Monday, March 19, 2012

Royal Crowne International vs. NLRC [G.R. No. 78085 October 16, 1989]

Facts: Petitioner, a duly licensed private employment agency, recruited and deployed private respondent Virgilio for employment with ZAMEL as an architectural draftsman in Saudi Arabia. Service agreement was executed by private respondent and ZAMEL whereby the former was to receive per month a salary of US$500.00 plus US$100.00 as allowance for a period of one year commencing from the date of his arrival in Saudi Arabia. However, ZAMEL terminated the employment of private respondent on the ground that his performance was below par. For three successive days thereafter, he was detained at his quarters and was not allowed to report to work until his exit papers were ready. On February 16, 1984, he was made to board a plane bound for the Philippines. Private respondent then filed a complaint for illegal termination against Petitioner Royal Crown Internationale and ZAMEL with the POEA. 

Petitioner contends that there is no provision in the Labor Code, or the omnibus rules implementing the same, which either provides for the "third-party liability" of an employment agency or recruiting entity for violations of an employment agreement performed abroad, or designates it as the agent of the foreign-based employer for purposes of enforcing against the latter claims arising out of an employment agreement. Therefore, petitioner concludes, it cannot be held jointly and severally liable with ZAMEL for violations, if any, of private respondent's service agreement. 

Issue: Whether or not petitioner as a private employment agency may be held jointly and severally liable with the foreign-based employer for any claim which may arise in connection with the implementation of the employment contracts of the employees recruited and deployed abroad. 

HeldYes, Petitioner conveniently overlooks the fact that it had voluntarily assumed solidary liability under the various contractual undertakings it submitted to the Bureau of Employment Services. In applying for its license to operate a private employment agency for overseas recruitment and placement, petitioner was required to submit, among others, a document or verified undertaking whereby it assumed all responsibilities for the proper use of its license and the implementation of the contracts of employment with the workers it recruited and deployed for overseas employment. It was also required to file with the Bureau a formal appointment or agency contract executed by the foreign-based employer in its favor to recruit and hire personnel for the former, which contained a provision empowering it to sue and be sued jointly and solidarily with the foreign principal for any of the violations of the recruitment agreement and the contracts of employment. Petitioner was required as well to post such cash and surety bonds as determined by the Secretary of Labor to guarantee compliance with prescribed recruitment procedures, rules and regulations, and terms and conditions of employment as appropriate. 

These contractual undertakings constitute the legal basis for holding petitioner, and other private employment or recruitment agencies, liable jointly and severally with its principal, the foreign-based employer, for all claims filed by recruited workers which may arise in connection with the implementation of the service agreements or employment contracts. 

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