FIRST DIVISION
[G.R. No. 229918. January 17, 2023.]
FILHIGH GNS, INC., 1petitioner, vs.DENNIS O. VALDEZ, respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, First Division, issued a Resolution datedJanuary 17, 2023which reads as follows: HTcADC
"G.R. No. 229918 (FilHigh GNS, Inc. v. Dennis O. Valdez). — This Petition for Review on Certiorari2 (Petition) seeks to reverse and set aside the Decision 3 dated 26 August 2016 and the Resolution 4 dated 27 January 2017 of the Court of Appeals (CA) in CA-G.R. SP No. 144980. The CA reversed and set aside the Decisions dated 27 May 2014 5 and 28 January 2016 6 of the National Labor Relations Commission (NLRC) in OFW (L) 05-07930-13 (NLRC LAC No. 03-000273-14).
Antecedents
On July 25, 2012, petitioner FilHigh GNS, Inc. (petitioner) contracted Dennis O. Valdez (respondent) for its foreign principal, Industrial Technology Services, Co., Ltd., as material controller in its Skikda Refinery Rehabilitation & Adaptation Project (project/Skikda project) in Algeria for one year, with a basic monthly salary of USD1,500.00. 7
Sometime in January 2013, respondent was informed by petitioner and its foreign principal that the project was already completed. Consequently, he was advised to communicate with his immediate superior for demobilization. Thus, on 24 January 2013, he was repatriated to the country. As the duration of his employment was shortened to six months, respondent filed a Complaint 8 for underpayment of overtime pay, breach of contract, refund of placement fee, and other money claims. 9
Petitioner argued that, initially, respondent signed a one-year employment contract 10 for a basic monthly salary of USD1,000.00. Under the said contract, respondent's working hours would be "eight hours regular/basic hours and two hours of guaranteed overtime." 11 After the contract had been signed, respondent threatened to back out after realizing that his monthly salary covered 10 working hours with the two hours extra not covered as overtime. In order not to further delay his departure, petitioner and respondent agreed that the latter would be paid USD1,500.00 as basic salary to cover the whole 10 working hours. Since returning the contract to the Philippine Overseas Employment Administration (POEA) would entail further delay, the new agreement was made by the simple expedient of rewriting the first page of respondent's employment contract. 12
Ruling of the LA
In a Decision 13 dated 30 January 2014, the Labor Arbiter partially granted the complaint. The LA found that since the duration of the contract was for 12 months, starting from 26 July 2012 up to 26 July 2013, respondent's repatriation in January 2013 was a breach of the express terms of the contract. The claim for overtime pay was denied, as respondent failed to adduce evidence that he rendered overtime work beyond 10 hours. The LA likewise declared that respondent's basic monthly salary was USD1,500.00 to cover 10 working hours. 14 Thus —
WHEREFORE, premises considered, judgment is hereby rendered ordering respondents Filhigh-GNS, Inc., Industrial Technology Services Co. Ltd.[,] and Henry N. Jan to pay complainant jointly and severally the sum of US$9,045.00 or its peso equivalent representing the unexpired portion of the contract.
All other claims are DISMISSED for want of factual basis.
SO ORDERED.15
Aggrieved, petitioner filed an appeal 16 with the NLRC.
Ruling of the NLRC
In its Decision dated 27 May 2014, the NLRC partially granted petitioner's appeal. It ruled that respondent was not entitled to the unexpired portion of an employment contract since the same should be paid only in cases of termination without justified or authorized causes, and not premised on money claim nor breach of contract. The NLRC likewise allowed the grant of separation pay in the nature of financial assistance in view of the company's willingness to pay the same. 17 The dispositive portion of the NLRC Decision follows —
IN VIEW OF THE FOREGOING PREMISES, the assailed decision is REVERSED and SET ASIDE and a new decision is hereby entered DISMISSING the complaint but respondents are hereby ordered to award the complainant separation pay equivalent to one (1) month salary.
SO ORDERED. 18
Dissatisfied with the findings of the NLRC, respondent filed a Motion for Reconsideration. On 21 November 2014, the NLRC rendered a Decision 19 affirming with modification the Decision dated 27 May 2014 by awarding overtime pay to respondent in the amount of USD4,460.20. Consequently, petitioner filed a motion for reconsideration. 20 Before the said motion could be resolved, the NLRC rendered its third Decision 21 dated 27 January 2015 modifying its Decision dated 21 November 2014 to reflect the correct computation of unpaid overtime pay in the amount of USD3,201.14. On 15 April 2015, the NLRC issued an Entry of Judgment 22 of its Decision dated 21 November 2014 which was modified in the Decision dated 27 January 2015.
Finally, on 28 January 2016, the NLRC rendered its fourth Decision, 23 the dispositive portion of which reads —
WHEREFORE, premises considered, the Entry of Judgment dated April 15, 2015 is hereby LIFTED. Respondents' Motion for Reconsideration is GRANTED. Our Decisions dated November 21, 2014 and January 27, 2015 are hereby VACATED. Our Decision dated May 27, 2014 is REINSTATED [in toto].
SO ORDERED. 24
The NLRC pointed out that considering that the company's motion for reconsideration of the Decision dated 21 November 2014 was still unresolved when the entry of judgment was issued, the said Decision had yet to become final and executory. It was further ruled that since the company did not include the matter of overtime pay in its partial appeal, the NLRC should have limited itself to reviewing and deciding only the issue of propriety of the award representing the unexpired portion of the employment contract. 25
Respondent, thereafter, sought recourse to the CA by filing a petition for certiorari. 26
Ruling of the CA
In its Decision 27 dated 26 August 2016, the CA granted the petition, to wit —
WHEREFORE, premises considered, the Petition for Certiorari is hereby GRANTED. The assailed Decisions dated May 27, 2014 and January 28, 2016 of the NLRC Second Division in OFW (L) 05-07930-13 [NLRC LAC No. 03-000273-14], are hereby REVERSED and SET ASIDE. The January 30, 2014 Decision of the Labor Arbiter is hereby REINSTATED.
SO ORDERED.28
The CA held that petitioner breached the employment contract. There being no justified, valid or authorized cause for the pre-termination of the contract, such breach of contract is tantamount to a case of illegal dismissal. 29
Petitioner subsequently moved for reconsideration, but the CA denied the motion in its Resolution 30 dated 27 January 2017. Hence, the filing of the instant petition before this Court.
Issues
The issues in this case are the following:
a. Whether or not the CA correctly ruled in finding that respondent was illegally dismissed; and
b. Whether or not the CA correctly awarded respondent his salaries for the unexpired portion of his employment contract.
Ruling of the Court
The Petition is without merit.
Only questions of law may be
It is well-established that the Court is not a trier of facts. As a rule, the function of the Court in a petition for review on certiorari under Rule 45 of the Rules of Court is limited to questions of law. However, this rule admits of exceptions. 31 The present case is an exception to the rule. There is a need for this Court to reevaluate and reexamine the evidence on record considering the divergence of factual findings between the LA and the CA, on one hand, and the NLRC, upon the other hand. Whereas both the LA and the CA ruled that respondent is entitled to his salaries for the unexpired portion of his contract, the CA found otherwise.
For this reason, We took cognizance of the petition, scrutinized the facts and evidence on record, and recalibrated them Ourselves.
A contract is the law between the
A contract freely entered into is considered the law between the parties who can establish stipulations, clauses, terms and conditions as they may deem convenient, as long as they are not contrary to law, morals, good customs, public order or public policy. 32 It is provided in the contract of employment entered into between the company and respondent that its termination is allowed, thus —
15. Termination:
a. Termination by Employer: The employer may terminate this Contract on the following just causes: serious/minor misconduct, willful disobedience of employer's lawful orders, habitual neglect of duties, absenteeism, insubordination, revealing secrets of establishment, engaging in trade union activities, when employee violates customs, traditions, and laws of Algeria and/or terms of this Agreement. The employee shall shoulder the repatriation expenses.
xxx xxx xxx
c. Termination due to Illness: Either party may terminate the contract on the ground of illness, diseases or injury suffered by the employee. The employer shall shoulder the cost of repatriation. 33
It was likewise stated in the contract that its duration was for one year commencing from respondent's departure from the point of origin to the site of employment. 34 Halfway through the contract respondent was advised to write to his immediate superior for demobilization since the project had already been completed. Simply put, the contract of employment was pre-terminated.
There is no provision in the contract that allows the company to terminate the contract when the project is finished ahead of schedule. Certainly, it is not among the "just causes" when the employer may terminate the contract. In the absence of any stipulation, the company cannot pre-terminate an employment contract with a fixed period unilaterally. By pre-terminating the contract on an invalid ground or without just cause, the company had clearly committed a breach of contract. Such breach is tantamount to an illegal dismissal. 35
The company, however, puts the blame on the POEA for the non-inclusion of a stipulation for pre-terminating the contract. We do not see why considering its admission that the POEA's only function is to verify and approve the contracts presented before it. 36 The company, had it a mind to, could have included a stipulation on pre-terminating the contract since it was the one which prepared the contract. Its failure to do so can only mean that it never intended to have the contract pre-terminated by reason of project completion.
Early completion of a project is
Petitioner company further contends that respondent was retrenched since the early completion of the project constituted a cessation of business operations under Article 298 of the Labor Code.
Article 298 of the Labor Code provides:
ARTICLE 298. [283] Closure of Establishment and Reduction of Personnel. — The employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. X x x In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year.
Closure or cessation of business operation or undertaking is the complete or partial cessation of the operations and/or shut-down of the establishment of the employer. It is carried out to either stave off the financial ruin or promote the business interest of the employer. Closure of business as an authorized cause for termination of employment is governed by Article 298 of the Labor Code. 37 We do not find the early completion of the Skikda project akin to a cessation of business operation because it is a mere project run by the foreign principal. We quote with approval the following observation of the CA:
x x x In a plethora of cases, this ground for termination is construed as applying on the business operations of the employer itself. It does not apply to a single project or undertaking. Here, the completion of the Skikda project may not be considered as an authorized cause because it does not involve any partial or complete stoppage in the business of private respondents. At most, what transpired is a mere completion of an isolated transaction which translates to a consummated contract of work. 38
It would be a different matter altogether if it was the foreign principal itself which had ceased its business operation either partially or completely. However, there was no such allegation. To stress, the early completion of the project is not considered as a cessation of operations of the company's foreign principal. There is, thus, no authorized cause for the termination of respondent's employment.
Section 7 of Republic Act No. 10022 39 provides:
SECTION 7. Section 10 of Republic Act No. 8042, as amended, is hereby amended to read as follows:
SEC. 10. Money Claims. — x x x
xxx xxx xxx
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 worker's 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.
There being no showing of any just, valid or authorized cause for respondent's dismissal, the law considers the matter a case of illegal dismissal. 40 For having been illegally dismissed from employment, respondent is entitled to his salaries corresponding to the unexpired portion of his employment contract 41 in accordance with the aforequoted provision.
Anent the company's contention that the LA erred when it considered the amount of USD1,500.00 as respondent's basic salary, it is worth reiterating that the employment contract freely entered into between the former and respondent has the force of law between them. 42 It is stated clearly in the contract that USD1,500.00 is respondent's basic salary. 43 Hence, the LA did not err in using the said amount as its basis in the computation of respondent's salaries for the entire unexpired period of his contract.
As an aside, petitioner argues that Art. 298 of the Labor Code applies also to single projects or undertaking. It cites the case of International Management Services v. Logarta44 where an employee, Roel P. Logarta (Logarta), was allegedly involved in a single project. In the said case, Logarta worked for Petrocon Arabia Limited (Petrocon) as Piping Designer for works on the projects of Saudi Arabian Oil Company (Saudi Aramco). Logarta's employment was shortened when Petrocon reduced its personnel, as its work allocation from Saudi Aramco was reduced. However, We do not find the facts of the Logarta case similar to the instant case, as it was not shown that Logarta worked on a single project or undertaking. In reiteration, Art. 298 of the Labor Code applies only to the whole business operation of the employer and not to single projects or undertakings.
Legal interest should be imposed
In accordance with Nacar v. Gallery Frames, 45 the monetary award due to respondent shall earn legal interest at the rate of six percent (6%) per annum, to be computed from finality of this ruling until full payment.
WHEREFORE, premises considered, the instant Petition is hereby DENIED. Accordingly, the Decision dated 26 August 2016 and Resolution dated 27 January 2017 of the Court of Appeals in CA-G.R. SP No. 144980 are AFFIRMEDwith MODIFICATION in that the monetary judgment due to respondent Dennis O. Valdez shall earn legal interest at the rate of six percent (6%) per annum from finality of this Resolution until fully satisfied.
SO ORDERED."
By authority of the Court:
(SGD.) LIBRADA C. BUENADivision Clerk of Court
By:
MARIA TERESA B. SIBULODeputy Division Clerk of Court
Footnotes
1. Fil-High GNS, Inc., in some parts of the record.
2.Rollo, pp. 7-22.
3.Id. at 24-37; penned by Associate Justice Remedios A. Salazar-Fernando and concurred in by Associate Justices Priscilla J. Baltazar-Padilla (now a retired member of this Court) and Socorro B. Inting.
4.Id. at 39-40; penned by Associate Justice Remedios A. Salazar-Fernando and concurred in by Associate Justices Priscilla J. Baltazar-Padilla (now a retired member of this Court) and Socorro B. Inting.
5. CA rollo, pp. 13-22; penned by Presiding Commissioner Raul T. Aquino and concurred in by Commissioners Teresita D. Castillon-Lora and Erlinda T. Agus.
6.Id. at 23-28; penned by Presiding Commissioner Gregorio O. Bilog, III and concurred in by Commissioners Erlinda T. Agus and Alan A. Ventura.
7.Id. at 29.
8.Id. at 32-33.
9.Rollo, p. 26.
10. CA rollo, pp. 70-72.
11.Id. at 70.
12.Rollo, pp. 26-27.
13. CA rollo; pp. 84-89; penned by Labor Arbiter Marita V. Padolina.
14.Id. at 87-88.
15.Id. at 89.
16.Id. at 90-99.
17.Id. at 19-21.
18.Id. at 21.
19.Id. at 111-115.
20.Id. at 119-122.
21.Id. at 123-125.
22.Id. at 126.
23.Id. at 23-28.
24.Id. at 27.
25.Id. at 26-27.
26.Id. at 3; unnumbered page after p. 12.
27.Rollo, pp. 24-37.
28.Id. at 36-37.
29.Id. at 33.
30.Id. at 39-40.
31.Myra M. Moral v. Momentum Properties Management Corporation, G.R. No. 226240, 06 March 2019.
32.Cuartocruz v. Active Works, Inc., G.R. No. 209072, 24 July 2019.
33. CA rollo, pp. 71-72.
34.Id. at 70.
35. See Aldovino v. Gold and Green Manpower Management and Development Services, Inc., G.R. No. 200811, 19 June 2019.
36. See Rollo, p. 13.
37.Manarpiis v. Texan Philippines, Inc., 752 Phil. 305, 319 (2015).
38.Rollo, p. 35.
39. Entitled "AN ACT AMENDING REPUBLIC ACT NO. 8042, OTHERWISE KNOWN AS THE MIGRANT WORKERS AND OVERSEAS FILIPINO ACT OF 1995." Approved on 08 March 2010.
40. See Cuartocruz v. Active Works, Inc., G.R. No. 209072, 24 July 2019.
41.Jacob v. First Step Manpower Int'l. Services, Inc., G.R. No. 229984, 08 July 2020.
42. See Roxas v. De Zuzuarregui, Jr., 516 Phil. 605, 622-623 (2006).
43. See Rollo, p. 27.
44. 686 Phil. 21 (2012).
45. 716 Phil. 267, 283 (2013).