Aldovino v. Gold and Green Manpower (2019): OFWs Dismissed on a Whim

Seven workers applied for overseas work through Gold and Green Manpower, a local manning agency whose foreign principal was Sage International Development Company. They were hired as sewers for a company in Taiwan. Their contracts provided an eight-hour working day, a fixed monthly salary and overtime pay.

Before deployment, the agency required each of them to pay a placement fee of P72,000. They could not raise the money, so the agency referred them to a financing company, where they borrowed it. In Taiwan, the agency took their travel documents, including their passports. They were made to sign a new contract that paid them per piece instead of a fixed monthly salary. They worked from 8:00 a.m. to 9:00 p.m., six days a week, sometimes also on Sundays without overtime premium. They earned less than their original contract promised and fell behind on their loans.

On January 19, 2009, six of them filed a complaint in a Taiwan court against their employer and Sage International. On March 26, 2009, at a meeting before the Bureau of Labor Affairs, the employer told them to go back to the Philippines because it was no longer interested in their services. They were made to pack and were left at a train station in Taipei. They stayed for a week at the Manila Economic and Cultural Office and then for four months in a shelter.

The parties then signed a compromise agreement to settle the Taiwan case. It provided for payments of NT$500,000 and NT$1 million, and said the workers gave up all other rights to compensation. The workers who had sued also signed quitclaims. All seven returned to the Philippines on July 28, 2009 and filed a complaint before the Labor Arbiter for illegal dismissal, underpayment, refund of placement fees, damages and other money claims.

The Labor Arbiter found no illegal dismissal but gave each worker P20,000 as financial assistance. The NLRC said the workers had returned voluntarily and the compromise agreement barred further claims; it deleted the financial assistance. The Court of Appeals reversed: it found the workers illegally dismissed, ordered a refund of their placement fees with 12% interest, and awarded salaries for the unexpired portion of their contracts "or for three (3) months for every year of the unexpired term, whichever is less." The workers asked the Supreme Court to remove that cap. The other side argued that the compromise agreement released it from liability.

Did the compromise agreement bar the workers' claims? Were they illegally dismissed? And are they owed salary for the whole unexpired portion of their contracts, despite the three-month cap that Section 7 of Republic Act No. 10022 had put back into the law?

The Supreme Court granted the workers' petition.

Philippine law applies. The contracts were signed in the Philippines, so Philippine law governs them. The Court said security of tenure "is not stripped off when Filipinos work in a different jurisdiction."

The compromise agreement and quitclaims did not bar the case. Waivers and quitclaims by employees are generally frowned upon, because employers and employees do not stand on equal footing. The compromise agreement was meant to settle the underpayment case in Taiwan, not the workers' other legal claims. The Court said blanket waivers that free employers from liability are ineffective. The workers had just been let go and signed out of dire necessity.

The dismissal was illegal. An employer may end employment only for a just or authorized cause and after due process. The Court quoted Article 297 [282] (just causes for dismissal by the employer) and Article 300 [285] (termination by the employee). The employer carries the burden of proving that a dismissal was valid. Here the workers were let go "merely because respondents no longer wanted their services," which is not a just or authorized cause. The Court said: "Employment contracts cannot be terminated on a whim." Signing the compromise agreement was not a resignation.

No due process. The Court said: "The employer must comply with the two (2)-notice requirement, while the employee must be given an opportunity to be heard." The workers were only verbally dismissed, with no notice and no stated cause.

Damages and fees. The Court found bad faith: the piece-rate contract violated the Migrant Workers and Overseas Filipinos Act, the workers were underpaid and denied overtime premium, and they were dismissed without notice and left at a train station. It awarded moral and exemplary damages and attorney's fees under Article 2208 of the Civil Code. It also upheld the refund of the placement fees with 12% interest a year under Section 7 of Republic Act No. 10022.

The three-month cap is void. The Court recalled Serrano v. Gallant Maritime (2009) and Sameer Overseas Placement Agency v. Cabiles (2014). It said: "Incorporating a similarly worded provision in a subsequent legislation does not cure its unconstitutionality." The reinstated clause in Section 7 of Republic Act No. 10022 "has no force and effect of law."

The order. Gold and Green Manpower, Sage International and Alberto C. Alvina must pay each worker:

1. salary for the unexpired portion of the employment contract;
2. the placement fee, with 12% interest a year;
3. P50,000 in moral damages;
4. P25,000 in exemplary damages;
5. attorney's fees of 10% of the award; and
6. 6% interest a year on the total award from the finality of the decision until paid, except the placement fee refund, which earns 12%.

Overseas workers whose contracts were signed in the Philippines keep their security of tenure abroad; a dismissal without a just or authorized cause and without the two notices is illegal; a compromise agreement or quitclaim signed out of necessity does not bar the worker's claims; and the three-month cap reinstated by Section 7 of Republic Act No. 10022 is unconstitutional, so the worker gets salary for the entire unexpired contract.

Aldovino brings several common OFW problems into one decision: a contract replaced after arrival, passports taken, a dismissal by word of mouth, and a settlement signed in a hurry. It confirms that a worker in that position can still bring a case in the Philippines. It also shows the current numbering of the Labor Code: the Court quoted the just causes as Article 297 [282] and resignation as Article 300 [285].

Here is a made-up illustration, with invented names. Lorna works abroad on a two-year contract signed in Manila. After eight months her employer says it no longer needs her and has her sign a paper accepting a small sum and waiving all claims. If a labor tribunal finds that she was let go without a valid cause and signed only because she had no other means, the paper may not stop her claim, and under Aldovino the measure of her salary claim is the 16 months left on her contract.

For plain answers, read Fired without notice? and OFW illegally dismissed: salary for the unexpired contract. Before signing with or paying any agency, check its license on the DMW list. For a case of your own, see where to find legal help.