G.R. No. 207828. February 14, 2022.
SRL INTERNATIONAL MANPOWER AGENCY, REPRESENTED BY SEVILLA SARAH SORITA AND AKKILA CO., LTD., UAE AND/OR AL SALMEEN, PETITIONERS, VS. PEDRO S. YARZA, JR., RESPONDENT.

FACTS

Respondent Pedro S. Yarza, Jr. was hired by petitioners SRL International Manpower Agency and its foreign principal Akkila Co. Ltd. UAE as a Project Manager under a two-year contract with a monthly basic salary of AED 8,000.00. He departed for the UAE on October 14, 2010. On March 24, 2011, he was repatriated to the Philippines to renew his visa with instructions to return. After complying, he received a termination letter dated May 22, 2011. Yarza filed a complaint for illegal dismissal and other monetary claims. SRL argued that Yarza was deployed under a visit visa through direct arrangements with Akkila, against SRL’s advice, and that for his re-deployment, a medical examination declared him unfit for work due to Uncontrolled Diabetes Mellitus Type II, leading Akkila to terminate his employment. The Labor Arbiter dismissed the complaint, finding no employer-employee relationship with SRL regarding the initial deployment and that the medical unfitness was a just cause. The NLRC initially reversed the LA, finding SRL actively participated in recruitment and that the dismissal was illegal, awarding salaries for the unexpired portion. Upon reconsideration, the NLRC set aside its decision, ruling the failure to re-deploy was due to Yarza’s failure in the PEME. The Court of Appeals reinstated the NLRC’s initial decision. Petitioners elevated the case to the Supreme Court.

ISSUE

Whether the Court of Appeals erred in finding that respondent was illegally dismissed and in awarding him monetary benefits.

RULING

The Supreme Court denied the petition. It held that an employer-employee relationship existed between Yarza and petitioners. SRL, as the licensed recruitment agency, was jointly and severally liable with its foreign principal, Akkila, for claims arising from the employment. The Court found that Yarza was illegally dismissed. The termination based on a medical condition (Diabetes Mellitus Type II) was not a valid cause as petitioners failed to secure a certification from a competent public health authority that the disease was incurable within six months with proper treatment, as required by law. The Court affirmed the award of salaries corresponding to the unexpired portion of the employment contract. Applying Republic Act No. 10022, which amended the Migrant Workers Act, the award was limited to three months’ salary for every year of the unexpired term. Since Yarza had a two-year contract and was terminated in the sixth month, he was entitled to three months’ salary for each year of the unexpired term, totaling six months’ salary (AED 48,000.00). The award of attorney’s fees was also sustained. However, the Court deleted the awards for moral and exemplary damages for lack of sufficient basis.