G.R. No. 226578 - Augustin International Center, Inc. vs. Bartolome

In 2010, respondents Elfrenito B. Bartolome and Rumby L. Yamat applied for positions as carpenter and tile setter, respectively, with Augustin International Center, Inc. (AICI), an employment agency providing manpower to foreign corporations.
The respondents were eventually engaged by Golden Arrow Company, Ltd., located in Khartoum, Republic of Sudan.
Upon engagement, both respondents signed employment contracts that stipulated a minimum service period of twenty-four (24) months.
The contracts included a dispute settlement provision stating that all claims and complaints relative to the employment contract would be settled in accordance with company policies, rules, and regulations, with an amicable settlement to be reached involving the Labour Attaché or any authorized representative of the Philippine Embassy nearest the site of employment.

After their arrival in Sudan (sometime in March and April 2011), Golden Arrow transferred the respondents’ employment to its sister company, Al Mamoun Trading and Investment Company (Al Mamoun).
On May 2, 2012, Al Mamoun issued Notices of Termination of Service to the respondents, prompting them to return to the Philippines.

On May 22, 2012, the respondents filed a complaint before the National Labor Relations Commission (NLRC) alleging illegal dismissal, breach of contract, and payment of the unexpired portion of their contract.
Golden Arrow, via an e-mail message, accused the respondents of abandoning their duties, asserting that such refusal constituted a self-termination of employment.
The Labor Arbiter (LA) found in its decision dated August 31, 2012 that the respondents were illegally dismissed, and ordered AICI and Al Mamoun to pay each respondent an amount equivalent to their salaries for the remaining term of the contract.
The NLRC, in its decision dated June 27, 2013, affirmed the LA’s ruling, emphasizing that AICI and Al Mamoun failed to produce substantial evidence to prove a just or authorized cause for the termination.

AICI and Al Mamoun, aggrieved by the rulings, filed appeals against the decisions of the NLRC and the LA.
The Court of Appeals (CA) in a decision dated November 11, 2015, denied the petition for review on the grounds that the respondents were not afforded procedural or substantive due process in their dismissal.
Subsequently, AICI and Al Mamoun raised a motion for reconsideration for the first time, arguing that the respondents were not required to contest their termination via the designated dispute settlement mechanism (i.e., with the Labour Attaché or authorized representative) before filing their complaint.
In its Resolution dated August 19, 2016, the CA dismissed the motion for reconsideration, holding that the dispute settlement provision did not remove the Labor Arbiter’s exclusive jurisdiction over termination disputes.

Whether the Labor Arbiter correctly took cognizance of the case despite the dispute settlement provision in the employment contracts that allegedly required disputes to be settled amicably through a Labour Attaché or authorized representative of the Philippine Embassy.
Whether the contractual dispute settlement mechanism could divest the LA of its original and exclusive jurisdiction as provided by law.

Whether AICI, as a recruitment agency, can be held liable for the illegal dismissal of the respondents, notwithstanding its claim of not having a direct employer-employee relationship with them.
Whether AICI’s role is sufficient to trigger solidary liability under the relevant provisions of Republic Act No. 8042 (as amended) notwithstanding the separation of functions between recruitment agencies and the actual employers overseas.