MODULE 1 – Syllabus Based

Sources: Bedan Red Book 2020/2021, The Labor Code Volume I (Azucena)

I. Fundamental Principles (Articles 1-6 of the Labor Code)

II. Recruitment and Placement (Articles 12-42 of the Labor Code)

A. Definition of Recruitment and Placement

Any act of (CETCHUP) canvassing, enlisting, transporting, contracting, hiring, utilizing, or procuring workers, and includes (CRAP) contract
services, referrals, advertising, or promising for employment, locally or abroad, whether for profit or not. Provided, any person or entity which
offers or promises a fee employment to two or more persons shall be deemed engaged in recruitment and placement. [Article 13(b), Labor Code]

NOTE: The definition enumerates eleven (11) activities combined as recruitment and placement. Any activity done by any person without the
required license from the Bureau of Local Employment or the Philippine Overseas Employment Administration (POEA) is punishable as illegal
recruitment. [Azucena, Labor Code Vol. I]

Case: People v. Panis

B. Regulation of Recruitment and Placement Activities

1. Regulatory Authorities

a. Philippine Overseas Employment Administration

PROVISION: An Overseas Employment Development Board is created to undertake a systematic program for overseas employment of
Filipino workers and to protect their rights to fair and equitable employment practices. [Article 17, Labor Code]

NOTE: POEA is the protector of overseas workers’ rights to fair and equitable employment practices.

a.1 Power and Duty

 Promote the overseas employment of Filipino workers through comprehensive market promotion and development programs.
 Secure the best possible terms and conditions of employment of Filipino contract workers.
 Recruit and place workers for overseas employment.
 Act as secretariat for the Board of Trustees of the Welfare and Training Fund for Overseas Workers. [Article 17, Labor Code]

a.2 Functions

 Formulation, implementation, and monitoring of policies and programs on overseas employment of Filipino workers.
 Deployment of Filipino workers through government-to-government hiring. [Azucena, Labor Code Vol. I]

a.3 Regulatory Powers of POEA

 Issuance of license
 Suspension, cancellation, or revocation of license
 Approval of transfer of business address
 Approval of establishment of executive office outside of the registered address
 Accreditation of principals or projects
 Revocation of accreditation
 Closure of agencies engaged in illegal recruitment.
 Registration of any change in the composition of the board of directors, officers, and personnel of a recruitment agency.

a.4 Quasi-Judicial Powers of POEA

 All cases which are administrative in nature

o Those involving or arising out of violations of rules and regulations relating to licensing and registration of recruitment and
employment agencies.
 Disciplinary action cases and other special cases which are administrative in nature.
o Those that involves employers, principals, contracting partners and Filipino migrant workers.

b. Regulatory and Visitorial Powers of the DOLE Secretary

b.1 Power and Authority of the DOLE Secretary

 To organize and establish new employment offices.
 To organize and establish a nationwide job clearance and information system.
 To develop and organize a program that will facilitate the mobility of labor as well as provide assistance.
 To require a person, establishment, organization or institution to submit such employment information.

b.2 Regulatory Power of the DOLE Secretary

PROVISION: The Secretary of Labor shall have the power to restrict and regulate the recruitment and placement activities of all agencies
within the coverage of this Title and is hereby authorized to issue orders and promulgate rules and regulations to carry out the objectives and
implement the provisions of this Title. [Article 36, Labor Code]

b.3 Visitorial Powers of the DOLE Secretary

PROVISION: The Secretary of Labor and Employment or his duly authorized representatives may, at any time, inspect the premises, books
of accounts and records of any person or entity covered by this Title, require it to submit reports regularly on prescribed forms, and act on
violation of any provisions. [Article 37, Labor Code]

REASON: The visitorial and enforcement powers of the DOLE Secretary play a vital role in upholding workers’ rights and ensuring
compliance with labor laws and regulations. Article 128 authorizes the Department of Labor and Employment (DOLE) to inspect the
premises of employers to assess their compliance with labor laws and regulations.

 Access to employer’s records

 Access to employer’s premises
 Right to copy employer’s records
 Right to question any employee
 Right to investigate regarding violations of labor laws [Article 128, Labor Code]

c. Ban on Direct Hiring

PROVISION: No employer may hire a Filipino worker for overseas employment except through the Boards and entities authorized by the
Secretary of Labor. Direct hiring by members of the diplomatic corps, international organizations and such other employers as may be
allowed by the Secretary of Labor is exempted from this provision. [Article 18, Labor Code]

GENERAL RULE: Direct hiring of Filipino workers by a foreign employer is not allowed.

EXCEPTION: Direct hiring by (1) members of the diplomatic corps, (2) international organizations, (3) employers as may be allowed by
DOLE and (4) “name hirees” or those individual workers who are able to secure contracts for overseas employment on their own efforts and
representation without assistance or participation of any agency.

Name hires (contracted worker) requirements for registration with the POEA:

1. Employment contract
2. Valid passport
3. Employment visa / work permit
4. Certificate of medical fitness
5. Certificate of attendance to the required employment orientation

NOTE: Their hiring must be processed through the POEA.

d. Entities Prohibited from Recruiting

Overseas Employment (Revised POEA Rules and Regulations Governing the Recruitment and Employment of Land based Overseas
Filipino Workers of 2016)

1. Travel agencies and sales agencies of airline companies;

2. Officers or members of the Board of any corporation or partners in a partnership engaged in the business of a travel agency;
3. Corporations and partnerships, where any of its officers, members of the board or partners is also an officer, member of the board or
partner of a corporation or partnership engaged in the business of a travel agency;
4. Individuals, partners, officers or directors of an insurance company who make, propose or provide an insurance contract under the
compulsory insurance coverage for agency hired Overseas Filipino Workers;
5. Sole proprietors, partners or officers and members of the board with derogatory records, such as, but not limited to the following:
a. Those convicted, or against whom probable cause of guilt is determined by a competent authority, for illegal recruitment.
 b. Those agencies whose licenses have been revoked for violation of RA 8042 (Migrant Workers and Overseas Filipinos Act
of 1995) and RA 9208 (Trafficking in Persons Act of 2003).
c. Those agencies whose licenses have been cancelled, or those who were included in the list of persons with derogatory
record for violation of recruitment laws and regulations.
6. Any official or employee of the DOLE, POEA, OWWA, DFA, DOJ, DOH, BI, IC, NLRC, TESDA, CFO, NBI, PNP, Civil Aviation
Authority of the Philippines (CAAP), international airport authorities, and other government agencies directly involved in the
implementation of RA 8042, as amended, and/or any of his/her relatives within the fourth civil degree of consanguinity or affinity.

Local Employment (Domestic and Industry Workers)

- D.O. No. 217-20 Rules and Regulations Governing Recruitment and Placement of Domestic Workers by the PEA for local
employment.
- D.O. No. 216-20 Rules and Regulations Governing Recruitment and Placement of Industry Workers by the PEA for local employment.

1. Those convicted of illegal recruitment, trafficking in persons, anti-child labor violation, or crimes involving moral turpitude.
2. Those against whom probable cause of guilt for illegal recruitment exists specifically to owners or directors of agencies who have
committed illegal recruitment.
3. Those whose licenses have been previously revoked or cancelled by DOLE.
4. Cooperatives whether registered or not under the Cooperative Act of the Philippines.
5. Law enforcers and any official or employee of the DOLE.
6. Sole proprietors of duly licensed agencies are prohibited from securing another license to engage in recruitment and placement.
7. Sole proprietors, partnership or corporations licensed to engage in private recruitment and placement for local employment are
prohibited from engaging in job contracting or subcontracting activities.
8. Technical-vocational training institutions and other training institutions.

e. Suspension or Cancellation of License or Authority

PROVISION: 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]

Grounds for Automatic Revocation of License

1. Expiration of the principal’s/employer’s business license or cessation of business or recruitment activity after a period of (1) year from
expiration.
2. Upon written mutual agreement by the principal/employer and the licensed recruitment agency to terminate the agreement.
3. When the principal/employer meted the penalty of disqualification from participation in the overseas employment program.
4. Failure to comply with the undertaking submitted as requirement for accreditation.

Grounds for Suspension/Cancellation of License

1. Unjustified refusal to assist/repatriate distressed OFW.

2. Deliberate violation/non-compliance of the principal/employer with its contractual obligations to its hired OFW’s.
3. Continued processing and deployment of the OFW – it will lead to further exploitation of any of its applicants and pose imminent
danger to the lives and safety of its OFWs.
4. When it is found to have hired and employed an OFW who is either minor or below the prescribed minimum age requirement.

NOTE: The DOLE Secretary and the POEA have concurrent jurisdiction to suspend or cancel a license. The Secretary of Labor has the
power under Art. 35 to apply sanctions. He also has the authority, under Art. 36, not only to restrict and regulate the recruitment and
placement activities of all agencies, but also to promulgate rules and regulations to carry out the objectives.

f. Prohibited Practices

PROVISION: It shall be unlawful for any individual, entity, licensee, or holder of authority:

1. To charge or accept any amount greater than that specified in the schedule of allowable fees prescribed by the Secretary of Labor.
2. To furnish or publish any false notice or information in relation to recruitment or employment.
3. To give any false notice, information, or document or commit any act of misrepresentation.
4. To induce or attempt to induce a worker already employed to quit his employment.
5. To influence or to attempt to influence any person or entity not to employ any worker.
6. To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to the dignity of the Republic of
the Philippines.
7. To obstruct or attempt to obstruct inspection by the Secretary of Labor.
 8. To fail to file reports on the status of employment, placement vacancies, remittance of foreign exchange earnings etc., as may be
required the Secretary of Labor.
9. To substitute or alter employment contracts approved and verified by the Department of Labor.
10. To become an officer or member of the Board of any corporation engaged in travel agency.
11. To withhold or deny travel documents from applicant workers before departure for monetary or financial considerations. [Article 34,
Labor Code]

C. Illegal Recruitment

PROVISION: (a) 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.

(b) when committed by a syndicate or in large scale shall be considered an offense involving economic sabotage and shall be penalized.

Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring and/or confederating
with one another in carrying out any unlawful or illegal transaction, enterprise or scheme defined under the first paragraph hereof. Illegal
recruitment is deemed committed in large scale if committed against three (3) or more persons individually or as a group.

(c) The Secretary of Labor and Employment or his duly authorized representatives shall have the power to cause the arrest and detention of such
non-licensee or non-holder of authority if after investigation it is determined that his activities constitute a danger to national security and public
order or will lead to further exploitation of jobseekers.

The Secretary shall order the search of the office or premises and seizure of documents, paraphernalia, properties, and other implements used in
illegal recruitment activities and the closure of companies, establishments and entities found to be engaged in the recruitment of workers for
overseas employment, without having been licensed or authorized to do so. [Article 38, Labor Code]

Case: People v. Dela Piedra

1. Elements

a. The offender has no valid license or authority required by law to enable him to lawfully engage in recruitment and placement of
workers.
b. The offender undertakes any of the activities within the meaning of “recruitment and placement” under Art. 13(b), or any prohibited
practices under Art. 34 of this Code.

2. Types

a. Simple Illegal Recruitment

Illegal recruitment committed by any person who is neither a licensee nor a holder of authority wherein the offender undertakes any of
the prohibited acts under Art. 34 of this Code.
Elements:
1. The offender has no valid license or authority required by law to lawfully engage in recruitment and placement of workers.
2. The offender undertakes any activity within the meaning of “recruitment and placement” or any prohibited practice enumerated
in Arts. 34 & 38 of this Code.

b. Economic Sabotage/Qualified Illegal Recruitment

1. Large Scale Illegal Recruitment
Illegal recruitment by one person or with another person against three or more persons individually or as a group.

Elements:

a. The offender undertakes any activity within the meaning of “recruitment and placement” under Art. 13(b) or any prohibited
practices under Arts. 34 & 38 of this Code.
b. The offender commits the same against three or more persons, individually or as a group.

Case: People v. Chua

2. Illegal Recruitment by a Syndicate

Illegal recruitment committed by a syndicate or a group of (3) or more persons in carrying out the act prohibited by the law.

Elements:

a. The offender undertakes any activity within the meaning of “recruitment and placement” under Art. 13(b) or any prohibited
practices under Arts. 34 & 38 of this Code.
 b. The acts are committed by at least (3) persons.
c. The offenders are not licensed or authorized to do so.

3. Illegal Recruitment as Distinguished from Estafa

Illegal Recruitment Estafa

Malum prohibitum Malum in se
The criminal intent of the accused is not necessary. The criminal intent is imperative.
It is penalized under the Labor Code. It is penalized under the RPC.
It is limited in scope. It is wider in scope and covers deceits whether related or not
related to recruitment activities.

NOTE: The offense of illegal recruitment is malum prohibitum where the criminal intent of the accused is not necessary for
conviction, while estafa is malum in se where the criminal intent of the accused is crucial for conviction. An illegal recruiter can be
liable for the crimes of illegal recruitment committed in large scale and estafa without risk of being put in double jeopardy, provided
that the accused has been so charged under separate information.

4. Venue

A criminal action arising from illegal recruitment shall be filed with the RTC of the province or city where the offense was committed
or where the offended party actually resides at the time of the commission of the offense.

D. Liability of Local Recruitment Agency and Foreign Employer

1. Solidary Liability
The nature of liability of the local recruitment agency and foreign employer is solitary. A recruitment agency is solidarily liable for the
unpaid salaries of a worker it recruited for employment with a foreign principal.

That is why POEA Rules provide that before recruiting any worker, the private employment agency shall submit an undertaking that
the agency can sue and be sued jointly and solidarily with the principal or foreign-based employer for any of the violations of the
recruitment agreement.

REASON: 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.

2. Theory of Imputed Knowledge (Case of Sunace International Management Services, Inc. v. NLRC)
The theory of imputed knowledge teaches that the knowledge of the agent is knowledge of the principal. It is not the knowledge of the
principal is the knowledge of the agent. Hence, in the case of Sunace, being ignorant of the employment extension and of illegal acts
of the employer-principal during such extension, the agency is free from liability.
o Any information known to the agent is presumed to be known by the principal employer

In other words, 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.

Applying the doctrine to the case 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.

Case: Sunace International Management Service v. NLRC – negation to the general rule

E. Termination of Contract of Migrant Worker

Case: Maersk-Filipinas Crewing Inc. v. Avestruz

1. If terminated on grounds other than those that are lawful and valid before the agreed termination date, the employer will pay the
workers their salaries corresponding to the unexpired portion of the employment contract (Vinta Maritime Co., Inc. v. NLRC, G.R.
No. 113911, January 23, 1998).

Liability for Interest

 The award of salaries for the unexpired portion], similar to back wages, is subject to legal interest.

NOTE: Effective July 1, 2013, the rate of interest for the loan or forbearance of money, goods, or credits and the rate allowed in
judgments, in the absence of an express contract as to such rate of interest shall be 6% per annum (BSP Circular No. 799, series of
2013, Sec. 1).

2. Under Section 10, a worker dismissed from overseas employment without just, valid or authorized cause or there are any unauthorized
deductions from his salary, he is entitled to full reimbursement of his placement fee and the deductions made. with interest at 12% per
annum plus salaries for the unexpired portion of his contract (R.A. 8042, Sec. 10, par. 5).

e.1 Unconstitutionality of the clause "or for three months for every year of the unexpired term, whichever is less" in Sec. 10(5) of R.A. No. 8042

The SC was aware that said clause] was reinstated in Sec. 7 of R.A. No. 10022. However, when a law or a provision of law is null because it is
inconsistent with the Constitution, the nullity cannot be cured by reincorporation or reenactment of the same or similar law or provision. A law or
provision of law that was already declared unconstitutional remains as such unless the circumstances have so changed as to warrant a reverse
conclusion.

The Court reiterated its finding in Serrano v. Gallant Maritime that limiting wages that should be recovered by an illegally dismissed overseas
worker to three months is both a violation of due process and the equal protection clause of the Constitution.

e.2 Due Process Required to Terminate Employment

Procedural due process requires that a seaman must be given:

1. Written notice of the charges against him. The employer is bound to furnish him 2 notices:
a. The written charge; and
b. The written notice of dismissal in case that is the penalty imposed.
2. Formal investigation where he can defend himself personally or through a representative before he can be dismissed and disembarked
from the vessel.

e.3 Minimum Employment Conditions of Overseas Employment: (GF2- JO)

1. Guaranteed wages for regular work hours and overtime pay, as appropriate, which shallot be lower than the prescribed minimum wage
in the host country, not lower than the appropriate minimum wage standard set forth in a bilateral agreement or international
convention duly ratified by the host country and the Philippines or not lower than the minimum wage in the Philippines, whichever is
highest;
2. Free transportation to and from the worksite, or offsetting benefit;
3. Free food and accommodation, or offsetting benefit;
4. Just/authorized causes for termination of the contract or of the services of the workers taking into consideration the customs,
traditions, norms, mores, practices, company policies and the labor laws and social legislations of the host country;
5. The Administration may also consider the following as basis for Other provisions of the contract: (PEAR)
a. Prevailing condition/realities in the market;
b. Existing labor and social laws of the host country;
c. Relevant bilateral and multilateral Agreements or arrangements with the host country; and
d. Relevant agreements, conventions, delegations or resolutions (2016 POEA Rules and Regulations Governing the Recruitment
and Employment of Land-based Overseas Workers, Part V, Rule I, Sec. 135).

F. Employment of Non-Resident Aliens

D.O. No. 221-21, Revised Rules for the Issuance of Employment Permits to Foreign Nationals

PROVISION: Any alien seeking admission to the Philippines for employment purposes and any domestic or foreign employer who desires to
engage an alien for employment in the Philippines shall obtain an employment permit from the Department of Labor and Employment (DOLE).
[Article 40, Labor Code]

NOTE: The issuance of Alien Employment Permit (AEP) is not an exclusive authority for a foreign national to work in the Philippines. It is just
one of the requirements in the issuance of a work visa for a foreign national who is legally engaged in gainful employment in the country.

f.1 Alien Employment Permit (AEP)

All foreign nationals who intend to engage in gainful employment in the Philippines shall apply for AEP.

Gainful employment refers to a state or condition that creates an employer-employee relationship between the Philippine based employer and
the foreign national where the former has the power to hire or dismiss the foreign national from employment, pays the salaries or wages thereof
and has authority to control the performance or conduct of the tasks and duties.
f.2 Prohibitions on Foreign Nationals Granted with AEP

After the issuance of an employment permit, the alien shall not transfer to another job or change his employer without prior approval of the
Secretary of Labor.

III. Training and Employment of Special Workers (Articles 57-81 of the Labor Code)

MODULE 1 CASES

Title People v. Chua

Topic Illegal Recruitment – Large Scale (Article 38, Labor Code)
Doctrine Illegal Recruitment in Large Scale penalized under Republic Act No. 8042, or “The Migrant Workers and
Overseas Filipinos Act of 1995,” is a special law, a violation of which is malum prohibitum. Illegal recruitment is
malum prohibitum, while estafa is malum in se.

In the first, the criminal intent of the accused is not necessary for conviction. In the second, such an intent is
imperative. Estafa under Article 315, paragraph 2, of the Revised Penal Code, is committed by any person who
defrauds another by using fictitious name, or falsely pretends to possess power, influence, qualifications,
property, credit, agency, business or imaginary transactions, or by means of similar deceits executed prior to or
simultaneously with the commission of fraud.

Facts Golden Gate, Inc., (Golden Gate), of which Chua was a cashier, was initially authorized to recruit workers for
deployment abroad (Taiwan). However, its license expired, and it was delisted from the roster of licensed
agencies. Chua was as one of the persons who enticed the complainants to part with their money upon the
representation that they would be able to secure for them employment abroad. As a consequence, Chua was
indicted for Illegal Recruitment (Large Scale) and was convicted thereof by the Regional Trial Court. She was
also indicted for five counts of Estafa but was convicted only for three. The Court of Appeals affirmed Chua’s
conviction.

Issue Whether Chua would be free her of liability if she was unaware of the illegal nature of the recruitment business
of Golden Gate.

Ruling NO. Any recruitment activities to be undertaken by non-licensee or non-holder of contracts, or as in the present
case, an agency with an expired license, shall be deemed illegal and punishable under Article 39 of the Labor
Code.

Illegal recruitment is deemed committed in large scale if committed against three or more persons individually or
as a group. Thus, for illegal recruitment in large scale to prosper, the prosecution has to prove three essential
elements, to wit:

1. The accused undertook a recruitment activity under Article 13 (b) or any prohibited practice under
Article 34 of the Labor Code;
2. The accused did not have the license or the authority to lawfully engage in the recruitment and
placement of workers; and
3. The accused committed such illegal activity against three or more persons individually or as a group.

Title People v. Panis

Topic Recruitment and Placement of Workers (Article 13, Labor Code)
Doctrine The number of persons dealt with is not an essential ingredient of the act of recruitment and placement of
workers. Any of the acts mentioned in the basic rule in Article 13(b) will constitute recruitment and placement
even if only one prospective worker is involved. The provision merely lays down a rule of evidence that where a
fee is collected in consideration of a promise or offer of employment to two or more prospective workers, the
individual or entity dealing with them shall be deemed to be engaged in the act of recruitment and placement.
Facts Four information was filed alleging that Abug, without first securing license as a holder of authority to operate a
fee-charging employment agency, operated a private fee-charging employment agency by charging fees and
expenses from, and promising employment in Saudi Arabia to four separate individuals, in violation of Article 16
in relation to Article 39 of the Labor Code.

Abug filed a motion to quash on the ground that the information did not charge an offense arguing that, there
would be illegal recruitment only “whenever two or more persons are in any manner promised or offered any
employment for a fee.”

Issue Whether it is an indispensable requirement to constitute recruitment and placement that all the acts mentioned in
Article 13(b) of the Labor Code should involve dealings with two or more persons.

Ruling NO. The number of persons dealt with is not an essential ingredient of the act of recruitment and placement of
workers. Any of the acts mentioned in the basic rule in Article 13(b) will constitute recruitment and placement
even if only one prospective worker is involved. The proviso merely lays down a rule of evidence that where a
fee is collected in consideration of a promise or offer of employment to two or more prospective workers, the
individual or entity dealing with them shall be deemed to be engaged in the act of recruitment and placement.

The presumption is that the individual or entity is engaged in recruitment and placement whenever he or it is
dealing with two or more persons to whom, in consideration of a fee, an offer or promise of employment is made
in the course of the “canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring (of) workers.”

Title People v. Dela Piedra

Topic Illegal Recruitment (Article 38, Labor Code)
Doctrine Illegal recruitment is committed when two elements concur.

(1) The offender has no valid license or authority required by law to enable one to lawfully engage in
recruitment and placement of workers.
(2) He or she undertakes either any activity within the meaning of “recruitment and placement” defined
under Article 13 (b), or any prohibited practices enumerated under Article 34 of the Labor Code.
(3) In case of illegal recruitment in large scale, a third element is added: that the accused commits said
acts against three or more persons, individually or as a group.

Facts Carol was charged with illegal recruitment in large scale. The information alleged that she, without having
previously obtained a license or authority to engage in recruitment and overseas placement of workers from
POEA, offered and promised for a fee employment as nurses in a certain hospital in Singapore to the (3)
registered nurses who all advanced P2K for the promised employment that did not materialize.

Carol was arrested in a raid conducted by the POEA. The raiding team used a certain Eileen, who pretended to be
an applicant, the latter saw the (3) other applicants arrived at the house to follow up the result of their
 applications and to give their advance payment. During their investigation, POEA revealed that the Carol was not
licensed or authorized to conduct recruitment.

Issue Whether the accused is guilty of illegal recruitment on a large scale.

Ruling NO, but she is guilty of 2 counts of simple illegal recruitment. Illegal recruitment is committed when 2 elements
concur:
(1) The offender has no valid license or authority required by law to enable one to lawfully engage in
recruitment and placement of workers.
(2) He or she undertakes either any activity within the meaning of recruitment and placement defined
under Article 13 (b), or any prohibited practices enumerated under Article 34 of the Labor Code.
(3) The accused commits said acts against three or more persons, individually or as a group (only in case
of illegal recruitment in large scale).

In this case, the 1st and 2nd elements are present. (1st element) The certification of POEA states that accused is
not licensed or authorized to engage in recruitment and placement. (2nd element) Accused is presumed engaged
in recruitment and placement under Article 13 (b) of the Labor Code based on the testimonies of the 2 credible
witnesses, meeting the standard of proof beyond reasonable doubt that accused committed recruitment and
placement.

However, a conviction for large scale illegal recruitment must be based on a finding in each case of illegal
recruitment of three or more persons whether individually or as a group. In this case, only 2 persons were proven
to have been recruited by appellant. The 3rd person named in the complaint was not presented in court to testify.

Title Sunace International Management Service v. NLRC

Topic The Theory of Imputed Knowledge
Doctrine The theory of imputed knowledge ascribes the knowledge of the agent to the principal not the other way around.
The knowledge of the principal-foreign employer cannot, therefore, be imputed to its agent.
Facts Petitioner, Sunace International Management Services (Sunace), a corporation duly organized and existing under
the laws of the Philippines, deployed to Taiwan Divina as a domestic helper under a 12-month contract. The
deployment was with the assistance of a Taiwanese broker, who is the President of Jet Crown International Co.,
Ltd.

After her return, Divina filed a complaint before the NLRC against Sunace, one Perez, the Taiwanese broker, and
the employer-foreign principal alleging that she was jailed for (3) months and that she was underpaid. Divina
filed her Position Paper claiming that under her original one-year contract and the 2-year extended contract which
was with the knowledge and consent of Sunace.

Reacting to Divina’s Position Paper, Sunace alleged that Divina’s 2-year extension of her contract was without its
knowledge and consent, hence, it had no liability attaching to any claim arising therefrom.

The Labor Arbiter (LA) rejected Sunace’s claim that the extension of Divina’s contract for two (2) years was
without its knowledge and consent because as Annex B shows, Sunace and Wang have not stopped
communicating with each other and yet the matter of the contract’s extension and Sunace’s alleged non-consent
thereto has not been categorically established.

What Sunace should have done was to write to POEA about the extension and its objection thereto, copy
furnished the complainant herself, her foreign employer, Hang Rui Xiong and the Taiwanese broker, Edmund
Wang. And because it did not, it is presumed to have consented to the extension and should be liable for anything
that resulted therefrom. Both the NLRC and Court of Appeals affirmed the LA’s ruling.

Issue Whether Sunace consented to the 2-year extension contract of Divina?

Ruling NO. There being no substantial proof that Sunace knew of and consented to be bound under the 2-year
employment contract extension, it cannot be said to be privy thereto. As such, it and its “owner” cannot be held
solidarily liable for any of Divina’s claims arising from the 2-year employment extension. As provided under
Article 1311 of the Civil Code, “Contracts take effect only between the parties, their assigns, and heirs, except in
cases where the rights and obligations arising from the contract are not transmissible by their nature, or by
stipulation or by provision of law.”

Furthermore, as Sunace correctly points out, there was an implied revocation of its agency relationship with its
foreign principal when, after the termination of the original employment contract, the foreign principal directly
negotiated with Divina and entered into a new and separate employment contract in Taiwan.

Title Century Canning Corporation v. Court of Appeals

Topic Training and Employment of Special Workers – Apprenticeship (Arts. 57-72 of the Labor Code)
Doctrine The TESDA’s approval of the employer’s apprenticeship program is required before the employer is allowed to
hire apprentices. Prior approval from the TESDA is necessary to ensure that only employers in the highly
technical industries may employ apprentices and only in apprenticeable occupations.

Facts Century Canning Corporation hired a fish cleaner at petitioner’s tuna and sardine’s factory. The fish cleaner
signed an apprenticeship agreement (Art. 58 (d) & Art. 62) with petitioner. Petitioner submitted its apprenticeship
program for approval to TESDA of the DOLE. TESDA then approved petitioner’s apprenticeship program.

According to petitioner, a performance evaluation was conducted where petitioner gave Palad (fish cleaner) a
rating of N.I. or “needs improvement” since her score is low based on the performance indicator. Furthermore,
according to the performance evaluation, Palad incurred numerous tardiness and absences. As a consequence,
petitioner issued a termination notice to Palad. Palad then filed a complaint for illegal dismissal, underpayment of
wages, and non-payment of pro-rated 13th month pay.

Issue Whether Palad (fish cleaner) was an apprentice of petitioner.

Ruling NO. Palad was not an apprentice, but a regular employee of the petitioner. The Labor Code defines an apprentice
as a worker who is covered by a written apprenticeship agreement with an employer.

In this case, the apprenticeship agreement was entered into between the parties before petitioner filed its
apprenticeship program with TESDA for approval. The apprenticeship program was only approved by TESDA
two months after it was submitted for approval. Clearly, the apprenticeship agreement was enforced even before
TESDA approved petitioner’s apprenticeship program. Thus, the apprenticeship agreement is void because it
lacked prior approval from TESDA.

The TESDA’s approval of the employer’s apprenticeship program is required before the employer is allowed to
hire apprentices. Prior approval from the TESDA is necessary to ensure that only employers in the highly
technical industries may employ apprentices and only in apprenticeable occupations.
MODULE 2 CASES

Title Teng v. Pahagac

Topic Employer-Employee Relationship
Doctrine The element of control is a strong indicator of the existence of an employer – employee relationship.
Facts Petitioner (Teng) owns Albert Teng Fish Trading, a company engaged in deep see fishing. He claimed that as part
of business operations, he customarily enters into a joint venture agreement with Master Fisherman (Maestros) or
the one skilled and expert in deep sea fishing. The Maestros were the ones engaged in the management as well as
hiring members of the staff. He declared that respondents Pahagac, et al were hired directly by the Maestros.

Respondents denied Teng’s claim and asserted that it was Petitioner Teng who hired them. They sustained their
claim by alleging that they were hired as checkers of Teng that will serve as his eyes and ears during fishing trips.
However, sometime in 2002, Teng expressed his doubts against their services and was subsequently terminated.
Respondents filed an illegal dismissal claim which was upheld by CA.

Teng, among others, expresses that there was no employer-employee relationship between them, thus he cannot
be liable for illegal dismissal.

Issue Whether there was an employer-employee relationship between Teng and the respondents who served as his
checkers during fishing trips.

Ruling YES. there is a four-fold test to determine whether an employer-employee exists. These are:
1. Selection and Engagement (Hiring)
While Teng alleged that it was the maestros who hired the respondent workers, it was his company
that issued to the respondent workers identification cards (IDs) bearing their names as employees and
Teng’s signature as the employer.

2. Payment of Wages
For the 13 years that the respondent workers worked for Teng, they received wages on a regular basis,
in addition to their shares in the fish caught.

3. Power of Dismissal
The respondent worker’s allegation that Teng summarily dismissed them on suspicion that they were
not reporting to him the correct volume of the fish caught.

4. Power to Control
Teng not only owned the tools and equipment, but he also directed how the respondent workers were
to perform their job as checkers; they, in fact, acted as Teng’s eyes and ears in every fishing
expedition.

More importantly, the element of control — which we have ruled in a number of cases to be a strong indicator of
the existence of an employer- employee relationship.

Accordingly, we hold that employer-employee ties exist between Teng and the respondent workers. For his
failure to comply with the Labor Code’s substantive requirement on termination of employment, we declare that
Teng illegally dismissed the respondent workers.
Title Tongko v. Manufacturer’s Life Insurance Company
Topic Employer – Employee Relationship
Doctrine Codes of conduct are norms or standards of behavior rather than employer directives into how specific tasks are
to be done. These codes are not per se indicative of labor law control under our jurisprudence.
Facts Petitioner Tongko’s contractual relationship with respondent Manulife Inc. had two phases. The initial phase was
under Career Agreement where it was understood and signed him as an independent contractor. Sometime after,
the second phase began where he was named Unit Manager. However, because of the declining performance of
his unit, Manulife terminated the Agency Agreement.

Tongko filed an illegal dismissal case alleging that he was a Unit Manager who was paid an annual over-ride
regardless of production level and was tasked with numerous functions and supervisory authority. He further
asserted that as Manulife agent, he was subject to control and guidelines that were written in his terms and
conditions in the contract.

Issue Whether petitioner as an insurance agent that is subject to the control of guidelines of insurance agency
considered an employee.

Ruling NO. Manulife’s code of conduct that binds petitioner Tongko does not result in control that has the nature of
dictating the means or methods to be employed in attaining the result.

Codes of conduct are norms or standards of behavior rather than employer directives into how specific tasks are
to be done. These codes are not per se indicative of labor law control under our jurisprudence.

There are built-in elements of control specific to an insurance agency, which do not amount to the elements of
control that characterize an employment relationship governed by the Labor Code. Manulife’s codes of conduct,
all of which do not intrude into the insurance agents’ means and manner of conducting their sales and only
control them as to the desired results and Insurance Code norms, cannot be used as basis for a finding that the
labor law concept of control existed between Manulife and Tongko.
Title
Topic
Doctrine
Facts
Issue
Ruling