G.R. No. 159832 ; May 5, 2006
MERCEDITA ACUÑA, MYRNA RAMONES, and JULIET MENDEZ, Petitioners, vs. HON. COURT OF APPEALS and JOIN INTERNATIONAL CORPORATION and/or ELIZABETH ALAÑON, Respondents.

FACTS

Petitioners, overseas Filipino workers, were deployed by private respondent Join International Corporation (JIC) to work in Taiwan under a two-year contract stipulating a monthly salary of NT$15,840. Upon arrival, they were forced to sign a new contract reducing their salary to NT$11,840. They were subjected to deplorable living conditions, including overcrowded and unsanitary quarters, and made to work twelve-hour night shifts. After enduring these conditions for a week, they resigned and returned to the Philippines at their own expense, having received no salary for work rendered. JIC refunded portions of their placement fees only after they signed quitclaims.
Petitioners filed complaints for illegal dismissal and monetary claims. The Labor Arbiter ruled in their favor, awarding salaries for the unexpired portion of their contract, unpaid wages, overtime pay, refund of placement fees, and damages. The NLRC modified the decision by deducting the amounts received under the quitclaims. The Court of Appeals reversed the NLRC and dismissed the complaint, prompting this petition.

ISSUE

Whether the Court of Appeals erred in dismissing the complaint and in not holding that petitioners were illegally dismissed and entitled to their monetary claims.

RULING

The Supreme Court granted the petition, reversed the Court of Appeals, and reinstated the NLRC resolution with modifications. The Court held that petitioners were illegally dismissed. Their resignation was not voluntary but a forced response to the substandard working and living conditions unilaterally imposed by the foreign employer, which constituted a breach of contract. This breach justified petitioners’ abandonment of their employment.
On the quitclaims, the Court ruled they were invalid. The amounts received were mere refunds of placement fees, not compensation for labor claims. The payments were grossly disproportionate to the lawful awards and were exacted from petitioners who were in desperate financial straits upon their return. A quitclaim is void when there is clear exploitation of workers’ financial need. Regarding liability, the Court found JIC jointly and severally liable with its foreign principal for the awarded claims, as mandated by the rules on overseas employment. The awards for moral and exemplary damages were deleted for lack of sufficient basis, but attorney’s fees were granted. The case was also referred to the Philippine Overseas Employment Administration for possible administrative action against JIC for illegal recruitment.