Primary Holding

The provisions of Section 13 of Act No. 3071 are unconstitutional and void as they violate the constitutional right to liberty of contract under the first paragraph of section 3 of the Act of Congress of August 29, 1916.

Background

In 1923, the Philippine Legislature enacted Act No. 3071, which mandated employers to provide paid maternity leave to pregnant women workers. Under Section 13 of this law, women employees were entitled to receive wages for thirty days before and thirty days after childbirth. The case arose when Julio Pomar, managing La Flor de la Isabela tobacco factory, refused to pay such maternity benefits to Macaria Fajardo, a cigar-maker who had given birth. The prosecution filed charges against Pomar for violating the Act, leading to his conviction in the lower court. Pomar challenged the constitutionality of the law, arguing it violated fundamental rights to freedom of contract and property, ultimately bringing the case before the Supreme Court for review.

Facts

• 1. Julio Pomar was the manager of La Flor de la Isabela, a tobacco factory owned by La Campania General de Tabacos de Filipinas
• 2. Macaria Fajardo was employed as a cigar-maker at the factory
• 3. On July 16, 1923, Fajardo was granted vacation leave due to pregnancy
• 4. She gave birth on August 12, 1923
• 5. Pomar refused to pay Fajardo wages for 30 days before and 30 days after her delivery (P80 total) despite her demands
• 6. This refusal was in violation of Section 13 of Act No. 3071

Arguments of the Petitioners

• 1. The prosecution argued that Act No. 3071 was a valid exercise of police power
• 2. The law aimed to protect the health and welfare of women workers
• 3. The requirement to provide paid maternity leave was reasonable regulation

Arguments of the Respondents

• 1. The defendant contended that Act No. 3071 was unconstitutional
• 2. The law violated the right to freedom of contract
• 3. The provisions constituted deprivation of property without due process
• 4. The law created involuntary terms in employment contracts without parties' consent

Issues

• 1. The defendant contended that Act No. 3071 was unconstitutional
• 2. The law violated the right to freedom of contract
• 3. The provisions constituted deprivation of property without due process
• 4. The law created involuntary terms in employment contracts without parties' consent

Ruling

• 1. The Supreme Court declared Sections 13 and 15 of Act No. 3071 unconstitutional and void
• 2. The Court ruled that requiring employers to pay wages during maternity leave violated the constitutional right to freedom of contract
• 3. The Court found that the law arbitrarily imposed payment obligations on employers without considering the employee's capability to earn such wages
• 4. The Court determined that the law unfairly compelled employers to pay wages regardless of their business's ability to sustain the financial burden
• 5. The Court held that the law improperly required payment without requiring any service of equivalent value from the employee
• 6. The Court ruled that the law failed to account for periods of business distress or depression that might affect the employer's ability to pay
• 7. The Court found that the law improperly shifted the burden of supporting partially indigent persons from society to individual employers
• 8. The Court determined that the law created mandatory contract terms without the consent of the contracting parties
• 9. The Court held that while police power could regulate private rights, this law exceeded legitimate police power boundaries
• 10. The Court ruled that the law's declared basis of ensuring employee subsistence was not causally connected to the employment relationship
• 11. The Court found no precedent for deprivation of property under police power except in cases of legal violations or public nuisance
• 12. The Court determined that the law violated the due process clause by interfering with the right to make employment contracts
• 13. The Supreme Court consequently revoked the lower court's sentence, dismissed the complaint, and discharged the defendant

Doctrines

• 1. Police Power: The power of the state to regulate private rights for public welfare, but subject to constitutional limitations
• 2. Freedom of Contract: The liberty to enter into agreements without arbitrary government interference
• 3. Due Process: Protection against deprivation of life, liberty, or property without proper legal proceedings
• 4. Property Rights: The right to acquire, use, and dispose of property without unreasonable government restriction

Key Excerpts

• 1. "The right to contract about one's affairs is a part of the liberty of the individual protected by the due process clause of the constitution"
• 2. "Liberty includes not only the right to labor, but to refuse to labor, and, consequently, the right to contract to labor or for labor"
• 3. "The police power of the state is a growing and expanding power... But that power cannot grow faster than the fundamental law of the state"

Precedents Cited

• 1. Mugler vs. Kansas (123 U.S. 623): Cited to discuss limits of police power regarding property rights
• 2. Adkins vs. Children's Hospital (261 U.S. 525): Referenced regarding freedom of contract and minimum wage regulations
• 3. Coppage vs. Kansas (236 U.S. 1): Used to establish the essential nature of labor contracts
• 4. Adair vs. United States (208 U.S. 161): Cited for employer-employee equality in contract rights

Statutory and Constitutional Provisions

• 1. Act No. 3071, Sections 13 and 15
• 2. Act of Congress of August 29, 1916, Section 3
• 3. Civil Code, Article 1255
• 4. Philippine Constitution's due process clause