G.R. No.

197528 September 5, 2012

PERT/CPM MANPOWER EXPONENT CO., INC., Petitioner,
vs.
ARMANDO A. VINUY A, LOUIE M. ORDOVEZ, ARSENIO S. LUMANTA,.
JR., ROBELITO S. ANIPAN, VIRGILIO R. ALCANTARA, MARINO M. ERA,
SANDY 0. ENJAMBRE and NOEL T. LADEA, Respondents.
BRION, J .:
Facts:
On March 5, 2008, respondents Armando A. Vinuya, Louie M. Ordovez,
Arsenio S. Lumanta, Jr., Robelito S. Anipan, Virgilio R. Alcantara, Marino M.
Era, Sandy O. Enjambre and Noel T. Ladea (respondents) filed a complaint
for illegal dismissal against the petitioner Pert/CPM Manpower Exponent Co.,
Inc. (agency), and its President Romeo P. Nacino.
Agency deployed respondents between March 29, 2007 and May 12, 2007 to
work as aluminum fabricator/installer for the agencys principal, Modern
Metal Solution LLC/MMS Modern Metal Solution LLC (Modern Metal) in
Dubai, United Arab Emirates.
Respondents employment contracts, which were approved by the POEA,
provided for a two-year employment, nine hours a day, salary of 1,350 AED
with overtime pay, food allowance, free and suitable housing (four to a room),
free transportation, free laundry, and free medical and dental services.
On April 2, 2007, Modern Metal gave the respondents, except Era,
appointment letters with terms different from those in the employment
contracts which they signed at the agencys office in the Philippines. Under
the letters of appointment, their employment was increased to three years at
1,000 to 1,200 AED and food allowance of 200 AED.
The respondents claimed that they were shocked to find out what their
working and living conditions were in Dubai. They were required to work from
6:30 a.m. to 6:30 p.m., with a break of only one hour to one and a half hours.
When they rendered overtime work, they were most of the time either
underpaid or not paid at all. Their housing accommodations were cramped
and were shared with 27 other occupants. The lodging house was in Sharjah,
which was far from their jobsite in Dubai, leaving them only three to four
hours of sleep a day because of the long hours of travel to and from their
place of work; there was no potable water and the air was polluted.
When the respondents received their first salaries, they called up the agency
and complained about their predicament. The agency assured them that their
concerns would be promptly addressed, but nothing happened.
On May 5, 2007, Modern Metal required the respondents to sign new
employment contracts. The contracts reflected the terms of their appointment
letters. Burdened by all the expenses and financial obligations they incurred
for their deployment, they were left with no choice but to sign the contracts.
They raised the matter with the agency, which again took no action.
On August 5, 2007, the respondents expressed to Modern Metal their desire
to resign. Out of fear, as they put it, that Modern Metal would not give them
their salaries and release papers, the respondents, except Era, cited
personal/family problems for their resignation. Era mentioned the real reason
"because I dont want the company policy" for his resignation.
They all returned to Manila in September 2007. Except for Ordovez and
Enjambre, all the respondents shouldered their own airfare.
The agency countered that the respondents were not illegally dismissed; they
voluntarily resigned from their employment to seek a better paying job. It
claimed that the respondents, while still working for Modern Metal, applied
with another company which offered them a higher pay. Unfortunately, their
supposed employment failed to materialize and they had to go home
because they had already resigned from Modern Metal.
The agency further alleged that the respondents even voluntarily signed
affidavits of quitclaim and release after they resigned. It thus argued that their
claim for benefits, under Section 10 of Republic Act No. (R.A.) 8042,
damages and attorneys fees is unfounded.
Labor Arbiter:
On April 30, 2008, Labor Arbiter Ligerio V. Ancheta rendered a
Decision
10
dismissing the complaint, finding that the respondents voluntarily
resigned from their jobs. He also found that four of them Alcantara, Era,
Anipan and Lumanta even executed a compromise agreement (with
quitclaim and release) before the POEA. He considered the POEA recourse
a case of forum shopping.
NLRC:
On May 12, 2009, the NLRC granted respondents appeal. It ruled that they
had been illegally dismissed. It anchored its ruling on the new employment
contracts they were made to sign in Dubai. It stressed that it is illegal for
an employer to require its employees to execute new employment
papers, especially those which provide benefits that are inferior to the
POEA-approved contracts.
The NLRC rejected the quitclaim and release executed by the respondents in
Dubai. It believed that the respondents executed the quitclaim
documents under duress as they were afraid that they would not be
allowed to return to the Philippines if they did not sign the documents.
Further, the labor tribunal disagreed with the labor arbiters opinion that the
compromise agreement they executed before the POEA had effectively
foreclosed the illegal dismissal complaint before the NLRC and that the
respondents had been guilty of forum shopping. It pointed out that the
POEA case involved pre-deployment issues; whereas, the complaint
before the NLRC is one for illegal dismissal and money claims arising
from employment.
Consequently, the NLRC ordered the agency, Nacino and Modern Metal to
pay, jointly and severally, the respondents
The agency moved for reconsideration, contending that the appeal was
never perfected and that the NLRC gravely abused its discretion in reversing
the labor arbiters decision.The respondents, on the other hand, moved
for partial reconsideration, maintaining that their salaries should have
covered the unexpired portion of their employment contracts, pursuant
to the Courts ruling in Serrano v. Gallant Maritime Services, Inc.
The NLRC denied the agencys motion for reconsideration, but granted the
respondents motion. It sustained the respondents argument that the
award needed to be adjusted, particularly in relation to the payment of
their salaries, consistent with the Courts ruling in Serrano. The ruling
declared unconstitutional the clause, "or for three (3) months for every year of the unexpired
term, whichever is less," in Section 10, paragraph 5, of R.A. 8042, limiting the entitlement of
illegally dismissed overseas Filipino workers to their salaries for the unexpired term of their
contract or three months, whichever is less. Accordingly, it modified its earlier decision
and adjusted the respondents salary entitlement.
CA:
It upheld the NLRC ruling.
The CA stressed that the filing of a complaint for illegal dismissal is
inconsistent with resignation. Moreover, it found nothing in the records
to substantiate the agencys contention that the respondents
resignation was of their own accord; on the contrary, it considered the
resignation letters "dubious for having been lopsidedly-worded to
ensure that the petitioners (employers) are free from any liability."
The appellate court likewise refused to give credit to the compromise
agreements that the respondents executed before the POEA. It agreed with
the NLRCs conclusion that the agreements pertain to the respondents
charge of recruitment violations against the agency distinct from their illegal
dismissal complaint, thus negating forum shopping by the respondents.
Lastly, the CA found nothing legally wrong in the NLRC adjusting the
respondents salary award on the basis of the unexpired portion of their
contracts, as enunciated in the Serrano case.
Issues/Held:
1. WoN the respondents voluntarily resigned- NO;
2. WoN the compromise agreements before the POEA pertain
only to the respondents charge of recruitment violations
against the agency- YES;
3. WoN NLRC was mistaken to award the respondents of their
salaries for the unexpired portion of their employment
Ruling:
We find no merit in the petition. The CA committed no reversible error
and neither did it commit grave abuse of discretion in affirming the
NLRCs illegal dismissal ruling.
The agency and its principal, Modern Metal, committed flagrant violations
of the law on overseas employment, as well as basic norms of decency
and fair play in an employment relationship, pushing the respondents
to look for a better employment and, ultimately, to resign from their
jobs.
The agency and Modern Metal are guilty of contract substitution. The
respondents complained with the agency about the contract substitution, but
the agency refused or failed to act on the matter.
The fact that the respondents contracts were altered or substituted at
the workplace had never been denied by the agency. On the contrary, it
admitted that the contract substitution did happen when it argued."
Clearly, the agency and Modern Metal committed a prohibited practice
and engaged in illegal recruitment under the law. Article 34 of the Labor
Code provides:
Art. 34. Prohibited Practices. It shall be unlawful for any individual, entity, licensee, or holder of
authority:
(i) To substitute or alter employment contracts approved and verified by the Department of Labor
from the time of actual signing thereof by the parties up to and including the periods of expiration
of the same without the approval of the Secretary of Labor.
Further, Article 38 of the Labor Code, as amended by R.A. 8042,
35
defined
"illegal recruitment" to include the following act:
(i) To substitute or alter to the prejudice of the worker, employment contracts approved and
verified by the Department of Labor and Employment from the time of actual signing thereof by
the parties up to and including the period of the expiration of the same without the approval of
the Department of Labor and Employment.
Also, the agency and Modern Metal committed breach of contract.
Aggravating the contract substitution imposed upon them by their
employer, the respondents were made to suffer substandard (shocking,
as they put it) working and living arrangements. Both the original
contracts the respondents signed in the Philippines and the appointment
letters issued to them by Modern Metal in Dubai provided for free housing
and transportation to and from the jobsite. The original contract mentioned
free and suitable housing.
36
Although no description of the housing
was made in the letters of appointment except: "Accommodation:
Provided by the company," it is but reasonable to think that the
housing or accommodation would be "suitable."
1.
With their original contracts substituted and their oppressive working and
living conditions unmitigated or unresolved, the respondents decision to
resign is not surprising. They were compelled by the dismal state of
their employment to give up their jobs; effectively, they were
constructively dismissed. A constructive dismissal or discharge is "a quitting because
continued employment is rendered impossible, unreasonable or unlikely, as, an offer involving a
demotion in rank and a diminution in pay."
Without doubt, the respondents continued employment with Modern Metal
had become unreasonable. A reasonable mind would not approve of a
substituted contract that pays a diminished salary or an extended
employment at such inferior terms, or a "free and suitable" housing
which is hours away from the job site, cramped and crowded, without
potable water and exposed to air pollution.
As the CA did, we find the resignation letters "dubious," not only for
having been lopsidedly worded to ensure that the employer is rendered free
from any liability, but also for the odd coincidence that all the
respondents had, at the same time, been confronted with urgent family
problems so that they had to give up their employment and go home.
The truth, as the respondents maintain, is that they cited family problems as
reason out of fear that Modern Metal would not give them their salaries and
their release papers. Only Era was bold enough to say the real reason for his
resignation to protest company policy.
We likewise find the affidavits of quitclaim and release which the respondents
executed suspect. Obviously, the affidavits were prepared as a follow
through of the respondents supposed voluntary resignation. Unlike the
resignation letters, the respondents had no hand in the preparation of the
affidavits. They must have been prepared by a representative of Modern
Metal as they appear to come from a standard form and were
apparently introduced for only one purpose to lend credence to the
resignation letters. In Modern Metals haste, however, to secure the
respondents affidavits, they did not check on the model they used. Thus,
Lumantas affidavit mentioned a G & A International Manpower as his
recruiting agency, an entity totally unknown to the respondents; the
same thing is true for Eras affidavit. This confusion is an indication of
the employers hurried attempt to avoid liability to the respondents.
2.
The compromise agreements (with quitclaim and release) between the
respondents and the agency before the POEA did not foreclose their
employer-employee relationship claims before the NLRC. The
respondents, except Ordovez and Enjambre, aver in this respect that
they all paid for their own airfare when they returned home and that the
compromise agreements settled only their claim for refund of their
airfare, but not their other claims.
46
Again, this submission has not been
refuted or denied by the agency.
On the surface, the compromise agreements appear to confirm the agencys
position, yet a closer examination of the documents would reveal their true
nature. Copy of the compromise agreement is a standard POEA
document, prepared in advance and readily made available to parties
who are involved in disputes before the agency, such as what the
respondents filed with the POEA ahead (filed in 2007) of the illegal
dismissal complaint before the NLRC (filed on March 5, 2008).
The agency agreed to pay them a total of P 72,000.00. Although there was
no breakdown of the entitlement for each of the six, but guided by the
compromise agreement signed by Era and Alcantara, we believe that the
agency paid them P 12,000.00 each, just like Era and Alcantara.
The uniform insubstantial amount for each of the signatories to the
agreement lends credence to their contention that the settlement
pertained only to their claim for refund of the airfare which they
shouldered when they returned to the Philippines. Under the
circumstances, we cannot see how the compromise agreements can be
considered to have fully settled the respondents claims before the
NLRC illegal dismissal and monetary benefits arising from
employment.
3.
The agencys objection to the application of the Serrano ruling in the present
case is of no moment. Its argument that the ruling cannot be given
retroactive effect, because it is curative and remedial, is untenable. It points
out, in this respect, that the respondents filed the complaint in 2007, while the
Serrano ruling was handed down in March 2009. The issue, as the
respondents correctly argue, has been resolved in Yap v. Thenamaris Ships
Management.
Undaunted, the agency posits that in any event, the Serrano ruling has
been nullified by R.A. No. 10022, entitled "An Act Amending Republic
Act No. 8042, Otherwise Known as the Migrant Workers and Overseas
Filipinos Act of 1995, As Amended, Further Improving the Standard of
Protection and Promotion of the Welfare of Migrant Workers, Their
Families and Overseas Filipinos in Distress, and For Other
Purposes."
51
It argues that R.A. 10022, which lapsed into law (without
the Signature of the President) on March 8, 2010, restored the subject
clause in the 5th paragraph, Section 10 of R.A. 8042. The amendment,
contained in Section 7 of R.A. 10022, reads as follows:
In case of termination of overseas employment without just, valid or authorized cause as defined
by law or contract, or any unauthorized deductions from the migrant workers salary, the worker
shall be entitled to the full reimbursement "of" his placement fee and the deductions made with
interest at twelve percent (12%) per annum, plus his salaries for the unexpired portion of his
employment contract or for three (3) months for every year of the unexpired term, whichever is
less.
52
(emphasis ours)
This argument fails to persuade us. Laws shall have no retroactive
effect, unless the contrary is provided.
53
By its very nature, the
amendment introduced by R.A. 10022 restoring a provision of R.A.
8042 declared unconstitutional cannot be given retroactive effect,
not only because there is no express declaration of retroactivity in the
law, but because retroactive application will result in an impairment of a
right that had accrued to the respondents by virtue of the Serrano
ruling - entitlement to their salaries for the unexpired portion of their
employment contracts.
All statutes are to be construed as having only a prospective application,
unless the purpose and intention of the legislature to give them a
retrospective effect are expressly declared or are necessarily implied from
the language used.
54
We thus see no reason to nullity the application of the
Serrano ruling in the present case.
WHEREFORE, premises considered, the petition is DENIED. The assailed
Decision dated May 9, 2011 and the Resolution dated June 23, 2011 of the
Court of Appeals in CA-G.R. SP No. 114353 are AFFIRMED. Let this
Decision be brought to the attention of the Honorable Secretary of Labor and
Employment and the Administrator of the Philippine Overseas Employment
Administration as a black mark in the deployment record of petitioner
Pert/CPM Manpower Exponent Co., Inc., and as a record that should be
considered in any similar future violations.
Costs against the petitioner.
SO ORDERED.