FEAGLE CONSTRUCTION CORPORATION, PETITIONER, VS. GAVINO GAYDA, ELPIDIO AGPALAYA, MIGUELITO BATOON, ELIGIO CUENCO, CLARO CUNANAN, SANTIAGO CURAMENG, MANUEL DACO, EDUARDO DEPONE, …

The singular issue in this case is whether or not petitioner may
be held solidarily liable with the foreign employer
for any unpaid claims of private respondents against their foreign principal
employer even as they have a stipulation to this effect.

This petition (G.R. No. 82310) was previously dismissed on March 23, 1988 for failure of
Petitioner to sufficiently show that the respondent Commission had committed a
grave abuse of discretion in rendering its questioned judgment.^[1]
An amended petition was filed on April
4, 1988.^[2]
The amended petition was given due course on July 4, 1988.^[3]

Petitioner questions the decision of the First Division of public
respondent National Labor Relations Commission^[4]
dated January 29, 1988 in
POEA Case No. L-86-10-971, which modified the decision dated July 20, 1987, of
Commissioner Tomas D. Achacoso of the Philippine
Overseas Employment Administration dated July 20, 1987, excluding petitioner’s
officials Florentino Aguila
and Rene Aguila from liability, but affirming the
liability of the petitioner to private respondents on the ground that
petitioner is solidarily liable together with the
private respondents’ foreign employer-Algosaibi-Bison
Ltd., Dammam, Saudi Arabia.^[5]

The modified decision of Administrator Achacoso
has the following dispositive portion:

“WHEREFORE, premises
considered, respondents Feagle Construction
Corporation, Florentino Aguila
and Rene Aguila and its (sic) foreign principal Algosaibi Bison, Ltd., Dammam,
Saudi Arabia are hereby held jointly and severally liable to pay herein
complainants within ten (10) days from receipt of this Order, the peso
equivalent at the time of actual payment of the sum appearing opposite
complainants’ names representing their total claim for unpaid salaries/wages,
remittances and other benefits, to wit:

1.       Elpidio
Agpalza  ——-  S.R. 19,245.00

2.       Miguel Batoon —————— 
9,433.00

3.       Eligio
Cuenca ——————18,015.00

4.       Claro
Cunanan  —————-16,409.00

5.       Santiago
Curameng  ———-13,065.00

6.       Manuel Daco  ———————9,062.00

7.       Eduardo Depone —————-24,038.00

8.       Raymundo
Ervera  ————–15,235.00

9.       Jose Estabillo  ———————9,358.00

10.     Rogelio Figueroa  —————-19,554.00

11.     Gavino
Gayda  ——————–14,977.00

12.     Artemio
Hulingnga  —————-8,581.00

13.     Jorge lting  ————————-18,436.00

14.     Emiliano
Macam  —————–13,436.00

15.     Alexander Maputol  —————16,394.00

16.     Avelino
Mendoza ——————-8,124.00

17.     Rogelio Noo  ———————–18,930.00

18.     Rolando Patinio  ——————18,598.00

19.     Vitaliano
Pena  ——————–16,187.00

20.     Rolly
Perales  ———————10,713.00

21.     Dominador
Sta. Catalina  ——-12,767.00

22.     Arsenio
L. Santos  —————-17,708.00

23.     Felipe Tesado  ———————14,236.00

TOTAL ————- S.R.342,501.00

We
take note that complainants have been paid of (sic) their plane fare bonds as
evidenced by check vouchers duly signed by individual complainants, hence, such
claim is considered settled and/or fully paid.

Respondents are further ordered to pay
attorney’s fees equivalent to five percent (5%) of the total amount of the
claims.

All other claims are hereby dismissed
for lack of merit.

No pronouncement as to cost.”^[6]

A temporary restraining order was issued by this Court on September 12, 1988 and the petitioner
filed the required bond in the amount of P50,000.00.^[7]

The following antecedent pertinent facts are not disputed:

“1.            Private respondents
have been employed with Algosaibi-Bison, Ltd. in Saudi
Arabia for three to five years working on
construction projects for the Kingdom
of Saudi Arabia.

2.  Sometime in 1983, Algosaibi-Bison, Ltd. started encountering financial
difficulties because of the drop in the price of oil.  Because of the drop in the price of oil, the
income of the Kingdom of Saudi
Arabia plunged from about one hundred billion
dollars a year to eighteen billion dollars a year.  As a result, the Kingdom
of Saudi Arabia encountered
financial difficulties in paying.  Algosaibi-Bison, Ltd. for its construction projects.

3.  Starting in 1983, the
remittance of the allotments of the beneficiaries of Filipino workers employed
with Algosaibi-Bison, Ltd. was delayed.  Although all the allotments for 1983 and 1984
were eventually paid, all these payments were delayed.

4.  During all these years
petitioner never charged Filipino workers like private respondents a single
centavo for sending them to work for Algosaibi-Bison,
Ltd. Petitioner advanced all mobilization expenses out of its funds.

5.  Because of its financial
difficulties, Alfosaibi-Bison, Ltd. could not even
reimburse petitioner for the mobilization expenses petitioner advanced, such as
passport fees, medical fees, and visa application fees.  Petitioner insisted that Algosaibi-Bison,
Ltd. should give top priority to the payment of the wages and the allotments of
the Filipino workers employed with it.

6.  Because of this
development, petitioner decided to stop sending back Filipino workers to work
with Algosaibi-Bison, Ltd.  Workers are given a one-month vacation after
a year with re-entry visa.

7.  Sometime in July, 1984,
the Filipino workers employed with Algosaibi-Bison,
Ltd. who had returned to Manila,
including private respondents, requested for a meeting with the management of
petitioner.  About forty (40) Filipino
workers attended the meeting.  During the
meeting, the workers requested petitioner to return them to their job site in Saudi
Arabia. 
Mr. Florentino B. Aguila,
the president of petitioner, informed the workers that petitioner did not want
to send back any workers to Saudi Arabia
because of the big risk due to the financial difficulties of Algosaibi-Bison, Ltd.

8.  However, the workers
pleaded with Mr. Florentino B. Aguila
to send them back to Saudi Arabia.  They explained that they were jobless in the Philippines,
because of the depressed economic condition of the country.  Rather than remain jobless, they would rather
to take a chance in Saudi Arabia.  They assured petitioner that they were
willing to assume the risk in case the remittance of their salaries would be
delayed.  They emphasized that they were
willing to sign a written statement indicating that they would not hold
petitioner liable for any delay or non-payment of their salaries and any amounts
due them from Algosaibi-Bison, Ltd.  In accordance with their commitment, the said
workers, including private respondents, signed a Statement xxx.  Moreover, the workers stated they would seek
the help of Saudi labor authorities individually in the event they would not be
paid.

9.  It was under the
foregoing circumstances that petitioner reluctantly agreed to send back private
respondents to Saudi Arabia to help them in their dire financial need if they
would sign the aforementioned ‘Statement’ xxx before they leave for Saudi
Arabia.  xxx.

10.           While the
Filipino workers were in Saudi Arabia,
they received their salaries directly from Algosaibi-Bison,
Ltd.

11.           When Algosaibi-Bison, Ltd. went into bankruptcy in 1986, all the
Filipino workers in its employ, including private respondents dealt with the
liquidator directly and in their individual capacities.  They filed their claims with the liquidator,
and the liquidator issued to each of them a certificate stating the amount
payable to each of them as soon as funds are available.  The said Filipino workers, including private
respondents, agreed that the liquidator would pay them directly and
individually through their bank accounts in the Philippines.  xxx.

12.           Just the same,
to assist the workers, petitioner has written the liquidator to follow up the
claims of the Filipino workers, and the liquidator has replied to it.  The reply of the liquidator confirmed the
individual agreement of the said workers, including private respondents, that
they would be paid by the liquidator directly and individually.  Thus, petitioner has nothing to do with the
remittance of the payments due private respondents.  In fact, the liquidator even refused to
furnish the petitioner a list of their individual claims and corresponding amounts
due each of them.  The liquidator
considered these information confidential and privy to said workers.  xxx.

13.           Under the law
of Saudi Arabia, the claims of the Filipino workers of Algosaibi-Bison,
Ltd. has first priority for payment in the bankruptcy proceeding.  Article 15 of the Labor Law of Saudi Arabia
provides:

‘The amounts to which the workman or his dependents are entitled
under the provisions of this Law shall be considered first class privileged
debts, and for the recovery thereof the workman or his heirs shall have a
priority rights over all the employer’s property.’

14.           On October 3, 1986, private respondents
filed with the Philippine Overseas Employment Administration a Complaint
against petitioner for the payment of their claims with the liquidator of Algosaibi-Bison, Ltd.

15.           On December 2, 1986, petitioner filed
its Answer.  In its Answer, it pointed
out that it was never furnished with a copy of any Complaint from private
respondent Artemio Hulingnga.

16.           On July 20, 1987, the Philippine
Overseas Employment Administration rendered a Decision in favor of private
respondents, including respondent Artemio Hulingnga, although petitioner was never furnished with a
copy of his Complaint.

17.           On August 7, 1987, petitioner appealed to
respondent National Labor Relations Commission (hereinafter referred to as
respondent Commission).

18.           On January 29, 1988, respondent
Commission rendered a Decision affirming the Decision of the Philippine
Overseas Employment Administration with the modification that the ‘president’
and the ‘vice president for administration and finance’ of petitioner were
exempted from liability for the claims of private respondents.  xxx.

19.           On February 11, 1988, petitioner filed a
Motion for Reconsideration.  xxx.

20.           On February 29, 1988, respondent
Commission issued a Resolution denying the Motion for Reconsideration.  xxx.

21.           On March 8, 1988, before receipt of the
aforementioned Resolution of respondent Commission, petitioner filed a
Supplemental Motion for Reconsideration. 
xxx.  Petitioner received the said
Resolution of respondent Commission only after petitioner had filed its
Supplemental Motion for Reconsideration.”^[8]

The petition is impressed with merit.

We agree with Public Respondents that the general rule as provided
for in Section 1, Rule II of the rules and regulations of the Philippine
Overseas Employment Administration is that every licensed private recruitment
agency shall be jointly and solidarily liable with
the employer for all claims and liabilities which may arise in connection
with the implementation of the contract of employment.

In this case, however, We find it necessary to deviate from the
general rule.  First, because of changed
circumstances, and second, because of individual agreements between petitioner
and private respondents which cannot be considered void because the same cannot
be considered contrary to law.

It is the uncontradicted contention of
petitioner that 13 of private respondents filed their claims for salaries due
in January, February and March of 1986, when their contracts of employment
expired in 1985.^[9]

It is also clear that private respondents executed new and
different contracts of employment directly with Algosaibi-Bison,
Ltd. without the participation and consent of the petitioner.  The former contracts with the petitioner
expired and private respondents entered into new contracts of employment with
the Algosaibi-Bison, Ltd., without the participation
of petitioner.

The claims of private respondents were made directly with the
liquidator of Algosaibi-Bison, Ltd. and they agreed
to wait for the promised payment.  Again
the petitioner had nothing to do with those claims.

We simply cannot ignore that petitioner was reluctant to send the
private respondents back to Saudi Arabia because as early as 1983, the Algosaibi-Bison, Ltd. started encountering financial
difficulties because of the drop in the price of oil.  Private respondents were the ones who
insisted that they be allowed to resume employment.  They were informed of the risks involved
relating to the financial reverses of the employer.  They insisted to return to Saudi
Arabia and they agreed to sign individual
statements, which they did, to the effect that each one of them did not hold
petitioner responsible for delay or non-payment of their salaries and any
amounts due them from Algosaibi-Bison, Ltd.

These individual statements voluntarily signed by the private
respondents to convince the reluctant petitioner to send them back to Saudi
Arabia, notwithstanding their knowledge of
the financial reverses of this employer, are eloquent individual waivers of
their rights against petitioner.  They
were informed of the risk involved in returning to an employer in serious
financial distress.  They insisted on
returning to work, even persuading petitioner to allow them to do so, by
waiving the possible liability of petitioner. 
Under these circumstances, when private respondents were insisting to
return to work despite the warning, We cannot consider their written waivers as
to petitioner’s responsibilities void. 
They were not victims of deceit or deception.  They entered into those waivers with open
eyes and clear minds.  They were aware of
the imminent danger and the great risks involved in their renewed ventures.

We also consider that as of record in the past, petitioner never
took advantage of private respondents. 
They were always treated fairly and in accordance with law.  Private respondents did not question the good
faith of Petitioner.  Their former
employer Algosaibi-Bison, Ltd. went into bankruptcy
in 1986 and petitioner had nothing to do with that.  Private respondents filed their claims
directly with the Liquidator of their former employer Algosaibi-Bison,
Ltd.  They were given certificates of the
amounts due them, to be given preference under the laws of Saudi
Arabia. 
They were to be paid directly, again without participation of the
petitioner.  Petitioner wrote the
Liquidator just to help private respondents, so that their claims may be expedited.

Holding, therefore, that in view of the circumstances proven in
this case, and the very clear waiver of liability individually signed by
private respondents in favor of petitioner, the petitioner cannot be held
jointly and solidarily liable with the employer Algosaibi-Bison, Ltd. for the claims of private
respondents.  All other issues need no
longer be discussed.

WHEREFORE, the temporary restraining order issued on September 12, 1988, is made permanent
and the bond filed of P50,000.00 by petitioner is cancelled.  The questioned decision of the National Labor
Relations Commission dated January 29,
1988, and the order denying the motion for reconsideration of the
same in POEA Case No. L-86-10-971, are modified, in that petitioner and its
officials are not solidarily liable with petitioner
with the Algosaibi-Bison, Ltd. on the claims filed by
private respondents.  Costs against
private respondents.

This decision is immediately executory.

SO ORDERED.

Narvasa, (Chairman), Cruz, and Medialdea, JJ., concur.

Griño-Aquino, J., on leave.

^[1]
Page 38, Rollo.

^[2]
Pages 39-53, Rollo.

^[3]
Page 142, Rollo.

^[4]
Commissioner G. Encarnacion, ponente.

^[5]
Pages 88-104, Rollo.

^[6]
Pages 88-88-A, Rollo.

^[7]
Pages 188-190, 202, Rollo.

^[8]
Pages 2-6, Rollo.

^[9]
Page 2, Memorandum on Additional Arguments In Support of Petition, last portion
of Rollo.