658 SUPREME COURT REPORTS ANNOTATED

Acuña vs. Court of Appeals

*
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.

Labor Law; Dismissals; What Constitutes Constructive

Dismissal.—As we have held previously, constructive dismissal
covers the involuntary resignation resorted to when continued
employment becomes impossible, unreasonable or unlikely; when
there is a demotion in rank or a diminution in pay; or when a
clear discrimination, insensibility or disdain by an employer
becomes unbearable to an employee.

Same; Evidence; The claim of overseas workers against foreign

employers could not be subjected to same rules of evidence and
procedure easily obtained by complainants whose employers are
locally based.—The claim for overtime pay should not have been
disallowed because of the failure of the petitioners to substantiate
them. The claim of overseas workers against foreign employers
could not be subjected to same rules of evidence and procedure
easily obtained by complainants whose employers are locally
based. While normally we would require the presentation of
payrolls, daily time records and similar documents before
allowing claims for overtime pay, in this case, that would be
requiring the near-impossible.

Same; Same; In controversies between a worker and his

employer, doubts reasonably arising from the evidence or in the
interpretation of agreements and writing should be resolved in the
worker’s favor.—It is a time-honored rule that in controversies
between a worker and his employer, doubts reasonably arising
from the evidence, or in the interpretation of agreements and
writing should be resolved in the worker’s favor. The policy is to
extend the applicability of the decree to a greater number of
employees who can avail of the benefits under the law, which is in
consonance with the avowed policy of the State to give maximum
aid and protection to labor.

_______________

* THIRD DIVISION.

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Acuña vs. Court of Appeals

Accordingly, we rule that private respondents are solidarily liable

with the foreign principal for the overtime pay claims of
petitioners.

Same; Same; Damages; Moral and exemplary damages are

recoverable only where the dismissal of an employee was attended
by bad faith or fraud or constituted an act oppressive to labor or
was done in a manner contrary to morals, good customs or public
policy.—On the award of moral and exemplary damages, we hold
that such award lacks legal basis. Moral and exemplary damages
are recoverable only where the dismissal of an employee was
attended by bad faith or fraud, or constituted an act oppressive to
labor, or was done in a manner contrary to morals, good customs
or public policy. The person claiming moral damages must prove
the existence of bad faith by clear and convincing evidence, for the
law always presumes good faith. Petitioners allege they suffered
humiliation, sleepless nights and mental anguish, thinking how
they would pay the money they borrowed for their placement fees.
Even so, they failed to prove bad faith, fraud or ill motive on the
part of private respondents. Moral damages cannot be awarded.
Without the award of moral damages, there can be no award of
exemplary damages, nor attorney’s fees.

Same; Quitclaims; Quitclaims executed by the employees are

commonly frowned upon as contrary to public policy and
ineffective to bar claims for the full measure of the workers’ legal
rights, considering the economic disadvantage of the employee and
the inevitable pressure upon him by financial necessity.—
Quitclaims executed by the employees are commonly frowned
upon as contrary to public policy and ineffective to bar claims for
the full measure of the workers’ legal rights, considering the
economic disadvantage of the employee and the inevitable
pressure upon him by financial necessity. Nonetheless, the so-
called “economic difficulties and financial crises” allegedly
confronting the employee is not an acceptable ground to annul the
compromise agreement unless it is accompanied by a gross
disparity between the actual claim and the amount of the
settlement. A perusal of the records reveals that petitioners were
not in any way deceived, coerced or intimidated into signing a
quitclaim waiver in the amounts of P13,640, P15,080 and P16,200
respectively. Nor was there a disparity between the amount of the
quitclaim and the amount actually due the petitioners.

660

660 SUPREME COURT REPORTS ANNOTATED

Acuña vs. Court of Appeals

PETITION for review on certiorari of a decision of the

Court of Appeals.

The facts are stated in the opinion of the Court.

          Encarnacion, Fernandez and Associates for
petitioners.
     Laguesma, Magsalin, Consulta & Gastardo for Joint
International Corp. and Elizabeth Alañon.

QUISUMBING, J.:

This petition seeks the review and reversal of the Court of

Appeals’ Decision1 dated January 27, 2003, in CA-G.R. SP
No. 70724, entitled Join International Corporation and/or
Eliza-beth Alañon v. National Labor Relations Commission
(Third Division), Mercedita Acuña, Juliet Mendez, and
Myrna Ramones, setting aside the resolutions of the NLRC
and dismissing the complaint of petitioners.
Petitioners are Filipino overseas workers deployed by
private respondent Join International Corporation (JIC), a
licensed recruitment agency, to its principal, 3D Pre-Color
Plastic, Inc., (3D) in Taiwan, Republic of China, under a
uni-formly-worded employment contract for a period of two
years. Herein private respondent Elizabeth Alañon is the
president of Join International Corporation.
Sometime in September 1999, petitioners filed with
private respondents applications for employment abroad.
They submitted their passports, NBI clearances, medical
clearances and other requirements and each paid a2
placement fee of P14,850, evidenced by official receipts
issued by private respondents.
_______________

1 Rollo, pp. 87-96. Penned by Associate Justice Edgardo F. Sun-diam,

with Associate Justices Ruben T. Reyes, and Remedios Sala-zar-Fernando
concurring.
2 Rollo, pp. 126-127.

661

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Acuña vs. Court of Appeals

After their papers were processed, petitioners claimed 3

they
signed a uniformly-worded employment contract with
private respondents which stipulated that they were to
work as machine operators with a monthly salary of
NT$15,840.00, exclusive of overtime, for a period of two
years.
On December 9, 1999, with 18 other contract workers
they left for Taiwan. Upon arriving at the job site, a factory
owned by 3D, they were made to sign another contract4
which stated that their salary was only NT$11,840.00.
They were likewise informed that the dormitory which
would serve as their living quarters was still under
construction. They were requested to temporarily bear with
the inconvenience but were assured that5
their dormitory
would be completed in a short time. Petitioners alleged
that they were brought to a “small room with a cement
floor so dirty and smelling with foul odor (sic).” Forty
women were jampacked in the room and each person was
given a pillow. Since the ladies’ comfort room was out of
order,6 they had to ask permission to use the men’s comfort
room. Petitioners claim they were made to work twelve
hours a day, from 8:00 p.m. to 8:00 a.m.
The petitioners averred that on December 16, 1999, due
to unbearable working conditions, they were constrained to
inform management that they were leaving. They booked a
flight home, at their own expense. Before 7 they left, they
were made to sign a written waiver. In addition,
petitioners were not paid
8
any salary for work rendered on
December 11-15, 1999.
Immediately upon arrival in the Philippines, petitioners
went to private respondents’ office, narrated what
happened,

_______________

3 Id., at pp. 116-119.

 4 Id., at p. 192.
5 Id., at p. 366.
6 Ibid.
7 Id., at pp. 120-125.
8 Id., at pp. 192-193.

662

662 SUPREME COURT REPORTS ANNOTATED

Acuña vs. Court of Appeals

and demanded the return of their placement fees and plane

fare. Private respondents refused.
On December 28, 1999, private respondents9 offered a
settlement. Petitioner Mendez received P15,080. The next
day, petitioners 10 Acuña and Ramones
11
went back and
received P13,640 and P16,200, respectively. They claim
they signed
12
a waiver, otherwise they would not be
refunded.
On January 14, 2000, petitioners13
Acuña and Mendez
invoking Republic Act No. 8042, filed a complaint for
illegal dismissal and non-payment/underpayment of
salaries or wages, overtime pay, refund of transportation
fare, payment of salaries/wages for 3 months, moral and
exemplary damages, and refund of placement fee before the
National Labor Relations Commission (NLRC). Petitioner
Ramones filed her complaint on January 20, 2000.
The Labor Arbiter ruled in favor of petitioners, declaring
that Myrna Ramones, Juliet Mendez and Mercedita Acuña
did not resign voluntarily from their jobs. Thus, private
respondents were ordered to pay jointly and severally, in
Philippine Peso, at the rate of exchange prevailing at the
time of payment, the following:

_______________

9 Id., at p. 120. Erroneously written as “Fifteen thousand”.

10 Id., at p. 124. Erroneously written as “Thirteen thousand six
hundred.”
11 Id., at p. 122. Written as “P16,220” in figures.
12 Id., at pp. 89, 157.
13 AN ACT TO INSTITUTE THE POLICIES OF OVERSEAS
EMPLOYMENT AND ESTABLISH A HIGHER STANDARD OF
PROTECTION AND PROMOTION OF THE WELFARE OF MIGRANT
WORKERS, THEIR FAMILIES AND OVERSEAS FILIPINOS IN
DISTRESS, AND FOR OTHER PURPOSES.

663
 VOL. 489, MAY 5, 2006 663
Acuña vs. Court of Appeals

1. MERCEDITA ACUÑA

a. Unexpired Portion NT$95,000.00

b. Salary for 4 days      2,436.92
c. Overtime pay for 4  
  hrs. in 4 days      1,523.07
*
    NT$98,960.00

d. Refund of placement fee PHP45,000.00  

  (Less: Amount received per 13,640.00 31,360.00
Quit-
  claim) ___________  
e. Moral damages   25,000.00
f. Exemplary damages   40,000.00

2. JULIET C. MENDEZ

a. Unexpired Portion NT$95,000.00

b. Salary for 4 days      2,436.92
c. Overtime pay for 4  
  hrs. in 4 days      1,523.07
*
    NT$98,960.00

d. Refund of placement fee PHP45,000.00  

14
  (Less: Amount received per 15,080.00 29,920.00
Quit-
  claim) ___________  
e. Moral damages   25,000.00
f. Exemplary damages   40,000.00

3. MYRNA R. RAMONES

a. Unexpired Portion NT$95,000.00

b. Salary for 4 days      2,436.92
c. Overtime pay for 4  
  hrs. in 4 days      1,523.07
*
    NT$98,960.00
_______________

* 98,959.99 rounded off.

14 Erroneously written as P1,523.07.

664

664 SUPREME COURT REPORTS ANNOTATED

Acuña vs. Court of Appeals

d. Refund of placement fee PHP45,000.00  

  (Less: Amount received per 16,200.00 28,800.00
Quit-
  claim) ___________  
e. Moral damages   25,000.00
15
f. Exemplary damages   40,000.00

The Labor Arbiter likewise ordered the payment of

attorney’s fees equivalent to ten percent (10%) of the award
which totaled NT$296,880.00 and P285,080.00. The other
claims were dismissed for lack of merit.
Private respondents thereafter appealed the decision to
the National Labor Relations Commission. The NLRC
ruled that the inclusion of Alañon as party respondent in
this case had no basis since respondent JIC, being a
juridical person, has a 16legal personality, separate and
distinct from its officers. It partially granted the appeal
and ordered that the amounts of P15,080, P13,640 and
P16,200 received under the quitclaim by Mendez, Acuña
and Ramones, respectively, be deducted from their
respective awards. They were awarded attorney’s fees
equivalent to ten percent (10%) of their awarded
laborstandards claims for unpaid wages and overtime pays.
No moral17and exemplary damages and placement fees were
awarded. Private respondents’ motion for partial
reconsideration was denied.
On appeal, the Court of Appeals ruled for private
respondents. It set aside the resolutions dated February 26,
2002 and December 10, 2001 18
of the NLRC and dismissed
the complaint of petitioners.
In their petition before us, petitioners raise the following
issues:

_______________

15 Rollo, pp. 163-165.

16 Id., at pp. 196-197.
 17 Id., at p. 203.
18 Id., at p. 95.

665

VOL. 489, MAY 5, 2006 665

Acuña vs. Court of Appeals

WHETHER OR NOT PUBLIC RESPONDENT COURT OF

APPEALS ERRED AND/OR GRAVELY ABUSED ITS
DISCRETION, AMOUNTING TO LACK OF JURISDICTION, IN
TAKING COGNIZANCE OF THE PETITION FOR CERTIORARI
FILED BY THE PRIVATE RESPONDENTS, DESPITE THE
FACT THAT THE NLRC’S RESOLUTION OF DECEMBER 10,
2001 HAD ALREADY BECOME FINAL AND EXECUTORY,
PRIVATE RESPONDENTS’ MOTION FOR PARTIAL
RECONSIDERATION WITH THE NLRC HAVING BEEN FILED
OUT OF TIME

II

ALTERNATIVELY, WHETHER OR NOT PUBLIC

RESPONDENT COURT OF APPEALS ERRED IN SETTING
ASIDE THE RESOLUTIONS OF THE NLRC, AND 19
IN
DISMISSING THE COMPLAINT OF THE PETITIONERS.

Prefatorily, petitioners aver that private respondents’

Verification and Certification of the Petition for Certiorari
stated that the copy of the resolution of the NLRC dated
December 10, 2001 was received on January 4, 2002 and its
partial motion for reconsideration filed on January 29,
2002, or 15 days beyond the reglementary period. However,
20
a perusal of the Partial Motion for Reconsideration filed
by private respondents show that the NLRC Resolution
dated December 10, 2001 was in fact received by private
respondents on January 24, 2002 and not on January 4,
2002. Hence, the appeal was properly filed within the 10-
day reglementary period.
In this petition the issue left for resolution is whether
petitioners were illegally dismissed under Rep. Act No.
8042, thus entitling them to benefits plus damages.
The Labor Arbiter and the NLRC found that petitioners
admitted they resigned from their jobs without force,
coercion,

_______________
 19 Id., at pp. 369-370.
20 Id., at pp. 205-214.

666

666 SUPREME COURT REPORTS ANNOTATED

Acuña vs. Court of Appeals

intimidation and 21
pressure from private respondents’
principal abroad.
According to the Labor Arbiter, while it may be true that
petitioners were not coerced into giving up their jobs, the
deplorable, oppressive and sub-human working conditions
drove petitioners to resign. In effect, according to 22
the Labor
Arbiter, the petitioners did not voluntarily resign.
The NLRC also ruled that there was constructive
dismissal since
23
working under said conditions was
unbearable.
As we have held previously, constructive dismissal
covers the involuntary resignation resorted to when
continued employment becomes impossible, unreasonable
or unlikely; when there is a demotion in rank or a
diminution in pay; or when a clear discrimination,
insensibility or disdain
24
by an employer becomes unbearable
to an employee.
In this case, the appellate court found that petitioners
did not deny that the accommodations were not as homely
as expected. In the petitioners’ memorandum, they
admitted that they were told by the principal, upon their
arrival, that the dormitory was still under construction and
were requested to bear with the temporary inconvenience
and the dormitory would soon be finished. We likewise note
that petitioners did not refute private respondents’
assertion that they had deployed approximately sixty other
workers to their principal, and to the best of their
knowledge, no other worker assigned to the same principal 25
has resigned, much less, filed a case for illegal dismissal.
To our mind these cited circumstances do not reflect
malice by private respondents nor do they show the
principal’s inten-

_______________

21 Id., at p. 195.
22 Id., at p. 159.
23 Id., at p. 198.
24 Leonardo v. National Labor Relations Commission, G.R. No. 125303,
June 16, 2000, 333 SCRA 589, 598.
 25 Rollo, p. 91.

667

VOL. 489, MAY 5, 2006 667

Acuña vs. Court of Appeals

tion to subject petitioners to unhealthy accommodations.

Under these facts, we cannot rule that there was
constructive dismissal.
Private respondents also claim that petitioners were not
entitled to overtime pay, since they had offered no proof
that they actually rendered overtime work. Petitioners, on
the other hand, say that they could not show any
documentary proof since their employment records were all
in the custody of the principal employer. It was sufficient,
they claim, that they alleged the same with particularity.
On this matter, we rule for the petitioners. The claim for
overtime pay should not have been disallowed because 26
of
the failure of the petitioners to substantiate them. The
claim of overseas workers against foreign employers could
not be subjected to same rules of evidence and procedure
easily obtained 27
by complainants whose employers are
locally based. While normally we would require the
presentation of payrolls, daily time records and similar
documents before allowing claims for overtime pay, in this
case, that would be requiring the nearimpossible.
To our mind, it is private respondents who could have
obtained the records of their principal to refute petitioners’
claim for overtime pay. By their failure to do so, private
respondents waived their defense and in effect admitted
the allegations of the petitioners.
It is a time-honored rule that in controversies between a
worker and his employer, doubts reasonably arising from
the evidence, or in the interpretation of agreements 28
and
writing should be resolved in the worker’s favor. The
policy is to extend the applicability of the decree to a
greater number of

_______________

26 Cuadra v. National Labor Relations Commission, G.R. No. 98030,

March 17, 1992, 207 SCRA 279, 282.
27 Ibid.
28 Prangan v. National Labor Relations Commission, G.R. No. 126529,
April 15, 1998, 289 SCRA 142, 148-149.

668
668 SUPREME COURT REPORTS ANNOTATED
Acuña vs. Court of Appeals

employees who can avail of the benefits under the law,

which is in consonance with the avowed policy 29
of the State
to give maximum aid and protection to labor. Accordingly,
we rule that private respondents are solidarily liable with
the foreign principal for the overtime pay claims of
petitioners.
On the award of moral and exemplary damages, we hold
that such award lacks legal basis. Moral and exemplary
damages are recoverable only where the dismissal of an
employee was attended by bad faith or fraud, or constituted
an act oppressive to labor, or was done in a manner 30
contrary to morals, good customs or public policy. The
person claiming moral damages must prove the existence of
bad faith by clear and convincing
31
evidence, for the law
always presumes good faith. Petitioners allege they
suffered humiliation, sleepless nights and mental anguish,
thinking how they would32
pay the money they borrowed for
their placement fees. Even so, they failed to prove bad
faith, fraud33 or ill motive on the part of private
respondents. Moral damages cannot be awarded. Without
the award of moral damages, there can 34
be no award of
exemplary damages, nor attorney’s fees.
Quitclaims executed by the employees are commonly
frowned upon as contrary to public policy and ineffective to
bar claims for the full measure of the workers’ legal rights,
considering the economic disadvantage of the employee and

_______________

29 Sarmiento v. Employees’ Compensation Commission, No. L-68648,

September 24, 1986, 144 SCRA 421, 427.
30 Ford Philippines Inc. v. Court of Appeals, G.R. No. 99039, February
3, 1997, 267 SCRA 320, 330.
31 See Equitable Banking Corporation v. National Labor Relations
Commission, G.R. No. 102467, June 13, 1997, 273 SCRA 352, 379.
32 Rollo, p. 130.
33 Audion Electric Co., Inc. v. National Labor Relations Commission,
G.R. No. 106648, June 17, 1999, 308 SCRA 340, 355.
34 See Bernardo v. Court of Appeals (Special Sixth Division), G.R. No.
106153, July 14, 1997, 275 SCRA 413, 432.

669

VOL. 489, MAY 5, 2006 669

 Acuña vs. Court of Appeals

35
the inevitable pressure upon him by financial necessity.
Nonetheless, the so-called “economic difficulties and
financial crises” allegedly confronting the employee is not
36
an acceptable ground to annul the compromise agreement
unless it is accompanied by a gross disparity 37between the
actual claim and the amount of the settlement.
A perusal of the records reveals that petitioners were
not in any way deceived, coerced or intimidated into
signing a quitclaim waiver in the amounts of P13,640,
P15,080 and P16,200 respectively. Nor was there a
disparity between the amount of the quitclaim and the
amount actually due the petitioners.
Conformably then the petitioners are entitled to the
following amounts in Philippine Peso at the rate of
exchange prevailing at the time of payment:

1. MERCEDITA ACUÑA

a. Salary for 4 days NT $ 2,436.92

b. Overtime pay for 4 hours in 4 days      1,523.07
    NT $ 3,959.99
     

2. JULIET C. MENDEZ

a. Salary for 4 days NT $ 2,436.92

b. Overtime pay for 4 hours in 4 days      1,523.07
    NT $ 3,959.99

_______________

35 America Home Assurance Co. v. National Labor Relations

Commission, G.R. No. 120043, July 24, 1996, 259 SCRA 280, 293-294.
36 Olaybar, et al. v. National Labor Relations Commission, et al., G.R.
No. 108713, October 28, 1994, 237 SCRA 819, 824.
37 See B. Sta. Rita and Co., Inc., et al. v. National Labor Relations
Commission, et al., G.R. No. 119617, August 14, 1995, 247 SCRA 354, 359-
360.

670

670 SUPREME COURT REPORTS ANNOTATED

Acuña vs. Court of Appeals
 3. MYRNA R. RAMONES

a. Salary for 4 days NT $ 2,436.92

b. Overtime pay for 4 hours in 4 days      1,523.07
    NT $ 3,959.99

According to the Bangko Sentral Treasury Department, the

prevailing exchange rates on December 1999 was NT$1 to
P1.268805. Hence, after conversion to Philippine pesos, the
amount of the quitclaim paid to petitioners was actually
higher than the amount due them.
WHEREFORE, the petition is DISMISSED, without
prejudice to the filing of illegal recruitment complaint
against the respondents pursuant to Section 6(i) of The
Migrant Workers and Overseas Filipino Act of 1995 (Rep.
Act No. 8042).
SO ORDERED.

     Carpio, Carpio-Morales, Tinga and Velasco, Jr., JJ.,

concur.

Petition dismissed without prejudice to filing of illegal

recruitment complaint against respondents.

Note.—Deeds of release or quitclaim cannot bar

employees from demanding benefits to which they are
legally entitled or from contesting the legality of their
dismissal and their acceptance of these benefits would not
amount to estoppel. (EMCO Plywood Corporation vs.
Abelgas, 427 SCRA 496 [2004])

——o0o——

671

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