Labor Law Lecture 1

VIN GALE ARQUIZAL
Second Year JURIS DOCTOR

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TABLE OF CONTENTS
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REPUBLIC ACT NO. 8042
AN ACT TO INSTITUTE THE POLICIES OF OVERSEAS

EMPLOYMENT AND ESTABLISH A HIGHER STANDARD OF
PROTECTION AND PROMOTION OF THE WELFARE OF
MIGRANT WORKERS, THEIR FAMILIES AND OVERSEAS
FILIPINOS IN DISTRESS, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines
in Congress assembled:
SECTION 1. Short Title. – This act shall be known and cited as the “Migrant
Workers and Overseas Filipinos Act of 1995.”
SEC. 2. Declaration Of Policies—
(a) In the pursuit of an independent foreign policy and while considering

national sovereignty, territorial integrity, national interest and the right to
self-determination paramount in its relations with other states, the State
shall, at all times, uphold the dignity of its citizens whether in country or
overseas, in general, and Filipino migrant workers, in particular.
(b) 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. Towards this end, the State shall provide
adequate and timely social, economic and legal services to Filipino migrant
workers.
(c) 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 citizens 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.
(d) The State affirms the fundamental equality before the law of women and
men and the significant role of women in nation-building. Recognizing the
contribution of overseas migrant women workers and their particular
vulnerabilities, the State shall apply gender sensitive criteria in the
formulation and implementation of policies and programs affecting migrant
workers and the composition of bodies tasked for the welfare of migrant
workers.
(e) Free access to the courts and quasi-judicial bodies and adequate legal
assistance shall not be denied to any persons by reason of poverty. In this
regard, it is imperative that an effective mechanism be instituted to ensure
that the rights and interest of distressed overseas Filipinos, in general, and
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Filipino migrant workers, in particular, documented or undocumented, are
adequately protected and safeguarded.
(f) The right of Filipino migrant workers and all overseas Filipinos to
participate in the democratic decision-making processes of the State and to
be represented in institutions relevant to overseas employment is recognized
and guaranteed.
(g) The State recognizes that the ultimate protection to all migrant workers
is the possession of skills. Pursuant to this and as soon as practicable, the
government shall deploy and/or allow the deployment only to skilled Filipino
workers.
(h) Non-governmental organizations, duly recognized as legitimate, are

partners of the State in the protection of Filipino migrant workers and in the
promotion of their welfare, the State shall cooperate with them in a spirit of
trust and mutual respect.
(i) Government fees and other administrative costs of recruitment,

introduction, placement and assistance to migrant workers shall be rendered
free without prejudice to the provision of Section 36 hereof.
Nonetheless, the deployment of Filipino overseas workers, whether land-

based or sea-based by local service contractors and manning agencies
employing them shall be encouraged. Appropriate incentives may be
extended to them.
SEC. 3. DEFINITIONS. – For purposes of this Act:
(a) “Migrant worker” refers to a person who is to be engaged, is engaged or

has been engaged in a renumerated activity in a state of which he or she is
not a legal resident to be used interchangeably with overseas Filipino worker.
(b) “Gender-sensitivity” shall mean cognizance of the inequalities and

inequities prevalent in society between women and men and a commitment
to address issues with concern for the respective interests of the sexes.
(c) “Overseas Filipinos” refers to dependents of migrant workers and other

Filipino nationals abroad who are in distress as mentioned in Sections 24 and
26 of this Act.
I.
DEPLOYMENT
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 guarantee
on the part of the receiving country for the protection and the rights of
overseas Filipino workers:
(a) It has existing labor and social laws protecting the rights of migrant
workers;
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(b) It is a signatory to multilateral conventions, declaration 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 ORBANONDEPLOYMENT – 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.
II.
ILLEGAL RECRUITMENT
Sec. 6. DEFINITIONS. – For purposes of this Act, illegal recruitment shall

mean any act of canvassing, enlisting, contracting, transporting, utilizing,
hiring, procuring workers and includes referring, contact services, promising
or advertising for employment abroad, whether for profit or not, when
undertaken by a non-license 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 such non-license 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 persons, whether a non-
licensee, non-holder, licensee or holder of authority.
(a) To charge or accept directly or indirectly any amount greater than the
specified in the schedule of allowable fees prescribed by the Secretary of
Labor and Employment, 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 the Labor Code;
(d) To induce or attempt to induce a worker already employed to quit his

employment in order to offer him another unless the transfer is designed to
liberate a worker from oppressive terms and conditions of employment;
(e) To influence or attempt to influence any persons or entity not to employ

any worker who has not applied for employment through his agency;
(f) To engage in the recruitment of placement of workers in jobs harmful to

public health or morality or to dignity of the Republic of the Philippines;
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(g) To obstruct or attempt to obstruct inspection by the Secretary of Labor
and Employment or by his duly authorized representative;
(h) To fail to submit reports on the status of employment, placement

vacancies, remittances of foreign exchange earnings, separations 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 on indirectly in the management of a travel
agency;
(k) To withhold or deny travel documents from applicant workers before

departure for monetary or financial considerations other than those
authorized under the Labor Code and its implementing rules and regulations;
(l) Failure to actually deploy without valid reasons as determined by the

Department of Labor and Employment; and
(m) Failure to reimburse expenses incurred by the workers 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 as offense involving economic sabotage.
Illegal recruitment is deemed committed by a syndicate carried out by a

group of three (3) or more persons conspiring or confederating with one
another. It is deemed committed in large scale if committed against three (3)
or more persons individually or as a group.
The persons criminally liable for the above offenses are the principals,
accomplices and accessories. In case of juridical persons, the officers having
control, management or direction of their business shall be liable.
SEC. 7. PENALTIES –
(a) Any person found guilty of illegal recruitment shall suffer the penalty of
imprisonment of not less than six (6) years and one (1) day but not more
than twelve (12) years and a fine not less than two hundred thousand pesos
(P200,000.00) nor more than five hundred thousand pesos (P500,000.00).
(b) The penalty of life imprisonment and a fine of not less than five hundred
thousand pesos (P500,000.00) nor more than one million pesos
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(P1,000,000.00) shall be imposed if illegal recruitment constitutes economic
sabotage as defined herein.
Provided, however, that the maximum penalty shall be imposed if the person
illegally recruited is less than eighteen (18) years of age or committed by a
non-licensee or non-holder of authority.
SEC. 8. PROHIBITION ON OFFICIALS AND EMPLOYEES. – Ot shall be unlawful

for any official or employee of the Department of Labor and Employment, the
Philippine Overseas Employment Administration, or the Overseas Workers
Welfare Administration, or the Department of Foreign Affairs, or other
government agencies involved in the implementation of this Act, or their
relatives within the fourth civil degree of consanguinity or affinity, to engage,
directly or indirectly, in the business of recruiting migrant workers as defined
in this Act. The penalties shall be imposed upon them.
SEC. 9. VENUE. – A criminal action arising from illegal recruitment as defined

herein shall be filed with the Regional Trial Court of the province or city where
the offense was committed or where the offended party actually resides at
the same time of the commission of the offense: Provided, That the court
where the criminal action is first filed shall acquire jurisdiction to the exclusion
of other courts. Provided, however, That the aforestated provisions shall also
apply to those criminal actions that have already been filed in court at the
time of the effectivity of this Act.
SEC. 10. MONEY CLAIMS. – Botwithstanding any provision of law to the

contrary, the Labor Arbiters of the National Labor Relations Commission
(NLRC) shall have the priginal and exclusive jurisdiction to hear and decide,
within ninety (90) calendar days after 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
provisions 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.
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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.
In case of termination of overseas employment without just, valid or

authorized cause as defined by law or contract, the workers shall be entitled
to the full reimbursement of his placement fee with interest of twelve percent
(12%) per annum, plus 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.
Non-compliance 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
resolutions 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 disqualifications 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.
SEC. 11. MANADATORY PERIODS FOR RESOLUTION OF ILLEGAL

RECRUITMENT CASES. – The preliminary investigations of cases under this
Act shall be terminated within a period of thirty (30) calendar days from the
date of their filing. Where the preliminary investigation is conducted by a
prosecution officer and a prima facie case is established, the corresponding
information shall be filed in court within twenty-four (24) hours from the
termination of the investigation. If the preliminary investigation is conducted
by a judge and a prima facie case is found to exist, prosecution officer within
forty-eight (48) hours from the date of receipt of the records of the case.
SEC. 12. PRESCRIPTIVE PERIODS. – Illegal recruitment cases under this Act
shall prescribe in five (5) years: Provided, however, That illegal recruitment
cases involving economic sabotage as defined herein shall prescribe in twenty
(20) years.
SEC. 13. FREE LEGAL ASSISTANCE, PREFERENTIAL ENTITLEMENT UNDER

THE WITNESS PROTECTION PROGRAM. – A mechanism for free legal
assistance for victims of illegal recruitment shall be established within the
Department of Labor and Employment including its regional offices. Such
mechanism must include coordination and cooperation with the Department
of Justice, the Integrated Bar of the Philippines, and other non-governmental
organizations and volunteer groups.
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The provisions of Republic Act No. 6981 to the contrary, notwithstanding, any
person who is a victim of illegal recruitment shall be entitled to the Witness
Protection Program provided thereunder.
III.
SERVICES
SEC. 14. TRAVEL ADVISORY/INFORMATION DISSEMINATION. – To give

utmost priority to the establishment of programs and services to prevent
illegal recruitment, fraud, and exploitation or abuse of Filipino migrant
workers, all embassies and consular offices, through the Philippine Overseas
Employment Administration (POEA), shall issue travel advisories or
disseminate information on labor and employment conditions, migration
realities and other facts; and adherence of particular countries to
international standards on human and workers’ rights which will adequately
prepare individuals into making informed and intelligent decisions about
overseas employment. Such advisory or information shall be published in a
newspaper of general circulation at least three (3) times in every quarter.
SEC. 15. REPATRIATION OF WORKERS; EMERGENCY REPATRIATION FUND.

– The repatriation of the worker and the transport of his personal belongings
shall be the primary responsibility of the agency which recruited or deployed
the worker overseas. All costs attendant to repatriation shall be borne by or
charged to the agency concerned and/or its principal. Likewise, 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 local agency. However, in cases where the termination of
employment is due solely to the fault of the worker, the principal/employer
or agency shall not in any manner be responsible for the repatriation of the
former and/or his belongings.
The Overseas Workers Welfare Administration (OWWA), in coordination ith

appropriate international agencies, shall undertake the repatriation of
workers in cases of war, epidemic, disasters or calamities, natural or man-
made, and other similar events without prejudice to reimbursement by the
responsible principal or agency. However, in cases where the principal or
recruitment agency cannot be identified, all costs attendant to repatriation
shall be borne by the OWWA.
For this purposes, there is hereby created and established an emergency

repatriation fund under the administration control and supervision of the
OWWA, initially to consist of one hundred million pesos (P100,000,000.00),
inclusive of outstanding balances.
SEC. 16. MANDATORY REPATRIATION OF UNDERAGE MIGRANT WORKERS. –

Upon discovery or being informed of the presence of migrant workers whose
actual ages fall below the minimum age requirement for overseas
deployment, the responsible officers in the foreign service shall without delay
repatriate said workers and advise the Department of Foreign Affairs through
the fastest means of communication availavle of such discovery and other
relevant information.
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SEC. 17. ESTABLISHMENT OF RE-PLACEMENT AND MONITORING CENTER. –
A replacement and monitoring center is hereby created in the Department of
Labor and Employment for returning Filipino migrant workers which shall
provide a mechanism for their reintegration into the Philippine society, serve
as a promotion house for their local employment, and tap their skills and
potentials for national development.
The Department of Labor and Employment, the Overseas Workers Welfare

Administration, and the Philippine Overseas Employment Administration
shall, within ninety (90) days from the effectivity of this Act, formulate a
program that would motivate migrant workers to plan for productive options
such as entry into highly technical jobs or undertakings, livelihood and
entrepreneurial development, better wage employment, and investment of
savings.
For this purpose, the Technical Education and Skills Development Authority
(TESDA), the Technology Livelihood Resource Center (TLRC), and other
government agencies involved in training and livelihood development shall
give priority to return who had been employed as domestic helpers and
entertainers.
SEC. 18. FUNCTIONS OF THE RE-PLACEMENT AND MONITORING CENTER. –

The center shall provide the following service:
(a) Develop livelihood programs and projects for returning Filipino migrant
workers in coordination with the private sector;
(b) Coordinate with appropriate private and government agencies the

promotion, development, re-placement and the full utilization of their
potentials;
(c) Institute in cooperation with other government agencies concerned, a

computer-based information system on skilled Filipino migrant workers which
shall be accessible to all local recruitment agencies and employers, both
public and private;
(d) Provide a periodic study and assessment of job opportunities for returning
Filipino migrant workers.
SEC. 19. ESTABLISHMENT OF A MIGRANT WORKERS AND OTHER OVERSEAS

FILIPINOS RESOURCE CENTER. – Within the premises and under the
administrative jurisdiction of the Philippine Embassy in countries where there
are large concentrations of Filipino migrant workers, there shall be establish
a Migrant Workers and Other Overseas Filipinos Resource Center with the
following services:
(a) Counseling and legal services;
(b) Welfare assistance including the procurement of medical and

hospitalization services;
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(c) Information, advisory and programs to promote social integration such as
post-arrival orientation, settlement and community networking services for
social integration;
(d) Institute a scheme of registration of undocumented workers to bring them

within the purview of this Act. For this purpose, the Center is enjoined to
compel existing undocumented workers to register with it within six (6)
months from the effectivity of this Act, under pain of having his/her passport
cancelled;
(e) Human resource development, such as training and skills upgrading;
(f) Gender sensitive programs and activities to assist particular needs of

women migrant workers;
(g) Orientation program for returning workers and other migrants; and
(h) Monitoring of daily situations, circumstances and activities affecting

migrant workers and other overseas Filipinos.
The establishment and operations of the Center shall be a joint undertaking

of the various government agencies. The Center shall be open for twenty-
four (24) hours daily, including Saturdays, Sundays and holidays, and shall
be staffed by Foreign Service personnel, service attaches or officers who
represent other organizations from the host countries. In countries
categorized as highly problematic by the Department of Foreign Affairs and
the Department of Labor and Employment and where there is a concentration
of Filipino migrant workers, the government must provide a lawyer and a
social worker for the Center. The Labor Attache shall coordinate the operation
of the Center and shall keep the Chief of Mission informed and updated on all
matters affecting it.
The Center shall have a counterpart 24-hour information and assistance

center at the Department of Foreign Affairs to ensure a continuous network
and coordinative mechanism at the home office.
SEC. 20. ESTABLISHMENT OF A SHARED GOVERNMENT INFORMATION

SYSTEM FOR MIGRATION. – An inter-agency committee composed of the
Department of Foreign Affairs and its attached agency, the Commission on
Filipino Overseas, the Department of Labor and Employment, the Philippine
Overseas Employment Administration, The Overseas Workers Welfare
Administration, The Department of Tourism, the Department of Justice, the
Bureau of Immigration, the National Bureau of Investigation, and the National
Statistics Office shall be established to implement a shared government
information system for migration. The inter-agency committee shall initially
make available to itself the information contained in existing data bases/files.
The second phase shall involve linkaging of computer facilities in order to
allow free-flow data exchanges and sharing among concerned agencies.
The inter-agency committee shall convene to identify existing data bases

which shall be declassified and shared among member agencies. These
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shared data bases shall initially include, but not limited to, the following
information:
(a) Masterlists of departing/arriving Filipinos;
(b) Inventory of pending legal cases involving Filipino migrant workers and
other Filipino nationals, including those serving prison terms;
(c) Masterlists of departing/arriving Filipinos;
(d) Statistical profile on Filipino migrant workers/overseas Filipinos/Tourists;
(e) Blacklisted foreigners/undesirable aliens;
(f) Basic data on legal systems, immigration policies, marriage laws and civil
and criminal codes in receiving countries particularly those with the large
numbers of Filipinos;
(g) List of labor and other human rights instruments where receiving
countries are signatories;
(h) A tracking system of past and present gender disaggregated cases

involving male and female migrant workers; and
(i) Listing of overseas posts which may render assistance to overseas

Filipinos, in general, and migrant workers, in particular.
SEC. 21. MIGRANT WORKERS LOAN GUARANTEE FUND. – In order to further

prevent unscrupulous illegal recruiters from taking advantage of workers
seeking employment abroad, the OWWA, in coordination with government
financial institutions, shall institute financing schemes that will expand the
grant of pre-departure loan and family assistance loan. For this purpose, a
Migrant Workers Loan Guarantee Fund is hereby created and the revolving
amount of one hundred million pesos (P100,000,000.00) from the OWWA is
set aside as a guarantee fund in favor of participating government financial
institutions.
SEC. 22. RIGHTS AND ENFORCEMENT MECHANISM UNDER INTERNATIONAL

AND REGIONAL HUMAN RIGHTS SYSTEMS. – The Department of Foreign
Affairs is mandated to undertake the necessary initiative such as promotions,
acceptance or adherence of countries receiving Filipino workers to
multilateral convention, declaration or resolutions pertaining to the protection
of migrant workers’ rights. The Department of Foreign Affairs is also
mandated to make an assessment of rights and avenues of redress under
international and regional human rights systems that are available to Filipino
migrant workers who are victims of abuse and violation and, as far as
practicable and through the Legal Assistant for Migrant Workers Affairs
created under this Act, pursue the same on behalf of the victim if it is legally
impossible to file individual complaints. If a complaints machinery is available
under international or regional systems, the Department of Foreign Affairs
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shall fully apprise the Filipino migrant workers of the existence and
effectiveness of such legal options.
IV.
GOVERNMENT AGENCIES
SEC. 23. ROLE OF GOVERNMENT AGENCIES. – The following government

agencies shall perform the following to promote the welfare and protect the
rights of migrant workers and, as far as applicable, all overseas Filipinos:
(a) Department of Foreign Affairs. – The Department, through its home office
or foreign posts, shall take priority action 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;
(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 the referral
to proper medical centers or hospitals:
(b.1) Philippine Overseas Employment Administration – Subject to

deregulation and phase out as provided under Sections 29 and 30 herein, the
Administration 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 employment of Filipino
workers taking into consideration their welfare and the domestic manpower
requirements.
(b.2) 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 by their principals. In
the performance of this functions, he shall make representation and may call
on the agencies or entities concerned to conferences or conciliation meetings
for the purpose of settling the complaints or problems brought to his
attention.
V.
THE LEGAL ASSISTANT FOR MIGRANT WORKERS AFFAIRS
SEC. 24. LEGAL ASSISTANT FOR MIGRANT WORKERS AFFAIRS. – There is

hereby created the position of Legal Assistant for Migrant Workers Affairs
under the Department of Foreign Affairs who shall be primarily responsible
for the provision and overall coordination of all legal assistance services to
be provided to Filipino migrant workers as well as overseas Filipinos in
distress. He shall have the rank, salary and privileges equal to that of an
undersecretary of said Department.
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The said Legal Assistant for Migrant Workers Affairs shall be appointed by the
President and must be of proven competence in the field of law with at least
ten (10) years of experience as a legal practitioner and must not have been
a candidate to an elective office in the last local or national elections.
Among the functions and responsibilities of the aforesaid Legal Assistant are:
(a) To issue the guidelines, procedures and criteria for the provisions of legal
assistance services to Filipino migrant workers;
(b) To establish close linkages with the Department of Labor and

Employment, the POEA, the OWWA and other government agencies
concerned, as well as with non-governmental organizations assisting migrant
workers, to ensure effective coordination and cooperation in the provision of
legal assistance to migrant workers;
(c) To tap the assistance of reputable law firms and the Integrated Bar of the
Philippines and other bar associations to complement the government’s
efforts to provide legal assistance to migrant workers;
(d) To administer the legal assistance fund for migrant workers established
under Section 25 hereof and to authorize disbursements there from in
accordance with the purposes for which the fund was set up; and
(e) To keep and maintain the information system as provided in Section 20.
The legal Assistant for Migrant Workers Affairs shall have authority to hire
private lawyers, domestic or foreign, in order to assist him in the effective
discharge of the above functions.
SEC. 25. LEGAL ASSISTANCE FUND – There is hereby established a legal

assistance fund for migrant workers, herein after referred to as Legal
Assistance fund, in the amount of One hundred million pesos
(P100,000,000.00) to be constituted from the following sources:
Fifty million pesos (P50,000,000.00) from the Contingency Fund of the

President;
Thirty million pesos (P30,000,000.00) from the Presidential Social Fund; and
Twenty million pesos (P20,000,000.00) from the Welfare Fund for Overseas
Workers established under Letter of Instruction No. 537, as amended by
Presidential Decree Nos. 1694 and 1809.
Any balances of existing fund which have been set aside by the government
specifically as legal assistance or defense fund to help migrant workers shall,
upon effectivity of this Act, to be turned over to, and form part of, the Fund
created under this Act.
SEC. 26. USES OF THE LEGAL ASSISTANCE FUND. – The Legal Assistance
Fund created under the preceeding section shall be used exclusively to
provide legal services to migrant workers and overseas Filipinos in distress in
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accordance witht the guidelines, criteria and procedures promulgated in
accordance with Section 24 (a) hereof. The expenditures to be charged
against the Fund shall include the fees for the foreign lawyers to be hired by
the Legal Assistance for Migrant Workers Affairs to represent migrant workers
facing charges abroad, bail bonds to secure the temporary release of workers
under detention, court fees and charges and other litigation expenses.
VI.
COUNTRY – TEAM APPROACH
SEC. 27. PRIORITY CONCERNS OF PHILIPPINE FOREIGN SERVICE POSTS. –

The country team approach, as enunciated under Executive Order No. 74,
series of 1993, shall be the mode under which Philippine embassies or their
personnel will operate in the protection of the Filipino migrant workers as well
as in the promotion of their welfare. The protection of the Filipino migrant
workers and the promotion of their welfare, in particular, and the protection
of the dignity and fundamental rights and freedoms of the Filipino citizen
abroad, in general, shall be the highest priority concerns of the Secretary of
Foreign Affairs and the Philippine Foreign Service Posts.
SEC. 28. COUNTRY-TEAM APPROACH. – Under the country-team approach,

all officers, representatives and personnel of the Philippine government
posted abroad regardless of their mother agencies shall, on a per country
basis, act as one country-team with a mission under the leadership of the
ambassador. In this regard, the ambassador may recommend to the
Secretary of the Department of Foreign Affairs the recall of officers,
representatives and personnel of the Philippine government posted abroad
for acts inimical to the national interest such as, but not limited to, failure to
provide the necessary services to protect the rights of overseas Filipinos.
Upon receipt of the recommendation of the ambassador, the Secretary of the

Department of Foreign Affairs shall, in the case of officers, representatives
and personnel of other departments, endorse such recommendation to the
department secretary concerned for appropriate action. Pending investigation
by an appropriate body in the Philippines, the person recommended for recall
may be placed under preventive suspension by the ambassador.
In host countries where there are Philippine consulates, such consulates shall
also constitute part of the country-team under the leadership of the
ambassador.
In the implementation of the country-team approach, visiting Philippine

delegations shall be provided full support and information.
VII.
DEREGULATION AND PHASE-OUT
SEC. 29. COMPREHENSIVE DEREGULATION PLAN ON RECRUITMENT

ACTIVITIES. – Pursuant to a progressive policy of deregulation whereby the
migration of workers becomes strictly a matter between the worker and his
foreign employer, the DOLE within one (1) year from the effectivity of this
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Act, is hereby mandated to formulate a five-year comprehensive deregulation
plan on recruitment activities taking into account labor market trends,
economic conditions of the country and emergency circumstances which may
affect the welfare of migrant workers.
SEC. 30. GRADUAL PHASE-OUT OF REGULATORY FUNCTIONS. – Within a

period of five (5) years from the effectivity of this Act, the DOLE shall phase
out the regulatory functions of the POEA pursuant to the objectives of
deregulation.
VIII.
PROFESSIONAL AND OTHER HIGHLY-SKILLED FILIPINOS ABROAD
SEC. 31. INCENTIVES TO PROFESSIONALS AND OTHER HIGHLY-SKILLED

FILIPINOS ABROAD. – Pursuant to the objective of encouraging professionals
and other highly-skilled Filipinos abroad especially in the field of science and
technology to participate in, and contribute to national development, the
government shall provide proper and adequate incentives and programs so
as to secure their services in priority development areas of the public and
private sectors.
IX.
MISCELLANEOUS PROVISIONS
SEC. 32. POEA AND OWWA BOARD; ADDITIONAL MEMBERSHIPS. –

Notwithstanding any provision of law to the contrary, the respective Boards
of the POEA and the OWWA shall, in addition to their present composition,
have three (3) members each who shall come from the women, sea-based
and land-based sectors, respectively, to be appointed by the President in the
same manner as the other members.
SEC. 33. REPORT TO CONGRESS. – In order to inform the Philippine Congress

on the implementation of the policy enunciated in Section 4 hereof, the
Department of Foreign Affairs and the Department of Labor and Employment
shall submit to the said body a semi-annual report of Philippine foreign posts
located in countries hosting Filipino migrant workers. The report shall not be
limited to the following information:
(a) Masterlist of Filipino migrant workers, and inventory of pending cases

involving them and other Filipino nationals including those serving prison
terms;
(b) Working conditions of Filipino migrant workers;
(c) Problems encountered by the migrant workers, specifically violations of

their rights;
(d) Initiative/actions taken by the Philippine foreign posts to address the

problems of Filipino migrant workers;
(e) Changes in the laws and policies of host countries; and
17
(f) Status of negotiations on bilateral labor agreements between the
Philippines and the host country.
Any officer of the government who fails to report as stated in the preceeding
section shall be subjected to administrative penalty.
SEC. 34. REPRESENTATION IN CONGRESS. – Pursuant to Section 3(2),

Article VI of the Constitution and in line with the objective of empowering
overseas Filipinos to participate in the policy-making process to address
Filipino migrant concerns, two (2) sectoral representatives for migrant
workers in the House of Representatives shall be appointed by the President
from the ranks of migrant workers: Provided, that at least one (1) of the two
(2) sectoral representatives shall come from the women migrant workers
sector: Provided, further, that all nominees must have at least two (2) years
experience as a migrant worker.
SEC. 35. EXEMPTION FROM TRAVEL TAX AND AIRPORT FEE. – All laws to the
country notwithstanding, the migrant worker shall be exempt from the
payment of travel tax and airport fee upon proper showing of proof of
entitlement by the POEA.
SEC. 36. NON-INCREASE OF FEES; ABOLITION OF REPATRIATION BOND. –

Upon approval of this Act, all fees being charged by any government office
on migrant workers shall remain at their present levels and the repatriation
bond shall be established.
SEC. 37. THE CONGRESSIONAL MIGRANT WORKERS SCHOLARSHIP FUND. –

There is hereby created a Congressional Migrant Workers Scholarship Fund
which shall benefit deserving migrant workers and/or their immediate
descendants below twenty-one (21) years of age who intent to pursue
courses or training primarily in the field of science and technology. The initial
seed fund of two hundred million pesos (P200,000,000.00) shall be
constituted from the following sources:
(a) Fifty million pesos (P50,000,000.00) from the unexpected Countrywide

Development Fund for 1995 in equal sharing by all members of Congress;
and
(b) The remaining one hundred fifty million pesos (P150,000,000.00) shall
be funded from the proceeds of Lotto.
The Congressional Migrant Workers Scholarship Fund as herein created shall

be administered by the DOLE in coordination with the Department of Science
and Technology (DOST). To carry out the objectives of this section, the DOLE
and the DOST shall formulate the necessary rules and regulations.
SEC. 38. APPROPRIATION AND OTHER SOURCES OF FUNDING. – The amount

necessary to carry out the provisions of this Act shall be provided for in the
General Appropriations Act of the year following its enactment into law and
thereafter.
18
SEC. 39. MIGRANT WORKERS DAY. – The day of signing by the President of
this Act shall be designated as the Migrant Workers Day and shall henceforth
be commemorated as such annually.
SEC. 40. IMPLEMENTING RULES AND REGULATIONS. – The departments and

agencies charged with carrying out the provisions of this Act shall, within
ninety (90) days after the effectivity of this Act, formulate the necessary rules
and regulations for its effective implementation.
SEC. 41. REPEATING CLAUSE. – All laws, decrees, executive orders, rules
and regulations, or parts thereof inconsistent with the provisions of this Act
are hereby repealed or modified accordingly.
SEC. 42. SEPARABILITY CLAUSE. – If, for any reason, any section or provision
of this Act is held unconstitutional or invalid, the other sections or provisions
hereof shall not be affected thereby.
SEC. 43. EFFECTIVITY CLAUSE. – This Act shall take effect after fifteen (15)
days from its publication in the Official Gazette or in at least two (2) national
newspapers of general circulation whichever comes earlier.
Approved,
(Sgd.) EDGARDO J. ANGARA (Sgd.) Jose De Venecia, Jr

President of the Senate Speaker of the House
of Representatives
This Act which is a consolidation of House Bill No. 14314 and Senate Bill No.
2077 was finally passed by the House of Representatives and the Senate on
June 5, 1995 and June 3, 1995, respectively.
(Sgd.) EDUARDO E. TUMANGAN (Sgd.) CAMILIO L. SABIO

Secretary of the Senate Secretary General House
of Representatives
Approved: JUN 07 1995
(Sgd.) FIDEL V. RAMOS

President of the Philippines
19
REPUBLIC ACT No. 10022
AN ACT AMENDING REPUBLIC ACT NO. 8042, OTHERWISE KNOWN

AS THE MIGRANT WORKERS AND OVERSEAS FILIPINOS ACT OF
1995, AS AMENDED, FURTHER IMPROVING THE STANDARD OF
PROTECTION AND PROMOTION OF THE WELFARE OF MIGRANT
WORKERS, THEIR FAMILIES AND OVERSEAS FILIPINOS IN
DISTRESS, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippine

Congress Assembled:
Section 1. Paragraphs (a), (e), (g) and (h) of Section 2 of Republic Act. No.
8042, as amended, otherwise known as the "Migrant Workers and Overseas
Filipinos Act of 1995," is hereby amended to read as follows:
"(a) In the pursuit of an independent foreign policy and while considering

national sovereignty, territorial integrity, national interest and the right to
self-determination paramount in its relations with other states, the State
shall, at all times, uphold the dignity of its citizens whether in country or
overseas, in general, and Filipino migrant workers, in particular, continuously
monitor international conventions, adopt/be signatory to and ratify those that
guarantee protection to our migrant workers, and endeavor to enter into
bilateral agreements with countries hosting overseas Filipino workers."
"(e) Free access to the courts and quasi-judicial bodies and adequate legal
assistance shall not be denied to any person by reason of poverty. In this
regard, it is imperative that an effective mechanism be instituted to ensure
that the rights and interest of distressed overseas Filipinos, in general, and
Filipino migrant workers, in particular, whether regular/documented or
irregular/undocumented, are adequately protected and safeguarded."
"(g) The State recognizes that the most effective tool for empowerment is
the possession of skills by migrant workers. The government shall provide
them free and accessible skills development and enhancement programs.
Pursuant to this and as soon as practicable, the government shall deploy
and/or allow the deployment only of skilled Filipino workers."
"(h) The State recognizes non-governmental organizations, trade unions,

workers associations, stakeholders and their similar entities duly recognized
as legitimate, are partners of the State in the protection of Filipino migrant
workers and in the promotion of their welfare. The State shall cooperate with
them in a spirit of trust and mutual respect. The significant contribution of
recruitment and manning agencies shall from part this partnership."
Section 2. Section 3, paragraph (a) of Republic Act No. 8042, as amended,

is hereby amended to read as follows:
"(a) "Overseas Filipino worker" refers to 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 citizen or on board a vessel navigating the foreign seas
20
other than a government ship used for miliatry or non-commercial purposes
or on an installation located offshore or on the high seas; to be used
interchangeably with migrant worker."
Section 3. Section 4 of Republic Act No. 8042, as amended, is hereby

amended to rerad as follows:
"SEC. 4. Deployment of Migrant Workers. - The State shall allow the

deployment of 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
workers, including migrant workers;
"(b) It is a signatory to and/or a ratifier of multilateral conventions,

declarations or resolutions relating to the protection of workers,
including migrant workers; and
"(c) It has concluded a bilateral agreement or arrangement with

the government on the protection of the rights of overseas Filipino
Workers:
Provided, That the receiving country is taking positive, concrete measures to

protect the rights of migrant workers in furtherance of any of the guarantees
under subparagraphs (a), (b) and (c) hereof.
"In the absence of a clear showing that any of the aforementioned guarantees
exists in the country of destination of the migrant workers, no permit for
deployment shall be issued by the Philippine Overseas Employment
Administration (POEA).
"The members of the POEA Governing Board who actually voted in favor of
an order allowing the deployment of migrant workers without any of the
aforementioned guarantees shall suffer the penalties of removal or dismissal
from service with disqualification to hold any appointive public office for five
(5) years, Further, the government official or employee responsible for the
issuance of the permit or for allowing the deployment of migrant workers in
violation of this section and in direct contravention of an order by the POEA
Governing Board prohibiting deployment shall be meted the same penalties
in this section.
"For this purpose, the Department of Foreign Affairs, through its foreign
posts, shall issue a certification to the POEA, specifying therein the pertinent
provisions of the receiving country's labor/social law, or the
convention/declaration/resolution, or the bilateral agreement/arrangement
which protect the rights of migrant workers.
"The State shall also allow the deployment of overseas Filipino workers to
vessels navigating the foreign seas or to installations located offshore or on
21
high seas whose owners/employers are compliant with international laws and
standards that protect the rights of migrant workers.
"The State shall likewise allow the deployment of overseas Filipino workers
to companies and contractors with international operations: Provided, That
they are compliant with standards, conditions and requirements, as
embodied in the employment contracts prescribed by the POEA and in
accordance with internationally-accepted standards."

amended to read as follows:
"SEC. 5. Termination or Ban on Deployment. - Notwithstanding the

provisions of Section 4 hereof, in pursuit of the national interest or when
public welfare so requires, the POEA Governing Board, after consultation with
the Department of Foreign Affairs, may, at any time, terminate or impose a
ban on the deployment of migrant workers."

"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;
22
"(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
"(n) To allow a non-Filipino citizen to head or manage a licensed

recruitment/manning agency.
23
"Illegal recruitment is deemed committed by a syndicate if carried out by a
group of three (3) or more persons conspiring or confederating with one
another. It is deemed committed in large scale if committed against three (3)
or more persons individually or as a group.
"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;

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;

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.
"The persons criminally liable for the above offenses are the principals,
accomplices and accessories. In case of juridical persons, the officers having
ownership, control, management or direction of their business who are
24
responsible for the commission of the offense and the responsible
employees/agents thereof shall be liable.
"In the filing of cases for illegal recruitment or any of the prohibited acts
under this section, the Secretary of Labor and Employment, the POEA
Administrator or their duly authorized representatives, or any aggrieved
person may initiate the corresponding criminal action with the appropriate
office. For this purpose, the affidavits and testimonies of operatives or
personnel from the Department of Labor and Employment, POEA and other
law enforcement agencies who witnessed the acts constituting the offense
shall be sufficient to prosecute the accused.
"In the prosecution of offenses punishable under this section, the public
prosecutors of the Department of Justice shall collaborate with the anti-illegal
recruitment branch of the POEA and, in certain cases, allow the POEA lawyers
to take the lead in the prosecution. The POEA lawyers who act as prosecutors
in such cases shall be entitled to receive additional allowances as may be
determined by the POEA Administrator.
"The filing of an offense punishable under this Act shall be without prejudice
to the filing of cases punishable under other existing laws, rules or
regulations."1avvphi1

"SEC. 7. Penalties. -
"(a) Any person found guilty of illegal recruitment shall suffer the
penalty of imprisonment of not less than twelve (12) years and one
(1) day but not more than twenty (20) years and a fine of not less
than One million pesos (P1,000,000.00) nor more than Two million
pesos (P2,000,000.00).
"(b) The penalty of life imprisonment and a fine of not less than
Two million pesos (P2,000,000.00) nor more than Five million
pesos (P5,000,000.00) shall be imposed if illegal recruitment
constitutes economic sabotage as defined therein.
"Provided, however, That the maximum penalty shall be imposed

if the person illegally recruited is less than eighteen (18) years of
age or committed by a non-licensee or non-holder of authority.
"(c) Any person found guilty of any of the prohibited acts shall
suffer the penalty of imprisonment of not less than six (6) years
and one (1) day but not more than twelve (12) years and a fine of
not less than Five hundred thousand pesos (P500,000.00) nor
more than One million pesos (P1,000,000.00).
"If the offender is an alien, he or she shall, in addition to the penalties herein
prescribed, be deported without further proceedings.
25
"In every case, conviction shall cause and carry the automatic revocation of
the license or registration of the recruitment/manning agency, lending
institutions, training school or medical clinic."

"SEC. 10. Money Claims. - Notwithstanding any provision of law to the

(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 damage. Consistent with this
mandate, the NLRC shall endeavor to update and keep abreast with the
developments in the global services industry.
"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 de
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
amendment or modification made locally or in a foreign country of the said
contract.
"Any compromise/amicable settlement or voluntary agreement on money

claims inclusive of damages under this section shall be paid within thirty (30)
days from approval of the settlement by the appropriate authority.
"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, the worker shall be entitled to
the full reimbursement if his placement fee and the deductions made with
interest at twelve percent (12%) per annum, plus 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.
"In case of a final and executory judgement against a foreign

employer/principal, it shall be automatically disqualified, without further
proceedings, from participating in the Philippine Overseas Employment
Program and from recruiting and hiring Filipino workers until and unless it
fully satisfies the judgement award.
26
"Noncompliance with the mandatory periods for resolutions of case 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 incured under other
existing laws or rules and regulations as a consequence of violating the
provisions of this paragraph."
Section 8. The first paragraph of Section 13 of Republic Act No. 8042, as

amended is hereby amended to read as follows:
"SEC. 13. Free Legal Assistance; Preferential Entitlement Under the Witness
Protection Program. - A mechanism for free legal assistance for victims of
illegal recruitment shall be established in the anti-illegal recruitment branch
of the POEA including its regional offices. Such mechanism shall include
coordination and cooperation with the Department of Justice, the Integrated
Bar of the Philippines, and other non-governmental organizations and
volunteer groups."

"SEC. 16. Mandatory Repatriation of Underage Migrant Workers. - Upon

discovery or being informed of the presence of migrant workers whose ages
fall below the minimum age requirement for overseas deployment, the
responsible officers in the foreign service shall without delay repatriate said
workers and advise the Department of Foreign Affairs through the fastest
means of communication available of such discovery and other relevant
information. The license of a recruitment/manning agency which recruited or
deployed an underage migrant worker shall be automatically revoked and
shall be imposed a fine of not less than Five hundred thousand pesos (Php
500,000.00) but not more than One million pesos (Php 1,000,000.00). All
fees pertinent to the processing of papers or documents in the recruitment
or deployment shall be refunded in full by the responsible
recruitment/manning agency, without need of notice, to the underage
migrant worker or to his parents or guardian. The refund shall be independent
of and in addition to the indemnification for the damages sustained by the
underage migrant worker. The refund shall be paid within thirty (30) days
from the date of the mandatory repatriation as provided for in this Act."
27
"SEC. 17. Establishment of National Reintegration Center for Overseas

Filipino Workers. -A national reintegration center for overseas Filipino
workers (NRCO) is hereby created in the Department of Labor and
Employment for returning Filipino migrant workers which shall provide a
mechanism for their reintegration into the Philippine society, serve as a
promotion house for their local employment, and tap their skills and
potentials for national development.
"The Department of Labor and Employment, the Overseas Workers Welfare

Administration (OWWA), and the Philippine Overseas Employment
Administration (POEA) shall, within ninety (90) days from the effectivity of
this Act, formulate a program that would motivate migrant workers to plan
for productive options such as entry into highly technical jobs or
undertakings, livelihood and entrepreneurial development, better wage
employment, and investment of savings.
"For this purpose, the Technical Education and Skills Development Authority
(TESDA), the Technology Livelihood Resource Center (TLRC), and other
government agencies involved in training and livelihood development shall
give priority to returnees who had been employed as domestic helpers and
entertainers."
Section 11. Section 18 of Republic Act No. 8042, as amended is hereby

"SEC. 18. Functions of the National Reintegration Center for Overseas Filipino
Workers. -The Center shall provide the following services:
"(a) Develop and support programs and projects for livelihood,

entrepreneurship, savings, investments and financial literacy for
returning Filipino migrant workers and their families in coordination
with relevant stakeholders, service providers and international
organizations;
"(b) Coordinate with appropriate stakeholders, service providers

and relevant international organizations for the promotion,
development and the full utilization of overseas Filipino worker
returnees and their potentials;
"(c) Institute, in cooperation with other government agencies

concerned, a computer-based information system on returning
Filipino migrant workers shall be accessible to all local recruitment
agencies and employers, both public and private;
"(d) Proved a periodic study and assessment of job opportunities

for returning Filipino migrant workers;
28
"(e) Develop and implement other appropriate programs to
promote the welfare of returning Filipino migrant workers;
"(f) Maintain an internet-based communication system for on-line

registration and interaction with clients, and maintain and upgrade
computer-based service capabilities of the NRCO;
"(g) Develop capacity-building programs for returning overseas

Filipino workers and their families, implementers, service
providers, and stakeholders; and
"(h) Conduct research for policy recommendations and program

development."
Section 12. The second paragraph of Section 19 of Republic Act No. 8042,
as amended, is hereby amended to read as follows:
"The establishment and operations of the Center shall be a joint undertaking

of the various government agencies. The Center shall be open for twenty-
four (24) hours daily including Saturdays, Sundays and holidays, and shall
be staffed by Foreign Service personnel, service attaches or officers who
represent other Philippine government agencies abroad and, if available,
individual volunteers and bona fide non-government organizations from the
host countries. In countries categorized as highly problematic by the
and where there is a concentration of Filipino migrant workers, the
government must provide a Sharia or human rights lawyer, a psychologist
and a social worker for the Center. In addition to these personnel, the
government must also hire within the receiving country, in such number as
may be needed by the post, public relation officers or case officers who are
conversant, orally and in writing, with the local language, laws, customs and
practices. The Labor Attache shall coordinate the operation of the Center and
shall keep the Chief of Mission informed and updated on all matters affecting
it."

"SEC. 20. Establishment of a Shared Government Information System for

Migration. - An interagency committee composed of the Department of
Foreign Affairs and its attached agency, the Commission on Filipinos
Overseas, the Department of Labor and Employment and its attached
concerned agencies, the Department of Tourism, the Department of Justice
the Bureau of Immigration, the National Bureau of Investigation, the
Department of the Interior and Local Government, the National
Telecommunications Commission, the Commission on Information and
Communications Technology, the National Computer Center, the National
Statistical and Coordination Board, the National Statistics Office and other
government agencies concerned with overseas employment shall be
established to implement a shared government information system for
migration. The interagency committee shall initially make available to itself
29
the information contained in existing data bases/files. The second phase shall
involve linkaging of computer facilities on order to allow free-flow data
exchanges and sharing among concerned agencies.
"The inter-agency committee shall be co-chaired by the Department of

Foreign Affairs and the Department of Labor and Employment. The National
Computer Center shall provide the necessary technical assistance and shall
set the appropriate information and communications technology standards to
facilitate the sharing of information among the member agencies.
"The inter-agency committee shall meet regularly to ensure the immediate

and full implementation of this section and shall explore the possibility setting
up a central storage facility for the data on migration. The progress of the
implementation of this section shall be include in the report to Congress of
the Department of Foreign Affairs and the Department of Labor and
Employment under Section 33.
"The inter-agency committee shall convene to identify existing data bases

which shall be declassified and shared among member agencies. These
shared data bases shall initially include, but not be limited to, the following
information:
"(a) Masterlists of Filipino migrant workers/overseas Filipino

classified according to occupation/job category, civil status, by
country/state of destination including visa classification;
"(b) Inventory of pending legal cases involving Filipino migrant

workers and other Filipino nationals, including those serving prison
terms;
"(c) Masterlists of departing/arriving Filipinos;
"(d) Statistical profile on Filipino migrant workers/overseas

Filipinos/tourists;
"(e) Blacklisted foreigners/undesirable aliens;
"(f) Basic data on legal systems, immigration policies, marriage

laws and civil and criminal codes in receiving countries particularly
those with large numbers of Filipinos;
"(g) List of Labor and other human rights instruments where

receiving countries are signatories;
"(h) A tracking system of past and present gender disaggregated

cases involving male and female migrant workers, including
minors; and
"(i) Listing of overseas posts which may render assistance to

overseas Filipinos, in general, and migrant workers, in particular."
30
Section 14. Subparagraph (b.1) of paragraph (b) of Section 23 of Republic
Act No. 8042, as amended, is hereby amended to read as follows:
"(b.1) Philippine Overseas Employment Administration. - The Administration

shall regulate private sector participation in the recruitment and overseas
placement of workers by setting up a licensing and registration system. It
shall also formulate and implement, in coordination with appropriate entities
concerned, when necessary, a system for promoting and monitoring the
overseas employment of Filipino workers taking into consideration their
welfare and the domestic manpower requirements. It shall be responsible for
the regulation and management of overseas employment from the pre-
employment stage, securing the best possible employment terms and
conditions for overseas Filipino workers, and taking into consideration the
needs of vulnerable sectors and the peculiarities of sea-based and land-based
workers. In appropriate cases, the Administration shall allow the lifting of
suspension of erring recruitment/manning agencies upon the payment of fine
of Fifty thousand pesos (P50,000.00) for every month of suspension.
"in addition to its powers and functions, the Administration shall inform
migrant workers not only of their rights as workers but also of their rights as
human beings, instruct and guide the workers how to assert their rights and
provide the available mechanism to redress violation of their rights. It shall
also be responsible for the implementation, in partnership with other law-
enforcement agencies, of an intensified program against illegal recruitment
activities. For this purpose, the POEA shall provide comprehensive Pre-
Employment Orientation Seminars (PEOS) that will discuss topics such as
prevention of illegal recruitment and gender-sensitivity.
"The Administration shall not engage in the recruitment and placement of

overseas workers except on a government-to-government arrangement only.
"In the recruitment and placement of workers to service the requirements for
trained and competent Filipino workers of foreign governments and their
instrumentalitys, and such other employers as public interests may require,
the Administration shall deploy only to countries where the Philippine has
conclude bilateral labor agreements or arrangements: Provided, That such
countries shall guarantee to protect the rights of Filipino migrant workers;
and Provided, further, That such countries shall observe and/or comply with
the international laws and standards for migrant workers."
Section 15. Sub-paragraph (b.2) of Paragraph (b) of Section 23 of Republic

Act No. 8042, as amended, is hereby amended to read as follows:
"(b.2) Overseas Workers Welfare Administration. - The Welfare officer of 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 by 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 settling the compliance or problems brought to his
attention. The OWWA shall likewise formulate and implement welfare
31
programs for overseas Filipino workers and their families while they are
abroad and upon their return. It shall ensure the awareness by the overseas
Filipino workers and their families of these programs and other related
governmental programs.
"In the repatriation of workers to be undertaken by OWWA, the latter shall

be authorized to pay repatriation-related expenses, such as fines or penalties,
subject to such guidelines as the OWWA Board of Trustees may prescribe."
Section 16. Under Section 23 of Republic Act No. 8042, as amended, add
new paragraphs (c) and (d) with their corresponding subparagraphs to read
as follows:
"(c) Department of Health. - The Department of Health (DOH) shall regulate

the activities and operations of all clinics which conduct medical, physical,
optical, dental, psychological and other similar examinations, hereinafter
referred to as health examinations, on Filipino migrant workers as
requirement for their overseas employment. Pursuant to this, the DOH shall
ensure that:
" (c.1) The fees for the health examinations are regulated,
regularly monitored and duly published to ensure that the said fees
are reasonable and not exorbitant;
" (c.2) The Filipino migrant worker shall only be required to

undergo health examinations when there is reasonable certainty
that he or she will be hired and deployed to the jobsite and only
those health examinations which are absolutely necessary for the
type of job applied for or those specifically required by the foreign
employer shall be conducted;
" (c.3) No group or groups of medical clinics shall have a monopoly

of exclusively conducting health examinations on migrant workers
for certain receiving countries;
" (c.4) Every Filipino migrant worker shall have the freedom to
choose any of the DOH-accredited or DOH-operated clinics that will
conduct his/her health examinations and that his or her rights as a
patient are respected. The decking practice, which requires an
overseas Filipino worker to go first to an office for registration and
then farmed out to a medical clinic located elsewhere, shall not be
allowed;
" (c.5) Within a period of three (3) years from the effectivity of this
Act, all DOH regional and/or provincial hospitals shall establish and
operate clinics that can be serve the health examination
requirements of Filipino migrant workers to provide them easy
access to such clinics all over the country and lessen their
transportation and lodging expenses and
32
" (c.6) All DOH-accredited medical clinics, including the DOH-
operated clinics, conducting health examinations for Filipino
migrant workers shall observe the same standard operating
procedures and shall comply with internationally-accepted
standards in their operations to conform with the requirements of
receiving countries or of foreign employers/principals.
"Any Foreign employer who does not honor the results of valid health
examinations conducted by a DOH-accredited or DOH-operated clinic shall be
temporarily disqualified from the participating in the overseas employment
program, pursuant to POEA rules and regulations.
"In case an overseas Filipino worker is found to be not medically fit upon
his/her immediate arrival in the country of destination, the medical clinic that
conducted the health examination/s of such overseas Filipino worker shall
pay for his or her repatriation back to the Philippines and the cost of
deployment of such worker.
"Any government official or employee who violates any provision of this

subsection shall be removed or dismissed from service with disqualification
to hold any appointive public office for five(5) years. Such penalty is without
prejudice to any other liability which he or she may have incurred under
existing laws, rules or regulations.
"(d) Local Government Units. - In the fight against illegal recruitment, the
local government units (LGUs), in partnership with the POEA, other
concerned government agencies , and non-government organizations
advocating the rights and welfare of overseas Filipino workers, shall take a
proactive stance by being primarily responsible for the dissemination of
information to their constituents on all aspects of overseas employment. To
carry out this task, the following shall be undertaken by the LGUs:
"(d.1) Provide a venue for the POEA, other concerned government

agencies and non-government organizations to conduct PEOS to
their constituents on a regular basis;
"(d.2) Establish overseas Filipino worker help desk or kiosk in their

localities with the objective of providing current information to their
constituents on all the processes aspects of overseas employment.
Such desk or kiosk shall, as be linked to the database of all
concerned government agencies, particularly the POEA for its
updated lists of overseas job orders and licensed recruitment
agencies in good standing."
Section 17. Subparagraph ( c ) of Section of Republic Act No. 8042, as

amended, is hereby amended to read as follows:
"( c ) To tap the assistance of reputable law firms, the Integrated Bar of the
Philippines, other bar associations and other government legal experts on
overseas Filipino worker laws to complement the government's efforts to
provide legal assistance to our migrant workers;"
33
"SEC. 25. Legal Assistance Fund. - There is herby established a legal

assistance fund for migrant workers, hereinafter referred to as the Legal
Assistance Fund, in the amount of one hundred million pesos
(P100,000,000.00) to be constituted from the following sources.
"Fifty million pesos (50,000,000.00) from the Contingency Fund of the

President;
"Thirty million pesos (30,000,000.00) from the Contingency Fund of the

President Social Fund;
"Twenty million pesos (20,000,000.00) from the Welfare Fund for Overseas
Workers established under Letter of Instructions No. 537 as amended by
Presidential Decree Nos. 1694 and 1809; and
"An amount appropriated in the annual General Appropriations Act (GAA)

which shall not be less than Thirty million pesos (30,000,000.00) per year:
Provided, that the balance of the Legal Assistance Fund (LAF) including the
amount appropriated for the year shall not be less than One hundred million
pesos (P100,000,000.00) : Provided, further, That the fund shall be treated
as a special fund in the National Treasury and its balance, including the
amount appropriated in the GAA, which shall form part of the Fund, shall not
revert to the General Fund.
" Any balances of existing funds which have been set aside by the
government specifically as legal assistance or defense fund to help migrant
workers shall upon effectivity of this Act, be turned over to, and form part of,
the Fund created under this Act."

"SEC. 26. Uses of the Legal Assistance Fund. - The Legal Assistance Fund
created under the preceding section shall be used exclusively6 to provide
legal services to migrant workers and overseas Filipinos in distress in
accordance with the guidelines, criteria and procedures promulgated in
accordance with Section 24 ( a ) herof. The expenditures to be charged
against the Fund shall include the fees for the foreign lawyers to be hired by
the Legal Assistant for Migrant Workers Affairs to represent migrant workers
facing charges or in filing cases against erring or abusive employers abroad,
bail bonds to secure the temporary releases and other litigation
expenses: Provided, That at the end of every year, the Department of Foreign
Affairs shall include in its report to Congress, as provided for under Section
33 of this Act, the status of the Legal Assistance Fund, including the
expenditures from the said fund duly audited by the Commission on Audit
(COA): Provided, further, That the hiring of foreign legal counsels, when
circumstances warrant urgent action, shall be exempt from the coverage of
Republic Act No. 9184 or the Government Procurement Act."
34
"SEC. 32. POEA, OWWA and other Boards; Additional Memberships. -

Notwithstanding any provision of law to the contrary, the respective Boards
of the POEA and the OWWA shall, in addition to their present composition,
have three (3) members each who shall come from the women, sea-based
and land-based sectors respectively, to be selected and nominated openly by
the general membership of the sector being represented.
" The selection and nomination of the additional members from the women,
sea-based and land-based sectors shall be governed by the following
guidelines:
"(a) The POEA and the OWWA shall launch a massive information
campaign on the selection of nominees and provide for a system
of consultative sessions for the certified leaders or representatives
of the concerned sectors, at least three (3) times, within ninety
(90) days before the boards shall be convened, for purposes of
selection. The process shall be open, democratic and transparent;
"(b) Only non-government organizations that protect and promote

the rights and welfare of overseas Filipino workers, duly registered
with the appropriate Philippine government agency and in good
standing as such, and in existence for at least three (3) years prior
to the nomination shall be qualified to nominate a representative
for each sector to the Board;
"(c) The nominee must be at least twenty-five (25) years of age,

able to read and write, and a migrant worker at the time of his or
her nomination or was a migrant worker with at least three (3)
years experience as such; and
"(d) A final list of all the nominees selected by the OWWA/POEA

governing boards, which shall consist of three(3) names for each
sector to be represented, shall be submitted to the President and
published in a newspaper of general circulation;
"Within thirty (30) days from the submission of the list, the President shall
select and appoint from the list, the representatives to the POEA/OWWA
governing boards.
"The additional members shall have a term of three (3) years and shall be
eligible for reappointment for another three (3) years. In case of vacancy,
the President shall in accordance with the provisions of this Act, appoint a
replacement who shall serve the unexpired term of his or her predecessor.
"Any executive issuances or orders issued that contravene the provisions of

this section shall have no force and effect.
35
"All other government agencies and government-owned or controlled
corporations which require at least one (1) representative from the overseas
workers sector to their respective boards shall follow all the applicable
provisions of this section."
Section 21. The first and last paragraph of Section 33 of Republic Act No.
8042, as amended, is hereby amended to read as follows:
"SEC. 33. Report to Congress. - In order to inform the Philippine Congress on

the implementation of the policy enunciated in Section 4 hereof, the
shall submit separately to the said body a semi-annual report of Philippine
foreign posts located in countries hosting Filipino migrant workers. The mid-
year report covering the period January to June shall be submitted not later
than October 31 of the same year while the year-end report covering the
period July to December shall be submitted not later than May 31 of the
following year. The report shall include, but shall not limited to, the following
information:
"xxx
" Any officer of the government who fails to submit the report as stated in
this section shall be subject to an administrative penalty of dismissal from
the service with disqualification to hold any appointive public office for five
(5) years."

SEC. 35. Exemption from Travel Tax Documentary Stamp and Airport Fee. -
All laws to the contrary notwithstanding, the migrant workers shall be exempt
from the payment of travel tax and airport-fee upon proper showing of proof
entitlement by the POEA.
"The remittances of all overseas Filipino workers, upon showing of the same
proof of entitlement by the overseas Filipino worker's beneficiary or recipient,
shall be exempt from the payment of documentary stamp tax.
Section 23. A new Section 37-A. of Replublic Act No. 8042, as amended, is
hereby added to read as follows:
"SEC. 37-A. Compulsory Insurance Coverage for Agency-Hired Workers. - In

addition to the performance bond to be filed by the recruitment/manning
agency under Section 10, each migrant worker deployed by a
recruitment/manning agency shall be covered by a compulsory insurance
policy which shall be secured at no cost to the said worker. Such insurance
policy shall be effective for the duration of the migrant worker's employment
and shall cover, at the minimum:
36
"(a) Accidental death, with at least Fifteen thousand United States
dollars (US$10,000.00) survivor's benefit payable to the migrant
worker's beneficiaries;
"(c) Permanent total disablement, with at least Seven thousand

five hundred United States dollars (US$7,500.00) disability benefit
payable to the migrant worker. The following disabilities shall be
deemed permanent: total, complete loss of sight of both eyes; loss
of two(2) limbs at or above the ankles or wrists; permanent
complete paralysis of two (2) limbs; brain injury resulting to
incurable imbecility or insanity;
"(d) Repatriation cost of the worker when his/her employment is

terminated without any valid cause, including the transport of his
or her personal belongings. In case of death, the insurance
provider shall arrange and pay for the repatriation or return of the
worker's remains. The insurance provider shall also render any
assistance necessary in the transport including, but not limited to,
locating a local licensed funeral home, mortuary or direct
disposition facility to prepare the body for transport, completing all
documentation, obtaining legal clearances, procuring consular
services, providing necessary casket or air transport container, as
well as transporting the remains including retrieval from site of
death and delivery to the receiving funeral home;
"(e) Subsistence allowance benefit, with at least One hundred

United States dollars (US$100.00) Per month for a maximum of six
(6) months for a migrant worker who is involved in a case or
litigation for the protection of his/her rights in the receiving
country;
"(f) Money claims arising from employer's liability which may be

awarded or given to the worker in a judgment or settlement of his
or her case in the NLRC. The insurance coverage for money claims
shall be equivalent to at least three (3) months for every year of
the migrant worker's employment contract;
"In addition to the above coverage, the insurance policy shall also
include:
"(g) Compassionate visit. When a migrant worker is hospitalized

and has been confined for at least seven (7) consecutive days, he
shall be entitled to a compassionate visit by one (1) family member
or a requested individual. The insurance company shall pay for the
transportation cost of the family member or requested individual
to the major airport closest to the place of hospitalization of the
worker. It is, however, the responsibility of the family member or
requested individual to meet all visa and travel document
requirements;
37
"(h) Medical evacuation. When an adequate medical facility is not
available proximate to the migrant worker, as determined by the
insurance company's physician and/or a consulting physician,
evacuation under appropriate medical supervision by the mode of
transport necessary shall be undertaken by the insurance provider;
and
"(i) Medical repatriation. When medically necessary as determined

by the attending physician, repatriation under medical supervision
to the migrant worker's residence shall be undertaken by the
insurance provider at such time that the migrant worker is
medically cleared for travel by commercial carrier. If the period to
receive medical clearance to travel exceeds fourteen (14) days
from the date of discharge from the hospital, an alternative
appropriate mode of transportation, such as air ambulance, may
be arranged. Medical and non-medical escorts may be provided
when necessary.
"Only reputable private insurance companies duly registered with the

Insurance Commission (IC) , which are in existence and operational for at
least Five hundred million pesos (P500,000,000.00) to be determined by the
IC, and with a current year certificate of authority shall be qualified to provide
for the worker's insurance coverage. Insurance companies who have
directors, partners, officers, employees or agents with relatives, within the
fourth civil degree of consanguinity or affinity, who work or have interest in
any of the licensed recruitment/manning agencies or in any of the
government agencies involved in the overseas employment program shall be
disqualified from providing this workers' insurance coverage.
"The recruitment/manning agency shall have the right to choose from any of
the qualified insurance providers the company that will insure the migrant
worker it will deploy. After procuring such insurance policy, the
recruitment/manning agency shall provide an authenticated copy thereof to
the migrant worker. It shall then submit the certificate of insurance coverage
of the migrant worker to POEA as a requirement for the issuance of an
Overseas Employment Certificate (OEC) to the migrant worker. In the case
of seafarers who are insured under policies issued by foreign insurance
companies, the POEA shall accept certificates or other proofs of cover from
recruitment/manning agencies: Provided, That the minimum coverage under
sub-paragraphs (a) to (i) are included therein.
"Any person having a claim upon the policy issued pursuant to subparagraphs
(a), (b), (c), (d) and (e) of this section shall present to the insurance
company concerned a written notice of claim together with pertinent
supporting documents. The insurance company shall forthwith ascertain the
truth and extent of the claim and make payment within ten (10) days from
the filing of the notice of claim.
"Any claim arising from accidental death, natural death or disablement under
this section shall be paid by the insurance company without any contest and
38
without the necessity of providing fault or negligence of any kind on the part
of the insured migrant worker: Provided, That the following documents, duly
authenticated by the Philippine foreign posts, shall be sufficient evidence to
substantiate the claim:
"(1) Death Certificate - In case of natural or accidental death;
"(2) Police or Accident Report - In case of accidental death; and
"(3) Medical Certificate - In case of permanent disablement;
"For repatriation under subparagraph (d) hereof, a certification which states

the reason/s for the termination of the migrant worker's employment and the
need for his or her repatriation shall be issued by the Philippine foreign post
or the Philippine Overseas Labor Office (POLO) located in the receiving
country.
"For subsistence allowance benefit under subparagraph (e), the concerned

labor attaché or, in his absence, the embassy or consular official shall issue
a certification which states the name of the case, the names of the parties
and the nature of the cause of action of the migrant worker.
"For the payment of money claims under subparagraph (f), the following rules
shall govern:
"(1) After a decision has become final and executor or a

settlement/compromise agreement has been reached between the
parties at the NLRC, an order shall be released mandating the
respondent recruitment/manning agency to pay the amount
adjudged or agreed upon within thirty (30) days;
"(2) The recruitment/manning agency shall then immediately file a

notice of claim with its insurance provider for the amount of liability
insured, attaching therewith a copy of the decision or compromise
agreement;
"(3) Within ten (10) days from the filing of notice of claim, the
insurance company shall make payment to the
recruitment/manning agency the amount adjudged or agreed
upon, or the amount of liability insured, whichever is lower. After
receiving the insurance payment, the recruitment/manning agency
shall immediately pay the migrant worker's claim in full, taking into
account that in case the amount of insurance coverage is
insufficient to satisfy the amount adjudged or agreed upon, it is
liable to pay the balance thereof;
"(4) In case the insurance company fails to make payment within

ten (10) days from the filing of the claim, the recruitment/ manning
agency shall pay the amount adjudged or agreed upon within the
remaining days of the thirty (30)-day period, as provided in the
first subparagraph hereof;
39
"(5) If the worker's claim was not settled within the aforesaid thirty
(30)-day period, the recruitment/manning agency's performance
bond or escrow deposit shall be forthwith garnished to satisfy the
migrant worker's claim;
"(6) The provision of compulsory worker's insurance under this

section shall not affect the joint and solidary liability of the foreign
employer and the recruitment/manning agency under Section 10;
"(7) Lawyers for the insurance companies, unless the latter is

impleaded, shall be prohibited to appear before the NLRC in money
claims cases under this section.
"Any question or dispute in the enforcement of any insurance policy issued

under this section shall be brought before the IC for mediation or
adjudication.
"In case it is shown by substantial evidence before the POEA that the migrant
worker who was deployed by a licensed recruitment/manning agency has
paid for the premium or the cost of the insurance coverage or that the said
insurance coverage was used as basis by the recruitment/manning agency to
claim any additional fee from the migrant worker, the said licensed
recruitment/manning agency shall lose its license and all its directors,
partners, proprietors, officers and employees shall be perpetually disqualified
from engaging in the business of recruitment of overseas workers. Such
penalty is without prejudice to any other liability which such persons may
have incurred under existing laws, rules or regulations.
"For migrant workers recruited by the POEA on a government-to-government

arrangement, the POEA shall establish a foreign employers guarantee fund
which shall be answerable to the workers' monetary claims arising from
breach of contractual obligations. For migrant workers classified as rehires,
name hires or direct hires, they may opt to be covered by this insurance
coverage by requesting their foreign employers to pay for the cost of the
insurance coverage or they may pay for the premium themselves. To protect
the rights of these workers, the POEA shall provide them adequate legal
assistance, including conciliation and mediation services, whether at home or
abroad.
"At the end of every year, the Department of Labor and Employment and the
IC shall jointly make an assessment of the performance of all insurance
providers, based upon the report of the NLRC and the POEA on their
respective interactions and experiences with the insurance companies, and
they shall have the authority to ban or blacklist such insurance companies
which are known to be evasive or not responsive to the legitimate claims of
migrant workers. The Department of Labor and Employment shall include
such assessment in its year-end report to Congress.
"For purposes of this section, the Department of Labor and Employment, IC,
NLRC and the POEA, in consultation with the recruitment/manning agencies
and legitimate non-government organizations advocating the rights and
40
welfare of overseas Filipino workers, shall formulate the necessary
implementing rules and regulations.
"The foregoing provisions on compulsory insurance coverage shall be subject

to automatic review through the Congressional Oversight Committee
immediately after three (3) years from the effectivity of this Act in order to
determine its efficacy in favor of the covered overseas Filipino workers and
the compliance by recruitment/manning agencies and insurance companies,
without prejudice to an earlier review if necessary and warranted for the
purpose of modifying, amending and/or repealing these subject provisions.
Section 24. A new Section 37-B of Republic Act No. 8042, as amended, is
hereby added to read as follows:
"Sec. 37-B. Congressional Oversight Committee. - There is hereby created a

Joint Congressional Oversight Committee composed of five (5) Senators and
five (5) Representatives to be appointed by the Senate President and the
Speaker of the House of Representatives, respectively. The Oversight
Committee shall be co-chaired by the chairpersons of the Senate Committee
on Labor and Employment and the House of Representatives Committee on
Overseas Workers Affairs. The Oversight Committee shall have the following
duties and functions:
"(a) To set the guidelines and overall framework to monitor and

ensure the proper implementation of Republic Act No. 8042, as
amended, as well as all programs, projects and activities related to
overseas employment;
"(b) To ensure transparency and require the submission of reports

from concerned government agencies on the conduct of programs,
projects and policies relating to the implementation of Republic Act
No. 8042, as amended;
"(c) To approve the budget for the programs of the Oversight

Committee and all disbursements therefrom, including
compensation of all personnel;
"(d) To submit periodic reports to the President of the Philippines

and Congress on the implementation of the provisions of Republic
Act No. 8042, as amended;
"(e) To determine weaknesses in the law and recommend the

necessary remedial legislation or executive measures; and
"(f) To perform such other duties, functions and responsibilities as

may be necessary to attain its objectives.
"The Oversight Committee shall adopt its internal rules of procedure, conduct
hearings and receive testimonies, reports, and technical advice, invite or
summon by subpoena ad testificandum any public official or private citizen to
testify before it, or require any person by subpoena duces tecum documents
41
or other materials as it may require consistent with the provisions of Republic
Act No. 8042, as amended.
"The Oversight Committee shall organize its staff and technical panel, and
appoint such personnel, whether on secondment from the Senate and the
House of Representatives or on temporary, contractual, or on consultancy,
and determine their compensation subject to applicable civil service laws,
rules and regulations with a view to ensuring a competent and efficient
secretariat.
"The members of the Oversight Committee shall not receive additional

compensation, allowances or emoluments for services rendered thereto
except traveling, extraordinary and other necessary expenses to attain its
goals and objectives.
"The Oversight Committee shall exist for a period of ten (10) years from the
effectivity of this Act and may be extended by a joint concurrent resolution."
Section 25. Implementing Rules and Regulations. - The departments and

agencies charged with carrying out the provisions of this Act, except as
otherwise provided herein, in consultation with the Senate Committee on
Labor and Employment and the House of Representatives Committee on
Overseas Workers Affairs, shall, within sixty (60) days after the effectivity of
this Act, formulate the necessary rules and regulations for its effective
implementation.
Section 26. Funding. - The departments, agencies, instrumentalities,

bureaus, offices and government-owned and controlled corporations charged
with carrying out the provisions of this Act shall include in their respective
programs the implementation of this Act, the funding of which shall be
included in the General Appropriations Act. The Congressional Oversight
Committee on Overseas Workers Affairs shall have the sum of Twenty-five
million pesos (P25,000,000.00), half of which shall be charged against the
current appropriations of the Senate while the other half shall be charged
against the current appropriations of the House of Representatives, to carry
out its powers and functions for its initial operations and for fiscal years
wherein the General Appropriations Act is reenacted and no provision for its
continued operation is included in such Act. Thereafter, such amount
necessary for its continued operations shall be included in the annual General
Appropriations Act.
Section 27. Separability Clause. - If, for any reason, may portion of this Act
is declared unconstitutional or invalid, the same shall not affect the validity
of the other provisions not affected thereby.
Section 28. Repealing Clause. - All laws, decrees, executive orders,

issuances, rules and regulations or parts thereof inconsistent with the
provisions of this Act are hereby repealed or modified accordingly.
Section 29. Effectivity. - This Act shall take effect fifteen (15) days after its
publication in at least two (2) newspapers of general circulation.
42
Approved,
43
Pre-Employment
A. Recruitment and Placement of Local and Migrant Workers
1. Definition of Recruitment and Placement
"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.
2. Regulation of Recruitment and Placement Activities
a) Regulatory Authorities
(1) Philippine Overseas Employment Administration
The Philippine Overseas Employment Administration (POEA)
is an attached agency of the Department of Labor and
Employment (DOLE) mandated to regulate and ensure the
protection of Filipinos going out of the country for overseas
employment.
The laws governing the POEA are as follows:
• Presidential Decree (PD) 797 (1982)
• Executive Order (EO) 247 (1987)
• Republic Act 8042 (1995)
(2) Regulatory and Visitorial Powers of the Department of
Labor and Employment Secretary
Art. 128. Visitorial and enforcement power.
(a) The Secretary of Labor and Employment or his duly

authorized representatives, including labor regulation
officers, shall have access to employer’s records and
premises at any time of the day or night whenever work
is being undertaken therein, and the right to copy
therefrom, to question any employee and investigate
any fact, condition or matter which may be necessary to
determine violations or which may aid in the
enforcement of this Code and of any labor law, wage
order or rules and regulations issued pursuant thereto.
44
(b) Notwithstanding the provisions of Articles 129 and 217
of this Code to the contrary, and in cases where the
relationship of employer-employee still exists, the
Secretary of Labor and Employment or his duly
authorized representatives shall have the power to issue
compliance orders to give effect to the labor standards
provisions of this Code and other labor legislation based
on the findings of labor employment and enforcement
officers or industrial safety engineers made in the course
of inspection. The Secretary or his duly authorized
representatives shall issue writs of execution to the
appropriate authority for the enforcement of their
orders, except in cases where the employer contests the
findings of the labor employment and enforcement
officer and raises issues supported by documentary
proofs which were not considered in the course of
inspection. (As amended by Republic Act No. 7730, June
2, 1994).
An order issued by the duly authorized representative of

the Secretary of Labor and Employment under this
Article may be appealed to the latter. In case said order
involves a monetary award, an appeal by the employer
may be perfected only upon the posting of a cash or
surety bond issued by a reputable bonding company duly
accredited by the Secretary of Labor and Employment in
the amount equivalent to the monetary award in the
order appealed from. (As amended by Republic Act No.
7730, June 2, 1994)
(c) The Secretary of Labor and Employment may likewise

order stoppage of work or suspension of operations of
any unit or department of an establishment when non-
compliance with the law or implementing rules and
regulations poses grave and imminent danger to the
health and safety of workers in the workplace. Within
twenty-four hours, a hearing shall be conducted to
determine whether an order for the stoppage of work or
suspension of operations shall be lifted or not. In case
the violation is attributable to the fault of the employer,
he shall pay the employees concerned their salaries or
wages during the period of such stoppage of work or
suspension of operation.
45
(d) It shall be unlawful for any person or entity to obstruct,
impede, delay or otherwise render ineffective the orders
of the Secretary of Labor and Employment or his duly
authorized representatives issued pursuant to the
authority granted under this Article, and no inferior court
or entity shall issue temporary or permanent injunction
or restraining order or otherwise assume jurisdiction
over any case involving the enforcement orders issued
in accordance with this Article.
(e) Any government employee found guilty of violation of, or

abuse of authority, under this Article shall, after
appropriate administrative investigation, be subject to
summary dismissal from the service.
(f) The Secretary of Labor and Employment may, by

appropriate regulations, require employers to keep and
maintain such employment records as may be necessary
in aid of his visitorial and enforcement powers under this
Code.
b) Ban on Direct Hiring

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 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.
c) Entities Prohibited from Recruiting

Recruitment and placement of workers become illegal when
such acts are done by non-licensees or non-holders of
authority, and as such are punishable under the Labor Code.
The law says:
“Article 38. Illegal recruitment.
Any recruitment activities, including the prohibited practices
enumerated under Article 34 of this Code, to be undertaken
by non-licensees or non-holders of authority, shall be deemed
illegal and punishable under Article 39 of this Code. The
Department of Labor and Employment or any law
enforcement officer may initiate complaints under this Article.
46
xxx” (Article 38, Chapter III, Title I, Book I, Labor Code of the Philippines)
d) Suspension or Cancellation of License or Authority

What is a license?
The law says:

“License” means a document issued by the Department of Labor
authorizing a person or entity to operate a private employment
agency. (Section 13(d), Labor Code of the Philippines)
What is an authority?
The law says:
“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. (Section 13(f),
Labor Code of the Philippines)
Who may suspend and/or cancel a license or authority?
Jurisprudence says:
The power to suspend or cancel any license or authority to recruit
employees for overseas employment is vested upon the Secretary
of Labor and Employment. (Trans Action Overseas Corporation vs.
The Honorable Secretary of Labor, G.R. No. 109583 September 5,
1997)
The law says:
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. (Article 35, Labor
Code)
The Philippine Overseas Employment Administration, in the
exercise of adjudicatory power, may impose the penalty of
reprimand, suspension, or cancellation or revocation of license for
pre-employment/recruitment violation cases. (Section 10, Republic
Act No. 10022 also known as the Migrant Workers and Overseas
Filipino Act of 1995)
Note that the Ministry of Labor is now the Department of Labor and
Employment. The Overseas Employment Development Board has
47
been replaced by the Philippine Overseas Employment
Administration. General Orders and Letters of Instruction refer to
issuances by the President of the Republic in his capacity as
Commander-in-Chief of the Armed Forces of the Philippines.
(Article 35, Labor Code)
e) Prohibited Practices [Article 34, Labor Code]
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 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, 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.
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3. Illegal Recruitment [Labor Code and the Migrant Workers and
Overseas Employment Act of 1995 (RA 8042), as amended by RA
10022]
Under Republic Act No. 8042 (RA 8042) or the Migrant Workers
Act, as amended, illegal recruitment shall mean any act of
canvassing, enlisting, contracting, transporting, utilizing, hiring, or
procuring workers. It also 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 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. Simply put, illegal
recruitment is committed by persons who, without authority from
the government, give the impression that they have the power to
send workers abroad for employment purposes (People v. Arnaiz,
G.R. No. 205153, 9 September 2015, 770 SCRA 319).
a) Elements
Jurisprudence says:
Illegal recruitment is committed when two essential elements
concur:
i. that the offender has no valid license or authority required

by law to enable him to lawfully engage in the recruitment
and placement of workers; and
ii. that the offender undertakes any activity within the
meaning of “recruitment and placement” defined under
Article 13(b), or any prohibited practices enumerated under
Article 34 of the Labor Code. (Ritualo vs. People of the
Philippines, G.R. NO. 178337, June 25, 2009)
b) Types
There are 4 types of Illegal Recruitment:
1. SIMPLE illegal recruitment committed by a non-
licensee or non-holder of authority
2. SIMPLE illegal recruitment committed by a licensee or
holder of authority
3. Illegal recruitment committed by a SYNDICATE, if
carried out by a group of three (3) or more persons
conspiring or confederating with one another.
4. Illegal recruitment committed IN A LARGE SCALE,
Illegal recruitment is deemed committed by a
49
syndicate if carried out by a group of three (3) or more
persons conspiring or confederating with one another.
It is deemed committed in large scale if committed
against three (3) or more persons individually or as a
group. [1] People v. Tolentino, 762 Phil.
c) Illegal Recruitment vs. Estafa
Can a person be charged and convicted separately for illegal

recruitment and estafa for one act of illegal recruitment? YES.
Atty. Poquiz says that they are different crimes with different
elements. One is malum prohibitum (RA 8042 as amended by RA
10022 or the Labor Code for local employment), one is mala in se
(RPC). Thus, you can file both cases.
For illegal recruitment, criminal intent is not necessary. It is malum

prohibitum. Thus, good faith is not a defense.
For estafa, criminal intent is necessary. Good faith may be a defense.
The elements of estafa are:

1. the accused defrauded another by abuse of confidence or by means
of deceit
2. the offended party, or a third party, suffered damage or prejudice
capable of pecuniary estimation
“A conviction for illegal recruitment whether simple or committed on

a large scale would not preclude punishment for estafa under Article
315(2)(a) of the RPC. This is because no double jeopardy could attach
from the prosecution and conviction of the accused for both crimes
considering that they are penalized under different laws and involved
elements distinct from one another. Conviction under Article
315(2)(a) requires the concurrence of the following elements: (1) the
accused defrauded another by abuse of confidence or by means of
deceit; and (2) the offended party, or a third party, suffered damage
or prejudice capable of pecuniary estimation. These are elements
completely different from those required for illegal recruitment.”
–People v. Estrada, 2018
For example:
A, a licensed and authorized recruiter, made X pay a Php10,000 fee in
advance because he will then be deployed to the U.K. on January 1,
2022. But, January came and X was still not deployed. X asked A why
there was no deployment. A had no reason to give. X then asked A to
reimburse the Php10,000. A said that it was already spent.
50
In this example, A is DEFINITELY guilty of illegal recruitment by
committing acts under AFaFa, namely:
•Failing to actually deploy a contractual worker without valid reason
•Failing to reimburse expenses of an OFW who was not actually
deployed without his fault
It doesn’t matter if there was deceit on A’s part because illegal

recruitment is malum prohibitum.
A can also be guilty of estafa if there was deceit on his part like if he
knew that no deployment would actually come. Deceit or abuse of
confidence has to be proven because it is an element. There is also
damage here capable of pecuniary estimation: Php 10,000.
Additional notes by Chan:

1. Same evidence to prove illegal recruitment may be used to prove
estafa.
2. Conviction for both illegal recruitment and estafa is not double
jeopardy
AfaFa
• Allowing a non-Filipino citizen to head or manage a licensed
recruitment/manning agency.
• Failing to actually deploy a contractual worker without valid
reason
• Failing to reimburse expenses of an OFW who was not actually
deployed without his fault
4. Liability of Local Recruitment Agency and Foreign Employer

The nature of liability of the local recruitment agency and foreign
employer is solidary.
A solidary obligation is one in which each of the debtors is liable for the
entire obligation, and each of the creditors is entitled to demand the
satisfaction of the whole obligation from any or all of the debtors. (AFP
Retirement and Separation Benefits System vs. Sanvictores, G.R. No.
207586, August 17, 2016)
Jurisprudence says:
This Court has, time and again, ruled that private employment
agencies are held jointly and severally liable with the foreign-based
employer for any violation of the recruitment agreement or contract of
employment. This joint and solidary liability imposed by law against
recruitment agencies and foreign employers is meant to assure the
aggrieved worker of immediate and sufficient payment of what is due
him. This is in line with the policy of the state to protect and alleviate
51
the plight of the working class. (Santosa B. Datuman vs. First
Cosmopolitan Manpower and Promotion Services, Inc., G.R. No.
156029, November 14, 2008)
The joint and several nature of the liability of the principal/foreign

employer and the local recruitment/placement agency applies to any
and all monetary claims arising out of the implementation of the
employment contract involving Filipino workers for overseas
deployment. (Section 10, R.A. No. 8042, as amended by Section 7,
R.A. No. 10022)
This joint and several obligation must be incorporated in the contract

for overseas employment and shall be a condition precedent for its
approval. (Section 10, R.A. No. 8042, as amended by Section 7, R.A.
No. 10022)
Who are liable in case of juridical persons? The law says:
In case of a corporation or partnership, a duly notarized undertaking

by the corporate officers and directors, or partners, that they shall be
jointly and severally liable with the corporation or partnership for
claims and/or damages that may be awarded to the seafarers. (Section
4(g), Part II, Rule II, 2016 Revised POEA Rules and Regulations)
This liability shall continue during the entire period or duration of the
amendment, or modification made locally or in a foreign country of the
said contract. (Section 10, R.A. No. 8042, as amended by Section 7,
R.A. No. 10022)
a) Solidary Liability
The principal and the contractor shall be solidarily liable for any
violation of labor laws, including non-payment of wages and
mandatories to the extent of the work performed under the
employment contract of the contractor’s employees. (Section 9,
DO-174)
The extent of a principal’s liability will vary depending on
whether the arrangement has been declared as a legitimate job
contracting or labor-only contracting. If the declaration is one
for legitimate job contracting, the principal is solidarily liable
only to the extent of monetary claims. However, if the finding is
one of labor-only contracting, the principal is declared as the
true employer and thus may be held liable for illegal dismissal
and its consequences, such as backwages and damages.
52
“In legitimate job contracting, the law creates an employer-
employee relationship for a limited purpose, i.e., to ensure
that the employees are paid their wages. The principal
employer becomes jointly and severally liable with the job
contractor only for the payment of the employees’ wages
whenever the contractor fails to pay the same. Other than
that, the principal employer is not responsible for any claim
made by the employees.” (San Miguel Corporation v. MAERC
Integrated Services, Inc., G.R. No. 144672, 10 July 2003)
“On the other hand, in labor-only contracting, the statute
creates an employer-employee relationship for a
comprehensive purpose: to prevent a circumvention of labor
laws. The contractor is considered merely an agent of the
principal employer and the latter is responsible to the
employees of the labor-only contractor as if such employees
had been directly employed by the principal employer. The
principal employer therefore becomes solidarily liable with the
labor-only contractor for all the rightful claims of the
employees.” (Ibid.)
b) Theory of Imputed Knowledge

The theory of imputed knowledge is a doctrine in agency
stating 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. Notice to the agent is notice to the principal.
Jurisprudence says:
The theory of imputed knowledge ascribes the knowledge of
the agent, Sunace, to the principal, employer Xiong, not the other
way around. The knowledge of the principal-foreign employer
cannot, therefore, be imputed to its agent Sunace. (Sunace
International Management Services, Inc. vs. National Labor
Relations Commission, G.R. No. 161757. January 25, 2006)
In the case at hand, there was no substantial proof that
Sunace, the agent, knew and consented to be bound under the
extension of the employment contract of Divina, the domestic
helper that Sunace deployed under a 12-month contract. Thus,
Sunace cannot be solidarily liable for any of Divina’s claim arising
from the extension of the contract.
The law says:
Contracts take effect only between the parties, their assigns,
and heirs, except in case where the rights and obligations arising
from the contract are not transmissible by their nature, or by
53
stipulation or by provision of law. (Article 1311, New Civil Code of
the Philippines)
Moreover, in the same case of Sunace International
Management Services, Inc. vs. National Labor Relations
Commission, the termination of the original employment contract
is an implied revocation of the agency relationship.
The law says:
The agency is revoked if the principal directly manages the
business entrusted to the agent, dealing directly with third
persons. (Article 1924, NCC)
A local employment agency is considered the agent of the
foreign employer, the principal. Notice to the local employment
agency of any violation thereof is notice to the principal foreign
employer. But, notice to the principal is not notice to the agent.
Thus, notice to the foreign employer is not notice to the local
employment agency.
Jurisprudence says:
It is undisputed that Eduardo Santos was present in the March
1, 1976 TTTDC Board meeting wherein the December 29, 1975
Resolution was repealed. We hold that Eduardo Santos, being the
President of Rovels, is considered as Rovels’ agent. As such,
Santos’ knowledge of the repeal of the December 29, 1975
Resolution, under the theory of imputed knowledge, is ascribed to
his principal, Rovels. (Rovels Enterprises, Inc., vs. Emmanuel B.
Ocampo, G.R. No. 136821, October 17, 2002)
Knowledge of facts acquired or possessed by an officer or
agent of a corporation in the course of his employment, and in
relation to matters within the scope of his authority, is notice to the
corporation, whether he communicates such knowledge or not.
(Trinidad J. Francisco vs. Government Service Insurance System,
G.R. No. L-18287, March 30, 1963)
5. Termination of Contract of Migrant Worker

[The employee] having been illegally dismissed, is entitled to her
salary for the unexpired portion of the employment contract that was
violated together with attorney’s fees and reimbursement of amounts
withheld from her salary.
Section 10 of Republic Act No. 8042,otherwise known as the Migrant
Workers and Overseas Filipinos Act of1995, states that overseas workers
who were terminated without just, valid, or authorized cause “shall be
entitled to the full reimbursement of his placement fee with interest of
54
twelve (12%) per annum, plus 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. MONEY CLAIMS. – Notwithstanding any provision of law to the
(NLRC) shall have the original and exclusive jurisdiction to hear and
decide, within ninety (90) calendar days after 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 provisions [sic] 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
amendment or modification made locally or in a foreign country of the
said contract.
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.
In case of termination of overseas employment without just, valid or
authorized cause as defined by law or contract, the workers shall be
entitled to the full reimbursement of his placement fee with interest of
twelve (12%) per annum, plus 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…
Section 15 of Republic Act No. 8042 states that “repatriation of the
worker and the transport of his [or her] personal belongings shall be the
primary responsibility of the agency which recruited or deployed the
worker overseas.” The exception is when “termination of employment is
due solely to the fault of the worker,” which as we have established, is
not the case. It reads: SEC. 15. REPATRIATION OF WORKERS;
EMERGENCY REPATRIATION FUND. – The repatriation of the worker and
55
the transport of his personal belongings shall be the primary
responsibility of the agency which recruited or deployed the worker
overseas. All costs attendant to repatriation shall be borne by or charged
to the agency concerned and/or its principal. Likewise, 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 local agency. However, in cases where the termination of
employment is due solely to the fault of the worker, the
principal/employer or agency shall not in any manner be responsible for
the repatriation of the former and/or his belongings…
B. Employment of Non-Resident Aliens
Non-resident alien employees
1. Summary
▪ Foreigners or non-resident aliens are required to obtain an alien
employment permit (AEP) prior to working in the Philippines.
▪ They are prohibited from transferring employment without prior
approval from the DOLE Secretary.
▪ An employment contract is void if there is no alien employment
permit.
2. Concept
Any foreigner or 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 alien employment permit (AEP) from the Department of
Labor and Employment. (Article 40, Labor Code)
3. Requirements
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. (Paragraph 2, Article 40, Ibid.)
For an enterprise registered in preferred areas of investments,
said alien employment permit may be issued upon
recommendation of the government agency charged with the
supervision of said registered enterprise. (Paragraph 3, Article 40,
Ibid.)
4. Prohibition against transfer of employment
After the issuance of an alien employment permit, the alien shall
not transfer to another job or change his employer without prior
approval of the DOLE Secretary. (Article 41[a], Ibid.)
56
Any non-resident alien who shall take up employment in violation
of the foregoing rules and the implementing rules and regulations
shall be punished in accordance with the provisions of Articles
289 and 290 of the Labor Code. (Article 41[b], Ibid.)
In addition, the alien worker shall be subject to deportation after
service of his sentence. (Paragraph 2, Article 41, Ibid.)
5. No AEP, employment contract is void
Absent an employment permit, any employment relationship that
a foreign national contemplated with a local Company is void for
being contrary to law. A void or inexistent contract, in turn, has
no force and effect from the beginning as if it had never been
entered into. Thus, without an Alien Employment Permit, an
employment contract is void and cannot be the source of a right
or obligation. ( McBurnie v. Ganzon, EGI-Managers, Inc., G.R.
Nos. 178934 & 178117, 186984-85, 17 October 2013)
C. Discriminatory Practices
1. Age (RA 10911 or the Anti-Age Discrimination in Employment Act)
2. Gender and/or Marital Status (RA 9710 or the Magna Carta of
Women)
3. Health Condition (RA 7277 or the Magna Carta for Disabled Persons)
4. Solo Parents (Sec. 7, RA 8972, as amended by RA 11861)
57
C. Discriminatory Practices
1. Age (RA 10911 or the Anti-Age Discrimination in Employment Act)
• Republic Act No. 10911

An Act prohibiting discrimination against any individual in employment
on account of age and providing penalties therefor.
SECTION 1. Short Title - This Act shall be known the "Anti-Age
Discrimination in Employment Act”
SEC. 2. Declaration of Policies. The shall State promote equal
opportunities in employment for everyone. To this end, it shall be the
policy of the State to:
(a) Promote employment of individuals on the basis of their
abilities, knowledge, skills and qualifications rather than their
age.
(b) Prohibit arbitrary age limitations in employment.
(c) Promote the right of all employees and workers, regardless of
age, to be treated equally in terms of compensation, benifits,
promotion, training and other employment opportunities.
58
59
A. MANAGEMENT PREROGATIVE
Management prerogative” – refers to the employer’s bundle of rights in

relation to all aspects of employment, from pre-employment to post-
employment, and everything in between.
Under the doctrine of management prerogative, every employer has the

inherent right to regulate, according to his own discretion and judgment, all
aspects of employment, including hiring, work assignments, working
methods, the time, place and manner of work, work supervision, transfer of
employees, lay-off of workers, and discipline, dismissal, and recall of
employees. (Rural Bank of Cantilan, Inc. v. Julve, G.R. No. 169750, 27
February 2007)
As a privilege inherent in the employer’s right to control and manage its

enterprise effectively, its freedom to conduct its business operations to
achieve its purpose cannot be denied. (Peckson v. Robinsons Supermarket
Corporation, G.R. No. 198534, 03 July 2013)
Management prerogative is a function associated with the employer’s

inherent right to control and manage effectively its enterprise. Even as the
law is solicitous of the welfare of employees, it must also protect the right of
an employer to exercise what are clearly management prerogatives. The free
will of management to conduct its own business affairs to achieve its purpose
cannot be denied. (SCA Hygiene Products Corporation Employees
Association-FFW v. SCA Hygiene Products Corporation, G.R. No. 182877, 09
August 2010)
1. The employer has the right to discipline erring employees who have
been proven to commit violations provided that due process is observed.
If the infractions are grave and serious that would amount to a just
cause for termination of employment, the employer has the right to
dismiss them.
2. Transfer of employees
If there is legitimate business reasons for doing so, an employer may

transfer employees from one unit/department to another, as well as
deploy/re-locate an employee from one workplace to another. While
it is the right of an employer to transfer employees, such right is
subject to certain limitations such as good faith on the part of the
employer.
3. Productivity Standard
Simply put, an employer, by virtue of its right to regulate employment,

has the prerogative to prescribe the standards of productivity which may
be used as an incentive and/or a disciplinary scheme.
60
Notwithstanding the fact that a number of obligations on the part of the
employer are imposed, the law likewise protects the right of the
employer to expect from its employees a degree of diligence in the
performance of their work, as well as good conduct and loyalty.
Jurisprudence says:
In the case of Armando Aliling v. Jose Feliciano, et. al. (G.R. No. 185829,
25 April 2012), the Supreme Court held that an employer is entitled to
impose productivity standards for its employees, and the latter’s non-
compliance therewith can lead to his termination from work.
In the case of Family Planning Organization of the Philippines v. NLRC

(G.R. No. 75907, 23 March 1992), the Supreme Court ruled that:
It is the employer’s prerogative to prescribe reasonable rules and
regulations necessary or proper for the conduct of its business or
concern, to provide certain disciplinary measures to implement said
rules and to assure that the same be complied with. At the same time,
it is one of the fundamental duties of the employee to yield obedience
to all reasonable rules, orders, and instructions of the employer, and
willful or intentional disobedience thereof, as a general rule, justifies
rescission of the contract of service and the peremptory dismissal of the
employee.”
In the case of Armando Puncia v. Toyota Shaw Pasig, Inc. (G.R. No.
214399, 28 June 2016), the Supreme Court likewise ruled in the
following manner:
“The practice of a company in laying off workers because they failed to
make the work quota has been recognized in this jurisdiction. x x x. In
the case at bar, the petitioners’ failure to meet the sales quota
assigned to each of them constitutes a just cause of their
dismissal, regardless of the permanent or probationary status of their
employment. Failure to observe prescribed standards of work, or
to fulfill reasonable work assignments due to inefficiency may
constitute just cause for either dismissal. Such inefficiency is
understood to mean failure to attain work goals or work quotas,
either by failing to complete the same within the allotted
reasonable period, or by producing unsatisfactory
results.” (Emphasis and underscoring supplied.)
4. BONUS
Bonus or special incentive
61
A bonus is a gratuity or act of liberality of the giver which the recipient
has no right to demand as a matter of right. It is something given in
addition to what is ordinarily received by or strictly due the recipient.
1. Concept
“Bonus” – refers to a gratuity or act of liberality of the giver which the
recipient has no right to demand as a matter of right. It is something
given in addition to what is ordinarily received by or strictly due the
recipient. (Philippine National Construction Corporation v. NLRC, PNCC-
TOEWU, G.R. No. 117240, 02 October 1997)
[T]he term “bonus,” as used in employment contracts, conveys an idea

of something which is gratuitous, or which may be claimed to be
gratuitous, over and above the prescribed usage which the employer
agrees to pay. (Ibid.)
a. Management prerogative
The granting of a bonus is a management prerogative, something given
in addition to what is ordinarily received by or strictly due the recipient.
Thus, a bonus is not a demandable and enforceable obligation, except
when it is made part of the wage, salary or compensation of the
employee. (Producers Bank of the Philippines v. NLRC, Producers Bank
Employees Association, G.R. No. 100701, 28 March 2001)
The granting of a bonus is basically a management prerogative which

cannot be forced upon the employer who may not be obliged to assume
the onerous burden of granting bonuses or other benefits aside from the
employees’ basic salaries or wages. (Philippine National Construction
Corporation v. NLRC, PNCC-TOEWU, supra.)
b. Gratuity
A bonus is an amount granted and paid to an employee for his industry
and loyalty which contributed to the success of the employer’s business
and made possible the realization of profits. It is an act of generosity
granted by an enlightened employer to spur the employee to greater
efforts for the success of the business and realization of bigger profits.
(Producers Bank of the Philippines v. NLRC, Producers Bank Employees
Association, supra.)
By its very definition, bonus is a gratuity or act of liberality of the giver,

and cannot be considered part of an employee’s wages if it is paid only
when profits are realized or a certain amount of productivity is achieved.
If the desired goal of production or actual work is not accomplished, the
bonus does not accrue. (MEGA Magazine Publications, Inc. v. Defensor,
G.R. No. 162021, 16 June 2014)
A bonus is also granted by an enlightened employer to spur the

employee to greater efforts for the success of the business and
62
realization of bigger profits. (Lepanto Ceramics, Inc. v. Lepanto
Ceramics Employees Association, G.R. No. 180866, 02 March 2010)
An employer cannot be forced to distribute bonuses which it can no

longer afford to pay. To hold otherwise would be to penalize the
employer for his past generosity. (Producers Bank of the Philippines v.
NLRC, Producers Bank Employees Association, supra.)
2. When a right and demandable

GENERAL RULE:The grant of a bonus or special incentive, being a
management prerogative, is not a demandable and enforceable
obligation.
EXCEPTION:…except when the bonus or special incentive is:
1) Made part of the wage, salary or compensation of the employee

(MEGA Magazine Publications, Inc. v. Defensor, G.R. No. 162021, 16
June 2014)
2) Promised by the employer and expressly agreed upon by the parties.

(Ibid.)
3) A company’s long and regular practice (Eastern Telecommunications

Philippines, Inc. v. Eastern Telecoms Employees Union, G.R. No.
185665, 08 February 2012)
a. Part of the wage, salary or compensation

A bonus or special incentive is demandable if they are integrated into
the employee’s wage, salary, or compensation. This is similar to regular
allowances received by employees and thus considered as part of their
pay.
The grant of a bonus or special incentive, being a management

prerogative, is not a demandable and enforceable obligation, except
when the bonus or special incentive is made part of the wage, salary or
compensation of the employee, or is promised by the employer and
expressly agreed upon by the parties. (Mega Magazine Publications, Inc.
v. Defensor, G.R. No. 162021, 16 June 2014)
Whether or not a bonus forms part of wages depends upon the

circumstances and conditions for its payment. If it is additional
compensation which the employer promised and agreed to give without
any conditions imposed for its payment, such as success of business or
greater production or output, then it is part of the wage. But if it is paid
only if profits are realized or if a certain level of productivity is achieved,
it can not be considered part of the wage. Where it is not payable to all
but only to some employees and only when their labor becomes more
efficient or more productive, it is only an inducement for efficiency, a
63
prize therefor, not a part of the wage. (Metro Transit Organization, Inc.
v. NLRC, SEAM, G.R. No. 116008, 11 July 1995)
5. Change of Working Hours
The Supreme Court “is mindful that every business strives to keep afloat
during these times when prevailing economic situations turns such
endeavor into a near struggle. With as much latitude as our laws would
allow, the Court has always respected a company’s exercise of its
prerogative to devise means to improve its operations. Thus, we have
held that management is free to regulate, according to its own discretion
and judgment, all aspects of employment, including hiring, work
assignments, working methods, time, place and manner of work,
processes to be followed, supervision of workers, working regulations,
transfer of employees, work supervision, lay off of workers and
discipline, dismissal and recall of workers. Further, management retains
the prerogative, whenever exigencies of the service so require, to
change the working hours of its employees.” (Unicorn Safety Glass, Inc.
v. Basarte, G.R No. 154689, 25 November 2004)
Jurisprudence recognizes the exercise of management prerogatives.

Labor laws also discourage interference with an employer’s judgment in
the conduct of its business. For this reason, the Court often declines to
interfere in legitimate business decisions of employers. The law must
protect not only the welfare of employees, but also the right of
employers. (Endico v. Quantum Foods Distribution Center, G.R. No.
161615, 39 January 2009)
It is a well-settled rule that labor laws do not authorize interference with

the employer’s judgment in the conduct of its business. The Labor Code
and its implementing rules do not vest managerial authority in the labor
arbiters or in the different divisions of the National Labor Relations
Commission or in the courts. (SCA Hygiene Products Corporation
Employees Association-FFW v. SCA Hygiene Products Corporation, G.R.
No. 182877, 09 August 2010)
In this light, courts often decline to interfere in legitimate business

decisions of employers. In fact, labor laws discourage interference in
employers’ judgment concerning the conduct of their business. (St.
Luke’s Medical Center, Inc. v. Sanchez, G.R. No. 212054, 11 March
2015)
The Supreme Court has consistently refused to interfere with the

exercise by management of its prerogative to regulate the employees’
work assignments, the working methods and the place and manner of
work… As we all know, there are various laws imposing all kinds of
burdens and obligations upon the employer in relation to his employees,
and yet as a rule (the Supreme Court) has always upheld the employer’s
prerogative to regulate all aspects of employment relating to the
64
employees’ work assignment, the working methods and the place and
manner of work. Indeed, labor laws discourage interference with an
employer’s judgment in the conduct of his business.” (Peckson v.
Robinsons Supermarket Corporation, G.R. No. 198534, 03 July 2013)
Indeed, labor laws discourage interference in employers’ judgments

concerning the conduct of their business. The law must protect not only
the welfare of employees, but also the right of employers. (Mendoza v.
Rural Bank of Lucban, G.R. No. 155421, 07 July 2004)
6. Bona fide occupational qualification (BFOQ)

1. Concept
Employment in particular jobs may not be limited to persons of a
particular sex, religion, or national origin unless the employer can show
that sex, religion, or national origin is an actual qualification for
performing the job. The qualification is called a bona fide occupational
qualification (BFOQ). (Yrasuegi v. Philippine Airlines, Inc., G.R. No.
168081, 17 October 2008)
a. Legal basis
[T]he Constitution, the Labor Code, and RA No. 727761 or the Magna
Carta for Disabled Persons contain provisions similar to BFOQ. (Ibid.)
b. Not a statutory defense

[T]here is no merit to the argument that BFOQ cannot be applied if it
has no supporting statute. (Ibid.)
2. Tests
a. Meiorin Test
[I]n British Columbia Public Service Employee Commission (BSPSERC)
v. The British Columbia Government and Service Employee’s Union
(BCGSEU), the Supreme Court of Canada adopted the so-called “Meiorin
Test” in determining whether an employment policy is justified. Under
this test:
1) The employer must show that it adopted the standard for a purpose
rationally connected to the performance of the job;
2) The employer must establish that the standard is reasonably

necessary to the accomplishment of that work-related purpose; and
3) The employer must establish that the standard is reasonably

necessary in order to accomplish the legitimate work-related purpose.
(Ibid.)
b. Reasonableness Test
[I]n Star Paper Corporation v. Simbol, this Court held that in order to
justify a BFOQ, the employer must prove that:
65
1) The employment qualification is reasonably related to the essential
operation of the job involved; and
2) That there is factual basis for believing that all or substantially all
persons meeting the qualification would be unable to properly perform
the duties of the job. (Ibid.)
In short, the test of reasonableness of the company policy is used

because it is parallel to BFOQ. BFOQ is valid “provided it reflects an
inherent quality reasonably necessary for satisfactory job performance.”
(Ibid.)
3. Anti-Age Discrimination
By express provision of law, the Anti-Age Discrimination Employment
Act specifically states that “[i]t shall not be unlawful for an employer to
set age limitations in employment if… Age is a bona fide occupational
qualification reasonably necessary in the normal operation of a
particular business or where the differentiation is based on reasonable
factors other than age.” (Section 6[a], R.A. 10911, Anti-Age
Discrimination Employment Act)
7. Marriage between employees of competitor company
A company policy against marriage of an employee with a competitor

company’s employee has been declared valid.
Thus, in Tecson v. Glaxo Wellcome Philippines, Inc., the employee – a

Medical Representative – was validly dismissed after his refusal to be
re-assigned from Camarines Sur-Camarines North sales area to Butuan
City-Surigao City and Agusan del Sur areas. This was in response to his
having married an employee of a competitor company in violation of his
employer’s company policies.
TECSON v. GLAXO WELLCOME PHILIPPINES, INC., supra.
• The stipulation in [the employee’s] contract of employment with [the

employer] being questioned by [the employee] provides:
“10. You agree to disclose to management any existing or future

relationship you may have, either by consanguinity or affinity with co-
employees or employees of competing drug companies. Should it pose
a possible conflict of interest in management discretion, you agree to
resign voluntarily from the Company as a matter of Company policy.”
• The same contract also stipulates that [the employee] agrees to abide
by the existing company rules of [the employer], and to study and
become acquainted with such policies. In this regard, the Employee
Handbook of [the employer] expressly informs its employees of its rules
regarding conflict of interest:
66
“1. Conflict of Interest
“Employees should avoid any activity, investment relationship, or

interest that may run counter to the responsibilities which they owe
Glaxo Wellcome.
“Specifically, this means that employees are expected:
“a. To avoid having personal or family interest, financial or otherwise,

in any competitor supplier or other businesses which may consciously
or unconsciously influence their actions or decisions and thus deprive
Glaxo Wellcome of legitimate profit.
“b. To refrain from using their position in Glaxo Wellcome or knowledge

of Company plans to advance their outside personal interests, that of
their relatives, friends and other businesses.
“c. To avoid outside employment or other interests for income which

would impair their effective job performance.
“d. To consult with Management on such activities or relationships that

may lead to conflict of interest.
“1.1. Employee Relationships
“Employees with existing or future relationships either by consanguinity

or affinity with co-employees of competing drug companies are expected
to disclose such relationship to the Management. If management
perceives a conflict or potential conflict of interest, every effort shall be
made, together by management and the employee, to arrive at a
solution within six (6) months, either by transfer to another department
in a non-counter checking position, or by career preparation toward
outside employment after Glaxo Wellcome. Employees must be
prepared for possible resignation within six (6) months, if no other
solution is feasible.”
• [The employer’s] policy prohibiting an employee from having a

relationship with an employee of a competitor company is a valid
exercise of management prerogative.
• [The employer] has a right to guard its trade secrets, manufacturing

formulas, marketing strategies and other confidential programs and
information from competitors, especially so that it and Astra are rival
companies in the highly competitive pharmaceutical industry.
• The prohibition against personal or marital relationships with

employees of competitor companies upon [the employer’s] employees
is reasonable under the circumstances because relationships of that
67
nature might compromise the interests of the company. In laying down
the assailed company policy, [the employer] only aims to protect its
interests against the possibility that a competitor company will gain
access to its secrets and procedures.
• That [the employer] possesses the right to protect its economic

interests cannot be denied. No less than the Constitution recognizes the
right of enterprises to adopt and enforce such a policy to protect its right
to reasonable returns on investments and to expansion and growth.
Indeed, while our laws endeavor to give life to the constitutional policy
on social justice and the protection of labor, it does not mean that every
labor dispute will be decided in favor of the workers. The law also
recognizes that management has rights which are also entitled to
respect and enforcement in the interest of fair play.
• As held in a Georgia, U.S.A case, it is a legitimate business practice to

guard business confidentiality and protect a competitive position by
even-handedly disqualifying from jobs male and female applicants or
employees who are married to a competitor. Consequently, the court
ruled than an employer that discharged an employee who was married
to an employee of an active competitor did not violate Title VII of the
Civil Rights Act of 1964. The Court pointed out that the policy was
applied to men and women equally, and noted that the employer’s
business was highly competitive and that gaining inside information
would constitute a competitive advantage.
• In any event, from the wordings of the contractual provision and the
policy in its employee handbook, it is clear that [the employer] does not
impose an absolute prohibition against relationships between its
employees and those of competitor companies. Its employees are free
to cultivate relationships with and marry persons of their own choosing.
What the company merely seeks to avoid is a conflict of interest between
the employee and the company that may arise out of such relationships.
As succinctly explained by the appellate court, thus:
The policy being questioned is not a policy against marriage. An

employee of the company remains free to marry anyone of his or her
choosing. The policy is not aimed at restricting a personal prerogative
that belongs only to the individual. However, an employee’s personal
decision does not detract the employer from exercising management
prerogatives to ensure maximum profit and business success…
• [T]he assailed company policy which forms part of [the employer’s]

Employee Code of Conduct and of its contracts with its employees, such
as that signed by [the employee], was made known to him prior to his
employment. [The employee], therefore, was aware of that restriction
when he signed his employment contract and when he entered into a
relationship with Bettsy. Since [the employee] knowingly and voluntarily
68
entered into a contract of employment with [the employer], the
stipulations therein have the force of law between them and, thus,
should be complied with in good faith.” He is therefore estopped from
questioning said policy.
In contrast to the Star Paper Corporation case where the employer failed
to show a reasonable business necessity, the Glaxo Wellcome
Philippines’ case was able to establish the legitimate business necessity
for the policy – namely “to guard its trade secrets, manufacturing
formulas, marketing strategies and other confidential programs and
information from competitors.”
8. POST-EMPLOYMENT RESTRICTION
Once an employee leaves, he or she also takes with him or her, the
knowledge, information and skills he or she has acquired throughout his
or her employment. Because of this, our laws allow management
prerogatives on post-employment bans which would prevent disclosure
of company secrets and bar employees from accepting employment in
competition with his or her previous employer. These management
prerogatives are written on the contracts and/or agreements signed by
the employees and are often called “Confidentiality and Non-Compete
Clause.”
Confidentiality Clause: Non-Disclosure of Company Information
Included on the “Non-disclosure of Company Information and/or

Documents” is a mandatory obligation that all the records and
documents and all information pertaining to employer’s business or
affairs or any of its affiliated companies are confidential and no
unauthorized disclosure or reproduction shall be made by an employee
any time during or after employment. To enforce such confidentiality
clause and in order to ensure strict compliance of the confidentiality
clause, the employer may insert a provision allowing the latter to
enforce liability for damages and forfeiture of forms of compensation
including commissions and incentives, against the erring employee in
the event of breach.
Reasonable Restraint of Trade
Another allowable post-employment ban is a “non-compete clause”. A

non-compete clause provides that an employee shall not work or engage
in work for whatsoever capacity, either as an employee, agent or
consultant with any person whose business is in direct competition with
the company for a reasonable period from date of resignation or
termination. Most of the employment contracts or agreements, has non-
compete clause mandatory to resigned or terminated employees for a
period of one (1) to two (2) years from separation. Such clause may
also come with it a penalty for its strict enforcement which involves
acknowledgement of the erring employee that he or she will be liable
69
for damages, and in case damages may not be an adequate remedy, in
addition to any other remedies available to the employer at law or in
equity, the employer may file a legal suit to enforce its rights by way of
injunction, restraining order or other relief to enjoin any breach or
default of the contract.
Restraint of trade mandating a restrictive ban on the employee from

accepting a competitive employment after he resigns or retires from his
employment is a common practice. However, an issue arises when an
employee assails the validity of the covenant on grounds of public policy
(Marquez, Jefferson, Competitive employment ban: Void for restraint of
trade?, August 15, 2006, Last Accessed: June 03, 2019).
In the case of Rivera vs. Solidbank Corporation, G.R. No. 163269, April
19, 2006, the Supreme Court ruled that an employer is burdened to
establish that a restrictive covenant barring an employee from accepting
a competitive employment after retirement or resignation is not an
unreasonable or oppressive, or in undue or unreasonable restraint of
trade, thus, unenforceable for being repugnant to public policy. As the
Supreme Court stated in Ferrazzini v. Gsell (G.R. No. L-10712), cases
involving contracts in restraint of trade are to be judged according to
their circumstances or two principal grounds: one is, the injury to the
public by being deprived of the restricted party’s industry. And the other
is, the injury to the party himself by being precluded from pursuing his
occupation, and thus being prevented from supporting himself and his
family.
In Rivera vs. Solidbank Corporation, the Supreme Court elucidated that,

the determination of reasonableness of restraint of trade is made on the
particular facts and circumstances of each case. This could be done
through thorough consideration of surrounding circumstances, including
the subject matter of the contract, the purpose to be served, the
determination of the parties, the extent of the restraint and the
specialization of the business of the employer. The court also has to
consider whether its enforcement will be injurious to the public or cause
undue hardships to the employee, and whether the restraint imposed is
greater than necessary to protect the employer. Thus, the court must
have before it, evidence relating to the legitimate interests of the
employer which might be protected in terms of time, space and the
types of activity proscribed. Consideration must also be given to the
employee’s right to earn a living and to his ability to determine with
certainty the area within which his employment ban is restituted. In
view of this, a provision on territorial limitation is necessary to guide an
employee of what constitutes as violation of a restrictive covenant and
whether the geographic scope is co-extensive with that in which the
employer is doing business. Further, in considering a territorial
restriction, the facts and circumstances surrounding the case must be
considered.
70
Thus, in summary, in determining whether the contract is reasonable or
not, the trial court should consider the following factors: (a) whether
the covenant protects a legitimate business interest of the employer;
(b) whether the covenant creates an undue burden on the employee;
(c) whether the covenant is injurious to the public welfare; (d) whether
the time and territorial limitations contained in the covenant are
reasonable; and (e) whether the restraint is reasonable from the
standpoint of public policy.
Right to Protect Own Interest
In view of the above, employers have the right to protects its own
interest and in doing so, the restrictions must not be unduly harsh or
oppressive and must be reasonable in light of sound public policy. After
all, what one creates by his own labor is his own property. Public policy
does not intend that another person shall reap the fruits of one’s labor,
rather, it gives to him the right to protect the fruits of his labor and
secure the enjoyment of them to himself.Freedom to contract must not
be unreasonably abridged. Neither must the right to protect by
reasonable restrictions that which a man by industry, skill and good
judgment has built up, be denied (Rivera vs. Solidbank Corporation).
71
EMPLOYER – EMPLOYEE RELATIONS
• Article 97 (b) and (c), Labor Code
• Article 219 (e) (f)
• Article 173 (f) (g)
• ROMEO ALBA v. CONRADO G. ESPINOSA, GR No.
227734, 2017-08-09
FACTS:
It was alleged by the respondents that on various dates, Alba hired them
as construction workers for his projects in several residential villages
within Metro Manila and nearby provinces. The respondents were Alba's
regular employees who were paid different wage rates that ranged from
P350.00 to P500.00 a day, but were deprived of some statutorily-
mandated benefits such as their overtime pay, 13th month pay, holiday
pay, and service incentive leave (SIL) pay.[9] On different dates in
2013, some of the respondents[10] confronted Alba regarding their
benefits, but such action eventually resulted in their dismissal.[11]
In 2014, the other respondents again questioned Alba for his non-
payment of their benefits. Alba still took it against them and began
treating them harshly, as he would shout at them while at the job site,
and would find scheming ways to extend their working hours. The
foregoing prompted these respondents to seek the assistance of media
personality Raffy Tulfo (Tulfo) in his Radyo Singko Program. As he
addressed the respondents' dilemma, Tulfo personally called Alba, who
was reminded to pay the respondents their full benefits. The action,
however, proved to create more harm than good for the respondents
because when they reported back for work the following day, they were
informed of their dismissal.[12] Feeling aggrieved, all the respondents
filed their complaints for illegal dismissal and monetary claims with the
NLRC. The two complaints were later consolidated before the Labor
Arbiter (LA).
For his defense, Alba argued that the respondents could not be deemed
his regular employees. He claimed to be a mere taker of small-scale
construction projects for house repairs and renovations. In the
construction industry, he was deemed a mere mamamakyaw, who
would pool a team of skilled and semi-skilled carpenters and masons for
specific projects that usually lasted from one to two weeks. The
respondents were paid daily wages ranging from P600.00 to P1,000.00,
depending on their skill, and could take on projects with their own clients
after Alba's projects had terminated.[13] For succeeding projects, Alba
would only take in construction workers who were still available for the
duration of the new work.[14]... the NLRC rejected the LA's finding on
the lack of employer-employee relationship. The association between
Alba and the respondents was established after Alba readily proclaimed
that the respondents were part of his pool of workers. Alba had the
power to determine who would remain in or be terminated from his
projects. He also admitted that he paid the respondents their wages on
a daily basis.
72
On July 14, 2016, the CA rendered its Decision[32] dismissing Alba's
petition. The CA reiterated the satisfaction of the four-fold test that is
considered in finding employer-employee relationship. The appellate
court likewise assessed the nature of work that the respondents were
required to accomplish, vis-a-vis the type of Alba's business, which
prompted the CA to also affirm the finding that the illegally dismissed
respondents were regular employees.
ISSUES:
Alba restates the same grounds cited in his petition for certiorari with
the CA. Specifically assailed are the finding of employer-employee
relationship, and the ruling that the respondents were regular
employees illegally dismissed by Alba from employment. Alba likewise
disputes the order upon him to pay the monetary claims totalling
P16,125,574.61.
RULING:
The respondents were regular employees of Alba
PRINCIPLES:
Contrary to Alba's contention, the existence of an employer-employee
relationship between him and the respondents was sufficiently
established.
Alba's relationship with the respondents satisfies the four-fold test
As the Court affirms the finding of illegal dismissal, it underscores the
fact that the respondents were regular employees, and not project
employees as Alba asserts. The mere fact that the respondents worked
on projects that were time-bound did not automatically characterize
them as project employees. The nature of their work was determinative,
as the Court considers its ruling in DM. Consunji, Inc., et al. v. Jamin[46]
that "[o]nce a project or work pool employee has been: (1)
continuously, as opposed to intermittently, rehired by the same
employer for the same tasks or nature of tasks; and (2) these tasks are
vital, necessary and indispensable to the usual business or trade of the
employer, then the employee must be deemed a regular employee."
As construction workers, the respondents performed tasks that were
crucial and necessary in Alba's business. Their work was the core of his
trade. His enterprise could not have thrived through the years without
their service. The fact that the respondents had been engaged to work
for long periods of time, and across several construction projects,
further substantiate the finding that their work was vital in the business.
Most respondents were separately employed beginning way back to the
1990s to 2006.[48] One employee, Samuel, even began working for
Alba in 1982.[49] "[A]n employment ceases to be co-terminus with
specific projects when the employee is continuously rehired due to the
demands of the employer's business and re-engaged for many more
projects without interruption."[50]
Given the respondents' regular employment, their employment could
not have been validly terminated by Alba without just or valid cause,
and without affording them their right to due process. In cases affecting
an employee's dismissal, the burden is on the employer to prove that
the dismissal was legal, a matter that in this case, Alba miserably failed
73
to establish. There were no adequate explanations from Alba as to why
the respondents had ceased obtaining assignments in his construction
projects. In view of the illegal dismissal, the respondents were rightfully
entitled to the ordered reinstatement and award of backwages, or
separation pay in case of strained relations.
• SOUTH EAST INTERNATIONAL RATTAN INC V. JESUS J.

COMING (G.R. NO. 186621)
FACTS:
Petitioner South East International Rattan is a domestic corporation
engaged in the business of manufacturing and exporting furniture to
various countries. Respondent Coming was hired by petitioner as Sizing
Machine Operator whose work is initially compensated on ‘pakiao basis’
but sometime was fixed per day and a work schedule of 8:00am to
5:00pm. Without any apparent reason, his employment was interrupted
as he was told by petitioners to resume work in 2 months time but was
never called back. Respondent thus filed a complaint before the regional
arbitration branch. The Labor Arbiter ruled respondent as a regular
employee of petitioner SEIRI but on appeal, was reversed by the NLRC.
CA then reversed the NLRC decision and ruled that there existed an
employer-employee relationship between petitioners and respondent.
ISSUE:
Whether or not there is employer-employee relationship between
petitioner and respondent.
RULING: YES.
We affirm the CA.
To ascertain the existence of employer-employee relationship
jurisprudence has invariably adhered to the four-fold test, to wit: (1)
the selection and engagement of the employee; (2) the payment of
wages; (3) the power of dismissal; and (4) the power to control the
employee’s conduct, or the so-called “control test.”
x x x As to the “control test”, the following facts indubitably reveal that

respondents wielded control over the work performance of petitioner, to
wit: (1) they required him to work within the company premises; (2)
they obliged petitioner to report every day of the week and tasked him
to usually perform the same job; (3) they enforced the observance of
definite hours of work from 8 o’clock in the morning to 5 o’clock in the
afternoon; (4) the mode of payment of petitioner’s salary was under
their discretion, at first paying him on pakiao basis and thereafter, on
daily basis; (5) they implemented company rules and regulations; (6)
[Estanislao] Agbay directly paid petitioner’s salaries and controlled all
aspects of his employment and (7) petitioner rendered work necessary
and desirable in the business of the respondent company.
74
• JAIME N. GAPAYAO v. ROSARIO FULO, GR No. 193493,
2013-06-13
FACTS:
On 4 November 1997, Jaime Fulo (deceased) died of "acute renal failure

secondary to 1st degree burn 70% secondary electrocution"[5] while
doing repairs at the residence and business establishment of petitioner
located at San Julian,... Irosin, Sorsogon.
Allegedly moved by his Christian faith, petitioner extended some

financial assistance to private respondent. On 16 November 1997, the
latter executed an Affidavit of Desistance[6] stating that she was not
holding them liable for the death of her late... husband,... thereby
waiving her right and desisting from filing any criminal or civil action
against petitioner.
On 14 January 1998, both parties executed a Compromise

Agreement,[7] the relevant portion of which is quoted below:
The undersigned employer, hereby agrees to pay the sum of FORTY

THOUSAND PESOS (?40,000.00)
On the other hand, the undersigned surviving spouse of the victim
having received the said amount do [sic] hereby release and discharge
the employer from any and all claims that maybe due the victim in
connection with the victim's employment thereat.
Thereafter, private respondent filed a claim for social security benefits

with the Social Security System (SSS) Sorosogon Branch.[8] However,
upon verification and evaluation, it was discovered that the deceased
was not a registered member of the
SSS.[9]
Upon the insistence of private respondent that her late husband had
been employed by petitioner from January 1983 up to his untimely death
on 4 November 1997, the SSS conducted a field investigation to clarify
his status of employment. In its field investigation... report,[10] it
enumerated its findings as follows:... hereunder are the findings per
interview with Mr. Leonor Delgra, Santiago Bolanos and Amado Gacelo:
That Mr. Jaime Fulo was an employee of Jaime Gapayao as farm laborer
from 1983 to 1997.
Mr. Leonor Delgra and Santiago Bolanos are co-employees of Jaime Fulo.
75
Mr. Jaime Fulo receives compensation on a daily basis ranging from
?5.00 to P60.00 from 1983 to 1997.
Per interview from Mrs. Estela Gapayao, please be informed that:
Jaime Fulo is an employee of Mr. & Mrs. Jaime Gapayao on an extra

basis.
Sometimes Jaime Fulo is allowed to work in the farm as abaca harvester

and earn 1/3 share of its harvest as his income.
Mr. & Mrs. Gapayao hired the services of Jaime Fulo not only in the farm
as well as in doing house repairs whenever it is available. Mr. Fulo
receives his remuneration usually in the afternoon after doing his job.
Mr. & Mrs. Gapayao hires 50-100 persons when necessary to work in
their farm as laborer and Jaime Fulo is one of them. Jaime Fulo receives
more or less P50.00 a day.
Consequently, the SSS demanded that petitioner remit the social

security contributions of the deceased. When petitioner denied that the
deceased was his employee, the SSS required private respondent to
present documentary and testimonial evidence to refute petitioner's...
allegations.[11]
Instead of presenting evidence, private respondent filed a Petition[12]

before the SSC on 17 February 2003. In her Petition, she sought social
security coverage and payment of contributions i
On 6 May 2003, petitioner filed an Answer[13] disclaiming any liability

on the premise that the deceased was not the former's employee, but
was rather an independent contractor whose tasks were not subject to
petitioner's control and supervision.[14] Assuming arguendo that the
deceased was petitioner's employee, he was still not entitled to be paid
his SSS premiums for the intervening period when he was not at work,
as he was an "intermittent worker who [was] only summoned every now
and then as the... need [arose]... he SSC rendered a Resolution,[17]
the dispositive portion of which provides:... this Commission finds, and
so holds, that Jaime Fulo, the late husband of petitioner, was employed
by respondent Jaime N. Gapayao from January 1983 to November 4,
1997, working for nine (9) months a year receiving the minimum wage
then... prevailing.
Accordingly, the respondent is hereby ordered to pay P45,315.95

representing the unpaid SS contributions due on behalf of deceased
Jaime Fulo, the amount of P217,710.33 as 3% per month penalty for
76
late remittance thereof, computed as of March 30, 2006, without
prejudice to the... collection of additional penalty accruing thereafter,
and the sum of P230,542.20 (SSS) and P166,000.00 (EC) as damages
for the failure of the respondent to report the deceased Jaime Fulo for
SS coverage prior to his death pursuant to Section 24(a) of the SS Law,
as... amended.
Aggrieved, petitioner appealed to the CA... he CA on 19 December

2007.[20] On 17 March 2010, the CA rendered a Decision[21] in favor
of private respondent,... In holding thus, the CA gave credence to the
findings of the SSC. The appellate court held that it "does not follow that
a person who does not observe normal hours of work cannot be deemed
an employee."[22] For one, it is not essential for the employer to...
actually supervise the performance of duties of the employee; it is
sufficient that the former has a right to wield the power. In this case,
petitioner exercised his control through an overseer in the person of
Amado Gacelo, the tenant on petitioner's land
Most important, petitioner entered into a Compromise Agreement with

private respondent and expressly admitted therein that he was the
employer of the deceased.[24] The CA interpreted this admission as a
declaration against interest
Hence, this petition.
ISSUES:
The sole issue presented before us is whether or not there exists

between the deceased Jaime Fulo and petitioner an employer-employee
relationship that would merit an award of benefits in favor of private
respondent under social security laws.
RULING:
THE COURT'S RULING... private respondent alleges that her late

husband had been in the employ of petitioner for 14 years, from 1983
to 1997.[30] During that period, he was made to work as a laborer in
the... agricultural landholdings, a harvester in the abaca plantation, and
a repairman/utility worker in several business establishments owned by
petitioner.[31] To private respondent, the "considerable length of time
during which [the deceased] was given diverse... tasks by petitioner was
a clear indication of the necessity and indispensability of her late
husband's services to petitioner's business."[32] This view is bolstered
by the admission of petitioner himself in the Compromise Agreement
that he was the... deceased's employer.[33]
77
Private respondent's position is similarly espoused by the SSC, which
contends that its findings are duly supported by evidence on record.[34]
It insists that pakyaw workers are considered employees, as long as the
employer exercises control over... them. In this case, the exercise of
control by the employer was delegated to the caretaker of his farm,
Amado Gacelo. The SSC further asserts that the deceased rendered
services essential for the petitioner's harvest. While these services were
not rendered continuously (in the... sense that they were not rendered
every day throughout the year), still, the deceased had never stopped
working for petitioner from year to year until the day the former died
Petitioner, on the other hand, insists that the deceased was not his
employee. Supposedly, the latter, during the performance of his
function, was not under petitioner's control. Control is not necessarily
present even if the worker works inside the premises of the person
who... has engaged his servic
Alternatively, petitioner insists that the deceased was hired by Adolfo

Gamba, the contractor whom he had hired to construct their
building;[42] and by Amado Gacelo, the tenant whom petitioner
instructed to manage the latter's farm.[43] For this reason, petitioner
believes that a tenant is not beholden to the landlord and is not under
the latter's control and supervision. So if a worker is hired to work on
the land of a tenant such as petitioner the former cannot be the worker
of the landlord,... but of the tenant's.[44]
Anent the Compromise Agreement, petitioner clarifies that it was

executed to buy peace
Petitioner allegedly received threats that if the matter was not settled,
private respondent would... refer the matter to the New Peoples'
Army.[46] Allegedly, the Compromise Agreement was "extortion
camouflaged as an agreement."[47] Likewise, petitioner maintains that
he shouldered the hospitalization and burial expenses of the... deceased
to express his "compassion and sympathy to a distressed person and
his family," and not to admit liability.[48]
Lastly, petitioner alleges that the deceased is a freelance worker. Since

he was engaged on a pakyaw basis and worked for a short period of
time, in the nature of a farm worker every season, he was not precluded
from working with other persons and in fact worked for them.
We see no cogent reason to reverse the CA.
Farm workers may be considered... regular seasonal employees.
78
Article 280 of the Labor Code states:
Article 280. Regular and Casual Employment. The provisions of written

agreement to the contrary notwithstanding and regardless of the oral
agreement of the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform... activities which are
usually necessary or desirable in the usual business or trade of the
employer, except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been
determined at the time of the engagement of the... employee or where
the work or services to be performed is seasonal in nature and the
employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the

preceding paragraph: Provided, That, any employee who has rendered
at least one year of service whether such service is continuous or
broken, shall be considered a regular employee with respect to the...
activity in which he is employed and his employment shall continue while
such actually exists.
Jurisprudence has identified the three types of employees mentioned in

the provision: (1) regular employees or those who have been engaged
to perform activities that are usually necessary or desirable in the usual
business or trade of the employer; (2) project employees or those...
whose employment has been fixed for a specific project or undertaking,
the completion or termination of which has been determined at the time
of their engagement, or those whose work or service is seasonal in
nature and is performed for the duration of the season; and (3) casual...
employees or those who are neither regular nor project employees.[55]
Farm workers generally fall under the definition of seasonal employees.

We have consistently held that seasonal employees may be considered
as regular employees.[56] Regular seasonal employees are those called
to work from time to time. The nature of their... relationship with the
employer is such that during the off season, they are temporarily laid
off; but reemployed during the summer season or when their services
may be needed.[57] They are in regular employment because of the
nature of their job, and not... because of the length of time they have
worked.[58]
The rule, however, is not absolute. In Hacienda Fatima v. National

Federation of Sugarcane Workers-Food & General Trade,[59] the Court
held that seasonal workers who have worked for one season only may
not be considered regular employees.
79
Similarly, in Mercado, Sr. v. NLRC,[60] it was held that when seasonal
employees are free to contract their services with other farm owners,
then the former are not regular employees.
For regular employees to be considered as such, the primary standard

used is the reasonable connection between the particular activity they
perform and the usual trade or business of the employer.[61] This test
has been explained thoroughly in De Leon v.
NLRC,[62] viz:
The test is whether the former is usually necessary or... desirable in the
usual business or trade of the employer. The connection can be
determined by considering the nature of the work performed and its
relation to the scheme of the particular business or trade in its entirety.
Also if the employee has been performing the... job for at least one year,
even if the performance is not continuous or merely intermittent, the
law deems the repeated and continuing need for its performance as
sufficient evidence of the necessity if not indispensability of that activity
to the business. Hence, the... employment is also considered regular,
but only with respect to such activity and while such activity exists.
A reading of the records reveals that the deceased was indeed a farm
worker who was in the regular employ of petitioner. From year to year,
starting January 1983 up until his death, the deceased had been working
on petitioner's land by harvesting abaca and coconut, processing...
copra, and clearing weeds. His employment was continuous in the sense
that it was done for more than one harvesting season. Moreover, no
amount of reasoning could detract from the fact that these tasks were
necessary or desirable in the usual business of petitioner.
The other tasks allegedly done by the deceased outside his usual farm
work only bolster the existence of an employer-employee relationship.
As found by the SSC, the deceased was a construction worker in the
building and a helper in the bakery, grocery, hardware, and piggery all...
owned by petitioner.[63] This fact only proves that even during the off
season, the deceased was still in the employ of petitioner.
The most telling indicia of this relationship is the Compromise

Agreement executed by petitioner and private respondent. It is a valid
agreement as long as the consideration is reasonable and the employee
signed the waiver voluntarily, with a full understanding of what he or
she... was entering into.[64] All that is required for the compromise to
be deemed voluntarily entered into is personal and specific individual
consent.[65] Once executed by the workers or employees and their
employers to settle their... differences, and done in good faith, a
80
Compromise Agreement is deemed valid and binding among the
parties.[66]
Petitioner entered into the agreement with full knowledge that he was
described as the employer of the deceased.[67] This knowledge cannot
simply be denied by a statement that petitioner was merely forced or
threatened into such an agreement.
Pakyaw workers are considered employees for as long as their

employers exercise control over them. In Legend Hotel Manila v.
Realuyo,[68] the Court held that "the power of the employer to control
the work of the employee is considered the most... significant
determinant of the existence of an employer-employee relationship. This
is the so-called control test and is premised on whether the person for
whom the services are performed reserves the right to control both the
end achieved and the manner and means used to... achieve that end
It should be remembered that the control test merely calls for the
existence of the right to control, and not necessarily the exercise
thereof.[69] It is not essential that the employer actually supervises the
performance of duties by the... employee. It is enough that the former
has a right to wield the power.[70]
In this case, we agree with the CA that petitioner wielded control over
the deceased in the discharge of his functions. Being the owner of the
farm on which the latter worked, petitioner on his own or through his
overseer necessarily had the right to review the quality of work...
produced by his laborers
We do not give credence to the allegation that the deceased was an

independent contractor hired by a certain Adolfo Gamba, the contractor
whom petitioner himself had hired to build a building. The allegation was
based on the self-serving testimony of Joyce Gapay
Demate,[72] the daughter of petitioner. The latter has not offered any
other proof apart from her testimony to prove the contention.
The right of an employee to be covered by the Social Security Act is

premised on the existence of an employer-employee relationship.[73]
That having been established, the Court hereby rules in favor of private
respondent.
WHEREFORE, the Petition for Review on Certiorari is hereby DENIED.

The assailed Decision and Resolution of the Court of Appeals in CA-G.R.
SP. No. 101688 dated 17 March 2010 and 13 August 2010, respectively,
are hereby AFFIRMED.
81
• LEGEND HOTEL v. HERNANI S. REALUYO, GR No.
153511, 2012-07-18
FACTS:
Respondent averred that he had worked as a pianist at the Legend

Hotel's Tanglaw Restaurant from September 1992 with an initial rate of
P400.00/night that was given to him after each night's performance;
that his rate had increased to P750.00/night; and that during his...
employment, he could not choose the time of performance, which had
been fixed from 7:00 pm to 10:00 pm for three to six times/week.
He added that the Legend Hotel's restaurant manager had required him
to conform with the venue's motif; that he had been subjected to the
rules on... employees' representation checks and chits, a privilege
granted to other employees;
He added that the Legend Hotel's restaurant manager had required him
to conform with the venue's motif; that he had been subjected to the
rules on... employees' representation checks and chits, a privilege
granted to other employees
In its defense, petitioner denied the existence of an employer- employee

relationship with respondent, insisting that he had been only a talent
engaged to provide live music at Legend Hotel's Madison Coffee Shop
for three hours/day on two days each week; and stated that the...
economic crisis that had hit the country constrained management to
dispense with his services.
the Labor Arbiter (LA) dismissed the complaint for lack of merit upon
finding that the parties had no employer- employee relationship.
On the pivotal issue of whether or not there existed an employer-

employee relationship between the parties, our finding is in the
negative.
The finding finds support in the service contract dated September 1,

1992
This is reinforced by the undisputed fact that complainant received his

talent fee nightly, unlike the regular employees of the hotel who are paid
by monthly
And thus, absent the power to control with respect to the means and
methods by which his work was to be accomplished, there is no
employer-employee relationship between the parties
82
WHEREFORE, this case must be, as it is hereby, DISMISSED for lack of
merit.
Respondent appealed, but the National Labor Relations Commission

(NLRC) affirmed the LA on May 31, 2001.
Respondent assailed the decision of the NLRC in the Court of Appeals

(CA) on certiorari.
the CA set aside the decision of the NLRC,... Well settled is the rule that
of the four (4) elements of employer- employee relationship, it is the
power of control that is more decisive.
he was supervised and controlled by respondent's restaurant manager

who at certain times would require him to perform only tagalog songs
or music, or wear barong tagalog to... conform with Filipiniana motif of
the place and the time of his performance is fixed by the respondents
from 7:00 pm to 10:00 pm, three to six times a week. Petitioner could
not choose the time of his performance.
he is considered a regular employee of private respondents since the

job of the petitioner was in furtherance of the restaurant business of
respondent hotel.
Granting that petitioner was initially a contractual employee, by the

sheer length of... service he had rendered for private respondents, he
had been converted into a regular employee... he dismissal was due to
retrenchment in order to avoid or minimize business losses,... The
power of selection was firmly evidenced by, among others, the express
written recommendation dated January 12, 1998 by
Christine Velazco, petitioner's restaurant manager, for the increase of

his remuneration.
ISSUES:
WHEN IT RULED THAT THERE IS THE EXISTENCE OF EMPLOYER-

EMPLOYEE RELATIONSHIP BETWEEN THE PETITIONER HOTEL AND
RESPONDENT ROA.
IN FINDING THAT ROA IS A REGULAR EMPLOYEE AND THAT THE

TERMINATION OF HIS SERVICES WAS ILLEGAL.
83
THE CA LIKEWISE ERRED WHEN IT DECLARED THE REINSTATEMENT OF
ROA TO HIS FORMER POSITION OR BE GIVEN A SEPARATION PAY
EQUIVALENT TO ONE MONTH FOR EVERY YEAR OF SERVICE FROM
SEPTEMBER 1999 UNTIL JULY 30, 1999 CONSIDERING THE ABSENCE

OF AN EMPLOYMENT RELATIONSHIP BETWEEN THE PARTIES.
WHEN IT DECLARED THAT ROA IS ENTITLED TO BACKWAGES, SERVICE

INCENTIVE LEAVE AND OTHER BENEFITS CONSIDERING THAT THERE
IS NO EMPLOYER EMPLOYEE RELATIONSHIP BETWEEN THE PARTIES.
WHEN IT NULLIFIED THE DECISION DATED MAY 31, 2001 IN NLRC NCR
CA NO. 023404-2000 OF THE NLRC AS WELL AS ITS RESOLUTION
DATED JUNE 29, 2001 IN FAVOR OF HEREIN PETITIONER HOTEL WHEN
HEREIN RESPONDENT ROA FAILED TO SHOW PROOF THAT THE NLRC
AND THE LABOR ARBITER HAVE
COMMITTED GRAVE ABUSE OF DISCRETION OR LACK OF JURISDICTION

IN THEIR RESPECTIVE DECISIONS.
WHEN IT OVERLOOKED THE FACT THAT THE PETITION WHICH ROA

FILED IS IMPROPER SINCE IT RAISED QUESTIONS OF FACT. VI. XXX
WHEN IT GAVE DUE COURSE TO THE PETITION FILED BY ROA WHEN IT
IS CLEARLY IMPROPER AND SHOULD HAVE BEEN DISMISSED
OUTRIGHT CONSIDERING THAT A PETITION FOR
CERTIORARI UNDER RULE 65 IS LIMITED ONLY TO QUESTIONS OR

ISSUES OF GRAVE ABUSE OF DISCRETION OR LACK OF JURISDICTION
COMMITTED BY THE NLRC OR THE LABOR ARBITER, WHICH ISSUES ARE
NOT PRESENT IN THE CASE AT BAR.
whether or not respondent was an employee of petitioner... if

respondent was... petitioner's employee, whether he was validly
terminated.
Substantive Issue No. 1:
Employer-employee relationship... existed between the parties
We next ascertain if the CA correctly found that an employer- employee

relationship existed between the parties.
there is a conflict between the factual findings of the Labor Arbiter and
the NLRC, on the one hand, and those of the CA, on the other hand, it...
becomes proper for the Court, in the exercise of its equity jurisdiction,
84
to review and re-evaluate the factual issues and to look into the records
of the case and re-examine the questioned findings.
Validity of the Termination
Having established that respondent was an employee whom petitioner

terminated to prevent losses, the conclusion that his termination was by
reason of retrenchment due to an authorized cause under the Labor
Code is inevitable.
RULING:
The appeal fails.
A review of the circumstances reveals that respondent was, indeed,

petitioner's employee. He was undeniably employed as a pianist in
petitioner's Madison Coffee Shop/Tanglaw Restaurant from September
1992 until his services were terminated on July 9, 1999.
petitioner argues that whatever remuneration was given to respondent

were only his talent fees that were not included in the definition of wage
under the Labor Code; and that such talent fees were but the
consideration for the service... contract entered into between them.
Respondent's remuneration, albeit denominated as talent fees, was still

considered as included in the term wage in the sense and context of the
Labor Code, regardless of how petitioner chose to designate the
remuneration. Anent this, Article 97(f) of the Labor Code... clearly
states:... xxx wage paid to any employee shall mean the remuneration
or earnings, however designated, capable of being expressed in terms
of money, whether fixed or ascertained on a time, task, piece, or
commission basis, or other method of calculating the same, which... is
payable by an employer to an employee under a written or unwritten
contract of employment for work done or to be done, or for services
rendered or to be rendered, and includes the fair and reasonable value,
as determined by the Secretary of Labor, of board, lodging, or... other
facilities customarily furnished by the employer to the employee.
There is no denying that whatever amounts he received for his...

performance, howsoever designated by petitioner, were his wages.
Yet, petitioner did not present the payroll of its employees to bolster its
insistence of respondent not being its employee.
85
That respondent worked for less than eight hours/day was of no
consequence and did not detract from the CA's finding on the existence
of the employer-employee relationship. In providing that the " normal
hours of work of any employee shall not exceed eight (8) hours a day,"
Article 83 of the Labor Code only set a maximum of number of hours as

"normal hours of work" but did not prohibit work of less than eight
hours.
Thirdly, the power of the employer to control the work of the employee
is considered the most significant determinant of the existence of an
employer-employee relationship.[18] This is the so-called control test,
and is premised on whether the person for... whom the services are
performed reserves the right to control both the end achieved and the
manner and means used to achieve that end.
Petitioner submits that it did not exercise the power of control over
respondent and cites the following to buttress its submission, namely:
(a) respondent could beg off from his nightly performances in the
restaurant for other engagements; (b) he had the sole... prerogative to
play and perform any musical arrangements that he wished; (c)
although petitioner, through its manager, required him to play at certain
times a particular music or song, the music, songs, or arrangements,
including the beat or tempo, were under his... discretion, control and
direction; (d) the requirement for him to wear barong Tagalog to
conform with the Filipiniana motif of the venue whenever he performed
was by no means evidence of control; (e) petitioner could not require
him to do any other work in the... restaurant or to play the piano in any
other places, areas, or establishments, whether or not owned or
operated by petitioner, during the three hour period from 7:00 pm to
10:00 pm, three to six times a week; and (f) respondent could not be
required to sing, dance or play... another musical instrument.
A review of the records shows, however, that respondent performed his

work as a pianist under petitioner's supervision and control. Specifically,
petitioner's control of both the end achieved and the manner and means
used to achieve that end was demonstrated by the following, to... wit:...
a.
He could not choose the time of his performance, which petitioners had
fixed from 7:00 pm to 10:00 pm, three to six times a week;... b.
He could not choose the place of his performance;... c.
The restaurant's manager required him at certain times to perform only

Tagalog songs or music, or to wear barong Tagalog to conform to the
Filipiniana motif; and... d.
86
He was subjected to the rules on employees' representation check and
chits, a privilege granted to other employees. Relevantly, it is worth
remembering that the employer need not actually supervise the
performance of duties by the employee, for it sufficed... that the
employer has the right to wield that power.
Lastly, petitioner claims that it had no power to dismiss respondent due

to his not being even subject to its Code of Discipline, and that the power
to terminate the working relationship was mutually vested in the parties,
in that either party might terminate at will, with or... without cause.
The claim is contrary to the records. Indeed, the memorandum

informing respondent of the discontinuance of his service because of the
present business or financial condition of petitioner[20] showed that the
latter had the power to dismiss him from... employment.
Validity of the Termination
Having established that respondent was an employee whom petitioner

terminated to prevent losses, the conclusion that his termination was by
reason of retrenchment due to an authorized cause under the Labor
Code is inevitable.
The Court realizes that the lapse of time since the retrenchment might
have rendered respondent's reinstatement to his former job no longer
feasible. If that should be true, then petitioner should instead pay to
him separation pay at the rate of one. month pay for every year of...
service computed from September 1992 (when he commenced to work
for the petitioners) until the finality of this decision, and full backwages
from the time his compensation was withheld until the finality of this
decision.
WHEREFORE, we DENY the petition for review on certiorari, and AFFIRM

the decision of the Court of Appeals promulgated on February 11, 2002,
subject to the modification that should reinstatement be no longer
feasible, petitioner shall pay to respondent... separation pay of one
month for every year of service computed from September 1992 until
the finality of this decision, and full backwages from the time his
compensation was withheld until the finality of this decision.
Costs of suit to be paid by the petitioners.
87

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VIN GALE ARQUIZAL

Second Year JURIS DOCTOR

AN ACT TO INSTITUTE THE POLICIES OF OVERSEAS

SEC. 2. Declaration Of Policies—

(a) In the pursuit of an independent foreign policy and while considering

(c) While recognizing the significant contribution of Filipino migrant workers

(h) Non-governmental organizations, duly recognized as legitimate, are

(i) Government fees and other administrative costs of recruitment,

Nonetheless, the deployment of Filipino overseas workers, whether land-

SEC. 3. DEFINITIONS. – For purposes of this Act:

(a) “Migrant worker” refers to a person who is to be engaged, is engaged or

(b) “Gender-sensitivity” shall mean cognizance of the inequalities and

(c) “Overseas Filipinos” refers to dependents of migrant workers and other

SEC. 4. Deployment of Migrant Workers – The State shall deploy overseas

(c) It has concluded a bilateral agreement or arrangement with the

(d) It is taking positive, concrete measures to protect the rights of migrant

SEC. 5. TERMINATION ORBANONDEPLOYMENT – Notwithstanding the

Sec. 6. DEFINITIONS. – For purposes of this Act, illegal recruitment shall

(b) To furnish or publish any false notice or information or document in

(c) To give any false notice, testimony, information or document or commit

(d) To induce or attempt to induce a worker already employed to quit his

(e) To influence or attempt to influence any persons or entity not to employ

(f) To engage in the recruitment of placement of workers in jobs harmful to

(h) To fail to submit reports on the status of employment, placement

(i) To substitute or alter to the prejudice of the worker, employment contracts

(j) For an officer or agent of a recruitment or placement agency to become

(k) To withhold or deny travel documents from applicant workers before

(l) Failure to actually deploy without valid reasons as determined by the

(m) Failure to reimburse expenses incurred by the workers in connection with

Illegal recruitment is deemed committed by a syndicate carried out by a

SEC. 8. PROHIBITION ON OFFICIALS AND EMPLOYEES. – Ot shall be unlawful

SEC. 9. VENUE. – A criminal action arising from illegal recruitment as defined

SEC. 10. MONEY CLAIMS. – Botwithstanding any provision of law to the

The liability of the principal/employer and the recruitment/placement agency

In case of termination of overseas employment without just, valid or

Non-compliance with the mandatory periods for resolutions of cases provided

(b) Suspension for not more than ninety (90) days; or

Provided, however, that the penalties herein provided shall be without

SEC. 11. MANADATORY PERIODS FOR RESOLUTION OF ILLEGAL

SEC. 13. FREE LEGAL ASSISTANCE, PREFERENTIAL ENTITLEMENT UNDER

SEC. 14. TRAVEL ADVISORY/INFORMATION DISSEMINATION. – To give

SEC. 15. REPATRIATION OF WORKERS; EMERGENCY REPATRIATION FUND.

The Overseas Workers Welfare Administration (OWWA), in coordination ith

For this purposes, there is hereby created and established an emergency

SEC. 16. MANDATORY REPATRIATION OF UNDERAGE MIGRANT WORKERS. –

The Department of Labor and Employment, the Overseas Workers Welfare

SEC. 18. FUNCTIONS OF THE RE-PLACEMENT AND MONITORING CENTER. –

(b) Coordinate with appropriate private and government agencies the

(c) Institute in cooperation with other government agencies concerned, a

SEC. 19. ESTABLISHMENT OF A MIGRANT WORKERS AND OTHER OVERSEAS

(a) Counseling and legal services;

(b) Welfare assistance including the procurement of medical and

(d) Institute a scheme of registration of undocumented workers to bring them

(e) Human resource development, such as training and skills upgrading;

(f) Gender sensitive programs and activities to assist particular needs of

(h) Monitoring of daily situations, circumstances and activities affecting

The establishment and operations of the Center shall be a joint undertaking

The Center shall have a counterpart 24-hour information and assistance

SEC. 20. ESTABLISHMENT OF A SHARED GOVERNMENT INFORMATION

The inter-agency committee shall convene to identify existing data bases

(a) Masterlists of departing/arriving Filipinos;

(c) Masterlists of departing/arriving Filipinos;

(d) Statistical profile on Filipino migrant workers/overseas Filipinos/Tourists;

(e) Blacklisted foreigners/undesirable aliens;