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

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

FACTS:

Petitioner Conference of Maritime Manning Agencies, Inc., licensed manning agency to recruit Filipino seamen for and in behalf of their respective foreign shipowner-principals, urge 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 of this 2 main issues –

(a) The POEA does not have the power and authority to fix and promulgate rates affecting death and workmen’s compensation of Filipino seamen

(b) 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.

POEA contended that 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.

ISSUES:

(1) WON POEA does not have the power and authority to fix and promulgate rates affecting death and workmen’s compensation of Filipino seamen

(2) WON the resolution and the memorandum circular violate the contract clause of the Bill of Rights.

HELD:

(1) No. 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

(2) No. The freedom to contract is not absolute; all contracts and all rights are subject to the police power of the State. 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

Also 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.

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.

Notes –

Social justice is identified with the broad scope of the police power of the state and requires the extensive use of such power.

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