G.R. No. 78085 October 16, 1989
ROYAL CROWN INTERNATIONALE, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and VIRGILIO P. NACIONALES, respondents.

FACTS

Petitioner Royal Crown Internationale, a licensed private employment agency, recruited and deployed private respondent Virgilio P. Nacionales for employment with Zamel-Turbag Engineering and Architectural Consultant (ZAMEL) in Saudi Arabia as an architectural draftsman under a one-year service agreement. Nacionales commenced work on June 28, 1983. On February 13, 1984, ZAMEL terminated his employment, alleging subpar performance. He was subsequently confined to his quarters for three days and repatriated to the Philippines on February 16, 1984.
Nacionales filed a complaint for illegal dismissal with the Philippine Overseas Employment Administration (POEA) against both ZAMEL and Royal Crown. The POEA found the termination illegal due to lack of just cause and held both respondents jointly and severally liable for unpaid salaries for the unexpired contract portion, vacation pay, and other monetary claims. The National Labor Relations Commission (NLRC) affirmed this decision. Royal Crown elevated the case to the Supreme Court via a petition for review, which the Court treated as a petition for certiorari.

ISSUE

The principal issues were: (1) whether a private employment agency can be held jointly and severally liable with its foreign principal for claims arising from the employment contract, and (2) whether sufficient evidence established a just and valid cause for Nacionales’ dismissal.

RULING

The Supreme Court dismissed the petition, affirming the NLRC’s decision. On the first issue, the Court ruled that Royal Crown was solidarily liable with ZAMEL. This liability is not merely statutory but arises from the agency’s contractual undertakings. As a condition for obtaining its license, Royal Crown submitted a verified undertaking to the Bureau of Employment Services assuming responsibility for the proper implementation of the employment contracts of workers it recruits. Furthermore, the agency contract executed by the foreign principal contained a provision empowering the agency to sue and be sued jointly and solidarily with the principal for any violations. By voluntarily assuming these obligations, Royal Crown cannot evade solidary liability for breaches of the employment agreement.
On the second issue, the Court upheld the finding that the dismissal was illegal. ZAMEL and Royal Crown failed to substantiate the claim of unsatisfactory performance with clear and convincing evidence. The Court also rejected the argument that Saudi Arabian law, stipulated in the service agreement, should govern the dismissal’s validity. The Court emphasized that Filipino workers, whether employed locally or overseas, are protected by Philippine labor laws, including the constitutional guarantee of security of tenure and the requirements of due process. Contractual stipulations applying foreign law cannot override these mandatory and protective provisions of Philippine law, which are considered matters of public order and policy. Thus, the NLRC committed no grave abuse of discretion.