G.R. No.

103144            April 4, 2001

PHILSA INTERNATIONAL PLACEMENT and SERVICES CORPORATION, petitioner,

vs.
THE HON. SECRETARY OF LABOR AND EMPLOYMENT, VIVENCIO DE MESA, RODRIGO
MIKIN and CEDRIC LEYSON, respondents.

GONZAGA-REYES, J.:

This is a petition for certiorari from the Order dated November 25, 1991 issued by public respondent
Secretary of Labor and Employment. The November 25, 1991 Order affirmed in toto the August 29,
1988 Order of the Philippine Overseas Employment Administration (hereinafter the "POEA") which
found petitioner liable for three (3) counts of illegal exaction, two (2) counts of contract substitution
and one count of withholding or unlawful deduction from salaries of workers in POEA Case No. (L)
85-05-0370.

Petitioner Philsa International Placement and Services Corporation (hereinafter referred to as

"Philsa") is a domestic corporation engaged in the recruitment of workers for overseas employment.
Sometime in January 1985, private respondents, who were recruited by petitioner for employment in
Saudi Arabia, were required to pay placement fees in the amount of P5,000.00 for private
respondent Rodrigo L. Mikin and P6,500.00 each for private respondents Vivencio A. de Mesa and
Cedric P. Leyson. 1

After the execution of their respective work contracts, private respondents left for Saudi Arabia on
January 29, 1985. They then began work for Al-Hejailan Consultants A/E, the foreign principal of
petitioner.

While in Saudi Arabia, private respondents were allegedly made to sign a second contract on
February 4, 1985 which changed some of the provisions of their original contract resulting in the
reduction of some of their benefits and privileges. On April 1, 1985, their foreign employer allegedly
2 

forced them to sign a third contract which increased their work hours from 48 hours to 60 hours a
week without any corresponding increase in their basic monthly salary. When they refused to sign
this third contract, the services of private respondents were terminated by Al-Hejailan and they were
repatriated to the Philippines. 3

Upon their arrival in the Philippines, private respondents demanded from petitioner Philsa the return
of their placement fees and for the payment of their salaries for the unexpired portion of their
contract. When petitioner refused, they filed a case before the POEA against petitioner Philsa and its
foreign principal, Al-Hejailan., with the following causes of action:

1. Illegal dismissal;

2. Payment of salary differentials;

3. Illegal deduction/withholding of salaries;

4. Illegal exactions/refund of placement fees; and

5. Contract substitution.  4

The case was docketed as POEA Case No. (L) 85-05 0370.
Under the rules of the POEA dated May 21, 1985, complaints involving employer-employee relations
arising out of or by virtue of any law or contract involving Filipino workers for overseas employment,
including money claims, are adjudicated by the Workers' Assistance and Adjudication Office
(hereinafter the "WAAO") thru the POEA Hearing Officers.5 On the other hand, complaints involving
recruitment violations warranting suspension or cancellation of the license of recruiting agencies are
cognizable by the POEA thru its Licensing and Recruitment Office (hereinafter the "LRO"). 6 In cases
where a complaint partakes of the nature of both an employer-employee relationship case and a
recruitment regulation case, the POEA Hearing Officer shall act as representative of both the WAAO
and the LRO and both cases shall be heard simultaneously. In such cases, the Hearing Officer shall
submit two separate recommendations for the two aspects of the case. 7

In the case at bench, the first two causes of action were in the nature of money claims arising from
the employer-employee relations and were properly cognizable by the WAAO. The last two causes
of action were in the nature of recruitment violations and may be investigated by the LRO. The third
cause of action, illegal deduction/withholding of salary, is both a money claim and a violation of
recruitment regulations and is thus under the investigatory jurisdiction of both the WAAO and the
LRO.

Several hearings were conducted before the POEA Hearing Officer on the two aspects of private
respondents' complaint. During these hearings, private respondents supported their complaint with
the presentation of both documentary and testimonial evidence. When it was its turn to present its
evidence, petitioner failed to do so and consequently, private respondents filed a motion to decide
the case on the basis of the evidence on record. 8

On the aspects of the case involving money claims arising from the employer-employee relations
and illegal dismissal, the POEA rendered a decision dated August 31, 1988 9 , the dispositive portion
of which reads:

"CONFORMABLY TO THE FOREGOING, judgment is hereby rendered ordering respondent

PHILSA INTERNATIONAL PLACEMENT AND SERVICE CORPORATION to pay
complainants, jointly and severally with its principal Al-Hejailan, the following amounts, to wit:

1. TWO THOUSAND TWO HUNDRED TWENTY FIVE SAUDI RIYALS (SR2,225.00) to

each complainant, representing the refund of their unpaid separation pay;

2. ONE THOUSAND SAUDI RIYALS (SR1,000.00) for V.A. de Mesa alone, representing the
salary deduction from his March salary;

3. TWO THOUSAND SAUDI RIYALS (SR2,000.00) each for R.I. Mikin and C.A.P. Leyson
only, representing their differential pay for the months of February and March, 1985; and

4. Five percent (5%) of the total awards as and by way of attorney's fees.

All payments of the abovestated awards shall be made in Philippine Currency equivalent to
the prevailing exchange rate according to the Central Bank at the time of payment.

All other claims of complainants as well as the counterclaims of respondent are dismissed for
lack of merit.

SO ORDERED."  10
Under the Rules and Regulations of the POEA, the decision of the POEA-Adjudication Office on
matters involving money claims arising from the employer-employee relationship of overseas Filipino
workers may be appealed to the National Labor Relations Commission (hereinafter the "NLRC) . 11 

Thus, as both felt aggrieved by the said POEA Decision, petitioner and private respondents filed
separate appeals from the August 31, 1988 POEA Decision to the NLRC.

In a decision dated July 26, 1989  , the NLRC modified the appealed decision of the POEA
12 

Adjudication Office by deleting the award of salary deductions and differentials. These awards to
private respondents were deleted by the NLRC considering that these were not raised in the
complaint filed by private respondents. The NLRC likewise stated that there was nothing in the text
of the decision which would justify the award.

Private respondents filed a Motion for Reconsideration but the same was denied by the NLRC in a
Resolution dated October 25; 1989.

Private respondents then elevated the July 26, 1989 decision of the NLRC to the Supreme Court in a
petition for review for certiorari where it was docketed as G.R. No. 89089. However, in a Resolution
dated October 25, 1989, the petition was dismissed outright for "insufficiency in form and substance,
having failed to comply with the Rules of Court and Circular No. 1-88 requiring submission of a
certified true copy of the questioned resolution dated August 23, 1989." 13

Almost simultaneous with the promulgation of the August 31, 1988 decision of the POEA on private
respondents' money claims, the POEA issued a separate Order dated August 29, 1988  resolving
14 

the recruitment violations aspect of private respondents' complaint. In this Order, the POEA found
petitioner guilty of illegal exaction, contract substitution, and unlawful deduction. The dispositive
portion of this August 29, 1988 POEA Order reads:

"WHEREFORE, premises considered, this Office finds herein respondent PHILSA

International Placement and Services Corporation liable for three (3) counts of illegal
exaction, two (2) counts of contract substitution and one count of withholding or unlawful
deduction from salaries of workers.

Accordingly, respondent is hereby ordered to refund the placement fees in the amount of
P2,500.00 to Rodrigo L. Mikin, P4,000.00, each, to Vivencio A. de Mesa and Cedric A.P.
Leyson plus restitution of the salaries withheld in the amount of SR1,000.00 to Vivencio A.
de Mesa.

Moreover, respondent's license is hereby suspended for eight (8) months to take effect
immediately and to remain as such until full refund and restitution of the above-stated
amounts have been effected or in lieu thereof, it is fined the amount of SIXTY THOUSAND
(P60,000.00) PESOS plus restitution.

SO ORDERED."

In line with this August 29, 1988 Order, petitioner deposited the check equivalent to the claims of
private respondents and paid the corresponding fine under protest. From the said Order, petitioner
filed a Motion for Reconsideration which was subsequently denied in an Order dated October 10,
1989.

Under the POEA Rules and Regulations, the decision of the POEA thru the LRO suspending or
canceling a license or authority to act as a recruitment agency may be appealed to the Ministry (now
Department) of Labor and Employment.  Accordingly, after the denial of its motion for
15 

reconsideration, petitioner appealed the August 21, 1988 Order to the Secretary of Labor and
Employment. However, in an Order dated September 13, 1991, public respondent Secretary of
16 

Labor and Employment affirmed in toto the assailed Order. Petitioner filed a Motion for
Reconsideration but this was likewise denied in an Order dated November 25, 1991.

Hence, the instant Petition for Certiorari where petitioner raises the following grounds for the reversal
of the questioned Orders:

THE PUBLIC RESPONDENT HAS ACTED WITHOUT OR IN EXCESS OF JURISDICTION

OR WITH GRAVE ABUSE OF DISCRETION IN HOLDING PETITIONER GUILTY OF
ILLEGAL EXACTIONS. THE FINDING IS NOT SUPPORTED BY EVIDENCE AND IN ANY
EVENT, THE LAW ON WHICH THE CONVICTION IS BASED IS VOID.

II

THE PUBLIC RESPONDENT HAS ACTED WITHOUT OR IN EXCESS OF JURISDICTION

OR WITH GRAVE ABUSE OF DISCRETION IN PENALIZING PETITIONER WITH
CONTRACT SUBSTITUTION. IN THE PREMISES, THE CONTRACT SUBSTITUTION IS
VALID AS IT IMPROVED THE TERMS AND CONDITIONS OF PRIVATE RESPONDENTS'
EMPLOYMENT.

III.

THE PUBLIC RESPONDENT HAS ACTED WITHOUT OR IN EXCESS OF JURISDICTION,

OR WITH GRAVE ABUSE OF DISCRETION IN HOLDING PETITIONER LIABLE FOR
ILLEGAL DEDUCTIONS/WITHHOLDING OF SALARIES FOR THE SUPREME COURT
ITSELF HAS ALREADY ABSOLVED PETITIONER FROM THIS CHARGE.

With respect to the first ground, petitioner would want us to overturn the findings of the POEA,
subsequently affirmed by the Secretary of the Department of Labor and Employment, that it is guilty
of illegal exaction committed by collecting placement fees in excess of the amounts allowed by law.
This issue, however, is a question of fact which cannot be raised in a petition for certiorari under
Rule 65.  As we have previously held:
17 

"It should be noted, in the first place, that the instant petition is a special civil action for
certiorari under Rule 65 of the Revised Rules of Court. An extraordinary remedy, its use is
available only and restrictively in truly exceptional cases wherein the action of an inferior
court, board or officer performing judicial or quasi-judicial acts is challenged for being wholly
void on grounds of jurisdiction. The sole office of the writ of certiorari is the correction of
errors of jurisdiction including the commission of grave abuse of discretion amounting to lack
or excess of jurisdiction. It does not include correction of public respondent NLRC's
evaluation of the evidence and factual findings based thereon, which are generally accorded
not only great respect but even finality." 
18

The question of whether or not petitioner charged private respondents placement fees in excess of
that allowed by law is clearly a question of fact which is for public respondent POEA, as a trier of
facts, to determine. As stated above, the settled rule is that the factual findings of quasi-judicial
agencies like the POEA, which have acquired expertise because their jurisdiction is confined to
specific matters, are generally accorded not only respect, but at times even finality if such findings
are supported by substantial evidence.  19

On this point, we have carefully examined the records of the case and it is clear that the ruling of
public respondent POEA that petitioner is guilty of illegal exaction is supported by substantial
evidence. Aside from the testimonial evidence offered by private respondents, they also presented
documentary evidence consisting of receipts issued by a duly authorized representative of petitioner
which show the payment of amounts in excess of those allowed by the POEA. In contrast, petitioner
did not present any evidence whatsoever to rebut the claims of private respondents despite the
many opportunities for them to do so.

Petitioner insists, however, that it cannot be held liable for illegal exaction as POEA Memorandum
Circular No. 11, Series of 1983, which enumerated the allowable fees which may be collected from
applicants, is void for lack of publication.

There is merit in the argument.

In Tañada vs. Tuvera  , the Court held, as follows:

20 

"We hold therefore that all statutes, including those of local application and private laws,
shall be published as a condition for their effectivity, which shall begin fifteen days after
publication unless a different effectivity date is fixed by the legislature.

Covered by this rule are presidential decrees and executive orders promulgated by the
President in the exercise of legislative powers whenever the same are validly delegated by
the legislature or, at present, directly conferred by the Constitution: Administrative rules and
regulations must also be published if their purpose is to enforce or implement existing law
pursuant to a valid delegation.

Interpretative regulations and those merely internal in nature, that is, regulating only the
personnel of the administrative agency and the public, need not be published. Neither is
publication required of the so-called letter of instructions issued by the administrative
superiors concerning the rules or guidelines to be followed by their subordinates in the
performance of their duties."

Applying this doctrine, we have previously declared as having no force and effect the following
administrative issuances: a) Rules and Regulations issued by the Joint Ministry of Health-Ministry of
Labor and Employment Accreditation Committee regarding the accreditation of hospitals, medical
clinics and laboratories;  b) Letter of Instruction No. 416 ordering the suspension of payments due
21 

and payable by distressed copper mining companies to the national government;  c) Memorandum
22 

Circulars issued by the POEA regulating the recruitment of domestic helpers to Hong Kong;  d) 23 

Administrative Order No. SOCPEC 89-08-01 issued by the Philippine International Trading
Corporation regulating applications for importation from the People's Republic of China; and e)
24 

Corporate Compensation Circular No. 10 issued by the Department of Budget and Management
discontinuing the payment of other allowances and fringe benefits to government officials and
employees.  In all these cited cases, the administrative issuances questioned therein were uniformly
25 

struck down as they were not published or filed with the National Administrative Register as required
by the Administrative Code of 1987.  26

POEA Memorandum Circular No. 2, Series of 1983 must likewise be declared ineffective as the
same was never published or filed with the National Administrative Register.
POEA Memorandum Order No. 2, Series of 1983 provides for the applicable schedule of placement
and documentation fees for private employment agencies or authority holders. Under the said Order,
the maximum amount which may be collected from prospective Filipino overseas workers is
P2,500.00. The said circular was apparently issued in compliance with the provisions of Article 32 of
the Labor Code which provides, as follows:

"ARTICLE 32. Fees to be paid by workers. — Any person applying with a private fee-
charging employment agency for employment assistance shall not be charged any fee until
he has obtained employment through its efforts or has actually commenced employment.
Such fee shall be always covered with the approved receipt clearly showing the amount
paid. The Secretary of Labor shall promulgate a schedule of allowable fees." (italic supplied)

It is thus clear that the administrative circular under consideration is one of those issuances which
should be published for its effectivity, since its purpose is to enforce and implement an existing law
pursuant to a valid delegation.  Considering that POEA Administrative Circular No. 2, Series of 1983
27 

has not as yet been published or filed with the National Administrative Register, the same is
ineffective and may not be enforced.

The Office of the Solicitor General argues however that the imposition of administrative sanctions on
petitioner was based not on the questioned administrative circular but on Article 32 and Article 34
(a)  of the Labor Code.
28 

The argument is not meritorious. The said articles of the Labor Code were never cited, much less
discussed, in the body of the questioned Orders of the POEA and Secretary of Labor and
Employment. In fact, the said Orders were consistent in mentioning that petitioner's violation of
Administrative Circular No. 2, Series of 1983 was the basis for the imposition of administrative
sanctions against petitioner. Furthermore, even assuming that petitioner was held liable under the
said provisions of the Labor Code, Articles 32 and 34 (a) of the Labor Code presupposes the
promulgation of a valid schedule of fees by the Department of Labor and Employment. Considering
that, as, previously discussed, Administrative Circular No. 2, Series of 1983 embodying such a
schedule of fees never took effect, there is thus no basis for the imposition of the administrative
sanctions against petitioner. Moreover, under Book VI, Chapter II, Section 3 of the Administrative
Code of 1987, "(r)ules in force on the date of the effectivity of this Code which are not filed within
three (3) months from that date shall not thereafter be the basis of any sanction against any party or
persons." Considering that POEA Administrative Circular No. 2 was never filed with the National
Administrative Register, the same cannot be used as basis for the imposition of administrative
sanctions against petitioner.

The Office of the Solicitor General likewise argues that the questioned administrative circular is not
among those requiring publication contemplated by Tañada vs. Tuvera as it is addressed only to a
specific group of persons and not to the general public.

Again, there is no merit in this argument.

The fact that the said circular is addressed only to a specified group, namely private employment
agencies or authority holders, does not take it away from the ambit of our ruling in Tañada vs.
Tuvera. In the case of Phil. Association of Service Exporters vs. Torres, the administrative circulars
29 

questioned therein were addressed to an even smaller group, namely Philippine and Hong Kong
agencies engaged in the recruitment of workers for Hong Kong, and still the Court ruled therein that,
for lack of proper publication, the said circulars may not be enforced or implemented.
Our pronouncement in Tañada vs. Tuvera is clear and categorical. Administrative rules and
regulations must be published if their purpose is to enforce or implement existing law pursuant to a
valid delegation., The only exceptions are interpretative regulations, those merely internal in nature,
or those so-called letters of instructions issued by administrative superiors concerning the rules and
guidelines to be followed by their subordinates in the performance of their duties. Administrative
Circular No. 2, Series of 1983 has not been shown to fall under any of these exceptions.

In this regard, the Solicitor General's reliance on the case of Yaokasin vs. Commissioner of
Customs  is misplaced. In the said case, the validity of certain Customs Memorandum Orders were
30 

upheld despite their lack of publication as they were addressed to a particular class of persons, the
customs collectors, who were also the subordinates of the Commissioner of the Bureau of Customs.
As such, the said Memorandum Orders clearly fall under one of the exceptions to the publication
requirement, namely those dealing with instructions from an administrative superior to a subordinate
regarding the performance of their duties, a circumstance which does not obtain in the case at
bench.

With respect to the second ground, petitioner would want us to review the findings of fact of the
POEA regarding the two counts of alleged contract substitution. Again, this is a question of fact
which may not be disturbed if the same is supported by substantial evidence. A reading of the
August 29, 1988 Order of the POEA shows that, indeed, the ruling that petitioner is guilty of two (2)
counts of prohibited contract substitution is supported by substantial evidence. Thus:

"2. As admitted by respondent, there was definitely a contract of substitution in the first
count. The first contract was duly approved by the Administration and, therefore, the parties
are bound by the terms and condition thereof until its expiration. The mere intention of
respondents to increase the number of hours of work, even if there was a corresponding
increase in wage is clear violation of the contract as approved by the Administration, and
notwithstanding the same, the amendment is evidently contrary to law, morals, good
customs and public policy and hence, must be shunned (Art. 1306, Civil Code of the
Philippines, Book III, Title I, Chapter 1, Article 83, Labor Code of the Philippines, as
amended). Moreover, it would appear that the proposed salary increase corresponding to the
increase in number of work bonus may just have been a ploy as complainant were (sic)
thereafter not paid at the increased rate.

As to contract substitution in the second part, a third contract was emphatically intended by
respondent to be signed by complainants which, however, was not consummated due to the
adamant refusal of complainants to sign thereon. Mere intention of the respondent to commit
contract substitution for a second time should not be left unpunished. It is the duty of this
Office to repress such acts by teaching agencies a lesson to avoid repetition of the same
violation." 
31

With respect to the third ground, petitioner argues that the public respondent committed grave abuse
of discretion in holding petitioner liable for illegal deductions/withholding of salaries considering that
the Supreme Court itself has already absolved petitioner from this charge. Petitioner premises its
argument on the fact that the July 26, 1989 Decision of the NLRC absolving it from private
respondent de Mesa's claim for salary deduction has already attained finality by reason of the
dismissal of private respondents' petition for certiorari of the said NLRC decision by the Supreme
Court.

Petitioner is correct in stating that the July 26, 1989 Decision of the NLRC has attained finality by
reason of the dismissal of the petition for certiorari assailing the same. However, the said NLRC
Decision dealt only with the money claims of private respondents arising from employer-employee
relations and illegal dismissal and as such, it is only for the payment of the said money claims that
petitioner is absolved. The administrative sanctions, which are distinct and separate from the money
claims of private respondents, may still be properly imposed by the POEA. In fact, in the August 31,
1988 Decision of the POEA dealing with the money claims of private respondents, the POEA
Adjudication Office precisely declared that "respondent's liability for said money claims is without
prejudice to and independent of its liabilities for the recruitment violations aspect of the case which is
the subject of a separate Order."  32

The NLRC Decision absolving petitioner from paying private respondent de Mesa's claim for salary
deduction based its ruling on a finding that the said money claim was not raised in the
complaint.  While there may be questions regarding such finding of the NLRC, the finality of the said
33 

NLRC Decision prevents us from modifying or reviewing the same. But the fact that the claim for
salary deduction was not raised by private respondents in their complaint will not bar the POEA from
holding petitioner liable for illegal deduction or withholding of salaries as a ground for the suspension
or cancellation of petitioner's license.

Under the POEA Rules and Regulations, the POEA, on its own initiative, may conduct the necessary
proceeding for the suspension or cancellation of the license of any private placement agency on any
of the grounds mentioned therein.  As such, even without a written complaint from an aggrieved
34 

party, the POEA can initiate proceedings against an erring private placement agency and, if the
result of its investigation so warrants, impose the corresponding administrative sanction thereof.
Moreover, the POEA, in an investigation of an employer-employee relationship case, may still hold a
respondent liable for administrative sanctions if, in the course of its investigation, violations of
recruitment regulations are uncovered.  It is thus clear that even if recruitment violations were not
35 

included in a complaint for money claims initiated by a private complainant, the POEA, under its
rules, may still take cognizance of the same and impose administrative sanctions if the evidence so
warrants.

As such, the fact that petitioner has been absolved by final judgment for the payment of the money
claim to private respondent de Mesa does not mean that it is likewise absolved from the
administrative sanctions which may be imposed as a result of the unlawful deduction or withholding
of private respondents' salary. The POEA thus committed no grave abuse of discretion in finding
petitioner administratively liable of one count of unlawful deduction/withholding of salary.

To summarize, petitioner should be absolved from the three (3) counts of illegal exaction as POEA
Administrative Circular No. 2, Series of 1983 could not be the basis of administrative sanctions
against petitioner for lack of publication. However, we affirm the ruling of the POEA and the
Secretary of Labor and Employment that petitioner should be held administratively liable for two (2)
counts of contract substitution and one (1) count of withholding or unlawful deduction of salary.

Under the applicable schedule of penalties imposed by the POEA, the penalty for each count of
contract substitution is suspension of license for two (2) months or a fine of P10,000.00 while the
penalty for withholding or unlawful deduction of salaries is suspension of license for two (2) months
or fine equal to the salary withheld but not less than P10,000.00 plus restitution of the amount in
both instances. Applying the said schedule on the instant case, the license of petitioner should be
36 

suspended for six (6) months or, in lieu thereof, it should be ordered to pay fine in the amount of
P30,000.00. Petitioner should likewise pay the amount of SR1,000.00 to private respondent Vivencio
A. de Mesa as restitution for the amount withheld from his salary.

WHEREFORE, premises considered, the September 13, 1991 and November 25, 1991 Orders of
public respondent Secretary of Labor and Employment are hereby MODIFIED. As modified, the
license of private respondent Philsa International Placement and Services Corporation is hereby
suspended for six (6) months or, in lieu thereof, it is hereby ordered to pay the amount of P30,000.00
as fine. Petitioner is likewise ordered to pay the amount of SR1,000.00 to private respondent
Vivencio A. de Mesa. All other monetary awards are deleted.

SO ORDERED.