Court rules with OFW on claims

Published by rudy Date posted on April 1, 2009

For being discriminatory and oppressive, the Supreme Court declared as unconstitutional a provision in the Migrant Overseas Filipinos Act, or Republic Act 8042, that sets a limit on monetary claims of illegally dismissed overseas Filipino workers (OFWs).

The High Court en banc, in a 38-page decision penned by Associate Justice Ma. Alicia Austria-Martinez, said the fifth paragraph, Section 10 of the law violates the OFWs right to equal protection.

The ruling on the constitutionality of the clause stemmed from a petition filed by Antonio Serrano, a seafarer, who was illegally dismissed from his job after only three months in service.

The provision grants the illegally dismissed OFW, among others, “salaries for the unexpired portion of his employment contract or for three months for every year of the unexpired term whichever is less.”

The court noted that while the provision appears neutral as it applies to all OFWs, “a closer examination reveals that the subject clause has a discriminatory intent against and an invidious impact on OFWs at two levels.”

The first level, it pointed out, concerns OFWs with employment contracts of less than one year, vis-à-vis overseas workers with employment contracts of one year or more. The second level involves OFWs with employment contracts of more than one year and OFWs vis-à-vis local workers with fixed period employment.”

The assailed provision, the High Tribunal said, “Introduced a differentiated rule of computation of the money claims of illegally dismissed OFWs based on their employment periods, in the process singling out one category whose contracts have an unexpired portion of one year or more and subjecting them to the peculiar disadvantage of having their monetary awards limited to their salaries for three months or for the unexpired portion or whichever is less, but all the while sparing the other category from such prejudice, simply because the latter’s unexpired contract falls short of one year.”

Undelivered promise

Records of the case showed that Serrano was hired by respondents Gallant Maritime Services Inc. and Marlow Navigation Co. Ltd. as chief officer for 12 months with a basic monthly pay of $1,400.

On the day of his departure on March 19, 1998, the respondents downgraded Serrano’s employment contract to second officer with a monthly salary of 1,000, which Serrano was forced to accept with the assurance that he would be made chief officer by the end of April 1998.

The respondents failed on their promise and Serrano, who refused to stay on as second officer, was repatriated on May 26, 1998.

Serrano filed a complaint for constructive dismissal against respondent with the Labor arbiter and demanded payment for the unexpired portion of nine months and 23 days of his contract in the total amount of $26,442.73 having only served two months and seven days when he was repatriated.

The Labor arbiter ruled in Serrano’s favor and ordered respondents to pay Serrano $8,770 representing only three months of the unexpired portion of his contract.

The National Labor Relations Commission (NLRC), on Serrano’s appeal, upheld the arbiter’s findings of illegal dismissal but modified his claim to only $4,669.

While the Court of Appeals affirmed the ruling of the commission on the reduction of salary rate, it skirted the constitutionality issue raised by Serrano against the clause.

Court ruling

In its 38-page decision, the High Court granted the petition of Serrano and ruled that “the subject clause ‘or for three months for every year of the unexpired term, whichever is less’ in the fifth paragraph of Section 10 of Republic Act 8042 is declared unconstitutional.”

The justices also modified the decision of the appellate court directing respondents to pay Serrano “his salaries for the entire unexpired portion of his employment contract consisting of nine months and 23 days computed at the rate of $1,400 per month.”

In a separate concurring opinion, Associate Justice Antonio Carpio said that the assailed provision is “unduly oppressive, unreasonable and repugnant to the Constitution” and an “invalid exercise of police power.”

Carpio said that OFWs belong to a disadvantaged class, are oppressed and need protection and the assailed clause “makes them even more oppressed.”

“The assailed provision prevents the OFW from bargaining for payment of more than three months’ salary in case the employer wrongfully terminates the employment,” he added. “The law may set a minimum amount that the employee can recover, but it cannot set a ceiling because this unreasonably curtails the employee’s right to bargain for better terms of employment. The right to bargain for better terms of employment is a constitutional right that cannot be unreasonably curtailed by the state.”

He noted that the subject clause is the reverse of the constitutional mandate of the law to uphold the dignity of Filipino migrant workers, protect overseas labor and promote full employment opportunities.

“Instead of protecting the rights and promoting the welfare of OFWs, the assailed paragraph unreasonably curtails their freedom to enter into employment contracts; instead of empowering OFWs, it prevents them from bargaining for better terms; instead of setting the minimum amount that OFWs are entitled to in case they are terminated without just, valid or authorized cause, it provides a ceiling; instead of allowing OFWs who have been terminated without just, valid or authorized cause to recover what is rightfully due them, it arbitrarily sets the recoverable amount to their three-month salary,” Carpio said.

The court admitted its misgivings on the accuracy of its interpretation of the assailed clause in the case of Marsaman ManningAgency Inc. v. NLRC that became the basis in resolving 13 other illegal-dismissal cases of OFWs.

Government’s failure

The Office of the Solicitor General defended the subject clause as a police-power measure of the state designed to protect the employment of Filipino seafarers overseas, claiming that by limiting the liability to three months, Filipino seafarers have better chance of getting hired by foreign employers. But it failed to cite the source of its perception of state interest that is sought to be served by the assailed clause.

“The court dug deep into the records but found no compelling state interest that the subject clause may possibly serve.” The government reportedly “failed to discharge its burden of proving the existence of a compelling state interest that would justify the perpetuation of the discrimination against OFWs under the subject clause.”

“There can never be a justification for any form of government action that alleviates the burden of one sector, but imposes the same burden on another sector, especially when the favored sector is composed of private businesses such as placement agencies, while the disadvantaged sector is composed of OFWs whose protection no less than the Constitution commands. The idea that private business interest can be elevated to the level of a compelling state interest is odious,” the court said.

It added that the subject clause violates due process as it deprives the illegally dismissed OFW salaries and other emoluments he is entitled to under his fixed-period employment contract.

The court deleted Serrano’s monetary claim for holiday pay and overtime pay, finding no basis for their automatic inclusion in the absence of any proof that he worked on holidays and rendered overtime work. –William B. Depasupil, Reporter, Manila Times

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