Powerhouse Staffbuilders International, Inc. vs. Rey, et al.

A local recruitment agency remains jointly and severally liable with its foreign principal for the monetary claims of illegally dismissed overseas workers, notwithstanding an alleged transfer of accreditation, because Section 10 of R.A. No. 8042 provides that such liability shall not be affected by any substitution, amendment, or modification of the employment contract; and an illegally dismissed overseas worker is entitled to salaries for the entire unexpired portion of the contract, the three-month cap having been declared unconstitutional.

Powerhouse Staffbuilders International, Inc. is a local recruitment and placement agency that hired respondent employees as operators for its foreign principal, Catcher Technical Co. Ltd./Catcher Industrial Co. Ltd., in Taiwan. The overseas employment was governed by R.A. No. 8042, the Migrant Workers and Overseas Filipinos Act of 1995, which makes the principal/employer and the recruitment/placement agency jointly and severally liable for monetary claims and protects overseas Filipino workers. JEJ International Manpower Services Corporation was later impleaded on account of an alleged transfer to it of Catcher’s accreditation.

Powerhouse Staffbuilders International, Inc. hired Romelia Rey, Liza Cabad, Evangeline Nicmic, Eva Lameyra, Rosario Abordaje, Lilybeth Magalang, Venia Buyag, Jaynalyn Nolledo, Iren Nicolas, Aileen Samalea, Susan Ybañez, Cheryl Ann Oria, Ma. Liza Seraspi, and Katherine Oracion as operators for its foreign principal, Catcher Technical Co. Ltd./Catcher Industrial Co. Ltd., based in Taiwan. Each was to receive a monthly salary of NT$15,840.00 for a two-year term commencing upon arrival at the jobsite. They were deployed on June 2, 2000. Sometime in February 2001, Catcher informed them that it would reduce their working days due to low orders and financial difficulties. The employees were repatriated to the Philippines on March 11, 2001.

On March 22, 2001, the employees filed separate complaints for illegal dismissal, refund of placement fees, moral and exemplary damages, and attorney’s fees against Powerhouse and Catcher before the Labor Arbiter; the complaints were later consolidated upon their motion. They alleged that on March 2, 2001, Catcher informed them that they would all be repatriated due to low orders. They initially refused to be repatriated but eventually gave in because Catcher stopped providing them food, leaving them to live on donations and dole outs from sympathetic friends and the church. They further alleged that during their employment, NT$10,000.00 was unjustifiably deducted every month for eight to nine months from their individual salaries.

Powerhouse maintained that the employees voluntarily gave up their jobs after rejecting Catcher’s proposal to reduce their working days. It contended that before repatriation, each of the respondents accepted payments by way of settlement, with the assistance of Labor Attache Romulo Salud. During the proceedings before the Labor Arbiter, Powerhouse moved to implead JEJ International Manpower Services as respondent on account of the alleged transfer to it of Catcher’s accreditation. The motion was granted. JEJ submitted its position paper, arguing that the supposed transfer of accreditation to it did not affect the joint and solidary liability of Powerhouse in favor of the employees; it averred that any contract between JEJ and Powerhouse could not be enforced in the case because it involved no employer-employee relationship and was outside the Labor Arbiter’s jurisdiction.

Before the Labor Arbiter, Powerhouse failed to substantiate its allegations that the employees voluntarily pre-terminated their contracts and received payments in consideration thereof, and it was unable to rebut the employees’ alleged entitlement to refund of the amounts illegally deducted from their salaries. The Labor Arbiter found the employees’ dismissal and/or pre-termination of employment illegal.

On appeal, the NLRC found that JEJ was not privy to the employees’ deployment. The CA found that Powerhouse failed to prove that the employees were not illegally dismissed or that they voluntarily resigned. The employees were made to resign against their will, having been forced to sign resignation letters prepared by Catcher as an act of self-preservation after Catcher stopped providing them food for nine days before their repatriation on March 11, 2001. Their intention to leave and act of relinquishment were absent, and their vigorous pursuit of the illegal dismissal complaint was inconsistent with resignation. The CA also found that the photocopy of the undated and unsigned list supposedly furnished by Catcher to Powerhouse as proof of payment was not authenticated and had no probative value. It ruled that JEJ’s liability had not been established absent substantial evidence that the transfer of accreditation had been effected with POEA’s imprimatur, and that the Affidavit of Assumption of Responsibility could not be considered without violating due process.

• Illegal Dismissal: Petitioner maintained that no illegal dismissal occurred if workers choose to leave their place of work; respondent employees voluntarily gave up their jobs after rejecting Catcher’s proposal to reduce working days and accepted settlement payments with the assistance of Labor Attache Romulo Salud.
• Monetary Awards: Petitioner argued that monetary awards in labor cases cannot be based on mere allegations; the salary deductions and placement fee refunds lacked factual basis or concrete and direct evidence, and the refund of placement fees was subject to POEA jurisdiction.
• Transfer of Accreditation: Petitioner contended that the transfer of accreditation to JEJ and JEJ’s assumption of liability relieved Powerhouse of liability; it also questioned the dropping of JEJ as party respondent in disregard of POEA rules.
• Procedural Compliance: Petitioner argued that it substantially complied with procedural requirements in filing its CA petition and prayed for a liberal interpretation of the rules in the interest of substantial justice.

• Procedural Non-Compliance: Respondent employees asserted that Powerhouse failed to show any justifiable reason to be excused from the operation of the rules; the CA resolved the petition on the merits but Powerhouse showed nothing to warrant a favorable ruling.
• Scope of Review: JEJ averred that Powerhouse failed to raise as an issue the dismissal of its CA petition due to gross and blatant violations of Rule 65; instead, its assignments of errors or “novel questions of law” were a ploy to seek review of the factual findings of the CA and the NLRC.
• Factual Findings: Respondents maintained that the petition, in the guise of raising novel questions of law, was in reality seeking a review of the factual findings of the CA and the NLRC.

• Timeliness of Rule 65 Petition: Whether Powerhouse’s petition for certiorari before the CA was timely filed under Section 4, Rule 65, considering that the last day fell on a special non-working day.
• Verification and Certification Against Forum Shopping: Whether Powerhouse substantially complied with the verification and certification requirements when the petition was signed by its President and General Manager without a Secretary’s Certificate at the time of filing, later ratified by the board.
• Scope of Rule 45 Review: Whether the issues raised by Powerhouse—illegal dismissal, monetary awards, and transfer of accreditation—are questions of law reviewable by the Supreme Court or factual issues requiring re-examination of evidence.
• Illegal Dismissal: Whether there is illegal dismissal if workers choose to leave their place of work.
• Monetary Awards: Whether monetary awards in labor cases may be awarded based on mere allegations.
• Transfer of Accreditation: Whether the transfer of accreditation to another recruitment and placement agency, as well as the assumption of any liability as a consequence of this transfer, relieved the original recruitment and placement agency from any liability.
• Interest on Monetary Awards: Whether the monetary awards should earn interest, and at what rates.

• Timeliness of Rule 65 Petition: Yes. The petition was timely filed. The 60-day period from June 21, 2007 ended on August 20, 2007, which was a special non-working day under Proclamation No. 1353, so the next working day, August 21, 2007, was timely under Rule 22, Section 1.
• Verification and Certification Against Forum Shopping: Yes. Substantial compliance was shown. The President and General Manager is among the corporate officers who may sign without a board resolution, and the board’s October 24, 2007 resolution retroactively ratified his authority.
• Scope of Rule 45 Review: No. The issues, though phrased as legal, assume facts contrary to the uniform findings of the Labor Arbiter, NLRC, and CA and call for re-examination of evidence, which the Supreme Court cannot entertain in a Rule 45 petition.
• Illegal Dismissal: Yes. Illegal dismissal was established. The employer failed to prove voluntary resignation; the employees were forced to resign after Catcher stopped providing food, and their immediate filing of illegal dismissal complaints belied voluntary repatriation.
• Monetary Awards: Yes. Monetary claims and full reimbursement of placement fees were proper. The salary award must be increased to the entire unexpired term under Serrano and Sameer; the deductions were proven by the First Passbooks and deemed admitted.
• Transfer of Accreditation: No. The alleged transfer did not relieve Powerhouse. Section 10 of R.A. No. 8042 makes the principal and recruitment agency jointly and severally liable, and this liability is not affected by substitution, amendment, or modification; JEJ was not liable absent POEA approval.
• Interest on Monetary Awards: Yes. Placement fee reimbursements earn 12% per annum under Section 10, R.A. No. 8042; salaries for the unexpired term, illegal deductions, and attorney’s fees earn 6% per annum under BSP Circular No. 799, from finality until full payment.

• Timeliness of Rule 65 Petition: Section 4, Rule 65 requires a petition for certiorari to be filed not later than 60 days from notice of the judgment, order, or resolution. Powerhouse received the May 31, 2007 NLRC Order denying its motion for reconsideration on June 21, 2007, so it had until August 20, 2007 to file its petition. Because August 20, 2007 was proclaimed a special non-working day under Proclamation No. 1353, series of 2007, Rule 22, Section 1 provided that the time would not run until the next working day. The petition filed on August 21, 2007 was therefore timely, contrary to the CA’s finding that it was one day late.
• Verification and Certification Against Forum Shopping: Prior cases recognize that the Chairperson of the Board, the President, the General Manager or Acting General Manager, the Personnel Officer, and an Employment Specialist in a labor case may sign the verification and certification without a board resolution because they are in a position to verify the truthfulness and correctness of the allegations. William C. Go, the President and General Manager of Powerhouse, signed the verification and certification attached to the CA petition. Although no Secretary’s Certificate accompanied the petition, his authority was ratified by the Board in its Resolution adopted on October 24, 2007. The ratification retroactively confirmed and affirmed his authority, and the Court thus found substantial compliance.
• Scope of Rule 45 Review: In a petition for review on certiorari, the Supreme Court’s review of CA decisions is generally confined to errors of law; the Court is not a trier of facts, and this doctrine applies with greater force in labor cases. Factual questions are for the labor tribunals to resolve. Although Powerhouse’s three issues were phrased as legal, they assumed facts contrary to the findings of the Labor Arbiter, NLRC, and CA and called for a re-examination of evidence. Findings of quasi-judicial bodies like the NLRC, especially when passed upon and upheld by the CA, are accorded respect and finality if supported by substantial evidence. No reason existed to depart from this doctrine.
• Illegal Dismissal: The onus of proving that an employee was not dismissed, or that the dismissal was not illegal, rests fully on the employer; failure to discharge the onus means the dismissal was not justified and was illegal. The burden of proving allegations rests on the party alleging, and the proof must be clear, positive, and convincing. The Labor Arbiter, NLRC, and CA unanimously found that the employees were made to resign against their will after Catcher stopped providing them food from March 2, 2001 until their repatriation on March 11, 2001. The filing of complaints for illegal dismissal immediately after repatriation belied the claim that they voluntarily chose to be separated and repatriated. Voluntary repatriation, much like resignation, is inconsistent with the filing of the complaints.
• Monetary Awards: The employees were entitled to money claims and full reimbursement of their placement fees. The award of the three-month equivalent of their salaries was increased to the amount equivalent to the unexpired term of the employment contract in accordance with Serrano vs. Gallant Maritime Services, Inc. and Sameer Overseas Placement Agency, Inc. vs. Cabiles. In Serrano, the Court declared unconstitutional the clause in Section 10 of R.A. No. 8042 limiting the wages recoverable by an illegally dismissed overseas worker to three months for violating due process and equal protection. R.A. No. 10022 reinstated the clause, but in Sameer the Court again declared the reinstated clause unconstitutional. The refund of unauthorized monthly deductions of NT$10,000.00 was affirmed. The employees presented two passbooks: the First Passbooks, where salaries and overtime pay were deposited, were in the employer’s custody; the Second Passbooks, where allowances were deposited, were in the employees’ custody. The employees could withdraw only from the Second Passbooks, while the foreign employer made illegal deductions from the First Passbooks. The pertinent pages of the First Passbooks were part of the record. Powerhouse failed to dispute this claim, so it was deemed admitted. The burden of proving monetary claims rests on the employer because personnel files, payrolls, records, remittances, and similar documents are in the employer’s custody and control. Powerhouse failed to prove that Catcher had paid all the monetary claims, and thus failed to discharge the onus probandi.
• Transfer of Accreditation: The CA and NLRC correctly held that JEJ could not be held liable for the monetary claims on account of the alleged transfer of accreditation. Nothing in the two letters attached by Powerhouse in its motion for reconsideration before the NLRC proved that the alleged transfer pushed through with POEA’s imprimatur. At best, these showed that Catcher intended to appoint JEJ as its new agent and that Powerhouse had no objection to such transfer. The Affidavit of Assumption of Responsibility submitted to the CA could not absolve Powerhouse of liability. Section 10 of R.A. No. 8042 clearly states the solidary liability of the principal and the recruitment agency to the employees, and this liability shall not be affected by any substitution, amendment, or modification for the entire duration of the employment contract. In Skippers United Pacific, Inc. vs. Maguad, the Court ruled that the POEA Rules extend the manning agreement until the expiration of the employment contracts and that affidavits of assumption of responsibility, though valid between the agencies, are not enforceable against employees who are not parties. Even if there was a transfer of accreditation, Powerhouse’s liability remained intact because the employees were not privy to such contract, and in their POEA-approved overseas employment contract, Powerhouse was the recruitment agency of Catcher. Relieving Powerhouse would change the contract without the consent of the employees and would run contrary to the protective rationale of R.A. No. 8042. The local agency may seek reimbursement from the foreign employer.
• Interest on Monetary Awards: Section 10 of R.A. No. 8042 provides that in case of termination of overseas employment without just, valid, or authorized cause, the worker is entitled to full reimbursement of the placement fee with interest of 12% per annum. The provision does not provide a specific interest rate for the award of salary for the unexpired portion of the employment contract or for other money claims. In Sameer, the Court held that BSP Circular No. 799, which revised the interest rate for loan or forbearance of money from 12% to 6% in the absence of stipulation, is not applicable when there is a law that states otherwise. Thus, Circular No. 799 does not change the 12% interest on reimbursement of placement fees under Section 10 of R.A. No. 8042. However, Circular No. 799 applies to the award of salary for the unexpired portion of the employment contract and the other money claims of the employees since the law does not provide a specific interest rate for these awards. Accordingly, placement fee reimbursements earn 12% per annum from finality until full payment, while salaries for the unexpired term, illegal deductions, and attorney’s fees earn 6% per annum from finality until full payment.

• Substantial Compliance with Verification and Certification Against Forum Shopping — Verification and certification may be signed by certain corporate officers without a board resolution: the Chairperson of the Board of Directors, the President, the General Manager or Acting General Manager, the Personnel Officer, and an Employment Specialist in a labor case, because they are in a position to verify the truthfulness and correctness of the allegations. In this case, William C. Go, President and General Manager, signed; although no Secretary’s Certificate accompanied the petition, the board’s October 24, 2007 resolution ratified his authority, which retroactively confirmed it. The Court thus found substantial compliance.
• Timeliness of Rule 65 Petition When Last Day Is a Special Non-Working Day — Under Section 4, Rule 65, the petition must be filed not later than 60 days from notice of judgment, order, or resolution. Under Rule 22, Section 1, if the last day falls on a Saturday, Sunday, or legal holiday in the place where the court sits, the time does not run until the next working day. Because August 20, 2007 was a special non-working day under Proclamation No. 1353, the August 21, 2007 filing was timely.
• Factual Findings of Labor Tribunals Are Binding on the Supreme Court — In a Rule 45 petition, review is generally confined to errors of law; the Supreme Court is not a trier of facts, and this applies with greater force in labor cases. Findings of quasi-judicial bodies like the NLRC, if supported by substantial evidence and upheld by the CA, are accorded respect and finality. The Court found no reason to disturb the uniform factual findings.
• Illegal Dismissal and Forced Resignation — The burden of proving that an employee was not dismissed, or that dismissal was not illegal, rests on the employer; failure to discharge the onus means the dismissal was unjustified and illegal. Voluntary repatriation, much like resignation, is inconsistent with the filing of an illegal dismissal complaint. The employees’ immediate complaints after repatriation belied Powerhouse’s claim of voluntary separation.
• Joint and Several Liability of Principal and Recruitment Agency — Section 10, R.A. No. 8042 makes the liability of the principal/employer and the recruitment/placement agency for claims joint and several, and this liability continues for the entire duration of the employment contract and is not affected by any substitution, amendment, or modification made locally or in a foreign country. The local agency may seek reimbursement from the foreign employer. The alleged transfer of accreditation to JEJ did not relieve Powerhouse because the employees were not privy to it and no POEA approval was shown.
• Unconstitutionality of the Three-Month Cap on Wages — The clause in Section 10, R.A. No. 8042 limiting wages recoverable by an illegally dismissed overseas worker to three months for every year of the unexpired term, whichever is less, was declared unconstitutional in Serrano vs. Gallant Maritime Services, Inc. for violating due process and equal protection. The clause was reinstated by Section 7, R.A. No. 10022, but in Sameer Overseas Placement Agency, Inc. vs. Cabiles the Court again declared it unconstitutional. Thus, the employees were entitled to salaries for the entire unexpired portion of their contracts.
• Burden of Proving Monetary Claims — The burden of proving monetary claims rests on the employer because pertinent personnel files, payrolls, records, remittances, and similar documents are in the employer’s custody and control, not the worker’s. Powerhouse failed to dispute the employees’ evidence of illegal deductions from the First Passbooks, so the claim was deemed admitted; it also failed to prove payment by Catcher.
• Interest on Monetary Awards in Overseas Employment Cases — Section 10, R.A. No. 8042 expressly provides 12% per annum interest on reimbursement of placement fees. For salary for the unexpired portion and other money claims, where the law does not provide a specific rate, BSP Circular No. 799 applies, reducing the rate to 6% per annum. Thus, placement fee reimbursements earn 12%, while salaries, illegal deductions, and attorney’s fees earn 6%, from finality until full payment.

• "The petition in the CA was timely filed." — This resolves the procedural threshold and corrects the CA’s finding that the Rule 65 petition was one day late.
• "The filing of complaints for illegal dismissal immediately after repatriation belies the claim that respondent employees voluntarily chose to be separated and repatriated. Voluntary repatriation, much like resignation, is inconsistent with the filing of the complaints." — This states the ratio decidendi on illegal dismissal and forced resignation.
• "The terms of Section 10 of R.A. No. 8042 clearly states the solidary liability of the principal and the recruitment agency to the employees and this liability shall not be affected by any substitution, amendment or modification for the entire duration of the employment contract, to wit:" — This defines the controlling rule on why the alleged transfer of accreditation did not relieve Powerhouse of liability.
• "In Serrano, we declared unconstitutional the clause in Section 10 of R.A. No. 8042 limiting the wages that could be recovered by an illegally dismissed overseas worker to three months." — This anchors the increase of the salary award from the three-month cap to the entire unexpired term.

• Serrano vs. Gallant Maritime Services, Inc., G.R. No. 167614, March 24, 2009, 582 SCRA 255 — Controlling precedent declaring unconstitutional the clause in Section 10, R.A. No. 8042 limiting wages of illegally dismissed overseas workers to three months; relied on to increase the salary award to the entire unexpired term.
• Sameer Overseas Placement Agency, Inc. vs. Cabiles, G.R. No. 170139, August 5, 2014, 732 SCRA 22 — Followed; again declared unconstitutional the reinstated three-month cap in Section 7, R.A. No. 10022, and held BSP Circular No. 799 inapplicable where a law provides a specific interest rate; also cited on solidary liability and interest.
• Skippers United Pacific, Inc. vs. Maguad, G.R. No. 166363, August 15, 2006, 498 SCRA 639 — Relied on for the rule that POEA Rules extend the manning agreement until expiration of employment contracts and that affidavits of assumption of responsibility are not enforceable against employees who are not parties.
• Villar vs. National Labor Relations Commission, G.R. No. 130935, May 11, 2000, 331 SCRA 686 — Cited for the rule that the burden of proving monetary claims rests on the employer because records are in the employer’s custody and control.
• Nacar vs. Gallery Frames, G.R. No. 189871, August 13, 2013, 703 SCRA 439 — Cited in relation to the applicable interest rates on monetary awards.
• Cagayan Valley Drug Corporation vs. Commissioner of Internal Revenue, G.R. No. 151413, February 13, 2008, 545 SCRA 10 — Cited for the recognized corporate officers who may sign verification and certification against forum shopping without a board resolution.
• Swedish Match Philippines, Inc. vs. Treasurer of the City of Manila, G.R. No. 181277, July 3, 2013, 700 SCRA 428 — Cited on ratification by the board of directors retroactively confirming and affirming the authority of a corporate officer to sign the verification and certification.
• G & M (Phils.), Inc. vs. Cruz, G.R. No. 140495, April 15, 2005, 456 SCRA 215 — Cited for the rule that the Supreme Court is not a trier of facts and that factual issues are for labor tribunals to resolve.
• Becmen Service Exporter and Promotion, Inc. vs. Cuaresma, G.R. Nos. 182978-79, April 7, 2009, 584 SCRA 690 and Sevillana vs. I.T. (International) Corp., G.R. No. 99047, April 16, 2001, 356 SCRA 451 — Cited on the protective rationale of R.A. No. 8042 and the joint and several liability of the local agency.

• Section 4, Rule 65, 1997 Rules of Civil Procedure, as amended — Requires a petition for certiorari to be filed not later than 60 days from notice of judgment, order, or resolution; applied to compute the period from June 21, 2007 and to find the August 21, 2007 filing timely because the last day was a special non-working day.
• Rule 22, Section 1, Rules of Court — Provides that if the last day of the period falls on a Saturday, Sunday, or legal holiday in the place where the court sits, the time shall not run until the next working day; applied to excuse the August 21, 2007 filing.
• Section 10, R.A. No. 8042 (Migrant Workers and Overseas Filipinos Act of 1995) — Confers original and exclusive jurisdiction on Labor Arbiters over claims arising from employer-employee relationship or by virtue of law or contract involving Filipino workers for overseas deployment; makes the principal/employer and recruitment/placement agency jointly and severally liable; requires 12% per annum interest on placement fee reimbursement; and provides that liability is not affected by substitution, amendment, or modification. Applied to hold Powerhouse liable despite the alleged transfer.
• Section 7, R.A. No. 10022 — Reinstated the clause limiting wages to three months for every year of the unexpired term, whichever is less; in Sameer, the Court declared the reinstated clause unconstitutional. Applied to award salaries for the entire unexpired term.
• BSP Circular No. 799, June 21, 2013 — Revised the interest rate for loan or forbearance of money from 12% to 6% per annum in the absence of stipulation; held inapplicable to placement fee reimbursement because Section 10, R.A. No. 8042 provides a specific 12% rate, but applied to salaries for the unexpired term, illegal deductions, and attorney’s fees.
• Rule 8, Section 11, Rules of Court in relation to Section 3, Rule 1, NLRC Rules of Procedure — Cited in relation to the rule that failure to dispute a claim may be deemed an admission; applied to Powerhouse’s failure to dispute the illegal deductions shown in the First Passbooks.
• Due Process and Equal Protection Clauses, 1987 Constitution — Cited through Serrano, which declared the three-month cap unconstitutional for violating due process and equal protection; applied to invalidate the cap and increase the salary award.

Peralta (Acting Chairperson), Perez, and Reyes, JJ., concurred. Velasco, Jr. (Chairperson), J., was on leave.