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D. Liability of local recruitment agency and foreign employer

1. Solidary liability

The liability of the principal/employer and the recruitment/placement agency for any and all claims under this section shall be joint and several.  (Section 10, Rule I, Book III of the Rules and Regulations Governing Overseas Employment)

Joint and solidary liability is meant to assure aggrieved workers of immediate and sufficient payment of what is due them. The fact that petitioner and its principal have already terminated their agency agreement does not relieve the former of its liability. (Pentagon International Shipping Services, Inc. v. CA, Madrio, G.R. No. 169158, 01 July 2015)

a. Incorporated in the overseas employment contract

This provision [on solidary liability] shall be incorporated in the contract for overseas employment. (Section 10, Rule I, Book III of the Rules and Regulations Governing Overseas Employment)

b. Condition precedent for approval

This provision on solidary liability is a condition precedent for its approval. (Ibid.)

c. Performance bond: money claims or damages

The performance bond to be filed by the recruitment/placement agency, as provided by law, shall be answerable for all money claims or damages that may be awarded to the workers. (Ibid.)

d. If agency is a juridical entity: corporate officers and directors are solidarily liable

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 solidarily liable with the corporation or partnership for the aforesaid claims and damages. (Ibid.)

e. Continuing liability for duration of employment contract

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. (Ibid.)

2. Theory of imputed knowledge

The theory of imputed knowledge ascribes the knowledge of the agent to the principal- employer, not the other way around. The knowledge of the principal-foreign employer cannot, therefore, be imputed to its agent. (Sunace International Management Services, Inc. v. NLRC, G.R. No. 161757, 25 January 2006)

In Sunace, the Court ruled that the theory of imputed knowledge ascribed the knowledge of the agent to the principal, not the other way around. The knowledge of the principal-foreign employer could not, therefore, be imputed to its agent. As there was no substantial proof that Sunace knew of, and consented to be bound under, the 2-year employment contract extension, it could not be said to be privy thereto. As such, it and its owner were not held solidarily liable for any of the complainant’s claims arising from the 2-year employment extension. (APQ Shipmanagement Co., Ltd. v. Caseñas, G.R. No. 197303)

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