Who is a worker/employee?

Article 13 A worker is any member of the labor force, whether employed or unemployed.

A person who works for an employer for a fee; a person working for salary or wages.

Note the term employee under Article 212 of the Labor Code: Not limited to the employees of a
particular employer, it shall include any individual whose work has ceased as a result of or in
connection with any current labor dispute or because of any unfair labor practice if he has not
obtained any other substantially equivalent or regular employment.

Pre-employment

Article 12, Labor Code

Promote and maintain a state of full employment through improved manpower training,
allocation and utilization;

Protect every citizen by securing for him the best possible terms and condition of
employment;

Facilitate a free choice of available employment by persons seeking work in conformity

with the national interest;

Facilitate and regulate the movement of workers in conformity with the national
interest;

Article 12, Labor Code

Regulate the employment of aliens, including the establishment of a registration and/or

permit system;

Strengthen the network of public employment offices and rationalize the participation
of the private sector in the recruitment and placement of workers, locally and overseas
to serve national development objectives; and

Insure careful selection of Filipino workers for overseas employment in order to protect
the good name of the Philippines abroad.

Recruitment

For local employment:

Article 13(b) of the Labor Code, defines recruitment and placement as any act of
canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers,
and includes referrals, contract services, promising or advertising for employment,
locally or abroad, whether for profit or not; Provided, That any person or entity which,
in any manner, offers or promises for a fee employment to two or more persons shall be
deemed engaged in recruitment and placement.

For overseas employment: Art. 35; RA 8042, Secs. 6, 7 &10, as amended by RA 10022

Entities Authorized to Engage in Recruitment

Reference: Arts. 16, 25, 18, 12 (f); 2002 POEA Rules and Regulations, Part I, Rule II, Sec. 1

Public employment offices;

POEA;

Private recruitment entities;

Private (fee-charging) employment agencies;

Shipping or manning agents or representatives;

Construction contractors if authorized by the DOLE and the Construction Industry Authority of
the Philippines
 Members of the diplomatic- corps (through POEA);

Other persons or entities authorized by the SOLE; and

Name hirees.

Direct Hiring for overseas employment is not allowed (Article 18, LC)

Private Recruitment Entities

Any person or association engaged in the recruitment and placement of workers, locally or overseas,
without charging, directly or indirectly, any fee from the workers or employers.

Authority - document issued by DOLE authorizing a person or association to engage in recruitment and
placement activities as a private recruitment entity.

(see discussions on POEAs regulation of recruitment and placement agencies)

Private employment agencies

any person or entity engaged in the recruitment and placement of workers for a fee which is charged,
directly or indirectly, from the workers or employers or both.

License - a document issued by the DOLE authorizing a person or entity to operate a private
employment agency.

(see discussions on POEAs regulation of recruitment and placement agencies)

Entities prohibited from recruitment

References: Arts. 16, 18, 25, 26; 2002 POEA Rules and Regulations, Part I, Rule II, Sec. 2

Case Review: Hornales v. NLRC, 364 SCRA 778 (2001)

See how NLRC misappreciated JEACs business (travel agency vs. recruitment agency)

Employment Abroad

Overseas Filipino Worker a person who is to be engaged, is engaged or has been engaged in a
remunerated activity in a state of which he or she is not a citizen or on board a vessel navigating
the foreign seas other than a government ship used for military or non-commercial purposes or
on an installation located offshore or on the high seas, to be used interchangeably with migrant
worker. (RA 8042 as amended by RA 10022)

Seaman - any person employed in a vessel engaged in maritime navigation.

Overseas Employment - employment of a worker outside the Philippines covered by a valid

contract. (POEA Rules and Regulations Governing the Recruitment and Employment of Land
Based Overseas Workers, Feb. 4, 2002).

Note: A person to be engaged in a remunerated activity refers to an applicant worker

who has been promised or assured of employment overseas and acting on such promise
or assurance sustains damage and/or injury.

Emigrant any person, worker or otherwise, who emigrates to a foreign country by virtue of an
immigrant visa or resident permit or its equivalent in the country of destination.
The POEA

Philippine Overseas Employment Administration assumes functions of OEDB & NSB

Principal Functions:

Formulation, implementation, and monitoring of overseas employment of Filipino

workers;

Protection of worker rights to fair and equitable employment practices

Deployment of Filipino workers through government-to-government hiring.

Salient Regulatory Functions

Regulate private sector participation in the recruitment and overseas placement of

workers;

Formulate and implement a system for promoting and monitoring the overseas
employment of Filipino workers, considering worker welfare and the domestic
manpower requirements;

Inform migrant workers of their rights as workers and also as human beings;

Instruct and guide the workers how to assert their rights and provide the available
mechanism to redress violation of their rights;

Service the requirements for trained and competent Filipino workers of foreign
governments and their instrumentalities, and such other employers as public interest
may require;

Deployment of workers shall be sanctioned by the POEA only -

Where the Philippines has concluded Bilateral labor agreements or arrangements;

When an accommodating state observes and/or complies with the international laws
and standards for migrant workers;

Where there is a guarantee from the accommodating state to protect the rights of
Filipino migrant workers.

Adjudicatory Functions

Administrative cases involving violations of licensing rules and regulations and

registration of recruitment and employment agencies or entities;

POEA has the power to:

Suspend or cancel license; and

Order the refund or reimbursement of such illegally collected fees (Eastern

Assurance and Surety Corp. v. Sec. of Labor, GR Nos. 79436-50, January 17,
1990)

Disciplinary action cases and other special cases which are administrative in character,
involving employers, principals, contracting partners and Filipino migrant workers.
Grounds for disciplinary action (Under RA 8042) (Migrant Workers Act of 1995)

Prostitution

Unjust refusal to depart for the worksite

Gunrunning or possession of deadly weapons;

Vandalism or destroying company property;

Violation of the laws and sacred practices of the host country and unjustified breach of
employment contract;

Embezzlement of funds of the company or fellow worker entrusted for delivery to

relatives in the Philippines;

Creating trouble at the worksite or in the vessel;

Gambling;

Initiating or joining a strike or work stoppage where the laws of the host country
prohibit strikes or similar actions;

Commission of Felony punishable by Philippine Laws or by the host country;

Theft or robbery;

Drunkenness;

Drug Addiction or possession or trafficking of prohibited drugs; and

Desertion or abandonment.

Other General Provisions

Mandatory Remittance (Article 22)

Exceptions

Filipino servicemen working in U.S. military Installations;

Where the worker's immediate family members, dependents, or beneficiaries are

residing with him abroad; and

Immigrants and

Filipino professionals and employees working with United Nations agencies or

specialized bodies (Resolution No. 1-83, Inter-Agency Committee for Implementation of
E.G. 857).

What if an OFW fails/refuses to remit?

Worker shall be suspended or excluded from the list of eligible workers for overseas
employment. Subsequent violations shall warrant his repatriation.

Employers who fail to comply shall be excluded from the overseas employment program.

Private employment agencies or entities shall face cancellation or revocation of their licenses or
authority to recruit, without prejudice to other liabilities under existing laws and regulations

Regulation of Private Recruitment

Licensing:

Qualifications, Arts. 27, 28; 2002 POEA Rules and Regulations, Part II, Rule I, Sec. 1 (a) (b)

Issuance of License, Arts. 29, 30, 31; 2002 POEA Rules and Regulations, Part II, Rule II,
Secs. 4, 5, 6, 7, 8, 9
Recruitment and Placement Agencies (private)

Art. 27, LC: Filipino citizens, or Corporations, partnerships or entities at least 75% of the
authorized and voting capital stock of which is owned and controlled by Filipino citizens.

Art. 28, LC:

Private employment agency for local employment

For single proprietorship or partnership minimum net worth of two (2)

hundred thousand pesos.

For corporations a minimum paid up capital of five (5) hundred thousand

pesos.

Art. 28, LC:

Private recruitment or manning agency for overseas employment

For single proprietorship or partnership minimum capitalization of two (2)

million pesos.

For corporations minimum paid up capital of two (2) million pesos;

increase capitalization or paid-up capital to two (2) million pesos at the

rate of two hundred fifty thousand pesos (P250,000) every year.

Those not otherwise disqualified by law or other government regulations to engage in the
recruitment and placement of workers for overseas employment.

Entities disqualified from participating as a recruitment entity

Officials or employees of the DOLE or other government agencies directly involved in overseas
employment program and their relatives within the 4th degree of consanguinity or affinity;

Travel agencies and sales agencies of airline companies (Art. 26, LC).

Officers or members of the board of any corporation or members in a partnership engaged in

the business of a travel agency;

Corporations and partnerships, when any of its officers, members of the board, or partners, is
also an officer, member of the board, or partner of a corporation or partnership engaged in the
business of a travel agency (interlocking officers);

Persons, partnerships or corporations which have derogatory records

Those whose Licenses have been previously cancelled or revoked (Sec. 2, Rule I, 2002 Rules and
Regulations on the Recruitment and Employment of Land-Based Workers).

Persons with derogatory records

Derogatory record or information certified by NBI or by the Anti-Illegal Recruitment Branch of

the POEA;

Established probable cause or prima facie finding of guilt for illegal recruitment or other related
cases;

Persons convicted for illegal recruitment or other related cases and/or crimes involving moral
turpitude; and

Agencies with revoked or cancelled licenses

for violation of R.A. 8042, P.D. 442 as amended and their IRR.
License or Authority: Limitations

Used only by the person or entity in whose favor it was issued;

Used only in the Place stated in the license.

Recruitment and placement must be undertaken at their authorized official addresses.

Provincial recruitment and/or job fairs may be allowed only when authorized by POEA in writing.

Recruitment Agencies, Bond

All applicants for license or authority shall post such cash and surety bonds as determined by
the Secretary of Labor, including escrow deposits.

- ART. 31: BONDS

Purpose of Bond:

To guarantee compliance with prescribed recruitment procedures, rules and

regulations, and terms and conditions of employment;

Recruitment Agencies, Bond

The surety bond required of recruitment agencies is intended for the protection of our citizens who are
engaged for overseas employment by foreign companies. The purpose is to insure that if the rights of
these overseas workers are violated by their employers, recourse would still be available to them
against the local companies that recruited them for the foreign principal. The foreign principal is
outside the jurisdiction of our courts and would probably have no properties in this country against
which an adverse judgment can be enforced. This difficulty is corrected by the bond, which can be
proceeded against to satisfy that judgment. (STRONGHOLD INSURANCE COMPANY, INC. vs. CA and
ADRIANO URTESUELA, G.R. No. 88050, January 30, 1992)

Recruitment Agencies, Bond

Exemption from Garnishment

Cash bond filed by applicants for license or authority is not subject to garnishment by a
judgment creditor of the agency.

Should the bond/deposit in escrow or any part thereof be garnished, the same should
be replenished by the agency within 15 days from notice from the POEA. Failure to
replenish the same within the said period shall cause the suspension of the license (Sec.
22, Rule II, Book II, Rules and Regulations on the Recruitment and Employment of Land-
based Workers).

POEA has the power to enforce liability under cash or surety bonds.

Solidary Liability of Recruitment Agencies

The recruitment agency is SOLIDARILY LIABLE with the foreign principal for unpaid salaries of a
worker it recruited. Before recruiting, the agency is required to submit a document containing
its power to sue and be sued jointly and solidarily with the principal or foreign-based employer
for any of the violations of the recruitment agreement, and the contracts of employment (Sec.
10, Rule V, Book I, Implementing Regulations of LC).

The recruitment agency may still be sued even if agency agreement between recruitment
agency and principal is already severed if no notice of the termination was given to the
employee based on Art. 1921 of the New Civil Code (Catan v. NLRC, GR No. 77297, April 15,
1988).
 The recruitment agency is SOLIDARILY LIABLE with the foreign principal for unpaid salaries of a
worker it recruited. Before recruiting, the agency is required to submit a document containing
its power to sue and be sued jointly and solidarily with the principal or foreign-based employer
for any of the violations of the recruitment agreement, and the contracts of employment (Sec.
10, Rule V, Book I, Implementing Regulations of LC).

The recruitment agency may still be sued even if agency agreement between recruitment
agency and principal is already severed if no notice of the termination was given to the
employee based on Art. 1921 of the New Civil Code (Catan v. NLRC, GR No. 77297, April 15,
1988).

What fees will a worker pay, and when?

Sagun v. Sunace International Management Services, Inc., 644 SCRA 1717 (2011)

ART. 32, LC

Charging of fees only after employment obtained or actual commencement of

employment.

All fees paid shall be covered with appropriate receipt.

POEAs authority in case of illegally collected fees:

Suspend or cancel license; and

Order the refund or reimbursement of such illegally collected fees (Eastern Assurance
and Surety Corp. v. Sec. of Labor, GR Nos. 79436-50, January 17, 1990).

Reports/Employment Information, Arts. 33, 14 (d)

Placement fees cannot be collected from a hired worker until he has signed the employment
contract and shall be covered by receipts clearly showing the amount paid (Sec. 2[a], Rule V,
Book II, Rules and Regulations Governing Overseas Employment).

Manning agencies shall not charge any fee from seafarer-applicants for its recruitment and
placement services.

No other fees or charges including processing fees shall be imposed against any worker.

Regulation of Private Recruitment

Enforcement

Regulatory Power, Art. 36

Rule-Making Power, Art. 36

Visitorial Power, Art. 37

POEA Standard Employment Contract

Wallen Maritime Services, Inc. v. Ernesto C. Tanawan, 679 SCRA 255 (2012)

Liberal Construction (consistent with Art. 4, LC)

Terms and Conditions

Abante v. KJGS Fleet Management, Manila, 67 SCRA 734 (2009)

Joint and Several Liability of Agent and Principal, POEA Rules, Part II, Rule II, Sec. 1 (f); RA 8042,
Sec. 10, 2nd, 3rd, 4th, 5th pars. as amended
Recruitment Agencies, Suspension, Cancellation, Revocation

Suspension or Cancellation

Prohibited acts (Art. 34);

Charging a fee before the worker is employed or in excess of the authorized amount;

Recruitment activities in places outside the authorized area;

Deploying workers without processing through the POEA; and

Advertisements (job announcements) without POEA's prior approval (Sec.4, Rule II, Book
IV, POEA Rules).

Grounds for Revocation of License

Accumulated three counts of suspension by an agency based on final and executory

orders within the validity period of its license;

Violation of the conditions of license;

Engaging in acts of misrepresentation for the purpose of securing a license or renewal

thereof; and

Engaging in the recruitment or placement of workers to jobs harmful to the public

health or morality or to the dignity of the Republic of the Philippines (Sec.3, Rule I, Book
VI, Rules and Regulations Governing Overseas Employment).

Illegal Recruitment

Any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers
and includes referring, contract services, promising or advertising for employment abroad,
whether for profit or not, when undertaken by a non-licensee or non-holder of authority
contemplated under Article 13(f) of Presidential Decree No. 442, as amended, otherwise known
as the Labor Code of the Philippines. Provided, that any such non-licensee or non-holder who, in
any manner, offers or promises for a fee employment abroad to two or more persons shall be
deemed so engaged.

Includes prohibited acts under Article 34, LC, whether committed by any person, whether a non-
licensee, nonholder, licensee or holder of authority.

Other Acts of Illegal Recruitment

Failure to actually deploy without valid reason as determined by DOLE;

Failure to reimburse expenses incurred by the worker in connection with his documentation and
processing for purposes of deployment, in cases where the deployment does not actually take
place without the worker's fault; and

Recruitment and placement activities of agents or representatives appointed by a licensee,

whose appointments were not previously authorized by the POEA.

Illegal Recruitment, Elements

1. The offender is a licensee/non-licensee or holder/non-holder of authority engaged in the

recruitment and placement of workers; and

2. The offender undertakes either any recruitment activities defined under Article 13 (b), or any
prohibited practices enumerated under Art. 34 (People v. Sadiosa, GR No. 107084, May 15,
1998; Sec. 10, R.A. 8042).
 Illegal Recruitment as an Offense Involving Economic Sabotage

Qualifying Circumstances

When illegal recruitment is committed by a SYNDICATE, i.e., if it is carried out by three

(3) or more persons conspiring and/or confederating with one another; or

When illegal recruitment is committed in a LARGE SCALE, i.e., if it is committed against

three (3) or more persons individually or as a group.

Persons convicted will suffer the following sanctions

Automatic revocation of the license or authority (Art. 39[e], LC);

Forfeiture of the cash and surety bonds (Art. 39[e], LC); and

Conviction of the crime of estafa, if found guilty thereof (People v. Calonzo, GR Nos.
115150-55, September 27, 1996).

Acts Constituting Estafa

Act Constituting Estafa The accused represented themselves to complainants to have the
capacity to send workers abroad, although they did not have any authority or license. It is by this
representation that they induced complainants to pay a placement fee. Such act constitutes
estafa under Art. 315, par. 2 of the Revised Penal Code (People v. Hernandez, GR Nos. 141221-
36, March 7, 2002).

Why distinguish Illegal Recruitment?

Simple Economic Sabotage

Prescriptive Period 5 Years 20 Years

Imprisonment Reclusion Temporal Life imprisonment

Fine Up to P2,000,000 Up to P5,000,000

three elements of illegal recruitment in large scale

a) the offender has no valid license or authority required by law to enable him to
lawfully engage in recruitment and placement of workers;

b) the offender undertakes any of the activities within the meaning of recruitment and
placement under Article 13(b) of the Labor Code, or any of the prohibited practices
enumerated under Article 34 of the said Code (now Section 6 of Republic Act No. 8042);
and

c) the offender committed the same against three or more persons, individually or as a
group, are present in this case.
 The two elements of estafa

that the accused defrauded another by abuse of confidence or by means of deceit, and

that damage or prejudice capable of pecuniary estimation is caused to the offended

party or third person. The prosecution evidence duly proved that due to the appellants
false representations of overseas jobs, the complainants paid placement fees to the
appellant who failed to secure the promised overseas jobs.

Recruitment Agencies, Prohibited Acts

1. Charge greater amount than that specified in the schedule of allowable fees;

2. Furnish any false information in relation to recruitment or employment;

3. Give any false notice, testimony etc. or commit any act of misrepresentation to secure a license
or authority;

4. Induce or attempt to induce a worker to quit his job in lieu of another offer unless it is designed
to liberate the worker from oppressive terms of employment;

5. Influence or attempt to influence any person or entity not to employ any worker who has not
applied for employment through his agency;

6. Engage in recruitment or placement of jobs harmful to public health, morality or to the dignity
of the Philippines;

7. Obstruct or attempt to obstruct inspection by the Labor Secretary or his authorized

representatives;

8. Fail to file reports, on the status of employment, placement etc. and such other matters as may
be required by the SOLE;

9. Substitute or alter employment contracts without the approval of the Secretary of Labor;

10. Become an officer or member of the Board of any corporation engaged in the management of a
travel agency;

11. Withhold travel documents from applicant workers before departure for unauthorized
monetary considerations.