and
completely resolving the rights and obligations of the parties.
In all these, the Court allowed liberal interpretation given the extraordinary circumstances that justify a
deviation from an otherwise stringent rule.29[29]
Clearly, emphasized in these cases is that the policy of liberal interpretation is qualified by the requirement
that there must be exceptional circumstances to allow the relaxation of the rules.30[30]
Absent exceptional circumstances, we adhere to the rule that certain procedural precepts must remain
inviolable, like those setting the periods for perfecting an appeal or filing a petition for review, for it is doctrinally
entrenched that the right to appeal is a statutory right and one who seeks to avail oneself of that right must comply
with the statute or rules. The rules, particularly the requirements for perfecting an appeal within the reglementary
period specified in the law, must be strictly followed as they are considered indispensable interdictions against
needless delays and for orderly discharge of judicial business. Furthermore, the perfection of an appeal in the
manner and within the period permitted by law is not only mandatory but also jurisdictional and the failure to perfect
the appeal renders the judgment of the court final and executory. Just as a losing party has the right to file an appeal
within the prescribed period, the winning party also has the correlative right to enjoy the finality of the resolution of
his/her case.31[31]
In this particular case, we adhere to the strict interpretation of the rule for the following reasons:
Firstly, in this case, entry of judgment had already been made32[32] which rendered the Decision of the
Labor Arbiter as final and executory.

Secondly, it is a basic and irrefragable rule that in carrying out and in interpreting the provisions of the
Labor Code and its implementing regulations, the workingmans welfare should be the primordial and paramount
consideration. The interpretation herein made gives meaning and substance to the liberal and compassionate spirit of
the law enunciated in Article 4 of the Labor Code that all doubts in the implementation and interpretation of the
provisions of the Labor Code including its implementing rules and regulations shall be resolved in favor of
labor.33[33]
In the case of Bunagan v. Sentinel34[34] we declared that:

[T]hat the perfection of an appeal within the statutory or reglementary period is not only
mandatory, but jurisdictional, and failure to do so renders the questioned decision final and
executory and deprives the appellate court of jurisdiction to alter the final judgment, much less to
entertain the appeal. The underlying purpose of this principle is to prevent needless delay, a
circumstance which would allow the employer to wear out the efforts and meager resources of the
worker to the point that the latter is constrained to settle for less than what is due him. This Court
has declared that although the NLRC is not bound by the technical rules of procedure and is
allowed to be liberal in the interpretation of the rules in deciding labor cases, such liberality should
not be applied where it would render futile the very purpose for which the principle of liberality is
adopted. The liberal interpretation stems from the mandate that the workingmans welfare
should be the primordial and paramount consideration. We see no reason in this case to waive
the rules on the perfection of appeal.35[35]

The Court is aware that the NLRC is not bound by the technical rules of procedure and is
allowed to be liberal in the interpretation of rules in deciding labor cases. However, such
liberality should not be applied in the instant case as it would render futile the very purpose
for which the principle of liberality is adopted. The liberal interpretation in favor of labor stems
from the mandate that the workingmans welfare should be the primordial and paramount
consideration. x x x.36[36] (Emphases supplied.)

Indeed, there is no room for liberality in the instant case as it would render futile the very purpose for
which the principle of liberality is adopted. As so rightfully enunciated, the liberal interpretation in favor of labor
stems from the mandate that the workingmans welfare should be the primordial and paramount consideration. This
Court has repeatedly ruled that delay in the settlement of labor cases cannot be countenanced. Not only does it
involve the survival of an employee and his loved ones who are dependent on him for food, shelter, clothing,
medicine and education; it also wears down the meager resources of the workers to the point that, not infrequently,
they either give up or compromise for less than what is due them.37[37]

Without doubt, to allow the appeal of the respondent as what the Court of Appeals had done and remand
the case to the NLRC would only result in delay to the detriment of the petitioner. In Narag v. National Labor

Relations Commission,38[38] citing Vir-Jen Shipping and Marine Services, Inc. v. National Labor Relations
Commission,39[39] we held that delay in most instances gives the employers more opportunity not only to prepare
even ingenious defenses, what with well-paid talented lawyers they can afford, but even to wear out the efforts and
meager resources of the workers, to the point that not infrequently the latter either give up or compromise for less
than what is due them.40[40]
Nothing is more settled in our jurisprudence than the rule that when the conflicting interest of loan and
capital are weighed on the scales of social justice, the heavier influence of the latter must be counter-balanced by the
sympathy and compassion the law must accord the under-privileged worker.41[41]
Thirdly, respondent has not shown sufficient justification to reverse the findings of the Labor Arbiter as
affirmed by the NLRC.
Pertinent provision of the Labor Code provides:

ART. 223. APPEAL. Decisions, awards, or orders of the Labor Arbiter are final and executory
unless appealed to the Commission by any or both parties within ten (10) calendar days from
receipt of such decisions, awards, or orders. Such appeal may be entertained only on any of the
following grounds:
(a)
If there is prima facie evidence of abuse of discretion on the part of
the
Labor
Arbiter;
(b)
If the decision, order or award was secured through fraud or coercion, including graft
an corruption;
(c)
If made purely on question of law; and
(d)
If serious errors in the finding of facts are raised which would cause grave or irreparable
damage or injury to the appellant.

Under the above provision, to obtain a reversal of the decision of the Labor Arbiter, the respondent must be
able to show in his appeal that any one of the above instances exists.
Respondent failed to show the existence of any of the above. A more than perfunctory reading of the
Decision of the Labor Arbiter shows that the same is supported by the evidence on record.
Respondent narrates that it had a contract of services, first, with Supreme Construction (Supreme). Supreme
assigned petitioner to work with the respondent starting as a painter and moving on to perform electrical jobs.
Respondent terminated its contract with Supreme and entered into another contract of services with another jobcontracting agency, First Staffing Network Corporation. Petitioner continued to work for the respondent which
claimed that the former was supplied by FNSC to it as part of its contract to supply the manpower requirements of
the respondent. Petitioner is not the employee of the respondent. He was directly hired first by Supreme then later by
FNSC and deployed to work with the respondent based on the contract of services between respondent and these
job-contracting agencies. All these considered, respondent insists that petitioner is therefore not its employee.

We do not agree to this submission of the respondent. The Labor Arbiter concluded otherwise and this
finds support from the evidence, thus:
[R]espondent was not able to convincingly disprove complainants claims that at the outset, he was
directly hired by it as a maintenance helper on 21 August 1989. Although said respondent alleges
that complainant was hired by its job contractor, Supreme Construction, it failed to submit in
evidence the Contract of Service it had entered into in order to establish the entry of complainant
as deployed by said company for his duties at Alabang Country Club, Inc. pursuant to the said
Agreement. It can therefore be readily presumed that said respondent did not produce the said
document because the production of the same will readily prove complainants assertion of having
been hired long before said contractor Supreme Construction entered into the picture. We have
noted complainants admission of having been later coerced to sign up with said Supreme
Construction by respondent Alabang Country Club, Inc. which he did as he was told in his fear of
losing his job.
As shown by respondent Alabang Country Club, Inc.s own evidence, it later terminated
its contract of service or Memorandum of Agreement with Supreme Construction and entered into
a new contract of service with respondent First Staffing Network Corporation effective on 16 June
1994. However by said respondents own allegation, even with the absence of complainants
supposed direct employer Supreme Construction, he still remained in its employ until he signed up
with respondent First Staffing Network Corporation on 11 February 1996. This indeed runs
counter to the normal course of human experience such that when a contractor losses (sic) his
contract of service he packs up along with all his employees, but in this case, complainant was not
terminated from the service notwithstanding the expiration/termination of the contract of service
of his alleged direct employer. Complainant remained working with respondent Alabang Country
Club, Inc. despite the severance of the contractual relations between itself and Supreme
Construction.
The initial Memorandum of Agreement entered into by respondents Alabang Country
Club, Inc. and First Staffing Network Corporation was dated, 16 June 1994, and was apparently
renewed thereafter providing under Article III On Compensation thereof, the following, viz:
3.01 For and in consideration of the performance by FIRST
STAFFING of its obligations under this AGREEMENT, the CLIENT agrees to
pay the former based on the schedule of billing rates which shall be specified in
the Personnel Requisition Form signed by the CLIENT. The schedule of billing
rates is as follows, to wit:
BILLING RATES/HOUR PLUS 10% VALUE ADDED TAX
Covered Pos.
A
Waiters
Janitors
Bag Boy
Stewards
Cook Helpers
Messengers

B
Accounting
Supervisor
Data Encoders
Gen. Clerks
Secretary
Receptionist
Secretary
Cashier

xxx.
Nowhere, does complainants position of electrician appear as covered in the said
contract. Finally, suffice it for Us to stress that the said contract covers almost all of respondents
Alabang Country Club, Inc.s workforce including those whose jobs or activities are directly
related to said respondents business, emphasizing in no uncertain terms that respondent First

Staffing Network Corporation was not a truly bonafide job contractor, as it did not contract out
specific service but merely supplied work personnel, a clear indication, that it was engaged in a
job only contracting which is prohibited by law.
Besides, the said respondent First Staffing Network Corporation failed to prove that it is a
bonafide job contractor by showing that it had an adequate capital or investment in tools,
equipments and machineries and premises for that matter, and so did respondent Alabang Country
Club, Inc. fail to establish the same. For that matter, respondent First Staffing Network
Corporation had waived its right to present any evidence in its favor in this case.
Obviously, herein respondent Alabang Country Club, Inc. actually resorted to contracting
out all the positions for its workforce in violation of law in its desire to circumvent said employees
rights as regular employees under the law.42[42]
The existence of an employer-employee relationship between petitioner and respondent is
fortified by the fact that during his stint with the respondent, petitioner was given the opportunity
to attend a seminar/training on refrigeration and air conditioning from 16 January 1995 to 18
February 1995.43[43] A certificate of participation signed by three of respondents officials was
issued to the petitioner.
Equally significant is Article 106 of the Labor Code, as amended, which provides that legitimate job
contracting is permitted, but labor-only contracting is prohibited. The said provision reads:
Art. 106. CONTRACTOR OR SUBCONTRACTOR. Whenever an employer enters into
a contract with another person for the performance of the formers work, the employees of the
contractor and of the latters subcontractor, if any, shall be paid in accordance with the provisions
of this Code.
In the event that the contractor or subcontractor fails to pay the wages of his employees in
accordance with this Code, the employer shall be jointly and severally liable with his contractor or
subcontractor to such employees to the extent of the work performed under the contract, in the
same manner and extent that he is liable to employees directly employed by him.
The Secretary of Labor may, by appropriate regulations, restrict or prohibit the
contracting out of labor to protect the rights of workers established under the Code. In so
prohibiting or restricting, he may make appropriate distinctions between labor only contracting
and job contracting as well as differentiations within these types of contracting and determine who
among the parties involved shall be considered the employer for purposes of this Code, to prevent
any violation or circumvention of any provision of this Code.
There is laboronly 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 workers recruited and placed by such person are performing
activities which are directly related to the principal business of such employer. In such cases, the
person or intermediary 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.

Rule VIII-A, Book III of the Omnibus Rules Implementing the Labor Code, as amended
by Department Order No. 18, distinguishes between legitimate and labor only contracting:
Section 3. Trilateral Relationship in Contracting Arrangements. - In
legitimate contracting, there exists a trilateral relationship under which there is a
contract for a specific job, work or service between the principal and the contractor
or subcontractor, and a contract of employment between the contractor and
subcontractor and its workers. Hence, there are three parties involved in these
arrangements, the principal which decides to farm out a job or service to a contractor
or subcontractor, the contractor or subcontractor which has the capacity to
independently undertake the performance of the job, work or service, and the
contractual workers engaged by the contractor or subcontractor to accomplish the
job, work or service.
Section 5. Prohibition against laboronly contracting. Labor-only contracting
is hereby declared prohibited. For this purpose, labor only contracting shall refer to
an arrangement where the contractor or subcontractor merely recruits, supplies or
places workers to perform a job, work or service for a principal, and any of the
following elements are present:
i)

ii)

The contractor or subcontractor does not have substantial

capital or investment which relates to the job, work or service
to be performed and the employees recruited, supplied or
placed by such contractor or subcontractor are performing
activities which are directly related to the main business of the
principal, or
The contractor does not exercise the right to control over
the performance of the work of the contractual employee.

The foregoing provisions shall be without prejudice to the application of Article 248(c) of
the Labor Code, as amended.
Substantial capital or investment refers to capital stocks and subscribed capitalization in
the case of corporations, tools, equipments, implements, machineries and work premises, actually
and directly used by the contractor or subcontractor in the performance or completion of the job,
work or service contracted out.
The right to control shall refer to the right reserved to the person for whom the services of
the contractual workers are performed, to determine not only the end to be achieved, but also the
manner and means to be used in reaching that end.
The test to determine the existence of independent contractorship is whether one claiming
to be an independent contractor has contracted to do the work according to his on methods and
without being subject to the control of the employer, except only as to the results of the work.
In legitimate labor contracting, the law creates an employer-employee relationship for a
limited purpose, i.e., to ensure that the employees are paid their wages. The principal employer
becomes jointly and severally liable with the job contractor, only for the payment of the
employees wages whenever the contractor fails to pay the same. Other than that, the principal
employer is not responsible for any claim made by the employees.
44[44]

Despite respondents disavowal of the existence of the employer-employee relationship between it and
petitioner and its insistence that petitioner is an employee first, of Supreme and subsequently, of FSNC, the totality
of the facts and surrounding circumstances of the case convey otherwise.
On this point, the law is clear-cut. In laboronly contracting, the statute creates an employeremployee
relationship for a comprehensive purpose: to prevent a circumvention of labor laws. The contractor is considered
merely an agent of the principal employer and the latter is responsible to the employees of the laboronly contractor
as if such employees had been directly employed by the principal employer.
The Labor Code and its implementing rules empower the Labor Arbiter to be the trier of facts in labor
cases. Much reliance is placed on findings of facts of the Arbiter having had the opportunity to talk to and discuss
with the parties and their witnesses the factual matters of the case during the conciliation phase.45[45] We, thus,
give full credence to the findings of facts of the labor arbiter.
WHEREFORE, premises considered, the Petition is GRANTED. The Decision of the Court of Appeals
dated 9 May 2005 and its Resolution dated 21 July 2005 is REVERSED. The Decision of the Labor Arbiter dated
20 November 2000 is REINSTATED. Let the records of the above-entitled case be remanded to the Labor Arbiter
for immediate execution of the Decision. No costs.

ESTER M. ASUNCION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, Second Division,
MABINI MEDICAL CLINIC and DR. WILFRIDO JUCO, respondents.
DECISION
KAPUNAN, J.:
In her petition filed before this Court, Ester Asuncion prays that the Decision, dated November 29, 1996, and the
Resolution, dated February 20,1997, of the public respondent National Labor Relations Commission, Second
Division, in NLRC CA. 011188 which reversed the Decision of the Labor Arbiter, dated May 15, 1996 be set aside.
The antecedents of this case are as follows:
On August 16, 1993, petitioner Ester M. Asuncion was employed as an accountant/bookkeeper by the respondent
Mabini Medical Clinic. Sometime in May 1994, certain officials of the NCR-Industrial Relations Division of the
Department of Labor and Employment conducted a routine inspection of the premises of the respondent company
and discovered upon the disclosure of the petitioner of (documents) violations of the labor standards law such as the
non-coverage from the SSS of the employees. Consequently, respondent Company was made to correct these
violations.
On August 9, 1994, the private respondent, Medical Director Wilfrido Juco, issued a memorandum to petitioner
charging her with the following offenses:
1. Chronic Absentism (sic) You have incurred since Aug. 1993 up to the present 35 absences and 23 half-days.
2. Habitual tardiness You have late (sic) for 108 times. As shown on the record book.
3. Loitering and wasting of company time on several occasions and witnessed by several employees.
4. Getting salary of an absent employee without acknowledging or signing for it.
5. Disobedience and insubordination - continued refusal to sign memos given to you.i[1]
Petitioner was required to explain within two (2) days why she should not be terminated based on the above charges.
Three days later, in the morning of August 12, 1994, petitioner submitted her response to the memorandum. On the
same day, respondent Dr. Juco, through a letter dated August 12, 1994, dismissed the petitioner on the ground of
disobedience of lawful orders and for her failure to submit her reply within the two-day period.
This prompted petitioner to file a case for illegal termination before the NLRC.
In a Decision, dated May 15, 1996, Labor Arbiter Manuel Caday rendered judgment declaring that the petitioner
was illegally dismissed. The Labor Arbiter found that the private respondents were unable to prove the allegation of
chronic absenteeism as it failed to present in evidence the time cards, logbooks or record book which complainant
signed recording her time in reporting for work. These documents, according to the Labor Arbiter, were in the
possession of the private respondents. In fact, the record book was mentioned in the notice of termination. Hence,
the non-presentation of these documents gives rise to the presumption that these documents were intentionally
suppressed since they would be adverse to private respondents claim. Moreover, the Labor Arbiter ruled that the
petitioners absences were with the conformity of the private respondents as both parties had agreed beforehand that
petitioner would not report to work on Saturdays. The handwritten listing of the days when complainant was absent
from work or late in reporting for work and even the computerized print-out, do not suffice to prove that petitioners
absences were unauthorized as they could easily be manufactured.ii[2] Accordingly, the dispositive portion of the
decision states, to wit:

WHEREFORE, Premises Considered, judgment is hereby rendered declaring the dismissal of the complainant as
illegal and ordering the respondent company to immediately reinstate her to her former position without loss of
seniority rights and to pay the complainants backwages and other benefits, as follows:
1) P73,500.00 representing backwages as of the date of this decision until she is actually reinstated in the service;
2) P20,000.00 by way of moral damages and another P20,000.00 representing exemplary damages; and
3) 10% of the recoverable award in this case representing attorneys fees.
SO ORDERED.iii[3]
On appeal, public respondent NLRC rendered the assailed decision which set aside the Labor Arbiters ruling.
Insofar as finding the private respondents as having failed to present evidence relative to petitioners absences and
tardiness, the NLRC agrees with the Labor Arbiter. However, the NLRC ruled that petitioner had admitted the
tardiness and absences though offering justifications for the infractions. The decretal portion of the assailed decision
reads:
WHEREFORE, premises considered, the appealed decision is hereby VACATED and SET ASIDE and a NEW
ONE entered dismissing the complaint for illegal dismissal for lack of merit.
However, respondents Mabini Medical Clinic and Dr. Wilfrido Juco are jointly and solidarily ordered to pay
complainant Ester Asuncion the equivalent of her three (3) months salary for and as a penalty for respondents nonobservance of complainants right to due process.
SO ORDERED.iv[4]
Petitioner filed a motion for reconsideration which the public respondent denied in its Resolution, dated February
19, 1997. Hence, petitioner through a petition for certiorari under Rule 65 of the Rules of Court seeks recourse to
this Court and raises the following issue:
THE PUBLIC RESPONDENT ERRED IN FINDING THAT THE PETITIONER WAS DISMISSED BY THE
PRIVATE RESPONDENT FOR A JUST OR AUTHORIZED CAUSE.
The petition is impressed with merit.
Although, it is a legal tenet that factual findings of administrative bodies are entitled to great weight and respect, we
are constrained to take a second look at the facts before us because of the diversity in the opinions of the Labor
Arbiter and the NLRC.v[5] A disharmony between the factual findings of the Labor Arbiter and those of the NLRC
opens the door to a review thereof by this Court.vi[6]
It bears stressing that a workers employment is property in the constitutional sense. He cannot be deprived of his
work without due process. In order for the dismissal to be valid, not only must it be based on just cause supported by
clear and convincing evidence,vii[7] the employee must also be given an opportunity to be heard and defend
himself. viii[8] It is the employer who has the burden of proving that the dismissal was with just or authorized
cause.ix[9] The failure of the employer to discharge this burden means that the dismissal is not justified and that the
employee is entitled to reinstatement and backwages.x[10]
In the case at bar, there is a paucity of evidence to establish the charges of absenteeism and tardiness. We note that
the employer company submitted mere handwritten listing and computer print-outs. The handwritten listing was not
signed by the one who made the same. As regards the print-outs, while the listing was computer generated, the
entries of time and other annotations were again handwritten and unsigned.xi[11]

We find that the handwritten listing and unsigned computer print-outs were unauthenticated and, hence, unreliable.
Mere self-serving evidence of which the listing and print-outs are of that nature should be rejected as evidence
without any rational probative value even in administrative proceedings. For this reason, we find the findings of the
Labor Arbiter to be correct. On this point, the Labor Arbiter ruled, to wit:
x x x In the instant case, while the Notice of Termination served on the complainant clearly mentions the record
book upon which her tardiness (and absences) was based, the respondent (company) failed to establish (through) any
of these documents and the handwritten listing, notwithstanding, of (sic) the days when complainant was absent
from work or late in reporting for work and even the computerized print-outs, do not suffice to prove the
complainants absences were unauthorized as they could easily be manufactured. x x xxii[12]
In IBM Philippines, Inc. v. NLRC,xiii[13] this Court clarified that the liberality of procedure in administrative
actions is not absolute and does not justify the total disregard of certain fundamental rules of evidence. Such that
evidence without any rational probative value may not be made the basis of order or decision of administrative
bodies. The Courts ratiocination in that case is relevant to the propriety of rejecting the unsigned handwritten listings
and computer print-outs submitted by private respondents which we quote, to wit:
However, the liberality of procedure in administrative actions is subject to limitations imposed by basic
requirements of due process. As this Court said in Ang Tibay v. CIR, the provision for flexibility in administrative
procedure does not go so far as to justify orders without a basis in evidence having rational probative value. More
specifically, as held in Uichico v. NLRC:
It is true that administrative and quasi-judicial bodies like the NLRC are not bound by the technical rules of
procedure in the adjudication of cases. However, this procedural rule should not be construed as a license to
disregard certain fundamental evidentiary rules. While the rules of evidence prevailing in the courts of law or equity
are not controlling in proceedings before the NLRC, the evidence presented before it must at least have a modicum
of admissibility for it to be given some probative value. The Statement of Profit and Losses submitted by Crispa,
Inc. to prove its alleged losses, without the accompanying signature of a certified public accountant or audited by an
independent auditor, are nothing but self-serving documents which ought to be treated as a mere scrap of paper
devoid of any probative value.
The computer print-outs, which constitute the only evidence of petitioners, afford no assurance of their authenticity
because they are unsigned. The decisions of this Court, while adhering to a liberal view in the conduct of
proceedings before administrative agencies, have nonetheless consistently required some proof of authenticity or
reliability as condition for the admission of documents.
In Jarcia Machine Shop and Auto Supply, Inc. v. NLRC,xiv[14] this Court held as incompetent unsigned daily time
records presented to prove that the employee was neglectful of his duties:
Indeed, the DTRs annexed to the present petition would tend to establish private respondents neglectful attitude
towards his work duties as shown by repeated and habitual absences and tardiness and propensity for working
undertime for the year 1992. But the problem with these DTRs is that they are neither originals nor certified true
copies. They are plain photocopies of the originals, if the latter do exist. More importantly, they are not even signed
by private respondent nor by any of the employers representatives. x x x.
In the case at bar, both the handwritten listing and computer print-outs being unsigned, the authenticity thereof is
highly suspect and devoid of any rational probative value especially in the light of the existence of the official record
book of the petitioners alleged absences and tardiness in the possession of the employer company.
Ironically, in the memorandum charging petitioner and notice of termination, private respondents referred to the
record book as its basis for petitioners alleged absenteeism and tardiness. Interestingly, however, the record book
was never presented in evidence. Private respondents had possession thereof and the opportunity to present the
same. Being the basis of the charges against the petitioner, it is without doubt the best evidence available to
substantiate the allegations. The purpose of the rule requiring the production of the best evidence is the prevention of

fraud, because if a party is in possession of such evidence and withholds it, and seeks to substitute inferior evidence
in its place, the presumption naturally arises that the better evidence is withheld for fraudulent purposes which its
production would expose and defeat.xv[15] Thus, private respondents unexplained and unjustified non-presentation
of the record book, which is the best evidence in its possession and control of the charges against the petitioner,
casts serious doubts on the factual basis of the charges of absenteeism and tardiness.
We find that private respondents failed to present a single piece of credible evidence to serve as the basis for their
charges against petitioner and consequently, failed to fulfill their burden of proving the facts which constitute the
just cause for the dismissal of the petitioner. However, the NLRC ruled that despite such absence of evidence, there
was an admission on the part of petitioner in her Letter dated August 11, 1994 wherein she wrote:
I am quite surprised why I have incurred 35 absences since August 1993 up to the present. I can only surmise that
Saturdays were not included in my work week at your clinic. If you will please recall, per agreement with you, my
work days at your clinic is from Monday to Friday without Saturday work. As to my other supposed absences, I
believe that said absences were authorized and therefore cannot be considered as absences which need not be
explained (sic). It is also extremely difficult to understand why it is only now that I am charged to explain alleged
absences incurred way back August 1993.xvi[16]
In reversing the decision of the Labor Arbiter, public respondent NLRC relied upon the supposed admission of the
petitioner of her habitual absenteeism and chronic tardiness.
We do not subscribe to the findings of the NLRC that the above quoted letter of petitioner amounted to an admission
of her alleged absences. As explained by petitioner, her alleged absences were incurred on Saturdays. According to
petitioner, these should not be considered as absences as there was an arrangement between her and the private
respondents that she would not be required to work on Saturdays. Private respondents have failed to deny the
existence of this arrangement. Hence, the decision of the NLRC that private respondent had sufficient grounds to
terminate petitioner as she admitted the charges of habitual absences has no leg to stand on.
Neither have the private respondents shown by competent evidence that the petitioner was given any warning or
reprimanded for her alleged absences and tardiness. Private respondents claimed that they sent several notices to the
petitioner warning her of her absences, however, petitioner refused to receive the same. On this point, the Labor
Arbiter succinctly observed:
The record is bereft of any showing that complainant was ever warned of her absences prior to her dismissal on
August 9, 1994. The alleged notices of her absences from August 17, until September 30, 1993, from October until
November 27, 1993, from December 1, 1993 up to February 26, 1994 and the notice dated 31 May 1994 reminding
complainant of her five (5) days absences, four (4) half-days and tardiness for 582 minutes (Annex "1" to "1-D"
attached to respondent' Rejoinder), fail to show that the notices were received by the complainant. The allegation of
the respondents that the complainant refused to received (sic) the same is self-serving and merits scant
consideration. xxxxvii[17]
The Court, likewise, takes note of the fact that the two-day period given to petitioner to explain and answer the
charges against her was most unreasonable, considering that she was charged with several offenses and infractions
(35 absences, 23 half-days and 108 tardiness), some of which were allegedly committed almost a year before, not to
mention the fact that the charges leveled against her lacked particularity.
Apart from chronic absenteeism and habitual tardiness, petitioner was also made to answer for loitering and wasting
of company time, getting salary of an absent employee without acknowledging or signing for it and disobedience
and insubordination.xviii[18] Thus, the Labor Arbiter found that actually petitioner tried to submit her explanation
on August 11, 1994 or within the two-day period given her, but private respondents prevented her from doing so by
instructing their staff not to accept complainants explanation, which was the reason why her explanation was
submitted a day later.xix[19]

The law mandates that every opportunity and assistance must be accorded to the employee by the management to
enable him to prepare adequately for his defense.xx[20] In Ruffy v. NLRC,xxi[21] the Court held that what would
qualify as sufficient or ample opportunity, as required by law, would be every kind of assistance that management
must accord to the employee to enable him to prepare adequately for his defense. In the case at bar, private
respondents cannot be gainsaid to have given petitioner the ample opportunity to answer the charges leveled against
her.
From the foregoing, there are serious doubts in the evidence on record as to the factual basis of the charges against
petitioner. These doubts shall be resolved in her favor in line with the policy under the Labor Code to afford
protection to labor and construe doubts in favor of labor.xxii[22] The consistent rule is that if doubts exist between
the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter.
The employer must affirmatively show rationally adequate evidence that the dismissal was for a justifiable
cause.xxiii[23] Not having satisfied its burden of proof, we conclude that the employer dismissed the petitioner
without any just cause. Hence, the termination is illegal.
Having found that the petitioner has been illegally terminated, she is necessarily entitled to reinstatement to her
former previous position without loss of seniority and the payment of backwages.xxiv[24]
WHEREFORE, the Decision of the National Labor Relations Commission, dated November 29, 1996 and the
Resolution, dated February 20, 1997 are hereby REVERSED and SET ASIDE, and the Decision of the Labor
Arbiter, dated May 15, 1996 REINSTATED.

G.R. No. 98107 August 18, 1997

BENJAMIN C. JUCO, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and NATIONAL HOUSING CORPORATION, respondents.

HERMOSISIMA, JR., J.:

This is a petition for certiorari to set aside the Decision of the National Labor Relations Commission (NLRC) dated March 14, 1991, which
reversed the Decision dated May 21, 1990 of Labor Arbiter Manuel R Caday, on the ground of lack of jurisdiction.
Petitioner Benjamin C. Juco was hired as a project engineer of respondent National Housing Corporation (NHC) from November 16, 1970 to
May 14, 1975. On May 14, 1975, he was separated from the service for having been implicated in a crime of theft and/or malversation of
public funds.
On March 25, 1977, petitioner filed a complaint for illegal dismissal against the NHC with the Department of Labor.
On September 17, 1977, the Labor Arbiter rendered a decision dismissing the complaint on the ground that the NLRC had no jurisdiction
1
over the case.

Petitioner then elevated the case to the NLRC which rendered a decision on December 28, 1982,
2
reversing the decision of the Labor Arbiter.
Dissatisfied with the decision of the NLRC, respondent NHC appealed before this Court and on January
17, 1985, we rendered a decision, the dispositive portion thereof reads as follows:
WHEREFORE, the petition is hereby GRANTED. The questioned decision of the
respondent National Labor Relations Commission is SET ASIDE. The decision of the
3
Labor Arbiter dismissing the case before it for lack of jurisdiction is REINSTATED.
On January 6, 1989, petitioner filed with the Civil Service Commission a complaint for illegal dismissal,
4
with preliminary mandatory injunction.
On February 6, 1989, respondent NHC moved for the dismissal of the complaint on the ground that the
5
Civil Service Commission has no jurisdiction over the case.
On April 11, 1989, the Civil Service Commission issued an order dismissing the complaint for lack of
jurisdiction. It ratiocinated that:
The Board finds the comment and/or motion to dismiss meritorious. It was not disputed
that NHC is a government corporation without an original charter but organized/created
under the Corporation Code.
Article IX, Section 2 (1) of the 1987 Constitution provides:
The civil service embraces all branches, subdivisions, instrumentalities
and agencies of the Government, including government owned and
controlled corporations with original charters. (emphasis supplied)

From the aforequoted constitutional provision, it is clear that respondent NHC is not
within the scope of the civil service and is therefore beyond the jurisdiction of this Board.
Moreover, it is pertinent to state that the 1987 Constitution was ratified and became
effective on February 2, 1987.
WHEREFORE, for lack of jurisdiction, the instant complaint is hereby dismissed.

On April 28, 1989, petitioner filed with respondent NLRC a complaint for illegal dismissal with preliminary
7
mandatory injunction against respondent NHC.
On May 21, 1990, respondent NLRC thru Labor Arbiter Manuel R. Caday ruled that petitioner was illegally
dismissed from his employment by respondent as there was evidence in the record that the criminal case
against him was purely fabricated, prompting the trial court to dismiss the charges against him. Hence, he
concluded that the dismissal was illegal as it was devoid of basis, legal or factual.
He further ruled that the complaint is not barred by prescription considering that the period from which to
reckon the reglementary period of four years should be from the date of the receipt of the decision of the
Civil Service Commission promulgated on April 11, 1989. He also ratiocinated that:
It appears . . . complainant filed the complaint for illegal dismissal with the Civil Service
Commission on January 6, 1989 and the same was dismissed on April 11, 1989 after
which on April 28, 1989, this case was filed by the complainant. Prior to that, this case
was ruled upon by the Supreme Court on January 17, 1985 which enjoined the
complainant to go to the Civil Service Commission which in fact, complainant did. Under
the circumstances, there is merit on the contention that the running of the reglementary
period of four (4) years was suspended with the filing of the complaint with the said
Commission. Verily, it was not the fault of the respondent for failing to file the complaint
as alleged by the respondent but due to, in the words of the complainant, a "legal knot"
8
that has to be untangled.
Thereafter, the Labor Arbiter rendered a decision, the dispositive portion of which reads:
Premises considered, judgment is hereby rendered declaring the dismissal of the
complainant as illegal and ordering the respondent to immediately reinstate him to his
former position without loss of seniority rights with full back wages inclusive of allowance
and to his other benefits or equivalent computed from the time it is withheld from him
9
when he was dismissed on March 27, 1977, until actually reinstated.
On June 1, 1990, respondent NHC filed its appeal before the NLRC and on March 14, 1991, the NLRC
promulgated a decision which reversed the decision of Labor Arbiter Manuel R. Caday on the ground of
10
lack of jurisdiction.
The primordial issue that confronts us is whether or not public respondent committed grave abuse of
discretion in holding that petitioner is not governed by the Labor Code.
Under the laws then in force, employees of government-owned and/or controlled corporations were
governed by the Civil Service Law and not by the Labor Code. Hence,
Article 277 of the Labor Code (PD 442) then provided:

The terms and conditions of employment of all government employees, including

employees of government-owned and controlled corporations shall be governed by the
Civil Service Law, rules and regulations . . . .
The 1973 Constitution, Article II-B, Section 1(1), on the other hand provided:
The Civil Service embraces every branch, agency, subdivision and instrumentality of the
government, including government-owned or controlled corporations.
Although we had earlier ruled in National Housing Corporation v.
11
Juco, that employees of government-owned and/or controlled corporations, whether created by special
law or formed as subsidiaries under the general Corporation Law, are governed by the Civil Service Law
and not by the Labor Code, this ruling has been supplanted by the 1987 Constitution. Thus, the said
Constitution now provides:
The civil service embraces all branches, subdivisions, instrumentalities, and agencies of
the Government, including government owned or controlled corporations with original
charter. (Article IX-B, Section 2[1])
12

In National Service Corporation (NASECO) v. National Labor Relations Commission, we had the
occasion to apply the present Constitution in deciding whether or not the employees of NASECO are
covered by the Civil Service Law or the Labor Code notwithstanding that the case arose at the time when
the 1973 Constitution was still in effect. We ruled that the NLRC has jurisdiction over the employees of
NASECO on the ground that it is the 1987 Constitution that governs because it is the Constitution in place
at the time of the decision. Furthermore, we ruled that the new phrase "with original charter" means that
government-owned and controlled corporations refer to corporations chartered by special law as
distinguished from corporations organized under the Corporation Code. Thus, NASECO which had been
organized under the general incorporation statute and a subsidiary of the National Investment
Development Corporation, which in turn was a subsidiary of the Philippine National Bank, is exluded from
the purview of the Civil Service Commission.
We see no cogent reason to depart from the ruling in the aforesaid case.
In the case at bench, the National Housing Corporation is a government owned corporation organized in
1959 in accordance with Executive Order No. 399, otherwise known as the Uniform Charter of
Government Corporation, dated January 1, 1959. Its shares of stock are and have been one hundred
percent (100%) owned by the Government from its incorporation under Act 1459, the former corporation
law. The government entities that own its shares of stock are the Government Service Insurance System,
the Social Security System, the Development Bank of the Philippines, the National Investment and
13
Development Corporation and the People's Homesite and Housing Corporation. Considering the fact
that the NHA had been incorporated under Act 1459, the former corporation law, it is but correct to say
that it is a government-owned or controlled corporation whose employees are subject to the provisions of
the Labor Code. This observation is reiterated in the recent case of Trade Union of the Philippines and
Allied Services (TUPAS) v. National Housing
14
Corporation, where we held that the NHA is now within the jurisdiction of the Department of Labor and
Employment, it being a government-owned and/or controlled corporation without an original charter.
Furthermore, we also held that the workers or employees of the NHC (now NHA) undoubtedly have the
right to form unions or employee's organization and that there is no impediment to the holding of a
certification election among them as they are covered by the Labor Code.
Thus, the NLRC erred in dismissing petitioner's complaint for lack of jurisdiction because the rule now is
that the Civil Service now covers only government-owned or controlled corporations with original charters.

15

Having been incorporated under the Corporation Law, its relations with its personnel are governed by
the Labor Code and come under the jurisdiction of the National Labor Relations Commission.
One final point. Petitioners have been tossed from one forum to another for a simple illegal dismissal
case. It is but apt that we put an end to his dilemna in the interest of justice.
WHEREFORE, the decision of the NLRC in NLRC NCR-04-02036089 dated March 14, 1991 is hereby
REVERSED and the Decision of the Labor Arbiter dated May 21, 1990 is REINSTATED.
SO ORDERED.

G.R. No. 86773 February 14, 1992

SOUTHEAST ASIAN FISHERIES DEVELOPMENT CENTER-AQUACULTURE DEPARTMENT
(SEAFDEC-AQD), DR. FLOR LACANILAO (CHIEF), RUFIL CUEVAS (HEAD, ADMINISTRATIVE
DIV.), BEN DELOS REYES (FINANCE OFFICER), petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and JUVENAL LAZAGA, respondents.
Ramon Encarnacion for petitioners.
Caesar T. Corpus for private respondent.

NOCON, J.:
This is a petition for certiorari to annul and set aside the July 26, 1988 decision of the National Labor Relations
Commission sustaining the labor arbiter, in holding herein petitioners Southeast Asian Fisheries Development
Center-Aquaculture Department (SEAFDEC-AQD), Dr. Flor Lacanilao, Rufil Cuevas and Ben de los Reyes liable to
pay private respondent Juvenal Lazaga the amount of P126,458.89 plus interest thereon computed from May 16,
1986 until full payment thereof is made, as separation pay and other post-employment benefits, and the resolution
denying the petitioners' motion for reconsideration of said decision dated January 9, 1989.
The antecedent facts of the case are as follows:
SEAFDEC-AQD is a department of an international organization, the Southeast Asian Fisheries Development
Center, organized through an agreement entered into in Bangkok, Thailand on December 28, 1967 by the
governments of Malaysia, Singapore, Thailand, Vietnam, Indonesia and the Philippines with Japan as the sponsoring
country (Article 1, Agreement Establishing the SEAFDEC).
On April 20, 1975, private respondent Juvenal Lazaga was employed as a Research Associate an a probationary
basis by the SEAFDEC-AQD and was appointed Senior External Affairs Officer on January 5, 1983 with a monthly
basic salary of P8,000.00 and a monthly allowance of P4,000.00. Thereafter, he was appointed to the position of
Professional III and designated as Head of External Affairs Office with the same pay and benefits.
On May 8, 1986, petitioner Lacanilao in his capacity as Chief of SEAFDEC-AQD sent a notice of termination to
private respondent informing him that due to the financial constraints being experienced by the department, his
services shall be terminated at the close of office hours on May 15, 1986 and that he is entitled to separation benefits
equivalent to one (1) month of his basic salary for every year of service plus other benefits (Rollo, p. 153).

Upon petitioner SEAFDEC-AQD's failure to pay private respondent his separation pay, the latter filed on March 18,
1987 a complaint against petitioners for non-payment of separation benefits plus moral damages and attorney's fees
with the Arbitration Branch of the NLRC (Annex "C" of Petition for Certiorari).
Petitioners in their answer with counterclaim alleged that the NLRC has no jurisdiction over the case inasmuch as
the SEAFDEC-AQD is an international organization and that private respondent must first secure clearances from
the proper departments for property or money accountability before any claim for separation pay will be paid, and
which clearances had not yet been obtained by the private respondent.
A formal hearing was conducted whereby private respondent alleged that the non-issuance of the clearances by the
petitioners was politically motivated and in bad faith. On the other hand, petitioners alleged that private respondent
has property accountability and an outstanding obligation to SEAFDEC-AQD in the amount of P27,532.11.
Furthermore, private respondent is not entitled to accrued sick leave benefits amounting to P44,000.00 due to his
failure to avail of the same during his employment with the SEAFDEC-AQD (Annex "D", Id.).
On January 12, 1988, the labor arbiter rendered a decision, the dispositive portion of which reads:
WHEREFORE, premises considered, judgment is hereby rendered ordering respondents:
1. To pay complainant P126,458.89, plus legal interest thereon computed from May 16, 1986 until
full payment thereof is made, as separation pay and other post-employment benefits;
2. To pay complainant actual damages in the amount of P50,000, plus 10% attorney's fees.
All other claims are hereby dismissed.
SO ORDERED. (Rollo, p. 51, Annex "E")
On July 26, 1988, said decision was affirmed by the Fifth Division of the NLRC except as to the award of
P50,000.00 as actual damages and attorney's fees for being baseless. (Annex "A", p. 28, id.)
On September 3, 1988, petitioners filed a Motion for Reconsideration (Annex "G", id.) which was denied on January
9, 1989. Thereafter, petitioners instituted this petition for certiorari alleging that the NLRC has no jurisdiction to
hear and decide respondent Lazaga's complaint since SEAFDEC-AQD is immune from suit owing to its
international character and the complaint is in effect a suit against the State which cannot be maintained without its
consent.
The petition is impressed with merit.
Petitioner Southeast Asian Fisheries Development Center-Aquaculture Department (SEAFDEC-AQD) is an
international agency beyond the jurisdiction of public respondent NLRC.
It was established by the Governments of Burma, Kingdom of Cambodia, Republic of Indonesia, Japan, Kingdom of
Laos, Malaysia. Republic of the Philippines, Republic of Singapore, Kingdom of Thailand and Republic of Vietnam
(Annex "H", Petition).
The Republic of the Philippines became a signatory to the Agreement establishing SEAFDEC on January 16,1968.
Its purpose is as follows:
The purpose of the Center is to contribute to the promotion of the fisheries development in
Southeast Asia by mutual co-operation among the member governments of the Center, hereinafter

called the "Members", and through collaboration with international organizations and
governments external to the Center. (Agreement Establishing the SEAFDEC, Art. 1; Annex "H"
Petition) (p.310, Rollo)
SEAFDEC-AQD was organized during the Sixth Council Meeting of SEAFDEC on July 3-7, 1973 in Kuala
Lumpur, Malaysia as one of the principal departments of SEAFDEC (Annex "I", id.) to be established in Iloilo for
the promotion of research in aquaculture. Paragraph 1, Article 6 of the Agreement establishing SEAFDEC
mandates:
1. The Council shall be the supreme organ of the Center and all powers of the Center shall be
vested in the Council.
Being an intergovernmental organization, SEAFDEC including its Departments (AQD), enjoys functional
independence and freedom from control of the state in whose territory its office is located.
As Senator Jovito R. Salonga and Former Chief Justice Pedro L. Yap stated in their book, Public International Law
(p. 83, 1956 ed.):
Permanent international commissions and administrative bodies have been created by the
agreement of a considerable number of States for a variety of international purposes, economic or
social and mainly non-political. Among the notable instances are the International Labor
Organization, the International Institute of Agriculture, the International Danube Commission. In
so far as they are autonomous and beyond the control of any one State, they have a distinct
juridical personality independent of the municipal law of the State where they are situated. As
such, according to one leading authority "they must be deemed to possess a species of
international personality of their own." (Salonga and Yap, Public International Law, 83 [1956 ed.])
Pursuant to its being a signatory to the Agreement, the Republic of the Philippines agreed to be represented by one
Director in the governing SEAFDEC Council (Agreement Establishing SEAFDEC, Art. 5, Par. 1, Annex "H", ibid.)
and that its national laws and regulations shall apply only insofar as its contribution to SEAFDEC of "an agreed
amount of money, movable and immovable property and services necessary for the establishment and operation of
the Center" are concerned (Art. 11, ibid.). It expressly waived the application of the Philippine laws on the
disbursement of funds of petitioner SEAFDEC-AQD (Section 2, P.D. No. 292).
The then Minister of Justice likewise opined that Philippine Courts have no jurisdiction over SEAFDEC-AQD in
Opinion No. 139, Series of 1984
4. One of the basic immunities of an international organization is immunity from local
jurisdiction, i.e., that it is immune from the legal writs and processes issued by the tribunals of the
country where it is found. (See Jenks, Id., pp. 37-44) The obvious reason for this is that the
subjection of such an organization to the authority of the local courts would afford a convenient
medium thru which the host government may interfere in there operations or even influence or
control its policies and decisions of the organization; besides, such subjection to local jurisdiction
would impair the capacity of such body to discharge its responsibilities impartially on behalf of its
member-states. In the case at bar, for instance, the entertainment by the National Labor Relations
Commission of Mr. Madamba's reinstatement cases would amount to interference by the
Philippine Government in the management decisions of the SEARCA governing board; even
worse, it could compromise the desired impartiality of the organization since it will have to suit its
actuations to the requirements of Philippine law, which may not necessarily coincide with the
interests of the other member-states. It is precisely to forestall these possibilities that in cases
where the extent of the immunity is specified in the enabling instruments of international
organizations, jurisdictional immunity from the host country is invariably among the first
accorded. (See Jenks, Id.; See also Bowett, The Law of International Institutions, pp. 284-1285).

Respondent Lazaga's invocation of estoppel with respect to the issue of jurisdiction is unavailing because estoppel
does not apply to confer jurisdiction to a tribunal that has none over a cause of action. Jurisdiction is conferred by
law. Where there is none, no agreement of the parties can provide one. Settled is the rule that the decision of a
tribunal not vested with appropriate jurisdiction is null and void. Thus, in Calimlim vs. Ramirez, this Court held:
A rule, that had been settled by unquestioned acceptance and upheld in decisions so numerous to
cite is that the jurisdiction of a court over the subject matter of the action is a matter of law and
may not be conferred by consent or agreement of the parties. The lack of jurisdiction of a court
may be raised at any stage of the proceedings, even on appeal. This doctrine has been qualified by
recent pronouncements which it stemmed principally from the ruling in the cited case of
Sibonghanoy. It is to be regretted, however, that the holding in said case had been applied to
situations which were obviously not contemplated therein. The exceptional circumstances
involved in Sibonghanoy which justified the departure from the accepted concept of nonwaivability of objection to jurisdiction has been ignored and, instead a blanket doctrine had been
repeatedly upheld that rendered the supposed ruling in Sibonghanoy not as the exception, but
rather the general rule, virtually overthrowing altogether the time-honored principle that the issue
of jurisdiction is not lost by waiver or by estoppel. (Calimlim vs. Ramirez, G.R. No. L-34362, 118
SCRA 399; [1982])
Respondent NLRC'S citation of the ruling of this Court in Lacanilao v. De Leon (147 SCRA 286 [1987]) to justify
its assumption of jurisdiction over SEAFDEC is misplaced. On the contrary, the Court in said case explained why it
took cognizance of the case. Said the Court:
We would note, finally, that the present petition relates to a controversy between two claimants to
the same position; this is not a controversy between the SEAFDEC on the one hand, and an officer
or employee, or a person claiming to be an officer or employee, of the SEAFDEC, on the other
hand. There is before us no question involving immunity from the jurisdiction of the Court, there
being no plea for such immunity whether by or on behalf of SEAFDEC, or by an official of
SEAFDEC with the consent of SEAFDEC (Id., at 300; emphasis supplied).
WHEREFORE, finding SEAFDEC-AQD to be an international agency beyond the jurisdiction of the courts or local
agency of the Philippine government, the questioned decision and resolution of the NLRC dated July 26, 1988 and
January 9, 1989, respectively, are hereby REVERSED and SET ASIDE for having been rendered without
jurisdiction. No costs.

G.R. No. 85750 September 28, 1990

INTERNATIONAL CATHOLIC IMMIGRATION COMMISSION, petitioner
vs
HON. PURA CALLEJA IN HER CAPACITY AS DIRECTOR OF THE BUREAU OF LABOR RELATIONS
AND TRADE UNIONS OF THE PHILIPPINES AND ALLIED SERVICES (TUPAS) WFTU respondents.
G.R. No. 89331 September 28, 1990
KAPISANAN NG MANGGAGAWA AT TAC SA IRRI-ORGANIZED LABOR ASSOCIATION IN LINE
INDUSTRIES AND AGRICULTURE, petitioner,
vs
SECRETARY OF LABOR AND EMPLOYMENT AND INTERNATIONAL RICE RESEARCH INSTITUTE,
INC., respondents.
Araullo, Zambrano, Gruba, Chua Law Firm for petitioner in 85750.
Dominguez, Armamento, Cabana & Associates for petitioner in G.R. No. 89331.
Jimenez & Associates for IRRI.
Alfredo L. Bentulan for private respondent in 85750.

MELENCIO-HERRERA, J.:
Consolidated on 11 December 1989, these two cases involve the validity of the claim of immunity by the
International Catholic Migration Commission (ICMC) and the International Rice Research Institute, Inc.
(IRRI) from the application of Philippine labor laws.
I
Facts and Issues
A. G.R. No. 85750 the International Catholic Migration Commission (ICMC) Case.
As an aftermath of the Vietnam War, the plight of Vietnamese refugees fleeing from South Vietnam's
communist rule confronted the international community.

In response to this crisis, on 23 February 1981, an Agreement was forged between the Philippine
Government and the United Nations High Commissioner for Refugees whereby an operating center for
processing Indo-Chinese refugees for eventual resettlement to other countries was to be established in
Bataan (Annex "A", Rollo, pp. 22-32).
ICMC was one of those accredited by the Philippine Government to operate the refugee processing
center in Morong, Bataan. It was incorporated in New York, USA, at the request of the Holy See, as a
non-profit agency involved in international humanitarian and voluntary work. It is duly registered with the
United Nations Economic and Social Council (ECOSOC) and enjoys Consultative Status, Category II. As
an international organization rendering voluntary and humanitarian services in the Philippines, its
activities are parallel to those of the International Committee for Migration (ICM) and the International
Committee of the Red Cross (ICRC) [DOLE Records of BLR Case No. A-2-62-87, ICMC v. Calleja, Vol.
1].
On 14 July 1986, Trade Unions of the Philippines and Allied Services (TUPAS) filed with the then Ministry
of Labor and Employment a Petition for Certification Election among the rank and file members employed
by ICMC The latter opposed the petition on the ground that it is an international organization registered
with the United Nations and, hence, enjoys diplomatic immunity.
On 5 February 1987, Med-Arbiter Anastacio L. Bactin sustained ICMC and dismissed the petition for lack
of jurisdiction.
On appeal by TUPAS, Director Pura Calleja of the Bureau of Labor Relations (BLR), reversed the MedArbiter's Decision and ordered the immediate conduct of a certification election. At that time, ICMC's
request for recognition as a specialized agency was still pending with the Department of Foreign Affairs
(DEFORAF).
Subsequently, however, on 15 July 1988, the Philippine Government, through the DEFORAF, granted
ICMC the status of a specialized agency with corresponding diplomatic privileges and immunities, as
evidenced by a Memorandum of Agreement between the Government and ICMC (Annex "E", Petition,
Rollo, pp. 41-43), infra.
ICMC then sought the immediate dismissal of the TUPAS Petition for Certification Election invoking the
immunity expressly granted but the same was denied by respondent BLR Director who, again, ordered
the immediate conduct of a pre-election conference. ICMC's two Motions for Reconsideration were
denied despite an opinion rendered by DEFORAF on 17 October 1988 that said BLR Order violated
ICMC's diplomatic immunity.
Thus, on 24 November 1988, ICMC filed the present Petition for Certiorari with Preliminary Injunction
assailing the BLR Order.
On 28 November 1988, the Court issued a Temporary Restraining Order enjoining the holding of the
certification election.
On 10 January 1989, the DEFORAF, through its Legal Adviser, retired Justice Jorge C. Coquia of the
Court of Appeals, filed a Motion for Intervention alleging that, as the highest executive department with
the competence and authority to act on matters involving diplomatic immunity and privileges, and tasked
with the conduct of Philippine diplomatic and consular relations with foreign governments and UN
organizations, it has a legal interest in the outcome of this case.
Over the opposition of the Solicitor General, the Court allowed DEFORAF intervention.

On 12 July 1989, the Second Division gave due course to the ICMC Petition and required the submittal of
memoranda by the parties, which has been complied with.
As initially stated, the issue is whether or not the grant of diplomatic privileges and immunites to ICMC
extends to immunity from the application of Philippine labor laws.
ICMC sustains the affirmative of the proposition citing (1) its Memorandum of Agreement with the
Philippine Government giving it the status of a specialized agency, (infra); (2) the Convention on the
Privileges and Immunities of Specialized Agencies, adopted by the UN General Assembly on 21
November 1947 and concurred in by the Philippine Senate through Resolution No. 91 on 17 May 1949
(the Philippine Instrument of Ratification was signed by the President on 30 August 1949 and deposited
with the UN on 20 March 1950) infra; and (3) Article II, Section 2 of the 1987 Constitution, which declares
that the Philippines adopts the generally accepted principles of international law as part of the law of the
land.
Intervenor DEFORAF upholds ICMC'S claim of diplomatic immunity and seeks an affirmance of the
DEFORAF determination that the BLR Order for a certification election among the ICMC employees is
violative of the diplomatic immunity of said organization.
Respondent BLR Director, on the other hand, with whom the Solicitor General agrees, cites State policy
and Philippine labor laws to justify its assailed Order, particularly, Article II, Section 18 and Article III,
Section 8 of the 1987 Constitution, infra; and Articles 243 and 246 of the Labor Code, as amended, ibid.
In addition, she contends that a certification election is not a litigation but a mere investigation of a nonadversary, fact-finding character. It is not a suit against ICMC its property, funds or assets, but is the sole
concern of the workers themselves.
B. G.R. No. 89331 (The International Rice Research Institute [IRRI] Case).
Before a Decision could be rendered in the ICMC Case, the Third Division, on 11 December 1989,
resolved to consolidate G.R. No. 89331 pending before it with G.R. No. 85750, the lower-numbered case
pending with the Second Division, upon manifestation by the Solicitor General that both cases involve
similar issues.
The facts disclose that on 9 December 1959, the Philippine Government and the Ford and Rockefeller
Foundations signed a Memorandum of Understanding establishing the International Rice Research
Institute (IRRI) at Los Baos, Laguna. It was intended to be an autonomous, philanthropic, tax-free, nonprofit, non-stock organization designed to carry out the principal objective of conducting "basic research
on the rice plant, on all phases of rice production, management, distribution and utilization with a view to
attaining nutritive and economic advantage or benefit for the people of Asia and other major rice-growing
areas through improvement in quality and quantity of rice."
Initially, IRRI was organized and registered with the Securities and Exchange Commission as a private
corporation subject to all laws and regulations. However, by virtue of Pres. Decree No. 1620, promulgated
on 19 April 1979, IRRI was granted the status, prerogatives, privileges and immunities of an international
organization.
The Organized Labor Association in Line Industries and Agriculture (OLALIA), is a legitimate labor
organization with an existing local union, the Kapisanan ng Manggagawa at TAC sa IRRI (Kapisanan, for
short) in respondent IRRI.
On 20 April 1987, the Kapisanan filed a Petition for Direct Certification Election with Region IV, Regional
Office of the Department of Labor and Employment (DOLE).

IRRI opposed the petition invoking Pres. Decree No. 1620 conferring upon it the status of an international
organization and granting it immunity from all civil, criminal and administrative proceedings under
Philippine laws.
On 7 July 1987, Med-Arbiter Leonardo M. Garcia, upheld the opposition on the basis of Pres. Decree No.
1620 and dismissed the Petition for Direct Certification.
On appeal, the BLR Director, who is the public respondent in the ICMC Case, set aside the Med-Arbiter's
Order and authorized the calling of a certification election among the rank-and-file employees of IRRI.
Said Director relied on Article 243 of the Labor Code, as amended, infra and Article XIII, Section 3 of the
1
1987 Constitution, and held that "the immunities and privileges granted to IRRI do not include exemption
from coverage of our Labor Laws." Reconsideration sought by IRRI was denied.
On appeal, the Secretary of Labor, in a Resolution of 5 July 1989, set aside the BLR Director's Order,
dismissed the Petition for Certification Election, and held that the grant of specialized agency status by
the Philippine Government to the IRRI bars DOLE from assuming and exercising jurisdiction over IRRI
Said Resolution reads in part as follows:
Presidential Decree No. 1620 which grants to the IRRI the status, prerogatives, privileges
and immunities of an international organization is clear and explicit. It provides in
categorical terms that:
Art. 3 The Institute shall enjoy immunity from any penal, civil and administrative
proceedings, except insofar as immunity has been expressly waived by the DirectorGeneral of the Institution or his authorized representative.
Verily, unless and until the Institute expressly waives its immunity, no summons,
subpoena, orders, decisions or proceedings ordered by any court or administrative or
quasi-judicial agency are enforceable as against the Institute. In the case at bar there
was no such waiver made by the Director-General of the Institute. Indeed, the Institute, at
the very first opportunity already vehemently questioned the jurisdiction of this
Department by filing an ex-parte motion to dismiss the case.
Hence, the present Petition for Certiorari filed by Kapisanan alleging grave abuse of discretion by
respondent Secretary of Labor in upholding IRRI's diplomatic immunity.
The Third Division, to which the case was originally assigned, required the respondents to comment on
the petition. In a Manifestation filed on 4 August 1990, the Secretary of Labor declared that it was "not
adopting as his own" the decision of the BLR Director in the ICMC Case as well as the Comment of the
Solicitor General sustaining said Director. The last pleading was filed by IRRI on 14 August 1990.
Instead of a Comment, the Solicitor General filed a Manifestation and Motion praying that he be excused
from filing a comment "it appearing that in the earlier case of International Catholic Migration Commission
v. Hon. Pura Calleja, G.R. No. 85750. the Office of the Solicitor General had sustained the stand of
Director Calleja on the very same issue now before it, which position has been superseded by respondent
Secretary of Labor in G.R. No. 89331," the present case. The Court acceded to the Solicitor General's
prayer.
The Court is now asked to rule upon whether or not the Secretary of Labor committed grave abuse of
discretion in dismissing the Petition for Certification Election filed by Kapisanan.

Kapisanan contends that Article 3 of Pres. Decree No. 1620 granting IRRI the status, privileges,
prerogatives and immunities of an international organization, invoked by the Secretary of Labor, is
unconstitutional in so far as it deprives the Filipino workers of their fundamental and constitutional right to
form trade unions for the purpose of collective bargaining as enshrined in the 1987 Constitution.
A procedural issue is also raised. Kapisanan faults respondent Secretary of Labor for entertaining IRRI'S
appeal from the Order of the Director of the Bureau of Labor Relations directing the holding of a
2
certification election. Kapisanan contends that pursuant to Sections 7, 8, 9 and 10 of Rule V of the
Omnibus Rules Implementing the Labor Code, the Order of the BLR Director had become final and
unappeable and that, therefore, the Secretary of Labor had no more jurisdiction over the said appeal.
On the other hand, in entertaining the appeal, the Secretary of Labor relied on Section 25 of Rep. Act. No.
6715, which took effect on 21 March 1989, providing for the direct filing of appeal from the Med-Arbiter to
the Office of the Secretary of Labor and Employment instead of to the Director of the Bureau of Labor
Relations in cases involving certification election orders.
III
Findings in Both Cases.
There can be no question that diplomatic immunity has, in fact, been granted ICMC and IRRI.
Article II of the Memorandum of Agreement between the Philippine Government and ICMC provides that
ICMC shall have a status "similar to that of a specialized agency." Article III, Sections 4 and 5 of the
Convention on the Privileges and Immunities of Specialized Agencies, adopted by the UN General
Assembly on 21 November 1947 and concurred in by the Philippine Senate through Resolution No. 19 on
17 May 1949, explicitly provides:
Art. III, Section 4. The specialized agencies, their property and assets, wherever located
and by whomsoever held, shall enjoy immunity from every form of legal process except
insofar as in any particular case they have expressly waived their immunity. It is,
however, understood that no waiver of immunity shall extend to any measure of
execution.
Sec. 5. The premises of the specialized agencies shall be inviolable. The property and
assets of the specialized agencies, wherever located and by whomsoever held shall be
immune from search, requisition, confiscation, expropriation and any other form of
interference, whether by executive, administrative, judicial or legislative action.
(Emphasis supplied).
IRRI is similarly situated, Pres. Decree No. 1620, Article 3, is explicit in its grant of immunity, thus:
Art. 3. Immunity from Legal Process. The Institute shall enjoy immunity from any
penal, civil and administrative proceedings, except insofar as that immunity has been
expressly waived by the Director-General of the Institute or his authorized
representatives.
Thus it is that the DEFORAF, through its Legal Adviser, sustained ICMC'S invocation of immunity when in
a Memorandum, dated 17 October 1988, it expressed the view that "the Order of the Director of the
Bureau of Labor Relations dated 21 September 1988 for the conduct of Certification Election within ICMC
violates the diplomatic immunity of the organization." Similarly, in respect of IRRI, the DEFORAF
speaking through The Acting Secretary of Foreign Affairs, Jose D. Ingles, in a letter, dated 17 June 1987,

to the Secretary of Labor, maintained that "IRRI enjoys immunity from the jurisdiction of DOLE in this
particular instance."
The foregoing opinions constitute a categorical recognition by the Executive Branch of the Government
that ICMC and IRRI enjoy immunities accorded to international organizations, which determination has
been held to be a political question conclusive upon the Courts in order not to embarrass a political
department of Government.
It is a recognized principle of international law and under our system of separation of
powers that diplomatic immunity is essentially a political question and courts should
refuse to look beyond a determination by the executive branch of the government, and
where the plea of diplomatic immunity is recognized and affirmed by the executive branch
of the government as in the case at bar, it is then the duty of the courts to accept the
claim of immunity upon appropriate suggestion by the principal law officer of the
government . . . or other officer acting under his direction. Hence, in adherence to the
settled principle that courts may not so exercise their jurisdiction . . . as to embarrass the
executive arm of the government in conducting foreign relations, it is accepted doctrine
that in such cases the judicial department of (this) government follows the action of the
political branch and will not embarrass the latter by assuming an antagonistic jurisdiction.
3

A brief look into the nature of international organizations and specialized agencies is in order. The term
"international organization" is generally used to describe an organization set up by agreement between
4
two or more states. Under contemporary international law, such organizations are endowed with some
5
degree of international legal personality such that they are capable of exercising specific rights, duties
6
and powers. They are organized mainly as a means for conducting general international business in
7
which the member states have an interest. The United Nations, for instance, is an international
organization dedicated to the propagation of world peace.
"Specialized agencies" are international organizations having functions in particular fields. The term
8
9
appears in Articles 57 and 63 of the Charter of the United Nations:
The Charter, while it invests the United Nations with the general task of promoting
progress and international cooperation in economic, social, health, cultural, educational
and related matters, contemplates that these tasks will be mainly fulfilled not by organs of
the United Nations itself but by autonomous international organizations established by
inter-governmental agreements outside the United Nations. There are now many such
international agencies having functions in many different fields, e.g. in posts,
telecommunications, railways, canals, rivers, sea transport, civil aviation, meteorology,
atomic energy, finance, trade, education and culture, health and refugees. Some are
virtually world-wide in their membership, some are regional or otherwise limited in their
membership. The Charter provides that those agencies which have "wide international
responsibilities" are to be brought into relationship with the United Nations by agreements
entered into between them and the Economic and Social Council, are then to be known
10
as "specialized agencies."
The rapid growth of international organizations under contemporary international law has paved the way
for the development of the concept of international immunities.
It is now usual for the constitutions of international organizations to contain provisions
conferring certain immunities on the organizations themselves, representatives of their
member states and persons acting on behalf of the organizations. A series of

conventions, agreements and protocols defining the immunities of various international

11
organizations in relation to their members generally are now widely in force; . . .
There are basically three propositions underlying the grant of international immunities to international
organizations. These principles, contained in the ILO Memorandum are stated thus: 1) international
institutions should have a status which protects them against control or interference by any one
government in the performance of functions for the effective discharge of which they are responsible to
democratically constituted international bodies in which all the nations concerned are represented; 2) no
country should derive any national financial advantage by levying fiscal charges on common international
funds; and 3) the international organization should, as a collectivity of States members, be accorded the
facilities for the conduct of its official business customarily extended to each other by its individual
12
member States. The theory behind all three propositions is said to be essentially institutional in
character. "It is not concerned with the status, dignity or privileges of individuals, but with the elements of
functional independence necessary to free international institutions from national control and to enable
13
them to discharge their responsibilities impartially on behalf of all their members. The raison d'etre for
these immunities is the assurance of unimpeded performance of their functions by the agencies
concerned.
The grant of immunity from local jurisdiction to ICMC and IRRI is clearly necessitated by their international
character and respective purposes. The objective is to avoid the danger of partiality and interference by
the host country in their internal workings. The exercise of jurisdiction by the Department of Labor in
these instances would defeat the very purpose of immunity, which is to shield the affairs of international
organizations, in accordance with international practice, from political pressure or control by the host
country to the prejudice of member States of the organization, and to ensure the unhampered
performance of their functions.
ICMC's and IRRI's immunity from local jurisdiction by no means deprives labor of its basic rights, which
14
15
are guaranteed by Article II, Section 18, Article III, Section 8, and Article XIII, Section 3 (supra), of the
16
1987 Constitution; and implemented by Articles 243 and 246 of the Labor Code, relied on by the BLR
Director and by Kapisanan.
For, ICMC employees are not without recourse whenever there are disputes to be settled. Section 31 of
17
the Convention on the Privileges and Immunities of the Specialized Agencies of the United Nations
provides that "each specialized agency shall make provision for appropriate modes of settlement of: (a)
disputes arising out of contracts or other disputes of private character to which the specialized agency is
a party." Moreover, pursuant to Article IV of the Memorandum of Agreement between ICMC the the
Philippine Government, whenever there is any abuse of privilege by ICMC, the Government is free to
withdraw the privileges and immunities accorded. Thus:
Art. IV. Cooperation with Government Authorities. 1. The Commission shall cooperate
at all times with the appropriate authorities of the Government to ensure the observance
of Philippine laws, rules and regulations, facilitate the proper administration of justice and
prevent the occurrences of any abuse of the privileges and immunities granted its officials
and alien employees in Article III of this Agreement to the Commission.
2. In the event that the Government determines that there has been an abuse of the
privileges and immunities granted under this Agreement, consultations shall be held
between the Government and the Commission to determine whether any such abuse has
occurred and, if so, the Government shall withdraw the privileges and immunities granted
the Commission and its officials.
Neither are the employees of IRRI without remedy in case of dispute with management as, in fact, there
had been organized a forum for better management-employee relationship as evidenced by the formation

of the Council of IRRI Employees and Management (CIEM) wherein "both management and employees
were and still are represented for purposes of maintaining mutual and beneficial cooperation between
IRRI and its employees." The existence of this Union factually and tellingly belies the argument that Pres.
Decree No. 1620, which grants to IRRI the status, privileges and immunities of an international
organization, deprives its employees of the right to self-organization.
The immunity granted being "from every form of legal process except in so far as in any particular case
they have expressly waived their immunity," it is inaccurate to state that a certification election is beyond
the scope of that immunity for the reason that it is not a suit against ICMC. A certification election cannot
be viewed as an independent or isolated process. It could tugger off a series of events in the collective
bargaining process together with related incidents and/or concerted activities, which could inevitably
involve ICMC in the "legal process," which includes "any penal, civil and administrative proceedings." The
eventuality of Court litigation is neither remote and from which international organizations are precisely
shielded to safeguard them from the disruption of their functions. Clauses on jurisdictional immunity are
said to be standard provisions in the constitutions of international Organizations. "The immunity covers
the organization concerned, its property and its assets. It is equally applicable to proceedings in
18
personam and proceedings in rem."
We take note of a Manifestation, dated 28 September 1989, in the ICMC Case (p. 161, Rollo), wherein
TUPAS calls attention to the case entitled "International Catholic Migration Commission v. NLRC, et als.,
(G.R. No. 72222, 30 January 1989, 169 SCRA 606), and claims that, having taken cognizance of that
dispute (on the issue of payment of salary for the unexpired portion of a six-month probationary
employment), the Court is now estopped from passing upon the question of DOLE jurisdiction petition
over ICMC.
We find no merit to said submission. Not only did the facts of said controversy occur between 1983-1985,
or before the grant to ICMC on 15 July 1988 of the status of a specialized agency with corresponding
immunities, but also because ICMC in that case did not invoke its immunity and, therefore, may be
deemed to have waived it, assuming that during that period (1983-1985) it was tacitly recognized as
enjoying such immunity.
Anent the procedural issue raised in the IRRI Case, suffice it to state that the Decision of the BLR
Director, dated 15 February 1989, had not become final because of a Motion for Reconsideration filed by
IRRI Said Motion was acted upon only on 30 March 1989 when Rep. Act No. 6715, which provides for
direct appeals from the Orders of the Med-Arbiter to the Secretary of Labor in certification election cases
either from the order or the results of the election itself, was already in effect, specifically since 21 March
1989. Hence, no grave abuse of discretion may be imputed to respondent Secretary of Labor in his
assumption of appellate jurisdiction, contrary to Kapisanan's allegations. The pertinent portion of that law
provides:
Art. 259. Any party to an election may appeal the order or results of the election as
determined by the Med-Arbiter directly to the Secretary of Labor and Employment on the
ground that the rules and regulations or parts thereof established by the Secretary of
Labor and Employment for the conduct of the election have been violated. Such appeal
shall be decided within 15 calendar days (Emphasis supplied).
En passant, the Court is gratified to note that the heretofore antagonistic positions assumed by two
departments of the executive branch of government have been rectified and the resultant embarrassment
to the Philippine Government in the eyes of the international community now, hopefully, effaced.
WHEREFORE, in G.R. No. 85750 (the ICMC Case), the Petition is GRANTED, the Order of the Bureau of
Labor Relations for certification election is SET ASIDE, and the Temporary Restraining Order earlier
issued is made PERMANENT.

In G.R. No. 89331 (the IRRI Case), the Petition is Dismissed, no grave abuse of discretion having been
committed by the Secretary of Labor and Employment in dismissing the Petition for Certification Election.
No pronouncement as to costs.

MAGDALENA HIDALGO, EDITHA GONZALES,

EUNICE P. MALIMBAN, CHRISTINE VIDAL,
CHRISTIAN CALLEJO, CONSOLACION P. MORENO,
SHERINA F. DOREZA, LUZ T. SUCGANG, PRISCILLA F.
ESTOYE, REYNOSO V. GALLANO, ROSITA L.
SENEDRIN, JULITA P. DE CASTRO, JULIETA F.
PALAFOX, ERLINDO V. GALANO, JR., ROSALINDA R.
SALUD, EVANGELINE D. EVANGELISTA, BABYLINDA
N. NOHAY, BELINDA D. CARDONA, WILMA D.
BARCENA, ANABELLE P. MOJADAS, LEONORA
GRANADO, RICARDO R. BARANGCO, ROMEO O.
MAICON, DANILO B. ENRICO, MARIANILA SITO,
MERLINA A. CATAAN, NEMIA E. PIANO, SOLEDAD P.
RAMOS, DANTE L. PESIGAN, EDA A. JUNIO,
MERCEDES R. NAFARRETE, MARILYN S. GONO, LUZ
SAMSON,
ERNESTO C. DESEAR, TERESITA G. GONZAGA,
TERESITA
E.
EUSTAQUIO,
VIRGINIA
S.
MONTEMAYOR, CRISTINA ABANTO, HENRY C.
AMORTIZADO, FRANKIE VALERA, NELIA G.
CAMORO, JOYSIE LABRADOR, GERTRUDES
FALALES, OPHELIA G. MUSAMAREN, PETRA M.
IRINGAN, FRANCISCO C. CAPIZ, JR., RICKY
ECHIEVERA, MA. ELGIN O. ABAIS, JOHN CARANAN,
ROMEO LAGUNA, REBECCA C. BUGUA, NELSON
FERRER, HELEN MANRESA, CONSORCIA FAJANEL,
MA. JUANA A. GOLFO, RUBYLYN D. DUMANDAL,
FLORECERFINA S. BANDOLIN, FLORENCIO A.
QUILATON, JR., GLORIA J. DOMINGO, MAY
MACUGAY, MARY ANN CLAUDIO, ELVIRA KALALO,
DOROTEA MARTINEZ, LIGAYA PANEDA, and
RENATO AGUILAR,

G.R. No. 179793

Present:

CARPIO MORALES, J.,

Chairperson,
BRION,
BERSAMIN,
ABAD, and
VILLARAMA, JR., JJ.

Promulgated:

July 5, 2010
Petitioners,

- versus -

REPUBLIC OF THE PHILIPPINES, for and in behalf

of the ARMED FORCES OF THE PHILIPPINES
COMMISSARY AND EXCHANGE SERVICES
(AFPCES),
Respondent.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

VILLARAMA, JR., J.:

Which quasi-judicial agency has jurisdiction to hear and decide complaints for illegal dismissal against an
adjunct government agency engaged in proprietary function? Should the complaint be lodged before the National
Labor Relations Commission (NLRC) or to the Civil Service Commission (CSC)? This is the focal issue that needs
to be resolved in this petition for review on certiorari assailing the Decisionxxiv[1] and Resolutionxxiv[2] of the
Court of Appeals in CA-G.R. SP No. 84801 nullifying the Labor Arbiters and the NLRCs rulings.
Republic of the Philippines has represented respondent Armed Forces of the Philippines Commissary and
Exchange Services (AFPCES) in this recourse. AFPCES is a unit/facility of the Armed Forces of the Philippines
(AFP) organized pursuant to Letter of Instruction (LOI) No. 31, which was issued on November 20, 1972 by then
President Ferdinand Marcos. Under LOI No. 31-A, which amended LOI No. 31, an amount of P5 million was set
aside from the Philippine Veterans Claims Settlement Fund as seed capital for the AFPCES to be utilized and
administered for the operations and management of all commissary facilities in the military establishments all over
the country. AFPCES was intended to benefit the veterans, their widows and orphans, and the members of the AFP
and their dependents. In December 1972, the AFP General Headquarters (AFP GHQ) issued Staff Memorandum No.
5 formally organizing the AFPCES.xxiv[3]

In order to socialize the services of AFPCES, General Order No. 920 was issued by the AFP GHQ on July
13, 1976 reorganizing the AFPCES as an AFP-Wide Service Support Unit. General Order No. 920 also provided
that all installation Commissary Exchange Service including their equipment, records and assets shall be assigned
and absorbed by the AFPCES.xxiv[4] This, in effect, centralized the management of the commissary exchange
services to the AFPCES. On February 26, 1987, General Order No. 138 was issued activating the AFPCES as a
regular unit under the direct control of the AFP Chief of Staff.xxiv[5]

Petitioners, on the other hand, numbering 65 in all,xxiv[6] were hired as regular employees of AFPCES.
Some worked as food handlers in AFPCES catering business and served during social functions held within its
premises. Others occupied positions as computer technicians, auditors, record clerks, cashiers, canvassers,
bookkeepers, and warehousemen.xxiv[7] Several of them had worked with AFPCES for a number of years, ranging
from 4 to 31 years. Since the start of their employment, petitioners were enrolled in the Social Security System
(SSS), with respondent AFPCES paying its corresponding employers share in their monthly SSS
contribution.xxiv[8]

Between 1999 and 2001, however, AFPCES advised petitioners to undergo an indefinite leave of absence
without pay, allegedly upon a conditional promise that they would be allowed to return to work as soon as AFPCES
tax subsidy is released and upon resumption of its store operations.xxiv[9]

When AFPCES failed to recall petitioners to their work as allegedly promised, petitioners filed a complaint
for illegal (constructive) dismissal with damages against AFPCES before the NLRC.xxiv[10] On July 4, 2002, after
efforts to forge an amicable settlement had failed, Labor Arbiter Salimathar V. Nambi rendered a decisionxxiv[11]
in favor of petitioners by ordering AFPCES to pay a total of P16,007,996.00 as back wages, 13th month pay and
separation pay to petitioners.

AFPCES filed an appealxxiv[12] praying, among others, that it be exempted from posting the required
appeal bond. The NLRC, however, denied the plea and gave AFPCES ten (10) days to post an appeal bond. The
NLRC likewise denied AFPCES motion for reconsideration. Meanwhile, petitioners sought the immediate execution
of the Labor Arbiters decision.

AFPCES filed a petition before the appellate court docketed as CA-G.R. SP. No. 84801, and prayed among
others, for the issuance of a temporary restraining order to enjoin the NLRC from dismissing the appeal and granting
execution of the Labor Arbiters decision.

On October 22, 2004, the Court of Appeals issued a Resolution denying AFPCES prayer for the issuance of
a temporary restraining order for lack of merit.xxiv[13]

Subsequently, on October 29, 2004, the NLRC dismissed AFPCES appeal following its failure to post the
required appeal bond.xxiv[14] On December 7, 2004, petitioners moved for the execution of the Labor Arbiters
decision.

On March 17, 2005, the enforcing sheriffs of the NLRC issued a Progress Reportxxiv[15] indicating that
writs of execution and garnishment have been issued against AFPCES funds deposited with the Land Bank of the
Philippines to satisfy the Labor Arbiters award. The said report noted that AFPCES has reinstated petitioners to their
former positions although Capt. Preciliano M. Ruiz, AFPCES commander and general manager, gave no assurance
regarding the payment of petitioners salaries.xxiv[16]

On April 7, 2005, the Court of Appeals granted AFPCES motion to lift the writ of garnishment and to stay
the execution of the Labor Arbiters monetary award. Undaunted, petitioners were able to secure an alias writ of
execution after due hearing before the Labor Arbiter. The issue was again brought before the Court of Appeals.

On August 31, 2006, the appellate court promulgated the assailed Decision in CA-G.R. SP No. 84801
granting AFPCES petition. The Court of Appeals, after applying the Supreme Courts pronouncement in Duty Free
Philippines v. Mojica,xxiv[17] explained that since AFPCES is a governmental agency that has no personality
separate and distinct from the AFP, petitioners are considered civil service employees, and that complaints for
illegal dismissal should therefore be lodged not with the Labor Arbiter but with the CSC.xxiv[18]

Aggrieved, petitioners moved for a reconsideration of the said decision, but the appellate court denied the
same for lack of merit.xxiv[19]

Hence, this petition.

Pivotal to the resolution of this petition is a determination of the classification of petitioners employment
status with respondent AFPCES. AFPCES asserts that since petitioners are government employees, jurisdiction over
their complaints lies not with the NLRC, but with the CSC. Petitioners, on the other hand, contend that since they do
not belong to the approved plantilla of government personnel, their complaints for illegal dismissal was properly
made before the NLRC.

Let us clarify the matter.

Presidential Decree (PD) No. 807 or the Civil Service Decree of the Philippinesxxiv[20] declares that the
Civil Service Commission shall be the central personnel agency to set standards and to enforce the laws governing
the discipline of civil servants.xxiv[21] PD No. 807 categorically described the scope of the civil service as
embracing every branch, agency, subdivision, and instrumentality of the government, including every governmentowned or controlled corporations whether performing governmental or proprietary function;xxiv[22] and construed
an agency to mean any bureau, office, commission, administration, board, committee, institute, corporation, whether
performing governmental or proprietary function, or any other unit of the National Government, as well as
provincial, city or municipal government, except as otherwise provided.xxiv[23]

Subsequently, Executive Order (EO) No. 180xxiv[24] defined government employees as all employees of
all branches, subdivisions, instrumentalities, and agencies of the Government, including government-owned or
controlled corporations with original charters.xxiv[25] It provided that the Civil Service and labor laws shall be
followed in the resolution of complaints, grievances and cases involving government employees.xxiv[26]

In Philippine Refining Company v. Court of Appeals,xxiv[27] we declared that AFPCES is a government

agency that is not immune from suit since it is engaged in proprietary activities. We find no compelling reason to
deviate from such pronouncement. The historical background of its creation and establishment indicates that

AFPCES is an agency under the direct control and supervision of the AFP as it was established to take charge of the
operations and management of all commissary facilities in military establishments all over the country. By clear
implication of law, all AFPCES personnel should therefore be classified as government employees and any
appointment, promotion, discipline and termination of its civilian staff should be governed by appropriate civil
service laws and procedures.

Interestingly, in the course of the proceedings, petitioners did not question or refute such classification of
the AFPCES. They, in fact, averred that AFPCES is not created by a special law to classify it as a governmentowned or controlled corporation with original charter, but a mere entity of the AFP. They also admit that AFPCES is
without any corporate features as it is merely an agency performing proprietary functions not only for the benefit of
veterans, their widows and orphans, and the members of the AFP, but for the public in general.xxiv[28]

Petitioners, however, assert that the pronouncement in Duty Free Philippines should not be applied in the
instant case since the factual milieu of the said case is different from the case at bar.

We partly agree with petitioners.

Like AFPCES, Duty Free Philippines is also a government agency engaged in proprietary activities without
separate corporate existence. Unlike Duty Free Philippines, however, AFPCES committed acts which created an
impression upon petitioners that they fall within the coverage of pertinent labor laws and not the civil service law.
First, since the start of their employment and until their unceremonious indefinite suspension from work, AFPCES
have enrolled petitioners to the SSS, the primary governmental agency engaged in providing social security benefits
to employees of the private sector, instead of the Government Service Insurance System (GSIS) as mandated by
Commonwealth Act No. 186.xxiv[29] AFPCES even remitted its corresponding employers share to petitioners SSS
contributions. Such practice has been continuously observed by the AFPCES in the span of more than three (3)
decades.

Second, the hiring, appointment and discipline of AFPCES employees never went through the proper
procedure as required by pertinent civil service laws and regulations. In a formal request made by Feliciano M.
Gacis, Jr., Officer-in-Charge of the Office of the Assistant Secretary for Personnel of the Department of National
Defense, inquiring from the CSC whether petitioners are indeed government employees covered by the Civil Service
Law and CSC regulations, the said Commission issued a Resolution containing the following findings:
It is explicit that the aforequoted LOI merely set aside a fund in the amount of five (5)
[m]illion [p]esos for the operation of a commissary in all military establishments in the country for
the benefit of veterans, their widows and orphans, and the members of the Armed Forces of the
Philippines. And the fund and commissary shall be managed by an entity called AFPCES. It can,
thus, be said that the AFPCES is a mere entity in the Armed Forces of the Philippines that is

tasked to manage a commissary in different military establishments for the benefit of those
mentioned in the said LOI. Hence, it does not necessarily follow that all its civilian employees are
considered government employees covered by and subject to the Civil Service Law and rules.
Section 2 (1), Article IX B of the 1987 Constitution defines the scope of the civil service,
as follows:
Sec. 2. (1) The civil service embraces all branches, subdivisions,
instrumentalities, and agencies of the Government, including governmentowned or controlled corporations with original charters.
From the aforequoted constitutional provision, it is clear that only government-owned or
controlled corporations with original charters are embraced by the civil service. Hence, the
question now that needs to be answered is: Can LOI 31-A be considered as the charter of the
AFPCES such that it can be considered a government-owned or controlled corporation embraced
by the Civil Service Law and rules?
After a careful evaluation and scrutiny of LOI 31-A, the Commission is of the opinion
and so holds that the said LOI could hardly be considered as the charter of AFPCES. It should be
noted that the said LOI does not specify the composition of AFPCES, its specific functions, its
governing board, its powers and the limitation of the exercise thereof. In short, the said LOI does
not provide the AFPCES corporate features. This being the case, the AFPCES cannot be
considered a government-owned or controlled corporation with original charter. In fact, the
AFPCES does not exercise corporate powers. Accordingly, its civilian employees cannot be
considered as government employees covered by the Civil Service Law and rules.
xxxx
Further, there is neither a showing that the positions of civilian employees of the
AFPCES are included in the plantilla of personnel duly approved by the Department of Budget
and Management (DBM) nor said employees were issued appointments attested by the
Commission.
WHEREFORE, the Commission hereby rules that all civilian employees of the Armed
Forces of the Philippines Commissary and Exchange Service are not government employees
covered and embraced by the Civil Service Law and rules.xxiv[30]
Indeed, petitioners employment to the AFPCES should have been made in conformity with pertinent civil
service regulations since AFPCES is a government agency under the direct control and supervision of the AFP.
However, since this did not happen, petitioners were placed under an anomalous situation with AFPCES insisting
that they are government employees under the jurisdiction of the CSC, but with the CSC itself disavowing any
jurisdiction over them.

This notwithstanding, since it cannot be denied that petitioners are government employees, the proper body
that has jurisdiction to hear the case is the CSC. Such fact cannot be negated by the failure of respondents to follow
appropriate civil service rules in the hiring, appointment, discipline and dismissal of petitioners. Neither can it be
denied by the fact that respondents chose to enroll petitioners in the SSS instead of the GSIS. Such considerations
cannot be used against the CSC to deprive it of its jurisdiction. It is not the absence or presence of the required

appointment from the CSC, or the membership of an employee in the SSS or in the GSIS that determine the status of
the position of an employee. We agree with the opinion of the AFP Judge Advocate General that it is the regulation
or the law creating the Service that determines the position of the employee.xxiv[31]

Petitioners are government personnel since they are employed by an agency attached to the AFP.
Consequently, as correctly observed by the Court of Appeals, the Labor Arbiters decision on their complaint for
illegal dismissal cannot be made to stand since the same was issued without jurisdiction. Any decision issued
without jurisdiction is a total nullity, and may be struck down at any time.xxiv[32]

However, given petitioners peculiar situation, the Court is constrained not to deny the petition entirely, but
instead to refer it to the CSC pro hac vice. The Court notes that this case has been pending for nearly a decade, but
deciding it on the merits at this juncture, while ideal and more expeditious, is not possible. The records of the case
fail to adequately spell out the validity of the complaint for illegal dismissal as well as the actual amount of the
claim. In fact, the records even fail to disclose the amount of salary received by petitioners while they were engaged
to work in AFPCES facilities. But rather than directing petitioners to re-file and relitigate their claim before the CSC
a step which will only duplicate much of the proceedings already accomplished the Court deems it best, pro hac
vice, to order the NLRC to forward the entire records of the case directly to the CSC which is directed to take
cognizance of the case. The CSC is directed to promptly resolve whether petitioners were illegally dismissed from
the service, and whether they are entitled to their monetary claims. Further, taking into consideration AFPCES
failure to observe the proper procedure required by pertinent civil service rules and regulations regarding the hiring,
appointment and placement of petitioners, we likewise caution the CSC not to use the AFPCES inefficiency to
prejudice the status of petitioners employment or to deny whatever right they may have under pertinent civil service
laws. To hold otherwise would only be giving premium to AFPCES delinquent attitude towards petitioners in
particular, and to the civil service in general. The AFPCES cannot be made to have its cake and eat it, too.

WHEREFORE, the petition is PARTLY GRANTED. The Court of Appeals Decision dated August 31,
2006 in CA-G.R. SP No. 84801 and its Resolution dated September 18, 2007 are hereby SET ASIDE.

The National Labor Relations Commission (NLRC) is DIRECTED to forward the records of the case
(NLRC-NCR Case No. 03-01533-2001-NLRC NCR Case No. 032920-02) to the Civil Service Commission (CSC),
which is ordered to promptly proceed with the resolution of the case on the merits with deliberate dispatch.

ANTONIO P. SALENGA and

G.R. Nos. 174941

NATIONAL LABOR RELATIONS COMMISSION,

Present:

Petitioners,

CARPIO, Chairperson,
BRION,
- versus -

PORTUGAL PEREZ,
SERENO, and
REYES, JJ.

COURT OF APPEALS and

Promulgated:
CLARK DEVELOPMENT
CORPORATION,
February 1, 2012
Respondents.

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
DECISION
SERENO, J.:
The present Petition for Certiorari under Rule 65 assails the Decisionxxiv[1] of the Court of Appeals (CA)
promulgated on 13 September 2005, dismissing the Complaint for illegal dismissal filed by petitioner Antonio F.
Salenga against respondent Clark Development Corporation (CDC). The dispositive portion of the assailed Decision
states:
WHEREFORE, premises considered, the original and supplemental petitions are
GRANTED. The assailed resolutions of the National Labor Relations Commission dated September
10, 2003 and January 21, 2004 are ANNULLED and SET ASIDE. The complaint filed by Antonio B.
Salenga against Clark Development is DISMISSED. Consequently, Antonio B. Salenga is ordered to
restitute to Clark Development Corporation the amount of P3,222,400.00, which was received by
him as a consequence of the immediate execution of said resolutions, plus interest thereon at
the rate of 6% per annum from date of

such receipt until finality of this judgment, after which the interest shall be at the rate of 12% per
annum until said amount is fully restituted.
SO ORDERED.xxiv[2]
The undisputed facts are as follows:
On 22 September 1998, President/Chief Executive Officer (CEO) Rufo Colayco issued an Order informing
petitioner that, pursuant to the decision of the board of directors of respondent CDC, the position of head
executive assistant the position held by petitioner was declared redundant. Petitioner received a copy of the Order
on the same day and immediately went to see Colayco. The latter informed him that the Order had been issued as
part of the reorganization scheme approved by the board of directors. Thus, petitioners employment was to be
terminated thirty (30) days from notice of the Order.
On 17 September 1999, petitioner filed a Complaint for illegal dismissal with a claim for reinstatement
and payment of back wages, benefits, and moral and exemplary damages against respondent CDC and Colayco.
The Complaint was filed with the National Labor Relations Commission-Regional Arbitration Branch (NLRC-RAB) III
in San Fernando, Pampanga. In defense, respondents, represented by the Office of the Government Corporate
Counsel (OGCC), alleged that the NLRC had no jurisdiction to entertain the case on the ground that petitioner was
a corporate officer and, thus, his dismissal was an intra-corporate matter falling properly within the jurisdiction of
the Securities and Exchange Commission (SEC).
On 29 February 2000, labor arbiter (LA) Florentino R. Darlucio issued a Decisionxxiv[3] in favor of
petitioner Salenga. First, the LA held that the NLRC had jurisdiction over the Complaint, considering that petitioner
was not a corporate officer but a managerial employee. He held the position of head executive assistant,
categorized as a Job Level 12 position, not subject to election or appointment by the board of directors.
Second, the LA pointed out that respondent CDC and Colayco failed to establish a valid cause for the
termination of petitioners employment. The evidence presented by respondent CDC failed to show that the
position of petitioner was superfluous as to be classified redundant. The LA further pointed out that respondent
corporation had not disputed the argument of petitioner Salenga that his position was that of a regular employee.
Moreover, the LA found that petitioner had not been accorded the right to due process. Instead, the latter was
dismissed without the benefit of an explanation of the grounds for his termination, or an opportunity to be heard
and to defend himself.

Finally, considering petitioners reputation and contribution as a government employee for 40 years, the
LA awarded moral damages amounting to P2,000,000 and exemplary damages of P500,000. The dispositive portion
of the LAs Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered declaring respondent
Clark Development Corporation and Rufo Colayco guilty of illegal dismissal and for which they are
ordered, as follows:
1.

To reinstate complainant to his former or equivalent position without loss of

seniority rights and privileges;

2.

To pay complainant his backwages reckoned from the date of his dismissal on
September 22, 1998 until actual reinstatement or merely reinstatement in the
payroll which as of this date is in the amount of P722,400.00;

3.

To pay complainant moral damages in the amount of P2,000,000.00; and,

4.

To pay complainant exemplary damages in the amount of P500,000.00.

SO ORDERED.xxiv[4]

At the time the above Decision was rendered, respondent CDC was already under the leadership of Sergio
T. Naguiat. When he received the Decision on 10 March 2000, he subsequently instructed Atty. Monina C. Pineda,
manager of the Corporate and Legal Services Department and concurrent corporate board secretary, not to appeal
the Decision and to so inform the OGCC.xxiv[5]
Despite these instructions, two separate appeals were filed before LA Darlucio on 20 March 2000. One
appealxxiv[6] was from the OGCC on behalf of respondent CDC and Rufo Colayco. The OGCC reiterated its
allegation that petitioner was a corporate officer, and that the termination of his employment was an intracorporate matter. The Memorandum of Appeal was verified and certified by Hilana Timbol-Roman, the executive
vice president of respondent CDC. The Memorandum was accompanied by a UCPB General Insurance Co., Inc.
supersedeas bond covering the amount due to petitioner as adjudged by LA Darlucio. Timbol-Roman and OGCC
lawyer Roy Christian Mallari also executed on 17 March 2000 a Joint Affidavit of Declaration wherein they swore
that they were the respective authorized representative and counsel of respondent corporation. However, the
Memorandum of Appeal and the Joint Affidavit of Declaration were not accompanied by a board resolution
from respondents board of directors authorizing either Timbol-Roman or Atty. Mallari, or both, to pursue the
case or to file the appeal on behalf of respondent.
It is noteworthy that Naguiat, who was president/CEO of respondent CDC from 3 February 2000 to 5 July
2000, executed an Affidavit on 20 March 2002,xxiv[7] wherein he stated that without his knowledge, consent or

approval, Timbol-Roman and Atty. Mallari filed the above-mentioned appeal. He further alleged that their
statements were false.
The second appeal, meanwhile, was filed by former CDC President/CEO Rufo Colayco. Colayco alleged that
petitioner was dismissed not on 22 September 1998, but twice on 9 March 1999 and 23 March 1999. The dismissal
was allegedly approved by respondents CDC board of directors pursuant to a new organizational structure. Colayco
likewise stated that he had posted a supersedeas bond the same bond taken out by Timbol-Roman issued by the
UCPB General Insurance Co. dated 17 March 2000 in order to secure the monetary award, exclusive of moral and
exemplary damages.
Petitioner thereafter opposed the two appeals on the grounds that both appellants, respondent CDC as
allegedly represented by Timbol-Roman and Atty. Mallari and Rufo Colayco had failed to observe Rule VI, Sections
4 to 6 of the NLRC Rules of Procedure; and that appellants had not been authorized by respondents board of
directors to represent the corporation and, thus, they were not the employer whom the Rules referred to.
Petitioner also alleged that appellants failed to refute the findings of LA Darlucio in the previous Decision.
In the meantime, while the appeal was pending, on 19 October 2000, respondents board chairperson and
concurrent President/CEO Rogelio L. Singson ordered the reinstatement of petitioner to the latters former position
as head executive assistant, effective 24 October 2000.xxiv[8]
On 28 May 2001, respondent CDCs new President/CEO Emmanuel Y. Angeles issued a Memorandum,
which offered all managers of respondent corporation an early separation/redundancy program. Those who
wished to avail themselves of the program were to be given the equivalent of their 1.25-month basic salary for
every year of service and leave credits computed on the basis of the same 1.25-month equivalent of their basic
salary.xxiv[9]
In August 2001, respondent CDC offered another retirement plan granting higher benefits to the
managerial employees. Thus, on 12 September 2001, petitioner filed an application for the early retirement
program, which Angeles approved on 3 December 2001.
Meanwhile, in the proceedings of the NLRC, petitioner received on 12 September 2001 its 30 July 2001
Decisionxxiv[10] on the appeal filed by Timbol-Roman and Colayco. It is worthy to note that the said Decision
referred to the reports of reviewer arbiters Cristeta D. Tamayo and Thelma M. Concepcion, who in turn found that
petitioner Salenga was a corporate officer of CDC. Nevertheless, the First Division of the NLRC upheld LA Darlucios
ruling that petitioner Salenga was indeed a regular employee. It also found that redundancy, as an authorized
cause for dismissal, has not been sufficiently proven, rendering the dismissal illegal. However, the NLRC held that

the award of exemplary and moral damages were unsubstantiated. Moreover, it also dropped Colayco as a
respondent to the case, since LA Darlucio had failed to provide any ground on which to anchor the formers solidary
liability.
Petitioner Salenga thereafter moved for a partial reconsideration of the above-mentioned Decision. He
sought the reinstatement of the award of exemplary and moral damages. He likewise insisted that the NLRC should
not have entertained the appeal on the following grounds: (1) respondent CDC did not file an appeal and did not
post the required cash or surety bond; (2) both Timbol-Roman and Colayco were admittedly not real parties-ininterest; (3) they were not the employer or the employers authorized representative and, thus, had no right to
appeal; and (4) both appeals had not been perfected for failure to post the required cash or surety bond. In other
words, petitioners theory revolved on the fact that neither Timbol-Roman nor Colayco was authorized to represent
the corporation, so the corporation itself did not appeal LA Darlucios Decision. As a result, that Decision should be
considered as final and executory.
For its part, the OGCC also filed a Motion for Reconsiderationxxiv[11] of the NLRCs 30 July 2001 Decision
insofar as the finding of illegal dismissal was concerned. It no longer questioned the commissions finding that
petitioner was a regular employee, but instead insisted that he had been dismissed as a consequence of his
redundant position. The motion, however, was not verified by the duly authorized representative of respondent
CDC.
On 5 December 2002, the NLRC denied petitioner Salengas Motion for Partial Reconsideration and
dismissed the Complaint. The dispositive portion of the Resolutionxxiv[12] reads as follows:
WHEREFORE, complainants partial motion for reconsideration is denied. As
recommended by Reviewer Arbiters Cristeta D. Tamayo in her August 2, 2000 report and Thelma
M. Concepcion in her November 25, 2002 report, the decision of Labor Arbiter Florentino R.
Darlucio dated 29 February 2000 is set aside.
The complaint below is dismissed for being without merit.
SO ORDERED.xxiv[13]
Meanwhile, pending the Motions for Reconsideration of the NLRCs 30 July 2001 Decision, another issue
arose with regard to the computation of the retirement benefits of petitioner. Respondent CDC did not
immediately give his requested retirement benefits, pending clarification of the computation of these benefits. He
claimed that the computation of his retirement benefits should also include the forty (40) years he had been in
government service in accordance with Republic Act No. (R.A.) 8291, or the GSIS Act, and should not be limited to
the length of his employment with respondent corporation only, as the latter insisted.

In a letter dated 14 March 2003, petitioner Salengas counsel wrote to the board of directors of
respondent to follow up the payment of the retirement benefits allegedly due to petitioner.xxiv[14]
Pursuant to the NLRCs dismissal of the Complaint of petitioner Salenga, Angeles subsequently denied the
formers request for his retirement benefits, to wit:xxiv[15]
Please be informed that we cannot favorably grant your clients claim for retirement
benefits considering that Clark Development Corporation's dismissal of Mr. Antonio B. Salenga
had been upheld by the National Labor Relations Commission through a Resolution dated
December 5, 2002...
xxx

xxx

xxx

As it is, the said Resolution dismissed the Complaint filed by Mr. Salenga for being
without merit. Consequently, he is not entitled to receive any retirement pay from the
corporation.

Meanwhile, petitioner Salenga filed a second Motion for Reconsideration of the 5 December 2002
Resolution of the NLRC, reiterating his claim that it should not have entertained the imperfect appeal, absent a
proper verification and certification against forum-shopping from the duly authorized representative of
respondent CDC. Without that authority, neither could the OGCC act on behalf of the corporation.
The OGCC, meanwhile, resurrected its old defense that the NLRC had no jurisdiction over the case,
because petitioner Salenga was a corporate officer.
The parties underwent several hearings before the NLRC First Division. During these times, petitioner
Salenga demanded from the OGCC to present a board resolution authorizing it or any other person to represent
the corporation in the proceedings. This, the OGCC failed to do.
After giving due course to the Motion for Reconsideration filed by petitioner Salenga, the NLRC issued a
Resolutionxxiv[16] on 10 September 2003, partially granting the motion. This time, the First Division of the NLRC
held that, absent a board resolution authorizing Timbol-Roman to file the appeal on behalf of respondent CDC, the
appeal was not perfected and was thus a mere scrap of paper. In other words, the NLRC had no jurisdiction over
the appeal filed before it.
The NLRC further held that respondent CDC had failed to show that petitioner Salengas dismissal was
pursuant to a valid corporate reorganization or board resolution. It also deemed respondent estopped from
claiming that there was indeed a redundancy, considering that petitioner Salenga had been reinstated to his

position as head executive assistant. While it granted the award of moral damages, it nevertheless denied
exemplary damages. Thus, the dispositive portion of its Decision reads:
WHEREFORE, premises considered, the complainants Motion for Reconsideration is
GRANTED and We set aside our Resolution of December 5, 2002. The Decision of the Labor
Arbiter dated February 29, 2000 is REINSTATED with the MODIFICATION that:
1.)

Being a nominal party, respondent Rufo Colayco is declared to be not jointly and
severally liable with respondent Clark Development Corporation;

2.) Respondent Clark Development Corporation is ordered to pay the complainant his
full backwages and other monetary claims to which he is entitled under the decision
of the Labor Arbiter;
3.) Respondent CDC is likewise ordered to pay the complainant moral and exemplary
damages as provided under the Labor Arbiters Decision; and
4.) All other money claims are DENIED for lack of merit.
In the meantime, respondent CDC is ordered to pay the complainant his retirement
benefits without further delay.
SO ORDERED.xxiv[17]

On 3 October 2003, the OGCC filed a Motion for Reconsiderationxxiv[18] despite the absence of a
verification and the certification against forum shopping.
On 21 January 2004, the motion was denied by the NLRC for lack of merit.xxiv[19]
On 5 February 2004, the executive clerk of the NLRC First Division entered the judgment on the foregoing
case. Thereafter, on 9 February 2004, the NLRC forwarded the entire records of the case to the NLRC-RAB III Office
in San Fernando, Pampanga for appropriate action.
On 4 March 2004, petitioner Salenga filed a Motion for Issuance of Writ of Execution before the NLRC-RAB
III, Office of LA Henry D. Isorena. The OGCC opposed the motion on the ground that it had filed with the CA a
Petition for Certiorari seeking the reversal of the NLRC Decision dated 30 July 2001 and the Resolutions dated 10
September 2003 and 21 January 2004, respectively. It is noteworthy that, again, there was no board resolution
attached to the Petition authorizing its filing.
Despite the pending Petition with the CA, LA Isorena issued a Writ of Execution enforcing the 10
September 2003 Resolution of the NLRC. On 1 April 2004, the LA issued an Orderxxiv[20] to the manager of the

Philippine National Bank, Clark Branch, Angeles City, Pampanga, to immediately release in the name of NLRC-RAB
III the amount of P3,222,400 representing partial satisfaction of the judgment award, including the execution fee
of P31,720.
Respondent CDC filed with the CA in February 2004 a Petition for Certiorari with a prayer for the issuance
of a temporary restraining order and/or a writ of preliminary injunction. However, the Petition still lacked a board
resolution from the board of directors of respondent corporation authorizing its then President Angeles to verify
and certify the Petition on behalf of the board. It was only on 16 March 2004 that counsel for respondent filed a
Manifestation/Motionxxiv[21] with an attached Secretarys Certificate containing the boards Resolution No. 86,
Series of 2001. The Resolution authorized Angeles to represent respondent corporation in prosecuting,
maintaining, or compromising any lawsuit in connection with its business.
Meanwhile, in the proceedings before LA Isorena, both respondent CDCs legal department and the OGCC
on 6 April 2004 filed their respective Motions to Quash Writ of Execution.xxiv[22] They both cited the failure to
afford to respondent due process in the issuance of the writ. They claimed that the pre-conference hearing on the
execution of the judgment had not pushed through. They also reiterated that the Petition for Certiorari dated 11
February 2004 was still pending with the CA.
Both motions were denied by LA Isorena for lack of factual and legal bases.
On 6 May 2004, respondent filed with LA Isorena another Motion to Quash Writ of Execution, again
reiterating the pending Petition with the CA.
This active exchange of pleadings and motions and the delay in the payment of his money claims
eventually led petitioner Salenga to file an Omnibus Motionxxiv[23] before LA Isorena. In his motion, he
recomputed the amount due him representing back wages, other benefits or allowances, legal interests and
attorneys fees. He also prayed for the computation of his retirement benefits plus interests in accordance with R.A.
8291xxiv[24] and R.A. 1616.xxiv[25] He insisted that since respondent CDC was a government-owned and controlled corporation (GOCC), his previous government service totalling 40 years must also be credited in the
computation of his retirement pay. Thus, he demanded the payment of the total amount of P23,920,772.30,
broken down as follows:
A. From the illegal dismissal suit:
a. Recomputed award
b. Legal interest
c. Attorneys fees
d. Litigation expenses
B. Retirement pay

(In Philippine peso)

3,758,786
5,089,342.58
1,196,052.80
250,000

a.
b.
c.
d.

Retirement gratuity
Unused vacation and sick leave
Legal interest
Attorneys fees

6,987,944
1,440,328
4,050,544.96
1,147,781.90

On 11 May 2004, the CA issued a Resolutionxxiv[26] ordering petitioner Salenga to comment on the
Petition and holding in abeyance the issuance of a temporary restraining order.
The parties thereafter filed their respective pleadings.
On 19 July 2004, the CA temporarily restrained the NLRC from enforcing the Decision dated 29 February
2000 for a period of 60 days.xxiv[27] After the lapse of the 60 days, LA Isorena issued a Notice of
Hearing/Conference scheduled for 1 October 2004 on petitioners Omnibus Motion dated 7 May 2004.
Meanwhile, on 24 September 2004, the CA issued another Resolution,xxiv[28] this time denying the
application for the issuance of a writ of preliminary injunction, after finding that the requisites for the issuance of
the writ had not been met.
Respondent CDC subsequently filed a Supplemental Petitionxxiv[29] with the CA, challenging the
computation petitioner Salenga made in his Omnibus Motion filed with the NLRC. Respondent alleged that the
examiner had erred in including the other years of government service in the computation of retirement benefits.
It claimed that, since respondent corporation was created under the Corporation Code, petitioner Salenga was not
covered by civil service laws. Hence, his retirement benefits should only be limited to the number of years he had
been employed by respondent.
Subsequently, respondent CDC filed an Omnibus Motionxxiv[30] to admit the Supplemental Petition and
to reconsider the CAs Resolution denying the issuance of a writ of preliminary injunction. In the motion,
respondent alleged that petitioner Salenga had been more than sufficiently paid the amounts allegedly due him,
including the award made by LA Darlucio. On 12 March 2002, respondent CDC had issued a check amounting to
P852,916.29, representing petitioners retirement pay and terminal pay. Meanwhile, on 2 April 2004, P3,254,120
representing the initial award was debited from the account of respondent CDC.
On 7 February 2005, respondent CDC filed a Motionxxiv[31] once again asking the CA to issue a writ of
preliminary injunction in the light of a scheduled 14 February 2005 conference called by LA Mariano Bactin, who
had taken over the case from LA Isorena.

At the 14 February 2005 hearing, the parties failed to reach an amicable settlement and were thus
required to submit their relevant pleadings and documents in support of their respective cases.
On 16 February 2005, the CA issued a Resolutionxxiv[32] admitting the Supplemental Petition filed by
respondent, but denying the prayer for the issuance of an injunctive writ.
Thereafter, on 8 March 2005, LA Bactin issued an Orderxxiv[33] resolving the Omnibus Motion filed by
petitioner Salenga for the recomputation of the monetary claims due him. In the Order, LA Bactin denied
petitioners Motion for the recomputation of the award of back wages, benefits, allowances and privileges based
on the 29 February 2000 Decision of LA Darlucio. LA Bactin held that since the Decision had become final and
executory, he no longer had jurisdiction to amend or to alter the judgment.
Anent the second issue of the computation of retirement benefits, LA Bactin also denied the claim of
petitioner Salenga, considering that the latters retirement benefits had already been paid. The LA, however, did
not rule on whether petitioner was entitled to retirement benefits, either under the Government Service Insurance
System (GSIS) or under the Social Security System (SSS), and held that this issue was beyond the expertise and
jurisdiction of a LA.
Petitioner Salenga thereafter appealed to the NLRC, which granted the appeal in a Resolutionxxiv[34]
dated 22 July 2005. First, it was asked to resolve the issue of the propriety of having the Laguesma Law Office
represent respondent CDC in the proceedings before the LA. The said law firm entered its appearance as counsel
for respondent during the pre-execution conference/hearing on 1 October 2004. On this issue, the NLRC held that
respondent corporations legal department, which had previously been representing the corporation, was not
validly substituted by the Laguesma Law Office. In addition, the NLRC held that respondent had failed to comply
with Memorandum Circular No. 9, Series of 1998, which strictly prohibits the hiring of lawyers of private law firms
by GOCCs without the prior written conformity and acquiescence of the Office of Solicitor General, as the case may
be, and the prior written concurrence of the Commission on Audit (COA). Thus, the NLRC held that all actions and
submissions undertaken by the Laguesma Law Office on behalf of respondent were null and void.
The second issue raised before the NLRC was whether LA Bactin acted without jurisdiction in annulling
and setting aside the formers final and executory judgment contained in its 10 September 2003 Resolution,
wherein it held that the appeal had not been perfected, absent the necessary board resolution allowing or
authorizing Timbol-Roman and Atty. Mallari to file the appeal. On this issue, the NLRC stated:
The final and executory judgment in this case is clearly indicated in the dispositive
portion of Our Resolution promulgated on September 10, 2003 GRANTING complainants motion

for reconsideration, SETTING ASIDE Our Resolution of December 5, 2002, and REINSTATING the
Decision of the Labor Arbiter dated February 29, 2000 with the following modification[s]: (1)
declaring respondent Rufo Colayco not jointly and severally liable with respondent Clark
Development Corporation; (2) ordering respondent CDC to pay the complainant his full
backwages and other monetary claims to which he is entitled under the decision of the Labor
Arbiter; (3) ordering respondent CDC to pay complainant moral and exemplary damages as
provided under the Labor Arbiters Decision; and (4) ordering respondent CDC to pay the
complainant his retirement benefits without further delay. This was entered in the Book of Entry
of Judgment as final and executory effective as of February 2, 2004.
Implementing this final and executory judgment, Arbiter Isorena issued an Order dated
May 24, 2004, DENYING respondents Motion to Quash the Writ of Execution dated March 22,
2004, correctly stating thusly:
Let it be stressed that once a decision has become final and executory,
it becomes the ministerial duty of this Office to issue the corresponding writ of
execution. The rationale behind it is based on the fact that the winning party
has suffered enough and it is the time for him to enjoy the fruits of his labor
with dispatch. The very purpose of the pre-execution conference is to explore
the possibility for the parties to arrive at an amicable settlement to satisfy the
judgment award speedily, not to delay or prolong its implementation.
Thus, when Arbiter Bactin, who took over from Arbiter Isorena upon the latters filing for
leave of absence due to poor health in January 2005, issued the appealed Order nullifying,
instead of implementing, the final and executory judgment of this Commission, the labor arbiter
a quo acted WITHOUT JURISDICTION.xxiv[35]
xxx

xxx

xxx

WHEREFORE, premises considered, the appeal of herein complainant is hereby

GRANTED, and We declare NULL AND VOID the appealed Order of March 8, 2005 and SET ASIDE
said Order; We direct the immediate issuance of the corresponding Alias Writ of Execution to
enforce the final and executory judgment of this Commission as contained in Our September 10,
2003 Resolution.
SO ORDERED.xxiv[36]
Unwilling to accept the above Resolution of the NLRC, the Laguesma Law Office filed a Motion for
Reconsideration dated 29 August 2005 with the NLRC. Again, the motion lacked proper verification and
certification against non-forum shopping.
In the meantime, the OGCC also filed with the CA a Motion for the Issuance of a Writ of Preliminary
Injunction dated 30 August 2005xxiv[37] against the NLRCs 22 July 2005 Resolution. The OGCC alleged that the
issues in the Resolution addressed monetary claims that were raised by petitioner Salenga only in his Omnibus

Motion dated 7 May 2004 or after the issuance of the 10 September 2003 Decision of LA Darlucio. Thus, the OGCC
insisted that the NLRC had no jurisdiction over the issue, for the matter was still pending with the CA.
The OGCC likewise filed another Motion for Reconsiderationxxiv[38] dated 31 August 2005 with the NLRC.
The OGCC maintained that it was only acting in a collaborative manner with the legal department of respondent
CDC, for which the former remained the lead counsel. The OGCC reiterated that, as the statutory counsel of
GOCCs, it did not need authorization from them to maintain a case, and thus, LA Bactin had jurisdiction over that
case. Finally, it insisted that petitioner Salenga was not covered by civil service laws on retirement, the CDC having
been created under the Corporation Code.
On 13 September 2005, the CA promulgated the assailed Decision. Relying heavily on the reports of
Reviewer Arbiters Cristeta D. Tamayo and Thelma M. Concepcion, it held that petitioner Salenga was a corporate
officer. Thus, the issue before the NLRC was an intra-corporate dispute, which should have been lodged with the
Securities and Exchange Commission (SEC), which had jurisdiction over the case at the time the issue arose. The CA
likewise held that the NLRC committed grave abuse of discretion when it allowed and granted petitioner Salengas
second Motion for Reconsideration, which was a prohibited pleading.
Petitioner subsequently filed a Motion for Reconsideration on 7 October 2005, alleging that the CA
committed grave abuse of discretion in reconsidering the findings of fact, which had already been found to be
conclusive against respondent; and in taking cognizance of the latters Petition which had not been properly
verified.
The CA, finding no merit in petitioners allegations, denied the motion in its 17 August 2006 Resolution.
On 4 September 2006, petitioner Salenga filed a Motion for Extension of Time to File a Petition for Review
on Certiorari under Rule 45, praying for an extension of fifteen (15) days within which to file the Petition. The
motion was granted through this Courts Resolution dated 13 September 2006. The case was docketed as G.R. No.
174159.
On 25 September 2006, however, petitioner filed a Manifestationxxiv[39] withdrawing the motion. He
manifested before us that he would instead file a Petition for Certiorari under Rule 65, which was eventually
docketed as G.R. No. 174941. On 7 July 2008, this Court, through a Resolution, considered the Petition for Review
in G.R. No. 174159 closed and terminated.
Petitioner raises the following issues for our resolution:

I.
The Court of Appeals acted without jurisdiction in reviving and re-litigating the factual issues and
matters of petitioners illegal dismissal and retirement benefits.
II.
The Court of Appeals had no jurisdiction to entertain the original Petition as a remedy for an
appeal that had actually not been filed, absent a board resolution allowing the appeal.
III.
The Court of Appeals acted with grave abuse of discretion when it did the following:
a.

It failed to dismiss the original and supplemental Petitions despite the lack of
a board resolution authorizing the filing thereof.

b.

It failed to dismiss the Petitions despite the absence of a proper verification

and certification against non-forum shopping.

c.

It failed to dismiss the Petitions despite respondents failure to inform it of

the pending proceedings before the NLRC involving the same issues.

d.

It failed to dismiss the Petitions on the ground of forum shopping.

e.

It did not dismiss the Petition when respondent failed to attach to it certified
true copies of the assailed NLRC 30 July 2001 Decision; 10 September 2003
Resolution; 21 January 2004 Resolution; copies of material portions of the
record as are referred to therein; and copies of pleadings and documents
relevant and pertinent thereto.

f.

It did not act on respondents failure to serve on the Office of the Solicitor
General a copy of the pleadings, motions and manifestations the latter had
filed before the Court of Appeals, as well as copies of pertinent court
resolutions and decisions, despite the NLRC being a party to the present
case.

g.

It disregarded the findings of fact and conclusions of law arrived at by LA

Darlucio, subjecting them to a second analysis and evaluation and
supplanting them with its own findings.

h.

It granted the Petition despite respondents failure to show that the NLRC
committed grave abuse of discretion in rendering the latters 30 July 2001
Decision, 10 September 2003 Resolution and 21 January 2004 Resolution.

i.

It dismissed the complaint for illegal dismissal and ordered the restitution of
the P3,222,400 already awarded to petitioner, plus interest thereon.

In its defense, private respondent insists that the present Petition for Certiorari under Rule 65 is an
improper remedy to question the Decision of the CA, and thus, the case should be dismissed outright.
Nevertheless, it reiterates that private petitioner was a corporate officer whose employment was dependent on
board action. As such, private petitioners employment was an intra-corporate controversy cognizable by the SEC,
not the NLRC. Private respondent also asserts that it has persistently sought the reversal of LA Darlucios Decision
by referring to the letters sent to the OGCC, as well as Verification and Certificate against forum-shopping.
However, these documents were signed only during Angeles time as private respondents president/CEO, and not
of the former presidents. Moreover, private respondent contends that private petitioner is not covered by civil
service laws, thus, his years in government service are not creditable for the purpose of determining the total
amount of retirement benefits due him. In relation to this, private respondent enumerates the amounts already
paid to private petitioner.
The Courts Ruling
The Petition has merit.
This Court deigns it proper to collapse the issues in this Petition to simplify the matters raised in what
appears to be a convoluted case. First, we need to determine whether the NLRC and the CA committed grave
abuse of discretion amounting to lack or excess of jurisdiction, when they entertained respondents so-called
appeal of the 29 February 2000 Decision rendered by LA Darlucio.
Second, because of the turn of events, a second issue the computation of retirement benefits cropped up
while the first case for illegal dismissal was still pending. Although the second issue may be considered as separate
and distinct from the illegal dismissal case, the issue of the proper computation of the retirement benefits was
nevertheless considered by the relevant administrative bodies, adding more confusion to what should have been a
simple case to begin with.
The NLRC had no jurisdiction
to entertain the appeal filed by
Timbol-Roman and former
CDC CEO Colayco.

To recall, on 29 February 2000, LA Darlucio rendered a Decision in favor of petitioner, stating as follows:

xxxComplainant cannot be considered as a corporate officer because at the time of his

termination, he was holding the position of Head Executive Assistant which is categorized as a
Job Level 12 position that is not subject to the election or appointment by the Board of Directors.
The approval of Board Resolution Nos. 200 and 214 by the Board of Directors in its meeting held
on February 11, 1998 and March 25, 1998 clearly refers to the New CDC Salary Structure where
the pay adjustment was based and not to complainants relief as Vice-President, Joint Ventures
and Special Projects. While it is true that his previous positions are classified as Job Level 13
which are subject to board confirmation, the status of his appointment was permanent in nature.
In fact, he had undergone a six-month probationary period before having acquired the
permanency of his appointment. However, due to the refusal of the board under then Chairman
Victorino Basco to confirm his appointment, he was demoted to the position of Head Executive
Assistant. Thus, complainant correctly postulated that he was not elected to his position and his
tenure is not dependent upon the whim of the boardxxx
xxx

xxx

xxx

Anent the second issue, this Office finds and so holds that respondents have miserably
failed to show or establish the valid cause in terminating the services of complainant.
Xxx

xxx

xxx

In the case at bar, respondents failed to adduce any evidence showing that the position
of Head Executive Assistant is superfluous. In fact, they never disputed the argument advanced
by complainant that the position of Head Executive Assistant was classified as a regular position
in the Position Classification Study which is an essential component of the Organizational Study
that had been approved by the CDC board of directors in 1995 and still remains intact as of the
end of 1998. Likewise, studies made since 1994 by various management consultancy groups have
determined the need for the said position in the Office of the President/CEO in relation to the
vision, mission, plans, programs and overall corporate goals and objectives of respondent CDC.
There is no evidence on record to show that the position of Head Executive Assistant was
abolished by the Board of Directors in its meeting held in the morning of September 22, 1998.
The minutes of the meeting of the board on said date, as well as its other three meetings held in
the month of September 1998 (Annexes B, C, D and E, Complainants Reply), clearly reveal that no
abolition or reorganization plan was discussed by the board. Hence, the ground of redundancy is
merely a device made by respondent Colayco in order to ease out the complainant from the
respondent corporation.
Moreover, the other ground for complainants dismissal is unclear and unknown to him
as respondent did not specify nor inform the complainant of the alleged recent developmentsxxx
This Office is also of the view that complainant was not accorded his right to due
process prior to his termination. The law requires that the employer must furnish the worker
sought to be dismissed with two (2) written notices before termination may be validly effected:
first, a notice apprising the employee of the particular acts or omissions for which his dismissal is
sought and, second, a subsequent notice informing the employee of the decision to dismiss him.
In the case at bar, complainant was not apprised of the grounds of his termination. He was not
given the opportunity to be heard and defend himselfxxxxxiv[40]

The OGCC, representing respondent CDC and former CEO Colayco separately appealed from the above
Decision. Both alleged that they had filed the proper bond to cover the award granted by LA Darlucio.
It is clear from the NLRC Rules of Procedure that appeals must be verified and certified against forumshopping by the parties-in-interest themselves. In the case at bar, the parties-in-interest are petitioner Salenga, as
the employee, and respondent Clark Development Corporation as the employer.
A corporation can only exercise its powers and transact its business through its board of directors and
through its officers and agents when authorized by a board resolution or its bylaws. The power of a corporation to
sue and be sued is exercised by the board of directors. The physical acts of the corporation, like the signing of
documents, can be performed only by natural persons duly authorized for the purpose by corporate bylaws or by a
specific act of the board. The purpose of verification is to secure an assurance that the allegations in the pleading
are true and correct and have been filed in good faith.xxiv[41]
Thus, we agree with petitioner that, absent the requisite board resolution, neither Timbol-Roman nor
Atty. Mallari, who signed the Memorandum of Appeal and Joint Affidavit of Declaration allegedly on behalf of
respondent corporation, may be considered as the appellant and employer referred to by Rule VI, Sections 4 to 6
of the NLRC Rules of Procedure, which state:
SECTION 4. REQUISITES FOR PERFECTION OF APPEAL. - (a) The Appeal shall be filed
within the reglementary period as provided in Section 1 of this Rule; shall be verified by
appellant himself in accordance with Section 4, Rule 7 of the Rules of Court, with proof of
payment of the required appeal fee and the posting of a cash or surety bond as provided in
Section 6 of this Rule; shall be accompanied by memorandum of appeal in three (3) legibly
typewritten copies which shall state the grounds relied upon and the arguments in support
thereof; the relief prayed for; and a statement of the date when the appellant received the
appealed decision, resolution or order and a certificate of non-forum shopping with proof of
service on the other party of such appeal. A mere notice of appeal without complying with the
other requisites aforestated shall not stop the running of the period for perfecting an appeal.
(b) The appellee may file with the Regional Arbitration Branch or Regional Office where
the appeal was filed, his answer or reply to appellant's memorandum of appeal, not later than
ten (10) calendar days from receipt thereof. Failure on the part of the appellee who was properly
furnished with a copy of the appeal to file his answer or reply within the said period may be
construed as a waiver on his part to file the same.
(c) Subject to the provisions of Article 218, once the appeal is perfected in accordance
with these Rules, the Commission shall limit itself to reviewing and deciding specific issues that
were elevated on appeal.

SECTION 5. APPEAL FEE. -The appellant shall pay an appeal fee of one hundred fifty
pesos (P150.00) to the Regional Arbitration Branch or Regional Office, and the official receipt of
such payment shall be attached to the records of the case.
SECTION 6. BOND. - In case the decision of the Labor Arbiter or the Regional Director
involves a monetary award, an appeal by the employer may be perfected only upon the posting
of a cash or surety bond. The appeal bond shall either be in cash or surety in an amount
equivalent to the monetary award, exclusive of damages and attorneys fees.
In case of surety bond, the same shall be issued by a reputable bonding company duly
accredited by the Commission or the Supreme Court, and shall be accompanied by:
(a) a joint declaration under oath by the employer, his counsel, and the
bonding company, attesting that the bond posted is genuine, and shall be in effect until
final disposition of the case.
(b) a copy of the indemnity agreement between the employer-appellant and
bonding company; and
(c) a copy of security deposit or collateral securing the bond.
A certified true copy of the bond shall be furnished by the appellant to the appellee who
shall verify the regularity and genuineness thereof and immediately report to the Commission
any irregularity.
Upon verification by the Commission that the bond is irregular or not genuine, the
Commission shall cause the immediate dismissal of the appeal.
No motion to reduce bond shall be entertained except on meritorious grounds and upon
the posting of a bond in a reasonable amount in relation to the monetary award.
The filing of the motion to reduce bond without compliance with the requisites in the
preceding paragraph shall not stop the running of the period to perfect an appeal. (Emphasis
supplied)

The OGCC failed to produce any valid authorization from the board of directors despite petitioner
Salengas repeated demands. It had been given more than enough opportunity and time to produce the
appropriate board resolution, and yet it failed to do so. In fact, many of its pleadings, representations, and
submissions lacked board authorization.
We cannot agree with the OGCCs attempt to downplay this procedural flaw by claiming that, as the
statutorily assigned counsel for GOCCs, it does not need such authorization. In Constantino-David v.
Pangandaman-Gania,xxiv[42] we exhaustively explained why it was necessary for government agencies or

instrumentalities to execute the verification and the certification against forum-shopping through their duly
authorized representatives. We ruled thereon as follows:
But the rule is different where the OSG is acting as counsel of record for a government
agency. For in such a case it becomes necessary to determine whether the petitioning
government body has authorized the filing of the petition and is espousing the same stand
propounded by the OSG. Verily, it is not improbable for government agencies to adopt a stand
different from the position of the OSG since they weigh not just legal considerations but policy
repercussions as well. They have their respective mandates for which they are to be held
accountable, and the prerogative to determine whether further resort to a higher court is
desirable and indispensable under the circumstances.
The verification of a pleading, if signed by the proper officials of the client agency
itself, would fittingly serve the purpose of attesting that the allegations in the pleading are true
and correct and not the product of the imagination or a matter of speculation, and that the
pleading is filed in good faith. Of course, the OSG may opt to file its own petition as a People's
Tribune but the representation would not be for a client office but for its own perceived best
interest of the State.
The case of Commissioner of Internal Revenue v. S.C. Johnson and Son, Inc., is not also a
precedent that may be invoked at all times to allow the OSG to sign the certificate of non-forum
shopping in place of the real party-in-interest. The ruling therein mentions merely that the
certification of non-forum shopping executed by the OSG constitutes substantial compliance with
the rule since the OSG is the only lawyer for the petitioner, which is a government agency
mandated under Section 35, Chapter 12, Title III, Book IV, of the 1987 Administrative Code
(Reiterated under Memorandum Circular No. 152 dated May 17, 1992) to be represented only by
the Solicitor General.
By its very nature, substantial compliance is actually inadequate observance of the
requirements of a rule or regulation which are waived under equitable circumstances to facilitate
the administration of justice there being no damage or injury caused by such flawed compliance.
This concept is expressed in the statement the rigidity of a previous doctrine was thus subjected
to an inroad under the concept of substantial compliance. In every inquiry on whether to accept
substantial compliance, the focus is always on the presence of equitable conditions to administer
justice effectively and efficiently without damage or injury to the spirit of the legal obligation.
xxx

xxx

xxx

The fact that the OSG under the 1987 Administrative Code is the only lawyer for a
government agency wanting to file a petition, or complaint for that matter, does not operate
per se to vest the OSG with the authority to execute in its name the certificate of non-forum
shopping for a client office. For, in many instances, client agencies of the OSG have legal
departments which at times inadvertently take legal matters requiring court representation
into their own hands without the intervention of the OSG. Consequently, the OSG would have

no personal knowledge of the history of a particular case so as to adequately execute the

certificate of non-forum shopping; and even if the OSG does have the relevant information, the
courts on the other hand would have no way of ascertaining the accuracy of the OSG's
assertion without precise references in the record of the case. Thus, unless equitable
circumstances which are manifest from the record of a case prevail, it becomes necessary for
the concerned government agency or its authorized representatives to certify for non-forum
shopping if only to be sure that no other similar case or incident is pending before any other
court.
We recognize the occasions when the OSG has difficulty in securing the attention and
signatures of officials in charge of government offices for the verification and certificate of nonforum shopping of an initiatory pleading. This predicament is especially true where the period for
filing such pleading is non-extendible or can no longer be further extended for reasons of public
interest such as in applications for the writ of habeas corpus, in election cases or where sensitive
issues are involved. This quandary is more pronounced where public officials have stations
outside Metro Manila.
But this difficult fact of life within the OSG, equitable as it may seem, does not excuse it
from wantonly executing by itself the verification and certificate of non-forum shopping. If the
OSG is compelled by circumstances to verify and certify the pleading in behalf of a client agency,
the OSG should at least endeavor to inform the courts of its reasons for doing so, beyond
instinctively citing City Warden of the Manila City Jail v. Estrella and Commissioner of Internal
Revenue v. S.C. Johnson and Son, Inc.
Henceforth, to be able to verify and certify an initiatory pleading for non-forum
shopping when acting as counsel of record for a client agency, the OSG must (a) allege under
oath the circumstances that make signatures of the concerned officials impossible to obtain
within the period for filing the initiatory pleading; (b) append to the petition or complaint such
authentic document to prove that the party-petitioner or complainant authorized the filing of
the petition or complaint and understood and adopted the allegations set forth therein, and an
affirmation that no action or claim involving the same issues has been filed or commenced in
any court, tribunal or quasi-judicial agency; and, (c) undertake to inform the court promptly
and reasonably of any change in the stance of the client agency.
Anent the document that may be annexed to a petition or complaint under letter (b)
hereof, the letter-endorsement of the client agency to the OSG, or other correspondence to
prove that the subject-matter of the initiatory pleading had been previously discussed
between the OSG and its client, is satisfactory evidence of the facts under letter (b) above. In
this exceptional situation where the OSG signs the verification and certificate of non-forum
shopping, the court reserves the authority to determine the sufficiency of the OSG's action as
measured by the equitable considerations discussed herein. (Emphasis ours, italics provided)

The ruling cited above may have pertained only to the Office of the Solicitor Generals representation of
government agencies and instrumentalities, but we see no reason why this doctrine cannot be applied to the case
at bar insofar as the OGCC is concerned.
While in previous decisions we have excused transgressions of these rules, it has always been in the
context of upholding justice and fairness under exceptional circumstances. In this case, though, respondent failed
to provide any iota of rhyme or reason to compel us to relax these requirements. Instead, what is clear to us is that
the so-called appeal was done against the instructions of then President/CEO Naguiat not to file an appeal. TimbolRoman, who signed the Verification and the Certification against forum-shopping, was not even an authorized
representative of the corporation. The OGCC was equally remiss in its duty. It ought to have advised respondent
corporation, the proper procedure for pursuing an appeal. Instead, it maintained the appeal and failed to present
any valid authorization from respondent corporation even after petitioner had questioned OGCCs authority all
throughout the proceedings. Thus, it is evident that the appeal was made in bad faith.
The unauthorized and overzealous acts of officials of respondent CDC and the OGCC have led to a waste
of the governments time and resources. More alarmingly, they have contributed to the injustice done to petitioner
Salenga. By taking matters into their own hands, these officials let the case drag on for years, depriving him of the
enjoyment of property rightfully his. What should have been a simple case of illegal dismissal became an endless
stream of motions and pleadings.
Time and again, we have said that the perfection of an appeal within the period prescribed by law is
jurisdictional, and the lapse of the appeal period deprives the courts of jurisdiction to alter the final
judgment.xxiv[43] Thus, there is no other recourse but to respect the findings and ruling of the labor arbiter.
Clearly, therefore, the CA committed grave abuse of discretion in entertaining the Petition filed before it after the
NLRC had dismissed the case based on lack of jurisdiction. The assailed CA Decision did not even resolve petitioner
Salengas consistent and persistent claim that the NLRC should not have taken cognizance of the appeal in the first
place, absent a board resolution. Thus, LA Darlucios Decision with respect to the liability of the corporation still
stands.
However, we note from that Decision that Rufo Colayco was made solidarily liable with respondent
corporation. Colayco thereafter filed his separate appeal. As to him, the NLRC correctly held in its 30 July 2001
Decision that he may not be held solidarily responsible to petitioner. As a result, it dropped him as respondent.
Notably, in the case at bar, petitioner does not question that ruling.

Based on the foregoing, all other subsequent proceedings regarding the issue of petitioners dismissal are
null and void for having been conducted without jurisdiction. Thus, it is no longer incumbent upon us to rule on the
other errors assigned in the matter of petitioner Salengas dismissal.

CDC is not under the civil service laws on retirement.

While the case was still persistently being pursued by the OGCC, a new issue arose when petitioner
Salenga reached retirement age: whether his retirement benefits should be computed according to civil service
laws.
To recall, the issue of how to compute the retirement benefits of petitioner was raised in his Omnibus
Motion dated 7 May 2004 filed before the NLRC after it had reinstated LA Darlucios original Decision. The issue
was not covered by petitioners Complaint for illegal dismissal, but was a different issue altogether and should have
been properly addressed in a separate Complaint. We cannot fault petitioner, though, for raising the issue while
the case was still pending with the NLRC. If it were not for the appeal undertaken by Timbol-Roman and the OGCC
through Atty. Mallari, the issue would have taken its proper course and would have been raised in a more
appropriate time and manner. Thus, we deem it proper to resolve the matter at hand to put it to rest after a
decade of litigation.
Petitioner Salenga contends that respondent CDC is covered by the GSIS Law. Thus, he says, the
computation of his retirement benefits should include all the years of actual government service, starting from the
original appointment forty (40) years ago up to his retirement.
Respondent CDC owes its existence to Executive Order No. 80 issued by then President Fidel V. Ramos. It was
meant to be the implementing and operating arm of the Bases Conversion and Development Authority (BCDA) tasked to
manage the Clark Special Economic Zone (CSEZ). Expressly, respondent was formed in accordance with Philippine
corporation laws and existing rules and regulations promulgated by the SEC pursuant to Section 16 of Republic Act (R.A.)
7227.xxiv[44] CDC, a government-owned or -controlled corporation without an original charter, was incorporated under
the Corporation Code. Pursuant to Article IX-B, Sec. 2(1), the civil service embraces only those government-owned or controlled corporations with original charter. As such, respondent CDC and its employees are covered by the Labor
Code and not by the Civil Service Law, consistent with our ruling in NASECO v. NLRC,xxiv[45] in which we
established this distinction. Thus, in Gamogamo v. PNOC Shipping and Transport Corp.,xxiv[46] we held:

Retirement results from a voluntary agreement between the employer and the employee
whereby the latter after reaching a certain age agrees to sever his employment with the former.
Since the retirement pay solely comes from Respondent's funds, it is but natural that
Respondent shall disregard petitioner's length of service in another company for the computation
of his retirement benefits.
Petitioner was absorbed by Respondent from LUSTEVECO on 1 August 1979.
Ordinarily, his creditable service shall be reckoned from such date. However, since Respondent
took over the shipping business of LUSTEVECO and agreed to assume without interruption all
the service credits of petitioner with LUSTEVECO, petitioner's creditable service must start from
9 November 1977 when he started working with LUSTEVECO until his day of retirement on 1
April 1995. Thus, petitioner's creditable service is 17.3333 years.
We cannot uphold petitioner's contention that his fourteen years of service with the DOH
should be considered because his last two employers were government-owned and controlled
corporations, and fall under the Civil Service Law. Article IX(B), Section 2 paragraph 1 of the
1987 Constitution states
Sec. 2. (1)The civil service embraces all branches, subdivisions,
instrumentalities, and agencies of the Government, including governmentowned or controlled corporations with original charters.
It is not at all disputed that while Respondent and LUSTEVECO are governmentowned and controlled corporations, they have no original charters; hence they are not under
the Civil Service Law. In Philippine National Oil Company-Energy Development Corporation v.
National Labor Relations Commission, we ruled:
xxx Thus under the present state of the law, the test in determining whether a
government-owned or controlled corporation is subject to the Civil Service Law
are [sic] the manner of its creation, such that government corporations created
by special charter(s) are subject to its provisions while those incorporated under
the General Corporation Law are not within its coverage. (Emphasis supplied)
Hence, petitioner Salenga is entitled to receive only his retirement benefits based only on the number of
years he was employed with the corporation under the conditions provided under its retirement plan, as well as
other benefits given to him by existing laws.
WHEREFORE, in view of the foregoing, the Petition in G.R. No. 174941 is partially GRANTED. The Decision
of LA Darlucio is REINSTATED insofar as respondent corporations liability is concerned. Considering that petitioner
did not maintain the action against Rufo Colayco, the latter is not solidarily liable with respondent Clark
Development Corporation.
The case is REMANDED to the labor arbiter for the computation of petitioners retirement benefits in
accordance with the Social Security Act of 1997 otherwise known as Republic Act No. 8282, deducting therefrom
the sums already paid by respondent CDC. If any, the remaining amount shall be subject to the legal interest of 6%
per annum from the filing date of petitioners Omnibus Motion on 11 May 2004 up to the time this judgment
becomes final and executory. Henceforth, the rate of legal interest shall be 12% until the satisfaction of judgment.
SO ORDERED.

G.R. Nos. L-58674-77 July 11, 1990

PEOPLE OF THE PHILIPPINES, petitioner,
vs.
HON. DOMINGO PANIS, Presiding Judge of the Court of First Instance of
Zambales & Olongapo City, Branch III and SERAPIO ABUG, respondents.

CRUZ, J:
The basic issue in this case is the correct interpretation of Article 13(b) of P.D. 442, otherwise known as the Labor Code, reading as follows:
(b) Recruitment and placement' refers to any act of canvassing, enlisting, contracting, transporting, 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.
Four informations were filed on January 9, 1981, in the Court of First Instance of Zambales and Olongapo City alleging that Serapio Abug,
private respondent herein, "without first securing a license from the Ministry of Labor as a holder of authority to operate a fee-charging
employment agency, did then and there wilfully, unlawfully and criminally operate a private fee charging employment agency by charging
fees and expenses (from) and promising employment in Saudi Arabia" to four separate individuals named therein, in violation of Article 16 in
1
relation to Article 39 of the Labor Code.

Abug filed a motion to quash on the ground that the informations did not charge an offense because he
was accused of illegally recruiting only one person in each of the four informations. Under the proviso in
Article 13(b), he claimed, there would be illegal recruitment only "whenever two or more persons are in
2
any manner promised or offered any employment for a fee. "
Denied at first, the motion was reconsidered and finally granted in the Orders of the trial court dated June
3
24 and September 17, 1981. The prosecution is now before us on certiorari.
The posture of the petitioner is that the private respondent is being prosecuted under Article 39 in relation
to Article 16 of the Labor Code; hence, Article 13(b) is not applicable. However, as the first two cited
articles penalize acts of recruitment and placement without proper authority, which is the charge
embodied in the informations, application of the definition of recruitment and placement in Article 13(b) is
unavoidable.
The view of the private respondents is that to constitute recruitment and placement, all the acts
mentioned in this article should involve dealings with two or m re persons as an indispensable
requirement. On the other hand, the petitioner argues that the requirement of two or more persons is
imposed only where the recruitment and placement consists of an offer or promise of employment to such
persons and always in consideration of a fee. The other acts mentioned in the body of the article may
involve even only one person and are not necessarily for profit.
Neither interpretation is acceptable. We fail to see why the proviso should speak only of an offer or
promise of employment if the purpose was to apply the requirement of two or more persons to all the acts
mentioned in the basic rule. For its part, the petitioner does not explain why dealings with two or more
persons are needed where the recruitment and placement consists of an offer or promise of employment
but not when it is done through "canvassing, enlisting, contracting, transporting, utilizing, hiring or
procuring (of) workers.

As we see it, 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) win 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.
This is not unlike the presumption in article 217 of the Revised Penal Code, for example, regarding the
failure of a public officer to produce upon lawful demand funds or property entrusted to his custody. Such
failure shall be prima facie evidence that he has put them to personal use; in other words, he shall be
deemed to have malversed such funds or property. In the instant case, 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. (Klepp vs. Odin Tp., McHenry County 40 ND N.W. 313, 314.)
It is unfortunate that we can only speculate on the meaning of the questioned provision for lack of records
of debates and deliberations that would otherwise have been available if the Labor Code had been
enacted as a statute rather than a presidential decree. The trouble with presidential decrees is that they
could be, and sometimes were, issued without previous public discussion or consultation, the promulgator
heeding only his own counsel or those of his close advisers in their lofty pinnacle of power. The not
infrequent results are rejection, intentional or not, of the interest of the greater number and, as in the
instant case, certain esoteric provisions that one cannot read against the background facts usually
reported in the legislative journals.
At any rate, the interpretation here adopted should give more force to the campaign against illegal
recruitment and placement, which has victimized many Filipino workers seeking a better life in a foreign
land, and investing hard- earned savings or even borrowed funds in pursuit of their dream, only to be
awakened to the reality of a cynical deception at the hands of theirown countrymen.
WHEREFORE, the Orders of June 24, 1981, and September 17, 1981, are set aside and the four
informations against the private respondent reinstated. No costs.
SO ORDERED.

PEOPLE OF THE PHILIPPINES,

G.R. No. 187730

Petitioner,

Present:

- versus -

RODOLFO GALLO y GADOT,

Accused-Appellant,
FIDES PACARDO y JUNGCO and PILAR MANTA y
DUNGO,
Accused.

CORONA, C.J., Chairperson,

VELASCO, JR.,
LEONARDO-DE CASTRO,
DEL CASTILLO, and
PEREZ, JJ.
Promulgated:
June 29, 2010

x-----------------------------------------------------------------------------------------x

DECISION

VELASCO, JR., J.:

The Case
This is an appeal from the Decisionxxiv[1] dated December 24, 2008 of the Court of Appeals (CA) in CAG.R. CR-H.C. No. 02764 entitled People of the Philippines v. Rodolfo Gallo y Gadot (accused-appellant), Fides
Pacardo y Jungco and Pilar Manta y Dungo (accused), which affirmed the Decisionxxiv[2] dated March 15, 2007 of
the Regional Trial Court (RTC), Branch 30 in Manila which convicted the accused-appellant Rodolfo Gallo y Gadot
(accused-appellant) of syndicated illegal recruitment in Criminal Case No. 02-206293 and estafa in Criminal Case
No. 02-206297.
The Facts
Originally, accused-appellant Gallo and accused Fides Pacardo (Pacardo) and Pilar Manta (Manta),
together with Mardeolyn Martir (Mardeolyn) and nine (9) others, were charged with syndicated illegal recruitment
and eighteen (18) counts of estafa committed against eighteen complainants, including Edgardo V. Dela Caza (Dela
Caza), Sandy Guantero (Guantero) and Danilo Sare (Sare). The cases were respectively docketed as Criminal Case
Nos. 02-2062936 to 02-206311. However, records reveal that only Criminal Case No. 02-206293, which was filed
against accused-appellant Gallo, Pacardo and Manta for syndicated illegal recruitment, and Criminal Case Nos. 02206297, 02-206300 and 02-206308, which were filed against accused-appellant Gallo, Pacardo and Manta for
estafa, proceeded to trial due to the fact that the rest of the accused remained at large. Further, the other cases,
Criminal Case Nos. 02-206294 to 02-206296, 02-206298 to 02-206299, 02-206301 to 02-206307 and 02-206309 to
02-206311 were likewise provisionally dismissed upon motion of Pacardo, Manta and accused-appellant for failure
of the respective complainants in said cases to appear and testify during trial.
It should also be noted that after trial, Pacardo and Manta were acquitted in Criminal Case Nos. 02206293, 02-206297, 02-206300 and 02-206308 for insufficiency of evidence. Likewise, accused-appellant Gallo was
similarly acquitted in Criminal Case Nos. 02-206300, the case filed by Guantero, and 02-206308, the case filed by

Sare. However, accused-appellant was found guilty beyond reasonable doubt in Criminal Case Nos. 02-206293 and
02-206297, both filed by Dela Caza, for syndicated illegal recruitment and estafa, respectively.
Thus, the present appeal concerns solely accused-appellants conviction for syndicated illegal recruitment
in Criminal Case No. 02-206293 and for estafa in Criminal Case No. 02-206297.
In Criminal Case No. 02-206293, the information charges the accused-appellant, together with the others,
as follows:
The undersigned accuses MARDEOLYN MARTIR, ISMAEL GALANZA, NELMAR MARTIR,
MARCELINO MARTIR, NORMAN MARTIR, NELSON MARTIR, MA. CECILIA M. RAMOS, LULU
MENDANES, FIDES PACARDO y JUNGCO, RODOLFO GALLO y GADOT, PILAR MANTA y DUNGO,
ELEONOR PANUNCIO and YEO SIN UNG of a violation of Section 6(a), (l) and (m) of Republic Act
8042, otherwise known as the Migrant Workers and Overseas Filipino Workers Act of 1995,
committed by a syndicate and in large scale, as follows:
That in or about and during the period comprised between November 2000 and
December, 2001, inclusive, in the City of Manila, Philippines, the said accused conspiring and
confederating together and helping with one another, representing themselves to have the
capacity to contract, enlist and transport Filipino workers for employment abroad, did then and
there willfully and unlawfully, for a fee, recruit and promise employment/job placement abroad
to FERDINAND ASISTIN, ENTICE BRENDO, REYMOND G. CENA, EDGARDO V. DELA CAZA,
RAYMUND EDAYA, SANDY O. GUANTENO, RENATO V. HUFALAR, ELENA JUBICO, LUPO A.
MANALO, ALMA V. MENOR, ROGELIO S. MORON, FEDILA G. NAIPA, OSCAR RAMIREZ, MARISOL L.
SABALDAN, DANILO SARE, MARY BETH SARDON, JOHNNY SOLATORIO and JOEL TINIO in Korea as
factory workers and charge or accept directly or indirectly from said FERDINAND ASISTIN the
amount of P45,000.00; ENTICE BRENDO P35,000.00; REYMOND G. CENA P30,000.00; EDGARDO
V. DELA CAZA P45,000.00; RAYMUND EDAYA P100,000.00; SANDY O. GUANTENO P35,000.00;
RENATO V. HUFALAR P70,000.00; ELENA JUBICO P30,000.00; LUPO A. MANALO P75,000.00;
ALMA V. MENOR P45,000.00; ROGELIO S. MORON P70,000.00; FEDILA G. NAIPA P45,000.00;
OSCAR RAMIREZ P45,000.00; MARISOL L. SABALDAN P75,000.00; DANILO SARE P100,000.00;
MARY BETH SARDON P25,000.00; JOHNNY SOLATORIO P35,000.00; and JOEL TINIO P120,000.00
as placement fees in connection with their overseas employment, which amounts are in excess
of or greater than those specified in the schedule of allowable fees prescribed by the POEA Board
Resolution No. 02, Series 1998, and without valid reasons and without the fault of the said
complainants failed to actually deploy them and failed to reimburse the expenses incurred by the
said complainants in connection with their documentation and processing for purposes of their
deployment.xxiv[3] (Emphasis supplied)
In Criminal Case No. 02-206297, the information reads:
That on or about May 28, 2001, in the City of Manila, Philippines, the said accused
conspiring and confederating together and helping with [sic] one another, did then and there
willfully, unlawfully and feloniously defraud EDGARDO V. DELA CAZA, in the following manner, to
wit: the said accused by means of false manifestations and fraudulent representations which
they made to the latter, prior to and even simultaneous with the commission of the fraud, to the
effect that they had the power and capacity to recruit and employ said EDGARDO V. DELA CAZA
in Korea as factory worker and could facilitate the processing of the pertinent papers if given the
necessary amount to meet the requirements thereof; induced and succeeded in inducing said
EDGARDO V. DELA CAZA to give and deliver, as in fact, he gave and delivered to said accused the
amount of P45,000.00 on the strength of said manifestations and representations, said accused
well knowing that the same were false and untrue and were made [solely] for the purpose of
obtaining, as in fact they did obtain the said amount of P45,000.00 which amount once in their
possession, with intent to defraud said [EDGARDO] V. DELA CAZA, they willfully, unlawfully and
feloniously misappropriated, misapplied and converted the said amount of P45,000.00 to their
own personal use and benefit, to the damage and prejudice of the said EDGARDO V. DELA CAZA
in the aforesaid amount of P45,000.00, Philippine currency.

CONTRARY TO LAW.xxiv[4]
When arraigned on January 19, 2004, accused-appellant Gallo entered a plea of not guilty to all charges.
On March 3, 2004, the pre-trial was terminated and trial ensued, thereafter.
During the trial, the prosecution presented as their witnesses, Armando Albines Roa, the Philippine
Overseas Employment Administration (POEA) representative and private complainants Dela Caza, Guanteno and
Sare. On the other hand, the defense presented as its witnesses, accused-appellant Gallo, Pacardo and Manta.
Version of the Prosecution
On May 22, 2001, Dela Caza was introduced by Eleanor Panuncio to accused-appellant Gallo, Pacardo,
Manta, Mardeolyn, Lulu Mendanes, Yeo Sin Ung and another Korean national at the office of MPM International
Recruitment and Promotion Agency (MPM Agency) located in Malate, Manila.
Dela Caza was told that Mardeolyn was the President of MPM Agency, while Nelmar Martir was one of
the incorporators. Also, that Marcelino Martir, Norman Martir, Nelson Martir and Ma. Cecilia Ramos were its
board members. Lulu Mendanes acted as the cashier and accountant, while Pacardo acted as the agencys
employee who was in charge of the records of the applicants. Manta, on the other hand, was also an employee
who was tasked to deliver documents to the Korean embassy.
Accused-appellant Gallo then introduced himself as a relative of Mardeolyn and informed Dela Caza that
the agency was able to send many workers abroad. Together with Pacardo and Manta, he also told Dela Caza
about the placement fee of One Hundred Fifty Thousand Pesos (PhP 150,000) with a down payment of Forty-Five
Thousand Pesos (PhP 45,000) and the balance to be paid through salary deduction.
Dela Caza, together with the other applicants, were briefed by Mardeolyn about the processing of their
application papers for job placement in Korea as a factory worker and their possible salary. Accused Yeo Sin Ung
also gave a briefing about the business and what to expect from the company and the salary.
With accused-appellants assurance that many workers have been sent abroad, as well as the presence of
the two (2) Korean nationals and upon being shown the visas procured for the deployed workers, Dela Caza was
convinced to part with his money. Thus, on May 29, 2001, he paid Forty-Five Thousand Pesos (PhP 45,000) to MPM
Agency through accused-appellant Gallo who, while in the presence of Pacardo, Manta and Mardeolyn, issued and
signed Official Receipt No. 401.
Two (2) weeks after paying MPM Agency, Dela Caza went back to the agencys office in Malate, Manila
only to discover that the office had moved to a new location at Batangas Street, Brgy. San Isidro, Makati. He
proceeded to the new address and found out that the agency was renamed to New Filipino Manpower
Development & Services, Inc. (New Filipino). At the new office, he talked to Pacardo, Manta, Mardeolyn, Lulu
Mendanes and accused-appellant Gallo. He was informed that the transfer was done for easy accessibility to
clients and for the purpose of changing the name of the agency.
Dela Caza decided to withdraw his application and recover the amount he paid but Mardeolyn, Pacardo,
Manta and Lulu Mendanes talked him out from pursuing his decision. On the other hand, accused-appellant Gallo
even denied any knowledge about the money.
After two (2) more months of waiting in vain to be deployed, Dela Caza and the other applicants decided
to take action. The first attempt was unsuccessful because the agency again moved to another place. However,
with the help of the Office of Ambassador Seeres and the Western Police District, they were able to locate the new
address at 500 Prudential Building, Carriedo, Manila. The agency explained that it had to move in order to separate
those who are applying as entertainers from those applying as factory workers. Accused-appellant Gallo, together
with Pacardo and Manta, were then arrested.
The testimony of prosecution witness Armando Albines Roa, a POEA employee, was dispensed with after
the prosecution and defense stipulated and admitted to the existence of the following documents:
1.
Certification issued by Felicitas Q. Bay, Director II, Licensing Branch of the POEA to the
effect that New Filipino Manpower Development & Services, Inc., with office address at 1256
Batangas St., Brgy. San Isidro, Makati City, was a licensed landbased agency whose license
expired on December 10, 2001 and was delisted from the roster of licensed agencies on
December 14, 2001. It further certified that Fides J. Pacardo was the agencys Recruitment
Officer;

2.

Certification issued by Felicitas Q. Bay of the POEA to the effect that MPM International
Recruitment and Promotion is not licensed by the POEA to recruit workers for overseas
employment;
3. Certified copy of POEA Memorandum Circular No. 14, Series of 1999 regarding placement
fee ceiling for landbased workers.
4. Certified copy of POEA Memorandum Circular No. 09, Series of 1998 on the placement fee
ceiling for Taiwan and Korean markets, and
5. Certified copy of POEA Governing Board Resolution No. 02, series of 1998.
Version of the Defense
For his defense, accused-appellant denied having any part in the recruitment of Dela Caza. In fact, he
testified that he also applied with MPM Agency for deployment to Korea as a factory worker. According to him, he
gave his application directly with Mardeolyn because she was his town mate and he was allowed to pay only Ten
Thousand Pesos (PhP 10,000) as processing fee. Further, in order to facilitate the processing of his papers, he
agreed to perform some tasks for the agency, such as taking photographs of the visa and passport of applicants,
running errands and performing such other tasks assigned to him, without salary except for some allowance. He
said that he only saw Dela Caza one or twice at the agencys office when he applied for work abroad. Lastly, that he
was also promised deployment abroad but it never materialized.
Ruling of the Trial Court
On March 15, 2007, the RTC rendered its Decision convicting the accused of syndicated illegal recruitment
and estafa. The dispositive portion reads:
WHEREFORE, judgment is hereby rendered as follows:
I.
Accused FIDES PACARDO y JUNGO and PILAR MANTA y DUNGO are hereby
ACQUITTED of the crimes charged in Criminal Cases Nos. 02-206293, 02206297, 02-206300 and 02-206308;
II.
Accused RODOLFO GALLO y GADOT is found guilty beyond reasonable doubt
in Criminal Case No. 02-206293 of the crime of Illegal Recruitment committed
by a syndicate and is hereby sentenced to suffer the penalty of life
imprisonment and to pay a fine of ONE MILLION (Php1,000,000.00) PESOS. He
is also ordered to indemnify EDGARDO DELA CAZA of the sum of FORTY-FIVE
THOUSAND (Php45,000.00) PESOS with legal interest from the filing of the
information on September 18, 2002 until fully paid.
III.
Accused RODOLFO GALLO y GADOT in Criminal Case No. 02-206297 is
likewise found guilty and is hereby sentenced to suffer the indeterminate
penalty of FOUR (4) years of prision correccional as minimum to NINE (9) years
of prision mayor as maximum.
IV.
Accused RODOLFO GALLO y GADOT is hereby ACQUITTED of the crime
charged in Criminal Cases Nos. 02-206300 and 02-206308.
Let alias warrants for the arrest of the other accused be issued anew in all the criminal
cases. Pending their arrest, the cases are sent to the archives.
The immediate release of accused Fides Pacardo and Pilar Manta is hereby ordered
unless detained for other lawful cause or charge.
SO ORDERED.xxiv[5]
Ruling of the Appellate Court
On appeal, the CA, in its Decision dated December 24, 2008, disposed of the case as follows:
WHEREFORE, the appealed Decision of the Regional Trial Court of Manila, Branch 30, in
Criminal Cases Nos. 02-206293 and 02-206297, dated March 15, 2007, is AFFIRMED with the
MODIFICATION that in Criminal Case No. 02-206297, for estafa, appellant is sentenced to four (4)
years of prision correccional to ten (10) years of prision mayor.
SO ORDERED.xxiv[6]

The CA held the totality of the prosecutions evidence showed that the accused-appellant, together with
others, engaged in the recruitment of Dela Caza. His actions and representations to Dela Caza can hardly be
construed as the actions of a mere errand boy.
As determined by the appellate court, the offense is considered economic sabotage having been
committed by more than three (3) persons, namely, accused-appellant Gallo, Mardeolyn, Eleonor Panuncio and
Yeo Sin Ung. More importantly, a personal found guilty of illegal recruitment may also be convicted of
estafa.xxiv[7] The same evidence proving accused-appellants commission of the crime of illegal recruitment in
large scale also establishes his liability for estafa under paragragh 2(a) of Article 315 of the Revised Penal Code
(RPC).
On January 15, 2009, the accused-appellant filed a timely appeal before this Court.
The Issues
Accused-appellant interposes in the present appeal the following assignment of errors:
I
The court a quo gravely erred in finding the accused-appellant guilty of illegal recruitment
committed by a syndicate despite the failure of the prosecution to prove the same beyond
reasonable doubt.
II
The court a quo gravely erred in finding the accused-appellant guilty of estafa despite the failure
of the prosecution to prove the same beyond reasonable doubt.

Our Ruling
The appeal has no merit.
Evidence supports conviction of the crime of
Syndicated Illegal Recruitment
Accused-appellant avers that he cannot be held criminally liable for illegal recruitment because he was
neither an officer nor an employee of the recruitment agency. He alleges that the trial court erred in adopting the
asseveration of the private complainant that he was indeed an employee because such was not duly supported by
competent evidence. According to him, even assuming that he was an employee, such cannot warrant his outright
conviction sans evidence that he acted in conspiracy with the officers of the agency.
We disagree.
To commit syndicated illegal recruitment, three elements must be established: (1) the offender
undertakes either any activity within the meaning of recruitment and placement defined under Article 13(b), or
any of the prohibited practices enumerated under Art. 34 of the Labor Code; (2) he has no valid license or
authority required by law to enable one to lawfully engage in recruitment and placement of workers;xxiv[8] and (3)
the illegal recruitment is committed by a group of three (3) or more persons conspiring or confederating with one
another.xxiv[9] When illegal recruitment is committed by a syndicate or in large scale, i.e., if it is committed against
three (3) or more persons individually or as a group, it is considered an offense involving economic
sabotage.xxiv[10]
Under Art. 13(b) of the Labor Code, 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.
After a thorough review of the records, we believe that the prosecution was able to establish the
elements of the offense sufficiently. The evidence readily reveals that MPM Agency was never licensed by the
POEA to recruit workers for overseas employment.

Even with a license, however, illegal recruitment could still be committed under Section 6 of Republic Act
No. 8042 (R.A. 8042), otherwise known as the Migrants and Overseas Filipinos Act of 1995, viz:
Sec. 6. Definition. For purposes of this Act, illegal recruitment shall mean 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-licensee or non-holder of authority contemplated
under Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as the Labor
Code of the Philippines: Provided, That any such non-licensee or non-holder 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 following act, whether committed by any person, whether
a non-licensee, non-holder, licensee or holder of authority:
(a) To charge or accept directly or indirectly any amount greater than that specified in
the schedule of allowable fees prescribed by the Secretary of Labor and
Employment, or to make a worker pay any amount greater than that actually
received by him as a loan or advance;
xxxx
(l) Failure to actually deploy without valid reason as determined by the Department of
Labor and Employment; and
(m) Failure to reimburse expenses incurred by the worker in connection with his
documentation and processing for purposes of deployment and processing for
purposes of deployment, in cases where the deployment does not actually take
place without the workers fault. Illegal recruitment when committed by a syndicate
or in large scale shall be considered an offense involving economic sabotage.
Illegal recruitment is deemed committed by a syndicate if carried out by a group of
three (3) or more persons conspiring or confederating with one another. It is deemed committed
in large scale if committed against three (3) or more persons individually or as a group.
The persons criminally liable for the above offenses are the principals, accomplices and
accessories. In case of juridical persons, the officers having control, management or direction of
their business shall be liable.
In the instant case, accused-appellant committed the acts enumerated in Sec. 6 of R.A. 8042. Testimonial
evidence presented by the prosecution clearly shows that, in consideration of a promise of foreign employment,
accused-appellant received the amount of Php 45,000.00 from Dela Caza. When accused-appellant made
misrepresentations concerning the agencys purported power and authority to recruit for overseas employment,
and in the process, collected money in the guise of placement fees, the former clearly committed acts constitutive
of illegal recruitment.xxiv[11] Such acts were accurately described in the testimony of prosecution witness, Dela
Caza, to wit:
PROS. MAGABLIN
Q:
How about this Rodolfo Gallo?
A:
He was the one who received my money.
Q:
Aside from receiving your money, was there any other representations or acts
made by Rodolfo Gallo?
A:
He introduced himself to me as relative of Mardeolyn Martir and he even
intimated to me that their agency has sent so many workers abroad.
xxxx
PROS. MAGABLIN
Q:
Mr. Witness, as you claimed you tried to withdraw your application at the
agency. Was there any instance that you were able to talk to Fides Pacardo,
Rodolfo Gallo and Pilar Manta?
A:
Yes, maam.
Q:
What was the conversation that transpired among you before you demanded
the return of your money and documents?

A:

When I tried to withdraw my application as well as my money, Mr. Gallo told

me I know nothing about your money while Pilar Manta and Fides Pacardo told
me, why should I withdraw my application and my money when I was about to
be [deployed] or I was about to leave.
xxxx
Q:
And what transpired at that office after this Panuncio introduced you to those
persons whom you just mentioned?
A:
The three of them including Rodolfo Gallo told me that the placement fee in
that agency is Php 150,000.00 and then I should deposit the amount of Php
45,000.00. After I have deposited said amount, I would just wait for few days
xxxx
Q:
They were the one (sic) who told you that you have to pay Php 45,000.00 for
deposit only?
A:
Yes, maam, I was told by them to deposit Php 45,000.00 and then I would pay
the remaining balance of Php105,000.00, payment of it would be through
salary deduction.
Q:
That is for what Mr. Witness again?
A:
For placement fee.
Q:
Now did you believe to (sic) them?
A:
Yes, maam.
Q:
Why, why did you believe?
A:
Because of the presence of the two Korean nationals and they keep on telling
me that they have sent abroad several workers and they even showed visas of
the records that they have already deployed abroad.
Q:
Aside from that, was there any other representations which have been made
upon you or make you believe that they can deploy you?
A:
At first I was adamant but they told me If you do not want to believe us, then
we could do nothing. But once they showed me the [visas] of the people whom
they have deployed abroad, that was the time I believe them.
Q:
So after believing on the representations, what did you do next Mr. Witness?
A:
That was the time that I decided to give the money.
xxxx
PROS. MAGABLIN
Q:
Do you have proof that you gave the money?
A:
Yes, maam.
Q:
Where is your proof that you gave the money?
A:
I have it here.
PROS. MAGABLIN:
Witness is producing to this court a Receipt dated May 28, 2001 in the amount of
Php45,000.00 which for purposes of record Your Honor, may I request that the same be
marked in the evidence as our Exhibit F.
xxxx
PROS. MAGABLIN
Q:
There appears a signature appearing at the left bottom portion of this receipt.
Do you know whose signature is this?
A:
Yes, maam, signature of Rodolfo Gallo.
PROS. MAGABLIN
Q:
Why do you say that that is his signature?
A:
Rodolfo Gallos signature Your Honor because he was the one who received the
money and he was the one who filled up this O.R. and while he was doing it, he
was flanked by Fides Pacardo, Pilar Manta and Mardeolyn Martir.

Q:
A:

xxxx
So it was Gallo who received your money?
Yes, maam.

PROS. MAGABLIN
Q:
And after that, what did this Gallo do after he received your money?
A:
They told me maam just to call up and make a follow up with our agency.
xxxx
Q:
Now Mr. Witness, after you gave your money to the accused, what happened
with the application, with the promise of employment that he promised?
A:
Two (2) weeks after giving them the money, they moved to a new office in
Makati, Brgy. San Isidro.
xxxx
Q:
And were they able to deploy you as promised by them?
A:
No, maam, they were not able to send us abroad.xxiv[12]
Essentially, Dela Caza appeared very firm and consistent in positively identifying accused-appellant as one
of those who induced him and the other applicants to part with their money. His testimony showed that accusedappellant made false misrepresentations and promises in assuring them that after they paid the placement fee,
jobs in Korea as factory workers were waiting for them and that they would be deployed soon. In fact, Dela Caza
personally talked to accused-appellant and gave him the money and saw him sign and issue an official receipt as
proof of his payment. Without a doubt, accused-appellants actions constituted illegal recruitment.
Additionally, accused-appellant cannot argue that the trial court erred in finding that he was indeed an
employee of the recruitment agency. On the contrary, his active participation in the illegal recruitment is
unmistakable. The fact that he was the one who issued and signed the official receipt belies his profession of
innocence.
This Court likewise finds the existence of a conspiracy between the accused-appellant and the other
persons in the agency who are currently at large, resulting in the commission of the crime of syndicated illegal
recruitment.
In this case, it cannot be denied that the accused-appellent together with Mardeolyn and the rest of the
officers and employees of MPM Agency participated in a network of deception. Verily, the active involvement of
each in the recruitment scam was directed at one single purpose to divest complainants with their money on the
pretext of guaranteed employment abroad. The prosecution evidence shows that complainants were briefed by
Mardeolyn about the processing of their papers for a possible job opportunity in Korea, as well as their possible
salary. Likewise, Yeo Sin Ung, a Korean national, gave a briefing about the business and what to expect from the
company. Then, here comes accused-appellant who introduced himself as Mardeolyns relative and specifically told
Dela Caza of the fact that the agency was able to send many workers abroad. Dela Caza was even showed several
workers visas who were already allegedly deployed abroad. Later on, accused-appellant signed and issued an
official receipt acknowledging the down payment of Dela Caza. Without a doubt, the nature and extent of the
actions of accused-appellant, as well as with the other persons in MPM Agency clearly show unity of action
towards a common undertaking. Hence, conspiracy is evidently present.
In People v. Gamboa,xxiv[13] this Court discussed the nature of conspiracy in the context of illegal
recruitment, viz:

Conspiracy to defraud aspiring overseas contract workers was evident from the acts of
the malefactors whose conduct before, during and after the commission of the crime clearly
indicated that they were one in purpose and united in its execution. Direct proof of previous
agreement to commit a crime is not necessary as it may be deduced from the mode and manner
in which the offense was perpetrated or inferred from the acts of the accused pointing to a joint

purpose and design, concerted action and community of interest. As such, all the accused,
including accused-appellant, are equally guilty of the crime of illegal recruitment since in a
conspiracy the act of one is the act of all.

To reiterate, in establishing conspiracy, it is not essential that there be actual proof that all the
conspirators took a direct part in every act. It is sufficient that they acted in concert pursuant to the same
objective.xxiv[14]
Estafa
The prosecution likewise established that accused-appellant is guilty of the crime of estafa as defined
under Article 315 paragraph 2(a) of the Revised Penal Code, viz:
Art. 315. Swindling (estafa). Any person who shall defraud another by any means
mentioned hereinbelow
xxxx
2. By means of any of the following false pretenses or fraudulent acts executed prior to
or simultaneously with the commission of the fraud:
(a) By using fictitious name, or falsely pretending to possess power, influence,
qualifications, property, credit, agency, business or imaginary transactions; or by
means of other similar deceits.
The elements of estafa in general are: (1) that the accused defrauded another (a) by abuse of confidence,
or (b) by means of deceit; and (2) that damage or prejudice capable of pecuniary estimation is caused to the
offended party or third person.xxiv[15] Deceit is the false representation of a matter of fact, whether by words or
conduct, by false or misleading allegations, or by concealment of that which should have been disclosed; and
which deceives or is intended to deceive another so that he shall act upon it, to his legal injury.
All these elements are present in the instant case: the accused-appellant, together with the other accused
at large, deceived the complainants into believing that the agency had the power and capability to send them
abroad for employment; that there were available jobs for them in Korea as factory workers; that by reason or on
the strength of such assurance, the complainants parted with their money in payment of the placement fees; that
after receiving the money, accused-appellant and his co-accused went into hiding by changing their office locations
without informing complainants; and that complainants were never deployed abroad. As all these representations
of the accused-appellant proved false, paragraph 2(a), Article 315 of the Revised Penal Code is thus applicable.
Defense of Denial Cannot Prevail
over Positive Identification

Indubitably, accused-appellants denial of the crimes charged crumbles in the face of the positive
identification made by Dela Caza and his co-complainants as one of the perpetrators of the crimes charged. As
enunciated by this Court in People v. Abolidor,xxiv[16] [p]ositive identification where categorical and consistent
and not attended by any showing of ill motive on the part of the eyewitnesses on the matter prevails over alibi and
denial.
The defense has miserably failed to show any evidence of ill motive on the part of the prosecution
witnesses as to falsely testify against him.
Therefore, between the categorical statements of the prosecution witnesses, on the one hand, and bare
denials of the accused, on the other hand, the former must prevail.xxiv[17]
Moreover, this Court accords the trial courts findings with the probative weight it deserves in the absence
of any compelling reason to discredit the same. It is a fundamental judicial dictum that the findings of fact of the
trial court are not disturbed on appeal except when it overlooked, misunderstood or misapplied some facts or
circumstances of weight and substance that would have materially affected the outcome of the case. We find that
the trial court did not err in convicting the accused-appellant.

WHEREFORE, the appeal is DENIED for failure to sufficiently show reversible error in the assailed decision.
The Decision dated December 24, 2008 of the CA in CA-G.R. CR-H.C. No. 02764 is AFFIRMED.

PEOPLE OF THE PHILIPPINES,

Plaintiff-Appellee,

G.R. No. 173198

Present:
- versus -

DOLORES OCDEN,
Accused-Appellant.

CORONA, C.J.,
Chairperson,
VELASCO, JR.,
LEONARDO-DE CASTRO,
PERALTA,* and
PEREZ, JJ.

Promulgated:

June 1, 2011
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

LEONARDO-DE CASTRO, J.:

For Our consideration is an appeal from the Decisionxxiv[1] dated April 21, 2006 of the Court of Appeals in
CA-G.R. CR.-H.C. No. 00044, which affirmed with modification the Decisionxxiv[2] dated July 2, 2001 of the
Regional Trial Court (RTC), Baguio City, Branch 60, in Criminal Case No. 16315-R. The RTC found accused-appellant
Dolores Ocden (Ocden) guilty of illegal recruitment in large scale, as defined and penalized under Article 13(b), in
relation to Articles 38(b), 34, and 39 of Presidential Decree No. 442, otherwise known as the New Labor Code of
the Philippines, as amended, in Criminal Case No. 16315-R; and of the crime of estafa under paragraph 2(a), Article
315 of the Revised Penal Code, in Criminal Case Nos. 16316-R, 16318-R, and 16964-R.xxiv[3] The Court of Appeals
affirmed Ocdens conviction in all four cases, but modified the penalties imposed in Criminal Case Nos. 16316-R,
16318-R, and 16964-R,
The Amended Informationxxiv[4] for illegal recruitment in large scale in Criminal Case No. 16315-R reads:
That during the period from May to December, 1998, in the City of Baguio, Philippines,
and within the jurisdiction of this Honorable Court, the above-named accused, did then and
there willfully, unlawfully and feloniously for a fee, recruit and promise employment as factory
workers in Italy to more than three (3) persons including, but not limited to the following:
JEFFRIES C. GOLIDAN, HOWARD C. GOLIDAN, KAREN M. SIMEON, JEAN S. MAXIMO, NORMA
PEDRO, MARYLYN MANA-A, RIZALINA FERRER, and MILAN DARING without said accused having
first secured the necessary license or authority from the Department of Labor and Employment.

Ocden was originally charged with six counts of estafa in Criminal Case Nos. 16316-R, 16318-R, 16350-R,
16369-R, 16964-R, and 16966-R.
The Information in Criminal Case No. 16316-R states:
That sometime during the period from October to December, 1998 in the City of Baguio,
Philippines and within the jurisdiction of this Honorable Court, the above-named accused, did
then and there willfully, unlawfully and feloniously defraud JEFFRIES C. GOLIDAN, by way of false
pretenses, which are executed prior to or simultaneous with the commission of the fraud, as
follows, to wit: the accused knowing fully well that she is not (sic) authorized job recruiter for
persons intending to secure work abroad convinced said Jeffries C. Golidan and pretended that
she could secure a job for him/her abroad, for and in consideration of the sum of P70,000.00
when in truth and in fact they could not; the said Jeffries C. Golidan deceived and convinced by
the false pretenses employed by the accused parted away the total sum of P70,000.00, in favor
of the accused, to the damage and prejudice of the said Jeffries C. Golidan in the aforementioned
amount of SEVENTY THOUSAND PESOS (P70,000,00), Philippine Currency.xxiv[5]

The Informations in the five other cases for estafa contain substantially the same allegations as the one
above-quoted, except for the private complainants names, the date of commission of the offense, and the
amounts defrauded, to wit:
Case No.
Complainant

Name of the
Commission of Defrauded

Date of Amount

Private

the Offense
16318-R

Howard C. Golidan

Sometime during the

period from October
to December 1998

P70,000.00

16350-R

Norma Pedro

Sometime in May, 1998

P65,000.00

16369-R

Milan O. Daring

Sometime during the

period from November
13, 1998 to December
10, 1998

P70.000.00

16964-R

Rizalina Ferrer

Sometime in September

16966-R

Marilyn Mana-a

Sometime in September P70,000.00xxiv[6]

1998

P70,000.00

All seven cases against Ocden were consolidated on July 31, 2000 and were tried jointly after Ocden
pleaded not guilty.
The prosecution presented three witnesses namely: Marilyn Mana-a (Mana-a) and Rizalina Ferrer (Ferrer),
complainants; and Julia Golidan (Golidan), mother of complainants Jeffries and Howard Golidan.
Mana-a testified that sometime in the second week of August 1998, she and Isabel Dao-as (Dao-as) went
to Ocdens house in Baguio City to apply for work as factory workers in Italy with monthly salaries of US$1,200.00.

They were required by Ocden to submit their bio-data and passports, pay the placement fee of P70,000.00, and to
undergo medical examination.
Upon submitting her bio-data and passport, Mana-a paid Ocden P500.00 for her certificate of
employment and P20,000.00 as down payment for her placement fee. On September 8, 1998, Ocden accompanied
Mana-a and 20 other applicants to Zamora Medical Clinic in Manila for their medical examinations, for which each
of the applicants paid P3,000.00. Mana-a also paid to Ocden P22,000.00 as the second installment on her
placement fee. When Josephine Lawanag (Lawanag), Mana-as sister, withdrew her application, Lawanags
P15,000.00 placement fee, already paid to Ocden, was credited to Mana-a.xxiv[7]
Mana-a failed to complete her testimony, but the RTC considered the same as no motion to strike the said
testimony was filed.
Ferrer narrated that she and her daughter Jennilyn were interested to work overseas. About the second
week of September 1998, they approached Ocden through Fely Alipio (Alipio). Ocden showed Ferrer and Jennilyn a
copy of a job order from Italy for factory workers who could earn as much as $90,000.00 to $100,000.00.xxiv[8] In
the first week of October 1998, Ferrer and Jennilyn decided to apply for work, so they submitted their passports
and pictures to Ocden. Ferrer also went to Manila for medical examination, for which she spent P3,500.00. Ferrer
paid to Ocden on November 20, 1998 the initial amount of P20,000.00, and on December 8, 1998 the balance of
her and Jennilyns placement fees. All in all, Ferrer paid Ocden P140,000.00, as evidenced by the receipts issued by
Ocden.xxiv[9]
Ferrer, Jennilyn, and Alipio were supposed to be included in the first batch of workers to be sent to Italy.
Their flight was scheduled on December 10, 1998. In preparation for their flight to Italy, the three proceeded to
Manila. In Manila, they were introduced by Ocden to Erlinda Ramos (Ramos). Ocden and Ramos then accompanied
Ferrer, Jennilyn, and Alipio to the airport where they took a flight to Zamboanga. Ocden explained to Ferrer,
Jennilyn, and Alipio that they would be transported to Malaysia where their visa application for Italy would be
processed.
Sensing that they were being fooled, Ferrer and Jennilyn decided to get a refund of their money, but
Ocden was nowhere to be found. Ferrer would later learn from the Baguio office of the Philippine Overseas
Employment Administration (POEA) that Ocden was not a licensed recruiter.
Expecting a job overseas, Ferrer took a leave of absence from her work. Thus, she lost income amounting
to P17,700.00, equivalent to her salary for one and a half months. She also spent P30,000.00 for transportation
and food expenses.xxiv[10]
According to Golidan, the prosecutions third witness, sometime in October 1998, she inquired from
Ocden about the latters overseas recruitment. Ocden informed Golidan that the placement fee was P70,000.00 for
each applicant, that the accepted applicants would be sent by batches overseas, and that priority would be given
to those who paid their placement fees early. On October 30, 1998, Golidan brought her sons, Jeffries and Howard,
to Ocden. On the same date, Jeffries and Howard handed over to Ocden their passports and P40,000.00 as down
payment on their placement fees. On December 10, 1998, Jeffries and Howard paid the balance of their placement
fees amounting to P100,000.00. Ocden issued receipts for these two payments.xxiv[11] Ocden then informed
Golidan that the first batch of accepted applicants had already left, and that Jeffries would be included in the
second batch for deployment, while Howard in the third batch.
In anticipation of their deployment to Italy, Jeffries and Howard left for Manila on December 12, 1998 and
December 18, 1998, respectively. Through a telephone call, Jeffries informed Golidan that his flight to Italy was
scheduled on December 16, 1998. However, Golidan was surprised to again receive a telephone call from Jeffries
saying that his flight to Italy was delayed due to insufficiency of funds, and that Ocden went back to Baguio City to

look for additional funds. When Golidan went to see Ocden, Ocden was about to leave for Manila so she could be
there in time for the scheduled flights of Jeffries and Howard.
On December 19, 1998, Golidan received another telephone call from Jeffries who was in Zamboanga
with the other applicants. Jeffries informed Golidan that he was stranded in Zamboanga because Ramos did not
give him his passport. Ramos was the one who briefed the overseas job applicants in Baguio City sometime in
November 1998. Jeffries instructed Golidan to ask Ocdens help in looking for Ramos. Golidan, however, could not
find Ocden in Baguio City.
On December 21, 1998, Golidan, with the other applicants, Mana-a and Dao-as, went to Manila to meet
Ocden. When Golidan asked why Jeffries was in Zamboanga, Ocden replied that it would be easier for Jeffries and
the other applicants to acquire their visas to Italy in Zamboanga. Ocden was also able to contact Ramos, who
assured Golidan that Jeffries would be able to get his passport. When Golidan went back home to Baguio City, she
learned through a telephone call from Jeffries that Howard was now likewise stranded in Zamboanga.
By January 1999, Jeffries and Howard were still in Zamboanga. Jeffries refused to accede to Golidans
prodding for him and Howard to go home, saying that the recruiters were already working out the release of the
funds for the applicants to get to Italy. Golidan went to Ocden, and the latter told her not to worry as her sons
would already be flying to Italy because the same factory owner in Italy, looking for workers, undertook to
shoulder the applicants travel expenses. Yet, Jeffries called Golidan once more telling her that he and the other
applicants were still in Zamboanga.
Golidan went to Ocdens residence. This time, Ocdens husband gave Golidan P23,000.00 which the latter
could use to fetch the applicants, including Jeffries and Howard, who were stranded in Zamboanga. Golidan
traveled again to Manila with Mana-a and Dao-as. When they saw each other, Golidan informed Ocden regarding
the P23,000.00 which the latters husband gave to her. Ocden begged Golidan to give her the money because she
needed it badly. Of the P23,000.00, Golidan retained P10,000.00, Dao-as received P3,000.00, and Ocden got the
rest. Jeffries was able to return to Manila on January 16, 1999. Howard and five other applicants, accompanied by
Ocden, also arrived in Manila five days later.
Thereafter, Golidan and her sons went to Ocdens residence to ask for a refund of the money they had
paid to Ocden. Ocden was able to return only P50,000.00. Thus, out of the total amount of P140,000.00 Golidan
and her sons paid to Ocden, they were only able to get back the sum of P60,000.00. After all that had happened,
Golidan and her sons went to the Baguio office of the POEA, where they discovered that Ocden was not a licensed
recruiter.xxiv[12]
The defense presented the testimony of Ocden herself.
Ocden denied recruiting private complainants and claimed that she was also an applicant for an overseas
job in Italy, just like them. Ocden identified Ramos as the recruiter.
Ocden recounted that she met Ramos at a seminar held in St. Theresas Compound, Navy Base, Baguio
City, sometime in June 1998. The seminar was arranged by Aida Comila (Comila), Ramoss sub-agent. The seminar
was attended by about 60 applicants, including Golidan. Ramos explained how one could apply as worker in a stuff
toys factory in Italy. After the seminar, Comila introduced Ocden to Ramos. Ocden decided to apply for the
overseas job, so she gave her passport and pictures to Ramos. Ocden also underwent medical examination at
Zamora Medical Clinic in Manila, and completely submitted the required documents to Ramos in September 1998.
After the seminar, many people went to Ocdens house to inquire about the jobs available in Italy. Since
most of these people did not attend the seminar, Ocden asked Ramos to conduct a seminar at Ocdens house. Two
seminars were held at Ocdens house, one in September and another in December 1998. After said seminars,

Ramos designated Ocden as leader of the applicants. As such, Ocden received her co-applicants applications and
documents; accompanied her co-applicants to Manila for medical examination because she knew the location of
Zamora Medical Clinic; and accepted placement fees in the amount of P70,000.00 each from Mana-a and Ferrer
and from Golidan, the amount of P140,000.00 (for Jeffries and Howard).
Ramos instructed Ocden that the applicants should each pay P250,000.00 and if the applicants could not
pay the full amount, they would have to pay the balance through salary deductions once they start working in
Italy. Ocden herself paid Ramos P50,000.00 as placement fee and executed a promissory note in Ramoss favor for
the balance, just like any other applicant who failed to pay the full amount. Ocden went to Malaysia with Ramoss
male friend but she failed to get her visa for Italy.
Ocden denied deceiving Mana-a and Ferrer. Ocden alleged that she turned over to Ramos the money
Mana-a and Ferrer gave her, although she did not indicate in the receipts she issued that she received the money
for and on behalf of Ramos.
Ocden pointed out that she and some of her co-applicants already filed a complaint against Ramos before
the National Bureau of Investigation (NBI) offices in Zamboanga City and Manila.xxiv[13]
On July 2, 2001, the RTC rendered a Decision finding Ocden guilty beyond reasonable doubt of the crimes
of illegal recruitment in large scale (Criminal Case No. 16315-R) and three counts of estafa (Criminal Case Nos.
16316-R, 16318-R, and 16964-R). The dispositive portion of said decision reads:
WHEREFORE, premises considered, judgment is hereby rendered as follows:
1.
In Criminal Case No. 16315-R, the Court finds the accused, DOLORES OCDEN,
GUILTY beyond reasonable doubt of the crime of Illegal Recruitment committed in large scale as
defined and penalized under Article 13(b) in relation to Article 38(b), 34 and 39 of the Labor Code
as amended by P.D. Nos. 1693, 1920, 2018 and R.A. 8042. She is hereby sentenced to suffer the
penalty of life imprisonment and to pay a fine of P100,000.00;
2.
In Criminal Case No. 16316-R, the Court finds the accused, DOLORES OCDEN,
GUILTY beyond reasonable doubt of the crime of estafa and sentences her to suffer an
indeterminate penalty ranging from two (2) years, eleven (11) months and ten (10) days of
prision correccional, as minimum, up to nine (9) years and nine (9) months of prision mayor, as
maximum, and to indemnify the complainant Jeffries Golidan the amount of P40,000.00;
3.
In Criminal Case No. 16318-R, the Court finds the accused, DOLORES OCDEN,
GUILTY beyond reasonable doubt of the crime of estafa and sentences her to suffer an
indeterminate penalty ranging from two (2) years, eleven (11) months and ten (10) days of
prision correccional, as minimum, up to nine (9) years and nine (9) months of prision mayor, as
maximum, and to indemnify Howard Golidan the amount of P40,000.00;
4. In Criminal Case No. 16350-R, the Court finds the accused, DOLORES OCDEN, NOT
GUILTY of the crime of estafa for lack of evidence and a verdict of acquittal is entered in her
favor;
5. In Criminal Case No. 16369-R, the Court finds the accused, DOLORES OCDEN, NOT
GUILTY of the crime of estafa for lack of evidence and a verdict of acquittal is hereby entered in
her favor;

6.
In Criminal Case No. 16964-R, the Court finds the accused, DOLORES OCDEN,
GUILTY beyond reasonable doubt of the crime of estafa and sentences her to suffer an
indeterminate penalty of Four (4) years and Two (2) months of prision correccional, as minimum,
up to Twelve (12) years and Nine (9) months of reclusion temporal, as maximum, and to
indemnify Rizalina Ferrer the amount of P70,000.00; and
7. In Criminal Case No. 16966-R, the Court finds the accused, DOLORES OCDEN, NOT
GUILTY of the crime of estafa for insufficiency of evidence and a verdict of acquittal is hereby
entered in her favor.

In the service of her sentence, the provisions of Article 70 of the Penal Code shall be
observed.xxiv[14]

Aggrieved by the above decision, Ocden filed with the RTC a Notice of Appeal on August 15, 2001.xxiv[15]
The RTC erroneously sent the records of the cases to the Court of Appeals, which, in turn, correctly forwarded the
said records to us.
In our Resolutionxxiv[16] dated May 6, 2002, we accepted the appeal and required the parties to file their
respective briefs. In the same resolution, we directed the Superintendent of the Correctional Institute for Women
to confirm Ocdens detention thereat.
Ocden filed her Appellant's Brief on August 15, 2003,xxiv[17] while the People, through the Office of the
Solicitor General, filed its Appellee's Brief on January 5, 2004.xxiv[18]
Pursuant to our ruling in People v. Mateo,xxiv[19] we transferred Ocdens appeal to the Court of Appeals.
On April 21, 2006, the appellate court promulgated its Decision, affirming Ocdens conviction but modifying the
penalties imposed upon her for the three counts of estafa, viz:

[T]he trial court erred in the imposition of accused-appellants penalty.

Pursuant to Article 315 of the RPC, the penalty for estafa is prision correccional in its
maximum period to prision mayor in its minimum period. If the amount of the fraud exceeds
P22,000.00, the penalty provided shall be imposed in its maximum period (6 years, 8 months and
21 days to 8 years), adding 1 year for each additional P10,000.00; but the total penalty which
may be imposed shall not exceed 20 years.
Criminal Case Nos. 16316-R and 16318-R involve the amount of P40,000.00 each.
Considering that P18,000.00 is the excess amount, only 1 year should be added to the penalty in
its maximum period or 9 years. Also, in Criminal Case No. 16964-R, the amount involved is
P70,000.00. Thus, the excess amount is P48,000.00 and only 4 years should be added to the
penalty in its maximum period.
WHEREFORE, the instant appeal is DISMISSED. The assailed Decision, dated 02 July
2001, of the Regional Trial Court (RTC) of Baguio City, Branch 60 is hereby AFFIRMED with the
following MODIFICATIONS:
1.

In Criminal Case No. 16316-R, accused-appellant is sentenced to 2 years, 11

months, and 10 days of prision correccional, as minimum to 9 years of prision
mayor, as maximum and to indemnify Jeffries Golidan the amount of P40,000.00;

2.

In Criminal Case No. 16318-R, accused-appellant is sentenced to 2 years, 11

months, and 10 days of prision correccional, as minimum to 9 years of prision
mayor, as maximum and to indemnify Howard Golidan the amount of P40,000.00;
and

3.

In Criminal Case No. 16964-R, accused-appellant is sentenced to 4 years and 2

months of prision correccional, as minimum to 12 years of prision mayor, as
maximum and to indemnify Rizalina Ferrer the amount of P70,000.00.xxiv[20]

Hence, this appeal, in which Ocden raised the following assignment of errors:
I
THE TRIAL COURT ERRED IN CONVICTING ACCUSED-APPELLANT OF ILLEGAL RECRUITMENT
COMMITTED IN LARGE SCALE ALTHOUGH THE CRIME WAS NOT PROVEN BEYOND REASONABLE
DOUBT.
II
THE TRIAL COURT ERRED IN CONVICTING ACCUSED-APPELLANT OF ESTAFA IN CRIMINAL CASES
NOS. 16316-R, 16318-R AND 16[9]64-R.xxiv[21]

After a thorough review of the records of the case, we find nothing on record that would justify a reversal
of Ocdens conviction.
Illegal recruitment in large scale

Ocden contends that the prosecution failed to prove beyond reasonable doubt that she is guilty of the
crime of illegal recruitment in large scale. Other than the bare allegations of the prosecution witnesses, no
evidence was adduced to prove that she was a non-licensee or non-holder of authority to lawfully engage in the
recruitment and placement of workers. No certification attesting to this fact was formally offered in evidence by
the prosecution.
Ocdens aforementioned contentions are without merit.
Article 13, paragraph (b) of the Labor Code defines and enumerates the acts which constitute recruitment
and placement:
(b) Recruitment and placement refers to any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring, or procuring workers, and includes referrals, contract services,
promising for 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.

The amendments to the Labor Code introduced by Republic Act No. 8042, otherwise known as the
Migrant Workers and Overseas Filipinos Act of 1995, broadened the concept of illegal recruitment and provided
stiffer penalties, especially for those that constitute economic sabotage, i.e., illegal recruitment in large scale and
illegal recruitment committed by a syndicate. Pertinent provisions of Republic Act No. 8042 are reproduced below:
SEC. 6. Definition. - For purposes of this Act, illegal recruitment shall mean 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-licensee or non-holder of authority contemplated
under Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as the Labor
Code of the Philippines: Provided, That any such non-licensee or non-holder 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 following acts, whether committed by any person,
whether a non-licensee, non-holder, licensee or holder of authority:
(a) To charge or accept directly or indirectly any amount greater than that specified in
the schedule of allowable fees prescribed by the Secretary of Labor and Employment, or to make
a worker pay any amount greater than that actually received by him as a loan or advance;
(b) To furnish or publish any false notice or information or document in relation to
recruitment or employment;
(c) To give any false notice, testimony, information or document or commit any act of
misrepresentation for the purpose of securing a license or authority under the Labor Code;
(d) To induce or attempt to induce a worker already employed to quit his employment
in order to offer him another unless the transfer is designed to liberate a worker from oppressive
terms and conditions of employment;
(e) To influence or attempt to influence any person or entity not to employ any worker
who has not applied for employment through his agency;
(f) To engage in the recruitment or placement of workers in jobs harmful to public
health or morality or to the dignity of the Republic of the Philippines;
(g) To obstruct or attempt to obstruct inspection by the Secretary of Labor and
Employment or by his duly authorized representative;
(h) To fail to submit reports on the status of employment, placement vacancies,
remittance of foreign exchange earnings, separation from jobs, departures and such other
matters or information as may be required by the Secretary of Labor and Employment;
(i) To substitute or alter to the prejudice of the worker, employment contracts approved
and verified by the Department of Labor and Employment from the time of actual signing thereof
by the parties up to and including the period of the expiration of the same without the approval
of the Department of Labor and Employment;
(j) For an officer or agent of a recruitment or placement agency to become an officer or
member of the Board of any corporation engaged in travel agency or to be engaged directly or
indirectly in the management of a travel agency;

(k) To withhold or deny travel documents from applicant workers before departure for
monetary or financial considerations other than those authorized under the Labor Code and its
implementing rules and regulations;
(l) Failure to actually deploy without valid reason as determined by the Department of
Labor and Employment; and
(m) Failure to reimburse expenses incurred by the worker in connection with his
documentation and processing for purposes of deployment, in cases where the deployment
does not actually take place without the worker's fault. Illegal recruitment when committed by
a syndicate or in large scale shall be considered an offense involving economic sabotage.
Illegal recruitment is deemed committed by a syndicate if carried out by a group of
three (3) or more persons conspiring or confederating with one another. It is deemed committed
in large scale if committed against three (3) or more persons individually or as a group.
xxxx
Sec. 7. Penalties.
(a) Any person found guilty of illegal recruitment shall suffer the penalty of
imprisonment of not less than six (6) years and one (1) day but not more than twelve (12) years
and a fine of Two hundred thousand pesos (P200,000.00) nor more than Five hundred thousand
pesos (P500,000.00).
(b) The penalty of life imprisonment and a fine of not less than Five hundred thousand
pesos (P500,000.00) nor more than One million pesos (P1,000,000.00) shall be imposed if illegal
recruitment constitutes economic sabotage as defined herein.
Provided, however, That the maximum penalty shall be imposed if the person illegally
recruited is less than eighteen (18) years of age or committed by a non-licensee or non-holder of
authority. (Emphasis ours.)

It is well-settled that to prove illegal recruitment, it must be shown that appellant gave complainants the
distinct impression that he had the power or ability to send complainants abroad for work such that the latter
were convinced to part with their money in order to be employed.xxiv[22] As testified to by Mana-a, Ferrer, and
Golidan, Ocden gave such an impression through the following acts: (1) Ocden informed Mana-a, Ferrer, and
Golidan about the job opportunity in Italy and the list of necessary requirements for application; (2) Ocden
required Mana-a, Ferrer, and Golidans sons, Jeffries and Howard, to attend the seminar conducted by Ramos at
Ocdens house in Baguio City; (3) Ocden received the job applications, pictures, bio-data, passports, and the
certificates of previous employment (which was also issued by Ocden upon payment of P500.00), of Mana-a,
Ferrer, and Golidans sons, Jeffries and Howard; (4) Ocden personally accompanied Mana-a, Ferrer, and Golidans
sons, Jeffries and Howard, for their medical examinations in Manila; (5) Ocden received money paid as placement
fees by Mana-a, Ferrer, and Golidans sons, Jeffries and Howard, and even issued receipts for the same; and (6)
Ocden assured Mana-a, Ferrer, and Golidans sons, Jeffries and Howard, that they would be deployed to Italy.
It is not necessary for the prosecution to present a certification that Ocden is a non-licensee or non-holder
of authority to lawfully engage in the recruitment and placement of workers. Section 6 of Republic Act No. 8042
enumerates particular acts which would constitute illegal recruitment whether committed by any person, whether
a non-licensee, non-holder, licensee or holder of authority. Among such acts, under Section 6(m) of Republic Act

No. 8042, is the [f]ailure to reimburse expenses incurred by the worker in connection with his documentation and
processing for purposes of deployment, in cases where the deployment does not actually take place without the
workers fault.
Since illegal recruitment under Section 6(m) can be committed by any person, even by a licensed
recruiter, a certification on whether Ocden had a license to recruit or not, is inconsequential. Ocden committed
illegal recruitment as described in said provision by receiving placement fees from Mana-a, Ferrer, and Golidans
two sons, Jeffries and Howard, evidenced by receipts Ocden herself issued; and failing to reimburse/refund to
Mana-a, Ferrer, and Golidans two sons the amounts they had paid when they were not able to leave for Italy,
through no fault of their own.
Ocden questions why it was Golidan who testified for private complainants Jeffries and Howard. Golidan
had no personal knowledge of the circumstances proving illegal recruitment and could not have testified on the
same. Also, Jeffries and Howard already executed an affidavit of desistance. All Golidan wants was a
reimbursement of the placement fees paid.

Contrary to Ocdens claims, Golidan had personal knowledge of Ocdens illegal recruitment activities, which
she could competently testify to. Golidan herself had personal dealings with Ocden as Golidan assisted her sons,
Jeffries and Howard, in completing the requirements for their overseas job applications, and later on, in getting
back home from Zamboanga where Jeffries and Howard were stranded, and in demanding a refund from Ocden of
the placement fees paid. That Golidan is seeking a reimbursement of the placement fees paid for the failed
deployment of her sons Jeffries and Howard strengthens, rather than weakens, the prosecutions case. Going back
to illegal recruitment under Section 6(m) of Republic Act No. 8042, failure to reimburse the expenses incurred by
the worker when deployment does not actually take place, without the workers fault, is illegal recruitment.
The affidavit of desistance purportedly executed by Jeffries and Howard does not exonerate Ocden from
criminal liability when the prosecution had successfully proved her guilt beyond reasonable doubt. In People v.
Romero,xxiv[23] we held that:
The fact that complainants Bernardo Salazar and Richard Quillope executed a Joint
Affidavit of Desistance does not serve to exculpate accused-appellant from criminal liability
insofar as the case for illegal recruitment is concerned since the Court looks with disfavor the
dropping of criminal complaints upon mere affidavit of desistance of the complainant,
particularly where the commission of the offense, as is in this case, is duly supported by
documentary evidence.
Generally, the Court attaches no persuasive value to affidavits of desistance, especially
when it is executed as an afterthought. It would be a dangerous rule for courts to reject
testimonies solemnly taken before the courts of justice simply because the witnesses who had
given them, later on, changed their mind for one reason or another, for such rule would make
solemn trial a mockery and place the investigation of truth at the mercy of unscrupulous witness.
Complainants Bernardo Salazar and Richard Quillope may have a change of heart insofar
as the offense wrought on their person is concerned when they executed their joint affidavit of
desistance but this will not affect the public prosecution of the offense itself. It is relevant to
note that the right of prosecution and punishment for a crime is one of the attributes that by a
natural law belongs to the sovereign power instinctly charged by the common will of the
members of society to look after, guard and defend the interests of the community, the
individual and social rights and the liberties of every citizen and the guaranty of the exercise of
his rights. This cardinal principle which states that to the State belongs the power to prosecute

and punish crimes should not be overlooked since a criminal offense is an outrage to the
sovereign State.xxiv[24]

In her bid to exculpate herself, Ocden asserts that she was also just an applicant for overseas
employment; and that she was receiving her co-applicants job applications and other requirements, and accepting
her co-applicants payments of placement fees, because she was designated as the applicants leader by Ramos, the
real recruiter.

Ocdens testimony is self-serving and uncorroborated. Ocdens denial of any illegal recruitment activity
cannot stand against the prosecution witnesses positive identification of her in court as the person who induced
them to part with their money upon the misrepresentation and false promise of deployment to Italy as factory
workers. Besides, despite several opportunities given to Ocden by the RTC, she failed to present Ramos, who
Ocden alleged to be the real recruiter and to whom she turned over the placement fees paid by her co-applicants.
Between the categorical statements of the prosecution witnesses, on the one hand, and the bare denial
of Ocden, on the other, the former must perforce prevail. An affirmative testimony is far stronger than a negative
testimony especially when the former comes from the mouth of a credible witness. Denial, same as an alibi, if not
substantiated by clear and convincing evidence, is negative and self-serving evidence undeserving of weight in law.
It is considered with suspicion and always received with caution, not only because it is inherently weak and
unreliable but also because it is easily fabricated and concocted.xxiv[25]
Moreover, in the absence of any evidence that the prosecution witnesses were motivated by improper
motives, the trial courts assessment of the credibility of the witnesses shall not be interfered with by this
Court.xxiv[26] It is a settled rule that factual findings of the trial courts, including their assessment of the witnesses
credibility, are entitled to great weight and respect by the Supreme Court, particularly when the Court of Appeals
affirmed such findings. After all, the trial court is in the best position to determine the value and weight of the
testimonies of witnesses. The absence of any showing that the trial court plainly overlooked certain facts of
substance and value that, if considered, might affect the result of the case, or that its assessment was arbitrary,
impels the Court to defer to the trial courts determination according credibility to the prosecution
evidence.xxiv[27]
Ocden further argues that the prosecution did not sufficiently establish that she illegally recruited at least
three persons, to constitute illegal recruitment on a large scale. Out of the victims named in the Information, only
Mana-a and Ferrer testified in court. Mana-a did not complete her testimony, depriving Ocden of the opportunity
to cross-examine her; and even if Mana-as testimony was not expunged from the record, it was insufficient to
prove illegal recruitment by Ocden. Although Ferrer testified that she and Mana-a filed a complaint for illegal
recruitment against Ocden, Ferrers testimony is competent only as to the illegal recruitment activities committed
by Ocden against her, and not against Mana-a. Ocden again objects to Golidans testimony as hearsay, not being
based on Golidans personal knowledge.
Under the last paragraph of Section 6, Republic Act No. 8042, illegal recruitment shall be considered an
offense involving economic sabotage if committed in a large scale, that is, committed against three or more
persons individually or as a group.
In People v. Hu,xxiv[28] we held that 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. While it is
true that the 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,

there is conclusive evidence that Ocden recruited Mana-a, Ferrer, and Golidans sons, Jeffries and Howard, for
purported employment as factory workers in Italy. As aptly observed by the Court of Appeals:
Mana-as testimony, although not completed, sufficiently established that accusedappellant promised Mana-a a job placement in a factory in Italy for a fee with accused-appellant
even accompanying her for the required medical examination. Likewise, Julia Golidans testimony
adequately proves that accused-appellant recruited Jeffries and Howard Golidan for a job in Italy,
also for a fee. Contrary to the accused-appellants contention, Julia had personal knowledge of
the facts and circumstances surrounding the charges for illegal recruitment and estafa filed by
her sons. Julia was not only privy to her sons recruitment but also directly transacted with
accused-appellant, submitting her sons requirements and paying the placement fees as
evidenced by a receipt issued in her name. Even after the placement did not materialize, Julia
acted with her sons to secure the partial reimbursement of the placement fees.xxiv[29]

And even though only Ferrer and Golidan testified as to Ocdens failure to reimburse the placements fees
paid when the deployment did not take place, their testimonies already established the fact of non-reimbursement
as to three persons, namely, Ferrer and Golidans two sons, Jeffries and Howard.

Section 7(b) of Republic Act No. 8042 prescribes a penalty of life imprisonment and a fine of not less than
P500,000.00 nor more than P1,000,000.00 if the illegal recruitment constitutes economic sabotage. The RTC, as
affirmed by the Court of Appeals, imposed upon Ocden the penalty of life imprisonment and a fine of only
P100,000.00. Since the fine of P100,000 is below the minimum set by law, we are increasing the same to
P500,000.00.
Estafa
We are likewise affirming the conviction of Ocden for the crime of estafa. The very same evidence proving
Ocdens liability for illegal recruitment also established her liability for estafa.
It is settled that a person may be charged and convicted separately of illegal recruitment under Republic
Act No. 8042 in relation to the Labor Code, and estafa under Article 315, paragraph 2(a) of the Revised Penal Code.
We explicated in People v. Yabutxxiv[30] that:
In this jurisdiction, it is settled that a person who commits illegal recruitment may be
charged and convicted separately of illegal recruitment under the Labor Code and estafa under
par. 2(a) of Art. 315 of the Revised Penal Code. The offense of illegal recruitment is malum
prohibitum where the criminal intent of the accused is not necessary for conviction, while estafa
is malum in se where the criminal intent of the accused is crucial for conviction. Conviction for
offenses under the Labor Code does not bar conviction for offenses punishable by other laws.
Conversely, conviction for estafa under par. 2(a) of Art. 315 of the Revised Penal Code does not
bar a conviction for illegal recruitment under the Labor Code. It follows that ones acquittal of the
crime of estafa will not necessarily result in his acquittal of the crime of illegal recruitment in
large scale, and vice versa.xxiv[31]

Article 315, paragraph 2(a) of the Revised Penal Code defines estafa as:

Art. 315. Swindling (estafa). - Any person who shall defraud another by any of the
means mentioned hereinbelow x x x:
xxxx

or

2. By means of any of the following false pretenses or fraudulent acts executed prior to
simultaneously
with
the
commission
of
the
fraud:

(a) By using fictitious name, or falsely pretending to possess power, influence,

qualifications, property, credit, agency, business or imaginary transactions; or by means of other
similar deceits.

The elements of estafa are: (a) that the accused defrauded another by abuse of confidence or by means
of deceit, and (b) that damage or prejudice capable of pecuniary estimation is caused to the offended party or
third person.xxiv[32]
Both these elements are present in the instant case. Ocden represented to Ferrer, Golidan, and Golidans
two sons, Jeffries and Howard, that she could provide them with overseas jobs. Convinced by Ocden, Ferrer,
Golidan, and Golidans sons paid substantial amounts as placement fees to her. Ferrer and Golidans sons were
never able to leave for Italy, instead, they ended up in Zamboanga, where, Ocden claimed, it would be easier to
have their visas to Italy processed. Despite the fact that Golidans sons, Jeffries and Howard, were stranded in
Zamboanga for almost a month, Ocden still assured them and their mother that they would be able to leave for
Italy. There is definitely deceit on the part of Ocden and damage on the part of Ferrer and Golidans sons, thus,
justifying Ocdens conviction for estafa in Criminal Case Nos. 16316-R, 16318-R, and 16964-R.
The penalty for estafa depends on the amount of defraudation. According to Article 315 of the Revised
Penal Code:
Art. 315. Swindling (estafa). Any person who shall defraud another by any of the means
mentioned hereinbelow shall be punished by:
st

1 . The penalty of prision correccional in its maximum period to prision mayor in its
minimum period, if the amount of the fraud is over 12,000 pesos but does not exceed 22,000
pesos; and if such amount exceeds the latter sum, the penalty provided in this paragraph shall be
imposed in its maximum period, adding one year for each additional 10,000 pesos; but the total
penalty which may be imposed shall not exceed twenty years. In such cases, and in connection
with the accessory penalties which may be imposed and for the purpose of the other provisions
of this Code, the penalty shall be termed prision mayor or reclusion temporal, as the case may
be.

The prescribed penalty for estafa under Article 315 of the Revised Penal Code, when the amount of fraud
is over P22,000.00, is prision correccional maximum to prision mayor minimum, adding one year to the maximum
period for each additional P10,000.00, provided that the total penalty shall not exceed 20 years.
Applying the Indeterminate Sentence Law, we take the minimum term from the penalty next lower than
the minimum prescribed by law, or anywhere within prision correccional minimum and medium (i.e., from 6
months and 1 day to 4 years and 2 months).xxiv[33] Consequently, both the RTC and the Court of Appeals correctly
fixed the minimum term in Criminal Case Nos. 16316-R and 16318-R at 2 years, 11 months, and 10 days of prision

correccional; and in Criminal Case No. 16964-R at 4 years and 2 months of prision correccional, since these are
within the range of prision correccional minimum and medium.
As for the maximum term under the Indeterminate Sentence Law, we take the maximum period of the
prescribed penalty, adding 1 year of imprisonment for every P10,000.00 in excess of P22,000.00, provided that the
total penalty shall not exceed 20 years. To compute the maximum period of the prescribed penalty, the time
included in prision correccional maximum to prision mayor minimum shall be divided into three equal portions,
with each portion forming a period. Following this computation, the maximum period for prision correccional
maximum to prision mayor minimum is from 6 years, 8 months, and 21 days to 8 years. The incremental penalty,
when proper, shall thus be added to anywhere from 6 years, 8 months, and 21 days to 8 years, at the discretion of
the court.xxiv[34]
In computing the incremental penalty, the amount defrauded shall be substracted by P22,000.00, and the
difference shall be divided by P10,000.00. Any fraction of a year shall be discarded as was done starting with
People v. Pabalan.xxiv[35]
In Criminal Case Nos. 16316-R and 16318-R, brothers Jeffries and Howard Golidan were each defrauded of
the amount of P40,000.00, for which the Court of Appeals sentenced Ocden to an indeterminate penalty of 2
years, 11 months, and 10 days of prision correccional as minimum, to 9 years of prision mayor as maximum. Upon
review, however, we modify the maximum term of the indeterminate penalty imposed on Ocden in said criminal
cases. Since the amount defrauded exceeds P22,000.00 by P18,000.00, 1 year shall be added to the maximum
period of the prescribed penalty (anywhere between 6 years, 8 months, and 21 days to 8 years). There being no
aggravating circumstance, we apply the lowest of the maximum period, which is 6 years, 8 months, and 21 days.
Adding the one year incremental penalty, the maximum term of Ocdens indeterminate sentence in these two
cases is only 7 years, 8 months, and 21 days of prision mayor.
In Criminal Cases No. 19694-R, Ferrer was defrauded of the amount of P70,000.00, for which the Court of
Appeals sentenced Ocden to an indeterminate penalty of 4 years and 2 months of prision correccional, as
minimum, to 12 years of prision mayor, as maximum. Upon recomputation, we also have to modify the maximum
term of the indeterminate sentence imposed upon Ocden in Criminal Case No. 19694-R. Given that the amount
defrauded exceeds P22,000.00 by P48,000.00, 4 years shall be added to the maximum period of the prescribed
penalty (anywhere between 6 years, 8 months, and 21 days to 8 years). There likewise being no aggravating
circumstance in this case, we add the 4 years of incremental penalty to the lowest of the maximum period, which
is 6 years, 8 months, and 21 days. The maximum term, therefor, of Ocdens indeterminate sentence in Criminal
Case No. 19694-R is only 10 years, 8 months, and 21 days of prision mayor.
WHEREFORE, the instant appeal of accused-appellant Dolores Ocden is DENIED. The Decision dated April
21, 2006 of the Court of Appeals in CA-G.R. CR.-H.C. No. 00044 is AFFIRMED with MODIFICATION to read as
follows:
1.
In Criminal Case No. 16315-R, the Court finds the accused, Dolores Ocden, GUILTY beyond
reasonable doubt of the crime of Illegal Recruitment committed in large scale as defined and penalized under
Article 13(b) in relation to Articles 38(b), 34 and 39 of the Labor Code, as amended. She is hereby sentenced to
suffer the penalty of life imprisonment and to pay a fine of P500,000.00;
2.
In Criminal Case No. 16316-R, the Court finds the accused, Dolores Ocden, GUILTY beyond
reasonable doubt of the crime of estafa and sentences her to an indeterminate penalty of 2 years, 11 months, and
10 days of prision correccional, as minimum, to 7 years, 8 months, and 21 days of prision mayor, as maximum, and
to indemnify Jeffries Golidan the amount of P40,000.00;
3.
In Criminal Case No. 16318-R, the Court finds the accused, Dolores Ocden, GUILTY beyond
reasonable doubt of the crime of estafa and sentences her to an indeterminate penalty of 2 years, 11 months, and

10 days of prision correccional, as minimum, to 7 years, 8 months, and 21 days of prision mayor, as maximum, and
to indemnify Howard Golidan the amount of P40,000.00; and
4.
In Criminal Case No. 16964-R, the Court finds the accused, Dolores Ocden, GUILTY beyond
reasonable doubt of the crime of estafa and sentences her to an indeterminate penalty of 4 years and 2 months of
prision correccional, as minimum, to 10 years, 8 months, and 21 days of prision mayor, as maximum, and to
indemnify Rizalina Ferrer the amount of P70,000.00.

G.R. No. 195668

June 25, 2014
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,
vs.
MA. HARLETA VELASCO y BRIONES, MARICAR B. INOVERO, MARISSA DIALA, and BERNA M.
PAULINO, Accused,
MARICAR B. INOVERO, Accused-Appellant.
DECISION
BERSAMIN, J.:
The several accused in illegal recruitment committed in large scale against whom the State establishes a conspiracy
are each equally criminally and civilly liable. It follows, therefore, that as far as civil liability is concerned each is
solidarily liable to the victims of the illegal recruitment for the reimbursement of the sums collected from them,
regardless of the extent of the participation of the accused in the illegal recruitment.
The Case
Accused-appellant Maricar B. Inovero seeks the review and reversal of the decision promulgated on August 26,
2010,1 whereby the Court of Appeals (CA) affirmed her conviction for illegal recruitment committed in large scale
amounting to economic sabotage under the judgment rendered on January 14, 2008 by the Regional Trial Court
(RTC), Branch 133, in Makati City.2
Antecedents
On March 17, 2004, the Office of the City Prosecutor of Makati City filed in the RTC two informations3 charging
Inovero, Ma. Harleta Velasco y Briones, Marissa Diala and Berna Paulino with illegal recruitment as defined and
penalized under Section 6 of Republic Act No. 8042 (Migrant Workers Act of 1995), and 11 informations4
charging the same accused with estafa as defined and penalized under Article315, paragraph 2(a) of the Revised
Penal Code. Only Inovero was arrested and prosecuted, the other accused having remained at large.
Six cases charging estafa (Criminal Case No. 04-1565, Criminal Case No. 1568, Criminal Case No. 1570, Criminal
Case No. 1571 and Criminal Case No. 1572 and Criminal Case No. 1573) and one of the two charging illegal
recruitment (Criminal Case No. 04-1563) were provisionally dismissed because of the failure of the complainants to
prosecute.5 The seven cases were later permanently dismissed after the complainants did not revive them within two
years, as provided in Section 8,6 Rule 117 of the Rules of Court.
Trial on the merits ensued as to the remaining cases (Criminal Case No. 04-1562, for illegal recruitment; and
Criminal Case No. 04-1564; Criminal Case No. 04-1566; Criminal Case No. 04-1567; Criminal Case No. 1569 and
Criminal Case No. 04-1574, for estafa).7
The CA recounted the transactions between the complainants and the accused, including Inovero, in the following
manner:
Regarding Criminal Case No. 04-1562, the prosecution presented the five (5) private complainants as witnesses to
prove the crime of Illegal Recruitment, namely: Novesa Baful ("Baful"), Danilo Brizuela ("Brizuela"), Rosanna
Aguirre ("Aguirre"), Annaliza Amoyo ("Amoyo"), and Teresa Marbella ("Marbella"), and Mildred Versoza
("Versoza") from the Philippine Overseas Employment Administration ("POEA").
Baful testified that on May 20, 2003 she, together with her sister-in-law, went to Harvel International Talent
Management and Promotion ("HARVEL") at Unit 509 Cityland Condominium, Makati City upon learning that
recruitment for caregivers to Japan was on-going there. On said date, she allegedly met Inovero; Velasco, and Diala,
and saw Inovero conducting a briefing on the applicants. She also testified that Diala, the alleged talent manager,
directed her to submit certain documents, and to pay Two Thousand Five Hundred Pesos (P2,500.00) as training fee,
as well as Thirty Thousand Pesos (P30,000.00) as placement and processing fees. Diala also advised her to undergo
physical examination.
On June 6, 2003, after complying with the aforesaid requirements and after paying Diala the amounts of Eighteen
Thousand Pesos (P18,000.00) and Ten Thousand pesos (P10,000.00), Baful was promised deployment within two
(2) to three (3) months. She likewise testified that Inovero briefed her and her co-applicants on what to wear on the
day of their departure. However, she was never deployed. Finally, she testified that she found out that HARVEL was
not licensed to deploy workers for overseas employment.
Brizuela, another complainant, testified that he went to HARVELs office in Makati on February 7, 2003 to inquire
on the requirements and hiring procedure for a caregiver in Japan. There, Diala told him the amount required as
processing fee and the documents to be submitted. And when he submitted on March 7, 2003 the required
documents and payments, it was, this time, Paulino who received them. He claimed that he underwent training and
medical examination; he likewise attended an orientation conducted by Inovero at which time, he and his batchmates
were advised what clothes to wear on the day of their departure; he was assured of deployment on the first week of

June 2003, however, on the eve of his supposed "pre-departure orientation seminar," Paulino texted him that the
seminar was cancelled because Inovero, who had the applicants money, did not show up. He testified that he was
not deployed. Neither was his money returned, as promised.
On cross-examination, Brizuela testified that Inovero was the one who conducted the orientation, and represented to
all the applicants that most of the time, she was in the Japanese Embassy expediting the applicants visa.
Aguirre, the third complainant to testify, alleged that she went to HARVEL on May 22, 2003, to apply as caregiver
in Japan; there, Diala informed her that Inovero was oneof the owners of HARVEL and Velasco was its President;
she paid Thirty Five Thousand Pesos (P35,000.00), and submitted her documents, receipt of which was
acknowledged by Diala; despite her undergoing medical examination and several training seminars, she was
however not deployed to Japan. Worse, she found out that HARVEL was not licensed to recruit workers.
Amoyo, the fourth complainant, testified that she went to HARVELs office on May 28, 2003 to apply as caregiver
in Japan, and Diala required her to submit certain documents, to undergo training and medical examination, and to
pay Thirty Five Thousand Pesos (P35,000.00) as placement and processing fees. However, after complying with
said requirements, she was never deployed as promised.
Marbella was the last complainant to testify. She alleged that she applied for the position of janitress at HARVEL
sometime in December 2002; just like the rest of the complainants, she was required to submit certain documents
and to pay a total amount of Twenty Thousand pesos (P20,000.00) as processing fee; after paying said fee, Diala and
Inovero promised her and the other applicants that they will be deployed in three (3) months or in June 2003;
however, the promised deployment never materialized; she later found out that HARVEL was not even licensed to
recruit workers.
[Mildred] Versoza, on the other hand, is a Labor and Employment Officer at the POEA Licensing Branch. She
testified that she prepared a Certification certifying that neither HARVEL nor Inovero was authorized to recruit
workers for overseas employment as per records at their office.
In her defense, Inovero denied the allegations hurled against her. As summarized in the assailed Decision, she
claimed that she is the niece of accused Velasco, the owner of HARVEL, but denied working there. Explaining her
presence in HARVEL, she alleged that she worked for her uncle, Velascos husband, as an office assistant, hence,
for at least two or three times a week, she had to go to HARVEL on alleged errands for her uncle. She also testified
that her alleged errands mainly consisted of serving food and refreshments during orientations at HARVEL. Inovero
likewise denied receiving any money from the complainants, nor issuing receipts therefor.8
Judgment of the RTC
On January 14, 2008, the RTC rendered judgment acquitting Inovero of five counts of estafabut convicting her in
Criminal Case No. 04-1562 of illegal recruitment committed in large scale as defined and penalized by Section 6
and Section 7 of Republic Act No. 8042 (Migrant Workers and Overseas Filipinos Act of 1995), disposing thusly:
WHEREFORE, judgment is hereby rendered in the aforestated cases as follows:
In Criminal Case No. 04-1562, accused Maricar Inovero is found guilty beyond reasonable doubt of the crime of
Illegal Recruitment in large scale defined and penalized under Sections 6 and 7, II, of Republic Act No. 8042
otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995, and is hereby sentenced to suffer the
penalty of life imprisonment. She is likewise ordered to pay a fine of Five Hundred Thousand Pesos (P500,000.00).
Criminal Case No. 04-1563 also for illegal recruitment in large scale is hereby ordered dismissed to its finality for
failure of complainants Alvin De Leon, Roderick Acuna, Agosto Vale and Marina Viernes to revive said case
despite the lapse of two years from its provisional dismissal.
Criminal Cases No. 04-1564, 1566, 1567, 1569, 1571 and 1574 are hereby ordered DISMISSED for failure of the
prosecution to adduce sufficient evidence to prove all the elements of the said offense.
Criminal Cases Nos. 1565, 1568, 1570, 1572 and 1573 also for estafa [are] hereby ordered dismissed to its finality
for failure of complainants Agosto Vale, Alvin De Leon, Roselyn Saruyda, Roderick Acuna and Marina Viernes to
revive said cases despite the lapse of two (2) years from its provisional dismissal.
Considering that the accused is a detention prisoner, she shall be credited in the service of her sentence with the full
time during which she has undergone preventive imprisonment if she agrees voluntarily to abide by the same
disciplinary rules imposed upon convicted prisoners, otherwise, with four-fifths thereof.
Meanwhile, considering that the accused Ma. Harleta B. Velasco, Marissa Diala and Berna Paulino are still at large,
let alias warrants of arrest be issued against them. In the meantime, let the cases filed against them be archived,
which shall be revived upon their apprehension.
SO ORDERED.9
Decision of the CA
Inovero appealed, contending that:

THE TRIAL COURT GRAVELY ERRED IN FINDING ACCUSEDAPPELLANT GUILTY OF THE CRIME
CHARGED DESPITE THE PROSECUTIONS FAILURE TO ESTABLISH [HER] GUILT BEYOND
REASONABLE DOUBT.10
On August 26, 2010, the CA affirmed the conviction, viz:
WHEREFORE, the instant appeal is DISMISSED. The January 14, 2008 Decision of the RTC is AFFIRMED.
SO ORDERED.11
Issue
In this appeal, Inovero insists that the CA erred in affirming her conviction by the RTC because she had not been an
employee of Harvel at any time; that she could be faulted only for her association with the supposed illegal
recruiters; that in all stages of the complainants recruitment for overseas employment by Harvel, they had
transacted only and directly with Diala; and that the certification from the POEA to the effect she was not a licensed
recruiter was not a positive proof that she engaged in illegal recruitment.
Ruling of the Court
The appeal lacks merit.
In its assailed decision, the CA affirmed the entire findings of fact of the RTC, stating:
The essential elements of illegal recruitment committed in large scale are: (1) that the accused engaged in acts of
recruitment and placement of workers as defined under Article 13(b) of the Labor Code, or in any prohibited
activities under Article 34 of the same Code; (2) that the accused had not complied with the guidelines issued by the
Secretary of Labor and Employment with respect to the requirement to secure a license or authority to recruit and
deploy workers; and (3) that the accused committed the unlawful acts against 3 or more persons. In simplest terms,
illegal recruitment is committed by persons who, without authority from the government, give the impression that
they have the power to send workers abroad for employment purposes. In Our view, despite Inoveros protestations
that she did not commit illegal recruitment, the following circumstances contrarily convince Us that she was into
illegal recruitment.
First, private complainants Baful and Brizuela commonly testified that Inovero was the one who conducted
orientations/briefings on them; informed them, among others, on how much their salary would be as caregivers in
Japan; and what to wear when they finally will be deployed. Second, when Diala introduced her (Inovero) to private
complainant Amoyo as one of the owners of HARVEL, Inovero did not bother to correct said representation.
Inoveros silence is clearly an implied acquiescence to said representation.
Third, Inovero, while conducting orientation on private complainant Brizuela, represented herself as the one
expediting the release of applicants working visa for Japan.
Fourth, in a Certification issued and attested to by POEAs Versoza Inovero had no license nor authority to recruit
for overseas employment.
Based on the foregoing, there is therefore no doubt that the RTC correctly found that Inovero committed illegal
recruitment in large scale by giving private complainants the impression that she can send them abroad for
employment purposes, despite the fact that she had no license or authority to do so.12
It is basic that the Court, not being a trier of facts, must of necessity rely on the findings of fact by the trial court
which are conclusive and binding once affirmed by the CA on intermediate review. The bindingness of the trial
courts factual findings is by virtue of its direct access to the evidence. The direct access affords the trial court the
unique advantage to observe the witnesses demeanor while testifying, and the personal opportunity to test the
accuracy and reliability of their recollections of past events, both of which are very decisive in a litigation like this
criminal prosecution for the serious crime of illegal recruitment committed in large scale where the parties have
disagreed on the material facts. The Court leaves its confined precinct of dealing only with legal issues in order to
deal with factual ones only when the appellant persuasively demonstrates a clear error in the appreciation of the
evidence by both the trial and the appellate courts. This demonstration was not done herein by the appellant. Hence,
the Court upholds the CAs affirmance of the factual findings by the trial court.
All that Inoveros appeal has offered was her denial of complicity in the illegal recruitment of the complainants. But
the complainants credibly described and affirmed her specific acts during the commission of the crime of illegal
recruitment. Their positive assertions were far trustworthier than her mere denial.
Denial, essentially a negation of a fact, does not prevail over an affirmative assertion of the fact.1wphi1 Thus,
courts both trial and appellate have generally viewed the defense of denial in criminal cases with considerable
caution, if not with outright rejection. Such judicial attitude comes from the recognition that denial is inherently
weak and unreliable by virtue of its being an excuse too easy and too convenient for the guilty to make. To be
worthy of consideration at all, denial should be substantiated by clear and convincing evidence. The accused cannot
solely rely on her negative and self-serving negations, for denial carries no weight in law and has no greater

evidentiary value than the testimony of credible witnesses who testify on affirmative matters.13 It is no different
here.
We concur with the RTC and the CA that Inovero was criminally liable for the illegal recruitment charged against
her. Strong and positive evidence demonstrated beyond reasonable doubt her having conspired with her co-accused
in the recruitment of the complainants. The decision of the CA amply recounted her overt part in the conspiracy.
Under the law, there is a conspiracy when two or more persons come to an agreement concerning the commission of
a felony, and decide to commit it.14
The complainants paid varying sums for placement, training and processing fees, respectively as follows: (a) Baful
P28,500.00; (b) Brizuela P38,600.00; (c) Aguirre P38,600.00; (d) Amoyo P39,000.00; and (e) Marbella
P20,250.00. However, the RTC and the CA did not adjudicate Inoveros personal liability for them in their
judgments. Their omission needs to be corrected, notwithstanding that the complainants did not appeal, for not doing
so would be patently unjust and contrary to law. The Court, being the ultimate reviewing tribunal, has not only the
authority but also the duty to correct at any time a matter of law and justice. It is, indeed, a basic tenet of our
criminal law that every person criminally liable is also civilly liable.15 Civil liability includes restitution, reparation
of the damage caused, and indemnification for consequential damages.16 To enforce the civil liability, the Rules of
Court has deemed to be instituted with the criminal action the civil action for the recovery of civil liability arising
from the offense charged unless the offended party waives the civil action, or reserves the right to institute the civil
action separately, or institutes the civil action prior to the criminal action.17 Considering that the crime of illegal
recruitment, when it involves the transfer of funds from the victims to the accused, is inherently in fraud of the
former, civil liability should include the return of the amounts paid as placement, training and processing fees.18
Hence, Inovero and her co-accused were liable to indemnify the complainants for all the sums paid.
That the civil liability should be made part of the judgment by the RTC and the CA was not disputable. The Court
pointed out in Bacolod v. People19 that it was "imperative that the courts prescribe the proper penalties when
convicting the accused, and determine the civil liability to be imposed on the accused, unless there has been a
reservation of the action to recover civil liability or a waiver of its recovery," because:
It is not amiss to stress that both the RTC and the CA disregarded their express mandate under Section 2, Rule 120
of the Rules of Court to have the judgment, if it was of conviction, state: "(1) the legal qualification of the offense
constituted by the acts committed by the accused and the aggravating or mitigating circumstances which attended its
commission; (2) the participation of the accused in the offense, whether as principal, accomplice, or accessory after
the fact; (3) the penalty imposed upon the accused; and (4) the civil liability or damages caused by his wrongful act
or omission to be recovered from the accused by the offended party, if there is any, unless the enforcement of the
civil liability by a separate civil action has been reserved or waived." Their disregard compels us to act as we now
do lest the Court be unreasonably seen as tolerant of their omission. That the Spouses Cogtas did not themselves
seek the correction of the omission by an appeal is no hindrance to this action because the Court, as the final
reviewing tribunal, has not only the authority but also the duty to correct at any time a matter of law and justice.
We also pointedly remind all trial and appellate courts to avoid omitting reliefs that the parties are properly entitled
to by law or in equity under the established facts. Their judgments will not be worthy of the name unless they
thereby fully determine the rights and obligations of the litigants. It cannot be otherwise, for only by a full
determination of such rights and obligations would they be true to the judicial office of administering justice and
equity for all. Courts should then be alert and cautious in their rendition of judgments of conviction in criminal
cases. They should prescribe the legal penalties, which is what the Constitution and the law require and expect them
to do. Their prescription of the wrong penalties will be invalid and ineffectual for being done without jurisdiction or
in manifest grave abuse of discretion amounting to lack of jurisdiction. They should also determine and set the civil
liability ex delicto of the accused, in order to do justice to the complaining victims who are always entitled to them.
The Rules of Court mandates them to do so unless the enforcement of the civil liability by separate actions has been
reserved or waived.20
What was the extent of Inoveros civil liability?
The nature of the obligation of the co-conspirators in the commission of the crime requires solidarity, and each
debtor may be compelled to pay the entire obligation.21 As a co-conspirator, then, Inoveros civil liability was
similar to that of a joint tortfeasor under the rules of the civil law. Joint tortfeasors are those who command,
instigate, promote, encourage, advise, countenance, cooperate in, aid or abet the commission of a tort, or who
approve of it after it is done, if done for their benefit.22 They are also referred to as those who act together in
committing wrong or whose acts, if independent of each other, unite in causing a single injury.23 Under Article
2194 of the Civil Code, joint tortfeasors are solidarily liable for the resulting damage. In other words, joint
tortfeasors are each liable as principals, to the same extent and in the same manner as if they had performed the

wrongful act themselves. As regards the extent of their respective liabilities, the Court expressed in Far Eastern
Shipping Company v. Court of Appeals:24
x x x. Where several causes producing an injury are concurrent and each is an efficient cause without which the
injury would not have happened, the injury may be attributed to all or any of the causes and recovery may be had
against any or all of the responsible persons although under the circumstances of the case, it may appear that one of
them was more culpable, and that the duty owed by them to the injured person was not same. No actors negligence
ceases to be a proximate cause merely because it does not exceed the negligence of other acts. Each wrongdoer is
responsible for the entire result and is liable as though his acts were the sole cause of the injury.
There is no contribution between joint tort-feasors whose liability is solidary since both of them are liable for the
total damage. Where the concurrent or successive negligent acts or omissions of two or more persons, although
acting independently, are in combination the direct and proximate cause of a single injury to a third person, it is
impossible to determine in what proportion each contributed to the injury and either of them is responsible for the
whole injury. x x x
It would not be an excuse for any of the joint tortfeasors to assert that her individual participation in the wrong was
insignificant as compared to those of the others.25 Joint tortfeasors are not liable pro rata. The damages cannot be
apportioned among them, except by themselves. They cannot insist upon an apportionment, for the purpose of each
paying an aliquot part. They are jointly and severally liable for the whole amount.26 Hence, Inoveros liability
towards the victims of their illegal recruitment was solidary, regardless of whether she actually received the amounts
paid or not, and notwithstanding that her co-accused, having escaped arrest until now, have remained untried.
Under Article 2211 of the Civil Code, interest as part of the damages may be adjudicated in criminal proceedings in
the discretion of the court. The Court believes and holds that such liability for interest attached to Inovero as a
measure of fairness to the complainants. Thus, Inovero should pay interest of 6% per annum on the sums paid by the
complainants to be reckoned from the finality of this judgment until full payment.27
WHEREFORE, the Court AFFIRMS the decision promulgated on August 26, 2010, subject to the
MODIFICATION that appellant Maricar B. Inovero is ordered to pay by way of actual damages to each of the
complainants the amounts paid by them for placement, training and processing fees, respectively as follows:
(a) Noveza Baful - P28,500.00;
(b) Danilo Brizuela - P38,600.00;
(c) Rosanna Aguirre - P38,600.00;
(d) Annaliza Amoyo - P39,000.00; and
(e) Teresa Marbella - P20,250.00.
plus interest on such amounts at the rate of six percent (6%) per annum from the finality of this judgment until fully
paid.
Inovero shall further pay the costs of suit.
SO ORDERED.