i. Solidary Liability

Sale in Bad Faith

Where the sale of a business enterprise is attended with bad faith, there is no need to consider the applicability of the rule that labor contracts being in personam are not enforceable against the transferee. The latter is in the position of tortfeasor, having been a party likewise responsible for the damage inflicted on the members of the aggrieved union and therefore cannot justly escape liability. (Cruz v. PAFLU, G.R. No. L-26519, 1971)

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. This provision shall be incorporated in the contract for overseas employment and shall be a condition precedent for its approval. (R.A. No. 8042, as amended, Sec. 10)

Even if the recruiter and the principal had already severed their agency agreement at the time employee was injured, the recruiter may still be sued for a violation of the employment contract because no notice of the agency agreement's termination was given to the employee.

The obligations covenanted in the recruitment agreement entered into by and between the local agent and its foreign principal are not coterminous with the term of such agreement so that if either or both of the parties decide to end the agreement, the responsibilities of such parties towards the contracted employees under the agreement do not at all end, but the same extends up to and until the expiration of the employment contracts of the employees recruited and employed pursuant to the said recruitment agreement. (Catan v. NLRC, G.R. No. 77279, 1988).

Purpose of Solidary Liability

The agency agreement with the principal even if ended as between them, still extends up to and until the expiration of, the employment contracts of the employees recruited and employed pursuant to the said recruitment agreement. (OSM Shipping Phil, Inc. v. NLRC, G.R. No. 138193, 2003)

Posting of Cash Bond by Recruiter

The requirement for the posting of a cash bond is also an indispensable requirement. By posting such, the agency undertakes to assume joint and solidary liability with the employer for all claims and liabilities which may arise in connection with the implementation of the overseas employment contract and to guarantee compliance with existing Philippine labor laws and the laws of country of employment.

The peculiar nature of overseas employment makes it very difficult for the Filipino overseas worker to effectively go after his foreign employer for employment-related claims and, hence, public policy dictates that the recruitment or placement agency in the Philippines be made to share in the employer's responsibility. (Capricorn Travel & Tours v. CA, G.R. No. 91096, April 3, 1990)

The surety bond is intended to insure that if the rights of overseas workers are violated by their employers, recourse would still be available against the local companies that recruited them for the foreign principal. (Stronghold Insurance Co. v. CA, G.R. No. 88050, 1992)