Forever Manpower Services Agency, Inc. vs. Court of Appeals

A compromise agreement voluntarily executed by the parties with the assistance of the SEADO is final and binding under Article 233 of the Labor Code, and the NLRC and courts may not assume jurisdiction over the settled issues except in case of non-compliance with the settlement or when there is prima facie evidence that the settlement was obtained through fraud, misrepresentation, or coercion. When the compromise is reached with government assistance through the SEADO, the burden shifts to the party assailing the settlement to prove fraud, misrepresentation, coercion, or non-compliance, and the reasonableness of the consideration is measured against the employee's claims at the time of the compromise, not against the amount subsequently awarded by a labor arbiter.

Forever Manpower Services Agency, Inc. is a recruitment agency that, on behalf of its foreign principal Nesmat Aljabalin Recruitment Office, deployed Larelyn Paulino Milagroso as a domestic worker to employer Issa Ibrahim Al Mutairi in the Kingdom of Saudi Arabia under a two-year Standard Employment Contract with a monthly salary of USD 400. The legal framework governing the dispute includes Article 233 (formerly Article 227) of the Labor Code, which governs the final and binding effect of compromise agreements reached with the assistance of the Bureau of Labor Relations (now the NCMB) or the appropriate DOLE regional office, and DOLE Department Order No. 151, S. 2016, which operationalizes the Single Entry Approach (SEnA) conciliation-mediation process through the Single Entry Approach Desk (SEADO). Ann Imelda Fidelino was the President of Forever Manpower and was impleaded in her personal capacity.

On October 10, 2017, Forever Manpower Services Agency, Inc., acting on behalf of its foreign principal Nesmat Aljabalin Recruitment Office, executed a Standard Employment Contract with Larelyn Paulino Milagroso for her employment as a domestic worker by Issa Ibrahim Al Mutairi in the Kingdom of Saudi Arabia. The contract was for a term of two years with a monthly salary of USD 400. Milagroso was deployed on February 8, 2018.

At the end of February and March 2018, Milagroso received only USD 300 as her monthly salary instead of the USD 400 stipulated in the contract. Beginning May 2018, Al Mutairi ceased paying her salary altogether, supposedly due to business setbacks. When Milagroso inquired about the unpaid amounts, Al Mutairi promised to settle them by the end of the contract on February 9, 2020. On July 10, 2019, however, Milagroso was suddenly brought to the KSA airport and given a one-way ticket to the Philippines. Upon her arrival, she received PHP 20,000 from the Overseas Workers Welfare Administration (OWWA) under the "Balik Pinas" assistance program.

Milagroso immediately sought OWWA's assistance for her unpaid salary claims, and her request was docketed as SEAD-OWWA-OLS-HO-647-07-19 and referred to conciliation-mediation before the Single Entry Approach Desk (SEADO). On July 25, 2019, both parties appeared before SEADO Ma. Victoria G. Demingoy. According to the Minutes of the Conciliation Conference, Forever Manpower offered PHP 40,000, while Milagroso stated she would think it over; the SEADO accordingly set another conference for August 7, 2019. On the same day, however, Milagroso executed a Quitclaim, an Affidavit of Quitclaim, and an Acknowledgment (collectively, the Compromise Documents), releasing Forever Manpower, its officers, its foreign principal, and her employer from all money claims in connection with her employment contract in exchange for PHP 40,000. The Quitclaim was notarized by SEADO Demingoy, and the Affidavit of Quitclaim was notarized by Atty. Judith Rowena P. Gamueda, the Supervising Administrative Officer of the OWWA's Office of the Legal Staff. In the Acknowledgment, Milagroso acknowledged that SEADO Demingoy had apprised her of her rights but that she voluntarily chose to settle for PHP 40,000 without force or duress, and she further handwrote that she had received and counted the full amount and had no further complaint against the agency.

In 2020, Milagroso filed a complaint for illegal dismissal with the Labor Arbiter, but it was dismissed without prejudice on June 21, 2021, for her failure to file a position paper. On November 17, 2021, Milagroso refiled the complaint, this time alleging that she was unpaid for approximately one year and two months—from May 2018 to July 2019—and seeking backwages, unpaid salary, salary differential, moral and exemplary damages, and attorney's fees. She did not mention the Compromise Documents in her complaint. Petitioners denied liability, asserting that Milagroso failed to substantiate her allegations of non-payment and abuse, and that Fidelino, as corporate president, could not be held personally liable for the corporation's obligations. The Compromise Documents were not raised before the Labor Arbiter but were submitted for the first time on appeal before the NLRC, with petitioners explaining that the COVID-19 pandemic had prevented their personnel from accessing offices and documents. The Labor Arbiter found petitioners liable for illegal dismissal and monetary claims totaling USD 8,700, but the NLRC reversed this ruling on the ground that the complaint was barred by the compromise. The Court of Appeals, in turn, nullified the NLRC's ruling and reinstated the Labor Arbiter's Decision, prompting the present petition.

• Proper Remedy and Grave Abuse of Discretion: Petitioners averred that the present Petition was proper because the CA acted with grave abuse of discretion in taking cognizance of Milagroso's petition for certiorari despite the parties' compromise agreement executed before the SEADO on July 25, 2019, and despite Milagroso's failure to timely file a motion for reconsideration of the NLRC Decision, which was a condition sine qua non for a petition for certiorari.
• Compromise Agreement as Bar to Re-litigation: Petitioners contended that the issues raised by Milagroso were barred by the parties' compromise agreement, citing Article 227 (now Article 233) of the Labor Code, Section 10 of DOLE Department Order No. 107, S. 2010, and Rule V, Section 3 of DOLE Department Order No. 151, S. 2016, asserting that the quitclaims were final and binding not only on the parties but also on all DOLE offices and attached agencies.
• Validity of the Compromise Despite the Minutes: Petitioners faulted the CA for disregarding the quitclaims based solely on the Minutes of the Conciliation Conference, arguing that nothing prevented the parties from discussing their dispute after the scheduled conference and returning to the SEADO on the same day to enter into a compromise agreement, even without awaiting the next scheduled conference.
• Reasonableness of the Consideration: Petitioners argued that during the SENA conference, Milagroso demanded only PHP 125,000.00, and that the PHP 40,000.00 settlement was reasonable when measured against that demand, not against the amount ultimately awarded by the Labor Arbiter.
• Burden of Proving Dismissal: Petitioners argued that Milagroso bore the burden to prove the fact of dismissal and that she failed to present any evidence of illegal dismissal.

• Wrong Remedy: Milagroso argued that the present Petition must be dismissed for being a wrong remedy against the CA rulings, asserting that the proper mode of appeal was a Rule 45 petition for review on certiorari and not a Rule 65 petition for certiorari, and that the Petition could not function as a substitute for the remedy of appeal that petitioners had already lost by filing beyond the 15-day reglementary period.
• Finality of the LA Decision: Milagroso argued that the LA Decision had become final and executory because petitioners failed to timely pay the appeal fees.
• Change of Theory on Appeal: Milagroso asserted that petitioners improperly changed their theory on appeal, which deprived her of due process.
• Fabrication of Documents: Milagroso alleged that petitioners fabricated the documents purporting to be a settlement of her claims.

• Correctness of Remedy: Whether petitioners availed of the correct remedy against the CA Decision and Resolution.
• Validity of the Compromise Documents: Whether the CA committed grave abuse of discretion in disregarding the Compromise Documents based on the Minutes of the Conciliation Conference.
• Reasonableness of the Consideration: Whether the CA committed grave abuse of discretion in holding that the Compromise Documents should be set aside because the consideration therefor was unreasonable.

• Correctness of Remedy: No, petitioners availed of the wrong remedy—Rule 65 instead of Rule 45—but the procedural rules were relaxed because the case fell within recognized exceptions: the broader interests of justice so required and the CA's writ appeared null and void for having been rendered in violation of Article 233 of the Labor Code.
• Validity of the Compromise Documents: Yes, the CA committed grave abuse of discretion. The Compromise Documents were adequately proven through notarized quitclaims bearing the signatures of Milagroso and the SEADO, and Milagroso's failure to specifically deny the compromise in her Answer constituted an implied admission under Rule 8, Section 11 of the Rules of Court.
• Reasonableness of the Consideration: Yes, the CA committed grave abuse of discretion. The reasonableness of the consideration must be measured against the employee's claims at the time of the compromise (PHP 125,000.00), not against the amount subsequently awarded by the Labor Arbiter (USD 8,700.00), and the PHP 40,000.00 settlement was not shockingly low given the reciprocal concessions inherent in compromise.

• Correctness of Remedy: Under Rule 45 of the Rules of Court, CA decisions may be appealed to the Supreme Court through a petition for review, and the availability of that appeal proscribes the filing of a Rule 65 petition for certiorari. A Rule 65 petition cannot serve as a substitute for a lost appeal. However, the Court recognized exceptions allowing relaxation of this rule: when public welfare and the advancement of public policy dictate, when the broader interests of justice so require, when the writs issued are null and void, or when the questioned order amounts to an oppressive exercise of judicial authority. The Court found that the present case fell within the first and third exceptions. The CA Decision was contrary to the State's policy favoring conciliation and mediation as modes of settling labor disputes, and the writ of certiorari appeared null and void for having been rendered in violation of Article 233 of the Labor Code. As in Martillano vs. Court of Appeals, the CA had relitigated issues that were supposed to have been resolved with finality through the parties' compromise. Because the Petition was impressed with merit and convincingly showed that the CA acted without jurisdiction or with grave abuse of discretion, the Court relaxed the rules and resolved the case on the merits.

• Validity of the Compromise Documents: The Court found that the compromise agreement was adequately proven. Although the Compromise Documents were submitted only on appeal before the NLRC, technical rules of procedure are not binding in administrative proceedings before the LA and the NLRC, and a party may submit new evidence on appeal provided the offeror explains the delay and sufficiently proves the allegations. Petitioners satisfied both requisites: they explained that the COVID-19 pandemic hindered document retrieval, and they proved the compromise through the Quitclaim, Affidavit of Quitclaim, and Acknowledgment, all dated July 25, 2019 and signed by Milagroso. The Quitclaim and Affidavit of Quitclaim were notarized documents, entitled to the presumption of regularity and full faith and credit, which could only be overcome by clear and convincing evidence that Milagroso failed to adduce. Furthermore, Milagroso did not specifically deny the genuineness and due execution of the Compromise Documents in her Answer before the NLRC, raising only procedural objections; under Rule 8, Section 11 of the Rules of Court, applied suppletorily, her silence constituted an implied admission. Milagroso herself submitted the same Notice of Conference that petitioners had attached, confirming that the compromise covered the very same matters raised in her complaint. The Court rejected the CA's reliance on the Minutes of the Conciliation Conference, which merely showed that no settlement was reached during the initial conference but did not preclude the parties from returning to the SEADO later that same day to execute the compromise. The signatures of SEADO Demingoy and Atty. Gamueda on the Compromise Documents confirmed that the settlement was reached with the SEADO's assistance. The Court also noted that Milagroso failed to present any proof that the second conference on August 7, 2019 was held, or that the SENA proceedings were referred to the LA, which would have been expected if no settlement had been reached.

• Reasonableness of the Consideration: The Court held that the CA erred in measuring the reasonableness of the PHP 40,000.00 consideration against the LA's monetary award of USD 8,700.00. Following Periquet vs. National Labor Relations Commission, the reasonableness of the consideration must be assessed in relation to the employee's monetary claims at the time of settlement. The Minutes of the Conciliation Conference indicated that Milagroso's claims at that time totaled only PHP 125,000.00, representing two months' unpaid salary and the seven-month unexpired portion of the contract. Measured against this amount, PHP 40,000.00 was not shockingly low. Moreover, the nature of compromise requires reciprocal concessions—each party must bend and balance gains and losses—so one cannot expect an employee to receive the full amount claimed. The Court also emphasized that when a compromise is reached with the assistance of the SEADO, the law presumes the public officer regularly performed their duties and ensured a fair deal, shifting the burden to the party assailing the settlement to prove fraud, misrepresentation, coercion, or non-compliance under Article 233. Milagroso did not allege, much less substantiate, any of these jurisdictional requirements. Her bare allegation of fabrication, made only in her Motion for Reconsideration before the NLRC and her petition before the CA, was insufficient, as forgery is not presumed and must be proven with clear and convincing evidence. The Court distinguished Aguilera vs. Coca-Cola FEMSA Philippines, Inc., which applied to quitclaims executed without government assistance, where the imbalance of power between employer and employee justifies stricter scrutiny. In contrast, when the SEADO assists in the settlement, the law has already stepped in to equalize the parties' relations, and the presumption of regularity attaches to the public officer's performance.

• Final and Binding Effect of SEADO-Assisted Compromise Agreements (Article 233, Labor Code) — A compromise settlement voluntarily agreed upon by the parties with the assistance of the NCMB or the appropriate DOLE regional office, including the SEADO, is final and binding upon the parties. The NLRC and the courts may not assume jurisdiction over the issues involved therein except in case of non-compliance with the settlement terms or if there is prima facie evidence that the settlement was obtained through fraud, misrepresentation, or coercion. These are jurisdictional requirements: complaints attempting to relitigate settled issues must be dismissed outright if not based on non-compliance or avoidance on grounds of fraud, misrepresentation, or coercion.

• Burden-Shifting in SEADO-Assisted Compromises — When a compromise or quitclaim is executed without the assistance of the appropriate labor office, the employer bears the burden to prove that the quitclaim constitutes a credible and reasonable settlement and that the employee executed it voluntarily with full understanding. However, when the compromise is reached with the assistance of the SEADO, the law presumes the public officer regularly performed their duties and ensured fairness, shifting the burden to the party assailing the settlement to prove fraud, misrepresentation, coercion, or non-compliance.

• Reasonableness of Compromise Consideration Measured Against Claims at Time of Settlement — The reasonableness of the consideration for a compromise agreement must be assessed in relation to the employee's monetary claims at the time of the compromise, not against the amount subsequently awarded by a labor arbiter or court. The nature of compromise requires reciprocal concessions, and one cannot expect the employee to receive the full amount of their claim.

• Relaxation of Procedural Rules for Rule 65 Petitions — Although a Rule 65 petition for certiorari cannot serve as a substitute for a lost appeal under Rule 45, the Court may allow it when: (1) public welfare and the advancement of public policy dictate; (2) the broader interests of justice so require; (3) the writs issued are null and void; or (4) the questioned order amounts to an oppressive exercise of judicial authority.

• Submission of New Evidence on Appeal Before the NLRC — Technical rules of procedure are not binding in administrative proceedings before the LA and the NLRC. A party may submit new or additional evidence for the first time on appeal with the NLRC, provided that: (1) the offeror adequately explains any delay in the submission of evidence; and (2) the party sufficiently proves the allegations sought to be proven.

• "The National Labor Relations Commission or any court, shall not assume jurisdiction over issues involved therein except in case of non-compliance thereof or if there is prima facie evidence that the settlement was obtained through fraud, misrepresentation, or coercion." — This is the text of Article 233 of the Labor Code as quoted in the decision, establishing the jurisdictional limits on the NLRC and courts over SEADO-assisted compromise agreements and forming the ratio decidendi of the case.

• "In compromise agreements that were reached with the assistance of the appropriate labor office, the law has already stepped in to equalize the relations between management and the labor force. In such a case, the law presumes that the public officer in charge of the matter regularly performed their official duties, ensured that the employees' rights were protected, and that from the totality of the circumstances and the respective claims and positions of the parties, both received a fair deal out of the settlement." — This passage articulates the doctrinal distinction between SEADO-assisted compromises and privately executed quitclaims, explaining why the burden shifts to the employee to prove invalidity when government assistance was present.

• "the reasonableness of the consideration for the Compromise Documents must be assessed in relation to Milagroso's monetary claims at the time of settlement, which was only PHP 125,000.00. When measured against this amount, the sum of PHP 40,000.00 that Milagroso received from petitioners as part of their compromise is not shockingly low as to be morally reprehensible or be taken as prima facie evidence of fraud, coercion, or misrepresentation." — This passage establishes the rule that the reasonableness of compromise consideration is measured against the employee's demands at the time of settlement, not against a subsequent arbitral award.

• Martillano vs. Court of Appeals, 477 Phil. 226 (2004) — Followed. The Court relaxed procedural rules to take cognizance of a Rule 65 petition despite the availability of a Rule 45 appeal, because the tribunal had relitigated issues previously decided with finality. The Court found the present case analogous, as the CA had relitigated issues settled through the parties' compromise.

• Periquet vs. National Labor Relations Commission, 264 Phil. 1115 (1990) — Followed. The Court applied the principle that an employee's omission of previously executed quitclaims casts doubt on their bona fides, and that the reasonableness of the consideration must be measured against the employee's claims at the time of the compromise, not against subsequently inflated claims.

• Aguilera vs. Coca-Cola FEMSA Philippines, Inc., 911 Phil. 517 (2021) — Distinguished. The CA relied on Aguilera's enumeration of grounds for disregarding quitclaims (fraud, incredible and unreasonable consideration, terms contrary to law or public policy). The Court distinguished Aguilera on the ground that the quitclaims there were executed without the assistance of the appropriate labor office, whereas the present compromise was reached with SEADO assistance, triggering the presumption of regularity and the burden-shifting rule under Article 233.

• Hubilla vs. HSY Marketing Ltd., Co., 823 Phil. 358 (2018) — Cited for the proposition that the CA may properly re-examine facts and re-assess evidence when the factual findings of the LA and the NLRC are contradictory.

• Princess Talent Center Production, Inc. vs. Masagca, 829 Phil. 381 (2018) — Cited for the rule that new evidence may be submitted for the first time on appeal before the NLRC, provided the offeror explains the delay and sufficiently proves the allegations.

• Article 233 (formerly Article 227), Labor Code — Provides that compromise settlements voluntarily agreed upon by the parties with the assistance of the NCMB or the appropriate DOLE regional office shall be final and binding, and that the NLRC or any court shall not assume jurisdiction over the issues involved except in case of non-compliance or prima facie evidence of fraud, misrepresentation, or coercion. The Court held these exceptions to be jurisdictional requirements that the employee failed to establish.

• Article 234 (formerly Article 228), Labor Code, as amended by Republic Act No. 10396 — Mandates that all issues arising from labor and employment shall be subject to mandatory conciliation-mediation, and that the labor arbiter or appropriate DOLE agency shall entertain only endorsed or referred cases. The Court cited this provision to underscore the State's policy favoring conciliation-mediation as a mode of dispute settlement.

• Rule V, Section 3, DOLE Department Order No. 151, S. 2016 — Provides that settlement agreements reached before the SEADO shall be final and immediately executory and binding on all DOLE offices and attached agencies, except when contrary to law, morals, public order, and public policy. The Court applied this to hold the compromise binding on the NLRC and the courts.

• Rule V, Section 1, DOLE Department Order No. 151, S. 2016 — Requires the SEADO to inform the parties of the consequences of accepting the settlement amount, ensure the agreement is fair and reasonable, and state that fairness/reasonableness depends on the totality of circumstances, degree of voluntariness, and credibility of consideration. The Court relied on this to presume that SEADO Demingoy properly discharged her duties.

• Rule 8, Section 11, Rules of Court — Provides that material averments not specifically denied are deemed admitted. Applied suppletorily to NLRC proceedings, the Court held that Milagroso's failure to specifically deny the Compromise Documents in her Answer constituted an implied admission.

• Rule 65, Section 1, Rules of Court — Governs petitions for certiorari, available only when there is no appeal or plain, speedy, and adequate remedy in the ordinary course of law. The Court held that petitioners availed of the wrong remedy but relaxed the rules under recognized exceptions.

• Rule 1, Section 6, Rules of Court — Directs that the Rules shall be liberally construed to promote the just, speedy, and inexpensive disposition of every action and proceeding. The Court invoked this to justify relaxing the procedural rules.

• Section 10, Republic Act No. 8042, as amended by Republic Act No. 10022 — Governs money claims of migrant workers and provides for the joint and several liability of the recruitment agency, its corporate officers, and the foreign principal. The LA relied on this provision in awarding monetary claims, but the Court ultimately held the claims barred by the compromise.

• Article 2028, Civil Code — Defines a compromise as a contract whereby the parties, by making reciprocal concessions, avoid or put an end to litigation. The Court cited this to explain that each party to a compromise must make concessions and cannot expect to receive the full amount of their claim.

Caguioa (Chairperson), Gaerlan, Dimaampao, and Singh, JJ., concurred.