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G.R. No.

196036 : OCTOBER 23, 2013

ELIZABETH M. GAGUI, Petitioner, v. SIMEON DEJERO and TEODORO R. PERMEJO, Respondents.

SERENO, C.J.:

FACTS:

On 14 December 1993, respondents Simeon Dejero and Teodoro Permejo filed separate Complaints for
illegal dismissal, nonpayment of salaries and overtime pay, refund of transportation expenses, damages, and
attorney fees against PRO Agency Manila, Inc., and Abdul Rahman Al Mahwes.

The Labor Arbiter Pedro Ramos rendered a decision ordering respondents Pro Agecy Manila Inc., and Abdul
Rahman Al Mahwes to pay complainants. The LA also issued a Writ of Execution. When the writ was
returned unsatisfied, an Alias Writ of Execution was issued, but was also returned unsatisfied.

Respondents filed a Motion to Implead Respondent Pro Agency Manila, Inc. Corporate Officers and
Directors as Judgment Debtor. It included petitioner as the Vice-president/Stockholder/Director of PRO
Agenct, Manila, Inc. The LA granted the motion.

A 2nd Alias Writ of Execution was issued, which resulted in the garnishment of petitioner bank deposit in the
amount of P85,430.48. Since, judgment remained unsatisfied, respondents sought a 3rd alias writ of
execution. The motion was granted resulting in the levying of two parcels of lot owned by petitioner located in
San Fernando Pampanga.

Petitioner filed a Motion to Quash 3rd Alias Writ of Execution. Petitioner alleged that apart from not being
made aware that she was impleaded as one of the parties to the case, the LA decision did not hold her liable
in any form whatsoever. Executive Labor Arbiter denied the motion.

Upon appeal, NLRC denied the appeal for lack of merit. NLRC ruled that in so far as overseas migrant
workers are concerned, it is R.A. 8042 itself that describes the nature of the liability of the corporation and its
officers and directors. It is not essential that the individual officers and directors be impleaded as party
respondents to the case instituted by the worker. A finding of liability on the part of the corporation will
necessarily mean the liability of the corporate officers or directors.

The CA affirmed the NLRC decision. The two Motions for Reconsideration were denied.

ISSUE: Whether or not petitioner may be held jointly and severally liable with PRO Agency Manila, Inc. in
accordance with Section 10 of R.A. 8042?

HELD: The Petitioner may not be held jointly and severally liable.

LABOR LAW: liability of corporate officers

The pertinent portion of Section 10, R.A. 8042 reads as follows: 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.

In Sto. Tomas v. Salac, we had the opportunity to pass upon the constitutionality of this provision. We have
thus maintained: the Court has already held, pending adjudication of this case, that the liability of corporate
directors and officers is not automatic. To make them jointly and solidarily liable with their company, there
must be a finding that they were remiss in directing the affairs of that company, such as sponsoring or
tolerating the conduct of illegal activities.

Hence, for petitioner to be found jointly and solidarily liable, there must be a separate finding that she was
remiss in directing the affairs of the agency, resulting in the illegal dismissal of respondents. Examination of
the records would reveal that there was no finding of neglect on the part of the petitioner in directing the
affairs of the agency. In fact, respondents made no mention of any instance when petitioner allegedly failed
to manage the agency in accordance with law, thereby contributing to their illegal dismissal.
ROYAL CROWN INTERNATIONALE VS NLRC GR 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: WON 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.
HELD: Yes, 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.