G.R. No. L-14711 - Smith, Bell and Co., Ltd. vs. Manila Port Service and Manila Railroad Co., Inc.

Petitioner ATCI Overseas Corporation (ATCI) and the Ministry of Public Health of Kuwait (Ministry) entered into a Memorandum of Understanding for ATCI to recruit medical professionals for work in Kuwait.
Private respondents Marissa Alcantara and Rosanna E. Cabatbat were hired as dental hygienists by the Ministry for a period of two years, with a monthly salary of 210 KD.
Before leaving, the private respondents underwent a physical and medical examination in an accredited clinic of the POEA, and both were found physically fit.
On 19 August 1991, private respondents departed for Kuwait.

Shortly after arriving in Kuwait, private respondents were subjected to another physical examination.
After working for only two months, private respondents were terminated.
Upon inquiry, private respondents were informed that they were physically unfit for their jobs.
After they had ceased to work for seven months, private respondents were repatriated to the Philippines on 16 May 1992.

Private respondents filed a complaint with the POEA against petitioner ATCI and its surety, Prudential Guarantee & Assurance, Inc., for:

Private respondents were not given by the foreign employer copies of the result of their medical examination; and
Private respondents were not given written notice of termination.

The Ministry had the right to dismiss private respondents because they were found physically unfit to work.
The Ministry’s dismissal was the act of a foreign government that could not be declared illegal by any Philippine government instrumentality.
Petitioner interceded on behalf of private respondents, but its efforts failed.

On 4 October 1993, the POEA rendered a decision finding petitioner and its surety solidarily liable for illegal dismissal.
The POEA held that the alleged just cause (lung defects) was not satisfactorily established.
The POEA found:

No written notice informed complainants of the reasons they were not allowed to work anymore.
Even if “lung defects” existed, the same should have been supported by a doctor’s report or medical certificate establishing unfitness.
Petitioner could not invoke the act of state doctrine to escape liability.
Because private respondents were deployed as physically fit and actually worked for two months, they should have been informed of their actual health conditions.
Private respondents were “just not allowed to work anymore,” were not notified in writing of the causes, and were not allowed to contest any alleged medical findings.
The Ministry of Kuwait’s alleged decision was not proffered.
The Philippine Labor Attache’s certification could not correct the findings of arbitrary dismissal.
The Labor Attache’s representations to Ministry officials were not substantiated and the “appeal” should have been documented.

The POEA ordered payment of salaries from the time private respondents stopped working until the expiry of their contracts, computed as from 17 October 1991 to 19 August 1993, awarding KD 4,634.00 to each private respondent.
The POEA awarded attorney’s fees equivalent to 10% of the judgment award for private respondents who sought counsel to prosecute their claims.
The POEA explained that Prudential Guarantee & Assurance, Inc. was impleaded as surety and was held jointly and severally liable with petitioner as guarantor of compliance with employment contract terms.
The POEA specified that the award should be in Philippine currency at the prevailing rate of exchange at the time of payment.

Private respondents appealed to the National Labor Relations Commission (NLRC).
On 22 August 1994, the NLRC set aside the POEA decision and dismissed the private respondents’ complaint.
In support of its appeal, private respondents submitted additional evidence consisting of a letter from the Ministry of Health of Kuwait stating that complainants were found to be positive of tuberculosis and heart sickness, with an English translation and certification by the Office of Consular Affairs.
The NLRC stressed that under Article 221 of the Labor Code, rules of evidence prevailing in court of law or equity were not controlling in NLRC proceedings; instead, the Commission should ascertain facts speedily and objectively without regard to technicalities to ensure due process.
The NLRC held that it could not disregard or set aside the Kuwait Ministry certification and found no reason to withhold weight and respect from it because it was issued by a government entity presumed regular absent contrary evidence.
The NLRC ...(Subscriber-Only)

Whether private respondents were probationary employees whose dismissal for failure to qualify as regular employees should be governed by Article 281 of the Labor Code.

Whether petitioner complied with the requirements for dismissal when an employee’s continued employment is prohibited by law or prejudicial to health, particularly the prerequisites of Sec. 8, Rule I, Book VI of the Omnibus Rules Implementing the Labor Code.
Whether the documentation presented by petitioner (the Kuwait Ministry letter and the Philippine Labor Attache certification) satisfied the Omnibus Rules and the evidentiary and timing requirements for lawful dismissal.