SUNACE INTERNATIONAL MANAGEMENT SERVICES vs NLRC Case Digest

SUNACE INTERNATIONAL MANAGEMENT SERVICES, INC. v. NATIONAL LABOR RELATIONS

COMMISSION et al.
480 SCRA 146 (2006)

FACTS: Respondent Divina Montehermozo is a domestic helper deployed to Taiwan by Sunace

International Management Services (Sunace) under a 12-month contract. Such employment was
made with the assistance of Taiwanese broker Edmund Wang. After the expiration of the contract,
Montehermozo continued her employment with her Taiwanese employer for another 2 years.

When Montehermozo returned to the Philippines, she filed a complaint against Sunace, Wang, and
her Taiwanese employer before the National Labor Relations Commission (NLRC). She alleges that
she was underpaid and was jailed for three months in Taiwan. She further alleges that the 2-year
extension of her employment contract was with the consent and knowledge of Sunace. Sunace, on
the other hand, denied all the allegations.

The Labor Arbiter ruled in favor of Montehermozo and found Sunace liable thereof. The National
Labor Relations Commission and Court of Appeals affirmed the labor arbiters decision. Hence, the
filing of this appeal.

ISSUE: Whether or not the 2-year extension of Montehermozos employment was made with the
knowledge and consent of Sunace

HELD: There is an implied revocation of an agency relationship when after the termination of the
original employment contract, the foreign principal directly negotiated with the employee and entered
into a new and separate employment contract.

Contrary to the Court of Appeals finding, the alleged continuous communication was with the
Taiwanese broker Wang, not with the foreign employer.

The finding of the Court of Appeals solely on the basis of the telefax message written by Wang to
Sunace, that Sunace continually communicated with the foreign "principal" (sic) and therefore was
aware of and had consented to the execution of the extension of the contract is misplaced. The
message does not provide evidence that Sunace was privy to the new contract executed after the
expiration on February 1, 1998 of the original contract. That Sunace and the Taiwanese broker
communicated regarding Montehermozos allegedly withheld savings does not necessarily mean
that Sunace ratified the extension of the contract.

As can be seen from that letter communication, it was just an information given to Sunace that
Montehermozo had taken already her savings from her foreign employer and that no deduction was
made on her salary. It contains nothing about the extension or Sunaces consent thereto.

Parenthetically, since the telefax message is dated February 21, 2000, it is safe to assume that it
was sent to enlighten Sunace who had been directed, by Summons issued on February 15, 2000, to
appear on February 28, 2000 for a mandatory conference following Montehermozos filing of the
complaint on February 14, 2000.

Respecting the decision of Court of Appeals following as agent of its foreign principal, [Sunace]
cannot profess ignorance of such an extension as obviously, the act of its principal extending
[Montehermozos] employment contract necessarily bound it, it too is a misapplication, a
misapplication of the theory of imputed knowledge.
The theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to the principal,
employer, not the other way around. The knowledge of the principal-foreign employer cannot,
therefore, be imputed to its agent Sunace.

There being no substantial proof that Sunace knew of and consented to be bound under the 2-year
employment contract extension, it cannot be said to be privy thereto. As such, it and its "owner"
cannot be held solidarily liable for any of Montehermozos claims arising from the 2-year
employment extension. As the New Civil Code provides, Contracts take effect only between the
parties, their assigns, and heirs, except in case where the rights and obligations arising from the
contract are not transmissible by their nature, or by stipulation or by provision of law. Furthermore,
as Sunace correctly points out, there was an implied revocation of its agency relationship with its
foreign principal when, after the termination of the original employment contract, the foreign principal
directly negotiated with Montehermozo and entered into a new and separate employment contract in
Taiwan. Article 1924 of the New Civil Code states that the agency is revoked if the principal directly
manages the business entrusted to the agent, dealing directly with third persons.

ANTONIO M. SERRANO
VS.
GALLANT MARITIME SERVICES, INC.

FACTS:

Petitioner Antonio Serrano was hired by respondents Gallant Maritime Services, Inc. and Marlow
Navigation Co., Inc., under a POEA-approved contract of employment for 12 months, as Chief
Officer, with the basic monthly salary of US$1,400, plus $700/month overtime pay, and 7 days paid
vacation leave per month.

On the date of his departure, Serrano was constrained to accept a downgraded employment
contract upon the assurance and representation of respondents that he would be Chief Officer by
the end of April 1998.

Respondents did not deliver on their promise to make Serrano Chief Officer.

Hence, Serrano refused to stay on as second Officer and was repatriated to the Philippines, serving
only two months and 7 days, leaving an unexpired portion of nine months and twenty-three days.
Upon complaint filed by Serrano before the Labor Arbiter (LA), the dismissal was declared illegal.
On appeal, the NLRC modified the LA decision based on the provision of RA 8042.

Serrano filed a Motion for Partial Reconsideration, but this time he questioned the constitutionality of
the last clause in the 5th paragraph of Section 10 of RA 8042.

ISSUES:

1. Whether or not the subject clause violates Section 10, Article III of the Constitution on non-
impairment of contracts;

2. Whether or not the subject clause violate Section 1, Article III of the Constitution, and Section 18,
Article II and Section 3, Article XIII on labor as a protected sector.

HELD:
On the first issue.
The answer is in the negative. Petitioners claim that the subject clause unduly interferes with the
stipulations in his contract on the term of his employment and the fixed salary package he will
receive is not tenable.

The subject clause may not be declared unconstitutional on the ground that it impinges on the
impairment clause, for the law was enacted in the exercise of the police power of the State to
regulate a business, profession or calling, particularly the recruitment and deployment of OFWs, with
the noble end in view of ensuring respect for the dignity and well-being of OFWs wherever they may
be employed.

On the second issue.

The answer is in the affirmative.

To Filipino workers, the rights guaranteed under the foregoing constitutional provisions translate to
economic security and parity.

Upon cursory reading, the subject clause appears facially neutral, for it applies to all OFWs.
However, a closer examination reveals that the subject clause has a discriminatory intent against,
and an invidious impact on, OFWs at two levels:

First, OFWs with employment contracts of less than one year vis--vis OFWs with
employment contracts of one year or more;

Second, among OFWs with employment contracts of more than one year; and
Third, OFWs vis--vis local workers with fixed-period employment;

The subject clause singles out one classification of OFWs and burdens it with a peculiar
disadvantage.

Thus, the subject clause in the 5th paragraph of Section 10 of R.A. No. 8042 is violative of the right
of petitioner and other OFWs to equal protection.

The subject clause or for three months for every year of the unexpired term, whichever is less in
the 5th paragraph of Section 10 of Republic Act No. 8042 is DECLARED UNCONSTITUTIONAL.

SAMEER OVERSEAS PLACEMENT AGENCY, INC., Petitioner,

vs.
JOY C. CABILES, Respondent.
G.R. No. 170139 August 5, 2014

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

FACTS:
Petitioner, Sameer Overseas Placement Agency, Inc., is a recruitment and placement
agency.
Respondent Joy Cabiles was hired thus signed a one-year employment contract for
a monthly salary of NT$15,360.00. Joy was deployed to work for Taiwan Wacoal, Co. Ltd. (Wacoal)
on June 26, 1997. She alleged that in her employment contract, she agreed to work as quality
control for one year. In Taiwan, she was asked to work as a cutter.
Sameer claims that on July 14, 1997, a certain Mr. Huwang from Wacoal informed Joy,
without prior notice, that she was terminated and that she should immediately report to their office to
get her salary and passport. She was asked to prepare for immediate repatriation. Joy claims that
she was told that from June 26 to July 14, 1997, she only earned a total of NT$9,000.15 According
to her, Wacoal deducted NT$3,000 to cover her plane ticket to Manila.
On October 15, 1997, Joy filed a complaint for illegal dismissal with the NLRC against
petitioner and Wacoal. LA dismissed the complaint. NLRC reversed LAs decision. CA affirmed the
ruling of the National Labor Relations Commission finding respondent illegally dismissed and
awarding her three months worth of salary, the reimbursement of the cost of her repatriation, and
attorneys fees

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

Whether or not Section 7 of Republic Act No. 10022 amending Section 10 of Republic Act
No. 8042 is unconstitutional.

HELD:

YES. The Court held that the award of the three-month equivalent of respondents salary
should be increased to the amount equivalent to the unexpired term of the employment contract.

In Serrano v. Gallant Maritime Services, Inc. and Marlow Navigation Co., Inc., this court
ruled that the clause or for three (3) months for every year of the unexpired term, whichever is less
is unconstitutional for violating the equal protection clause and substantive due process.

A statute or provision which was declared unconstitutional is not a law. It confers no

rights; it imposes no duties; it affords no protection; it creates no office; it is inoperative as if it has
not been passed at all.

The Court said that they are aware that the clause or for three (3) months for every year
of the unexpired term, whichever is less was reinstated in Republic Act No. 8042 upon promulgation
of Republic Act No. 10022 in 2010.

Ruling on the constitutional issue

In the hierarchy of laws, the Constitution is supreme. No branch or office of the

government may exercise its powers in any manner inconsistent with the Constitution, regardless of
the existence of any law that supports such exercise. The Constitution cannot be trumped by any
other law. All laws must be read in light of the Constitution. Any law that is inconsistent with it is a
nullity.

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

The Court observed that the reinstated clause, this time as provided in Republic Act. No.
10022, violates the constitutional rights to equal protection and due process.96 Petitioner as well as
the Solicitor General have failed to show any compelling change in the circumstances that would
warrant us to revisit the precedent.
 The Court declared, once again, the clause, or for three (3) months for every year of the
unexpired term, whichever is less in Section 7 of Republic Act No. 10022 amending Section 10 of
Republic Act No. 8042 is declared unconstitutional and, therefore, null and void.

Domingo vs. Rayala (596 SCRA 90)

Facts:
Ma. Lourdes T. Domingo (Domingo), then Stenographic Reporter III at the NLRC, filed a Complaint
for sexual harassment against Rayala, the chairman of NLRC.
She alleged that Rayala called her in his office and touched her shoulder, part of her neck then
tickled her ears. Rayala argued that his acts does not constitute sexual harassment because for it to
exist, there must be a demand, request or requirement of sexual favor.

Issue:
Whether or not Rayala commit sexual harassment.

Rulings:
Yes.

The law penalizing sexual harassment in our jurisdiction is RA 7877. Section 3 thereof defines work-
related sexual harassment in this wise:

Sec. 3. Work, Education or Training-related Sexual Harassment Defined. Work, education

or training-related sexual harassment is committed by an employer, manager, supervisor, agent of
the employer, teacher, instructor, professor, coach, trainor, or any other person who, having
authority, influence or moral ascendancy over another in a work or training or education
environment, demands, requests or otherwise requires any sexual favor from the other, regardless
of whether the demand, request or requirement for submission is accepted by the object of said Act.
(a) In a work-related or employment environment, sexual harassment is committed when:

(1) The sexual favor is made as a condition in the hiring or in the employment, re-
employment or continued employment of said individual, or in granting said individual
favorable compensation, terms, conditions, promotions, or privileges; or the refusal to grant
the sexual favor results in limiting, segregating or classifying the employee which in a way
would discriminate, deprive or diminish employment opportunities or otherwise adversely
affect said employee;
(2) The above acts would impair the employees rights or privileges under existing labor
laws; or
(3) The above acts would result in an intimidating, hostile, or offensive environment for the
employee.

Even if we were to test Rayalas acts strictly by the standards set in Section 3, RA 7877, he would
still be administratively liable. It is true that this provision calls for a demand, request or requirement
of a sexual favor. But it is not necessary that the demand, request or requirement of a sexual favor
be articulated in a categorical oral or written statement. It may be discerned, with equal certitude,
from the acts of the offender. Holding and squeezing Domingos shoulders, running his fingers
across her neck and tickling her ear, having inappropriate conversations with her, giving her money
allegedly for school expenses with a promise of future privileges, and making statements with
unmistakable sexual overtones all these acts of Rayala resound with deafening clarity the
unspoken request for a sexual favor.