THIRD
DIVISION
PACIFIC CONSULTANTS G.R. No. 166920
INTERNATIONAL
INC. and JENS PETER Present:
HENRICHSEN,
Petitioners, YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
-
versus - CALLEJO, SR., and
CHICO-NAZARIO,
JJ.
Promulgated:
KLAUS K. SCHONFELD,
Respondent. February 19, 2007
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D E C I S I O N
CALLEJO, SR., J.:
Before us is a Petition for Review on
Certiorari under Rule 45 of the
Revised Rules of Court of the Decision[1] of
the Court of Appeals (CA) in CA-G.R. SP No. 76563. The CA decision reversed the Resolution of
the National Labor Relations Commission (NLRC) in NLRC NCR CA No. 029319-01,
which, in turn, affirmed the Decision of the Labor Arbiter in NLRC NCR Case No.
30-12-04787-00 dismissing the complaint of respondent Klaus K. Schonfeld.
The
antecedent facts are as follows:
Respondent is a Canadian citizen and was
a resident of
In 1997, PCIJ
decided to engage in consultancy services for water and sanitation in the
On
Mr. Klaus K. Schonfeld
Dear Mr. Schonfeld,
Letter of Employment
This Letter of Employment with the attached General Conditions of Employment constitutes the agreement under which you will be engaged by our Company on the terms and conditions defined hereunder. In case of any discrepancies or contradictions between this Letter of Employment and the General Conditions of Employment, this Letter of Employment will prevail.
You will, from the
date of commencement, be [“seconded”] to
our subsidiary Pacicon Philippines, Inc. in
1. Project Country: The
2. Duty Station:
3. Family Status: Married.
4. Position: Sector Manager, Water and Sanitation.
5. Commencement:
6. Remuneration: US$7,000.00 per month. The amount will be paid partly as a local salary (US$2,100.00 per month) by Pacicon and partly as an offshore salary (US$4,900.00) by PCI to bank accounts to be nominated by you.
A performance related component corresponding to 17.6% of the total annual remuneration, subject to satisfactory performance against agreed tasks and targets, paid offshore.
7. Accommodation: The company will provide partly furnished accommodation to a rent including association fees, taxes and VAT not exceeding the Pesos equivalent of US$2,900.00 per month.
8. Transportation: Included for in the remuneration.
9. Leave Travels: You are entitled to two leave travels per year.
10. Shipment of Personal
Effects: The maximum allowance is US$4,000.00.
11. Mobilization
Travel: Mobilization
travel will be from
This letter is send (sic) to you in duplicate; we kindly request you to sign and return one copy to us.
Yours sincerely,
Pacific Consultants International
Jens Peter Henrichsen
Above terms and conditions accepted
Date:
(Sgd.)
Klaus Schonfeld
as
annotated and initialed[4]
Section 21 of the General Conditions
of Employment appended to the letter of employment reads:
21 Arbitration
Any question of interpretation,
understanding or fulfillment of the conditions of employment, as well as any
question arising between the Employee and the Company which is in consequence
of or connected with his employment with the Company and which can not be
settled amicably, is to be finally settled, binding to both parties through
written submissions, by the Court of Arbitration in London.[5]
Respondent arrived in the
As required by Rule XIV (Employment of
Aliens) of the Omnibus Rules Implementing the Labor Code, PPI applied for an Alien
Employment Permit (Permit) for respondent before the Department of Labor and
Employment (DOLE). It appended respondent’s contract of employment to the
application.
On
Republic
of the
Department of Labor & Employment
National Capital Region
ALIEN EMPLOYMENT PERMIT
ISSUED TO: SCHONFELD, KLAUS KURT
DATE
OF BIRTH:
POSITION: VP – WATER & SANITATION
EMPLOYER: PACICON PHILIPPINES, INC.
ADDRESS: 27/F
PERMIT
ISSUED
ON:
VALID
UNTIL:
APPROVED: BIENVENIDO S. LAGUESMA
By: MAXIMO B. ANITO
REGIONAL DIRECTOR
(Emphasis
supplied)[6]
Respondent
received his compensation from PPI for the following periods: February to June
1998, November to December 1998, and January to August 1999. He was also reimbursed by PPI for the
expenses he incurred in connection with his work as sector manager. He reported for work in
On
Respondent filed with PPI several
money claims, including unpaid salary, leave pay, air fare from
On
In his Complaint, respondent alleged
that he was illegally dismissed; PPI had not notified the DOLE of its decision
to close one of its departments, which resulted in his dismissal; and they
failed to notify him that his employment was terminated after
1.
Judgment be rendered in his favor ordering the respondents to reinstate
complainant to his former position without loss of seniority and other
privileges and benefits, and to pay his full backwages from the time
compensation was with held (sic) from
him up to the time of his actual reinstatement. In the alternative, if
reinstatement is no longer feasible, respondents must pay the complainant full
backwages, and separation pay equivalent to one month pay for every year of
service, or in the amount of US$16,400.00 as separation pay;
2.
Judgment be rendered ordering the respondents to pay the outstanding monetary
obligation to complainant in the amount of US$10,131.76 representing the balance
of unpaid salaries, leave pay, cost of his air travel and shipment of goods
from Manila to Canada; and
3.
Judgment be rendered ordering the respondent company to pay the complainant
damages in the amount of no less than US $10,000.00 and to pay 10% of the total
monetary award as attorney’s fees, and costs.
Other
reliefs just and equitable under the premises are, likewise, prayed for.[12]
Petitioners filed a Motion to Dismiss
the complaint on the following grounds: (1) the Labor Arbiter had no jurisdiction
over the subject matter; and (2) venue was improperly laid. It averred that respondent was a Canadian
citizen, a transient expatriate who had left the
Respondent
opposed the Motion, contending that he was employed by PPI to work in the
Respondent adduced in evidence the
following contract of employment dated
Mr. Klaus K. Schonfeld
Manila
Dear Mr. Schonfeld,
Letter of Employment
This Letter of Employment with the attached General Conditions of Employment constitutes the agreement, under which you will be engaged by Pacicon Philippines, Inc. on the terms and conditions defined hereunder.
1. Project Country: The
in other countries.
2.
Duty Station:
3. Family Status: Married.
4. Position: Sector Manager – Water and Sanitation
Sector.
5.
Commencement:
6. Remuneration: US$3,100.00 per month payable to a bank
account to be nominated by you.
7. Accommodation: The company will provide partly furnished
accommodation to a rent including
association fees, taxes and VAT not
exceeding the Pesos equivalent of
US$2300.00 per month.
8. Transportation: Included for in the remuneration.
9. Shipment of Personal The maximum allowance is US$2500.00 in
Effects: connection with initial shipment of personal
effects
from
10. Mobilization Travel: Mobilization travel will be from New
This letter is send (sic) to you in duplicate; we kindly request you to sign and return one copy to us.
Yours sincerely,
Pacicon Philippines, Inc.
Jens Peter Henrichsen
President[14]
According
to respondent, the material allegations of the complaint, not petitioners’
defenses, determine which quasi-judicial body has jurisdiction. Section 21 of the Arbitration Clause in the
General Conditions of Employment does not provide for an exclusive venue where the
complaint against PPI for violation of the Philippine Labor Laws may be filed. Respondent pointed out that PPI had adopted
two inconsistent positions: it was first alleged that he should have filed his
complaint in
In
their reply, petitioners claimed that respondent’s employer was PCIJ, which had
exercised supervision and control over him, and not PPI. Respondent was dismissed by PPI via a letter
of Henrichsen under the letterhead of PCIJ in
On
WHEREFORE,
finding merit in respondents’ Motion to Dismiss, the same is hereby granted.
The instant complaint filed by the complainant is dismissed for lack of merit.
SO
ORDERED.[17]
The Labor Arbiter found, among
others, that the
relationship should be submitted to the jurisdiction of the court of
arbitration in
On appeal, the NLRC agreed with the
disquisitions of the Labor Arbiter and affirmed the latter’s decision in toto.[18]
Respondent then filed a petition for certiorari under Rule 65 with the CA where
he raised the following arguments:
I
WITH ALL DUE
RESPECT, THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION GRAVELY ABUSED ITS
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT AFFIRMED THE
LABOR ARBITER’S DECISION CONSIDERING THAT:
A. PETITIONER’S TRUE EMPLOYER IS NOT PACIFIC
CONSULTANTS INTERNATIONAL OF
B. THE PROPER VENUE FOR THE PRESENT COMPLAINT IS THE ARBITRATION BRANCH OF THE NLRC AND NOT THE COURT OF ARBITRATION IN LONDON.
II
WITH ALL DUE
RESPECT, THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION GRAVELY ABUSED ITS
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT AFFIRMED THE
DISMISSAL OF THE COMPLAINT CONSIDERING THAT PETITIONER’S TERMINATION FROM
EMPLOYMENT IS ILLEGAL:
A. THE CLOSURE OF RESPONDENT COMPANY’S WATER
AND SANITATION SECTOR WAS NOT BONA FIDE.
B. ASSUMING ARGUENDO
THAT THE CLOSURE OF RESPONDENT COMPANY’S WATER AND SANITATION SECTOR WAS
JUSTIFIABLE, PETITIONER’S DISMISSAL WAS INEFFECTUAL AS THE DEPARTMENT OF LABOR
AND EMPLOYMENT (DOLE) AND PETITIONER WAS NOT NOTIFIED THIRTY (30) DAYS BEFORE
THE ALLEGED CLOSURE.[19]
Respondent
averred that the absence or existence of a written contract of employment is
not decisive of whether he is an employee of PPI. He maintained that PPI, through its president
Henrichsen, directed his work/duties as Sector Manager of PPI; proof of this was
his letter-proposal to the Development Bank of the
The CA found the petition
meritorious. Applying the four-fold test[21]
of determining an employer-employee relationship, the CA declared that respondent
was an employee of PPI. On the issue of
venue, the appellate court declared that, even under the
On
WHEREFORE,
the petition is GRANTED in that the assailed Resolutions of the NLRC are hereby
REVERSED and SET ASIDE. Let this case be REMANDED to the Labor Arbiter a quo for disposition of the case on the
merits.
SO
ORDERED.[22]
A motion for the reconsideration of
the above decision was filed by PPI and Henrichsen, which the appellate court denied
for lack of merit.[23]
In the present recourse, PPI and
Henrichsen, as petitioners, raise the following issues:
I
THE COURT OF APPEALS
GRAVELY ERRED IN RULING THAT AN EMPLOYMENT RELATIONSHIP EXISTED BETWEEN
PETITIONERS AND RESPONDENT DESPITE THE UNDISPUTED FACT THAT RESPONDENT, A
FOREIGN NATIONAL, WAS HIRED ABROAD BY A FOREIGN CORPORATION, EXECUTED HIS
EMPLOYMENT CONTRACT ABROAD, AND WAS MERELY “SECONDED” TO PETITIONERS SINCE HIS
WORK ASSIGNMENT WAS IN
II
THE COURT OF APPEALS
GRAVELY ERRED IN RULING THAT THE LABOR ARBITER A QUO HAS JURISDICTION OVER RESPONDENT’S CLAIM DESPITE THE
UNDISPUTED FACT THAT RESPONDENT, A FOREIGN NATIONAL, WAS HIRED ABROAD BY A
FOREIGN CORPORATION, EXECUTED HIS EMPLOYMENT CONTRACT ABROAD, AND HAD AGREED
THAT ANY DISPUTE BETWEEN THEM “SHALL BE FINALLY SETTLED BY THE COURT OF
ARBITRATION IN LONDON.”[24]
Petitioners fault the CA for
reversing the findings of the Labor Arbiter and the NLRC. Petitioners aver that the findings of the
Labor Arbiter, as affirmed by the NLRC, are conclusive on the CA. They maintain that it is not within the
province of the appellate court in a petition for certiorari to review the facts and evidence on record since there
was no conflict in the factual findings and conclusions of the lower tribunals.
Petitioners assert that such findings
and conclusions, having been made by agencies with expertise on the subject
matter, should be deemed binding and conclusive. They contend that it was the
PCIJ which employed respondent as an employee; it merely seconded him to
petitioner PPI in the
Petitioners assert that the
Petitioners further contend that, although
Henrichsen was both a director of PCIJ and president of PPI, it was he who signed
the termination letter of respondent upon instructions of PCIJ. This is buttressed by the fact that PCIJ’s
letterhead was used to inform him that his employment was terminated. Petitioners further assert that all work
instructions came from PCIJ and that petitioner PPI only served as a “conduit.” Respondent’s Alien Employment Permit stating that
petitioner PPI was his employer is but a necessary consequence of his being “seconded”
thereto. It is not sufficient proof that
petitioner PPI is respondent’s employer. The entry was only made to comply with
the DOLE requirements.
There being no evidence that
petitioner PPI is the employer of respondent, the Labor Arbiter has no
jurisdiction over respondent’s complaint.
Petitioners aver that since
respondent is a Canadian citizen, the CA erred in ignoring their claim that the
principlesof forum non conveniens and
lex loci contractus are
applicable. They also point out that the
principal office, officers and staff of PCIJ are stationed in
Moreover, under Section 21 of the
General Conditions for Employment incorporated in respondent’s
Petitioners insist that the U.S.
Labor-Management Act applies only to
In his Comment,[26]
respondent maintains that petitioners raised factual issues in their petition
which are proscribed under Section 1, Rule 45 of the Rules of Court. The finding of the CA that he had been an
employee of petitioner PPI and not of PCIJ is buttressed by his documentary
evidence which both the Labor Arbiter and the NLRC ignored; they erroneously
opted to dismiss his complaint on the basis of the letter of employment and
Section 21 of the General Conditions of Employment. In contrast, the CA took into account the
evidence on record and applied case law correctly.
The petition is denied for lack of
merit.
It must be stressed that in resolving
a petition for certiorari, the CA is
not proscribed from reviewing the evidence on record. Under Section 9 of Batas Pambansa Blg. 129,
as amended by R.A. No. 7902, the CA is empowered to pass upon the evidence, if
and when necessary, to resolve factual issues.[27] If it appears that the Labor Arbiter and the
NLRC misappreciated the evidence to such an extent as to compel a contrary
conclusion if such evidence had been properly appreciated, the factual findings
of such tribunals cannot be given great respect and finality.[28]
Inexplicably, the Labor Arbiter and
the NLRC ignored the documentary evidence which respondent appended to his
pleadings showing that he was an employee of petitioner PPI; they merely focused
on the
Petitioner
PPI applied for the issuance of an AEP to respondent before the DOLE. In said application, PPI averred that
respondent is its employee. To show that
this was the case, PPI appended a copy of respondent’s employment contract. The DOLE then granted the application of PPI
and issued the permit.
It bears stressing that under the
Omnibus Rules Implementing the Labor Code, one of the requirements for the
issuance of an employment permit is the employment contract. Section 5, Rule
XIV (Employment of Aliens) of the Omnibus Rules provides:
SECTION
1. Coverage.
– This rule shall apply to all aliens employed or seeking employment in the
SECTION
2. Submission
of list. – All employers employing foreign nationals, whether resident or
non-resident, shall submit a list of nationals to the Bureau indicating their
names, citizenship, foreign and local address, nature of employment and status
of stay in the
SECTION 3. Registration of resident aliens. – All employed resident aliens shall register with the Bureau under such guidelines as may be issued by it.
SECTION
4. Employment
permit required for entry. – No alien seeking employment, whether as a
resident or non-resident, may enter the
SECTION 5. Requirements for employment permit applicants. – The application for an employment permit shall be accompanied by the following:
(a) Curriculum vitae duly signed by the applicant indicating his educational background, his work experience and other data showing that he possesses technical skills in his trade or profession.
(b) Contract of employment between the employer and the principal which shall embody the following, among others:
1. That the non-resident alien worker
shall comply with all applicable laws and rules and regulations of the
2. That the non-resident alien worker and the employer shall bind themselves to train at least two (2) Filipino understudies for a period to be determined by the Minister; and
3. That he shall not engage in any gainful employment other than that for which he was issued a permit.
(c) A designation by the employer of at least two (2) understudies for every alien worker. Such understudies must be the most ranking regular employees in the section or department for which the expatriates are being hired to insure the actual transfer of technology.
Under Section 6 of the Rule, the DOLE
may issue an alien employment permit based only on the following:
(a) Compliance by the applicant and his employer with the requirements of Section 2 hereof;
(b) Report of the Bureau Director as to the
availability or non-availability of any person in the
(c) His assessment as to whether or not the employment of the applicant will redound to the national interest;
(d) Admissibility of the alien as certified by the Commission on Immigration and Deportation;
(e) The recommendation of the Board of
Investments or other appropriate government agencies if the applicant will be
employed in preferred areas of investments or in accordance with the imperative
of economic development.
Thus,
as claimed by respondent, he had an
employment contract with petitioner PPI; otherwise, petitioner PPI would not
have filed an application for a Permit with the DOLE. Petitioners are thus estopped from alleging
that the PCIJ, not petitioner PPI, had been the employer of respondent all
along.
We agree with the conclusion of the
CA that there was an employer-employee relationship between petitioner PPI and
respondent using the four-fold test. Jurisprudence
is firmly settled that whenever the existence of an employment relationship is
in dispute, four elements constitute the reliable yardstick: (a) the selection
and engagement of the employee; (b) the payment of wages; (c) the power of dismissal;
and (d) the employer’s power to control the employee’s conduct. It is the so-called “control test” which
constitutes the most important index of the existence of the employer-employee
relationship–that is, whether the employer controls or has reserved the right
to control the employee not only as to the result of the work to be done but
also as to the means and methods by which the same is to be accomplished. Stated otherwise, an employer-employee
relationship exists where the person for whom the services are performed
reserves the right to control not only the end to be achieved but also the
means to be used in reaching such end.[29] We quote with approval the following ruling of
the CA:
[T]here is, indeed,
substantial evidence on record which would erase any doubt that the respondent
company is the true employer of petitioner. In the case at bar, the power to control and
supervise petitioner’s work performance devolved upon the respondent company. Likewise, the power to terminate the
employment relationship was exercised by the President of the respondent
company. It is not the letterhead used
by the company in the termination letter which controls, but the person who
exercised the power to terminate the employee. It is also inconsequential if the second
letter of employment executed in the
The settled rule on stipulations
regarding venue, as held by this Court in the vintage case of Philippine Banking Corporation v. Tensuan,[31] is
that while they are considered valid and enforceable, venue stipulations in a
contract do not, as a rule, supersede the general rule set forth in Rule 4 of
the Revised Rules of Court in the absence of qualifying or restrictive words. They
should be considered merely as an agreement or additional forum, not as
limiting venue to the specified place. They
are not exclusive but, rather permissive. If the intention of the parties were to
restrict venue, there must be accompanying language clearly and categorically
expressing their purpose and design that actions between them be litigated only
at the place named by them.[32]
In the instant case, no restrictive
words like “only,” “solely,” “exclusively in this court,” “in
no other court save —,” “particularly,”
“nowhere else but/except —,” or words
of equal import were stated in the contract.[33] It cannot be said that the court of
arbitration in
Petitioners contend that respondent
should have filed his Complaint in his place of permanent residence, or where
the PCIJ holds its principal office, at the place where the contract of
employment was signed, in
Petitioners’
insistence on the application of the principle of forum non conveniens must be rejected. The bare fact that respondent is a Canadian
citizen and was a repatriate does not warrant the application of the principle
for the following reasons:
First. The Labor Code of the
Second. The propriety of dismissing a case based on this
principle requires a factual determination; hence, it is properly considered as
defense.[35]
Third. In Bank
of
x x x [a] Philippine Court may assume jurisdiction
over the case if it chooses to do so; provided, that the following requisites
are met: (1) that the Philippine Court is one to which the parties may
conveniently resort to; (2) that the Philippine Court is in a position to make
an intelligent decision as to the law and the facts; and, (3) that the
Philippine Court has or is likely to have power to enforce its decision. x x x
Admittedly,
all the foregoing requisites are present in this case.
WHEREFORE, the
petition is DENIED. The Decision of the Court of Appeals in
CA-G.R. SP No. 76563 is AFFIRMED. This case is REMANDED to the Labor Arbiter for disposition of the case on the
merits. Cost against petitioners.
SO ORDERED.
ROMEO J.
CALLEJO, SR.
Associate Justice
WE CONCUR:
CONSUELO YNARES-SANTIAGO
Associate
Justice
MA. ALICIA AUSTRIA-MARTINEZ MINITA V.
CHICO-NAZARIO
Associate Justice
Associate Justice
I
attest that the conclusions in the above Decision were reached in consultation
before the case was assigned to the writer of the opinion of the Court’s
Division.
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
Pursuant to Section 13, Article VIII of the
Constitution and the Division Chairperson’s Attestation, it is hereby certified
that the conclusions in the above Decision were reached in consultation before
the case was assigned to the writer of the opinion of the Court’s Division.
REYNATO
S. PUNO
Chief Justice
[1] Penned by Associate Justice Romeo A. Brawner (retired),
with Associate Justices Mariano C. Del Castillo and Magdangal M. De Leon,
concurring; rollo, pp. 31-37.
[2] Among these services are the following:
consulting services utilizing available local skills, technical competence and
know-how in the process, providing advice on scientific techniques and
technology applications which require advance expert capabilities related to
the conduct of surveys, preparation of master plans, feasibility studies,
preliminary and detailed designs, supervision and management for the
construction of roads, tollways, railways, tunnels, urban traffic networks,
ports and harbours, airports, river improvements, power stations, water supply
and sewage systems, agricultural and forestry civil works, and other civil
construction works, city planning, planning of tourism, rural and natural
resources development, planning of industrial and mining facilities, and all
other activities related, connected or incidental to any and all of the
foregoing activities. PPI later became
Pacific Consultants International Asia, Inc. when its Articles of Incorporation
were amended on
[3] Rollo,
pp. 42-43.
[4]
[5]
[6]
[7]
[8] CA rollo,
p. 81.
[9]
[10]
[11]
[12]
[13] Records, pp. 54-72.
[14]
[15]
[16]
[17] Rollo, p. 110.
[18] CA rollo, p. 47.
[19] Rollo, pp. 4-5.
[20] CA rollo, p. 208.
[21] This
test considers the following elements: (1) the power to hire; (2) the payment
of wages; (3) the power to dismiss; and (4) the power to control.
[22] Rollo, p. 36.
[23] Id. at 39.
[24] Id. at 11.
[25]
[26]
[27] R&E Transport v. Latag, G.R. No. 155214, February 13, 2004, 422 SCRA 698; Tanjuan v. Philippine Postal Savings Bank, Inc., G.R. No. 155278, September 16, 2003, 411 SCRA 168.
[28] Castillo v. National Labor Relations Commission, 367 Phil. 605 (1999).
[29] Aurora Land Projects Corporation v. National
Labor Relations Commission, 334 Phil. 4 (1997).
[30] Rollo, p. 35.
[31]
G.R. No. 104649,
[32] Unimasters Conglomeration, Inc. v. Court of
Appeals, 335 Phil. 415 (1997).
[33]
[34] PHILSEC Investment Corporation v. Court of
Appeals, G.R. No. 103493,
[35]
[36] 448 Phil. 181, 196 (2003).