Case Summary (G.R. No. 196036)
Procedural History
Respondents filed complaints for illegal dismissal and related money claims on 14 December 1993. The Labor Arbiter rendered a dispositive decision on 7 May 1997 ordering PRO Agency Manila, Inc. and Abdul Rahman Al Mahwes to jointly and severally pay specified amounts (unpaid salaries, overtime, unexpired contract amounts, refund of plane tickets, refund of placement fees, moral and exemplary damages, and attorney’s fees). A writ of execution was issued on 10 October 1997 and subsequently returned unsatisfied; alias writs followed. On 30 October 2002 respondents moved to implead corporate officers and directors as judgment debtors, naming petitioner; an order of 25 April 2003 granted impleader as to petitioner and another officer. Subsequent executions led to garnishment of petitioner’s bank deposit and levy on real property. Petitioner filed motions to quash the third alias writ in 2005–2006 which were denied on 26 June 2006. The NLRC denied petitioner’s appeal of that denial (29 November 2007). The Court of Appeals affirmed the NLRC (15 November 2010) and denied petitioner’s motions for reconsideration (25 February 2011). Petitioner filed a Rule 45 petition with the Supreme Court on 30 March 2011.
Issues Presented
- Whether the petition for review was timely filed.
- Whether petitioner may be held jointly and severally liable with PRO Agency Manila, Inc. under Section 10 of R.A. 8042 despite not being impleaded in the original complaint and not being named in the dispositive portion of the final 1997 Decision.
Applicable Law and Doctrinal Principles
- Section 10, Republic Act No. 8042 (Migrant Workers and Overseas Filipinos Act of 1995): grants NLRC original and exclusive jurisdiction over specified money claims, provides that liability of principal/employer and recruitment/placement agency shall be joint and several, and expressly states that if the recruitment/placement agency is a juridical person, the corporate officers and directors “shall themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid claims and damages.” The provision also makes such clause a condition precedent to contract approval and subject to the agency’s performance bond. (Text of Section 10 is reproduced in the record.)
- Neypes rule (as applied in the record): where a motion for reconsideration is filed and denied, a fresh period of 15 days runs from receipt of the denial within which to file the appeal to the Supreme Court.
- Established jurisprudence on immutability of judgments: once a decision becomes final and executory, its dispositive portion (fallo) is immutable and may not be modified by the tribunal that rendered it; orders of execution must conform to the fallo and cannot alter the judgment by imposing liability on persons not named in the dispositive portion. Precedents cited in the record support the principle that proceedings or orders purporting to amend the dispositive portion after finality are null and void.
Court’s Analysis — Timeliness of the Petition
The Court applied the Neypes rule to conclude that petitioner had a fresh 15-day period to file the petition counted from receipt of the Court of Appeals’ denial of her motions for reconsideration. Petitioner received that CA resolution on 16 March 2011 and thus had until 31 March 2011 to file the Rule 45 petition. The petition was filed on 30 March 2011, within the 15-day window; therefore it was timely. The Court rejected respondents’ contention that filing motions for reconsideration instead of directly appealing forfeited petitioner’s right and required a different calculation of the appeal period.
Court’s Analysis — Liability of Corporate Officers under Section 10, R.A. 8042
Although Section 10 of R.A. 8042 expressly imposes joint and solidary liability on corporate officers and directors of recruitment/placement agencies for money claims, the Court emphasized that such liability is not automatically applied without a factual finding that the officers were remiss in directing the affairs of the agency. The Court relied on its prior pronouncements (as cited in the record) that to make officers and directors personally liable there must be a separate finding that they sponsored, tolerated, or otherwise were negligent in the company’s conduct leading to the worker’s injury or claim. Application of that principle to the present record showed no finding, and no allegation adequately averred, that petitioner failed in her managerial duties or otherwise caused or contributed to respondents’ illegal dismissal. The Court noted respondents did not point to specific instances in the record showing petitioner’s personal involvement or neglect in the agency’s operations that produced the award.
Court’s Analysis — Immutability of the 1997 Decision and Invalidity of Late Impleader for Execution
The Court held that the 7 May 1997 Decision became final and executory because it was not appealed. The dispositive portion of that decision expressly adjudged liability only against PRO Agency Manila, Inc. and Abdul Rahman Al Mahwes. Subsequent proceedings in 2002 to implead petitioner for the purpose of execution sought effectively to alter the dispositive tenor of a final judgment by making an additio
...continue readingCase Syllabus (G.R. No. 196036)
Case Caption, Court, and Decision Reference
- G.R. No. 196036; decided October 23, 2013.
- Reported in 720 Phil. 475, First Division.
- Decision penned by Chief Justice Sereno; concurred in by Justices Leonardo-De Castro, Bersamin, Villarama, Jr., and Reyes.
- The petition is a Rule 45 Petition dated 30 March 2011, assailing: (a) the Decision of the Court of Appeals (CA) in CA-G.R. SP No. 104292 promulgated 15 November 2010; and (b) the CA Resolution dated 25 February 2011 denying reconsideration.
- The CA decision affirmed a National Labor Relations Commission (NLRC) Decision dated 29 November 2007 in NLRC Case No. OCW-RAB-IV-4-392-96-RI, which in turn executed and affirmed earlier Labor Arbiter findings and orders.
Parties
- Petitioner: Elizabeth M. Gagui — alleged Vice-President/Stockholder/Director of PRO Agency Manila, Inc.
- Private respondents: Simeon Dejero and Teodoro Permejo — complainants/respondent-judgment creditors in the underlying labor proceedings.
- Other respondents in the original labor proceedings: PRO Agency Manila, Inc. (placement/recruitment agency) and Abdul Rahman Al Mahwes (employer/principal).
Nature of the Case and Relief Sought
- Original complaints (filed 14 December 1993) were for illegal dismissal, nonpayment of salaries and overtime pay, refund of transportation expenses, damages, and attorneys’ fees.
- The present case is a petition for certiorari (Rule 45) to review appellate decisions that held petitioner Gagui solidarily liable with PRO Agency Manila, Inc. to satisfy money claims arising from an adjudication of illegal dismissal.
Antecedent Facts — Proceedings Before the Labor Arbiter
- On 7 May 1997, Labor Arbiter Pedro Ramos rendered a Decision ordering PRO Agency Manila, Inc., and Abdul Rahman Al Mahwes to jointly and severally pay the complainants specified amounts for unpaid salaries, overtime pay, unexpired portion of contract, plane ticket refunds, refund of excessive placement fees, moral and exemplary damages, and attorney’s fees. The dispositive portion (fallo) ordered payment by Pro Agency Manila, Inc. and Abdul Rahman Al Mahwes only.
- Specific monetary awards listed in the 7 May 1997 Decision (dispositive portion) include:
- Unpaid salaries: US$4,130.00 each (US$8,260.00 total) less cash advances of SR11,000.00, or peso equivalent.
- Overtime pay: US$1,032.00 each (US$2,065.00 total) for two hours overtime for fourteen months.
- Unexpired portion of contract: US$2,950.00 each (US$5,900.00 total).
- Refund of plane tickets: P15,642.90 (Permejo) and P16,932.00 (Dejero).
- Refund of excessive placement fees: P4,000.00 each (P8,000.00 total).
- Moral and exemplary damages: P10,000.00 each (P20,000.00 total).
- Attorneys’ fees: P48,750.00.
Execution Attempts After the Arbiter’s Decision
- A Writ of Execution was issued on 10 October 1997 following the 7 May 1997 Decision.
- The initial writ and an Alias Writ of Execution were returned unsatisfied.
- On 30 October 2002, respondents filed a Motion to Implead Respondent PRO Agency Manila, Inc. as Corporate Officers and Directors as Judgment Debtors, including petitioner Gagui as Vice-President/Stockholder/Director.
- On 25 April 2003, Executive Labor Arbiter Voltaire A. Balitaan issued an Order granting the motion to implead insofar as Merlita G. Lapuz and Elizabeth M. Gagui were impleaded and held liable jointly and solidarily with the original respondent adjudged liable under the May 7, 1997 Decision; a 2nd Alias Writ of Execution was ordered.
Garnishment and Levy Results
- A 2nd Alias Writ of Execution issued on 10 June 2003 resulted in garnishment of petitioner’s bank deposit in the amount of P85,430.48.
- Because the judgment remained unsatisfied, respondents moved for a third alias writ. Executive Labor Arbiter Lita V. Aglibut granted the motion by Order dated 15 December 2004, and the 3rd Alias Writ of Execution was issued on 6 June 2005.
- The 3rd Alias Writ resulted in the levying of two parcels of lot owned by petitioner located in San Fernando, Pampanga.
Petitioner’s Motions to Quash and Grounds Presented
- On 14 September 2005, petitioner filed a Motion to Quash the 3rd Alias Writ of Execution; on 29 June 2006, she filed a Supplemental Motion to Quash.
- Petitioner’s main contentions included:
- She had not been made aware that she was impleaded as one of the parties to the case and therefore had not been heard.
- The dispositive portion of the 7 May 1997 Decision did not hold her liable in any form.
- Impleading her for the purpose of execution effectively modified a decision that had long become final and executory, which she argued was impermissible.
- Respondents’ delay of five years in seeking her impleading constituted laches.
Executive Labor Arbiter Ruling on Motions to Quash
- On 26 June 2006, Executive Labor Arbiter Lita V. Aglibut denied petitioner’s Motions to Quash on two principal grounds:
- The records showed petitioner was given sufficient notices to register an opposition but refused, thereby waiving her right to be heard.
- Under Section 10 of Republic Act No. 8042 (Migrant Workers and Overseas Filipinos Act of 1995), corporate officers may be held jointly and severally liable with the placement agency for judgment awards, obviating the need for express pleading or adjudication against the corporate officer in the initial dispositive portion.
NLRC Appeal and Ruling
- Petitioner appealed to the NLRC. The NLRC rendered a Decision denying her appeal for lack of merit and affirmed the aforementioned Order of the Executive Labor Arbiter dated 26 June 2006.
- The NLRC reasoned, as to overseas migrant workers, R.A. 8042 “itself describes the nature of the liability of the corporation and its officers and directors.”
- The NLRC further stated that it is not essential that individual officers and directors be impleaded as party respondents to the case instituted by the worker; a finding of liability against the corporation will necessarily mean liability of its corporate officers or directors.
Court of Appeals Decision and Reasoning
- On 15 November 2010, the CA affirmed the NLRC Decision.
- The CA held there was “no need for petitioner to be impleaded” because R.A. 8042 expressly makes corporate officers solidarily liable with the placement agency for any and all money claims filed by private respondents.
- The CA emphasized that this is not a case requiring proof of malice or active misconduct by the corporate officer; rather, R.A. 8042 imposes liability by specific provision of law.
- The CA denied petitioner’s motions for reconsideration; the CA’s resolution denying reconsideration was issued 25 February 2011.