The Supreme Court ruled that recruitment agencies are responsible for their deployed workers’ welfare and wages, even if they circumvent formal POEA procedures. This decision ensures agencies cannot evade liability by claiming ignorance or non-involvement after deploying workers overseas. It underscores the duty of recruitment agencies to ensure fair treatment and compensation for Filipino workers abroad, reinforcing protections against exploitation.

Beyond Paper Trails: Can Agencies Dodge Responsibility for Overseas Workers?

This case revolves around Mario Hornales’s complaint against JEAC International and its owner, Jose Cayanan, for unpaid wages and damages sustained while working as a fisherman in Singapore. Despite JEAC’s claims of non-involvement and Hornales’s alleged direct hiring by a Singaporean agency, the Supreme Court examined the substance of their relationship. The central legal question is whether JEAC, despite lacking formal documentation, facilitated Hornales’s employment and should be held responsible for his unpaid wages and poor working conditions.

The narrative begins with Hornales filing a complaint with the Philippine Overseas Employment Administration (POEA) against JEAC and Cayanan, citing non-payment of wages and inhumane working conditions in Singapore. He alleged that JEAC deployed him, along with other Filipinos, and that they were met in Singapore by Victor Lim, who informed them of their fishing jobs. The conditions aboard the vessel, Ruey Horn #3, were harsh, including inadequate food and water, maltreatment, and excessive working hours. Eventually, Hornales and his co-workers left the vessel in Mauritius Islands due to these unbearable conditions.

JEAC countered by claiming they were “total strangers” to Hornales, Victor Lim, and the Taiwanese company Min Fu Fishery Co. Ltd. They presented a Joint Affidavit from two of Hornales’s co-workers, Efren Balucas and Alexander Natura, stating that Hornales admitted to going to Singapore as a tourist and securing employment directly through Step-Up Agency. This was further supported by a certification from Step-Up Agency. However, Hornales provided a Supplemental Affidavit, stating he knew Cayanan from the Philippines and that Cayanan had even sent reminders of loan obligations while the vessel was docked in Mauritius, including photocopies of PNB checks issued to their relatives and agreements authorizing Victor Lim to deduct loan amounts from their salaries.

The POEA initially ruled in favor of Hornales, ordering JEAC and its surety to pay US$1,646.66 in unpaid salaries and attorney’s fees. However, the National Labor Relations Commission (NLRC) reversed this decision, arguing there was no employer-employee relationship between Hornales and JEAC. The NLRC emphasized the absence of POEA-approved overseas employment contract and gave weight to the Joint Affidavit from Balucas and Natura. Unsatisfied, Hornales elevated the case to the Supreme Court, arguing that the NLRC committed grave abuse of discretion.

The Supreme Court scrutinized the evidence, finding that the scale tilted in favor of Hornales. The Court emphasized that the Joint Affidavit of Balucas and Natura was inadmissible due to the lack of opportunity for cross-examination and the fact that the affiants were merely repeating what Hornales allegedly told them, rather than testifying to its truth. Similarly, the Step-Up Agency certification was deemed unreliable because Victor Lim was not presented for cross-examination, and the certification was unverified.

“In a catena of labor cases, this Court has consistently held that where the adverse party is deprived of the opportunity to cross-examine the affiants, affidavits are generally rejected for being hearsay, unless the affiant themselves are placed on the witness stand to testify thereon.” The Court viewed the certification as a self-serving attempt by Step-Up Agency to shield JEAC from liability, noting the concerted actions between JEAC, Victor Lim, and Step-Up Agency in deploying Hornales.

Conversely, the PNB checks and agreements presented by Hornales significantly undermined JEAC’s claim of being “total strangers.” The checks, bearing the name “LIM Chang Koo &/or Jose Cayanan,” and the agreements authorizing Victor Lim to deduct loan obligations, suggested a clear connection between JEAC and Hornales’s employment. One agreement explicitly stated that Hornales’s expenses would be shouldered by JEAC and later charged by Victor Lim, who would remit the money to Cayanan.

JEAC argued that these documents were mere photocopies and thus inadmissible as evidence, citing the best evidence rule. The Court acknowledged this rule, which generally requires the original document as evidence of its contents. However, the Court noted exceptions, such as when the original is lost, destroyed, or in the possession of the opposing party who fails to produce it after notice. The Court found it unreasonable to demand the original checks from Hornales, as they would likely be held by the bank. Furthermore, JEAC did not deny the existence or authenticity of either the checks or the agreements.

The Court also underscored that POEA proceedings are non-litigious, and technical rules of evidence do not strictly apply. As the Supreme Court has ruled in Shoemart, Inc. v. National Labor Relations Commission:

“the rules of evidence prevailing in courts of law or equity shall not be controlling and it is the (law’s) spirit and intention that the Commission and its members and the Labor Arbiters shall use every and all reasonable means to ascertain the facts in each case speedily and objectively and without regard to technicalities of law or procedure, all in the interest of due process.’

Thus, the NLRC’s strict application of evidentiary rules was inappropriate.

Ultimately, the Supreme Court determined that the NLRC’s conclusion that JEAC was a mere “travel agency” and Hornales a “tourist” was baseless and contradicted JEAC’s own claims. JEAC consistently presented itself as a licensed recruitment agency. The Court found it highly improbable that Hornales and his co-workers, as tourists, would authorize Victor Lim to deduct loan obligations to Cayanan from their salaries. This arrangement indicated a clear connection between JEAC and Victor Lim, facilitated by JEAC’s deployment of the workers.

The Supreme Court also dismissed JEAC’s argument that the absence of a POEA-approved employment contract and lack of a Special Power of Attorney and Affidavit of Responsibility absolved them of liability. The Court stated that JEAC could not benefit from their non-compliance with POEA regulations, and to do so would be to reward violations of established rules. The Court emphasized that, at most, deploying Hornales without proper POEA compliance made JEAC susceptible to administrative sanctions, such as suspension or cancellation of their license, as per Section 2, Rule I, Book VI of POEA Rules and Regulations.

The Court reaffirmed the POEA’s decision, holding JEAC and Travelers Insurance Corporation jointly and severally liable to Hornales. The ruling emphasized that Section 2 (e), Rule V, Book I of the Omnibus Rules Implementing the Labor Code requires private employment agencies to assume all responsibilities for the implementation of overseas workers’ contracts. Further solidifying this, Section 1 (f) (3) of Rule II, Book II of the POEA Rules and Regulations mandates that licensed agencies undertake joint and solidary liability with employers for the payment of wages and other contractual obligations.

FAQs

What was the key issue in this case?	The main issue was whether JEAC International, a recruitment agency, could be held liable for the unpaid wages and poor working conditions of Mario Hornales, a Filipino worker deployed to Singapore, despite JEAC claiming they were not directly involved in his employment.
What did the POEA initially decide?	The POEA initially ruled in favor of Mario Hornales, ordering JEAC and its surety to pay US$1,646.66 in unpaid salaries and attorney’s fees, finding that JEAC facilitated his deployment.
How did the NLRC respond to the POEA decision?	The NLRC reversed the POEA’s decision, stating there was no employer-employee relationship between Hornales and JEAC, and giving weight to affidavits that Hornales was directly hired in Singapore.
What was the Supreme Court’s ruling?	The Supreme Court reversed the NLRC decision and reinstated the POEA’s original ruling, holding JEAC liable for Hornales’s unpaid wages and poor working conditions.
Why did the Supreme Court reject the affidavits presented by JEAC?	The Supreme Court rejected the affidavits because Hornales was not given the opportunity to cross-examine the affiants, making the affidavits inadmissible hearsay evidence.
What was the significance of the PNB checks and agreements in the case?	The PNB checks and agreements, which bore Jose Cayanan’s name and authorized deductions from workers’ salaries, proved a direct connection between JEAC and the workers’ employment, undermining JEAC’s claim of being “total strangers.”
Did JEAC’s non-compliance with POEA regulations affect the outcome?	Yes, the Supreme Court ruled that JEAC could not benefit from their non-compliance with POEA regulations, as that would reward violations of established rules.
What is the implication of this ruling for recruitment agencies?	This ruling reinforces that recruitment agencies have a responsibility to ensure fair treatment and compensation for Filipino workers they deploy overseas, regardless of whether they strictly followed POEA procedures.

This case serves as a critical reminder to recruitment agencies of their enduring responsibility towards the welfare of deployed Filipino workers. The Supreme Court’s decision reinforces that agencies cannot evade accountability by exploiting procedural technicalities or claiming ignorance of workers’ circumstances. This ruling provides a vital layer of protection for overseas workers, ensuring they receive the compensation and humane treatment they are entitled to under the law.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Mario Hornales vs. The National Labor Relations Commission, G.R. No. 118943, September 10, 2001