PASEI vs. Torres

Administrative rules and regulations whose purpose is to enforce or implement existing law must be published in full and filed with the Office of the National Administrative Register before they may take effect and be enforced against the public. Interpretative regulations and those merely internal in nature need not be published, but circulars that restrict and regulate the activities of private parties require publication and filing to be valid and enforceable.

PASEI is the largest national organization of private employment and recruitment agencies duly licensed and authorized by the POEA to engage in the business of obtaining overseas employment for Filipino landbased workers, including domestic helpers. The POEA was created by Executive Order No. 797 on May 1, 1982, taking over the functions of the Overseas Employment Development Board, the National Seamen Board, and the overseas employment functions of the Bureau of Employment Services. Article 36 of the Labor Code grants the Secretary of Labor the power to "restrict and regulate" the recruitment and placement activities of all agencies and to issue orders and promulgate rules and regulations to carry out the objectives and implement the provisions of the relevant title. The recruitment and deployment business is affected with public interest, and the delegation of quasi-legislative powers to administrative bodies has been recognized as a necessary response to the growing complexity of modern society.

The Philippine Association of Service Exporters, Inc. (PASEI) is the largest national organization of private employment and recruitment agencies duly licensed and authorized by the Philippine Overseas Employment Administration (POEA) to engage in the business of obtaining overseas employment for Filipino landbased workers, including domestic helpers. The POEA itself was created by Executive Order No. 797 on May 1, 1982, consolidating the functions of the Overseas Employment Development Board, the National Seamen Board, and the overseas employment functions of the Bureau of Employment Services.

On June 1, 1991, in response to published stories regarding abuses suffered by Filipino housemaids employed in Hong Kong, DOLE Secretary Ruben D. Torres issued Department Order No. 16, Series of 1991. The order temporarily suspended the recruitment by private employment agencies of Filipino domestic helpers going to Hong Kong, effective July 1, 1991, and directed the DOLE, through the facilities of the POEA, to take over the processing and deployment of such workers. All DOLE Regional Directors and the Bureau of Local Employment's regional offices were directed to coordinate with the POEA in maintaining a manpower pool of prospective domestic helpers on a regional basis.

Pursuant to the DOLE order, the POEA issued Memorandum Circular No. 30, Series of 1991, dated July 10, 1991, establishing guidelines for the temporary government processing and deployment of domestic helpers to Hong Kong. The circular created a joint POEA-OWWA Household Workers Placement Unit (HWPU) to handle negotiations and accreditation of Hong Kong recruitment agencies, manpower pooling, worker training and briefing, processing and deployment, and welfare programs. An interim arrangement allowed contracts stamped in Hong Kong as of June 30, 1991, to continue being processed by the POEA under the name of the Philippine agencies concerned until July 31, 1991, after which all contracts were to be processed with the HWPU.

On August 1, 1991, the POEA Administrator issued Memorandum Circular No. 37, Series of 1991, further implementing the new scheme. Contracts attested by the Hong Kong Commissioner of Labor up to June 30, 1991, were to be processed by the POEA Employment Contracts Processing Branch only until August 15, 1991. Effective August 16, 1991, all Hong Kong recruitment agencies hiring domestic helpers from the Philippines were required to recruit under the new scheme, which required prior accreditation with the POEA. Recruitment agencies could apply for accreditation at the Office of the Labor Attache in the Philippine Consulate General in Hong Kong until August 31, 1991, and thereafter at the HWPU in Manila.

On September 2, 1991, PASEI filed the present petition for prohibition before the Supreme Court, seeking to annul the challenged circulars and prohibit their implementation on grounds of grave abuse of discretion, unconstitutionality, and non-compliance with publication and filing requirements. The Solicitor General, in his Comment, defended the circulars as a valid and reasonable exercise of police power, noting that the restriction was limited in scope—confined to recruitment of domestic helpers for Hong Kong only—and was a temporary remedial measure intended to curtail rampant violations by private employment agencies, including excessive collections of placement and documentation fees.

• Grave Abuse of Discretion: Petitioner argued that the respondents acted with grave abuse of discretion and/or in excess of their rule-making authority in issuing the challenged DOLE and POEA circulars.
• Unconstitutionality: Petitioner maintained that the assailed circulars are contrary to the Constitution, and are unreasonable, unfair, and oppressive.
• Non-Compliance with Publication and Filing: Petitioner contended that the requirements of publication and filing with the Office of the National Administrative Register were not complied with, rendering the circulars invalid.

• Valid Exercise of Police Power: Respondent, through the Solicitor General, countered that the circulars merely restricted the scope of petitioner's business operations by excluding recruitment and deployment of domestic helpers for Hong Kong, while petitioner remained free to deploy other classes of Filipino workers either for Hong Kong or other countries.
• Remedial and Temporary Measure: Respondent argued that the alleged takeover was a temporary remedial measure that would expire after its purpose was attained, as evidenced by the language of Department Order No. 16 stating that recruitment was "temporarily suspended."
• Public Interest Justification: Respondent maintained that the circulars were reasonable, valid, and justified under the general welfare clause of the Constitution, since the recruitment and deployment business is affected with public interest, and the measure was confined solely to curbing unscrupulous practices of private employment agencies victimizing applicants for employment as domestic helpers for Hong Kong.

• Authority to Issue Circulars: Whether the respondents acted with grave abuse of discretion and/or in excess of their rule-making authority in issuing the challenged DOLE and POEA circulars.
• Constitutionality and Reasonableness: Whether the assailed circulars are contrary to the Constitution, unreasonable, unfair, and oppressive.
• Publication and Filing Requirements: Whether the circulars are legally invalid and unenforceable for lack of publication and filing with the Office of the National Administrative Register.

• Authority to Issue Circulars: No. The circulars fall within the administrative and policing powers expressly or by necessary implication conferred upon the respondents under Article 36 of the Labor Code, which grants the Secretary of Labor the power to "restrict and regulate" recruitment and placement activities.
• Constitutionality and Reasonableness: No. The vesture of quasi-legislative and quasi-judicial powers in administrative bodies is not unconstitutional, unreasonable, or oppressive; the delegation of police power to administrative agencies is a necessary response to the growing complexity of modern society.
• Publication and Filing Requirements: Yes. The circulars are legally invalid, defective, and unenforceable for lack of proper publication and filing as required by Article 2 of the Civil Code, Article 5 of the Labor Code, and Sections 3(1) and 4, Chapter 2, Book VII of the Administrative Code of 1987.

• Authority to Issue Circulars: Article 36 of the Labor Code expressly grants the Secretary of Labor the power to "restrict and regulate" the recruitment and placement activities of all agencies and to issue orders and promulgate rules and regulations to carry out the objectives and implement the provisions of the relevant title. The POEA's regulatory authority is likewise broad and far-ranging, having inherited from the defunct Bureau of Employment Services the power to establish and maintain a registration and licensing system to regulate private sector participation in the recruitment and placement of workers, and from the Overseas Employment Development Board the power to recruit and place workers for overseas employment. The power to "restrict" means to confine, limit, or stop, while the power to "regulate" means the power to protect, foster, promote, preserve, and control with due regard for the interests of the public. A careful reading of the challenged circulars discloses that they do not prohibit petitioner from engaging in the recruitment and deployment of Filipino landbased workers for overseas employment generally; they merely restrict the scope of petitioner's operations by excluding recruitment of domestic helpers for Hong Kong. The circulars thus fall within the administrative and policing powers conferred upon the respondents.

• Constitutionality and Reasonableness: The vesture of quasi-legislative and quasi-judicial powers in administrative bodies is not unconstitutional, unreasonable, or oppressive. It has been necessitated by the growing complexity of modern society, as administrative bodies, specialized in their particular fields, can deal with problems with more expertise and dispatch than the legislature or the courts. The questioned circulars are a valid exercise of police power delegated to the executive branch. The restriction is limited in scope—confined to recruitment of domestic helpers going to Hong Kong only—and is temporary in nature, as expressly stated in Department Order No. 16. The measure was intended to curtail rampant violations by private employment agencies, including excessive collections of placement and documentation fees, and the recruitment and deployment business is affected with public interest, justifying regulation under the general welfare clause.

• Publication and Filing Requirements: Notwithstanding the validity of the circulars as an exercise of delegated police power, they are legally invalid, defective, and unenforceable for lack of proper publication and filing. Article 2 of the Civil Code requires that laws take effect after fifteen days following the completion of their publication in the Official Gazette. Article 5 of the Labor Code requires that implementing rules and regulations become effective fifteen days after announcement of their adoption in newspapers of general circulation. Sections 3(1) and 4, Chapter 2, Book VII of the Administrative Code of 1987 require every agency to file three certified copies of every rule adopted with the University of the Philippines Law Center, and provide that each rule shall become effective fifteen days from the date of filing unless a different date is fixed. Pursuant to the ruling in Tañada vs. Tuvera, administrative rules and regulations must be published if their purpose is to enforce or implement existing law pursuant to a valid delegation. Publication must be in full, as its purpose is to inform the public of the content of the laws. Interpretative regulations and those merely internal in nature need not be published, but the challenged circulars regulate the activities of private parties and thus require publication and filing. For lack of proper publication, the administrative circulars may not be enforced and implemented.

• Publication Requirement for Administrative Rules — Administrative rules and regulations whose purpose is to enforce or implement existing law pursuant to a valid delegation must be published before they can take effect. Publication must be in full, as its purpose is to inform the public of the content of the laws. Interpretative regulations and those merely internal in nature—regulating only the personnel of the administrative agency and not the public—need not be published. Neither is publication required of letters of instructions issued by administrative superiors concerning rules or guidelines to be followed by subordinates. In this case, the challenged circulars regulated the activities of private employment agencies and therefore required publication and filing to be enforceable.

• Delegation of Police Power to Administrative Agencies — The vesture of quasi-legislative and quasi-judicial powers in administrative bodies is constitutional and not oppressive, having been necessitated by the growing complexity of modern society. Administrative bodies, specialized in their assigned fields, can deal with problems with more expertise and dispatch than the legislature or the courts. The power to "restrict and regulate" recruitment and placement activities under Article 36 of the Labor Code involves a grant of police power. To "restrict" means to confine, limit, or stop; to "regulate" means to protect, foster, promote, preserve, and control with due regard for the interests, first and foremost, of the public.

• "Administrative rules and regulations must also be published if their purpose is to enforce or implement existing law pursuant also to a valid delegation." — This passage, quoting from Tañada vs. Tuvera, articulates the controlling rule on the publication requirement for administrative issuances and forms the ratio decidendi for invalidating the challenged circulars.

• "Publication must be in full or it is no publication at all since its purpose is to inform the public of the content of the laws." — This defines the standard for valid publication of administrative rules, emphasizing that partial or summary publication does not satisfy the requirement.

• "The questioned circulars are therefore a valid exercise of the police power as delegated to the executive branch of Government." — This statement confirms the Court's validation of the substantive content of the circulars, distinguishing the merits of the delegation from the procedural defect of non-publication.

• Tañada vs. Tuvera, 146 SCRA 446 — Controlling precedent on the publication requirement for administrative rules and regulations. The Court relied on its ruling that administrative rules must be published if their purpose is to enforce or implement existing law, and that publication must be in full. This case also established the exceptions: interpretative regulations, internal rules, and letters of instructions need not be published.
• Solid Homes, Inc. vs. Payawal, 177 SCRA 72 — Cited to support the proposition that the delegation of quasi-legislative and quasi-judicial powers to administrative bodies is constitutional and necessitated by the growing complexity of modern society.
• People vs. Maceren, 79 SCRA 450 — Cited for the principle that administrative issuances falling within the "administrative and policing powers expressly or by necessary implication conferred" upon administrative agencies are valid.
• City of Naga vs. Court of Appeals, 24 SCRA 898 — Cited for the proposition that the power to "restrict and regulate" conferred by Article 36 of the Labor Code involves a grant of police power.
• Philippine Communications Satellite Corporation vs. Alcuaz, 180 SCRA 218 — Cited for the definition of the power to "regulate" as the power to protect, foster, promote, preserve, and control with due regard for the interests of the public, the utility, and its patrons.

• Article 2, Civil Code — Provides that laws shall take effect after fifteen days following the completion of their publication in the Official Gazette, unless otherwise provided. Applied to require publication of the challenged administrative circulars before they could take effect.
• Article 5, Labor Code — Requires that implementing rules and regulations promulgated by the Department of Labor and other government agencies shall become effective fifteen days after announcement of their adoption in newspapers of general circulation. Applied as an additional statutory basis for the publication requirement.
• Article 36, Labor Code — Grants the Secretary of Labor the power to "restrict and regulate" the recruitment and placement activities of all agencies and to issue orders and promulgate rules and regulations to carry out the objectives and implement the provisions of the relevant title. Applied as the statutory basis for the DOLE Secretary's authority to issue Department Order No. 16.
• Article 15, Labor Code — Among the functions inherited by the POEA from the defunct Bureau of Employment Services, including the power to establish and maintain a registration and licensing system to regulate private sector participation in the recruitment and placement of workers. Cited to establish the scope of POEA's regulatory authority.
• Article 17, Labor Code — Power inherited by the POEA from the defunct Overseas Employment Development Board to recruit and place workers for overseas employment on a government-to-government arrangement. Cited to establish POEA's authority to take over processing and deployment.
• Article 20, Labor Code — Power inherited by the POEA from the defunct National Seamen Board to regulate and supervise the activities of agents or representatives of shipping companies in the hiring of seamen for overseas employment. Cited as part of the broad regulatory mandate of the POEA.
• Sections 3(1) and 4, Chapter 2, Book VII, Administrative Code of 1987 — Require every agency to file three certified copies of every rule adopted with the University of the Philippines Law Center (Office of the National Administrative Register), and provide that each rule shall become effective fifteen days from the date of filing unless a different date is fixed. Applied as the statutory basis for the filing requirement that the challenged circulars failed to satisfy.

Narvasa, C.J., Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin, Medialdea, Regalado, Davide, Jr., Romero, Nocon, and Bellosillo, JJ., concurred.