Republic of the Philippines

Department of Labor and Employment

NATIONAL LABOR RELATIONS COMMISSION
National Capital Region
Quezon City

Raddney E. Nacua et al.,

Complainants,

-versus- OFW Case No. (L)04-

07939-19

Staffhouse International
Resources Corporation et al.,
Respondents.
x-----------------------------------------------------x

POSITION PAPER FOR RESPONDENTS

Respondents Staffhouse International Resources Corporation,

Mawarid Manpower Company, and Marc R. Capistrano,
respectfully submit this Position Paper:

I.
NATURE OF THE CASE

This is an action filed by complainants for breach of contract

and non-payment of salaries, overtime pay, vacation leave pay, sick
leave pay, and unexpired portion of the employment contract. . As
will be shown hereunder, the complaint against the respondents is
bereft of any factual and legal basis.

II.
THE PARTIES

1. Complainant RADDNEY E. NACUA is of legal age,

Filipino (Nacua).

2. Complainant JULIUS CAUESAR R. TORCULAS, is of

legal age, Filipino (Torculas).
1
 3. Respondent Staffhouse International Resources
Corporation (Staffhouse), is a corporation organized and existing
under the laws of the Republic of the Philippines with office address
at No. 43 West Point St., Cubao, Quezon City. Respondent Staffhouse
is duly licensed to engage in the recruitment and placement of
workers for overseas employment.

4. Respondent Mawarid Manpower Company (Mawarid),

is a foreign corporation represented by its authorized recruitment
agent, Staffhouse.

5. Respondent Marc R. Capistrano (Capistrano) is of legal

age, Filipino, and the General Manager of respondent Staffhouse and
holds office at the abovementioned address of Staffhouse.

III.
STATEMENT OF RELEVANT FACTS

6. Staffhouse is a corporation duly licensed to engage in the

recruitment and placement of workers for overseas employment. It is
the authorized Philippine recruitment agent of SAED.

7. Mawarid is a publicly-listed company in the Kingdom of

Saudi Arabia. Mawarid offers Manpower Services in Saudi Arabia.

8. Complainants were hired by Mawarid as delivery drivers

through Staffhouse and as such, employment contracts 1 were
executed between them.

9. The employment contracts of the complainants were for a

term of two (2) years and were processed through the POEA.
Thereafter, Staffhouse proceeded with the processing of the necessary
requirements for complainants’ overseas employment. They were
then issued the required Overseas Employment Certificates.

10. On September 2018, complainants left the Philippines and

commenced employment in Saudi Arabia.

1
The Employment Contracts of the complainants are attached as Annex “1”.

2
 11. The complainants began work in Saudi Arabia however
after seven (7) months, they informed Mawarid that they refuse to
continue to work. They are demanding for alleged unpaid overtime
work and alleged that they were deducted their Sick Leave Pay. They
also complained that their accommodation had no air conditioning.

12. In response, Mawarid denied the allegations of the

complainants. Mawarid explained that based on their records, the
complainants did not render any overtime work to warrant any
overtime pay. Neither was there any proof to show that their Sick
Leave Pay was deducted. Despite this fact, Mawarid still offered to
arrange for the complainants to be transferred to another project to
accommodate their requests.

13. However, the complainants refused to return to work.

Instead, they requested to be repatriated back to the Philippines.
Mawarid thus granted their request.

14. On 22 April 2018, the complainants each executed a

Declaration2 with Mawarid. The Declarations were executed before
the Labor Attache Nasser S. Mustafa of the Philippine Overseas
Labor Office (POLO) at the POLO office. In the said Declaration,
Mawarid shall provide for the exit visas and air tickets for the
complainants to return to the Philippines. On the other hand, the
complainants acknowledged that they did not complete their
employment contract and that they have received all their salaries
and benefits and shall no longer pursue any claims against their
employer.

15. Consequently, Mawarid provided the exit visas and air

tickets of the complainants and they returned to the Philippines.

16. On 30 April 2019, complainants filed the instant

complaint against the respondents.

17. For failure of the parties to arrive at an amicable

settlement during the mandatory conferences conducted in the
above-captioned case, the Honorable Labor Arbiter directed the

2
A copy of the Declaration dated 22 April 2018 of the complainants is hereto attached as Annex
“2”.

3
parties to file their respective position papers. Hence, this verified
Position Paper for the respondents.

IV.
ISSUES

A. WHETHER OR NOT COMPLAINANTS ARE

ENTITLED TO MONEY CLAIMS DESPITE
EXECUTING QUITCLAIMS IN THE PRESENCE OF
THE POLO.

B. WHETHER OR NOT RESPONDENTS WERE IN

BREACH OF CONTRACT.

C. WHETHER OR NOT CAPISTRANO SHOULD BE

HELD PERSONALLY AND SOLIDARILY LIABLE
WITH RESPONDENT COMPANY FOR THE
MONETARY CLAIMS CLAIMED BY THE
COMPLAINANTS

V.
ARGUMENTS AND DISCUSSION

A. The instant complaint

should be dismissed since both
complainants executed before the
POLO a Declaration stating that
they have received all their
salaries and benefits and shall no
longer pursue any claims against
the respondents.

18. At the outset, the instant complaint should be dismissed

since each of the complainants signed a Declaration waiving all their
claim against the respondents. These Declarations are valid
quitclaims since they were executed in the presence of the Labor
Attache Nasser S. Mustafa of the Philippine Overseas Labor Office
(POLO) in Riyadh, Saudi Arabia.

4
 19. Consistent with its mandate to see to it that labor and
social welfare laws in foreign countries are fairly applied to migrant
workers and whenever applicable, to other overseas Filipinos,
including the grant of legal assistance, the POLO serves as the
overseas operating arm of the DOLE. Under Section 2, Rule X of
Republic Act No. 10022, otherwise known as the “Migrant Workers
Act”, among the functions and responsibilities of the POLO are:

a. Ensure the promotion and protection of the welfare and

interests of OFWs and assist them in all problems arising
out of employer-employee relationships;

b. Coordinate the DOLE’s employment promotion

mandate, consistent with the principles of the Act;

c. Verify employment contracts and other employment-

related documents;
xxx

20. In the case at bar, there exists a presumption of validity of

the Declarations executed by the complainants in the presence of a
POLO officer absent any proof to the contrary. The POLO officer gave
his imprimatur of full compliance with labor laws and standards
when he signed and acknowledged the Declarations executed by
complainants.

21. Well-known is the doctrine holding that every public

official, absent any showing of bad faith and malice, is entitled to the
presumption regularity in the performance of official duties 3. When
an employment-related document, such as in this case the
Declaration, is signed in the presence of an officer of the POLO, it is
expected that the overseas Filipino worker was assisted by the POLO
officer and the contents of the document was verified and properly
explained to him. This in effect is in the nature of an admission that
the worker understood the contents of the document and that he
freely signed the document without any force or intimidation.
Without proof of the contrary, it would be just to presume that the
officer of the POLO had properly performed its duties in assisting the
worker.

3
Fernando vs. Sto. Tomas, G.R. No. 112309, July 28, 1994

5
 22. The validity and binding effect of waivers and quitclaims
executed before consular officers is not without precedent.

23. In the case of Iladan vs La Suerte International Manpower

Agency, Inc.4 which involves similar facts to the instant case, the
worker, Lorelei Iladan executed a Quitclaim which was subscribed
before the Labor Attache. Iladan argued that she was forced to sign
the quitclaim. However, the Supreme Court ruled for the validity of
the quitclaim. Thus:

“In the instant case, Iladan executed a resignation letter in her own
handwriting. She also accepted the amount of P35,000.00 as
financial assistance and executed an Affidavit of Release, Waiver
and Quitclaim and an Agreement, as settlement and waiver of any
cause of action against respondents. The affidavit of waiver and
the settlement were acknowledged/subscribed before Labor
Attache Romulo on August 6, 2009, and duly authenticated by the
Philippine Consulate. An affidavit of waiver duly acknowledged
before a notary public is a public document which cannot be
impugned by mere self-serving allegations. Proof of an
irregularity in its execution is absolutely essential. The
Agreement likewise bears the signature of Conciliator-Mediator
Diaz. Thus, the signatures of these officials sufficiently prove that
Iladan was duly assisted when she signed the waiver and
settlement. Concededly, the presumption of regularity of official
acts may be rebutted by affirmative evidence of irregularity or
failure to perform a duty. In this case, no such evidence was
presented. Besides, "[t]he Court has ruled that a waiver or
quitclaim is a valid and binding agreement between the parties,
provided that it constitutes a credible and reasonable settlement,
and that the one accomplishing it has done so voluntarily and with
a full understanding of its import." Absent any extant and clear
proof of the alleged coercion and threats Iladan allegedly received
from respondents that led her to terminate her employment
relations with respondents, it can be concluded that Iladan resigned
voluntarily.” (Emphasis supplied)

24. To reiterate, the Declarations signed by each of the

complainants were acknowledged and verified by the POLO as
evidenced by the signature of the Labor Attache Nasser S. Mustafa.
This clearly serves as proof of the authenticity of the quitclaims and
the fact that the complainants understood the contents of such. As
such, the complainants can no longer dispute the validity of their
respective quitclaims.
4
G.R. No. 203882, January 11, 2016.

6
 25. It is clear that under the quitclaims, the complainants
acknowledged that they received all their rights and entitlements for
their working period in total.

26. The Declaration5 provides as follows:

“Ako si (name of complainant) Pilipino, hustong gulang…

Ay mag FINAL EXIT sa ticket na bigay ng amo

Nagtrabaho ng DI TAPOS KONTRATA

ZERO (0) SAR halagang natanggap ay malayang naghahayag na

ang lahat ng sweldo at benepisyo sa panahon ng pagtatrabaho, o
bagaman kaunti sa aktwal ay tinatanggap ko bilang lubos na
kabayaran at ako ay kusang loob na hindi na magsasampa ng
kaso tungkol sa usapang pera dito sa Saudi Arabia o sa
Pilipinas.”

(Emphasis supplied)

27. The Declaration is a quitclaim of any future action arising

from the employment contract. Jurisprudence dictates that not all
quitclaims are per se invalid or against public policy. A quitclaim is
invalid or contrary to public policy only: (1) where there is clear
proof that the waiver was wrangled from an unsuspecting or gullible
person; or (2) where the terms of settlement are unconscionable on
their face. Indeed, there are legitimate waivers that represent the
voluntary and reasonable settlements of laborers’ claims that should
be respected by the Court as the law between the parties. Where the
party has voluntarily made the waiver, with a full understanding of
its terms as well as its consequences, and the consideration for the
quitclaim is credible and reasonable, the transaction must be
recognized as a valid and binding undertaking, and may not later be
disowned simply because of a change of mind.6 

28. In the present case, complainants were not forced,

intimated or coerced to sign the Declaration by respondents or any of
its officers. Also, the complainants had a full understanding of its
terms as well as its consequences, as they were assisted by the POLO.
5
See Annex “1”.
6
Coats Manila Bay, Inc. vs. Ortega, G.R. No. 172628, February 13, 2009.

7
As such, they can no longer maintain any suit arising from the
employment contract. Consequently, the instant complaint must be
dismissed for utter lack of merit.

B. There was no breach of

contract on the part of
respondents in the instant case as
the complainants voluntarily
resigned.

29. Complainants claim there is a breach of contract on the

part of the employer, Mawarid. However, it is the complainants who
are actually in breach of their employment contracts. Complainants
presented no proof of their claims of alleged non-payment of
overtime work or reduction of sick leave pay. On the other hand,
Mawarid even offered to transfer the complainants to a different
project to assist them. Despite the goodwill showed by Mawarid, the
complainants decided to stop reporting to work and demanded to be
repatriated instead.

30. Resignation is the voluntary act of an employee who is in

a situation where one believes that personal reasons cannot be
sacrificed in favor of the exigency of the service, and one has no other
choice but to dissociate oneself from employment. It is a formal
pronouncement or relinquishment of an office, with the intention of
relinquishing the office accompanied by the act of relinquishment. As
the intent to relinquish must concur with the overt act of
relinquishment, the acts of the employee before and after the alleged
resignation must be considered in determining whether he or she, in
fact, intended to sever his or her employment.7

31. In the instant case, clearly the complainants voluntarily

resigned from their employment. The complainants were all offered
by Mawarid to be transferred after they raised their complainants.
However, they instead chose to be repatriated back to the
Philippines.

32. When the complainants resigned and executed their

Declarations, they are already barred from claiming from the
7
Iladan vs. La Suerte. Manpower Agency, Inc, G.R. No. 203882, January 11, 2016.

8
respondents. In the case of Bilbao vs. Saudi Arabian Airlines8, the
Supreme Court said:

“Although the Supreme Court has, more often than not, been
inclined towards the workers and has upheld their cause in their
conflicts with the employers, such inclination has not blinded it to
the rule that justice is in every case for the deserving, to be
dispensed in the light of the established facts and applicable law
and doctrine. An employee who resigns and executes a quitclaim
in favor of the employer is generally stopped from filing any
further money claims against the employer arising from the
employment.”9 (Emphasis supplied)

33. There is nothing contrary to law, morals, good customs,

public order, or public policy in the Declaration entered into by
complainants and Mawarid especially since they were executed in
the presence of a POLO officer. Thus, complainants can no longer
claim against the respondents.

34. Moreover, the claim of breach of contract by the

complainants has no basis whatsoever. When asked to provide proof
of the alleged non-payment of overtime pay and sick leave pay, they
were unable to substantiate their claims. Allegations are not evidence
and without evidence, bare allegations do not prove fact.10

C. Capistrano cannot be held

personally liable for corporate
liabilities, if there are any.

35. In Pabalan v. NLRC,11 it was held that "a corporation is

vested by law with a personality separate and distinct from the persons
composing it, including its officers, as well as from that of any other legal
entity to which it may be related." Officers of a corporation are not
personally liable for their official acts unless it is shown that they have
exceeded their authority. The legal fiction that a corporation has a
personality separate and distinct from stockholders and members may
be disregarded only when it is used as a means to perpetuate fraud or

8
Bilbao vs. Saudi Arabian Airlines, G.R. No. 183915, December 14, 2011.
9
Ibid.
10
Sabellina vs. Buray, GR No. 187727, Sep 02, 2015.

11
184 SCRA 495.

9
an illegal act or as a vehicle for the evasion of an existing obligation, the
circumvention of statutes, and/or to confuse legitimate issues.
Moreover, the shield of corporate fiction should be pierced (only) when
it is deliberately and maliciously designed to evade financial
obligations to employees.12

36. In MAM Realty Development Corporation v. National

Labor Relations Commission, et al.,13 the Supreme Court resolved
the question of when to hold a director or officer of a corporation
solidarily obligated with the latter for a corporate liability. In holding
that the vice-president of the petitioner corporation cannot be held
personally liable for the employees’ claims for wage differentials,
"ECOLA," overtime pay, incentive leave pay, 13th month pay,
holiday pay and rest day pay, the Court stressed that solidary
liabilities may be incurred only when exceptional circumstances
warrant, as in the following cases:

“1. When directors and trustees or, in

appropriate cases, the officers of a corporation —

(a) vote for or assent to patently unlawful acts

of the corporation;

(b) act in bad faith or with gross negligence in

directing the corporate affairs;

(c) are guilty of conflict of interest to the

prejudice of the corporation, its stockholders or
members, and other persons.

2. When a director or officer has consented to

the issuance of watered stocks or who, having
knowledge thereof, did not forthwith file with the
corporate secretary his written objection thereto.

3. When the director, trustee or officer has

contractually agreed or stipulated to hold himself

12
Ibid.
13
G.R. No. 114787, 2 June 1995.

10
 personally and solidarily liable with the
Corporation.

4. When a director, trustee or officer is made,

by specific provision of law, personally liable for his
corporate action.”

37. In labor cases in particular, the Supreme Court has held

that corporate directors and officers are solidarily liable with the
corporation for the termination of employment of corporate
employees only if done with malice or in bad faith. Bad faith or
negligence is a question of fact and is evidentiary. It has been held
that bad faith does not connote bad judgment or negligence; it
imports a dishonest purpose or some moral obliquity and conscious
doing of wrong; it means breach of a known duty through some
motive or interest or ill will; it partakes of the nature of fraud. 14
Needless to state, it is imperative that ultimate facts of the officers’
having acted in excess of their authorities, or acted willfully or in bad
faith should be alleged in the complaint and satisfactorily proven.

38. In the present case, nothing of this sort was even presented
by the complainants against Capistrano. As borne by the pieces of
evidence at hand, the case of herein individual respondents is way off
the above-cited exceptional instances mentioned in the MAM Realty15
case. Herein Capistrano, therefore, should be exonerated from any
liability considering that he has not committed any malicious act or any
act tending to show bad faith on his part.

39. As shown above, the complainants voluntarily resigned. It

could not be said that the legal personality of the individual
respondents and Staffhouse was used as a means to perpetuate fraud
or an illegal act or as a vehicle to get rid of complainant. There is,
therefore, neither rhyme nor reason for piercing the veil of corporate
fiction. There is no single evidence or proof of malice or bad faith on
the part of herein individual respondent in connection with the
claimed dismissal of complainants.

14
Malayang Samahan Ng Mga Manggagawa, et al., v. Ramos, et al., G.R. No. 113907, 20 April 2001.
15
Supra.

11
 VI.
RESERVATION

40. Respondents respectfully reserve their right to present

additional documentary and testimonial evidence in the course of
these proceedings. Respondents likewise respectfully reserve the
right to file a Supplemental Position Paper and other allied pleadings
as they may deem necessary.

PRAYER

WHEREFORE, premises considered, it is most respectfully

prayed that this Honorable Office DISMISS the instant complaint for
utter lack of merit.

Other reliefs, just and equitable under the circumstances are

likewise prayed for.

Pasig City for Quezon City; 25 June 2019.

SOLIS MEDINA
LIMPINGCO AND FAJARDO
Counsel for Staffhouse
11th Floor East Tower
Philippine Stock Exchange Center
Exchange Road, Ortigas Business Center
Pasig City
Tel No.: 634-6722
Email: lawyers@solismedina.com

By:

JOSE GERARDO A. MEDINA

PTR No. 5214231/01.08.2019/Pasig
IBP Life Member Roll No. 00628
SC Roll of Attorneys No. 36650

12
 MCLE Compliance No. VI-
0015563
21 December 2018

and

CHRISTIAN V. URBINA
PTR No. 5214238/01.08.2019/Pasig
IBP No. 066485/01.10.2019/Q.C.
SC Roll of Attorneys No. 68572
Admitted to the Bar in 2017

13