Tourism Law in the Philippines (TH2016) PDF

TH2016 The Basics of Law Definition and Characteristics of Law Law is defined as a rule of conduct, just and obligatory, promulgated by legitimate authority, and of common observance and benefit (Maranan, Maranan, Caluza, & Dela Cruz, 2019). From this definition, the following characteristics of la...

TH2016 The Basics of Law Definition and Characteristics of Law Law is defined as a rule of conduct, just and obligatory, promulgated by legitimate authority, and of common observance and benefit (Maranan, Maranan, Caluza, & Dela Cruz, 2019). From this definition, the following characteristics of law can be deduced (Cagurangan, 2017): It is a rule of conduct. Because there is a law, order is established as people conduct themselves accordingly. It is just and obligatory. The penalty imposed by law must be commensurate to the wrongful act committed by a person. The law is obligatory because of the penalty or legal consequence it provides. It is promulgated by legitimate authority. The person who creates the law must have the power or authority to do so. The Constitution of the Philippines vests this power to the Congress of the Philippines. The law passed by Congress is called Statute. Bill is not a law but a proposal or a draft. It is for common observance and benefits. Laws are promulgated for the welfare of the people. No law shall be passed to endanger people. Kinds of Law The different kinds of law are classified according to their purpose and scope (Maranan et al., 2019). According to purpose: Substantive Law. It is a law that creates, defines, and regulates rights, or which regulates the rights and duties which give rise to a cause of action. Adjective Law. It is a law that provides the methods of aiding and protecting certain rights. According to scope: General or Public Law. It is a law that applies to all of the people of the state or all of a particular class of persons in the state, with equal force and obligation. Examples of this are Criminal Law (a law dealing with crimes and their punishment, as well as the procedure for that purpose), International Law (a body of rules or principles of action governing the relations between states), and Political Law (a law defining the relations of the state with the inhabitants of its territory). Special or Private Law. It is a law relating to particular persons or things of a class. Examples of this are Civil Law (refers to the mass of precepts that determines and regulates those relations of assistance, authority, and obedience existing among members of a family and those which exist among members of a society for the protection of private interests), Maritime Law (the law dealing with commerce by sea, involving regulation of ships and harbors, and the status of seamen), and Mercantile Law (the law of commercial transactions derived from the law of merchant, which includes commercial paper insurance, and other types of agency). The Concept of Tourism Law Tourism is defined by the World Tourism Organization (WTO) as "a social, cultural and economic phenomenon which entails the movement of people to countries or places outside their usual environment for personal or business/professional purpose." (UNWTO, n.d.) The hospitality industry, which is made up of two (2) distinct services, namely, accommodation and food and beverage, is one of tourism’s sectors. Tourism law may be defined as a body of rules or principles of action that deals with the regulation, authority, relations, and obedience among members of a society involved in tourist travel and accommodation. It includes persons traveling from place to place for pleasure and business establishments or persons engaged in the occupation of providing various services to tourists. 01 Handout 1 *Property of STI  [email protected] Page 1 of 7  TH2016 Importance and Application of Tourism Law Business establishments have been in food services, hotel services, travel and tour operations, and events management for the interest of entertainment of people traveling from one place to another. Additionally, electronic commerce (e-commerce) has now been considered a necessity to do business in tourism. Given these, various commercial transactions are involved in tourism regularly. Moreover, numerous regulations are being imposed by government agencies to promote tourism development. Therefore, there is a need to study and understand the principles and statutes governing tourism. Sources of Law The following are the sources of laws relevant to the tourism and hospitality industry (Maranan et al., 2019): The 1987 Philippine Constitution. It is the fundamental law of the land, to which all other laws must conform. Statutes or Legislative Enactments. It is the written will of the legislative department rendered authentic by certain prescribed forms and solemnities, prescribing rules of action, or civil conduct concerning persons, things, or both. Examples include the Civil Code of the Philippines, Labor Code of the Philippines, Public Service Act, and local government ordinances. Administrative or Executive Orders, Regulations, and Rulings. These are issued by administrative officials under legislative authority. Examples include the Rules and Regulations promulgated by the Secretary of Tourism to Govern the Accreditation of Hotels, Tourist Inns, Motels, Apartels, Resorts, Pension Houses, and Other Accommodation Establishment; Administrative issuances by the Department of Foreign Affairs; and Omnibus Rules Implementing the Labor Code of the Philippines. Judicial Decisions or Jurisprudence. These refer to the decisions of the Supreme Court in interpreting the laws or the Constitution. Custom. It is a rule of conduct which, in a given place and among given groups of people, has been followed for an appreciable time. Other sources. These refer to decisions of foreign tribunals and the opinions of distinguished textbook writers. The Philippine Constitution The Constitution is the basic and paramount law to which all other laws must conform and to which all persons, including the highest officials of the land, must defer. It is said to be supreme among all the laws of the archipelago. It is through the Constitution that the fundamental powers of the government are established, limited, and defined, and by which these powers are distributed among several departments (Maranan et al., 2019). The word "tourism" is mentioned only once in the 1987 Philippine Constitution. It is under Article X, Section 20, which states that "Within the territorial jurisdiction and subject to the provisions of this constitution and national laws, the organic power of autonomous regions shall provide for legislative powers over (6) economic, social, and tourism development." However, there are still other constitutional provisions that must be emphasized because of their connection and influence on the development of the entire tourism industry. These are the following: ARTICLE I: NATIONAL TERRITORY This is important since one of the considerations in establishing a hotel, travel agency, and related establishments is the location of the business or its territorial jurisdiction. This is to make known to the world the areas over which a country has title or ownership that can be asserted; thus, avoiding conflicts with other nations. 01 Handout 1 *Property of STI  [email protected] Page 2 of 7  TH2016 Article I provides that, "The national territory comprises the Philippine archipelago, with all the islands and waters embraced therein, and all other territories over which the Philippines has sovereignty or jurisdiction, consisting of its terrestrial, fluvial, and aerial domains, including its territorial sea, the seabed, the subsoil, the insular shelves, and other submarine areas. The waters around, between, and connecting the islands of the archipelago, regardless of their breadth and dimensions, form part of the internal waters of the Philippines." All communities of persons and properties permanently occupying a definite portion from the above scope of Philippine territory must render obedience to its government. Thus, any tourism establishment must follow the tourism laws of the Philippines as a state. Three Inherent Powers of the State The Philippines, as a state, is equipped with inherent powers that are supreme. Such powers affect all persons, properties, and rights in the country, and thus, including the tourism and hospitality industry. Police Power. It is the power to regulate laws and properties for a public purpose. As an example of the exercise of police power, the government can order the closure of a business establishment if it finds that such is harmful to the public. Power of Eminent Domain. It is the power to forcibly acquire private property for a public purpose and after payment of just compensation. Thus, the government can only order the demolition of a business establishment directly affected by its project after giving just compensation to the owners of the mentioned business establishment. Power of Taxation. It is the power of the government to raise revenues. Relevant to this is the power to destroy. To limit the establishment of business, which may be a front for prostitution, the government could regulate it by imposing higher taxes. This also applies to cigarettes and other alcoholic beverages on which the government has been imposing sin taxes. ARTICLE III: BILL OF RIGHTS This is a list of the most important rights of the citizens of a country, which is enshrined in Article III of the 1987 Philippine Constitution. Its purpose is to protect these rights against infringement from public officials and private citizens. The following sections focused on the provisions that apply to the tourism and hospitality industry. Section 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws. Thus, an employee in the tourism and hospitality industry cannot be dismissed from employment without being notified of the offense s/he had committed. S/he must be given a reasonable time to explain his/her side. Likewise, a municipal mayor cannot order the closure of any tourism business establishment without giving the owners notice and the opportunity to be heard. The equal protection of the law signifies that "all persons subject to legislation should be treated alike, under like circumstances and conditions both in the privileges conferred and limitations imposed." These are the two (2) things that must be remembered in the due process of law: every person must be notified of the offense he allegedly committed, and he must be given an opportunity to be heard. The due process of law has a two-fold aspect, as follows: Procedural due process. It refers to the method by which the law is enforced. In this particular process, hearing is necessary before condemnation. The condemnation proceeds only upon inquiry of the needed facts, and judgment is to be given only after trial. Substantive due process. It requires the fairness, justness, and reasonableness of the law itself. Arbitrary reasons and flimsy grounds are of no excuse. 01 Handout 1 *Property of STI  [email protected] Page 3 of 7  TH2016 Section 3. (1) The privacy of communication and correspondence shall be inviolable except upon lawful order of the court, or when public safety or order requires otherwise as prescribed by law. (2) Any evidence obtained in violation of this or the preceding section shall be inadmissible for any purpose in any proceeding. Communication and correspondences are inevitable in the tourism and hospitality industry. The forms of correspondence and communication covered in this provision include letters, telegrams, telephone calls, messages, and the like. Republic Act No. 4200, otherwise known as the Anti-Wiretapping Law, provides penalties for specific violations of the privacy of communication. Any evidence obtained in violation of the Act shall be considered "fruit from the poisonous tree"; thus, they shall not be admitted as evidence in any administrative or criminal proceeding. However, Section 3 of the Act authorizes wiretaps as pieces of evidence in certain crimes, such as treason, espionage, provoking war and disloyalty in case of war, and other offenses against national security. Application of the Law Case: The National Bureau of Investigation (NBI) received a tip on an important case it has been working on. It deals with drug dealing using hotel suites as meeting places of high profile drug dealers. The NBI sought the cooperation of the hotel management for an entrapment operation. Wiretapping devices were installed. The adjacent suite was reserved for NBI agents on a stakeout. Was the operation legal and justified? The tourism and hospitality industry is a labor-intensive industry, and it is common to have disputes between the labor sector and management. Likewise, the depiction of women and children in an exploitative manner has happened in the past. Thus, freedom of speech and expression must be understood. Section 4. No law shall be passed abridging the freedom of speech, of expression, or of the press, or the right of the people peaceably to assemble and petition the Government for the redress of their grievances. Speech, expression, and press include every form of expression, whether oral, tape-, CD-, or DVD-recorded. Obscenity is defined as materials that, taken as a whole, appeals to the prurient interest and lacks serious literary, artistic, political, or scientific value. Matters classified as such are not protected under the "free speech" guarantee of the Constitution. Application of the Law Case: Fort Santiago is a well-maintained wholesome historic theme park in Manila. The regular park promenaders were suddenly awed by the parading young girls clad in skimpy bikinis. They were movie starlets who were doing a pictorial for a magazine. There were occasions when the director would tell the girls to take off their bikini bras only to cover their breasts with their arms. The crowd was uneasy and grew bigger as the pictorial lasted almost over an hour. A Manila councilor who was near the location reminded the director of the city ordinance and the law that they were violating. Did the Manila councilor have the right to put a stop to the pictorial? Did the organizers and participants of the pictorial violate any law? Section 6. The liberty of abode and of changing the same within the limits prescribed by law shall not be impaired except upon lawful order of the court. Neither shall the right to travel be impaired except in the interest of national security, public safety, or public health, as may be provided by law. The constitutional provision guarantees the freedom to choose and change one's place of residence and dwelling place and freedom to travel within or outside the country. However, these liberties are not absolute rights, for they can be regulated by a lawful order of the court. An order releasing a person accused of a crime on bail is similar to a "lawful order of the court" under the provision, and a hold-departure order may be issued as this is a necessary consequence of the function of the bail bond, which is to secure the person's appearance when needed. 01 Handout 1 *Property of STI  [email protected] Page 4 of 7  TH2016 Application of the Law Case: Mr. Bondoc, president of ABC Securities, Inc., has been charged with estafa (swindling) before Philippine courts. While ABC Securities, Inc. is now under rehabilitation as approved by the courts, Mr. Bondoc requested the court that he be allowed to leave for the United States, which is "relative to his business transactions and opportunities" since he is already released on bail and his bail bond has been approved by Court. May the Court deny Mr. Bondoc's request without violating his constitutional right to travel? Section 8. The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged. The tourism and hospitality industry, being labor-intensive, elicits the possibility of unions and associations being formed to protect the rights of employees. While there is also a provision on this in the Constitution, a broader discussion is covered by the Labor Code. Government employees are now given the right to form unions. However, their right to strike is not included in the right to form unions. Unlike those employed in the private sector, government employees do not have the constitutional right to strike as a mandate under the civil service rules and regulations prohibiting government employees to strike. Application of the Law Case: Junie Bustillos, a room attendant, has been employed at a Quezon City Hotel for five (5) years. In his late twenties, Junie is a hardworking and idealistic employee. He has seen many abuse cases by management, especially in the past three (3) years in the hotel. Approximately 70% of the employees feel low morale because of these abuses, and they would readily support any move to form a union. Junie took the initiative in talking to some potential leaders who will form the core group of a possible union. He believes that this is the only way they can protect the rights of hotel workers. Upon learning of Junie's plans, top management gradually worked on a plan on how to get rid of Junie. After three (3) months, Junie was found to have committed serious offenses resulting in his dismissal from the hotel. Did the hotel management do the right thing? Did the hotel management violate any law? Section 10. No law impairing the obligations of contracts shall be passed. The tourism and hospitality industry makes use of many contracts such as employment, franchise, purchase, sales, and agencies. Under the Civil Code, the contract constitutes the law of the parties unless it violates some provision of law or public policy. The parties themselves make the law by which they shall be governed, and it is the business of the courts to see that the parties to a legal contract comply with its terms. A law changing the terms of a legal contract between parties, either in the time or mode of performance, or imposes new conditions, or dispenses with those expressed, or authorizes for its satisfaction something different from that provided in its terms, is a law which impairs the obligation of a contract and is null and void. Interference with the terms of a legal contract by legislation is unwarranted and illegal. However, not all impairment of the contractual provisions violates the Constitution. The Supreme Court has pronounced that a valid exercise of police power (see definition above) of the state is superior to the obligations of contracts. Application of the Law Case: The Philippine Airlines (PAL) and the Chamber of Real Estate Builders Association (CREBA) filed a Petition with the Supreme Court questioning the validity of Republic Act No. 7716 (An Act Restructuring the Value Added Tax System Widening Its Tax Base and Enhancing Its Administration) because it impairs the obligation of contracts on existing sales on real property payable in installments, franchise privileges, and exempt transactions such as the sale of agricultural products, food items, petroleum, and medical and veterinary services. Is the contention of PAL and CREBA correct? 01 Handout 1 *Property of STI  [email protected] Page 5 of 7  TH2016 ARTICLE XII: NATIONAL ECONOMY AND PATRIMONY Some of the provisions in Article XII apply to tourism. These are discussed below. Section 10. The Congress shall, upon recommendation of the economic and planning agency, when the national interests, reserve to citizens of the Philippines or to corporations or associations at least sixty per centum of whose capital is owned by such citizens, or such higher percentage as Congress may prescribe, certain areas of investments. In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos. The State shall regulate and exercise authority over foreign investments within its national jurisdiction and in accordance with its national goals and priorities. The term patrimony pertains to heritage. Thus, when the Constitution speaks of national patrimony, it refers not only to the natural resources of the Philippines but also to the cultural heritage of the Filipinos. The term "qualified Filipinos" simply means that preference shall be given to those citizens who can make a viable contribution to the common good because of credible competence and efficiency. Thus, in the granting of economic rights, privileges, and concessions between a "qualified foreigner" and a "qualified Filipino," the latter shall be chosen over the former. Application of the Law Case: During a bid for the purchase of the majority shares in Manila Hotel, a Malaysian corporation was the highest bidder. However, instead of awarding the sale to the Malaysian corporation, the same was awarded to a Filipino corporation. Is the awarding of the sale in favor of the Filipino Corporation valid? Section 11. No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines, or to corporations or associations organized under the laws of the Philippines or at least 60 per centum of whose capital is owned by such citizens, nor shall such franchise, certificate, or authorization be exclusive in character or for a longer period than fifty years. Neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment, alteration or repeal by the Congress when the common good so requires. The State shall encourage equity participation in public utilities by the general public. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizens of the Philippines. The first sentence provides that an operation of a public utility will be granted only to citizens of the Philippines or to corporations with 60% of their capital owned by Filipino citizens. Thus, corporations, the outstanding capital stock of which is owned by foreign nationals to the extent of more than 40%, are not allowed to operate as a public utility. The second sentence allows the legislature to impair the obligation of franchises "when the common good" so requires. The last sentence authorizes foreign investors' participation as the board of directors of public utility enterprises but shall be limited to their proportionate share in the capital as mandated in the first sentence. However, the executive and managing officers of such public utility enterprises must be citizens of the Philippines. 01 Handout 1 *Property of STI  [email protected] Page 6 of 7  TH2016 Application of the Law Case: Mr. Walker is an American investor who wants to put-up saunas and massage clinics in the Philippines. Would he be allowed to do so? Section 14. The sustained development of a reservoir of national talents consisting of Filipino scientists, entrepreneurs, professionals, managers, high-level technical manpower, and skilled workers and craftsmen in all fields shall be promoted by the State. The State shall encourage appropriate technology and regulate its transfer for the national benefit. The practice of all professions in the Philippines shall be limited to Filipino citizens, save in cases prescribed by law. The said provision mandates that the practice of a profession is preferred exclusively to citizens of the Philippines. The Foreign Investment Negative List specifically provides that foreign investors are prohibited from engaging in such an undertaking. Besides, the State shall prioritize Filipino talents for employment in the country. Aliens may be employed but must obtain a working visa from the Bureau of Immigration and a working permit from the Department of Labor and Employment (DOLE). Application of the Law Case: Mr. John Tan is looking for a Chief Executive Officer who will manage his five-star hotel in the Roxas Boulevard area. He is also looking for a legal counsel who will take charge of legal matters of his hotel business. What must be the qualification of the people he should hire for his hotel business? References: Cabulay, D. A., & Carpio-Aldeguer, C. P. (2015). Philippine tourism laws: A comprehensive guide to studying laws relevant to the Philippine tourism industry (2nd ed.). Rex Printing Company, Inc. Cagurangan, T. R. (2017). Laws in the hospitality industry (The Philippine tourism laws simplified). Mindshapers Co., Inc. Maranan, M. H., Maranan, J. D., Caluza, C. N., & Dela Cruz, K. G. (2019). Legal aspects in tourism and hospitality. Mindshapers Co., Inc. United Nations World Tourism Organization (UNWTO). (n.d.) Glossary of tourism terms. https://www.unwto.org/glossary-tourism- terms#:~:text=Tourism%20is%20a%20social%2C%20cultural,personal%20or%20business%2Fprofessio nal%20purposes. 01 Handout 1 *Property of STI  [email protected] Page 7 of 7