G.R. No. 181375 - Phil-Nippon Kyoei, Corp. vs. Gudelosao

In 1999, petitioner Sameer Overseas Placement Agency, Inc. deployed ten respondents—Maricel N. Bajaro, Pamela P. Morilla, Daisy L. Magdaong, Leah J. Tabujara, Lea M. Cancino, Michiel D. Meliang, Raquel Sumigcay, Rose R. Saria, Leona L. Angulo, and Melody B. Ingal—to Taiwan.
The deployment was for work as operators for Mabuchi Motors Company, Ltd. under individual two-year employment contracts.
Each respondent was to receive a monthly salary of NT$15,840.00.
Prior to deployment, every respondent paid a placement fee of P47,900.00 to the petitioner company.

Although the employment contracts were for two years, respondents worked for only 11 months before the contracts were terminated.
Respondents were repatriated to the Philippines following the early termination.
The termination prompted the filing of a complaint for illegal dismissal by the respondents.
Among the reliefs sought by the respondents were:

Payment of salaries and wages for the unexpired portion of their contracts in lieu of reinstatement.
Allegations of illegal deductions from monthly salaries amounting to NT$7,500.00.
Recovery of the full placement fee with 12% per annum interest.
Reimbursement of transportation expenses for those who personally purchased plane tickets, based on a contractual right to free transportation (specifically raised by Bajaro, Morilla, and Sumigcay).
Reimbursement of damages and attorney’s fees.

Petitioners contended that the termination was due to a valid retrenchment prompted by severe business losses suffered by their foreign principal.
They denied the allegation of illegal salary deductions and disputed any entitlement to damages or attorney’s fees.

The Labor Arbiter ruled that respondents were illegally dismissed because petitioners failed to validly substantiate a retrenchment defense.
The decision awarded respondents:

Reimbursement of the placement fee (P47,900.00 each) with 12% per annum interest.
Payment equivalent to three months’ salary (NT$47,520.00 each).
Recovery of NT$7,500.00 per month, representing the illegal salary deductions.
Reimbursement of NT$6,000.00 each for select respondents’ transportation expenses.
Attorney’s fees amounting to 10% of the total monetary award.

On appeal, the NLRC vacated and set aside the Labor Arbiter’s decision.
It found that all requirements for a valid retrenchment had been met.
The NLRC ruled that the awards for unpaid salaries, placement fee reimbursements, and salary deductions were without basis in law or fact.
Additionally, the NLRC absolved petitioner Lamson of personal liability, following the principle that corporate officers are not automatically liable in employment-related claims.

The CA nullified the NLRC decision in its August 22, 2005 decision and reinstated the Labor Arbiter’s ruling in toto.
The CA denied petitioners’ motion for reconsideration as reflected in the October 11, 2005 resolution.

Whether the Labor Arbiter’s decision, as reinstated by the Court of Appeals, correctly applied and interpreted Section 10 of R.A. 8042 in light of the respondents’ overseas employment contracts.
Whether the petitioners validly effected retrenchment or failed to comply with its substantive and procedural requirements.
Whether issues related to private international law and the labor standards laws of the Republic of China should be considered in interpreting the employment contracts.
Whether petitioners’ arguments regarding the liability of petitioner Lamson, as part of corporate officers, can be entertained given the procedural history.

Petitioners argued that the Labor Arbiter misconstrued and misapplied Section 10 of R.A. 8042.
They contended that the proper interpretation should include principles of private international law and the labor standards laws of the Republic of China.
They maintained that these considerations were essential for resolving the complaint but were not addressed in the lower court proceedings.