Sameer Overseas Placement Agency v. Cabiles (2014)

Joy Cabiles applied for a quality control job in Taiwan through Sameer Overseas Placement Agency. She signed a one-year employment contract with a monthly salary of NT$15,360. She said she paid a placement fee; the agency disputed the amount.

She was deployed to work for Taiwan Wacoal on June 26, 1997. On July 14, 1997, less than three weeks later, she was told without prior notice that she was terminated. She was asked to prepare for immediate repatriation and was sent home the same day. NT$3,000 was withheld from her pay for her plane ticket.

She filed a complaint for illegal dismissal. The agency said she was inefficient and did not meet her employer's work requirements. The Labor Arbiter dismissed her complaint. The NLRC reversed: it found her illegally dismissed and awarded three months' salary (NT$46,080), the NT$3,000 withheld, and NT$300 in attorney's fees. The Court of Appeals affirmed these awards. The agency appealed to the Supreme Court.

Was Joy illegally dismissed? If so, how much salary is she owed: three months, or the whole unexpired portion of her contract? And is the three-month clause, which Congress put back into the law in 2010, valid?

The Supreme Court denied the agency's petition and increased Joy's award.

The dismissal was illegal. The employer must prove a just cause. The agency only alleged inefficiency. It gave no evidence, did not say which standards Joy failed to meet, and did not show that the standards were made known to her. The Court said a worker can be dismissed for inefficiency only if the employer set work standards, told the worker about them, and did so a reasonable time before the assessment. There was also no due process: no two written notices and no chance to be heard. She was terminated and repatriated on the same day.

OFWs keep their [security of tenure](/law/glossary/security-of-tenure). The Court applied the rule that the law of the place where the contract is made governs it, and it repeated earlier rulings that Philippine labor law protects OFWs whose contracts were made in the Philippines. Under that law, OFWs may be dismissed only for a just or authorized cause, and only after due process.

The three-month clause is void again. Section 10 of Republic Act No. 8042, the Migrant Workers and Overseas Filipinos Act of 1995, gave an illegally dismissed OFW salary for the unexpired portion of the contract "or for three (3) months for every year of the unexpired term, whichever is less". In Serrano v. Gallant Maritime Services (2009), the Court had declared that clause unconstitutional. Republic Act No. 10022, promulgated on March 8, 2010, put the same clause back.

The Court noted that RA 10022 did not yet apply to Joy, who was dismissed in 1997. It still ruled on the clause, to prevent confusion and delay for many overseas workers. It said: "A law or provision of law that was already declared unconstitutional remains as such unless circumstances have so changed as to warrant a reverse conclusion." It found no such change. The clause again violated equal protection and due process, and was declared "unconstitutional and, therefore, null and void."

Interest. The Court applied Nacar v. Gallery Frames and BSP Circular No. 799. But it said the circular does not cover a refund of the placement fee. Section 10 of RA 8042 sets 12% a year for that refund, and "Bangko Sentral ng Pilipinas circulars cannot repeal Republic Act No. 8042". The salary for the unexpired portion has no rate in the law, so it earns 6% a year.

Who pays. The Court explained that under Section 10 the foreign employer and the local agency are jointly and severally liable for the worker's money claims. Any dispute between the agency and another agency, to which the employer's accreditation had allegedly been transferred, does not stop the worker from enforcing the judgment.

The order. The agency must pay Joy her salary for the unexpired portion of the contract, which the Court counted from July 15, 1997 to June 25, 1998, with 6% interest a year from the finality of the judgment. It must also return the NT$3,000 withheld and pay NT$300 in attorney's fees, with the same interest. The order does not include a placement fee refund. The NLRC had not ruled on that claim.

Justice Brion wrote a separate opinion, concurring in part and dissenting in part.

The clause "or for three (3) months for every year of the unexpired term, whichever is less" in Section 7 of RA 10022, amending Section 10 of RA 8042, is unconstitutional and void; an illegally dismissed overseas worker is entitled to salary for the entire unexpired portion of the employment contract, and a refund of the placement fee earns the 12% interest set by RA 8042, which a BSP circular cannot change.

Sameer answers the argument that an illegally dismissed OFW can claim only three months' salary. Read with Serrano v. Gallant Maritime Services, it means the full unexpired salary is the measure, whether the worker was dismissed before or after RA 10022 was passed.

Here is a made-up illustration, with invented names. Grace signs a two-year contract as a factory worker abroad. Her employer sends her home after four months without a valid reason and without notice. If a labor tribunal finds the dismissal illegal, then under the rule in Sameer the measure of her salary claim is the 20 months left on her contract, not a three-month cap.

This page explains the 2014 decision. Laws passed after 2014 on overseas employment are not covered here. Before signing with or paying any agency, check its license on the DMW list. For a plain answer, read OFW illegally dismissed: salary for the unexpired contract, and for a case of your own, see where to find legal help.