G.R. No. 197005 - Princess Joy Placement and General Services, Inc. vs. Binalla

Respondent German A. Binalla, a registered nurse, applied for employment in Saudi Arabia in April 2002 through Princess Joy Placement and General Services, Inc. ("Princess Joy").
Binalla was referred to Reginaldo Paguio and Cynthia Latea, who assisted in processing his employment papers.
He paid fees to both Paguio (P3,000.00) and Latea (P4,500.00) without receiving receipts.
He signed a four-year contract with Al Adwani General Hospital on April 12, 2002, despite a POEA-certified two-year contract being arranged through CBM Business Management and Manpower Services (CBM).

Binalla discovered, after departure, that his actual employment terms differed from the POEA-certified contract.
Under the POEA-certified arrangement, his salary was US$550.00 per month for a two-year term, but the four-year contract imposed a lower salary of SR 1,500.00 (approximately US$400.00) per month.
Binalla asserted the signature on the POEA-certified contract was forged and that he was induced into working under inferior conditions than originally approved.
He alleged additional violations including:

Withholding of his initial salary as a bond guarantee.
Unauthorized deductions for placement fee and board and lodging despite such benefits being contractually free.
Non-payment of overtime and employee benefits such as vacation and sick leave credits.

On filing his complaint on August 9, 2004, Binalla sought monetary claims against both CBM and Princess Joy/Al Adwani.
Labor Arbiter Fructuoso T. Aurellano found merit in Binalla’s complaint, concluding that Princess Joy and CBM had jointly undertaken his recruitment and deployment.
The labor arbiter awarded Binalla various sums covering:

Salary differentials.
Deductions allegedly withheld or unremitted (including the bond and placement fee).
Overtime pay, vacation/sick leave credits, and attorney’s fees.
Both moral and exemplary damages were also awarded in large amounts.

Princess Joy appealed the LA’s ruling at the NLRC by submitting a Notice of Appeal, Memorandum of Appeal, and a Motion to Reduce and Fix Bond with an initial surety bond of P250,000.00.
The NLRC, after receiving additional bond postings to equal the monetary award, reversed the labor arbiter’s decision in its resolution dated July 27, 2007, by rejecting several of Binalla’s claims and attributing sole liability for recruitment/deployment to CBM.

Binalla moved for reconsideration after the NLRC’s ruling, which was denied by the NLRC.
He then sought relief from the Court of Appeals (CA) under Rule 65, alleging grave abuse of discretion in:

Accepting Princess Joy’s appeal despite its failure to post a sufficient bond within the mandatory ten-day period.
Misapprehending the recruitment scheme, particularly the act of contract substitution.

The CA, in its decision dated May 6, 2010, set aside the NLRC rulings on the ground that the appeal was not perfected due to the bond posting irregularities.
Princess Joy then moved for reconsideration of the CA decision, leading to a subsequent resolution by this Court on August 8, 2011, which denied the petition for lack of reversible error.

Binalla maintained that Princess Joy’s appeal was not perfected due to failure to post an adequate appeal bond within the prescribed period.
He underscored his claim of being deceived into working under a four-year contract with inferior terms, in contrast with the POEA-certified contract.

In resolving the motion for reconsideration, the Supreme Court re-examined both the technical issue of the appeal bond and the substantive merits of the case.
The Court evaluated the evidence concerning the fraudulent recruitment scheme (often referred to as “are-processing”) and the alleged contract substitution.
Ultimately, the Court set aside the CA rulings, modified the NLRC resolution, and determined specific monetary awards for Binalla.

Whether the NLRC committed grave abuse of discretion in accepting Princess Joy’s motion to reduce the appeal bond even when posted beyond the ten-day period prescribed by the NLRC rules.
Whether Princess Joy’s appeal was perfected given the bond postings made, notwithstanding the technical lapse regarding the timing.
Whether there is sufficient evidence to establish that a fraudulent recruitment scheme (are-processing) involving contract substitution was employed by Princess Joy and CBM.
Whether the reversal of the labor arbiter’s decision by the CA, premised solely on the appeal bond issue, was justified given the substantial evidence on the merits.
Whether the award of moral and exemplary damages in the initial rulings was excessive and should be revised to conform with established principles of justice in labor cases.