Below is a broad overview of Philippine law and jurisprudence on the question of company liability versus security guard (and security agency) responsibility for losses—such as theft, damage to property, or other untoward incidents—in the Philippines. While this discussion is comprehensive, anyone with specific concerns should consult a qualified Philippine attorney or refer to the actual text of relevant laws, regulations, and Supreme Court decisions for authoritative guidance.

1. Legal Framework Governing Security Guards and Agencies

1.1 Republic Act No. 5487 (The Private Security Agency Law)

The primary statute regulating the organization, operation, and management of private security agencies (PSAs) and security guards in the Philippines is Republic Act No. 5487, commonly known as the Private Security Agency Law, and its Implementing Rules and Regulations (IRR). This law:

Establishes guidelines for the licensing and registration of private security agencies.
Requires security agencies to screen and train their security personnel.
Subjects security agencies and their guards to regulation by the Philippine National Police (PNP) through the Supervisory Office for Security and Investigation Agencies (SOSIA).

Notably, while RA 5487 sets broad standards and regulates private security businesses, it does not by itself dictate the exact liability scheme for all losses or criminal acts committed under a guard’s watch. Instead, liability questions typically revolve around principles of civil law (obligations and contracts, quasi-delicts) and labor law, supplemented by jurisprudence from Philippine courts.

1.2 Labor Code and Department Orders

Because security guards are generally employed by a security agency (rather than directly by the client company), they fall under the ambit of the Philippine Labor Code and various Department of Labor and Employment (DOLE) rules. Security guards are considered regular employees of the security agency, which is treated as an independent contractor that deploys the guards to the client’s premises based on a security service contract.

These laws and rules become critical in determining who bears liability for the guard’s acts or omissions—especially when analyzing who is the “employer,” who might be secondarily liable, and when the client-company’s direct liability might be triggered.

2. Nature of the Relationship: Security Guard, Security Agency, and Client Company

2.1 Principal–Independent Contractor Relationship

Under Philippine jurisprudence, when a company (the “principal” or “client”) contracts with a private security agency:

The security agency is typically deemed an independent contractor that retains control over the means and methods by which the security guard performs his duties.
The client company pays the security agency for the guard’s services under a security service contract.

The security guard is, in law, the employee of the security agency rather than the direct employee of the client company. Hence, if a security guard commits negligence or wrongdoing, the primary liability usually falls on the security agency as the direct employer.

2.2 Shared Responsibility or Solidary Liability

While the security agency is generally the direct employer and therefore primarily responsible for the guard’s acts and compensation, the client company may also be exposed to liability in certain circumstances, especially if:

The client exercises “control” or supervises the guard in a manner akin to an employer–employee relationship.
The client is found to be negligent in selecting or supervising the security agency.
A statute or contractual stipulation imposes solidary (joint and several) liability upon both the agency and the client for certain wrongful acts, such as unpaid wages or labor standard violations.

3. Company Liability for Losses

3.1 Contractual Obligations and Service Agreements

Companies typically enter into a Security Services Contract with a security agency. Such contracts often specify:

The scope of the security agency’s undertakings (e.g., guarding entrances, preventing theft).
The level of liability the agency may assume for losses.
Whether the security agency holds an insurance policy or bond to cover possible losses or damages.
Indemnity clauses, which may set limits or conditions on the extent to which the agency or the guard must indemnify the company for losses suffered under certain circumstances.

In many instances, these indemnity clauses are subject to the general rule that one cannot waive liability for gross negligence or willful misconduct. They also typically require a showing that the guard—or the agency—failed to meet the standard of due diligence or care expected of a security professional under RA 5487 and other applicable regulations.

3.2 Vicarious Liability vs. Quasi-Delict

Under the Civil Code of the Philippines:

Article 2176 covers quasi-delicts (fault or negligence causing damage to another).
Article 2180 covers vicarious liability, detailing how employers and certain parties can be held liable for the acts of their employees.

However, because the security guard is officially an employee of the security agency, primary vicarious liability usually attaches to the security agency, not directly to the client. The client company could be held secondarily or subsidiarily liable if it is proven that it exercised sufficient control over the guard (akin to an employer) or was itself negligent in some manner (e.g., failing to address repeated warnings, ignoring security protocols, or assisting in the guard’s wrongful acts).

3.3 Common Scenarios of Loss

Inside Job/Theft by the Guard
If a guard is complicit in a theft, the guard (as an individual wrongdoer) is personally liable under criminal law. The security agency, as the employer, may be liable for civil damages if it negligently hired or retained the guard (e.g., failing to conduct a background check or ignoring prior misconduct). The client company could pursue claims against both the guard and the security agency under contract or quasi-delict principles, especially if the contract includes indemnification clauses.
Negligent Performance of Duties
If a guard fails to prevent the theft of property due to negligence (e.g., sleeping on duty or abandoning post), the security agency generally bears responsibility to indemnify the client for proven losses attributable to that negligence, subject to the terms of the security contract. The guard may also bear personal liability if his negligence can be established, but clients more commonly pursue the security agency (which can in turn exercise its own remedies against the guard).
Force Majeure or Circumstances Beyond Control
Some contracts and legal rules exempt or limit liability for losses caused by force majeure (e.g., armed rebellion, extraordinary natural disasters) if the guard or agency is not at fault. In such cases, the security agency may be relieved from liability, provided it can prove the event was unforeseeable, unavoidable, and not due to any negligence on its part.

4. Security Guard Responsibility and Potential Personal Liability

4.1 Employment Status and Personal Accountability

Because the guard is an employee of the security agency, any financial liability for the guard’s negligent acts typically runs first to the agency. In labor relations, employees cannot be forced to pay more than the legally permissible deductions or amounts determined by final judgment. However, a guard found criminally liable (e.g., theft, robbery) or civilly liable (negligent action proven in court) may also face personal responsibility.

4.2 Disciplinary Measures and Termination

From an employment perspective, the security agency can impose disciplinary actions—up to termination—on a guard who is proven negligent or involved in wrongdoing. As a general rule, the guard’s salary cannot simply be withheld to pay for the entire loss unless there is a valid court judgment or labor arbitral award. Any wage deduction must follow due process under labor regulations.

5. Relevant Jurisprudential Principles

Philippine Supreme Court decisions highlight the following principles:

Employer-Employee Relationship
The security agency is the true employer of the guard—responsible for wages, disciplinary action, and general control over job performance.
Primary vs. Subsidiary Liability
The security agency bears primary liability for wrongful acts or omissions of its employees in the performance of their duties. Only under exceptional circumstances might the client company be held solidarily liable (for instance, if it is proven to have exercised extensive control over the guard or was itself negligent).
Extent of Indemnification
Courts look to the security services contract and evidence of negligence to determine the extent of indemnification or damages. A mere allegation of guard negligence is insufficient; proof that the guard’s acts or omissions caused the loss is crucial.
Negligence and Causation
In awarding damages, courts generally require establishing all elements of negligence under Article 2176 of the Civil Code: (a) duty of care, (b) breach of duty, (c) proximate causation, and (d) resulting damage.

6. Practical Tips for Companies and Security Agencies

Draft Clear Contracts
A well-defined security services contract can clarify roles, responsibilities, insurance or bonding requirements, and indemnification clauses.
Ensure Proper Training and Supervision
Security agencies should screen, train, and supervise their guards. Clients should also coordinate with agencies, providing proper instructions, standard operating procedures, and regular performance reviews.
Maintain Proper Documentation
In cases of loss or theft, thorough incident reports and investigations help establish the presence or absence of negligence.
Consider Insurance Coverage
Both security agencies and client companies often carry insurance or require bonds to mitigate potential losses. Ensuring adequate coverage is prudent.
Investigate Incidents Promptly
If loss occurs, prompt investigation not only helps identify the culprit but also preserves evidence needed to support any claim for damages against the responsible party (guard or agency).

7. Conclusion

In the Philippines, determining liability for losses under a security guard’s watch hinges on:

The contractual arrangements between the security agency and the client company.
The employment relationship, which typically puts the security guard under the direct employment of the private security agency.
Established principles under the Civil Code on quasi-delicts and vicarious liability.
Relevant labor regulations recognizing that the security agency is the direct employer and is primarily accountable for the guard’s actions in the line of duty.

While companies often assume the security guard (or the agency) will “automatically” shoulder all liability for losses, this is not absolute. Actual liability in each case depends on the facts, especially the presence or absence of guard negligence, the agency’s contractual obligations, and the possibility of contributory negligence by the client company.

Ultimately, companies and security agencies alike should protect their interests with well-drafted contracts, adequate insurance coverage, and careful oversight. Where incidents arise, parties would do well to investigate thoroughly and, if necessary, seek legal counsel to assess and enforce their respective rights and obligations under Philippine law.