Chavez vs Bonto-Perez

June 23, 2011

Labor Standards – Standard Employment Contract for Entertainers – Laches

Chavez is a dancer who was contracted by Centrum Placement & Promotions Corporation to perform in Japan for 6 months. The contract was for $1.5k a month, which was approved by POEA. After the approval of said contract, Chavez entered into a side contract reducing her salary with her Japanese employer through her local manager-agency (Jaz Talents Promotion). The salary was reduced to $500 and $750 was to go to Jaz Talents. In February 1991 (two years after the expiration of her contract), Chavez sued Centrum Placement and Jaz Talents for underpayment of wages before the POEA.

The POEA ruled against her. POEA stated that the side agreement entered into by Chavez with her Japanese employer superseded the Standard Employment Contract; that POEA had no knowledge of such side agreement being entered into; that Chavez is barred by laches for sleeping on her right for two years.

ISSUE: Whether or not Chavez is entitled to relief.

HELD: Yes. The SC ruled that the managerial commission agreement executed by Chavez to authorize her Japanese Employer to deduct her salary is void because it is against our existing laws, morals and public policy. It cannot supersede the standard employment contract approved by the POEA with the following stipulation appended thereto:

It is understood that the terms and conditions stated in this Employment Contract are in conformance with the Standard Employment Contract for Entertainers prescribed by the POEA under Memorandum Circular No. 2, Series of 1986. Any alterations or changes made in any part of this contract without prior approval by the POEA shall be null and void;

The side agreement which reduced Chavez’s basic wage is null and void for violating the POEA’s minimum employment standards, and for not having been approved by the POEA. Here, both Centrum Placement and Jaz Talents are solidarily liable.

Laches does not apply in the case at bar. In this case, Chavez filed her claim well within the three-year prescriptive period for the filing of money claims set forth in Article 291 of the Labor Code.  For this reason, laches is not applicable.


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