Labor Law

INTRODUCTION

LABOR means physical toilSALARY came from the Greek word “Salarium” which means salt

LABOR STANDARDS – minimum requirements prescribed by existing laws, rules and regulations relating to hours of work, cost of living allowance and other monetary and welfare benefits including occupational, safety and health standards

LABOR RELATIONS

KINDS OF LABOR LAWSI. LABOR STANDARDS LAWS

Laws, rules and regulations that set the minimum requirements for terms and conditions of employment such as wages, hours of work, etc

II. LABOR LAWS & SOCIAL LEGISLATIONS Laws, rules and regulations that promote welfare of all sectors of society. This includes laws that provide particular kinds of protection or benefits to the society, in furtherance of social justice.

Not all social legislation are labor laws.

SOURCES OF LABOR LAWSI. 1987 Constitution

Art II, Sec 10Section 10. The State shall promote social justice in all phases of national development.

Art II, Sec 18Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare.

Art XII, Sec 12Section 12. The State shall promote the preferential use of Filipino labor, domestic materials and locally produced goods, and adopt measures that help make them competitive.

Art XIII, Sec 1Section 1. The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good.To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments.

Art XIII, Sec 3*Section 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all.It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law.The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace.The State shall regulate the relations between workers and employers, recognizing the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns to investments, and to expansion and growth.

*2009 Bar Exam QuestionPolicies which were not covered in the Labor Code:

principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes regulation of relations bet workers and employees creation of economic opportunities

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*2006 Bar Exam QuestionThe purpose of labor legislation.

Art XIII, Sec 14Section 14. The State shall protect working women by providing safe and healthful working conditions, taking into account their maternal functions, and such facilities and opportunities that will enhance their welfare and enable them to realize their full potential in the service of the nation.

Constitutional Provisions are not self-executing.

Jurisprudence:Agabon vs NLRC:

The constitutional mandates of protection to labor and security of tenure may be deemed as self-executing in the senses that these are automatically acknowledged and observed without need for any enabling legislation. However to declare that the constitutional provisions are enough to guarantee the full exercise of the rights embodied therein, and the realization of ideals therein expressed, would be impractical, if not unrealistic. The espousal of such view presents dangerous tendency of being overboard and exaggerated.

Serrano vs Gallant Maritime Services, Inc.Thus Sec 3, Art XIII cannot be treated as a principal source of direct enforceable rights, for the violation of which the questioned case may be declared unconstitutional. It may unwittingly risk opening the floodgates of litigation to every worker or union over every conceivable violation of so broad a concept as social justice for labor.

II. Civil CodeArt. 1700. The relations between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to the common good. Therefore, such contracts are subject to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects.

Art. 1701. Neither capital nor labor shall act oppressively against the other, or impair the interest or convenience of the public.

Art. 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer.

Art. 1703. No contract which practically amounts to involuntary servitude, under any guise whatsoever, shall be valid.

Art. 1704. In collective bargaining, the labor union or members of the board or committee signing the contract shall be liable for non-fulfillment thereof.

Art. 1705. The laborer's wages shall be paid in legal currency.

Art. 1706. Withholding of the wages, except for a debt due, shall not be made by the employer.

Art. 1707. The laborer's wages shall be a lien on the goods manufactured or the work done.

Art. 1708. The laborer's wages shall not be subject to execution or attachment, except for debts incurred for food, shelter, clothing and medical attendance.

Art. 1709. The employer shall neither seize nor retain any tool or other articles belonging to the laborer.

Art. 1710. Dismissal of laborers shall be subject to the supervision of the Government, under special laws.

III. Revised Penal CodeArt. 288. Other similar coercions; (Compulsory purchase of merchandise and payment of wages by means of tokens.) — The penalty of arresto mayor or a fine ranging from 200 to 500 pesos, or both, shall be imposed upon any person, agent or officer, of any association or corporation who shall force or compel, directly or indirectly, or shall knowingly permit any laborer or employee employed by him or by such firm or corporation to be forced or compelled, to purchase merchandise or commodities of any kind.

The same penalties shall be imposed upon any person who shall pay the wages due a laborer or employee employed by him, by means of tokens or objects other than the legal tender currency of the laborer or employee.

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BASES OF LABOR LAWSI. POLICE POWER

It is the inherent power of the State to regulate rights and liberty for the common good.

Jurisprudence:JMM vs CA:The latin maxim salus populi est surprema lex embodies the character of the entire spectrum of public laws aimed at promoting the general welfare of the people under the State's police power. As an inherent attribute of sovereignty which virtually "extends to all public needs," this "least limitable" 3 of governmental powers grants a wide panoply of instruments through which the state, as parens patriae gives effect to a host of its regulatory powers.

Assoc de Agricultures de Talisy-Silay vs Talisay-Silay Milling Co.Serrano:True it is that, as counsel for the centrals contend, police power cannot be resorted to just any time the legislature wishes, but it is not correct to say that it is indispensable that exceptional circumstances must exist before police power can be exercised. As very aptly pointed out by the able amicus curiae, Attys. Tanada Teehankee and Carreon, gone are the days when courts could "be found adhering to the doctrine that interference with contracts can only be justified by exceptional circumstances", for the "test of validity today under the due process clause, even in the case of legislation interfering with existing contracts, is reasonableness, as held by this Honorable Supreme Court in the case of People vs. Zeta. In other words, freedom from arbitrariness, capriciousness and whimsicality is the test of constitutionality." (p. 17, Brief of Amicus Cuiae in Behalf of Silay-Saravia Planters' Association, Attys. Tanada Teehankee and Carreon.) And there is not enough showing here of unreasonableness in the legislation in question. Quite to the contrary, as win be discussed anon We find all the provisions of the impugned act to be germane to the end being pursued.

But it is not police power alone that sustains the validity of the statutory provision in dispute. Having in view its primary objective to promote the interests of labor, it can never be possible that the State would be bereft of constitutional authority to enact legislations of its kind. Here, in the Philippines, whenever any government measure designed for the advancement of the working class is impugned on constitutional grounds and shadows of doubt are cast over the scope of the State's prerogative in respect thereto, the imperious mandate of the social justice Ideal consecrated in our fundamental laws, both the old and the new asserts its majesty, upon the courts to accord utmost consideration to the spirit animating the act assailed, not just for the sake of enforcing the explicit social justice provisions of the article on "Declaration of Principles and State Policies", but more fundamentally, to serve the sacred cause of human dignity, which is actually what lies at the core of those constitutional precepts as it is also the decisive element always in the determination of any controversy between capital and labor.

II. SOCIAL JUSTICE Promotion of the welfare of ALL THE PEOPLEThose who have less in life shall have more in law.

Jurisprudence:Calalang vs Williams:"Social justice is 'neither communism, nor despositism, nor atomism nor anarchy,' but the humanization of laws and the equalization of social and economic forces by the State so that justice in its rational and objectively secular conception may at least be approximated. Social justice means the promotion of the welfare of all the people, the adoption by the Government of measures calculated to insure economic stability of all the component elements of society, through the maintenance of a proper economic and social equilibrium in the inter-relations of the members of the community, constitutionally, through the adoption of measures legally justifiable, or extra-constitutionally, through the exercise of powers underlying the existence of all governments on the time-honored principle of salus populi est suprema lex."

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PLDT vs NLRC, Aug 1988The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. At best it may mitigate the penalty but it certainly will not condone the offense. Compassion for the poor is an imperative of every humane society but only when the recipient is not a rascal claiming an undeserved privilege. Social justice cannot be permitted to be refuge of scoundrels any more than can equity be an impediment to the punishment of the guilty. Those who invoke social justice may do so only if their hands are clean and their motives blameless and not simply because they happen to be poor. This great policy of our Constitution is not meant for the protection of those who have proved they are not worthy of it, like the workers who have tainted the cause of labor with the blemishes of their own character.

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THE LABOR CODE OF THE PHILIPPINES

LABOR STANDARDS

Book I Pre Employment

Book II Human Resources Development

Book III Conditions of Employment

Book IV Health, Safety & Social Welfare Benefits

LABOR RELATIONS

Book V Labor Relations

Book VI Post Employment

Book VII Transitory & Final Provisions

SOCIAL LEGISLATIONS

13TH Month Pay Law

Social Security Act of 1997

PhilHealth

Employee’s Comensation Program

Solo Welfare Act of 2000

GSIS Law

R.A. 7699 Portability Law

R.A. 8042 Migrant Workers Act

R.A. 7796 Technical Education and Skills Development Authority

TESDA Law

R.A. 9442 Re special benefits of persons with Disabilities

Amending R.A. 7277

R.A. 9849 Re the Proclamation of Eidhl Adha as a National Holiday

R.A. 9492 Re the Declaration of Regular Holidays &

Nationwide Special Holidays

R.A. 6727 Wage Rationalization Act

R.A. 8282 SSS Law

R.A. 9710 Magna Carta for Women

R.A. 9262 Anti-Violence Against Women and their Children

R.A. 9995 Anti-Photo and Video Voyeurism Act of 2009

R.A. 7610 Special Protection of Children against Abuse,

Exploitation & Discrimination Act

R.A. 10150 Provisions re Nightworkers, Repealing Art 130 and 131

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A. FUNDAMENTAL PRINCIPLES & POLICIES1. Constitutional Provisions

a. Article II

Section 9. The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living, and an improved quality of life for all.

Section 10. The State shall promote social justice in all phases of national development.

Section 11. The State values the dignity of every human person and guarantees full respect for human rights.

Section 13. The State recognizes the vital role of the youth in nation-building and shall promote and protect their physical, moral, spiritual, intellectual, and social well-being. It shall inculcate in the youth patriotism and nationalism, and encourage their involvement in public and civic affairs.

Section 14. The State recognizes the role of women in nation-building, and shall ensure the fundamental equality before the law of women and men.

Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare.

Section 20. The State recognizes the indispensable role of the private sector, encourages private enterprise, and provides incentives to needed investments.

b. Article III

Section 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws.

Section 4. No law shall be passed abridging the freedom of speech, of expression, or of the press, or the right of the people peaceably to assemble and petition the government for redress of grievances.

Section 8. The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged.

c. Article XIII

Section 1. The Congress shall give highest priority to the enactment of measures that protect and

enhance the right of all the people to human dignity, reduce social, economic, and political

inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the

common good.

To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments.

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Section 3. The State shall afford full protection to labor, local and overseas, organized and

unorganized, and promote full employment and equality of employment opportunities for all.

It shall guarantee the rights of all workers to self-organization, collective bargaining and

negotiations, and peaceful concerted activities, including the right to strike in accordance with

law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They

shall also participate in policy and decision-making processes affecting their rights and benefits as

may be provided by law.

The State shall promote the principle of shared responsibility between workers and employers and

the preferential use of voluntary modes in settling disputes, including conciliation, and shall

enforce their mutual compliance therewith to foster industrial peace.

The State shall regulate the relations between workers and employers, recognizing the right of labor

to its just share in the fruits of production and the right of enterprises to reasonable returns to

investments, and to expansion and growth.

2. New Civil Code

Art. 1700. The relations between capital and labor are not merely contractual. They are so impressed with public interest

that labor contracts must yield to the common good. Therefore, such contracts are subject to the special laws on labor

unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar

subjects.

Art. 1701. Neither capital nor labor shall act oppressively against the other, or impair the interest or convenience of the

public.

Art. 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent

living for the laborer.

Art. 1703. No contract which practically amounts to involuntary servitude, under any guise whatsoever, shall be valid.

Art. 1704. In collective bargaining, the labor union or members of the board or committee signing the contract shall be

liable for non-fulfillment thereof.

Art. 1705. The laborer's wages shall be paid in legal currency.

Art. 1706. Withholding of the wages, except for a debt due, shall not be made by the employer.

Art. 1707. The laborer's wages shall be a lien on the goods manufactured or the work done.

Art. 1708. The laborer's wages shall not be subject to execution or attachment, except for debts incurred for food, shelter,

clothing and medical attendance.

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Art. 1709. The employer shall neither seize nor retain any tool or other articles belonging to the laborer.

Art. 1710. Dismissal of laborers shall be subject to the supervision of the Government, under special laws.

3. Labor Codea. Article 3

Article 3. Declaration of basic policy. The State shall afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed and regulate the relations between workers and employers. The State shall assure the rights of workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of work.

b. Article 211

Article 211. Declaration of Policy.

It is the policy of the State:

To promote and emphasize the primacy of free collective bargaining and negotiations, including voluntary arbitration, mediation and conciliation, as modes of settling labor or industrial disputes;

To promote free trade unionism as an instrument for the enhancement of democracy and the promotion of social justice and development;

To foster the free and voluntary organization of a strong and united labor movement;

To promote the enlightenment of workers concerning their rights and obligations as union members and as employees;

To provide an adequate administrative machinery for the expeditious settlement of labor or industrial disputes;

To ensure a stable but dynamic and just industrial peace; and

To ensure the participation of workers in decision and policy-making processes affecting their rights, duties and welfare.

To encourage a truly democratic method of regulating the relations between the employers and employees by means of agreements freely entered into through collective bargaining, no court or administrative agency or official shall have the power to set or fix wages, rates of pay, hours of work or other terms and conditions of employment, except as otherwise provided under this Code. (As amended by Section 3, Republic Act No. 6715, March 21, 1989)

c. Article 212

Article 212. Definitions.

"Commission" means the National Labor Relations Commission or any of its divisions, as the case may be, as provided under this Code.

"Bureau" means the Bureau of Labor Relations and/or the Labor Relations Divisions in the regional offices established under Presidential Decree No. 1, in the Department of Labor.

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"Board" means the National Conciliation and Mediation Board established under Executive Order No. 126.

"Council" means the Tripartite Voluntary Arbitration Advisory Council established under Executive Order No. 126, as amended.

"Employer" includes any person acting in the interest of an employer, directly or indirectly. The term shall not include any labor organization or any of its officers or agents except when acting as employer.

"Employee" includes any person in the employ of an employer. The term shall not be limited to the employees of a particular employer, unless the Code so explicitly states. It shall include any individual whose work has ceased as a result of or in connection with any current labor dispute or because of any unfair labor practice if he has not obtained any other substantially equivalent and regular employment.

"Labor organization" means any union or association of employees which exists in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and conditions of employment.

"Legitimate labor organization" means any labor organization duly registered with the Department of Labor and Employment, and includes any branch or local thereof.

"Company union" means any labor organization whose formation, function or administration has been assisted by any act defined as unfair labor practice by this Code.

"Bargaining representative" means a legitimate labor organization whether or not employed by the employer.

"Unfair labor practice" means any unfair labor practice as expressly defined by the Code.

"Labor dispute" includes any controversy or matter concerning terms and conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether the disputants stand in the proximate relation of employer and employee.

"Managerial employee" is one who is vested with the powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees. Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. All employees not falling within any of the above definitions are considered rank-and-file employees for purposes of this Book.

"Voluntary Arbitrator" means any person accredited by the Board as such or any person named or designated in the Collective Bargaining Agreement by the parties to act as their Voluntary Arbitrator, or one chosen with or without the assistance of the National Conciliation and Mediation Board, pursuant to a selection procedure agreed upon in the Collective Bargaining Agreement, or any official that may be authorized by the Secretary of Labor and Employment to act as Voluntary Arbitrator upon the written request and agreement of the parties to a labor dispute.

"Strike" means any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute.

"Lockout" means any temporary refusal of an employer to furnish work as a result of an industrial or labor dispute.

"Internal union dispute" includes all disputes or grievances arising from any violation of or disagreement over any provision of the constitution and by laws of a union, including any violation of the rights and conditions of union membership provided for in this Code.

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"Strike-breaker" means any person who obstructs, impedes, or interferes with by force, violence, coercion, threats, or intimidation any peaceful picketing affecting wages, hours or conditions of work or in the exercise of the right of self-organization or collective bargaining.

"Strike area" means the establishment, warehouses, depots, plants or offices, including the sites or premises used as runaway shops, of the employer struck against, as well as the immediate vicinity actually used by picketing strikers in moving to and fro before all points of entrance to and exit from said establishment. (As amended by Section 4, Republic Act No. 6715, March 21, 1989)

d. Article 255

Article 255. Exclusive bargaining representation and workers’ participation in policy and decision-making. The labor organization designated or selected by the majority of the employees in an appropriate collective bargaining unit shall be the exclusive representative of the employees in such unit for the purpose of collective bargaining. However, an individual employee or group of employees shall have the right at any time to present grievances to their employer.

Any provision of law to the contrary notwithstanding, workers shall have the right, subject to such rules and regulations as the Secretary of Labor and Employment may promulgate, to participate in policy and decision-making processes of the establishment where they are employed insofar as said processes will directly affect their rights, benefits and welfare. For this purpose, workers and employers may form labor-management councils: Provided, That the representatives of the workers in such labor-management councils shall be elected by at least the majority of all employees in said establishment. (As amended by Section 22, Republic Act No. 6715, March 21, 1989)

B. RECRUITMENT & PLACEMENT1. Recruitment of Local & Migrant Workers

a. Definition of Recruitment and Placement

Art 13b Labor Code. 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.

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CASE ASSIGNMENT:

People vs Hon. Domingo Panis

Facts: Serapio Abug was charged with illegal recruitment in 4 criminal

information. Abug filed a motion to quash these information, contending that

Art13b of the Labor codes provides that there shall be illegal recruitment only if

recruitment and placement was committed against two or more persons.

The Office of the Solicitor General argued that the requirement that

there should be two or more persons if the recruitment consists of an offer or

promise of employment to such persons and always for a fee.

Issue: Whether or not the clause “two or more persons” should be construed as a

requirement for the commission of illegal recruitment

Ruling: The SC held:

“xx The proviso merely lays down a rule of evidence that

where a fee is collected in consideration of a promise or

offer of employment to two or more prospective workers,

the individual or entity dealing with them shall be

deemed to be engaged in the act of recruitment and

placement. The words "shall be deemed" create that

presumption.”

Abug was convicted as charged.

a) License vs Authority

License is a document issued by the DOLE authorizing a person or entity to operate a private recruitment employment agency. A licensee is authorized to collect fees.

Authority is a document issued by the DOLE authorizing a person or association to engage in recruitment and placement activities as a private recruitment agency.

b) Essential Elements of Illegal Recruitment

“It is well settled that to prove illegal recruitment, it must be shown that appellant gave complainants the distinct impression that he had the power or ability to send complainants abroad for work such that the latter were convinced to part with their money in order to be employed. Appellant’s act of promising the private complainants that they will be deployed abroad within three months after they have paid the cash bond clearly shows that he is engaged in illegal recruitment.” – People vs Gasacao

“To prove illegal recruitment, only two elements need to be shown: (1) the person charged with the crime must have undertaken recruitment activities and (2) the said person does not have a license or authority to do so.” – People vs de Leon, Feb 7, 1997

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“There is illegal recruitment when one gives the impression of aving the ability to send a worker abroad.” –People vs Goce, Aug 29, 1995

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.

Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic sabotage and shall be penalized in accordance with Article 39 hereof.

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.

Article 34. Prohibited practices. It shall be unlawful for any individual, entity, licensee, or holder of authority:

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;

To furnish or publish any false notice or information or document in relation to recruitment or employment;

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.

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;

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;

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;

To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly authorized representatives;

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.

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;

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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

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.

R.A. 8042, as amended by RA 10022

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;

(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;

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(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.

c) Simple Illegal Recruitment

Simple Illegal Recruitment is the act of recruiting and placing one or two workers abroad without the required license or authority, committed by one to two persons.

Penalty:

Imprisonment of not less than 12 yrs and 1 day to not more than 20 yrs; and

Fine of not less than 1M to not more than 2M.

d) Illegal Recruitment in Large Scale

“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.” –People vs Calonzo, February 27, 1996

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Case Assignment:

People vs Hashim

Facts: Accused Hashim, Macky and a certain Tas, a certain Jun and Neneng were

charged with syndicated illegal recruitment committed against four women.

The latter were promised a decent job abroad but were instead brought to

Malaysia to work as prostitutes. Only Neneng and Hashim were arrested and

arraigned.

Accused Neneng contends that the charge should not be syndicated illegal

recruitment because there were only two of them and that the other accused

remain at large.

Issue: Whether or not the three accused should be arrested and arraigned in

order for syndicated illegal recruitment to propser

Ruling: The SC held that the

“xx it was established beyond reasonable doubt that accused-

appellant, together with at least two other persons, came to an

agreement to commit the felony and decided to commit it. It is

not necessary to show that two or more persons met together

and entered into an explicit agreement laying down the details

of how an unlawful scheme or objective is to be carried out.

Conspiracy may be deduced from the mode and manner in

which the offense was perpetrated; or from the acts of the

accused evincing a joint or common purpose and design,

concerted action and community of interest. xx”

e) Illegal Recruitment as Economic Sabotage

“Illegal recruitment is deemed committed in large scale if committed against three or more persons individually or as a group. In this case, five complainants testified against appellant’s acts of illegal recruitment, thereby rendering his acts tantamount to economic sabotage. Under Section 7 (b) of RA No. 8042, the penalty of life imprisonment and a fine of not less than P500,000.00 nor more than P1,000.000.00 shall be imposed if illegal recruitment constitutes economic sabotage.” –People vs Gasacao

Penalty:

Life Imprisonment; and


LABOR LAW REVIEW 15

f) Illegal Recruitment filed against employees (added based on the lecture)

Employees are liable as illegal recruiters when there is conspiracy to recruit without the necessary license/authority.

In the case of People vs Cabais, the High Court held Cabais, an employee and an applicant herself, liable. She acted directly and participated in the recruitment activities of her employer RSEA which did not have the necessary license to recruit. Cabais also represented herself to the applicant that RSEA can send them abroad for work.

Case Assignment:

People vs Cabais

Facts: Accused Cabais was an employee of Red Sea Employment Agency, owned

by Anita Forneas. They, along with Harm Yong Ho, recruited without a

license/authority six individuals to be sent to Korea.

Cabais and Ho were arrested while Forneas remained at large. RTC

convicted them of syndicated illegal recruitment. Cabais, appealed the decision

contending that she was a mere employee of RSEA and should not be held liable

for illegal recruitment. She was just running the errands of her boss, Forneas.

Issue: Whether or not Cabais, being a mere employee, should not be held liable

for the illegal recruitment

LABOR LAW REVIEW 16

Case Assignment:

People vs Cabais

Ruling: The SC held Cabais liable to wit:

“xx An employee of a company or corporation engaged in

illegal recruitment may be held liable as principal, together

with his employer, if it is shown that he actively and

consciously participated in illegal recruitment. 21Recruitment

is "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." In this case, evidence

showed that accused-appellant was the one who informed

complainants of job prospects in Korea and the requirements

for deployment. She also received money from them as

placement fees. All of the complainants testified that they

personally met accused-appellant and transacted with her

regarding the overseas job placement offers. Complainants

parted with their money, evidenced by receipts signed by

accused Cabais and accused Forneas. Thus, accused-appellant

actively participated in the recruitment of the complainants.

xx”

In the case of People vs Gamboa, the accused contended that she did not give a misrepresentation to the applicant that she can send them abroad. However, the High Court was quick to rule that it was not required that there was a misrepresentation. It was enough that the accused gave an impression that she can send them abroad for work.

Case Assignment:

People vs Gamboa

Facts: Accused Gamboa was an office assistant in a recruitment agency in

Ermita Manila. The agency operated without the required license. An

entrapment operation was conducted by the task force of Anti-Illegal

Recruitment leading to her arrest.

LABOR LAW REVIEW 17

Case Assignment:

People vs Gamboa

Gamboa posits that she is merely a clerk who processes the papers at

the office. She interposed the defense of denial, as well as that she herself was an

applicant for placement abroad. People countered that Gamboa herself

conducted recruitment and placement activities. Gamboa was also not licensed

by the POEA to conduct said recruitment.

Issue: Whether or not Gamboa, being a mere office clerk, may be made liable for

illegal recruitment activities

Ruling: The SC held Gamboa liable to wit:

“xx Accused-appellant Lourdes Gamboa was the office

assistant who answered the queries of applicants and

performed clerical work. Conspiracy to defraud aspiring

overseas contract workers was evident from the acts of the

malefactors whose conduct before, during and after the

commission of the crime clearly indicated that they were one

in purpose and united in its execution. Direct proof of previous

agreement to commit a crime is not necessary as it may be

deduced from the mode and manner in which the offense was

perpetrated or inferred from the acts of the accused pointing

to a joint purpose and design, concerted action and community

of interest. xx”

“xx At any rate, the lack of criminal intent on the

part of an accused - assuming ex-gratia argumenti that

accused-appellant was indeed unaware of the illegal nature of

the recruitment business of her co-accused - is hardly a defense

in the prosecution for illegal recruitment. It must be

emphasized that Illegal Recruitment in Large Scale penalized

under The Migrant Workers and Overseas Filipinos Act of

1995, a special law, is malum prohibitum and not malum in se.

The criminal intent of the accused is not necessary and the fact

alone that the accused violated the law warrants her

conviction.”

LABOR LAW REVIEW 18

Case Assignment:

People vs Gamboa

“xx Suffice it to say that an illegal recruiter need not

expressly represent to the victim that she has the ability to

send workers abroad. It is enough that she gives

the impression of her ability to enlist workers for job

placement abroad in order to induce them to tender payment

of fees, as what accused-appellant had done to the

complainants in this case. xx”

In the case People vs Goce, the Supreme Court reiterated the same ruling from People vs Gamboa. It was the making of impression that is enough to justify conviction of illegal recruitment.

Case Assignment:

People vs Spouses Goce

Facts: Nellie Agustin was charged with syndicated and llarge scale illegal

recruitment along with spouse Dan and Loma Goce. Agustin contended that she

merely introduced the applicants to the spouses and did not participate directly

in the recruitment activities. She posits that there was no conspiracy to recruit.

Issue: WON Agustin actively and directly recruited applicants for employment

abroad.

Ruling: The Supreme Court held that the act of introducing is included in the

definition of recruitment as making referrals, to wit:

“xx referral is the act of passing along or forwarding of an

applicant for employment after an initial interview of a

selected applicant for employment to a selected employer,

placement officer or bureau. There is illegal recruitment

when one gives the impression of having the ability to send a

worker abroad." It is undisputed that appellant gave

complainants the distinct impression that she had the power

or ability to send people abroad for work such that the latter

were convinced to give her the money she demanded in order

to be so employed. xx”

Agustin also received money from the applicants.

LABOR LAW REVIEW 19

Case Assignment:

People vs Gallardo

Facts: Remedios Malapit, along with Nenita Gallardo, was charged with large-

scale illegal recruitment. Malapit contended that she did not convince nor

promise the applicants any employment abroad nor did she accept payments

from them.

Issue: WON Remedios Malapit committed any act of illegal recruitment.

Ruling: The Supreme Court convicted Malapit of large-scale illegal recruitment.

It held:

“xx , the evidence against accused-appellant has established

beyond a shadow of doubt that she actively collaborated with

co-accused Gallardo in illegally recruiting the complainants in

this case. As correctly pointed out by the trial court, the

private complainants in this case would not have been induced

to apply for a job in Canada were it not for accused-appellant’s

information, recruitment, and introduction of the private

complainants to her co-accused Gallardo.

Illegal recruitment is committed when it is shown that the

accused-appellant gave the private complainants the distinct

impression that she had the power or ability to send

complainants abroad for work such that the latter were

convinced to part with their money in order to be employed.

To be engaged in the practice and placement, it is plain that

there must at least be a promise or offer of an

employment from the person posing as a recruiter whether

locally or abroad. xx”

In the case of People vs Alforte, the Supreme Court likewise ruled that in syndicated illegal recruitment, there is conspiracy to be established among the recruiters. Each person plays a definite role such that conviction for syndicated illegal recruitment is justified.

LABOR LAW REVIEW 20

Case Assignment:

People vs Alforte

Facts: Dino Alforte and his group were charged with syndicated illegal

recruitment. They were alleged to have charged placement and processing fees

against their applicants but failed to provide the promised employment to

Saipan. It was found that the group did not have the necessary license or

authority to conduct illegal recruitment.

Issue: WON Alforte and his cohorts acted in conspiracy and confederated with

each other to commit syndicated illegal recruitment

Ruling: The Supreme Court held that there was conspiracy to wit:

“xx It was accused-appellant's assurances and promises of

employment abroad which had induced them to part with

large sums of money.

The five culprits including accused-appellant represented

themselves as a group; hence when private complainants paid

the sums of money to accused-appellant, the issuance of the

receipts by the other members would be entirely reasonable

and proper. In fact, this delineation of their respective roles

strongly shows that the group were acting in concert in the

defraudation of private complainants. xx”

In the case of People vs Chowdury, the Supreme Court held that an employee who did not know that there the employer has no license or that the employer did not register his name with POEA did not conspire with the employer for the commission of the illegal recruitment.

LABOR LAW REVIEW 21

Case Assignment:

People vs Chowdury

Facts: Bulu Chowdury was charged with illegal recruitment committed in a large

scale. The accused was a consultant for Craftrade Overseas Developers.

Chowdury denied having knowledge that the license of Craftrade has already

expired and that he was not registered with POEA. He also interposed the

defense that he was merely fulfilling his job as a consultant in the said office. it

was in his job description to interview applicants for abroad.

Issue: WON Chowdury knowingly and intentionally participated in the

commission of illegal recruitment

Ruling: The Supreme Court held that Chowdury was not aware of the fact that

Craftrade was no longer licensed to conduct recruitment. Thus,

“xx The obligation to register its personnel with the POEA

belongs to the officers of the agency.[32] A mere employee of the

agency cannot be expected to know the legal requirements for

its operation. The evidence at hand shows that accused-

appellant carried out his duties as interviewer of Craftrade

believing that the agency was duly licensed by the POEA and

he, in turn, was duly authorized by his agency to deal with the

applicants in its behalf. Accused-appellant in fact confined his

actions to his job description. He merely interviewed the

applicants and informed them of the requirements for

deployment but he never received money from them. Their

payments were received by the agency's cashier, Josephine

Ong. Furthermore, he performed his tasks under the

supervision of its president and managing director. Hence, we

hold that the prosecution failed to prove beyond reasonable

doubt accused-appellant's conscious and active participation

in the commission of the crime of illegal recruitment. His

conviction, therefore, is without basis. xx”

g) Illegal Recruitment vs Estafa

RA 10022, AN ACT AMENDING REPUBLIC ACT NO. 8042

Sec 5. xx

LABOR LAW REVIEW 22

http://sc.judiciary.gov.ph/jurisprudence/2000/feb2000/129577_80.html#_ftn32

"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 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

People vs Calonzo

“As regards the conviction of Calonzo for estafa on five (5) counts we ruled in People v. Turda that recruitment of persons for overseas employment without the necessary recruiting permit or authority from the POEA constitutes illegal recruitment; however, where some other crimes or felonies are committed in the process, conviction under the Labor Code does not preclude punishment under other statutes. In People v. Romero we said that the elements of estafa were: (a) that the accused defrauded another by abuse of confidence or by means of deceit, and (b) that damage or prejudice capable of pecuniary estimation is caused to the offended party or third person.”

h) Liabilitiesa. Local employment agencyb. Foreign Employer

i. Theory of Imputed KnowledgeThe theory of imputed knowledge provides that knowledge of matters pertaining to employment are ascribed to the principal through the agent.

LABOR LAW REVIEW 23

Case Assignment:

Sunace vs NLRC

Facts: Divina Montehermozowas deployed to Taiwan by Sunace Agency as a

domestic helper. The year was for a year only but she entered into another two

year contract after the expiration of the original one.

Upon her arrival n Manila, she filed a complaint against the Sunace

Agency before the NLC. She claims that she was underpaid and was imprisoned.

Sunace denied any liability on the ground that it did not know of the extension.

Also, the contract of agency between Suunace and Divina was already

extinguished.

Both the LA and the CA held Sunace to be liable based on the theory of

imputed knowledge.

Issue: Whether or not the doctrine of imputed knowledge can be applied in this

case

Case Assignment:

Sunace vs NLRC

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 the New Civil Code provides,

xx” Contracts take effect only between the parties, their assigns, and heirs, except in case w here the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law.

Sunace also averred that the contract of agency between it and Divina

was impliedly revoked. As such:

“xx 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. Article

1924 of the New Civil Code reading The agency is revoked if the principal directly manages

i) Pretermination

Jurisdiction Money Claims of OFWJurisdiction of money claims of OFWs was vested on Labor Arbiters by virtue of RA 8042. This includes claims for damages arising out of employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment, including actual, moral, exemplary and other forms of damages. (Section 10, RA 8042)

The period to decide the cases shall be within 90 calendar days from the filing of the complaint which shall commence to run upon acquisition by the Labor Arbiter of jurisdiction over the respondents. (Sec 13, Rule V, The 2005 Revised Rules of Procedure of the NLRC).

Award in case of premature termination: Full reimbursement of the OFWs placement fee with 12% interest per annum; and

o If the contract is below one year, the salaries for the entire unexpired portion of the contract shall be paid; OR

LABOR LAW REVIEW 24

Case Assignment:

Sunace vs NLRC

Facts: Divina Montehermozowas deployed to Taiwan by Sunace Agency as a

domestic helper. The year was for a year only but she entered into another two

year contract after the expiration of the original one.

Upon her arrival n Manila, she filed a complaint against the Sunace

Agency before the NLC. She claims that she was underpaid and was imprisoned.

Sunace denied any liability on the ground that it did not know of the extension.

Also, the contract of agency between Suunace and Divina was already

extinguished.

Both the LA and the CA held Sunace to be liable based on the theory of

imputed knowledge.

Issue: Whether or not the doctrine of imputed knowledge can be applied in this

case

RA 8042, 1995

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

o If the contract was for one year and more, the salaries for the unexpired portion of the contract OR three (3) months pay for every year of the unexpired portion whichever is less.

NOTE: Accdg to our lecture, for this is to apply, the contract was terminated after service of more than a year.

The following case are of worth to determine the applicability of the provisions of RA 8042 in award of money claims of preterminated OFWs:

Marsaman Maritime Agency vs NLRC, Aug 1999 Serrano vs Gallant Maritime Services, March 2009 Yap vs Thenamaris Ship’s Mgt, 2011 Skipper’s vs Sereno, February 2012 PERT/CPM vs Venly, Sept 2011

LABOR LAW REVIEW 25

RA 8042, 1995

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

RA 10022, 2009

"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.

CASE TITLE CONTRACT DETAILSDATE OF

TERMINATION OF EMPLOYEE

DATE OF JUDGMENT

WHAT WAS APPLIED AND HOW WHY

Marsaman Maritime Agency vs NLRC

Wifredo Cajeras

Contract Period: of 10 months

Terminated: Less than 2 months after being on board.

Sept 25, 1995

August 1999 RA 8042.

Award for the unexpired portion of the contract because the contract was less than one year.

Because RA 8042 was effective at that time Cajeras was dismissed.

“We agree with petitioners that Sec. 10, RA 8042, applies in the case of private respondent and to all overseas contract workers dismissed on or after its effectivity on 15 July 1995”

Serrano vs Gallant Maritime Services

Antonio Serrano

Contract period: 1year

JD: Chief Officer but was downgraded to second officer

Terminated: 2 months and 7 days after being on board

May 26, 1998

March 24, 2009 AWARDED his salaries for the entire unexpired portion of his employment contract consisting of nine months and 23 days computed

The provision was declared UNCONSTITUTIONAL because it creates disparity among the OFW with less than 1 year as against those for more than 1 year. The provision was stated to be a suspect classification violative of the Constitutional mandate of equal protection clause.

Yap vs Thenamaris Ship’s Mgt

Claudio Yap

Contract Period: 1 year from Aug 14, 2001

JD: Electrician

Terminated: Nov 10, 2001

May 30, 2011 Serrano ruling was applied.

As a general rule, an unconstitutional act is not a law; it confers no rights; it imposes no duties; it affords no protection; it creates no office; it is inoperative as if it has not been passed at all.

The doctrine of operative fact serves as an exception to the aforementioned general rule. The doctrine is applicable when a declaration of unconstitutionality will impose an undue burden on those who have relied on the invalid law.Following Serrano, we hold that this case should not be included in the aforementioned exception. After all, it was not the fault of petitioner that he lost his job due to an act of illegal dismissal committed by respondents. To rule otherwise would be iniquitous to petitioner and other OFWs, and would, in effect, send a wrong signal that principals/employers and recruitment/manning agencies may violate an OFW’s security of tenure which an employment contract embodies and actually profit from such violation based on an unconstitutional provision of law.

LABOR LAW REVIEW 26

Skipper’s vs Sereno

Name: Napoleon O. De GraciaContract Duration: 10 monthsContract Date: 17 July 1998Position: 3rd Engineer

Name: Isidro L. LataDuration: 12 monthsPosition: 4th EngineerContractContract Date: 17 April 1998

Name: Charlie A. AprostaContract Duration: 12 months Position: Third OfficerContract Date: 17 April 1998

January 28, 1999 Feb 8, 2012 Serrano Doctrine as against RA 8042, as UNAMENDED

Since the termination occurred on January 1999 before the passage of the amendatory RA 10022, we shall apply RA 8042, as unamended, without touching on the constitutionality of Section 7 of RA 10022.

The declaration in March 2009 of the unconstitutionality of the clause “or for three months for every year of the unexpired term, whichever is less” in RA 8042 shall be given retroactive effect to the termination that occurred in January 1999 because an unconstitutional clause in the law confers no rights, imposes no duties and affords no protection. The unconstitutional provision is inoperative, as if it was not passed into law at all.

PERT/CPM vs Venly

LABOR LAW REVIEW 27

b. Illegal Recruitment, Art 38, Sec 6 Migrant Workers Act

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.

Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic sabotage and shall be penalized in accordance with Article 39 hereof.

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.

R.A. 8042, as amended by RA 10022

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;

(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;

LABOR LAW REVIEW 28

(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.

c. Direct Hiring

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

Exceptions: Members of the Diplomatic Corps International Organizations Such other persons which the DOLE may authorize Name Hire or those persons who were able to secure employment overseas without the assistance

of any recruitment or placement agency

2. Regulation and Enforcement

a. Remittance of Foreign Exchange earnings

Article 22. Mandatory remittance of foreign exchange earnings. It shall be mandatory for all Filipino workers abroad to remit a portion of their foreign exchange earnings to their families, dependents, and/or beneficiaries in the country in accordance with rules and regulations prescribed by the Secretary of Labor.

E.O. 857:

1. To protect the welfare of the families, dependents and other beneficiaries of OFW;

2. To ensure that the remittances are channeled through authorized financial institutions; and

LABOR LAW REVIEW 29

3. To help the government in their economic development programs.

Rate of Remittances:

Seafarers a d Mariners 80% of Basic salary Construction companies and workers 70% of Basic Salary Professional Workers 70% of Basic Salary Professional Workers w/o Board & Lodging 50% of Basic Salary Domestic & other service workers 50% of Basic Salary All other workers 50% of Basic Salary

Remittance Procedure

Proof of Compliance:

Confirmed bank remittance form; Duly authenticated certification from the employer that the remittance has been effected; Certification a to the surrender for pesos to the Philippine Banking System and Receipt of the International Postal Money Order.

b. Prohibited Activities

Article 34. Prohibited practices. It shall be unlawful for any individual, entity, licensee, or holder of authority:

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;

To furnish or publish any false notice or information or document in relation to recruitment or employment;

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.

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;

LABOR LAW REVIEW 30

Open Bank Acct prior to departure.

Give the Account Number to POEA.

Licensed agency, construction, contractor or manning agent of the OFW must deposit to the account.

Direct payment to the beneficiaries is allowed.

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;

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;

To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly authorized representatives;

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.

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;

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

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.

c. Regulatory and Visitorial Powers of the Secretary

Article 33. Reports on employment status. Whenever the public interest requires, the Secretary of Labor may direct all persons or entities within the coverage of this Title to submit a report on the status of employment, including job vacancies, details of job requisitions, separation from jobs, wages, other terms and conditions and other employment data.

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

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

d. Penalties for Illegal Recruitment

Penalty for Simple Illegal Recruitment:

Imprisonment of not less than 12 yrs and 1 day to not more than 20 yrs; and Fine of not less than 1M to not more than 2M.

Penalty for Illegal Recruitment Constituting Economic Sabotage:

Imprisonment of not less than 12 yrs and 1 day to not more than 20 yrs; andLABOR LAW REVIEW 31


e. Payment of Claims of OFWs in case of illegal termination

RA 8042 provides that the in case of illegal termination of OFW, the award shall be:

Republic of the PhilippinesDEPARTMENT OF LABOR AND EMPLOYMENT

Intramuros, Manila

RULES AND REGULATIONS GOVERNING PRIVATERECRUITMENT AND PLACEMENT AGENCY

FOR LOCAL EMPLOYMENT

By virtue of the authority vested in the Secretary of Labor and Employment under Article 25 of the Labor Code of the Philippines, as amended, the following revised rules and regulations are hereby promulgated to govern and regulate the activities of all individuals and entities engaged in the recruitment and placement of persons for local employment.

Rule I

DEFINITIONS OF TERMS

SECTION 1. Definition of Terms a. Department – refers to the Department of Labor and Employment.

b. Secretary – refers to the Secretary of Labor and Employment.

c. Bureau – refers to the Bureau of Local Employment.

d. Regional Office – refers to the Regional Offices of the Department.

e. District/Provincial Office – refers to the extension offices of the Department.

f. Regional Director – refers to the Director of the Regional Office.

g. Private Recruitment and Placement Agency (PRPA) or Agency – refers to any individual,` partnership,

corporation or entity engaged in the recruitment and placement of persons for local employment.

h. PRPA Branch – refers to any extension office of a licensed PRPA.

i. Representative – refers to a person acting as an agent of a licensed PRPA registered with the Regional Office

and granted Authority in the recruitment of persons for local employment.

j. 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 local employment,

whether for profit or not; provided, that any person or entity which in any manner, offers or promises

employment for a fee, to two or more persons shall be deemed engaged in recruitment and lacement.

k. Recruit – refers to any individual promised, contracted, or enlisted for employment for a fee.

l. License – refers to the certificate issued by the Department authorizing an individual, partnership, corporation, or

entity to operate a private recruiment and placement agency.

m. Authority to Operate Branch Office – refers to the document granted by the Department authorizing the

licensed PRPA to establish and operate a branch office.

n. Authority to Recruit – refers to the document granted by the Regional Office authorizing a person to conduct

recruitment activities in the region.

o. Licensee – refers to any person or entity duly licensed and authorized by the Department to operate a private

recruitment and placement agency.

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p. Recruitment Contract – refers to the agreement entered into between a licensed PRPA or its authorized

representative and a recruit stating clearly the terms and conditions of the recruitment in a language known and

understood by the recruit.

q. Employment Contract – refers to the agreement entered into between the employer and a recruit stating clearly

the terms and conditions of the employment in a language known and understood by the recruit.

r. Placement Fee – refers to the amount charged by a PRPA from a recruit as payment for placement services.

s. Service Fee – refers to the amount charged by a PRPA from an employer as payment for employment services.

Rule IIAPPLICATION / RENEWAL OF LICENSE OF PRIVATE RECRUITMENT AND PLACEMENT AGENCY

Section 2. Qualifications - An applicant for a license to operate a private recruitment and placement agency must possess the

following:

a. Must be a Filipino citizen, if single proprietorship. In case of partnership or a corporation, at least seventy-five

percent (75%) of the authorized capital stock must be owned and controlled by Filipino citizens;

b. Must have a minimum networth of P200,000.00 in the case of single proprietorship and partnership or a minimum

paid-up capital of P500,000.00 in the case of a corporation.

c. The owner, partners or the officers of the corporation must be of good moral character and not otherwise

disqualified by law;

d. Must have an office space with a minimum floor area of fifty (50) square meters.

SECTION 3. Place to File application. Application for license shall be filed with the Regional Office having jurisdiction over the

place where the applicant wishes to establish its main office.

SECTION 4. Requirements for Application. The applicant for a license shall submit a duly accomplished application form, and in

support thereof, the following requirements:

a. A filing fee of One Thousand Pesos (P1000.00); if single proprietor; and P3,000 if corporation or partnership;

b. Certified copy of the Certificate of Registration of firm or business name from the Department of Trade and

Industry (DTI), in the case of single proprietorship; or a certified copy of the Articles of Partnership or

Incorporation duly registered with the Securities and Exchange Commission (SEC), in the case of a partnership

or a corporation;

c. A sworn statement of assets and liabilities and/or a duly audited financial statement, as the case may be;

d. Owner’s certificate/title of office location or contract of lease of office space for at least two (2) years;

e. NBI clearance of the applicant, or the partners in the case of a partnership or all the officers and members of the

Board of Directors, in the case of a corporation;

f. Income Tax Returns for the last two (2) years;

g. A verified undertaking that the applicant shall:

(1) not engage in the recruitment of children below 15 years of age or place children below 18 years old in

hazardous occupation in accordance with Republic Act No. 7610 as amended by Republic Act No. 7658

and other related laws; and

(2) assume full responsibility for all claims and liabilities which may arise in connection with the use of the

license;

h. Organizational structure and list of all officers and personnel with their respective bio-data, two (2) passport-size

ID pictures and a detailed description of their duties and responsibilities; and

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i. Specific address and location map of the Office/proposed Office;

j. List of all authorized representatives, if any, who must be at least high school graduate, with their corresponding

bio-data, two (2) passport-size ID pictures, high school diploma or other proof of educational attainment duly

authenticated, NBI clearance and Special Power of Attorney (SPA).

No application shall be accepted, unless all the requirements have been complied with.

SECTION 5. Action on the Application.a. Upon receipt of the application, the Regional Director or his duly authorized representative shall evaluate the

documents submitted and conduct an ocular inspection of the applicant’s office;

b. Within fifteen (15) working days after the ocular inspection, the Regional Director shall act on the application, and

immediately notify the applicant of the action taken; and

c. Application which do not meet the requirements set forth in these rules shall be denied.

SECTION 6. Posting of Cash and Surety Bonds and Payment of License FeePrior to the approval of the license, the applicant shall post cash and surety bonds of Twenty-Five Thousand Pesos (P25,000.00)

and One Hundred Thousand Pesos (P100,000.00) respectively, valid for two (2) years and then pay a license of Six Thousand

Pesos (P6,000.00). The bonds shall answer for all valid and legal claims arising from the illegal use of the license and shall likewise

guarantee compliance

with the provisions of the Labor Code and its implementing Rules. In case of loss of license, the licensee shall pay Six Hundred

Pesos (P600.00) as payment for the issuance of a certified copy of the license upon presentation of proof of loss.

SECTION 7. Publication. The Agency shall publish once in a newspaper of general circulation the license number of the agency,

names and pictures of authorized representatives within fifteen (15) days from the issuance of the license and shall submit a copy of

said publication to the Department.

SECTION 8. Validity of the License. The license shall be valid all over the Philippines for two (2) years from the date of issuance,

upon submission of proof of publication unless sooner suspended, cancelled or revoked by the Regional Director.

SECTION 9. Non-transferability. No license shall be transferred, conveyed or assigned to any other person or entity.

SECTION 10. Display of License. The original license or a copy shall be displayed conspicuously at all times in the office premises

of the PRPA.

SECTION 11. Renewal of License. An application for renewal of license shall be filed not later than thirty (30) days before

expiration of the same. No agency shall be allowed to renew its license if it has been convicted by the regular courts for violation of

the Labor Code, as amended, and its implementing Rules, or if its license has been previously revoked.

SECTION 12. Requirements for Renewal. The Agency shall submit its existing license together with the requirement specified in

Section 4 of this Rules.

SECTION 13. Change of Ownership. Any Agency which desires to transfer ownership shall surrender its license to the issuing

Regional Office.

SECTION 14. Changes of Business Address. An Agency which desires to transfer to a new business address shall notify the

Regional Office which issued the license at least thirty (30) working days prior to the intended date of transfer. It shall likewise notify

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the Regional Office which has jurisdiction over the new business address and submit a sketch of the new office and a copy of the

contract of lease, if any.

RULE IIIGRANTING/RENEWAL OF AUTHORITY TO RECRUIT, RECRUITMENT PROCEDURE, PLACEMENT AND OTHER RELATED

ACTIVITIES

SECTION 15. Authority to Recruit. A licensed Agency or its authorized representative shall secure an authority to recruit from the

Regional Office having jurisdiction over the place where recruitment activities will be undertaken. Such authority shall be

coterminous with the license unless sooner revoked/cancelled by the issuing Regional Office or terminated by the Agency.

SECTION 16. Documents Required. The following documents shall be submitted by the applicant/agency for the issuance/renewal

of an Authority to Recruit:

a. Letter request by the agency;

b. Copy of current license;

c. Certification under oath of licensee of the proposed recruitment activities of the representative;

d. NBI clearance and bio-data of the representative with two (2) ID pictures;

e. Clearance from previous agency, if applicable; and

f. Previous Authority to Recruit, in case of renewal.

No application shall be accepted unless all the requirements have been complied with.

SECTION 17. Action on the Application for the Issuance/Renewal of an Authority to Recruita. Within ten (10) working days from receipt of complete documents, the Regional Director shall act on the

application;

b. In case of denial, the Regional Director shall state the reasons for denial; A new application/renewal may be

denied on any of the following grounds:

- non compliance with the requirements;

- applicant’s record of unresolved illegal recruitment case; or

- presence of any pending case against the applicant and/or the agency

c. Upon approval of application/renewal, the applicant shall pay a fee of P1,500.00 to the Regional Office

concerned.

SECTION 18. Recruitment by Representative. Only representatives duly authorized to recruit and whose names are registered

with the Regional Office can engage in recruitment activities.

SECTION 19. Termination of Authority of Representatives. The authority of the representatives may be revoked or terminated by

the Agency or cancelled by the issuing Regional Office. The Agency shall publish in a newspaper of general circulation the names

and pictures of representatives whose authority have been revoked or terminated and the Regional Office shall be furnished a copy

of the said publication. The Regional Office shall keep a record of the authorities issued, revoked or terminated and furnish copy to

the Bureau.

SECTION 20. Steps to be followed in the Recruitment of Persons. The following procedures shall be followed by the licensed

Agency or its duly authorized representative in the recruitment of persons;

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a. The Agency or its duly authorized representative shall present to the PESO, Provincial and District Office

where the recruitment activity is to be undertaken, copy of existing license, and original copy of authority to

recruit issued by the Regional Office concerned.

b. The representative shall require the recruit to submit a copy each of the following:

(1) birth certificate from the local civil registrar; and

(2) medical certificate issued by a government physician or by a reputable private medical practitioner.

c. The Agency or its authorized representative and the recruit shall enter into a recruitment contract, duly

notarized a copy of which shall be submitted to the Regional Office where recruitment activity was undertaken.

d. The Agency or its duly authorized representative shall submit a list of the names and addresses of its recruits,

together with copy of documents specified in procedure (b) above, to the Regional Office or the appropriate

Provincial/District Office where recruitment was undertaken for appropriate authentication and validation;

copies of these documents shall be furnished the Regional Office of destination of the recruit.

e. After the recruitment activity, the Regional Office of origin shall issue a certification to the Agency or its duly

authorized representative that the recruitment activity has been in accordance with this Rule, copy furnished

the Marine Police/Coast Guard/Philippine National Police, as the case may be.

f. Provide the recruit with a stamped envelope and form indicating the name, address of recruit and the name,

address, telephone number of his/her employer to be sent to the parent.

g. Prior to deployment the Regional Office of origin shall notify the Regional Office of destination of the arrival of

the recruits, and the latter shall see to it that the terms and conditions of the recruitment contract are followed

strictly.

SECTION 21. Replacement of Worker Without Cost. An employer shall be entitled to replace a worker without additional cost

only once, within one (1) month from the first day the worker reported for work, on any of the following grounds:

a. The worker is found to be suffering from an incurable or contagious disease as certified by a competent

physician;

b. The worker is physically or mentally incapable of discharging the minimum normal requirements of the job, as

specified in the employment contract; or

c. The worker abandons the job, voluntarily resigns, commits theft or any other prejudicial to the employer.

SECTION 22. Refund of Service Fee. The employer is entitled to a refund of seventy five (75%) percent of the service fee if the

Agency failed to provide a replacement after a lapse of one (1) month from receipt of the request for the replacement based on any

of the grounds enumerated in the preceding Section.

SECTION 23. Forfeiture of Rights. The employer is deemed to have forfeited his right for a replacement without cost or refund of

the service fee, if he failed to avail of the same within one (1) month from the date of engagement of the worker.

RULE IVESTABLISHMENT OF BRANCH OFFICE/RENEWAL OF AUTHORITY TO OPERATE BRANCH OFFICE

SECTION 24. Establishment of Branch Office. The application to establish a branch office shall be filed with the Regional Office

having jurisdiction over the place where the branch office is to be established.

SECTION 25. Requirements. A licensee who desires to establish a branch office shall submit the following requirements:

a. Filing fee of One Thousand Pesos (P1000.00);

b. Certified copy of the current license;

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c. Organizational structure of the branch office, including duly notarized appointments;

d. NBI clearance, bio-data and two (2) passport-size ID pictures of the branch manager and staff members;

e. Certification that the branch office has office space with a minimum floor area of fifty (50) square meters;

f. Certification that the licensee has no pending case with the Regional Office issuing the license or where it has

established branch office; and

g. List of all authorized representatives, if any, who must be at least high school graduate, with their

corresponding bio-data, two (2) passport-size ID pictures, high school diploma or other proof of educational

attainment, NBI clearance and Special Power of Attorney (SPA) issued by the licensee.

No application shall be accepted, unless all the requirements have been complied with.

SECTION 26. Action on the Application.

a. Upon receipt of the application, the Regional Director or his duly authorized representative shall evaluate the

documents submitted and conduct an ocular inspection of the PRPA branch.

b. Within fifteen (15) working days from the date of filing, the Regional Director shall either deny or approve the

application and immediately notify the application of the action taken.

SECTION 27. Posting of Additional Surety Bond and Payment of Registration Fee. Prior to approval of the authority to

establish a branch office, the licensee/applicant shall post an additional surety bond of Fifty Thousand Pesos (P50,000.00) and pay

a registration fee of Three Thousand Pesos (P3,000.00).

In case of loss, the licensee shall pay Six Hundred Pesos (P600.00) as payment for the issuance of a certified copy of the authority

upon presentation of proof of loss.

SECTION 28. Validity of the Authority. The authority to operate branch office shall be coterminous with the validity of the license

of the Agency subject for renewal upon submission of the original authority and requirements provided for under Section 25 hereof

as well as the original authority.

RULE VPLACEMENT FEE, SERVICE FEE, AND OTHER CHARGES

SECTION 29. Placement Fee. A licensed PRPA may charge workers a placement fee which shall not exceed twenty percent

(20%) of the worker’s first month’s basic salary; in no case shall such fee be charged prior to the actual commencement of

employment.

SECTION 30. Service Fee. A licensed PRPA may charge employers a service fee which shall not exceed twenty percent (20%) of

the annual basic salary of the worker. In no case shall the service fee be deducted from the worker’s salary.

SECTION 31. Transportation. Transportation expenses of the worker from the place of origin to the place of work shall be charged

against the employer, and shall in no case be deducted from the worker’s salary.

SECTION 32. Issuance of Official Receipt. All payments made or fees collected by a licensed Agency shall be covered by an

official receipt indicating the amount paid and the purpose of such payment.

RULE VISUSPENSION, REVOCATION/CANCELLATION OF LICENSE

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SECTION 33. Grounds for Suspension of a License. Any of the following shall constitute a ground for suspension of a license:

a. violation of any of the provisions of Sections 7,13, or 14 of these Rules;

b. violation of Department Order No. 21, series of 1994 regarding publication of job

vacancies;

c. non-issuance of official receipt for every fee collected;

d. non-submission of monthly report as provided in Section 61 of these Rules;

e. charging or accepting directly or indirectly, any amount in excess of what is prescribed by these Rules;

f. disregard of lawful orders and notices issued by the Secretary or his duly authorized representative; or

g. non-observance of the procedures on recruitment as stated in Section 20 of these Rules.

SECTION 34. Grounds for Cancellation/Revocation of a License. Any of the following shall constitute a ground for the

cancellation/revocation of license:

a. violation/s of the conditions of license;

b. engaging an act or acts of misrepresentation for the purpose of securing a license or renewal thereof;

c. continuous operation despite due notice that the license has expired;

d. incurring two (2) suspensions by a PRPA based on final and executory orders;

e. engaging in labor-only contracting as defined in Article 106 of the Labor Code, as amended;

f. recruitment and placement of workers in violation of Republic Act No. 7610 as amended by Republic Act No.

7658;

g. transferring, conveying or assigning of license/authority to any person or entity other than the one in whose

favor it was issued;

h. violation of any of the provisions, particularly, Article 34 of the Labor Code, as amended, and its Implementing

Rules and Regulations.

SECTION 35. Table of Penalties and Fines. The commission of any of the aforecited grounds for suspension,

cancellation/revocation shall merit imposition of fine and penalties provided in the herein

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Rules and Regulations :

The Agency is jointly and severally liable to any violation or illegal act committed by its

branch.

RULE VIIHEARING AND DISPOSITION OF RECRUITMENT VIOLATION AND RELATED CASES

SECTION 36. Complaints Against Agency. Complaints based on any of the grounds enumerated under the previous Sections

against a licensee/and or the authorized representative/s shall be filed in writing and under oath with the Regional/District/Provincial

Office having jurisdiction over the place where the PRPA/Branch Office is located, or where the prohibited act was committed, or at

complainant’s place of residence, at the option of the complainant; provided, that the Regional Office which first acquires jurisdiction

over the case shall do so to the exclusion of the others.

SECTION 37. Caption and Title. The complaint shall be filed in accordance with the following caption:

Republic of the Philippines

Department of Labor and Employment

Regional Office No. ___

__________________________

Province/District

In the Matter of Violation of

Recruitment Rules and Regulations/Pertinent

Regulations Implementing the Labor

Code, as Amended

- versus - RO Case No. PRPA yr/mo/no. RV

_____________________

Respondent/s.

X - - - - - - - - - - - - - - - - - - - - x

11

SECTION 38. Contents of Complaint. All complaints shall be under oath to be administered by any officer authorized by law and

must contain, among others the following:

a. The name/s and address/es of the complainant/s;

b. The name/s and address/es of the respondent/s;

c. The nature of the complaint;

LABOR LAW REVIEW 40

d. The substance, cause/grounds of the complaint;

e. When and where the action complained of happened;

f. The amount of claim, if any; and

g. The relief/s sought.

All pertinent papers or documents in support of the complaint must be attached whenever possible.

SECTION 39. Docket and Assignment of Cases. Complaints duly received shall be docketed and numbered and shall be

scheduled for hearing within ten (10) working days.

SECTION 40. Answer/Counter-Affidavit. Upon receipt of the complaint, the Regional Director shall issue show cause order

directing the respondent/s to file a verified Answer/Counter-Affidavit within ten (10) working days and copy furnished the complaint/s

and not a Motion to Dismiss, incorporating therein all pertinent documents in support of its defense, and attaching thereto proof of

service of a copy thereof upon the complaint/s. The answer shall be deemed filed on the date of receipt stamped thereon, if filed

personally, or on the date indicated in the registry receipt, if filed by registered mail.

SECTION 41. Motion for Extension. Only one motion for extension of time to file answer shall be allowed. The Regional Director,

upon receipt of such motion may, upon meritorious grounds, grant a non-extendible period not exceeding ten (10) working days.

Rulings of the Regional Director on motions for extension shall be sent by personal service or by registered mail.

SECTION 42. Failure to File Answer. Failure to file an answer/counter affidavit will constitute a waiver on the part of the

respondent.

SECTION 43. Service of Subpoena Duces Tecum and Subpoena Ad Testificandum. The Regional Director shall issue sub-

poena or sub-poena duces tecum. The process server who personally served the subpoena duces tecum and/or subpoena ad

testificandum, notice, order, resolution or decision shall submit his return within five (5) working days from the date of his service

thereof, stating legibly in his return his name, the mode/s of service, the name/s of the other person/s served and the date/s of

receipt. If no service was effected, the serving officer shall state the reason therefor. The return shall form part of the records of the

case.

SECTION 44. Failure or Refusal to Obey Subpoena Duces Tecum and Subpoena Ad Testificandum. The license of an agency

who fails or refuses to obey the subpoena duces tecum/subpoena ad testificandum, shall be suspended until compliance of the

directive of the Regional Director. This is without prejudice to the outcome of the investigation wherein the proper penalty may be

imposed.

SECTION 45. Proof and Completeness of Service. The return is prima facie proof of the facts stated herein. Service by registered

mail is completed upon receipt of the addressee or agent; but if the addressee or agent fails to claim his mail from the post office

within five (5) working days from date of last notice of the postmaster, service shall take effect after such time.

SECTION 46. Authority to Initiate Clarifying Questions. At any stage of the proceedings and prior to the submission by the

parties of the case for resolution, the Regional Office may initiate clarificatory questions to further elicit facts or information, including

but not limited to the subpoena of relevant documentary evidence.

SECTION 47. Summary Judgment. Should the Regional Director find upon consideration of the answers, counter-affidavits and

evidence submitted, that r esolution/decision may be rendered thereon, the case shall be deemed submitted for decision.

LABOR LAW REVIEW 41

SECTION 48. Nature of Proceedings. The proceedings before the Regional Office shall be non-litigious in nature. Subject to the

requirements of due process, the technicalities of and procedure and rules obtaining in the courts of law shall not strictly apply

thereto. The Regional Director may avail himself of all reasonable means to ascertain the facts of the case, including ocular

inspection, where appropriate, and examination of informed persons.

SECTION 49. Effects of Withdrawal/Desistance. The withdrawal/desistance of the complaining witness shall not bar the Regional

Office from proceeding with the investigation on recruitment violation/s. The Regional Office shall act on the case as may be merited

by the results of the investigation and impose such penalties on the erring Agency as may be deemed appropriate.

SECTION 50. Effects of Settlement. At any stage of the proceedings, the parties may submit a Compromise Agreement subject to

the approval of the Regional Office.

SECTION 51. Resolution of the Case. The conduct of hearings shall be terminated within fifteen (15) working days from the first

scheduled hearing. The Regional Director shall resolve the case within ten (10) working days from the time the case is deemed

submitted for decision.

SECTION 52. Suspension of License Pending Investigation. Pending investigation of a complaint leading to the

cancellation/revocation of license, the Regional Director, who is hearing the case, may suspend the license of the PRPA concerned

on any of the following grounds:

a. There exist reasonable grounds to believe that the continued operation of the Agency will lead to further

violation or exploitation of the workers being recruited;

b. Failure of the licensed PRPA to submit its Position Paper/Answer on the complaint within the prescribed

period;

c. Failure to attend the hearing despite due notice called by the Regional Office;

d. Failure or refusal to obey subpoena duces tecum and subpoena ad testificandum issued by the Regional

Director; and

e. Prima facie evidence shows that the Agency has violated and continues to violate any of the provisions of the

Labor Code, as amended, its Implementing

Rules and Regulations on the recruitment and placement of workers.

SECTION 53. Suspension/ Cancellation of License. - The Regional Director who issued the license shall have the power to

suspend/ cancel the license of the Agency.

SECTION 54. Effects of Orders of Suspension/Cancellation or Revocation. – An order of suspension/cancellation or revocation

shall have the effect of suspending or terminating all activities of the Agency which fall under the definition of recruitment and

placement. The Regional Office may seek the assistance of other government institutions, agencies or offices to ensure that

suspension or cancellation orders are implemented.

SECTION 55. Suppletory Application of the Rules of Court. In the absence of any applicable provisions of these Rules, the

pertinent provisions of the Rules of Court may be applied in a suppletory character.

SECTION 56. Appeal. Decision of the Regional Director is appealable to the Secretary within ten (10) working days from receipt of

a copy of the order, on any of the following grounds:

a. If there is prima facie evidence of abuse of discretion on the part of the Regional Director;

b. If the decision and/or award was secured through fraud or coercion;

LABOR LAW REVIEW 42

c. If made purely on questions of law; and/or

d. If serious errors in the findings of facts are raised which, if not corrected, would cause grave or irreparable

damage or injury to the appellant. The appeal shall be filed with the Office of the Secretary, copy furnished the

Regional Office, issuing the Order of suspension or cancellation/revocation.

The Secretary shall have thirty (30) working days from receipt of the records to resolve the appeal. The decision of the Secretary

shall be final and inappealable.

RULE VIIICESSATION OF OPERATION OF THE AGENCY/BRANCH

SECTION 57. Notice of Closure of the Agency or its Branch. The Agency or its branch office which ceases to operate prior to the

expiration of its license or its authority to operate shall notify the Regional Office concerned, stating the justification for such closure,

accompanied by the original receipt of cash bond and the license, or the authority to operate, as the case may be.

SECTION 58. Refund of Cash Bond. An Agency which voluntarily surrender its license shall be entitled to the refund of its

deposited cash bond only after posting a surety bond of similar amount from a bonding company accredited by the Insurance

Commission. The surety bond is valid for three (3) years from expiration of the license.

RULE IXINSPECTORATE AND ENFORCEMENT FUNCTIONS

SECTION 59. Inspection Function. To ensure the effective supervision and regulation of the activities of all licensees, the Regional

Director or his duly authorized representative shall have access to the licensee’s records and premises at any time of the day or

night whenever work is being undertaken therein, to determine violation or may aid in the enforcement of these Rules.

SECTION 60. Writ of Execution. The Regional Director shall issue writs of execution to the appropriate authority for the

enforcement of his/her Orders.

SECTION 61. Submission of Monthly Reports. All Agencies shall submit to the Regional Office, copy furnished the Bureau, not

later than the 5th working day of every month reports verified and confirmed by the Regional Director or his duly authorized

representative of their recruitment and placement activities during the preceding month.

RULE XREPEALING CLAUSE AND EFFECTIVITY DATE

SECTION 62. Repealing Clause. All rules and regulations, guidelines and issuances inconsistent herewith are repealed or modified

accordingly.

SECTION 63. Effectivity. The provisions of these Rules and Regulations shall take effect fifteen (15) days after its publication in

two (2) newspapers of general circulation.

Done in the City of Manila this 5th day of June 1997.

(Sgd.) LEONARDO A. QUISUMBINGSecretary

Refer to POEA Rules for Land-Based Overseas Workers Refer to POEA Rules for Sea-Based Overseas Workers

LABOR LAW REVIEW 43

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C. LABOR STANDARDS

Art 82 of the Labor Code provides that the provisions of Book III shall apply to employees on all establishments and undertakings whether for profit of not, but not to:

1. Government employees of GOCCs with original charter; For GOCCs with original charter, the Civil Service Commission has the jurisdiction.

2. Managerial Employees (including supervisory employees); Those whose primary duty consists of the management of the establishment in which they are employed or

of a department or subdivision thereof; They customarily and regularly direct the works of two or more employees; They have the authority to hire or fire employees of lower rank; or their suggestions and recommendations

as to hiring and firing and as to the promotion or any other change of status of other employed, are given particular weight (Rule 1, Sec 2b, Implementing Rules and Regulations of Book III, Labor Code)

Supervisory employees are Deemed Managerial Employees in view of Art 82 if:

The primary duty consists of the performance of work directly related to management policies of their employer;

Customarily and regularly exercise discretion and independent judgment; and

(i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the management of the establishment in which he is employed or subdivision thereof; or

(ii) execute under general supervision work along specialized or technical lines requiring special training experience or technical lines requiring special training, experience, or knowledge, or

(iii) execute, under general supervision, special assignments and tasks.

Who do not devote more than 20% of their hours worked in a work week to activities which are not directly and closely related to the performance of the work described in paragraphs (1), (2), and (3) above. (Rule 1, Sec 2c, Implementing Rules and Regulations of Book III, Labor Code)

3. Field Personnel;

“Field personnel” is not merely concerned with the location where the employee regularly performs his duties but also with the fact that the employee’s performance is unsupervised by the employer…whose actual hours of work in the field cannot be determined by reasonable certainty. –Autobus Transport Sys, Inc vs Bautista, May 16, 2005

“Fishermen employed by petitioner have no choice but to remain on board its vessel. Although they perform non-agricultural work away from petitioner’s business offices, the fact remains that throughout the duration of their work teu are under the effective control and supervision of petitioner through the vessel’s patron or master as the NLRC correctly held. –Mercidar Fishing Corporation vs NLRC, Oct 8, 1998

4. Members of the family of the employee solely dependent upon him for support;They are not covered because their support may even exceed the benefits given under Book III of the Labor Code.

5. Domestic helper/family drivers those in the personal service of the employer and who cater to the comfort and the convenience of his family or household; Tasks are usually necessary and desirable in the maintenance or enjoyment of the home; and

LABOR LAW REVIEW 45

Personal comfort, convenience and safety of the employer, as well as of the members of the household.

6. Employees paid by result, piece rate workers, pakyaw basis, task basis or by commission; and The basis of their compensation if work accomplished. The employer has no control over their work Refer to Makati Haberdashery vs NLRC

7. Employees of retail establishments and service establishments employing not more than 10 employees.

These employees are also not entitled to:

Overtime pay; Premium pay for rest days and holidays; Night shift differential; Holiday pay; Service incentive leave; and Service charges.

1. Hours of Worka. Coverage and Exclusions

Coverage: All employees of establishments and undertakingsExcluded: Refer to Art 82

1. Government employees of GOCCs with original charter;2. Managerial Employees (including supervisory employees);3. Field Personnel;4. Members of the family of the employee solely dependent upon him for support;5. Domestic helper/family drivers those in the personal service of the employer and who cater to

the comfort and the convenience of his family or household;6. Employees paid by result, piece rate workers, pakyaw basis, task basis or by commission; and7. Employees of retail establishments and service establishments employing not more than 10

employees.

b. Normal Hours of WorkArt 83. The normal hours of work shall not exceed 8 hrs a day.

For health personnel, it shall be 8hrs a day for 5days if the following requisites are met: Cities and Municipalities with a population of 1M ; and Hospitals and clinics with at least 100 bed capacity.

Hours worked shall be compensable:

a) All time during which an employee is required to be on duty or to be at the employer’s premises or to be prescribed to be on duty;

b) All time during which an employee is suffered or permitted to work (Sec 3, Rule I, LC, IRR, Bk III)

(Sec 4, Rule I, LC, IRR, Bk III)

c. ExceptionsArt 83. Except where the exigencies of the service require that such personnel work for 6 days or 48 hours, in which case they shall be entitled to an additional compensation of at least 30% of their regular wage for work on the 6th day.

d. Work interrupted due to brownouts

e. Meal Breaks

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f. Idle time, waiting time, commuting time, travel time whether paid of hours of work or notg. Overtime workh. Night worki. CBA provisions vis-à-vis overtime workj. Night Shift Differentialk. Holiday payl. Service Incentive Leaves

2. WagesWages are remuneration or earnings, however designated, capable of being expressed in terms of money whether fixed or ascertained oon a time, task, piece or commission basis, or other method of calculating the same, which is payable by an employer to employee under a written or unwritten contract of employment for work done, or for work to be done, or for service rendered or to be rendered. (Chavez vs NLRC)

a. No work , no pay principleUniversity of Pangasinan Faculty Union vs NLRC

b. Coverage and Exclusions

c. Facilities vs SupplementsSupplements constitute extra-remuneration or special priveleges or benefits given to or received by the laborers over and above their ordinary earnings or wages.

Facilities are items of necessary expenses for the laborer’s and his family’s existence and subsistence so that by express provision of law, they form part of the wage and when furnished by employer are deductible therefrom, since they are not so furnished, the laborer would spend and pay for them just the same.

Note: Be prepared to be asked for various examples differentiating facilities from supplements.

d. Wages vs Salaries

e. Wage DistortionWage distortion is a situation where an increase in the prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service or other logical bases of differentiation (RA 6727, Metrobank Employees Union vs NLRC).

Note that wage distortion is a non-strikeable issue. The resolution for wage distortion issue shall be sought by voluntary negotiation or arbitration and not by strikes, or lockouts… (RA 6727, Ilaw at Buklod ng Manggagawa vs NLRC)

Elements of Wage Distortion (Prubankers Assoc vs Pru Bank & Trust Co):1. There is hierarchy of positions with corresponding salary rates;2. Significant change in the salary rate of a lower pay class without a concomitant increase in the higher

one;3. Elimination of the distinction between the two levels; and4. The existence of the distortion between the two levels in the same region of the country.

f. CBA provisions vis-à-vis Wage Order, CBA creditabilityThe Credibility provision in Wage Order No. 6 is based on impt public policy, that is, the encouragement of employers to grant wage and allowance increases to their employees higher than the minimum rates of increases prescribed by the statute or administrative regulation (Producers bank vs NLRC).

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My take on this: In other words, the employees have the right to negotiate for a higher salary than what the Regional Tripartite Wage Productivity Board or similar agencies prescribe. Wage Order No 6 prevent the sanctioning of employers who increase the wage of the employees without waiting for the statutory prescribed increase in the latter’s salary. Rather, it encourages the same as bargaining with the employer is a constitutional right and that wages is included in the negotiation. In addition, CBA is the contract between the parties.

g. Non-dimunition of BenefitsArt 100. Prohibition of Elimination or Dimunition of Benefits

Art 127. Non-Dimunition of BenefitsNo wage order issued by any regional board shall provide for wage rates lower than the statutory minimum wage rates prescribed by the Congress (as amended by RA 6727).

Versus Non-diminition of Benefits

h. Workers Preference in case of bankruptcyArt 110, Sec 10 Rule VIII Implementing Rules and Regulations of Book III

i. Labor Code provisions for wage protectionsArt 112 - 119

j. Allowable deductions without employee’s consentArt 113.Galvadores vs Trajano

k. Attorney’s fees and Union Service Fee in Labor CasesArt 111.

l. Criteria / Factors for Wage Setting

3. Rest Daya. Right to Weekly Rest Dayb. Preference of the Employeec. When work on a rest day is authorized

4. Holidays

a. Right to Holiday Payb. Exclusions for Coverage

5. Leavesa. Service Incentive Leaveb. Maternity Leavec. Paternity Leaved. Parental Leavee. Leaves for victims of violence against women

6. Service Chargesa. Coverage b. Exclusionsc. Distributiond. Integration

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7. 13th Month Pay and other Bonusesa. Coverageb. Exclusions ad Exemptions from Coveragec. Nature of the 13th Month Payd. CBA vis-à-vis 13th Month Pay

8. Women Workers (RA 10151)a. Discrimination b. Stipulation against Marriagec. Prohibited Actsd. Classification of Certain Women Workerse. Anti-Sexual Harassment Act

9. Minor Workers (RA 7610, as amended by RA 7678 and RA 9231)a. Regulation of Working Hours of a Childb. Employment of the child in public entertainmentc. Prohibition of employing minors n certain undertaking and certain advertisements

10. Employment of Househelpersa. Definitionb. Benefits accorded to Househelpersc. Terminationd. Reliefs for Unjust Termination

11. Employment of Homeworkersa. Definitionb. Rights and Benefits accorded to Homeworkersc. Conditions for deduction from Homeworkers earnings

12. Apprentice and Learnersa. Distinctions between Learnership and Apprenticeship

13. Handicapped Workers ((RA 7277, as amended by RA 9242)a. Definition of Handicapped Workeresb. Rights of Disabled Workersc. Prohibitions on Discrimintaion adgainst Disabled Personsd. Incentives for Employers

D. TERMINATION OF EMPLOYMENT1. Employer-Employee Relationship

a. 4-Fold Testb. Probationary Employmentc. Kinds of Employment

1. Regular Employment

Reasonable Connection Rule

2. Project Employment

Indicators of Project Employment

3. Seasonal Employment4. Casual Employment5. Fixed Term Employment

Requisite for Validity

d. Job-Contracting and Labor-Only Contracting

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1. When is there Job-Contracting?2. When is there Labor-Only Contracting?3. Conditions that must concur in legitimate job contracting4. Effects of Finding that there is labor only contracting

2. Termination of Employmenta. Substantive Due Process

1. Just Causesa) Serious Misconduct or Willful Disobedienceb) Gross and Habitual Neglect of Dutiesc) Fraud or Willful Breach of Trustd) Abandonment of Employmente) Termination of Employment pursuant to a Union Security Clausef) Totality of Infractions Doctrine

2. Authorized Causesa) Redundancy /Retrenchment and Closure

i. Procedural Steps Requiredii. Requirements for Valid Retrenchment /redundancyiii. Criteria for selecting employees for dismissaliv. Standards to be followed

3. Disease or Illness

b. Procedural Due Process1. Reinstatement Aspect

a) Immediately executori. Actual Reinstatement

ii. Payroll Reinstatement2. Separation Pay in lieu of Reinstatement

a) Strained Relations Rule3. Backwages

a) Components of the Amount of Backwages4. Constructive Dismissal5. Preventive Suspenion6. Quitclaims7. Termination of Employment by Employee

c. Reliefs for Illegal Dismissal

3. Retirement Pay Lawa. Coverageb. Exclusions from Coveragec. Components of Retirement Payd. Retirement Pay under RA 7641 vis-a-viis retirement benefits under SSS and GSIS laws

E. MANAGEMENT PREROGATIVE1. Discipline2. Transfer of Employees3. Productivity Standards4. Grant of Bonus5. Change of Working Hours6. Marital Discrimination7. Post-employment Ban8. Limitations in its Exercise

F. SOCIAL LEGISLATION1. SSS Law

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a. Coverageb. Exclusions from Coverragec. Benefitsd. Beneficiaries

2. GSIS Lawa. Coverageb. Exclusions from Coveragec. Benefitsd. Beneficiaries

3. Limited Portability Law4. Employees Compensation Coverage

LABOR CASES: FLOWCHART OF FILING CASES

I. Cases falling under the Original Exclusive Jurisdiction of the Labor Arbiter

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File the Labor Cases before the Labor Arbiter. Cases under its jurisdiction are enumerated under Art 217. The following are also included:

Money claims of OFWs are also included by virtue of RA 8042; Wage distortion in an unorganized establishments by virtue of RA 6727; Enforcement of compromise agreements (Art 227 of the Labor Code); and Cases arising out of the interpretation and implementation of the CBA by virtue of

Revised Rules of Procedures of the NLRC.

Note that the Labor Arbiters have the ancillary power to issue injunctions only as incidents to cases pending before it in order to preserve the rights of the parties. This, however, does not include injunction on strikes or lockouts. (Pondoc vs NLRC)

Note that the Labor Arbiter has 30 calendar days to hear and decide cases submitted before it.

File an Ordinary Appeal of the decision of the Labor Arbiter before the NLRC within 10 calendar days. The grounds for appeal are as follows:

1. If there is prima facie evidence of abuse of discretion on the part of the Labor arbiter;

2. If the decision, order or award was secured through fraud, or coercion, including graft and corruption;

3. If made purely on questions of law; and4. If serious errors in the findings of facts are raised which would cause grave of

irreparable damage of injury to the appellant.

(Art 223)

The NLRC shall decide the cases within 20 calendar days from receipt of the answer of the appellee. Its decision shall be final and executory after 10 calendar days from the receipt of the parties.

File a Petition for Certiorari under Rule 65 before the Court of Appeals within _________________.

Rule 43 of the Rules of Court is not binding on Labor Cases (Rule 43, Sec 2).

Motion for Reconsideration

II. Direct and Indirect Contempt CasesIII. Cases falling under the Original Exclusive Jurisdiction of the Regional DirectorIV. Cases falling under the Original Exclusive Jurisdiction of the Bureau of Labor RelationsV. Cases falling under the Original Exclusive Jurisdiction of the NLRC

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Labor Law

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