Mr. A signed a one (1)-year contract with XYZ Recruitment Co. for deployment as welding supervisor for DEF, Inc. located in Dubai. The employment contract, which the Philippine Overseas Employment Administration (POEA) approved, stipulated a salary of US$600.00 a month.
Mr. A had only been in his job in Dubai for six (6) months when DEF, Inc. announced that it was suffering from severe financial losses and thus intended to retrench some of its workers, among them Mr. A. DEF, Inc. hinted, however, that employees who would accept a lower salary could be retained.
Together with some other Filipino workers, Mr. A agreed to a reduced salary of US$400.00 a month and thus, continued with his employment.
(a) Was the reduction of Mr. A’s salary valid? Explain. (2.5%)
(b) Assuming that the reduction was invalid, may Mr. A hold XYZ recruitment Co. liable for underpayment of wages? Explain. (2.5%)
Suggested Answer:
(a) No. Answer
Under the 1987 Constitution and R.A. 8042, the State shall afford full protection to labor, including overseas employment. To add, the Labor Code prohibits reduction of wages via the non-diminution of benefits rule. Rule
In the case at bar, Philippine labor law applies to Mr. A even if he work in Dubai. Since the non-diminution of benefits prohibits reduction of wages, his salary should not have been deducted. Apply
Thus, the reduction of Mr. A’s salary was not valid.
(b) Yes. Answer
Under the implementing rules and regulations of R.A. 8042, the liability of the principal/employer and the recruitment/placement agency for any and all claims under this section shall be joint and several. Rule
In the case at bar, XYZ Recruitment is the local agent of DEF, Inc. As an agent, XYZ Recruitment Co. hired Mr. A to work for DEF, Inc. Based on the cited provision, XYZ Recruitment Co. is solidarily liable with the foreign employer for the underpayment of wages of Mr. A. Apply
Thus, Mr. A. may hold XYZ Recruitment Co. liable for underpayment of wages. Conclusion
