CASE BRIEF NO. 2019-0044


“Employment contracts cannot divest the LA of its jurisdiction over the illegal dismissal case involving Filipino Overseas Worker.


CASE: Augustin International Center, Inc., vs. Elfrenito B. Bartolome and Rumby L. Yamat [G.R. No. 226578, January 28, 2019]

PONENTE: Justice Estela Perlas-Bernabe

SUBJECT:
          A.       LABOR LAW:
                   i.        Labor Arbiter – Original and Exclusive Jurisdiction
                   ii.       Voluntary Arbitration vs. Amicable Settlement
                   iii.      Money Claims – Solidary liability of recruitment agency and foreign employer

FACTS:        In 2010, Bartolome and Yamat applied as carpenter and tile setter, respectively, with AICI, an employment agency providing manpower to foreign corporations. They were eventually engaged by Golden Arrow Company, Ltd. (Golden Arrow), which had its office in Khartoum, Republic of Sudan. In their employment contracts, there was a provision on dispute settlement that reads:

14. Settlement of disputes: All claims and complaints relative to the employment contract of the employee shall be settled in accordance with Company policies, rules[,] and regulations. In case the Employee contests the decision of the employer, the matter shall be settled amicably with the participation of the Labour Attaché or any authorised representative of the Philippines Embassy nearest the site of employment. x x x

Upon their arrival in Sudan sometime in March and April 2011, Golden Arrow transferred their employment to its sister company, Al Mamoun Trading and Investment Company (Al Mamoun). A year later, Al Mamoun served Notices of Termination of Serviceto Bartolome and Yamat, causing them to return to the Philippines. On May 22, 2012, they filed their complaintbefore the NLRC seeking that AICI and A1 Mamoun be held liable for illegal dismissal, breach of contract, and payment of the unexpired portion of the contract.

In its decision, the Labor Arbiter held that Bartolome and Yamat were illegally dismissed. The NLRC affirmed the same.

AICI appealed but it was denied by the CA.

AICI and Al Mamoun moved for reconsideration, arguing for the first time that they were denied due process because Bartolome and Yamat did not first contest their termination before the “Labor Attache or any authorized representative of the Philippine Embassy nearest the site of employment,” as stipulated in the employment contracts, before filing the complaint before the LA.

In a Resolution, the CA denied the said motion. It explained that employment contracts does not remove the LA’s jurisdiction to decide whether there is illegal termination.

ISSUES:
A.       Whether or not the LA correctly took cognizance of the illegal dismissal filed by Bartolome and Yamat.
          a.       Who has original and exclusive jurisdiction over claims arising from contracts involving Overseas Contract Workers?
          b.       How is jurisdiction conferred?

B.       Whether the defense raised by AICI for the first time on appeal should be entertained.

C.       Whether the designated persons -“Labour Attaché or any authorised representative of the Philippines Embassy”- in the employment contracts are voluntary arbitrators as contemplated under the Labor Code.
          a.       Differentiate amicable settlement from voluntary arbitration.

D.      Whether AICI is liable for illegal dismissal.
          a.       Whether AICI’s lack of an employee-employer relationship with Bartolome and Yamat exculpate it from its liability to pay the latter’s money claims.

RULING:
A.       Section 10 of Republic Act No. (RA) 8042, as amended by RA 10022, explicitly provides that LAs have original and exclusive jurisdiction over claims arising out of employer-employee relations or by virtue of any law or contract involving Filipino workers for overseas deployment, as in this case. The relevant portion of the provision reads:

Section 10. Money Claims. – Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after filing of the complaint, the claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages. x x x

Settled is the rule that jurisdiction over the subject matter is conferred by law and cannot be acquired or waived by agreement of the parties. As herein applied, the dispute settlement provision in Bartolome and Yamat’ employment contracts cannot divest the LA of its jurisdiction over the illegal dismissal case. Hence, it correctly took cognizance of the complaint filed by Bartolome and Yamat before it.


B.       Issues not raised in the previous proceedings cannot be raised for the first time at a late stage. In this case, AICI failed to raise the issue of Bartolome and Yamat’s supposed non-compliance with the dispute settlement provision before the LA, as well as before the NLRC. In fact, AICI only mentioned this issue for the first time before the CA in its motion for reconsideration. Therefore, such argument or defense is deemed waived and can no longer be considered on appeal. Section 1, Rule 9 of the Rules of Court provides that “defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived. [See also Maxicare PCIB Cigna Healthcare v. Contreras, 702 Phil. 688, 696 (2013)]


C.       The Voluntary Arbitratorunder the Labor Code is one agreed upon by the parties to resolve certain disputesand is tasked to render an award or decision within twenty (20) calendar days pursuant to Article 276 of the Labor Code.

In this case, the dispute settlement provision reads:
14. Settlement of disputes: All claims and complaints relative to the employment contract of the employee shall be settled in accordance with Company policies, rules, and regulations. In case the Employee contests the decision of the employer, the matter shall be settled amicably with the participation of the Labour Attaché or any authorised representative of the Philippines Embassy nearest the site of employment. x x x

Clearly, the mechanism contemplated herein is an amicable settlement whereby the parties can negotiate with each other; it is not a voluntary arbitration under the Labor Code wherein a third party renders a decision to resolve the dispute. The text of the contractual provision shows that the designated person is tasked merely to participate in the amicable settlement and not to decide the dispute. Hence, the “Labor Attaché or any authorized representative of the Philippine Embassy nearest the site of employment” was not called upon to act as a Voluntary Arbitrator as contemplated under the Labor Code.

Considering that the parties did not submit the present illegal termination case to the voluntary arbitration mechanism, the dispute remained under the exclusive and original jurisdiction of the LA, which therefore correctly took cognizance of the case. Hence, the Court modifies the CA’s ruling on this matter accordingly.


D.      AICI argues in its petition that it cannot be held liable for illegal dismissal because it only recruits employees for foreign employers, and as such, it does not have an employee-employer relationship with the overseas workers.

This argument does not hold water. Section 10 of RA 8042, as amended, expressly provides that a recruitment agency, such as AICI, is solidarily liable with the foreign employer for money claims arising out of the employee-employer relationship between the latter and the overseas Filipino worker. Jurisprudence explains that this solidary liability is meant to assure the aggrieved worker of immediate and sufficient payment of what is due him [Sameer Overseas Placement Agency, Inc. v. Cabiles, 740 Phil. 403, 445 (2014)], as well as to afford overseas workers an additional layer of protection against foreign employers that tend to violate labor laws. In view of the express provision of law, AICI’s lack of an employee-employer relationship with Bartolome and Yamat cannot exculpate it from its liability to pay the latter’s money claims.


E.       Nevertheless, AICI is not left without a remedy. The law does not preclude AICI from going after the foreign employer for reimbursement of any payment it has made to Bartolome and Yamat to answer for the money claims against the foreign employer [Sameer Overseas Placement Agency, Inc. v. Cabiles, 740 Phil. 403, 445 (2014)].

Related CASE BrieFs:
          a)       Sameer Overseas Placement Agency, Inc. v. Cabiles, 740 Phil. 403 (2014)
          b)       Maxicare PCIB Cigna Healthcare v. Contreras, 702 Phil. 688, 696 (2013)
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THINGS DECIDED:

A.       LAs have original and exclusive jurisdiction over claims arising out of employer-employee relations or by virtue of any law or contract involving Filipino workers for overseas deployment.
B.       Jurisdiction over the subject matter is conferred by law and cannot be acquired or waived by agreement of the parties. Xxxx employment contracts cannot divest the LA of its jurisdiction over the illegal dismissal case.
C.       The Voluntary Arbitrator under the Labor Code is one agreed upon by the parties to resolve certain disputes and is tasked to render an award or decision within twenty (20) calendar days pursuant to Article 276 of the Labor Code.
D.      Recruitment agency, such as AICI, is solidarily liable with the foreign employer for money claims arising out of the employee-employer relationship between the latter and the overseas Filipino worker.
E.       The law does not preclude recruitment agencies from going after the foreign employer for reimbursement of any payment it has made to Filipino Overseas Workers to answer for the money claims against the foreign employer.

‘Stand by things decided’ ~ Stare Decisis


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