Wednesday, March 28, 2012

PHILSA International Placement & Services Corporation vs. Honorable Secretary of Labor and Employment [G.R. No. 103144 April 4, 2001]

Facts: Philsa is a domestic corporation engaged in the recruitment of workers for overseas employment. Sometime in January 1985, private respondents, who were recruited by petitioner for employment in Saudi Arabia, were required to pay placement fees in the amount of P5,000.00 for private respondent Rodrigo L. Mikin and P6,500.00 each for private respondents Vivencio A. de Mesa and Cedric P. Leyson. After the execution of their respective work contracts, private respondents left for Saudi Arabia on January 29, 1985. They then began work for Al-Hejailan Consultants A/E, the foreign principal of petitioner. While in Saudi Arabia, private respondents were allegedly made to sign a second contract which changed some of the provisions of their original contract resulting in the reduction of some of their benefits and privileges. They were again allegedly forced by their foreign employer to sign a third contract which increased their work hours from 48 hours to 60 hours a week without any corresponding increase in their basic monthly salary. When they refused to sign this third contract, the services of private respondents were terminated by Al-Hejailan and they were repatriated to the Philippines. 

Upon their arrival in the Philippines, private respondents demanded from petitioner Philsa the return of their placement fees and for the payment of their salaries for the unexpired portion of their contract. When petitioner refused, they filed a case before the POEA against petitioner Philsa and its foreign principal, Al-Hejailan. On the aspects of the case involving money claims arising from the employer-employee relations and illegal dismissal, the POEA rendered a decision dated August 31, 1988 ordering respondent PHILSA to pay complainants, jointly and severally with its principal Al-Hejailan. 

In a decision dated July 26, 1989 , the NLRC modified the appealed decision of the POEA Adjudication Office by deleting the award of salary deductions and differentials. The awards to private respondents were deleted by the NLRC considering that these were not raised in the complaint filed by private respondents. Private respondents then elevated the July 26, 1989 decision of the NLRC to the Supreme Court in a petition for review for certiorari where it was docketed as G.R. No. 89089. However, in a Resolution dated October 25, 1989, the petition was dismissed outright for "insufficiency in form and substance, having failed to comply with the Rules of Court and Circular No. 1-88 requiring submission of a certified true copy of the questioned resolution dated August 23, 1989. 

Almost simultaneous with the promulgation of the August 31, 1988 decision of the POEA on private respondents' money claims, the POEA issued a separate Order dated August 29, 1988 resolving the recruitment violations aspect of private respondents' complaint. In this Order, the POEA found petitioner guilty of illegal exaction, contract substitution, and unlawful deduction. Under the POEA Rules and Regulations, the decision of the POEA thru the LRO suspending or canceling a license or authority to act as a recruitment agency may be appealed to the Ministry (now Department) of Labor and Employment. Accordingly, after the denial of its motion for reconsideration, petitioner appealed the August 31, 1988 Order to the Secretary of Labor and Employment. However, in an Order dated September 13, 1991, public respondent Secretary of Labor and Employment affirmed in toto the assailed Order. Petitioner filed a Motion for Reconsideration but this was likewise denied in an Order dated November 25, 1991. 


(1) Whether or not the public respondent has acted without or in excess of jurisdiction, or with grave abuse of discretion in holding petitioner liable for illegal deductions/withholding of salaries for the supreme court itself has already absolved petitioner from this charge. 

(2) Whether or not the petitioner can be held liable for illegal exaction as POEA Memorandum Circular No. 11, Series of 1983, which enumerated the allowable fees which may be collected from applicants, is void for lack of publication. 


(1) Petitioner is correct in stating that the July 26, 1989 Decision of the NLRC has attained finality by reason of the dismissal of the petition for certiorari assailing the same. However, the said NLRC Decision dealt only with the money claims of private respondents arising from employer-employee relations and illegal dismissal and as such, it is only for the payment of the said money claims that petitioner is absolved. The administrative sanctions, which are distinct and separate from the money claims of private respondents, may still be properly imposed by the POEA. In fact, in the August 31, 1988 Decision of the POEA dealing with the money claims of private respondents, the POEA Adjudication Office precisely declared that "respondent's liability for said money claims is without prejudice to and independent of its liabilities for the recruitment violations aspect of the case which is the subject of a separate Order." 

The fact that petitioner has been absolved by final judgment for the payment of the money claim to private respondent de Mesa does not mean that it is likewise absolved from the administrative sanctions which may be imposed as a result of the unlawful deduction or withholding of private respondents' salary. The POEA thus committed no grave abuse of discretion in finding petitioner administratively liable of one count of unlawful deduction/withholding of salary. 

(2) No. The administrative circular under consideration is one of those issuances which should be published for its effectivity, since its purpose is to enforce and implement an existing law pursuant to a valid delegation. Considering that POEA Administrative Circular No. 2, Series of 1983 has not as yet been published or filed with the National Administrative Register, the same is ineffective and may not be enforced. The fact that the said circular is addressed only to a specified group, namely private employment agencies or authority holders, does not take it away from the ambit of our ruling in Tañada vs. Tuvera. In the case of Phil. Association of Service Exporters vs. Torres, the administrative circulars questioned therein were addressed to an even smaller group, namely Philippine and Hong Kong agencies engaged in the recruitment of workers for Hong Kong, and still the Court ruled therein that, for lack of proper publication, the said circulars may not be enforced or implemented. 

Our pronouncement in Tañada vs. Tuvera is clear and categorical. Administrative rules and regulations must be published if their purpose is to enforce or implement existing law pursuant to a valid delegation. The only exceptions are interpretative regulations, those merely internal in nature, or those so-called letters of instructions issued by administrative superiors concerning the rules and guidelines to be followed by their subordinates in the performance of their duties. Administrative Circular No. 2, Series of 1983 has not been shown to fall under any of these exceptions. 

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1 comments: on "PHILSA International Placement & Services Corporation vs. Honorable Secretary of Labor and Employment [G.R. No. 103144 April 4, 2001]"

jaylen watkins said...

Much exceptional and very helpful one surely.

International Contracts

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