CONTRACT IS DEEMED EXTENDED DESPITE ABSENCE OF EXTENSION AGREEMENT IF THE EMPLOYER IS AWARE THAT THE EMPLOYEE CONTINUED WORKING

Contract in this case has a duration of six (6) months extendible by another six months by mutual agreement of the parties. However, the employer was aware that she continued working despite the original six-month period had ended. Hence, there was consented extension for the same period of six months such that when she was repatriated after nine months there was violation of such agreement.

The SC held as follows:

Princess Talent Center Production, Inc. vs. Desiree T. Masagca
G.R. No. 191310, April 11, 2018

Facts:

Respondent Desiree Masagca (Masagca) auditioned for a singing contest at ABC-Channel 5 when a talent manager approached her to discuss her show business potential. Enticed by thoughts of a future in the enterainment industry, Masagca went to the office of petitioner Princess Talent Center Production, Inc. (PTCPI).

At the office, Masagca met with Moldes, President of PTCPI who persuaded her to apply for a job as a singer/entertainer in South Korea. A Model Employment Contract for Filipino Overseas Performing Artists (OPAS) to Korea was executed and PTCPI as the Philippine agent of SAENCO, the Korean principal/promoter.

The contract has a duration of six (6) months extendible by another six months by mutual agreement of the parties. Masagca left for South Korea and worked there as a singer for nine months, until her repatriation to the Philippines sometime in June 2004. Believing that the termination of her contract was unlawful and premature, Masagca filed a complaint against PTCPI and SAENCO with the NLRC.

Masagca alleged that she did not receive any salary and subsisted only on the 20% commission that she received for every lady’s drink the customers purchase for her.

PTCPI alleged that Masagca on her own extended her Employment Contract with SAENCO and so its liability should not extend beyond the original six-month term of the Employment Contract because the extension was made without their participation or consent.

PTCPI likewise averred that they received complaints that Masagca violated the club policies of SAENCO against wearing skimpy and revealing dresses, dancing ina provocative and immoral manner, and going out with customers after working hours. She was repatriated to the Philippines on account o her illegal or immoral activities. Her salaries were also paid in full as evidenced by the nine cash vouchers. PTCPI submitted the affidavits of her co-workers who confirmed that Masagca violated the club policies of SAENCO and that she received her salaries.

Moldes disavowed personal liability stating that she merely acted in her capacity as a corporate officer of PTCPI.

LA Ruling:

The LA dismissed the complaint.

The LA ruled that there is no evidence to show that the POEA approved the contract extension. Hence, the six-month contract should be honored as it was the one approved by the POEA. There was no illegal dismissal since Masagca was able to finish the duration of the contract as approved by the POEA.

Masagca appealed to the NLRC.

NLRC Ruling:

The NLRC ruled in Masagca’s favor.

The NLRC found that the vouchers prove that masagca wa allowed to work beyond the effectivity of her visa. The vouchers cover nine months which imply that despite having a visa good for six months, PTCPI consented to Masagca working up to nine months.

Otherwise, if they were against Masagca’s overstaying in Korea, they could have asked for her deportation earlier. Also, if Masagca was misbehaving and went against the policy, they could have taken disciplinary action against her earlier.

PTCPI filed a Motion for Reconsideration. It was granted by the NLRC reversing its decision due to several fatal procedural defects of Masagca’s appeal. The NLRC explained that the Memorandum of Appeal of Masagca contains no averments as to the date she or her counsel received the Decision of the LA. The appeal is unverified. There was no certificate of non-forum shopping. The appeal fee was paid beyond the allowable period. Lacking these mandatory requirements, the appeal is fatally defective and no appeal was perfected iwhtin the reglementary period.

The NLRC held that the Employment Contract would prove that the employment was only for a period of six months. It was verified by the Labor Attache of the Philippine Embassy in Korea and duly approved by the POEA. There is no showing that the contract was extended by Masagca and SAENCO or that an extension was approved by the POEA.

The NLRC denied the MR of Masagca. She filed a Petition for Certiorari before the CA.

CA Ruling:

The CA granted Masagca’s petition.

The CA held that Masagca was dismissed from employment without just cause and without procedural due process and that PTCPI and SAENCO were solidarily liable to pay her unpaid salaries for one year and attorney’s fees.

The MR of PTCPI was denied.

Issue/s:

Whether or not an employee who was dismissed due to contract expiration and who worked beyond the period of the original contract without the extension agreement but aware of the employee’s continued work was illegally dismissed

Whether or not an employee can be held responsible for serious misconduct based on unwritten company policies

Whether or not the cash vouchers as evidence of alleged payment of salary without bearing the name of payor can prove payment and absolve the employer from liability

SC Ruling:

The SC partly granted the Petition.

The SC held that although Masagca’s employment with SAENCO was good for six months only, it is convinced that it was extended under the same terms and conditions for another six months.

Parties submitted evidence establishing that Masagca continued to work for SAENCO even after the original six-month period under her Employment Cotnract had already expired. Ideally, the extension of her employment should have also been reduced into writing and submitted/reported to the appropriate Philippine labor authorities.

Labor Code 2018 Edition (Re-numbered and updated)

Nonetheless, even in the absence of a written contract evidencing the six-month extension of employment, the same is practically admitted by PTCPI subject only to the defense that there is no proof of their knowledge of or participation in said extension and so they cannot be held liable for the events that transpired between Masagca and SAENCO during the extension period.

PTCPI presented nine vouchers to prove that Masagca received her salaries from SAENCO for nine months. It also did not deny that Moldes went to confront Masagca about her outstanding loan thus, revealing that PTCPI and Moldes were aware that Masagca was still working for SAENCO up to that time.

The SC found Masagca to be illegally dismissed. Neither PTCPI or SAENCO can feign ignorance of the expiration of Masagca’s work visa at the same time as her original six-month employment period as they were the ones who facilitated and processed the requirements for her employment in South Korea. They should have been responsible also for securing her work visa for the extended period of her employment.

Aside from bare allegations, PTCPI and Moldes failed to present concrete proof of the club policies allegedly violated by Masagca. The club policies were not written down. There is no allegation, much less, evidence, that she was at least verbally apprised of the said club policies during her employment.

To refute the allegations against her, Masagca submitted a poster promoting the club and pictures of her with her co-workers at the said club. Based on said poster and pictures, Masagca did not appear to be wearing dresses that were skimpier or more revealing than those of the other women working at the club. She also presented the Affidavit of Wolfgang Pelzer, a Canadian citizen who was a regular patron of the club. According to Pelzer, Masagca was appropriately dressed for the songs she sang, and while she was employed as a singer, she was also pressured into dancing onstage and she appeared hesitant and uncomfortable as she danced.

As between the allegations of Pelzer, on one hand, and those of employees of SAENCO as regards Masagca’s behavior at the club, the SC accorded more weight to Pelzer’s testimony being disinterested witness who had no apparent gain in executing his affidavit.

The SC added that if Masagca was truly misbehaving as PTCPI and Moldes alleged, SAENCO would have terminated her employment at the earliest opportunity to protect its interest. Instead, SAENCO even extended her employment beyond the original six-month period. There is no showing as well that at any time during the course of employment Masagca was given a reminder and/or warning that she was violating the club policies.

PTCPI and Moldes submitted nine cash vouchers with Masagca’s signature. That the cash vouchers did not bear the name of SAENCO and its TIN is insignificant as there is no legal basis for requiring such. The vouchers clearly state that these were “salary full payment” for the nine-month period. The signatures on all the pages of the Employment Contract and the vouchers appear consistently the same. The consistency and similarity of signatures on all the documents support the genuineness of said signatures. At that point, the burden of evidence has shifted to Masagca to negate the payment of her salaries.

Pursuant to 5^th paragraph of Section 10 of RA 8042, Masagca is entitled to an award of her salaries for the unexpired three months of her extended Employment Contract.