UNIVERSITY OF THE PHILIPPINES COLLEGE OF LAW Const 2
E2024 Professor Loanzon
Sameer Overseas Placement Agency, Inc. v. Joy C. Cabiles
G.R. No. 170139 – August 5, 2014
En banc | Leonen, J.
Case Summary:
Joy Cabiles claimed she was illegally dismissed, filed a complaint against petitioner and Taiwan Wacoal.
Court ruled that she was illegally dismissed because petitioner’s allegations were not supported by evidence.
Court also decided on the constitutionality of Sec. 10, RA 8042 with regard to its unreasonable classification
among OFWs.
FACTS OF THE CASE
• Sameer Overseas Placement Agency is a recruitment and placement agency, who accepted Joy’s
application to their ad for a quality control job in Taiwan. She was asked to sign a 1-year employment
contract with a salary of NT$15,360.00. Joy alleged that Sameer required her to pay a placement fee
of P70,000.00 when she signed the contract.
o June 26, 1997 - Joy started to work for Taiwan Wacoal. She was asked to work as a cutter.
o July 14, 1997 – Sameer claimed that a Mr. Huwang from Wacoal told Joy that she was
terminated without prior notice, and asked her to “prepare for immediate repatriation.”
o Joy was informed that she only earned NT$9,000 from June 26 to July 14, as Wacoal deducted
NT$3,000 to cover her plane ticket home.
• October 15, 1997 – Joy filed a complaint with the NLRC against petitioner and Wacoal, claiming she
was illegally dismissed. She asked for the return of her placement fee, the withheld amount for
repatriation costs, payment of her salary for 23 months as well as moral and exemplary damages. She
also identified Wacoal as Sameer’s foreign principal.
• Sameer alleged that her termination was due to her inefficiency, negligence in her duties, and “failure
to comply with the work requirements of her foreign employer.”
o Also claimed that they did not ask for a placement fee, showed an official receipt for P20,360.
o Said Wacoal’s accreditation with petitioner was transferred to the Pacific Manpower &
Management Services, Inc. as of August 6, so they have already been replaced.
o Pacific moved for the dismissal of petitioner’s claims against it, alleging the absence of an
employer-employee relationship; therefore, claims against it were outside the Labor Arbiter’s
(LA) jurisdiction. Argued that to identify employer’s contractual obligations, employment
contract must be presented first. Further denied it assumed liability for petitioner’s illegal acts.
• July 29, 1998 – LA dismissed the complaint, ruling that it was based on mere allegations. Found there
was no excess payment of placement fees based on the receipt, and considered the transfer of
obligations to Pacific immaterial in view of the dismissal of the complaint.
• March 31, 2004 – After an appeal, NLRC declared Joy was illegally dismissed. Reiterated the doctrine
that the burden of proof to show that the dismissal was just belongs to the employer.
o Sameer failed to prove there were just causes for termination; no sufficient proof that Joy was
inefficient in her work and that she failed to comply with company requirements. Procedural
due process was also not observed in the termination.
o NLRC awarded respondent 3 months of salary (NT$46,080), the reimbursement of the
NT$3,000 withheld from her, and attorney’s fees (NT$300).
• NLRC denied the agency’s MFR, so Sameer filed a petition for certiorari with the CA, who affirmed
the decision of the NLRC, and also remanded the case to the latter to address the validity of the
allegations against Pacific.
• Sameer filed a petition for the SC, asserting the following:
o The CA erred in affirming the ruling of the NLRC; that there was a just cause for termination
because there was a finding from Wacoal that respondent was inefficient in her work; and that
since Wacoal’s accreditation was validly transferred to Pacific when respondent filed her
complaint, they should assume responsibility for Wacoal’s contractual obligations to the
workers Sameer originally hired.
UNIVERSITY OF THE PHILIPPINES COLLEGE OF LAW Const 2
E2024 Professor Loanzon
ISSUE/S & RATIO/S
1. W/N there was just cause for Joy’s dismissal—NO.
• Sameer failed to show that there was just cause; Wacoal also failed to accord her due process. Workers
are entitled to substantive and procedural due process before termination, as security of tenure for labor
is constitutionally guaranteed. Employees are not stripped of this when they move to work in a different
jurisdiction.
o With respect to the rights of OFWs, we follow the principle of lex loci contractus, the law of
the place where the contract is made. (Triple Eight Integrated Services, Inc. v. NLRC)
o “The provisions of the Constitution as well as the Labor Code which afford protection to labor
apply to Filipino employees whether working within the Philippines or abroad” (PCL Shipping
Philippines, Inc. v. NLRC)
o Petitioner’s allegation may constitute a just cause for termination under Art. 282 (b),1 but only
if they were able to prove it. It must be shown that: 1) the employer has set standards of conduct
and workmanship against which the employee will be judged; 2) the standards of conduct and
workmanship must have been communicated with the employee; and 3) the communication
was made at a reasonable time prior to the employee’s performance assessment.
o The pre-determined standards set by the employer are the bases for determining a
probationary employee’s fitness, propriety, efficiency, and qualifications as a regular
employee. Due process requires that the probationary employee be informed of such standards
at the time of engagement so he can adjust his character or workmanship accordingly.
o In this case, petitioner’s allegations were not supported by any evidence, nor did they bother
to satisfy what requirements were not met, what efficiency standards were violated, or what
particular acts of respondent constituted inefficiency. Also, no showing that respondent was
sufficiently informed of the standards against which her work efficiency and performance will
be judged. Even the matter as basic as the job title was not clear.
• Petitioner also failed to comply with the requirements of due process, evidenced by respondent’s
dismissal less than one year from hiring and her repatriation on the same day. A valid dismissal
requires both a valid cause and adherence to the valid procedure of dismissal.2
o The abruptness of the termination negated any finding that she was properly notified and given
the opportunity to be heard. Her constitutional right to due process of law was violated.
2. W/N respondent is entitled to her salary for the unexpired portion of the employment contract—YES.
• Sec. 10 of RA 8042 (Migrant Workers and Overseas Filipinos Act of 1995) states that overseas workers
who were terminated without just cause “shall be entitled to the full reimbursement of his placement
fee with interest of 12% per annum, plus his salaries for the unexpired portion of his employment
contract or for 3 months for every year of the unexpired term, whichever is less.”3
o The Labor Code also entitles the employee to 10% of the amount of withheld wages as
attorney’s fees when the withholding is unlawful.
• SC upheld the finding that respondent is entitled to all of the awards given by the NLRC decision, but
the award of the 3-month equivalent of respondent’s salary should be increased to the amount
equivalent to the unexpired term of the employment contract.
3. W/N the award of the 3-month equivalent of respondent’s salary should be modified—YES.
• The clause “or for 3 months every year for every year of the unexpired term, whichever is less” is
unconstitutional for violating the equal protection clause and substantive due process. (Serrano v.
Gallant Maritime Services, Inc. and Marlow Navigation Co., Inc., 2009)
o Because this clause was reinstated in RA 8042 upon promulgation of RA 10022 in 2010, the
reinstatement of the clause in RA 8042 was not yet in effect at the time of respondent’s
termination in 1997.
o In this case, the law passed incorporates the clause already declared unconstitutional, without
any perceived substantial change in the circumstances. As this may cause confusion on part of
the NLRC and the CA, and may delay the execution of the judgment in this case, there is a
necessity to decide its constitutionality.
UNIVERSITY OF THE PHILIPPINES COLLEGE OF LAW Const 2
E2024 Professor Loanzon
o SC reiterated its finding in Serrano that limiting wages that should be recovered by an illegally
dismissed overseas worker to three months is both a violation of due process and the equal
protection clauses of the Constitution. The reinstated clause does not satisfy the requirement
of reasonable classification.3
o Labor is afforded special protection under the Constitution. The subject clause creates a
sublayer of discrimination among OFWs whose contract periods are for more than one year.
Strict scrutiny is not needed to conclude that these classifications do not rest on any real or
substantial distinctions that would justify different treatments in terms of money claims
resulting from illegal termination. OFWs, regardless of their classifications, are entitled to
security of tenure. It is a state policy to protect the rights of workers without qualification as
to the place of employment.
o The rights of a fixed-period local worker are equal to a fixed-period overseas worker when
they are illegally terminated. The same is true for OFWs with an employment contract of less
than one year, and OFWs with at least one year, and with OFWs with at least a year left in their
contracts, and OFWs with less than a year in their contracts when they were illegally dismissed.
The Court cannot subscribe to the argument that OFWs are contractual employees who
can never acquire regular employment status, unlike local workers, because it already
justifies differentiated treatment in terms of computation of money claims.
o The jurisdictional and enforcement issues on OFWs’ money claims do not justify a
differentiated treatment in the computation of money claims. These issues justify an equal, if
not greater protection and assistance to OFWs who generally are more prone to exploitation
given their physical distance from our government.
o The Court also finds that the classifications are not relevant to the purpose of the law, which
is to “establish a higher standard of protection and promotion of the welfare of migrant workers,
their families and overseas Filipinos in distress, and for other purposes.” Putting a cap on the
money claims of certain OFWs does not increase the standard of protection afforded to them,
while foreign employers are incentivized to enter into contracts of at least a year because it
gives them more flexibility to violate the rights of OFWs. Their liability is decreased at the
expense of the workers when the latter are arbitrarily terminated.
o The stipulated clause operates to benefit the wrong party and allows that party, without
justifiable reason, to mitigate its liability for wrongful dismissals.
• Respondent is entitled to her salary for the unexpired portion of her contract, in accordance with Sec.
10 of RA 8042. The 3-month equivalence of respondent’s salary is modified to her salary from
July 15, 1997 to June 25, 1998.
• On the interest rate, BSP revised the interest rate for loan or forbearance from 12% to 6% in the absence
of stipulation, which applies to this case. Sec. 10 of RA 8042 provides that unlawfully terminated
OFWs are entitled to the reimbursement of his/her placement fee with an interest of 12% per annum;
since BSP circulars cannot repeal this law, the issuance of its circular does not have the effect of
changing the interest on awards for reimbursement of placement fees, despite it being stated in Sec. 1
of the circular that the interest rate applies even to judgments.
o However, awards for salary for the unexpired portion of the employment contract under RA
8042 is not covered by the circular because the law does not provide a specific interest rate that
should apply.
• In sum, if the judgment did not become final and executory before July 1, 2013, and there was no
stipulation in the contract providing a different interest rate, other money claims under Sec. 10 of RA
8042 shall be subject to the 6% interest per annum in accordance with Circular No. 799. Hence,
respondent is entitled to an interest of 6% per annum on her money claims from the finality of
judgment.
RULING
Petition DENIED, CA decision affirmed with modification. Sameer ordered to pay respondent the amount
equivalent her salary for the unexpired portion of her employment contract at an interest of 6% per annum
UNIVERSITY OF THE PHILIPPINES COLLEGE OF LAW Const 2
E2024 Professor Loanzon
from the finality of this judgment. Petitioner also ordered to reimburse respondent the withheld NT$3,000
salary and pay respondent attorney’s fees of NT$300 at an interest of 6% per annum from the finality of this
judgment.
The clause, “or for three (3) months for every year of the unexpired term, whichever is less” in Sec. 7 of RA
10022 amending Sec. 10 of RA 8042 is declared unconstitutional and null and void.
NOTES
1 Art. 282 of the Labor Code. Termination by employer. – An employer may terminate an employment for any
of the following causes:
a) Serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work;
b) Gross and habitual neglect by the employee of his duties;
c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly
authorized representative;
d) Commission of a crime or offense by the employee against the person of his employer or
any immediate member of his family or his duly authorized representatives; and
e) Other causes analogous to the foregoing.
2 Employer is required to give the employee at least two written notices before termination, one of which
informs them of the particular acts that may cause their dismissal. The other notice must inform the employee
about the employer’s decision. Aside from this requirement, the employee must also be given “an
opportunity to be heard.”
3Sec. 15 of RA 8042 also states that “repatriation of the worker and the transport of [his or her] personal
belongings shall be the primary responsibility of the agency which recruited or deployed the worker overseas,”
with the exception when “termination of employment is due solely to the fault of the worker,” which, as
established here, is not the case.
4A reasonable classification “(1) must rest on substantial distinctions; (2) must be germane to the purposes of
the law; (3) must not be limited to existing conditions only; and (4) must apply equally to all members of the
same class.”
* On the liabilities of Wacoal as principal and petitioner as the employment agency:
o Sec. 10 of RA 8042 – foreign employer and local employment agency are jointly and severally
liable for money claims, including claims from employee-employer relationship and/or
damages. Also provides that the performance bond filed by the local agency shall be
answerable for such money claims or damages if they were awarded to the employee.
o Filing of money claims against a foreign employer is attended by practical and legal
complications. The provision on joint and several liability assures OFWs that their rights will
not be frustrated with these complications.
o Fundamental effect of joint and several liability is that “each of the debtors is liable for the
entire obligation.” Final determination may be achieved even if only one of the joint and several
debtors are impleaded in an action. Hence, in overseas employment, either the local agency or
foreign employer may be sued for all claims arising from the foreign employer’s labor law
violations.
o While the provision shifts the burden of going after the foreign employer to the local
employment agency, the later that is held to answer for the OFW’s money claims is not left
without remedy. The law does not preclude it from going after the foreign employer for
reimbursement of whatever payment it has made to the employee to answer for the money
claims against the foreign employer.
o Provision also ensures that local agencies must have mechanisms guarding against
unscrupulous foreign employers.
UNIVERSITY OF THE PHILIPPINES COLLEGE OF LAW Const 2
E2024 Professor Loanzon
o With the present state of pleadings, it’s not possible to determine whether there was indeed a
transfer of obligations from petitioner to Pacific. But this should not be an obstacle for the
respondent to proceed with the enforcement of this judgment. Petitioner is possessed with the
resources to determine the proper legal remedies to enforce its rights against Pacific, if any.
