FACTS: 

Claudio S. Yap was employed as electrician of the vessel, M/T SEASCOUT by Intermare Maritime Agencies, Inc. in behalf of its principal, Vulture Shipping Limited. The contract of employment entered into by Yap and Capt. Francisco B. Adviento, the General Manager of Intermare, was for a duration of 12 months. On 23 August 2001, Yap boarded M/T SEASCOUT and commenced his job as electrician. However, on or about 8 November 2001, the vessel was sold. The Philippine Overseas Employment Administration (POEA) was informed about the sale on 6 December 2001 in a letter signed by Capt. Adviento. Yap, along with the other crewmembers, was informed by the Master of their vessel that the same was sold and will be scrapped.

Yap received his seniority bonus, vacation bonus, extra bonus along with the scrapping bonus. However, with respect to the payment of his wage, he refused to accept the payment of one-month basic wage. He insisted that he was entitled to the payment of the unexpired portion of his contract since he was illegally dismissed from employment. He alleged that he opted for immediate transfer but none was made. He then filed a complaint for Illegal Dismissal with Damages and Attorney’s Fees before the Labor Arbiter.

The LA rendered a decision in favor of petitioner, finding the latter to have been constructively and illegally dismissed by respondents. The NLRC affirmed the decision but held that instead of an award of salaries corresponding to nine months, petitioner was only entitled to salaries for three months as provided under Section 10 of R.A. No. 8042. Petitioner however questions the award of wages and assails Sec. 10 of R.A. 8042 as unconstitutional.

ISSUE: Is the 5th par. Sec 10 of R.A. 8042 violative of substantive due process?

RULING: 

Yes.

The Court declared in Serrano vs. Gallant Maritime that the clause “or for three months for every year of the unexpired term, whichever is less” provided in the 5th paragraph of Section 10 of R.A. No. 8042 is unconstitutional for being violative of the rights of Overseas Filipino Workers (OFWs) to equal protection of the laws. In an exhaustive discussion of the intricacies and ramifications of the said clause, this Court, in Serrano, pertinently held:

The Court concludes that the subject clause contains a suspect classification in that, in the computation of the monetary benefits of fixed-term employees who are illegally discharged, it imposes a 3-month cap on the claim of OFWs with an unexpired portion of one year or more in their contracts, but none on the claims of other OFWs or local workers with fixed-term employment. The subject clause singles out one classification of OFWs and burdens it with a peculiar disadvantage.

Moreover, this Court held therein that the subject clause does not state or imply any definitive governmental purpose; hence, the same violates not just therein petitioner’s right to equal protection, but also his right to substantive due process under Section 1, Article III of the Constitution.