CONTRACT IS DEEMED EXTENDED DESPITE ABSENCE OF EXTENSIO…E THAT THE EMPLOYEE CONTINUED WORKING - EBV Law Office 2019-10-27,

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The Author

Atty. Elvin B.
Villanueva is a
CONTRACT IS DEEMED EXTENDED litigation lawyer
DESPITE ABSENCE OF EXTENSION specializing in labor
laws. He graduated
AGREEMENT IF THE EMPLOYER IS from Arellano
AWARE THAT THE EMPLOYEE University School of
Law with honors. He
CONTINUED WORKING was a recipient of
the Supreme Court
Published by # Atty Elvin B. Villanueva at $ June 27, 2018
award for his essay
on the Role of the
Rule of Law in
National
Contract in this case has a duration of six (6) months extendible by another six Development.
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, Learn More
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: Categories

Princess Talent Center Production, Inc. vs. Desiree T. Masagca
G.R. No. 191310, April 11, 2018 Atty. Elvin's
Books
Facts:
Civil Law
Respondent Desiree Masagca (Masagca) auditioned for a singing contest at ABC-
Channel 5 when a talent manager approached her to discuss her show business Corporation
potential. Enticed by thoughts of a future in the enterainment industry, Masagca Law
went to the office of petitioner Princess Talent Center Production, Inc. (PTCPI).
Our mission Opening hours Contact usLaw
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To deliver legal services Monday - Friday: ! Unit G03 Makati

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CONTRACT IS DEEMED EXTENDED DESPITE ABSENCE OF EXTENSIO…E THAT THE EMPLOYEE CONTINUED WORKING - EBV Law Office 2019-10-27, 11:05 PM

At the office, Masagca met withTo deliver

Moldes,legal services
President Monday
of PTCPI - Friday: her to
who persuaded ! Unit G03 Makati
Events
that will provide the best $ 8:30am - 5:30pm
apply for a job as a singer/entertainer in South Korea. A Model Employment Executive Tower 2, Dela
solution for clients and
Contract for Filipino Overseas Performing Artists (OPAS) to Korea was executed and Rosa St., Makati
Forms andCity
PTCPI as the Philippine agentbetter results the
of SAENCO, for society. Saturday - Sunday:
Korean principal/promoter. Templates
$ Closed " (02) 579-9170
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© 2019 EBV Law. All Rights Reserved.
The contract has a duration of six (6) months extendible by another six months by Privacy - Terms

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 Tags
2004. Believing that the termination of her contract was unlawful and premature,
Masagca filed a complaint against PTCPI and SAENCO with the NLRC. 120-day rule 240-
day rule
Masagca alleged that she did not receive any salary and subsisted only on the 20%
abandonment
commission that she received for every lady’s drink the customers purchase for
her. abandonment
of work appeal
PTCPI alleged that Masagca on her own extended her Employment Contract with attorney's fees
SAENCO and so its liability should not extend beyond the original six-month term backwages burden
of the Employment Contract because the extension was made without their of proof
participation or consent.
compensability
PTCPI likewise averred that they received complaints that Masagca violated the constructive
club policies of SAENCO against wearing skimpy and revealing dresses, dancing ina dismissal Death
provocative and immoral manner, and going out with customers after working benefit disability

hours. She was repatriated to the Philippines on account o her illegal or immoral Disability claim
activities. Her salaries were also paid in full as evidenced by the nine cash dismissal
vouchers. PTCPI submitted the affidavits of her co-workers who confirmed that employer-
Masagca violated the club policies of SAENCO and that she received her salaries. employee
relationship
immutability of judgment
Moldes disavowed personal liability stating that she merely acted in her capacity as
jurisdiction labor-
a corporate officer of PTCPI.
only contracting
LA Ruling: loss of trust
The LA dismissed the complaint.
and confidence
PEME
The LA ruled that there is no evidence to show that the POEA approved the Permanent
contract extension. Hence, the six-month contract should be honored as it was the and Total
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.
Disability
petition for certiorari
Masagca appealed to the NLRC. piercing the veil Post
employment medical
NLRC Ruling: examination procedural
due process project
The NLRC ruled in Masagca’s favor.

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

Otherwise, if they were against Masagca’s overstaying in Korea, they could have retirement
asked for her deportation earlier. Also, if Masagca was misbehaving and went retrenchment
against the policy, they could have taken disciplinary action against her earlier. separation pay
serious
misconduct
PTCPI filed a Motion for Reconsideration. It was granted by the NLRC reversing its
strained relations
decision due to several fatal procedural defects of Masagca’s appeal. The NLRC
termination theft third
explained that the Memorandum of Appeal of Masagca contains no averments as to
doctor valid
the date she or her counsel received the Decision of the LA. The appeal is
dismissal waiver
unverified. There was no certificate of non-forum shopping. The appeal fee was
willful breach Willful
paid beyond the allowable period. Lacking these mandatory requirements, the
breach of trust willful
appeal is fatally defective and no appeal was perfected iwhtin the reglementary
disobedience work-
period.
relatedness
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

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CONTRACT IS DEEMED EXTENDED DESPITE ABSENCE OF EXTENSIO…E THAT THE EMPLOYEE CONTINUED WORKING - EBV Law Office 2019-10-27, 11:05 PM

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,

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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.

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