EMPLOYMENT OF HOMEWORKERS
ordinarily very little supervision or regulation of
ART. 153. REGULATION OF INDUSTRIAL
HOMEWORKERS
The employment of industrial homeworkers and
field personnel shall be regulated by the
Government through appropriate regulations issued
by the Secretary of Labor to ensure the general
welfare and protection of homeworkers and
field personnel and the industries employing
them.
ART. 154. REGULATIONS OF SECRETARY OF
LABOR
The regulations or orders to be issued pursuant to
this Chapter shall be designed to assure the
minimum terms and conditions of employment
applicable to the industrial homeworkers or field
personnel involved.
ART. 155. DISTRIBUTION OF HOMEWORK
For purposes of this Chapter, the "employer" of
homeworkers includes any person, natural or
artificial, who for his account or benefit, or on
behalf of any person residing outside the
country, directly or indirectly or through any
employee, agent, contractor, subcontractor or any
other person:
(1) Delivers, or causes to be delivered, any goods,
articles or materials to be processed or fabricated
in or about a home and thereafter to be returned or
to be disposed of or distributed in accordance with
his directions; or
(2) Sells any goods, articles or materials to be
processed or fabricated in or about a home and
then rebuys them after such processing or
fabrication either himself or through some other
person.
1. INDUSTRIAL HOMEWORK
Industrial homework is a system of production
under which work for an employer or contractor
is carried out by a homeworker at his home.
Materials may or may not be furnished by the
employer or contractor. It differs from regular
factory production principally in that it is a
decentralized form of production where there is
methods of work.
Home means any room, house, apartment or other
premises used regularly, in whole or in part, as
dwelling place, except those situated within the
premises or compound of an employer, contractor
or sub-contractor, and the work performed therein
is under the active or personal supervision by or for
the latter.1
2. NEW RULE XIV Department Order No. 5 dated
February 4, 1992 has replaced Rule XIV of the
Rules Implementing Book HI of the Code.
The new Rule XIV, among other things, authorizes
the formation and registration of labor organization
of industrial homeworkers. It also makes explicit the
employer's duty to pay and remit SSS, Medicare
and ECC premiums. Complaints for violation of
labor standards and the terms and conditions of
employment involving money claims of
homeworkers not exceeding P5,000 per
homeworker shall be heard and decided by the
Regional Director. Beyond that amount the case
falls under the jurisdiction of a Labor Arbiter in the
NLRC.
APPRENTICES
ART. 57. STATEMENT OF OBJECTIVES
This Title aims:
(1) To help meet the demand of the economy for
trained manpower;
(2) To establish a national apprenticeship program
through the participation of employers, workers and
government and non-government agencies; and
(3) To establish apprenticeship standards for the
protection of apprentices.
ART. 58. DEFINITION OF TERMS As used in this
Title:
(a) "Apprenticeship" means practical training on
the job supplemented by related theoretical
instruction.
 (b) An "apprentice" is a worker who is covered by
a written apprenticeship agreement with an
individual employer or any of the entities
recognized under this Chapter.
(c) An "apprenticeable occupation" means any
trade, form of employment or occupation which
requires more than three-(3) months practical
training on the job supplemented by related
theoretical instruction. (See R.A. No. 7796.)
(d) "Apprenticeship agreement" is an
employment contract wherein the employer binds
himself to train the apprentice and the apprentice
in turn accepts the terms of training.
ART. 59. QUALIFICATIONS OF APPRENTICE
To qualify as an apprentice, a person shall:
(a) be at least fourteen (14) years of age;
(b) Possess vocational aptitude and capacity for
appropriate tests; and
(c) Possess the ability to comprehend and
follow oral and written instructions. Trade and
industry associations may recommend to the
Secretary of Labor appropriate educational
requirements for different occupations.
ART. 60. EMPLOYMENT OF APPRENTICES
Only employers in the highly technical industries
may employ apprentices and only in
apprenticeable occupations approved by the
Minister of Labor and Employment.
1. GENERAL POLICY AND GUIDELINES IN THE
IMPLEMENTATION OF APPRENTICESHIP
PROGRAM
Apprenticeship, generally understood, is the
arrangement and the period when an upcoming
worker undergoes hands-on training, more or less
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
line-up a succession of trained young workers.
Through apprenticeship, a nation builds, as it
were, an army of workers possessing industrial
skills.
Under Department Order No. 8, Series of 1989,
issued on March 9, 1989, the policy of the
Department of Labor and Employment is to:
a. Obtain the voluntary adoption of
apprenticeship programs by employers and
workers to help meet the increasing demand for
skilled manpower necessary for economic
development, and
b. Increase worker productivity through a
relevant and effective apprenticeship program.
Under the Department Order, the Bureau of Local
Employment is required to undertake the review
of trades, occupations and jobs in all sectors of
the economy to determine apprenticeability, after
which it should publish a list of approved
apprenticeable occupations.
The Regional Offices are required to screen and
evaluate apprenticeship programs so that only
companies, entities and establishments with
adequate facilities for training are recognized
and issued the corresponding certificate of
program recognition.
The certificate is required prior to the hiring of
apprentices. The creation of a Plant Apprenticeship
Committee, which as much as possible should be
tripartite, is encouraged. Such committee shall
organize, administer and monitor the technical
progress of the program, ratify every
apprenticeship agreement processed by the
organizing company, and recommend to the
Regional Office concerned the issuance of a
certificate of completion to the apprentice after
passing the appropriate trade test.
2. TESDA IMPLEMENTS THE APPRENTICESHIP
PROGRAM Section 18 of the TESDA Act of 1994
expressly empowers the TESDA to implement
and administer the apprenticeship program in
accordance with existing laws, rules and
regulations.
3. REQUISITES FOR EMPLOYMENT OF
APPRENTICES
The following are the requisites for employment of
apprentices:
 (a) The employer should be engaged in a business
that is considered a highly technical industry. A
highly technical industry is a trade, business,
enterprise, industry or other activity which
utilizes the application of advanced technology.
(b) The job to which the apprentice will work on
should be classified as an apprenticeable
occupation.
An apprenticeable occupation is an occupation
officially endorsed by a tripartite body and
approved for apprenticeship by the Technical
Education and Skills Development Authority
(TESDA). It is no longer the Secretary of Labor
and Employment, but the TESDA, who approves
apprenticeable occupations.
4. APPRENTICEABLE AGE
The apprenticeable age under this article is
fourteen (14) years but fifteen (15) under the
Implementing Rules (Book II, Rule VI, Section 11).
The elementary rule is that an implementing
regulation cannot prevail over a statutory
provision. In any case, the question of variance is
rendered moot by RA. No. 7610, as amended by
R.A. No. 7658 (approved on November 9,1993),
which explicitly prohibits employment of
children below fifteen (15) years of age. The
same law recognizes certain exceptions, but
being an apprentice in an apprenticeable
occupation is not one of the exceptions.
ART. 61. CONTENTS OF APPRENTICESHIP
AGREEMENTS
Apprenticeship agreements, including the wage
rates of apprentices, shall conform to the rules
issued by the Minister of Labor and Employment.
The period of apprenticeship shall not exceed sjx
months. Apprenticeship agreements providing
for wage rates below the legal minimum wage,
which in no case shall start below 75 percent of the
applicable minimum wage, may be entered into
only in accordance with apprenticeship programs
duly approved by the Minister of Labor and
Employment. The Ministry shall develop standard
model programs of apprenticeship.
APPRENTICESHIP NEEDS DOLE'S PRIOR
APPROVAL, OR APPRENTICE BECOMES
REGULAR EMPLOYEE
ART. 62. SIGNING OF APPRENTICESHIP
AGREEMENT
Every apprenticeship agreement shall be signed
by the employer or his agent, or by an authorized
representative of any of the recognized
organizations, associations or groups, and by
the apprentice. An apprenticeship agreement with
a minor shall be signed in his behalf by his
parent or guardian or, if the latter is not available,
by an authorized representative of the Department
of Labor, and the same shall be binding during its
lifetime. Every apprenticeship agreement
entered into under this Title shall be ratified by the
appropriate apprenticeship committee, if any,
and a copy thereof shall be furnished both the
employer and the apprentice.
ART. 63. VENUE OF APPRENTICESHIP
PROGRAMS
Any firm, employer, group or association, industry,
organization or civic group wishing to organize an
apprenticeship program (may choose" from any
of the following apprenticeship schemes as the
training venue of apprentices:
(a) Apprenticeship conducted entirely by and
within the sponsoring firm, establishment or
entity;
(b) Apprenticeship entirely within a Department of
Labor training center or other public training
institutions; or
(c) Initial training in trade fundamentals in a
training center or other institutions with
subsequent actual work participation within the
sponsoring firm or entity during the final stage of
training.
ART. 64. SPONSORING OF APPRENTICESHIP
PROGRAM
Any of the apprenticeship schemes recognized
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
undertaken:
(a) In the premises of the sponsoring employer
in the case of individual apprenticeship programs;
(b) In the premises of one or several
designated firms in the case of programs
sponsored by a group or association of employers
or by a civic organization; or
(c) In a Department of Labor training center or
other public training institution
ART. 65. INVESTIGATION OF VIOLATION OF
APPRENTICESHIP AGREEMENT
Upon complaint of any interested person or upon its
own initiative, the appropriate agency of the
Department of Labor or its authorized
representative shall investigate any violation of
an apprenticeship agreement pursuant to such
rules and regulations as may be prescribed by
the Secretary of Labor.
ART. 66. APPEAL TO THE SECRETARY OF
LABOR
The, decision of the authorized agency of the
Department of Labor may be appealed by any
aggrieved person to the Secretary of Labor within
five (5-)days from receipt of the decision. The
decision of the Secretary of Labor shall be final and
executory.
ART. 67. EXHAUSTION OF ADMINISTRATIVE
REMEDIES ^
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
administrative remedies.
ART. 68. APTITUDE TESTING OF APPLICANTS
Consonant with the minimum qualifications of
apprentice-applicants required under this
Chapter, employers or entities with duly
recognized apprenticeship programs shall have
primary responsibility for providing appropriate
aptitude tests in the selection of apprentices. If
they do not have adequate facilities for the
purpose, the Department of Labor shall perform
the service free of charge".
ART. 69. RESPONSIBILITY FOR THEORETICAL
INSTRUCTION
Supplementary theoretical instruction to
apprentices in cases where the program is
undertaken in the plant may be done by the
employer. If the latter is not prepared to assume
the responsibility, the same may be delegated to
an appropriate government agency.
ART. 70. VOLUNTARY ORGANIZATION OF
APPRENTICESHIP PROGRAMS; EXEMPTIONS
(a) The organization of apprenticeship program
shall be primarily a voluntary
undertaking of employers;
(b) When national security or particular
requirements of economic development so
demand, the President of the Philippines
may require compulsory training of
apprentices in certain trades, occupations,
jobs or employment levels where shortage of
trained manpower is deemed critical as
determined by the Secretary of Labor.
Appropriate rules in this connection shall be
promulgated by the Secretary of Labor as the
need arises;
(c) Where services of foreign technicians are
utilized by private companies in
apprenticeable trades, said companies are
required to set up appropriate apprenticeship
programs.
ART. 71. DEDUCTIBILITY OF TRAINING
COSTS
An additional deduction from taxable income of
one-half (1/2) of the value of labor training
expenses incurred for developing the
productivity and efficiency of apprentices
shall be granted to the person or enterprise
organizing an apprenticeship program:
Provided, That such program is duly
recognized by the Department of Labor:
Provided, further, That such deduction shall not
exceed ten (10%) percent of direct labor wage:
And provided, finally, That the person or
 enterprise who wishes to avail himself or
itself of this incentive should pay his
apprentices the minimum wage.
ART. 72. APPRENTICESWITHOUT
COMPENSATION
The Secretary of Labor may authorize the
hiring of apprentices without compensation
whose training on the job is required by the
school or training program curriculum or as
a requisite for graduation or board
examination.
1. WORKING SCHOLAR; LIABILITY OF SCHOOL
In relation to Article 72, the Implementing Rules
provide: There is no employer-employee
relationship between students on one hand, and
schools, colleges or universities, on the other,
where there is written agreement between them
under which the former agree to work for the
latter in exchange for the privilege to study free
of charge, provided the students are given real
opportunities, including such facilities as may be
reasonable and necessary to finish their chosen
courses under such agreement.
If the student (referred to in the preceding
implementing rule) injures a third party, does the
school become liable? In the Filamer case the
Supreme Court at first said no and then
reconsidered, through the pen of Justice Gutierrez,
Jr.
LEARNERS
ART. 73. LEARNERS DEFINED /
Learners are persons hired as trainees in
semi-skilled and other industrial occupations
which are non-apprenticeable and which may be
learned through practical training on the job in a
relatively short period of time which shall not
exceed three (3) months.
ART. 74. WHEN LEARNERS MAYBE HIRED
Learners may be employed when -no
experienced workers are available, the
employment of learners is necessary to prevent
curtailment of employment opportunities, and
the employment does not create unfair
competition in terms of labor costs or impair or
lower working standards.
ART. 75. LEARNERSHIP AGREEMENT
Any employer desiring to employ learners
shall enter into a learnership agreement with
them, which agreement shall include:
(a) The names and addresses of the learners;
(b) The duration of the learnership period,
which shall not exceed three (3) months;
(c) The wages or salary rates of the learners
which shall begin at not less than seventy-five
percent (75%) of the applicable minimum wage;
and
(d) A commitment to employ the learners if
they so desire, as regular employees upon
completion of the learnership. All learners who
have been allowed or suffered to work during
the first two (2) months shall be deemed regular
employees if training is terminated by the
employer before the end of the stipulated period
through no fault of the learner.
The learnership agreement shall be
subject to inspection by the Secretary of Labor, or
his duly authorized representatives.
ART. 76. LEARNERS IN PIECEWORK
Learners employed in piece or incentive-rate
jobs during the training period shall be paid in
full for the work done.
ART. 77. PENALTY CLAUSE
Any violation of this Chapter or its
implementing rules and regulations shall be
subject to the general penalty clause provided
for in this Code.
LEARNERSHIP VS. APPRENTICESHIP
Learnership and apprenticeship are similar
because they both mean training periods for
jobs requiring skills that can be acquired through
actual work experience. And because both a
learner and an apprentice are not as fully
productive as regular workers, the learner and
the apprentice maybe paid wages twenty-five
percent lower than the applicable legal
minimum wage.
They differ in the focus and the terms of
training. A learner trains in a semi-skilled job or in
industrial occupations that require training for less
than three months. An apprentice, on the other
hand, trains in a highly skilled job or in a job
found only in a highly technical industry.
Because it is a highly skilled job, the training
period exceeds three months.
For a learner, the training period is shorter
because the job is more easily learned than that
in apprenticeship. The job, in other words, is
"non-apprenticeable" because its practical skills
can be learned in three (not six) months. A
learner is not an apprentice but an apprentice
is, conceptually, also a learner.
Accordingly, because the job is more easily
learnable in learnership than in apprenticeship,
the employer is committed to hire the learner-
trainee as an employee after the training period.
No such commitment exists in apprenticeship.
Finally, employment of apprentices, as stated
in Article 60, is legally allowed only in highly
technical industries and only in apprenticeable
occupations approved by DOLE. Learnership is
allowed even for non-technical jobs.
HANDICAPPED WORKERS
ART. 78. DEFINITION
Handicapped workers are those whose earning
capacity is impaired by age or physical or
mental deficiency or injury.
ART. 79. WHEN EMPLOYABLE
Handicapped workers may be employed when
their employment is necessary to prevent
curtailment of employment opportunities and
when it does not create unfair competition in
labor costs or impair or lower working standards.
ART. 80. EMPLOYMENT AGREEMENT
Any employer who employs handicapped
workers shall enter into an employment
agreement with them, which agreement shall
include:
(a) The names and addresses of the
handicapped workers to be employed;
(b) The rate to be paid the handicapped
workers which shall be not less than seventy-
five (75%) percent of the applicable legal
minimum wage;
(c) The duration of employment period; and
(d) The work to be performed by handicapped
workers. The employment agreement shall be
subject to inspection by the Secretary of Labor or
his duly authorized representatives.
ART. 81. ELIGIBILITY FOR APPRENTICESHIP
Subject to the appropriate provisions of this Code,
handicapped workers maybe hired as
apprentices or learners if their handicap is not
such as to effectively impede the performance
of job operations in the particular occupations for
which they are hired.
1. THE MAGNA CARTA FOR DISABLED
PERSONS.
The "Magna Carta for Disabled Persons “ensures
equal opportunities for disabled-persons and
prohibits discrimination against them. Its
pertinent provisions include:
Section 5. Equal Opportunity for Employment.
—No disabled person shall be denied access to
opportunities for suitable employment. A
qualified disabled employee shall be subject to
the same terms and conditions of employment
and the same compensation, privileges,
benefits, fringe benefits, incentives or-
allowances as a qualified able-bodied person.
Five percent (5%)/of all casual, emergency and
contractual positions in the Departments of Social
Welfare and Development; Health; Education,
Culture and Sports; and other government
agencies, offices or corporations engaged in social
development shall be reserved for disabled
persons.
Section 6. Sheltered Employment. —If suitable
employment for disabled persons cannot be
found through open employment as provided in
the immediately preceding Section, the State shall
endeavor to provide it by means of sheltered
employment. In the placement of disabled
persons in sheltered employment, it shall accord
due regard to the individual qualities, vocational
goals and inclinations to ensure a good working
atmosphere and efficient production.
Section 7. Apprenticeship.
— Subject to the provisions of the Labor Code as
amended, disabled persons shall be eligible as
apprentices or learners: Provided, That their
handicap is not much as to effectively impede
the performance of job operations in the
particular occupation for which they are hired:
Provided, further, That after the lapse of the
period of apprenticeship, if found satisfactory
in the job performance, they shall be eligible for
employment.
Section 8. Incentives for Employment.
a) To encourage the active participation of the
private sector in promoting the welfare of
disabled persons and to ensure gainful
employment for qualified disabled persons,
adequate incentives shall be provided to private
entities which employ disabled persons.
b) Private entities that employ disabled persons
who meet the required skills or qualifications,
either as regular employee, apprentice or
learner, shall be entitled to an additional
deduction, from their gross income, equivalent
to twenty-five percent (25%) of the total amount
paid as salaries and wages to disabled persons:
Provided, however, That such entities present proof
as certified by the Department of Labor and
Employment that disabled persons are under
their employ: Provided, further, That the disabled
employee is accredited with the Department of
Labor and Employment and the Department of
Health as to his disability, skills and
qualifications. ;
c) Private entities that improve or modify their
physical facilities in order to provide reasonable
accommodation for disabled persons shall also
be entitled to an additional deduction from their
taxable income, equivalent to fifty percent (50%)
of the direct costs of the improvements or
modifications. This Section, however, does not
apply to improvements or modifications of
facilities required under Batas Pambansa Bilang
344.
Section 32. Discrimination on Employment. —
No entity, whether public or private, shall
discriminate against a qualified disabled person
by reason of disability in regard to job
application procedures, the hiring, promotion,
or discharge of employees, employee
compensation, job training, and other terms,
conditions, and privileges of employment.
The following constitutes acts of
discrimination:
a) Limiting, segregating or classifying a disabled
job applicant in such a manner that adversely
affects his work opportunities;
b) Using qualification standards, employment
test or other selection criteria that screen out or
tend to screen out a disabled person unless
such standards, test or other selection criteria are
shown to be job-related for the position in
question and are consistent with business
necessity;
c) Utilizing standards, criteria, or methods of
administration that:
1) have the effect of discrimination on
the basis of disability;
or
2) perpetuate the discrimination of others
who are subject to common administrative control.
d) Providing less compensation, such as salary,
wage or other forms of remuneration and fringe
benefits, to a qualified disabled employee, by
reason of his disability, than the amount to
which a non-disabled person performing the
same work is entitled;
e) Favoring a non-disabled employee over a
qualified disabled employee with respect to
promotion, training opportunities^ study and
scholarship grants, solely on account of the
latter's disability;
f) Re-assigning or transferring a disabled
employee to a job or position he cannot perform
by reason of his disability;
g) Dismissing or terminating the services of a
disabled employee by reason of his disability
unless the employer can prove that he impairs
the satisfactory performance of the work
involved to the prejudice of the business entity:
Provided, however, That the employer first
sought to provide reasonable accommodations
for disabled persons;
h) Failing to select or administer in the most
effective manner employment tests which
accurately reflect the skills, aptitude or other factor
of the disabled applicant or employee that such test
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
in labor unions or similar organizations.
Section 33. Employment Entrance Examination.
— Upon an offer of employment, a disabled
applicant may be subjected to medical
examination, on the following occasions:
a) all entering employees are subjected to such
an examination regardless of disability;
b) information obtained during the medical
condition or history of the applicant is collected
and maintained on separate forms and in
separate medical files and is treated as a
confidential medical record: Provided, however,
That:
1) supervisors and managers may be informed
regarding necessary restrictions on the work or
duties of the employees and necessary
accommodations;
2) first aid and safety personnel may be
informed, when appropriate, if the disability might
require emergency treatment;
3) government officials investigating compliance
with this Act shall be provided relevant information
on request; and
4) the results of such examination are used only
in accordance with this Act.
QUALIFIED DISABLED PERSONS AS REGULAR
EMPLOYEES
Even handicapped persons, employed by a bank
to accommodate the request of the social
welfare secretary, may become regular
employees.
Republic of the Philippines
Congress of the Philippines
Metro Manila
Thirteenth Congress
Third Regular Session
Begun and held in Metro Manila, on Monday, the
twenty-fourth day of July, two thousand six.
REPUBLIC ACT NO. 9442 April 30, 2007
AN ACT AMENDING REPUBLIC ACT NO. 7277,
OTHERWISE KNOWN AS THE "MAGNA CARTA
FOR DISABLED PERSONS, AND FOR OTHER
PURPOSES"
Be it enacted by the Senate and House of
Representatives of the Philippines in Congress
assembled:
SECTION 1. A new chapter, to be denominated as
"Chapter 8. Other Privileges and Incentives" is
hereby added to Title Two of Republic Act No.
7277, otherwise known as the "Magna Carta for
Disabled Persons", with new Sections 32 and 33, to
read as follows:
"CHAPTER 8. Other Privileges and
Incentives
"SEC. 32. Persons with disability shall be
entitled to the following:
(a) At least twenty percent (20%) discount
from all establishments relative to the
utilization of all services in hotels and similar
lodging establishments; restaurants and
recreation centers for the exclusive use or
enjoyment of persons with disability;
(b) A minimum of twenty percent (20%)
discount on admission fees charged by the
theaters, cinema houses, concert halls,
circuses, carnivals and other similar places
of culture, leisure and amusement for the
exclusive use or enjoyment of persons with
disability;
(c) At least twenty percent (20%) discount
for the purchase of medicines in all
drugstores for the exclusive use or
enjoyment of persons with disability;
(d) At least twenty percent (20%) discount
on medical and dental services including
diagnostic and laboratory fees such as, but
not limited to x-rays, computerized
tomography scans and blood tests, in all
government facilities, subject to guidelines
to be issued by the Department of Health
(DOH), in coordination with the Philippine
Health Insurance Corporation
(PHILHEALTH);
(e) At least twenty percent (20%) discount
on medical and dental services including
diagnostic and laboratory fees, and
professional fees of attending doctors in all
private hospitals and medical facilities, in
accordance with the rules and regulations to
be issued by the DOH, in coordination with
the PHILHEALTH;
(f) At least twenty percent (20%) discount
on fare for domestic air and sea travel for
the exclusive use or enjoyment of persons
with disability;
(g) At least twenty percent (20%) discount in
public railways, skyways and bus fare for
the exclusive use and enjoyment of persons
with disability;
(h) Educational assistance to persons with
disability, for them to pursue primary,
secondary, tertiary, post tertiary, as well as
vocational or technical education, In both
public and private schools, through the
provision of scholarships, grants, financial
aids, subsidies and other incentives to
qualified persons with disability, including
support for books, learning materials, and
uniform allowance to the extent feasible:
provided, that persons with disability shall
meet minimum admission requirements;
(i) To the extent practicable and feasible,
the continuance of the same benefits and
privileges given by the Government Service
Insurance System (GSIS), Social Security
System (SSS), and PAG-IBIG, as the case
may be, as are enjoyed by those in actual
service;
(j) To the extent possible, the government
may grant special discounts in special
programs for persons with disability on
purchase of basic commodities, subject to
guidelines to be issued for the purpose by
the Department of Trade and Industry (DTI)
and the Department of Agriculture (DA); and
(k) Provision of express lanes for persons
with disability in all commercial and
government establishments; in the absence
thereof, priority shall be given to them.
The abovementioned privileges are
available only to persons with disability who
are Filipino citizens upon submission of any
of the following as proof of his/her
entitlement thereto:
(I) An identification card issued by
the city or municipal mayor the
barangay captain of the place where
the person with disability resides;
(II) The passport of the persons with
disability concerned; or
(III) Transportation discount fare
Identification Card (ID) issued by the
National Council for the Welfare of
Disabled Persons (NCWDP).
The privileges may not be claimed if the
persons with disability claims a higher
discount as may be granted by the
 commercial establishment and/or under
other existing laws or in combination with
other discount program/s.
The establishments may claim the discounts
granted in sub-sections (a), (b), (c), (e), (f)
and (g) as tax deductions based on the net
cost of the goods sold or services rendered:
provided, however, That the cost of the
discount shall be allowed as deduction from
gross income for the same taxable year that
the discount is granted: provided, further,
That the total amount of the claimed tax
deduction net of value-added tax if
applicable, shall be Included in their gross
sales receipts for tax purposes and shall be
subject to proper documentation and to the
provisions of the National Internal Revenue
Code (NIRC), as amended."
"SEC. 33. Incentives. - Those caring for and
living with a person with disability shall be
granted the following incentives;
(a) persons with disability shall be treated
as dependents under Section 35(A) of the
National Internal Revenue Code, as
amended and as such, individual taxpayers
caring for them shall be accorded the
privileges granted by the code Insofar as
having dependents under the same section
are concerned; and
(b) Individuals or nongovernmental
institutions establishing homes, residential
communities or retirement villages solely to
suit the needs and requirements of persons
with disability shall be accorded the
following:
(i) Realty tax holiday for the first five
years of operation; and
(ii) Priority in the building and/or
maintenance of provincial or
municipal roads leading to the
aforesaid home residential
community or retirement village."
SEC. 2. Republic Act No. 7277 is hereby amended
by inserting a new title, chapter and section after
Section 38 to be denominated as Title 4, chapters 1
and 2 and Sections 39, 40, 41 and 42 to read as
follows:
"Title Four
Prohibitions on Verbal, Non-verbal Ridicule
and VilificationAgainst Persons with
Disability
"CHAPTER 1. Deliverance from Public
Ridicule.
"SEC. 39. Public Ridicule . - For purposes of
this Chapter, public ridicule shall be defined
as an act of making fun or contemptuous
initiating or making mockery of persons with
disability whether in writing or in words, or in
action due to their impairment/s.
"SEC. 40. No individual, group or
community shall execute any of these acts
of ridicule against persons with disability in
any time and place which could intimidate or
result in loss of self-esteem of the latter.
"CHAPTER 2. Deliverance from Vilification
"SEC. 41. Vilification. - For purposes of this
chapter, vilification shall be defined as:
(a) the utterance of slanderous and abusive
statements against a person with disability;
and/or
(b) An activity in public which incites hatred
towards serious contempt for, or severe
ridicule of persons with disability."
"SEC. 42. Any individual, group or
community is hereby prohibited from
vilifying any person with disability which
could result into loss of self-esteem of the
latter."
SEC. 3. Section 46 of Republic Act No. 7277 is
hereby amended to read as follows:
"SEC. 46. Penal Clause. -
(a) Any person who violates any provision of
this Act shall suffer the following penalties:
(1) For the first violation, a fine of not
less than Fifty thousand pesos
(P50,000.00) but not exceeding One
hundred thousand pesos
(P100,000.00) or imprisonment of
not less than six months but not
more than two years, or both at the
discretion of the court; and
 (2) For any subsequent violation, a
fine of not less than One hundred
thousand pesos (P100,000.00) but
not exceeding Two hundred
thousand pesos (P200,000.00) or
imprisonment for not less than two
years but not more than six years, or
both at the discretion of the court.
(b) Any person who abuses the privileges
granted herein shall be punished with
imprisonment of not less than six months or
a fine of not less than Five thousand pesos
(P5,000.00), but not more than Fifty
thousand pesos (P50,000.00), or both, at
the discretion of the court.
(c) If the violator is a corporation
organization or any similar entity, the
officials thereof directly involved shall be
liable therefore.
(d) If the violator is an alien or a foreigner,
he shall be deported immediately after
service of sentence without further
deportation proceedings.
Upon filing of an appropriate complaint, and
after notice and hearing the proper
authorities may also cause the cancellation
or revocation of the business permit, permit
to operate, franchise and other similar
privileges granted to any business entity
that fails to abide by the provisions of this
Act."
Sec. 4. The title of Republic Act No. 7277 is hereby
amended to read as the "Magna Carta for Persons
with Disability", and all references on the said law
to "disabled persons" shall likewise be amended to
read as "persons with disability".
SEC. 5. The Department of Social Welfare and
Development, the National Council for the Welfare
of Disabled Persons, and the Bureau of Internal
Revenue, in consultation with the concerned
Senate and House committees and other agencies,
organizations, establishments shall formulate an
agencies, organizations, establishments shall
formulate an implementing rules and regulations
pertinent to the provisions of this Act within six
months after the effectivity of this Act.
SEC. 6. This Act shall take effect fifteen (15) days
after its publication in any two newspapers of
general circulation.
Approved,
EMPLOYMENT OF NON-RESIDENT ALIENS
ART. 40. EMPLOYMENT PERMIT OF NON-
RESIDENT ALIENS
Any alien seeking admission to the
Philippines for employment purposes and any
domestic or foreign employer who desires to
engage an alien for employment in the
Philippines shall obtain an employment permit
from the Department of Labor.
The employment permit may be issued to
a non-resident alien or to the applicant employer
after a determination of the non-availability of a
person in the Philippines who is competent,
able and willing at the time of application to
perform the services for which the alien is
desired.
For an enterprise registered in preferred
areas of investments, said employment permit
may be issued upon recommendation of the
government agency charged with the
supervision of said registered enterprise.
ART. 41. PROHIBITION AGAINST TRANSFER
OF EMPLOYMENT
(a) After the issuance of an employment permit,
the alien shall not transfer to another job or
change his employer without prior approval of
the Secretary of Labor.
(b) Any non-resident alien who shall take up
employment in violation of the provision of this
Title and its implementing rules and regulations
shall be punished in accordance with the
provisions of Articles 289 and 290 of the Labor
Code.
In addition, the alien worker shall be subject to
deportation after service of his sentence.
ART. 42. SUBMISSION OF LIST
Any employer employing non-resident foreign
nationals on the effective date of this Code shall
submit a list of such nationals to the Secretary of
Labor within thirty (30) days after such date
indicating their names, citizenship, foreign and
local addresses, nature of employment and
status of stay in the country. The Secretary of
Labor shall then determine if they are entitled to
an employment permit.
EMPLOYMENT OF ALIENS
Article 40 requires only non-resident
aliens to secure employment permit. Resident
aliens are not so required.1 For immigrants and
resident aliens what is required is an Alien
Employment Registration Certificate(AFRC).
Foreigners may not be employed in certain
"nationalized" business. The Anti-Dummy Law
(CA. No. 108, as amended by P.D. No. 715)
prohibits employment of aliens in entities that
own or control a right, franchise, privilege,
property or business whose exercise or
enjoyment is reserved by law only to Filipinos
or to corporations or associations whose capital
should be at least 60% Filipino-owned. Authority
to operate a public utility or to develop, exploit,
and utilize natural resources can be granted only
to Philippine citizens or to corporations or
associations at least 60% of the capital of which
is owned by such citizens.
The same 60% requirement applies to
financing companies.2 Under the Philippine
Constitution, Article XVI, Section 11, mass
media enterprises can be owned or managed
only by Filipinos or by corporations or
associations wholly owned or managed by
them.
The Secretary of Justice has rendered an
Opinion, however, that aliens may be employed
in entities engaged in nationalized activities:
(a) where-the^ Secretary of Justice
specifically authorizes the employment of
foreign technical personnel, or
(b) where the aliens are elected members
of the board of directors or governing body of
corporations or associations in proportion to their
allowable participation in the capital of such
entities.
Enterprises registered under the Omnibus
Investments Code (E.O. No. 226) may, for a
limited period, employ foreign nationals in
technical, supervisory, or advisory positions.
Department Order No. 75-06
Several department orders have been issued
about employment permit for foreign workers.
The latest of these, replacing the earlier ones, is
D.O. No. 75, dated 31 May 2006 whose full text is
reproduced below.
Revised Rules for the Issuance of Employment
Permits to Foreign Nationals
Pursuant to the provisions of Articles 5 and 40 of
P.D. No. 442, as amended, the provisions of Rule
XIV Book I of its Implementing Rules and
Regulations, Section 17(5), Chapter 4, Title VII of
the Administrative Code of 1987, the following
Rules are hereby promulgated: Rule I. Coverage
and Exemption
1. Coverage. All foreign nationals who intend to
engage in gainful employment in the Philippines
shall apply for Alien Employment Permit (AEP).
2. Exemption. The following categories of foreign
nationals are exempt from securing an
employment permit:
2.1 All members of the diplomatic service and
foreign government officials accredited by and
with reciprocity arrangement with the Philippine
government;
2.2 Officers and staff of international
organizations of which the Philippine government
is a member, and their legitimate spouses
desiring to work in the Philippines;
2.3 Foreign nationals elected as members of the
Governing Board who do not occupy any other
position, but have only voting rights in the
corporation;
2.4 All foreign nationals granted exemption by
law;
2.5 Owners and representatives of foreign
principals whose companies are accredited by
the Philippine Overseas Employment
Administration (POEA), who come to the
Philippines for a limited period and solely for the
purpose of interviewing Filipino applicants for
employment abroad;
2.6 Foreign nationals who come to the
Philippines to teach, present and/or conduct
research studies in universities and colleges as
visiting, exchange or adjunct professors under
formal agreements between the universities or
colleges in the Philippines and foreign
universities or colleges; or between the
Philippine government and foreign government;
provided that the exemption is on a reciprocal
basis; and
2.7 Resident foreign nationals.
Rule II. Procedure in the Processing of
Applications for AEP
1. Applications shall be filed with the Regional
Office having jurisdiction over the intended place
of work. Only applications with the following
complete documentary requirements shall be
received and acted upon by the Regional Office:
- Duly accomplished Application Form
- Photocopy of Passport, with visa or Certificate
of Recognition for refugees
- Contract of Employment/Appointment or
Board Secretary's Certificate of Election
Photocopy of Mayor's Permit to operate
business - Photocopy of current AEP (if for
renewal)
In the case of foreign nationals to be assigned in
related companies, they may file their application
with any of the Regional Offices having jurisdiction
over the applicant's intended place of work.
XXXXX….
III. RECRUITMENT AND PLACEMENT
ART. 13. DEFINITIONS
(a) "Worker" means any member of the labor force,
whether employed or unemployed.
(b) "Recruitment and placement" refers to any act
of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring
workers, and includes referrals, contract
services, promising or advertising for
employment, locally or abroad, whether for profit
or not: Provided, That any person or entity which,
in any manner, offers or promises for a fee
employment to two or more persons shall be
deemed engaged in recruitment and placement.
(c) "Private fee-charging employment agency"
means any person or entity engaged in the
recruitment and placement of workers for a fee
which is charged, directly or indirectly, from the
workers or employers or both.
(d) "License" means a document issued by the
Department of Labor authorizing a person or
entity to operate a private employment agency.
(e) "Private recruitment entity" means any
person or association engaged in the
recruitment and placement of workers, locally or
overseas, without charging, directly or indirectly,
any fee from the workers or employers.
(f) "Authority" means a document issued by the
Department of Labor authorizing a person or
association to engage in recruitment and placement
activities as a private recruitment entity.
(g) "Seaman" means any person employed in a
vessel engaged in maritime navigation.
(h) "Overseas employment" means employment
of a worker outside the Philippines.
(i) "Emigrant" means any person, worker or
otherwise, who emigrates to a foreign country
by virtue of an immigrant visa or resident permit
or its equivalent in the country of destination.
People vs. Panis, 142 SCRA 664 (1986) — Facts:
Four separate criminal complaints were filed
against Abug for operating a fee-charging
employment agency without first securing a license.
Abug filed a motion to quash alleging that the
informations did not charge an offense as he was
charged with illegally recruiting only one person in
each of the four informations.
Abug claimed that under Article 13 (b) there would
be illegal recruitment only when two or more
persons in any manner were promised or offered
any employment for a fee.
Ruling: The Court ruled that the number of
persons is not an essential ingredient of the act
of recruitment and placement of workers. — "As
we see it, the proviso was intended neither to
impose a condition on the basic rule nor to
provide an exception thereto but merely to
create a presumption.
The presumption is that the individual or entity is
engaged in recruitment and placement whenever
he or it is dealing with two or more persons to
whom, in consideration of a fee, an offer or
promise of employment is made in the course
of the "canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring (of)
workers."
The number of persons dealt with is not an
essential ingredient of the act of recruitment and
placement of workers. Any of the acts mentioned
in the basic rule in Article 13(b) will constitute
recruitment and placement even if only one
prospective worker is involved.
The proviso merely lays down a rule of evidence
that where a fee is collected in consideration of
a promise or offer of employment to two or
more prospective workers, the individual or
entity dealing with them shall be deemed to be
engaged in the act of recruitment and
placement. The words 'shall be deemed' create
that presumption."
ART. 14. EMPLOYMENT PROMOTION
The Secretary of Labor shall have the power and
authority:
(a) To organize and establish new employment
offices in addition to the existing employment
offices under the Department of Labor as the need
arises;
(b) To organize and establish a nationwide job
clearance and information system to inform
applicants registering with a particular employment
office of job opportunities in other parts of the
country as well as job opportunities abroad;
(c) To develop and organize a program that will
facilitate occupational, industrial and
geographical mobility of labor and provide
assistance in the relocation of workers from one
area to another; and
(d) To require any person, establishment,
organization or institution to submit such
employment information as may be prescribed by
the Secretary of Labor.
EMPLOYMENT PROMOTION
To pursue its responsibility to promote
employment opportunities, the DOLE carries
out programs for local and overseas
employment. Effective allocation of manpower
resources in local employment is assigned to the
BLE (Bureau of Local Employment) and to POEA
(Philippine Overseas Employment Administration)
for overseas employment.
ART. 15. BUREAU OF EMPLOYMENT SERVICES
(a) The Bureau of Employment Services shall
be primarily responsible for developing and
monitoring a comprehensive employment
program. It shall have the power and duty:
1. To formulate and develop plans and
programs to implement the employment
promotion objectives of this Title;
2. To establish and maintain a registration
and/or licensing system to regulate private
sector participation in the recruitment and
placement of workers, locally and overseas,
and to secure the best possible terms and
conditions of employment for Filipino
contract workers and compliance therewith
under such rules and regulations as may be
issued by the Department of Labor and
Employment;
3. To formulate and develop employment
programs designed to benefit disadvantaged
groups and communities;
 4. To establish and maintain a registration
and/or work permit system to regulate the
employment of aliens;
5. To develop a labor market information
system in aid of proper manpower and
development planning;
6. To develop a responsible vocational
guidance and testing system in aid of proper
human resources allocation; and
7. To maintain a central registry of skills,
except seamen.
[(b) The regional offices of the Department of
Labor shall have the original and exclusive
jurisdiction over all matters or cases
involving employer-employee relations
including money claims, arising out of or by
virtue of any law or contracts involving Filipino
workers for overseas employment except
seamen:
Provided, That the Bureau of Employment
Services may, in the case of the National
Capital Region, exercise such power,
whenever the Department of Labor and
Employment deems it appropriate. The
decisions of the regional offices or the Bureau
of Employment Services if so authorized by the
Secretary of Labor and Employment as
provided in this Article, shall be appealable to
the National Labor Relations Commission upon
the same grounds provided in Article 223
hereof. The decisions of the National Labor
Relations Commission shall be final and
unappealable.
(b) The Minister of Labor shall have the power
to impose and collect fees, based on rates
recommended by the Bureau of Employment
Services. Such fee shall be deposited in the
National Treasury as a special account of the
General Fund, for the promotion of the
objectives of the Bureau of Employment
Services, subject to the provisions of Section
40 of Presidential Decree No. 1177.]'
LOCAL EMPLOYMENT
Pursuing the social justice goal, through
availability of jobs, Article 15 requires the
Department of Labor and Employment to promote
employment opportunities. This crucial task
was given by P.D. No. 850 (December 16, 1975)
to the Bureau of Employment Services which has
been replaced by the Bureau of Local Employment
(BLE) through Executive Order No. 797 (May
1,1982).
The same Executive Order created the Philippine
Overseas Employment Administration which
consolidated the overseas employment
functions of the BES as well as those of the
Overseas Employment Development Board
(OEDB) under Article 17 and the National
Seamen Board (NSB) under Article 20. In the
meantime, through Administrative Order No. 186
(September 4, 1987), the Secretary of Labor and
Employment devolved to the DOLE regional offices
the line functions of the BLE. The regional offices
therefore now handle the licensing of local
recruitment agencies and the issuance of work
permits to non-resident aliens and of
employment registration certificates to resident
aliens.
The Bureau of Local Employment has issued the
Rules and Regulations Governing Local
Employment, which is reproduced in Book I of the
Implementing Rules in this volume
The PESO
A significant development in the promotion of
local employment is the approval of R.A. No. 8759
on February 4, 2000. It requires the
establishment of a public employment service
office (PESO) in capital towns, cities and other
strategic areas. A PESO is intended to serve as
employment service and information center in
its area of operation. It regularly obtains lists of
job vacancies from employers, publicizes
them, invites and evaluates applicants, and
refers them for probable hiring. It also provides
training and educational guidance and employment
counseling services.
The PESO also renders special services to the
public such as holding of (job fairs) livelihood
and self-employment bazaars; special credit
assistance for placed overseas workers;
special program for employment of students
(SPES) during summer or semestral breaks;
work appreciation seminars and conferences; and
hiring of workers in infrastructure projects
(WHIP.)
The WHIP is a program pursuant to Republic Act
6885 which requires the Department of Public
Works and Highways and private contractors to
hire 30 percent of skilled and 50 percent
unskilled labor requirements from the area
where the project is being undertaken.
ART 16. PRIVATE RECRUITMENT
Except as provided in Chapter II of this Tide, no
person or entity, other than the public
employment offices, shall engage in the
recruitment and placement of workers.
AUTHORIZED ENTITIES
Although this Article says that only the public
employment offices shall engage in
recruitment and placement of workers,
Article 25 provides a broad exception as it
states that "the private employment sector shall
participate in the recruitment and placement of
workers, locally and overseas."
And while Article 18 generally prohibits direct
hiring for overseas employment, it also
recognizes a number of exceptions. Summing
up, based on the Rules Implementing the Code,
the following entities are authorized to recruit
and place workers for local or overseas
employment:
a. public employment offices
b. private recruitment entities
c. private employment agencies
d. shipping or manning agents or
representatives
e. the POEA
f. construction contractors if authorized to
operate by DOLE and the Construction Industry
Authority g- members of the diplomatic corps
although hirings done by them have to be
processed through the POEA
h. other persons or entities as may be
authorized by the DOLE secretary
ART. 17. OVERSEAS EMPLOYMENT
DEVELOPMENT BOARD
An Overseas Employment Development Board
is hereby created to undertake, in cooperation with
relevant entities and agencies, a systematic
program for overseas employment of Filipino
workers in excess of domestic needs and to
protect their rights to fair and equitable
employment practices. It shall have the power
and duty:
1. To promote the overseas employment of
Filipino workers through a comprehensive
market promotion and development program;
2. To secure the best possible terms and
conditions of employment of Filipino contract
workers on a government-to-government basis
and to ensure compliance therewith;
3. To recruit and place workers for overseas
employment on a government-to-government
arrangement and in such other sectors as policy
may dictate; and
4. To act as secretariat for the Board of Trustees of
the Welfare and Training Fund for Overseas
Workers.
OVERSEAS EMPLOYMENT POLICY
The export of Filipino labor is an offspring of
national poverty. Particularly during the dark,
debauched, and deplorable years of the martial
law regime, manpower export had to happen to
alleviate the twin problems of unemployment
and the deficit in the balance of trade. The
dictatorial government required homeward
remittance of overseas workers' earnings.
Because of the remittances the overseas
employment, meant only to be a stopgap measure,
fast became a top dollar-earning industry. Indeed
the export of people brought in good sums of
money, and the dictator enjoyed it. But he hardly
cared that it was bloody money. The remittances
were accompanied by accounts of horrendous
abuses suffered by Filipino workers in the
hands of some foreign employers. The people
realized that the demagogic government had not
even bothered to formulate the courses of
action it would take if misfortune should happen
to its citizens abroad. The fate of the
Contemplacions, the Magas and the Balabagans
woke the Government up. Out of these tales of
woe, condemned in widespread street
demonstrations, the "Migrant Workers and
Overseas Filipinos Act of 1995" (R.A. No. 8042)
was passed during the Ramos Administration.
R.A. No. 8042 R.A. No. 8042, which was signed
on June 7, 1995 and took effect on July 15,
1995, redefines the policy on overseas
employment.
It states in part: While recognizing the significant
contribution of Filipino migrant workers to the
national economy through their foreign
exchange remittances, the State does not
promote overseas employment as a means to
sustain economic growth and achieve national
development.
The existence of the overseas employment
program rests solely on the assurance that the
dignity and fundamental human rights and
freedoms of the Filipino citizen shall not, at any
time, be compromised or violated. The State,
therefore, shall continuously create local
employment opportunities and promote the
equitable distribution of wealth and the
benefits of development. (Sec. 2[c], R.A. No.
8042.)
Selective Deployment
The dictatorial Marcos government did not bother
to say what places the OFWs could safely go to.
R.A. No. 8042, on the other hand, requires
certain guarantee of protection for the
overseas workers before they are deployed in
countries that meet some criteria. It states:
SEC. 4. Deployment of Migrant Workers. — The
State shall deploy overseas Filipino workers
only in countries where the rights of Filipino
migrant workers are protected. The government
recognizes any of the following as a guarantee on
the part of the receiving country for the protection
of the rights of overseas Filipino workers:
(a) It has existing labor and social laws
protecting the rights of migrant workers;
(b) It is a signatory to multilateral conventions,
declarations or resolutions relating to the
protection of migrant workers;
(c) It has concluded a bilateral agreement or
arrangement with the government protecting the
rights of overseas Filipino workers; and
(d) It is taking positive, concrete measures to
protect the rights of migrant workers.
SEC. 5. Termination or Ban on Deployment. —
Notwithstanding the provisions of Section 4 hereof,
the government, in pursuit of the national
interest or when public welfare so requires,
may, at any time, terminate or impose a ban on
the deployment of migrant workers.
THE POEA; OVERVIEW OF ITS FUNCTIONS
AND POWERS
As already noted, the Philippine Overseas
Employment Administration has taken over the
functions of OEDB and the NSB. Created by E.O.
No. 797 (May 1, 1982), POEA was reorganized by
E.O. No. 247 (July 24, 1987). Among the principal
functions of the POEA are the formulation,
implementation, and monitoring of the overseas
employment of Filipino workers and the
protection of their rights to fair and equitable
employment practices.
POEA also participates in the deployment of
Filipino workers through government-to-
government hiring. It has extended its services
nationally through its regional extension units.
They process vacationing workers, register
sea-based workers, and participate in
government hiring through manpower pooling.
Overseas Filipino Worker (OFW) is understood
as a Filipino worker who is to be engaged, is
engaged, or has been engaged in a remunerated
activity in a country of which he/she is not a
legal resident.'
Officially, OFWs are classified by DOLE as either
land-based or sea-based. Sea-Based OFWs (or
seamen) are those employed in a vessel engaged
in maritime navigation. Sea-based work pertains
to ship operations like navigation, engineering,
maintenance, including a variety of
occupations from kitchen staff to on-board
entertainment in large vessel ships.
Land-Based OFWs are contract workers other
than a seaman including workers engaged in
offshore activities whose occupation requires
that majority of his working/ gainful hours are
spent on land. Occupations in the land-based
categories are broader, covering all the skill
areas one can think of from house cleaners to
entertainers to managers. The land-based group
constitutes the great majority of OFWs.
REGULATORY FUNCTION OF POEA
The POEA performs regulatory and adjudicatory
functions.
POEA regulates the private sector participation
in the recruitment and overseas placement of
workers through its licensing and registration
system. This function is taken up further under
Article 25.
5.1 POEA Rules (2002) The POEA has issued
and amended the rules and regulations
governing overseas employment. These form
part of the Implementing Rules, Book I, in this
volume.
6. ADJUDICATORY FUNCTION OF POEA
Before the passage of R.A. No. 8042 in 1995,
POEA had original and exclusive jurisdiction to
hear and decide the following kinds of cases:
a. Recruitment Violation and Related cases
consisting of all pre employment cases which are
administrative in character, involving or arising
out of recruitment laws, rules and regulations,
including money claims therefrom or violations of
the conditions for issuance of license to recruit
workers.1
b. Employer-Employee Relations cases
consisting of all claims arising out of an employer-
employee relationship or by virtue of any law or
contract involving Filipino workers in overseas
employment, such as but not limited to:
(1) violation of the terms and conditions of
employment;
(2) disputes relating to the implementation
and interpretation of employment contracts;
(3) money claims of workers against
their employers and duly authorized agents in the
Philippines or vice versa;
(4) claims for death, disability and other
benefits arising out of employment; and
(5) violation/s of or noncompliance with
any compromise agreement entered into by and
between the parties in an overseas employment
contract.
c. Disciplinary Action cases consisting of all
complaints against a contract worker for
breach of discipline.
The disciplinary action may take the form of
warning, repatriation, suspension, or
disqualification from the, overseas
employment program, or inclusion in the POEA
blacklist.
Jurisdiction Transferred to NLRC
The allocation of jurisdiction enumerated above
has been partially changed by R.A. No. 8042 or
the "Migrant Workers and Overseas Filipinos Act of
1995." This law has transferred to the NLRC the
jurisdiction over employer-employee relations
cases. Insofar as pertinent, its Section 10 provides:
SEC. 10. Money Claims. —Notwithstanding any
provision of law to the contrary, the Labor
Arbiters of the National Labor Relations
Commission (NLRC) shall have the original and
exclusive jurisdiction to hear and decide, within
ninety (90) calendar days after the filing of the
complaint, the claims arising out of an
employer-employee relationship or by virtue of
any law or contract involving Filipino workers
for overseas deployment including claims for
actual, moral, exemplary and other forms of
damages.
The liability of the principal/employer and the
recruitment/ placement agency for any and all
claims under this section shall be joint and
several. This provision shall be incorporated in
the contract for overseas employment and shall
be a condition precedent for its approval.
The performance bond to be filed by the
recruitment/placement agency, as provided by
law, shall be answerable for all money claims
or damages that may be awarded to the
workers. If the recruitment/placement agency is
a juridical being, the corporate officers and
directors and partners, as the case may be, shall
themselves be jointly and solidarily liable with
the corporation or partnership for the aforesaid
claims and damages.
Such liabilities shall continue during the entire
period or duration of the employment contract
and shall not be affected by any substitution,
amendment or modification made locally or in a
foreign country of the said contract.
R.A. No. 8042 not only transferred from POEA to
NLRC the jurisdiction over money claims of
OFWs; it even expanded the scope of such
money claim. When the jurisdiction was still with
the POEA, the jurisdiction covered only money
claims involving Filipino workers for overseas
employment. Now the NLRC jurisdiction is over
money claims involving Filipino workers for
overseas deployments—
R.A. No. 8042 defines a "Migrant Worker" as a
"person who is to be engaged, is engaged, or has
been engaged in a remunerated activity in a
state of which he or she is not a legal resident."
("Migrant worker" is used interchangeably with
"overseas Filipino worker.") The phrase "to be
engaged in a remunerated activity" refers to an
applicant worker who has been promised or
assured of employment overseas and acting on
such promise or assurance, sustains damage
and/or injury.
(Section 2, Rules Implementing R.A. No. 8042). It
appears that R.A. 8042 allows claims for money
or damages sustained during the period of
deployment or before departure for abroad.
Hence, even an applicant OFW may file a money
claim with the labor arbiter of the NLRC. Aside
from this R.A. No. 8042 allows recovery of actual,
moral, exemplary and other forms of damages.
Compromise Agreement Consistent with the
policy encouraging amicable settlement of labor
disputes, the same Section 10 of R.A. No. 8042
allows resolution by compromise of cases filed
with the NLRC.
It states: Any compromise/amicable settlement
or voluntary agreement on money claims
inclusive of damages under this section shall be
paid within four (4) months from the approval
of the settlement by the appropriate authority.
Mandatory Periods Failure to resolve the cases
mentioned in Section 10 within the periods therein
specified is punishable under the same Section
10:
Noncompliance with the mandatory
periods for resolutions of cases provided under this
section shall subject the responsible officials to
any or all of the following penalties:
(a) The salary of any such official who fails to
render his decision or resolution within the
prescribed period shall be, or caused to be,
withheld until the said official complies
therewith;
(b) Suspension for not more than ninety (90)
days; or
(c) Dismissal from the service with
disqualification to hold any appointive public
office for five (5) years.
Provided, however, That the penalties herein
provided shall be without prejudice to any
liability which any such official may have incurred
under other existing laws or rules and regulations
as a consequence of violating the provisions of this
paragraph.
Employer-employee Relations Cases:
Termination of Employment.
CONTRACTUAL EMPLOYEES
In Millares and Lagda vs. NLRC reversing an
earlier ruling, finally decided seafarers are
contractual employees. Their employment is
contractually fixed for a certain period. This
matter is further explained in commentaries under
Article 280.
PREMATURE TERMINATION OF CONTRACT
Where the workers' employment contract is
terminated before its agreed termination date,
and the termination is not shown to be based on
lawful or valid grounds, the employer will be
ordered to pay the workers their salaries
corresponding to the unexpired portion of their
employment contract.
PRETERMINATION UNDER R.A. NO. 8042
Under Section 10 of R.A. No. 8042, a worker
dismissed from overseas employment without
just, valid or authorized cause as defined by law
or contract, is entitled to "full reimbursement of
his placement fee with interest at twelve percent
(12%) per annum, plus his salary for the
unexpired portion of his employment contract
or for three (3) months for every year of the
unexpired term, whichever is less."
Prior to its ruling in Serrano vs. Gallant in 2009,
the court had ruled that the option of "three
months for every year" is available only if the
employment is for one year or more. If it is
shorter than one year, the salary to be
recovered has to be that for the unexpired
portion.
For instance, if the employment contract is for
ten months but is terminated unjustifiably on
the second month, the award should be of eight
months' salary (plus placement fee with interest
and attorney's fee). The Court made this
interpretation in Marsaman Manning Agency,
Inc. vs. NLRC, G.R No. 127195, August 25,
1999.
SECTION 10 UNCONSTITUTIONAL; SERRANO
VS. GALLANT
Some ten years later the Court en banc re-
examined the Marsaman interpretation and then
ruled that the clause "whichever is less" in
Section 10 of R.A. No. 8042 is unconstitutional
as it violates the OFW's right to equal
protection of the law and to substantive due
process. Being unconstitutional, the clause is
now deemed deleted from the law. Hence, in
case of pretermination of employment contract
the alternative to pay three month's salary for
every year of the unexpired term is no longer
available. The OFW is entitled to his salaries for
the unexpired portion of his employment
contract, plus full reimbursement of his
placement fee with interest of twelve percent
(12%) per annum.'
In this significant Serrano vs. Gallant case, if the
award to the employee would be based on the
unexpired portion, he would get more than
US$25 thousand, but it would only be about US$4
thousand based on three months' pay per year.
He therefore impugned the constitutionality of
the "whichever is less" clause in Section 10. The
clause, he argued through his learned counsel,
impairs the freedom of OFWs to negotiate their
employment contracts and, further, impinges on
the equal protection clause of the Constitution
as it treats OFWs differently from local workers.
The Solicitor General, defending the clause,
explained that it was intended to protect the
local placement agencies from heavy liability if
the foreign employer reneges on its obligation.
The Court retorted: "... such callous and cavalier
rationale will have to be rejected. There can
never be a justification for any form of
government action that alleviates the burden of
one sector, but imposes the same burden on
another sector, especially when the favored
sector is composed of private businesses such
as placement agencies, while the disadvantage
sector is composed of OFWs whose protection no
less than the Constitution commands. The idea
that private business interest can be elevated to
the level of a compelling state interest is
odious... Thus the subject clause in the 5th
paragraph of Section 10 of R.A. No. 8042 is
violative of the right of petitioner and other
OFWs to equal protection." Therefore, the three-
month option is gone.
CONTRACTED BUT NOT DEPLOYED;
PERFECTED CONTRACT—.
If the employment contract has been signed but
employer-employee relationship did not
commence because the seafarer was not
actually deployed, can he complain of "unpaid
salary"? We quote the court's affirmative answer:
There is no question that the parties entered
into an employment contract on 3 February
1998, whereby petitioner was contracted by
respondent to render services on board "MSV
Seaspread" for the consideration of US$515.00
per month for nine (9) months, plus overtime
pay. However, respondent failed to deploy
petitioner from the port of Manila to Canada.
Considering that petitioner was not able to
depart from the airport or seaport in the point
of hire, the employment contract did not
commence, and no employer-employee
relationship was created between the parties.
However, a distinction must be made between
the perfection of the employment contract and
the commencement of the employer employee
relationship. The perfection of the contract,
which in this case coincided with the date of
execution thereof, occurred when petitioner and
respondent agreed on the object and the
cause, as well as the rest of the terms and
conditions therein.
The commencement of the employeremployee
relationship, as earlier discussed, would have
taken place had petitioner been actually
developed from the point of hire.' Thus, even
before the start of any employer>employee
relationship, contemporaneous with the
perfection of the employment contract was the
birth of certain rights and obligations, the
breach of which may give rise to a cause of
action against the erring party. Thus, if the
reverse had happened, that is the seafarer failed
or refused to be deployed as agreed upon, he
would be liable for damages.
Moreover, while the POEA Standard Contract
must be recognized and respected, neither the
manning agent nor the employer can simply
prevent a seafarer from being deployed without a
valid reason.
Respondent's act of preventing petitioner from
departing the port of Manila and boarding "MSV
Seaspread" constitutes a breach of contract,
giving rise to petitioner's cause of action.
Respondent unilaterally and unreasonably reneged
on its obligation to deploy petitioner and must
therefore answer for the actual damages he
suffered.
EMPLOYER-EMPLOYEE RELATIONS CASES:
MONEY CLAIMS; EMPLOYER'S NATIONALITY
IMMATERIAL
The Labor Code, the Migrant Workers' law, and
the relevant regulations extend protection to
Filipino workers overseas, i.e., outside the
Philippines. The statute and regulations do not
limit the coverage to non-Filipino employers.
Filipinos working overseas share the same
risks and burdens whether their employers be
Filipino or foreigner.
For instance, it is well known that foreign-owned
and foreign-registered vessels have frequently
also secured Philippine registration where the
interest or convenience of the owners dictated
such second or dual registration. The underlying
regulatory policy is that Filipino seamen
working in ocean-going vessels should receive
the same wages and benefits without regard to
the nationality or nationalities of the vessels on
which they serve.
DEATH AND OTHER BENEFITS, BASIS OF
COMPENSATION.
One of the principal concerns about OFWs is
their employment conditions and benefits.
The standard contract of employment for Filipino
seamen allows the payment of death benefit
pension, funeral benefit and burial gratuity to
the private respondent-worker.
The claims for death and burial benefits
involving seamen and/or overseas contract
workers over which the POEA (now Labor
Arbiters of NLRC) has jurisdiction, are not the
same as the claims against the State Insurance
Fund under Book IV of the Labor Code.
In Inter-Orient Maritime Enterprises, Inc., et al.
vs. NLRC, et al., G.R No. 115497, September 10,
1996, a Filipino migrant worker suffering from
mental disorder died in the hands of a
policeman in Bangkok while he was being
repatriated to the Philippines. The employer
invoked the ruling in De Jesus vs. ECC [May 27,
1986], that it is not liable because the cause of
the death of the worker is not an occupational
disease listed by law. The Supreme Court,
finding no parallelism with the De Jesus case,
debunked the employer's assertion.
"Petitioner's (employer's) reliance on De Jesus is
misplaced, as the death and burial benefits
being claimed in this case are not payable by
the Employees' Compensation Commission and
chargeable against the State Insurance Fund.
These claims arose from the responsibility of
the foreigner employer together with the local
agency for "the safety of the employee during
his repatriation and until his arrival in this
country, the point of hire. Though the
termination of the employment contract was
duly effected in Dubai, still, the responsibility of
the foreign employer to see to it that Pineda
(the seaman-employee) was duly repatriated to
the point of hiring, subsisted.
Section 4, Rule VIII of the Rules and
Regulations Governing Overseas Employment
clearly provides for the duration of the
mandatory personal accident and life
insurance covering accidental health,
dismemberment and disability of overseas
workers." (Inter-Orient Maritime Enterprises,
Inc., et al. vs. NLRC, et al., G.R No. 115497,
September 10, 1996.)
Where the contract of a Filipino seaman
provides that workmen's compensation benefit
shall be computed on the basis of whichever is
greater between Philippine law or the law of the
registry of the vessel, it is correct to resolve the
award based on the law of registry of the
vessel (Singapore) providing greater benefit.
In a similar situation, the foreign employer and a
group of Filipino contract workers state in their
employment contract that the "total
remuneration and benefits should not fall
below that of the host country" [in this case,
Bahrain]. In applying the Bahrain law as the basis,
the NLRC declared that "where the laws of the
Lost country are more favorable and beneficial
to the workers, then the laws of the host
country shall form part of the overseas
employment contract." But the employer insisted
before the Supreme Court that the principle that a
law is deemed part of a contract applied only to
Philippine laws in relation to contracts executed
in the Philippines. The Supreme Court debunked
such contention and ruled that the NLRC, in
applying the foreign law to grant the workers'
claims, did not abuse its desertion.
It is proper for the POEA to take judicial notice
of foreign laws applicable to a claim by a
Filipino overseas contract worker. True, it has
been ruled that a foreign law, being a matter of
evidence, must be alleged and proved in order
to be recognized and applied in a particular
controversy involving conflicts of laws. But this
ruling is not meant to apply to cases before
administrative or quasi-judicial bodies. Well-
settled is the rule that administrative and quasi-
judicial bodies are not bound strictly by
technical rules.
Stated differently, for death of a seafarer to be
compensable, the death must occur during the
term of his contract of employment. It is the only
condition for compensability of a seafarer's
death. Once it is established that the seaman
died during the effectivity of his employment
contract, the employer is liable.
Compensability of death does not depend on
whether his illness was work-connected or not.
What is material is that his death occurred
during the term of his employment contract. By
provision of Section 20(A) of the POEA Standard
Employment Contract, based on POEA
Memorandum Circular No. 055, series of 1996,
payment of death benefits pension is mandated
in case of death of a seafarer during the term of
his employment.
EVALUATION OF THE DISABILITY: WHOSE
OPINION SHALL PREVAIL?
Two recent decisions grapple with two challenging
questions: (1) whose medical opinion should
prevail: that of the company-designated
physician or that of an independent
practitioner? (2) in determining a seafarer's
disability, which law governs: the Labor Code or
the POEA standard contract?
The decisions in 2005 and 2008 (penned by two
former labor secretaries) give different answers;
thus, the decision in 2008 has to carefully point out
the differing circumstances of the employees'
claims.
*Examined at the company-designated clinic,
and at the Manila Doctor's Hospital, he was
diagnosed with "papillary carcinoma, etc." and
underwent a total thyroidectomy. His attending
physician diagnosed him as permanently
disabled with a Grade .9 impediment. To this
Grade 9 assessment two more physicians of
another hospital, concurred. Thus, three
physicians, including the company-designated
ones, diagnosed the impediment at Grade 9. But
Natividad consulted a non company-designated
physician. Dr. Vicaldo, who opined that he was
totally and permanently disabled with Grade 1
impediment. Grade 1 is more serious
impediment than Grade 9 and grants a higher
compensation.
Natividad demanded US$60,000.00 for a Grade 1
disability. When the employer turned this down he
filed a complaint with the NLRC. The labor arbiter
granted the Grade 1 disability claim with moral
damages. On appeal the NLRC at first reversed
the labor arbiter on the ground that the findings of
company-designated physicians are binding, as
stipulated in the POEA standard employment
contract for seafarers. But, upon motion for
reconsideration by Natividad, the NLRC
changed its mind and this time affirmed that
company physician's finding are self-serving;
thus the NLRC concurred with the award of Grade
1 disability benefit.
The law does not require that the illness should
be incurable. What is important is that he was
unable to perform his customary work for more
than 120 days which constitutes permanent
total disability. An award of a total and permanent
disability benefit would be germane to the
purpose of the benefit, which is to help the
employee in making ends meet at the time
when he is unable to work.
The POEA Standard Employment Contract and
the CBA clearly provide that when a seafarer
sustains a work-related illness or injury while
on board the vessel, his fitness or unfitness for
work shall be determined by the company-
designated physician. If the physician
appointed by the seafarer disagrees with the
company-designated physician's assessment,
the opinion of a third doctor may be agreed
jointly between the employer and the seafarer
to be the decision final and binding on them.
ADOPTION OF THE LABOR CODE CONCEPT
OF DISABILITY
Sec. 20. Compensation and Benefits xxx
B. Compensation and Benefits for Injury or
Illness.
The liabilities of the employer when the seafarer
suffers injury or illness during the term of his
contract are as follows: xxx 5. In case of
permanent total or partial disability of the
seafarer during the term of employment caused
by either injury or illness[,] the seafarer shall be
compensated in accordance with the schedule of
benefits enumerated in Section 30 of [t]his
Contract. Computation of his benefits arising
from an illness or disease shall be governed by
the rates and the rules of compensation
applicable at the time the illness or disease was
contracted.
"Disability" is generally defined as "loss or
impairment of a physical or mental function
resulting from injury or sickness." Clearly,
"disability" is not synonymous with "sickness"
or "illness," the former being a potential effect of
the latter.
The schedule in Sec. 30 of the POEA SEC is a
Schedule of Disability or Impediment for
Injuries Suffered and Diseases or Illness
Contracted. It is not a list of compensable
sickness. Unlike the 2000 POEA SEC, nowhere in
the 1996 POEA SEC is there a list of
"Occupational Diseases." The unqualified phrases
"during the term" in Section 20(B) of the 1996
POEA SEC covers all injury or illness occurring in
the lifetime of the contract. The injury or illness
need not be shown to be work-related.
JURISDICTION RETAINED WITH POEA
Even after the passage of R.A. No. 8042, the
POEA retains original and exclusive
jurisdiction to hear and decide:
(a) all cases which are administrative in
character, involving or arising out of violations of
rules and regulations relating to licensing and
registration of recruitment and employment
agencies or entities; and
(b) disciplinary action cases and other special
cases which are administrative in character,
involving employers, principals, contracting
partners and Filipino migrant workers. (Sec. 28,
Rules Implementing the Migrant Workers' Act
dated February 29, 1996.)
REGULATORY FUNCTION OF POEA
POEA regulates the private sector participation
in the recruitment and overseas placement of
workers through its licensing and registration
system. This function is taken up further under
Article 25.
DISCIPLINARY ACTION CASES
RA. No. 8042 has not transferred to the NLRC
the jurisdiction of POEA over disciplinary
action cases. Rule VII of Book VII of the POEA
Rules provides that complaints for breach of
discipline against a contract worker shall be
filed with the Adjudication Office or Regional
Office of the POEA, as the case may be. The
POEA may motu proprio undertake disciplinary
action against a worker for breach of discipline.
It shall establish a system of watching and
blacklisting of overseas contract workers.
GROUNDS FOR DISCIPLINARY ACTION
Commission by the worker of any of the offenses
enumerated below or of similar offenses while
working overseas, shall be subject to appropriate
disciplinary actions as the POEA may deem
necessary:
a. Commission of a felony punishable by
Philippine laws or by the laws of the host
country
b. Drug addiction or possession or trafficking of
prohibited drugs;
c. Desertion or abandonment;
d. Drunkenness, especially where the laws of the
host country prohibit intoxicating drinks;
e. Gambling, especially where the laws of the
host country prohibit the same;
f. Initiating or joining a strike or work stoppage
where the laws of the host country prohibit strikes
or similar actions;
g. Creating trouble at the worksite or in the
vessel;
h. Embezzlement of company funds or of
moneys and properties of a fellow worker
entrusted for delivery to kins or relatives in the
Philippines;
i. Theft or robbery;
j. Prostitution;
k. Vandalism or destroying company property;
1. Gunrunning or possession of deadly
weapons;
m. Unjust refusal to depart for the worksite
after all employment and travel documents
have been duly approved by the appropriate
government agency/ies; and
n. Violation/s of the laws and sacred practices
of the host country and unjustified breach of
government-approved employment contract by a
worker.
OUTSIDE OF POEA JURISDICTION
No Jurisdiction to Enforce Foreign Judgment
The Philippine Overseas Employment
Administration has no jurisdiction to hear and
decide a claim for enforcement of a foreign
judgment. Such a claim must be brought before
the regular courts. The POEA is not a court, it is
an administrative agency, exercising, inter alia,
adjudicatory or quasi-judicial functions. Neither
the rules of procedure nor the rules of evidence
which are mandatorily applicable in
proceedings before courts, are observed in
proceedings before the POEA.'
8.2 NO JURISDICTION OVER TORTS
ART. 18. BAN ON DIRECT-HIRING
No employer may hire a Filipino worker for
overseas employment except through the
Boards and entities authorized by the
Department of Labor and Employment. Direct-
hiring by members of the diplomatic corps,
international organizations and such other
employers as may be allowed by the Department
of Labor and Employment is exempted from this
provision.
Direct hiring of Filipino workers by a foreign
employer is not allowed except direct hiring by
members of the diplomatic corps and others
mentioned in this Article. Also excepted are
"name hirees" or those individual workers who
are able to secure contracts for overseas
employment on their own efforts and
representation without the assistance or
participation of any agency. Their hiring,
nonetheless, has to be processed through the
POEA.
Name hires should register with the POEA by
submitting the following documents:
(a) Employment contract;
(b) Valid passport;
(c) Employment visa or work permit, or equivalent
document;
(d) Certificate of medical fitness; and
(e) Certificate of attendance to the required
employment orientation/briefing.
ART. 19. OFFICE OF EMIGRANT AFFAIRS
(a) Pursuant to the national policy to maintain
close ties with Filipino migrant communities
and promote their welfare as well as establish a
data bank in aid of national manpower policy
formulation, an Office of Emigrant Affairs is
hereby created in the Department of Labor. The
Office shall be a unit at the Office of the
Secretary and shall initially be manned, and
operated by such personnel and through such
funding as are available within the Department
and its attached agencies. Thereafter, its
appropriation shall be made part of the regular
General Appropriations Decree.
(b) The office shall, among others, promote the
well-being of emigrants and maintain their close
link to the homeland by:
1) serving as a liaison with migrant communities;
2) providing welfare and cultural services;
3) promoting and facilitating re-integration of
migrants into the national mainstream;
4) promoting economic, political and cultural
ties with the communities; and
5) undertaking such activities as may be
appropriate to enhance such cooperative links.
The Office of Emigrant Affairs has been
abolished and its pertinent functions were
transferred to the Commission on Filipinos
Overseas by Batas Pambansa Big. 79, approved
on June 16, 1980. Among other functions, the
CFO provides advice and assistance to the
President of the Philippines and the Congress in
the formulation of policies and measures
affecting Filipinos overseas. It also formulates,
in coordination with agencies concerned, an
integrated program for the promotion of the welfare
of Filipinos overseas for implementation by
suitable existing agencies.
ART. 20. NATIONAL SEAMEN BOARD.
(a) A National Seamen Board is hereby created
which shall develop and maintain a comprehensive
program for Filipino seamen employed overseas. It
shall have the power and duty:
1. To provide free placement services for
seamen;
2. To regulate and supervise the activities of
agents or representatives of shipping
companies in the hiring of seamen for overseas
employment; and secure the best possible
terms of employment for contract seamen
workers and secure compliance therewith;
3. To maintain a complete registry of all Filipino
seamen.
(b) The Board shall have original and exclusive
jurisdiction over all matters or cases including
money claims, involving employer-employee
relations, arising out of or by virtue of any law or
contracts involving Filipino seamen for overseas
employment. The decision of the Board shall be
appealable to the National Labor Relations
Commission upon the same grounds provided in
Article 223 hereof. The decisions of the National
Labor Relations Commission shall be final and
unappealable
NSB NOW POEA
Executive Order No. 797 (issued on May 1, 1982)
abolished the National Seamen Board and
transferred its functions to the POEA which the
Order created. The NSB's "original and
exclusive jurisdiction" mentioned in paragraph
(b) of this Article has since been exercised by the
POEA.
ARTICLE 20 CONSTRUED; SEAMEN'S
EMPLOYMENT CONTRACTS AND THE
INTERNATIONAL TRANSPORT FEDERATION
Article 20, no. 2, requires the National Seamen
Board (now POEA) to "secure the best possible
terms of employment for contract seamen
workers and secure compliance therewith." The
implications of this article are illustrated in the
following cases which also rule on the question of
immutability of seamen's standard contract.
The form contracts approved by the National
Seamen Board [now POEA] are designed to
protect Filipinos, not foreign shipowners who
can take care of themselves.
The standard forms embody the basic minimums
which must be incorporated as parts of the
employment contract. (Section 15, Rule V, Rules
and Regulations Implementing the Labor Code.)
They are not collective bargaining agreements
or immutable contracts which the parties cannot
improve upon or modify in the course of the agreed
peril of time. To state, therefore, that the affected
seamen cannot petition their employer for
higher salaries during the 12-month duration of
the contract runs counter to established
principles of labor legislation. The National
Labor Relations Commission, as the appellate
tribunal from the decision of the National Seamen
Board, correctly ruled that the seamen did not
violate their contracts to warrant their
dismissal.
INVALID SIDE AGREEMENT
An agreement that diminishes the employee's
pay and benefits as contained in a POEA-
approved contract is void, unless such
subsequent agreement is approved by POEA.
DELAY IN FILING CLAIM
In the above-cited case of Chavez, the Court
explained why the claim, although filed two years
after the employment, could still prosper. The
laches doctrine did not apply.
Laches is defined as the failure or neglect for an
unreasonable and unexplained length of time to do
that which, by exercising due diligence, could or
should have been done earlier, thus giving rise to a
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
of delay, standing alone, is insufficient to constitute
laches.
The doctrine of laches is based upon grounds of
public policy which requires, for the peace of
society, the discouragement of stale claims, and is
principally a question of the inequity or unfairness
of permitting a right or claim to be enforced or
asserted.
There is no absolute rule as to what constitutes
laches; each case is to be determined according to
its particular circumstances. The question of
laches is addressed to the sound discretion of the
court, and since it is an equitable doctrine, its
application is controlled by equitable
considerations. It cannot be worked to defeat
justice or to perpetrate fraud and injustice
In the case of Esalyn Chavez, she filed her claim
well within the three-year prescriptive period for
the filing of money claims set forth in Article 291 of
the Labor Code.
MINIMUM EMPLOYMENT CONDITIONS
The POEA Regulations Governing Overseas
Employment (amended in 2002) in Part V, Rule I,
Section 2 prescribes the following minimum
provisions of employment contracts:
a. Guaranteed wages for regular working hours
and overtime pay, as appropriate, which shall
not be lower than the prescribed minimum
wage in the host country, nor lower than the
appropriate minimum wage standard set forth in
a bilateral agreement or international
convention duly ratified by the host country
and the Philippines or not lower than the minimum
wage in the Philippines, whichever is highest;
b. Free transportation to and from the worksite,
or offsetting benefit;
c. Free food and accommodation, or offsetting
benefit;
d. Just/authorized causes for termination of the
contract or of the services of the workers taking
into consideration the customs, traditions, norms,
mores, practices, company policies and the labor
laws and social legislations of the host country;
e. The Administration may also consider the
following as basis for other provisions of the
contract:
1. Existing labor and social laws of the host
country;
2. Relevant agreements, conventions,
delegations or resolutions;
3. Relevant bilateral and multilateral
agreements or arrangements with the host
country; and
4. Prevailing condition/realities in the market.
FREEDOM TO STIPULATE
Parties to overseas employment contracts are
allowed to stipulate other terms and conditions
and other benefits not provided under these
minimum requirements; provided the whole
employment package should be more beneficial
to the worker than the minimum; provided that
the same shall not be contrary to law, public
policy and morals, and provided further, that
Philippine agencies shall make foreign
employers aware of the standards of
employment adopted by the Administration
ART. 21. FOREIGN SERVICE ROLE AND
PARTICIPATION
To provide ample protection to Filipino workers
abroad, the labor attaches the labor reporting
officers duly designated by the Secretary of Labor
and the Philippine diplomatic or consular officials
concerned shall, even without prior instruction
or advice from the home office, exercise the
power and duty:
(a) To provide all Filipino workers within their
jurisdiction assistance on all matters arising
out of employment;
(b) To insure that Filipino workers are not
exploited or discriminated against;
(c) To verify and certify as requisite to
authentication that the terms and conditions of
employment in contracts involving Filipino
workers are in accordance with the Labor Code
and rules and regulations of the Overseas
Employment Development Board and National
Seamen Board;
(d) To make continuing studies or researches
and recommendations on the various aspects
of the employment market within their
jurisdiction;
(e) To gather and analyze information on the
employment situation and its probable trends,
and to make such information available to the
Department of Labor and Employment and the
Department of Foreign Affairs; and
(f) To perform such other duties as may be
required of them from time to time.
PROTECTION AND ASSISTANCE BY
GOVERNMENT AGENCIES
In addition to the officials mentioned in Article 21,
R.A. No. 8042 (Section 23) assigns four
government agencies to promote the welfare
and protect the rights of migrant workers and,
as far as applicable, of all overseas Filipinos.
The agencies are the Department of Foreign
Affairs (DFA), the Department of Labor and
Employment (DOLE), the Philippine Overseas
Employment Administration (POEA), and the
Overseas Workers Welfare Administration
(OWWA).
(a) Department of Foreign Affairs. —The
Department, through its home office or foreign
posts, shall take priority action or make
representation with the foreign authority
concerned to protect the rights of migrant
workers and other overseas Filipinos and
extend immediate assistance including the
repatriation of distressed or beleaguered
migrant workers and other overseas Filipinos.
Furthermore, R.A. No. 8042 created the position of
Legal Assistant for Migrant Worker's Affairs
[LAMWA] under the Department of Foreign Affairs.
Its primary responsibility is to provide and
coordinate all legal assistance services to
Filipinos in distress. It also administers the Legal
Assistance Fund for Migrant Workers.
Finally, R.A. No. 8042 establishes a "Migrant
Workers and Other Overseas Filipinos
Resource Center" in Philippine Embassies in
countries where there are at least 20,000
migrant workers. The resource center is
envisioned to provide such services as
counseling and legal assistance, welfare
assistance including procurement of medical
and hospitalization services, registration of
undocumented workers, and conciliation of
disputes arising from employer employee
relationship. The resource center is to be
established and operated jointly by the government
agencies mentioned, although its operation is to be
managed by the Labor Attached.
(b) Department of Labor and Employment. —
The Department of Labor and Employment shall
see to it that labor and social welfare laws in
the foreign countries are fairly applied to migrant
workers and whenever applicable, to other
overseas Filipinos including the grant of legal
assistance and referral to proper medical
centers or hospitals.
(c) Philippine Overseas Employment
Administration. — The POEA shall regulate
private sector participation in the recruitment
and overseas placement of workers by setting
up a licensing and registration system. It shall
also formulate and implement, in coordination
with appropriate entities concerned, when
necessary, a system for promoting and
monitoring the overseas employment of
Filipino workers taking into consideration their
welfare and the domestic manpower
requirements.
(d) Overseas Workers Welfare Administration.
— The Welfare Officer or in his absence, the
coordinating officer, shall provide the Filipino
migrant worker and his family all the
assistance they may need in the enforcement
of contractual obligations by agencies or entities
and/or their principals. In the performance of this
function, he shall make representation and may
call on the agencies or entities concerned to
conferences or conciliation meetings for the
purpose of setting the complaints or problems
brought to his attention.
THE RPM CENTER
A migrant worker returning to the country has to
be reintegrated into the Philippine society. To
serve as a promotion house for local
employment of these returning workers and to
tap their skills for national development, RA No.
8042 created in the Department of Labor and
Employment the "RPM (Re-Placement and
Monitoring) Center." Coordinating with the private
sector, the RPM Center is expected to develop
livelihood programs for the returning workers
and formulate a computer-based information
system on skilled Filipino migrant workers.
3. THE OWWA
The Welfare Fund for Overseas Workers
Administration was created by PD. No. 1694 (May
1,1980) as amended by PD. No. 1809 (January
16,1981). Known as the Welfund, it was intended
to provide social and welfare services,
including insurance coverage, legal assistance,
placement assistance and remittance services
to Filipino overseas workers. The Welfund was
funded with contributions from the workers
themselves and the fees and charges imposed by
the POEA and the BLE. The Welfund was (and still
is) administered by a Board of Trustees chaired by
the Secretary of Labor and Employment. In 1987,
Executive Order No. 126 renamed the Welfund the
Overseas Workers Welfare Administration or
OWWA.
REPATRIATION OF WORKERS
The OWWA has a role to play even in cases
where a worker has to be sent or brought back
to the Philippines, as shown in the dramatic
repatriation of thousands of OFWs trapped in
Israel-Lebanon war in July 2006. But the
primary responsibility to repatriate a worker,
including his or her remains and personal effects,
belongs to the principal or the agency that
recruited or deployed the worker. Being
primarily responsible, the principal or agency has
to advance the plane fare and immediately
repatriate the worker, as needed, without
determining the cause of termination of
employment.
If the termination is due solely to the fault of
the worker, the principal or agency may recover
the cost of repatriation from the worker after
return to the country. The cause of termination
will be determined by the Labor Arbiter. Such
obligation of the principal/agency to advance
the plane fare and of the worker to refund the cost
should be stipulated in every contract for overseas
employment.
If the principal or agency does not comply with
its obligation, the POEA shall notify OWWA to
advance the repatriation cost with recourse to
the agency or principal. POEA may also impose
sanctions on the recalcitrant agency or
principal.
In no case shall an employment agency require
any bond or cash deposit from the worker to
guarantee performance under the contract of
his/her repatriation. The mandatory repatriation
bond is abolished as of June 17,1995 pursuant to
Section 36 of R.A. No. 8042.
VALIDITY
A recruitment agency has questioned the
validity of Section 15 of R.A. No. 8042 and of
Sections 52 to 55 of the implementing rules on the
ground that they violate the agency's right to
due process.
The Court upheld the validity of the law and the
rules which provide that "the repatriation of
remains and transport of the personal
belongings of a deceased worker and all costs
attendant thereto shall be borne by the
principal and/or the local agency.”
The mandatory nature of said obligation is
characterized by the legislature's use of the word
"shall." That the concerned government
agencies opted to demand the performance of
said responsibility solely upon petitioner does
not make said directives invalid as the law
plainly obliges a local placement agency such
as herein petitioner to bear the burden of
repatriating the remains of a deceased OFW
with or without recourse to the principal abroad. In
this regard, we see no reason to invalidate Section
52 of the omnibus rules as Republic Act No. 8042
itself permits the situation wherein a local
recruitment agency can be held exclusively
responsible for the repatriation of a deceased
OFW.
The placement agency may try to establish the
worker's fault, but while doing so the agency
must repatriate the OFW. Said the Court:
Section 15 of Republic Act No. 8042, however,
certainly does not preclude a placement agency
from establishing the circumstances
surrounding an OFWs dismissal from service in
an appropriate proceeding. As such
determination would most likely take some time, it
is only proper that an OFW be brought back here
in our country at the soonest possible time lest
he remains stranded in a foreign land during
the whole time that recruitment agency
contests its liability for repatriation. As aptly
pointed out by the Solicitor General —
Such a situation is unacceptable.
24. This is the same reason why repatriation is
made by law an obligation of the agency and/or
its principal without the need of first
determining the cause of the termination of the
worker's employment. Repatriation is in effect
an unconditional responsibility of the agency
and/or its principal that cannot be delayed by an
investigation of why the worker was terminated
from employment. To be left stranded in a
foreign land without the financial means to
return home and being at the mercy of
unscrupulous individuals is a violation of the
OFWs dignity and his human rights. These are
the same rights R.A. No. 8042 seeks to protect.
ART. 22. MANDATORY REMITTANCE OF
FOREIGN EXCHANGE EARNINGS
It shall be mandatory for all Filipino workers
abroad to remit a portion of their foreign
exchange earnings to their families,
dependents, and/ or beneficiaries in the country
in accordance with rules and regulations
prescribed by the Secretary of Labor and
Employment.
REMITTANCE
Executive Order No. 857, as amended, prescribe
the percentages of foreign exchange
remittance ranging from 50% to 80% of the
basic salary, depending on the worker's kind of
job. DOLE figures for 1998-2000 show that the
annual remittances have breached the US$6
billion level, inspiring the government to call the
OFWs "Mga Bagong Bayani".
COMPOSITION OF THE POEA
As reorganized by E.O. No. 247 (July 24,1987),
after the end of the Marcos dictatorship, the
Philippine Overseas Employment
Administration consists of the Governing Board,
the Office of the Administrator, the Offices of
such number of Deputy Administrators as may
be necessary, and Office of the Director for each
of the principal subdivisions of its internal
structure. The Governing Board is composed of
the Secretary of Labor and Employment as
Chairman, the Administrator, and a third
member, considered well-versed in the field of
overseas employment who shall be appointed
by the President to serve for a term of two (2)
years.
The Administrator and such Deputy Administrator
and Directors as may be necessary are
appointed by the President upon
recommendation of the Secretary the functional
structure of the Administration is established
along the areas of market development,
employment, welfare, licensing, regulation and
adjudication, each headed by a Director.
Cash and surety bonds are required by the
POEA and its predecessor agencies from
recruitment and employment companies precisely
as a means of ensuring prompt and effective
recourse against such companies when held
liable for applicants or workers' claims. That
public policy will be effectively negated if POEA
and the Department of Labor and Employment
were held powerless to compel a surety
company to make good on its solidary
undertaking in the same quasi-judicial
proceeding where the liability of the principal
obligor, the recruitment or employment
REGULATIONS OF RECRUITMENT AND
PLACEMENT ACTIVITIES
ART. 25. PRIVATE SECTOR PARTICIPATION IN
THE RECRUITMENT AND PLACEMENT OF
WORKERS '
Pursuant to national development objectives and in
order to harness and maximize the use of
private sector resources and initiative in the
development and implementation of a
comprehensive employment program, the
private employment sector shall participate in
the recruitment and placement of workers,
locally and overseas, under such guidelines, rules
and regulations as may be issued by the Secretary
of Labor.
POEA'S RETAINED JURISDICTION
As already noted, R.A. No. 8042 transferred from
POEA to NLRC the jurisdiction over OFWs'
claims arising from employer-employee
relationship. But POEA retains original and
exclusive jurisdiction over cases involving
violations of POEA rules and regulations,
disciplinary cases and other cases that are
administrative in character involving OFWs.
Thus, POEA performs regulatory, enforcement,
and limited or special adjudicatory functions.
2. VALIDITY OF POEA REGULATIONS
Under Section 4(a) of Executive Order No. 797
which created the POEA, the authority to issue
regulations is clearly provided:
"xxx The governing Board of the Administration
(POEA), as hereunder provided, shall promulgate
the necessary rules and regulations to govern
the exercise of the adjudicatory functions of the
Administration (POEA)."
With the proliferation of specialized activities
and their attendant peculiar problems, the
national legislature has found it more and more
necessary to entrust to administrative agencies
the authority to issue rules to carry out the general
provisions of the statute. This is called "the power
of subordinate legislation.
POEA Circular No. 11 (1983) Unenforceable
The ruling in Tanada vs. Tuvera [136 SCRA 27
(1985)] is reiterated; i.e., administrative rules and
regulations must be published if its purpose is to
enforce or implement existing law pursuant to a
valid delegation. Considering that POEA
Administrative Circular No. 2 Series of 1983
(embodying a schedule of fees that
employment offices may charge) has not yet
been published or filed with the National
Administrative Register, the circular cannot be
used as basis for the imposition of
administrative sanctions.
ART. 26. TRAVEL AGENCIES PROHIBITED TO
RECRUIT
Travel agencies and sales agencies of airline
companies are prohibited from engaging in the
business of recruitment and placement of
workers for overseas employment whether for
profit or not.
In addition to those mentioned in this article, the
POEA Rules (Rule 1, Section 2) also disqualify
persons with derogatory records such as those
convicted for illegal recruitment or other crimes
involving moral turpitude. The same prohibition
extends to any official or employee of DOLE,
POEA, OWWA, DFA and other government
agencies directly involved in the
implementation of R.A. No. 8042 or any of their
relatives within the fourth civil degree.
ART. 27. CITIZENSHIP REQUIREMENT
Only Filipino citizens or corporations,
partnerships or entities at least seventy-five
percent (75%) of the authorized and voting capital
stock of which
'Eastern Shipping Lines, Inc. vs. POEA, Minister of
Labor and Employment, Hearing Officer Abdu
Basar and Kathleen D. Saco, G.R. No. 76633,
October 18, 1988. Is owned and controlled by
Filipino citizens shall be permitted to participate
in the recruitment and placement of workers,
locally or overseas.
ART. 28. CAPITALIZATION
All applicants for authority to hire or renewal of
License to recruit are required to have such
substantial capitalization as determined by the
Secretary of Labor.
A private employment agency for local
employment should have a minimum net worth
of P200,000.00 in the case of single
proprietorship and partnership or a minimum
paid-up capital of P500,000.00 in the case of a
corporation.
A private recruitment or manning agency for
overseas employment should have a minimum
capitalization of P2,000,000.00 for single
proprietorship or partnership, and a minimum
paid-up capital of P2,000,000.00 for corporation.
ART. 29. NON-TRANSFERABILITY OF LICENSE
OR AUTHORITY
No license or authority shall be used directly or
indirectly by any person other than the one in
whose favor it was issued or at any place other
than that stated in the license or authority, nor
may such license or authority be transferred,
conveyed or assigned to any other person or
entity. Any transfer of business address,
appointment or designation of any agent or
representative including the establishment of
additional offices anywhere shall be subject to
the prior approval of the Department of Labor.
PLACE OF RECRUITMENT
Licensees or holders of authority or their duly
authorized representatives may, as a rule,
undertake recruitment and placement activity
only at their authorized official addresses. Most,
if not all, of these licensees or holders of
authority have their official addresses in Metro
Manila. Under existing regulations, they may be
allowed to conduct provincial recruitment
and/or job fairs only upon written authority
from the POEA.
A matter of procedure, prior to the conduct of
provincial recruitment, a copy of the authority
shall be presented to the DOLE/Regional Director
concerned. The recruitment activities are
conducted under the supervision of a DOLE
employee or officer designated by the Regional
Director.
Obviously, recruitment of workers for overseas
employment cannot be lawfully undertaken on
a house-to-house basis, in residences, or
secluded places.
ART. 30. REGISTRATION FEES
The Secretary of Labor shall promulgate
schedule of fees for the registration of all
applicants for license or authority.
ART. 31. BONDS
All applicants for license or authority shall post
such cash and surety bonds as determined by
the Secretary of Labor to guarantee compliance
with prescribed recruitment procedures, rules
and regulations, and terms and conditions of
employment as may be appropriate.
AMOUNT OF BOND
1.1 Local Employment; Recruitment Agency
Prior to the approval of license, an applicant for
license to operate a private employment agency
for local employment shall post:
a. Cash bond in the amount of Twenty-Five
Thousand Pesos (25,000.00); and
b. Surety bond in the amount of One Hundred
Thousand Pesos (P100.000.00).
These bonds are valid for two (2) years and will
answer for all valid and legal claims arising from
the illegal use of the license and shall likewise
guarantee compliance with the provisions of the
Labor Code and its Implementing Rules.1
1.2 Recruitment or Manning Agency f 6r,
Overseas Employment
Upon approval of the application for license, the
applicant for license to operate a private
recruitment or manning agency shall:
(a) Submit an Escrow Agreement in the amount
of One Million Pesos (PI,000,000.00), with
confirmation of escrow deposit with an accredited
reputable bank; and
(b) Post a surety bond in the amount of One-
Hundred Thousand Pesos (P100.000.00) from a
bonding company acceptable to the POEA and
accredited with the Insurance Commission. The
surety bond shall cover the validity of the period
of the license, and shall include the condition that
notice to the principal is notice to the surety and
that any judgment against the principal in
connection with matters falling under the
jurisdiction of the POEA or NLRC shall be
binding and conclusive on the surety.
The bonds and escrows shall answer for all
valid and legal claims arising from violations of
the conditions for the grant and use of the
license and/or accreditation and contracts of
employment. The bonds and escrow shall
likewise guarantee compliance with the
provisions of the Philippine laws and all liabilities
that the POEA may impose.
2. ENFORCEMENT The POEA possesses the
power to enforce liability under cash or surety
bonds.
APART FROM APPEAL BOND
The bond required under Article 31 of the Labor
Code is different from the bond required under
Article 223 of the Labor Code. The bond under
Article 223 is a requirement for the perfection of
an appeal. It is intended to insure the payment
of the monetary award if the judgment is affirmed
on appeal.
It is true that the cash and surety bonds under
Article 31 of the Labor Code are also intended
to guarantee payment of all valid and legal
claims against an employer, but these claims are
not limited to monetary awards to employees
whose contracts of employment have been
violated.
The POEA can go against these bonds also for
violations by the recruiter of the conditions for its
license, the provisions of the Labor Code, the
rules of the POEA as well as the settlement of
other liabilities the recruiter may incur.
Therefore, a recruitment agency who appeals a
judgment of the POEA or Labor Arbiter to the
NLRC is still obliged to post a bond in an
amount equivalent to the monetary award as
required by Article 223 of the Labor Code,
notwithstanding the fact that it has already posted
a bond under Article 31 of the Labor Code.
GARNISHMENT OF BONDS
The bond under Article 31 of the Labor Code is
intended to answer only for employment-related
claims and for violations of labor laws.
Therefore, it cannot be garnished to satisfy a
claim against a recruitment agency such as
payment for airline tickets used by the
agency's recruits. Though the liability may have
been incurred in connection with the business
of recruiting or placing overseas workers, it is
definitely not one arising from violation of the
conditions for the grant and use of the license
or authority and contracts of employment. Nor
is it one arising from a violation of labor laws.
EFFECT OF A VALID GARNISHMENT
As soon as an Order or Notice of Garnishment is
served upon the Bank, and the same is
correspondingly earmarked, the deposit in
escrow shall no longer be considered sufficient.
The POEA shall then require the recruitment or
manning agency to replenish its escrow deposit.
Within fifteen (15) days from date of receipt of
notice from the POEA mat the bonds or deposit in
escrow, or any part of it had been garnished, the
recruitment or manning agency shall replenish the
same. Failure to replenish such bonds or
deposit in escrow within the said period shall
cause the suspension of the license.
RELEASE OF CASH BOND/DEPOSIT IN
ESCROW
6.1 Recruitment Agency for Local Employment
- A private recruitment and placement agency
for local employment which voluntarily
surrenders its license shall be entitled to the
refund of its deposited cash bond only after
posting a surety bond of similar amount from a
bonding company accredited by the Insurance
Commission. The surety bond is valid for three
(3) years from expiration of the license.
Recruitment or Manning Agency for Overseas
Employment
A licensed recruitment or manning agency for
overseas employment which voluntarily
surrenders its license shall be entitled to the
release of the deposit in escrow, only after
posting a surety bond of similar amount valid
for four (4) years from expiration of license and
submission of clearance from the National
Labor Relations Commission and the POEA.
LAW AS PART OF THE BOND
It is a settled doctrine that the conditions of a
bond specified and required in the provisions of
the statute or regulation providing for the
submission of the bond are incorporated or
built into all bonds tendered under that statute or
regulation even though not there set out in printer's
ink.
ART. 32. FEES TO BE PAID BY WORKERS
Any person applying with a private fee-charging
employment agency for employment assistance
shall not be charged any fee until he has
obtained employment through its efforts or has
actually commenced employment. Such fee
shall be always covered with the appropriate
receipt clearly showing the amount paid. The
Secretary of Labor shall promulgate a schedule
of allowable fees.
CHARGEABLE FEES
Placement Fee for Local Employment
A licensed private recruitment and placement
agency for local employment may charge a
worker placement fee which shall not exceed
twenty percent (20%) of the worker's first
month's basic salary. In no case shall such fee
be charged prior to the actual commencement of
employment.
Placement and Documentation Fees for
Overseas Employment
The POEA Rules and Regulations Governing
Overseas Employment (Part II, Rule V, Sections 2
and 3[2002]) provides:
Section 2. Fees and Costs Chargeable to
Principals. Unless otherwise provided, the
principal shall be responsible for the payment of
the following:
a. visa fee;
b. airfare;
c. POEA processing fee; and
d. OWWA membership fee.
Section 3. Fees/Costs Chargeable to the
Workers. Except where the prevailing system in
the country where the worker is to be deployed,
either by law, policy or practice, does not allow the
charging or collection of placement and
recruitment fee, a land-based agency may charge
and collect from its hired workers a placement fee
in an amount equivalent to one month salary,
exclusive of documentation costs.
Documentation costs to be paid by the worker
shall include, but not be limited to, expenses for
the following:
a. Passport
b. NBI/Police/Barangay Clearance
c. Authentication
d. Birth Certificate
e. Medicare
f. Trade Test, if necessary
g. Inoculation, when required by host country
h. Medical Examination fees
In the event that the recruitment agency agrees
to perform documentation services, the worker
shall pay only the actual costs of the document
which shall be covered by official receipts.
'Section 29, Rule VIII, Rules and Regulations
Governing Private Recruitment and Placement
Agency for Local Employment.
The above-mentioned placement and
documentation costs are the only authorized
payments that may be collected from a hired
worker. No other charges in whatever form,
manner or purpose, shall be imposed on and be
paid by the worker without prior approval of the
POEA.
Such fees shall be collected from a hired worker
only after he has obtained employment through
the facilities of the recruitment agency.
SERVICE FEES
For Employment Agency for Local Employment
A licensed private recruitment and
placement agency may charge the employer
service fee which shall not exceed twenty percent
(20%) of the annual salary of the worker. In no
case shall the service fee be deducted from the
worker's salary. Transportation expenses of the
worker from the place of origin to the place of work
shall be charged against the employer and shall in
no case be deducted from the worker's salary.1
For Recruitment or Manning Agency for
Overseas Employment
A private recruitment or manning agency for
overseas employment shall charge their principals
a service or manning fee to cover services
rendered in the recruitment documentation and
placement of workers or seafarers.
REFUND OF FEES
POEA has the power to order refund of illegally
collected fees. Implicit in its power to regulate the
recruitment and placement activities of all
agencies is the award of appropriate relief to the
victims of the offenses committed by the
respondent agency or contractor.
Such relief includes the refund or
reimbursement of such fees as may have been
fraudulently or otherwise illegally collected or
such money, goods or services imposed and
accepted in excess of what is licitly prescribed.
It would be illogical and absurd to limit the
sanction on an offending recruitment agency or
contractor to suspension or cancellation of its
license, without the concomitant obligation to
repair the injury caused to its victims.
ART. 33. REPORTS ON EMPLOYMENT STATUS
Whenever the public interest requires, the
Secretary of Labor may direct all persons or
entities within the coverage of this Title to submit
a report on the status of employment, including
job vacancies, details of job requisitions,
separation from jobs, wages, other terms and
conditions, and other employment data.
ART. 34. PROHIBITED PRACTICES
It shall be unlawful for any individual, entity,
licensee, or holder of authority:
(a) To charge or accept, directly or indirectly,
any amount greater than that specified in the
schedule of allowable fees prescribed by the
Secretary of Labor, or to make a worker pay any
amount greater than that actually received by him
as a loan or advance;
(b) To furnish or publish any false notice or
information or document in relation to
recruitment or employment;
(c) To give any false notice, testimony,
information or document or commit any act of
misrepresentation for the purpose of securing a
license or authority under this Code;
(d) To induce or to attempt to induce a worker
already employed to quit his employment in
order to offer him to another unless the transfer
is designed to liberate the worker from
oppressive terms and conditions of
employment;
(e) To influence or to attempt to influence any
person or entity not to employ any worker who
has not applied for employment through his
agency;
(f) To engage in the recruitment or placement
of workers in jobs harmful to public health or
morality or to the dignity of the Republic of the
Philippines;
(g) To obstruct or attempt to obstruct inspection
by the Secretary of Labor or by his duly authorized
representatives;
(h) To fail to file reports on the status of
employment, placement, vacancies, remittances of
foreign exchange earnings, separation from jobs,
departures and such other matters or information
as may be required by the Secretary of Labor;
(i) To substitute or alter employment contracts
approved and verified by the Department of
Labor from the time of actual signing thereof by
the parties up to and including the periods of
expiration of the same without the approval of the
Secretary of Labor;
(j) To become an officer or member of the
Board of any corporation engaged in travel
agency or to be engaged directly or indirectly in
the management of a travel agency; and
(k)To withhold or deny travel documents from
applicant workers before departure for
monetary or financial considerations other
than those authorized under this Code and its
implementing rules and regulations.
PROHIBITED PRACTICES
Commission of any act prohibited under this
article may constitute not just recruitment
violation but illegal recruitment because these
acts are now embodied in the definition of
"illegal recruitment" under Section 6 of RA. No.
8042.
These prohibitions and the comments below may
be read in relation to Article 38: Illegal
Recruitment. Article 34(a) of the Labor Code has
two parts.
The first part prohibits the charging or accepting
of fees greater than that allowed by regulations.
Apart from Article 32 of the Labor Code, Section 3,
Rule V, Part II of the Rules and Regulations on
Overseas Employment provides that "fees shall
be collected from a hired worker only after he
has obtained employment through the facilities of
the recruitment agency."
The second part of Article 34(a) is a deterrent to
loan sharks who lend money at usurious interests.
Under Article 34(b) the prohibition includes the act
of furnishing fake employment documents to a
worker, and the act of publishing false notice or
information in relation to recruitment or
employment.
The act of advertising for employment is within
the definition of recruitment and placement and
the falsity of the notice or information
published is immaterial in prosecution for
illegal recruitment for unauthorized
advertisement.
Under Article 34(d) a mere attempt to induce the
worker to quit his employment for the purpose of
offering him to another is sufficient to constitute
the offense. It is not necessary that the worker
was actually induced or did quit employment.
Nonlicensees or nonholders of authority cannot
lawfully engage in recruitment and placement
of workers; they are likewise prohibited by Article
34(e) from attempting to influence another not to
employ a worker.
The purpose of Article 34, paragraph (i) of the
Labor Code is to protect both parties. The rule
that there should be concern, sympathy and
solicitude for the rights and welfare of the
working class, is meet and proper. That in
controversies between a laborer and his master,
doubts reasonably arising from the evidence or
in the interpretation of agreement and writings
should be resolved in the former's favor, is not
an unreasonable or unfair rule. But to disregard
the employer's own rights and interests solely
on the basis of that concern and solicitude for
labor is unjust and unacceptable.
The law empowers the POEA to approve and
verify a contract under Article 34(i) of the Labor
Code to insure that the employee shall not be
placed in a disadvantageous position and that
the contract contains the minimum standards
of such employment contract set by the POEA.
This is why a standard format for employment
contracts has been adopted by the Department of
Labor. However, there is no prohibition against
stipulating in a contract more benefits to the
employee than those required by law.
Thus, where a supplementary contract was
entered into affording greater benefits to the
employee than the previous one and although
the same was not submitted for approval of the
POEA, the NLRC properly considered said
contract to be valid and enforceable.
Moreover, as said contract was voluntarily
entered into by the parties, the same is binding
between them.
Not being contrary to law, morals, good
customs, public policy or public order, its
validity must be sustained.
ART. 35. SUSPENSION AND/OR
CANCELLATION OF LICENSE OR AUTHORITY
The Minister of Labor shall have the power to
suspend or cancel any license or authority to
recruit employees for overseas employment for
violation of rules and regulations issued by the
Ministry of Labor, the Overseas Employment
Development Board, and the National Seamen
Board, or for violation of the provisions of this and
other applicable laws, General Orders and Letters
of Instructions.
SUSPENSION OR CANCELLATION OF
LICENSE
The POEA Rules enumerate the recruitment
violations that may cause the imposition of
administrative sanctions, including suspension
or cancellation of license.
The grounds for imposition of administrative
sanctions include engaging in act/s of
misrepresentation for the purpose of securing
a license or renewal thereof, such as giving
false testimonies or falsified documents;
engaging in the recruitment or placement of
workers in jobs harmful to public health or
morality or to the dignity of the Republic of the
Philippines; charging of any fee before
employment is obtained for an applicant
worker; charging of any fee in amount exceeding
the allowable rate; and obstructing inspections by
DOLE. The acts prohibited under Article 34 are
not merely grounds for suspension or
cancellation of license or authority. They
likewise constitute illegal recruitment under RA.
No. 8042, as will be explained in notes to
Article. 38.
PERSONS LIABLE; DURATION OF LIABILITY
A recruitment agency is solidarity liable for the
unpaid salaries of a worker it recruited for
employment with a foreign principal. Section
10, Rule V, Book I [now Part II, Rule II, Section
(f) of the 2002 POEA Rules — CAA] of the
Implementing Regulations of the Labor Code,
provides: "Before recruiting any worker, the
private employment agency shall submit the
following documents: x x x (2) Power of the
agency to sue and be sued jointly and
solidarily with the principal or foreign-based
employer for any of the violations of the
recruitment agreement, and the contracts of
employment."2
Even if the recruitment agency and the principal
had already severed their agency agreement at
the time the worker was injured, the recruitment
agency may still be sued for violation of the
employment contract, if no notice of the agency
agreement's termination was given to the
employee.
This is pursuant to Article 1921 of the Civil Code,
which states that if the agency has been
entrusted for the purpose of contracting with
specified persons, its revocation shall not
prejudice the latter if they were not given
notice thereof.'
The obligations covenanted in the recruitment
agreement entered into by and between the local
agent and its foreign principal are not
coterminous with the term of such agreement
so that if either or both of the parties decide to
end the agreement, the responsibilities of such
parties towards the contracted employees
under the agreement do not at all end.
It extends up to and until the expiration of the
employment contracts of the employees
recruited and employed pursuant to the said
recruitment agreement. Otherwise, this will
render nugatory the very purpose for which the
law governing the employment of workers for
foreign jobs abroad was enacted.
SOLIDARY LIABILITY ASSUMED BY
RECRUITMENT AGENT
Royal Crown Internationale vs. National Labor
Relations Commission, G.R. No. 78085, October
16,1989 —
Facts: Petitioner, a private employment agency,
contends that there is no provision in the Labor
Code or the omnibus implementing rules which
provides for the "third-party liability" of an
employment agency for violations of an
employment agreement performed abroad.
Neither does the law designate it as the agent of
the foreign employer for enforcing claims arising
from such employment agreement.
Ruling: Petitioner's contention is erroneous. It
overlooks the fact that it had voluntarily
assumed liability under various contractual
undertakings it submitted to the Bureau of
Employment Services [POEA now].
In applying for a license to operate a private
employment agency for overseas recruitment
and placement, petitioner was required to
submit a verified undertaking. In that document
the agency assumed all responsibilities for the
proper use of its license and the proper
implementation of the employment contracts
with the workers it recruited and deployed for
overseas employment. The agency was also
required to file with the [POEA] a formal
appointment or agency contract executed by the
foreign-based employer authorizing the agency to
recruit and hire personnel for the former. It
contained a provision empowering it to sue
and be sued jointly and solidarily with the
foreign principal for any of the violations of the
recruitment agreement and the contracts of
employment. The agency was also required to
post bonds to guarantee compliance with
prescribed recruitment procedures and terms of
employment as appropriate.
These contractual undertakings constitute the
legal basis for private employment or
recruitment agencies being liable jointly and
severally with its principal, the foreign-based
employer. The undertakings cover all claims that
the recruited workers may file in connection with
the implementation of the service agreements or
employment contracts.
Required Undertaking by Agent Under POEA
Rules (Part II, Rule II, Section f), an applicant for a
license to operate a private employment
agency or manning agency should submit an
undertaking under oath stating that the applicant:
(1) Shall select only medically and technically
qualified recruits;
(2) Shall assume full and complete
responsibility for all claims and liabilities which
may arise in connection with the use of the license;
(3) Shall assume joint and solidary liability with
the employer for all claims and liabilities which
may arise in connection with the implementation of
the contract; including but not limited to
payment of wages, health and disability
compensation and repatriation;
(4) Shall guarantee compliance with the
existing labor and social legislations of the
Philippines and of the country of employment of
recruited workers;
(5) Shall assume full and the complete
responsibility for all acts of its officials,
employees and representatives done in connection
with recruitment and placement.
(6) Shall negotiate for the best terms and
conditions of employment;
(7) Shall disclose the full terms and conditions
of employment to the applicant workers;
(8) Shall deploy at least 100 workers to its new
markets within one (1) year from the issuance
of its license;
(9) Shall provide orientation on recruitment
procedures, terms and conditions and other
relevant information to its workers and provide
facilities therefor; and
(10) Shall repatriate the deployed workers and
his personal belongings when the need arises.
For the purpose of compliance with item (1), the
agency may require the worker to undergo
trade testing and medical examination only after
the worker has been pre-qualified for
employment.
In case of corporation or partnership, its
officers, directors or partners shall file the
verified undertaking that they will be jointly and
severally liable with the company over claims
arising from employer-employee relationship.
CONTRACT BY PRINCIPAL
Even if it was the agency's principal which
entered into contract with the worker,
nevertheless, the petitioner, as the manning
agent in the Philippines, is jointly and solidarity
responsible with its principal.1
3.3 PROPER PARTY
A sister in the Philippines of a maltreated
Filipino domestic helper in Abu Dhabi is a
proper party to file complaint. The agency is
liable for illegal dismissal of the domestic
helper.
EXCEPTIONS
The rule holding the agency solidarily liable
admits of exceptions depending on peculiar
circumstances. In one case where the workers
themselves insisted for the recruitment agency
to send them back to their foreign employer
despite their knowledge of its inability to pay
their wages, the Court absolved the agency from
liability.
It cannot simply be ignored that FCC Agency
was reluctant to send [the complainant] and the
other workers back to Saudi Arabia because of
the financial difficulties encountered by
Algosaibi-Bison, Ltd. They were informed of the
risks involved, but [the complainant] and the
other workers insisted that they be allowed to
resume employment and they even signed
Statements to the effect that each one of them
did not hold FCC Agency liable for delay or non-
payment of their salaries and amounts due
them from Algosaibi-Bison, Ltd. Under the
circumstances where [the complainant] and the
other workers were insisting to return to work
despite the warning, it cannot be said that their
written waivers as to FCC Agency's
responsibilities are void. They were not victims
of deceit or deception. They entered into those
waivers with open eyes and clear minds. They
were aware of the imminent danger and great risks
involved in their renewed ventures.
LLIABILITY FOR MORAL DAMAGES
A recruitment agency is obligated to protect and
tend to the welfare of its recruits. Even if the
death of the recruit is not attributable to the
recruitment agency's principal and even if the
death is not work-related, the nonchalant and
uncaring attitude of the recruitment agency,
even after it was shown that the worker did not
commit suicide but was murdered, may justify
making the agency liable for moral and
exemplary damages of the worker's family.
"It is surprising, therefore, that [the foreign
employer and the recruitment agencies] should
insist on suicide, without even lifting a finger to
help solve the mystery of [the worker's] death.
*Being in the business of sending OFWs to work
abroad, Becmen and White Falcon [the agencies]
should know what happens to some of our OFWs.
It is impossible for them to be completely unaware
that cruelties and inhumanities are inflicted on
OFWs who are unfortunate to be employed by
vicious employers, or upon those who work in
communities or environments where they are liable
to become victims of crimes.... It appears from the
record that to this date, no follow up of Jasmin's
case was ever made at all by them, and they seem
to have expediently treated Jasmin's death as a
closed case." Therefore, the foreign employer, the
recruitment agencies and their corporate directors
and officers are found jointly and solidarily liable
for moral and exemplary damages to the heirs of
the deployed worker.
SUABILITY OF A FOREIGN CORPORATION
WHICH HIRES FILIPINO WORKERS
A foreign corporation which, through unlicensed
agents, recruits workers in the country may be
sued in and found liable by Philippine courts.
Facilities Management Corp. vs. De La Osa, 89
SCRA 131 (1979) — A foreign corporation
domiciled outside of the Philippines was ordered
by the CIR to pay a Filipino employee unpaid
overtime and premium pay. On certiorari before
the Supreme Court, the corporation contended that
because it was domiciled outside and not doing
business in the Philippines, it could not be sued in
the country.
It was shown that the corporation, through one of
its employees in the Philippines, recruited Filipino
workers for employment abroad. The question
was: Does the act of a nonresident foreign
corporation of recruiting Filipino workers to work
for it abroad constitute "doing business in the
Philippines"?
The Supreme Court ruled: "Indeed, if a foreign
corporation, not engaged in business in the
Philippines, is not barred from seeking redress
from courts in the Philippines, a fortiori, that same
corporation cannot claim exemption from being
sued in Philippine courts for acts done against a
person or persons in the Philippines."
Note: Under present Article 18 of the Labor
Code, "no employer may hire a Filipino worker for
overseas employment except through the Boards
and entities authorized by the Secretary of Labor."
ART. 36. REGULATORY POWER The
Secrerary_of Labor
shall have the power to restrict and regulate the
recruitment and placement activities of all
agencies within the coverage of this Title and is
hereby authorized to issue orders and
promulgate rules and regulations to carry out the
objectives and implement the provisions of this
Title.
ATTEMPTED DEREGULATION AND PHASE
OUT
R.A. No. 8042 envisions a phase-out of POEA's
regulatory function so that the migration of the
workers will become strictly a matter between
the worker and his employer. Its Section 38
provides that the DOLE within one year from the
effectivity of the Act in 1995 is mandated to
formulate a five-year comprehensive deregulation
plan on recruitment activities. It will take into
account labor market trends, economic conditions
of the country, and emergency circumstances that
may affect the welfare of migrant workers.
Additionally, Section 39, titled "Gradual Phase-Out
of Regulatory Functions" provides that within a
period of five-years from effectivity of R.A. No.
8042, the DOLE shall phase-out the regulatory
functions of POEA pursuant to the objectives of
deregulation.
This projected deregulation has stirred some
controversy. Employment agencies have sought
to compel POEA to implement the phase-out, but
POEA appears reluctant or unwilling. DOLE-POEA
believes that the "mandate" of phase-out is not
absolute as it is subject to the condition that the
country first attain the status of a newly
industrialized country (or NIChood) by the year
2000.
DOLE-POEA argues that the perennial problem of
illegal recruitment, the surge of welfare cases, and
the indifference of host countries to the protection
of the OFWs, among other factors, do impede the
deregulation process. An untimely phase-out, it is
said, will go against the very spirit of protection of
the OFWs that R.A. No. 8042 pursues. The debate
is over because R.A. No. 9422, approved on April
10, 2007, repealed the phase-out provision of RA.
No. 8042.