Interasia Outsource, Inc. v. Padua

THIRD DIVISION

[G.R. No. 229189. November 20, 2017.]

INTERASIA OUTSOURCE, INC., KANSANSHI MINING PLC AND LOURDES QUERUBIN-ROSALES, petitioners,vs. EDWIN S. PADUA, SHIERNAN G. DAKILA, JESUS M. JIMENEZ, JR., JAYSON C. ANGLO, OSCAR Q. ENDITA, RANDY A. DIMACULANGAN, MARIO M. VILLAMOR, SANNY A. CALALO, CESAR M. GLORIA AND REMIGIO 1 G. ESCOBAR, respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, Third Division, issued a Resolution dated November 20, 2017, which reads as follows:

"G.R. No. 229189 (Interasia Outsource, Inc., Kansanshi Mining PLC and Lourdes Querubin-Rosales v. Edwin S. Padua, Shiernan G. Dakila, Jesus M. Jimenez, Jr., Jayson C. Anglo, Oscar Q. Endita, Randy A. Dimaculangan, Mario M. Villamor, Sanny A. Calalo, Cesar M. Gloria and Remigio G.2 and January 4, 2017 Resolution 3 of the Court of Appeals (CA) in CA-G.R. SP No. 140748, which, in turn, reversed and set aside the February 4, 2015 Decision 4 and March 31, 2015 Resolution 5 of the National Labor Relations Commission (NLRC), and reinstated the September 30, 2014 Decision 6 of the Labor Arbiter (LA) in a complaint for illegal dismissal.

The Antecedents

Petitioner Interasia Outsource, Inc. (Interasia) is a domestic corporation licensed to recruit and deploy Filipino workers for overseas employment, while petitioner Lourdes Querubin-Rosales is its President. Kansanshi Mining, PLC (Kansashi), on the other hand, is a foreign corporation engaged in the business of mining, established under the laws of the Republic of Zambia, South Africa. [Herein collectively referred to as Petitioners].

In 2013, respondents Edwin S. Padua, Shiernan G. Dakila, Jesus M. Jimenez, Jr., Jayson C. Anglo, Oscar Q. Endita, Randy A. Dimaculangan, Mario M. Villamor, Sanny A. Calalo, Cesar M. Gloria (Gloria) and Remegio G. Escobar (collectively referred to as Respondents) were hired on various dates by Interasia, for and in behalf of Kansanshi, thus:

	Position	Monthly Salary
Edwin S. Padua 7	Coded Welder	US$1,560.00
Jesus M. Jimenez, Jr. 8	Boilermaker-Piping	US$1,120.60
Jayson C. Anglo 9	Boilermaker-Piping	US$1,120.60
Shiernan G. Dakila 10	Boilermaker-Piping	US$1,120.60
Mario M. Villamor 11	Boilermaker-Piping	US$1,120.60
Sanny A. Calalo 12	Boilermaker-Piping	US$1,120.60
Oscar Q. Endita 13	Pipe Fitter	US$1,300.00
Randy A. Dimaculangan 14	Boilermaker-Piping	US$1,120.60
Cesar M. Gloria 15	Pipe Fitter	US$1,300.00
Remegio G. Escobar 16	Coded Welder	US$1,560.00

Respondents' respective Service Contracts 17 provided for a period of four (4) to six (6) months employment and may be extended upon mutual agreement of the parties.

In June 2013, respondents were deployed to Zambia, South Africa to work in Kansanshi's 12 Million Tons Per Annum (MTPA) Project. After the expiration of their contracts, respondents were re-hired to undertake a similar work in the 12 MTPA Project until July 2014. 18 Meanwhile, on January 21, 2014, Gloria was promoted from Pipe Fitter to SMP Foreman with a corresponding increase in salary amounting to US$7.90/hour. 19

On March 4, 2014, respondents received separate Letters, 20 informing them that their extended employment contracts were pre-terminated. They were repatriated to the Philippines in March and April 2014.

As a result, respondents filed a complaint for illegal dismissal and prayed for the payment of their salaries covering the unexpired portion of their employment contracts, as well as moral and exemplary damages, and attorney's fees. 21

Petitioners moved for the dismissal of the complaint. They asserted that respondents' termination was valid as the phase of the project to which they were assigned was substantially completed. Petitioners explained that respondents were employed as project employees tasked to work as part of the piping crew of Kansanshi's 12 MTPA Project; that respondents were aware that their employment was coterminus with the completion of the project to which they were assigned and in fact, voluntarily executed a Release, Waiver and Quitclaim 22 upon their return to the Philippines. 23

The Ruling of the Labor Arbiter

On September 30, 2014, the LA rendered judgment 24 in favor of the respondents. The LA ruled that the untimely termination of the respondents' service contract was illegal as they enjoy security of tenure during the duration of the contract and that their dismissal was devoid of any just or authorized cause. The LA did not give credence to the release, waiver and quitclaim signed by the respondents because they were not sworn to before a notary public and that the said release, waiver and quitclaim will not preclude them from pursuing a valid claim. Accordingly, petitioners were directed to pay, solidarily and jointly, the respondents their salaries corresponding to the unexpired portion of the contract.

The fallo of the Decision reads:

WHEREFORE, a decision is hereby rendered ordering respondents Interasia Outsource, Inc., Kansanshi Mining PLC and Lourdes Q. Rosales to jointly pay complainants the amount equivalent to the unexpired portion of their contracts, in Philippine peso at the time of payment, computed at:

a. EDWIN S. PADUA — US$1,560.00 x 3 = US$4,680.00

b. SHIERNAN G. DAKILA — US$1,120.00 x 3 = US$3,360.00

c. JESUS M. JIMENEZ, JR. — US$1,120.00 x 3 = US$3,360.00

d. JAYSON C. ANGLO — US$1,120.00 x 3 = US$3,360.00

e. OSCAR Q. ENDITA — US$1,300.00 x 3 = US$3,900.00

f. RANDY A. DIMACULANGAN — US$1,120.00 x 3 = US$3,360.00

g. MARIO M. VILLAMOR — US$1,120.00 x 3 = US$3,360.00

h. SANNY A. CALALO — US$1,120.00 x 3 = US$3,360.00

i. CESAR M. GLORIA — US$2,054.00 x 3 = US$6,162.0025

j. REMEGIO G. ESCOBAR, JR. — US$1,560.00 x 3 = US$4,680.00

Complainants are also awarded attorney's fees equivalent to 10% of the monetary award. Other claims are denied.

SO ORDERED. 26

The Ruling of the NLRC

On appeal, the NLRC, in a Decision, 27 reversed the decision of the LA and dismissed the complaint for lack of merit. The NLRC found that the respondents were project employees and the termination of their contracts based on the completion of the project to which they were assigned was valid and recognized by jurisprudence. The NLRC opined that it would be unfair for the employer to continuously pay the salaries of the respondents considering that the project had already been completed.

The Ruling of the Court of Appeals

Respondents assailed the NLRC decision via a petition for certiorari under Rule 65 of the Rules of Court before the CA. In a Decision, 28 the CA reversed and set aside the decision of the NLRC and reinstated the September 30, 2014 decision of the LA. The CA ruled that the respondents were not project employees but fixed-term employees as specified in their service contract agreements. The CA declared that the terms of the service contracts explicitly provided that respondents were employed for a fixed duration and not for a specific project only. It further declared that the determining factor of the employment contract is not the nature of the work performed by the employee but the stipulated period of employment agreed upon by the parties.

Petitioners filed a motion for reconsideration but it was denied in a Resolution, 29 dated January 4, 2017.

Hence, this petition anchored on the following:

Issues:

I.

WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE RESPONDENTS ARE FIXED-TERM EMPLOYEES AND NOT PROJECT EMPLOYEES —

II.

WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT RESPONDENTS ARE ENTITLED TO THE AWARD OF ATTORNEY'S FEES —

III.

WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN REVERSING THE DECISION OF THE LABOR ARBITER —

IV.

WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT PETITIONER [[QUERUBIN-ROSALES] SHOULD BE HELD PERSONALLY LIABLE WITH PETITIONERS INTERASIA AND KANSANSHI — 30

The fundamental issue before the Court demands the determination of the employment status of the respondents, that is, whether they are project employees or whether respondents are employed under a fixed-term employment contract.

The Petition

Petitioners insist that respondents are project employees and not fixed-term employees for they were assigned to carry out a specific project. Petitioners allege that respondents were aware of the status of their employment, in fact, they were briefed on the duration and nature of their employment during their pre-departure and re-departure orientation, and that the respondents' individual service contracts submitted to the Philippine Overseas Employment Authority (POEA) specifically stated that they were hired as pipe fitters, coded welders and boiler makers for the 12 MTPA.

Petitioners reiterate that the dismissal of the respondents is valid as the phase for which the respondents were employed was already completed and the 12 MTPA Project had ended. To substantiate their claim, petitioners cited the case of Archbuild Masters and Construction, Inc. v. NLRC, 31 which allowed the employer to reduce its work force into a number suitable for the remaining work to be done upon completion or approximate accomplishment of the project.

Petitioners contend that in determining the nature of one's employment, courts and labor tribunals should not simply rely on the wordings of the employment contract but should consider other circumstances surrounding the worker's employment. Petitioners assert that even if the individual service contracts of the respondents provided for the exact duration of the project, the same would not negate their project employment status for they were fully aware that they were recruited and deployed in connection with a specific construction project, which was the 12 MTPA Project and should not expect to be employed continuously even after the completion of the project.

Petitioners further aver that there was no basis in awarding attorney's fees to the respondents even if the respondents were compelled to litigate and incur expenses for there was no showing of bad faith on their part.

Comment of the Respondents

In their Comment, 32 respondents counter that petitioners have no valid and legal ground to terminate their fixed-term employment and to cause their immediate repatriation to the Philippines. The respondents assert that they could not be considered project employees as their individual service contracts and extension contracts clearly stated that their employment was predetermined until July 2014, and that there was nothing in the contract that would indicate that their deployment were coterminus with any project or undertaking of Kansanshi.

Ruling of the Court

Respondents are Fixed-Term Employees

A project employee is one whose employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. 33 The test for distinguishing a project employee is whether or not he has been assigned to carry out a specific project or undertaking, with the duration and scope of his engagement specified at the time his service is contracted. 34

On the other hand, an employee is said to be under a fixed-term employment when he is hired under a contract which specifies that the employment will last only for a definite period. 35 To be valid, the following conditions must be observed: (a) The fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress, or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent; or (b) It satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms with no moral dominance exercised by the former on the latter. 36

The separate service contracts of the respondents, which are similarly worded except for the respondents' positions and salaries, provide among others:

1. Site of Employment: Zambia

2. Contract Duration: Four (4) to Six (6) months commencing from the worker's departure from the point of origin to the site of work. May be extended upon mutual agreement (Subject to passing the medical test and being granted a visa).

3. Employee's Position: x x x

4. Hourly salary: x x x

5. Regular Working Hours: Working time for both artisans and supervision shall be a [sic] 65 hours per week.

6. Overtime Pay: x x x

7. Vacation Leave: x x x

8. Sick Leave: x x x

9. Free transportation to the site of work and in the following cases, free return transportation to the point of origin:

xxx xxx xxx

10. Free food and suitable housing.

11. Free emergency medical and dental services and facilities including medicine.

12. Compulsory Insurance Coverage for Agency Hired Filipino Workers under Philippine Republic Act No. 10022 without cost to the worker. This will cover Accidental Death, Natural Death, Compassionate Visit, Medical Evacuation, Medical repatriation and repatriation of Mortal Remains. Below are their benefits with their corresponding limits as stated in RA 10022.

xxx xxx xxx 37

Respondents' individual service contracts were extended until July 2014 "under the same terms and conditions of the previous contract" as set forth in the written notices. 38

A reading of the individual service contract of the respondents would reveal that the contracts entered into by the parties are a fixed-term employment contract. Respondents were hired for a definite period whose employments were to end only at the expiration of the period stipulated in the contracts. 39 In fact, both the petitioners and respondents did not dispute the existence of these employment contracts and that the contracts have been extended until July 2014 after the expiration of the original contracts "under the same terms and conditions of the previous contract." 40 There was no mention whatsoever in the extended service contracts that the respondents have been re-employed for a specific project or undertaking or for a shorter period. It bears to stress that petitioners' own evidence belies its claim that respondents were hired specifically for the 12 MPTA Project. Annexes "EE" 41 and "EE-1" 42 of respondents' Position Paper filed before the LA categorically stated that "Respondents are being recruited for positions in Solwezi, Zambia." Being a valid contract between the parties, the provisions thereof, specifically with respect to the period of employment, have the force of law between them. 43

The Court finds no reason to deviate from the finding of the Court of Appeals regarding the nature of respondents' employment. Notwithstanding the insistence of the petitioners that respondents were project employees, the facts show that respondents were employed for a definite period governed by the service contracts they signed. As a party to this contract, respondents enjoy security of tenure for the period of time that their contracts are in effect. 44 In the case of Sameer Overseas Placement Agency, Inc. v. Cabiles, 45 the Court enunciated that:

Overseas workers regardless of their classifications are entitled to security of tenure, at least for the period agreed upon in their contracts. This means that they cannot be dismissed before the end of their contract terms without due process. If they were illegally dismissed, the workers' right to security of tenure is violated. 46

Moreover, the service contract prepared by the petitioners expressly enumerated the instances when the contract may be terminated, thus:

15. Termination:

a. Termination by Contractor: The contractor may terminate this contract on the following just causes: serious misconduct, willful disobedience of contractor's lawful orders, habitual neglect of duties, absenteeism, insubordination, revealing secrets of the establishment, engaging in trade union and/or terms of this Agreement. In these cases, the workers shall shoulder the repatriation expenses.

b. Termination by Worker: The worker may terminate this Contract without serving any notice to the contractor for any of the following just causes: serious insult by the contractor or its representative, inhuman and unbearable treatment accorded the worker by the contractor or its representative, commission of a crime/offense by the contractor or its representative. In these cases, the contractor shall pay the repatriation expenses back to the Philippines.

c. Termination due to illness: Either party may terminate this service contract on the ground of illness, disease or injury by the worker. The contractor shall shoulder the cost of repatriation. 47

Nothing from the above-quoted provisions would justify the termination of respondents' employment before the expiration of their contracts.

As stated, overseas workers enjoy security of tenure for the duration of the period agreed upon in their contracts. Essentially, they can only be terminated for a just or authorized cause and after compliance with procedural due process requirements. 48 The burden of proving the just cause of dismissing an employee rests on the employer, and his failure to do so would result in a finding that the dismissal is unjustified. 49 Considering that respondents were terminated prior to the expiration of the period of their employment without just cause, their termination was illegal.

Under Section 7 of R.A. No. 10022, 50 a worker dismissed from overseas employment without just, valid or authorized cause is entitled to the full reimbursement of his/her placement fee with interest of twelve percent (12%) per annum, plus salaries for the unexpired portion of their employment contract or for three (3) months for every year of the unexpired term, whichever is less. It also provides that the foreign employer and the local employment agency are jointly and severally liable for money claims including claims arising out of an employer-employee relationship and/or damages.

With respect to attorney's fees, the Court rules that respondents are entitled to attorney's fees in the amount of ten percent (10%) of their total monetary award, having been forced to litigate in order to seek redress for their grievances, as provided in Article 111 of the Labor Code, as amended, and existing jurisprudence. 51 In the case of Rutaquio, et al. v. NLRC, et al., 52 the Court held that in actions for recovery of wages or where an employee was forced to litigate and, thus, incur expenses to protect his rights and interest, the award of attorney's fees is legally and morally justifiable. 53

Validity of Release, Waiver and Quitclaim

Petitioners cannot take refuge in the Release, Waiver and Quitclaim purportedly signed by the respondents. Jurisprudence is replete with pronouncements that the deed of release, waiver and quitclaim cannot bar employees from demanding benefits to which they are legally entitled or from contesting the legality of their dismissal. 54 To be valid, a deed of release, waiver and quitclaim must observe the following requirements: (1) that there was no fraud or deceit on the part of any of the parties; (2) that the consideration for the quitclaim is credible and reasonable; and (3) that the contract is not contrary to law, public order, public policy, morals or good customs, or prejudicial to a third person with a right recognized by law. 55 The burden of proving that the quitclaim or waiver was voluntarily entered into rests on the employer. 56

In the present case, petitioners failed to discharge this burden. The mere fact that respondents were not physically coerced or intimidated does not necessarily imply that they freely and voluntarily consented to the terms of the final settlement. 57 Besides, a perusal of the release, waiver and quitclaim 58 executed by the parties would show that the quitclaim was not supported by valuable consideration. The release, waiver and quitclaim failed to indicate the amounts received by the respondents. Other than their bare assertion, no evidence was presented to show that respondents actually received a consideration for the settlement.

WHEREFORE, the petition is DENIED. The June 29, 2016 Decision and January 4, 2017 Resolution of the Court of Appeals (CA) in CA-G.R. SP No. 140748, which reversed and set aside the February 4, 2015 Decision and March 31, 2015 Resolution of the National Labor Relations Commission (NLRC) and reinstated the September 30, 2014 Decision 59 of the Labor Arbiter, are AFFIRMED.

SO ORDERED."

Very truly yours,

(SGD.) WILFREDO V. LAPITANDivision Clerk of Court

 

Footnotes

1. Referred to as Remegio J. Escobar, Jr. in CA Decision, Rollo, pp. 42-52, CA Resolution, Rollo, pp. 70-72 and Service Contract, Rollo, 186-187.

2. Penned by Associate Justice Ramon A. Cruz, with Associate Justices Marlene Gonzales-Sison and Henri Jean Paul B. Inting, concurring; Rollo, pp. 42-51.

3. Penned by Associate Justice Ramon A. Cruz, with Associate Justices Marlene Gonzales-Sison and Henri Jean Paul B. Inting, concurring, Id., pp. 70-72.

4.Id., pp. 368-375.

5.Id., pp. 394-395.

6.Id., pp. 306-310.

7. Service Contract, Id., pp. 168-169.

8. Service Contract, Id., pp. 170-171.

9. Service Contract, Id., pp. 172-173.

10. Service Contract, Id., pp. 174-175.

11. Service Contract, Id., pp. 176-177.

12. Service Contract, Id., pp. 178-179.

13. Service Contract, Id., pp. 180-181.

14. Service Contract, Id., pp. 182-183.

15. Service Contract, Id., pp. 184-185.

16. Service Contract, Id., pp. 186-187.

17.Id., pp. 168-187.

18.Id., pp. 188-198.

19.Id., p. 198.

20.Id., pp. 199-207.

21. Position Papers for the Complainants, Id., pp. 158-165.

22.Id., pp. 270-279.

23. Position Paper, Id., pp. 208-214.

24.Id., pp. 306-310.

25. Promotion and Salary Adjustment, Id., p. 198.

26.Id., pp. 309-310.

27.Id., pp. 368-374.

28.Id., pp. 42-51.

29.Id., pp. 70-72.

30.Id., pp. 10-11.

31. G.R. No. 108142, December 26, 1995.

32.Rollo, pp. 482-490.

33.Filipinas Pre-Fabricated Building Systems, Inc., et al. v. Puente, 493 Phil. 923, 931-932 (2005).

34.William Uy Construction Corp. v. Trinidad, 629 Phil. 185, 189 (2010).

35.OKS Designtech, Inc. v. Caccam, 765 Phil. 946, 957 (2015).

36.Pure Foods Corporation vs. National Labor Relations Commission, et al., 347 Phil. 434, 443 (1997).

37.Rollo, pp. 168-187.

38.Id., pp. 188-197.

39.Asia World Recruitment, Inc. v. National Labor Relations Commission, et al., 371 Phil. 745, 755 (1999).

40.Rollo, pp. 188-197.

41.Id., p. 259.

42.Id., p. 260.

43.D. M. Consunji, Inc. v. National Labor Relations Commission, et al., 401 Phil. 635, 642-643 (2000).

44.Asia World Recruitment, Inc. v. National Labor Relations Commission, et al., 371 Phil. 745, 756 (1999).

45. 740 Phil. 403 (2014).

46.Id., at 437.

47.Rollo, pp. 168-187.

48.Sameer Overseas Placement Agency, Inc. v. Cabiles, 740 Phil. 403, 437 (2014).

49.Slolt-Nielsen Marine Services, Inc. v. National Labor Relations Commission, et al., 360 Phil. 881, 889 (1998).

50. 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.Philippine Spring Water Resources, Inc. v. Court of Appeals, et al., 736 Phil. 305, 323-324 (2014).

52. 375 Phil. 405 (1999).

53.Id., at 418.

54.Soriano, Jr. v. National Labor Relations Commission, et al., 550 Phil. 111, 131 (2007).

55.Interorient Maritime Enterprises, Inc., et al. v. Remo, 636 Phil. 240, 251 (2010).

56.Universal Staffing Services, Inc. v. National Labor Relations Commission, et al., 581 Phil. 199, 210 (2008).

57.Ibid.

58.Rollo, pp. 270-279.

59.Id., pp. 306-310.