Recruitment and Placement

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LAST-MINUTE NOTES ON THE 2012 BAR EXAMINATION IN LABOR LAW BASED ON THE SUPREME COURT-PRESCRIBED SYLLABUS Prof. Joselito Guianan Chan B. RECRUITMENT AND PLACEMENT [These 8-part Notes discuss all topics/sub-topics in the Supreme Court-prescribed Syllabus for Labor Law]

================================ ================================================ ================================ ================== == TOPICS UNDER THE SYLLABUS

B. RECRUITMENT AND PLA CEMENT 1. Recruitment Recruitment of Local and Migrant Workers a. Recruitment and placement; defined b. Illegal Recruit ment, Art . 38 (Loc (Loc al), Sec. Sec. 6, Migr Migr ant Work ers Ac t, RA 8042 8042 (a) (a) License vs. Authorit y (b) Essential Essential elements of illegal recruitment (c) Simple illegal recruitment (d) Illegal recruitment in large scale (e) Illegal recruitment as economic sabotage (f) Illegal Recruit Recruit ment vs. Estafa (g) Liabilities (a) (a) local emplo yment agency (b) foreign employer i. Theory Theory of imputed know ledge (h) Pretermina Pretermination tion o f contr act of migr ant worker c. Direct Direct hirin g 2. Regulation and Enforcement a. Remittance Remittance of foreign exchange earnings earnings b. Prohibited activities c. Regulatory Regulatory and visitori al powers of the Labor Secretary Secretary d. Penalties Penalties for illegal recruitment

--------------------------------------------------------------------------------------------------------------------====================================== TOPIC UNDER THE SYLLABUS: B. RECRUITMENT AND PLA CEMENT 1. Recruitment Recruitment of Local and Migrant Workers ====================================== Introduction:

The Syllabus speaks of recruitment of recruitment of: 1. Local Workers; and 2. Migrant Workers. Indeed, the rules are different for the two (2) situations mentioned above. Hence, discussion herein shall be divided into these two classifications. 1. LOCAL EMPLOYMENT; RECRUITMENT AND PLACEMENT.

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a. Definition of important of important terms. The following definitions are relevant to the rules governing local employment: “Employment contract” refers to the contract entered into between the employer and the recruit; 1. “Employment contract” 2. “License” refers to the document issued by the DOLE Regional Office authorizing a person or entity to operate an employment agency; 3. “Licensee” refers to any person or entity duly licensed and authorized by the Department of Labor and Employment (DOLE) to operate a private employment agency; 4. “Placement fee” fee” refers to the amount charged by private employment agency from an applicant worker for its services in the recruitment and placement of said of said worker; Employment Agency” cy” refers to any person or entity engaged in the recruitment and placement of 5. “Private Employment Agen for a fee, which is charged directly or indirectly to the account of the workers for local employment for a of the recruit and/or employers; 1

Thediscussi Thedi scussion under this topic is based onthe provisions of the theRul Rules and Regulations GoverningPri g Private Recruitment and Placement Agencies for Local Employment.

LABOR LAW: B. RECRUITMENT AND PLACEMENT Prof. Joselito Guianan Chan

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6. “Recruit” refers to any person who directly applied to a private employment or authorized recruiter; 7. “Recruiter” refers to a recruitment agent of a licensed private employment agency who has been duly registered and authorized by the DOLE Regional Office to recruit workers; placement” ” rrefers to any act of canvassing, 8. “Recruitment and placement of canvassing, enlisting, contracting, transporting, utilizing, hiring, assigning, or advertising employment locally, whether for profit or not, provided, that any person or entity which, in any manner, offers or promises employment for a fee to one or more persons shall be deemed engaged in a recruitment and placement; Recruitment contract” refers to the contract entered into between a private employment agency and the 9. “ Recruitment recruit. 2 10. “Worker” refers to any member of the of the labor force whether employed or unemployed. b. Licensing of local of local recruitment and placement agencies. 3 1. Coverage. The Rules apply to all persons, entities and associations engaged in the recruitment and 4 placement of workers of workers for local employment for a fee, whether this is charged from the worker or the employer or both. 2. Prohibition. No person, entity, or association shall engage in the recruitment and placement of workers of workers for a 5 fee unless it has first secured a license from the Regional Office. 3. Citizenship requirement. Only Filipino citizens or corporations, partnerships or entities at least seventy‐five percent (75%) of the of the authorized and voting capital stock of which of which is owned and controlled by Filipino citizens shall be 6 permitted to participate in the recruitment and placement of workers of workers for local employment. of license applicants. All applicants for license to operate private recruitment and placement 4. Qualifications of license agencies for local employment shall possess the following qualifications: (a) Citizenship requirement; (b) Appropriate capitalization of P25,000.00 of P25,000.00 in case of single of single proprietors or a minimum paid‐up capital or net ip or corporation; and worth of P25,000.00 of P25,000.00 in the case of partnersh of partnership 7 (c) Applicant should be of good of good moral character and not otherwise disqualified by law, rules and regulations. 5. Validity of license. The license shall be valid for one (1) year from the date of issuance unless sooner cancelled or suspended by the Director for violation of any of any of the of the conditions prescribed in the license or of any of any applicable 8 provision of the of the Labor Code or its Implementing Rules. transferability of license. license. No license shall be transferred, conveyed or assigned to any other person or 6. Non‐transferability of entity, or used in any place other than that stated in the license, unless authorized by the Director. Any transfer of the of the business address, appointment or designation of any agency or representative of the licensee or establishment or 9 branch offices shall be subject to the prior approval of the of the Regional Office. c. Authority to establish or operate branch office(s). 1. Prohibition. No licensee shall establish or operate branch office(s) unless the same has been registered and 10 its operation duly authorized by the Regional Office. d. Grant of authority of authority to recruiters. 1. Prohibition. No person shall act as an agent or recruiter of a private recruitment and placement agency without prior authority from the DOLE Regional Office having jur having jurisdi isdictio ction n over the place where recruitment activities will 11 be undertaken. e. Renewal of license of license of local of local private recruitment and placement agency. for renewal of of license. license. A licensee may apply for the renewal of his 1. Request for renewal of his license with the Regional Office 12 concerned within forty‐five (45) days before the expiration of his of his current license. f. Cancellation or suspension of license. of license. private employment agency. Complaints based on any prohibited practices enumerated 1. Complaints against private under Rule IX of the of the Rules and Regulations and Regulations Governing Private Recruitment and Recruitment and Placement Placement Agencie Agenciess for Local for Local Employment Employment against a private employment agency shall be filed with the Regional Office where the agency/branch office is located, where the prohibited act was was committed or at complainant’s place of residence, at the option of the complainant: Provided, That the Regional Office which first acquires juri acquires jurisdic sdiction tion over the case shall do so to the exclusion of the of the others. Conduct of investigation. investigation. The proceedings shall be summary in character where technical rules of procedure 2. Conduct of of procedure may only be applied suppletorily. The investigation shall be terminated within fifteen (15) working days from the first 13 hearing. The Regional Director shall resolve the case within ten (10) days thereafter. of license pend pending ing investigation. Pending investigation of a 3. Suspension of license of a complaint, the Director may suspend the license of the of the private employment agency concerned, on any of the of the following grounds: (a) Failure on the part of the agency to submit its position paper/comment on the complaint within the the hearing called by the Regional Office; prescribed period or whe where it refuses to attend the

Section 1, Rule Rule I, Rules and andRegul Regulations Governing Private Recruitment and Placement Agencies for Local Employment. Rules andRegulations GoverningPrivate gPri vateRecrui Recruitment andPlacement Agenciesfor Local Employment Section1, Rule II, Ibid.. 5 Section2, Rule II, Ibid.. 6 Section3, Rule II, Ibid.. 7 Section4, Rule II, Ibid.. 8 Section9, Rule II, Ibid.. 9 Section10, Rule II, Ibid.. 10 Section2, Rule III, Ibid.. 11 Section2, Rule IV, Ibid.. 12 Section1, Rule VI, Ibid.. 13 Section2, Rule VII, Ibid.. 2 3 4

2 LABOR LAW: B. RECRUITMENT AND PLACEMENT Prof. Joselito Guianan Chan

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(b) Prima facie evidence shows that the agency has violated and continue to violate the Labor Code provision on the recruitment and placement of workers, its implementing rules and other issuances by the Secretary; and (c) There exist reasonable grounds showing that the continued operation of the agency will lead to further 14 violations of the conditions of the license or the exploitation of the workers being recruited. 4. Cancellation of license. The Director shall have the power, after due notice and hearing, to cancel the license or authority of private employment agency for any violation of the provision of the Labor Code on recruitment and 15 placement of workers and its implementing rules, and other issuances by the DOLE Secretary. 5. Appeals. Any party aggrieved by the decision of the Regional Director may appeal the same to the DOLE Secretary within ten (10) working days from receipt of his copy of the order on grounds of: (a) grave abuse of discretion; and (b) gross incompetence. The appeal shall be filed in the DOLE Regional Office which shall transmit the records to the DOLE Secretary within five (5) days from receipt of the appeal. The DOLE Secretary shall have thirty (30) days from receipt of the records of the case to resolve the appeal. The decision of the DOLE Secretary shall be final and 16 inappealable. 2. OVERSEAS EMPLOYMENT; RECRUITMENT AND PLACEMENT. a. Relevant laws on recruitment for overseas employment. 1. The Labor Code; 2. Migrant Workers and Overseas Filipinos Act of 1995 [R. A. No. 8042], as amended by R.A. No. 10022 (March 8, 2010). b. Definition of relevant terms. 17 1. “Overseas Filipinos” refer to migrant workers, other Filipino nationals and their dependents abroad. 2. “Overseas Filipino Worker or Migrant Worker” refers to 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. A "person to be engaged in a remunerated activity" refers to an applicant worker who has been promised or assured employment 18 overseas. 3. “Regular/Documented Filipino Migrant Workers” refer to the following: (1) Those who possess valid passports and appropriate visas or permits to stay and work in the receiving country; and (2) Those whose contracts of employment have been processed by the POEA, or subsequently verified 19 and registered on‐site by the POLO, if required by law or regulation. 4. “Seafarer” refers to any person who is employed or engaged in overseas employment in any capacity on board a ship other than a government ship used for military or non‐commercial purposes. The definition shall include fishermen, cruise ship personnel and those serving on mobile offshore and 20 drilling units in the high seas. 5. “Skilled Filipino Workers” refer to those who have obtained an academic degree, qualification, or experience, or those who are in possession of an appropriate level of competence, training and certification, for the job they are applying, as may be determined by the appropriate government 21 agency. 6. “Underage Migrant Workers” refers to those who are below 18 years or below the minimum age 22 requirement for overseas employment as determined by the Secretary of Labor and Employment. 7. “Overseas Filipino in Distress” refers to an Overseas Filipino who has a medical, psycho‐social or legal assistance problem requiring treatment, hospitalization, counselling, legal representation as specified in Rule IX of these Rules or any other kind of intervention with the authorities in the country where he 23 or she is found. 8. “Rehires” refer to land‐based workers who renewed their employment contracts with the same 24 principal. c. Terms of an employment contract govern the employment of an OFWs. In cases involving employment of overseas Filipino workers (OFWs), the rights and obligations among and between the OFWs, the local recruiter/agent, and the foreign employer/principal are governed by the employment contract. A contract freely entered into is considered the law between the parties and, therefore, should be respected. In formulating the contract, the parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.

Section3, Rule VII, Ibid.. Section4, Rule VII, Ibid.. Section5, Rule VII, Ibid.. 17 Section 1[hh], Rule II, Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995, As Amended by R. A. No. 10022 (March 08, 2010) 18 Section 1[JJ], Rule II, Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995, As Amended by R. A. No. 10022 (March 08, 2010) 19 Section 1[rr], Rule II, Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995, As Amended by R. A. No. 10022 (March 08, 2010) 20 Section 1[ss], Rule II, Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995, As Amended by R. A. No. 10022 (March 08, 2010) 21 Section 1[tt], Rule II, Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995, As Amended by R. A. No. 10022 (March 08, 2010) 22 Section 1[vv], Rule II, Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995, As Amended by R. A. No. 10022 (March 08, 2010) 23 Section 1[II], Rule II, Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995, As Amended by R. A. No. 10022 (March 08, 2010) 24 Section 1[qq], Rule II, Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995, As Amended by R. A. No. 10022 (March 08, 2010) 14 15 16


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d. Rules affecting overseas employment make a distinction between land‐based overseas workers and seafarers. The rules on overseas employment is divided into two, namely: 1. POEA Rules and Regulations Governing the Recruitment and Employment of Land ‐Based Overseas 25 Workers; and 26 2. POEA Rules and Regulations Governing the Recruitment and Employment of Seafarers. The obvious intent for the two (2) separate issuances is to distinguish between the rules applicable to land‐ based overseas workers and those applicable to seafarers (formerly termed as “seamen” ). This is as it should be because of the unique and peculiar distinguishing features of maritime employment. 2.1. LICENSING AND REGULATION FOR OVERSEAS RECRUITMENT AND PLACEMENT. a. Qualifications. Only those who possess the following qualifications may be permitted to engage in the business of recruitment and placement of overseas Filipino workers: 1. Filipino citizens, partnerships or corporations at least seventy five percent (75%) of the authorized capital stock of which is owned and controlled by Filipino citizens; 2. A minimum capitalization of Two Million Pesos (P2,000,000.00) in case of a single proprietorship or partnership and a minimum paid‐up capital of Two Million Pesos (P2,000,000.00) in case of a corporation; Provided, that those with existing licenses shall, within four years from effectivity hereof, increase their capitalization or paid up capital, as the case may be, to Two Million Pesos (P2,000,000.00) at the rate of Two Hundred Fifty Thousand Pesos (P250,000.00) every year. 3. Those not otherwise disqualified by law or other government regulations to engage in the recruitment and 27 placement of workers for overseas employment. b. Disqualifications. The following are not qualified to engage in the business of recruitment and placement of Filipino workers overseas: a. Travel agencies and sales agencies of airline companies; b. Officers or members of the Board of any corporation or members in a partnership engaged in the business of a travel agency; c. 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; d. Persons, partnerships or corporations which have derogatory records, such as, but not limited to, the following: 1) Those certified to have derogatory record or information by the National Bureau of Investigation or by the Anti‐Illegal Recruitment Branch of the POEA; 2) Those against whom probable cause or prima facie finding of guilt for illegal recruitment or other related cases exists; 3) Those convicted for illegal recruitment or other related cases and/or crimes involving moral turpitude; and 4) Those agencies whose licenses have been previously revoked or cancelled by the Administration for violation of RA 8042, PD 442, as amended, and their implementing rules and regulations as well as the Rules and regulations. All applicants for issuance/renewal of license shall be required to submit clearances from the National Bureau of Investigation and Anti‐Illegal Recruitment Branch, POEA, including clearances for their respective officers and employees. e. Any official or employee of the DOLE, POEA, OWWA, DFA and other government agencies directly involved th in the implementation of R.A. No. 8042 and/or any of his/her relatives within the fourth (4 ) civil degree of consanguinity or affinity; and f. Persons or partners, officers and directors of corporations whose licenses have been previously cancelled or 28 revoked for violation of recruitment laws. c. Provisional license. Applicants for new license shall be issued a provisional license which shall be valid for a limited period of one (1) year within which the applicant should be able to comply with its undertaking to deploy one hundred (100) workers to its new principal. The license of a complying agency shall be upgraded to a full license entitling it to another three years 29 of operation. Non‐complying agencies will be notified of the expiration of their license. d. Validity of the license. Except in case of a provisional license, every license shall be valid for four (4) years from the date of issuance unless sooner cancelled, revoked or suspended for violation of applicable Philippine law, the Rules and other pertinent 25

Issued by DOLESecretary Patricia Sto. Tomas on February 4, 2002. Issued on May 23, 2003. Section1, Rule I, Part II, 2002 POEARules for Land-BasedOverseas Workers; Section1, RuleI, Part II, 3003 POEARules for Seafarers. 28 Section2, Rule I, Part II, 2002 POEARules for Land-BasedOverseas Workers; Section2, RuleI, Part II, 2003 POEARules for Seafarers. 29 Section5,RuleII, PartII, 2002POEARulesfor Land-BasedOverseasWorkers;Section5, RuleII, PartII, 2003POEARulesfor Seafarers. 26 27



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issuances. Such license shall be valid only at the place/s stated therein and when used by the licensed person, 30 partnership or corporation. e. Non‐transferability of license. No license shall be transferred, conveyed or assigned to any person, partnership or corporation. It shall not be used directly or indirectly by any person, partnership or corporation other than the one in whose favor it was issued. In case of death of the sole proprietor and to prevent disruption of operation to the prejudice of the interest of legitimate heirs, the license may be extended upon request of the heirs, to continue only for the purpose of winding up 31 the business operations. f. Change of ownership/relationship of single proprietorship or partnership. Transfer or change of ownership of a single proprietorship licensed to engage in overseas employment shall cause the automatic revocation of the license. A change in the relationship of the partners in a partnership duly licensed to engage in overseas employment which materially interrupts the course of the business or results in the actual dissolution of the partnership shall likewise 32 cause the automatic revocation of the license. g. Upgrading of single proprietorships or partnerships. License holders which are single proprietorships or partnerships may, subject to the guidelines of the Administration (POEA), convert into corporations for purposes of upgrading or raising their capabilities to respond adequately to developments/changes in the international labor market and to enable them to better comply with their responsibilities arising from the recruitment and deployment of workers overseas. The approval of merger, consolidation or upgrading shall automatically revoke or cancel the licenses of the 33 single proprietorships, partnerships or corporations so merged, consolidated or upgraded. h. Derogatory record after issuance/renewal of license. The license of a single proprietorship or a partnership shall be suspended until cleared by the Administration (POEA) should any derogatory record be found to exist against the single proprietorship or any or all of the partners, as the case may be. The appointment of any officer or employee of any licensed agency may be cancelled or revoked at any time with due notice to the agency concerned, whenever said officer or employee is found to have any derogatory 34 record, as herein contemplated. i. Appointment/change of officers and personnel. Every appointment of agents or representatives of a licensed agency shall be subject to prior approval or authority of the Administration (POEA). The acknowledgment or approval may be issued upon submission of or compliance with the following: a. proposed appointment or special power of attorney; b. clearances of the proposed representative or agent from the National Bureau of Investigation (NBI)/Anti‐ Illegal Recruitment Branch, POEA; and c. sworn or verified statement by the designating or appointing person or company assuming full responsibility for all acts of the agent or representative done in connection with the recruitment and placement of workers. Every change in the composition of the Board of Directors of a corporation, appointment or termination of officers and personnel shall be registered with the Administration (POEA) within thirty (30) calendar days from the date of such change. The agency shall be required to submit the minutes of proceedings duly certified by the SEC in case of election of new members of the Board of Directors with their bio‐data, ID pictures and clearances. The Administration (POEA) reserves the right to deny the acknowledgment or appointment of officers, 35 employees and representatives who were directly involved in recruitment irregularities. j. Publication of change of directors/other officers and personnel; revocation or amendment of appointment of representatives. In addition to the requirement of registration with and submission to the Administration (POEA), every change in the membership of the Board of Directors, termination for cause of other officers and personnel, revocation or amendment of appointment of representatives shall be published at least once in a newspaper of general circulation, in 36 order to bind third parties. Proof of such publication shall be submitted to the Administration (POEA). k. Transfer of business address. Any transfer of business address shall be effected only with prior authority or approval of the Administration (POEA). The approval shall be issued only upon formal notice of the intention to transfer with the following attachments: a. In the case of a corporation, a Board Resolution duly registered with the SEC authorizing the transfer of business address; and b. Copy of the contract of lease or proof of building ownership.

Section6,RuleII, PartII, 2002POEARulesfor Land-BasedOverseasWorkers;Section6, RuleII, PartII, 2003POEARulesfor Seafarers. Section7,RuleII, PartII, 2002POEARulesfor Land-BasedOverseasWorkers;Section7, RuleII, PartII, 2003POEARulesfor Seafarers. Section8,RuleII, PartII, 2002POEARulesfor Land-BasedOverseasWorkers;Section8, RuleII, PartII, 2003POEARulesfor Seafarers. 33 Section9,RuleII, PartII, 2002POEARulesfor Land-BasedOverseasWorkers;Section9, RuleII, PartII, 2003POEARulesfor Seafarers. 34 Section 10, Rule II, Part II, 2002 POEARules for Land-Based OverseasWorkers; Section 10, Rule II, Part II, 2003 POEARules for Seafarers. 35 Section 11, Rule II, Part II, 2002 POEARules for Land-Based OverseasWorkers; Section 11, Rule II, Part II, 2003 POEARules for Seafarers. 36 Section 12, Rule II, Part II, 2002 POEARules for Land-Based OverseasWorkers; Section 12, Rule II, Part II, 2003 POEARules for Seafarers. 30 31 32



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The new office shall be subject to the regular ocular inspection procedures by duly authorized representatives of the Administration (POEA). 37 A notice to the public of the new address shall be published in a newspaper of general circulation. l. Establishment of additional/extension offices. 38 Additional/extension offices may be established subject to the prior approval of the Administration (POEA). m. Conduct of recruitment outside of registered office. No licensed agency shall conduct any provincial recruitment, jobs fair or recruitment activities of any form outside of the address stated in the license or approved additional office(s) without first securing prior authority from 39 the Administration (POEA). n. Renewal of license. An agency shall submit an application for the renewal of its license on or before its expiration. Such application shall be supported by the following documents: a. Renewed or revalidated surety bond amounting to One Hundred Thousand Pesos (P100,000.00); b. Renewed escrow agreement in the amount of P1,000,000.00 with a commercial bank to primarily answer for valid and legal claims of recruited workers as a result of recruitment violations or money claims; c. Audited financial statements for the past two years with verified corporate or individual tax returns. In case the equity of the agency is below the minimum capitalization requirement, it shall be given thirty (30) days from release of the renewed license to submit proof(s) of capital infusion, such as SEC certification of such infusion or bank certification corresponding to the amount infused and treasurer’s affidavit duly received by the SEC. Otherwise, the license shall be suspended until it has complied with the said requirement; d. Clearances from the National Bureau of Investigation and the Anti‐Illegal Recruitment Branch for the Board of Directors and responsible officers; and 40 e. Other requirements as may be imposed by the Administration (POEA). o. Non‐expiration of license. Where the license holder has made timely and sufficient application for renewal, the existing license shall not expire until the application shall have been finally determined by the Administration (POEA). For this purpose, an 41 application shall be considered sufficient if the applicant has substantially complied with the requirements for renewal.

====================================== TOPIC UNDER THE SYLLABUS: B. RECRUITMENT AND PLA CEMENT 1. Recruitment of Local and Migrant Workers a. Recruitment and placement; defined ====================================== 1. RECRUITMENT AND PLACEMENT OF WORKERS. a. Requisites. In order for an activity to be considered as “recruitment and placement” as described in Article 13 [b] of the Labor Code, the following elements must concur: 1. A person or entity is engaged in any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, including referrals, contract services, promising or advertising for employment; 2 The recruitment and placement of workers is either for local or overseas employment; and 3. The recruitment and placement may or may not be for profit. b. Presumption of engaging in recruitment and placement. Any person or entity which, in any manner, offers or promises for a fee, employment to two (2) or more persons is deemed engaged in recruitment and placement.

Section 13, Rule II, Part II, 2002 POEARules for Land-Based OverseasWorkers; Section 13, Rule II, Part II, 2003 POEARules for Seafarers. Section 14, Rule II, Part II, 2002 POEARules for Land-Based OverseasWorkers; Section 14, Rule II, Part II, 2003 POEARules for Seafarers. Section 15, Rule II, Part II, 2002 POEARules for Land-Based OverseasWorkers. Note: Therei s no similar provision in the POEARules andRegulations Governing the Recruitment and Employment of Seafarers, May 23, 2003. But this certainly applies to the cases contemplated thereunder. 40 Section 16, Rule II, Part II, 2002 POEARules for Land-Based OverseasWorkers; Section 15, Rule II, Part II, 2003 POEARules for Seafarers. 41 Section 18, Rule II, Part II, 2002 POEARules for Land-Based OverseasWorkers; Section 17, Rule II, Part II, 2003 POEARules for Seafarers. 37 38 39



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========================================= TOPIC UNDER THE SYLLABUS: B. RECRUITMENT AND PLA CEMENT 1. Recruitment of Local and Migrant Workers b. Illegal Recru itment , Art. 38 (Local), Sec. 6, Migrant Wor kers Ac t, RA 8042, as amended by R.A. No. 10022 (March 8, 2010). ========================================= 1. LABOR CODE PROVISION.

Article 38 of the Labor Code provides: Article 38. Illegal Recruitment. – (a) Any recruitment activities, including the prohibited practices enumerated under Article 34 of this Code, to be undertaken by non‐licensees or non‐ holders of authority, shall be deemed illegal and punishable under Article 39 of this Code. The Department of Labor and Employment or any law enforcement officer may initiate complaints under this Article. (b) Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic sabotage and shall be penalized in accordance with Article 39 hereof. Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring and/or confederating with one another in carrying out any unlawful or illegal transaction, enterprise or scheme defined under the first paragraph hereof. Illegal recruitment is deemed committed in large scale if committed against three (3) or more persons individually or as a group. (c) The Secretary of Labor and Employment or his duly authorized representatives shall have the power to cause the arrest and detention of such non‐licensee or non‐holder of authority if after investigation, it is determined that his activities constitute a danger to national security and public order or will lead to further exploitation of job‐seekers. The Secretary shall order the search of the office or premises and seizure of documents, paraphernalia, properties and other implements used in illegal recruitment activities and the closure of companies, establishments and entities found to be engaged in the recruitment of workers for overseas employment, without having been licensed or authorized to do so. 2. R.A. NO. 8042, AS AMENDED BY R.A. NO. 10022 (MARCH 8, 2010):

Section 6 of R.A. No. 8042 (Migrant Workers and Overseas Filipinos Act of 1995) which defines illegal recruitment was amended by Section 5 of R.A. No. 10022 (March 8, 2010). Consequently, illegal recruitment is now defined as follows: SEC. 6. Definition. ‐ For purposes of this Act, illegal recruitment shall mean 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 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. It shall likewise include the following acts, whether committed by any person, whether a non‐licensee, non‐holder, licensee or holder of authority: (a) To charge or accept directly or indirectly any amount greater than that specified in the schedule of allowable fees prescribed by the Secretary of Labor and Employment, or to make a worker pay or acknowledge any amount greater than that actually received by him as a loan or advance; (b) To furnish or publish any false notice or information or document in relation to recruitment or employment; (c) To give any false notice, testimony, information or document or commit any act of misrepresentation for the purpose of securing a license or authority under the Labor Code, or for the purpose of documenting hired workers with the POEA, which include the act of reprocessing workers through a job order that pertains to nonexistent work, work different from the actual overseas work, or work with a different employer whether registered or not with the POEA; (d) To include or attempt to induce a worker already employed to quit his employment in order to offer him another unless the transfer is designed to liberate a worker from oppressive terms and conditions of employment; (e) To influence or attempt to influence any person or entity not to employ any worker who has not applied for employment through his agency or who has formed, joined or supported, or has contacted or is supported by any union or workers' organization;



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(f) To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to the dignity of the Republic of the Philippines; (h) To fail to submit reports on the status of employment, placement vacancies, remittance of foreign exchange earnings, separation from jobs, departures and such other matters or information as may be required by the Secretary of Labor and Employment; (i) To substitute or alter to the prejudice of the worker, employment contracts approved and verified by the Department of Labor and Employment from the time of actual signing thereof by the parties up to and including the period of the expiration of the same without the approval of the Department of Labor and Employment; (j) For an officer or agent of a recruitment or placement agency to become an officer or member of the Board of any corporation engaged in travel agency or to be engaged directly or indirectly in the management of travel agency; (k) To withhold or deny travel documents from applicant workers before departure for monetary or financial considerations, or for any other reasons, other than those authorized under the Labor Code and its implementing rules and regulations; (l) Failure to actually deploy a contracted worker without valid reason as determined by the Department of Labor and Employment; (m) 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. Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic sabotage; and (n) To allow a non‐Filipino citizen to head or manage a licensed recruitment/manning agency. 3. APPLICATION OF ARTICLE 38 TO BOTH LOCAL AND OVERSEAS EMPLOYMENT.

The definition of “illegal recruitment” under Article 38 of the Labor Code applies to both local and overseas employment. The law is clear in its coverage that any recruitment activities including the commission of the prohibited practices enumerated under Article 34 of the Labor Code, to be undertaken by non‐licensees or non‐holders of 42 authority, shall be deemed illegal and punishable under Article 39 of this Code. 4. CONCEPT OF ILLEGAL RECRUITMENT.

The term “illegal recruitment” is defined as any recruitment activities, including the prohibited practices 43 enumerated under Article 34 of the Labor Code, to be undertaken by non‐licensees or non‐holders of authority. Based on paragraph [a] of Article 38, illegal recruitment as defined therein, in relation to Articles 13 [b] and 34 and penalized under Article 39 of the Labor Code, may be committed only by non‐licensees or non‐holders of authority . R.A. No. 8042, as amended by R.A. No. 10022 (March 8, 2010) and its Implementing Rules, have broadened this concept of illegal recruitment as far as overseas placement and recruitment activities are concerned. Consequently, illegal recruitment for overseas employment likewise includes the acts described in Section 6 of R.A. No. 8042, as amended by Section 5 of R.A. No. 10022, whether committed by any person, whether a non‐licensee, non‐holder, licensee or holder of authority .

======================================= TOPIC UNDER THE SYLLABUS: B. RECRUITMENT AND PLA CEMENT 1. Recruitment of Local and Migrant Workers b. Illegal Recruitment (a) License vs. Authori ty ======================================= 1. DISTINCTION BETWEEN A “LICENSE” AND AN “AUTHORITY.” “License” refers to the document issued by the Secretary of Labor and Employment authorizing a person, 44 partnership or corporation to operate a private recruitment/manning agency. “Authority” refers to a document issued by the Secretary of Labor and Employment authorizing the officers, personnel, agents or representatives of a licensed recruitment/manning agency to conduct recruitment 45 and placement activities in a place stated in the license or in a specified place. 2. PRIVATE EMPLOYMENT AGENCY.

A “private fee‐charging employment agency” is any person or entity engaged in recruitment and 46 placement of workers for a fee which is charged, directly or indirectly, from the workers or employers or both. Such “entity” may be a partnership or corporation duly licensed by the Secretary of Labor and Employment to engage in the recruitment and placement of workers for overseas employment.

42

Article 38[a], Labor Code. People v. Cabacang, G.R. No. 113917, July 17, 1995, 246 SCRA530. Section 1[w], Rule II, Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995, As Amended by R. A. No. 10022 (March 08, 2010). 45 Section 1[b], Rule II, Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995, As Amended by R. A. No. 10022 (March 08, 2010). 46 See Article 13 [c] of the Labor Code. 43 44



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3. PRIVATE RECRUITMENT ENTITY.

A “private recruitment entity” refers to any person or association engaged in the recruitment and 47 placement of workers without charging, directly or indirectly, any fee from the workers or employers. 4. DISTINCTIONS BETWEEN A PRIVATE EMPLOYMENT AGENCY AND A PRIVATE RECRUITMENT ENTITY.

A private employment agency technically may be distinguished from a private recruitment entity as follows: 1.

A private employment agency has a right duly recognized in law to charge a fee, directly or indirectly, from the workers or the employers or from both; while a private recruitment entity does not charge any fee either directly or indirectly from the workers or employers to which they would be deployed; 2. The former is authorized to recruit only for overseas placement or deployment; while the latter is allowed to recruit for both local and overseas deployment. 3. The former derives its authority to recruit and place workers from a document denominated as a 48 “license” ; while the latter sources its authority from a document called “authority.” But under the Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995, as amended by R. A. No. 10022 (March 08, 2010), these two terms have now a common definition as follows: “ Private Recruitment/Employment Agency ” refers to any person, partnership or corporation duly licensed by the Secretary of Labor and Employment to engage in the recruitment and placement of workers for overseas employment for a fee which is charged, directly or indirectly, 49 from the workers who renewed their employment contracts with the same principal. 5. ENTITIES AUTHORIZED TO ENGAGE IN RECRUITMENT AND PLACEMENT OF WORKERS.

The following are authorized to engage in recruitment and placement of workers: a. Public employment offices; b. Philippine Overseas Employment Administration (POEA); c. Private recruitment entities; d. Private employment agencies; e. Shipping or manning agents or representatives; f. Such other persons or entities as may be authorized by the Secretary of Labor and Employment; and g. Construction contractors. 6. OTHER RELEVANT TERMS. “Filipino Service Contractor” refers to any person, partnership or corporation duly licensed as a private recruitment agency by the Secretary of Labor and Employment to recruit workers for its accredited projects or 50 contracts overseas. “Manning Agency” refers to any person, partnership or corporation duly licensed by the Secretary of Labor and Employment to engage in the recruitment and placement of seafarers for ships plying international 51 waters and for related maritime activities. “Non‐Licensee” refers to any person, partnership or corporation with no valid license to engage in recruitment and placement of overseas Filipino workers or whose license is revoked, cancelled, terminated, 52 expired or otherwise delisted from the roll of licensed recruitment/manning agencies registered with the POEA. “ Placement Fees” refer to any and all amounts charged by a private recruitment agency from a worker 53 for its recruitment and placement services as prescribed by the Secretary of Labor and Employment.

======================================== TOPIC UNDER THE SYLLABUS B. RECRUITMENT AND PLA CEMENT 1. Recruitment of Local and Migrant Workers b. Illegal Recruitment (b) Essential elements of illegal recruitment (c) Simple illegal recruitment ======================================== 1. ELEMENTS OF SIMPLE ILLEGAL RECRUITMENT.

The essential elements of simple illegal recruitment without the attendant qualifying circumstances, are: 1. The person charged with the crime must have undertaken recruitment and placement activities under Article 13 [b] or any of the activities enumerated in Article 34 of the Labor Code, as amended; and

According to Article 13 [e] of the Labor Code. As defined in Article 13 of the Labor Code. Section 1[pp], Rule II, Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995, As Amended by R. A. No. 10022 (March 08, 2010) 50 Section 1[p], Rule II, Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995, As Amended by R. A. No. 10022 (March 08, 2010). 51 Section 1[y], Rule II, Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995, As Amended by R. A. No. 10022 (March 08, 2010). 52 Section 1[cc], Rule II, Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995, As Amended by R. A. No. 10022 (March 08, 2010). 53 Section 1[ll], Rule II, Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995, As Amended by R. A. No. 10022 (March 08, 2010) 47 48 49



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2. Said person does not have a license or authority to do so or more specifically, that he has not complied with such guidelines, rules and regulations issued by the Secretary of Labor and Employment, particularly with 54 respect to the securing of license or authority to recruit and deploy workers, either locally or overseas. In People v. De Leon, [G.R. No. 104995, August 26, 1993, 225 SCRA 651], it was categorically declared that violations of Articles 13 [b], 34, 38 and 39 of the Labor Code, as amended, constitute illegal recruitment. 2. FIRST ELEMENT: RECRUITMENT AND PLACEMENT ACTIVITIES. a. Recruitment and placement activities, defined. The phrase “recruitment and placement” refers to the acts described in paragraph [b] of Article 13 of the Labor Code, viz.: “[b] ‘Recruitment and placement’ refers to 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 55 persons shall be deemed engaged in recruitment and placement.” b. Some principles on illegal recruitment. 56 1. Mere impression is sufficient to constitute illegal recruitment. But if no such impression is given, the 57 accused should not be convicted for illegal recruitment. 58 2.. Mere promise or offer of employment abroad amounts to recruitment. 59 3. There is no need to show that accused represented himself as a licensed recruiter. 60 4. Referrals may constitute illegal recruitment. 61 5. Recruitment whether done for profit or not is immaterial. 6. The act of receiving money far exceeding the amount as required by law is not considered as “recruitment 62 and placement” as this phrase is contemplated under the law. 63 7. Actual receipt of fee, not an element of the crime of illegal recruitment. 64 8. Conduct of interviews amounts to illegal recruitment. 65 9. Absence of receipt, not essential. 66 10. Conviction for illegal recruitment may be made on the strength of the testimonies of the complainants. 11. Absence of documents evidencing the recruitment activities strengthens, not weakens, the case for illegal 67 recruitment. 68 12. Only one person recruited is sufficient to convict one for illegal recruitment. 69 13. Non‐prosecution of another suspect, immaterial. 14. Execution of affidavit of desistance affects only the civil liability but has no effect on the criminal liability for 70 illegal recruitment. 15. Conspiracy in illegal recruitment cases, how proved. Direct proof of previous agreement to commit a crime is not necessary. Such previous agreement may be deduced from the mode and manner in which the offense was perpetrated, or inferred from the acts of the accused which point to a joint purpose and 71 design, concerted action and community of interest. 3. SECOND ELEMENT: NON‐LICENSEE OR NON‐HOLDER OF AUTHORITY.

The phrase “non‐licensee” or “non‐holder of authority” refers to any person, corporation or entity which has not been issued a valid license or authority to engage in recruitment and placement by the Secretary of Labor and Employment, or whose license or authority has been suspended, revoked or cancelled by the POEA or the Secretary of 72 Labor and Employment. The acts mentioned in Article 13 [b] of the Labor Code can lawfully be undertaken only by licensees or holders 73 of authority to engage in the recruitment and placement of workers. As far as agents or representatives appointed by licensees or holders of authority are concerned, they shall be considered as falling within the ambit of the term “non‐licensee” or “non‐holder of authority” if their appointments were 74 not previously authorized by the POEA. Consequently, their activities shall be considered illegal recruitment. Non‐possession of a license to recruit is, under the law, an essential ingredient of the crime of illegal 75 recruitment penalized under the Labor Code.

People v. Cabacang, G.R. No. 113917, July 17, 1995, 246 SCRA530; People v. Coral, G.R. Nos. 97849-54, March1, 1994, 230 SCRA499/ Article 13[b], Labor Code; People v. Goce, G.R. No. 113161, Aug. 29, 1995, 247 SCRA780; People v. Bautista, G.R. No. 113547, Feb. 9, 1995, 241 SCRA216. Lapasaran v. People, [G.R. No. 179907, February 12, 2009]; People v. Manungas, Jr., [G.R. Nos. 91552-55, March 10, 1994, 231 SCRA1]. 57 Darvin v. CA, [G.R. No. 125044. July 13, 1998]. 58 People v. Gallardo, G.R. Nos. 140067-71, Aug. 29, 2002, 436 Phil. 698, 711; People v. Delmo Valle, [G.R. No. 126933, February 23, 2001]. 59 People v. Ballesteros, [G.R. Nos. 116905-908, August 6, 2002]. 60 Article13[b] of the Labor Code; Rodolfo v. People, [G.R. No. 146964, August 10, 2006]. 61 People v. Jamilosa[G.R. No. 169076, January 23, 2007, 512 SCRA340, 352]; People v. Valenciano, [G.R. No. 180926, December 10, 2008]. 62 People v. Gaoat, G.R. No. 97028, May 21, 1993, 222 SCRA385. 63 People v. Ballesteros, [G.R. Nos. 116905-908, August 6, 2002]; People v. Arabia, [G.R. Nos. 138431-36, September 12, 2001]. 64 Section 6 of R.A. No. 8042; C.F. Sharp CrewManagement, Inc. v. Hon. Espanol, Jr., [G.R. No. 155903, September 14, 2007]. 65 People v. Juego, [G.R. No. 123162. October 13, 1998]. 66 People v. Saulo, [G.R. No. 125903, November 15, 2000]; People v. Remullo, [G.R. Nos. 124443-46, June6, 2002]. 67 Peoplev. Pantaleon, [G.R. No. 108107, June19, 1997]. 68 People v. Panis, [G.R. Nos. L-58674-77, July 11, 1986, 142 SCRA664]. 69 People v. Sendon, [G.R. Nos. 101579-89, December 15, 1993, 228SCRA489]. 70 People v. Laurel, [G.R. No. 120353, February 12, 1998]. 71 People v. Ballesteros, [G.R. Nos. 116905-908, August 6, 2002]. 72 Section 1 [d], Rules Implementing P.D. No. 1920, July 12, 1984. 73 People v. Bodozo, G.R. No. 96621. Oct. 21, 1992, 215 SCRA33. 74 2nd paragraph, Section 1, Rule V, Book II, POEARules and Regulations on Overseas Employment [May 21, 1985]. 75 People v. Taguba, G.R. Nos. 95207-17, Jan. 10, 1994, 229 SCRA188; People v. Sendon, G.R. Nos. L-101579-82, Dec. 15, 1993, 228SCRA489. 54 55 56



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A person who promised a job placement abroad to another, for a consideration, when he is not duly licensed 76 nor authorized to engage in recruitment, is criminally liable for illegal recruitment. 4. ANY PERSON, WHETHER A NON‐LICENSEE, NON‐HOLDER, LICENSEE OR HOLDER OF AUTHORITY MAY BE HELD LIABLE FOR ILLEGAL RECRUITMENT. a. Under R.A. No, 8042, license or authority of the illegal recruiter is immaterial. Under R.A. No. 8042, the crime of illegal recruitment may be committed by any person, whether a non‐ licensee, non‐holder, licensee or holder of authority . It is clear that under this law, in order to prove illegal recruitment, there is no need to establish whether the accused is a licensee or holder of authority or not because it is no longer an 77 element of the crime. b. Recruiter may be a natural or juridical person. Accused‐appellant in People v. Saulo, [G.R. No. 125903. November 15, 2000], contends that he could not have committed the crime of illegal recruitment in large scale since Nancy Avelino, a labor and employment officer at the POEA, testified that licenses for recruitment and placement are issued only to corporations and not to natural persons. Holding that this argument is specious and illogical, the Supreme Court ratiocinated that any person, whether natural or juridical, that engages in recruitment activities without the necessary license or authority shall be penalized under Art. 39 of the Labor Code

======================================== TOPIC UNDER THE SYLLABUS B. RECRUITMENT AND PLACEMENT 1. Recruitment of Local and Migrant Workers b. Illegal Recruitment (d) Illegal recruitment in large scale (e) Illegal recruitment as economic sabotage ======================================== 1. ILLEGAL RECRUITMENT, WHEN CONSIDERED ECONOMIC SABOTAGE.

Illegal recruitment is considered a crime involving economic sabotage when the commission thereof is attended by the following qualifying circumstances: 1. when committed by a syndicate; or 2. when committed in large scale. 2. ILLEGAL RECRUITMENT COMMITTED BY A SYNDICATE. a. When committed by a syndicate. Illegal recruitment is deemed committed by a syndicate if it is carried out by a group of three (3) or more persons conspiring or confederating with one another. b. Elements of illegal recruitment by a syndicate. The essential elements of the crime of illegal recruitment committed by a syndicate are as follows: 1. There are at least three (3) persons who, conspiring and/or confederating with one another, carried out any unlawful or illegal recruitment and placement activities as defined under Article 13 [b] or in any prohibited activities under Article 34 of the Labor Code; and 78 2. Said persons are not licensed or authorized to do so, either locally or overseas. The law, it must be noted, does not require that the syndicate should recruit more than one (1) person in order to constitute the crime of illegal recruitment by a syndicate. Recruitment of one (1) person would suffice to qualify the 79 illegal recruitment act as having been committed by a syndicate. 3. ILLEGAL RECRUITMENT IN LARGE SCALE. a. When committed in large scale. Illegal recruitment is deemed committed in large scale if committed against three (3) or more persons individually or as a group. b. Elements of illegal recruitment in large scale. The essential elements of illegal recruitment in large scale, as distinguished from simple illegal recruitment, are as follows: 1. The accused engages in the recruitment and placement of workers as defined under Article 13 [b] or in any prohibited activities under Article 34 of the Labor Code; 2. The accused has not complied with the guidelines issued by the Secretary of Labor and Employment, particularly with respect to the securing of license or an authority to recruit and deploy workers, either locally or overseas; and 3. The accused commits the same against three (3) or more persons, individually or as a group. People v. Alforte, G.R. Nos. 91711-15, March 3, 1993, 219 SCRA458. People v. Jimmy Ang, [G.R. No. 181245, August 06, 2008]; People v. Nogra, [G.R. No. 170834, August 29, 2008]; People v.Gasacao, [G.R. No. 168445, November 11, 2005]. Id.; Id.; Id.; Peoplev. Bodozo, G.R. No. 96621. Oct. 21, 1992, 215 SCRA33. 79 Peoplev. Hernandez, [G.R. Nos. 141221-36. March7, 2002]. 76 77 78



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c. Distinguished from illegal recruitment by a syndicate. As distinguished from illegal recruitment committed by a syndicate, illegal recruitment in large scale may be committed by only one (1) person. What is important as qualifying element is that there should be at least three (3) 80 victims of such illegal recruitment, individually or as a group. d. Some principles on illegal recruitment involving economic sabotage. 1. The number of persons victimized is determinative of the crime. A conviction for large scale illegal recruitment must be based on a finding in each case of illegal recruitment of three (3) or more persons 81 having been recruited, whether individually or as a group. 82 2. Failure to prove at least 3 persons recruited makes the crime a case of simple illegal recruitment. 83 3. No illegal recruitment in large scale based on several informations filed by only one complainant. 84 4. The number of offenders is not material in illegal recruitment in large scale. 85 5. Recruitment in large scale is malum prohibitum and not malum in se.

==================================== TOPIC UNDER THE SYLLABUS B. RECRUITMENT AND PLA CEMENT 1. Recruitment of Local and Migrant Workers b. Illegal Recruitment (f) Illegal Recruit ment vs . Estafa ==================================== 1. A PERSON, FOR THE SAME ACT, MAY BE CHARGED AND CONVICTED SEPARATELY FOR ILLEGAL RECRUITMENT AND ESTAFA. a. Conviction under the Labor Code does not preclude conviction under other laws. In cases where some other crimes or felonies are committed in the process of illegal recruitment, conviction 86 under the Labor Code does not preclude punishment under other statutes. Illegal recruitment is penalized under the 87 Labor Code which is a special law, and not under the Revised Penal Code. Not all acts which constitute the felony of estafa under the Revised Penal Code necessarily establish the crime of illegal recruitment under the Labor Code. Estafa 88 is wider in scope and covers deceits whether related or not related to recruitment activities. b. Some principles on illegal recruitment and estafa as separate crimes. 89 1. Same evidence to prove illegal recruitment may be used to prove estafa. 90 2. Conviction for both illegal recruitment and estafa, not double jeopardy.

==================================== TOPIC UNDER THE SYLLABUS B. RECRUITMENT AND PLA CEMENT 1. Recruitment of Local and Migrant Workers b. Illegal Recruitment (g) Liabilities (a) local employ ment agency (b) foreign employer i. Theory of imputed know ledge (h) Pretermination of con tract of mig rant worker c. Direct hir ing ==================================== 1. NATURE OF LIABILITY OF LOCAL RECRUITMENT AGENCY AND FOREIGN PRINCIPAL.

The nature of liability is as follows: 1. Local Agency is solidarily liable with foreign principal. 2. Severance of relations between local agent and foreign principal does not affect liability of local recruiter. 2. PERSONS CRIMINALLY LIABLE FOR ILLEGAL RECRUITMENT. a. Persons who may be criminally held liable for illegal recruitment.

People v. Bautista, G.R. No. 113547, Feb. 9, 1995, 241SCRA216; People v. Taguba, G.R. Nos. 95207-17, Jan. 10, 1994, 229SCRA188. People v. Honrada, G.R. Nos. 112178-79, April 21, 1995, 243 SCRA640; Peoplev. Reyes, G.R. No. 105204, March 9, 1995, 242 SCRA264. People v. Hu, [G.R. No. 182232, October 06, 2008]. 83 Peoplev. Hernandez, [G.R. Nos. 141221-36. March7, 2002]. 84 People v. Laurel, [G.R. No. 120353, February 12, 1998]. 85 People v. Enriquez, [G.R. No. 127159, May 5, 1999], cit ing People v. Reyes, [G.R. Nos. 104739-44, November 18, 1997, 282 SCRA105]. 86 People v. Turda, G.R. Nos. 97044-46, July 6, 1994, 233 SCRA702. 87 People v. Duque, G.R. No. 100285, Aug. 13, 1992, 212SCRA607. 88 People v. Turda, G.R. Nos. 97044-46, July 6, 1994, 233 SCRA702. 89 People v. Alzona, [G.R. No. 132029, July 30, 2004]. 90 Peoplev. Billaber, [G.R. Nos. 114967-68, January26, 2004]. 80 81 82



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The persons criminally liable for illegal recruitment are: 1. In case of natural persons a. Principals; b. Accomplices; and c. Accessories. 2. In case of juridical persons a. Officers having ownership, control, management or direction of their business who are responsible for the commission of the offense; and 91 b. Responsible employees/agents thereof. b. Some principles on the persons liable for illegal recruitment. 1. Employees of a licensed recruitment agency may be held liable for illegal recruitment as principal by direct participation, together with his employer, if it is shown that he actively and consciously participated in illegal 92 recruitment. 93 2. Good faith and merely following orders of superiors, not valid defense of an employee. 3. A manager of a recruitment/manning agency is not a mere employee. As such, he receives job applications, interviews applicants and informs them of the agency’s requirement of payment of performance or cash bond prior to the applicant’s deployment. As the crewing manager, he was at the forefront of the 94 company’s recruitment activities. 3. ADMINISTRATIVE LIABILITY OF LICENSEE OR HOLDER OF AUTHORITY, SEPARATE AND DISTINCT FROM THE CRIMINAL LIABILITY FOR ILLEGAL RECRUITMENT.

The institution of the criminal action is without prejudice to any administrative action against the licensee or 95 holder of authority cognizable by the POEA which could proceed independently of the criminal action. 4. THEORY OF IMPUTED KNOWLEDGE.

This theory refers to cognizance of a circumstance or fact attributed to a party because of its position, or its relationship with or responsibility for another party. The relationship of the local recruitment/manning agency vis‐a‐vis its foreign principal is that of agent‐ principal, the former being the agent and the latter, the principal. Consequently, the theory of imputed knowledge ascribes the knowledge of the agent to the principal but not the other way around. Thus, the violations of the terms and conditions of an extension contract, the execution thereof the recruiter did not know and did not consent to, shall not make said recruiter solidarily liable for the reason that knowledge by his principal of said contract cannot be imputed to him Sunace International Management Services, Inc. v. NLRC, [G.R. No. 161757, January 25, 2006]. The High Court has the opportunity to discuss the application of the theory of imputed knowledge in this case. Here, the OFW (Divina), a domestic helper in Taiwan, has extended her 12‐month contract after its expiration for two (2) more years after which she returned to the Philippines. It was established by evidence that the extension was without the knowledge of the local recruitment agency, petitioner Sunace. The Court of Appeals, however, affirmed the Labor Arbiter and NLRC’s finding that Sunace knew of and impliedly consented to the extension of Divina’s 2‐year contract. It went on to state that "It is undisputed that [Sunace] was continually communicating with [Divina’s] foreign employer." It thus concluded that "[a]s agent of the foreign principal, ‘petitioner cannot profess ignorance of such extension as obviously, the act of the principal extending complainant (sic) employment contract necessarily bound it.’ " In finding that the application of this theory of imputed knowledge was misplaced, the High Court ruled that the theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to the principal, employer Xiong, not the other way around. The knowledge of the principal‐foreign employer cannot, therefore, be imputed to its agent Sunace. There being no substantial proof that Sunace knew of and consented to be bound under the 2‐year employment contract extension, it cannot be said to be privy thereto. As such, it and its "owner" cannot be held solidarily liable for any of Divina’s claims arising from the 2‐year employment extension. As the New Civil Code provides: “Contracts take effect only between the parties, their assigns, and heirs, except in case where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by 96 provision of law.” Furthermore, as Sunace correctly points out, there was an implied revocation of its agency relationship with its foreign principal when, after the termination of the original employment contract, the foreign principal directly negotiated with Divina and entered into a new and separate employment contract in Taiwan. Article 1924 of the New Civil Code reading: “The agency is revoked if the principal directly manages the business entrusted to the agent, dealing directly with third persons” thus applies.

Section 6, R.A. No. 8042, as amended by Section5, R.A. No. 10022. Peoplev. Cabais, [G.R. No. 129070, March 16, 2001, 354 SCRA 553, 561]. People v. Gutierrez [G.R. No. 124439, February 5, 2004, 422 SCRA32, 43-44]. 94 People v.Gasacao, [G. R. No. 168445, November 11, 2005]. 95 Section 12, Republic Act No. 8042; Section 12, Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995 dated Feb. 29, 1996; Section 2, Rule I, Part V, POEARules and Regulations Governing the Recruit ment and Employment of Seafarers, May 23, 2003. 96 See also Rovels Enterprises, Inc. v. Ocampo, [G.R. No. 136821, October 17, 2002, 391 SCRA 176]. 91 92 93



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As defined, a “principal” refers to an employer or foreign placement agency hiring or engaging Filipino 97 workers for overseas employment through a licensed private recruitment/manning agency. It bears stressing that the nature of the liability of the local recruitment/manning agency and its principal is “joint and several.” This holds true for any and all claims arising out of the implementation of the employment contract involving Filipino workers for overseas deployment. If the recruitment/manning agency is a juridical being, the corporate officers and directors and partners, as the case may be, shall themselves be jointly and severally 98 liable with the corporation or partnership for the aforesaid claims and damages. 5. PRETERMINATION OF CONTRACT OF MIGRANT WORKERS. a. Termination of employment of OFWs. Termination of employment may mean any of the following: 1. The worker has requested for an early termination of employment; 2. The worker and employer mutually agreed on an early termination of employment; 3. The contract of employment has expired; 4. The worker has been discharged for just cause or disciplinary reasons; 5. the employer terminated the worker’s employment; 6. The worker suffered injury or illness; or 7. The worker has died. Whichever ground, the migrant worker has the right to insist that he be repatriated to the Philippines. The only exception is when the migrant worker is charged for certain crimes or charges in foreign courts and thus may not be allowed to go home until the case is terminated in his/her favor. b. Effect of unauthorized substitution or alteration of POEA‐approved employment contract. R.A. No. 8042 explicitly prohibits the substitution or alteration to the prejudice of the worker, of employment contracts already approved and verified by the POEA from the time of actual signing thereof by the parties up to and 99 including the period of their expiration without the approval of the POEA. Consequently, it was held in Chavez v. Bonto‐Perez, [G.R. No. 109808, March 1, 1995, 242 SCRA 73, 82; 312 Phil. 88], that the subsequently executed side agreement of an overseas contract worker with her foreign employer which reduced her salary below the amount approved by the POEA is void because it is against our existing laws, morals and public policy. The said side agreement cannot supersede her standard employment contract approved by the POEA. Following the same rule, the unauthorized alteration in the employment contract of the OFW in the case of Placewell International Services Corp. v. Camote, [G.R. No. 169973, June 26, 2006], particularly the diminution in his salary from US$370.00 to SR800.00 per month, was declared void for violating the POEA‐approved contract which set the minimum standards, terms, and conditions of his employment. Thus, the original POEA‐approved employment contract of the OFW subsists despite the so‐called new agreement with the foreign employer at the Kingdom of Saudi Arabia, to which he was deployed by petitioner. Consequently, the solidary liability of petitioner with the foreign employer for the OFW’s money claims continues in accordance with Section 10 of R.A. No. 8042. c. Repatriation When a Seafarer Requests for Early Termination. A seafarer who requests for early termination of his contract shall be liable for his repatriation cost as well 100 as the transportation cost of his replacement. 6. DIRECT HIRING. “Direct Hiring” refers to the process of directly hiring workers by employers for overseas employment as authorized by the DOLE Secretary and processed by the POEA, including: 1. Those hired by international organizations 2. Those hired by members of the diplomatic corps. 3. Name hires or workers who are able to secure overseas employment opportunity with an employer 101 without the assistance or participation of any agency.

97

Section 1[oo], Rule II, Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995, As Amended by R. A. No. 10022 (March 08, 2010) Section 1[s], Rule II, Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995, As Amended by R. A. No. 10022 (March 08, 2010). See Sec. 6[i], R.A. No. 8042. 100 Section 19.G, Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels. 101 Section 1[i], Rule II, Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995, As Amended by R. A. No. 10022 (March 08, 2010). 98 99



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======================================== TOPIC UNDER THE SYLLABUS B. RECRUITMENT AND PLACEMENT

2. Regulation and Enfor cement a. Remittance of for eign exchange earnin gs b. Prohibited activities c. Regulatory and visi torial powers of the Labor Secretary d. Penalties for illegal recruitment ======================================== 1. REMITTANCE OF FOREIGN EXCHANGE EARNINGS. a. Remittance of foreign exchange earnings is mandatory. It shall be mandatory for all Filipino workers abroad to remit a portion of their foreign exchange earnings to their families, dependents, and/or beneficiaries in the country in accordance with rules and regulations prescribed by the 102 Secretary of Labor. b. Reason why obligation is mandatory. Remittance to the Philippines of foreign exchange earnings of Filipino workers abroad is necessary to protect the welfare of their families, dependents and beneficiaries and to ensure that their foreign exchange earnings are remitted through authorized financial institutions of the Philippine government in line with the country’s economic development program. Non‐compliance with the laws and regulations on remittance of foreign exchange earnings and recourse to the use of unauthorized and unofficial financing institutions had led to the detriment of the country’s balance of payments and economic development program. Consequently, it is imperative that the mandatory remittance requirement be fully complied with by all concerned through the institution of appropriate remittance 103 facilities and the imposition of effective sanctions. c. Coverage. This mandatory requirement applies to every contract worker and seamen recruited and placed in overseas 104 employment. They also apply to licensed agencies and authority holders. d. Mandatory obligation to remit. It is mandatory for a worker or seaman to remit regularly a portion of his foreign exchange earnings abroad to 105 his beneficiary through the Philippine banking system. The obligation to remit is required to be stipulated in the following documents: (1) Contract of employment and/or service between a foreign‐based employer and a worker; (2) Affidavit of undertaking whereby a worker obligates himself to remit a portion of his earnings to his beneficiaries; (3) Application for a license or authority to recruit workers; (4) Recruitment agreement and/or service contract between a licensed agency or authority holder and its foreign employer or principal; and 106 (5) Application for accreditation of a principal or project. e. Amount of foreign exchange remittances. The percentage of foreign remittance shall be as follows: 1. Seamen and mariners: Eighty percent (80%) of the basic salary ; 2. Workers of Filipino contractors and construction companies: Seventy percent (70%) of the basic salary ; 3. Doctors, engineers, teachers, nurses and other professional workers whose employment contracts provide for free board and lodging facilities: Seventy percent (70%) of the basic salary ; 4. All other professionals whose employment contracts do not provide free board and lodging facilities: Fifty percent (50%) of the basic salary ; 5. Domestic and other service workers: Fifty percent (50%) of the basic salary ; 6. All other workers not falling under the afore‐mentioned categories: Fifty percent (50%) of the basic 107 salary. 7. Performing artists overseas are required to remit at least fifty percent (50%) of their monthly salary to 108 the Philippines. f. Form of remittance. Remittance of foreign exchange may be done individually by a worker or collectively through an employer 109 under a payroll deduction scheme, to be approved by the Department of Labor and Employment.

Article22,LaborCode. “Whereas” clauses, ExecutiveOrder No. 857; Section 1, RuleII, Rules andRegulations ImplementingExecutiveOrder No. 857. Section1, Rule XIII, Book I, Rules toImplement theLabor Code. 105 Section2, Rule XIII, Book I, Rules toImplement theLabor Code; Section 1, ExecutiveOrder No. 857; Section 2, Rule III, Rules andRegulations ImplementingExecutiveOrder No. 857. 106 Section2, Rule XIII, Book I, Rules toImplement theLabor Code. 107 Section 2, Executive Order No. 857 [Section 2 (a) was amended by Executive Order No. 925, issued on Nov. 22, 1983 and became effective on Jan. 1, 1984]; Section 4, Rules and Regulations Implementing Executive Order No. 857; Section 3, Rule VIII, Book VIII, POEARules and RegulationsGoverningOverseasEmployment, asamendedin1991. 108 SectionB [7],DOLEOrderNo.35,Seriesof1994. 109 Section4, Rule XIII, Book I, Rules to Implement theLabor Code; Section 6, ExecutiveOrder No. 857. 102 103 104



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g. Procedure of remittance. (a) The worker, prior to departure, is required to open a deposit account for his mandatory remittance in favor of his beneficiary in any Philippine bank. A foreign currency account may also be opened by the worker to be funded by savings in excess of the mandatory remittance. The applicant should inform the POEA of his deposit account number. (b) In the case of seamen, construction workers and other organized work crews involving at least twenty five (25) workers, the foreign currency/peso account should be opened by the employee with any Philippine bank upon the signing of the employment contract. The account shall be accompanied by a covering letter of nomination of beneficiaries and the date of payment of the allotment to the beneficiaries as may be stipulated by the employee and the licensed agency, manning agency or construction contractor. (c) At the end of every period as may be stipulated in the notice as payment, the licensed agency, construction contractor or manning agent shall prepare a payroll sheet indicating the names of the workers covered by the scheme, their beneficiaries, their individual bank account numbers, the amount of foreign currency remitted and the peso equivalent thereof. This payroll sheet, together with the peso check representing the remittance, shall be forwarded to the bank concerned with instructions to credit the account of the worker or beneficiaries. A copy of the payroll sheet shall be furnished the POEA on a monthly basis. (d) No local agent or representative shall pay directly the beneficiaries of the worker. The agent or representative shall submit to the POEA copies of the reports which the bank may require him to submit and payroll sheets on or before the end of the succeeding month of the payroll period together with the bank credit advice 110 evidencing remittance of foreign exchange. h. Failure or refusal to remit and trafficking in foreign currency. A licensed agency, authority holder, or manning agent or a worker who wilfully fails or refuses to remit the assigned portion of his foreign exchange earnings or is found to have engaged or is engaging in the illegal traffic or 111 blackmarket of foreign exchange, shall be liable under the Labor Code and existing Central Bank rules. i. Responsibility of employer or his representative. The employer or his representative shall undertake the proper implementation of the relevant provisions of the Rules to Implement the Labor Code by providing facilities to effect the remittance and monitoring of foreign exchange earnings. Failure to do so shall be subject to appropriate sanctions specified in the Labor Code and Central Bank 112 regulations. j. Obligation to report. Agencies shall submit periodic reports to the Central Bank of the Philippines (now Bangko Sentral ng Pilipinas) 113 on their foreign exchange earnings, copies of which shall be furnished the POEA. k. Non‐compliance with the mandatory remittance requirement; effect on issuance, renewal and extension of passport. Under Executive Order No. 857 [December 13, 1982] as well as its Implementing Rules, it is declared that no passport shall be issued, renewed or extended by the Department of Foreign Affairs unless proof of applicant’s substantial compliance with the mandatory remittance requirement in the percentages provided under the law, is 114 submitted. Passports issued to Filipino contract workers shall have an initial period of validity of one (1) year. The 115 Department of Foreign Affairs may, however, adjust, as circumstances may require, the initial passport validity period. The passport shall be renewable every year upon submission of usual requirements and presentation of 116 documentary proof of compliance to the remittance requirement. l. “Substantial compliance,” explained. The Inter ‐ Agency Committee of the Central Bank Ministry (now Department) of Labor and Ministry (now Department) of Foreign Affairs for the Implementation of Executive Order No. 857 , in its Resolution No. 1‐83 passed on February 9, 1983, clarified the foregoing effect of non‐compliance with the mandatory remittance requirement on the issuance, renewal and extension of passport. Said Committee declared that in accordance with the normal duration of contracts of employment and taking into account the provisions of both Executive Orders Nos. 855 and 857 mandating the Department of Foreign Affairs to adjust, as circumstances may require, the initial validity period, passports issued to contract workers shall be valid for two (2) years, renewable for another two (2) years, subject to compliance with the mandatory remittance requirement. Clarifying the definition of the phrase “substantial compliance,” the Committee declared that, as a general rule, compliance with the percentages of mandatory remittance defined in Section 2 of Executive Order No. 857 shall be required. However, during the initial period of the implementation of the Executive Order which is from February 1, 1983, consular officers may renew old passports or issue new passports and officials of the Ministry (now Department) of Labor and Employment may renew employment contracts if the contract workers concerned are able to submit proof of “substantial compliance” with the mandatory remittance requirements.

Section5, Rule XIII, Book I, Rules to Implement theLabor Code. Section8, Rule XIII, Book I, Rules to Implement theLabor Code. Section7, Rule XIII, Book I, Rules to Implement theLabor Code; Section 6, ExecutiveOrder No. 857; Section 1, Rule V, Rules and Regulations ImplementingExecutiveOrder No. 857. 113 Section2, Rule VIII, Book VIII, POEARules andRegulations Governing Overseas Employment, as amendedin 1991; Section3, Rule III, Rules andRegulations ImplementingExecutiveOrder No. 857. 114 Section3, ExecutiveOrder No. 857; Section1, Rule IV, Rulesand Regulations ImplementingExecutiveOrder No. 857. 115 Section3, ExecutiveOrder No. 857; Section2, Rule IV, Rulesand Regulations ImplementingExecutiveOrder No. 857. 116 Section3, ExecutiveOrder No. 857; Section3, Rule IV, Rulesand Regulations ImplementingExecutiveOrder No. 857. 110 111 112



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A contract worker shall be deemed to have substantially complied with the mandatory requirement if, at the time he applies for renewal of passport or renewal of his employment contract during the period cited above, he can show proof that he has remitted and sold for pesos at least one‐half (1/2) of the amount of foreign exchange corresponding to the mandatory remittance required of him. The requirement to remit on a monthly basis need not be strictly applied during the initial period of implementation provided that the amount remitted and sold for pesos through authorized financing institutions shall at least be equal to one‐half of the amount corresponding to the mandatory percentage requirement defined under the Executive Order. For example, if the salary of a contract worker is US$200 a month or US$2,400 a year, such worker is required to remit 50% thereof or US$1,200 annually under Executive Order No. 857. Pursuant to the substantial compliance formula, a contract worker needs only to show proof that he has at least remitted and sold for pesos 50% of US$1,200 thereof or US$600.00 a year. The “substantial compliance” as defined, applies to contract workers remitting on an individual basis. It does not apply to those contract workers already remitting or who will be remitting under the payroll system, or on a monthly 117 basis. m. Non‐compliance with the mandatory remittance requirement; effect on accreditation of employer, issuance of license or authority and approval/renewal of contracts of employment. No accreditation shall be issued to an employer, and no license or authority shall be granted to an agency or entity by the Department of Labor and Employment unless they submit proof that they have provided facilities to effect 118 the remittance of foreign exchange earnings of Filipino workers under their employ. No contracts of employment and/or service agreement shall be approved or renewed by the Department of 119 Labor and Employment unless proof of compliance with the mandatory remittance requirement is submitted. A contract worker who fails to comply with the mandatory remittance requirement shall be suspended or excluded from the list of eligible workers for overseas employment and in case of subsequent violations, he shall be 120 repatriated at his own expense or at the expense of his employer, as the case may be. Filipino or foreign employers and/or their representatives who fail to comply with the law shall be excluded 121 from the overseas employment program. In the case of local private employment agencies and other similar entities, their failure to comply with the mandatory remittance requirement shall be a ground for cancellation of their authority to recruit workers for overseas 122 employment without prejudice to their liabilities under existing laws and regulations. n. Conflict in mandatory remittance requirement and host country’s regulations on the matter. Should there be conflict in complying with the mandatory remittance requirement in view of the host country’s 123 regulations on the matter, the percentages of remittance shall be, within allowable limits, set down by local laws. o. Beneficiaries living with contract workers abroad. A contract worker whose immediate family members, dependents or beneficiaries are residing with him abroad, is not compelled to comply with the mandatory remittance requirement except if the dependents themselves are contract workers, subject to verification of his family status by the Ministries (now Departments) of Foreign Affairs and/or Labor and Employment. He should be encouraged, nevertheless, to remit a portion of his foreign earnings to the 124 Philippines. p. Punitive provisions of Executive Order No. 857, repealed. Executive Order No. 1021 [On Encouraging the Inward Remittances of Contract Workers Earnings Through Official Channels] issued on May 1, 1985 by President Ferdinand E. Marcos, repealed the punitive provisions of Executive Order No. 857. q. Role of embassy as channel for remittance. The role of the Embassy as defined in Section 7 of Rule III of the Implementing Rules of Executive Order No. 857 is only temporary, in the absence of banking facilities in the jobsite and pending the establishment of appropriate arrangements by the Central Bank (now Bangko Sentral ng Pilipinas). In exercising this function, the Embassy shall abide 125 by customary local laws and regulations of the host country. r. Remittances of contract workers, not deemed personal deductions for income taxation purposes. Obligations of contract workers to remit portions of their foreign exchange earnings under Executive Order No. 126 857 are separate and distinct from the personal deductions defined under gross income taxation laws.

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ItemI [Guideli nes], Resolution No. 1-83 dated Feb. 9, 1983issued bythe Inter-Agency Committeeof the Central Bank, Ministry of Labor and Ministry of Foreign Affairs for the Implementation of Executive Order No. 857. Section4, ExecutiveOrder No. 857; Section 1, Rule V, Rules and Regulations Implementing Executive Order No. 857. Section4, Ibid.; Section2, RuleV, Ibid.. 120 Section9, Ibid.; Section3, RuleV, Ibid.. 121 Section9, Ibid.; Section4, RuleV, Ibid.. 122 Section9, Ibid.; Section5, RuleV, Ibid.. 123 ItemI [Guidelines], [1.5], Resolution No. 1-83 datedFeb. 9, 1983issued bytheInter-AgencyCommitteeof the Central Bank, Ministry of Labor andMinistry of ForeignAffairs for the Implementation of ExecutiveOrder No. 857. 124 ItemI [Guidelines], [1.6], Resolution No. 1-83 datedFeb. 9, 1983, Ibid.. 125 ItemI [Guidelines], [1.7], Resolution No. 1-83 datedFeb. 9, 1983, Ibid.. 126 ItemI [Guidelines], [1.8], Resolution No. 1-83 datedFeb. 9,1983,Ibid.. 118 119



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2. PROHIBITED ACTIVITIES.

Besides illegal recruitment, Section 6 of R.A. No. 8042, as amended by Section 5 of R.A. No. 10022 (March 8, 2010), additionally provides that it shall also be unlawful for any person or entity to commit the following prohibited acts: (1) Grant a loan to an overseas Filipino worker with interest exceeding eight percent (8%) per annum, which will be used for payment of legal and allowable placement fees and make the migrant worker issue, either personally or through a guarantor or accommodation party, postdated checks in relation to the said loan; (2) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to avail of a loan only from specifically designated institutions, entities or persons; (3) Refuse to condone or renegotiate a loan incurred by an overseas Filipino worker after the latter's employment contract has been prematurely terminated through no fault of his or her own; (4) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to undergo health examinations only from specifically designated medical clinics, institutions, entities or persons, except in the case of a seafarer whose medical examination cost is shouldered by the principal/shipowner; (5) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to undergo training, seminar, instruction or schooling of any kind only from specifically designated institutions, entities or persons, except for recommendatory trainings mandated by principals/shipowners where the latter shoulder the cost of such trainings; (6) For a suspended recruitment/manning agency to engage in any kind of recruitment activity including the processing of pending workers' applications; and (7) For a recruitment/manning agency or a foreign principal/employer to pass on the overseas Filipino worker or deduct from his or her salary the payment of the cost of insurance fees, premium or other insurance related charges, as provided under the compulsory worker's insurance coverage. 3. REGULATORY AND VISITORIAL POWERS OF THE LABOR SECRETARY. a. 2 separate provisions in the Labor Code. As far as recruitment and placement of workers for local and overseas employment are concerned, the Labor Code contains two (2) separate provisions on the regulatory and visitorial powers of the DOLE Secretary, namely: 1. Article 36 ‐ Regulatory Power; and 2. Article 37 – Visitorial Power. 3.1. REGULATORY POWER. Article 36. Regulatory Power. – The Secretary of Labor shall have the power to restrict and regulate the recruitment and placement activities of all agencies within the coverage of this Title and is hereby authorized to issue orders and promulgate rules and regulations to carry out the objectives and implement the provisions of this Title. a. Nature of regulatory power. The power to regulate and restrict the recruitment and placement activities of all agencies conferred by Article 127 36 to the Secretary of Labor and Employment is a valid grant of police power. Being regulatory, the DOLE Secretary may validly issue rules and regulations restricting or otherwise regulating the recruitment and placement activities of persons and entities engaged in the recruitment and placement of workers locally or overseas. b. Exercise of the regulatory power. Pursuant to Article 36 and in accordance with other pertinent and related provisions of the Labor Code, the DOLE Secretary has issued several implementing rules, guidelines and regulations such as, among others, the following: 1. Rules and Regulations Governing Private Recruitment and Placement Agencies for Local Employment issued by Secretary Ruben D. Torres on April 4, 1991; 2. Rules and Regulations Governing Overseas Employment issued by Secretary Ruben D. Torres on May 31, 1991; and 3. Policy Instructions such as Policy Instructions No. 22, Series of 1977 [Guidelines Governing the Employment of Construction Workers Overseas by April 1, 1977] and its Implementing Rules and Regulations; Policy Instructions No. 34, Series of 1978 [Omnibus Instructions Governing the Deployment of Construction Workers Overseas]; and Policy Instructions No. 45, Series of 1981 [Directing the OEDB to Monitor, Develop and Administer the Hiring and Employment of Filipinos in Foreign Households]; 4. Circulars such as Circular No. 01‐91 issued by Secretary Ruben D. Torres on November 20, 1991 prescribing additional requirements, conditions and procedures for the deployment of performing artists;

Philippine Association of ServiceExporters, Inc. v. Torres, G.R. No. 101279, Aug. 6, 1992, 212SCRA298.

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5. DOLE Order No. 35, Series of 1994, issued on October 14, 1994 by Secretary Ma. Nieves Confesor regarding the Comprehensive Welfare Program for Artists Overseas. 6. POEA Rules and Regulations Governing the Recruitment and Employment of Land ‐Based Overseas Workers issued on February 4, 2002. 7. POEA Rules and Regulations Governing the Recruitment and Employment of Seafarers issued on May 23, 2003. 3.2. VISITORIAL POWER. Article 37. Visitorial Power. – The Secretary of Labor or his duly authorized representatives may, at any time, inspect the premises, books of accounts and records of any person or entity covered by this Title, require it to submit reports regularly on prescribed forms, and act on violation of any provisions of this Title. a. Distinctions of the visitorial powers of the DOLE Secretary under Articles 27 and 128 of the Labor Code. The visitorial power of the DOLE Secretary or his duly authorized representatives described in Article 37 of the Labor Code should be distinguished from the other visitorial powers granted to him by other provisions of the Labor Code such as the ones provided for under Article 128 and Article 274 thereof. Here, the visitorial power pertains to the inspection of the premises, books of accounts and records of persons and entities engaged in the recruitment and placement of workers for local or overseas employment. It also includes the power to require the submission of reports regularly on certain prescribed forms and to act on any violation of Title I, 128 Book I of the Labor Code. The visitorial and enforcement power of the DOLE Secretary or his duly authorized representatives, including labor regulation officers, treated in Article 128 pertains to the inspection of premises, books of accounts and records of employers to determine violations of the Labor Code or which may aid in the enforcement thereof and of any labor laws, 129 wage orders or rules and regulations issued pursuant thereto. Article 274 dwells on the visitorial power of the DOLE Secretary to inquire into the financial activities of legitimate labor organizations. b. Effect of obstruction of exercise of visitorial power. The act of any person, whether a non‐licensee, non‐holder, licensee or holder of authority, in obstructing or attempting to obstruct inspection by the DOLE Secretary or by his duly authorized representative under Article 37 of the 130 Labor Code is one of the prohibited practices and unlawful acts which constitutes “illegal recruitment.” Also constitutive of illegal recruitment is the act of furnishing or publishing any false notice or information or document in relation to recruitment or employment; or giving any false notice, testimony, information or document; or committing any act of misrepresentation for the purpose of securing a license or authority under the Labor Code; or failing to submit reports on the status of employment, placement vacancies, remittance of foreign exchange earnings, separation from jobs, departures and such other matters or information as may be required by the Secretary of Labor 131 and Employment. 4. PENALTIES FOR ILLEGAL RECRUITMENT. a. Penalties for illegal recruitment separate and distinct from penalties for commission of prohibited acts. Republic Act No. 8042, as amended by R.A. No. 10022, provides separate penalties for illegal recruitment and commission of prohibited acts.

The penalties for illegal recruitment are as follows: (a) Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of not less than twelve (12) years and one (1) day but not more than twenty (20) years and a fine of not less than One million pesos (P1,000,000.00) nor more than Two million pesos (P2,000,000.00). (b) The penalty of life imprisonment and a fine of not less than Two million pesos (P2,000,000.00) nor more than Five million pesos (P5,000,000.00) shall be imposed if illegal recruitment constitutes economic sabotage ; Provided, however, That the maximum penalty shall be imposed if the person illegally recruited is less than eighteen (18) years of age or committed by a non‐licensee or non‐ holder of authority. The penalties for commission of prohibited acts are as follows: (a) Any person found guilty of any of the prohibited acts shall suffer the penalty of imprisonment of not less than six (6) years and one (1) day but not more than twelve (12) years and a fine of not less than Five hundred thousand pesos (P500,000.00) nor more than One million pesos (P1,000,000.00). If the offender is an alien, he or she shall, in addition to the penalties above, be deported without further 132 proceedings.

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Article 37,LaborCode. Article 128, Labor Code; SanJose v. NLRC, G.R. No. 121227, Aug. 17, 1998. See Article 34[g], Labor Code; Section 6, Republic Act No. 8042; Section 9 [VI], Omnibus Rules and Regulations Implementing the Migrant Workers andOverseas Fili pinos Act of 1995dated Feb. 29, 1996. 131 See Article 34, Labor Code; Section 6, Republic Act No. 8042; Section 9 [VI], Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995 dated Feb. 29, 1996. 132 Section 7, R.A. No. 8042, as amended by Section6, R.A. No. 10022; Article 39 [d], Labor Code. 129 130



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In every case, conviction shall cause and carry the automatic revocation of the license or registration of 133 the recruitment/manning agency, lending institutions, training school or medical clinic.

END OF DISCUSSION ON TOPIC B. RECRUITMENT AND PLACEMENT

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Section 7, R.A. No. 8042, as amended by Section6, R.A. No. 10022.

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Recruitment and Placement

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