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EMPLOYMENT OF HOMEWORKERS decentralized form of production where there is

ordinarily very little supervision or regulation of

ART. 153. REGULATION OF INDUSTRIAL methods of work.
Home means any room, house, apartment or other
The employment of industrial homeworkers and premises used regularly, in whole or in part, as
field personnel shall be regulated by the dwelling place, except those situated within the
Government through appropriate regulations issued premises or compound of an employer, contractor
by the Secretary of Labor to ensure the general or sub-contractor, and the work performed therein
welfare and protection of homeworkers and is under the active or personal supervision by or for
field personnel and the industries employing the latter.1
2. NEW RULE XIV Department Order No. 5 dated
ART. 154. REGULATIONS OF SECRETARY OF February 4, 1992 has replaced Rule XIV of the
LABOR Rules Implementing Book HI of the Code.
The regulations or orders to be issued pursuant to The new Rule XIV, among other things, authorizes
this Chapter shall be designed to assure the the formation and registration of labor organization
minimum terms and conditions of employment of industrial homeworkers. It also makes explicit the
applicable to the industrial homeworkers or field employer's duty to pay and remit SSS, Medicare
personnel involved. and ECC premiums. Complaints for violation of
ART. 155. DISTRIBUTION OF HOMEWORK labor standards and the terms and conditions of
employment involving money claims of
For purposes of this Chapter, the "employer" of homeworkers not exceeding P5,000 per
homeworkers includes any person, natural or homeworker shall be heard and decided by the
artificial, who for his account or benefit, or on Regional Director. Beyond that amount the case
behalf of any person residing outside the falls under the jurisdiction of a Labor Arbiter in the
country, directly or indirectly or through any NLRC.
employee, agent, contractor, subcontractor or any
other person: APPRENTICES

(1) Delivers, or causes to be delivered, any goods, ART. 57. STATEMENT OF OBJECTIVES
articles or materials to be processed or fabricated This Title aims:
in or about a home and thereafter to be returned or
to be disposed of or distributed in accordance with (1) To help meet the demand of the economy for
his directions; or trained manpower;

(2) Sells any goods, articles or materials to be (2) To establish a national apprenticeship program
processed or fabricated in or about a home and through the participation of employers, workers and
then rebuys them after such processing or government and non-government agencies; and
fabrication either himself or through some other
person. (3) To establish apprenticeship standards for the
protection of apprentices.
ART. 58. DEFINITION OF TERMS As used in this
Industrial homework is a system of production Title:
under which work for an employer or contractor
is carried out by a homeworker at his home. (a) "Apprenticeship" means practical training on
Materials may or may not be furnished by the the job supplemented by related theoretical
employer or contractor. It differs from regular instruction.
factory production principally in that it is a
(b) An "apprentice" is a worker who is covered by Under Department Order No. 8, Series of 1989,
a written apprenticeship agreement with an issued on March 9, 1989, the policy of the
individual employer or any of the entities Department of Labor and Employment is to:
recognized under this Chapter.
a. Obtain the voluntary adoption of
(c) An "apprenticeable occupation" means any apprenticeship programs by employers and
trade, form of employment or occupation which workers to help meet the increasing demand for
requires more than three-(3) months practical skilled manpower necessary for economic
training on the job supplemented by related development, and
theoretical instruction. (See R.A. No. 7796.)
b. Increase worker productivity through a
(d) "Apprenticeship agreement" is an relevant and effective apprenticeship program.
employment contract wherein the employer binds
himself to train the apprentice and the apprentice Under the Department Order, the Bureau of Local
in turn accepts the terms of training. Employment is required to undertake the review
of trades, occupations and jobs in all sectors of
ART. 59. QUALIFICATIONS OF APPRENTICE the economy to determine apprenticeability, after
which it should publish a list of approved
To qualify as an apprentice, a person shall: apprenticeable occupations.
(a) be at least fourteen (14) years of age; The Regional Offices are required to screen and
(b) Possess vocational aptitude and capacity for evaluate apprenticeship programs so that only
appropriate tests; and companies, entities and establishments with
adequate facilities for training are recognized
(c) Possess the ability to comprehend and and issued the corresponding certificate of
follow oral and written instructions. Trade and program recognition.
industry associations may recommend to the
Secretary of Labor appropriate educational The certificate is required prior to the hiring of
requirements for different occupations. apprentices. The creation of a Plant Apprenticeship
Committee, which as much as possible should be
ART. 60. EMPLOYMENT OF APPRENTICES tripartite, is encouraged. Such committee shall
organize, administer and monitor the technical
Only employers in the highly technical industries progress of the program, ratify every
may employ apprentices and only in apprenticeship agreement processed by the
apprenticeable occupations approved by the organizing company, and recommend to the
Minister of Labor and Employment. Regional Office concerned the issuance of a
certificate of completion to the apprentice after
passing the appropriate trade test.
PROGRAM Section 18 of the TESDA Act of 1994
Apprenticeship, generally understood, is the
expressly empowers the TESDA to implement
arrangement and the period when an upcoming
and administer the apprenticeship program in
worker undergoes hands-on training, more or less
accordance with existing laws, rules and
formal, to learn the ropes of a skilled job. It is
usually the entry point to the world of work. A
national apprenticeship program is needed to 3. REQUISITES FOR EMPLOYMENT OF
line-up a succession of trained young workers. APPRENTICES
Through apprenticeship, a nation builds, as it
were, an army of workers possessing industrial The following are the requisites for employment of
skills. apprentices:
(a) The employer should be engaged in a business APPRENTICESHIP NEEDS DOLE'S PRIOR
that is considered a highly technical industry. A APPROVAL, OR APPRENTICE BECOMES
highly technical industry is a trade, business, REGULAR EMPLOYEE
enterprise, industry or other activity which
utilizes the application of advanced technology. ART. 62. SIGNING OF APPRENTICESHIP
(b) The job to which the apprentice will work on
should be classified as an apprenticeable Every apprenticeship agreement shall be signed
occupation. by the employer or his agent, or by an authorized
representative of any of the recognized
An apprenticeable occupation is an occupation organizations, associations or groups, and by
officially endorsed by a tripartite body and the apprentice. An apprenticeship agreement with
approved for apprenticeship by the Technical a minor shall be signed in his behalf by his
Education and Skills Development Authority parent or guardian or, if the latter is not available,
(TESDA). It is no longer the Secretary of Labor by an authorized representative of the Department
and Employment, but the TESDA, who approves of Labor, and the same shall be binding during its
apprenticeable occupations. lifetime. Every apprenticeship agreement
entered into under this Title shall be ratified by the
4. APPRENTICEABLE AGE appropriate apprenticeship committee, if any,
and a copy thereof shall be furnished both the
The apprenticeable age under this article is
fourteen (14) years but fifteen (15) under the employer and the apprentice.
Implementing Rules (Book II, Rule VI, Section 11). ART. 63. VENUE OF APPRENTICESHIP
The elementary rule is that an implementing PROGRAMS
regulation cannot prevail over a statutory
provision. In any case, the question of variance is Any firm, employer, group or association, industry,
rendered moot by RA. No. 7610, as amended by organization or civic group wishing to organize an
R.A. No. 7658 (approved on November 9,1993), apprenticeship program (may choose" from any
which explicitly prohibits employment of of the following apprenticeship schemes as the
children below fifteen (15) years of age. The training venue of apprentices:
same law recognizes certain exceptions, but
being an apprentice in an apprenticeable (a) Apprenticeship conducted entirely by and
occupation is not one of the exceptions. within the sponsoring firm, establishment or
AGREEMENTS (b) Apprenticeship entirely within a Department of
Labor training center or other public training
Apprenticeship agreements, including the wage institutions; or
rates of apprentices, shall conform to the rules
issued by the Minister of Labor and Employment. (c) Initial training in trade fundamentals in a
The period of apprenticeship shall not exceed sjx training center or other institutions with
months. Apprenticeship agreements providing subsequent actual work participation within the
for wage rates below the legal minimum wage, sponsoring firm or entity during the final stage of
which in no case shall start below 75 percent of the training.
applicable minimum wage, may be entered into ART. 64. SPONSORING OF APPRENTICESHIP
only in accordance with apprenticeship programs PROGRAM
duly approved by the Minister of Labor and
Employment. The Ministry shall develop standard Any of the apprenticeship schemes recognized
model programs of apprenticeship. herein may be undertaken or sponsored by a
single employer or firm or by a group or
association thereof, or by a civic organization.
Actual training of apprentices may be purpose, the Department of Labor shall perform
undertaken: the service free of charge".

(a) In the premises of the sponsoring employer ART. 69. RESPONSIBILITY FOR THEORETICAL
in the case of individual apprenticeship programs; INSTRUCTION

(b) In the premises of one or several Supplementary theoretical instruction to

designated firms in the case of programs apprentices in cases where the program is
sponsored by a group or association of employers undertaken in the plant may be done by the
or by a civic organization; or employer. If the latter is not prepared to assume
the responsibility, the same may be delegated to
(c) In a Department of Labor training center or an appropriate government agency.
other public training institution
(a) The organization of apprenticeship program
Upon complaint of any interested person or upon its shall be primarily a voluntary
own initiative, the appropriate agency of the undertaking of employers;
Department of Labor or its authorized
representative shall investigate any violation of (b) When national security or particular
an apprenticeship agreement pursuant to such requirements of economic development so
rules and regulations as may be prescribed by demand, the President of the Philippines
the Secretary of Labor. may require compulsory training of
apprentices in certain trades, occupations,
ART. 66. APPEAL TO THE SECRETARY OF jobs or employment levels where shortage of
LABOR trained manpower is deemed critical as
The, decision of the authorized agency of the determined by the Secretary of Labor.
Department of Labor may be appealed by any Appropriate rules in this connection shall be
aggrieved person to the Secretary of Labor within promulgated by the Secretary of Labor as the
five (5-)days from receipt of the decision. The need arises;
decision of the Secretary of Labor shall be final and (c) Where services of foreign technicians are
executory. utilized by private companies in
ART. 67. EXHAUSTION OF ADMINISTRATIVE apprenticeable trades, said companies are
REMEDIES ^ required to set up appropriate apprenticeship
No person shall institute any action for the
enforcement of any apprenticeship agreement or
damages for breach of any such agreement,
unless he has exhausted all available An additional deduction from taxable income of
administrative remedies. one-half (1/2) of the value of labor training
ART. 68. APTITUDE TESTING OF APPLICANTS expenses incurred for developing the
productivity and efficiency of apprentices
Consonant with the minimum qualifications of shall be granted to the person or enterprise
apprentice-applicants required under this organizing an apprenticeship program:
Chapter, employers or entities with duly Provided, That such program is duly
recognized apprenticeship programs shall have recognized by the Department of Labor:
primary responsibility for providing appropriate Provided, further, That such deduction shall not
aptitude tests in the selection of apprentices. If exceed ten (10%) percent of direct labor wage:
they do not have adequate facilities for the And provided, finally, That the person or
enterprise who wishes to avail himself or competition in terms of labor costs or impair or
itself of this incentive should pay his lower working standards.
apprentices the minimum wage.
COMPENSATION Any employer desiring to employ learners
shall enter into a learnership agreement with
The Secretary of Labor may authorize the them, which agreement shall include:
hiring of apprentices without compensation
whose training on the job is required by the (a) The names and addresses of the learners;
school or training program curriculum or as
(b) The duration of the learnership period,
a requisite for graduation or board which shall not exceed three (3) months;
(c) The wages or salary rates of the learners
1. WORKING SCHOLAR; LIABILITY OF SCHOOL which shall begin at not less than seventy-five
In relation to Article 72, the Implementing Rules percent (75%) of the applicable minimum wage;
provide: There is no employer-employee and
relationship between students on one hand, and (d) A commitment to employ the learners if
schools, colleges or universities, on the other, they so desire, as regular employees upon
where there is written agreement between them completion of the learnership. All learners who
under which the former agree to work for the have been allowed or suffered to work during
latter in exchange for the privilege to study free the first two (2) months shall be deemed regular
of charge, provided the students are given real employees if training is terminated by the
opportunities, including such facilities as may be employer before the end of the stipulated period
reasonable and necessary to finish their chosen through no fault of the learner.
courses under such agreement.
The learnership agreement shall be
If the student (referred to in the preceding subject to inspection by the Secretary of Labor, or
implementing rule) injures a third party, does the his duly authorized representatives.
school become liable? In the Filamer case the
Supreme Court at first said no and then ART. 76. LEARNERS IN PIECEWORK
reconsidered, through the pen of Justice Gutierrez, Learners employed in piece or incentive-rate
Jr. jobs during the training period shall be paid in
full for the work done.
Any violation of this Chapter or its
Learners are persons hired as trainees in
implementing rules and regulations shall be
semi-skilled and other industrial occupations subject to the general penalty clause provided
which are non-apprenticeable and which may be for in this Code.
learned through practical training on the job in a
relatively short period of time which shall not
exceed three (3) months.
Learners may be employed when -no Learnership and apprenticeship are similar
experienced workers are available, the because they both mean training periods for
employment of learners is necessary to prevent jobs requiring skills that can be acquired through
curtailment of employment opportunities, and actual work experience. And because both a
the employment does not create unfair learner and an apprentice are not as fully
productive as regular workers, the learner and Any employer who employs handicapped
the apprentice maybe paid wages twenty-five workers shall enter into an employment
percent lower than the applicable legal agreement with them, which agreement shall
minimum wage. include:

They differ in the focus and the terms of (a) The names and addresses of the
training. A learner trains in a semi-skilled job or in handicapped workers to be employed;
industrial occupations that require training for less
than three months. An apprentice, on the other (b) The rate to be paid the handicapped
hand, trains in a highly skilled job or in a job workers which shall be not less than seventy-
found only in a highly technical industry. five (75%) percent of the applicable legal
Because it is a highly skilled job, the training minimum wage;
period exceeds three months. (c) The duration of employment period; and
For a learner, the training period is shorter
(d) The work to be performed by handicapped
because the job is more easily learned than that workers. The employment agreement shall be
in apprenticeship. The job, in other words, is subject to inspection by the Secretary of Labor or
"non-apprenticeable" because its practical skills his duly authorized representatives.
can be learned in three (not six) months. A
learner is not an apprentice but an apprentice ART. 81. ELIGIBILITY FOR APPRENTICESHIP
is, conceptually, also a learner.
Subject to the appropriate provisions of this Code,
Accordingly, because the job is more easily handicapped workers maybe hired as
learnable in learnership than in apprenticeship, apprentices or learners if their handicap is not
the employer is committed to hire the learner- such as to effectively impede the performance
trainee as an employee after the training period. of job operations in the particular occupations for
No such commitment exists in apprenticeship. which they are hired.

Finally, employment of apprentices, as stated 1. THE MAGNA CARTA FOR DISABLED

in Article 60, is legally allowed only in highly PERSONS.
technical industries and only in apprenticeable
occupations approved by DOLE. Learnership is The "Magna Carta for Disabled Persons “ensures
allowed even for non-technical jobs. equal opportunities for disabled-persons and
prohibits discrimination against them. Its
HANDICAPPED WORKERS pertinent provisions include:

ART. 78. DEFINITION Section 5. Equal Opportunity for Employment.

—No disabled person shall be denied access to
Handicapped workers are those whose earning
opportunities for suitable employment. A
capacity is impaired by age or physical or qualified disabled employee shall be subject to
mental deficiency or injury. the same terms and conditions of employment
ART. 79. WHEN EMPLOYABLE and the same compensation, privileges,
benefits, fringe benefits, incentives or-
Handicapped workers may be employed when allowances as a qualified able-bodied person.
their employment is necessary to prevent
curtailment of employment opportunities and Five percent (5%)/of all casual, emergency and
when it does not create unfair competition in contractual positions in the Departments of Social
labor costs or impair or lower working standards. Welfare and Development; Health; Education,
Culture and Sports; and other government
ART. 80. EMPLOYMENT AGREEMENT agencies, offices or corporations engaged in social
development shall be reserved for disabled Health as to his disability, skills and
persons. qualifications. ;

Section 6. Sheltered Employment. —If suitable c) Private entities that improve or modify their
employment for disabled persons cannot be physical facilities in order to provide reasonable
found through open employment as provided in accommodation for disabled persons shall also
the immediately preceding Section, the State shall be entitled to an additional deduction from their
endeavor to provide it by means of sheltered taxable income, equivalent to fifty percent (50%)
employment. In the placement of disabled of the direct costs of the improvements or
persons in sheltered employment, it shall accord modifications. This Section, however, does not
due regard to the individual qualities, vocational apply to improvements or modifications of
goals and inclinations to ensure a good working facilities required under Batas Pambansa Bilang
atmosphere and efficient production. 344.

Section 7. Apprenticeship. Section 32. Discrimination on Employment. —

No entity, whether public or private, shall
— Subject to the provisions of the Labor Code as discriminate against a qualified disabled person
amended, disabled persons shall be eligible as by reason of disability in regard to job
apprentices or learners: Provided, That their application procedures, the hiring, promotion,
handicap is not much as to effectively impede or discharge of employees, employee
the performance of job operations in the compensation, job training, and other terms,
particular occupation for which they are hired: conditions, and privileges of employment.
Provided, further, That after the lapse of the
period of apprenticeship, if found satisfactory The following constitutes acts of
in the job performance, they shall be eligible for discrimination:
a) Limiting, segregating or classifying a disabled
Section 8. Incentives for Employment. job applicant in such a manner that adversely
affects his work opportunities;
a) To encourage the active participation of the
private sector in promoting the welfare of b) Using qualification standards, employment
disabled persons and to ensure gainful test or other selection criteria that screen out or
employment for qualified disabled persons, tend to screen out a disabled person unless
adequate incentives shall be provided to private such standards, test or other selection criteria are
entities which employ disabled persons. shown to be job-related for the position in
question and are consistent with business
b) Private entities that employ disabled persons necessity;
who meet the required skills or qualifications,
either as regular employee, apprentice or c) Utilizing standards, criteria, or methods of
learner, shall be entitled to an additional administration that:
deduction, from their gross income, equivalent
to twenty-five percent (25%) of the total amount 1) have the effect of discrimination on
paid as salaries and wages to disabled persons: the basis of disability;

Provided, however, That such entities present proof or

as certified by the Department of Labor and 2) perpetuate the discrimination of others
Employment that disabled persons are under who are subject to common administrative control.
their employ: Provided, further, That the disabled
employee is accredited with the Department of d) Providing less compensation, such as salary,
Labor and Employment and the Department of wage or other forms of remuneration and fringe
benefits, to a qualified disabled employee, by
reason of his disability, than the amount to duties of the employees and necessary
which a non-disabled person performing the accommodations;
same work is entitled;
2) first aid and safety personnel may be
e) Favoring a non-disabled employee over a informed, when appropriate, if the disability might
qualified disabled employee with respect to require emergency treatment;
promotion, training opportunities^ study and
scholarship grants, solely on account of the 3) government officials investigating compliance
latter's disability; with this Act shall be provided relevant information
on request; and
f) Re-assigning or transferring a disabled
employee to a job or position he cannot perform 4) the results of such examination are used only
by reason of his disability; in accordance with this Act.

g) Dismissing or terminating the services of a QUALIFIED DISABLED PERSONS AS REGULAR

disabled employee by reason of his disability EMPLOYEES
unless the employer can prove that he impairs Even handicapped persons, employed by a bank
the satisfactory performance of the work
to accommodate the request of the social
involved to the prejudice of the business entity: welfare secretary, may become regular
Provided, however, That the employer first employees.
sought to provide reasonable accommodations
for disabled persons; Republic of the Philippines
Congress of the Philippines
h) Failing to select or administer in the most
Metro Manila
effective manner employment tests which
accurately reflect the skills, aptitude or other factor Thirteenth Congress
of the disabled applicant or employee that such test Third Regular Session
purports to measure, rather than the impaired
sensory, manual or speaking skills of such
applicant or employee, if any; and

i) Excluding disabled persons from membership Begun and held in Metro Manila, on Monday, the
in labor unions or similar organizations. twenty-fourth day of July, two thousand six.

Section 33. Employment Entrance Examination. REPUBLIC ACT NO. 9442 April 30, 2007
— Upon an offer of employment, a disabled
applicant may be subjected to medical AN ACT AMENDING REPUBLIC ACT NO. 7277,
examination, on the following occasions: OTHERWISE KNOWN AS THE "MAGNA CARTA
a) all entering employees are subjected to such PURPOSES"
an examination regardless of disability;
Be it enacted by the Senate and House of
b) information obtained during the medical Representatives of the Philippines in Congress
condition or history of the applicant is collected
and maintained on separate forms and in
SECTION 1. A new chapter, to be denominated as
separate medical files and is treated as a "Chapter 8. Other Privileges and Incentives" is
confidential medical record: Provided, however, hereby added to Title Two of Republic Act No.
That: 7277, otherwise known as the "Magna Carta for
Disabled Persons", with new Sections 32 and 33, to
1) supervisors and managers may be informed read as follows:
regarding necessary restrictions on the work or
"CHAPTER 8. Other Privileges and (h) Educational assistance to persons with
Incentives disability, for them to pursue primary,
secondary, tertiary, post tertiary, as well as
"SEC. 32. Persons with disability shall be vocational or technical education, In both
entitled to the following: public and private schools, through the
provision of scholarships, grants, financial
(a) At least twenty percent (20%) discount aids, subsidies and other incentives to
from all establishments relative to the qualified persons with disability, including
utilization of all services in hotels and similar support for books, learning materials, and
lodging establishments; restaurants and uniform allowance to the extent feasible:
recreation centers for the exclusive use or provided, that persons with disability shall
enjoyment of persons with disability; meet minimum admission requirements;

(b) A minimum of twenty percent (20%) (i) To the extent practicable and feasible,
discount on admission fees charged by the the continuance of the same benefits and
theaters, cinema houses, concert halls, privileges given by the Government Service
circuses, carnivals and other similar places Insurance System (GSIS), Social Security
of culture, leisure and amusement for the System (SSS), and PAG-IBIG, as the case
exclusive use or enjoyment of persons with may be, as are enjoyed by those in actual
disability; service;

(c) At least twenty percent (20%) discount (j) To the extent possible, the government
for the purchase of medicines in all may grant special discounts in special
drugstores for the exclusive use or programs for persons with disability on
enjoyment of persons with disability; purchase of basic commodities, subject to
guidelines to be issued for the purpose by
(d) At least twenty percent (20%) discount the Department of Trade and Industry (DTI)
on medical and dental services including and the Department of Agriculture (DA); and
diagnostic and laboratory fees such as, but
not limited to x-rays, computerized (k) Provision of express lanes for persons
tomography scans and blood tests, in all with disability in all commercial and
government facilities, subject to guidelines government establishments; in the absence
to be issued by the Department of Health thereof, priority shall be given to them.
(DOH), in coordination with the Philippine
Health Insurance Corporation The abovementioned privileges are
(PHILHEALTH); available only to persons with disability who
are Filipino citizens upon submission of any
(e) At least twenty percent (20%) discount of the following as proof of his/her
on medical and dental services including entitlement thereto:
diagnostic and laboratory fees, and
professional fees of attending doctors in all (I) An identification card issued by
private hospitals and medical facilities, in the city or municipal mayor the
accordance with the rules and regulations to barangay captain of the place where
be issued by the DOH, in coordination with the person with disability resides;
(II) The passport of the persons with
(f) At least twenty percent (20%) discount disability concerned; or
on fare for domestic air and sea travel for
the exclusive use or enjoyment of persons (III) Transportation discount fare
with disability; Identification Card (ID) issued by the
National Council for the Welfare of
(g) At least twenty percent (20%) discount in Disabled Persons (NCWDP).
public railways, skyways and bus fare for
the exclusive use and enjoyment of persons The privileges may not be claimed if the
with disability; persons with disability claims a higher
discount as may be granted by the
commercial establishment and/or under Prohibitions on Verbal, Non-verbal Ridicule
other existing laws or in combination with and VilificationAgainst Persons with
other discount program/s. Disability

The establishments may claim the discounts "CHAPTER 1. Deliverance from Public
granted in sub-sections (a), (b), (c), (e), (f) Ridicule.
and (g) as tax deductions based on the net
cost of the goods sold or services rendered: "SEC. 39. Public Ridicule . - For purposes of
provided, however, That the cost of the this Chapter, public ridicule shall be defined
discount shall be allowed as deduction from as an act of making fun or contemptuous
gross income for the same taxable year that initiating or making mockery of persons with
the discount is granted: provided, further, disability whether in writing or in words, or in
That the total amount of the claimed tax action due to their impairment/s.
deduction net of value-added tax if
applicable, shall be Included in their gross "SEC. 40. No individual, group or
sales receipts for tax purposes and shall be community shall execute any of these acts
subject to proper documentation and to the of ridicule against persons with disability in
provisions of the National Internal Revenue any time and place which could intimidate or
Code (NIRC), as amended." result in loss of self-esteem of the latter.

"SEC. 33. Incentives. - Those caring for and "CHAPTER 2. Deliverance from Vilification
living with a person with disability shall be
granted the following incentives; "SEC. 41. Vilification. - For purposes of this
chapter, vilification shall be defined as:
(a) persons with disability shall be treated
as dependents under Section 35(A) of the (a) the utterance of slanderous and abusive
National Internal Revenue Code, as statements against a person with disability;
amended and as such, individual taxpayers and/or
caring for them shall be accorded the
privileges granted by the code Insofar as (b) An activity in public which incites hatred
having dependents under the same section towards serious contempt for, or severe
are concerned; and ridicule of persons with disability."
(b) Individuals or nongovernmental "SEC. 42. Any individual, group or
institutions establishing homes, residential community is hereby prohibited from
communities or retirement villages solely to vilifying any person with disability which
suit the needs and requirements of persons could result into loss of self-esteem of the
with disability shall be accorded the latter."
SEC. 3. Section 46 of Republic Act No. 7277 is
(i) Realty tax holiday for the first five hereby amended to read as follows:
years of operation; and
"SEC. 46. Penal Clause. -
(ii) Priority in the building and/or
maintenance of provincial or
(a) Any person who violates any provision of
municipal roads leading to the
this Act shall suffer the following penalties:
aforesaid home residential
community or retirement village."
(1) For the first violation, a fine of not
less than Fifty thousand pesos
SEC. 2. Republic Act No. 7277 is hereby amended
(P50,000.00) but not exceeding One
by inserting a new title, chapter and section after
hundred thousand pesos
Section 38 to be denominated as Title 4, chapters 1
(P100,000.00) or imprisonment of
and 2 and Sections 39, 40, 41 and 42 to read as
not less than six months but not
more than two years, or both at the
discretion of the court; and
"Title Four
(2) For any subsequent violation, a Approved,
fine of not less than One hundred
thousand pesos (P100,000.00) but
not exceeding Two hundred
thousand pesos (P200,000.00) or EMPLOYMENT OF NON-RESIDENT ALIENS
imprisonment for not less than two
years but not more than six years, or ART. 40. EMPLOYMENT PERMIT OF NON-
both at the discretion of the court. RESIDENT ALIENS

(b) Any person who abuses the privileges Any alien seeking admission to the
granted herein shall be punished with Philippines for employment purposes and any
imprisonment of not less than six months or domestic or foreign employer who desires to
a fine of not less than Five thousand pesos engage an alien for employment in the
(P5,000.00), but not more than Fifty
thousand pesos (P50,000.00), or both, at Philippines shall obtain an employment permit
the discretion of the court. from the Department of Labor.

The employment permit may be issued to

(c) If the violator is a corporation
organization or any similar entity, the a non-resident alien or to the applicant employer
officials thereof directly involved shall be after a determination of the non-availability of a
liable therefore. person in the Philippines who is competent,
able and willing at the time of application to
(d) If the violator is an alien or a foreigner, perform the services for which the alien is
he shall be deported immediately after desired.
service of sentence without further
deportation proceedings. For an enterprise registered in preferred
areas of investments, said employment permit
Upon filing of an appropriate complaint, and
may be issued upon recommendation of the
after notice and hearing the proper
authorities may also cause the cancellation government agency charged with the
or revocation of the business permit, permit supervision of said registered enterprise.
to operate, franchise and other similar
privileges granted to any business entity ART. 41. PROHIBITION AGAINST TRANSFER
that fails to abide by the provisions of this OF EMPLOYMENT
(a) After the issuance of an employment permit,
Sec. 4. The title of Republic Act No. 7277 is hereby the alien shall not transfer to another job or
amended to read as the "Magna Carta for Persons change his employer without prior approval of
with Disability", and all references on the said law the Secretary of Labor.
to "disabled persons" shall likewise be amended to
read as "persons with disability". (b) Any non-resident alien who shall take up
employment in violation of the provision of this
SEC. 5. The Department of Social Welfare and Title and its implementing rules and regulations
Development, the National Council for the Welfare shall be punished in accordance with the
of Disabled Persons, and the Bureau of Internal
Revenue, in consultation with the concerned provisions of Articles 289 and 290 of the Labor
Senate and House committees and other agencies, Code.
organizations, establishments shall formulate an
agencies, organizations, establishments shall In addition, the alien worker shall be subject to
formulate an implementing rules and regulations deportation after service of his sentence.
pertinent to the provisions of this Act within six
months after the effectivity of this Act. ART. 42. SUBMISSION OF LIST

SEC. 6. This Act shall take effect fifteen (15) days Any employer employing non-resident foreign
after its publication in any two newspapers of nationals on the effective date of this Code shall
general circulation. submit a list of such nationals to the Secretary of
Labor within thirty (30) days after such date Enterprises registered under the Omnibus
indicating their names, citizenship, foreign and Investments Code (E.O. No. 226) may, for a
local addresses, nature of employment and limited period, employ foreign nationals in
status of stay in the country. The Secretary of technical, supervisory, or advisory positions.
Labor shall then determine if they are entitled to
an employment permit. Department Order No. 75-06

EMPLOYMENT OF ALIENS Several department orders have been issued

about employment permit for foreign workers.
Article 40 requires only non-resident The latest of these, replacing the earlier ones, is
aliens to secure employment permit. Resident D.O. No. 75, dated 31 May 2006 whose full text is
aliens are not so required.1 For immigrants and reproduced below.
resident aliens what is required is an Alien
Employment Registration Certificate(AFRC). Revised Rules for the Issuance of Employment
Permits to Foreign Nationals
Foreigners may not be employed in certain
"nationalized" business. The Anti-Dummy Law Pursuant to the provisions of Articles 5 and 40 of
(CA. No. 108, as amended by P.D. No. 715) P.D. No. 442, as amended, the provisions of Rule
prohibits employment of aliens in entities that XIV Book I of its Implementing Rules and
own or control a right, franchise, privilege, Regulations, Section 17(5), Chapter 4, Title VII of
property or business whose exercise or the Administrative Code of 1987, the following
enjoyment is reserved by law only to Filipinos Rules are hereby promulgated: Rule I. Coverage
or to corporations or associations whose capital and Exemption
should be at least 60% Filipino-owned. Authority 1. Coverage. All foreign nationals who intend to
to operate a public utility or to develop, exploit, engage in gainful employment in the Philippines
and utilize natural resources can be granted only shall apply for Alien Employment Permit (AEP).
to Philippine citizens or to corporations or
associations at least 60% of the capital of which 2. Exemption. The following categories of foreign
is owned by such citizens. nationals are exempt from securing an
employment permit:
The same 60% requirement applies to
financing companies.2 Under the Philippine 2.1 All members of the diplomatic service and
Constitution, Article XVI, Section 11, mass foreign government officials accredited by and
media enterprises can be owned or managed with reciprocity arrangement with the Philippine
only by Filipinos or by corporations or government;
associations wholly owned or managed by
them. 2.2 Officers and staff of international
organizations of which the Philippine government
The Secretary of Justice has rendered an is a member, and their legitimate spouses
Opinion, however, that aliens may be employed desiring to work in the Philippines;
in entities engaged in nationalized activities:
2.3 Foreign nationals elected as members of the
(a) where-the^ Secretary of Justice Governing Board who do not occupy any other
specifically authorizes the employment of position, but have only voting rights in the
foreign technical personnel, or corporation;

(b) where the aliens are elected members 2.4 All foreign nationals granted exemption by
of the board of directors or governing body of law;
corporations or associations in proportion to their
allowable participation in the capital of such 2.5 Owners and representatives of foreign
entities. principals whose companies are accredited by
the Philippine Overseas Employment
Administration (POEA), who come to the (b) "Recruitment and placement" refers to any act
Philippines for a limited period and solely for the of canvassing, enlisting, contracting,
purpose of interviewing Filipino applicants for transporting, utilizing, hiring or procuring
employment abroad; workers, and includes referrals, contract
services, promising or advertising for
2.6 Foreign nationals who come to the employment, locally or abroad, whether for profit
Philippines to teach, present and/or conduct or not: Provided, That any person or entity which,
research studies in universities and colleges as in any manner, offers or promises for a fee
visiting, exchange or adjunct professors under employment to two or more persons shall be
formal agreements between the universities or deemed engaged in recruitment and placement.
colleges in the Philippines and foreign
universities or colleges; or between the (c) "Private fee-charging employment agency"
Philippine government and foreign government; means any person or entity engaged in the
provided that the exemption is on a reciprocal recruitment and placement of workers for a fee
basis; and which is charged, directly or indirectly, from the
workers or employers or both.
2.7 Resident foreign nationals.
(d) "License" means a document issued by the
Rule II. Procedure in the Processing of Department of Labor authorizing a person or
Applications for AEP entity to operate a private employment agency.
1. Applications shall be filed with the Regional (e) "Private recruitment entity" means any
Office having jurisdiction over the intended place person or association engaged in the
of work. Only applications with the following recruitment and placement of workers, locally or
complete documentary requirements shall be overseas, without charging, directly or indirectly,
received and acted upon by the Regional Office: any fee from the workers or employers.
- Duly accomplished Application Form (f) "Authority" means a document issued by the
- Photocopy of Passport, with visa or Certificate Department of Labor authorizing a person or
of Recognition for refugees association to engage in recruitment and placement
activities as a private recruitment entity.
- Contract of Employment/Appointment or
Board Secretary's Certificate of Election (g) "Seaman" means any person employed in a
vessel engaged in maritime navigation.
Photocopy of Mayor's Permit to operate
business - Photocopy of current AEP (if for (h) "Overseas employment" means employment
renewal) of a worker outside the Philippines.

(i) "Emigrant" means any person, worker or

In the case of foreign nationals to be assigned in
related companies, they may file their application otherwise, who emigrates to a foreign country
with any of the Regional Offices having jurisdiction by virtue of an immigrant visa or resident permit
over the applicant's intended place of work. or its equivalent in the country of destination.

People vs. Panis, 142 SCRA 664 (1986) — Facts:

Four separate criminal complaints were filed
III. RECRUITMENT AND PLACEMENT against Abug for operating a fee-charging
employment agency without first securing a license.
Abug filed a motion to quash alleging that the
(a) "Worker" means any member of the labor force, informations did not charge an offense as he was
whether employed or unemployed. charged with illegally recruiting only one person in
each of the four informations.
Abug claimed that under Article 13 (b) there would office of job opportunities in other parts of the
be illegal recruitment only when two or more country as well as job opportunities abroad;
persons in any manner were promised or offered
any employment for a fee. (c) To develop and organize a program that will
facilitate occupational, industrial and
Ruling: The Court ruled that the number of geographical mobility of labor and provide
persons is not an essential ingredient of the act assistance in the relocation of workers from one
of recruitment and placement of workers. — "As area to another; and
we see it, the proviso was intended neither to
impose a condition on the basic rule nor to (d) To require any person, establishment,
provide an exception thereto but merely to organization or institution to submit such
create a presumption. employment information as may be prescribed by
the Secretary of Labor.
The presumption is that the individual or entity is
engaged in recruitment and placement whenever EMPLOYMENT PROMOTION
he or it is dealing with two or more persons to To pursue its responsibility to promote
whom, in consideration of a fee, an offer or employment opportunities, the DOLE carries
promise of employment is made in the course out programs for local and overseas
of the "canvassing, enlisting, contracting,
employment. Effective allocation of manpower
transporting, utilizing, hiring or procuring (of)
resources in local employment is assigned to the
workers." BLE (Bureau of Local Employment) and to POEA
The number of persons dealt with is not an (Philippine Overseas Employment Administration)
essential ingredient of the act of recruitment and for overseas employment.
placement of workers. Any of the acts mentioned ART. 15. BUREAU OF EMPLOYMENT SERVICES
in the basic rule in Article 13(b) will constitute
recruitment and placement even if only one (a) The Bureau of Employment Services shall
prospective worker is involved. be primarily responsible for developing and
monitoring a comprehensive employment
The proviso merely lays down a rule of evidence program. It shall have the power and duty:
that where a fee is collected in consideration of
a promise or offer of employment to two or 1. To formulate and develop plans and
more prospective workers, the individual or
programs to implement the employment
entity dealing with them shall be deemed to be promotion objectives of this Title;
engaged in the act of recruitment and
placement. The words 'shall be deemed' create
2. To establish and maintain a registration
that presumption." and/or licensing system to regulate private
ART. 14. EMPLOYMENT PROMOTION sector participation in the recruitment and
placement of workers, locally and overseas,
The Secretary of Labor shall have the power and and to secure the best possible terms and
authority: conditions of employment for Filipino
contract workers and compliance therewith
(a) To organize and establish new employment under such rules and regulations as may be
offices in addition to the existing employment issued by the Department of Labor and
offices under the Department of Labor as the need Employment;

(b) To organize and establish a nationwide job 3. To formulate and develop employment
clearance and information system to inform programs designed to benefit disadvantaged
applicants registering with a particular employment groups and communities;
4. To establish and maintain a registration
and/or work permit system to regulate the
employment of aliens; LOCAL EMPLOYMENT

Pursuing the social justice goal, through

5. To develop a labor market information availability of jobs, Article 15 requires the
system in aid of proper manpower and
Department of Labor and Employment to promote
development planning; employment opportunities. This crucial task
was given by P.D. No. 850 (December 16, 1975)
6. To develop a responsible vocational to the Bureau of Employment Services which has
guidance and testing system in aid of proper
been replaced by the Bureau of Local Employment
human resources allocation; and (BLE) through Executive Order No. 797 (May
7. To maintain a central registry of skills,
except seamen. The same Executive Order created the Philippine
Overseas Employment Administration which
[(b) The regional offices of the Department of consolidated the overseas employment
Labor shall have the original and exclusive functions of the BES as well as those of the
jurisdiction over all matters or cases Overseas Employment Development Board
involving employer-employee relations (OEDB) under Article 17 and the National
including money claims, arising out of or by Seamen Board (NSB) under Article 20. In the
virtue of any law or contracts involving Filipino meantime, through Administrative Order No. 186
workers for overseas employment except (September 4, 1987), the Secretary of Labor and
seamen: Employment devolved to the DOLE regional offices
the line functions of the BLE. The regional offices
Provided, That the Bureau of Employment therefore now handle the licensing of local
Services may, in the case of the National recruitment agencies and the issuance of work
Capital Region, exercise such power, permits to non-resident aliens and of
whenever the Department of Labor and employment registration certificates to resident
Employment deems it appropriate. The aliens.
decisions of the regional offices or the Bureau
of Employment Services if so authorized by the The Bureau of Local Employment has issued the
Secretary of Labor and Employment as Rules and Regulations Governing Local
provided in this Article, shall be appealable to Employment, which is reproduced in Book I of the
the National Labor Relations Commission upon Implementing Rules in this volume
the same grounds provided in Article 223
hereof. The decisions of the National Labor
Relations Commission shall be final and A significant development in the promotion of
unappealable. local employment is the approval of R.A. No. 8759
on February 4, 2000. It requires the
(b) The Minister of Labor shall have the power establishment of a public employment service
to impose and collect fees, based on rates office (PESO) in capital towns, cities and other
recommended by the Bureau of Employment strategic areas. A PESO is intended to serve as
Services. Such fee shall be deposited in the employment service and information center in
National Treasury as a special account of the its area of operation. It regularly obtains lists of
General Fund, for the promotion of the job vacancies from employers, publicizes
objectives of the Bureau of Employment them, invites and evaluates applicants, and
Services, subject to the provisions of Section refers them for probable hiring. It also provides
40 of Presidential Decree No. 1177.]' training and educational guidance and employment
counseling services.
The PESO also renders special services to the f. construction contractors if authorized to
public such as holding of (job fairs) livelihood operate by DOLE and the Construction Industry
and self-employment bazaars; special credit Authority g- members of the diplomatic corps
assistance for placed overseas workers; although hirings done by them have to be
special program for employment of students processed through the POEA
(SPES) during summer or semestral breaks;
work appreciation seminars and conferences; and h. other persons or entities as may be
hiring of workers in infrastructure projects authorized by the DOLE secretary
The WHIP is a program pursuant to Republic Act DEVELOPMENT BOARD
6885 which requires the Department of Public An Overseas Employment Development Board
Works and Highways and private contractors to is hereby created to undertake, in cooperation with
hire 30 percent of skilled and 50 percent relevant entities and agencies, a systematic
unskilled labor requirements from the area
program for overseas employment of Filipino
where the project is being undertaken.
workers in excess of domestic needs and to
ART 16. PRIVATE RECRUITMENT protect their rights to fair and equitable
employment practices. It shall have the power
Except as provided in Chapter II of this Tide, no and duty:
person or entity, other than the public
employment offices, shall engage in the 1. To promote the overseas employment of
recruitment and placement of workers. Filipino workers through a comprehensive
market promotion and development program;
2. To secure the best possible terms and
Although this Article says that only the public conditions of employment of Filipino contract
employment offices shall engage in workers on a government-to-government basis
recruitment and placement of workers, and to ensure compliance therewith;

Article 25 provides a broad exception as it 3. To recruit and place workers for overseas
states that "the private employment sector shall employment on a government-to-government
participate in the recruitment and placement of arrangement and in such other sectors as policy
workers, locally and overseas." may dictate; and

And while Article 18 generally prohibits direct 4. To act as secretariat for the Board of Trustees of
hiring for overseas employment, it also the Welfare and Training Fund for Overseas
recognizes a number of exceptions. Summing Workers.
up, based on the Rules Implementing the Code,
the following entities are authorized to recruit OVERSEAS EMPLOYMENT POLICY
and place workers for local or overseas The export of Filipino labor is an offspring of
employment: national poverty. Particularly during the dark,
a. public employment offices debauched, and deplorable years of the martial
law regime, manpower export had to happen to
b. private recruitment entities alleviate the twin problems of unemployment
and the deficit in the balance of trade. The
c. private employment agencies dictatorial government required homeward
d. shipping or manning agents or remittance of overseas workers' earnings.
representatives Because of the remittances the overseas
employment, meant only to be a stopgap measure,
e. the POEA fast became a top dollar-earning industry. Indeed
the export of people brought in good sums of SEC. 4. Deployment of Migrant Workers. — The
money, and the dictator enjoyed it. But he hardly State shall deploy overseas Filipino workers
cared that it was bloody money. The remittances only in countries where the rights of Filipino
were accompanied by accounts of horrendous migrant workers are protected. The government
abuses suffered by Filipino workers in the recognizes any of the following as a guarantee on
hands of some foreign employers. The people the part of the receiving country for the protection
realized that the demagogic government had not of the rights of overseas Filipino workers:
even bothered to formulate the courses of
action it would take if misfortune should happen (a) It has existing labor and social laws
to its citizens abroad. The fate of the protecting the rights of migrant workers;
Contemplacions, the Magas and the Balabagans (b) It is a signatory to multilateral conventions,
woke the Government up. Out of these tales of declarations or resolutions relating to the
woe, condemned in widespread street protection of migrant workers;
demonstrations, the "Migrant Workers and
Overseas Filipinos Act of 1995" (R.A. No. 8042) (c) It has concluded a bilateral agreement or
was passed during the Ramos Administration. arrangement with the government protecting the
rights of overseas Filipino workers; and
R.A. No. 8042 R.A. No. 8042, which was signed
on June 7, 1995 and took effect on July 15, (d) It is taking positive, concrete measures to
1995, redefines the policy on overseas protect the rights of migrant workers.
SEC. 5. Termination or Ban on Deployment. —
It states in part: While recognizing the significant Notwithstanding the provisions of Section 4 hereof,
contribution of Filipino migrant workers to the the government, in pursuit of the national
national economy through their foreign interest or when public welfare so requires,
exchange remittances, the State does not may, at any time, terminate or impose a ban on
promote overseas employment as a means to the deployment of migrant workers.
sustain economic growth and achieve national
The existence of the overseas employment
program rests solely on the assurance that the As already noted, the Philippine Overseas
dignity and fundamental human rights and Employment Administration has taken over the
freedoms of the Filipino citizen shall not, at any functions of OEDB and the NSB. Created by E.O.
time, be compromised or violated. The State, No. 797 (May 1, 1982), POEA was reorganized by
therefore, shall continuously create local E.O. No. 247 (July 24, 1987). Among the principal
employment opportunities and promote the functions of the POEA are the formulation,
equitable distribution of wealth and the implementation, and monitoring of the overseas
benefits of development. (Sec. 2[c], R.A. No. employment of Filipino workers and the
8042.) protection of their rights to fair and equitable
employment practices.
Selective Deployment
POEA also participates in the deployment of
The dictatorial Marcos government did not bother Filipino workers through government-to-
to say what places the OFWs could safely go to. government hiring. It has extended its services
R.A. No. 8042, on the other hand, requires nationally through its regional extension units.
certain guarantee of protection for the They process vacationing workers, register
overseas workers before they are deployed in sea-based workers, and participate in
countries that meet some criteria. It states: government hiring through manpower pooling.
Overseas Filipino Worker (OFW) is understood including money claims therefrom or violations of
as a Filipino worker who is to be engaged, is the conditions for issuance of license to recruit
engaged, or has been engaged in a remunerated workers.1
activity in a country of which he/she is not a
legal resident.' b. Employer-Employee Relations cases
consisting of all claims arising out of an employer-
Officially, OFWs are classified by DOLE as either employee relationship or by virtue of any law or
land-based or sea-based. Sea-Based OFWs (or contract involving Filipino workers in overseas
seamen) are those employed in a vessel engaged employment, such as but not limited to:
in maritime navigation. Sea-based work pertains
to ship operations like navigation, engineering, (1) violation of the terms and conditions of
maintenance, including a variety of employment;
occupations from kitchen staff to on-board (2) disputes relating to the implementation
entertainment in large vessel ships. and interpretation of employment contracts;
Land-Based OFWs are contract workers other (3) money claims of workers against
than a seaman including workers engaged in their employers and duly authorized agents in the
offshore activities whose occupation requires Philippines or vice versa;
that majority of his working/ gainful hours are
spent on land. Occupations in the land-based (4) claims for death, disability and other
categories are broader, covering all the skill benefits arising out of employment; and
areas one can think of from house cleaners to
entertainers to managers. The land-based group (5) violation/s of or noncompliance with
constitutes the great majority of OFWs. any compromise agreement entered into by and
between the parties in an overseas employment

The POEA performs regulatory and adjudicatory c. Disciplinary Action cases consisting of all
functions. complaints against a contract worker for
breach of discipline.
POEA regulates the private sector participation
in the recruitment and overseas placement of The disciplinary action may take the form of
workers through its licensing and registration warning, repatriation, suspension, or
system. This function is taken up further under disqualification from the, overseas
Article 25. employment program, or inclusion in the POEA
5.1 POEA Rules (2002) The POEA has issued
and amended the rules and regulations Jurisdiction Transferred to NLRC
governing overseas employment. These form
part of the Implementing Rules, Book I, in this The allocation of jurisdiction enumerated above
volume. has been partially changed by R.A. No. 8042 or
the "Migrant Workers and Overseas Filipinos Act of
6. ADJUDICATORY FUNCTION OF POEA 1995." This law has transferred to the NLRC the
jurisdiction over employer-employee relations
Before the passage of R.A. No. 8042 in 1995, cases. Insofar as pertinent, its Section 10 provides:
POEA had original and exclusive jurisdiction to
hear and decide the following kinds of cases: SEC. 10. Money Claims. —Notwithstanding any
provision of law to the contrary, the Labor
a. Recruitment Violation and Related cases Arbiters of the National Labor Relations
consisting of all pre employment cases which are Commission (NLRC) shall have the original and
administrative in character, involving or arising exclusive jurisdiction to hear and decide, within
out of recruitment laws, rules and regulations,
ninety (90) calendar days after the filing of the
complaint, the claims arising out of an such promise or assurance, sustains damage
employer-employee relationship or by virtue of and/or injury.
any law or contract involving Filipino workers
for overseas deployment including claims for (Section 2, Rules Implementing R.A. No. 8042). It
actual, moral, exemplary and other forms of appears that R.A. 8042 allows claims for money
damages. or damages sustained during the period of
deployment or before departure for abroad.
The liability of the principal/employer and the Hence, even an applicant OFW may file a money
recruitment/ placement agency for any and all claim with the labor arbiter of the NLRC. Aside
claims under this section shall be joint and from this R.A. No. 8042 allows recovery of actual,
several. This provision shall be incorporated in moral, exemplary and other forms of damages.
the contract for overseas employment and shall
be a condition precedent for its approval. Compromise Agreement Consistent with the
policy encouraging amicable settlement of labor
The performance bond to be filed by the disputes, the same Section 10 of R.A. No. 8042
recruitment/placement agency, as provided by allows resolution by compromise of cases filed
law, shall be answerable for all money claims with the NLRC.
or damages that may be awarded to the
workers. If the recruitment/placement agency is It states: Any compromise/amicable settlement
a juridical being, the corporate officers and or voluntary agreement on money claims
directors and partners, as the case may be, shall inclusive of damages under this section shall be
themselves be jointly and solidarily liable with paid within four (4) months from the approval
the corporation or partnership for the aforesaid of the settlement by the appropriate authority.
claims and damages. Mandatory Periods Failure to resolve the cases
Such liabilities shall continue during the entire mentioned in Section 10 within the periods therein
period or duration of the employment contract specified is punishable under the same Section
and shall not be affected by any substitution, 10:
amendment or modification made locally or in a Noncompliance with the mandatory
foreign country of the said contract. periods for resolutions of cases provided under this
R.A. No. 8042 not only transferred from POEA to section shall subject the responsible officials to
NLRC the jurisdiction over money claims of any or all of the following penalties:
OFWs; it even expanded the scope of such (a) The salary of any such official who fails to
money claim. When the jurisdiction was still with
render his decision or resolution within the
the POEA, the jurisdiction covered only money prescribed period shall be, or caused to be,
claims involving Filipino workers for overseas withheld until the said official complies
employment. Now the NLRC jurisdiction is over therewith;
money claims involving Filipino workers for
overseas deployments— (b) Suspension for not more than ninety (90)
days; or
R.A. No. 8042 defines a "Migrant Worker" as a
"person who is to be engaged, is engaged, or has (c) Dismissal from the service with
been engaged in a remunerated activity in a disqualification to hold any appointive public
state of which he or she is not a legal resident." office for five (5) years.
("Migrant worker" is used interchangeably with
"overseas Filipino worker.") The phrase "to be Provided, however, That the penalties herein
engaged in a remunerated activity" refers to an provided shall be without prejudice to any
applicant worker who has been promised or liability which any such official may have incurred
assured of employment overseas and acting on under other existing laws or rules and regulations
as a consequence of violating the provisions of this Inc. vs. NLRC, G.R No. 127195, August 25,
paragraph. 1999.

Employer-employee Relations Cases: SECTION 10 UNCONSTITUTIONAL; SERRANO

Termination of Employment. VS. GALLANT

CONTRACTUAL EMPLOYEES Some ten years later the Court en banc re-
examined the Marsaman interpretation and then
In Millares and Lagda vs. NLRC reversing an ruled that the clause "whichever is less" in
earlier ruling, finally decided seafarers are Section 10 of R.A. No. 8042 is unconstitutional
contractual employees. Their employment is as it violates the OFW's right to equal
contractually fixed for a certain period. This protection of the law and to substantive due
matter is further explained in commentaries under process. Being unconstitutional, the clause is
Article 280. now deemed deleted from the law. Hence, in
case of pretermination of employment contract
the alternative to pay three month's salary for
Where the workers' employment contract is every year of the unexpired term is no longer
terminated before its agreed termination date, available. The OFW is entitled to his salaries for
and the termination is not shown to be based on the unexpired portion of his employment
lawful or valid grounds, the employer will be contract, plus full reimbursement of his
ordered to pay the workers their salaries placement fee with interest of twelve percent
corresponding to the unexpired portion of their (12%) per annum.'
employment contract.
In this significant Serrano vs. Gallant case, if the
PRETERMINATION UNDER R.A. NO. 8042 award to the employee would be based on the
unexpired portion, he would get more than
Under Section 10 of R.A. No. 8042, a worker US$25 thousand, but it would only be about US$4
dismissed from overseas employment without thousand based on three months' pay per year.
just, valid or authorized cause as defined by law He therefore impugned the constitutionality of
or contract, is entitled to "full reimbursement of the "whichever is less" clause in Section 10. The
his placement fee with interest at twelve percent clause, he argued through his learned counsel,
(12%) per annum, plus his salary for the impairs the freedom of OFWs to negotiate their
unexpired portion of his employment contract employment contracts and, further, impinges on
or for three (3) months for every year of the the equal protection clause of the Constitution
unexpired term, whichever is less." as it treats OFWs differently from local workers.
Prior to its ruling in Serrano vs. Gallant in 2009, The Solicitor General, defending the clause,
the court had ruled that the option of "three explained that it was intended to protect the
months for every year" is available only if the local placement agencies from heavy liability if
employment is for one year or more. If it is the foreign employer reneges on its obligation.
shorter than one year, the salary to be The Court retorted: "... such callous and cavalier
recovered has to be that for the unexpired rationale will have to be rejected. There can
portion. never be a justification for any form of
government action that alleviates the burden of
For instance, if the employment contract is for
one sector, but imposes the same burden on
ten months but is terminated unjustifiably on
another sector, especially when the favored
the second month, the award should be of eight
sector is composed of private businesses such
months' salary (plus placement fee with interest
as placement agencies, while the disadvantage
and attorney's fee). The Court made this
sector is composed of OFWs whose protection no
interpretation in Marsaman Manning Agency,
less than the Constitution commands. The idea
that private business interest can be elevated to reverse had happened, that is the seafarer failed
the level of a compelling state interest is or refused to be deployed as agreed upon, he
odious... Thus the subject clause in the 5th would be liable for damages.
paragraph of Section 10 of R.A. No. 8042 is
violative of the right of petitioner and other Moreover, while the POEA Standard Contract
OFWs to equal protection." Therefore, the three- must be recognized and respected, neither the
month option is gone. manning agent nor the employer can simply
prevent a seafarer from being deployed without a
Respondent's act of preventing petitioner from
If the employment contract has been signed but departing the port of Manila and boarding "MSV
employer-employee relationship did not Seaspread" constitutes a breach of contract,
commence because the seafarer was not giving rise to petitioner's cause of action.
actually deployed, can he complain of "unpaid Respondent unilaterally and unreasonably reneged
salary"? We quote the court's affirmative answer: on its obligation to deploy petitioner and must
There is no question that the parties entered therefore answer for the actual damages he
into an employment contract on 3 February suffered.
1998, whereby petitioner was contracted by
respondent to render services on board "MSV EMPLOYER-EMPLOYEE RELATIONS CASES:
Seaspread" for the consideration of US$515.00 MONEY CLAIMS; EMPLOYER'S NATIONALITY
per month for nine (9) months, plus overtime IMMATERIAL
pay. However, respondent failed to deploy
The Labor Code, the Migrant Workers' law, and
petitioner from the port of Manila to Canada. the relevant regulations extend protection to
Considering that petitioner was not able to Filipino workers overseas, i.e., outside the
depart from the airport or seaport in the point Philippines. The statute and regulations do not
of hire, the employment contract did not limit the coverage to non-Filipino employers.
commence, and no employer-employee Filipinos working overseas share the same
relationship was created between the parties. risks and burdens whether their employers be
However, a distinction must be made between Filipino or foreigner.
the perfection of the employment contract and For instance, it is well known that foreign-owned
the commencement of the employer employee
and foreign-registered vessels have frequently
relationship. The perfection of the contract, also secured Philippine registration where the
which in this case coincided with the date of interest or convenience of the owners dictated
execution thereof, occurred when petitioner and such second or dual registration. The underlying
respondent agreed on the object and the regulatory policy is that Filipino seamen
cause, as well as the rest of the terms and
working in ocean-going vessels should receive
conditions therein. the same wages and benefits without regard to
The commencement of the employeremployee the nationality or nationalities of the vessels on
relationship, as earlier discussed, would have which they serve.
taken place had petitioner been actually DEATH AND OTHER BENEFITS, BASIS OF
developed from the point of hire.' Thus, even COMPENSATION.
before the start of any employer>employee
relationship, contemporaneous with the One of the principal concerns about OFWs is
perfection of the employment contract was the their employment conditions and benefits.
birth of certain rights and obligations, the
breach of which may give rise to a cause of The standard contract of employment for Filipino
action against the erring party. Thus, if the seamen allows the payment of death benefit
pension, funeral benefit and burial gratuity to Where the contract of a Filipino seaman
the private respondent-worker. provides that workmen's compensation benefit
shall be computed on the basis of whichever is
The claims for death and burial benefits greater between Philippine law or the law of the
involving seamen and/or overseas contract registry of the vessel, it is correct to resolve the
workers over which the POEA (now Labor award based on the law of registry of the
Arbiters of NLRC) has jurisdiction, are not the vessel (Singapore) providing greater benefit.
same as the claims against the State Insurance
Fund under Book IV of the Labor Code. In a similar situation, the foreign employer and a
group of Filipino contract workers state in their
employment contract that the "total
In Inter-Orient Maritime Enterprises, Inc., et al. remuneration and benefits should not fall
vs. NLRC, et al., G.R No. 115497, September 10, below that of the host country" [in this case,
1996, a Filipino migrant worker suffering from Bahrain]. In applying the Bahrain law as the basis,
mental disorder died in the hands of a the NLRC declared that "where the laws of the
policeman in Bangkok while he was being Lost country are more favorable and beneficial
repatriated to the Philippines. The employer to the workers, then the laws of the host
invoked the ruling in De Jesus vs. ECC [May 27, country shall form part of the overseas
1986], that it is not liable because the cause of employment contract." But the employer insisted
the death of the worker is not an occupational before the Supreme Court that the principle that a
disease listed by law. The Supreme Court, law is deemed part of a contract applied only to
finding no parallelism with the De Jesus case, Philippine laws in relation to contracts executed
debunked the employer's assertion. in the Philippines. The Supreme Court debunked
such contention and ruled that the NLRC, in
"Petitioner's (employer's) reliance on De Jesus is
applying the foreign law to grant the workers'
misplaced, as the death and burial benefits
being claimed in this case are not payable by claims, did not abuse its desertion.
the Employees' Compensation Commission and It is proper for the POEA to take judicial notice
chargeable against the State Insurance Fund. of foreign laws applicable to a claim by a
These claims arose from the responsibility of Filipino overseas contract worker. True, it has
the foreigner employer together with the local been ruled that a foreign law, being a matter of
agency for "the safety of the employee during evidence, must be alleged and proved in order
his repatriation and until his arrival in this to be recognized and applied in a particular
country, the point of hire. Though the controversy involving conflicts of laws. But this
termination of the employment contract was ruling is not meant to apply to cases before
duly effected in Dubai, still, the responsibility of administrative or quasi-judicial bodies. Well-
the foreign employer to see to it that Pineda settled is the rule that administrative and quasi-
judicial bodies are not bound strictly by
(the seaman-employee) was duly repatriated to
the point of hiring, subsisted. technical rules.

Section 4, Rule VIII of the Rules and Stated differently, for death of a seafarer to be
Regulations Governing Overseas Employment compensable, the death must occur during the
clearly provides for the duration of the term of his contract of employment. It is the only
mandatory personal accident and life condition for compensability of a seafarer's
insurance covering accidental health, death. Once it is established that the seaman
dismemberment and disability of overseas died during the effectivity of his employment
workers." (Inter-Orient Maritime Enterprises, contract, the employer is liable.
Inc., et al. vs. NLRC, et al., G.R No. 115497, Compensability of death does not depend on
September 10, 1996.) whether his illness was work-connected or not.
What is material is that his death occurred contract for seafarers. But, upon motion for
during the term of his employment contract. By reconsideration by Natividad, the NLRC
provision of Section 20(A) of the POEA Standard changed its mind and this time affirmed that
Employment Contract, based on POEA company physician's finding are self-serving;
Memorandum Circular No. 055, series of 1996, thus the NLRC concurred with the award of Grade
payment of death benefits pension is mandated 1 disability benefit.
in case of death of a seafarer during the term of
his employment. The law does not require that the illness should
be incurable. What is important is that he was
EVALUATION OF THE DISABILITY: WHOSE unable to perform his customary work for more
OPINION SHALL PREVAIL? than 120 days which constitutes permanent
total disability. An award of a total and permanent
Two recent decisions grapple with two challenging disability benefit would be germane to the
questions: (1) whose medical opinion should purpose of the benefit, which is to help the
prevail: that of the company-designated employee in making ends meet at the time
physician or that of an independent when he is unable to work.
practitioner? (2) in determining a seafarer's
disability, which law governs: the Labor Code or The POEA Standard Employment Contract and
the POEA standard contract? the CBA clearly provide that when a seafarer
sustains a work-related illness or injury while
The decisions in 2005 and 2008 (penned by two on board the vessel, his fitness or unfitness for
former labor secretaries) give different answers; work shall be determined by the company-
thus, the decision in 2008 has to carefully point out designated physician. If the physician
the differing circumstances of the employees' appointed by the seafarer disagrees with the
claims. company-designated physician's assessment,
*Examined at the company-designated clinic, the opinion of a third doctor may be agreed
and at the Manila Doctor's Hospital, he was jointly between the employer and the seafarer
diagnosed with "papillary carcinoma, etc." and to be the decision final and binding on them.
underwent a total thyroidectomy. His attending ADOPTION OF THE LABOR CODE CONCEPT
physician diagnosed him as permanently OF DISABILITY
disabled with a Grade .9 impediment. To this
Grade 9 assessment two more physicians of Sec. 20. Compensation and Benefits xxx
another hospital, concurred. Thus, three
physicians, including the company-designated B. Compensation and Benefits for Injury or
ones, diagnosed the impediment at Grade 9. But Illness.
Natividad consulted a non company-designated The liabilities of the employer when the seafarer
physician. Dr. Vicaldo, who opined that he was suffers injury or illness during the term of his
totally and permanently disabled with Grade 1 contract are as follows: xxx 5. In case of
impediment. Grade 1 is more serious permanent total or partial disability of the
impediment than Grade 9 and grants a higher
seafarer during the term of employment caused
compensation. by either injury or illness[,] the seafarer shall be
Natividad demanded US$60,000.00 for a Grade 1 compensated in accordance with the schedule of
disability. When the employer turned this down he benefits enumerated in Section 30 of [t]his
filed a complaint with the NLRC. The labor arbiter Contract. Computation of his benefits arising
granted the Grade 1 disability claim with moral from an illness or disease shall be governed by
damages. On appeal the NLRC at first reversed the rates and the rules of compensation
the labor arbiter on the ground that the findings of applicable at the time the illness or disease was
company-designated physicians are binding, as contracted.
stipulated in the POEA standard employment
"Disability" is generally defined as "loss or discipline against a contract worker shall be
impairment of a physical or mental function filed with the Adjudication Office or Regional
resulting from injury or sickness." Clearly, Office of the POEA, as the case may be. The
"disability" is not synonymous with "sickness" POEA may motu proprio undertake disciplinary
or "illness," the former being a potential effect of action against a worker for breach of discipline.
the latter. It shall establish a system of watching and
blacklisting of overseas contract workers.
The schedule in Sec. 30 of the POEA SEC is a
Schedule of Disability or Impediment for GROUNDS FOR DISCIPLINARY ACTION
Injuries Suffered and Diseases or Illness
Contracted. It is not a list of compensable Commission by the worker of any of the offenses
sickness. Unlike the 2000 POEA SEC, nowhere in enumerated below or of similar offenses while
the 1996 POEA SEC is there a list of working overseas, shall be subject to appropriate
"Occupational Diseases." The unqualified phrases disciplinary actions as the POEA may deem
"during the term" in Section 20(B) of the 1996 necessary:
POEA SEC covers all injury or illness occurring in a. Commission of a felony punishable by
the lifetime of the contract. The injury or illness Philippine laws or by the laws of the host
need not be shown to be work-related.
JURISDICTION RETAINED WITH POEA b. Drug addiction or possession or trafficking of
prohibited drugs;
Even after the passage of R.A. No. 8042, the
POEA retains original and exclusive c. Desertion or abandonment;
jurisdiction to hear and decide: d. Drunkenness, especially where the laws of the
(a) all cases which are administrative in host country prohibit intoxicating drinks;
character, involving or arising out of violations of e. Gambling, especially where the laws of the
rules and regulations relating to licensing and
host country prohibit the same;
registration of recruitment and employment
agencies or entities; and f. Initiating or joining a strike or work stoppage
where the laws of the host country prohibit strikes
(b) disciplinary action cases and other special
or similar actions;
cases which are administrative in character,
involving employers, principals, contracting g. Creating trouble at the worksite or in the
partners and Filipino migrant workers. (Sec. 28, vessel;
Rules Implementing the Migrant Workers' Act
dated February 29, 1996.) h. Embezzlement of company funds or of
moneys and properties of a fellow worker
REGULATORY FUNCTION OF POEA entrusted for delivery to kins or relatives in the
POEA regulates the private sector participation
in the recruitment and overseas placement of i. Theft or robbery;
workers through its licensing and registration
system. This function is taken up further under j. Prostitution;
Article 25.
k. Vandalism or destroying company property;
1. Gunrunning or possession of deadly
RA. No. 8042 has not transferred to the NLRC weapons;
the jurisdiction of POEA over disciplinary
m. Unjust refusal to depart for the worksite
action cases. Rule VII of Book VII of the POEA
after all employment and travel documents
Rules provides that complaints for breach of
have been duly approved by the appropriate (a) Employment contract;
government agency/ies; and
(b) Valid passport;
n. Violation/s of the laws and sacred practices
of the host country and unjustified breach of (c) Employment visa or work permit, or equivalent
government-approved employment contract by a document;
worker. (d) Certificate of medical fitness; and
OUTSIDE OF POEA JURISDICTION (e) Certificate of attendance to the required
No Jurisdiction to Enforce Foreign Judgment employment orientation/briefing.

The Philippine Overseas Employment ART. 19. OFFICE OF EMIGRANT AFFAIRS

Administration has no jurisdiction to hear and (a) Pursuant to the national policy to maintain
decide a claim for enforcement of a foreign close ties with Filipino migrant communities
judgment. Such a claim must be brought before and promote their welfare as well as establish a
the regular courts. The POEA is not a court, it is data bank in aid of national manpower policy
an administrative agency, exercising, inter alia,
formulation, an Office of Emigrant Affairs is
adjudicatory or quasi-judicial functions. Neither
hereby created in the Department of Labor. The
the rules of procedure nor the rules of evidence Office shall be a unit at the Office of the
which are mandatorily applicable in Secretary and shall initially be manned, and
proceedings before courts, are observed in operated by such personnel and through such
proceedings before the POEA.' funding as are available within the Department
8.2 NO JURISDICTION OVER TORTS and its attached agencies. Thereafter, its
appropriation shall be made part of the regular
ART. 18. BAN ON DIRECT-HIRING General Appropriations Decree.

No employer may hire a Filipino worker for (b) The office shall, among others, promote the
overseas employment except through the well-being of emigrants and maintain their close
Boards and entities authorized by the link to the homeland by:
Department of Labor and Employment. Direct-
hiring by members of the diplomatic corps, 1) serving as a liaison with migrant communities;
international organizations and such other 2) providing welfare and cultural services;
employers as may be allowed by the Department
of Labor and Employment is exempted from this 3) promoting and facilitating re-integration of
provision. migrants into the national mainstream;

Direct hiring of Filipino workers by a foreign 4) promoting economic, political and cultural
employer is not allowed except direct hiring by ties with the communities; and
members of the diplomatic corps and others
mentioned in this Article. Also excepted are 5) undertaking such activities as may be
"name hirees" or those individual workers who appropriate to enhance such cooperative links.
are able to secure contracts for overseas
The Office of Emigrant Affairs has been
employment on their own efforts and
abolished and its pertinent functions were
representation without the assistance or
transferred to the Commission on Filipinos
participation of any agency. Their hiring,
Overseas by Batas Pambansa Big. 79, approved
nonetheless, has to be processed through the
on June 16, 1980. Among other functions, the
CFO provides advice and assistance to the
Name hires should register with the POEA by President of the Philippines and the Congress in
submitting the following documents: the formulation of policies and measures
affecting Filipinos overseas. It also formulates, Article 20, no. 2, requires the National Seamen
in coordination with agencies concerned, an Board (now POEA) to "secure the best possible
integrated program for the promotion of the welfare terms of employment for contract seamen
of Filipinos overseas for implementation by workers and secure compliance therewith." The
suitable existing agencies. implications of this article are illustrated in the
following cases which also rule on the question of
ART. 20. NATIONAL SEAMEN BOARD. immutability of seamen's standard contract.
(a) A National Seamen Board is hereby created The form contracts approved by the National
which shall develop and maintain a comprehensive Seamen Board [now POEA] are designed to
program for Filipino seamen employed overseas. It protect Filipinos, not foreign shipowners who
shall have the power and duty: can take care of themselves.
1. To provide free placement services for The standard forms embody the basic minimums
seamen; which must be incorporated as parts of the
2. To regulate and supervise the activities of employment contract. (Section 15, Rule V, Rules
agents or representatives of shipping and Regulations Implementing the Labor Code.)
companies in the hiring of seamen for overseas They are not collective bargaining agreements
employment; and secure the best possible or immutable contracts which the parties cannot
terms of employment for contract seamen improve upon or modify in the course of the agreed
workers and secure compliance therewith; peril of time. To state, therefore, that the affected
seamen cannot petition their employer for
3. To maintain a complete registry of all Filipino
higher salaries during the 12-month duration of
the contract runs counter to established
(b) The Board shall have original and exclusive principles of labor legislation. The National
jurisdiction over all matters or cases including Labor Relations Commission, as the appellate
money claims, involving employer-employee tribunal from the decision of the National Seamen
relations, arising out of or by virtue of any law or Board, correctly ruled that the seamen did not
contracts involving Filipino seamen for overseas violate their contracts to warrant their
employment. The decision of the Board shall be dismissal.
appealable to the National Labor Relations
Commission upon the same grounds provided in
Article 223 hereof. The decisions of the National An agreement that diminishes the employee's
Labor Relations Commission shall be final and pay and benefits as contained in a POEA-
unappealable approved contract is void, unless such
NSB NOW POEA subsequent agreement is approved by POEA.


Executive Order No. 797 (issued on May 1, 1982)
abolished the National Seamen Board and In the above-cited case of Chavez, the Court
transferred its functions to the POEA which the explained why the claim, although filed two years
Order created. The NSB's "original and after the employment, could still prosper. The
exclusive jurisdiction" mentioned in paragraph laches doctrine did not apply.
(b) of this Article has since been exercised by the
POEA. Laches is defined as the failure or neglect for an
unreasonable and unexplained length of time to do
ARTICLE 20 CONSTRUED; SEAMEN'S that which, by exercising due diligence, could or
EMPLOYMENT CONTRACTS AND THE should have been done earlier, thus giving rise to a
INTERNATIONAL TRANSPORT FEDERATION presumption that the party entitled to assert it
either has abandoned or declined to assert it. It
is not concerned with mere lapse of time; the fact mores, practices, company policies and the labor
of delay, standing alone, is insufficient to constitute laws and social legislations of the host country;
e. The Administration may also consider the
The doctrine of laches is based upon grounds of following as basis for other provisions of the
public policy which requires, for the peace of contract:
society, the discouragement of stale claims, and is
principally a question of the inequity or unfairness 1. Existing labor and social laws of the host
of permitting a right or claim to be enforced or country;
asserted. 2. Relevant agreements, conventions,
There is no absolute rule as to what constitutes delegations or resolutions;
laches; each case is to be determined according to 3. Relevant bilateral and multilateral
its particular circumstances. The question of agreements or arrangements with the host
laches is addressed to the sound discretion of the country; and
court, and since it is an equitable doctrine, its
application is controlled by equitable 4. Prevailing condition/realities in the market.
considerations. It cannot be worked to defeat
justice or to perpetrate fraud and injustice FREEDOM TO STIPULATE

In the case of Esalyn Chavez, she filed her claim Parties to overseas employment contracts are
well within the three-year prescriptive period for allowed to stipulate other terms and conditions
the filing of money claims set forth in Article 291 of and other benefits not provided under these
the Labor Code. minimum requirements; provided the whole
employment package should be more beneficial
MINIMUM EMPLOYMENT CONDITIONS to the worker than the minimum; provided that
the same shall not be contrary to law, public
The POEA Regulations Governing Overseas policy and morals, and provided further, that
Employment (amended in 2002) in Part V, Rule I, Philippine agencies shall make foreign
Section 2 prescribes the following minimum employers aware of the standards of
provisions of employment contracts: employment adopted by the Administration
a. Guaranteed wages for regular working hours ART. 21. FOREIGN SERVICE ROLE AND
and overtime pay, as appropriate, which shall PARTICIPATION
not be lower than the prescribed minimum
wage in the host country, nor lower than the To provide ample protection to Filipino workers
appropriate minimum wage standard set forth in abroad, the labor attaches the labor reporting
a bilateral agreement or international officers duly designated by the Secretary of Labor
convention duly ratified by the host country and the Philippine diplomatic or consular officials
and the Philippines or not lower than the minimum concerned shall, even without prior instruction
wage in the Philippines, whichever is highest; or advice from the home office, exercise the
power and duty:
b. Free transportation to and from the worksite,
or offsetting benefit; (a) To provide all Filipino workers within their
jurisdiction assistance on all matters arising
c. Free food and accommodation, or offsetting out of employment;
(b) To insure that Filipino workers are not
d. Just/authorized causes for termination of the exploited or discriminated against;
contract or of the services of the workers taking
into consideration the customs, traditions, norms, (c) To verify and certify as requisite to
authentication that the terms and conditions of
employment in contracts involving Filipino Filipinos in distress. It also administers the Legal
workers are in accordance with the Labor Code Assistance Fund for Migrant Workers.
and rules and regulations of the Overseas
Employment Development Board and National Finally, R.A. No. 8042 establishes a "Migrant
Seamen Board; Workers and Other Overseas Filipinos
Resource Center" in Philippine Embassies in
(d) To make continuing studies or researches countries where there are at least 20,000
and recommendations on the various aspects migrant workers. The resource center is
of the employment market within their envisioned to provide such services as
jurisdiction; counseling and legal assistance, welfare
assistance including procurement of medical
(e) To gather and analyze information on the and hospitalization services, registration of
employment situation and its probable trends, undocumented workers, and conciliation of
and to make such information available to the disputes arising from employer employee
Department of Labor and Employment and the relationship. The resource center is to be
Department of Foreign Affairs; and established and operated jointly by the government
(f) To perform such other duties as may be agencies mentioned, although its operation is to be
required of them from time to time. managed by the Labor Attached.

PROTECTION AND ASSISTANCE BY (b) Department of Labor and Employment. —

GOVERNMENT AGENCIES The Department of Labor and Employment shall
see to it that labor and social welfare laws in
In addition to the officials mentioned in Article 21, the foreign countries are fairly applied to migrant
R.A. No. 8042 (Section 23) assigns four workers and whenever applicable, to other
government agencies to promote the welfare overseas Filipinos including the grant of legal
and protect the rights of migrant workers and, assistance and referral to proper medical
as far as applicable, of all overseas Filipinos. centers or hospitals.
The agencies are the Department of Foreign
(c) Philippine Overseas Employment
Affairs (DFA), the Department of Labor and
Administration. — The POEA shall regulate
Employment (DOLE), the Philippine Overseas
Employment Administration (POEA), and the private sector participation in the recruitment
and overseas placement of workers by setting
Overseas Workers Welfare Administration
up a licensing and registration system. It shall
also formulate and implement, in coordination
(a) Department of Foreign Affairs. —The with appropriate entities concerned, when
Department, through its home office or foreign necessary, a system for promoting and
posts, shall take priority action or make monitoring the overseas employment of
representation with the foreign authority Filipino workers taking into consideration their
concerned to protect the rights of migrant welfare and the domestic manpower
workers and other overseas Filipinos and requirements.
extend immediate assistance including the
repatriation of distressed or beleaguered (d) Overseas Workers Welfare Administration.
migrant workers and other overseas Filipinos. — The Welfare Officer or in his absence, the
coordinating officer, shall provide the Filipino
Furthermore, R.A. No. 8042 created the position of migrant worker and his family all the
Legal Assistant for Migrant Worker's Affairs assistance they may need in the enforcement
[LAMWA] under the Department of Foreign Affairs. of contractual obligations by agencies or entities
Its primary responsibility is to provide and and/or their principals. In the performance of this
coordinate all legal assistance services to function, he shall make representation and may
call on the agencies or entities concerned to
conferences or conciliation meetings for the repatriate the worker, as needed, without
purpose of setting the complaints or problems determining the cause of termination of
brought to his attention. employment.

THE RPM CENTER If the termination is due solely to the fault of

the worker, the principal or agency may recover
A migrant worker returning to the country has to the cost of repatriation from the worker after
be reintegrated into the Philippine society. To return to the country. The cause of termination
serve as a promotion house for local will be determined by the Labor Arbiter. Such
employment of these returning workers and to obligation of the principal/agency to advance
tap their skills for national development, RA No. the plane fare and of the worker to refund the cost
8042 created in the Department of Labor and should be stipulated in every contract for overseas
Employment the "RPM (Re-Placement and employment.
Monitoring) Center." Coordinating with the private
sector, the RPM Center is expected to develop If the principal or agency does not comply with
livelihood programs for the returning workers its obligation, the POEA shall notify OWWA to
and formulate a computer-based information advance the repatriation cost with recourse to
system on skilled Filipino migrant workers. the agency or principal. POEA may also impose
sanctions on the recalcitrant agency or
3. THE OWWA principal.
The Welfare Fund for Overseas Workers In no case shall an employment agency require
Administration was created by PD. No. 1694 (May any bond or cash deposit from the worker to
1,1980) as amended by PD. No. 1809 (January guarantee performance under the contract of
16,1981). Known as the Welfund, it was intended his/her repatriation. The mandatory repatriation
to provide social and welfare services, bond is abolished as of June 17,1995 pursuant to
including insurance coverage, legal assistance, Section 36 of R.A. No. 8042.
placement assistance and remittance services
to Filipino overseas workers. The Welfund was VALIDITY
funded with contributions from the workers
themselves and the fees and charges imposed by A recruitment agency has questioned the
the POEA and the BLE. The Welfund was (and still validity of Section 15 of R.A. No. 8042 and of
is) administered by a Board of Trustees chaired by Sections 52 to 55 of the implementing rules on the
the Secretary of Labor and Employment. In 1987, ground that they violate the agency's right to
Executive Order No. 126 renamed the Welfund the due process.
Overseas Workers Welfare Administration or The Court upheld the validity of the law and the
OWWA. rules which provide that "the repatriation of
REPATRIATION OF WORKERS remains and transport of the personal
belongings of a deceased worker and all costs
The OWWA has a role to play even in cases attendant thereto shall be borne by the
where a worker has to be sent or brought back principal and/or the local agency.”
to the Philippines, as shown in the dramatic
repatriation of thousands of OFWs trapped in The mandatory nature of said obligation is
Israel-Lebanon war in July 2006. But the characterized by the legislature's use of the word
primary responsibility to repatriate a worker, "shall." That the concerned government
including his or her remains and personal effects, agencies opted to demand the performance of
belongs to the principal or the agency that said responsibility solely upon petitioner does
recruited or deployed the worker. Being not make said directives invalid as the law
primarily responsible, the principal or agency has plainly obliges a local placement agency such
to advance the plane fare and immediately as herein petitioner to bear the burden of
repatriating the remains of a deceased OFW prescribed by the Secretary of Labor and
with or without recourse to the principal abroad. In Employment.
this regard, we see no reason to invalidate Section
52 of the omnibus rules as Republic Act No. 8042 REMITTANCE
itself permits the situation wherein a local Executive Order No. 857, as amended, prescribe
recruitment agency can be held exclusively
the percentages of foreign exchange
responsible for the repatriation of a deceased remittance ranging from 50% to 80% of the
OFW. basic salary, depending on the worker's kind of
The placement agency may try to establish the job. DOLE figures for 1998-2000 show that the
worker's fault, but while doing so the agency annual remittances have breached the US$6
must repatriate the OFW. Said the Court: billion level, inspiring the government to call the
OFWs "Mga Bagong Bayani".
Section 15 of Republic Act No. 8042, however,
certainly does not preclude a placement agency COMPOSITION OF THE POEA
from establishing the circumstances As reorganized by E.O. No. 247 (July 24,1987),
surrounding an OFWs dismissal from service in after the end of the Marcos dictatorship, the
an appropriate proceeding. As such Philippine Overseas Employment
determination would most likely take some time, it Administration consists of the Governing Board,
is only proper that an OFW be brought back here the Office of the Administrator, the Offices of
in our country at the soonest possible time lest such number of Deputy Administrators as may
he remains stranded in a foreign land during be necessary, and Office of the Director for each
the whole time that recruitment agency
of the principal subdivisions of its internal
contests its liability for repatriation. As aptly structure. The Governing Board is composed of
pointed out by the Solicitor General — the Secretary of Labor and Employment as
Such a situation is unacceptable. Chairman, the Administrator, and a third
member, considered well-versed in the field of
24. This is the same reason why repatriation is overseas employment who shall be appointed
made by law an obligation of the agency and/or by the President to serve for a term of two (2)
its principal without the need of first years.
determining the cause of the termination of the
worker's employment. Repatriation is in effect The Administrator and such Deputy Administrator
an unconditional responsibility of the agency and Directors as may be necessary are
and/or its principal that cannot be delayed by an appointed by the President upon
investigation of why the worker was terminated recommendation of the Secretary the functional
from employment. To be left stranded in a structure of the Administration is established
foreign land without the financial means to along the areas of market development,
return home and being at the mercy of employment, welfare, licensing, regulation and
unscrupulous individuals is a violation of the adjudication, each headed by a Director.
OFWs dignity and his human rights. These are
Cash and surety bonds are required by the
the same rights R.A. No. 8042 seeks to protect. POEA and its predecessor agencies from
ART. 22. MANDATORY REMITTANCE OF recruitment and employment companies precisely
FOREIGN EXCHANGE EARNINGS as a means of ensuring prompt and effective
recourse against such companies when held
It shall be mandatory for all Filipino workers liable for applicants or workers' claims. That
abroad to remit a portion of their foreign public policy will be effectively negated if POEA
exchange earnings to their families, and the Department of Labor and Employment
dependents, and/ or beneficiaries in the country were held powerless to compel a surety
in accordance with rules and regulations company to make good on its solidary
undertaking in the same quasi-judicial provisions of the statute. This is called "the power
proceeding where the liability of the principal of subordinate legislation.
obligor, the recruitment or employment
POEA Circular No. 11 (1983) Unenforceable
PLACEMENT ACTIVITIES The ruling in Tanada vs. Tuvera [136 SCRA 27
(1985)] is reiterated; i.e., administrative rules and
ART. 25. PRIVATE SECTOR PARTICIPATION IN regulations must be published if its purpose is to
THE RECRUITMENT AND PLACEMENT OF enforce or implement existing law pursuant to a
WORKERS ' valid delegation. Considering that POEA
Administrative Circular No. 2 Series of 1983
Pursuant to national development objectives and in (embodying a schedule of fees that
order to harness and maximize the use of employment offices may charge) has not yet
private sector resources and initiative in the been published or filed with the National
development and implementation of a Administrative Register, the circular cannot be
comprehensive employment program, the used as basis for the imposition of
private employment sector shall participate in administrative sanctions.
the recruitment and placement of workers,
locally and overseas, under such guidelines, rules ART. 26. TRAVEL AGENCIES PROHIBITED TO
and regulations as may be issued by the Secretary RECRUIT
of Labor.
Travel agencies and sales agencies of airline
POEA'S RETAINED JURISDICTION companies are prohibited from engaging in the
business of recruitment and placement of
As already noted, R.A. No. 8042 transferred from workers for overseas employment whether for
POEA to NLRC the jurisdiction over OFWs' profit or not.
claims arising from employer-employee
relationship. But POEA retains original and In addition to those mentioned in this article, the
exclusive jurisdiction over cases involving POEA Rules (Rule 1, Section 2) also disqualify
violations of POEA rules and regulations, persons with derogatory records such as those
disciplinary cases and other cases that are convicted for illegal recruitment or other crimes
administrative in character involving OFWs. involving moral turpitude. The same prohibition
Thus, POEA performs regulatory, enforcement, extends to any official or employee of DOLE,
and limited or special adjudicatory functions. POEA, OWWA, DFA and other government
agencies directly involved in the
2. VALIDITY OF POEA REGULATIONS implementation of R.A. No. 8042 or any of their
Under Section 4(a) of Executive Order No. 797 relatives within the fourth civil degree.
which created the POEA, the authority to issue ART. 27. CITIZENSHIP REQUIREMENT
regulations is clearly provided:
Only Filipino citizens or corporations,
"xxx The governing Board of the Administration partnerships or entities at least seventy-five
(POEA), as hereunder provided, shall promulgate percent (75%) of the authorized and voting capital
the necessary rules and regulations to govern stock of which
the exercise of the adjudicatory functions of the
Administration (POEA)." 'Eastern Shipping Lines, Inc. vs. POEA, Minister of
Labor and Employment, Hearing Officer Abdu
With the proliferation of specialized activities Basar and Kathleen D. Saco, G.R. No. 76633,
and their attendant peculiar problems, the October 18, 1988. Is owned and controlled by
national legislature has found it more and more Filipino citizens shall be permitted to participate
necessary to entrust to administrative agencies in the recruitment and placement of workers,
the authority to issue rules to carry out the general locally or overseas.
ART. 28. CAPITALIZATION conducted under the supervision of a DOLE
employee or officer designated by the Regional
All applicants for authority to hire or renewal of Director.
License to recruit are required to have such
substantial capitalization as determined by the Obviously, recruitment of workers for overseas
Secretary of Labor. employment cannot be lawfully undertaken on
a house-to-house basis, in residences, or
A private employment agency for local secluded places.
employment should have a minimum net worth
of P200,000.00 in the case of single ART. 30. REGISTRATION FEES
proprietorship and partnership or a minimum
paid-up capital of P500,000.00 in the case of a The Secretary of Labor shall promulgate
corporation. schedule of fees for the registration of all
applicants for license or authority.
A private recruitment or manning agency for
overseas employment should have a minimum ART. 31. BONDS
capitalization of P2,000,000.00 for single All applicants for license or authority shall post
proprietorship or partnership, and a minimum
such cash and surety bonds as determined by
paid-up capital of P2,000,000.00 for corporation. the Secretary of Labor to guarantee compliance
ART. 29. NON-TRANSFERABILITY OF LICENSE with prescribed recruitment procedures, rules
OR AUTHORITY and regulations, and terms and conditions of
employment as may be appropriate.
No license or authority shall be used directly or
indirectly by any person other than the one in AMOUNT OF BOND
whose favor it was issued or at any place other
1.1 Local Employment; Recruitment Agency
than that stated in the license or authority, nor
may such license or authority be transferred, Prior to the approval of license, an applicant for
conveyed or assigned to any other person or license to operate a private employment agency
entity. Any transfer of business address, for local employment shall post:
appointment or designation of any agent or
representative including the establishment of a. Cash bond in the amount of Twenty-Five
additional offices anywhere shall be subject to Thousand Pesos (25,000.00); and
the prior approval of the Department of Labor.
b. Surety bond in the amount of One Hundred
PLACE OF RECRUITMENT Thousand Pesos (P100.000.00).

Licensees or holders of authority or their duly These bonds are valid for two (2) years and will
authorized representatives may, as a rule, answer for all valid and legal claims arising from
undertake recruitment and placement activity the illegal use of the license and shall likewise
only at their authorized official addresses. Most, guarantee compliance with the provisions of the
if not all, of these licensees or holders of Labor Code and its Implementing Rules.1
authority have their official addresses in Metro
1.2 Recruitment or Manning Agency f 6r,
Manila. Under existing regulations, they may be
Overseas Employment
allowed to conduct provincial recruitment
and/or job fairs only upon written authority Upon approval of the application for license, the
from the POEA. applicant for license to operate a private
recruitment or manning agency shall:
A matter of procedure, prior to the conduct of
provincial recruitment, a copy of the authority (a) Submit an Escrow Agreement in the amount
shall be presented to the DOLE/Regional Director of One Million Pesos (PI,000,000.00), with
concerned. The recruitment activities are
confirmation of escrow deposit with an accredited Therefore, a recruitment agency who appeals a
reputable bank; and judgment of the POEA or Labor Arbiter to the
NLRC is still obliged to post a bond in an
(b) Post a surety bond in the amount of One- amount equivalent to the monetary award as
Hundred Thousand Pesos (P100.000.00) from a required by Article 223 of the Labor Code,
bonding company acceptable to the POEA and notwithstanding the fact that it has already posted
accredited with the Insurance Commission. The a bond under Article 31 of the Labor Code.
surety bond shall cover the validity of the period
of the license, and shall include the condition that GARNISHMENT OF BONDS
notice to the principal is notice to the surety and
that any judgment against the principal in The bond under Article 31 of the Labor Code is
connection with matters falling under the intended to answer only for employment-related
jurisdiction of the POEA or NLRC shall be claims and for violations of labor laws.
binding and conclusive on the surety. Therefore, it cannot be garnished to satisfy a
claim against a recruitment agency such as
The bonds and escrows shall answer for all payment for airline tickets used by the
valid and legal claims arising from violations of agency's recruits. Though the liability may have
the conditions for the grant and use of the been incurred in connection with the business
license and/or accreditation and contracts of of recruiting or placing overseas workers, it is
employment. The bonds and escrow shall definitely not one arising from violation of the
likewise guarantee compliance with the conditions for the grant and use of the license
provisions of the Philippine laws and all liabilities or authority and contracts of employment. Nor
that the POEA may impose. is it one arising from a violation of labor laws.


power to enforce liability under cash or surety
bonds. As soon as an Order or Notice of Garnishment is
served upon the Bank, and the same is
APART FROM APPEAL BOND correspondingly earmarked, the deposit in
escrow shall no longer be considered sufficient.
The bond required under Article 31 of the Labor The POEA shall then require the recruitment or
Code is different from the bond required under manning agency to replenish its escrow deposit.
Article 223 of the Labor Code. The bond under
Article 223 is a requirement for the perfection of Within fifteen (15) days from date of receipt of
an appeal. It is intended to insure the payment notice from the POEA mat the bonds or deposit in
of the monetary award if the judgment is affirmed escrow, or any part of it had been garnished, the
on appeal. recruitment or manning agency shall replenish the
same. Failure to replenish such bonds or
It is true that the cash and surety bonds under deposit in escrow within the said period shall
Article 31 of the Labor Code are also intended cause the suspension of the license.
to guarantee payment of all valid and legal
claims against an employer, but these claims are RELEASE OF CASH BOND/DEPOSIT IN
not limited to monetary awards to employees ESCROW
whose contracts of employment have been
violated. 6.1 Recruitment Agency for Local Employment

The POEA can go against these bonds also for - A private recruitment and placement agency
violations by the recruiter of the conditions for its for local employment which voluntarily
license, the provisions of the Labor Code, the surrenders its license shall be entitled to the
rules of the POEA as well as the settlement of refund of its deposited cash bond only after
other liabilities the recruiter may incur. posting a surety bond of similar amount from a
bonding company accredited by the Insurance
Commission. The surety bond is valid for three The POEA Rules and Regulations Governing
(3) years from expiration of the license. Overseas Employment (Part II, Rule V, Sections 2
and 3[2002]) provides:
Recruitment or Manning Agency for Overseas
Employment Section 2. Fees and Costs Chargeable to
Principals. Unless otherwise provided, the
A licensed recruitment or manning agency for principal shall be responsible for the payment of
overseas employment which voluntarily the following:
surrenders its license shall be entitled to the
release of the deposit in escrow, only after a. visa fee;
posting a surety bond of similar amount valid
for four (4) years from expiration of license and b. airfare;
submission of clearance from the National c. POEA processing fee; and
Labor Relations Commission and the POEA.
d. OWWA membership fee.
Section 3. Fees/Costs Chargeable to the
It is a settled doctrine that the conditions of a
Workers. Except where the prevailing system in
bond specified and required in the provisions of
the country where the worker is to be deployed,
the statute or regulation providing for the either by law, policy or practice, does not allow the
submission of the bond are incorporated or
charging or collection of placement and
built into all bonds tendered under that statute or
recruitment fee, a land-based agency may charge
regulation even though not there set out in printer's
and collect from its hired workers a placement fee
ink. in an amount equivalent to one month salary,
ART. 32. FEES TO BE PAID BY WORKERS exclusive of documentation costs.

Any person applying with a private fee-charging Documentation costs to be paid by the worker
employment agency for employment assistance shall include, but not be limited to, expenses for
shall not be charged any fee until he has the following:
obtained employment through its efforts or has a. Passport
actually commenced employment. Such fee
shall be always covered with the appropriate b. NBI/Police/Barangay Clearance
receipt clearly showing the amount paid. The
Secretary of Labor shall promulgate a schedule c. Authentication
of allowable fees.
d. Birth Certificate
e. Medicare
Placement Fee for Local Employment
f. Trade Test, if necessary
A licensed private recruitment and placement
g. Inoculation, when required by host country
agency for local employment may charge a
worker placement fee which shall not exceed h. Medical Examination fees
twenty percent (20%) of the worker's first
month's basic salary. In no case shall such fee In the event that the recruitment agency agrees
be charged prior to the actual commencement of to perform documentation services, the worker
employment. shall pay only the actual costs of the document
which shall be covered by official receipts.
Placement and Documentation Fees for
Overseas Employment
'Section 29, Rule VIII, Rules and Regulations accepted in excess of what is licitly prescribed.
Governing Private Recruitment and Placement It would be illogical and absurd to limit the
Agency for Local Employment. sanction on an offending recruitment agency or
contractor to suspension or cancellation of its
The above-mentioned placement and license, without the concomitant obligation to
documentation costs are the only authorized repair the injury caused to its victims.
payments that may be collected from a hired
worker. No other charges in whatever form, ART. 33. REPORTS ON EMPLOYMENT STATUS
manner or purpose, shall be imposed on and be
paid by the worker without prior approval of the Whenever the public interest requires, the
POEA. Secretary of Labor may direct all persons or
entities within the coverage of this Title to submit
Such fees shall be collected from a hired worker a report on the status of employment, including
only after he has obtained employment through job vacancies, details of job requisitions,
the facilities of the recruitment agency. separation from jobs, wages, other terms and
conditions, and other employment data.
For Employment Agency for Local Employment
It shall be unlawful for any individual, entity,
A licensed private recruitment and licensee, or holder of authority:
placement agency may charge the employer
service fee which shall not exceed twenty percent (a) To charge or accept, directly or indirectly,
(20%) of the annual salary of the worker. In no any amount greater than that specified in the
case shall the service fee be deducted from the schedule of allowable fees prescribed by the
worker's salary. Transportation expenses of the Secretary of Labor, or to make a worker pay any
worker from the place of origin to the place of work amount greater than that actually received by him
shall be charged against the employer and shall in as a loan or advance;
no case be deducted from the worker's salary.1
(b) To furnish or publish any false notice or
For Recruitment or Manning Agency for information or document in relation to
Overseas Employment recruitment or employment;

A private recruitment or manning agency for (c) To give any false notice, testimony,
overseas employment shall charge their principals information or document or commit any act of
a service or manning fee to cover services misrepresentation for the purpose of securing a
rendered in the recruitment documentation and license or authority under this Code;
placement of workers or seafarers.
(d) To induce or to attempt to induce a worker
REFUND OF FEES already employed to quit his employment in
order to offer him to another unless the transfer
POEA has the power to order refund of illegally is designed to liberate the worker from
collected fees. Implicit in its power to regulate the oppressive terms and conditions of
recruitment and placement activities of all employment;
agencies is the award of appropriate relief to the
victims of the offenses committed by the (e) To influence or to attempt to influence any
respondent agency or contractor. person or entity not to employ any worker who
has not applied for employment through his
Such relief includes the refund or agency;
reimbursement of such fees as may have been
fraudulently or otherwise illegally collected or (f) To engage in the recruitment or placement
such money, goods or services imposed and of workers in jobs harmful to public health or
morality or to the dignity of the Republic of the has obtained employment through the facilities of
Philippines; the recruitment agency."

(g) To obstruct or attempt to obstruct inspection The second part of Article 34(a) is a deterrent to
by the Secretary of Labor or by his duly authorized loan sharks who lend money at usurious interests.
representatives; Under Article 34(b) the prohibition includes the act
of furnishing fake employment documents to a
(h) To fail to file reports on the status of worker, and the act of publishing false notice or
employment, placement, vacancies, remittances of information in relation to recruitment or
foreign exchange earnings, separation from jobs, employment.
departures and such other matters or information
as may be required by the Secretary of Labor; The act of advertising for employment is within
the definition of recruitment and placement and
(i) To substitute or alter employment contracts the falsity of the notice or information
approved and verified by the Department of published is immaterial in prosecution for
Labor from the time of actual signing thereof by illegal recruitment for unauthorized
the parties up to and including the periods of advertisement.
expiration of the same without the approval of the
Secretary of Labor; Under Article 34(d) a mere attempt to induce the
worker to quit his employment for the purpose of
(j) To become an officer or member of the offering him to another is sufficient to constitute
Board of any corporation engaged in travel the offense. It is not necessary that the worker
agency or to be engaged directly or indirectly in was actually induced or did quit employment.
the management of a travel agency; and
Nonlicensees or nonholders of authority cannot
(k)To withhold or deny travel documents from lawfully engage in recruitment and placement
applicant workers before departure for of workers; they are likewise prohibited by Article
monetary or financial considerations other 34(e) from attempting to influence another not to
than those authorized under this Code and its employ a worker.
implementing rules and regulations.
The purpose of Article 34, paragraph (i) of the
PROHIBITED PRACTICES Labor Code is to protect both parties. The rule
Commission of any act prohibited under this that there should be concern, sympathy and
article may constitute not just recruitment solicitude for the rights and welfare of the
violation but illegal recruitment because these working class, is meet and proper. That in
acts are now embodied in the definition of controversies between a laborer and his master,
"illegal recruitment" under Section 6 of RA. No. doubts reasonably arising from the evidence or
in the interpretation of agreement and writings
should be resolved in the former's favor, is not
These prohibitions and the comments below may an unreasonable or unfair rule. But to disregard
be read in relation to Article 38: Illegal the employer's own rights and interests solely
Recruitment. Article 34(a) of the Labor Code has on the basis of that concern and solicitude for
two parts. labor is unjust and unacceptable.

The first part prohibits the charging or accepting The law empowers the POEA to approve and
of fees greater than that allowed by regulations. verify a contract under Article 34(i) of the Labor
Apart from Article 32 of the Labor Code, Section 3, Code to insure that the employee shall not be
Rule V, Part II of the Rules and Regulations on placed in a disadvantageous position and that
Overseas Employment provides that "fees shall the contract contains the minimum standards
be collected from a hired worker only after he of such employment contract set by the POEA.
This is why a standard format for employment
contracts has been adopted by the Department of the allowable rate; and obstructing inspections by
Labor. However, there is no prohibition against DOLE. The acts prohibited under Article 34 are
stipulating in a contract more benefits to the not merely grounds for suspension or
employee than those required by law. cancellation of license or authority. They
likewise constitute illegal recruitment under RA.
Thus, where a supplementary contract was No. 8042, as will be explained in notes to
entered into affording greater benefits to the Article. 38.
employee than the previous one and although
the same was not submitted for approval of the PERSONS LIABLE; DURATION OF LIABILITY
POEA, the NLRC properly considered said
contract to be valid and enforceable. A recruitment agency is solidarity liable for the
unpaid salaries of a worker it recruited for
Moreover, as said contract was voluntarily employment with a foreign principal. Section
entered into by the parties, the same is binding 10, Rule V, Book I [now Part II, Rule II, Section
between them. (f) of the 2002 POEA Rules — CAA] of the
Implementing Regulations of the Labor Code,
Not being contrary to law, morals, good provides: "Before recruiting any worker, the
customs, public policy or public order, its private employment agency shall submit the
validity must be sustained. following documents: x x x (2) Power of the
ART. 35. SUSPENSION AND/OR agency to sue and be sued jointly and
CANCELLATION OF LICENSE OR AUTHORITY solidarily with the principal or foreign-based
employer for any of the violations of the
The Minister of Labor shall have the power to recruitment agreement, and the contracts of
suspend or cancel any license or authority to employment."2
recruit employees for overseas employment for
violation of rules and regulations issued by the Even if the recruitment agency and the principal
had already severed their agency agreement at
Ministry of Labor, the Overseas Employment
the time the worker was injured, the recruitment
Development Board, and the National Seamen
agency may still be sued for violation of the
Board, or for violation of the provisions of this and
employment contract, if no notice of the agency
other applicable laws, General Orders and Letters
of Instructions. agreement's termination was given to the
LICENSE This is pursuant to Article 1921 of the Civil Code,
which states that if the agency has been
The POEA Rules enumerate the recruitment entrusted for the purpose of contracting with
violations that may cause the imposition of specified persons, its revocation shall not
administrative sanctions, including suspension prejudice the latter if they were not given
or cancellation of license. notice thereof.'

The grounds for imposition of administrative The obligations covenanted in the recruitment
sanctions include engaging in act/s of agreement entered into by and between the local
misrepresentation for the purpose of securing agent and its foreign principal are not
a license or renewal thereof, such as giving coterminous with the term of such agreement
false testimonies or falsified documents; so that if either or both of the parties decide to
engaging in the recruitment or placement of end the agreement, the responsibilities of such
workers in jobs harmful to public health or parties towards the contracted employees
morality or to the dignity of the Republic of the under the agreement do not at all end.
Philippines; charging of any fee before
employment is obtained for an applicant It extends up to and until the expiration of the
worker; charging of any fee in amount exceeding employment contracts of the employees
recruited and employed pursuant to the said These contractual undertakings constitute the
recruitment agreement. Otherwise, this will legal basis for private employment or
render nugatory the very purpose for which the recruitment agencies being liable jointly and
law governing the employment of workers for severally with its principal, the foreign-based
foreign jobs abroad was enacted. employer. The undertakings cover all claims that
the recruited workers may file in connection with
SOLIDARY LIABILITY ASSUMED BY the implementation of the service agreements or
RECRUITMENT AGENT employment contracts.
Royal Crown Internationale vs. National Labor Required Undertaking by Agent Under POEA
Relations Commission, G.R. No. 78085, October Rules (Part II, Rule II, Section f), an applicant for a
16,1989 — license to operate a private employment
Facts: Petitioner, a private employment agency, agency or manning agency should submit an
contends that there is no provision in the Labor undertaking under oath stating that the applicant:
Code or the omnibus implementing rules which (1) Shall select only medically and technically
provides for the "third-party liability" of an qualified recruits;
employment agency for violations of an
employment agreement performed abroad. (2) Shall assume full and complete
Neither does the law designate it as the agent of responsibility for all claims and liabilities which
the foreign employer for enforcing claims arising may arise in connection with the use of the license;
from such employment agreement.
(3) Shall assume joint and solidary liability with
Ruling: Petitioner's contention is erroneous. It the employer for all claims and liabilities which
overlooks the fact that it had voluntarily may arise in connection with the implementation of
assumed liability under various contractual the contract; including but not limited to
undertakings it submitted to the Bureau of payment of wages, health and disability
Employment Services [POEA now]. compensation and repatriation;

In applying for a license to operate a private (4) Shall guarantee compliance with the
employment agency for overseas recruitment existing labor and social legislations of the
and placement, petitioner was required to Philippines and of the country of employment of
submit a verified undertaking. In that document recruited workers;
the agency assumed all responsibilities for the
proper use of its license and the proper (5) Shall assume full and the complete
implementation of the employment contracts responsibility for all acts of its officials,
with the workers it recruited and deployed for employees and representatives done in connection
overseas employment. The agency was also with recruitment and placement.
required to file with the [POEA] a formal (6) Shall negotiate for the best terms and
appointment or agency contract executed by the conditions of employment;
foreign-based employer authorizing the agency to
recruit and hire personnel for the former. It (7) Shall disclose the full terms and conditions
contained a provision empowering it to sue of employment to the applicant workers;
and be sued jointly and solidarily with the
foreign principal for any of the violations of the (8) Shall deploy at least 100 workers to its new
recruitment agreement and the contracts of markets within one (1) year from the issuance
employment. The agency was also required to of its license;
post bonds to guarantee compliance with
(9) Shall provide orientation on recruitment
prescribed recruitment procedures and terms of
procedures, terms and conditions and other
employment as appropriate.
relevant information to its workers and provide resume employment and they even signed
facilities therefor; and Statements to the effect that each one of them
did not hold FCC Agency liable for delay or non-
(10) Shall repatriate the deployed workers and payment of their salaries and amounts due
his personal belongings when the need arises. them from Algosaibi-Bison, Ltd. Under the
For the purpose of compliance with item (1), the circumstances where [the complainant] and the
agency may require the worker to undergo other workers were insisting to return to work
trade testing and medical examination only after despite the warning, it cannot be said that their
the worker has been pre-qualified for written waivers as to FCC Agency's
employment. responsibilities are void. They were not victims
of deceit or deception. They entered into those
In case of corporation or partnership, its waivers with open eyes and clear minds. They
officers, directors or partners shall file the were aware of the imminent danger and great risks
verified undertaking that they will be jointly and involved in their renewed ventures.
severally liable with the company over claims
arising from employer-employee relationship.

CONTRACT BY PRINCIPAL A recruitment agency is obligated to protect and

tend to the welfare of its recruits. Even if the
Even if it was the agency's principal which death of the recruit is not attributable to the
entered into contract with the worker, recruitment agency's principal and even if the
nevertheless, the petitioner, as the manning death is not work-related, the nonchalant and
agent in the Philippines, is jointly and solidarity uncaring attitude of the recruitment agency,
responsible with its principal.1 even after it was shown that the worker did not
commit suicide but was murdered, may justify
3.3 PROPER PARTY making the agency liable for moral and
exemplary damages of the worker's family.
A sister in the Philippines of a maltreated
Filipino domestic helper in Abu Dhabi is a "It is surprising, therefore, that [the foreign
proper party to file complaint. The agency is employer and the recruitment agencies] should
liable for illegal dismissal of the domestic insist on suicide, without even lifting a finger to
helper. help solve the mystery of [the worker's] death.
EXCEPTIONS *Being in the business of sending OFWs to work
abroad, Becmen and White Falcon [the agencies]
The rule holding the agency solidarily liable
should know what happens to some of our OFWs.
admits of exceptions depending on peculiar
It is impossible for them to be completely unaware
circumstances. In one case where the workers
that cruelties and inhumanities are inflicted on
themselves insisted for the recruitment agency
OFWs who are unfortunate to be employed by
to send them back to their foreign employer
vicious employers, or upon those who work in
despite their knowledge of its inability to pay
communities or environments where they are liable
their wages, the Court absolved the agency from
to become victims of crimes.... It appears from the
record that to this date, no follow up of Jasmin's
It cannot simply be ignored that FCC Agency case was ever made at all by them, and they seem
was reluctant to send [the complainant] and the to have expediently treated Jasmin's death as a
other workers back to Saudi Arabia because of closed case." Therefore, the foreign employer, the
the financial difficulties encountered by recruitment agencies and their corporate directors
Algosaibi-Bison, Ltd. They were informed of the and officers are found jointly and solidarily liable
risks involved, but [the complainant] and the for moral and exemplary damages to the heirs of
other workers insisted that they be allowed to the deployed worker.
SUABILITY OF A FOREIGN CORPORATION R.A. No. 8042 envisions a phase-out of POEA's
WHICH HIRES FILIPINO WORKERS regulatory function so that the migration of the
workers will become strictly a matter between
A foreign corporation which, through unlicensed the worker and his employer. Its Section 38
agents, recruits workers in the country may be provides that the DOLE within one year from the
sued in and found liable by Philippine courts. effectivity of the Act in 1995 is mandated to
Facilities Management Corp. vs. De La Osa, 89 formulate a five-year comprehensive deregulation
SCRA 131 (1979) — A foreign corporation plan on recruitment activities. It will take into
domiciled outside of the Philippines was ordered account labor market trends, economic conditions
by the CIR to pay a Filipino employee unpaid of the country, and emergency circumstances that
overtime and premium pay. On certiorari before may affect the welfare of migrant workers.
the Supreme Court, the corporation contended that Additionally, Section 39, titled "Gradual Phase-Out
because it was domiciled outside and not doing of Regulatory Functions" provides that within a
business in the Philippines, it could not be sued in period of five-years from effectivity of R.A. No.
the country. 8042, the DOLE shall phase-out the regulatory
It was shown that the corporation, through one of functions of POEA pursuant to the objectives of
its employees in the Philippines, recruited Filipino deregulation.
workers for employment abroad. The question This projected deregulation has stirred some
was: Does the act of a nonresident foreign controversy. Employment agencies have sought
corporation of recruiting Filipino workers to work to compel POEA to implement the phase-out, but
for it abroad constitute "doing business in the POEA appears reluctant or unwilling. DOLE-POEA
Philippines"? believes that the "mandate" of phase-out is not
The Supreme Court ruled: "Indeed, if a foreign absolute as it is subject to the condition that the
corporation, not engaged in business in the country first attain the status of a newly
Philippines, is not barred from seeking redress industrialized country (or NIChood) by the year
from courts in the Philippines, a fortiori, that same 2000.
corporation cannot claim exemption from being DOLE-POEA argues that the perennial problem of
sued in Philippine courts for acts done against a illegal recruitment, the surge of welfare cases, and
person or persons in the Philippines." the indifference of host countries to the protection
Note: Under present Article 18 of the Labor of the OFWs, among other factors, do impede the
Code, "no employer may hire a Filipino worker for deregulation process. An untimely phase-out, it is
overseas employment except through the Boards said, will go against the very spirit of protection of
and entities authorized by the Secretary of Labor." the OFWs that R.A. No. 8042 pursues. The debate
is over because R.A. No. 9422, approved on April
ART. 36. REGULATORY POWER The 10, 2007, repealed the phase-out provision of RA.
Secrerary_of Labor No. 8042.

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