PHILIPPINE NATIONAL BANK, PETITIONER, VS. FLORENCE O. CABANSAG, RESPONDENT.

Philippine National Bank versus Cabansag

The Case

This is a petition by the Philippine National Bank against Florence Cabansag, a Filipina it hired for its Singapore branch and then dismissed. She sued for illegal dismissal before the labor tribunals in the Philippines, and the bank resisted on the ground that her employment was governed by Singapore law and lay beyond the reach of our labor authorities. The case matters because it fixes the reach of Philippine labor law over overseas Filipino workers: it holds that the protective mantle of our labor and social legislation covers all Filipino workers, whether employed locally or abroad, and that a foreign work permit or a foreign employment pass does not waive that protection.

Procedural History

Cabansag filed a complaint for illegal dismissal against the bank and its Singapore branch manager. The labor arbiter ruled in her favor, finding the dismissal illegal and tainted by want of due process, and ordered reinstatement with back wages and monetary awards. The bank appealed to the National Labor Relations Commission, which affirmed the labor arbiter but reduced the moral and exemplary damages. The commission denied the bank's motion for reconsideration. The bank then went up to the Court of Appeals by petition for certiorari, which dismissed the petition and sustained the labor tribunals. After the Court of Appeals denied reconsideration, the bank filed a petition for review on certiorari before the Supreme Court.

Facts

In late 1998, Cabansag arrived in Singapore as a tourist and applied for work at the Singapore branch of the Philippine National Bank, a Philippine corporation. The branch manager found her qualified and recommended her appointment as Branch Credit Officer, and the bank's president in Manila approved the recommendation. She obtained an employment pass from the Singapore Ministry of Manpower, and on December 7, 1998, the branch manager offered her a temporary appointment on probation for three consecutive months, with a term allowing termination on one day's notice during probation or one month's notice upon confirmation.

She accepted and assumed office. The Philippine Embassy in Singapore processed her employment contract, and on March 8, 1999, the Philippine Overseas Employment Administration issued her an Overseas Employment Certificate declaring her a bona fide contract worker for Singapore. Barely three months in, she submitted a performance report that drew the notation good work. Yet in the evening of April 14, 1999, two officers of the branch told her the manager wanted her to resign. The manager confirmed this, citing cost cutting and the planned sale or conversion of the branch, and refused to give her a formal advice from Manila. On April 16, he again demanded her resignation, warning that her record would be marked dismissed, and told her she should be out by May 15.

On April 19, he again ordered her to resign, and she refused. On April 20, 1999, she received a letter terminating her employment effective the same day, together with the equivalent of one month's pay. She had submitted no resignation.

Issues

• Whether or not the labor arbiter and the National Labor Relations Commission have jurisdiction over the controversy.
• Whether or not the Quezon City arbitration branch is the proper venue to hear and decide the case.
• Whether or not Cabansag was illegally dismissed and therefore entitled to damages and attorney's fees.

Applicable Provisions

Article 217 of the Labor Code provides:

ART. 217. Jurisdiction of Labor Arbiters and the Commission. – (a) Except as otherwise provided under this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural: Unfair labor practice cases; Termination disputes; If accompanied with a claim for reinstatement, those cases that workers may file involving wage, rates of pay, hours of work and other terms and conditions of employment; Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations; Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; and Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from employer-employee relations, including those of persons in domestic or household service, involving an amount of exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement. (b) The commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.

This provision supplies the original and exclusive jurisdiction of labor arbiters over termination disputes involving all workers, which the Court applies to overseas Filipino workers.

Section 10 of Republic Act Number 8042, the Migrant Workers and Overseas Filipinos Act of 1995, provides:

SECTION 10. Money Claims. — Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages.

This provision expressly lodges jurisdiction over claims of Filipino workers for overseas deployment in the labor arbiters.

Section 1 of Rule IV of the National Labor Relations Commission Rules of Procedure provides:

Section 1. Venue – (a) All cases which Labor Arbiters have authority to hear and decide may be filed in the Regional Arbitration Branch having jurisdiction over the workplace of the complainant/petitioner; Provided, however that cases of Overseas Filipino Worker (OFW) shall be filed before the Regional Arbitration Branch where the complainant resides or where the principal office of the respondent/employer is situated, at the option of the complainant.

This provision gives the overseas Filipino worker the option of venue, which the Court uses to sustain the filing in Quezon City.

Article 281 of the Labor Code provides:

An employee who is allowed to work after a probationary period shall be considered a regular employee.

This provision makes Cabansag a regular employee, since her three-month probation had already ended when she was dismissed.

Ruling

On the first issue, the Court held that the labor arbiter and the commission had jurisdiction. Labor arbiters have original and exclusive jurisdiction over claims arising from employer-employee relations, including termination disputes involving all workers, among whom are overseas Filipino workers. The Court rejected the argument that the Singapore employment pass subjected her to Singapore law alone. It held that a work permit does not imply a waiver of one's national laws on labor; it simply means the holder has a legal status as a worker in the issuing country. Moreover, she had obtained an Overseas Employment Certificate from the Philippine Overseas Employment Administration, which declared her a bona fide contract worker and entitled her to all benefits and processes under our statutes. The Court also noted that her employment had to be approved by the bank's president in Manila, which reinforced her status as a migrant worker and prevented the bank from escaping Philippine law.

On the second issue, the Court held that venue was properly laid. As a migrant worker, Cabansag had the option to file where she resides or where the principal office of her employer is situated. Having returned to her residence in Quezon City, her filing before the arbitration branch there was a valid choice of venue.

On the third issue, the Court held that she was illegally dismissed. She was already a regular employee because her probationary period had ended, and the bank itself treated her as such by giving her one month's salary in lieu of notice. As a regular employee, she could not be dismissed without due process. The employer must furnish two written notices, one apprising the employee of the acts or omissions for which dismissal is sought and another informing her of the decision to dismiss, and the essence of a hearing is the opportunity to be heard. Here she was given neither: only a notice of termination effective the same day, with one month's pay. The Court held that the law gives no option to substitute prior notice and hearing with the payment of thirty days' salary. Nor did the bank assert any of the just or authorized causes for dismissal; it relied only on the contract. The Court answered that while parties may stipulate terms, those terms must not be contrary to law, morals, customs, public policy or public order, and an employment contract is imbued with public interest.

Doctrine

All Filipino workers, whether employed locally or overseas, enjoy the protective mantle of Philippine labor and social legislation, and our labor statutes may not be rendered ineffective by laws or judgments promulgated, or stipulations agreed upon, in a foreign country. Labor arbiters have original and exclusive jurisdiction over termination disputes involving all workers, including overseas Filipino workers, under Article 217 of the Labor Code and Section 10 of Republic Act Number 8042. A foreign work permit or employment pass does not amount to a waiver of Philippine labor law; it merely confers a legal status as a worker in the issuing country. An overseas Filipino worker may choose venue either where she resides or where the employer's principal office is situated. An employee allowed to work beyond the probationary period is a regular employee under Article 281, and a regular employee may not be dismissed without the twin requirements of notice and hearing, which cannot be replaced by the payment of thirty days' salary.

Disposition

The Supreme Court denied the petition and affirmed the decision of the Court of Appeals, sustaining the finding of illegal dismissal and the awards in Cabansag's favor.

Remember This

Memorize the line: all Filipino workers, whether employed locally or overseas, enjoy the protective mantle of Philippine labor and social legislation, and a foreign work permit waives none of it. Examiners use this case on the jurisdiction of labor arbiters over overseas Filipino workers, on venue at the worker's option, and on the rule that paying thirty days' salary never substitutes for notice and hearing.