Labor Digest

PI MANUFACTURING INC v PIMS Facts: Petitioner P.I. Manufacturing, Incorporated is a domestic corporation engaged in the manufacture and sale of household appliances. On the other hand, respondent P.I. Manufacturing Supervisors and Foremen Association (PIMASUFA) is an organization of petitioner’s supervisors and foremen, joined in this case by its federation, the National Labor Union (NLU). On December 10, 1987, the President signed into law Republic Act (R.A.) No. 66402 providing, among others, an increase in the statutory minimum wage and salary rates of employees and workers in the private sector. Thereafter, on December 18, 1987, petitioner and respondent PIMASUFA entered into a new Collective Bargaining Agreement (1987 CBA) whereby the supervisors were granted an increase of P625.00 per month and the foremen, P475.00 per month. The increases were made retroactive to May 12, 1987, or prior to the passage of R.A. No. 6640, and every year thereafter until July 26, 1989. Issue: whether the implementation of R.A. No. 6640 resulted in a wage distortion and whether such distortion was cured or remedied by the 1987 CBA.

skills, length of service, or other logical bases of differentiation. Otherwise stated, wage distortion means the disappearance or virtual disappearance of pay differentials between lower and higher positions in an enterprise because of compliance with a wage order. . It is therefore undeniable that the increase in the wage rates by virtue of R.A. No. 6640 resulted in wage distortion or the elimination of the intentional quantitative differences in the wage rates of the above employees.

However, while we find the presence of wage distortions, we are convinced that the same were cured or remedied when respondent PIMASUFA entered into the 1987 CBA with petitioner after the effectivity of R.A. No. 6640. The 1987 CBA increased the monthly salaries of the supervisors by P625.00 and the foremen, by P475.00, effective May 12, 1987. These increases reestablished and broadened the gap, not only between the supervisors and the foremen, but also between them and the rank-and-file employees. Interestingly, such gap as re-established by virtue of the CBA is more than a substantial compliance with R.A. No. 6640.

Held: We grant the motion. Ratio: R.A. No. 6727, otherwise known as the Wage Rationalization Act, explicitly defines "wage distortion" as: x x x a situation where an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on

We believe and so hold that the reestablishment of a significant gap or differential between regular employees and casual employees by operation of the CBA was more than substantial compliance with the requirements of the several Wage Orders (and of Article 124 of the Labor Code). That this re-establishment of a significant differential was the result of collective bargaining negotiations, rather than of a special grievance procedure, is not a legal basis for ignoring it.

The provisions of the CBA should be read in harmony with the wage orders, whose benefits should be given only to those employees covered thereby.

contracting, transporting, utilizing, hiring or procuring (of) workers. "

The goal of collective bargaining is the making of agreements that will stabilize business conditions and fix fair standards of working conditions.

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.

People v Panis

People v Goce

Facts: 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 relation to Article 39 of the Labor Code.

Facts: On January 12, 1988, an information for illegal recruitment committed by a syndicate and in large scale, punishable under Articles 38 and 39 of the Labor Code (Presidential Decree No. 442) as amended by Section 1(b) of Presidential Decree No. 2018, was filed against spouses Dan and Loma Goce and herein accused-appellant Nelly Agustin.

Illustration shows, almost all of the members of respondent PIMASUFA have been receiving wage rates above P100.00 and, therefore, not entitled to the P10.00 increase.

Issue: The basic issue in this case is the correct interpretation of Article 13(b) of P.D. 442, otherwise known as the Labor Code, Held: 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. Ratio: 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,

It is appellant's defensive theory that all she did was to introduce complainants to the Goce spouses. Issue: whether or not appellant Agustin merely introduced complainants to the Goce couple or her actions went beyond that. Held: The testimonial evidence hereon show that she indeed further committed acts constitutive of illegal recruitment. Ratio: All four prosecution witnesses testified that it was Agustin whom they initially approached regarding their plans of working overseas. It was from her that they learned about the fees they had to pay, as well as the papers that they had to submit. It was after they had talked to her that they met the accused spouses who owned the placement agency.

Article 38 of the Labor Code, as amended by Presidential Decree No. 2018, provides that any recruitment activity, including the prohibited practices enumerated in Article 34 of said Code, undertaken by nonlicensees or non-holders of authority shall be deemed illegal and punishable under Article 39 thereof. The same article further provides that illegal recruitment shall be considered an offense involving economic sabotage if any of these qualifying circumstances exist, namely, (a) when illegal recruitment is committed by a syndicate, i.e., if it is carried out by a group of three or more persons conspiring and/or confederating with one another; or (b) when illegal recruitment is committed in large scale, i.e., if it is committed against three or more persons individually or as a group. On the other hand, referral is the act of passing along or forwarding of an applicant for employment after an initial interview of a selected applicant for employment to a selected employer, placement officer or bureau. There is illegal recruitment when one gives the impression of having the ability to send a worker abroad." 29 It is undisputed that appellant gave complainants the distinct impression that she had the power or ability to send people abroad for work such that the latter were convinced to give her the money she demanded in order to be so employed. Her act of collecting from each of the complainants payment for their respective passports, training fees, placement fees, medical tests and other sundry expenses unquestionably constitutes an act of recruitment within the meaning of the law. DARVIN v CA Facts: The evidence for the prosecution, based on the testimony of private respondent, Macaria Toledo, shows that sometime in March, 1992, she met accused-appellant Darvin in the latter's

residence at Dimasalang, Imus, Cavite, through the introduction of their common friends, Florencio Jake Rivera and Leonila Rivera. In said meeting, accused-appellant allegedly convinced Toledo that by giving her P150,000.00, the latter can immediately leave for the United States without any appearance before the U.S. embassy. Issue: whether the accused-appellant indeed engaged in recruitment activities, as defined under the Labor Code. Held: We find the appeal impressed with merit. Ratio: Applied to the present case, to uphold the conviction of accused-appellant, two elements need to be shown: (1) the person charged with the crime must have undertaken recruitment activities; and (2) the said person does not have a license or authority to do so. In this case, we find no sufficient evidence to prove that accused-ppellant offered a job to private respondent. It is not clear that accused gave the impression that she was capable of providing the private respondent work abroad. What is established, however, is that the private respondent gave accused-appellant P150,000.00. The claim of the accused that the P150,000.00 was for payment of private respondent's air fare and US visa and other expenses cannot be ignored because the receipt for the P150,000.00, which was presented by both parties during the trial of the case, stated that it was "for Air Fare and Visa to USA." 13 Had the amount been for something else in addition to air fare and visa expenses, such as work placement abroad, the receipt should have so stated. By themselves, procuring a passport, airline tickets and foreign visa for another individual, without more, can hardly qualify as recruitment activities. Aside from the testimony of private respondent, there is nothing to show that accused-appellant engaged in recruitment activities.

WALLEM PHILIPPINES SHIPPING INC. v MINISTER OF LABOR Facts: Private respondents were hired by petitioner sometime in May 1975 to work as seamen for a period of ten months on board the M/V Woermann Sanaga, a Dutch vessel owned and operated by petitioner's European principals. While their employment contracts were still in force, private respondents were dismissed by their employer, petitioner herein, and were discharged from the ship on charges that they instigated the International Transport Federation (ITF) to demand the application of worldwide ITF seamen's rates to their crew. Issue: The whole controversy is centered around the liability of petitioner when it ordered the dismissal of herein private respondents before the expiration of their respective employment contracts. Held: The findings and conclusion of the Board should be sustained. Ratio: As already intimated above, there is no logic in the statement made by the Secretariat's Hearing Officer that the private respondents are liable for breach of their employment contracts for accepting salaries higher than their contracted rates. Said respondents are not signatories to the Special Agreement, nor was there any showing that they instigated the execution thereof. Respondents should not be blamed for accepting higher salaries since it is but human for them to grab every opportunity which would improve their working conditions and earning capacity. The records fail to establish clearly the commission of any threat. But even if there had been such a threat, respondents' behavior should not be censured because it is but natural for them to employ some means of pressing their demands for petitioner, who refused to abide with the terms of the Special Agreement, to honor and respect the same. They were only

acting in the exercise of their rights, and to deprive them of their freedom of expression is contrary to law and public policy. VIR-JEN SHIPPING v NLRC Facts: The records show that private respondents have a manning contract for a period of one (1) year with petitioner in representation of its principal Kyoei Tanker Co. Ltd. Aware of the problem that vessels not paying rates imposed by the International Transport Workers Federation (ITF) would be detained or interdicted in foreign ports controlled by the ITF, petitioner and private respondents executed a side contract to the effect that should the vessel M/T Jannu be required to pay ITF rates when it calls on any ITF controlled foreign port, private respondents would return to petitioner the amounts so paid to them. On March 23, 1979, the master of the vessel who is one of the private respondents sent a cable to petitioner, while said vessel was en route to Australia which is an ITF controlled port, stating that private respondents were not contented with the salary and benefits stipulated in the manning contract, and demanded that they be given 50% increase thereof, as the "best and only solution to solve ITF problem." The seamen were accordingly disembarked in Japan and repatriated to Manila. Issue: That the respondent NLRC had no more jurisdiction to entertain private respondents' appeal because the NSB decision became final and executory for failure of said respondents to serve on he petitioner a copy of their "APPEAL AND MEMORANDUM OF APPEAL" within the ten (10) day reglementary period for appeal and even after the expiration of said period; Held: We have arrived at the conclusion that the shortened period of ten (10) days

fixed by Article 223 contemplates calendar days and not working days. Ratio: We are persuaded to this conclusion, if only because We believe that it is precisely in the interest of labor that the law has commanded that labor cases be promptly, if not peremptorily, dispose of. Long periods for any acts to be done by the contending parties can be taken advantage of more by management than by labor. Most labor claims are decided in their favor and management is generally the appellant. 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. Issue: Whether or not the Seamen breached their respective employment contracts; Held: With respect to the first issue, the Board believes that the answer should be in the affirmative. Ratio: This is so for the Seamen demanded and in fact received from the Company wages over and above their contracted rates, which in effect is an alteration or modification of a valid and subsisting contract; and the same not having been done thru mutual consent and without the prior approval of the Board the alteration or modification is contrary to the provisions of the New Labor Code, as amended, more particularly Art. 34 (i) thereof which states that: Art. 34. Prohibited practices.—It shall be unlawful for any individual, entity, licensee or holder of authority: xxx

xxx

xxx

(i) To substitute or alter employment contracts approved and verified by the Department of Labor from the time of actual signing thereof by the parties up to and including the period of expiration of the same without the approval of the Department of Labor; xxx

xxx

xxx

The revision of the contract was not done thru mutual consent for the Company did not voluntarily agree to an increase of wage, but was only constrained to make a counter-proposal of 25% increase to prevent the vessel from being interdicted and/or detained by the ITF because at the time the demand for salary increase was made the vessel was enroute to Kwinana, Australia (via Senipah, Indonesia), a port where the ITF is strong and militant. While the Board recognizes the rights of the Seamen to seek higher wages provided the increase is arrived at thru mutual consent, it could not however, sanction the same if the consent of the employer is secured thru threats, intimidation or force. Issue: Whether or not the Seamen were illegally dismissed by the Company; Held: the Board believes that the termination of the services of the Seamen was legal and in accordance with the provisions of their respective employment contracts. Ratio: Considering the findings of the Board that the Seamen breached their contracts, their subsequent repatriation was justified. While it may be true that the Seamen were hired for a definite period their services could be terminated prior to the completion of the fun term thereof for a just and valid cause. It may be stated in passing that Vir-jen Shipping & Marine Services, Inc., despite the fact that it was compelled to accede to a 25% salary increase for the Seamen, tried

to convince its principal Kyoei Tanker, Ltd. to an adjustment in their agency fee to answer for the 25% increase, but the latter not only denied the request but likewise terminated their Manning, Agreement. The Seamen's breach of their employment contracts and the subsequent termination of the Manning Agreement of Vir-jen Shipping & Marine Services, Inc. with the Kyoei Tanker, Ltd., justified the termination of the Seamen's services. Chavez v Perez Facts: On December 1, 1988, petitioner, an entertainment dancer, entered into a standard employment contract for overseas Filipino artists and entertainers with Planning Japan Co., Ltd., 2 through its Philippine representative, private respondent Centrum Placement & Promotions Corporation. December 5, 1888, the POEA approved the contract. Subsequently, petitioner executed the following side agreement with her Japanese employer through her local manager, Jaz Talents Promotion: Date: Dec. 10, 1988 SUBJECT:

Salary Deduction

MANAGERIAL COMMISSION DATE OF _________________

DEPARTURE:

ATTENTION: MR. IWATA I, ESALYN CHAVEZ, DANCER, do hereby with my own free will and voluntarily have the honor to authorize your good office to please deduct the amount of TWO

HUNDRED FIFTY DOLLARS ($250) from my contracted monthly salary of SEVEN HUNDRED FIFTY DOLLARS ($750) as monthly commission for my Manager, Mr. Jose A. Azucena, Jr. That, my monthly salary (net) is FIVE HUNDRED DOLLARS ($500). Issue: wages with the POEA on February 21, 1991. She prayed for the payment of Six Thousand U.S. Dollars (US$6,000.00), representing the unpaid portion of her basic salary for six months. Held: The petition is meritorious. Ratio: Firstly, we hold that the managerial commission agreement executed by petitioner to authorize her Japanese Employer to deduct Two Hundred Fifty U.S. Dollars (US$250.00) from her monthly basic salary is void because it is against our existing laws, morals and public policy. It cannot supersede the standard employment contract of December 1, 1988 approved by the POEA with the following stipulation appended Any alterations or changes made in any part of this contract without prior approval by the POEA shall be null and void Clearly, the basic salary of One Thousand Five Hundred U.S. Dollars (US$1,500.00) guaranteed to petitioner under the parties' standard employment contract is in accordance with the minimum employment standards with respect to wages set by the POEA, Thus, the side agreement which reduced petitioner's basic wage to Seven Hundred Fifty U.S. Dollars (US$750.00) is null and void for violating the POEA's minimum employment standards, and for not having been approved by the POEA.