Non-substitution of solidary liability: principal, recruitment agency

The terms of Section 10 of R.A. No. 8042 clearly states the solidary liability[1] of the principal and the recruitment agency to the employees and this liability shall not be affected by any substitution, amendment or modification for the entire duration of the employment contract, to wit:

Sec. 10. Monetary 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 damages.

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 be filed by the recruitment/placement agency, as provided by law, shall be answerable for all monetary 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 solidarity 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. (Emphasis supplied.)

In Skippers United Pacific, Inc. v. Maguad,[2] it was ruled that the provisions of the POEA Rules and Regulations are clear enough that the manning agreement extends up to and until the expiration of the employment contracts of the employees recruited and employed pursuant to the said recruitment agreement.[3] In that case, the Courd held that the Affidavits of Assumption of Responsibility, though valid as between petitioner Skippers United Pacific Inc. and the other two manning agencies, were not enforceable against the respondents (the employees) because the latter were not parties to those agreements.[4]

In the case of Powerhouse v. Rey, even if there was transfer of accreditation by Catcher from Powerhouse to JEJ, Powerhouse's liability to respondent employees remained intact because respondent employees are not privy to such contract, and in their overseas employment contract approved by POEA, Powerhouse is the recruitment agency of Catcher. To relieve Powerhouse from liability arising from the approved overseas employment contract is to change the contract without the consent from the other contracting party.

To rule otherwise and free Powerhouse of liability against respondent employees would go against the rationale of R.A. No. 8042 to protect and safeguard the rights and interests of overseas Filipinos and overseas Filipino workers, in particular, and run contrary to this law's intention to an additional layer of protection to overseas workers.[5] This ensures that overseas workers have recourse in law despite the circumstances of their employment. By providing that the liability of the foreign employer may be "enforced to the full extent" against the local agent, the overseas worker is assured of immediate and sufficient payment of what is due them. Corollarily, the provision on joint and several liability in R.A. No. 8042 shifts the burden of going after the foreign employer from the overseas worker to the local employment agency. However, the local agency that is held to answer for the overseas worker's money claims is not left without remedy. The law does not preclude it from going after the foreign employer for reimbursement of whatever payment it has made to the employee to answer for the money claims against the foreign employer.[6]


[2] G.R. No. 166363, August 15, 2006, 498 SCRA 639.

[3] Id. at 669.

[4] Id.

[5] See Becmen Service Exporter and Promotion, Inc. v. Cuaresma, G.R. Nos. 182978-79, April 7, 2009, 584 SCRA 690 and Sevillana v. I.T. (International) Corp., G.R. No. 99047, April 16, 2001, 356 SCRA 451.

[6] Sameer Overseas Placement Agency, Inc. v. Cabiles, G.R. No. 170139, August 5, 2014, 732 SCRA 22.