Pert:CPM Manpower Exponent Co., Inc. vs. Vinuya

SUPREME COURT REPORTS ANNOTATED VOLUME 680 http://www.central.com.ph/sfsreader/session/000001477b6512...
G.R. No. 197528.September 5, 2012.*
PERT/CPM MANPOWER EXPONENT CO., INC.,

petitioner, vs. 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.
Labor Law; Illegal Recruitment; Words and Phrases; Article

38 of the Labor Code, as amended by R.A. 8042, defined illegal
recruitment to include the following act: 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.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: x x x x (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, 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[.]
Same; Termination of Employment; Constructive Dismissal; 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.With their original contracts substituted and their
oppressive working
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* SECOND DIVISION.
oppressive working
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* SECOND DIVISION.
285
VOL. 680, SEPTEMBER 5, 2012 285
Pert/CPM Manpower Exponent Co., Inc. vs. Vinuya
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.
Statutory Construction; Retroactivity of Laws; Laws shall
have no retroactive effect, unless the contrary is provided.Laws
shall have no retroactive effect, unless the contrary is provided.
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.
PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Manicad, Ong, Dela Cruz & Fallarme for petitioner.
Leao, Leao & Leao III Law Office for respondents.
BRION,J.:
We resolve the present petition for review on certiorari1
assailing the decision2 dated May 9, 2011 and the
resolution3
_______________
1 Rollo, pp. 27-64; filed under Rule 45 of the Rules of Court.
2 Id., at pp. 107-121; penned by Associate Justice Bienvenido L. Reyes
2 of 23 (now a member of this Court), and concurred in by Associate Justices 7/28/14 1:17 PM
Estela M. Perlas-Bernabe (now also a member of this Court) and Elihu A.
Ybaez.
1 Rollo, pp. 27-64; filed under Rule 45 of the Rules of Court.

2 Id., at pp. 107-121; penned by Associate Justice Bienvenido L. Reyes
(now a member of this Court), and concurred in by Associate Justices
Estela M. Perlas-Bernabe (now also a member of this Court) and Elihu A.
Ybaez.
3 Id., at pp. 138-139.
286
286 SUPREME COURT REPORTS ANNOTATED

dated June 23, 2011 of the Court of Appeals (CA) in

CA-G.R. SP No. 114353.
The Antecedents
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.
The respondents alleged that the agency deployed them
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.
The respondents employment contracts,4 which were
approved by the Philippine Overseas Employment
Administration (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. They each paid a P15,000.00
processing fee.5
On April 2, 2007, Modern Metal gave the respondents,
except Era, appointment letters6 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.
3 of 23 7/28/14 1:17 PM
_______________
4 Id., at pp. 316-322.
out what their working and living conditions were in

Dubai.
_______________
4 Id., at pp. 316-322.
5 Id., at pp. 323-326.
6 Id., at pp. 327-333.
287
VOL. 680, SEPTEMBER 5, 2012 287

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 (at
the rates provided in their appointment letters and with
deductions for placement fees) and because of their difficult
living and working conditions, 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,7 except for
Era who was made to sign later. 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, despondent over their unbearable
living and working conditions and by the agencys inaction,
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
4 of 23 7/28/14 1:17 PM
_______________
7 Id., at pp. 334, 336-339.
respondents, except Era, cited personal/family problems for

their
_______________
7 Id., at pp. 334, 336-339.
288

resignation.8 Era mentioned the real reasonbecause I

dont (sic) want the company policy9for his resignation.
It took the agency several weeks to repatriate the
respondents to the Philippines. They all returned to Manila
in September 2007. Except for Ordovez and Enjambre, all
the respondents shouldered their own airfare.
For its part, 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.
The Compulsory Arbitration Rulings
On April 30, 2008, Labor Arbiter Ligerio V. Ancheta
rendered a decision10 dismissing the complaint, finding
that the respondents voluntarily resigned from their jobs.
He also found that four of themAlcantara, Era, Anipan
and Lumantaeven executed a compromise agreement
(with quitclaim and release) before the POEA. He
considered the POEA recourse a case of forum shopping.
The respondents appealed to the National Labor
Relations Commission (NLRC). They argued that the labor
arbiter committed serious errors in (1) admitting in
evidence the
_______________
8 Id., at pp. 269, 278, 282 and 296.
5 of 23 9 Id., at p. 286. 7/28/14 1:17 PM
10 Id., at pp. 141-154.
289
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8 Id., at pp. 269, 278, 282 and 296.
9 Id., at p. 286.
10 Id., at pp. 141-154.
289
VOL. 680, SEPTEMBER 5, 2012 289

quitclaims and releases they executed in Dubai, which

were mere photocopies of the originals and which failed to
explain the circumstances behind their execution; (2)
failing to consider that the compromise agreements they
signed before the POEA covered only the refund of their
airfare and not all their money claims; and (3) ruling that
they violated the rule on non-forum shopping.
On May 12, 2009, the NLRC granted the appeal.11 It
ruled that the respondents 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, as follows:
WHEREFORE, the Decision dated 30 April 2008 is hereby

REVERSED and SET ASIDE, a new Decision is hereby issued
ordering the respondents PERT/CPM MANPOWER
EXPONENTS
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_______________
11 Id., at pp. 155-162.
EXPONENTS
_______________
11 Id., at pp. 155-162.
290

CO., INC., ROMEO NACINO, and MODERN METAL

SOLUTIONS, INC. to jointly and severally, pay the complainants
the following:
Employee Underpaid Placement Salary for Exemplary

Salary fee the Damages
unexpired
portion of
the
contract
(1350 x 6
months)
Vinuya, 150 x 6 = USD 400 8100 AED P20,000.00
ARMANDO 900 AED
Alcantara 150 X 4 = USD 400 8100 AED P20,000.00
VIRGILIO 600 AED
Era, 350 x 4 = USD 400 8100 AED P20,000.00
MARINO 1400 AED
Ladea, 150 x 5 = USD 400 8100 AED P20,000.00
NOEL 750 AED
Ordovez, 250 X 3 = USD 400 8100 AED P20,000.00
LOUIE 750 AED
Anipan, 150 x 4 = USD 400 8100 AED P20,000.00
ROBELITO 600 AED
Enjambre, 150 x 4 = USD 400 8100 AED P20,000.00
SANDY 600 AED
Lumanta, 250 x 5 = USD 400 8100 AED P20,000.00
ARSENIO 1250 AED
TOTAL: 6,850 AED US$3,200 64,800 AED P400,000.00

or their peso equivalent at the time of actual payment plus
attorney[]s fees equivalent to 10% of the judgment award.12
_______________
12 Id., at p. 160.
291
VOL. 680, SEPTEMBER 5, 2012 291

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The agency moved for reconsideration, contending that

VOL. 680, SEPTEMBER 5, 2012 291

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.13
The NLRC denied the agencys motion for
reconsideration, but granted the respondents motion.14 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 based on the following matrix:
Employee Duration Departure Date Unexpired

of date dismissed
portion of
Contract contract
Vinuya, 2 years 29 March 8 August 19 months
ARMANDO 2007 2007 and 21
days
Alcantara, 2 years 3 April 8 August 20 months
VIRGILIO 2007 2007 and 5 days
Era, 2 years 12 May 8 August 21 months
MARINO 2007 2007 and 4 days
_______________
13 G.R. No. 167614, March 24, 2009, 582 SCRA 254.
14 Rollo, pp. 246-251; resolution dated September 2, 2009.
292

8 of 23 Pert/CPM Manpower Exponent Co., Inc. vs. Vinuya 7/28/14 1:17 PM
Ladea, NOEL 2 29 March 8 August 19 months


Ladea, NOEL 2 29 March 8 August 19 months

years 2007 2007 and 21 days
Ordovez, 2 3 April 26 July 21 months
LOUIE years 2007 2007 and 23 days
Anipan, 2 3 April 8 August 20 months
ROBELITO years 2007 2007 and 5 days
Enjambre, 2 29 March 26 July 20 months
SANDY years 2007 2007 and 3 days
Lumanta, 2 29 March 8 August 19 months
ARSENIO years 2007 2007 and 21 days15
Again, the agency moved for reconsideration, reiterating

its earlier arguments and, additionally, questioning the
application of the Serrano ruling in the case because it was
not yet final and executory. The NLRC denied the motion,
prompting the agency to seek recourse from the CA
through a petition for certiorari.
The CA Decision
The CA dismissed the petition for lack of merit.16 It
upheld the NLRC ruling that the respondents were
illegally dismissed. It found no grave abuse of discretion in
the NLRCs rejection of the respondents resignation
letters, and the accompanying quitclaim and release
affidavits, as proof of their voluntary termination of
employment.
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
_______________
15 Id., at p. 250.
16 Supra note 2.
293
VOL. 680, SEPTEMBER 5, 2012 293

own accord; on the contrary, it considered the resignation

letters dubious for having been lopsidedly-worded to
ensure that the petitioners (employer[s]) are free from any
liability.17
9 of 23 7/28/14 1:17 PM
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
ensure that the petitioners (employer[s]) are free from any

liability.17
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
correcting itself (upon being reminded by the respondents),
by adjusting the respondents salary award on the basis of
the unexpired portion of their contracts, as enunciated in
the Serrano case.
The agency moved for, but failed to secure, a
reconsideration of the CA decision.18
The Petition
The agency is now before the Court seeking a reversal of
the CA dispositions, contending that the CA erred in:
1.affirming the NLRCs finding that the respondents
were illegally dismissed;
2.holding that the compromise agreements before the
POEA pertain only to the respondents charge of
recruitment violations against the agency; and
3.affirming the NLRCs award to the respondents of
their salaries for the unexpired portion of their
employment contracts, pursuant to the Serrano ruling.
_______________
17 Id., at p. 118.
18 Supra note 3.
294

The agency insists that it is not liable for illegal

dismissal, actual or constructive. It submits that as
correctly found by the labor arbiter, the respondents
voluntarily resigned from their jobs, and even executed
affidavits of quitclaim and release; the respondents stated
family concerns for their resignation. The agency posits
that the letters were duly proven as they were written
unconditionally by the respondents. It, therefore, assails
10 of 23 7/28/14 1:17 PM
the conclusion that the respondents resigned under duress
or that the resignation letters were dubious.
The agency raises the same argument with respect to
that the letters were duly proven as they were written

unconditionally by the respondents. It, therefore, assails
the conclusion that the respondents resigned under duress
or that the resignation letters were dubious.
The agency raises the same argument with respect to
the compromise agreements, with quitclaim and release, it
entered into with Vinuya, Era, Ladea, Enjambre, Ordovez,
Alcantara, Anipan and Lumanta before the POEA,
although it submitted evidence only for six of them.
Anipan, Lumanta, Vinuya and Ladea signing one
document;19 Era20 and Alcantara21 signing a document
each. It points out that the agreement was prepared with
the assistance of POEA Conciliator Judy Santillan, and
was duly and freely signed by the respondents; moreover,
the agreement is not conditional as it pertains to all issues
involved in the dispute between the parties.
On the third issue, the agency posits that the Serrano
ruling has no application in the present case for three
reasons. First, the respondents were not illegally dismissed
and, therefore, were not entitled to their money claims.
Second, the respondents filed the complaint in 2007, while
the Serrano ruling came out on March 24, 2009. The ruling
cannot be given retroactive application. Third, R.A. 10022,
which was enacted on March 8, 2010 and which amended
R.A. 8042, restored the subject clause in Section 10 of R.A.
8042, declared unconstitutional by the Court.
_______________
19 Rollo, p. 344.
20 Id., at p. 345.
21 Id., at p. 345-A.
295
VOL. 680, SEPTEMBER 5, 2012 295

The Respondents Position

In their Comment (to the Petition) dated September 28,
2011,22 the respondents ask the Court to deny the petition
for lack of merit. They dispute the agencys insistence that
they resigned voluntarily. They stand firm on their
submission that because of their unbearable living and
working conditions in Dubai, they were left with no choice
but to resign. Also, the agency never refuted their detailed
11 of 23 narration of the reasons for giving up their employment. 7/28/14 1:17 PM
The respondents maintain that the quitclaim and
release affidavits,23 which the agency presented, betray its
working conditions in Dubai, they were left with no choice

but to resign. Also, the agency never refuted their detailed
narration of the reasons for giving up their employment.
The respondents maintain that the quitclaim and
release affidavits,23 which the agency presented, betray its
desperate attempt to escape its liability to them. They
point out that, as found by the NLRC, the affidavits are
ready-made documents; for instance, in Lumantas24 and
Eras25 affidavits, they mentioned a certain G & A
International Manpower as the agency which recruited
thema fact totally inapplicable to all the respondents.
They contend that they had no choice but to sign the
documents; otherwise, their release papers and remaining
salaries would not be given to them, a submission which
the agency never refuted.
On the agencys second line of defense, the compromise
agreement (with quitclaim and release) between the
respondents and the agency before the POEA, the
respondents argue that the agreements pertain only to
their charge of recruitment violations against the agency.
They add that based on the agreements, read and
considered entirely, the agency was discharged only with
respect to the recruitment and pre-deployment issues such
as excessive placement fees, non-issuance of receipts and
placement misrepresentation, but not with respect to
post-deployment issues such as ille-
_______________
22 Id., at pp. 453-465.
23 Id., at pp. 268, 272, 277, 280, 281, 285, 289 and 294.
24 Id., at p. 277.
25 Id., at p. 285.
296

gal dismissal, breach of contract, underpayment of salaries

and underpayment and nonpayment of overtime pay. The
respondents stress that the agency failed to controvert
their contention that the agreements came about only to
settle their claim for refund of their airfare which they paid
for when they were repatriated.
Lastly, the respondents maintain that since they were
12 of 23 illegally dismissed, the CA was correct in upholding the 7/28/14 1:17 PM
NLRCs award of their salaries for the unexpired portion of
their employment contracts, as enunciated in Serrano.
for when they were repatriated.

Lastly, the respondents maintain that since they were
illegally dismissed, the CA was correct in upholding the
NLRCs award of their salaries for the unexpired portion of
their employment contracts, as enunciated in Serrano.
They point out that the Serrano ruling is curative and
remedial in nature and, as such, should be given
retroactive application as the Court declared in Yap v.
Thenamaris Ships Management.26 Further, the
respondents take exception to the agencys contention that
the Serrano ruling cannot, in any event, be applied in the
present case in view of the enactment of R.A. 10022 on
March 8, 2010, amending Section 10 of R.A. 8042. The
amendment restored the subject clause in paragraph 5,
Section 10 of R.A. 8042 which was struck down as
unconstitutional in Serrano.
The respondents maintain that the agency cannot raise
the issue for the first time before this Court when it could
have raised it before the CA with its petition for certiorari
which it filed on June 8, 2010;27 otherwise, their right to
due process will be violated. The agency, on the other hand,
would later claim that it is not barred by estoppel with
respect to its reliance on R.A. 10022 as it raised it before
the CA in CA-G.R. SP No. 114353.28 They further argue
that RA 10022 cannot be applied in their case, as the law is
an amendatory statute which is, as a rule, prospective in
application, unless the contrary is provided.29 To put the
issue to
_______________
26 G.R. No. 179532, May 30, 2011, 649 SCRA 369.
27 Rollo, p. 205; date when petition was stamped received by the CA.
28 Id., at pp. 469-470.
29 Civil Code, Article 4.
297
VOL. 680, SEPTEMBER 5, 2012 297

rest, the respondents ask the Court to also declare

unconstitutional Section 7 of R.A. 10022.
Finally, the respondents submit that the petition should
be dismissed outright for raising only questions of fact,
rather than of law.
13 of 23 The Courts Ruling 7/28/14 1:17 PM
The procedural question
We deem it proper to examine the facts of the case on
be dismissed outright for raising only questions of fact,

rather than of law.
The Courts Ruling
The procedural question
We deem it proper to examine the facts of the case on
account of the divergence in the factual conclusions of the
labor arbiter on the one hand, and, of the NLRC and the
CA, on the other.30 The arbiter found no illegal dismissal in
the respondents loss of employment in Dubai because they
voluntarily resigned; whereas, the NLRC and the CA
adjudged them to have been illegally dismissed because
they were virtually forced to resign.
The merits of the case
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.
First. The agency and Modern Metal are guilty of
contract substitution. The respondents entered into a
POEA-
_______________
30 Fujitsu Computer Products Corp. of the Phils. v. Court of Appeals,
494 Phil. 697, 716; 454 SCRA 737, 758 (2005).
298

approved two-year employment contract,31 with Modern

Metal providing among others, as earlier discussed, for a
monthly salary of 1350 AED. On April 2, 2007, Modern
Metal issued to them appointment letters32 whereby the
respondents were hired for a longer three-year period and a
reduced salary, from 1,100 AED to 1,200 AED, among
other provisions. Then, on May 5, 2007, they were required
to sign new employment contracts33 reflecting the same
terms contained in their appointment letters, except that
14 of 23 this time, they were hired as ordinary laborer, no longer 7/28/14 1:17 PM
aluminum fabricator/installer. The respondents
complained with the agency about the contract
to sign new employment contracts33 reflecting the same

terms contained in their appointment letters, except that
this time, they were hired as ordinary laborer, no longer
aluminum fabricator/installer. 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, [a]s to their claim
for [underpayment] of salary, their original contract
mentioned 1350 AED monthly salary, which includes
allowance while in their Appointment Letters, they were
supposed to receive 1,300 AED. While there was [a]
difference of 50 AED monthly, the same could no longer be
claimed by virtue of their Affidavits of Quitclaims and
Desistance[.]34
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:
xxxx
_______________
31 Supra note 4.
32 Supra note 6.
33 Supra note 7.
34 Rollo, p. 342.
299
VOL. 680, SEPTEMBER 5, 2012 299

(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:
15 of 23 (i)To substitute or alter to the prejudice of the worker, 7/28/14 1:17 PM
following act:
(i)To substitute or alter to the prejudice of the worker,

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[.]
Second.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.
As earlier pointed out, the respondents were made to
work from 6:30 a.m. to 6:30 p.m., with a meal break of one
to one and a half hours, and their overtime work was
mostly not paid or underpaid. Their living quarters were
cramped as they shared them with 27 other workers. The
lodging
_______________
35 Migrant Workers and Overseas Filipinos Act of 1995.
36 Supra note 4.
300

house was in Sharjah, far from the jobsite in Dubai, leaving

them only three to four hours of sleep every workday
because of the long hours of travel to and from their place
of work, not to mention that there was no potable water in
the lodging house which was located in an area where the
air was polluted. The respondents complained with the
16 of 23 agency about the hardships that they were suffering, but 7/28/14 1:17 PM
the agency failed to act on their reports. Significantly, the
agency failed to refute their claim, anchored on the ordeal
that they went through while in Modern Metals employ.
the lodging house which was located in an area where the

air was polluted. The respondents complained with the
agency about the hardships that they were suffering, but
the agency failed to act on their reports. Significantly, the
agency failed to refute their claim, anchored on the ordeal
that they went through while in Modern Metals employ.
Third.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.37
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 salaryfrom 1350 AED a
month in the original contract to 1,000 AED to 1,200 AED
in the appointment letters, a difference of 150 AED to 250
AED (not just 50 AED as the agency claimed) or an
extended employment (from 2 to 3 years) 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.
We thus cannot accept the agencys insistence that the
respondents voluntarily resigned since they personally pre-
_______________
37 C.A. Azucena, Jr., The Labor Code (with Comments and Cases),
Volume II, Sixth Ed., 2007, p. 889, citing Philippine Japan Active Carbon
Corporation v. NLRC, 253 Phil. 149; 171 SCRA 164 (1989).
301
VOL. 680, SEPTEMBER 5, 2012 301

pared their resignation letters38 in their own handwriting,

citing family problems as their common ground for
resigning. As the CA did, we find the resignation letters
dubious,39 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
17 of 23 respondents had, at the same time, been confronted with 7/28/14 1:17 PM
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
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 resignationto
protest company policy.
We likewise find the affidavits40 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 purposeto 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 affidavit41
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.42
This confusion is an indication of the employers hurried
attempt to avoid liability to the respondents.
_______________
38 Supra note 8.
39 Supra note 2, at p. 118.
40 Rollo, pp. 268, 271, 272, 277, 280, 281, 285 and 289.
41 Id., at p. 277.
42 Id., at p. 285.
302

The respondents position is well-founded. The NLRC

itself had the same impression, which we find in order and
hereunder quote:
The acts of respondents of requiring the signing of new contracts

upon reaching the place of work and requiring employees to sign
18 of 23 quitclaims before they are paid and repatriated to the Philippines 7/28/14 1:17 PM
are all too familiar stories of despicable labor practices which our
employees are subjected to abroad. While it is true that
The acts of respondents of requiring the signing of new contracts

upon reaching the place of work and requiring employees to sign
quitclaims before they are paid and repatriated to the Philippines
are all too familiar stories of despicable labor practices which our
employees are subjected to abroad. While it is true that
quitclaims are generally given weight, however, given the facts of
the case, We are of the opinion that the complainants-appellants
executed the same under duress and fear that they will not be
allowed to return to the Philippines.43
Fourth.The compromise agreements (with quitclaim

and release)44 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
home45 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).
_______________
43 Id., at pp. 159-160.
44 Supra notes 19, 20 and 21.
45 Rollo, p. 307.
46 Id., at p. 299.
303
VOL. 680, SEPTEMBER 5, 2012 303

Under the heading Post-Deployment, the agency

agreed to pay Era47 and Alcantara48 P12,000.00 each,
purportedly in satisfaction of the respondents claims
arising from overseas employment, consisting of unpaid
19 of 23 salaries, salary differentials and other benefits, including 7/28/14 1:17 PM
money claims with the NLRC. The last document was
signed by (1) Anipan, (2) Lumanta, (3) Ladea, (4) Vinuya,
purportedly in satisfaction of the respondents claims

arising from overseas employment, consisting of unpaid
salaries, salary differentials and other benefits, including
money claims with the NLRC. The last document was
signed by (1) Anipan, (2) Lumanta, (3) Ladea, (4) Vinuya,
(5) Jonathan Nangolinola, and (6) Zosimo Gatchalian (the
last four signing on the left hand side of the document; the
last two were not among those who filed the illegal
dismissal complaint).49 The agency agreed to pay them a
total of P72,000.00. 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 P12,000.00 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. The compromise agreement,
apparently, was intended by the agency as a settlement
with the respondents and others with similar claims, which
explains the inclusion of the two (Nangolinola and
Gatchalian) who were not involved in the case with the
NLRC. Under the circumstances, we cannot see how the
compromise agreements can be considered to have fully
settled the respondents claims before the NLRCillegal
dismissal and monetary benefits arising from employment.
We thus find no reversible error nor grave abuse of
discretion in the rejection by the NLRC and the CA of said
agreements.
Fifth.The agencys objection to the application of the
Serrano ruling in the present case is of no moment. Its ar-
_______________
47 Id.
48 Id., at p. 300.
49 Id., at p. 298.
304

gument that the ruling cannot be given retroactive effect,

because it is curative and remedial, is untenable. It points
20 of 23 out, in this respect, that the respondents filed the 7/28/14 1:17 PM
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
gument 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,50 where the Court sustained the
retroactive application of the Serrano ruling which
declared unconstitutional the subject clause in Section 10,
paragraph 5 of R.A. 8042, limiting to three months the
payment of salaries to illegally dismissed Overseas Filipino
Workers.
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)
_______________
50 Supra note 26.
51 OFFICIAL GAZETTE, Vol. 106, No. 19, May 10, 2010, pp. 2729-2746.
52 Id., at p. 2734.
305
VOL. 680, SEPTEMBER 5, 2012 305

21 of 23 7/28/14 1:17 PM
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
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 rulingentitlement 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 nullify the
application of the Serrano ruling in the present case.
Whether or not R.A. 10022 is constitutional is not for us to
rule upon in the present case as this is an issue that is not
squarely before us. In other words, this is an issue that
awaits its proper day in court; in the meanwhile, we make
no pronouncement on it.
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.
_______________
53 CIVIL CODE OF THE PHILIPPINES, Article 4.
54 A.M. Tolentino, Civil Code of the Philippines, Commentaries and
Jurisprudence, 1990, Vol. 1, p. 28.
206

22 of 23 7/28/14 1:17 PM
SO ORDERED.

SO ORDERED.
Carpio (Chairperson), Peralta, ** Del Castillo and

Perez, JJ., concur.
Petition denied, judgment and resolution affirmed.
Notes.Well-established in jurisprudence that a person

may be convicted of both illegal recruitment and estafa.
(Lapasaran vs. People, 578 SCRA 658 [2009])
Constructive dismissal is defined as a quitting because
continued employment is rendered impossible,
unreasonable or unlikely, or when there is a demotion in
rank or a diminution of pay; Absent any evidence of bad
faith, it is within the exercise of respondents management
prerogative to transfer some of petitioners duties if in their
judgment, it would be more beneficial to the corporation.
(Velasco vs. Transit Automotive Supply, Inc., 621 SCRA 275
[2010])
o0o
23 of 23 7/28/14 1:17 PM

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SUPREME COURT REPORTS ANNOTATED VOLUME 680 http://www.central.com.ph/sfsreader/session/000001477b6512...

G.R. No. 197528.September 5, 2012.*

PERT/CPM MANPOWER EXPONENT CO., INC.,

Labor Law; Illegal Recruitment; Words and Phrases; Article

VOL. 680, SEPTEMBER 5, 2012 285

Pert/CPM Manpower Exponent Co., Inc. vs. Vinuya

and living conditions unmitigated or unresolved, the respondents

PETITION for review on certiorari of the decision and

1 Rollo, pp. 27-64; filed under Rule 45 of the Rules of Court.

286 SUPREME COURT REPORTS ANNOTATED

dated June 23, 2011 of the Court of Appeals (CA) in

out what their working and living conditions were in

VOL. 680, SEPTEMBER 5, 2012 287

They were required to work from 6:30 a.m. to 6:30 p.m.,

respondents, except Era, cited personal/family problems for

288 SUPREME COURT REPORTS ANNOTATED

resignation.8 Era mentioned the real reasonbecause I

VOL. 680, SEPTEMBER 5, 2012 289

quitclaims and releases they executed in Dubai, which

WHEREFORE, the Decision dated 30 April 2008 is hereby

290 SUPREME COURT REPORTS ANNOTATED

CO., INC., ROMEO NACINO, and MODERN METAL

Employee Underpaid Placement Salary for Exemplary

TOTAL: 6,850 AED US$3,200 64,800 AED P400,000.00

VOL. 680, SEPTEMBER 5, 2012 291

The agency moved for reconsideration, contending that

VOL. 680, SEPTEMBER 5, 2012 291

The agency moved for reconsideration, contending that

Employee Duration Departure Date Unexpired

292 SUPREME COURT REPORTS ANNOTATED

Ladea, NOEL 2 29 March 8 August 19 months

292 SUPREME COURT REPORTS ANNOTATED

Ladea, NOEL 2 29 March 8 August 19 months

Again, the agency moved for reconsideration, reiterating

VOL. 680, SEPTEMBER 5, 2012 293

own accord; on the contrary, it considered the resignation

ensure that the petitioners (employer[s]) are free from any

294 SUPREME COURT REPORTS ANNOTATED

The agency insists that it is not liable for illegal

that the letters were duly proven as they were written

VOL. 680, SEPTEMBER 5, 2012 295

The Respondents Position

working conditions in Dubai, they were left with no choice

296 SUPREME COURT REPORTS ANNOTATED

gal dismissal, breach of contract, underpayment of salaries

for when they were repatriated.

VOL. 680, SEPTEMBER 5, 2012 297

rest, the respondents ask the Court to also declare

be dismissed outright for raising only questions of fact,

298 SUPREME COURT REPORTS ANNOTATED

approved two-year employment contract,31 with Modern

to sign new employment contracts33 reflecting the same

Art.34.Prohibited Practices.It shall be unlawful for any

VOL. 680, SEPTEMBER 5, 2012 299

(i) To substitute or alter employment contracts

Further, Article 38 of the Labor Code, as amended by R.A.

(i)To substitute or alter to the prejudice of the worker,

Second.The agency and Modern Metal committed

300 SUPREME COURT REPORTS ANNOTATED