Republic of the PhilippinesSUPREME COURTManilaEN BANCG.R. No. 167614 March 24, 2009ANTONIO M. SERRANO, Petitioner, vs.Gallant MARITIME SERICES, INC. an! MAR"O# NAIGATION CO., INC., Respondents.Constitutional Law; Non-impairment of Contracts;The prohibition is aligned with the general principle that laws newl enacted have onl a prospective operation,!"and cannot a#ect acts or contracts alread perfected$!% however, as to laws alread in e&istence, their provisions are read into contracts and dee'ed a part thereof.Thus, the non-impairment clause under Section 10, Article II is limited in application to laws about to be enacted that would in any way derogate from existing acts or contracts by enlarging, abridging or in any manner changing the intention of the parties thereto.Same; Same; Same; Police Power; But even if the Court were to disregard the ti'eline, the sub(ect clause 'a not be declared unconstitutional on the ground that it i'pinges on the i'pair'ent clause, for the law was enacted in the e&ercise of the police power of the )tate to regulate a business, profession or calling, particularl the recruit'ent and deplo'ent of *+,s, with the noble end in view of ensuring respect for the dignit and well-being of *+,s wherever the 'a be e'ploed. Police power legislations adopted by the State to promote the health, morals, peace, education, good order, safety, and general welfare of the people are generally applicable not only to future contracts but een to those already in existence, for all priate contracts must yield to the superior and legitimate measures ta!en by the State to promote public welfareSame;Labor Law; Section 18, Article II and Section 3 ArticleSection 1", Article II and Section #,$% Article &III accord all members of the labor sector, without distinction as to place of deployment, full protection of their rights and welfare.To +ilipino wor.ers, the rights guaranteed under the foregoing constitutional provisions translate to econo'ic securit and parit/ all 'onetar bene0ts should be e1uall en(oed b wor.ers of si'ilar categor, while all 'onetar obligations should be borne b the' in e1ual degree$ none should be denied the protection of the laws which is en(oed b, or spared the burden i'posed on, others in li.e circu'stancesSame; Same;epublic Act No 8!"#It is plain that prior to '.A. (o. "0%), all *+,s, regardless of contract periods or the unexpired portions thereof, were treated ali!e in terms of the computation of their monetary bene-ts in case of illegal dismissal. .heir claims were sub/ected to a uniform rule of computation0 their basic salaries multiplied by the entire unexpired portion of their employment contracts.The enact'ent of the sub(ect clause in R.A. No. "234 introduced a di#erentiated rule of co'putation of the'one clai's of illegall dis'issed *+,s based on their e'plo'ent periods, in the process sin$lin$ out one categor whose contracts have an une&pired portion of one ear or 'ore and sub(ecting the' to the peculiar disadvantage of having their 'onetar awards li'ited to their salaries for 5 'onths or for the une&pired portion thereof, whichever is less, but all the while sparing the other categor fro' such pre(udice, si'pl because the latter6s une&pired contracts fall short of one ear.Same; Same;%it& t&e enactment of epublic Act 8!"#In sum, prior to '.A. (o. "0%), *+,s and local wor!ers with -xed-term employment who were illegally discharged were treated ali!e in terms of the computation of their money claims0 they were uniformly entitled to their salaries for the entire unexpired portions of their contracts. But with the enact'ent of R.A. No. "234, speci0call the adoption of the sub(ect clause, illegall dis'issed *+,s with an une&pired portion of one ear or 'ore in their e'plo'ent contract have since been di#erentl treated in that their 'one clai's are sub(ect to a 5-'onth cap, whereas no such li'itation is i'posed on local wor.ers with 0&ed-ter' e'plo'ent.Same; Same; Same;'&e Court concludes t&at t&e sub(ect clause contains a suspect classi)cation in t&at, in t&e computation of t&e monetar* bene)ts of )+ed-term emplo*ees w&o are ille$all* disc&ar$ed, it imposes a 3-mont& cap on t&e claim of ,-%s wit& an une+pired portion of one *ear or more in t&eir contracts, but none on t&e claims of ot&er ,-%s or local wor.ers wit& )+ed-term emplo*ment/ '&e sub(ect clause sin$les out one classi)cation of ,-%s and burdens it wit& a peculiar disad0anta$e/There being a suspect classi0cation involving a vulnerable sector protected b the Constitution, the Court now sub(ects the classi0cation to a strict (udicial scrutin, and deter'ines whether it serves a co'pelling state interest through the least restrictive 'eans.Same; Same; Same;,hile all the proisions of the 11"2 3onstitution are presumed self-executing,1#) there are some which this3ourt has declared not (udiciall* enforceable, Article &III being one,755 particularl )ection 5 thereof, thenature of which, this Court, in Agabon . (ational 4abor 'elations 3ommission,753 has described to be not self-actuating/Thus, the constitutional 'andates of protection to labor and securit of tenure 'a be dee'ed as self-e&ecuting in the sense that these are auto'aticall ac.nowledged and observed without need for an enabling legislation. 8owever, to declare that the constitutional provisions are enough to guarantee the fulle&ercise of the rights e'bodied therein, and the reali9ation of ideals therein e&pressed, would be i'practical, if not unrealistic. The espousal of such view presents the dangerous tendenc of being overbroad and e&aggerated. The guarantees of :full protection to labor: and :securit of tenure:, when e&a'ined in isolation, are faciall un1uali0ed, and the broadest interpretation possible suggests a blan.et shield in favor of labor against an for' of re'oval regardless of circu'stance. This interpretation i'plies an uni'peachable right to continued e'plo'ent-a utopian notion, doubtless-but still hardl within the conte'plation of the fra'ers. )ubse1uent legislation is still needed to de0ne the para'eters of these guaranteed rights to ensure the protection and pro'otion, not onl the rights of the labor sector, but of thee'ploers6 as well. ,ithout speci0c and pertinent legislation, (udicial bodies will be at a loss, for'ulating their own conclusion to appro&i'ate at least the ai's of the Constitution.Same; Same; Same;Section 3 of Article 1III of t&e Constitution;It must be stressed that Section #, Article &III does not directly bestow on the wor!ing class any actual enforceable right, but merely clothes it with the status of a sector for whom the 3onstitution urges protection through executie or legislatie action and (udicial reco$nition. Its utility is best limited to being an impetus not /ust for the executie and legislatie departments, but for the /udiciary as well, to protect the welfare of the wor!ing class/ And it was in fact consistent with that constitutional agenda that the Court in 3entral 5an! 6now 5ang!o Sentral ng Pilipinas7 8mployee Association, Inc. . 5ang!o Sentral ng Pilipinas, penned b then Associate ;ustice now Chief ;ustice Renato ). Puno, for'ulated the (udicial precept that when the challenge to a statute is pre'ised on the perpetuation of pre(udice against persons favored b the Constitution with special protection -- such as the wor.ing class or a section thereof -- the Court 'a recogni9e the e&istence of a suspect classi0cation and sub(ect the sa'e to strict (udicial scrutin.Same; Same; Same;The view that the concepts of suspect classi0cation and strict (udicial scrutin for'ulated in 3entral 5an! 8mployee Association e&aggerate the signi0cance of )ection 5, Article ece'ber ", 4223 >ecision5 and April 7, 422! Resolution3 of the Court of Appeals DCAE, which applied the sub(ect clause, entreating this Court to declare the sub(ect clause unconstitutional.Petitioner was hired b Aallant Mariti'e )ervices, =nc. and Marlow Navigation Co., Gtd. DrespondentsE undera Philippine *verseas E'plo'ent Ad'inistration DP*EAE-approved Contract of E'plo'ent with the following ter's and conditions/>uration of contract 74 'onthsPosition Chief *HcerBasic 'onthl salar @)I7,322.228ours of wor. 3".2 hours per wee.*verti'e @)IC22.22 per 'onthJacation leave with pa C.22 das per 'onth!*n March 7%, 7%%", the date of his departure, petitioner was constrained to accept a downgraded e'plo'ent contract for the position of )econd *Hcer with a 'onthl salar of @)I7,222.22, upon the assurance and representation of respondents that he would be 'ade Chief *Hcer b the end of April 7%%".KRespondents did not deliver on their pro'ise to 'a.e petitioner Chief *Hcer.C 8ence, petitioner refused to sta on as )econd *Hcer and was repatriated to the Philippines on Ma 4K, 7%%"."Petitioner6s e'plo'ent contract was for a period of 74 'onths or fro' March 7%, 7%%" up to March 7%, 7%%%, but at the ti'e of his repatriation on Ma 4K, 7%%", he had served onl two D4E 'onths and seven DCE das of his contract, leaving an une&pired portion of nine D%E 'onths and twent-three D45E das.Petitioner 0led with the Gabor Arbiter DGAE a Co'plaint% against respondents for constructive dis'issal and for pa'ent of his 'one clai's in the total a'ount of @)I4K,334.C5, as well as 'oral and e&e'plar da'ages and attorne6s fees.The GA rendered a >ecision dated ;ul 7!, 7%%%, declaring the dis'issal of petitioner illegal and awarding hi' 'onetar bene0ts, to wit/,8ERE+*RE, pre'ises considered, (udg'ent is hereb rendered declaring that the dis'issal of the co'plainant DpetitionerE b the respondents in the above-entitled case was illegal and the respondents are hereb ordered to pa the co'plainant LpetitionerM, (ointl and severall, in Philippine Currenc, based on the rate of e&change prevailing at the ti'e of pa'ent, the a'ount of 6I78' '8,9SAN: S6;6N 89N:6: S6;6N'< 9/S/ :,LLAS 49S =8,>>!/!!5, representin$ t&e complainant?s salar* for t&ree 435 mont&s of t&e une+pired portion of t&e aforesaid contract of emplo*ment.1aphi1The respondents are li.ewise ordered to pa the co'plainant LpetitionerM, (ointl and severall, in Philippine Currenc, based on the rate of e&change prevailing at the ti'e of pa'ent, the a'ount of +*RT? +=JE @.). >*GGAR) D@)I 3!.22E,74 representing the co'plainantNs clai' for a salar di#erential. =n addition, the respondents are hereb ordered to pa the co'plainant, (ointl and severall, in Philippine Currenc, at the e&change rate prevailing at the ti'e of pa'ent, the co'plainantNs Dpetitioner6sE clai' for attorneNs fees e1uivalent to ten percent D72FE of the total a'ount awarded to the aforesaid e'ploee under this >ecision.The clai's of the co'plainant for 'oral and e&e'plar da'ages are hereb >=)M=))E> for lac. of 'erit.All other clai's are hereb >=)M=))E>.)* *R>ERE>.75 DE'phasis suppliedE=n awarding petitioner a lu'p-su' salar of @)I",CC2.22, the GA based his co'putation on the salar period of three 'onths onl -- rather than the entire une&pired portion of nine 'onths and 45das of petitioner6s e'plo'ent contract - appling the sub(ect clause. 8owever, the GA applied thesalar rate of @)I4,!%2.22, consisting of petitioner6s :LbMasic salar, @)I7,322.22O'onth P @)IC22.22O'onth, 0&ed overti'e pa, P @)I3%2.22O'onth, vacation leave pa Q @)I4,!%2.22Oco'pensation per 'onth.:73Respondents appealed7! to the National Gabor Relations Co''ission DNGRCE to 1uestion the 0nding of the GA that petitioner was illegall dis'issed.Petitioner also appealed7K to the NGRC on the sole issue that the GA erred in not appling the ruling of the Court in .riple Integrated Serices, Inc. . (ational 4abor 'elations 3ommission7C that in case of illegal dis'issal, *+,s are entitled to their salaries for the une&pired portion of their contracts.7"=n a >ecision dated ;une 7!, 4222, the NGRC 'odi0ed the GA >ecision, to wit/,8ERE+*RE, the >ecision dated 7! ;ul 7%%% is M*>=+=E>. Respondents are hereb ordered to pa co'plainant, (ointl and severall, in Philippine currenc, at the prevailing rate of e&change at the ti'e of pa'ent the following/7. Three D5E 'onths salarI7,322 & 5 @)I3,422.224. )alar di#erential 3!.22@)I3,43!.225. 72F AttorneNs fees 343.!2T*TAG @)I3,KK%.!2The other 0ndings are aHr'ed.)* *R>ERE>.7%The NGRC corrected the GA6s co'putation of the lu'p-su' salar awarded to petitioner b reducing the applicable salar rate fro' @)I4,!%2.22 to @)I7,322.22 because R.A. No. "234 :does not provide for the award of overti'e pa, which should be proven to have been actuall perfor'ed, and for vacation leave pa.:42Petitioner 0led a Motion for Partial Reconsideration, but this ti'e he 1uestioned the constitutionalit of the sub(ect clause.47 The NGRC denied the 'otion.44Petitioner 0led a Petition for 3ertiorari45 with the CA, reiterating the constitutional challenge against the sub(ect clause.43 After initiall dis'issing the petition on a technicalit, the CA eventuall gave due course to it, as directed b this Court in its Resolution dated August C, 4225 which granted the petition for certiorari, doc.eted as A.R. No. 7!7"55, 0led b petitioner.=n a >ecision dated >ece'ber ", 4223, the CA aHr'ed the NGRC ruling on the reduction of the applicable salar rate$ however, the CA s.irted the constitutional issue raised b petitioner.4!8is Motion for Reconsideration4K having been denied b the CA,4C petitioner brings his cause to this Court on the following grounds/=The Court of Appeals and the labor tribunals have decided the case in a wa not in accord with applicable decision of the )upre'e Court involving si'ilar issue of granting unto the 'igrant wor.er bac. wages e1ual to the une&pired portion of his contract of e'plo'ent instead of li'iting it to three D5E 'onths===n the alternative that the Court of Appeals and the Gabor Tribunals were 'erel appling their interpretation of )ection 72 of Republic Act No. "234, it is sub'itted that the Court of Appeals gravel erred in law when it failed to discharge its (udicial dut to decide 1uestions of substance not theretofore deter'ined b the 8onorable )upre'e Court, particularl, the constitutional issues raised b the petitioneron the constitutionalit of said law, which unreasonabl, unfairl and arbitraril li'its pa'ent of the award for bac. wages of overseas wor.ers to three D5E 'onths.===Even without considering the constitutional li'itations LofM )ec. 72 of Republic Act No. "234, the Court of Appeals gravel erred in law in e&cluding fro' petitionerNs award the overti'e pa and vacation pa provided in his contract since under the contract the for' part of his salar.4"*n +ebruar 4K, 422", petitioner wrote the Court to withdraw his petition as he is alread old and sic.l, and he intends to 'a.e use of the 'onetar award for his 'edical treat'ent and 'edication.4% Re1uired to co''ent, counsel for petitioner 0led a 'otion, urging the court to allow partial e&ecution of the undisputed 'onetar award and, at the sa'e ti'e, praing that the constitutional 1uestion be resolved.52Considering that the parties have 0led their respective 'e'oranda, the Court now ta.es up the full 'erit of the petition 'indful of the e&tre'e i'portance of the constitutional 1uestion raised therein.,n t&e )rst and second issuesThe unani'ous 0nding of the GA, NGRC and CA that the dis'issal of petitioner was illegal is not disputed. Gi.ewise not disputed is the salar di#erential of @)I3!.22 awarded to petitioner in all three fora. ,hat re'ains disputed is onl the co'putation of the lu'p-su' salar to be awarded to petitioner b reason of his illegal dis'issal.Appling the sub(ect clause, the NGRC and the CA co'puted the lu'p-su' salar of petitioner at the 'onthl rate of @)I7,322.22 covering the period of three 'onths out of the une&pired portion of nine 'onths and 45 das of his e'plo'ent contract or a total of @)I3,422.22.='pugning the constitutionalit of the sub(ect clause, petitioner contends that, in addition to the @)I3,422.22 awarded b the NGRC and the CA, he is entitled to @)I47,7"4.45 'ore or a total of @)I4!,5"4.45, e1uivalent to his salaries for the entire nine 'onths and 45 das left of his e'plo'ent contract, co'puted at the 'onthl rate of @)I4,!%2.22.57Th& Ar'()&nt* o+ P&t,t,on&rPetitioner contends that the sub(ect clause is unconstitutional because it undul i'pairs the freedo' of *+,s to negotiate for and stipulate in their overseas e'plo'ent contracts a deter'inate e'plo'ent period and a 0&ed salar pac.age.54 =t also i'pinges on the e1ual protection clause, for it treats *+,s di#erentl fro' local +ilipino wor.ers Dlocal wor.ersE b putting a cap on the a'ount of lu'p-su' salar to which *+,s are entitled in case of illegal dis'issal, while setting no li'it to the sa'e 'onetar award for local wor.ers when their dis'issal is declared illegal$ that the disparate treat'ent is not reasonable as there is no substantial distinction between the two groups$55 and that it defeats )ection 7",53 Article == of the Constitution which guarantees the protection of the rights and welfare of all +ilipino wor.ers, whether deploed locall or overseas.5!Moreover, petitioner argues that the decisions of the CA and the labor tribunals are not in line with e&isting(urisprudence on the issue of 'one clai's of illegall dis'issed *+,s. Though there are conRicting rulings on this, petitioner urges the Court to sort the' out for the guidance of a#ected *+,s.5KPetitioner further underscores that the insertion of the sub(ect clause into R.A. No. "234 serves no other purpose but to bene0t local place'ent agencies. 8e 'ar.s the state'ent 'ade b the )olicitor Aeneral in his Me'orandu', i=./*ften, place'ent agencies, their liabilit being solidar, shoulder the pa'ent of 'one clai's in the event that (urisdiction over the foreign e'ploer is not ac1uired b the court or if the foreign e'ploer reneges on its obligation. 8ence, place'ent agencies that are in good faith and which ful0ll their obligations are unnecessaril penali9ed for the acts of the foreign e'ploer. .o protect them and to promote their continued helpful contribution in deploying +ilipino migrant wor!ers, liability for money claims was reduced under Section 10 of '.A. (o. "0%).5C DE'phasis suppliedEPetitioner argues that in 'itigating the solidar liabilit of place'ent agencies, the sub(ect clause sacri0ces the well-being of *+,s. Not onl that, the provision 'a.es foreign e'ploers better o# than local e'ploers because in cases involving the illegal dis'issal of e'ploees, foreign e'ploers are liable for salaries covering a 'a&i'u' of onl three 'onths of the une&pired e'plo'ent contract while local e'ploers are liable for the full lu'p-su' salaries of their e'ploees. As petitioner puts it/=n ter's of practical application, the local e'ploers are not li'ited to the a'ount of bac.wages the haveto give their e'ploees the have illegall dis'issed, following well-entrenched and une1uivocal (urisprudence on the 'atter. *n the other hand, foreign e'ploers will onl be li'ited to giving the illegall dis'issed 'igrant wor.ers the 'a&i'u' of three D5E 'onths unpaid salaries notwithstanding the une&pired ter' of the contract that can be 'ore than three D5E 'onths.5"Gastl, petitioner clai's that the sub(ect clause violates the due process clause, for it deprives hi' of the salaries and other e'olu'ents he is entitled to under his 0&ed-period e'plo'ent contract.5%Th& Ar'()&nt* o+ R&*-on!&nt*=n their Co''ent and Me'orandu', respondents contend that the constitutional issue should not be entertained, for this was belatedl interposed b petitioner in his appeal before the CA, and not at the earliest opportunit, which was when he 0led an appeal before the NGRC.32Th& Ar'()&nt* o+ th& Sol,c,tor G&n&ralThe )olicitor Aeneral D*)AE37 points out that as R.A. No. "234 too. e#ect on ;ul 7!, 7%%!, its provisions could not have i'paired petitioner6s 7%%" e'plo'ent contract. Rather, R.A. No. "234 having preceded petitioner6s contract, the provisions thereof are dee'ed part of the 'ini'u' ter's of petitioner6s e'plo'ent, especiall on the 'atter of 'one clai's, as this was not stipulated upon b the parties.34Moreover, the *)A e'phasi9es that *+,s and local wor.ers di#er in ter's of the nature of their e'plo'ent, such that their rights to 'onetar bene0ts 'ust necessaril be treated di#erentl. The *)A enu'erates the essential ele'ents that distinguish *+,s fro' local wor.ers/ 0rst, while local wor.ers perfor' their (obs within Philippine territor, *+,s perfor' their (obs for foreign e'ploers, over who' it is diHcult for our courts to ac1uire (urisdiction, or against who' it is al'ost i'possible to enforce (udg'ent$ and second, as held in Cooca v. National Gabor Relations Co''ission35 and Millares v. National Gabor Relations Co''ission,33 *+,s are contractual e'ploees who can never ac1uire regular e'plo'ent status, unli.e local wor.ers who are or can beco'e regular e'ploees. 8ence, the *)A positsthat there are rights and privileges e&clusive to local wor.ers, but not available to *+,s$ that these peculiarities 'a.e for a reasonable and valid basis for the di#erentiated treat'ent under the sub(ect clause of the 'one clai's of *+,s who are illegall dis'issed. Thus, the provision does not violate the e1ual protection clause nor )ection 7", Article == of the Constitution.3!Gastl, the *)A defends the rationale behind the sub(ect clause as a police power 'easure adopted to 'itigate the solidar liabilit of place'ent agencies for this :redounds to the bene0t of the 'igrant wor.ers whose welfare the govern'ent see.s to pro'ote. The survival of legiti'ate place'ent agencies helps LassureM the govern'ent that 'igrant wor.ers are properl deploed and are e'ploed under decent and hu'ane conditions.:3KTh& Co(rt.* R(l,n'The Court sustains petitioner on the 0rst and second issues.,hen the Court is called upon to e&ercise its power of (udicial review of the acts of its co-e1uals, such as the Congress, it does so onl when these conditions obtain/ D7E that there is an actual case or controvers involving a conRict of rights susceptible of (udicial deter'ination$3C D4E that the constitutional 1uestion is raised b a proper part3" and at the earliest opportunit$3% and D5E that the constitutional 1uestion is the ver lis 'ota of the case,!2otherwise the Court will dis'iss the case or decide the sa'e on so'e other ground.!7,ithout a doubt, there e&ists in this case an actual controvers directl involving petitioner who is personall aggrieved that the labor tribunals and the CA co'puted his 'onetar award based on the salar period of three 'onths onl as provided under the sub(ect clause.The constitutional challenge is also ti'el. =t should be borne in 'ind that the re1uire'ent that a constitutional issue be raised at the earliest opportunit entails the interposition of the issue in the pleadings before acompetent court, such that, if the issue is not raised in the pleadings before that co'petent court, it cannot be considered at the trial and, if not considered in the trial, it cannot be considered on appeal.!4 Records disclose that the issue on the constitutionalit of the sub(ect clause was 0rst raised, not in petitioner6s appeal with the NGRC, but in his Motion for Partial Reconsideration with said labor tribunal,!5 and reiterated in his Petition for3ertiorari before the CA.!3 Nonetheless, the issue is dee'ed seasonabl raised because it is not the NGRC but the CA which has the co'petence to resolve the constitutional issue. The NGRC is a labor tribunal that 'erel perfor's a 1uasi-(udicial function S its function in the present case is li'ited to deter'ining 1uestions of fact to which the legislative polic of R.A. No. "234 is to be applied and to resolving such 1uestions in accordance with the standards laid down b the law itself$!! thus, its fore'ost function is to ad'inister and enforce R.A. No. "234, and not to in1uire into the validit of its provisions. The CA, on the other hand, is vested with the power of (udicial review or the power to declare unconstitutional a law or a provision thereof, such as the sub(ect clause.!KPetitioner6s interposition of the constitutional issue before the CA was undoubtedl seasonable. The CA was therefore re'iss in failing to ta.e up the issue in its decision.The third condition that the constitutional issue be critical to the resolution of the case li.ewise obtains because the 'onetar clai' of petitioner to his lu'p-su' salar for the entire une&pired portion of his 74-'onth e'plo'ent contract, and not (ust for a period of three 'onths, stri.es at the ver core of the sub(ect clause.Thus, the stage is all set for the deter'ination of the constitutionalit of the sub(ect clause.>oes the sub/ect clause iolate Section 10,Article III of the 3onstitution on non-impairmentof contracts?The answer is in the negative.Petitioner6s clai' that the sub(ect clause undul interferes with the stipulations in his contract on the ter' of his e'plo'ent and the 0&ed salar pac.age he will receive!C is not tenable.)ection 72, Article === of the Constitution provides/No law i'pairing the obligation of contracts shall be passed.The prohibition is aligned with the general principle that laws newl enacted have onl a prospective operation,!"and cannot a#ect acts or contracts alread perfected$!% however, as to laws alread in e&istence, their provisions are read into contracts and dee'ed a part thereof.K2 Thus, the non-i'pair'ent clause under )ection 72, Article == is li'ited in application to laws about to be enacted that would in an wa derogate fro' e&isting acts or contracts b enlarging, abridging or in an 'anner changing the intention of the parties thereto.As aptl observed b the *)A, the enact'ent of R.A. No. "234 in 7%%! preceded the e&ecution of the e'plo'ent contract between petitioner and respondents in 7%%". 8ence, it cannot be argued that R.A. No. "234, particularl the sub(ect clause, i'paired the e'plo'ent contract of the parties. Rather, when the parties e&ecuted their 7%%" e'plo'ent contract, the were dee'ed to have incorporated into it all the provisions of R.A. No. "234.But even if the Court were to disregard the ti'eline, the sub(ect clause 'a not be declared unconstitutional on the ground that it i'pinges on the i'pair'ent clause, for the law was enacted in the e&ercise of the police power of the )tate to regulate a business, profession or calling, particularl the recruit'ent and deplo'ent of *+,s, with the noble end in view of ensuring respect for the dignit and well-being of *+,s wherever the 'a be e'ploed.K7 Police power legislations adopted b the )tate to pro'ote the health, 'orals, peace, education, good order, safet, and general welfare of the people are generall applicable not onl to future contracts but even to those alread in e&istence, for all private contracts 'ust ield to the superior and legiti'ate 'easures ta.en b the )tate to pro'ote public welfare.K4>oes the sub/ect clause iolate Section 1,Article III of the 3onstitution, and Section 1",Article II and Section #, Article &III on laboras a protected sector?The answer is in the aHr'ative.)ection 7, Article === of the Constitution guarantees/No person shall be deprived of life, libert, or propert without due process of law nor shall an person be denied the e1ual protection of the law.)ection 7",K5 Article == and )ection 5,K3 Article al, K7 N. ?., 5K4$ Allen vs. ,hitlar., %% Mich., 3%4$ +arrell vs. )chool >istrict No. 4, %" Mich., 35.E77! DE'phasis suppliedE*n August 52, 7%!2, the New Civil Code too. e#ect with new provisions on 0&ed-ter' e'plo'ent/ )ection 4 D*bligations with a PeriodE, Chapter 5, Title =, and )ections 4 DContract of GaborE and 5 DContract for a Piece of ,or.E, Chapter 5, Title J===, Boo. =J.77K Much li.e Article 7!"K of the Civil Code of 7""%, the new provisions of the Civil Code do not e&pressl provide for the re'edies available to a 0&ed-ter' wor.er who is illegall discharged. 8owever, it is noted that in Mac.a Radio V Telegraph Co., =nc. v. Rich,77C the Court carried over the principles on the pa'ent of da'ages underling Article 7!"K of the Civil Code of 7""% and applied the sa'e to a case involving the illegal discharge of a local wor.er whose 0&ed-period e'plo'ent contract was entered into in 7%!4, when the new Civil Code was alread in e#ect.77"More signi0cantl, the sa'e principles were applied to cases involving overseas +ilipino wor.ers whose 0&ed-ter' e'plo'ent contracts were illegall ter'inated, such as in +irst Asian Trans V )hipping Agenc,=nc. v. *ple,77%involving seafarers who were illegall discharged. =n Te.ni.a ).ills and Trade )ervices, =nc. v. National Gabor Relations Co''ission,742 an *+, who was illegall dis'issed prior to the e&piration of her 0&ed-period e'plo'ent contract as a bab sitter, was awarded salaries corresponding to the une&pired portion of her contract. The Court arrived at the sa'e ruling in Anderson v. National Gabor Relations Co''ission,747 which involved a fore'an hired in 7%"" in )audi Arabia for a 0&ed ter' of two ears, but who was illegall dis'issed after onl nine 'onths on the (ob -- the Court awarded hi' salaries corresponding to 7! 'onths, the une&pired portion of his contract. =n Asia ,orld Recruit'ent, =nc. v. National Gabor Relations Co''ission,744 a +ilipino wor.ing as a securit oHcer in 7%"% in Angola was awarded his salaries for the re'aining period of his 74-'onth contract after he was wrongfull discharged. +inall, in Ainta isagreeing Provisions of )enate Bill No. 42CC and 8ouse Bill No. 73573E.: 8owever, the Court 0nds no discernible state interest, let alone a co'pelling one, that is sought to be protected or advanced b the adoption of the sub(ect clause.=n 0ne, the Aovern'ent has failed to discharge its burden of proving the e&istence of a co'pelling state interest that would (ustif the perpetuation of the discri'ination against *+,s under the sub(ect clause.Assu'ing that, as advanced b the *)A, the purpose of the sub(ect clause is to protect the e'plo'ent of*+,s b 'itigating the solidar liabilit of place'ent agencies, such callous and cavalier rationale will have to be re(ected. There can never be a (usti0cation for an for' of govern'ent action that alleviates the burden of one sector, but i'poses the sa'e burden on another sector, especiall when the favored sector is co'posed of private businesses such as place'ent agencies, while the disadvantaged sector is co'posed of *+,s whose protection no less than the Constitution co''ands. The idea that private business interest can be elevated to the level of a co'pelling state interest is odious.Moreover, even if the purpose of the sub(ect clause is to lessen the solidar liabilit of place'ent agencies is-a-is their foreign principals, there are 'echanis's alread in place that can be e'ploed to achieve that purpose without infringing on the constitutional rights of *+,s.The P*EA Rules and Regulations Aoverning the Recruit'ent and E'plo'ent of Gand-Based *verseas ,or.ers, dated +ebruar 3, 4224, i'poses ad'inistrative disciplinar 'easures on erring foreign e'ploers who default on their contractual obligations to 'igrant wor.ers andOor their Philippine agents. These disciplinar 'easures range fro' te'porar dis1uali0cation to preventive suspension. The P*EA Rules and Regulations Aoverning the Recruit'ent and E'plo'ent of )eafarers, dated Ma 45, 4225, contains si'ilar ad'inistrative disciplinar 'easures against erring foreign e'ploers.Resort to these ad'inistrative 'easures is undoubtedl the less restrictive 'eans of aiding local place'ent agencies in enforcing the solidar liabilit of their foreign principals.Thus, the sub(ect clause in the !th paragraph of )ection 72 of R.A. No. "234 is violative of the right of petitioner and other *+,s to e1ual protection.1aphi1+urther, there would be certain 'isgivings if one is to approach the declaration of the unconstitutionalit ofthe sub(ect clause fro' the lone perspective that the clause directl violates state polic on labor under )ection 5,757Article