A. Recruitment and placement (Labor Code and R. A. No. 8042, as amended by R.A. No. 10022)

Atty. Jericho Del Puerto

Atty. Jericho Del Puerto

Lawyer, Author, Mentor

Frequency: ★★★★☆

1. Illegal recruitment and other prohibited activities

a. Elements

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

2) That he undertakes either any activity within the meaning of “recruitment and placement” defined under Article 13 (b), or any prohibited practices enumerated under Article 34 of the Labor Code (now Section 6, R.A. 8042, as amended). (Lapasaran v. People, G.R. No. 179907, 12 February 2009)

NB: Since there is no direct definition of recruitment and placement under the law and regulations, the terms are defined within the context of illegal recruitment. Otherwise stated, the acts constituting illegal recruitment are the same acts constituting recruitment and placement when done lawfully.

1) The 2 Kinds of Illegal Recruiter:

1) Non-licensee / Non-holder of authority – those who commit illegal recruitment, wrongful, and prohibited acts; and/or,

2) Licensed recruiter / Holder of authority – those who commit any of the 14 wrongful acts (Ibid.)

a) By non-licensee/non-holder of authority

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. (Section 6, R.A. 8042, as amended)

b) By non-licensee/non-holder or licensee/holder of authority

Illegal recruitment shall likewise include the following acts, whether committed by any person, whether a non-licensee, non-holder, licensee or holder of authority:

1) 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;

2) To furnish or publish any false notice or information or document in relation to recruitment or employment;

3) 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 non-existent work, work different from the actual overseas work, or work with a different employer whether registered or not with the POEA;

4) To induce 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;

5) 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;

6) 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;

7) To obstruct or attempt to obstruct inspection by the Secretary of Labor and Employment or by his duly authorized representative;

8) 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;

9) 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;

10) 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 a travel agency;

11) 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;

12) Failure to actually deploy a contracted worker without valid reason as determined by the Department of Labor and Employment;

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

14) To allow a non-Filipino citizen to head or manage a licensed recruitment/manning agency. (Section 1, Rule IV, Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995, as amended; See also Section 6, R.A. 8042)

2) Aggravating circumstances

a) Committed by a syndicate

Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring or confederating with one another. (Paragraph 2, Section 6, R.A. 8042, as amended)

b) Committed in a large scale

Illegal recruitment is deemed committed in large scale if committed against three (3) or more persons individually or as a group. (Ibid.)

3) Distinct impression, sufficient

Illegal recruitment may be committed by offender who makes a distinct impression that she had the power or ability to send one abroad for work, such that the latter was convinced to part with his money in order to be employed. To be engaged in the practice of recruitment and placement, it is plain that there must, at least, be a promise or an offer of employment from the person posing as a recruiter whether locally or abroad. (Ibid.)

b. Types of illegal recruitment

1) Simple

2) By a Syndicate (at least 3 offenders)

3) Large-Scale (at least 3 victims) (Ibid.)

c. Illegal recruitment vs. estafa

FactorsIllegal RecruitmentEstafa
a. Criminal intentNot necessary – since it is a special crimeNecessary – since it is a felony under the Revised Penal Code
b. DamageNot essentialEssential
c. Not mutually exclusiveBoth crimes may be applicable in the same case. Conviction in one does not preclude the other.Same
d. Legal basisLabor CodeRevised Penal Code

2. Liability of local recruitment agency and foreign employer

a. Solidary liability

The liability of the principal/employer and the recruitment/placement agency for any and all claims under this section shall be joint and several.  (Section 10, Rule I, Book III of the Rules and Regulations Governing Overseas Employment)

Joint and solidary liability is meant to assure aggrieved workers of immediate and sufficient payment of what is due them. The fact that petitioner and its principal have already terminated their agency agreement does not relieve the former of its liability. (Pentagon International Shipping Services, Inc. v. CA, Madrio, G.R. No. 169158, 01 July 2015)

a. Incorporated in the overseas employment contract

This provision [on solidary liability] shall be incorporated in the contract for overseas employment. (Section 10, Rule I, Book III of the Rules and Regulations Governing Overseas Employment)

b. Condition precedent for approval

This provision on solidary liability is a condition precedent for its approval. (Ibid.)

c. Performance bond: money claims or damages

The performance bond to be filed by the recruitment/placement agency, as provided by law, shall be answerable for all money claims or damages that may be awarded to the workers. (Ibid.)

d. If agency is a juridical entity: corporate officers and directors are solidarily liable

If the recruitment/placement agency is a juridical being, the corporate officers and directors and partners as the case may be, shall themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid claims and damages. (Ibid.)

e. Continuing liability for duration of employment contract

Such liabilities shall continue during the entire period or duration of the employment contract and shall not be affected by any substitution, amendment or modification made locally or in a foreign country of the said contract. (Ibid.)

b. Theory of imputed knowledge

The theory of imputed knowledge ascribes the knowledge of the agent to the principal- employer, not the other way around. The knowledge of the principal-foreign employer cannot, therefore, be imputed to its agent. (Sunace International Management Services, Inc. v. NLRC, G.R. No. 161757, 25 January 2006)

In Sunace, the Court ruled that the theory of imputed knowledge ascribed the knowledge of the agent to the principal, not the other way around. The knowledge of the principal-foreign employer could not, therefore, be imputed to its agent. As there was no substantial proof that Sunace knew of, and consented to be bound under, the 2-year employment contract extension, it could not be said to be privy thereto. As such, it and its owner were not held solidarily liable for any of the complainant’s claims arising from the 2-year employment extension. (APQ Shipmanagement Co., Ltd. v. Caseñas, G.R. No. 197303)

BAR EXAM QUESTION
(Question B.13, Part II, Labor Law, 2019 Bar Exam)
Mr. A signed a one (1)-year contract with XYZ Recruitment Co. for deployment as welding supervisor for DEF, Inc. located in Dubai. The employment contract, which the Philippine Overseas Employment Administration (POEA) approved, stipulated a salary of US$600.00 a month.
Mr. A had only been in his job in Dubai for six (6) months when DEF, Inc. announced that it was suffering from severe financial losses and thus intended to retrench some of its workers, among them Mr. A. DEF, Inc. hinted, however, that employees who would accept a lower salary could be retained.
Together with some other Filipino workers, Mr. A agreed to a reduced salary of US$400.00 a month and thus, continued with his employment.
(a) Was the reduction of Mr. A’s salary valid? Explain. (2.5%)
(b) Assuming that the reduction was invalid, may Mr. A hold XYZ Recruitment Co. liable for underpayment of wages? Explain. (2.5%)
SUGGESTED ANSWER:
(a) No. Answer
Under the 1987 Constitution and R.A. 8042, the State shall afford full protection to labor, including overseas employment. To add, the Labor Code prohibits reduction of wages via the non-diminution of benefits rule. Rule
In the case at bar, Philippine labor law applies to Mr. A even if he work in Dubai. Since the non-diminution of benefits prohibits reduction of wages, his salary should not have been deducted. Apply
Thus, the reduction of Mr. A’s salary was not valid.
(b) Yes. Answer
Under the implementing rules and regulations of R.A. 8042, the liability of the principal/employer and the recruitment/placement agency for any and all claims under this section shall be joint and several. Rule
In the case at bar, XYZ Recruitment is the local agent of DEF, Inc. As an agent, XYZ Recruitment Co. hired Mr. A to work for DEF, Inc. Based on the cited provision, XYZ Recruitment Co. is solidarily liable with the foreign employer for the underpayment of wages of Mr. A. Apply
Thus, Mr. A. may hold XYZ Recruitment Co. liable for underpayment of wages. Conclusion

BAR EXAM QUESTION
(Question III[A], Labor Law, 2017 Bar Exam)
Andrew Manning Agency (AMA) recruited Feliciano for employment by lnvictus Shipping, its foreign principal. Meantime, AMA and lnvictus Shipping terminated their agency agreement. Upon his repatriation following his premature termination, Feliciano claimed from AMA and lnvictus Shipping the payment of his salaries and benefits for the unserved portion of the contract. AMA denied liability on the ground that it no longer had an agency agreement with lnvictus Shipping. Is AMA correct? Explain your answer. (3%)
SUGGESTED ANSWER:
No. Answer
Under the implementing rules and regulations of R.A. 8042, the liability of the principal/employer and the recruitment/placement agency for any and all claims under this section shall be joint and several. Rule
In the case at bar, AMA recruited Feliciano who was eventually employed by Invictus Shipping. The termination of the agency agreement between AMA and the Invictus Shipping does not affect the solidary liability of AMA for any claims to Feliciano who was prematurely terminated. Apply
Thus, AMA is not correct. Conclusion

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. 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. Termination of contract of migrant worker without just or valid cause

a. Due process: applicable to migran workers/OFWs

To emphasize, overseas workers, regardless of their classification, are entitled to security of tenure, at least for the period agreed upon in their contracts. This means that they cannot be dismissed before the end of their contract terms without due process. The law recognizes the right of an employer to dismiss employees in warranted cases, but it frowns upon the arbitrary and whimsical exercise of that right when employees are not accorded due process. If they were illegally dismissed, the workers’ right to security of tenure is violated. (Gopio v. Bautista, G.R. No. 205953, 06 June 2018)

The law and jurisprudence guarantee to every employee security of tenure. This textual and the ensuing jurisprudential commitment to the cause and welfare of the working class proceed from the social justice principles of the Constitution that the Court zealously implements out of its concern for those with less in life, Thus, the Court will not hesitate to strike down as invalid any employer act that attempts to undermine workers’ tenurial security. (Ibid.)

b. Philippine Labor Law applies

Indeed, while our Civil Code recognizes that parties may stipulate in their contracts such terms and conditions as they may deem convenient, these terms and conditions must not be contrary to law, morals, good customs, public order or policy. The employment contract between Shomcliffe and Bautista is governed by Philippine labor laws. Hence, the stipulations, clauses, and terms and conditions of the contract must not contravene our labor law provisions. (Ibid.)

Time and again, we have held that a contract of employment is imbued with public interest. The parties are not at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by simply contracting with each other. Also, while a contract is the law between the parties, the provisions of positive law that regulate such contracts are deemed included and shall limit and govern the relations between the parties. (Ibid.)

c. Non-compliance, illegal dismissal

In sum, there being no showing of any clear, valid, and legal cause for the termination of Bautista’s employment and that he was not afforded due process, the law considers the matter a case of illegal dismissal for which Bautista is entitled to indemnity. We uphold the Labor Arbiter’s award of indemnity equivalent to Bautista’s salaries for the unexpired term of his employment contract, and damages. (Ibid.)

6. Ban on direct hiring, exceptions

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.)

a. 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 f Landbased Overseas Filipino Workers of 2016)

BAR EXAM QUESTION
(Question III[B], Labor Law, 2017 Bar Exam)
As a rule, direct hiring of migrant workers is not allowed. What are the exceptions? Explain your answer. (2.5%)
SUGGESTED ANSWER:
The exceptions are:
(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, which 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.

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