I. FUNDAMENTAL PRINCIPLES AND
It
POLICIES
A. LEGAL BASIS
1. 1987 CONSTITUTION
a. Article II. Secs 9, 10, 11, 13, 14, 18, 20
ARTICLE II - DECLARATION OF PRINCIPLES AND STATE
POLICIES
SECTION 9. THE STATE SHALL PROMOTE A JUST AND DYNAMIC
SOCIAL ORDER THAT WILL ENSURE THE PROSPERITY AND INDEPENDENCE
OF THE NATION AND FREE THE PEOPLE FROM POVERTY THROUGH
POLICIES THAT PROVIDE ADEQUATE SOCIAL SERVICES, PROMOTE FULL
EMPLOYMENT, A RISING STANDARD OF LIVING, AND AN IMPROVED
QUALITY OF LIFE FOR ALL.
SECTION 10. THE STATE SHALL PROMOTE SOCIAL JUSTICE IN ALL
PHASES OF NATIONAL DEVELOPMENT.
SECTION 11. THE STATE VALUES THE DIGNITY OF EVERY HUMAN
PERSON AND GUARANTEES FULL RESPECT FOR HUMAN RIGHTS.
SECTION 13. THE STATE RECOGNIZES THE VITAL ROLE OF THE YOUTH
IN NATION-BUILDING AND SHALL PROMOTE AND PROTECT THEIR
PHYSICAL, MORAL, SPIRITUAL, INTELLECTUAL, AND SOCIAL WELL-BEING.
IT SHALL INCULCATE IN THE YOUTH PATRIOTISM AND NATIONALISM,
AND ENCOURAGE THEIR INVOLVEMENT IN PUBLIC AND CIVIC AFFAIRS.
SECTION 14. THE STATE RECOGNIZES THE ROLE OF WOMEN IN
NATION-BUILDING, AND SHALL ENSURE THE FUNDAMENTAL EQUALITY
BEFORE THE LAW OF WOMEN AND MEN.
SECTION 18. THE STATE AFFIRMS LABOR AS A PRIMARY SOCIAL
ECONOMIC FORCE. IT SHALL PROTECT THE RIGHTS OF WORKERS AND
PROMOTE THEIR WELFARE.
SECTION 20. THE STATE RECOGNIZES THE INDISPENSABLE ROLE OF
THE PRIVATE SECTOR, ENCOURAGES PRIVATE ENTERPRISE, AND
PROVIDES INCENTIVES TO NEEDED INVESTMENTS.
General Definition of Social Justice
Social justice is neither communism, nor despotism, nor
atomism, nor anarchy, but the humanization of laws and the
equalization of social and economic forces by the State so
that justice in its rational and objectively secular conception
may at least be approximated (Calalang vs. Williams, G.R.
No. 47800, December 2, 1940).
Limits of Social Justice
Social justice should be used only to correct an injustice.
must be founded on the recognition of the necessity of
interdependence among diverse units of a society, and of
the protection that should be equally and evenly extended
to all groups as a combined force in our social and economic
life. As partners in nation-building, labor and management
need each other to foster productivity and economic growth;
hence, the need to weigh and balance the rights and welfare
of both the employee and employer (Agabon vs. NLRC, G.R.
No. 158693, November 17, 2004).
The policy of social justice is not intended to countenance
wrongdoing simply because it is committed by the
underprivileged. At best it may mitigate the penalty but it
certainly will not condone the offense. Compassion for the
poor is an imperative of every humane society but only
when the recipient is not a rascal claiming an undeserved
privilege. Social justice cannot be permitted to be a refuge
of scoundrels any more than can equity be an impediment
to the punishment of the guilty. Those who invoke social
justice may do so only if their hands are clean and their
motives blameless and not simply because they happen to
be poor. This great policy of our Constitution is not meant
for the protection of those who have proved they are not
worthy of it, like the workers who have tainted the cause of
labor with the blemishes of their own character. [Tirazona
vs. Philippine EDS Techno-Service Inc., G.R. No. 169712
(2009)]
Laissez Faire
The Constitution is primarily a document of social justice,
and although it has recognized the importance of the
private sector, it has not embraced fully the concept of
laissez-faire or relied on pure market forces to govern the
economy. [Employees Confederation of the Philippines vs.
NWPC, G.R. No. 96169 (1991)]
Balancing of Interests
It is high time that employer and employee cease to view
each other as adversaries and instead recognize that theirs
is a symbiotic relationship, wherein they must rely on each
other to ensure the success of the business. When they
consider only their own self- interests, and when they act
only with their own benefit in mind, both parties suffer from
short-sightedness, failing to realize that they both have a
stake in the business. The employer wants the business to
succeed, considering the investment that has been made.
The employee in turn, also wants the business to succeed,
as continued employment means a living, and the chance to
better one’s lot in life. It is clear then that they both have
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the same goal, even if the benefit that results may be
greater for one party than the other. If this becomes a
source of conflict, there are various, more amicable means
of settling disputes and of balancing interests that do not
add fuel to the fire, and instead open avenues for
understanding and cooperation between the employer and
the employee. [Toyota Motor Phils. Corp Workers
Association (TMPCWA) v. NLRC, G.R. No. 158786 (2007)]
While labor laws should be construed liberally in favor of
labor, we must be able to balance this with the equally
important right of the [employer] to due process [Gagui v.
Dejero, G.R. No. 196036 (2013)
b. Article III. Sections 1, 4, 7, 8, 10, 16, 18(2)
ARTICLE III - BILL OF RIGHTS
SECTION 1. NO PERSON SHALL BE DEPRIVED OF LIFE, LIBERTY, OR
PROPERTY WITHOUT DUE PROCESS OF LAW, NOR SHALL ANY PERSON BE
DENIED THE EQUAL PROTECTION OF THE LAWS.
SECTION 4. NO LAW SHALL BE PASSED ABRIDGING THE FREEDOM OF
SPEECH, OF EXPRESSION, OR OF THE PRESS, OR THE RIGHT OF THE
PEOPLE PEACEABLY TO ASSEMBLE AND PETITION THE GOVERNMENT FOR
REDRESS OF GRIEVANCES.
SECTION 8. THE RIGHT OF THE PEOPLE, INCLUDING THOSE
EMPLOYED IN THE PUBLIC AND PRIVATE SECTORS, TO FORM UNIONS,
ASSOCIATIONS, OR SOCIETIES FOR PURPOSES NOT CONTRARY TO LAW
SHALL NOT BE ABRIDGED.
SECTION 10. NO LAW IMPAIRING THE OBLIGATION OF CONTRACTS
SHALL BE PASSED.
SECTION 16. ALL PERSONS SHALL HAVE THE RIGHT TO A SPEEDY
DISPOSITION OF THEIR CASES BEFORE ALL JUDICIAL, QUASI-JUDICIAL, OR
ADMINISTRATIVE BODIES.
SECTION 18. (2) NO INVOLUNTARY SERVITUDE IN ANY FORM SHALL
EXIST EXCEPT AS A PUNISHMENT FOR A CRIME WHEREOF THE PARTY
SHALL HAVE BEEN DULY CONVICTED.
Due Process
Under the Labor Code, as amended, the requirements for
the lawful dismissal of an employee by his employer are
two-fold: the substantive and the procedural. Not only must
the dismissal be for a valid or authorized cause as provided
by law, but the rudimentary requirements of due process,
basic to which are that an opportunity to be heard and to
defend oneself must be observed before an employee may
be dismissed [Metro Eye Security v. Salsona, G.R. No.
167367 (2007)]
To constitute valid dismissal from employment, two
requisites must concur: (1) the dismissal must be for a just
or authorized cause; and (2) the employee must be afforded
an opportunity to be heard and to defend himself. [Jeffrey
Nacague vs. Sulpicio Lines, Inc., G.R. No. 172589 (2010)]
Labor as Property Right
One’s employment is a property right, and the wrongful
interference therewith is an actionable wrong. The right is
considered to be property within the protection of the
constitutional guarantee of due process of law. [Texon
Manufacturing v. Millena, G.R. No. 141380 (2004)]
Between an employer and an employee, the latter is
oftentimes on the losing or inferior position. Without the
mandatory requirement of a hearing, employees may be
unjustly terminated from their work, effectively losing their
means of livelihood. The right of persons to their work is
considered a property right which is well within the meaning
of the constitutional guarantee. Depriving employees their
job without due process essentially amounts to a
deprivation of property without due process (Perez, et al. vs
PT&T Company, G.R. No. 152048, April 7, 2009)
A legal theory called the job as property doctrine states that
employment is a fundamental right of American workers
and that the loss of employment has such a serious impact
on a person's life that individuals should not lose their jobs
without the protection of due process as later codified
under the Fourteenth Amendment to the Constitution. (See
Arthur W. Sherman, Jr., George W. Bohlander, and Herbert
J. Chruden, Managing Human Resources, 8th Edi-
tion (Cincinnati: South-Western Publishing Company, 1988),
p. 442.) Affording due process means recognizing the
employee's right to be informed of unsatisfactory
performance and to have a chance to defend himself and
improve before an adverse employment action (such as
discharge) is taken.
This property right protection places on management an
obligation to deal in good faith with employees and to take
corrective action measures based on just cause (i.e., good
reason). This just cause requirement, in turn, mandates that
businesses take corrective action measures only for clear,
compelling, and justifiable reasons
(https://www.shrm.org/resourcesandtools/hr-
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topics/employee-relations/pages/the-elements-of-due-
process.aspx).
The Right to Assemble
The right of peaceable assembly is a right cognate to those
of free speech and free press and is equally fundamental.
[de Jonge vs. Oregon (1937)]
Wearing armbands and putting up placards to express one’s
views without violating the rights of third parties, are legal
per se and even constitutionally protected. [Bascon v CA,
G.R. No. 144899 (2004)]
The Right to Form Associations
The right to form associations shall not be impaired except
through a valid exercise of police power.
Non-impairment of Contracts
A law which changes the terms of a legal contract between
parties, either in the time or mode or performance, or
imposes new conditions, or dispenses with those expressed,
or authorizes for its satisfaction something different from
that provided in its terms, is a law which impairs the
obligation of a contract and is null and void. [Clemens vs.
Nolting (1922)]
The prohibition to impair the obligation of contracts is not
absolute and unqualified. In spite of the constitutional
prohibition and the fact that both parties are of full age and
competent to contract, it does not necessarily deprive the
State of the power to interfere where the parties do not
stand upon an equality, or where the public health demands
that one party to the contract shall be protected against
himself. [Leyte Land
c. Article XIII. Sections 1, 2, 3, 13, 14
ARTICLE XIII - SOCIAL JUSTICE AND HUMAN RIGHTS
SECTION 1. THE CONGRESS SHALL GIVE HIGHEST PRIORITY TO THE
ENACTMENT OF MEASURES THAT PROTECT AND ENHANCE THE RIGHT OF
ALL THE PEOPLE TO HUMAN DIGNITY, REDUCE SOCIAL, ECONOMIC, AND
POLITICAL INEQUALITIES, AND REMOVE CULTURAL INEQUITIES BY
EQUITABLY DIFFUSING WEALTH AND POLITICAL POWER FOR THE
COMMON GOOD.
TO THIS END, THE STATE SHALL REGULATE THE ACQUISITION,
OWNERSHIP, USE, AND DISPOSITION OF PROPERTY AND ITS
INCREMENTS.
SECTION 2. THE PROMOTION OF SOCIAL JUSTICE SHALL INCLUDE THE
COMMITMENT TO CREATE ECONOMIC OPPORTUNITIES BASED ON
FREEDOM OF INITIATIVE AND SELF-RELIANCE.
LABOR
SECTION 3. THE STATE SHALL AFFORD FULL PROTECTION TO LABOR,
LOCAL AND OVERSEAS, ORGANIZED AND UNORGANIZED, AND PROMOTE
FULL EMPLOYMENT AND EQUALITY OF EMPLOYMENT OPPORTUNITIES
FOR ALL. IT SHALL GUARANTEE THE RIGHTS OF ALL WORKERS TO SELF-
ORGANIZATION, COLLECTIVE BARGAINING AND NEGOTIATIONS, AND
PEACEFUL CONCERTED ACTIVITIES, INCLUDING THE RIGHT TO STRIKE IN
ACCORDANCE WITH LAW. THEY SHALL BE ENTITLED TO SECURITY OF
TENURE, HUMANE CONDITIONS OF WORK, AND A LIVING WAGE. THEY
SHALL ALSO PARTICIPATE IN POLICY AND DECISION-MAKING PROCESSES
AFFECTING THEIR RIGHTS AND BENEFITS AS MAY BE PROVIDED BY LAW.
THE STATE SHALL PROMOTE THE PRINCIPLE OF SHARED
RESPONSIBILITY BETWEEN WORKERS AND EMPLOYERS AND THE
PREFERENTIAL USE OF VOLUNTARY MODES IN SETTING DISPUTES,
INCLUDING CONCILIATION, AND SHALL ENFORCE THEIR MUTUAL
COMPLIANCE THEREWITH TO FOSTER INDUSTRIAL PEACE.
THE STATE SHALL REGULATE THE RELATIONS BETWEEN WORKERS
AND EMPLOYERS, RECOGNIZING THE RIGHT OF LABOR TO ITS JUST SHARE
IN THE FRUITS OF PRODUCTION AND THE RIGHT OF ENTERPRISES TO
REASONABLE RETURNS ON INVESTMENTS, AND TO EXPANSION AND
GROWTH.
HEALTH
SECTION 13. THE STATE SHALL ESTABLISH A SPECIAL AGENCY FOR
DISABLED PERSONS FOR REHABILITATION, SELF-DEVELOPMENT AND
SELF-RELIANCE, AND THEIR INTEGRATION INTO THE MAINSTREAM OF
SOCIETY.
WOMEN
SECTION 14. THE STATE SHALL PROTECT WORKING WOMEN BY
PROVIDING SAFE AND HEALTHFUL WORKING CONDITIONS, TAKING INTO
ACCOUNT THEIR MATERNAL FUNCTIONS, AND SUCH FACILITIES AND
OPPORTUNITIES THAT WILL ENHANCE THEIR WELFARE AND ENABLE
THEM TO REALIZE THEIR FULL POTENTIAL IN THE SERVICE OF THE
NATION.
Participation in Decision-Making Process
Verily, a line must be drawn between management
prerogatives regarding business operations per se and those
which affect the rights of the employees. In treating the
latter, management should see to it that its employees are
at least properly informed of its decisions or modes action.
Indeed, industrial peace cannot be achieved if the
employees are denied their just participation in the
discussion of matters affecting their rights. [Phil. Airlines Inc.
vs. NLRC, G.R. No. 85985 (1993)]
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Collective bargaining is just one of the forms of employee
participation. Despite so much interest in and the
promotion of collective bargaining, it is incorrect to say that
it is the device and no other, which secures industrial
democracy. It is equally misleading to say that collective
bargaining is the end-goal of employee representation.
Rather, the real aim is employee participation in whatever
form it may appear, bargaining or no bargaining, union or no
union. Any labor organization which may or may not be a
union may deal with the employer. This explains why a
workers' association or organization does not always have
to be a labor union and why employer-employee collective
interactions are not always collective bargaining.
To further strengthen employee participation, Article 255
(now 261) of the Labor Code mandates that workers shall
have the right to participate in policy and decision-making
processes of the establishment where they are employed
insofar as said processes will directly affect their rights,
benefits and welfare. For this purpose, workers and
employers may form LMCs (Samahan ng Manggagawa sa
Hanjin Shipyard, vs BLR, October 14, 2015, G.R. No. 211145).
2. CIVIL CODE
ARTICLE 1700. THE RELATIONS BETWEEN CAPITAL AND LABOR ARE
NOT MERELY CONTRACTUAL. THEY ARE SO IMPRESSED WITH PUBLIC
INTEREST THAT LABOR CONTRACTS MUST YIELD TO THE COMMON
GOOD. THEREFORE, SUCH CONTRACTS ARE SUBJECT TO THE SPECIAL
LAWS ON LABOR UNIONS, COLLECTIVE BARGAINING, STRIKES AND
LOCKOUTS, CLOSED SHOP, WAGES, WORKING CONDITIONS, HOURS OF
LABOR AND SIMILAR SUBJECTS.
ARTICLE 1702. IN CASE OF DOUBT, ALL LABOR LEGISLATION AND ALL
LABOR CONTRACTS SHALL BE CONSTRUED IN FAVOR OF THE SAFETY AND
DECENT LIVING FOR THE LABORER.
ART. 1703 – NO CONTRACT WHICH PRACTICALLY AMOUNTS TO
INVOLUNTARY SERVITUDE, UNDER ANY GUISE WHATSOEVER, SHALL BE
VALID.
Contracts
Under the Civil Code, contracts of labor are explicitly subject
to the police power of the state because they are not
ordinary contracts but are impressed with public interest.
Inasmuch as in this particular instance the contract in
question would have been deemed in violation of pertinent
labor laws, the provisions of said laws would prevail over the
terms of the contract, and private respondent would still be
entitled to overtime pay. [PAL Employees Savings and Loan
Assn., Inc. vs. NLRC, G.R. No. 105963 (1996)]
Indeed, a contract of employment is impressed with public
interest. For this reason, provisions of applicable statutes
are deemed written into the contract. Hence, the parties are
not at liberty to insulate themselves and their relationships
from the impact of labor laws and regulations by simply
contracting with each other. Moreover, in case of doubt, the
terms of a contract should be construed in favor of labor.
[Innodata Philippines, Inc. vs. Quejada-Lopez, G.R. No.
162839 (2006)]
A contract is the law between the parties, and courts have
no choice but to enforce such contract so long as it is not
contrary to law, morals, good customs or public policy.
Otherwise, courts would be interfering with the freedom of
contract of the parties. Simply put, courts cannot stipulate
for the parties or amend the latter’s agreement, for to do so
would be to alter the real intention of the contracting
parties when the contrary function of courts is to give force
and effect to the intention of the parties. [Maynilad Water
Supervisors Association vs. Maynilad Water Services, Inc.,
G.R. No. 198935 (2013)]
3. LABOR CODE
Salient Features of the Labor Code
a. It re-orients labor laws towards development and
employment goals;
b. It institutionalizes the NLRC to facilitate the speedy
settlement of labor disputes;
c. It establishes a new system of workmen’s compensation;
d. It establishes a system for employment of overseas
workers and optimizes national benefit therefrom in the
form of dollar remittances and improved skills and
technology for our people; and
e. It institutionalizes voluntary arbitration as a mode of
settling labor disputes.
Effectivity of the Labor Code
Took effect on November 1, 1974; Promulgated on May 1,
1974
B. STATE POLICIES TOWARDS LABOR
1. Security of tenure
Petitioner’s submission ignore the protection accorded by
our Constitution to the worker’s precious right to security of
tenure. The enthronement of the worker’s right to security
or tenure in our fundamental law was not achieved
overnight. For all its liberality towards labor, our 1935
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Constitution did not elevate the right as a constitutional
right. For a long time, the worker’s security of tenure had
only the protective mantle of statutes and their
interpretative rules and regulations. It was as uncertain
protection that sometimes yielded to the political
permutations of the times. It took labor nearly four decades
of sweat and tears to persuade our people thru their leaders,
to exalt the worker’s right to security of tenure as a
sacrosanct constitutional right. It was Article II, section 2 of
our 1973 Constitution that declared as a policy that the
State shall assure the right of worker’s to security tenure.
The 1987 Constitution is even more solicitous of the welfare
of labor. Section 3 of its Article XIII mandates that the State
shall afford full protection to labor and declares that all
workers shall be entitled to security of tenure. Among the
enunciated State policies are the promotion of social justice
and a just and dynamic social order. In contrast, the
prerogative of management to dismiss a worker, as an
aspect of property right, has never been endowed with a
constitutional status. The unequivocal constitutional
declaration that all workers shall be entitled to security of
tenure spurred our lawmakers to strengthen the protective
walls around this hard earned right. The right was protected
from undue infringement both by our substantive and
procedural laws. Thus, the causes for dismissing employees
were more defined and restricted; on the other hand, the
procedure of termination was also more clearly delineated.
These substantive and procedural laws must be strictly
complied with before a worker can be dismissed from his
employment. [BPI Credit Corporation vs NLRC, et al., G.R. No.
106027, July 25, 1994.]
2. Social justice
3. Equal work opportunities
Whether employed locally or overseas, all Filipino workers
enjoy the protective mantle of Philippine labor and social
legislation, contract stipulations to the contrary
notwithstanding. This pronouncement is in keeping with the
basic public policy of the State to afford protection to labor,
promote full employment, ensure equal work opportunities
regardless of sex, race or creed, and regulate the relations
between workers and employers (PNB vs. Cabansag, G.R. No.
157010 June 21, 2005)
Receiving salaries less than their counterparts hired abroad,
the local-hires of private respondent school, mostly Filipinos,
cry discrimination. We agree. That the local-hires are paid
more than their colleagues in other schools is, of course,
beside the point. The point is that employees should be
given equal pay for work of equal value. That is a principle
long honored in this jurisdiction. That is a principle that rests
on fundamental notions of justice. That is the principle we
uphold today. (ISAE vs Quisumbing, G.R. No. 128845 June 1,
2000)
4. Right to self-organization and collective bargaining
The right of employees "to self-organization and to form,
join or assist labor organizations of their own choosing" (Sec.
3, Republic Act No. 875) is a fundamental right that yields
only to the proviso that "nothing in this Act or statute of the
Republic of the Philippines shall preclude an employer from
making an agreement with a labor organization to require
as a condition of employment membership therein, if such
labor organization is the representative of the employees as
provided in Section twelve." (Sec. [4a] [4]). [National
Brewery and Allied Industries Labor Union of the Philippines
vs. San Miguel Brewery, Inc., G.R. No. L-18170. August 31,
1963.]
Guaranteed to all employees or workers is the "right to self-
organization and to form, join, or assist labor organizations
of their own choosing for purposes of collective bargaining."
This is made plain by no less than three provisions of the
Labor Code of the Philippines. [As amended inter alia by R.A.
Nos. 6715, 6725 AND 6727]
The right of self-organization includes the right to organize
or affiliate with a labor union or determine which of two or
more unions in an establishment to join, and to engage in
concerted activities with co-workers for purposes of
collective bargaining through representatives of their own
choosing, or for their mutual aid and protection, i.e., the
protection, promotion, or enhancement of their rights and
interests. [Art. 247, Labor Code, as amended] Logically, the
right NOT to join, affiliate with, or assist any union, and to
disaffiliate or resign from a labor organization, is subsumed
in the right to join, affiliate with, or assist any union, and to
maintain membership therein. The right to form or join a
labor organization necessarily includes the right to refuse or
refrain from exercising said right. It is self-evident that just
as no one should be denied the exercise of a right granted
by law, so also, no one should be compelled to exercise such
a conferred right. The fact that a person has opted to
acquire membership in a labor union does not preclude his
subsequently opting to renounce such membership. The
right to refuse to join or be represented by any labor
organization is recognized not only by the law but also in the
rules drawn up for implementation thereof (Reyes, et al. vs
Trajano, et al., G.R. No. 84433. June 2, 1992.]
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5. Construction in favor of labor
Doubts are resolved in favor of labor in line with the
principle that those who have less in life should have more
in law. When conflicting interest of labor and capital are
weighed on the scales of social justice, the heavier influence
of the latter must be counter-balanced by the sympathy and
compassion the law must accord the underprivileged
worker. A contrary ruling would be a dilution and
emasculation of the protection to labor clause of the
Constitution.
Article 4 of the Labor Code applies only when there is a
doubt. When there is no doubt, there is no room for
construction. Where the evidence is clear that an employee
is not an asset but a liability that delays production and sets
a bad example to his co-workers, the courts should not
hesitate to confirm or order his dismissal.
This Court has also taken the early occasion to qualify that
when it comes to evaluating work-relatedness with respect
to its guiding provisions in labor laws and their
implementing rules, the same must always be construed
fairly, reasonably, or liberally in favor, or for the benefit, of
employees and their dependents, with all doubts as to the
right to compensation being resolved, and all presumptions
indulged in their favor (German Marine Agencies, Inc., et al.
vs Caro, February 13, 2019, G.R. No. 200774)
The law, in protecting the rights of the laborer, authorizes
neither oppression nor self-destruction of the employer.
While the constitution is committed to the policy of social
justice and the protection of the working class, it should not
be supposed that every labor dispute will be automatically
decided in favor of labor. Management also has its own
rights which, as such, are entitled to respect and
enforcement in the interest of simple fair play. Out of its
concern for those with less privileges in life, the Supreme
Court has inclined more often than not towards the worker
and upheld his cause with his conflicts with the employer.
Such favoritism, however, has not blinded the Court to rule
that justice is, in every case, for the deserving, to be
dispensed in the light of the established facts and applicable
law and doctrine. (Sime Darby Pilipinas, Inc. vs. NLRC,
119205, April 15, 1998).
The State is bound under the Constitution to afford full
protection to labor. When conflicting interests of labor and
capital are to be weighed on the scales of social justice, the
heavier influence of the latter should be counterbalanced
with the sympathy and compassion the law accords the less
privileged workingman. This is only fair if the worker is to be
given the opportunity and the right to assert and defend his
cause not as a subordinate but as part of management with
which he can negotiate on even plane. Hence, labor is not a
mere employee of capital but its active and equal partner.
Evidently, courts should be ever vigilant in the preservation
of the constitutionally enshrined rights of the working class.
Certainly, without the protection accorded by our laws and
the tempering of courts, the natural and historical
inclination of capital to ride roughshod over the rights of
labor would run unabated (Bantogon vs PVC Master Mfg.
Corp., G.R. No. 239433, September 16, 2020)
6. Burden of proof and quantum of evidence
Time and again, the rule is that in illegal dismissal cases, the
onus of proving that the employee was not dismissed or if
dismissed, that the dismissal was not illegal, rests on the
employer and failure to discharge the same would mean
that the dismissal is not justified and, therefore, illegal.
(Limketkai Sons Milling, Inc. vs. Llamera, G. R. No. 152514,
July 12, 2005).
Indeed, in illegal dismissal cases, the burden of proof is on
the employer in proving the validity of dismissal. However,
the fact of dismissal, if disputed, must be duly proven by the
complainant (Italkarat 18, Inc. vs Gerasmio, G.R. No. 221411,
September 28, 2020)
All administrative determinations require only substantial
proof and not clear and convincing evidence. (Segismundo
vs. NLRC, G. R. No. 112203, Dec. 13, 1994).
II. RECRUITMENT AND PLACEMENT
TITLE I
RECRUITMENT AND PLACEMENT OF WORKERS
CHAPTER I
GENERAL PROVISIONS
ARTICLE 13. DEFINITIONS.
"WORKER" MEANS ANY MEMBER OF THE LABOR FORCE, WHETHER
EMPLOYED OR UNEMPLOYED.
"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
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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.
"PRIVATE FEE-CHARGING EMPLOYMENT AGENCY" MEANS ANY PERSON
OR ENTITY ENGAGED IN RECRUITMENT AND PLACEMENT OF WORKERS
FOR A FEE WHICH IS CHARGED, DIRECTLY OR INDIRECTLY, FROM THE
WORKERS OR EMPLOYERS OR BOTH.
"LICENSE" MEANS A DOCUMENT ISSUED BY THE DEPARTMENT OF
LABOR AUTHORIZING A PERSON OR ENTITY TO OPERATE A PRIVATE
EMPLOYMENT AGENCY.
"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.
"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.
"SEAMAN" MEANS ANY PERSON EMPLOYED IN A VESSEL ENGAGED IN
MARITIME NAVIGATION.
"OVERSEAS EMPLOYMENT" MEANS EMPLOYMENT OF A WORKER
OUTSIDE THE PHILIPPINES.
"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.
ARTICLE 14. EMPLOYMENT PROMOTION. THE SECRETARY OF LABOR
SHALL HAVE THE POWER AND AUTHORITY:
TO ORGANIZE AND ESTABLISH NEW EMPLOYMENT OFFICES IN ADDITION
TO THE EXISTING EMPLOYMENT OFFICES UNDER THE DEPARTMENT OF
LABOR AS THE NEED ARISES;
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;
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
TO REQUIRE ANY PERSON, ESTABLISHMENT, ORGANIZATION OR
INSTITUTION TO SUBMIT SUCH EMPLOYMENT INFORMATION AS MAY BE
PRESCRIBED BY THE SECRETARY OF LABOR.
ARTICLE 15. BUREAU OF EMPLOYMENT SERVICES.
THE BUREAU OF EMPLOYMENT SERVICES SHALL BE PRIMARILY
RESPONSIBLE FOR DEVELOPING AND MONITORING A COMPREHENSIVE
EMPLOYMENT PROGRAM. IT SHALL HAVE THE POWER AND DUTY:
TO FORMULATE AND DEVELOP PLANS AND PROGRAMS TO IMPLEMENT
THE EMPLOYMENT PROMOTION OBJECTIVES OF THIS TITLE;
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 MINISTER OF LABOR;
TO FORMULATE AND DEVELOP EMPLOYMENT PROGRAMS DESIGNED TO
BENEFIT DISADVANTAGED GROUPS AND COMMUNITIES;
TO ESTABLISH AND MAINTAIN A REGISTRATION AND/OR WORK PERMIT
SYSTEM TO REGULATE THE EMPLOYMENT OF ALIENS;
TO DEVELOP A LABOR MARKET INFORMATION SYSTEM IN AID OF PROPER
MANPOWER AND DEVELOPMENT PLANNING;
TO DEVELOP A RESPONSIVE VOCATIONAL GUIDANCE AND TESTING
SYSTEM IN AID OF PROPER HUMAN RESOURCES ALLOCATION; AND
TO MAINTAIN A CENTRAL REGISTRY OF SKILLS, EXCEPT SEAMEN.
THE REGIONAL OFFICES OF THE MINISTRY 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 MINISTER OF LABOR DEEMS IT APPROPRIATE.
THE DECISIONS OF THE REGIONAL OFFICES OF THE BUREAU OF
EMPLOYMENT SERVICES, IF SO AUTHORIZED BY THE MINISTER OF
LABOR 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 INAPPEALABLE.
(SUPERSEDED BY EXEC. ORDER 797, MAY 1, 1982).
THE MINISTER OF LABOR SHALL HAVE THE POWER TO IMPOSE AND
COLLECT FEES BASED ON RATES RECOMMENDED BY THE BUREAU OF
EMPLOYMENT SERVICES. SUCH FEES 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.
ARTICLE 16. PRIVATE RECRUITMENT. EXCEPT AS PROVIDED IN
CHAPTER II OF THIS TITLE, NO PERSON OR ENTITY OTHER THAN THE
PUBLIC EMPLOYMENT OFFICES, SHALL ENGAGE IN THE RECRUITMENT
AND PLACEMENT OF WORKERS.
ARTICLE 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:
TO PROMOTE THE OVERSEAS EMPLOYMENT OF FILIPINO WORKERS
THROUGH A COMPREHENSIVE MARKET PROMOTION AND
DEVELOPMENT PROGRAM;
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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;
TO RECRUIT AND PLACE WORKERS FOR OVERSEAS EMPLOYMENT ON A
GOVERNMENT-TO-GOVERNMENT ARRANGEMENT AND IN SUCH OTHER
SECTORS AS POLICY MAY DICTATE; AND
TO ACT AS SECRETARIAT FOR THE BOARD OF TRUSTEES OF THE
WELFARE AND TRAINING FUND FOR OVERSEAS WORKERS.
ARTICLE 18. BAN ON DIRECT-HIRING. NO EMPLOYER MAY HIRE A
FILIPINO WORKER FOR OVERSEAS EMPLOYMENT EXCEPT THROUGH THE
BOARDS AND ENTITIES AUTHORIZED BY THE SECRETARY OF LABOR.
DIRECT-HIRING BY MEMBERS OF THE DIPLOMATIC CORPS,
INTERNATIONAL ORGANIZATIONS AND SUCH OTHER EMPLOYERS AS MAY
BE ALLOWED BY THE SECRETARY OF LABOR IS EXEMPTED FROM THIS
PROVISION.
ARTICLE 19. OFFICE OF EMIGRANT AFFAIRS.
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.
THE OFFICE SHALL, AMONG OTHERS, PROMOTE THE WELL-BEING OF
EMIGRANTS AND MAINTAIN THEIR CLOSE LINK TO THE HOMELAND BY:
SERVING AS A LIAISON WITH MIGRANT COMMUNITIES;
PROVISION OF WELFARE AND CULTURAL SERVICES;
PROMOTE AND FACILITATE RE-INTEGRATION OF MIGRANTS INTO THE
NATIONAL MAINSTREAM;
PROMOTE ECONOMIC; POLITICAL AND CULTURAL TIES WITH THE
COMMUNITIES; AND
GENERALLY TO UNDERTAKE SUCH ACTIVITIES AS MAY BE APPROPRIATE
TO ENHANCE SUCH COOPERATIVE LINKS.
ARTICLE 20. NATIONAL SEAMEN BOARD.
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:
TO PROVIDE FREE PLACEMENT SERVICES FOR SEAMEN;
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;
TO MAINTAIN A COMPLETE REGISTRY OF ALL FILIPINO SEAMEN.
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 DECISIONS 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
INAPPEALABLE.
ARTICLE 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:
TO PROVIDE ALL FILIPINO WORKERS WITHIN THEIR JURISDICTION
ASSISTANCE ON ALL MATTERS ARISING OUT OF EMPLOYMENT;
TO INSURE THAT FILIPINO WORKERS ARE NOT EXPLOITED OR
DISCRIMINATED AGAINST;
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;
TO MAKE CONTINUING STUDIES OR RESEARCHES AND
RECOMMENDATIONS ON THE VARIOUS ASPECTS OF THE EMPLOYMENT
MARKET WITHIN THEIR JURISDICTION;
TO GATHER AND ANALYZE INFORMATION ON THE EMPLOYMENT
SITUATION AND ITS PROBABLE TRENDS, AND TO MAKE SUCH
INFORMATION AVAILABLE; AND
TO PERFORM SUCH OTHER DUTIES AS MAY BE REQUIRED OF THEM
FROM TIME TO TIME.
ARTICLE 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.
ARTICLE 23. COMPOSITION OF THE BOARDS.
THE OEDB SHALL BE COMPOSED OF THE SECRETARY OF LABOR AND
EMPLOYMENT AS CHAIRMAN, THE UNDERSECRETARY OF LABOR AS
VICE-CHAIRMAN, AND A REPRESENTATIVE EACH OF THE DEPARTMENT
OF FOREIGN AFFAIRS, THE DEPARTMENT OF NATIONAL DEFENSE, THE
CENTRAL BANK, THE DEPARTMENT OF EDUCATION, CULTURE AND
SPORTS, THE NATIONAL MANPOWER AND YOUTH COUNCIL, THE
BUREAU OF EMPLOYMENT SERVICES, A WORKERS’ ORGANIZATION AND
AN EMPLOYERS’ ORGANIZATION AND THE EXECUTIVE DIRECTOR OF THE
OEDB AS MEMBERS.
THE NATIONAL SEAMEN BOARD SHALL BE COMPOSED OF THE
SECRETARY OF LABOR AND EMPLOYMENT AS CHAIRMAN, THE
UNDERSECRETARY OF LABOR AS VICE-CHAIRMAN, THE COMMANDANT
OF THE PHILIPPINE COAST GUARD, AND A REPRESENTATIVE EACH OF
THE DEPARTMENT OF FOREIGN AFFAIRS, THE DEPARTMENT OF
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EDUCATION, CULTURE AND SPORTS, THE CENTRAL BANK, THE
MARITIME INDUSTRY AUTHORITY, THE BUREAU OF EMPLOYMENT
SERVICES, A NATIONAL SHIPPING ASSOCIATION AND THE EXECUTIVE
DIRECTOR OF THE NSB AS MEMBERS.
THE MEMBERS OF THE BOARDS SHALL RECEIVE ALLOWANCES TO BE
DETERMINED BY THE BOARD WHICH SHALL NOT BE MORE THAN
P2,000.00 PER MONTH.
THE BOARDS SHALL BE ATTACHED TO THE DEPARTMENT OF LABOR FOR
POLICY AND PROGRAM COORDINATION. THEY SHALL EACH BE ASSISTED
BY A SECRETARIAT HEADED BY AN EXECUTIVE DIRECTOR WHO SHALL BE
A FILIPINO CITIZEN WITH SUFFICIENT EXPERIENCE IN MANPOWER
ADMINISTRATION, INCLUDING OVERSEAS EMPLOYMENT ACTIVITIES.
THE EXECUTIVE DIRECTOR SHALL BE APPOINTED BY THE PRESIDENT OF
THE PHILIPPINES UPON THE RECOMMENDATION OF THE SECRETARY OF
LABOR AND SHALL RECEIVE AN ANNUAL SALARY AS FIXED BY LAW. THE
SECRETARY OF LABOR SHALL APPOINT THE OTHER MEMBERS OF THE
SECRETARIAT.
THE AUDITOR GENERAL SHALL APPOINT HIS REPRESENTATIVE TO THE
BOARDS TO AUDIT THEIR RESPECTIVE ACCOUNTS IN ACCORDANCE WITH
AUDITING LAWS AND PERTINENT RULES AND REGULATIONS.
ARTICLE 24. BOARDS TO ISSUE RULES AND COLLECT FEES. THE BOARDS
SHALL ISSUE APPROPRIATE RULES AND REGULATIONS TO CARRY OUT
THEIR FUNCTIONS. THEY SHALL HAVE THE POWER TO IMPOSE AND
COLLECT FEES FROM EMPLOYERS CONCERNED, WHICH SHALL BE
DEPOSITED IN THE RESPECTIVE ACCOUNTS OF SAID BOARDS AND BE
USED BY THEM EXCLUSIVELY TO PROMOTE THEIR OBJECTIVES.
CHAPTER II
REGULATION OF RECRUITMENT AND PLACEMENT
ACTIVITIES
ARTICLE 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.
ARTICLE 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.
ARTICLE 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 IS OWNED AND CONTROLLED BY FILIPINO CITIZENS SHALL BE
PERMITTED TO PARTICIPATE IN THE RECRUITMENT AND PLACEMENT OF
WORKERS, LOCALLY OR OVERSEAS.
ARTICLE 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.
ARTICLE 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 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.
ARTICLE 30. REGISTRATION FEES. THE SECRETARY OF LABOR SHALL
PROMULGATE A SCHEDULE OF FEES FOR THE REGISTRATION OF ALL
APPLICANTS FOR LICENSE OR AUTHORITY.
ARTICLE 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.
ARTICLE 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.
ARTICLE 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.
ARTICLE 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 ATTEMPT TO INDUCE A WORKER ALREADY EMPLOYED
TO QUIT HIS EMPLOYMENT IN ORDER TO OFFER HIM TO ANOTHER
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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, REMITTANCE 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.
ARTICLE 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, OR FOR VIOLATION OF THE
PROVISIONS OF THIS AND OTHER APPLICABLE LAWS, GENERAL ORDERS
AND LETTERS OF INSTRUCTIONS.
CHAPTER III
MISCELLANEOUS PROVISIONS
ARTICLE 36. REGULATORY POWER. THE SECRETARY OF LABOR SHALL
HAVE THE POWER TO RESTRICT AND REGULATE THE RECRUITMENT AND
PLACEMENT ACTIVITIES OF ALL AGENCIES WITHIN THE COVERAGE OF
THIS TITLE AND IS HEREBY AUTHORIZED TO ISSUE ORDERS AND
PROMULGATE RULES AND REGULATIONS TO CARRY OUT THE OBJECTIVES
AND IMPLEMENT THE PROVISIONS OF THIS TITLE.
ARTICLE 37. VISITORIAL POWER. THE SECRETARY OF LABOR OR HIS
DULY AUTHORIZED REPRESENTATIVES MAY, AT ANY TIME, INSPECT THE
PREMISES, BOOKS OF ACCOUNTS AND RECORDS OF ANY PERSON OR
ENTITY COVERED BY THIS TITLE, REQUIRE IT TO SUBMIT REPORTS
REGULARLY ON PRESCRIBED FORMS, AND ACT ON VIOLATION OF ANY
PROVISIONS OF THIS TITLE.
ARTICLE 38. ILLEGAL RECRUITMENT. (A) THE FOLLOWING
RECRUITMENT ACTIVITIES ARE DEEMED ILLEGAL AND PUNISHABLE AS
PROVIDED HEREIN:
1. THOSE UNDERTAKEN IN ANY FORM OR MANNER BY NON-LICENSEES
OR NON-HOLDERS OF AUTHORITY;
2. PARTICIPATION IN THE EXACTION OF MONEY, GOODS AND/OR
SERVICES IN CONSIDERATION OF EMPLOYMENT IN AN AMOUNT
EXCEEDING THAT AUTHORIZED BY LAW OR APPROPRIATE REGULATIONS;
AND
3. PARTICIPATION IN THE RECRUITMENT , PLACEMENT OR DEPLOYMENT
OF ANY WORKER UNDER FALSE PRETENSE OR FALSE DOCUMENTATION.
(B) ILLEGAL RECRUITMENT SHALL BE CONSIDERED AS A CRIME OF
ECONOMIC SABOTAGE AND SHALL BE PENALIZED AS SUCH IN
ACCORDANCE WITH EXISTING LAWS.
(C) THE SECRETARY OF LABOR OR HIS DULY AUTHORIZED
REPRESENTATIVE SHALL HAVE THE POWER TO RECOMMEND THE ARREST
AND DETENTION OF ANY PERSON ENGAGED IN ILLEGAL RECRUITMENT.
(D) THE DEPARTMENT OF LABOR SHALL SET UP A SECRETARIAT ON
ILLEGAL RECRUITMENT TO SERVE AS THE FOCAL POINT FOR ALL INTER-
AGENCY EFFORTS AGAINST ILLEGAL RECRUITMENT AND RELATED
ACTIVITIES. THE SECRETARIAT SHALL INITIALLY BE MANNED AND
OPERATED BY SUCH PERSONNEL AND THROUGH SUCH FUNDING AS ARE
AVAILABLE IN THE DEPARTMENT OF LABOR. THEREAFTER ITS
APPROPRIATION SHALL BE MADE PART OF THE REGULAR
APPROPRIATION ACT.
ARTICLE 39. PENALTIES.
THE PENALTY OF LIFE IMPRISONMENT AND A FINE OF ONE HUNDRED
THOUSAND PESOS (P1000,000.00) SHALL BE IMPOSED IF ILLEGAL
RECRUITMENT CONSTITUTES ECONOMIC SABOTAGE AS DEFINED
HEREIN;
ANY LICENSEE OR HOLDER OF AUTHORITY FOUND VIOLATING OR
CAUSING ANOTHER TO VIOLATE ANY PROVISION OF THIS TITLE OR ITS
IMPLEMENTING RULES AND REGULATIONS SHALL, UPON CONVICTION
THEREOF, SUFFER THE PENALTY OF IMPRISONMENT OF NOT LESS THAN
TWO YEARS NOR MORE THAN FIVE YEARS OR A FINE OF NOT LESS THAN
P10,000 NOR MORE THAN P50,000, OR BOTH SUCH IMPRISONMENT
AND FINE, AT THE DISCRETION OF THE COURT;
ANY PERSON WHO IS NEITHER A LICENSEE NOR A HOLDER OF AUTHORITY
UNDER THIS TITLE FOUND VIOLATING ANY PROVISION THEREOF OR ITS
IMPLEMENTING RULES AND REGULATIONS SHALL, UPON CONVICTION
THEREOF, SUFFER THE PENALTY OF IMPRISONMENT OF NOT LESS THAN
FOUR YEARS NOR MORE THAN EIGHT YEARS OR A FINE OF NOT LESS THAN
P20,000 NOR MORE THAN P100,000 OR BOTH SUCH IMPRISONMENT
AND FINE, AT THE DISCRETION OF THE COURT;
IF THE OFFENDER IS A CORPORATION, PARTNERSHIP, ASSOCIATION OR
ENTITY, THE PENALTY SHALL BE IMPOSED UPON THE OFFICER OR
OFFICERS OF THE CORPORATION, PARTNERSHIP, ASSOCIATION OR
ENTITY RESPONSIBLE FOR VIOLATION; AND IF SUCH OFFICER IS AN ALIEN,
HE SHALL, IN ADDITION TO THE PENALTIES HEREIN PRESCRIBED, BE
DEPORTED WITHOUT FURTHER PROCEEDINGS;
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IN EVERY CASE, CONVICTION SHALL CAUSE AND CARRY THE AUTOMATIC
REVOCATION OF THE LICENSE OR AUTHORITY AND ALL THE PERMITS AND
PRIVILEGES GRANTED TO SUCH PERSON OR ENTITY UNDER THIS TITLE,
AND THE FORFEITURE OF THE CASH AND SURETY BONDS IN FAVOR OF
THE OVERSEAS EMPLOYMENT DEVELOPMENT BOARD OR THE
NATIONAL SEAMEN BOARD, AS THE CASE MAY BE, BOTH OF WHICH ARE
AUTHORIZED TO USE THE SAME EXCLUSIVELY TO PROMOTE THEIR
OBJECTIVES.
A. Definition of Recruitment and Placement
Recruitment and placement refers to any act of: Canvassing,
Enlisting, Transporting, Contracting, Hiring, Utilizing, or
Procuring workers, and also includes Contract services,
Referrals, Advertising, Promising 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. [Art. 13 (b), LC]
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 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 presumed to be engaged in the act of
recruitment and placement. (People v. Panis, G. R. Nos. L-
58674-77, July 11, 1990)
Acts of referral
The act of referral, which is included in recruitment, is "the
act of passing along or forwarding of an applicant for
employment after an initial interview of a selected applicant
for employment to a selected employer, placement officer
or bureau." [Rodolfo vs. People, G.R. No. 146964 (2006)]
Promising employment
Promising employment as factory workers and receiving
money allegedly for processing papers without
authorization or license is engaging into unlawful
recruitment and placement activities. The absence of the
necessary license or authority renders all of accused-
appellant’s recruitment activities criminal. [People vs. Saulo,
G.R. No. 125903 (2000)]
B. Regulation of Recruitment and Placement Activities
1. Regulatory Authority
a. Philippine Overseas Employment Administration (POEA)
POEA is the regulatory body for overseas employment, and
has original and exclusive jurisdiction to hear and decide:
1. All cases which are administrative in character,
involving or arising out of violations of recruitment
laws, rules and regulations, including refund of fees
collected from workers and violation of the
conditions for the issuance of license to recruit
landbased overseas workers or seafarers; and
2. Disciplinary action cases against migrant workers
or seafarers, foreign employers and principals that
are administrative in character.
Decisions of the POEA are appealable to the Secretary of
Labor and Employment within 15 days from receipt of
decision.
b. Regulatory and visitorial powers of the Department of
Labor and Employment Secretary
Regulatory & rule-making powers [Art. 36, LC]
The Secretary of Labor shall have the power to restrict and
regulate the recruitment and placement activities of all
agencies within the coverage of this Title and is hereby
authorized to issue orders and promulgate rules and
regulations to carry out the objectives and implement the
provisions of this Title.
Visitorial powers [Art. 37, LC]
The Secretary of Labor or his duly authorized
representatives may, at any time, inspect the premises,
books of accounts and records of any person or entity
covered by this Title, require it to submit reports regularly
on prescribed forms, and act on violations of any provisions
of this Title.
Note: In the old case of Salazar vs. Achacoso [G.R. No. 81510
(1990)], it was declared that Art. 38 (c) of the LC is
unconstitutional and that the Secretary of Labor and
Employment cannot issue a warrant of arrest.
Usually conducted:
a. Before issuance of license
b. In case of transfer of office
c. Upon receipt of complaint for violation of existing rules
and regulations
In case of violation, appropriate sanction may be imposed,
or denial of application for renewal of license
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Inspectors must present to the agency their Authority to
Inspect stating in detail the purpose and subject of
inspection.
2. Ban on direct hiring
Rationale for the Law: to enable the monitoring of
overseas contract workers and ensure that Filipino
overseas workers are afforded fair and equitable
recruitment and employment practices thereby assuring
the best terms and conditions of employment and
facilitating the enforcement of employment contracts.
Exception(s) to the Ban on Direct-Hiring
1. members of the diplomatic corps;
2. international organizations; and
3. other employers who may be allowed by the Secretary
of Labor and Employment to directly hire their workers.
Name Hire
A name hire is a worker who is able to secure an overseas
employment on his own without the assistance or
participation of any agency.
3. Entities prohibited from recruiting
Entities disqualified from being issued a license
(1) Travel agencies and sales agencies of airline
companies. [Art. 26]
(2) Officers or members of the Board of any
corporation or members in partnership engaged in the
business of a travel agency.
(3) Corporations and partnerships, when any of its
officers, members of the board or partners, is also an
officer, member of the board of partner of a corporation or
partnership engaged in the business of a travel agency.
(4) Individuals, partners, officers or directors of an
insurance company who make, propose or provide an
insurance contract under the compulsory insurance
coverage for agency-hired Overseas Filipino Workers; (5)
Sole proprietors, partners or officers and members of the
board with derogatory records, such as, but not limited to
the following:
a. Those convicted, or against whom probable cause or
prima facie finding of guilt is determined by a competent
authority, for illegal recruitment, or for other related
crimes or offenses committed in the course of, related to,
or resulting from, illegal recruitment, or for crimes
involving moral turpitude;
b. Those agencies whose licenses have been revoked for
violation of RA 8042 (Migrant Workers and Overseas
Filipinos Act of 1995), as amended, PD 442 (Labor Code of
the Philippines), as amended, and RA 9208 (Trafficking in
Persons Act of 2003), as amended, and their implementing
rules and regulations;
c. Those agencies whose licenses have been cancelled, or
those who, pursuant to the Order of the Administrator,
were included in the list of persons with derogatory record
for violation of recruitment laws and regulations; and
(6) Any official or employee of the DOLE, POEA, OWWA,
DFA, DOJ, DOH, BI, IC, NLRC, TESDA, CFO, NBI, PNP, Civil
Aviation Authority of the Philippines (CAAP), international
airport authorities, and other government agencies directly
involved in the implementation 6 of RA 8042, as amended,
and/or any of his/her relatives within the fourth civil
degree of consanguinity or affinity.
Non-transferability of license or authority
(1) 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,
(2) 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.
[Art. 29, LC]
See: POEA Rules Part II, Rule II, Sec. 7, 8, 9
Enforceability of the license
Licensed agencies are prohibited from conducting any
recruitment activities of any form outside of the address
stated in the license, acknowledged branch or extension
office, without securing prior authority from the POEA.
[People vs. Buli-e, G.R. No. 123146 (2003)]
Duration of Validity
4 years [POEA Rules of 2016]
Citizenship requirement
(1) Only Filipino citizens or
(2) Corporations, partnerships or entities at least
seventy-five percent (75%) of the authorized and voting
capital stock of which is owned and controlled by Filipino
citizens shall be permitted to participate in the recruitment
and placement of workers, locally or overseas. [Art. 27, LC]
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See: POEA Rules, Part II, Rule I, Sec. 1(a)
Capitalization requirement
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. [Art. 28, LC]
Based on POEA Rules the following are the substantial
capital requirements:
(1) Single proprietorships or partnerships with
minimum capitalization of P5,000,000.
(2) Corporations with minimum paid-up capital of
P5,000,000.
It shall be mandatory for all Filipino workers abroad to
remit a portion of their foreign earnings to their families,
dependents, and/or beneficiaries in the country. [Art. 22,
LC]
Amount required to be remitted [Executive Order No. 857]
The amount of one’s salary required to be remitted
depends on the type or nature of work performed by the
employee.
The following are the percentages of foreign exchange
remittance required from various kinds of migrant workers:
(1) Seaman or mariner – 80% of basic salary
(2) Workers for Filipino contractors and
construction companies – 70%
(3) Doctors, engineers, teachers, nurses and other
professional workers whose contract provide
for free board and lodging – 70%
(4) All other professional workers whose
employment contracts do not provide for free
board and lodging facilities – 50%
(5) Domestic and other service workers –
50%
(6) All other workers not falling under the
aforementioned categories – 50%
(7) Performing artists – 50%
Individuals exempted from the mandatory remittance
requirement:
The immediate family members, dependents or
beneficiaries of migrant workers residing with the latter
abroad;
(1) Filipino servicemen working within US military
installations;
Immigrants and Filipino professionals working with the
United Nations and its agencies or other specialized bodies.
4. Suspension or cancellation of license or authority
The Secretary 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 Department of Labor, the
Overseas Employment Development
Board, and the National SeamenBoard
§ violation of the provisions of this and
other applicable laws, General Orders
and Letters of Instructions. [Art. 35, LC]
Acts prohibited under Article 34 are grounds
for suspension or cancellation of license. Note
that these acts likewise constitute illegal
recruitment under R.A. 8042 as amended by
R.A. 10022.
Who can suspend or cancel the license?
(1) DOLE Secretary
(2) POEA Administrator
The power to suspend or cancel any license or
authority to recruit employees for overseas
employment is concurrently vested with the
POEA and the Secretary of Labor. [People v.
Diaz, G.R. 112175 (1996)]
Grounds for suspension or cancellation of license:
a. Recruitment agency for local employment:
1. Violation of the conditions of license
2. Engaging in acts of misrepresentation for the
purpose of securing a license or the renewal
thereof.
3. Continuous operation despite due notice that the
license has expired
4. Incurring two suspensions based on final and
executory orders
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 5. Engaging in labor-only contracting as defined in
Article 106 of the Labor Code
b. Recruitment agency for land-based overseas
employment:
1. Deploying under-aged workers
2. Deploying workers to principals not accredited by the
POEA
3. Falsifying or altering travel documents of applicant
worker in relation to overseas recruitment activities
4. Withholding of worker’s salaries or remittances without
justifiable reasons or shortchanging of remittances
5. Failure to comply with the undertaking to provide Pre-
Departure Orientation Seminar to workers; etc
c. Manning agency for overseas seafarers:
1. Transfer or change of ownership of a single
proprietorship licensed to engage in overseas
employment
2. Falsifying or altering travel documents of applicant
seafarer in relation to recruitment activities
3. Appointing or designating agents, representatives
or employees without prior approval from the
POEA
4. Failure to deploy a seafarer within the prescribed
period without valid reason
5. Disregard of orders, notices, and other processes
issued by the POEA
5. Prohibited Practices
In addition to the prohibited acts enumerated under Article
34 of the Labor Code, the following are likewise prohibited
under RA 8042, as amended by RA 10022.
"In addition to the acts enumerated above, it shall also be
unlawful for any person or entity to commit the following
prohibited acts:
"(1) Grant a loan to an overseas Filipino worker
with interest exceeding eight percent (8%) per
annum, which will be used for payment of legal
and allowable placement fees and make the
migrant worker issue, either personally or through
a guarantor or accommodation party, postdated
checks in relation to the said loan;
"(2) Impose a compulsory and exclusive
arrangement whereby an overseas Filipino worker
is required to avail of a loan only from specifically
designated institutions, entities or persons;
"(3) Refuse to condone or renegotiate a loan
incurred by an overseas Filipino worker after the
latter's employment contract has been
prematurely terminated through no fault of his or
her own;
"(4) Impose a compulsory and exclusive
arrangement whereby an overseas Filipino worker
is required to undergo health examinations only
from specifically designated medical clinics,
institutions, entities or persons, except in the case
of a seafarer whose medical examination cost is
shouldered by the principal/shipowner;
"(5) Impose a compulsory and exclusive
arrangement whereby an overseas Filipino worker
is required to undergo training, seminar,
instruction or schooling of any kind only from
specifically designated institutions, entities or
persons, except fpr recommendatory trainings
mandated by principals/shipowners where the
latter shoulder the cost of such trainings;
"(6) For a suspended recruitment/manning agency
to engage in any kind of recruitment activity
including the processing of pending workers'
applications; and
"(7) For a recruitment/manning agency or a foreign
principal/employer to pass on the overseas Filipino
worker or deduct from his or her salary the
payment of the cost of insurance fees, premium or
other insurance related charges, as provided under
the compulsory worker's insurance coverage.
C. Illegal Recruitment
In addition to the definition provided under the Labor
Code, note the following definition under RA 8042, as
amended by RA 10022
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SEC. 6. Definition. - For purposes of this Act, illegal
recruitment shall mean any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring, or procuring
workers and includes referring, contract services, promising
or advertising for employment abroad, whether for profit or
not, when undertaken by non-licensee or non-holder of
authority contemplated under Article 13(f) of Presidential
Decree No. 442, as amended, otherwise known as the Labor
Code of the Philippines: Provided, That any such non-
licensee or non-holder who, in any manner, offers or
promises for a fee employment abroad to two or more
persons shall be deemed so engaged. It shall likewise
include the following acts, whether committed by any
person, whether a non-licensee, non-holder, licensee or
holder of authority:
"(a) To charge or accept directly or indirectly any
amount greater than that specified in the schedule
of allowable fees prescribed by the Secretary of
Labor and Employment, or to make a worker pay
or acknowledge any amount greater than that
actually received by him as a loan or advance;
"(b) To furnish or publish any false notice or
information or document in relation to
recruitment or employment;
"(c) To give any false notice, testimony,
information or document or commit any act of
misrepresentation for the purpose of securing a
license or authority under the Labor Code, or for
the purpose of documenting hired workers with
the POEA, which include the act of reprocessing
workers through a job order that pertains to
nonexistent work, work different from the actual
overseas work, or work with a different employer
whether registered or not with the POEA;
"(d) To include or attempt to induce a worker
already employed to quit his employment in order
to offer him another unless the transfer is
designed to liberate a worker from oppressive
terms and conditions of employment;
"(e) To influence or attempt to influence any
person or entity not to employ any worker who
has not applied for employment through his
agency or who has formed, joined or supported, or
has contacted or is supported by any union or
workers' organization;
"(f) To engage in the recruitment or placement of
workers in jobs harmful to public health or
morality or to the dignity of the Republic of the
Philippines;
"(h) To fail to submit reports on the status of
employment, placement vacancies, remittance of
foreign exchange earnings, separation from jobs,
departures and such other matters or information
as may be required by the Secretary of Labor and
Employment;
"(i) To substitute or alter to the prejudice of the
worker, employment contracts approved and
verified by the Department of Labor and
Employment from the time of actual signing
thereof by the parties up to and including the
period of the expiration of the same without the
approval of the Department of Labor and
Employment;
"(j) For an officer or agent of a recruitment or
placement agency to become an officer or
member of the Board of any corporation engaged
in travel agency or to be engaged directly or
indirectly in the management of travel agency;
"(k) To withhold or deny travel documents from
applicant workers before departure for monetary
or financial considerations, or for any other
reasons, other than those authorized under the
Labor Code and its implementing rules and
regulations;
"(l) Failure to actually deploy a contracted worker
without valid reason as determined by the
Department of Labor and Employment;
"(m) Failure to reimburse expenses incurred by the
worker in connection with his documentation and
processing for purposes of deployment, in cases
where the deployment does not actually take place
without the worker's fault. Illegal recruitment
when committed by a syndicate or in large scale
shall be considered an offense involving economic
sabotage; and
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 "(n) To allow a non-Filipino citizen to head or Illegal recruitment, if committed by a syndicate or in a
manage a licensed recruitment/manning agency. large scale, is considered an offense involving economic
sabotage, hence, a higher penalty is imposed.
"Illegal recruitment is deemed committed by a syndicate if
carried out by a group of three (3) or more persons 3. Illegal Recruitment as distinguished form estafa
conspiring or confederating with one another. It is deemed Illegal Recruitment Estafa
committed in large scale if committed against three (3) or Malum prohibitum Malum in se
more persons individually or as a group.
Conviction for
Conviction for
1. Elements (in general) offenses under the
estafa does not bar
(a)Thepersonchargedwiththecrimemust have Labor Code does
a conviction for
not bar conviction
undertaken recruitment activities defined under illegal recruitment
for offenses
Art. 13 (b) or prohibited activities defined under Art. under the Labor
punishable by other
34; and Code.
laws.
(b) Thesaidperson doesnothavealicense or
authority to do so. [Art. 38, LC] One convicted for illegal recruitment may still be convicted
of estafa
2. Types In People v. Cortez the Court explained that: “In this
a. Simple Illegal Recruitment jurisdiction, it is settled that a person who commits illegal
recruitment may be charged and convicted separately of
First type:
illegal recruitment under the Labor Code and estafa under
(1) Person charged undertakes any par. 2(a) of Art. 315 of the Revised Penal Code. The offense
recruitment activity as defined in of illegal recruitment is malum prohibitum where the
Art.13 criminal intent of the accused is not necessary for
(b) of the Labor Code; and conviction, while estafa is malum in se where the criminal
(2) Said person does not have a intent of the accused is crucial for conviction. Conviction
license or authority to do so. for offenses under the Labor Code does not bar conviction
for offenses punishable by other laws. Conversely,
conviction for estafa under par. 2(a) of Art. 315 of the
Second type: Revised Penal Code does not bar a conviction for illegal
(1) Person charged commits any of recruitment under the Labor Code. It follows that one's
the enumerated acts under Sec. 6 acquittal of the crime of estafa will not necessarily result in
of R.A. 8042, as amended by, R.A. his acquittal of the crime of illegal recruitment in large
10022. scale, and vice versa.” [People v. Ochoa (2011); People v.
(2) It is immaterial whether he is a Ocden (2011)]
holder or not of any license or
authority D. Liability of local recruitment agency and foreign
employer
b. Qualified Illegal Recruitment LOCAL RECRUITMENT AGENCY
Illegal recruitment involving local workers [Art. 39, LC]
1. If its committed by a syndicate, i.e., carried out by ACT PENALTY
a group of 3 or more persons conspiring or Licensee orholder of Imprisonment: 2 - 5 yrs.
confederating with one another in carrying out any authority violating or OR
illegal or unlawful recruitment activity; or causinganotherto violate
2. If it is committed by a large scale, i.e., if committed Title I, Book I, LC Fine: P10k – P50k OR
against 3 or more persons, individually or as a Both
group. Violating or causing Imprisonment: 4 - 8
anotherto violate Title I, yrs. OR
Book I, LC

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 Fine: P20k – P100k OR
If the offender is an alien, he or she shall, in addition to the
Both penalties herein prescribed, be deported without further
Illegal recruitment Life imprisonment AND proceed-ings.
constituting economic In every case, conviction shall cause and carry the
Fine: P100k
sabotage automatic revocation of the license or registration of the
recruitment/ manning agency, lending institutions, training
If the offender is a corporation, partnership, association or school or medical clinic.
entity, the penalty shall be imposed upon the officer or
officers of the corporation, partnership, association or Common Rules on Liability
entity responsible for violation. (1) Employees of a company or corporation engaged
If such officer is an alien, he shall, in addition to the in illegal recruitment may be held liable as principal,
penalties herein prescribed, be deported without further together with his employer, if it is shown that he actively
proceedings. and consciously participated in illegal recruitment. [People
In every case, conviction shall cause and carry the vs. Sagayaga, G.R. 143726 (2004)]
automatic revocation of the license or authority and all the (2) Private employment agencies are held jointly and
permits and privileges granted to such person or entity severally liable with the foreign-based employer for any
under this Title, and the forfeiture of the cash and surety violation of the recruitment agreement or contract of
bonds in favor of the Overseas Employment Development employment. This joint and solidary liability imposed by
Board or the National Seamen Board, as the case may be, law against recruitment agencies and foreign
both of which are authorized to use the same exclusively to
promote their objectives. employers is meant to assure the aggrieved worker of
immediate and sufficient payment of what is due him
Illegal recruitment involving migrant workers [Sec. 7, RA [Becmen Service Exporter vs. Sps. Cuaresma, G.R. 182978-
8042 as amended by RA 10022] 79, (2009]
ACT PENALTY
Prohibited Act(s) Imprisonment: 6 yrs. (3) If the recruitment/placement agency is a juridical
and 1 day – 12 yrs. being, the corporate officers and directors and partners as
AND the case may be, shall themselves be jointly and solidarily
Fine: P500k – P1M liable with the corporation or partnership for the aforesaid
Illegal recruitment Imprisonment: 12 yrs. claims and damages. [Becmen Service Exporter vs. Sps.
and 1 day – 20 yrs. Cuaresma, G.R. 182978-79, (2009]
AND
(4) Foreign employer shall assume joint and solidary
Fine: P1M – P2M
liability with the employer for all claims and liabilities which
Illegal recruitment Life
may arise in connection with the implementation of the
constituting economic imprisonment contract, including but not limited to payment of wages,
sabotage
AND death and disability compensation and repatriation
Fine: P2M – P5M

Maximum penalty Common Rules on Illegal Recruitment (Local or Overseas)

if:
1. Illegally recruited Venue
person below 18
years old A criminal action arising from illegal recruitment shall be
filed with the RTC of the province or city:
OR
Offense committed
(1) where the offense was committed or
without license/authority
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(2) where the offended party actually resides at the
time of the commission of the offense. [Sec. 9, R.A. 8042
(this part was not amended by R.A. 10022)].
Prescriptive Periods
(1) Simple Illegal Recruitment – 5 years
(2) Illegal Recruitment involving Economic Sabotage –
20 years [Sec. 12, R.A. 8042 (this part was not amended by
R.A, 10022)].
FOREIGN EMPLOYER
Foreign employer 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,
death and disability compensation and repatriation
1. SOLIDARY LIABILITY
Solidary Liability of Agent and Principal
The written application for a license to operate a private
employment or manning agency shall be submitted with,
among others, a verified undertaking stating that the
applicant:
(1) Shall assume full and complete
responsibility for:
all claims and liabilities which may arise in
connection with the use of license;
all acts of its officials, employees and
representatives done in connection with recruitment and
placement;
(2) 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, death and
disability compensation and repatriation;
(3) Shall guarantee compliance with the existing labor
and social legislations of the Philippines and of the country
of employment of recruited workers [POEA Rules, Book II,
Rule II, Sec. 1 (f) (2-5)]
Purpose of Solidary Liability
The fact that the manning agency and its principal have
already terminated their agency agreement does not
relieve the former of its liability. The agency agreement
with the principal even if ended as between them, still
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, that is, to assure aggrieved workers of
immediate and sufficient payment of what is due them.
[OSM Shipping Phil, Inc. v. NLRC (2003)]
2. THEORY OF IMPUTED KNOWLEDGE
This is a doctrine in agency which states that the principal
is chargeable with and bound by the knowledge of or
notice to his agent received while the agent was acting as
such. Simply put, notice to the agent is notice to the
principal.
Since the local employment agency is considered the agent
of the foreign employer, the principal, knowledge of the
former of existing labor and social legislation in the
Philippines is binding on the latter. Consequently, notice to
the former of any violation thereof is notice to the latter.
However, notice to the principal is not notice to the agent.
The SC held in Sunace International Management Services,
Inc. vs. NLRC [G.R. 161757 (2006)] that “the theory of
imputed knowledge ascribes the knowledge of the agent to
the principal, not the other way around. The knowledge of
the principal- foreign employer cannot, therefore, be
imputed to its agent.”
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E. Termination of contract of migrant worker
In case of termination of overseas employment,
without just, valid or authorized cause as defined
by law or contract, or
any unauthorized deductions from the migrant
worker's salary
...shall entitle the worker to full
reimbursement of:
(1) his placement fee and the deductions made with
interest at twelve percent (12%) per annum,
and;
(2) his salaries for the unexpired portion of his
employment contract [or for three (3) months for every
year of the unexpired term, whichever is less*] [Sec. 10,
R.A. 8042, as amended by
R.A. 10022]
Rule before Serrano (1995-2009): 3-month salary rule
applied
The employment contract involved in the instant case
covers a two-year period but the overseas contract worker
actually worked for only 26 days prior to his illegal
dismissal. Thus, the three months’ salary rule applies
[Flourish Maritime Shipping v. Almanzor, G.R. No. 177948
(2008)]
Rule after Serrano: invalidated the 3-month salary cap
clause
The SC there held that “said clause is unconstitutional for
being an invalid classification, in violation of the equal
protection clause”. [Serrano v. Gallant Maritime Services,
Inc., G.R. No. 167614 (2009)]
In the case of Yap vs. Thenamaris Ship’s Management and
Intermare Maritime Agencies, Inc. [G.R. No. 179532 (May
30, 2011)], the SC
affirmed the Serrano ruling, but did not apply the
Operative Fact doctrine: “As an exception to the general
rule, the doctrine applies only as a matter of equity and fair
play.”
NB: In 2010, a year after Serrano, RA 10022, in amending
RA 8042, reincorporated the nullified 3-month salary cap
clause. However, the SC did not allow this and again struck
the revived clause as unconstitutional in the 2014 case of
Sameer Overseas Placement Agency vs. Cabiles [G.R. No.
170139, (August 05, 2014)]. There, the SC said that: “when
a law or a provision of law is null because it is inconsistent
with the Constitution, the nullity cannot be cured by
reincorporation or reenactment of the same or a similar
law or provision. A law or provision of law that was already
declared unconstitutional remains as such unless
circumstances have so changed as to warrant a reverse
conclusion.”
Hence, the case of Serrano holds as binding precedent,
even after the passage of RA 10022.
F. Employment of non-resident aliens
Art. 12 Statement of objectives – It is the policy of the
State:
(e) To regulate the employment of aliens, including
the establishment of a registration and/or work
permit system;
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