Facts
Joy C. Cabiles (Respondent/OFW) was hired by Sameer Overseas Placement Agency, Inc. (Petitioner/Agency) for a one-year employment contract as a quality control worker in Taiwan. Upon deployment on June 26, 1997, she was made to work as a cutter instead of quality control. On July 14, 1997, barely a month into her contract, she was informed of her termination, effective immediately, based on unproven allegations of inefficiency and failure to comply with work requirements. She was repatriated on the same day without being afforded procedural due process (notice and hearing). The agency claimed that its liability, if any, was transferred to another agency, Pacific Manpower & Management Services, Inc., due to accreditation transfer. Cabiles sought payment for the unexpired portion of her contract and reimbursement of the NT$3,000 deducted from her salary for repatriation costs. The National Labor Relations Commission (NLRC) affirmed the illegal dismissal but initially limited the award to three months’ salary (NT$46,080), in accordance with the prior wording of Republic Act (R.A.) No. 8042.
Issues
- Did the Court of Appeals err in affirming the finding that Joy C. Cabiles was illegally dismissed?
- Did the transfer of accreditation from Sameer Overseas Placement Agency to a subsequent agency affect Sameer’s liability to Cabiles?
- Is the clause in Section 10 of R.A. No. 8042 (as reinstated by R.A. No. 10022), limiting the salary claims of an illegally dismissed overseas worker to “three (3) months for every year of the unexpired term, whichever is less,” constitutional?
Ruling
“WHEREFORE, the petition is DENIED. The decision of the Court of Appeals is AFFIRMED with modification. Petitioner Sameer Overseas Placement Agency is ORDERED to pay respondent Joy C. Cabiles the amount equivalent to her salary for the unexpired portion of her employment contract at an interest of 6% per annum from the finality of this judgment. Petitioner is also ORDERED to reimburse respondent the withheld NT$3,000.00 salary and pay respondent attorneyas fees of NT$300.00 at an interest of 6% per annum from the finality of this judgment. The clause, aor for three (3) months for every year of the unexpired term, whichever is lessa in Section 7 of Republic Act No. 10022 amending Section 10 of Republic Act No. 8042 is declared unconstitutional and, therefore, null and void.“
Essential Elements of Jurisprudence
1. Controlling Doctrines on OFW Protection:
- Lex Loci Contractus: Employment contracts perfected in the Philippines, including those for Overseas Filipino Workers (OFWs), are governed by the Philippine Labor Code, its implementing rules, and other laws affecting labor.
- Security of Tenure and Due Process: Workers, whether local or overseas, are entitled to substantive and procedural due process before termination. A valid dismissal requires both a valid cause and adherence to the twin notices and hearing requirements. The burden of proof to show just or valid cause rests on the employer.
- Joint and Several Liability (RA 8042, Sec. 10): The liability of the principal/employer and the recruitment/placement agency for any and all claims arising from an employer-employee relationship shall be joint and several. This liability continues for the duration of the contract and is not affected by any substitution, amendment, modification of the contract, or transfer of accreditation.
- Repatriation Responsibility (RA 8042, Sec. 15): The repatriation of the worker and costs attendant thereto are the primary responsibility of the agency and/or its principal, unless the termination is due solely to the fault of the worker.
2. Legal Principles Established (Unconstitutionality of Three-Month Cap):
- Reaffirmation of Serrano v. Gallant Maritime: The Supreme Court reiterated that the clause limiting an illegally dismissed overseas worker’s salary recovery to “three (3) months for every year of the unexpired term, whichever is less” is unconstitutional.
- Violation of Constitutional Rights: The reinstatement of the clause (via R.A. No. 10022) violates the constitutional rights to equal protection and substantive due process.
- Equal Protection Rationale: The clause creates arbitrary classifications (e.g., distinguishing between fixed-period local workers and fixed-period overseas workers, or between OFWs with long vs. short unexpired terms) that do not rest on real or substantial distinctions and are not germane to the purpose of the law (which is to provide high protection to migrant workers).
- Due Process Rationale: The limitation is arbitrary because it deprives overseas workers of their full monetary claims without any valid purpose.
- Mandatory Monetary Award: An illegally dismissed OFW whose contract is violated is entitled to their salaries for the unexpired portion of the employment contract (full term salary).
Sample Q&A
Question: Alex, an OFW recruited by Agency X for a two-year contract in Country Y, was illegally dismissed six months into the job without just cause or due process. Agency X argues that, pursuant to the language of Republic Act No. 10022, Alex is only entitled to three months’ worth of salary for the unexpired portion of his contract (18 months). Is Agency X correct, and what is the extent of Alex’s monetary entitlement against Agency X and the foreign employer?
Answer: Agency X is incorrect. The Supreme Court, in Sameer Overseas Placement Agency, Inc. vs. Cabiles, declared the restrictive clause “or for three (3) months for every year of the unexpired term, whichever is less” found in Section 10 of Republic Act No. 8042 (as reinstated by R.A. No. 10022) unconstitutional and void for violating the constitutional rights to equal protection and substantive due process (CONST., Art. III, Sec. 1).
Since Alex was illegally dismissed, he is entitled to the full measure of his monetary claims under Section 10 of R.A. No. 8042.
- Monetary Entitlement: Alex is entitled to his salaries for the entire unexpired portion of his employment contract (18 months), not merely the three-month cap.
- Liability: The liability of Agency X (the recruitment agency) and the foreign employer (principal) for all money claims is joint and several (R.A. No. 8042, Sec. 10). Alex may pursue the full amount against either party.
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