G.R. No. 142358 . January 31, 2006.
GRAND PLACEMENT AND GENERAL SERVICES CORPORATION, Petitioner, vs. COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION, and MARY ANN PARAGAS, Respondents.

FACTS

Mary Ann Paragas was deployed by J.S. Contractor, Inc. (JSCI) to work for Philips Electronics in Taiwan. She filed a complaint before the NLRC against Philips and JSCI for breach of contract, alleging non-payment of night shift allowances, full attendance bonuses, and payment of an excessive placement fee. During the pendency of the case, JSCI’s accreditation was transferred to Grand Placement and General Services Corporation (petitioner), which was consequently impleaded as an additional respondent.
JSCI denied liability, arguing that the transfer of accreditation shifted responsibility to petitioner. It also presented a receipt to refute the claim of an excessive placement fee. Petitioner, for its part, argued it had no privity of contract with Paragas and should not be held liable. The Labor Arbiter ruled in favor of Paragas, holding both JSCI and petitioner liable for her monetary claims.

ISSUE

Whether petitioner, as the transferee agency of JSCI’s accreditation, can be held solely liable for the contractual obligations to the overseas worker, Mary Ann Paragas.

RULING

Yes. The Supreme Court affirmed the decisions of the NLRC and the Court of Appeals holding petitioner solely liable. The legal logic hinges on the application of Section 6, Rule I, Book III of the POEA Rules and Regulations, which governs the transfer of accreditation between recruitment agencies. The rule explicitly states that the transferee agency “shall assume full and complete responsibility for all contractual obligations of the principals to its workers originally recruited and processed by the former agency.”
The Court rejected petitioner’s argument that it had no privity of contract and that the breach occurred before the transfer. The POEA rule is clear and imposes absolute responsibility on the transferee to ensure no diminution of the worker’s wages and benefits. This assumption of responsibility is not contingent on the timing of the breach but is a condition of the transfer itself, designed to protect overseas workers from agency subterfuge. Petitioner’s own “Affidavit of Assumption of Responsibility” solidified its obligation. Consequently, JSCI was correctly absolved, and petitioner, as the accredited agency at the time of the decision, was rightfully held answerable for the unpaid benefits of Paragas. The award for excess placement fee was, however, deleted due to insufficient evidence.