G.R. No. L-3616 - Carreon vs. De la Cruz

On August 15, 1999, Placewell International Services Corporation (PISC) deployed Ireneo B. Camote to work as a building carpenter for SAAD Trading and Contracting Co. at the Kingdom of Saudi Arabia (KSA) under a contract lasting two years.
The original employment contract, approved by the Philippine Overseas Employment Administration (POEA), stipulated a salary of US$370.00 per month.

At the job site, respondent was allegedly found incompetent by his foreign employer, which led to his termination from the original position.
Instead of complete dismissal, respondent pleaded for his retention and consented to a new arrangement that involved accepting a lower salary of SR 800.00 per month.
The new employment contract, allegedly written in Arabic and under duress (with threats of job loss for refusal), replaced the original POEA-approved contract.

On November 27, 2001, respondent filed a sworn Complaint for monetary claims, asserting:

Coercion to sign a new contract;
Receipt of a reduced salary (SR 590.00 per month in practice) contrary to the agreed US$370.00 per month; and
Non-payment of overtime pay despite rendering nine hours of daily work.

The modification of the employment contract violated Section 10 of Republic Act No. 8042;
Respondent was entitled to his original contracted salary; and
Any alleged overtime work, computed against the modified rate, was substantially equivalent to what should have been paid under the original contract.

Additionally, the labor arbiter awarded attorney’s fees equal to 10% of the total judgment award due to the necessity for legal representation.

The National Labor Relations Commission (NLRC) subsequently set aside the labor arbiter’s decision (November 20, 2002 Resolution), dismissing the case for lack of cause of action.
Respondent then filed a Petition for Certiorari under Rule 65 in the Court of Appeals, which:

The reduction of respondent’s salary from US$370.00 to SR 800.00 per month was a clear violation of Section 10 of R.A. No. 8042;
The alleged incompetence of the respondent lacked substantiation; and
The unauthorized deductions amounting to P171,780.00 were deleted for lack of factual or legal basis.

Petitioner contended that respondent failed to prove that he was forced to enter into the new employment contract, arguing that any such contract was voluntarily agreed upon.
Petitioner further argued:

The claim should be barred by laches as the respondent did not immediately report problems until nearly two years after deployment; and
The award for unauthorized deductions and attorney’s fees was unfounded.

Citing Chavez v. Bonto-Perez, petitioner stressed that any subsequent side agreement reducing the approved salary is void and cannot supersede the original POEA-approved employment contract.

Whether the modification of the original POEA-approved employment contract, which reduced the respondent’s salary, violated Section 10 of R.A. No. 8042.

Did the circumstances surrounding the execution of the new contract indicate coercion or force?
Is the forced acceptance of a lower salary a breach of the mandatory standards of an approved contract?

The validity of awarding attorney’s fees and the computation of unauthorized deductions.

Were the additional awards, such as attorney’s fees, justified under established legal principles in cases of wage recovery?
Did the NLRC and Court of Appeals correctly apply legal standards in computing or deleting the unauthorized deductions?

Whether the delay in asserting claims by the respondent should bar his monetary recovery under the principle of laches; and
Whether the timing of the complaint’s filing falls within the permissible period under applicable labor laws.