Answers to Key Questions (Azucena, 2010 - p.109-160)

What acts constitute illegal recruitment and who are the persons that can be held liable for it?

Acts:

(a) To charge or accept directly or indirectly any amount greater than the specified in the schedule of allowable fees prescribed by the Secretary of Labor and Employment, or to make a worker pay any amount greater than that actually received by him as a loan or advance;

(b) To furnish or publish any false notice or information or document in relation to recruitment or employment;

(c) To give any false notice, testimony, information or document or commit any act of misrepresentation for the purpose of securing a license or authority under the Labor Code;

(d) To induce or attempt to induce a worker already employed to quit his employment in order to offer him another unless the transfer is designed to liberate a worker from oppressive terms and conditions of employment;

(e) To influence or attempt to influence any persons or entity not to employ any worker who has not applied for employment through his agency;

(f) To engage in the recruitment of placement of workers in jobs harmful to public health or morality or to dignity of the Republic of the Philippines;

(g) To obstruct or attempt to obstruct inspection by the Secretary of Labor and Employment or by his duly authorized representative;

(h) To fail to submit reports on the status of employment, placement vacancies, remittances of foreign exchange earnings, separations from jobs, departures and such other matters or information as may be required by the Secretary of Labor and Employment;

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

(j) For an officer or agent of a recruitment or placement agency to become an officer or member of the Board of any corporation engaged in travel agency or to be engaged directly on indirectly in the management of a travel agency;

(k) To withhold or deny travel documents from applicant workers before departure for monetary or financial considerations other than those authorized under the Labor Code and its implementing rules and regulations;

(l) Failure to actually deploy without valid reasons as determined by the Department of Labor and Employment; and

(m) Failure to reimburse expenses incurred by the workers in connection with his documentation and processing for purposes of deployment, in cases where the deployment does not actually take place without the worker's fault. Illegal recruitment when committed by a syndicate or in large scale shall be considered as offense involving economic sabotage.

Illegal recruitment is deemed committed by a syndicate carried out by a group of three (3) or more persons conspiring or confederating with one another. It is deemed committed in large scale if committed against three (3) or more persons individually or as a group. (Sec 6, RA 8042)

Persons:

1. Principals, accomplices and accessories. For juridical persons, the officers having control, management or direction of their business.

2. Employee of a company engaged in illegal recruitment held liable together his employer, if it is shown that he actively and consciously participated in illegal recruitment.

Under what circumstances is illegal recruitment an offense involving economic sabotage?

                When the ff. qualifying circumstances are present:

Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic sabotage and shall be penalized in accordance with Article 39 hereof.

Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring and/or confederating with one another in carrying out any unlawful or illegal transaction, enterprise or scheme defined under the first paragraph hereof. Illegal recruitment is deemed committed in large scale if committed against three (3) or more persons individually or as a group. (Art 38.b, Labor Code)

Is the Labor Sec. legally authorized to order the arrest of an illegal recruiter? May he order closure of an illegal recruitment office?

                On arrest:

                Yes. The Labor Sec. may order arrest via (a) warrant of arrest issued by a judge or (b) warrantless arrest. A person who has committed any act of illegal recruitment may be arrested by virtue of a warrant issued by a Judge of RTC/MTC where the criminal information was filed after preliminary investigation. An illegal recruiter may be also lawfully be arrested without warrant under Sec 105, Rule 113 of Rules of Criminal Procedure.

                On closure:

                Yes. It is an administrative and regulatory function of the Labor Sec.

Issuance of Closure Order. - The Secretary of Labor and Employment or the POEA Administrator or the DOLE Regional Director of the appropriate regional office outside the National Capital Region, or their duly authorized representatives, may conduct an ex parte preliminary examination to determine whether the activities of a non-licensee constitute a danger to national security and public order or will lead to further exploitation of job seekers. For this purpose, the Secretary of Labor and Employment, the POEA Administrator or the Regional Director concerned or their duly authorized representatives, may examine personally the complainants and/or their witnesses in the form of searching questions and answers and shall take their testimony under oath. The testimony of the complainants and/or witnesses shall be reduced in writing and signed by them.

If upon the preliminary examination or surveillance, the Secretary of Labor and Employment, the POEA Administrator or DOLE Regional Director is satisfied that such danger or exploitation exists, a written order may be issued for the closure of the establishment being used for illegal recruitment activity.

In case of a business establishment whose license or permit to operate a business was issued by the local government, the Secretary of Labor and Employment, the POEA Administrator or the Regional Director concerned shall likewise recommend to the granting authority the immediate cancellation/revocation of the license or permit to operate its business. (Sec 19, Omnibus Rules Implementing RA 8042)

Who are the foreign nationals that cannot work in the Philippines without an employment permit?

Non-resident Aliens.  Art. 40 of the Labor Code explicitly state that they should obtain an employment permit from the Dept. of Labor

Who are exempt from such requirement?

1.       Resident Aliens and immigrants – just required an Alien Employment Registration Certificate

2.       Those enumerated under DO 75-06:

o   Members of the diplomatic services and foreign government officials accredited by the Philippine government;

o   Officers and staff of international organizations of which the Philippine government is a cooperating member, and their legitimate spouses desiring to work in the Philippines;

o   Foreign nationals elected as members of the Governing Board who do not occupy any other position, but have only voting rights in the corporation;

o   All foreign nationals granted exemption by special laws and all other laws that may be promulgated by the Congress;

o   Owners and representatives of foreign principals, whose companies are accredited by the Philippine Overseas Employment Administration (POEA), who come to the Philippines for a limited period solely for the purpose of interviewing Filipino applicants for employment abroad;

o   Foreign nationals who come to the Philippines to teach, present and/or conduct research studies in universities and colleges as visiting, exchange or adjunct professors under formal agreements between the universities or colleges in the Philippines and foreign universities or colleges; or between the Philippine government and foreign government; provided that the exemption is on a reciprocal basis; and

o   Resident foreign nationals and temporary or probationary resident visa holders employed or seeking employment in the Philippines.

What is TESDA and what are its responsibilities?

TESDA – Technical Education and Skills Authority

The Authority shall primarily be responsible for formulating, continuing, coordinated and fully integrated technical education and skills development policies, plans and programs taking into consideration the following:

a) the State policy declared herein of giving new direction and thrusts to efforts in developing the quality of Filipino human resource through technical education and skills development;

b) the implementation of the above-mentioned policy requires the coordination and cooperation of policies, plans, and programs of different concerned sectors of Philippine society;

c) equal participation of representatives of industry groups, trade associations, employers, workers and government shall be made the rule in order to ensure that urgent needs and recommendations are readily addressed; and

d) improved linkages between industry, labor and government shall be given priority in the formulation of any national-level plan. (Sec. 8, RA 7796)

How may the success or failure of TESDA be measured?

Every five (5) years, independent review panel composed of three (3) persons appointed by the President shall review the performance of the Authority and shall make recommendations, based on its findings to the President and to both Houses of Congress. (Sec. 35, RA 7796)

Good Day Trading Corporation v Board of Tax Appeals

Facts:

Good Day Trading Corporation imported 238 cases of  Chesterfield cigarettes. Surety bond was filed to secure the payment of P52,360 – the amount of specific taxes due on cigarette importation. The shipment was stored in a bonded warehouse.

While the cigarettes were stored, Good Day sold them to Buenaventura Isleta for P32,000, EXCLUSIVE of specific taxes, on the condition that the buyer shall pay all specific taxes or file a surety bond with the BIR to guarantee its payment within 15 days from the sale agreement. A few days later, Isleta informed Good Day that he bought the cigarettes not for himself but in behalf of his companions who intended to pay the specific taxes with certificates of indebtedness.

Good day then wrote a letter to the CIR advising him of the sale. Despite several extensions, Isleta and his companions failed to show evidence that they paid the taxes or filed the surety. To avoid deterioration of the cigars, Good Day decided to rescind the sale, pay an initial tax of P8,800, and attempted to withdraw the 40 cases of cigars covered by the initial payment. Warehouseman refused, claiming that Isleta owns the shipment because they have already submitted to the BIR the certificates of indebtedness which the BIR approved. The BIR also authorized the Bureau of Customs to release to buyers the whole shipment.

Good Day asks for the refund of P8,800. CIR granted the refund. Secretary of Finance approved and no appeal was taken. But because the amount was more than P5,000, the case was brought before the Board of Tax Appeals. The Board reversed the decision of the CIR, rejected the payment through certificates of indebtedness, and ordered Good Day to pay the whole tax.

Good Day asked for reconsideration claiming that the payment of P8,800 amounted to a double payment because it was paid later through the certificates of indebtedness.  MR was denied.

Issue:

Whether or not Good Day should pay the specific taxes since it is an importer of the shipment of cigarettes.

Held:

No.Under Sec. 125 of the NIRC,

Payment of specific tax on imported articles. — Specific taxes on imported articles shall be paid by the owner or importer to the customs officers, conformably with regulations of the Department of Finance and before the release of such articles from the customhouse.

either the owner of importer shall pay the specific taxes on imported articles. If the sale of the cigarettes was valid, then purchasers (Isleta and company) become the owners of shipment and could pay specific taxes.

*BTA erred in holding Good Day to pay the specific taxes.

Notes:

Importer – primary consignee to whom the goods are sent and who himself presents the invoices, makes the entry, receives the bill of lading and gets the goods.

When importation by sea begins and ends: Importation is not completed until the duties due upon the merchandise have been paid and legal permit for withdrawal and actual withdrawing the goods becomes the importer.

*Whether one is an importer or not is NOT an issue in paying specific taxes.

Revilla v CA (G.R. No. 95329)

Facts:

Don Cayetano Revilla, a bachelor, owned 2 pieces of land with buildings in Manila and 6 parcels of land in his hometown in Bulacan. These properties are worth P30M. In 1978, he executed a 13-page last will and testament, bequeathing all his properties to his 9 nephews and nieces including petitioner, Heracio Revilla. To each, he gave 1/10 of his estate reserving the last tenth for masses to be said after his death and for the care of religious images he kept in a chapel in Bulacan.

During his lifetime, Don Cayetano sought the probate of his will to which the CFI Manila admitted. However, the City Hall of Manila was burned by fire where the records were also burned. A petition for reconstitution of the records was filed and it was granted.

After Don Cayetano died, Heracio Revilla filed another petition of a will wherein he instituted Heracio as sole heir of his uncle’s estate and executor of the will allegedly executed in 1982.  The probate was opposed by Heracio’s 8 brothers and sisters on the grounds that:

-      Since 1978 up to Cayetano’s death, he never informed that he revoked the will executed in 1978

-      The 1982 will was not executed in accordance with law and the signature of Cayetano was different from his usual and customary signature

-      Cayetano was of unsound mind when he executed the will

-      That the alleged will was executed with undue pressure and influence

-      That the 1978 will is void for the reason that it was executed under duress or the influence of fear or threats

-      Cayetano acted by mistake and the signatures in the alleged will were procured by fraud and he did not intend that the instrument be his will at the time of fixing his signature

The trial court disallowed the second will. On appeal, the CA affirmed the trial court.

Issue:

Whether or not the court erred in disallowing the second will.

Held:

When Don Cayetano testified in the reconstitution proceedings, he was unaware of the second will which he supposedly made. He identified his first will and declared that it was his true and only will. He could not have executed a second will because he was sick in the hospital during that time (he stayed there for 2 months) and he could not sign any papers while he was confined in the hospital.

During the reconstitution proceedings, the will was produced. It was placed in a browned envelope stating “Buksan ito pagkalibing ko” to which Cayetano agreed to open. He recognized the original will and acknowledged that he signed it. In the court records, Cayetano declared that he did not execute another last will and testament after the original will had been probated.

Significantly, although the petitioner opposed the reconstitution of Don Cayetano's first will, he did not reveal the second will which Don Cayetano supposedly made only 2months before he testified in the reconstitution proceeding. If the second will already existed on November 27, 1982, it would have been Heracio's strongest argument against the reconstitution of the probate of the first will.

Since the execution of the second will could not have occurred on the alleged date (September 13, 1982) appearing therein (for Don Cayetano was admittedly sick in the hospital then) it must have been procured at the time when the testator was a virtual prisoner, held incommunicado, in his house. Judge Eduardo Bengson had to issue an order commanding the petitioner to allow his 8 brothers and sisters to visit Don Cayetano. Only then were they able to penetrate the iron curtain that Heracio had placed around their uncle. A videotape, taken during their visit and shown in court, belied Heracio's allegation that Don Cayetano was displeased with his said nephews and nieces, that was why he left them out of his second will.

Despite Judge Bengzon's order, Heracio did not cease his efforts to monopolize Don Cayetano and his estate. To isolate Don Cayetano and make him inacessible to the private respondents, Heracio transferred him from his own house in Manila to Heracio's house in Quezon City.

The execution of the second will in an environment of secrecy and seclusion and the disinheritance of his 8 other nephews and nieces, justified the trial court's and the Court of Appeals' belief that undue influence was exercised by Horacio over Don Cayetano to make him sign the second will (which Don Cayetano did not know to be such) in order to deprive his brothers and sisters of their rightful share in their uncle's estate.

There was fraud because Don Cayetano was not apprised that the document he was signing with Co, Barredo and Lim  ( as witnesses) was a second will revoking the dispositions of property that he made in his first will. Had he been aware that it was a second will, and if it were prepared at his own behest, he would not have denied that he made it. He would probably have caused it to be probated while he was still alive, as he did with his first will. But apparently, the instrument was foisted on him without his being aware of its true nature which the petitioner assiduously concealed, not only from the court and the private respondents, but from Don Cayetano himself.

That the dispositions in the second will were not made by Don Cayetano is proven by the omission of Don Cayetano's reservation of one-tenth of his properties and the income thereof to pay for holy masses and to be spent for the maintenance of his family chapel. That provision in his first will, for his personal benefit, would not have been deleted by Don Cayetano if his only purpose in making a second will was to disinherit his nephews and nieces. But Heracio overdid himself. He wanted everything.

*Assuming for the sake of arguments that the second will was executed, the testimonies of the notary public, as well as those of the three (3) instrumental witnesses were not given credit because of major contradictions in testimonies.

PEREZ V CA (G.R.No. 118870, March 29, 1996)

Facts:

Ray Perez is a doctor practicing in Cebu while Nerissa, his wife, (petitioner) is a registered nurse.  After six miscarriages, two operations and a high-risk pregnancy, Nerissa finally gave birth to Ray Perez II in New York on July 20, 1992. Ray stayed with her in the U.S. twice and took care of her when she became pregnant.  Unlike his wife, however, he had only a tourist visa and was not employed.

On January 17, 1993, the couple and their baby arrived in Cebu.  After a few weeks, only Nerissa returned to the U.S.  She alleged that they came home only for a five-week vacation and that they all had round-trip tickets.  However, her husband stayed behind to take care of his sick mother and promised to follow her with the baby.  According to Ray, they had agreed to reside permanently in the Philippines but once Nerissa was in New York, she changed her mind and continued working.  She was supposed to come back immediately after winding up her affairs there.

When Nerissa came home a few days before Ray II’s first birthday, the couple was no longer on good terms.  They had quarrels. Nerissa did not want to live near her in-laws and rely solely on her husband’s meager income of P5,000.00. On the other hand, Ray wanted to stay here, where he could raise his son even as he practiced his profession.  He maintained that it would not be difficult to live here since they have their own home and a car. Despite mediation by the priest, the couple failed to reconcile.

Nerissa filed a petition to surrender the custody of their son to her.

The trial court issued an Order awarding custody to Nerissa citing the second paragraph of Article 213 of the Family Code which provides that no child under seven years of age shall be separated from the mother, unless the court finds compelling reasons to order otherwise.

Upon appeal by Ray Perez, the Court of Appeals reversed the trial court’s order and held that granting custody to the boy’s father would be for the child’s best interest and welfare.

Issue:

Who should have rightful custody of a child?

Held:

Nerissa. Aside from Article 213 of the Family Code, the Revised Rules of Court also contains a similar provision. Rule 99, Section 6 (Adoption and Custody of Minors) provides:

“SEC. 6. Proceedings as to child whose parents are separated. Appeal. - When husband and wife are divorced or living separately and apart from each other, and the questions as to the care, custody, and control of a child or children of their marriage is brought before a Court of First Instance by petition or as an incident to any other proceeding, the court, upon hearing the testimony as may be pertinent, shall award the care, custody, and control of each such child as will be for its best interest, permitting the child to choose which parent it prefers to live with if it be over ten years of age, unless the parent chosen be unfit to take charge of the child by reason of moral depravity, habitual drunkenness, incapacity, or poverty x x x. No child under seven years of age shall be separated from its mother, unless the court finds there are compelling reasons therefor.” (Italics supplied)

The provisions of law quoted above clearly mandate that a child under seven years of age shall not be separated from his mother unless the court finds compelling reasons to order otherwise.  The use of the word “shall” in Article 213 of the Family Code and Rule 99, Section 6 of the Revised Rules of Court connotes a mandatory character.

The general rule that a child under seven years of age shall not be separated from his mother finds its reason in the basic need of a child for his mother’s loving care. Only the most compelling of reasons shall justify the court’s awarding the custody of such a child to someone other than his mother, such as her unfitness to exercise sole parental authority. In the past the following grounds have been considered ample justification to deprive a mother of custody and parental authority: neglect, abandonment, unemployment and immorality, habitual drunkenness, drug addiction, maltreatment of the child, insanity and being sick with a communicable disease.

It has long been settled that in custody cases, the foremost consideration is always the welfare and best interest of the child. In fact, no less than an international instrument, the Convention on the Rights of the Child provides: “In all actions concerning children, whether undertaken by public or private social welfare institutions, courts of law, administrative authorities or legislative bodies, the best interests of the child shall be a primary consideration.

In the case, financial capacity is not a determinative factor inasmuch as both parties have demonstrated that they have ample means. Nerissa’s present work schedule is not so unmanageable as to deprive her of quality time with her son.  Quite a number of working mothers who are away from home for longer periods of time are still able to raise a family well, applying time management principles judiciously. Also, delegating child care temporarily to qualified persons who run day-care centers does not detract from being a good mother, as long as the latter exercises supervision, for even in our culture, children are often brought up by housemaids under the eagle eyes of the mother. 

Although Ray’s is a general practitioner, the records show that he maintains a clinic, works for several companies on retainer basis and teaches part-time. He cannot possibly give the love and care that a mother gives to his child.

Brotherhood Labor Unity Movement of the Phil. v. Zamora

Facts:

The petitioners are workers who have been employed at the San Miguel Parola Glass Factory as “pahinantes” or “kargadors” for almost seven years. They worked exclusively at the SMC plant, never having been assigned to other companies or departments of San Miguel Corp, even when the volume of work was at its minimum. Their work was neither regular nor continuous, depending on the volume of bottles to be loaded and unloaded, as well as the business activity of the company. However, work exceeded the eight-hour day and sometimes, necessitated work on Sundays and holidays. -for this, they were neither paid overtime nor compensation.

Sometime in 1969, the workers organized and affiliated themselves with Brotherhood Labor Unity Movement (BLUM). They wanted to be paid to overtime and holiday pay. They pressed the SMC management to hear their grievances. BLUM filed a notice of strike with the Bureau of Labor Relations in connection with the dismissal of some of its members. San Miguel refused to bargain with the union alleging that the workers are not their employees but the employees of an independent labor contracting firm, Guaranteed Labor Contractor.

The workers were then dismissed from their jobs and denied entrance to the glass factory despite their regularly reporting for work. A complaint was filed for illegal dismissal and unfair labor practices.

Issue:

Whether or not there was employer-employee (ER-EE)relationship between the workers and San Miguel Corp.

Held:

YES. In determining if there is an existence of the (ER-EE) relationship, the four-fold test was used by the Supreme Court.  These are:

·         The selection and engagement of the employee

·         Payment of wages

·         Power of dismissal

·         Control Test- the employer’s power to control the employee with respect to the means and methods by which work is to be accomplished

In the case, the records fail to show that San Miguel entered into mere oral agreements of employment with the workers. Considering the length of time that the petitioners have worked with the company, there is justification to conclude that they were engaged to perform activities necessary in the usual business or trade. Despite past shutdowns of the glass plant, the workers promptly returned to their jobs. The term of the petitioner’s employment appears indefinite and the continuity and habituality of the petitioner’s work bolsters the claim of an employee status.

As for the payment of the workers’ wages, the contention that the independent contractors were paid a lump sum representing only the salaries the workers where entitled to have no merit. The amount paid by San Miguel to the contracting firm is no business expense or capital outlay of the latter. What the contractor receives is a percentage from the total earnings of all the workers plus an additional amount from the earnings of each individual worker.

The power of dismissal by the employer was evident when the petitioners had already been refused entry to the premises. It is apparent that the closure of the warehouse was a ploy to get rid of the petitioners, who were then agitating the company for reforms and benefits.

The inter-office memoranda submitted in evidence prove the company’s control over the workers. That San Miguel has the power to recommend penalties or dismissal is the strongest indication of the company’s right of control over the workers as direct employer.

*SC ordered San Miguel to reinstate the petitioners with 3 years backwages.

BIR Ruling 145-98

Facts:

A lot was registered in the name of the Posadas spouses (jointly titled in their names). Juan Posadas (husband) died in an aircraft accident and an agreement was executed by Maria Elena Posadas (wife) that the designated lots shall be exclusively registered in the name of one party only in exchange for the exclusive co-ownership of other lots by the other co-owner. Maria Elena, who was assigned the property, sold the lot to Noel Espina where title to the property should be transferred in his name upon payment of the appropriate taxes.

Issue:

Whether the transaction of Elena and Noel is exempt from capital gains tax.

Held:

The agreement executed by Elena and the administratrix of Juan Posadas in effect partitioned the properties transferring the co-ownership by designating the said properties to each of the said owners. Also, the transfer of title from the co-owners is not a barter, exchange or disposition of realty that would warrant the imposition of capital gains tax.

The dissolution of the co-ownership is not subject to capital gains tax however, that portion of the properties belonging to the deceased owner (in this case Juan) shall be subject to estate tax.

Dison v Posadas

Facts:

Don Felix Dison, before his death, made a gift inter vivos in favor of plaintiff Luis Dison. Luis was the legitimate and only child of Felix. The Collector of Internal Revenue, Juan Posadas Jr. taxed him. Luis filed for the recovery of an inheritance tax in the sum of P2,808.73 paid under protest. He alleged in his complaint that the tax is illegal because he received the property from his father before his death by a deed of gift inter vivos which was duly accepted and registered before the death of his father. He contends that he received and held the property by a consummated gift and that Act No. 2601 being the inheritance tax statute, does not tax gifts.

Issue:

Whether or not Dison should pay inheritance tax.

Held:

Yes. Dison should pay tax. Section 1540 of the Administrative Code is applicable. It states that:

‘Addition of Gifts and Advances- After the aforementioned deductions have been made, there shall be added to the resulting amount the value of all gifts/advances made by the predecessor to any of those, who, after his death, shall prove to be his heirs, devisees, legatees or donees mortis causa.’

That Dison occupies the status of heir to his deceased father cannot be questioned. The conveyance is deemed to be an advancement upon the inheritance which the donee, as the sole and forced heir of the donor, would be entitled to receive upon the death of the donor. The tax has been properly assessed by the CIR.

As regards Act 2601, it is not applicable since the Act does not make any reference to a tax on gifts.