POLICARPIO Y. FAUSTO, PETITIONER, VS. VICENTE LEOGARDO, JR., AS DEPUTY MINISTER, MINISTRY OF LABOR AND EMPLOYMENT AND MCDERMOTT DUBAI/OCEANIC CONTRACTORS, INC., RESPONDENTS.

Fausto versus Leogardo

The Case

This is a petition by Policarpio Fausto against Deputy Minister Vicente Leogardo, Junior, of the Ministry of Labor and Employment, and against McDermott Dubai and Oceanic Contractors, Incorporated. Fausto asks the Supreme Court to set aside the Deputy Minister's order dismissing his complaint for illegal termination and upholding his separation from employment. The case matters because it shows the narrow gate through which the Supreme Court reviews administrative findings in labor cases, and because it tests whether a worker's refusal to sign an approved addendum to his overseas employment contract can amount to a cause for terminating him.

Procedural History

Fausto filed a complaint with the National Capital Region of the Ministry of Labor, accusing McDermott of illegally terminating his employment. Regional Director Francisco Estrella resolved the case on the merits and found that Fausto had indeed been illegally terminated, ordering his reinstatement with full back wages. McDermott moved for reconsideration, arguing that the Regional Director had no jurisdiction and that he had gravely erred in disregarding the addendum approved by the Overseas Employment and Development Board. That motion was treated as an appeal and referred to the Deputy Minister of Labor and Employment. The Deputy Minister issued an order dated January 7, 1985, ruling that the jurisdictional objection was without merit because McDermott had participated in all the proceedings and had sought affirmative relief without ever impugning the Director's competence, and was therefore estopped by laches. On the merits, however, the Deputy Minister reversed the Regional Director and dismissed Fausto's complaint. Fausto then came to the Supreme Court by petition, asking that the Deputy Minister's order be set aside.

Facts

On October 23, 1979, Fausto signed an employment contract with McDermott to work as a clerk-typist in Saudi Arabia, at a monthly salary of 555 dollars, based on a guaranteed forty-eight hours of straight time and twelve hours of overtime per week. Barely two months after he began work, he received an inter-office communication dated December 17, 1979. It enclosed an addendum embodying amendments to his contract, effective January 1, 1980. The letter explained that the amendments were meant to clarify how overtime payments were calculated and to increase his salary by about two percent in most cases, based on working ten hours a day, six days a week. It also advised that if he did not wish to sign the addendum, he would be given early contract completion on or about January 1, 1980, and that the letter itself would serve as the official fifteen-day notice of separation.

Fausto refused to sign the addendum, believing it would be prejudicial to him. McDermott then terminated his services on January 1, 1980. He filed a complaint for illegal termination, and the Regional Director ruled in his favor, ordering reinstatement with back wages computed at 555 dollars a month from the time of the illegal termination up to actual reinstatement.

On appeal, the Deputy Minister found that Fausto had in fact opted for early contract completion when given the choice between that termination and working under the amended contract. The Deputy Minister stressed that the addendum bore the approval of the Overseas Employment Development Board, the agency tasked to secure the best possible terms for Filipino overseas contract workers, and that there was no showing that Fausto would be prejudiced economically or otherwise. He reversed the Regional Director and dismissed the complaint.

Issues

• Whether or not the Deputy Minister acted without or in excess of jurisdiction, or with grave abuse of discretion, in setting aside the Regional Director's order and dismissing Fausto's complaint.
• Whether or not Fausto's refusal to sign the addendum approved by the Overseas Employment Development Board constituted a valid cause for the termination of his employment.

Applicable Provisions

The decision refers to the rule governing the remedy Fausto invoked, Rule 65 of the Rules of Court, which allows a tribunal's order to be nullified only on the ground of lack of or excess of jurisdiction, or grave abuse of discretion:

Petition for certiorari. When any tribunal, board or officer exercising judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require.

This provision defines the only ground on which the Supreme Court could properly set aside the Deputy Minister's order.

Ruling

On the first issue, the Court held that Fausto had not succeeded in showing that the Deputy Minister's order was rendered without or in excess of jurisdiction, or with grave abuse of discretion. That showing, the Court said, is the only way by which the Supreme Court might properly nullify and set aside the order. The Court noted that the jurisdictional issue raised before the Deputy Minister had been resolved on the authority of what he took to be the applicable case law, and that in any event Fausto no longer raised it.

On the second issue, the Court upheld the Deputy Minister's finding that the termination was proper. The Court relied on the official approval by the Overseas Employment Development Board of the addendum to Fausto's original contract, and on the absence of any showing by Fausto that he would be prejudiced economically or otherwise. On those premises, the Deputy Minister had concluded that Fausto had no valid reason to refuse the terms and conditions of the addendum had he wanted to maintain his relationship with the company. The Court also accepted the Solicitor General's observation that the addendum actually secured a two percent salary increase for Fausto, and thus could not have impaired the obligations of his employment contract, since the prohibition against impairing the obligation of contracts signifies unreasonable impairment only, and not a case where the worker's employment has been enhanced.

Doctrine

First, an order of the Deputy Minister of Labor and Employment may be annulled by the Supreme Court only upon a showing that it was rendered without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction. Absent that showing, the petition must fail.

Second, where an addendum to an overseas employment contract carries the approval of the Overseas Employment Development Board, and the worker shows no economic or other prejudice from it, his refusal to accept the addendum furnishes a valid basis for terminating his employment. The termination is treated as for cause, at the instance of the employer but brought about by the worker's own refusal.

Third, the constitutional prohibition against impairing the obligation of contracts forbids unreasonable impairment only. An amendment that enhances the worker's employment, as by increasing his salary, does not impair his contract.

Disposition

The petition was dismissed, and the challenged order of January 7, 1985 was affirmed, with no costs.

Remember This

Memorize the line that a labor order is set aside only for lack of or excess of jurisdiction or grave abuse of discretion, and that a worker's refusal of an approved addendum that does not prejudice him is a cause for termination. Examiners use this case to test the certiorari standard over administrative labor rulings and the impairment of contracts clause in overseas employment.