666 SUPREME COURT REPORTS ANNOTATED

The Conference of Maritime Manning Agencies, Inc. vs. Philippine

Overseas Employment Administration

*
G.R. No. 114714. April 21, 1995.

THE CONFERENCE OF MARITIME MANNING AGENCIES,

INC., ALSTER INTERNATIONAL SHIPPING, INC.,
CREAMSHIP MANAGEMENT, INC., EL GRANDE SHIPPING
CORP., EASTGATE (INT’L.) MARITIME AGENCIES, INC.,
FILIPINAS KALAYAAN OVERSEAS SHIPPING CORP.,
INTERWORLD SHIPPING CORP., JZEL COMPANY, INC.,
LAINE SHIPPING AGENCY CORP., MARINERS SERVICES,
CORP., MARITIME SERVICES & MGT., INC., MID OCEAN
(PHILS.) MARINE

_______________

* FIRST DIVISION.

667

VOL.243,APRIL21,1995 667
The Conference of Maritime Manning Agencies, Inc. vs. Philippine
Overseas Employment Administration

AGENCY, OCEAN EAST AGENCY CORP., PASIA-PHIL.

GROUP, INC., PHIL. MARINE CONSULTANT, INC., SEASTAR
MARINE SERVICES, INC., TSM SHIPPING (PHILS.) INC.,
TRANS-MED (MANILA) CORPORATION, petitioners, vs.
PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION,
HON. NIEVES CONFESSOR AND THE HON. FELICISIMO
JOSON, respondents.
 Constitutional Law; Delegation of Powers; The Congress may
constitutionally delegate the authority to promulgate rules and regulations
to the administrative agency.—It is, of course, well established in our
jurisdiction that, while the making of laws is a non-delegable power that
pertains exclusively to Congress, nevertheless, the latter may
constitutionally delegate the authority to promulgate rules and regulations to
implement a given legislation and effectuate its policies, for the reason that
the legislature finds it impracticable, if not impossible, to anticipate
situations that may be met in carrying the law into effect. All that is required
is that the regulation should be germane to the objects and purposes of the
law; that the regulation be not in contradiction to but in conformity with the
standards prescribed by the law.
Same; The guaranty of equal protection of the laws is not violated by
legislation based on reasonable classification.—It is an established principle
of constitutional law that the guaranty of equal protection of the laws is not
violated by legislation based on reasonable classification. And for the
classification to be reasonable, it (1) must rest on substantial distinctions; (2)
must be germane to the purpose of the law; (3) must not be limited to
existing conditions only; and (4) must apply equally to all members of the
same class. There can be no dispute about the dissimilarities between land-
based and sea-based Filipino overseas workers in terms of, among other
things, work environment, safety, dangers and risks to life and limb, and
accessibility to social, civic, and spiritual activities.Nor is there merit in the
claim that the resolution and memorandum circular violate the contract
clause of the Bill of Rights.
Same; Police Power; Social justice is identified with the broad scope of
the police power of the state.—The executive order creating the POEA was
enacted to further implement the social justice provisions of the 1973
Constitution, which have been greatly enhanced and expanded in the 1987
Constitution by placing them under a separate Article. The Article on Social
Justice was aptly described as the “heart

668

668 SUPREMECOURTREPORTSANNOTATED

The Conference of Maritime Manning Agencies, Inc. vs. Philippine

Overseas Employment Administration

of the new Charter” by the President of the 1986 Constitutional

Commission, retired Justice Cecilia Muñoz-Palma. Social justice is
identified with the broad scope of the police power of the state and requires
the extensive use of such power.
Same; Same; The constitutional prohibition against impairing
contractual obligations is not absolute.—The constitutional prohibition
against impairing contractual obligations is not absolute and is not to be
read with literal exactness. It is restricted to contracts with respect to
property or some object of value and which confer rights that may be
asserted in a court of justice; it has no application to statutes relating to
public subjects within the domain of the general legislative powers of the
State and involving the public rights and public welfare of the entire
community affected by it. It does not prevent a proper exercise by the State
of its police power by enacting regulations reasonably necessary to secure
the health, safety, morals, comfort, or general welfare of the community,
even though contracts may thereby be affected, for such matters cannot be
placed by contract beyond the power of the State to regulate and control
them.
Same; Same; Same; The freedom to contract is not absolute.—Verily,
the freedom to contract is not absolute; all contracts and all rights are
subject to the police power of the State and not only may regulations which
affect them be established by the State, but all such regulations must be
subject to change from time to time, as the general well-being of the
community may require, or as the circumstances may change, or as
experience may demonstrate the necessity. And under the Civil Code,
contracts of labor are explicitly subject to the police power of the State
because they are not ordinary contracts but are impressed with public
interest.

PETITION for review of a resolution and a memorandum circular of

the Philippine Overseas Employment Administration.

The facts are stated in the opinion of the Court.

     Bermudez & Associates for petitioners.

DAVIDE, JR.,J.:

Petitioner Conference of Maritime Manning Agencies, Inc., an

incorporated association of licensed Filipino manning agencies, and
its co-petitioners, all licensed manning agencies which hire

669

VOL.243,APRIL21,1995 669
The Conference of Maritime Manning Agencies, Inc. vs. Philippine
Overseas Employment Administration
and recruit Filipino seamen for and in behalf of their respective
foreign shipowner-principals, urge us to annul Resolution No. 01,
series of 1994, of the Governing Board of the Philippine Overseas
Employment Administration (POEA) and POEA Memorandum
Circular No. 05, series of 1994, on the grounds that:

(1) The POEA does not have the power and authority to fix and
promulgate rates affecting death and workmen’s
compensation of Filipino seamen working in ocean-going
vessels; only Congress can.
(2) Even granting that the POEA has that power, it,
nevertheless, violated the standards for its exercise.
(3) The resolution and the memorandum circular are
unconstitutional because they violate the equal protection
and non-impairment of obligation of contracts clauses of
the Constitution.
(4) The resolution and the memorandum circular are not valid
acts of the Governing Board because the private sector
representative mandated by law has not been appointed by
the President since the creation of the POEA.
1
Governing Board Resolution No. 01, issued on 14 January 1994,
reads as follows:

GOVERNING RESOLUTION NO. 01

SERIES OF 1994.

WHEREAS, it is the policy of the Administration to afford protection to

Filipino overseas contract workers, including seafarers and their families,
promote their interest and safeguard their welfare;
WHEREAS, the Administration under its mandate has the power and
function to secure the best terms and conditions of employment of Filipino
contract workers and ensure compliance therewith;
WHEREAS, the minimum compensation and other benefits in cases of
death, disability and loss or damage to crew’s effects provided under the
POEA Standard Employment Contract for seafarers which was revised in
1989 are now becoming very much lesser than the prevailing international
standards and those given to unionized seafarers as provided by their
collective bargaining agreements;
WHEREAS, the Tripartite Technical Working Group convened for the
purpose of deliberating the compensation and benefits provided

_______________
 1 Annex “A” of Petition; Rollo, 29-30.

670

670 SUPREME COURT REPORTS ANNOTATED

The Conference of Maritime Manning Agencies, Inc. vs. Philippine
Overseas Employment Administration

under the POEA Standard Employment Contract for seafarers has

recommended for the upgrading of the said compensation and benefits;
WHEREAS, for the interest of Filipino seafarers and their families, there
is an urgent need to improve and realign the minimum compensation and
other benefits provided under the POEA Standard Employment Contract for
seafarers in order to keep them at par with prevailing international standards
and those provided under collective bargaining agreements.
NOW, THEREFORE, the POEA Governing Board, in a meeting duly
convened, hereby resolves to amend and increase the compensation and
other benefits as specified under Part II, Section C, paragraph 1 and Section
L, paragraphs 1 and 2 of the POEA Standard Employment Contract for
Seafarers which shall henceforth read as follows:

I. “Section C. COMPENSATION AND BENEFITS

1. In case of death of the seaman during the term of his Contract, the
employer shall pay his beneficiaries the Philippine Currency
equivalent to the amount of US$50,000 and an additional amount
of US$7,000 to each child under the age of twenty-one (21) but not
exceeding four children at the exchange rate prevailing during the
time of payment.
Where the death is caused by warlike activity while sailing within a
declared warzone or war risk area, the compensation payable shall
be doubled. The employer shall undertake appropriate warzone
insurance coverage for this purpose.”
     x x x

III. The maximum rate provided under Appendix I-A shall likewise be
adjusted to US$50,000 regardless of rank and position of the
seafarer.
IV. Upon effectivity, the new compensation and other benefits herein
provided shall apply to any Filipino seafarer on board any vessel,
provided, that the cause of action occurs after this Resolution takes
effect.
V. This Resolution shall take effect after sixty (60) days from
publication in a newspaper of general circulation.
2
 2
Memorandum Circular No. 05, issued on 19 January 1994 by
POEA Administrator Felicisimo Joson and addressed to all Filipino
seafarers, manning agencies, shipowners, managers and

_______________

2 Annex “B” of Petition; Rollo, 31-33.

671

VOL. 243, APRIL 21, 1995 671

The Conference of Maritime Manning Agencies, Inc. vs. Philippine
Overseas Employment Administration

principals hiring Filipino seafarers, informed them that Governing

Board Resolution No. 01 adjusted the rates of compensation and
other benefits in Part II, Section C, paragraph 1; Section L,
paragraphs 1 and 2; and Appendix 1-A of the POEA Standard
Employment Contracts for Seafarers, which adjustments took effect
on 20 March 1994, and that:

IV. Upon effectivity, the new compensation and other benefits ... shall apply
to any Filipino seafarer already on-board any vessel, provided, that the
cause of action occurs after the said compensation and benefits take effect.

The Tripartite Technical Working Group mentioned in the

Resolution, which convened on 7 January 1994, was composed of
the following:

1. DA Crescencio M. Siddayao, POEA

2. Dir. Angeles T. Wong, POEA
3. Dir. Jaime P. Jimenez, POEA
4. Dir. Lorna O. Fajardo, POEA
5. OIC Salome Mendoza, POEA
6. Capt. Gregorio Oca, AMOSUP
7. Atty. Romeo Occena, PSU-ALU-TUCP
8. Mr. Vicente Aldanese, FAME
9. Capt. Emmanuel L. Regio, PAMAS
10. Atty. Rexlito Bermudez, COMMA
11. Atty. Alexandro M. Cruje, POEA
12. Mr. Jay Rosauro Baluyot, POEA
13. Ms. Magdalena Sarcos, POEA
3
 3
14. Atty. Augusto Arreza, FSA

In their comment, the public respondents contend that the petition is

without merit and should be dismissed because (a) the issuance of
the challenged resolution and memorandum circular was a valid
exercise of the POEA’s rule-making authority or power of
subordinate legislation which this Court had sustained

_______________

3 Annex “2” of Comment (Minutes of the Seabased Tripartite Technical Working

Group’s Meeting Held on 07 January 1993 [sic] at Deputy Administrator Siddayao’s
Conference Room); Rollo, 82-84.

672

672 SUPREMECOURTREPORTSANNOTATED
The Conference of Maritime Manning Agencies, Inc. vs. Philippine
Overseas Employment Administration

4
in Eastern Shipping Lines, Inc. vs. POEA; (b) the “non-
appointment” of the third member of the Governing Board does not
necessarily invalidate the acts of the Board, for it has been
functioning “under the advisement of the Tripartite Technical
Working Group which group is incidentally constituted by the
private sector, i.e., seafarer employers and/or associations of
manning agencies including herein petitioner,” for which reason “the
third member complement ... has5 been substantially represented by
said technical working group;” and (c) the consensus on the
increase in the rates of compensation and other benefits was arrived
at after appropriate consultations with the shipowners and the
private sector; the Board therefore soundly exercised its discretion.
In view of the importance of the issues raised, we gave due
course to the petition and required the parties to submit their
respective memoranda. The petitioners did, while the public
respondents opted to adopt their comment as their memorandum.
The constitutional challenge of the rule-making power of the
POEA based on impermissible delegation of legislative power had
been, as correctly contended by the public respondents, brushed
6
aside by this Court in Eastern Shipping Lines, Inc. vs. POEA. The
petitioner in that case assailed the constitutionality of Memorandum
Circular No. 02 of the POEA (effective 1 February 1984) which
prescribed a standard contract to be adopted by both foreign and
domestic shipping companies in the hiring of Filipino seamen for
overseas employment. The challenged resolution and memorandum
circular here merely further amended Memorandum Circular No. 02,
which was earlier amended in 1989 per Memorandum Circular No.
7
41, series of 1989.
In sustaining the rule-making authority of the POEA and in
holding against the claimed infirmity of delegation of legislative
power,Eastern first considered the history of the charter of the

_______________

4 166 SCRA 533 (1988).

5 Rollo, 70-71.
6 Supra, note 4.
7 Annex “1” of Comment; Rollo, 75-81.

673

VOL. 243, APRIL 21, 1995 673

The Conference of Maritime Manning Agencies, Inc. vs. Philippine
Overseas Employment Administration

POEA and then discussed separately the above constitutional issues

thus:

[T]he petitioner questions the validity of Memorandum Circular No. 2 itself

as violative of the principle of non-delegation of legislative power. It
contends that no authority had been given the POEA to promulgate the said
regulation; and even with such authorization, the regulation represents an
exercise of legislative discretion which, under the principle, is not subject to
delegation.
The authority to issue the said regulation is clearly provided in Section
4(a) of Executive Order No. 797, reading as follows:

“x x x The governing Board of the Administration (POEA), as hereunder provided,

shall promulgate the necessary rules and regulations to govern the exercise of the
adjudicatory functions of the Administration (POEA).”

Similar authorization had been granted the National Seamen Board,

which, as earlier observed, had itself prescribed a standard shipping contract
substantially the same as the format adopted by the POEA.
The second challenge is more serious as it is true that legislative
discretion as to the substantive contents of the law cannot be delegated.
What can be delegated is the discretion to determine how the law may be
enforced, not what the law shall be. The ascertainment of the latter subject is
a prerogative of the legislature. This prerogative cannot be abdicated or
surrendered by the legislature to the delegate....
...
The principle of non-delegation of powers is applicable to all the three
major powers of the Government but is especially important in the case of
the legislative power because of the many instances when its delegation is
permitted. The occasions are rare when executive or judicial powers have to
be delegated by the authorities to which they legally pertain. In the case of
legislative power, however, such occasions have become more and more
frequent, if not necessary. This had led to the observation that the delegation
of legislative power has become the rule and its non-delegation the
exception.
The reason is the increasing complexity of the task of government and
the growing inability of the legislature to cope directly with the myriad
problems demanding its attention. The growth of society has ramified its
activities and created peculiar and sophisticated problems that the legislature
cannot be expected reasonably to comprehend. Specialization even in
legislation has become necessary. To many of the problems attendant upon
present-day undertakings, the legislature

674

674 SUPREMECOURTREPORTSANNOTATED
The Conference of Maritime Manning Agencies, Inc. vs. Philippine
Overseas Employment Administration

cious, not to say, specific solutions. These solutions may, however, be

expected from its delegates, who are supposed to be experts in the particular
fields assigned to them.
The reasons given above for the delegation of legislative powers in
general are particularly applicable to administrative bodies. With the
proliferation of specialized activities and their attendant peculiar problems,
the national legislature has found it more and more necessary to entrust to
administrative agencies the authority to issue rules to carry out the general
provisions of the statute. This is called the “power of subordinate
legislation.”
...
With this power, administrative bodies may implement the broad policies
laid down in a statute by “filling in” the details which the Congress may not
have the opportunity or competence to provide. This is effected by their
promulgation of what are known as supplementary regulations, such as the
implementing rules issued by the Department of Labor on the new Labor
Code. These regulations have the force and effect of law.
...
 Memorandum Circular No. 2 is one such administrative regulation. The
model contract prescribed thereby has been applied in a significant number
of the cases without challenge by the employer. The power of the POEA
(and before it the National Seamen Board) in requiring the model contract is
not unlimited as there is a sufficient standard guiding the delegate in the
exercise of the said authority. That standard is discoverable in the executive
order itself which, in creating the Philippine Overseas Employment
Administration, mandated it to protect the rights of overseas Filipino
8
workers to “fair and equitable employment practices.”

The POEA mandate referred to as providing the reasonable standard

for the exercise of the POEA’s rule-making authority is found in the
statement of powers and functions of the said office in paragraph (a),
Section 4 of E.O. 797, to wit:

(a) The Administration shall formulate and undertake in coordination where

necessary with the appropriate entities concerned, a systematic program for
promoting and monitoring the overseas employment of Filipino workers
taking into consideration domestic man-

_______________

8 Supra, note 4, at 542-545.

675

VOL. 243, APRIL 21, 1995 675

The Conference of Maritime Manning Agencies, Inc. vs. Philippine
Overseas Employment Administration

power requirements, and to protect their rights to fair and equitable

employment practices. It shall have original and exclusive jurisdiction over
all cases, including money claims, involving employer-employee relations
arising out of or by virtue of any law or contract involving Filipino workers
for overseas employment, including seamen. This adjudicatory function
shall be undertaken in appropriate circumstances in consultation with the
Construction Industry Authority of the Philippines. The governing Board of
the Administration, as hereinunder provided, shall promulgate the necessary
rules and regulations to govern the exercise of the adjudicatory functions of
the Administration.

It is, of course, well established in our jurisdiction that, while the

making of laws is a non-delegable power that pertains exclusively to
Congress, nevertheless, the latter may constitutionally delegate the
authority to promulgate rules and regulations to implement a given
legislation and effectuate its policies, for the reason that the
legislature finds it impracticable, if not impossible, to anticipate
situations that may be met in carrying the law into effect. All that is
required is that the regulation should be germane to the objects and
purposes of the law; that the regulation be not in contradiction to but
9
in conformity with the standards prescribed by the law. This is the
principle of subordinate legislation which was discussed by this
10
Court in People vs. Rosenthal and in Pangasinan Transportation
11 12
vs. Public Service Commission. Thus in Calalang vs. Williams,
this Court stated:

In the case of People vs. Rosenthal and Osmeña, G.R. Nos. 46076 and
46077, promulgated June 12, 1939, and in Pangasinan Transportation vs.
The Public Service Commission, G.R. No. 47065, promulgated June 26,
1940, this Court had occasion to observe that the principle of

_______________

9 People vs. Exconde, 101 Phil. 1125, 1129-1130 [1957], citing Calalang vs. Williams, 70
Phil. 726 [1940]; Pangasinan Transportation vs. Public Service Commission, 70 Phil. 22
[1940]; People vs. Rosenthal, 68 Phil. 328 [1939]; People vs. Vera, 65 Phil. 56 [1937]; and
Rubi vs. Provincial Board of Mindoro, 39 Phil. 660 [1919].
10 Supra, note 9.
11 Supra, note 9.
12 Supra, note 9, at 732.

676

676 SUPREMECOURTREPORTSANNOTATED
The Conference of Maritime Manning Agencies, Inc. vs. Philippine
Overseas Employment Administration

separation of powers has been made to adapt itself to the complexities of

modern governments, giving rise to the adoption, within certain limits, of
the principle of “subordinate legislation,” not only in the United States and
England but in practically all modern governments. Accordingly, with the
growing complexity of modern life, the multiplication of the subjects of
governmental regulations, and the increased difficulty of administering the
laws, the rigidity of the theory of separation of governmental powers has, to
a large extent, been relaxed by permitting the delegation of greater powers
by the legislative and vesting a larger amount of discretion in administrative
and executive officials, not only in the execution of the laws, but also in the
promulgation of certain rules and regulations calculated to promote public
interest.
That the challenged resolution and memorandum circular, which
merely further amended the previous Memorandum Circular No. 02,
strictly conform to the sufficient and valid standard of “fair and
equitable employment13
practices” prescribed in E.O. No. 797 can no
longer be disputed.
There is, as well, no merit to the claim that the assailed resolution
and memorandum circular violate the equal protection and contract
clauses of the Constitution. To support its contention of inequality,
the petitioners claim discrimination against foreign shipowners and
principals employing Filipino seamen and in favor of foreign
employers employing overseas Filipinos who are not seamen.

_______________

13 In the past, this Court has held the following, inter alia, as sufficient standards
for purposes of subordinate legislation: public welfare in Municipality of Cardona vs.
Binangonan, 36 Phil. 547 [1917]; necessary in the interest of law and order in Rubi
vs. Provincial Board, supra, note 9; public interest in People vs. Rosenthal, supra,
note 9; justice and equity in Antamok GoldFields Mining Co. vs. CIR, 70 Phil. 340
[1940]; public convenience and welfare in Calalang vs. Williams, supra note 9; justice
and equity and substantial merits of the case in International Hardwood and Veneer
Co. vs. Pangil Federation of Workers, 70 Phil. 602 [1940]; simplicity, economy and
efficiency in Cervantes vs. Auditor General, 91 Phil. 359 [1952]; and national interest
in Free Telephone Workers Union vs. Minister of Labor and Employment, 108 SCRA
757 [1981].

677

VOL. 243, APRIL 21, 1995 677

The Conference of Maritime Manning Agencies, Inc. vs. Philippine
Overseas Employment Administration

It is an established principle of constitutional law that the guaranty

of equal protection of the laws is not violated by legislation based on
reasonable classification. And for the classification to be reasonable,
it (1) must rest on substantial distinctions; (2) must be germane to
the purpose of the law; (3) must not be limited to existing conditions14
only; and (4) must apply equally to all members of the same class.
There can be no dispute about the dissimilarities between land-based
and sea-based Filipino overseas workers in terms of, among other
things, work environment, safety, dangers and risks to life and limb,
and accessibility to social, civic, and spiritual activities.
Nor is there merit in the claim that the resolution and
memorandum circular violate the contract clause of the Bill of
Rights. The executive order creating the POEA was enacted to
further implement the social justice provisions of the 1973
Constitution, which have been greatly enhanced and expanded in the
15
1987 Constitution by placing them under a separate Article. The
Article on Social Justice was aptly described as the “heart of the new
Charter” by the President of the 1986 Constitutional Commission,
16
retired Justice Cecilia Muñoz-Palma. Social justice is identified
with the broad scope of the police power of the state and requires the
17 18
extensive use of such power. In Calalang vs. Williams, this Court,
speaking through Justice Jose P. Laurel, expounded on social justice
thus:

Social justice is “neither communism, nor despotism, nor atomism, nor

anarchy,” but the humanization of laws and the equalization of social and
economic forces by the State so that justice in its rational and objectively
secular conception may at least be approximated. Social justice means the
promotion of the welfare of all the people, the

_______________

14 People vs. Cayat, 68 Phil. 12, 18 [1939].

15 Article XIII.
16 Record of the Constitutional Commission, vol. V, 945, 1010. See Aris (Phil.) Inc. vs.
NLRC, 200 SCRA 246 [1991].
17 ENRIQUE M. FERNANDO, The Constitution of the Philippines, 2nd ed. [1977], 79-80;
Philippine Apparel Worker’s Union vs. NLRC, 106 SCRA 444 [1981].
18 Supra, note 9, at 734-735.

678

678 SUPREMECOURTREPORTSANNOTATED
The Conference of Maritime Manning Agencies, Inc. vs. Philippine
Overseas Employment Administration

adoption by the Government of measures calculated to insure economic

stability of all the competent elements of society, through the maintenance
of a proper economic and social equilibrium in the interrelations of the
members of the community, constitutionally, through the adoption of
measures legally justifiable, or extra-constitutionally, through the exercise of
powers underlying the existence of all governments on the time-honored
principle of salus populi est suprema lex.
Social justice, therefore, must be founded on the recognition of the
necessity of interdependence among divers and diverse units of a society
and of the protection that should be equally and evenly extended to all
groups as a combined force in our social and economic life, consistent with
the fundamental and paramount objective of the state of promoting the
health, comfort, and quiet of all persons, and of bringing about “the greatest
good to the greatest number.”

The constitutional prohibition against impairing contractual

obligations is not absolute and is not to be read with literal
exactness. It is restricted to contracts with respect to property or
some object of value and which confer rights that may be asserted in
a court of justice; it has no application to statutes relating to public
subjects within the domain of the general legislative powers of the
State and involving the public rights and public welfare of the entire
community affected by it. It does not prevent a proper exercise by
the State of its police power by enacting regulations reasonably
necessary to secure the health, safety, morals, comfort, or general
welfare of the community, even though contracts may thereby be
affected, for such matters cannot be placed by contract beyond the
19
power of the State to regulate and control them.
Verily, the freedom to contract is not absolute; all contracts and
all rights are subject to the police power of the State and not only
may regulations which affect them be established by the State, but
all such regulations must be subject to change from time to time, as
the general well-being of the community may require, or as the
circumstances may change, or as experience may demonstrate the
20
necessity. And under the Civil Code,

_______________

19 16 C.J.S. Constitutional Law § 281 [1930 ed.].

20 THOMAS M. COOLEY, A Treatise on the Constitutional Limitations, vol. Two,
Eighth Ed., 1236-1237; Ongsiako vs. Gamboa, 86

679

VOL. 243, APRIL 21, 1995 679

The Conference of Maritime Manning Agencies, Inc. vs. Philippine
Overseas Employment Administration

contracts of labor are explicitly subject to the police power of the

State because they are not ordinary contracts but are impressed with
public interest. Article 1700 thereof expressly provides:

ART.1700. The relations between capital and labor are not merely
contractual. They are so impressed with public interest that labor contracts
must yield to the common good. Therefore, such contracts are subject to the
special laws on labor unions, collective bargaining, strikes and lockouts,
closed shop, wages, working conditions, hours of labor and similar subjects.

The challenged resolution and memorandum circular being valid

implementations of E.O. No. 797, which was enacted under the
police power of the State, they cannot be struck down on the ground
that they violate the contract clause. To hold otherwise is to alter
long-established constitutional doctrine and to subordinate the police
power to the contract clause.
The last issue concerns the contention that without the
appointment by the President of the third member of the governing
board, the POEA cannot legally function and exercise its powers.
This contention merits scant consideration. Section 4 of E.O. No.
797 indubitably declares the immediate creation of the POEA. Thus
upon the effectivity of E.O. No. 797, the POEA attained its juridical
personality. The appointment of the third member “who shall be well
versed in the field of overseas employment,” provided for in
paragraph (b) of the said Section, was not meant to be asine qua non
to the birth of the POEA, much less to the validity of the acts of the
Board. As a matter of fact, in the same paragraph the President is
given the “discretion [to] designate a Deputy Administrator as the
third member of the Board.”
WHEREFORE, for lack of merit, the instant petition is
DISMISSED with costs against the petitioners.
SO ORDERED.

     Padilla (Chairman), Bellosillo, Quiason and Kapunan, JJ.,

concur.

_______________

Phil. 50, 54-55 [1950].

680

680 SUPREMECOURTREPORTSANNOTATED
Coca-Cola Salesforce Union vs. NLRC

Petition dismissed.

——o0o——
© Copyright 2019 Central Book Supply, Inc. All rights reserved.