GENERAL MILLING CORPORATION AND EARL TIMOTHY CONE, PETITIONERS, VS. HON. RUBEN D. TORRES, IN HIS CAPACITY AS SECRETARY OF LABOR AND EMPLOYMENT, HON. BIENVENIDO E. LAGUESMA, IN H…

General Milling versus Torres

The Case

This is a petition for certiorari brought by General Milling Corporation and its American coach, Earl Timothy Cone, against the Secretary of Labor and Employment and the Basketball Coaches Association of the Philippines. The petitioners ask the Supreme Court to annul the Secretary's decision cancelling Cone's alien employment permit, and to strike down a rule of the implementing regulations as beyond the authority of the Labor Code. The case matters because it settles who decides whether an alien may be employed in the Philippines, and on what grounds — a question every employer of foreign talent must confront.

Procedural History

The Department of Labor's Regional Director in the National Capital Region granted General Milling's request and issued Cone an alien employment permit. The Basketball Coaches Association appealed that issuance to the Secretary of Labor, who reversed the Regional Director and ordered the permit cancelled. General Milling moved for reconsideration, twice supplementing its motion, but the Acting Secretary of Labor denied reconsideration. The petitioners then came to the Supreme Court on a petition for certiorari, alleging grave abuse of discretion and the invalidity of the implementing rule. While the petition was pending, the petitioners manifested that the Secretary had reversed himself and issued a permit, and sought to withdraw the petition as moot. The Court declined to leave the constitutional and labor-law questions unanswered, and decided the case on the merits.

Facts

On the first of May 1989, the Department of Labor's National Capital Region issued an alien employment permit in favor of Earl Timothy Cone, a United States citizen, as sports consultant and assistant coach of General Milling Corporation. On the twenty-seventh of December 1989, the company and Cone signed a contract of employment under which he would coach the company's basketball team. In January 1990, the Board of Special Inquiry of the Commission on Immigration and Deportation approved Cone's change of admission status from temporary visitor to prearranged employee.

In February 1990, General Milling asked for renewal of the permit and for authority to employ Cone as full-fledged coach. The Regional Director granted the request, and a new alien employment permit, valid until the twenty-fifth of December 1990, was issued.

The Basketball Coaches Association appealed to the Secretary of Labor. The Secretary cancelled the permit, holding that there was no showing that no person in the Philippines was competent, able and willing to perform the services required, and no showing that hiring Cone would redound to the national interest. Reconsideration was denied, and the petitioners elevated the matter to the Supreme Court.

Issues

• Whether or not the Secretary of Labor gravely abused his discretion in revoking Cone's alien employment permit.
• Whether or not Section 6, paragraph c, of Rule XIV, Book I of the Omnibus Rules Implementing the Labor Code is null and void for allowing the Secretary to determine whether the employment of an alien would redound to the national interest, a condition the petitioners say is absent from the Labor Code.

Applicable Provisions

Article 40 of the Labor Code provides:

Article 40. Employment permit of non-resident aliens. — Any alien seeking admission to the Philippines for employment purposes and any domestic or foreign employer who desires to engage an alien for employment in the Philippines shall obtain an employment permit from the Department of Labor. The employment permit may be issued to a non-resident alien or to the applicant employer after a determination of the non-availability of a person in the Philippines who is competent, able and willing at the time of application to perform the services for which the alien is desired. For an enterprise registered in preferred areas of investments, said employment permit may be issued upon recommendation of the government agency charged with the supervision of said registered enterprise.

This is the enabling law whose requirements the petitioners must satisfy, and whose permissive language the Court reads as conferring discretion.

Article 12 of the Labor Code provides:

Article 12. Statement of Objectives. — It is the policy of the State: a) To promote and maintain a state of full employment through improved manpower training, allocation and utilization; c) To facilitate a free choice of available employment by persons seeking work in conformity with the national interest; d) To facilitate and regulate the movement of workers in conformity with the national interest; e) To regulate the employment of aliens, including the establishment of a registration and or work permit system.

These objectives supply the national-interest standard that the Secretary must take into account in exercising his authority.

Section 6 of Rule XIV, Book I of the Implementing Rules provides:

Section 6. Issuance of Employment Permit — The Secretary of Labor may issue an employment permit to the applicant based on: (a) Compliance by the applicant and his employer with the requirements of Section 2 hereof; (b) Report of the Bureau Director as to the availability or non-availability of any person in the Philippines who is competent and willing to do the job for which the services of the applicant are desired; (c) His assessment as to whether or not the employment of the applicant will redound to the national interest; (d) Admissibility of the alien as certified by the Commission on Immigration and Deportation; (e) The recommendation of the Board of Investments or other appropriate government agencies if the applicant will be employed in preferred areas of investments or in accordance with the imperative of economic development.

Paragraph c is the very rule the petitioners attack as beyond the Labor Code.

Ruling

On the first issue, the Court held that no grave abuse of discretion was shown. The failure to notify the petitioners of the appeal was cured when they were allowed to file a motion for reconsideration. The claim that hiring a foreign coach is the employer's prerogative has no legal basis, because the right to choose whom to employ is limited by the statutory requirement of an alien employment permit. The equal protection argument fails: Cone cannot be compared with a long-time resident of the country, since Article 40 applies only to non-resident aliens. Nor is there an impairment of contracts, because the permit requirements existed long before the employment contract, and provisions of law affected with public policy are deemed written into contracts. Finally, the Secretary of Labor, not the Commission on Immigration and Deportation, is the agency vested with jurisdiction to determine the availability of local workers.

On the second issue, the Court upheld the challenged rule. The permissive language of Article 40 shows that the authority granted involves the exercise of discretion, and Article 12's statement of objectives, including the regulation of the employment of aliens in conformity with the national interest, must be taken into account. The constitutional objections were too insubstantial to require further consideration.

Doctrine

An employer's freedom to choose whom to employ is limited by the alien employment permit requirement of Article 40 of the Labor Code. The Secretary of Labor has jurisdiction to determine the non-availability of a competent, able and willing person in the Philippines, and may also assess whether the alien's employment will redound to the national interest, as the permissive language of Article 40 and the objectives of Article 12 confirm. Labor laws and their implementing rules on alien employment are deemed written into contracts and cannot be contracted away. Article 40 applies only to non-resident aliens, so a resident alien is not a valid comparison for equal protection purposes.

Disposition

The Supreme Court dismissed the petition for certiorari for lack of merit, with costs against the petitioners.

Remember This

Memorize this line: the employer's right to choose whom to employ is limited by the statutory requirement of an alien employment permit, and the Secretary of Labor decides the availability of local workers and the national-interest question. Examiners use this case on the police power and impairment of contracts, on equal protection and the resident-alien distinction, and on the validity of implementing rules that fill out a statute's declared objectives.