Case Summary (G.R. No. 114714)
Grant of Rule-Making Authority Under EO 797
Executive Order No. 797, as implemented under the 1987 Constitution, mandates the POEA to “formulate and undertake … a systematic program for promoting and monitoring overseas employment” and to “promulgate the necessary rules and regulations to govern” its adjudicatory functions. The Supreme Court reaffirmed that Congress may delegate subordinate legislative power to administrative agencies to “fill in” details of broad policy mandates, provided regulations conform to statutory standards.
Delegation and Subordinate Legislation Doctrine
Relying on Eastern Shipping Lines, Inc. vs. POEA (166 SCRA 533 [1988]), the Court held that the POEA’s power to prescribe standard employment contracts is valid subordinate legislation. EO 797’s directive to secure “fair and equitable employment practices” supplies an adequate standard guiding board discretion and avoids impermissible delegation of substantive legislative power.
Equal Protection and Reasonable Classification
Petitioners alleged discriminatory treatment of seafarers versus land-based overseas workers and among shipowners. The Court applied the four-part test for reasonable classification—substantial distinctions, germane purpose, not limited to existing conditions, and equal application within classes—and found that differences in work environment, risk exposure, and accessibility legitimated distinct compensation standards for seafarers.
Contract Clause and Police Power
The petitioners’ impairment‐of‐contracts claim was rejected based on the principle that labor contracts “are so impressed with public interest” and subject to state police power (Civil Code, Art. 1700). Regulations enacted under police power to protect workers’ welfare may alter contractual obligations when reasonably necessary for health, safety, and social justice under Article XIII of the Constitution.
Board Composition and Validity of Acts
Petitioners contended that absence of the “private sect
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Facts of the Case
- Petitioners are an incorporated association of licensed Filipino manning agencies and their co‐petitioners, all licensed manning agencies recruiting seamen for foreign shipowners.
- Respondents are the Philippine Overseas Employment Administration (POEA) and its officials, Administrator Felicisimo Joson and Governing Board Chair Nieves Confessor.
- In January 1994, the POEA Governing Board adopted Resolution No. 01, series of 1994, to amend death and compensation benefits in the Standard Employment Contract for seafarers.
- Shortly after, POEA Administrator Joson issued Memorandum Circular No. 05, series of 1994, informing stakeholders of the adjustments and their effective date of March 20, 1994.
Procedural History
- Petitioners filed a petition for certiorari and prohibition before the Supreme Court, assailing the validity of the POEA resolution and memorandum circular.
- The Supreme Court required memoranda; petitioners submitted theirs, respondents adopted their comment as memorandum.
- The case was submitted for decision on April 21, 1995.
Petitioners’ Contentions
- POEA lacks authority to fix death and workmen’s compensation rates—only Congress may legislate such rates.
- Even if POEA has rule‐making power, it failed to observe required standards in exercising that power.
- The challenged acts violate equal protection and impairment of contracts clauses of the Constitution.
- Governing Board acts are invalid because the private‐sector representative mandated by law has never been appointed.
Respondents’ Contentions
- The resolution and circular are valid exercises of POEA’s rule‐making or subordinate legislative authority, as upheld in Eastern Shipping Lines, Inc. vs. POEA.
- The absence of the private‐sector representative on the Board is cured by the advisory participation of the Tripartite Technical Working Group.
- The adjustments were the product of proper consultation and consensus with shipowners and private sector representatives.
Governing Board Resolution No. 01, series of 1994
- Enacted January 14, 1994, under the POEA’s mandate to protect overseas Fil