LABOR REVIEW NOTES

PRE-EMPLOYMENT

RECRUITMENT AND PLACEMENT OF LOCAL AND MIGRANT WORKERS

Government Regulatory Agencies

 Recruitment and Placement for Local Employment- BLE; overseas-POEA

 As a rule, only public employment offices can engage in recruitment/placement of
workers; direct-hiring is also banned
o XPN: entities authorized to recruit and place workers (PPP-SM-CO)
 PESO (public)
 Private employment agencies
 Shipping/manning agents or representatives
 POEA
 Construction contractors (authorized by POEA and CIA)
 Members of diplomatic corps (hirings processed by POEA)
 Other persons/entities as may be authorized by DOLE
 POEA- major agency regulating overseas employment
 RA 8042- Migrant Workers and Overseas Filipinos Act of 1995 institutes policies on
overseas employment and establishes a higher standard of protection and
promotion of the welfare of migrant workers
 RA 10022- 2010-improved standard of protection and promotion of welfare
provided under RA 8042 (MWOFA)
 POLICIES UNDER RA 8042:
 GUARANTEEs FOR PROTECTION OF OFWS (selective deployment)
o Existing labor and social laws protecting the rights of workers including
migrant workers
o Signatory or ratifier of multilateral conventions, declarations or resolutions
relating to the protection of workers
o Concluded bilateral arrangement with Ph government for the protection of
the rights of Filipino workers
o Without any of these guarantees= no permit for deployment shall be issued
 REALIGNMENT OF JURISDICTION
o Transferred ee-er relations cases from OEA to NLRC (labor court)
o E.g. money claims arising from pretermination of employment contract
without valid cause
 Sec 10 RA 8042- entitles OFW for reimbursement of placement fee
with interest + salary for
 Unexpired portion of employment contract
 3 mos for every year of unexpired term whichever is less
 note: 3-month option declared as unconstitutional by SC
o POEA retains jurisdiction over administrative cases (violations of R&R
involving licensing and registration of recruitment/placement agencies) and
disciplinary actions involving ers, principals, migrant workers
 o Disciplinary action (grounds)
o Commission by worker of any of the ff:
 Submission of false information/documents
 Unjustified refusal to continue application after signing employment
contract
 Commission of felony punished by PH laws or laws of host country
 Possession/use of prohibited drugs
 Embezzlement of company funds/money/property of fellow worker
 Unjust refusal to depart for worksite after all emt and travel docs
have been duly approved
 Violations of cultural practices of host country
o APPEALS IN POEA CASES (not NLRC nor CA)
 to the SOLE (supervision and control power)
 BAN ON DIRECT HIRING
o RULE: direct-hiring of Filipino workers by foreign employer is not allowed
o XPN: direct-hiring by
 Members of diplomatic corps
 International organizations
 NAME-HIREES (contracted worker) - individual workers able to secure
contracts for overseas employment without the assistance or
participation of any agency; process hiring through POEA; register
with POEA (submit passport, emt contract, work visa/permit,
medcert)
 Does the Labor Code/ IRR cover a Filipino working aborad?
o Yes. Sameer vs Cabiles
 With respect to the rights of OFWs we follow lex loci contractus, the
law of the place where the contract is made. Contract was perfected
in the PH, therefore LC and IRR and other laws affecting the Labor
(including POEA SEC) applies in this case.
 POEA- SEC- provides the minimum requirements in the employment contract of
OFWs
o Vergara vs Hammonia- harmonized POEA-SEC with Labor Code and AREC
 120-day period under POEA SEC is given to the er to determne the
fitness of the seafarer to work during w/c the SF is deemed to be in a
state of total and temporary disability
 the 120 d of TTD may be extended by max of 120 days or up to 240
days should SF require further medical treatment
 TTD become permanent when so declared by the company-
designated physicianwith 120d/240d or upon the expiration of the
said perios w/o declaration of fitness to work/PD and the SF is still
unable to resume his regular duties
o Crystal Shipping vs Natividad
 What constituted PTD is inability to perform customary work for more
than 120 days and it is of no consequence that the ee recovered
 TERMINATION OF CONTRACT
o RULE: just and valid cause + procedural due process ( ie Sec 17 POEA-SEC)
 o XPN: employment-at-will; may be terminatd with / without just cause if
freely stipulated in writing between the foreign er and ofw but termination
should be in good faith
 E.g. GBMLT vs Malinao
 Ee teached in University of Ethiopia and the contract
stipulated that either party can terminate for no cause with 3-
mos’ notice. Valid because ee was given 3 month’s notice and
entitled to salaries. Contact has a force of law between the
parties.
o XPN to XPN: EAW only valid if foreign employment; not applicable to Filipino
employed in the PH. Governing law is SOT principle.
 RELIEF of OFW in case of pretermination of Contract of Employment
o RA 8042 provides:
 Full reimbursement of placement fee with 12% interest
 Note: BSP circular lowering interest rate to 6% not applicable
on placement fees (a circular cannot repeal a law); BUT for
awards or salaries for unexpired portions of emt contract,
Circular 799 (2013) applies because the law does not provide
for a specific interest rate that should apply (Gallery Frames)
 Salaries for the unexpired portion of his employment contract or for 3
months for every year of unexpired term, whichever is less
o 2009 case (Serrano vs Gallant)
 3-month rule is unconstitutional for violation of equal protection
clause and substantive due process. Null provision.
 Congress restored the 3-month rule in RA 10022 but in Sameer vs
Cabiles, SC reiterated the nullity of 3MR; remains unconstitutional

REGULATION OF RECRUITMENT AND PLACEMENT ACTIVITIES

DO 141-12- R&R governing recruitment and placement for local employment (thru agency)
 CAPITALIZATION (AUTHORITY TO HIRE/LICENSE TO RECRUIT) of private emt agency
o Local - 1 M networth for single prop/partnership; 1 M paid-up capital for
corporations
o Overseas- min. 5M for SP/P; 5M paid-up capital for corporations
 DISQUALIFICATIONS FOR domestic employment CACO
o Persons convicted of Illegal Recruitment, trafficking in persons, violation of
child labor laws or crimes involving moral turpitude
o Those against whom probable cause or prima facie finding of guilt for illegal
recruitment exist particularly to owners/ directors of agencies who have
commited IR or other related cases
o Agencies whose licenses have been previously cancelled/revoked
o Cooperatives w/er or not registered under Cooperative Act of the PH
o Law enforcers or any official/employee of DOLE
 For overseas
o Travel agencies and sales agencies of airline companies
o Officers/ members of board of corp/pat engaged in business of travel agency
 o Corp/pat where any of its members/pat is a member/pat of an entity engage
in travel agency
o Individuals/pat/officer/director of an insurance company which propose or
provide insurance contract under compulsory insurance coverage for agency-
hired OFWs
o Sole prop, pat, officers or directors with derogatory records such as
 Convicted/ PC for IR and other related crimes in the course of, related
to or reslting from IR; crimes inv moral turpitude
 Agencies whose licenses have been revoked in violation of ra 8042,
Labor Code and IRRs
 Licenses have been cancelled
o Official/ employee of DOLE, POEA, OWWA, DFA, DOJ, DOH. BI, TESDA, NLRC,
NBI, PNP and other agencies directly involved in the implementation of ra
8042
 VALIDITY OF LICENSE
o Local- 3 years from issucance unless revoked /cancelled
 Renewal- application be not earlier than 60 d but not later than 30d
before its expiration
o Overseas
 Issuance of provisional license for 2 years
 Provisional license may be upgraded to regular license upon:
- Recruiter has deployed atleast 100 workers
- Certification stating that the escrow deposit remains at 1M
(meant to answer for valid claims arising from emt contract
and violation of conditions of license)
- Application for RL must be filed w/in 3 mos before expiration
of PL
 Provisional license does not authorize domestic employment
 Regular License- 4 years validity from the time of issuance of
provisional license
 LIABILITY UNDERTAKINGS OF RECRUITMENT AGENCY (notarized)
o Pre-qualification requirement
o Undertaken by sole proprietor, managing partner or president of corp
o Negotiate best T&C of employment, deployment of only medically fit
workers, provide orientation, insurance, copy of contract etc.
o ASSUMPTION OF JOINT AND SEVERAL LIABILITY with employer for all claims
and liabilities which may arise in connection with the implementation of the
contract including but not limited to unpaid wages, death, disability
compensation and repatriation
o Assumption of full and complete responsibility for all the acts of officers,
employees and representatives done in connection with recruitment and
placement
o PLUs
o Undertaking by corp officer/ partners that theyd be solidarily liable with
corp/pat for claims/damages that may be awarded to workers
 SOLIDARY LIABILITY
o Even if the agency and the er had severed their relationship before the
worker was injured; agrrement bet them extends up to expiration of ees
contract
o XPN: Feagle Case where ees insisted on being redeployed to Saudi despite
knowledge that principal cannot afford to pay them; waiver was entered into
with open eyes
o Theory of Imputed Knowledge- “knowledge of the agent is knowledge of the
principal” not applied in Sunace case where agency (sunace) did not know
that the principal (mr. Hang) extended Divina’s contract. Hence, Sunace was
not held solidarily liable
o MORAL DAMAGES (BECMEN VS CUARESMA)
 Uncaring and nonchalant attitude of principal and agency ven after it
was shown that the worker did not commit suicide justifies liability for
moral and exemplary damages; RA and Er did not lift a finger to
investigate; being RA, Becmen/White Falcon should know what
happens to the OFWs
 LICENSES ARE NON-TRANSFERABLE/ NON-ASSIGNABLE
 PLACE OF RECRUITMENT at their official addresses/ provincial recruitment- POEA
 BOND
o Cash or surety bond to guarantee compliance with prescribed recruitment
procedures, rules and regulations (emt contract, conditions of license)
o POEA has the power to enforce liability under cash and surety bonds
o Finnman General Assurance vs Innocencio
 To compel POEA and beneficiaries of Finnman’s bond to go to the
insurance commission or regular courts to enforce the bond would be
to collide with public policy of prompt resolution of claims against
recruitment agencies
o Cash/surety bond is different from appeal bond; cash bond may be garnished
only if employment-related claim and violations of labor laws
 CHARGEABLE FEES
 LOCAL EMPLOYMENT
o Charged to employer; not deductible from worker’s salary
o Service Fee-
o Transportation expenses-
o If ee replaced- employer is entitled to replacement without cost or refund of
75% of service/transportation fees if:
 Worker certified by competent govt physician to be suffering from
medical/mental illness w/in 1 month from first day of work
 If worker abandons the job, resigns, commit theft or acts prejudicial
to the employer w/in 3 mos from 1st day of work
 OVERSEAS EMPLOYMENT
o Chargeable to principal or employer:
 Visa +stamping fee
 Work/residence permit
 Airfare
 POEA processing fee
  OWWA membership fee
 Transpo from airport to jobsite
 Trade/assessment test if required by principal
 Service fee of agency
o Chargeable to OFW
 Placement fee equivalent to 1 month basic salary specified in POEA
approved contract except
- Domestic workers
- Workers deployed in countries where prevailing rules do not
allow the charging/collection of placement fee
 Documentation costs (passport, NBI,Bcert, TOR, PRC license,
medical/health exam)
 Membership with PhilHealth, SSS, GSIS

PROHIBITED PRACTICES OF LICENSEE/HOA

1. charge/ accept amount greater than the prescribed fees by POEA or make worker
pay amount greater than what he loaned
2. furnish/publish false notice or information or document in relation to recruitment or
employment
3. acts of misrepresentation to secure license
4. induce/attempt to induce worker to quit employment in order to offer him to
another except if designed to liberate worker from oppressive T&C of emt
5. influence person/entity not to employ a worker who has not applied thru his agency
6. engage in rec of workers in jobs harmful to public health/morality/dignity of RP
7. obstruct/attempt to obstruct inspection by SOLE
8. fail to file reports on sttus of emt, placement, vacancies, forex earnings, separation
from jobs
9. substitute/alter emt contracts approved by POEA exc: more beneficial to ee
10. become an officer of a corporation engaged in travel agency
11. withhold/deny travel docs from workers for monetary considerations other than
those authorized by law
SUSPENSION AND CANCELLATION OF LICENSE
 GROUNDS : 3, 6, 7, 1 +false information/docs; charging fees before deployment
 Concurrent jurisdiction- POEA administrator and SOLE

ILLEGAL RECRUITMENT

Recruitment- 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 any
entity which in any manner offers or promises for a fee employment to 2 or more persons
shall be deemed engaged in recruitment/placement

Illegal recruitment- committed when

 Recruitment activities/ prohibited acts are done by non-licensees/HOA
TWO KINDS
 Illegal recruitment by a non-licensee- without license from BLE/ POEA (mere
undertaking of recruitment activities under Art 13)
 By a licensee

OTHER ILLEGAL RECRUITMENT ACTS DONE BY EITHER NON-LICENSEE/ LICENSEE

RELATING TO LOCAL EMPLOYMENT 8 ACTS:
1. Overcharging
2. False notice- in rel to recruitment/ employment
3. Misrepresentation to secure license
4. Inducing worker to quit
5. Inducement not to employ
6. Recruitment for harmful jobs
7. Obstructing inspection
8. Contract substitution

RELATING TO OVERSEAS EMPLOYMENT (8+14 acts)

9. Misrepresentation in documentation
10. Non-submission of reports
11. Involvement in travel agency
12. Withholding of documents
13. Failure to deploy without valid reason
14. Failure to reimburse when deployment did not take plce w/o worker’s fault
15. Non-filipino manager or a recruitment agency
16. Excessive interest (loan interest beyond 8%)
17. Specifying a loan enitity
18. non-renegotiation of loan when ee’s contract was pre-terminated without his fault
19. specifying a medical entity (exc: when med exam cost is shouldered by principal)
20. specifying a training entity (exc when p shoulders the cost)
21. violation of suspension
22. collection of insurance premium- deduction from ee’s salary

ILLEGAL RECRUITMENT AS ECONOMIC SABOTAGE

 if committed by a syndicate: carried out by a group or 3 or more persons
conspiring/confederating with one another
 committed in large scale: against 3 or more persons individually or as a group
SIMPLE ILLEGAL RECRUITMENT
 recruitment activities proved but elements of large scale/syndicated are absent
ELEMENTS
1. undertake recruitment activities/ prohibited acts
2. offender gave the complainants the distinct impression that he had the power or
ability to send them abroad for work (promise or an offer)
Darvin vs CA- there is lack of evidence to prove that accused offered a job to
complainant; the receipt of money for airfare and visa hardly qualified as
recruitment activities
3. complainant was convinced to part with their money in order to be employed
Note: any act in art 13 done without license= illegal recruitment even if done with only one
person. Phrase “offer or promise to 2 or more persons” merely lays down Rule of Evidence.
When this is done, there arises a presumption. But IR may be done with 1 victim only.

ESTAFA
 aside from charge of illegal recruitment, a worker may also file a case for estafa
 a person convicted of illegal recruitment may be convicted for estafaprovided the
elements of the crime are proved:
 accused defrauded another by abuse of confidence/ means of deceit
 that damage or prejudice capable of pecuniary estimation was caused
to the offended party
o People vs Hernandez- accused-apellants represented themselves to have
capacity to send DH to Italy although they do not have authority of license. It
is by this representation that they induced the private complainants to pay
placement fee of 150, 000. Such act constitutes estafa.

WHO ARE LIABLE FOR ILLEGAL RECRUITMENT

 Principals, accessories, accomplices
 Juridical persons- officers having control of the business responsible for the offense
 Corporate officers- liable if they have knowledge of illegal recruitment
 Employee- GR: not liable if not engaged in the management of the company or
merely acting under direction or unaware XPN: if he actively participated in illegal
recruitment

POWER TO ISSUE SEARCH/ARREST WARRANTS

 POEA HAS NO POWER; unconstitutional provision of Labor Code; only judge may
issue warrants so litigants shall go thru judicial process
 But SOLE or duly authorized representatives may CAUSE the arrest either:
o By judicial warrant issued by a judge
o Without judicial warrant (warrantless searches and arrest)
POWER TO ORDER CLOSURE
 Subsists; in line with administrative and regulatory power of SOLE and DAR
PRESCRIPTION OF ILLEGAL RECUITMENT CASES
 5 years
 economic sabotage- 20 years

PEOPLE VS ANGELES
 in this case, Angeles was not proven to have engaged in Illegal Recuitment. TO
prove, it ist be shown that the accused gave a distinct impression that he had power
or ability to send complainants for work such that the latter would be convinced to
part with their money.
EMPLOYMENT OF NON-RESIDENT ALIENS

 secure Alien Employment Permit

 for resident Aliens, no need for AEP, just Alien Employment Registration Certificate
(AERC)
 foreigners may not be employed in NATIONALIZED BUSINESSES (reserved only to
Filipinos or whose CS must be 60% Filipino-owned)
o mass media- Filipino owned
o Public Utilities, Use of Natural Resources, Financing- 60% owned
 BUT foreigners may be employed in nationalized industries IF:
o SOJ specifically authorizes the employment of foreign technical personnel
o Aliens elected as members of the board or governing body of corporations or
association in proportion to their allowable participation in the capital of
their entities
 Note DO 146-15