G.R. No. 93666 - General Milling Corp. vs. Torres

Case Summary (G.R. No. 93666)

Chronology of Events and Administrative Acts

1 May 1989: DOLE-NCR issued Alien Employment Permit No. M-0689-3-535 for Cone as sports consultant/assistant coach.
27 December 1989: GMC and Cone executed an employment contract for Cone to coach GMC’s basketball team.
15 January 1990: Commission on Immigration and Deportation’s Board of Special Inquiry approved Cone’s change of admission from temporary visitor to prearranged employee.
9 February 1990: GMC requested renewal of Cone’s alien employment permit and sought approval for him to be employed as a full-fledged coach.
15 February 1990: DOLE Regional Director Luna Piezas granted the request.
18 February 1990: Alien Employment Permit No. M-0290-3-881 issued (valid until 25 December 1990).
BCAP appealed to the Secretary of Labor; 23 April 1990: Secretary ordered cancellation of Cone’s permit for failure to show non-availability of a Filipino competent to perform the services and lack of proof that hiring Cone would redound to national interest.
Motions for reconsideration by petitioners were denied by Acting Secretary Laguesma on 8 June 1990.
14 June 1990: Petition for Certiorari filed in the Supreme Court challenging the Secretary’s alleged grave abuse of discretion and the constitutionality of Section 6(c), Rule XIV, Book I of the Implementing Rules (asserted to exceed the Labor Code).

Issues Presented to the Court

Whether the Secretary of Labor gravely abused his discretion in canceling Cone’s alien employment permit.
Whether Section 6(c), Rule XIV, Book I of the Implementing Rules (which permits consideration of whether employment of the alien will “redound to the national interest”) is ultra vires or unconstitutional because Article 40 of the Labor Code does not explicitly include that criterion.

Applicable Law and Constitutional Basis

Article 40, Labor Code: requires an employment permit for non-resident aliens and conditions issuance on a determination of non-availability in the Philippines of a person competent, able and willing to perform the services. It also permits issuance upon recommendation for preferred investments.
Section 6(c), Rule XIV, Book I (Implementing Rules): lists factors the Secretary may consider in issuing an employment permit, including whether employment of the applicant will redound to the national interest.
Article 12, Labor Code (statement of objectives): policies including promoting full employment, facilitating free choice of employment in conformity with the national interest, regulating the employment of aliens, and related labor policies.
1987 Constitution: the Court considered constitutional provisions such as the equal protection clause and the State’s power to regulate employment and matters of public policy (the decision date falls after 1987, so the 1987 Constitution is the governing charter).

Standard of Review and Discretion of the Secretary of Labor

The Labor Code’s permissive language and the implementing rules vest the Secretary with discretionary authority to determine non-availability of local workers and to weigh considerations relevant to the public interest. The Court evaluated whether the Secretary acted with grave abuse of discretion, acted without or in excess of jurisdiction, or denied procedural rights.

Court’s Findings on Procedural Due Process and Notice

The petitioners alleged a lack of notice regarding BCAP’s appeal. The Court found that any alleged defect was cured because petitioners were permitted to file motions for reconsideration before the Secretary. Citing precedent (De Leon v. Commission on Elections), the Court held that the opportunity to be heard via reconsideration remedied any earlier notice concern.

Employer’s Right to Choose and Article 40 Limitations

The Court rejected petitioner GMC’s argument that employer prerogative to hire foreign coaches is unfettered. Article 40 imposes a statutory restriction: employers must secure an alien employment permit after a determination of non-availability of competent Filipino personnel. Thus, the employer’s freedom to choose is subject to statutory permitting requirements, and compliance with the Labor Code is a precondition to employing a non-resident alien.

Equal Protection Argument

Petitioners attempted to invoke equal protection in comparing Cone to another foreign coach (Norman Black). The Court found the comparison inapt because Black was a long-time resident and therefore not a “non-resident alien” subject to Article 40; the technical immigration classifications control the applicability of Article 40. Consequently, equal protection did not afford relief to petitioners under the facts presented.

Contractual Obligations and Public Policy

Petitioners argued that cancellation would impair contractual obligations. The Court noted that the Labor Code and its permitting requirements pre-existed the employment contract; laws and public-policy provisions are deemed incorporated into contracts when they govern the subject matter. Private parties cannot contractually waive applicable public-law requirements, particularly those affecting public policy. Therefore, the statutory permitting regime constrained the contractual freedom of the parties.

Deference Between Agencies: DOLE vs. Commission on Immigration and Deportation

Petitioners urged deference to the Commission on Immigration and Deportation’s approval of Cone’s change of admission status. The Court rejected this contention: Article 40 and the Labor Code specifically vest the Department of Labor with jurisdiction to determine the availability of Filipino workers and to issue or cancel employment permits. The two agencies perform distinct functions (admissibility vs. employment-permit determination), and the Labor Department is the proper authority to make the availability determination under the Labor Code.

Validity of Implementing Rule Section 6(c) (National Interest Criterion)

Petitioners contended Section 6(c) imposes a condition not found in Article 40. The Court

Case Syllabus (G.R. No. 93666)

Facts

On 1 May 1989, the National Capital Region of the Department of Labor and Employment issued Alien Employment Permit No. M-0689-3-535 in favor of Earl Timothy Cone, a United States citizen, as sports consultant and assistant coach for General Milling Corporation (GMC).
On 27 December 1989, GMC and Earl Timothy Cone entered into a contract of employment in which Cone undertook to coach GMC’s basketball team.
On 15 January 1990, the Board of Special Inquiry of the Commission on Immigration and Deportation approved Cone’s application for a change of admission status from temporary visitor to prearranged employee.
On 9 February 1990, GMC requested renewal of Cone’s alien employment permit and asked permission to employ Cone as a full-fledged coach.
On 15 February 1990, DOLE Regional Director Luna Piezas granted GMC’s request.
On 18 February 1990, Alien Employment Permit No. M-0290-3-881, valid until 25 December 1990, was issued for Cone.
The Basketball Coaches Association of the Philippines (BCAP) appealed issuance of the permit to the Secretary of Labor.
On 23 April 1990, the Secretary of Labor issued a decision ordering cancellation of Cone’s employment permit on the ground that there was no showing that there was no person in the Philippines who was competent, able and willing to perform the services required nor that hiring Cone would redound to the national interest.
GMC filed a Motion for Reconsideration and two Supplemental Motions for Reconsideration; these were denied by Acting Secretary Bienvenido E. Laguesma in an Order dated 8 June 1990.
Petitioners filed a Petition for Certiorari dated 14 June 1990 challenging the Secretary’s revocation and the validity of Section 6(c), Rule XIV, Book I of the Omnibus Rules Implementing the Labor Code.

Procedural History

Initial issuance of employment permits and subsequent renewal occurred at the DOLE regional level (permits dated 1 May 1989 and 18 February 1990).
BCAP appealed the renewal/issuance to the Secretary of Labor, resulting in revocation on 23 April 1990.
Petitioners’ motions for reconsideration were denied by Acting Secretary Laguesma on 8 June 1990.
Petitioners elevated the case to the Supreme Court via a Petition for Certiorari on 14 June 1990.
Petitioners later manifested to the Court that the Secretary of Labor had reversed his earlier decision and issued an employment permit to Cone; petitioners sought to withdraw the Petition as moot and academic.

Issues Presented

Whether the respondent Secretary of Labor gravely abused his discretion in revoking Cone’s alien employment permit.
Whether Section 6(c), Rule XIV, Book I of the Omnibus Rules Implementing the Labor Code is invalid because the Labor Code does not empower the Secretary to determine whether employment of an alien would “redound to the national interest.”
Ancillary questions raised by petitioners: alleged failure of notice regarding BCAP’s appeal; whether hiring of a foreign coach is an employer’s unfettered prerogative; whether equal protection and impairment of contract arguments are viable; whether the Secretary should defer to the Commission on Immigration and Deportation’s findings.

Relevant Statutory and Regulatory Provisions Quoted in the Record

Section 6, Rule XIV, Book I (Implementing Rules) as quoted:
- “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; x x x x x x x x”
Article 40, Labor Code (as quoted):
- “ART. 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 nonresident 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.”
Article 12, Labor Code – Statement of Objectives (selected provisions quoted):
- “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; x x x x x x x x x”

Petitioners’ Principal Contentions (as presented in the Petition)

The S