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B. Regulation of recruitment and placement activities

1. Regulatory authorities

a. Philippine Overseas Employment Administration

1) Regulation of private sector

The POEA shall regulate private sector participation in the recruitment and overseas placement of workers by setting up a licensing and registration system. It shall also formulate and implement, in coordination with appropriate entities concerned, when necessary, a system for promoting and monitoring the overseas employment of Filipino workers taking into consideration their welfare and the domestic manpower requirements. It shall be responsible for the regulation and management of overseas employment from the pre-employment stage, securing the best possible employment terms and conditions for overseas Filipino workers, and taking into consideration the needs of vulnerable sectors and the peculiarities of sea-based and land-based workers. (Section 4, Part A, Rule X, Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995, as amended)

b. Regulatory and visitorial powers of the Department of Labor and Employment Secretary

1) Labor Code provisions

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 [Title I – Recruitment and Placement of Workers, Book One – Pre-Employment] and is hereby authorized to issue orders and promulgate rules and regulations to carry out the objectives and implement the provisions of this Title. (Article 36, Labor Code)

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. (Article 37, Ibid.)

2. Ban on direct hiring

a. General rule: Ban on direct-hiring

No employer may hire a Filipino worker for overseas employment except through the Boards and entities authorized by the Secretary of Labor. Direct-hiring by members of the diplomatic corps, international organizations and such other employers as may be allowed by the Secretary of Labor is exempted from this provision. (Article 18, Ibid.)

b. Exception: Those exempted from the direct hire ban

1) Members of Diplomatic Corps

2) International Organizations

3) Heads of State and Government Officials w/ rank of at least deputy minister

4) Other employers allowed by the POEA*

*These include: (a) those lesser rank in Nos. 1, 2, and 3, if endorsed by the POLO, or Head of Mission in the absence of POLO; (b) professionals and skilled workers w/ duly executed/authenticated contracts w/ terms above POEA standards (limitation: 5 OFWs only for first-time hire by employer; workers hired as a group is counted as 1); and (c) workers hired by a relative/family member who is a permanent resident of the host country. (Section 124, Revised POEA Rules and Regulations Governing the Recruitment and Employment of Landbased Overseas Filipino Workers of 2016)

3. Entities prohibited from recruiting

a. Disqualified from recruitment and placement of workers

1) Travel agencies and sales agencies of airline companies;

2) Officers or members of the Board of any corporation or partners in a partnership engaged in the business of a travel agency;

3) Corporations and partnerships, where 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;

4) Individuals, partners, officers or directors of an insurance company who make, propose or provide an insurance contract under the compulsory insurance coverage for agency-hired OFWs;

5) Sole proprietors, partners or officers and members of the board with derogatory records, such as, but not limited to the following:

a) Those convicted, or against whom probable cause or prima facie finding of guilt is determined by a competent authority, for illegal recruitment, or for other related crimes or offenses committed in the course of, related to, or resulting from, illegal recruitment, or for crimes involving moral turpitude;

b) Those agencies whose licenses have been revoked for violation of RA 8042 (Migrant Workers and Overseas Filipinos Act of 1995), as amended, PD 442 (Labor Code of the Philippines), as amended, and RA 9208 (Trafficking in Persons Act of 2003), as amended, and their implementing rules and regulations;

c) Those agencies whose licenses have been cancelled, or those who, pursuant to the Order of the Administrator, were included in the list of persons with derogatory record for violation of recruitment laws and regulations;

6) Any official or employee of the DOLE, POEA, OWWA, DFA, DOJ, DOH, BI, IC, NLRC, TESDA, CFO, NBI, PNP, CAAP, international airport authorities, and other government agencies directly involved in the implementation of RA 8042, as amended, and/or any of his/her relatives within the fourth civil degree of consanguinity or affinity. (Section 3, Ibid.)

4. Suspension or cancellation of license or authority

a. Action on the Complaint/Report

Where the complaint/report alleges that illegal recruitment activities are ongoing, surveillance shall be undertaken at the premises where the alleged illegal recruitment activities are conducted. If illegal recruitment activities are confirmed, the POEA Director of the Licensing and Regulation Office (LRO) shall recommend to the POEA Administrator the institution of criminal action and/or the issuance of a closure order or order of preventive suspension. (Section 9, Rule VI, Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995, as amended)

b. Imposition of Administrative Penalty

For pre-employment/recruitment violation cases, the Administrator, in the exercise of adjudicatory power, may impose the penalty of reprimand, suspension, or cancellation or revocation of license. (Section 10, Rule X, Ibid.)

Where the penalty of suspension is imposed, the Administrator shall, in appropriate cases, allow the lifting of suspension of erring recruitment/manning agencies upon the payment of fine of Fifty Thousand Pesos (Php50,000.00) for every month of suspension. (Paragraph 2, Section 10, Rule X, Ibid.)

For disciplinary action cases against employers, the Administrator may impose disqualification from the overseas employment program. For disciplinary action cases against workers, the Administrator may likewise impose suspension or disqualification. (Paragraph 3, Section 10, Rule X, Ibid.)

5. Prohibited practices

a. Prohibited acts, unlawful for any person or entity to commit

In addition to the acts enumerated above, it shall also be unlawful for any person or entity to commit the following prohibited acts:

1) Grant a loan to an OFW with interest exceeding eight (8%) percent 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 OFW 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 OFW after the latter’s employment contract has been prematurely terminated through no fault of his/her own;

4) Impose a compulsory and exclusive arrangement whereby an OFW 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 OFW is required to undergo training, seminar, instruction or schooling of any kind only from specifically designated institutions, entities or persons, except for recommendatory training 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;

7) For a recruitment/manning agency or a foreign principal/employer to pass-on to the OFW or deduct from his/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. (Rule IV, Section 3, Ibid.; See also Section 6, R.A. 8042)

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