G.R. No. 197309 : October 10, 2012 ACE NAVIGATION CO., INC., VELA INTERNATIONAL MARINE LTD., an !

or RODOL"O #AMINT$AN, Petitioners, v. TEODORICO "ERNANDE%, a&&'&te b( GLENITA "ERNANDE%,Respondent. DECI)ION *RION, J.: For resolution is the petition for review on certiorari1rll which seeks to nullify the decision2rll dated Septem er 22, 2!1! and the resolution"rll dated #ay 2$,2!11 ofthe %ourt of &ppeals (CA) in %&'(.). S* +o. 112!,1. -he &ntecedents .n .cto er /, 2!!,, seaman -eodorico Fernande0 1Fernandez2, assisted y his wife, (lenita Fernande0, filed with the +ational 3a or )elations %ommission 1NLRC2 a complaint for disa ility enefits, with prayer for moral and e4emplary dama5es, plus attorneys fees, a5ainst &ce +avi5ation %o., 6nc., 7ela 6nternational #arine 3td., and8or )odolfo *amintuan 1petitioners2. -he petitioners moved to dismiss the complaint,9rll contendin5 that the la or ar iter had no :urisdiction over the dispute. -hey ar5ued that e4clusive ori5inal :urisdiction is with the voluntary ar itrator or panel of voluntary ar itrators, pursuant to Section 2/ of the *.;& Standard ;mployment %ontract 1POEA-SEC2, since the parties are covered y the &#.S<*' -%% or &#.S<*'7;3& 1as later cited y the petitioners2 collective ar5ainin5 a5reement 1CBA2. <nder Section 19 of the %=&, a dispute etween a seafarer and the company shall e settled throu5h the 5rievance machinery and mandatory voluntary ar itration. Fernande0 opposed the motion.>rll ?e ar5ued that inasmuch as his complaint involves a money claim, ori5inal and e4clusive :urisdiction over the case is vested with the la or ar iter. -he %ompulsory &r itration )ulin5s .n @ecem er /, 2!!,, 3a or &r iter )omelita +. )ioflorido denied the motion to dismiss, holdin5 that under Section 1! of )epu lic &ct 1R.A.2 +o. ,!92, the #i5rant Aorkers and .verseas Filipinos &ct of 1//>, the la or ar iter has ori5inal and e4clusive :urisdiction over money claims arisin5 out of an employer'employee relationship or y virtue of any law or contract, notwithstandin5 any provision of law to the contrary.$rll -he petitioners appealed to the +3)%, ut the la or a5ency denied the appeal. 6t a5reed with the la or ar iter that the case involves a money claim and is within the :urisdiction of the la or ar iter, in accordance with Section 1! of ).&. +o. ,!92. &dditionally, it declared that the denial of the motion to dismiss is an interlocutory order which is not appeala le. &ccordin5ly, it remanded the case to the la or ar iter for further proceedin5s. -he petitioners moved for reconsideration, ut the +3)% denied the motion, promptin5 the petitioners to elevate the case to the %& throu5h a petition for certiorariunder )ule $> of the )ules of %ourt.

-he %& @ecision -hrou5h its decision of Septem er 22, 2!1!,Brll the %& denied the petition on procedural and su stantive 5rounds. *rocedurally, it found the petitioners to have availed of the wron5 remedy when they challen5ed the la or ar iters denial of their motion to dismiss y way of an appeal to the +3)%. 6t stressed that pursuant to the +3)% rules,,rll an order denyin5 a motion to dismiss is interlocutory and is not su :ect to appeal. .n the merits of the case, the %& elieved that the petition cannot also prosper. 6t re:ected the petitioners su mission that the 5rievance and voluntary ar itration procedure of the parties %=& has :urisdiction over the case, to the e4clusion of the la or ar iter and the +3)%. &s the la or ar iter and the +3)% did, it opined that under Section 1! of ).&. +o. ,!92, the la or ar iter has the ori5inal and e4clusive :urisdiction to hear Fernande0s money claims. Further, the %& clarified that while the law/rll allows parties to su mit to voluntary ar itration other la or disputes, includin5 matters fallin5 within the ori5inal and e4clusive :urisdiction of the la or ar iters under &rticle 21B of the 3a or %ode as this %ourt reco5ni0ed in Vivero v. Court o Appea!s"1!rll the parties su mission a5reement must e e4pressed in uneCuivocal lan5ua5e. 6t found no such uneCuivocal lan5ua5e in the &#.S<*8-%% %=& that the parties a5reed to su mit money claims or, more specifically, claims for disa ility enefits to voluntary ar itration. -he %& also took note of the *.;&'S;%11rll which provides in its Section 2/ that in cases of claims and disputes arisin5 from a Filipino seafarers employment, the parties covered y a %=& shall su mit the claim or dispute to the ori5inal and e4clusive :urisdiction of the voluntary ar itrator or panel of voluntary ar itrators. -he %& e4plained that the relevant *.;&'S;% provisions should likewise e Cualified y the rulin5 in the Vivero case, the 3a or %ode, and other applica le laws and :urisprudence. 6n sum, the %& stressed that the :urisdiction of voluntary ar itrators is limited to the seafarers claims which do not fall within the la or ar iters ori5inal and e4clusive :urisdiction or even in cases where the la or ar iter has :urisdiction, the parties have a5reed in unmistaka le terms 1throu5h their %=&2 to su mit the case to voluntary ar itration. -he petitioners moved for reconsideration of the %& decision, ut the appellate court denied the motion, reiteratin5 its earlier pronouncement that on the 5round alone of the petitioners wron5 choice of remedy, the petition must fail. -he *etition -he petitioners are now efore this %ourt prayin5 for a reversal of the %& :ud5ment on the followin5 5roundsD 1. -he %& committed a reversi le error in disre5ardin5 the .mni us 6mplementin5 )ules and )e5ulations 1#RR2 of the #i5rant Aorkers and .verseas Filipinos &ct of 1//>,12rll as amended y ).&. +o. 1!!22,1"rll mandatin5 that EFor .FAs with collective ar5ainin5 a5reements, the caseshall e su mitted for voluntary ar itration in accordance with &rticles 2$1 and 2$2 of the 3a or %ode.E19rll

-he petitioners ewail the %&s re:ection of the a ove ar5ument for the reason that the remedy they pursued was inconsistent with the 2!!> )evised )ules of *rocedure of the +3)%. %itin5 $unicipa!it% o Sta. Fe v. $unicipa!it% o Aritao,1>rll they ar5ue that the Edismissal of a case for lack of :urisdiction may e raised at any sta5e of the proceedin5s.E 6n any event, they posit that the 6)) of ).&. +o. 1!!22 is in the nature of an ad:ective or procedural law which must e 5iven retroactive effect and which should have een applied y the %& in resolvin5 the present case. 2. -he %& committed a reversi le error in rulin5 that the &#.S<*'7;3& %=& does not contain uneCuivocal wordin5s for the mandatory referral of Fernande0s claim to voluntary ar itration. -he petitioners assail the %&s failure to e4plain the asis Efor rulin5 that no e4plicit or uneCuivocal wordin5s appeared on said %=& for the mandatory referral of the disa ility claim to ar itration.E1$rll -hey surmise that the %& construed the phrase Eeither party+a( refer the case to a #&+@&-.)F &)=6-)&-6.+ %.##6--;;E under Section 19.B1a2 of the %=& as merely permissive and not mandatory ecause of the use of the word E+a(.E -hey contend that notwithstandin5 the use of the word E+a(,E the parties uneCuivocally and unmistaka ly a5reed to refer the present disa ility claim to mandatory ar itration. ". -he %& committed a reversi le error in disre5ardin5 the +3)% memorandum prescri in5 the appropriate action for complaints and8or proceedin5s which were initially processed in the 5rievance machinery of e4istin5 %=&s. 6n their motion for reconsideration with the %&, the petitioners manifested that the appellate courts assailed decision had een modified y the followin5 directive of the +3)%Dchanro lesvirtuallawli rary &s one of the measures ein5 adopted y our a5ency in response to the *latform and *olicy *ronouncements on 3a or ;mployment, you are here y directed to immediately dismiss the complaint and8or terminate proceedin5s which were initially processed in the 5rievance machinery as provided in the e4istin5 %ollective =ar5ainin5 &5reements 1%=&s2 etween parties, throu5h the issuance of an .rder of @ismissal and referral of the disputes to the +ational %onciliation #ediation =oard 1+%#=2 for voluntary ar itration. F.) S-)6%- %.#*36&+%;.1Brll 9. .n Guly "1, 2!12,1,rll the petitioners manifested efore the %ourt that on Gune 1", 2!12, the %ourts Second @ivision issued a rulin5 in (.). +o. 1B2$92, entitled Estate o Ne!son R. &u!a%" represented '% (is )i e $errid% *ane P. &u!a% v. A'oitiz *e'sen $ariti+e" #nc." and ,enera! C(arterers" #nc." upholdin5 the :urisdiction of the voluntary ar itrator or panel of voluntary ar itrators over a seafarers money claim. -hey implore the %ourt that since the factual ackdrop and the issues involved in the case are similar to the present dispute, the &u!a% rulin5 should e applied to this case and which should accordin5ly e referred to the +ational %onciliation and #ediation =oard for voluntary ar itration. -he %ase for Fernande0 6n compliance with the %ourts directive,1/rll Fernande0 filed on .cto er B, 2!11 his %omment2!rll 1on the *etition2 with the plea that the petition e dismissed for lack of merit. Fernande0 presents the followin5 ar5umentsD

1. -he 6)) of the #i5rant Aorkers and .verseas Filipinos &ct of 1//> 1).&. +o. ,!922, as amended y ).&. +o. 1!!22,21rll did not divest the la or ar iters of their ori5inal and e4clusive :urisdiction over money claims arisin5 from employment, for nowhere in said 6)) is there such a divestment. 2. -he voluntary ar itrators do not have :urisdiction over the present controversy as can e deduced from &rticles 2$1 and 2$2 of the 3a or %ode. Fernande0 e4plains that his complaint does not involve any Eunresolved 5rievances arisin5 from the interpretation or implementation of the %ollective =ar5ainin5 &5reement HnorI from the interpretation or enforcement of company personnel policiesH.IE22rll &s he never referred his claim to the 5rievance machinery, there is no Eunresolved 5rievanceE to speak of. ?is complaint involves a claim for compensation and dama5es which is outside the voluntary ar itrators :urisdiction under &rticle 2$1. Further, only disputes involvin5 the union and the company shall e referred to the 5rievance machinery and to voluntary ar itration, as the %ourt held in San%o P(i!ippines -or.ers /nion-PSSL/ v. Cazares2"rll and Si!va v. CA.29rll ". -he %& correctly ruled that no uneCuivocal wordin5s appear in the %=& for the mandatory referral of Fernande0s disa ility claim to a voluntary ar itrator. -he %ourts )ulin5 Ae first rule on the procedural Cuestion arisin5 from the la or ar iters denial of the petitioners motion to dismiss the complaint. .n this point, Section $, )ule 7 of -he 2!!> )evised )ules of *rocedure of the +3)% providesDchanro lesvirtuallawli rary .n or efore the date set for the mandatory conciliation and mediation conference, the respondent may file a motion to dismiss. &ny motion to dismiss on the 5round of lack of :urisdiction, improper venue, or that the cause of action is arred y prior :ud5ment, prescription, or forum shoppin5, shall e immediately resolved y the 3a or &r iter throu5h a written order. &n order denyin5 the motion to dismiss, or suspendin5 its resolution until the final determination of the case, is not appeala le. Hunderscorin5 oursI %orollarily, Section 1!, )ule 76 of the same )ules statesDchanro lesvirtuallawli rary Frivo!ous or &i!ator% Appea!s. +o appeal from an interlocutory order shall e entertained. -o discoura5e frivolous or dilatory appeals, includin5 those taken from interlocutory orders, the %ommission may censure or cite in contempt the errin5 parties and their counsels, or su :ect them to reasona le fine or penalty. 6n #ndiana Aerospace /niversit% v. Co++. on 0i1(er Educ. ,2>rll the %ourt declared that EHaIn order denyin5 a motion to dismiss is interlocutoryEJ the proper remedy in this situation is to appeal after a decision has een rendered. %learly, the denial of the petitioners motion to dismiss in the present case was an interlocutory order and, therefore, not su :ect to appeal as the %& aptly noted. -he petitions procedural lapse notwithstandin5, the %& proceeded to review the merits of the case and ad:ud5ed the petition unmeritorious. Ae find the %&s action in order. -he 3a or %ode itself declares that Eit is the spirit and intention of this %ode that the %ommission and its mem ers and the 3a or &r iters shall use every and all reasona le means to ascertain the facts in each case speedily and o :ectively and without re5ard to technicalities of law or procedure, all in the interest of due process.E 2$rll

Ae now address the focal Cuestion of who has the ori5inal and e4clusive :urisdiction over Fernande0s disa ility claim the la or ar iter under Section 1! of ).&. +o. ,!92, as amended, or the voluntary ar itration mechanism as prescri ed in the parties %=& and the *.;&'S;%K -he answer lies in the States la or relations policy laid down in the %onstitution and fleshed out in the ena lin5 statute, the 3a or %ode. Section ", &rticle L666 1on Social Gustice and ?uman )i5hts2 of the %onstitution declaresDchanro lesvirtuallawli rary 4444 -he State shall promote the principle of shared responsi ility etween workers and employers and the preferential use of voluntary modes in settlin5 disputes, includin5 conciliation, and shall enforce their mutual compliance therewith to foster industrial peace. &rticle 2$! of the 3a or %ode 1(rievance machinery and voluntary ar itration2 statesDchanro lesvirtuallawli rary -he parties to a %ollective =ar5ainin5 &5reement shall include therein provisions that will ensure the mutual o servance of its terms and conditions. -hey shall esta lish a machinery for the ad:ustment and resolution of 5rievances arisin5 from the interpretation or implementation of their %ollective =ar5ainin5 &5reement and those arisin5 from the interpretation or enforcement of company personnel policies. &rticle 2$1 of the 3a or %ode 1Gurisdiction of 7oluntary &r itrators or panel of 7oluntary &r itrators2, on the other hand, reads in partDchanro lesvirtuallawli rary -he 7oluntary &r itrator or panel of 7oluntary &r itrators shall have ori5inal and e4clusive :urisdiction to hear and decide all unresolved 5rievances arisin5 from the interpretation or implementation of the %ollective =ar5ainin5 &5reement and those arisin5 from the interpretation or enforcement of company personnel policiesH.I &rticle 2$2 of the 3a or %ode 1Gurisdiction over other la or disputes2 declaresDchanro lesvirtuallawli rary -he 7oluntary &r itrator or panel of 7oluntary &r itrators, upon a5reement of the parties, shall also hear and decide all other la or disputes includin5 unfair la or practices and ar5ainin5 deadlocks. Further, the *.;&'S;%, which 5overns the employment of Filipino seafarers, provides in its Section 2/ on @ispute Settlement *roceduresDchanro lesvirtuallawli rary In ca&e& o, c-a'+& an '&./te& ar'&'n0 ,ro+ t1'& e+.-o(+ent, t1e .art'e& co2ere b( a co--ect'2e bar0a'n'n0 a0ree+ent &1a-- &/b+'t t1e c-a'+ or '&./te to t1e or'0'na- an e3c-/&'2e 4/r'& 'ct'on o, t1e 2o-/ntar( arb'trator or .ane- o, 2o-/ntar( arb'trator&. 6f the parties are not covered y a collective ar5ainin5 a5reement, the parties may at their option su mit the claim or dispute to either the ori5inal and e4clusive :urisdiction of the +ational 3a or )elations %ommission 1+3)%2, pursuant to )epu lic &ct 1)&2 ,!92 otherwise known as the #i5rant Aorkers and .verseas Filipinos &ct of 1//> or to the ori5inal and e4clusive :urisdiction of the voluntary ar itrator or panel of voluntary ar itrators. 6f there is no provision as to the voluntary ar itrators to e appointed y the

parties, the same shall e appointed from the accredited voluntary ar itrators of the +ational %onciliation and #ediation =oard of the @epartment of 3a or and ;mployment. Hemphasis oursI 5e ,'n +er't 'n t1e .et't'on.

<nder the a ove'Cuoted constitutional and le5al provisions, the voluntary ar itrator or panel of voluntary ar itrators has ori5inal and e4clusive :urisdiction over Fernande0s disa ility claim. -here is no dispute that the claim arose out of Fernande0s employment with the petitioners and that their relationship is covered y a %=& the &#.S<*8-%% or the &#.S<*'7;3& %=&. -he %=& provides for a 5rievance procedure for the resolution of 5rievances or disputes which occur durin5 the employment relationship and, like the 5rievance machinery created under &rticle 2$1 of the 3a or %ode, it is a two'tiered mechanism, with voluntary ar itration as the last step. %ontrary to the %&s readin5 of the %=&s &rticle 19, there is uneCuivocal or unmistaka le lan5ua5e in the a5reement which mandatorily reCuires the parties to su mit to the 5rievance procedure any dispute or cause of action they may have a5ainst each other. -he relevant provisions of the %=& stateDchanro lesvirtuallawli rary 16.7 An( D'&./te, 0r'e2ance, or +'&/n er&tan 'n0 concern'n0 an( r/-'n0, .ract'ce, 8a0e& or 8or9'n0 con 't'on& 'n t1e COM#AN: or an( breac1 o, t1e Contract o, E+.-o(+ent, or an( '&./te ar'&'n0 ,ro+ t1e +ean'n0 or a..-'cat'on o, t1e .ro2'&'on& o, t1'& A0ree+ent or a c-a'+ o, 2'o-at'on t1ereo, or an( co+.-a'nt or ca/&e o, act'on t1at an( &/c1 )ea+an +a( 1a2e a0a'n&t t1e COM#AN:, a& 8e-- a& co+.-a'nt& 81'c1 t1e COM#AN: +a( 1a2e a0a'n&t &/c1 )ea+an &1a-- be bro/01t to t1e attent'on o, t1e GRIEVANCE RE)OL$TION COMMITTEE be,ore e't1er .art( ta9e& an( act'on, -e0a- or ot1er8'&e. *r'n0'n0 &/c1 a '&./te to t1e Gr'e2ance Re&o-/t'on Co++'ttee &1a-- be /n8a'2ab-e .rere;/'&'te or con 't'on .rece ent ,or br'n0'n0 an( act'on, -e0a- or ot1er8'&e, 'n an( ,or/+ an t1e ,a'-/re to &o re,er t1e '&./te &1a-- bar an( an a-- -e0a- or ot1er act'on&. 19.Ba2 I, b( rea&on o, t1e nat/re o, t1e D'&./te, t1e .art'e& are /nab-e to a+'cab-( &ett-e t1e '&./te, e't1er .art( +a( re,er t1e ca&e to a MANDATOR: AR*ITRATION COMMITTEE.-he #&+@&-.)F &)=6-)&-6.+ %.##6--;; shall consist of one representative to e desi5nated y the <+6.+, and one representative to e desi5nated y the %.#*&+F and a third mem er who shall act as %hairman and shall e nominated y mutual choice of the parties. 444 h2 Re,erra- o, a-- /nre&o-2e '&./te& ,ro+ t1e Gr'e2ance Re&o-/t'on Co++'ttee to t1e Man ator( Arb'trat'on Co++'ttee &1a-- be /n8a'2ab-e .rere;/'&'te or con 't'on .rece ent ,or br'n0'n0 an( act'on, c-a'+, or ca/&e o, act'on, -e0a- or ot1er8'&e, be,ore an( co/rt, tr'b/na-, or .ane- 'n an( 4/r'& 'ct'on. T1e ,a'-/re b( a .art( or &ea+an to &o re,er an a2a'- one&e-, to t1e '&./te re&o-/t'on +ec1an'&+ conta'ne 'n t1'& act'on &1a-- bar an( -e0a- or ot1er act'on. A-- .art'e& e3.re&&-( a0ree t1at t1e or er-( re&o-/t'on o, a-- c-a'+& 'n t1e .re&cr'be +anner &er2e t1e 'ntere&t& o, reac1'n0 &ett-e+ent& or c-a'+& 'n an or er-( an /n',or+ +anner, a& 8e-- a& .re&er2'n0 .eace,/- an 1ar+on'o/& -abor re-at'on& bet8een &ea+an, t1e $n'on, an t1e Co+.an(.2Brll 1emphases ours2 Ahat mi5ht have caused the %& to miss the clear intent of the parties in prescri in5 a 5rievance procedure in their %=& is, as the petitioners have intimated, the use of the

au4iliary ver E+a(E in &rticle 19.B1a2 of the %=& which, to reiterate, .ro2' e& t1at <', b( rea&on o, t1e nat/re o, t1e D'&./te, t1e .art'e& are /nab-e to a+'cab-( &ett-e t1e '&./te, e't1er .art( +a( re,er t1e ca&e to a MANDATOR: AR*ITRATION COMMITTEE.E2,rll Ahile the %& did not Cualify its readin5 of the su :ect provision of the %=&, it is reasona le to conclude that it viewed as optional the referral of a dispute to the mandatory ar itration committee when the parties are una le to amica ly settle the dispute. Ae find this a strained interpretation of the %=& provision. -he %& read the provision separately, or in isolation of the other sections of &rticle 19, especially 19.B1h2, which, in clear, e4plicit lan5ua5e, states that t1e <re,erra- o, a-- /nre&o-2e '&./te& ,ro+ t1e Gr'e2ance Re&o-/t'on Co++'ttee to t1e Man ator( Arb'trat'on Co++'ttee &1a-- be /n8a'2ab-e .rere;/'&'te or con 't'on .rece ent ,or br'n0'n0 an( act'on, c-a'+, or ca/&e o, act'on, -e0a- or ot1er8'&e, be,ore an( co/rt, tr'b/na-, or .ane- 'n an( 4/r'& 'ct'on<29=>r?@-- an t1at t1e ,a'-/re b( a .art( or &ea+an to &o re,er t1e '&./te to t1e .re&cr'be '&./te re&o-/t'on +ec1an'&+ &1a-- bar an( -e0a- or ot1er act'on. )ead in its entirety, the %=&s &rticle 19 1(rievance *rocedure2 unmistaka ly reflects the parties a5reement to su mit any unresolved dispute at the 5rievance resolution sta5e to mandatory voluntary ar itration under &rticle 19.B1h2 of the %=&. &nd, it should e added that, in compliance with Section 2/ of the *.;&'S;% which reCuires that in cases of claims and disputes arisin5 from a seafarers employment, the parties covered y a %=& shall su mit the claim or dispute to the ori5inal and e4clusive :urisdiction of the voluntary ar itrator or panel of voluntary ar itrators. Since the parties used uneCuivocal lan5ua5e in their %=& for the su mission of their disputes to voluntary ar itration 1a condition laid down in Vivero for the reco5nition of the su mission to voluntary ar itration of matters within the ori5inal and e4clusive :urisdiction of la or ar iters2, we find that the %& committed a reversi le error in its rulin5J it disre5arded the clear mandate of the %=& etween the parties and the *.;&'S;% for su mission of the present dispute to voluntary ar itration. %onsistent with this findin5, Fernande0s contention that his complaint for disa ility enefits is a money claim that falls within the ori5inal and e4clusive :urisdiction of the la or ar iter under Section 1! of ).&. +o. ,!92 is untena le. Ae likewise re:ect his ar5ument that he never referred his claim to the 5rievance machinery 1so that no unresolved 5rievance e4ists as reCuired under &rticle 2$1 of the 3a or %ode2, and that the parties to the case are not the union and the employer."!rll +eedless to state, no such distinction e4ists in the parties %=& and the *.;&'S;%. 6t ears stressin5 at this point that we are upholdin5 the :urisdiction of the voluntary ar itrator or panel of voluntary ar itrators over the present dispute, not only ecause of the clear lan5ua5e of the parties %=& on the matterJ more importantly, we so uphold the voluntary ar itrators :urisdiction, in reco5nition of the States e4press preference for voluntary modes of dispute settlement, such as conciliation and voluntary ar itration as e4pressed in the %onstitution, the law and the rules. 6n this li5ht, we see no need to further consider the petitioners su mission re5ardin5 the 6)) of the #i5rant Aorkers and .verseas Filipinos &ct of 1//>, as amended y ).&. +o. 1!!22, e4cept to note that the 6)) lends further support to our rulin5.

6n closin5, we Cuote with approval a most recent %ourt pronouncement on the same issue, thus It '& &ett-e t1at 81en t1e .art'e& 1a2e 2a-' -( a0ree on a .roce /re ,or re&o-2'n0 0r'e2ance& an to &/b+'t a '&./te to 2o-/ntar( arb'trat'on t1en t1at .roce /re &1o/- be &tr'ct-( ob&er2e ."1rll 1emphasis ours2 5AERE"ORE, premises considered, the petition is GRANTED. -he assailed decision and resolution of the %ourt of &ppeals are )ET A)IDE. -eodorico Fernande0Ms disa ility claim is RE"ERRED to the (rievance )esolution %ommittee of the partiesM collective ar5ainin5 a5reement and8or the #andatory &r itration %ommittee, if warranted.rNlNOlP rNr )O ORDERED.

SUNACE case full text

Petitioner, Sunace International Management Services (Sunace), a corporation dul organi!ed and existing under t"e la#s of t"e P"ilippines, deplo ed to $ai#an %ivina A& Monte"ermo!o (%ivina) as a domestic "elper under a '()mont" contract effective *e+ruar ', ',,-&[1] $"e deplo ment #as #it" t"e assistance of a $ai#anese +ro.er, Edmund /ang, President of 0et Cro#n International Co&, 1td& After "er '()mont" contract expired on *e+ruar ', ',,2, %ivina continued #or.ing for "er $ai#anese emplo er, 3ang 4ui 5iong, for t#o more ears, after #"ic" s"e returned to t"e P"ilippines on *e+ruar 6, (777& S"ortl after "er return or on *e+ruar '6, (777, %ivina filed a complaint[2] +efore t"e National 1a+or 4elations Commission (N14C) against Sunace, one Adelaide Pere!, t"e $ai#anese +ro.er, and t"e emplo er) foreign principal alleging t"at s"e #as 8ailed for t"ree mont"s and t"at s"e #as underpaid& $"e follo#ing da or on *e+ruar '9, (777, 1a+or Ar+itration Associate 4egina $& :avin issued Summons[3] to t"e Manager of Sunace, furnis"ing it #it" a cop of %ivina;s complaint and directing it to appear for mandator conference on *e+ruar (2, (777& $"e sc"eduled mandator conference #as reset& It appears to "ave +een concluded, "o#ever& <n April =, (777, %ivina filed "er Position Paper [4] claiming t"at under "er original one) ear contract and t"e () ear extended contract #"ic" #as #it" t"e .no#ledge and consent of Sunace, t"e follo#ing amounts representing income tax and savings #ere deducted> ?ear ',,',,2 ',,, %eduction for Income $ax N$'7,697&77 N$,,977&77 N$'@,@77&77 %eduction for Savings N$(@,'77&77 N$@=,777&77 N$@=,777&77A[5]

and #"ile t"e amounts deducted in ',,- #ere refunded to "er, t"ose deducted in ',,2 and ',,, #ere not& <n even date, Sunace, + its ProprietorB:eneral Manager Maria 1uisa <larte, filed its Cerified Ans#er and Position Paper,[6] claiming as follo#s, Duoted verbatim> COMPLAINANT IS NOT ENTITLED FOR THE REFUND OF HER 24 MONTHS SAVINGS @& Complainant could not an more claim nor entitled for t"e refund of "er (6 mont"s savings as s"e alread too. +ac. "er saving alread last ear and t"e emplo er did not deduct an mone from "er salar , in accordance #it" a Fascimile Message from t"e respondent SUNACE;s emplo er, 0et Cro#n International Co& 1td&, a xerograp"ic cop of #"ic" is "ere#it" attac"ed as ANNEX 2 "ereofA COMPLAINANT IS NOT ENTITLED TO REFUND OF HER !4 MONTHS TAX AND PA"MENT OF ATTORNE"#S FEES 6& $"ere is no +asis for t"e grant of tax refund to t"e complainant as t"e s"e finis"ed "er $%e &ea' c$%('ac( and "ence, #as not illegall dismissed + "er emplo er & S"e could onl la claim over t"e tax refund or muc" more +e a#arded of damages suc" as attorne ;s fees as said reliefs are availa+le onl #"en t"e dismissal of a migrant #or.er is #it"out 8ust valid or la#ful cause as defined + la# or contract& $"e rationales +e"ind t"e a#ard of tax refund and pa ment of attorne ;s fees is not to enric" t"e complainant +ut to compensate "im for actual in8ur suffered& Complainant did not suffer in8ur , "ence, does not deserve to +e compensated for #"atever .ind of damages& 3ence, t"e complainant "as N< cause of action against respondent SUNACE for monetar claims, considering t"at s"e "as +een totall paid of all t"e monetar +enefits due "er under "er Emplo ment Contract to "er full satisfaction& =& *urt"ermore, t"e tax deducted from "er salar is in compliance #it" t"e $ai#anese la#, #"ic" respondent SUNACE "as no control and complainant "as to o+e and t"is 3onora+le <ffice "as no aut"orit B8urisdiction to intervene +ecause t"e po#er to tax is a sovereign po#er #"ic" t"e $ai#anese :overnment is supreme in its o#n territor & $"e sovereign po#er of taxation of a state is recogni!ed under international la# and among sovereign states&

-& $"at respondent SUNACE respectfull reserves t"e rig"t to file supplemental Cerified Ans#er andBor Position Paper to su+stantiate its pra er for t"e dismissal of t"e a+ove case against t"e "erein respondent& AN% E? /A? <* ) x x x x (Emp"asis and underscoring supplied) 4eacting to %ivina;s Position Paper, Sunace filed on April (9, (777 an F& & & ANS/E4 $< C<MP1AINAN$;S alleging t"at %ivina;s () ear extension of "er contract #as #it"out its .no#ledge and consent, "ence, it "ad no lia+ilit attac"ing to an claim arising t"erefrom, and %ivina in fact executed a /aiverBHuitclaim and 4elease of 4esponsi+ilit and an Affidavit of %esistance, cop of eac" document #as annexed to said F& & & ANS/E4 $< C<MP1AINAN$;S P<SI$I<N PAPE4&G
P<SI$I<N PAPE4G[7]

$o Sunace;s F& & & ANS/E4 $< C<MP1AINAN$;S P<SI$I<N PAPE4,G %ivina filed a ()page repl , [8] #it"out, "o#ever, refuting Sunace;s disclaimer of .no#ledge of t"e extension of "er contract and #it"out sa ing an t"ing a+out t"e 4elease, /aiver and Huitclaim and Affidavit of %esistance& $"e 1a+or Ar+iter, re8ected Sunace;s claim t"at t"e extension of %ivina;s contract for t#o more ears #as #it"out its .no#ledge and consent in t"is #ise> /e re8ect Sunace;s su+mission t"at it s"ould not +e "eld responsi+le for t"e amount #it""eld +ecause "er contract #as extended for ( more ears #it"out its .no#ledge and consent +ecause as Annex FEG[9] s"o#s, Sunace and Edmund /ang "ave not stopped communicating #it" eac" ot"er and et t"e matter of t"e contract;s extension and Sunace;s alleged non)consent t"ereto "as not +een categoricall esta+lis"ed& /"at Sunace s"ould "ave done #as to #rite to P<EA a+out t"e extension and its o+8ection t"ereto, cop furnis"ed t"e complainant "erself, "er foreign emplo er, 3ang 4ui 5iong and t"e $ai#anese +ro.er, Edmund /ang& And +ecause it did not, it is presumed to "ave consented to t"e extension and s"ould +e lia+le for an t"ing t"at resulted t"ereform (sic)&[10] (Underscoring supplied) $"e 1a+or Ar+iter re8ected too Sunace;s argument t"at it is not lia+le on account of %ivina;s execution of a /aiver and Huitclaim and an Affidavit of %esistance& <+served t"e 1a+or Ar+iter> S"ould t"e parties arrive at an agreement as to t"e #"ole or an part of t"e dispute, t"e same s"all +e reduced to #riting and signed + t"e parties and t"eir respective counsel ( sic), if an , +efore t"e 1a+or Ar+iter& $"e settlement s"all +e approved + t"e 1a+or Ar+iter after +eing satisfied t"at it #as voluntaril entered into + t"e parties and after "aving explained to t"em t"e terms and conseDuences t"ereof& A compromise agreement entered into + t"e parties not in t"e presence of t"e 1a+or Ar+iter +efore #"om t"e case is pending s"all +e approved + "im, if after confronting t"e parties, particularl t"e complainants, "e is satisfied t"at t"e understand t"e terms and conditions of t"e settlement and t"at it #as entered into freel voluntaril ( sic) + t"em and t"e agreement is not contrar to la#, morals, and pu+lic polic & And +ecause no consideration is indicated in t"e documents, #e stri.e t"em do#n as contrar to la#, morals, and pu+lic polic & [11]

3e accordingl decided in favor of %ivina, + decision of <cto+er ,, (777,[12] t"e dispositive portion of #"ic" reads> /"erefore, 8udgment is "ere+ rendered ordering respondents SUNACE IN$E4NA$I<NA1 SE4CICES and its o#ner A%E1AI%A PE4:E, +ot" in t"eir personal capacities and as agent of 3ang 4ui 5iongBEdmund /ang to 8ointl and severall pa complainant %ICINA A& M<N$E3E4M<I< t"e sum of N$,',,97&77 in its peso eDuivalent at t"e date of pa ment, as refund for t"e amounts #"ic" s"e is "ere+ ad8udged entitled to as earlier discussed plus '7J t"ereof as attorne ;s fees since compelled to litigate, complainant "ad to engage t"e services of counsel& S< <4%E4E%&[13] (Underescoring supplied)

<n appeal of Sunace, t"e N14C, + 4esolution of April @7, (77(,[14] affirmed t"e 1a+or Ar+iter;s decision& Cia petition for certiorari,[15] Sunace elevated t"e case to t"e Court of Appeals #"ic" dismissed it outrig"t + 4esolution of Novem+er '(, (77(,[16] t"e full text of #"ic" reads> $"e petition for certiorari faces outrig"t dismissal& $"e petition failed to allege facts constitutive of grave a+use of discretion on t"e part of t"e pu+lic respondent amounting to lac. of 8urisdiction #"en t"e N14C affirmed t"e 1a+or Ar+iter;s finding t"at petitioner Sunace International Management Services impliedl consented to t"e extension of t"e contract of private respondent %ivina A& Monte"ermo!o& It is undisputed t"at petitioner #as continuall communicating #it" private respondent;s foreign emplo er (sic)& As agent of t"e foreign principal, Fpetitioner cannot profess ignorance of suc" extension as o+viousl , ()e ac( $* ()e +'i%ci+al e,(e%-i%g c$m+lai%a%( (sic) em+l$&me%( c$%('ac( %ecessa'il& .$/%- i(&G :rave a+use of discretion is not present in t"e case at +ar& ACCORDINGL", t"e petition is "ere+ DENIED DUE COURSE and DISMISSED&
[17]

S< <4%E4E%& (Emp"asis on #ords in capital letters in t"e originalA emp"asis on #ords in small letters and underscoring supplied) Its Motion for 4econsideration "aving +een denied + t"e appellate court + 4esolution of 0anuar '6, (776, [18] Sunace filed t"e present petition for revie# on certiorari& $"e Court of Appeals affirmed t"e 1a+or Ar+iter and N14C;s finding t"at Sunace .ne# of and impliedl consented to t"e extension of %ivina;s () ear contract& It #ent on to state t"at FIt is undisputed t"at KSunaceL #as continuall communicating #it" K%ivina;sL foreign emplo er&G It t"us concluded t"at FKaLs agent of t"e foreign principal, Mpetitioner cannot profess ignorance of suc" extension as o+viousl , t"e act of t"e principal extending complainant (sic) emplo ment contract necessaril +ound it&;G Contrar to t"e Court of Appeals finding, t"e alleged continuous communication #as #it" t"e $ai#anese +ro.er /ang, not #it" t"e foreign emplo er 5iong& $"e *e+ruar (', (777 telefax message from t"e $ai#anese +ro.er to Sunace, t"e $%l& +asis of a finding of continuous communication, reads verbatim> xxxx 4egarding to %ivina, s"e did not sa an t"ing a+out "er saving in police station& As #e contact #it" "er emplo er, s"e too. +ac. "er saving alread last ears& And t"e did not deduct an mone from "er salar & <r s"e #ill call +ac. "er emplo er to c"ec. it again& If "er emplo er said esN #e #ill get it +ac. for "er&

$"an. ou and +est regards& (sgd&) Edmund /ang President[19]

$"e finding of t"e Court of Appeals s$lel& on t"e +asis of t"e a+ove)Duoted telefax message, t"at Sunace continuall communicated #it" t"e foreign FprincipalG ( sic) and t"erefore #as a#are of and "ad consented to t"e execution of t"e extension of t"e contract is misplaced& $"e message does not provide evidence t"at Sunace #as priv to t"e ne# contract executed after t"e expiration on *e+ruar ', ',,2 of t"e original contract& $"at Sunace and t"e $ai#anese +ro.er communicated regarding %ivina;s allegedl #it""eld savings does not necessaril mean t"at Sunace ratified t"e extension of t"e contract& As Sunace points out in its 4epl [20] filed +efore t"e Court of Appeals, As can +e seen from t"at letter communication, it #as 8ust an information given to t"e petitioner t"at t"e private respondent "ad tKa.enL alread "er savings from "er foreign emplo er and t"at no deduction #as made on "er salar & It contains not"ing a+out t"e extension or t"e petitioner;s consent t"ereto&[21] Parent"eticall , since t"e telefax message is dated *e+ruar (', (777, it is safe to assume t"at it #as sent to enlig"ten Sunace #"o "ad +een directed, + Summons issued on *e+ruar '9, (777, to appear on *e+ruar (2, (777 for a mandator conference follo#ing %ivina;s filing of t"e complaint on *e+ruar '6, (777& 4especting t"e Court of Appeals follo#ing dictum> As agent of its foreign principal, KSunaceL cannot profess ignorance of suc" an extension as o+viousl , t"e act of its principal extending K%ivina;sL emplo ment contract necessaril +ound it,[22] it too is a misapplication, a misapplication of t"e t"eor of imputed .no#ledge& $"e t"eor of imputed .no#ledge ascri+es t"e .no#ledge of t"e agent, Sunace, to t"e principal, emplo er 5iong, %$( ()e $()e' 0a& a'$/%-&[23] $"e .no#ledge of t"e principal)foreign emplo er cannot, t"erefore, +e imputed to its agent Sunace& $"ere +eing no su+stantial proof t"at Sunace .ne# of and consented to +e +ound under t"e () ear emplo ment contract extension, it cannot +e said to +e priv t"ereto& As suc", it and its Fo#nerG cannot +e "eld solidaril lia+le for an of %ivina;s claims arising from t"e () ear emplo ment extension& As t"e Ne# Civil Code provides, Contracts ta.e effect onl +et#een t"e parties, t"eir assigns, and "eirs, except in case #"ere t"e rig"ts and o+ligations arising from t"e contract are not transmissi+le + t"eir nature, or + stipulation or + provision of la#&[24] *urt"ermore, as Sunace correctl points out, t"ere #as an implied revocation of its agenc relations"ip #it" its foreign principal #"en, after t"e termination of t"e original emplo ment contract, t"e foreign principal directl negotiated #it" %ivina and entered into a ne# and separate emplo ment contract in $ai#an& Article ',(6 of t"e Ne# Civil Code reading $"e agenc is revo.ed if t"e principal directl manages t"e +usiness entrusted to t"e agent, dealing directl #it" t"ird persons& t"us applies& In lig"t of t"e foregoing discussions, consideration of t"e validit of t"e /aiver and Affidavit of %esistance #"ic" %ivina executed in favor of Sunace is rendered unnecessar &

1HEREFORE, t"e petition is GRANTED& $"e c"allenged resolutions of t"e Court of Appeals are "ere+ REVERSED and SET ASIDE& $"e complaint of respondent %ivina A& Monte"ermo!o against petitioner is DISMISSED&