Art.-13-39

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 

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Article 12, Labor Code ◦

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

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

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Facilitate a free choice of available employment by persons seeking work in conformity with the national interest;

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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;

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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

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

Recruitment 

For local employment: ◦

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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

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Public employment offices;

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POEA;

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Private recruitment entities;

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Private (fee-charging) employment agencies;

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Shipping or manning agents or representatives;

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Construction contractors if authorized by the DOLE and the Construction Industry Authority of the Philippines

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Members of the diplomatic- corps (through POEA);

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Other persons or entities authorized by the SOLE; and

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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 POEA’s 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 POEA’s 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

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

See how NLRC misappreciated JEAC’s 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)

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

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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). ◦

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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

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Principal Functions:

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Formulation, implementation, and monitoring of overseas employment of Filipino workers;

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Protection of worker rights to fair and equitable employment practices

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

Salient Regulatory Functions ◦

Regulate private sector participation in the recruitment and overseas placement of workers;

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

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

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

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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;

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

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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;

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POEA has the power to:

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Suspend or cancel license; and

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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

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Unjust refusal to depart for the worksite

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Gunrunning or possession of deadly weapons;

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Vandalism or destroying company property;

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

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Embezzlement of funds of the company or fellow worker entrusted for delivery to relatives in the Philippines;

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Creating trouble at the worksite or in the vessel;

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Gambling;

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

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

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Theft or robbery;

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Drunkenness;

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Drug Addiction or possession or trafficking of prohibited drugs; and

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Desertion or abandonment.

Other General Provisions 

Mandatory Remittance (Article 22)

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Exceptions ◦

Filipino servicemen working in U.S. military Installations;

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Where the worker's immediate family members, dependents, or beneficiaries are residing with him abroad; and

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Immigrants and

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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.

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

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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)

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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.

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Art. 28, LC: ◦

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Private employment agency for local employment 

For single proprietorship or partnership –minimum net worth of two (2) hundred thousand pesos.

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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.

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

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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;

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

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Officers or members of the board of any corporation or members in a partnership engaged in the business of a travel agency;

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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);

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Persons, partnerships or corporations which have derogatory records

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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;

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

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

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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;

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Used only in the Place stated in the license.

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

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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 

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Exemption from Garnishment ◦

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

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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 Landbased 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).

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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).

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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).

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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)

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ART. 32, LC

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Charging of fees only after employment obtained or actual commencement of employment.

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All fees paid shall be covered with appropriate receipt.

POEA’s authority in case of illegally collected fees: ◦

Suspend or cancel license; and

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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).

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

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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).

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

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

Regulation of Private Recruitment

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Enforcement

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Regulatory Power, Art. 36

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Rule-Making Power, Art. 36

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Visitorial Power, Art. 37

POEA Standard Employment Contract ◦

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

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Liberal Construction (consistent with Art. 4, LC)

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Terms and Conditions

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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 

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Suspension or Cancellation ◦

Prohibited acts (Art. 34);

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

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Recruitment activities in places outside the authorized area;

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Deploying workers without processing through the POEA; and

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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;

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Violation of the conditions of license;

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

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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.

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

Other Acts of Illegal Recruitment 

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

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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

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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 

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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

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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);

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

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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. 14122136, 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

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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;

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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

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

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The two elements of estafa – ◦

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

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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 appellant’s 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.