G.R. No. 200811, June 19, 2019
JULITA M. ALDOVINO, ET AL., Petitioners, vs. GOLD AND GREEN MANPOWER MANAGEMENT AND DEVELOPMENT SERVICES, INC., ET AL., Respondents.

FACTS

Petitioners, recruited by respondent agency for work in Taiwan, were required to pay a substantial placement fee via a loan. Upon arrival, their travel documents were confiscated, and they were compelled to sign a new contract altering their compensation from a fixed monthly salary to a disadvantageous piece-rate basis. They worked extensive hours, often without proper overtime pay, and received less than their originally stipulated wages. After inquiring about their pay, they were summarily ordered to return to the Philippines. While stranded, they entered into a Compromise Agreement with their foreign employer in Taiwan, receiving a monetary settlement and executing quitclaims.
Upon repatriation, petitioners filed a complaint before the Labor Arbiter for illegal dismissal and various money claims. The Labor Arbiter and the National Labor Relations Commission dismissed the complaint, ruling that the Compromise Agreement and quitclaims barred further claims. The Court of Appeals affirmed the finding of illegal dismissal but modified the monetary award, applying the clause “for three months for every year of the unexpired term, whichever is less” from the Migrant Workers Act to limit their backwages.

ISSUE

Whether the Compromise Agreement and quitclaims executed abroad are valid waivers that bar petitioners’ claims, and whether the statutory cap on the award of salaries for the unexpired term is constitutional.

RULING

The Supreme Court granted the petition. On the first issue, the Compromise Agreement and quitclaims are void. Waivers of workers’ rights are strictly scrutinized and are valid only if made voluntarily, with full understanding, and for reasonable consideration. The agreement was executed while petitioners were in a distressed situation—stranded, without documents, and lacking access to independent counsel. The settlement amount was unconscionable and did not constitute adequate consideration for the full extinguishment of their claims, which included illegal dismissal and underpayment.
On the second issue, the Court declared the subject clause “or for three (3) months for every year of the unexpired term, whichever is less” unconstitutional. This clause, found in Section 7 of Republic Act No. 10022 (amending the Migrant Workers Act), arbitrarily limited the award of salaries for the unexpired portion of an employment contract. Following the precedent in Sameer Overseas Placement Agency, Inc. v. Cabiles, the Court held that it violated the constitutional right to due process. It deprived illegally dismissed overseas workers of their rightful monetary claims without any discernible valid state purpose, creating an unfair distinction between local and overseas workers. Consequently, petitioners are entitled to their full salaries for the entire unexpired portion of their contracts. The liability of the local recruitment agency and its foreign principal is joint and several.