ROYAL CROWN INTERNATIONALE, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION AND VIRGILIO P. NACIONALES, RESPONDENTS.

Petitioner Royal Crown Internationale seeks the nullification of
a resolution of the National Labor Relations Commission (NLRC) which affirmed a
decision of the Philippine Overseas Employment Administration (POEA) holding it
liable to pay, jointly and severally
with Zamel-Turbag Engineering and Architectural Consultant (ZAMEL), private
respondent Virgillo P. Nacioniales’ salary and vacation pay corresponding to
the unexpired portion of his employment contract with ZAMEL.

In 1983, petitioner, a duly
licensed private employment agency, recruited and deployed private respondent
for employment with ZAMEL as an architectural draftsman in Saudi Arabia. On May
25, 1983, a 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 allowances for a period of one (1) year commencing from the
date of his arrival in Saudi Arabia. Private respondent departed for Saudi Arabia on June 28, 1983.

On February 13, 1984, ZAMEL terminated the employment of private
respondent on the ground that his performance was below par. For three (3) 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 on April 23, 1984 a complaint for
illegal termination against petitioner and ZAMEL with the POEA, docketed as POEA Case No. (L) 84-04-401.

Based on a finding that petitioner and ZAMEL failed to establish
that private respondent was terminated for just and valid cause, the Workers’
Assistance and Adjudication Office of the POEA issued a decision dated June 23, 1986 signed by Deputy Administrator
and Officer-in-Charge Crescencio M. Siddayao, the dispositive portion of which
reads:

WHEREFORE, judgment is hereby rendered in favor of the complainant
and against respondents, ordering the latter to pay, jointly and severally, to
complainant the following amounts:

1. TWO THOUSAND SIX HUNDRED FORTY US DOLLARS
(US$2,640.00) or its equivalent in Philippine currency at the time of payment,
representing the salaries corresponding to the unexpired portion of
complainant’s contract;

2. SIX HUNDRED US DOLLARS (US$600.00) less
partial payment of FIVE HUNDRED FIFTY-EIGHT SAUDI RIYALS (SR 558), or its
equivalent in Philippine currency at the time of actual payment, representing
the unpaid balance of complainant’s vacation pay;

3. THREE HUNDRED FIFTY US DOLLARS (US$350.00)
or its equivalent in Philippine currency at the time of actual payment
representing reimbursement of salary deductions for return travel fund;

4. Ten percent (10%) of the above-stated amounts, as and for attorney’s
fees.

Complainant’s claim for legal and transportation expenses are
hereby DISMISSED for lack of merit.

SO ORDERED.

[POEA Decision, p. 5; Rollo, p. 34.]

On July 18, 1986, petitioner filed thru its new counsel a motion
for reconsideration which was treated
as an appeal to the NLRC by the POEA. Petitioner alleged that the POEA erred in holding it solidarily liable
for ZAMEL’s violation of private respondent’s service agreement even if it was
not a party to the agreement.

In a resolution promulgated on December 11, 1986, the NLRC
affirmed the POEA decision, holding that, as
a duly licensed private employment agency, petitioner is jointly and severally liable with its foreign
principal ZAMEL for all claims and liabilities which may arise in connection
with the implementation of the employment contract or service agreement [NLRC
Decision, pp. 3-4; Rollo, pp. 26-27.]

On March 30, 1987, the
NLRC denied for lack of merit petitioner’s motion for reconsideration.

Hence, petitioner filed
the present petition captioned as “Petition for Review”.

At this point, it is not
amiss to note that the filing of a “Petition
for Review” under Rule 45 of the Rules of Court is not the proper means by
which NLRC decisions are appealed to the Supreme Court. It is only through a petition for certiorari under Rule 65
that NLRC decisions may be reviewed and nullified on the grounds of lack of
jurisdiction or grave abuse of discretion amounting to lack or excess of
jurisdiction. Nevertheless, in the
interest of justice, this Court opted to treat the instant petition as if it
were a petition for certiorari. Thus, after the filing of respondents’ comments, petitioner’s joint
reply thereto, and respondents’ rejoinders, the Court resolved to consider the
issues joined and the case submitted for decision.

The case at bar involves two principal issues, to wit:

I. 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;

II. Whether or not
sufficient evidence was presented by petitioner to establish the termination of
private respondent’s employment for just and valid cause.

I.

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.

Petitioner’s conclusion is erroneous. 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 [Section 2(e), Rule V, Book
I, Rules to Implement the Labor Code (1976).] 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 [Section 10 (a) (2), Rule V, Book I of the Rules to
Implement the Labor Code (1976).] 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 [Section 1 of Pres. Dec. 1412 (1978)
amending Article 31 of the Labor Code.]

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 [See Ambraque International Placement and
Services v. NLRC, G.R. No. 77970, January 28, 1988, 157 SCRA 431; Catan v.
NLRC, G.R. No. 77279, April 15, 1988, 160 SCRA
691; Alga Moher International
Placement Services v. Atienza, G.R. No. 74610, September 30, 1988.]

In a belated attempt to bolster its position, petitioner contends
in its joint reply that the omnibus rules implementing the Labor Code are invalid
for not having been published in the Official Gazette pursuant to the Court’s
pronouncements in the cases of Tanada v. Tuvera [G.R. No.
63915, April 25, 1985, 136 SCRA 27; December 29, 1986, 146 SCRA 446.]
Petitioner further contends that the
1985 POEA Rules and Regulations, in particular Section 1, Rule I of Book VII*
quoted in the NLRC decision, should not have been retroactively applied to the
case at bar.

But these contentions are irrelevant to the issues at bar. They proceed from a misapprehension of the
legal basis of petitioner’s liabilities as a duly licensed private employment
agency. It bears repeating that the
basis for holding petitioner jointly and severally liable with the
foreign-based employer ZAMEL is the contractual undertakings described above
which it had submitted to the Bureau of Employment Services. The sections of the omnibus rules
implementing the Labor Code cited by this Court merely enumerate the various
documents or undertakings which were submitted by petitioner as applicant for the license to
operate a private employment agency for overseas recruitment and
placement. These sections do not create
the obligations and liabilities of a
private employment agency to an employee it had recruited and deployed for work
overseas. It must be emphasized again
that petitioner assumed the obligations and liabilities of a private employment
agency by contract. Thus, whether or
not the omnibus rules are effective in accordance with Tanada v. Tuvera is an issue the resolution of which
does not at all render nugatory the binding effect upon petitioner of its own contractual undertakings.

The Court, consequently, finds it unnecessary to pass upon both the implications of Tanada v. Tuvera on the omnibus rules implementing the
Labor Code as well as the applicability of the 1985 POEA
Rules and Regulations.

Petitioner further argues that it cannot be held solidarily
liable with ZAMEL since public respondent had not acquired jurisdiction over
ZAMEL through extra-territorial service of summons as mandated by Section 17, Rule 14 of the Rules of Court.

This argument is untenable. It is well–settled that service upon any agent of a foreign corporation, whether or not
engaged in business in the Philippines, constitutes personal service upon that
corporation, and accordingly, judgment may be rendered against said foreign
corporation [Facilities Management Corporation v. De la Osa, G.R. No. L-38649,
March 26, 1979, 89 SCRA 131.] In the case at bar, it cannot be denied that
petitioner is an agent of ZAMEL. The
service agreement was executed in the Philippines between private respondent
and Milagros G. Fausto, the General Manager of petitioner, for and in behalf of
ZAMEL [Annex “D” of Petition, p. 3; Rollo, p. 37.] Moreover, one of
the documents presented by petitioner as evidence, i.e. the counter-affidavit
of its General Manager Ms. Fausto, contains an admission that it is the representative and agent of
ZAMEL [See Paragraph No. 1 of Annex “H” of Petition; Rollo, p.
43.]

Considering the foregoing, the Court holds that the NLRC
committed no grave abuse of discretion amounting to lack or excess of jurisdiction in declaring petitioner jointly
and severally liable with its foreign principal ZAMEL for all claims which have
arisen in connection with the implementation of private respondent’s employment
contract.

II.

Petitioner asserts that the NLRC failed to consider the
overwhelming evidence it had presented before the POEA which establishes the
fact that private respondent was terminated for just and valid cause in
accordance with his service agreement with ZAMEL.

This assertion is without merit. The NLRC upheld the POEA finding that petitioner’s evidence was
insufficient to prove termination from employment for just and valid
cause. And a careful study of the
evidence thus far presented by petitioner reveals to this Court that there is
legal basis for public respondent’s conclusion.

It must be borne in mind that the basic principle in termination
cases is that the burden of proof rests upon the employer to show that the
dismissal for just and valid
cause, and failure to do so would necessarily mean that the dismissal was not
justified and, therefore, was illegal [Polymedic General Hospital v. NLRC, G.R.
No. 64190, January 31, 1985, 134 SCRA 420; and also Article 277 of the Labor
Code.] And where the termination cases involve a Filipino worker recruited and
deployed for overseas employment, the burden naturally devolves upon both the
foreign-based employer and the employment agency or recruitment entity which recruited
the worker, for the latter is not only the agent of the former, but is also
solidarily liable with its foreign principal for any claims or liabilities
arising from the dismissal of the worker.

In the case at bar, petitioner had indeed failed to discharge the
burden of proving that private
respondent was terminated from employment for just and valid cause. Petitioner’s evidence consisted only of the
following documents:

(1) A letter dated May 15, 1984 allegedly written by an official of ZAMEL, stating that
a periodic evaluation of the entire staff was conducted; that the personnel concerned were given a
chance to improve; that complainant’s performance was found below par; and that on February 13, 1984, at
about 8:30 AM, complainant was caught on the way out of the office to look for
another job during office hours without the permission of his supervisor;

(2) A
telex message allegedly sent by employees of ZAMEL, stating that they have not
experienced maltreatment, and that the working conditions (in ZAMEL) are good;

(3)   The signatures of fifteen (15) persons who
allegedly sent the telex message;

(4) A receipt dated February 16, 1984 signed by
complainant, stating that he was paid SR915 representing his salary and SR558,
representing vacation pay for the month of February 1984;

(5) The counter-affidavit of Milagros G. Fausto,
the General Manager of Royal Crown, stating that complainant was dismissed
because of poor performance, acts of dishonesty and misconduct, and denying complainant’s claim that his salary
and leave pay were not paid, and that he was maltreated [See POEA
Decision, p. 3; Rollo, p. 32. See also Annexes “E”,
“F”, “F-1”, “G” and “H” of Petition;
Rollo, pp, 38-43.]

Certainly, the telex message supposedly by the employees of ZAMEL
is not relevant in the determination of the legality of private respondent’s
dismissal. On the other hand, the
receipt signed by private respondent does not prove payment to him of the
salary and vacation pay corresponding to the unexpired portion of his contract.

More importantly, except for its allegation that private
respondent was caught on February 13, 1984 on his way out of the
office compound without permission, petitioner had failed to allege and
to prove with particularity its charges against private respondent. The letter dated May 15, 1984 allegedly
written by the Actg. Project Architect and the counter-affidavit of
petitioner’s General Manager merely stated that the grounds for the employee’s
dismissal were his unsatisfactory performance and various acts of dishonesty,
insubordination and misconduct. But the particular acts which would
indicate private respondent’s
incompetence or constitute the above infractions were neither specified nor
described therein. In the absence of
any other evidence to substantiate the general charges hurled against private
respondent, these documents, which comprise petitioner’s evidence in chief,
contain empty and self-serving statements insufficient to establish just and
valid cause for the dismissal of private respondent [See Euro-Lines,
Phils., Inc. v. NLRC, G.R. No. 75782, December 1, 1987, 156 SCRA 78; Ambraque
International Placement and Services v. NLRC, supra.]

The Court is aware of the document attached in petitioner’s
manifestation and joint reply which is purportedly a xerox copy of a statement executed on December 13, 1987 in
Saudi Arabia by private respondent claiming that the latter had settled the
case with ZAMEL and had “received all [his] benefits that is salary,
vacation pay, severance pay and all other bonuses before [he] left the Kingdom
of Saudi Arabia on 13 Feb. 1984 and hereby indemnify [ZAMEL] from any claims or
liabilities, [he] raised in the Philippine Courts” [Annex “A” of petitioner’s
Manifestation with Motion to hold in Abeyance;
Rollo, p. 82. And also Annex “A” of petitioner’s Joint Reply; Rollo, p.
111.]

But the veracity of the contents of the document it precisely
disputed by private respondent. He claims
that he was made to sign the above statement against his will and under threat
of deportation [See Telex of private respondent received by the Supreme Court of the
Philippines on January 14, 1988; Rollo, p. 83. And also private respondent’s
Rejoinder, pp. 1-3; Rollo, pp.
139-141.]

Petitioner finally contends that inasmuch as clause no. 13 of the service agreement provided that
the law under which the agreement shall be regulated was the laws of Saudi
Arabia [Annex “D” of Petition, p. 2; Rollo, p. 36], public respondent should
have taken into account the laws of Saudi Arabia and the stricter concept of
morality availing in that jurisdiction for the determination of the legality of
private respondent’s dismissal.

This contention is patently erroneous. The provisions of the Labor Code of the Philippines, its
implementing rules and regulations, and doctrines laid down in jurisprudence
dealing with the principle of due process
and the basic right of all Filipino workers to security of tenure, provide the
standard by which the legality of the exercise by management of its prerogative
to dismiss incompetent, dishonest or recalcitrant employees, is to be
determined. Whether employed locally or overseas, all Filipino workers
enjoy the protective mantle of Philippine labor and social legislation,
contract stipulations to the contrary notwithstanding. This pronouncement is in keeping with the
basic public policy of the State to afford protection to labor, promote full
employment, ensure equal work opportunities regardless of sex, race or creed,
and regulate the relations between workers and employers. For the State assures the basic rights of
all workers to self-organization, collective bargaining, security of tenure,
and just and humane conditions of work [Article 3 of the Labor Code of the Philippines;
See also Section 18, Article II and Section 3,
Article XIII, 1987 Constitution.] This ruling is likewise rendered imperative
by Article 17 of the Civil Code which states that laws “which have for
their object public order, public policy and good customs shall not be rendered
ineffective by laws or judgments promulgated, or by determination or
conventions agreed upon in a foreign country.”

Needless to say, the laws of Saudi Arabia which were,
incidentally, neither pleaded nor proved by petitioner, have absolutely no
bearing whatsoever to the case at bar.

The Court holds, therefore, that the NLRC committed no grave
abuse of discretion amounting to lack or excess of jurisdiction in upholding
the POEA’s finding of insufficiency of evidence to prove termination for just
and valid cause.

WHEREFORE, the Court Resolved to DISMISS the instant petition.

SO ORDERED.

Fernan, C.J., Feliciano, and
Bidin, JJ., concur.

Gutierrez, Jr., J., on leave.

*
Section 1. . . . Agencies or entities shall be responsible for the faithful
compliance by their foreign principal of all obligations under the employment
contract and shall therefore, be liable for any and all violations of the contract. . . .