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Republic of the Philippines

Department of Labor and Employment


NATIONAL LABOR RELATIONS COMMISSION
Banawe, Quezon City

JUN BUENCAMINO,
Complainant,

- versus - NLRC NCR No. L-02-01275-18


LA JOSE ANTONIO RAMOS

BLUE STAR, INC., CENTRAL


CONTRACTING COMPANY
LTD., and GILBERT PETILLA
Respondents.
x---------------------------------------------------------------x

POSITION PAPER

Respondents, by counsel, unto this Honorable Office, most


respectfully aver:

THE PARTIES:

Respondent Blue Star, Inc. (“Blue Star”) is a land based local


agency duly authorized under the law to screen, recruit, hire and
deployed workers to its lists of foreign principals, which includes
Central Contracting Company, Ltd. Blue Star’s principal address is
located at #1234 Leviste Street, Makati City. Individual Respondent
Gilbert Petilla was impleaded in his official capacity as former
President of Blue Star.

Respondents may be served with legal processes through the


undersigned law firm, GERRAN LAMBINO LAW OFFICES, with
office address at 1213-A East Tower, Philippine Stock Exchange
Center, Ortigas Center, Pasig City.

Meanwhile, complainant Jun Buencamino is one of the former


project employees recruited by Blue Star which was deployed and

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assigned in Central Contracting Company, Ltd. (CCC), in Alkhobar,


Saudi Arabia. Complainant formerly held the position of QA/QC
Technical Manager for a fixed period of one (1) year. He may be served
with legal processes of this Honorable Office at 1546 Craig St.,
Sampaloc, Manila.

STATEMENT OF FACTS:

Complainant Buencamino was previously hired as a QA/QC


Technical Manager for CCC where he signed a contract of employment
for a period of one (1) year only. The processing of the employment
and travel documents of the complainant was initially processed by
Blue Star with the Philippine Overseas Employment Agency (POEA).

The pertinent portions of the complainant’s OFW Information


Sheet dated 05 December 2017, read:

xxx

Position: Manager Deputy QA/QC Technical

xxx

Contract Duration: 12 months

xxx

A copy of the said OFW Information Sheet is attached hereto as


Annex “1.”

The Employment Contract, including the two (2) Addendums


thereto, wherein the complete terms and conditions of the
employment of the complainant is attached hereto as Annexes “2 to
2-B.” As for first Addendum dated 22 March 2012 to the Employment
Contract, the same is attached hereto as “2-C. As for second
Addendum dated 22 March 2012 to the Employment Contract, the
same is attached hereto as “2-D to “2-E.” As for the third Addendum
dated 12 April 2016 to the Employment Contract, the same is attached
hereto as “2-F.”

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Moreover, as could be gleaned from the said contract and the


three addendums thereto, the same were duly approved and/or
registered in the POEA.

Complainant commenced his work on August 2016 and


performed his duties as a QA/QC Technical Manager of CCC.

After the expiration of complainant’s first Employment Contract


with CCC. Then on August 2017, complainant, this time, had directly
negotiated and then successfully entered into another Employment
Contract with his foreign employer, CCC, without the knowledge and
involvement of Blue Star. Complainant’s direct negotiation with CCC
proved successful as he was given another year of contract based on
the same terms and conditions as that of his previous employment
contract.

Thereafter, the complainant went on vacation to the Philippines


last August 2017 as evidenced by his OFW Information Sheet dated
30 August 2017. Complainant personally processed the said OFW
Information Sheet with the POEA without any help or assistance from
Blue Star.

In the complainant’s OFW Information Sheet dated 30 August


2017, it must be noted that he did not already state the name of Blue
Star as his agency for his second work deployment in CCC. This only
proves that Blue Star had no participation with the aforesaid work re-
application of the complainant with CCC.

A copy of the said OFW Information Sheet dated 30 August 2017


is attached hereto as Annex “3.”

Considering that Blue Star has no knowledge as to what


transpired during the second employment contract of the complainant
with CCC and so as for it to be enlightened about the claims made by
the complainant in this case, Blue Star sought the assistance of CCC for
information and documents relative to the same.

As per CCC, during the course of the second employment of the


complainant with it, their company suffered severe business losses due
to the global financial crisis which adversely affected the Kingdom of
Saudi Arabia. As a result of the same, the clients of CCC have reduced

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the scope of work to be done by CCC. Given the same, it thereby


resulted to earlier project requirement completion.

In light of what was happening, CCC has no choice but to


downsize its work force and retrench or terminate the services of some
of its employees.

On 05 November 2017, complainant received a letter of


Termination of Employment dated 19 October 2017 from CCC. In the
said letter, complainant was notified that his services are being
terminated as per Article 20 (a) of his employment contract.

As per handwritten notation of the complainant in the said letter,


he requested that the reckoning of the 60 days advance notice of
termination be reckoned, not from 19 October 2017 which was stated
in the letter, but from his actual receipt of the letter which was on 05
November 2017. His request was granted by CCC.

A copy of the said letter of Termination of Employment dated


19 October 2017 is attached hereto as Annex “4.” The handwritten
notation of the complainant in the said letter was sub-marked as
Annex “4-A.” Moreover, complainant’s thumbmark and signature on
the aforesaid letter was sub-marked as Annex “4-B.”

Article 20 of the Employment Contract of the complainant with


CCC clearly stated that:

Article 20: This contract may be terminated in any of the


following cases:

(a) At any time by a 30-day written notice from the


Employer or immediately upon serving such notice
and after making to the Employee the payment of
wages in lieu of the notice period of 30 days.

(b) By the employer without need of any notice or cash


payment in lieu thereof and without payment of any
award or compensation by any reason or of the
reason determined in Article (80) of the Saudi Labour
Law.

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(c) At any time by a 30-day written notice from the


Employee, in which case, the Employer will only be
responsible for payment of benefits, air ticket etc. as
stipulated in the Saudi Labour Law.

As a benevolent and humanitarian act of CCC in order to


compensate for the lost income of the complainant due to pre-
termination of his Employment Contract, he was given by CCC a two
(2) month notice of termination pay, instead of giving just one (1)
month notice of termination pay as per Article 20 of his employment
contract.

As could be gleaned from the Payment of Wages/Salaries or


Settlement Dues from CCC, the complainant was paid the following:

1. The amount of TWENTY THOUSAND FIVE HUNDRED


TWENTY-SEVEN AND 50/100 (SR20,527.50) Saudi Riyals as
Notice Pay up to 03 January 2018;

2. The amount of NINE THOUSAND EIGHT HUNDRED


THREE and 70/100 (SR 9,803.70) Saudi Riyal as Indemnity
Pay;

3. The amount of TWO THOUSAND THREE HUNDRED


FOURTEEN and 38/100 (SR 2,314.38) Saudi Riyal as Vacation
Leave Pay;

4. The amount of ONE THOUSAND SEVEN HUNDRED AND


83/100 (SR 1,700.83) Saudi Riyal as O/T Allowance; and

5. The amount of FOUR HUNDRED TWO AND 50/100 (SR


402.50) Saudi Riyal as National Day pay.

Complainant acknowledged receipt of the total amount of


THIRTY NINE THOUSAND NINE HUNDRED EIGHTY ONE
(SR 39,981.00) Saudi Riyals. If the said amount is converted to
Philippine Peso at the exchange rate of P13.65 per Saudi Riyal, the
same would amount to FIVE HUNDRED FORTY FIVE THOUSAND
PESOS AND SEVEN HUNDRED FORTY 65/100 (P545,740.65).
Complainant willingly acknowledged receipt of the said amount by

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affixing his signature and his thumb mark on the said Payment of
Wages/Salaries or Settlement Dues.

A copy of the said Payment of Wages/Salaries or Settlement


Dues is attached hereto as Annex “5.” The thumb mark of the
complainant therein is sub-marked Annex “5-A” and while his
signature thereon is sub-marked Annex “5-B.”

In connection with his receipt of the aforesaid amount


(SR 39,981.00 or in Peso equivalent - Php552,137.61), complainant also
voluntarily signed the Full and Final Settlement Receipt on
09 November 2017. When complainant received the said amount and
signed the settlement receipt, he is very much aware that his acts
would be amounting to a waiver of any future claim that he may have
against CCC and that he could no longer file any claim based on his
past employment with it.

The pertinent portions of the said Full and Final Settlement


Receipt reads:

“I, Jun Buencamino, hereby declare that I have


received from Central Contracting Company Ltd. the sum
of SR 39,981.00 (Thirty Nine Thousand Nine Hundred
Eighty One Saudi Riyals Only) in full and final settlement
of my dues for my services with the company up to
13/11/2017 and that I have no further claim or right
whatsoever from Central Contracting Company Ltd./ or
any of its owners or managers or Mr. Shakeeb Bermour
Abdullah Aliza. Also, I declare that to my knowledge I
have not committed the company to any liability but if any
bills of personal nature arise in the future, I hereby
undertake to reimburse the company for any costs or
losses that may be incurred by the company.”

A copy of the Full and Final Settlement is hereto attached


marked as Annex “6.” The thumb mark of the complainant affixed
thereon was sub-marked as Annex “6-A” and while his signature
thereon was marked Annex “6-B”.

On 26 December 2017, CCC informed the Philippine


Consulate/Philippine Overseas Labor Office (POLO) in Alkhobar that

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their project employees have been terminated before completion date


of their contract due to “Project Requirements Completion.” This is
due to the on-going financial global crisis where CCC’s clients has
reduced the scope of their projects resulting to “Project Requirements
Completion.”

A copy of the Letter dated 26 December 2017 issued by CCC is


attached hereto as Annex “7 to “7-A.”

As mentioned previously, due to the considerable decrease in


the work requirement to be done by CCC, it was therefore constrained
to reduce its manpower by way of a cost cutting measure to prevent
heavy losses. CCC’s initial batch of terminated employees includes
QA/QC Senior Engineer, Foreman (Structural), Supervisor (Welding),
Senior Engineer (Piping), Supervisor (Rigging) and the like. For the
first batch of retrenched employees, the services of a total of 25 affected
employees of CCC were terminated. The complainant was one of the
said employees.

The services of thirteen more employees were terminated in the


succeeding batches of retrenchment in CCC.

The Letter dated 27 December 2017 sent by CCC to the Philippine


Consulate/POLO in connection with the second batch of employees
whose services were terminated is attached hereto as Annex “8.”

The Letter dated 09 January 2018 sent by CCC to the


Philippine Consulate/POLO in connection with the third batch
of employees whose services were terminated is attached hereto
as Annex “8-A.”

The Letter dated 14 January 2018 sent by CCC to the


Philippine Consulate/POLO in connection with the fourth batch
of employees whose services were terminated is attached hereto
as Annex “8-B.”

The Letter dated 16 January 2018 sent by CCC to the


Philippine Consulate/POLO in connection with the fifth batch of
employees whose services were terminated is attached hereto as
Annex “8-C.”

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The Letter dated 16 January 2018 sent by CCC to the


Philippine Consulate/POLO in connection with the sixth batch
of employees whose services were terminated is attached hereto
as Annex “8-D.”

On 14 November 2017, complainant returned to the country.

On 08 January 2018, complainant filed a Complaint for Illegal


Dismissal against Blue Star, CCC and Mr. Petilla, seeking the payment
for the unexpired portion of his contract and his other money claims.

Respondents thereafter received Summons from the National


Labor Relations Commission (NLRC) and thereafter attended the
series of mandatory conferences called for the subject case.

Since the parties failed to amicably settle the case, both parties
where directed by the Honorable Labor Arbiter to file their respective
Position Papers.

On 06 March 2018, CCC sent a Letter dated 06 March 2018 to the


Philippine Embassy. In the said letter, CCC furnished the Philippine
Embassy, among others, the Full and Final Settlement Receipts and
Payment of Wages/Salaries or Settlement Claims that were issued and
signed by the employees whose services were terminated by CCC.

The Full and Final Settlement Receipt and Payment of


Wages/Salaries or Settlement Claim which were signed by the
complainant were among of those documents submitted to the
Philippine Embassy.

A copy of the Letter dated 06 March 2018 of CCC to the


Philippine Embassy is attached hereto as Annex “9” to “9-B.”

ISSUES:

1. WHETHER OR NOT THE COMPLAINANT HAS A


CAUSE OF ACTION AGAINST RESPONDENT
BLUE STAR SERVICES, INC.

2. WHETHER OR NOT THE COMPLAINANT WAS


ILLEGALLY DISMISSED FROM THE SERVICE.

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3. WHETHER OR NOT COMPLAINANT IS ENTITLED


TO BE PAID IN CONNECTION WITH THE
UNEXPIRED PORTION OF HIS EMPLOYMENT
CONTRACT AND TO HIS OTHER MONETARY
CLAIMS.

4. WHETHER OR NOT IT WAS LEGALLY


APPROPRIATE TO IMPLEAD MR. GILBERT
PETILLA AS ONE OF THE RESPONDENTS IN THE
CASE.

DISCUSSIONS:

The complainant has no cause of


action against Respondent Blue
Star because there is no privity of
contract that existed between Blue
Star and the complainant with
respect to his second Employment
Contract.

As a general rule, under the Migrant Workers Act, as amended,


the recruitment agency is jointly and solidarily liable as regards the
claims filed by the employee against the foreign employer in cases of
breach of contracts and money claims.

This is clear in Section 10 of Republic Act No. 8042, as amended,


which read as follows:

SEC. 10. Money Claims. - Notwithstanding any


provision of law to the contrary, the Labor Arbiters of the
National Labor Relations Commission (NLRC) shall have
the original and exclusive jurisdiction to hear and decide,
within ninety (90) calendar days after the filing of the
complaint, the claims arising out of an employer-employee
relationship or by virtue of any law or contract involving
Filipino workers for overseas deployment including
claims for actual, moral, exemplary and other forms of
damage. Consistent with this mandate, the NLRC shall

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endeavor to update and keep abreast with the


developments in the global services industry.

"The liability of the principal/employer and the


recruitment/placement agency for any and all claims
under this section shall be joint and several. This provision
shall be incorporated in the contract for overseas
employment and shall be a condition precedent for its
approval. The performance bond to de filed by the
recruitment/placement agency, as provided by law, shall
be answerable for all money claims or damages that may
be awarded to the workers. If the recruitment/placement
agency is a juridical being, the corporate officers and
directors and partners as the case may be, shall themselves
be jointly and solidarily liable with the corporation or
partnership for the aforesaid claims and damages.

Such liabilities shall continue during the entire


period or duration of the employment contract and shall
not be affected by any substitution, amendment or
modification made locally or in a foreign country of the
said contract.”

This is equally true if employee’s employment contract subsists


at the time a breach of contract allegedly occurred.

This case, however, is an exception thereto. Based on the records,


it is clear and evident that Blue Star had no knowledge or participation
as regards the second contract of the complainant with CCC. Initially,
Complainant obtained employment with CCC through its recruitment
agency, Blue Star, which screened, processed and pre-qualified his
application. Subsequently, when all the qualifications were met,
complainant was given one (1) year employment contract with CCC
and the same was duly approved by the POEA. When the said first
contract was completed, Complainant renegotiated directly with CCC
in his own personal capacity, without any of Blue Star’s involvement
and consent. When it proved successful, as he obtained another one (1)
year of contract, he returned to the Philippines.

Blue Star’s non-involvement in the second contract of the


complainant is clear and evident from the OFW Information Sheet as

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the complainant did not anymore state nor include the name of Blue
Star as his agency for his second work deployment in CCC. This only
proves that Blue Star indeed had no participation with the aforesaid
work re-application of the complainant. Blue Star has no knowledge of
such second contract and complainant’s personal dealings with CCC
until after it received the summons in connection with the subject case.

Apparently, considering that Blue Star was not privy to or in any


way involved in the execution of the said second employment contract,
whatever claims that the complainant may have against CCC should
be directed solely to the latter, excluding Blue Star.

The joint and solidary provision of Section 10 of the Migrant


Workers Act applies only in instances where the recruitment agency is
a part and privy with the contract that the employee has entered with
the foreign principal. This provision does not apply when the
recruitment agency like Blue Star in this case, has nothing to do with
the contract that the complainant has personally and directly entered
with CCC.

The case of Sunace International Management Services, Inc. v.


NLRC (G.R. No. 161757, 25 January 2018), the Court held:

“There being no substantial proof that Sunace knew


of and consented to be bound under the 2-year
employment contract extension, it cannot be said to be
privy thereto. As such, it and its "owner" cannot be held
solidarily liable for any of Divina’s claims arising from the
2-year employment extension. As the New Civil Code
provides,

Contracts take effect only between the parties, their


assigns, and heirs, except in case where the rights and
obligations arising from the contract are not transmissible
by their nature, or by stipulation or by provision of law.

Furthermore, as Sunace correctly points out, there


was an implied revocation of its agency relationship with
its foreign principal when, after the termination of the
original employment contract, the foreign principal
directly negotiated with Divina and entered into a new and

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separate employment contract in Taiwan. Article 1924 of


the New Civil Code reading:

“The agency is revoked if the principal


directly manages the business entrusted to the
agent, dealing directly with third persons.”

thus applies.”

The pieces of evidence submitted


in this case indubitably show that
complainant was not illegally
dismissed.

Nonetheless, while Blue Star is clearly not privy with


complainant’s second contract and should not have been impleaded in
the first place, the series of documents which was submitted on record
already showed that complainant’s dismissal from service is just and
authorized under the law.

Retrenchment is the reduction of work personnel usually due to


poor financial returns, aimed to cut down costs for operation
particularly on salaries and wages. It is one of the economic grounds
to dismiss employees and is resorted by an employer primarily to
avoid or minimize business losses. (F.F. Marine Corporation v.
National Labor Relations Commission, Second Division, G.R. No.
152039, April 8, 2005, 455 SCRA 154, 166.)

Retrenchment programs are purely business decisions within


the purview of a valid and reasonable exercise of management
prerogative. It is one way of downsizing an employer’s workforce and
is often resorted to by the employer during periods of business
recession, industrial depression, or seasonal fluctuations, and during
lulls in production occasioned by lack of orders, shortage of materials,
conversion of the plant for a new production program, or introduction
of new methods or more efficient machinery or automation. It is a valid
management prerogative, provided it is done in good faith and the
employer faithfully complies with the substantive and procedural
requirements laid down by law and jurisprudence. (Hotel Enterprises
of the Philippines, Inc. (HEPI) v. Samahan ng mga Manggagawa sa
Hyatt-National Union of Workers in the Hotel and Restaurant and

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Allied Industries [SAMASAH-NUWHRAIN], G.R. No. 165756, 05 June


2009, 588 SCRA 497, 509)

In the case of Shimizu Phils. Contractors, Inc. v. Callanta, G.R.


No. 165923, September 29, 2010, the Supreme Court held that to prove
that retrenchment is a valid exercise of management prerogative, the
following criteria must be observed, thus:

“(1) That the retrenchment is reasonably necessary and


likely to prevent business losses which, if already incurred,
are not merely de minimis, but substantial, serious, actual
and real, or if only expected, are reasonably imminent as
perceived objectively and in good faith by the employer;

(2) That the employer served written notice both to the


employees and to the Department of Labor and
Employment at least one month prior to the intended date
of retrenchment;

(3) That the employer pays the retrenched employees


separation pay equivalent to one month pay or at least
month pay for every year of service, whichever is higher;

(4) That the employer exercises its prerogative to retrench


employees in good faith for the advancement of its interest
and not to defeat or circumvent the employees' right to
security of tenure; and

(5) That the employer used fair and reasonable criteria in


ascertaining who would be dismissed and who would be
retained among the employees, such as status, x x x
efficiency, seniority, physical fitness, age, and financial
hardship for certain workers.”

It is our submission that the said criteria were fully met and
complied with by CCC.

It is clear on the records, more particularly the letter sent by CCC


to the Philippine Consulate/Philippine Overseas Labor Office (POLO),
that CCC had to reduce its current manpower to prevent losses. With
the on-going global financial crisis which prompted the clients of CCC

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to reduce its scope of works to be undertaken by CCC, the latter was


left with no choice but to reduce its manpower as well.

The severity of the effect of the global financial crisis in the


Kingdom of Saudi Arabia was very much documented. It could be
seen in the newspapers, magazines, TV, and the internet. Practically
anyone is aware of it and this Honorable Court should take judicial
notice of the same.

Under such dire circumstances, CCC cannot be forced to


maintain its current work force when the scope of projects initially
assigned by its clients were drastically decreased. As such, CCC’s
reduction of its work force is a clear management prerogative intended
primarily to prevent losses on their part.

As to the requirements nos. (2) and (3), it is without a doubt that


Termination letters were both given to the employee concerned and
the POLO at least 60 days in advance prior to the effectivity date of
their termination which is even, more than compliance with the 30 day
period as prescribed by the law.

Moreover, the Full and Final Settlement Receipt also showed that
complainant was paid with at least two months salary and benefits.

As to requirements nos. (4) and (5), it is our submission that the


same was also complied with. Complainant was not terminated
because of any ill will against him. He was not singled out by the
company. In fact, in the Letter dated 26 December 2017 submitted by
CCC to the Philippine Consulate/POLO, the complainant was merely
one of the unfortunate 25 project employees who were terminated due
to reduction of personnel. While he belongs to the first batch of
retrenched employees, succeeding batches also followed.

Included in the list of terminated employees were even those


high ranking project employees such as Managers, Supervisors and
Foremen. The reduction of personnel was made in good faith and it
did not specifically target complainant’s position.

Truly, it needs to stress that CCC’s implementation of reducing


its personnel is a management prerogative of the company. An

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employer is not precluded from adopting a new policy conducive to a


more economical and effective management.

Besides, Complainant executed a full and final settlement of his


claim which served as a waiver of any future claims he may have
arising from his previous employment with the Respondents. Said
settlement/quitclaim is not invalid as ruled upon by the court in the
case of Lambo vs. NLRC1, where the Court held that:

“In any case, private respondents executed two


releases in favor of petitioner company. Not all quitclaims
are per se invalid or against public policy. But those (1)
where there is clear proof that the waiver was wangled
from an unsuspecting or gullible person or (2) where the
terms of settlement are unconscionable on their face are
invalid. In these cases, the law will step in to annul the
questionable transactions.”

In this case, there is no showing that complainant is an


unsuspecting or gullible person. As a matter of fact, the complainant
is highly educated and is a high-ranking officer of CCC being one of
the managers thereof. Furthermore, the amount received by the
complainant in this case (i.e. SR 39,981.00 or in Peso equivalent -
Php552,137.61) is by way of final settlement is very substantial. The
terms of the final settlement cannot also be in any way be considered
to be unconscionable since the complainant was given the benefits of
what is due to him under the law.

In the case of Periquet vs. NLRC, 186 SCRA 724 (1990), the
Supreme Court held:

“Not all waivers and quitclaims are invalid as


against public policy. If the agreement was voluntarily
entered into and represents a reasonable settlement, it is
binding on the parties and may not be disowned of a
change of mind. It is only when there is a clear proof that
the waiver was wrangled from an unsuspecting or gullible
person or the terms of settlement unconscionable on its
face, that the law will step into annul the questionable
transaction. But where it is shown that the person making
the waiver did so voluntarily, with full understanding of
1 Lambo vs. National Labor Relations Commission, 317 SCRA 420 (1999).

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what he was doing, and the consideration for the quitclaim


is credible and reasonable, the transaction must be
recognized as a valid and binding undertaking.”

Respondents therefore submits that the Full and Final Settlement


Receipt that the Complainant had executed and freely signed is legal,
valid and binding upon the complainant and should not be invalidated
or set aside just because Complainant find it unacceptable.

The complainant is not entitled to


the unexpired portion of his
employment contract and with
other monetary claims.

Xxx xxxx

Xxx

There is absolutely no basis for


the inclusion of Mr. Gilbert
Petilla as one of the respondents
in the instant case. As such, his
name should be deleted from the
impleaded parties.

Xxx

Xxx

PRAYER

WHEREFORE, Respondents respectfully pray that this present


complaint be dismissed for utter lack of merit.

Petitioners likewise pray for other relief just and equitable


under the premises.

Pasig City for City of Manila, 12 March 2018.

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GERRAN LAMBINO
LAW OFFICES
Counsel for the Respondents
1213-A East Tower,
Philippine Stock Exchange Centre,
Ortigas Centre, Pasig City
Telefax No. 6331644

By:

MICHELLE DELOS SANTOS


PTR No. 373321 -01/04/18 Pasig City
IBP No. 0207603 -01/04/18 RSM
Roll No. 67555
MCLE No. V- 0011200; 09 March 2016

Copy furnished:

Jun Buencamino
1546 Craig St., Sampaloc, Manila.

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VERIFICATION/CERTIFICATION

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