Recruitment and Placement Rules for Local Workers

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LABOR LAW: B. RECRUITMENT AND PLACEMENT

Prof. Joselito Guianan Chan
LAST-MINUTE
NOTES ON THE 2012 BAR EXAMINATION IN LABOR LAW BASED ON THE
SUPREME COURT-PRESCRIBED SYLLABUS
B. RECRUITMENT AND PLACEMENT
[These 8-part Notes discuss all topics/sub-topics in the Supreme Court-prescribed Syllabus for Labor Law]
==================================================================
TOPI CS UNDER THE SYLLABUS


1. Recruitment of Local and Migrant Workers

a. Recruitment and placement; defined
b. Illegal Recruitment, Art. 38 (Local), Sec. 6, Migrant Workers Act, RA 8042
(a) License vs. Authority
(b) Essential elements of illegal recruitment
(c) Simple illegal recruitment
(d) Illegal recruitment in large scale
(e) Illegal recruitment as economic sabotage
(f) Illegal Recruitment vs. Estafa
(g) Liabilities
(a) local employment agency
(b) foreign employer
i. Theory of imputed knowledge
(h) Pretermination of contract of migrant worker
c. Direct hiring

2. Regulation and Enforcement

a. Remittance of foreign exchange earnings
b. Prohibited activities
c. Regulatory and visitorial powers of the Labor Secretary
d. Penalties for illegal recruitment

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======================================
TOPIC UNDER THE SYLLABUS:
======================================

Introduction:
TheSyllabusspeaksofrecruitmentof:

1. LocalWorkers;and
2. MigrantWorkers.
Indeed, the rules are different for the two (2) situations mentioned above. Hence, discussion herein shall be
dividedintothesetwoclassifications.

1.LOCALEMPLOYMENT;RECRUITMENTANDPLACEMENT.
1

a.Definitionofimportantterms.
Thefollowingdefinitionsarerelevanttotherulesgoverninglocalemployment:
1. Employmentcontractreferstothecontractenteredintobetweentheemployerandtherecruit;
2. License refers to the document issued by the DOLE Regional Office authorizing a person or entity to
operateanemploymentagency;
3. Licensee refers to any person or entity duly licensed and authorized by the Department of Labor and
Employment(DOLE)tooperateaprivateemploymentagency;
4. Placementfeereferstotheamountchargedbyprivateemploymentagencyfromanapplicantworkerfor
itsservicesintherecruitmentandplacementofsaidworker;
5. PrivateEmploymentAgencyreferstoanypersonorentityengagedintherecruitmentandplacementof
workersforlocalemploymentforafee,whichischargeddirectlyorindirectlytotheaccountoftherecruit
and/oremployers;
1
Thediscussionunderthistopicisbasedontheprovisionsof theRulesandRegulationsGoverningPrivateRecruitment andPlacement AgenciesforLocal Employment.

ChanRobles Internet Bar Review : ChanRobles Professional Review, Inc.
www.chanroblesbar.com : www.chanroblesbar.com.ph
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6. Recruitreferstoanypersonwhodirectlyappliedtoaprivateemploymentorauthorizedrecruiter;
7. Recruiter refers to a recruitment agent of a licensed private employment agency who has been duly
registeredandauthorizedbytheDOLERegionalOfficetorecruitworkers;
8. Recruitmentandplacementreferstoanyactofcanvassing,enlisting,contracting,transporting,utilizing,
hiring,assigning,oradvertisingemploymentlocally,whetherforprofitornot,provided,thatanypersonor
entity which, in any manner, offers or promises employment for a fee to one or more persons shall be
deemedengagedinarecruitmentandplacement;
9. Recruitmentcontractreferstothecontractenteredintobetweenaprivateemploymentagencyandthe
recruit.
10.Workerreferstoanymemberofthelaborforcewhetheremployedorunemployed.
2

b.Licensingoflocalrecruitmentandplacementagencies.
1. Coverage. The Rules
3
apply to all persons, entities and associations engaged in the recruitment and
placementofworkersforlocalemploymentforafee,whetherthisischargedfromtheworkerortheemployerorboth.
4
2.Prohibition.Noperson,entity,orassociationshallengageintherecruitmentandplacementofworkersfora
feeunlessithasfirstsecuredalicensefromtheRegionalOffice.
5

3.Citizenshiprequirement.OnlyFilipinocitizensorcorporations,partnershipsorentitiesatleastseventyfive
percent(75%)oftheauthorizedandvotingcapitalstockofwhichisownedandcontrolledbyFilipinocitizensshallbe
permittedtoparticipateintherecruitmentandplacementofworkersforlocalemployment.
6
4.Qualificationsoflicenseapplicants.Allapplicantsforlicensetooperateprivaterecruitmentandplacement
agenciesforlocalemploymentshallpossessthefollowingqualifications:
(a) Citizenshiprequirement;
(b) AppropriatecapitalizationofP25,000.00incaseofsingleproprietorsoraminimumpaidupcapitalornet
worthofP25,000.00inthecaseofpartnershiporcorporation;and
(c) Applicantshouldbeofgoodmoralcharacterandnototherwisedisqualifiedbylaw,rulesandregulations.
7
5. Validity of license. The license shall be valid for one (1) year from the date of issuance unless sooner
cancelledorsuspendedbytheDirectorforviolationofanyoftheconditionsprescribedinthelicenseorofanyapplicable
provisionoftheLaborCodeoritsImplementingRules.
8
6.Nontransferabilityoflicense.Nolicenseshallbetransferred,conveyedorassignedtoanyotherpersonor
entity,orusedinanyplaceotherthanthatstatedinthelicense,unlessauthorizedbytheDirector.Anytransferofthe
business address, appointment or designation of any agency or representative of the licensee or establishment or
branchofficesshallbesubjecttothepriorapprovaloftheRegionalOffice.
9

c.Authoritytoestablishoroperatebranchoffice(s).
1.Prohibition.Nolicenseeshallestablishoroperatebranchoffice(s)unlessthesamehasbeenregisteredand
itsoperationdulyauthorizedbytheRegionalOffice.
10

d.Grantofauthoritytorecruiters.
1. Prohibition. No person shall act as an agent or recruiter of a private recruitment and placement agency
withoutpriorauthorityfromtheDOLERegionalOfficehavingjurisdictionovertheplacewhererecruitmentactivitieswill
beundertaken.
11

e.Renewaloflicenseoflocalprivaterecruitmentandplacementagency.
1.Requestforrenewaloflicense.AlicenseemayapplyfortherenewalofhislicensewiththeRegionalOffice
concernedwithinfortyfive(45)daysbeforetheexpirationofhiscurrentlicense.
12

f.Cancellationorsuspensionoflicense.
1.Complaintsagainstprivateemploymentagency.Complaintsbasedonanyprohibitedpracticesenumerated
underRuleIXoftheRulesandRegulationsGoverningPrivateRecruitmentandPlacementAgenciesforLocalEmployment
againstaprivateemploymentagencyshallbefiledwiththeRegionalOfficewheretheagency/branchofficeislocated,
where the prohibited act was committed or at complainants place of residence, at the option of the complainant:
Provided,ThattheRegionalOfficewhichfirstacquiresjurisdictionoverthecaseshalldosototheexclusionoftheothers.
2.Conductofinvestigation.Theproceedingsshallbesummaryincharacterwheretechnicalrulesofprocedure
may onlybe applied suppletorily. The investigation shallbeterminated within fifteen(15) working days from the first
hearing.TheRegionalDirectorshallresolvethecasewithinten(10)daysthereafter.
13
3.Suspensionoflicensependinginvestigation.Pendinginvestigationofacomplaint,theDirectormaysuspend
thelicenseoftheprivateemploymentagencyconcerned,onanyofthefollowinggrounds:
(a) Failure on the part of the agency to submit its position paper/comment on the complaint within the
prescribedperiodorwhereitrefusestoattendthehearingcalledbytheRegionalOffice;
2
Section1, RuleI, RulesandRegulationsGoverningPrivateRecruitment andPlacement AgenciesforLocal Employment.
3
RulesandRegulationsGoverningPrivateRecruitment andPlacement AgenciesforLocal Employment
4
Section1, RuleII, Ibid..
5
6
7
8
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Section2, RuleIII, Ibid..
11
Section2, RuleIV, Ibid..
12
Section1, RuleVI, Ibid..
13
Section2, RuleVII, Ibid..
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(b) PrimafacieevidenceshowsthattheagencyhasviolatedandcontinuetoviolatetheLaborCodeprovision
on the recruitment and placement of workers, its implementing rules and other issuances by the
Secretary;and
(c) There exist reasonable grounds showing that the continued operation of the agency will lead to further
violationsoftheconditionsofthelicenseortheexploitationoftheworkersbeingrecruited.
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4.Cancellationoflicense.TheDirectorshallhavethepower,afterduenoticeandhearing,tocancelthelicense
or authority of private employment agency for any violation of the provision of the Labor Code on recruitment and
placementofworkersanditsimplementingrules,andotherissuancesbytheDOLESecretary.
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5. Appeals. Any party aggrieved by the decision of the Regional Director may appeal the same to the DOLE
Secretarywithinten(10)workingdaysfromreceiptofhiscopyoftheorderongroundsof:(a)graveabuseofdiscretion;
and(b)grossincompetence.TheappealshallbefiledintheDOLERegionalOfficewhichshalltransmittherecordstothe
DOLE Secretary within five (5) days from receipt of the appeal. The DOLE Secretary shall have thirty (30) days from
receipt of the records of the case to resolve the appeal. The decision of the DOLE Secretary shall be final and
inappealable.
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2.OVERSEASEMPLOYMENT;RECRUITMENTANDPLACEMENT.

a.Relevantlawsonrecruitmentforoverseasemployment.
1.TheLaborCode;
2.MigrantWorkersandOverseasFilipinosActof1995[R.A.No.8042],asamendedbyR.A.No.10022
(March8,2010).

b.Definitionofrelevantterms.
1. OverseasFilipinosrefertomigrantworkers,otherFilipinonationalsandtheirdependentsabroad.
17
2. OverseasFilipinoWorkerorMigrantWorkerreferstoapersonwhoistobeengaged,isengaged,or
hasbeenengagedinaremuneratedactivityinastateofwhichheorsheisnotacitizenoronboarda
vessel navigating the foreign seas other than a government ship usedfor military or noncommercial
purposes, or on an installation located offshore or on the high seas. A "person to be engaged in a
remunerated activity" refers to an applicant worker who has been promised or assured employment
overseas.
18
3. Regular/DocumentedFilipinoMigrantWorkersrefertothefollowing:
(1)Thosewhopossessvalidpassportsandappropriatevisasorpermitstostayandworkinthe
receivingcountry;and
(2)ThosewhosecontractsofemploymenthavebeenprocessedbythePOEA,orsubsequentlyverified
andregisteredonsitebythePOLO,ifrequiredbylaworregulation.
19
4. Seafarerreferstoanypersonwhoisemployedorengagedinoverseasemploymentinanycapacity
on board a ship other than a government ship used for military or noncommercial purposes. The
definition shall include fishermen, cruise ship personnel and those serving on mobile offshore and
drillingunitsinthehighseas.
20
5. Skilled Filipino Workers refer to those who have obtained an academic degree, qualification, or
experience, or those who are in possession of an appropriate level of competence, training and
certification, for the job they are applying, as may be determined by the appropriate government
agency.
21
6. Underage Migrant Workers refers to those who are below 18 years or below the minimum age
requirementforoverseasemploymentasdeterminedbytheSecretaryofLaborandEmployment.
22
7. OverseasFilipinoinDistressreferstoanOverseasFilipinowhohasamedical,psychosocialorlegal
assistanceproblemrequiringtreatment,hospitalization,counselling,legalrepresentationasspecified
inRuleIXoftheseRulesoranyotherkindofinterventionwiththeauthoritiesinthecountrywherehe
orsheisfound.
23
8.Rehires refer to landbased workers who renewed their employment contracts with the same
principal.
24

c.TermsofanemploymentcontractgoverntheemploymentofanOFWs.
In cases involving employment of overseas Filipino workers (OFWs), the rights and obligations among and
between the OFWs, the local recruiter/agent, and the foreign employer/principal are governed by the employment
contract.Acontractfreelyenteredintoisconsideredthelawbetweenthepartiesand,therefore,shouldberespected.
Informulatingthecontract,thepartiesmayestablishsuchstipulations,clauses,termsandconditionsastheymaydeem
convenient,providedtheyarenotcontrarytolaw,morals,goodcustoms,publicorder,orpublicpolicy.
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17
Section1[hh], RuleII, Omnibus RulesandRegulationsImplementingtheMigrant WorkersandOverseasFilipinosAct of 1995, As AmendedbyR. A. No. 10022(March08, 2010)
18
Section1[JJ], RuleII, Omnibus RulesandRegulationsImplementingtheMigrant WorkersandOverseasFilipinosAct of 1995, As AmendedbyR. A. No. 10022(March08, 2010)
19
Section1[rr], RuleII, Omnibus RulesandRegulationsImplementingtheMigrant WorkersandOverseasFilipinos Act of 1995, AsAmendedbyR. A. No. 10022(March08, 2010)
20
Section1[ss], RuleII, Omnibus RulesandRegulationsImplementingtheMigrant WorkersandOverseasFilipinosAct of 1995, As AmendedbyR. A. No. 10022(March08, 2010)
21
Section1[tt], RuleII, OmnibusRulesandRegulationsImplementingtheMigrant WorkersandOverseasFilipinos Act of 1995, AsAmendedbyR. A. No. 10022(March08, 2010)
22
Section1[vv], RuleII, Omnibus RulesandRegulationsImplementingtheMigrant WorkersandOverseasFilipinosAct of 1995, As AmendedbyR. A. No. 10022(March08, 2010)
23
Section1[II], RuleII, OmnibusRulesandRegulationsImplementingtheMigrant WorkersandOverseasFilipinos Act of 1995, AsAmendedbyR. A. No. 10022(March08, 2010)
24
Section1[qq], RuleII, Omnibus RulesandRegulationsImplementingtheMigrant WorkersandOverseasFilipinosAct of 1995, As AmendedbyR. A. No. 10022(March08, 2010)
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d.Rulesaffectingoverseasemploymentmakeadistinctionbetweenlandbasedoverseasworkersand
seafarers.
Therulesonoverseasemploymentisdividedintotwo,namely:
1. POEA Rules and Regulations Governing the Recruitment and Employment of LandBased Overseas
Workers;
25
and
2. POEARulesandRegulationsGoverningtheRecruitmentandEmploymentofSeafarers.
26
The obvious intent for the two (2) separate issuances is to distinguish between the rules applicable to land
basedoverseasworkersandthoseapplicabletoseafarers(formerlytermedasseamen).Thisisasitshouldbebecause
oftheuniqueandpeculiardistinguishingfeaturesofmaritimeemployment.

2.1.LICENSINGANDREGULATIONFOROVERSEASRECRUITMENTANDPLACEMENT.

a.Qualifications.
Onlythosewhopossessthefollowingqualificationsmaybepermittedtoengageinthebusinessofrecruitment
andplacementofoverseasFilipinoworkers:
1. Filipinocitizens,partnershipsorcorporationsatleastseventyfivepercent(75%)oftheauthorizedcapital
stockofwhichisownedandcontrolledbyFilipinocitizens;
2. A minimum capitalization of Two Million Pesos (P2,000,000.00) in case of a single proprietorship or
partnershipandaminimumpaidupcapitalofTwoMillionPesos(P2,000,000.00)incaseofacorporation;
Provided, that those with existing licenses shall, within four years from effectivity hereof, increase their
capitalizationorpaidupcapital,asthecasemaybe,toTwoMillionPesos(P2,000,000.00)attherateofTwo
HundredFiftyThousandPesos(P250,000.00)everyyear.
3. Thosenototherwisedisqualifiedbylaworothergovernmentregulationstoengageintherecruitmentand
placementofworkersforoverseasemployment.
27

b.Disqualifications.
The following are not qualified to engage in the business of recruitment and placement of Filipino workers
overseas:
a. Travelagenciesandsalesagenciesofairlinecompanies;
b. OfficersormembersoftheBoardofanycorporationormembersinapartnershipengagedinthebusiness
ofatravelagency;
c. Corporations and partnerships, when any of its officers, members of the board or partners, is also an
officer,memberoftheboardorpartnerofacorporationorpartnershipengagedinthebusinessofatravel
agency;
d. Persons, partnerships or corporations which have derogatory records, such as, but not limited to, the
following:
1) ThosecertifiedtohavederogatoryrecordorinformationbytheNationalBureauofInvestigationorby
theAntiIllegalRecruitmentBranchofthePOEA;
2) Thoseagainstwhomprobablecauseorprimafaciefindingofguiltforillegalrecruitmentorotherrelated
casesexists;
3) Thoseconvictedforillegalrecruitmentorotherrelatedcasesand/orcrimesinvolvingmoralturpitude;
and
4) Those agencies whose licenses have been previously revoked or cancelled by the Administration for
violationofRA8042,PD442,asamended,andtheirimplementingrulesandregulationsaswellasthe
Rulesandregulations.
All applicants for issuance/renewal of license shall be required to submit clearances from the National
BureauofInvestigationandAntiIllegalRecruitmentBranch,POEA,includingclearancesfortheirrespective
officersandemployees.
e. AnyofficialoremployeeoftheDOLE,POEA,OWWA,DFAandothergovernmentagenciesdirectlyinvolved
intheimplementationofR.A.No.8042and/oranyofhis/herrelativeswithinthefourth(4
th
)civildegreeof
consanguinityoraffinity;and
f. Personsorpartners,officersanddirectorsofcorporationswhoselicenseshavebeenpreviouslycancelledor
revokedforviolationofrecruitmentlaws.
28

c.Provisionallicense.
Applicantsfornewlicenseshallbeissuedaprovisionallicensewhichshallbevalidforalimitedperiodofone(1)
yearwithinwhichtheapplicantshouldbeabletocomplywithitsundertakingtodeployonehundred(100)workersto
itsnewprincipal.Thelicenseofacomplyingagencyshallbeupgradedtoafulllicenseentitlingittoanotherthreeyears
ofoperation.Noncomplyingagencieswillbenotifiedoftheexpirationoftheirlicense.
29

d.Validityofthelicense.
Exceptincaseofaprovisionallicense,everylicenseshallbevalidforfour(4)yearsfromthedateofissuance
unlesssoonercancelled,revokedorsuspendedforviolationofapplicablePhilippinelaw,theRulesandotherpertinent
25
IssuedbyDOLESecretaryPatriciaSto. TomasonFebruary4, 2002.
26
IssuedonMay23, 2003.
27
Section1, RuleI, Part II, 2002POEARulesforLand-BasedOverseasWorkers; Section1, RuleI, Part II, 3003POEARulesforSeafarers.
28
Section2, RuleI, Part II, 2002POEARulesforLand-BasedOverseasWorkers; Section2, RuleI, Part II, 2003POEARulesforSeafarers.
29
Section5, RuleII, Part II, 2002POEARulesforLand-BasedOverseasWorkers; Section5, RuleII, Part II, 2003POEARulesfor Seafarers.
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issuances. Such license shall be valid only at the place/s stated therein and when used by the licensed person,
partnershiporcorporation.
30

e.Nontransferabilityoflicense.
Nolicenseshallbetransferred,conveyedorassignedtoanyperson,partnershiporcorporation.Itshallnotbe
useddirectlyorindirectlybyanyperson,partnershiporcorporationotherthantheoneinwhosefavoritwasissued.
Incaseofdeathofthesoleproprietorandtopreventdisruptionofoperationtotheprejudiceoftheinterestof
legitimateheirs,thelicensemaybeextendeduponrequestoftheheirs,tocontinueonlyforthepurposeofwindingup
thebusinessoperations.
31

f.Changeofownership/relationshipofsingleproprietorshiporpartnership.
Transfer or change of ownership of a single proprietorship licensed to engage in overseas employment shall
causetheautomaticrevocationofthelicense.
Achangeintherelationshipofthepartnersinapartnershipdulylicensedtoengageinoverseasemployment
whichmateriallyinterruptsthecourseofthebusinessorresultsintheactualdissolutionofthepartnershipshalllikewise
causetheautomaticrevocationofthelicense.
32

g.Upgradingofsingleproprietorshipsorpartnerships.
License holders which are single proprietorships or partnerships may, subject to the guidelines of the
Administration (POEA), convert into corporations for purposes of upgrading or raising their capabilities to respond
adequatelytodevelopments/changesintheinternationallabormarketandtoenablethemtobettercomplywiththeir
responsibilitiesarisingfromtherecruitmentanddeploymentofworkersoverseas.
The approval of merger, consolidation or upgrading shall automatically revoke or cancel the licenses of the
singleproprietorships,partnershipsorcorporationssomerged,consolidatedorupgraded.
33

h.Derogatoryrecordafterissuance/renewaloflicense.
ThelicenseofasingleproprietorshiporapartnershipshallbesuspendeduntilclearedbytheAdministration
(POEA)shouldanyderogatoryrecordbefoundtoexistagainstthesingleproprietorshiporanyorallofthepartners,as
thecasemaybe.Theappointmentofanyofficeroremployeeofanylicensedagencymaybecancelledorrevokedatany
time with due notice to the agency concerned, whenever said officer or employee is found to have any derogatory
record,ashereincontemplated.
34

i.Appointment/changeofofficersandpersonnel.
Every appointment of agents or representatives of a licensed agency shall be subject to prior approval or
authority of the Administration (POEA). The acknowledgment or approval may be issued upon submission of or
compliancewiththefollowing:
a. proposedappointmentorspecialpowerofattorney;
b. clearances oftheproposed representative or agentfrom the NationalBureau of Investigation(NBI)/Anti
IllegalRecruitmentBranch,POEA;and
c. sworn or verified statement by the designating or appointing person or company assuming full
responsibility for all acts of the agent or representative done in connection with the recruitment and
placementofworkers.
Every change in the composition of the Board of Directors of a corporation, appointment or termination of
officersandpersonnelshallberegisteredwiththeAdministration(POEA)withinthirty(30)calendardaysfromthedate
ofsuchchange.TheagencyshallberequiredtosubmittheminutesofproceedingsdulycertifiedbytheSECincaseof
electionofnewmembersoftheBoardofDirectorswiththeirbiodata,IDpicturesandclearances.
The Administration (POEA) reserves the right to deny the acknowledgment or appointment of officers,
employeesandrepresentativeswhoweredirectlyinvolvedinrecruitmentirregularities.
35

j.Publicationofchangeofdirectors/otherofficersandpersonnel;revocationoramendmentofappointment
ofrepresentatives.
InadditiontotherequirementofregistrationwithandsubmissiontotheAdministration(POEA),everychange
in the membership of the Board of Directors, termination for cause of other officers and personnel, revocation or
amendmentofappointmentofrepresentativesshallbepublishedatleastonceinanewspaperofgeneralcirculation,in
ordertobindthirdparties.ProofofsuchpublicationshallbesubmittedtotheAdministration(POEA).
36

k.Transferofbusinessaddress.
AnytransferofbusinessaddressshallbeeffectedonlywithpriorauthorityorapprovaloftheAdministration
(POEA).Theapprovalshallbeissuedonlyuponformalnoticeoftheintentiontotransferwiththefollowingattachments:
a. In the case of a corporation, a Board Resolution duly registered with the SEC authorizing the transfer of
businessaddress;and
b. Copyofthecontractofleaseorproofofbuildingownership.
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Thenewofficeshallbesubjecttotheregularocularinspectionproceduresbydulyauthorizedrepresentatives
oftheAdministration(POEA).
Anoticetothepublicofthenewaddressshallbepublishedinanewspaperofgeneralcirculation.
37

l.Establishmentofadditional/extensionoffices.
Additional/extensionofficesmaybeestablishedsubjecttothepriorapprovaloftheAdministration(POEA).
38

m.Conductofrecruitmentoutsideofregisteredoffice.
No licensed agency shall conduct any provincial recruitment, jobs fair or recruitment activities of any form
outsideoftheaddressstatedinthelicenseorapprovedadditionaloffice(s)withoutfirstsecuringpriorauthorityfrom
theAdministration(POEA).
39

n.Renewaloflicense.
Anagencyshallsubmitanapplicationfortherenewalofitslicenseonorbeforeitsexpiration.Suchapplication
shallbesupportedbythefollowingdocuments:
a. RenewedorrevalidatedsuretybondamountingtoOneHundredThousandPesos(P100,000.00);
b. RenewedescrowagreementintheamountofP1,000,000.00withacommercialbanktoprimarilyanswer
forvalidandlegalclaimsofrecruitedworkersasaresultofrecruitmentviolationsormoneyclaims;
c. Auditedfinancialstatementsforthepasttwoyearswithverifiedcorporateorindividualtaxreturns.Incase
theequityoftheagencyisbelowtheminimumcapitalizationrequirement,itshallbegiventhirty(30)days
fromreleaseoftherenewedlicensetosubmitproof(s)ofcapitalinfusion,suchasSECcertificationofsuch
infusionorbankcertificationcorrespondingtotheamountinfusedandtreasurersaffidavitdulyreceivedby
theSEC.Otherwise,thelicenseshallbesuspendeduntilithascompliedwiththesaidrequirement;
d. ClearancesfromtheNationalBureauofInvestigationandtheAntiIllegalRecruitmentBranchfortheBoard
ofDirectorsandresponsibleofficers;and
e. OtherrequirementsasmaybeimposedbytheAdministration(POEA).
40

o.Nonexpirationoflicense.
Wherethelicenseholderhasmadetimelyandsufficientapplicationforrenewal,theexistinglicenseshallnot
expire until the application shall have been finally determined by the Administration (POEA). For this purpose, an
applicationshallbeconsideredsufficientiftheapplicanthassubstantiallycompliedwiththerequirementsforrenewal.
41
======================================
a. Recruitment and placement; defined
======================================

1.RECRUITMENTANDPLACEMENTOFWORKERS.

a.Requisites.
InorderforanactivitytobeconsideredasrecruitmentandplacementasdescribedinArticle13[b]of
theLaborCode,thefollowingelementsmustconcur:
1. A person or entity is engaged in any act of canvassing, enlisting, contracting, transporting, utilizing,
hiring or procuring workers, including referrals, contract services, promising or advertising for
employment;
2 Therecruitmentandplacementofworkersiseitherforlocaloroverseasemployment;and
3. Therecruitmentandplacementmayormaynotbeforprofit.

b.Presumptionofengaginginrecruitmentandplacement.
Anypersonorentitywhich,inanymanner,offersorpromisesforafee,employmenttotwo(2)ormore
personsisdeemedengagedinrecruitmentandplacement.
37
38
39
Section15, RuleII, Part II, 2002POEARulesfor Land-BasedOverseasWorkers. Note: Thereisnosimilar provisioninthePOEARulesandRegulationsGoverningtheRecruitment andEmployment of Seafarers, May23, 2003. But thiscertainlyappliestothecasescontemplated
thereunder.
40
41
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=========================================
b. Illegal Recruitment, Art. 38 (Local), Sec. 6,
Migrant Workers Act, RA 8042, as amended
by R.A. No. 10022 (March 8, 2010).
=========================================

1.LABORCODEPROVISION.

Article38oftheLaborCodeprovides:

Article 38. Illegal Recruitment. (a) Any recruitment activities, including the prohibited
practices enumerated under Article 34 of this Code, to be undertaken by nonlicensees 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
underthisArticle.
(b)Illegalrecruitmentwhencommittedbyasyndicateorinlargescaleshallbeconsidered
anoffenseinvolvingeconomicsabotageandshallbepenalizedinaccordancewithArticle39hereof.
Illegalrecruitmentisdeemedcommittedbyasyndicateifcarriedoutbyagroupofthree
(3)ormorepersonsconspiringand/orconfederatingwithoneanotherincarryingoutanyunlawful
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
individuallyorasagroup.
(c) The Secretary of Labor and Employment or his duly authorized representatives shall
havethepowertocausethearrestanddetentionofsuchnonlicenseeornonholderofauthorityif
after investigation, it isdetermined thathis activitiesconstitute adanger tonationalsecurity and
publicorderorwillleadtofurtherexploitationofjobseekers.TheSecretaryshallorderthesearch
of the office or premises and seizure of documents, paraphernalia, properties and other
implementsusedinillegalrecruitmentactivitiesandtheclosureofcompanies,establishmentsand
entities found to be engaged in the recruitment of workers for overseas employment, without
havingbeenlicensedorauthorizedtodoso.

2.R.A.NO.8042,ASAMENDEDBYR.A.NO.10022(MARCH8,2010):

Section 6 of R.A. No. 8042 (Migrant Workers and Overseas Filipinos Act of 1995) which defines illegal
recruitment was amended by Section 5 of R.A. No. 10022 (March 8, 2010). Consequently, illegal recruitment is now
definedasfollows:

SEC. 6. Definition. For purposes of this Act, illegal recruitment shall mean any act of
canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers and includes
referring,contractservices,promisingoradvertisingforemploymentabroad,whetherforprofitor
not,whenundertakenbynonlicenseeornonholderofauthoritycontemplatedunderArticle13(f)
ofPresidentialDecreeNo.442,asamended,otherwiseknownastheLaborCodeofthePhilippines:
Provided,That anysuchnonlicensee ornonholder who,in anymanner, offers orpromisesfora
fee employment abroad to two or more persons shall be deemed so engaged. It shall likewise
includethefollowingacts,whethercommittedbyanyperson,whetheranonlicensee,nonholder,
licenseeorholderofauthority:
(a) Tochargeoracceptdirectlyorindirectlyanyamountgreaterthanthatspecifiedintheschedule
ofallowablefeesprescribedbytheSecretaryofLaborandEmployment,ortomakeaworker
pay or acknowledge any amount greater than that actually received by him as a loan or
advance;
(b) Tofurnishorpublishanyfalsenoticeorinformationordocumentinrelationtorecruitmentor
employment;
(c) To give any false notice, testimony, information or document or commit any act of
misrepresentationforthepurposeofsecuringalicenseorauthorityundertheLaborCode,or
for the purpose of documenting hired workers with the POEA, which include the act of
reprocessing workers through a job order that pertains to nonexistent work, work different
from the actual overseas work, or work with a different employer whether registered or not
withthePOEA;
(d) Toincludeorattempttoinduceaworkeralreadyemployedtoquithisemploymentinorderto
offerhim anotherunless thetransfer is designed to liberate a worker from oppressive terms
andconditionsofemployment;
(e) Toinfluenceorattempttoinfluenceanypersonorentitynottoemployanyworkerwhohas
not applied for employment through his agency or who has formed, joined or supported, or
hascontactedorissupportedbyanyunionorworkers'organization;
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(f) To engage in the recruitment or placement of workers in jobs harmful to public health or
moralityortothedignityoftheRepublicofthePhilippines;
(h) To fail to submit reports on the status of employment, placement vacancies, remittance of
foreign exchange earnings, separation from jobs, departures and such other matters or
informationasmayberequiredbytheSecretaryofLaborandEmployment;
(i) To substitute or alter to the prejudice of the worker, employment contracts approved and
verifiedbytheDepartmentofLaborandEmploymentfromthetimeofactualsigningthereof
by the parties up to and including the period of the expiration of the same without the
approvaloftheDepartmentofLaborandEmployment;
(j) Foranofficeroragentofarecruitmentorplacementagencytobecomeanofficerormember
oftheBoardofanycorporationengagedintravelagencyortobeengageddirectlyorindirectly
inthemanagementoftravelagency;
(k) Towithholdordenytraveldocumentsfromapplicantworkersbeforedepartureformonetary
or financial considerations, or for any other reasons, other than those authorized under the
LaborCodeanditsimplementingrulesandregulations;
(l) Failure to actually deploy a contracted worker without valid reason as determined by the
DepartmentofLaborandEmployment;
(m) Failure to reimburse expenses incurred by the worker in connection with his documentation
andprocessingforpurposesofdeployment,incaseswherethedeploymentdoesnotactually
takeplacewithouttheworker'sfault.Illegalrecruitmentwhencommittedbyasyndicateorin
largescaleshallbeconsideredanoffenseinvolvingeconomicsabotage;and
(n) ToallowanonFilipinocitizentoheadormanagealicensedrecruitment/manningagency.

3.APPLICATIONOFARTICLE38TOBOTHLOCALANDOVERSEASEMPLOYMENT.

The definition of illegal recruitment under Article 38 of the Labor Code applies to both local and overseas
employment.Thelawisclearinitscoveragethatanyrecruitmentactivitiesincludingthecommissionoftheprohibited
practices enumerated under Article 34 of the Labor Code, to be undertaken by nonlicensees or nonholders of
authority,shallbedeemedillegalandpunishableunderArticle39ofthisCode.
42

4.CONCEPTOFILLEGALRECRUITMENT.

The term illegal recruitment is defined as any recruitment activities, including the prohibited practices
enumeratedunderArticle34oftheLaborCode,tobeundertakenbynonlicenseesornonholdersofauthority.
43
Basedonparagraph[a]ofArticle38,illegalrecruitmentasdefinedtherein,inrelationtoArticles13[b]and34
andpenalizedunderArticle39oftheLaborCode,maybecommittedonlybynonlicenseesornonholdersofauthority.
R.A.No.8042,asamendedbyR.A.No.10022(March8,2010)anditsImplementingRules,havebroadenedthis
concept of illegal recruitment as far as overseas placement and recruitment activities are concerned. Consequently,
illegal recruitment for overseas employment likewise includes the acts described in Section 6 of R.A. No. 8042, as
amended by Section 5 of R.A. No. 10022, whether committed by any person, whether a nonlicensee, nonholder,
licenseeorholderofauthority.
=======================================
b. Illegal Recruitment
(a) License vs. Authority
=======================================

1.DISTINCTIONBETWEENALICENSEANDANAUTHORITY.

LicensereferstothedocumentissuedbytheSecretaryofLaborandEmploymentauthorizingaperson,
partnershiporcorporationtooperateaprivaterecruitment/manningagency.
44
Authority refers to a document issued by the Secretary of Labor and Employment authorizing the
officers, personnel, agents or representatives of a licensed recruitment/manning agency to conduct recruitment
andplacementactivitiesinaplacestatedinthelicenseorinaspecifiedplace.
45

2.PRIVATEEMPLOYMENTAGENCY.

A private feecharging employment agency is any person or entity engaged in recruitment and
placementofworkersforafeewhichischarged,directlyorindirectly,fromtheworkersoremployersorboth.
46
Such entity may be a partnership or corporation duly licensed by the Secretary of Labor and
Employmenttoengageintherecruitmentandplacementofworkersforoverseasemployment.

42
Article38[a], LaborCode.
43
Peoplev. Cabacang, G.R. No. 113917, July17, 1995, 246SCRA530.
44
Section1[w], RuleII, Omnibus RulesandRegulationsImplementingtheMigrant WorkersandOverseasFilipinos Act of 1995, AsAmendedbyR. A. No. 10022(March08, 2010).
45
Section1[b], RuleII, OmnibusRulesandRegulationsImplementingtheMigrant WorkersandOverseasFilipinos Act of 1995, AsAmendedbyR. A. No. 10022(March08, 2010).
46
SeeArticle13[c] of theLabor Code.
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3.PRIVATERECRUITMENTENTITY.

A private recruitment entity refers to any person or association engaged in the recruitment and
placementofworkerswithoutcharging,directlyorindirectly,anyfeefromtheworkersoremployers.
47

4.DISTINCTIONSBETWEENAPRIVATEEMPLOYMENTAGENCYANDAPRIVATERECRUITMENTENTITY.

A private employment agency technically may be distinguished from a private recruitment entity as
follows:
1. Aprivateemploymentagencyhasarightdulyrecognizedinlawtochargeafee,directlyorindirectly,
fromtheworkersortheemployersorfromboth;whileaprivaterecruitmententitydoesnotcharge
anyfeeeitherdirectlyorindirectlyfromtheworkersoremployerstowhichtheywouldbedeployed;
2. The former is authorized to recruit only for overseas placement or deployment; while the latter is
allowedtorecruitforbothlocalandoverseasdeployment.
3. The former derives its authority to recruit and place workers from a document denominated as a
license;whilethelattersourcesitsauthorityfromadocumentcalledauthority.
48
ButundertheOmnibusRulesandRegulationsImplementingtheMigrantWorkersandOverseasFilipinos
Actof1995,asamendedbyR.A.No.10022(March08,2010),thesetwotermshavenowacommondefinitionas
follows:
Private Recruitment/Employment Agency refers to any person, partnership or corporation
duly licensed by the Secretary of Labor and Employment to engage in the recruitment and
placementofworkersforoverseasemploymentforafeewhichischarged,directlyorindirectly,
fromtheworkerswhorenewedtheiremploymentcontractswiththesameprincipal.
49

5.ENTITIESAUTHORIZEDTOENGAGEINRECRUITMENTANDPLACEMENTOFWORKERS.

Thefollowingareauthorizedtoengageinrecruitmentandplacementofworkers:
a. Publicemploymentoffices;
b. PhilippineOverseasEmploymentAdministration(POEA);
c. Privaterecruitmententities;
d. Privateemploymentagencies;
e. Shippingormanningagentsorrepresentatives;
f. SuchotherpersonsorentitiesasmaybeauthorizedbytheSecretaryofLaborandEmployment;and
g. Constructioncontractors.

6.OTHERRELEVANTTERMS.

FilipinoServiceContractorreferstoanyperson,partnershiporcorporationdulylicensedasaprivate
recruitment agency by the Secretary of Labor and Employment to recruit workers for its accredited projects or
contractsoverseas.
50
Manning Agency refers to any person, partnership or corporation duly licensed by the Secretary of
Labor and Employment to engage in the recruitment and placement of seafarers for ships plying international
watersandforrelatedmaritimeactivities.
51
NonLicensee refers to any person, partnership or corporation with no valid license to engage in
recruitment and placement of overseas Filipino workers or whose license is revoked, cancelled, terminated,
expiredorotherwisedelistedfromtherolloflicensedrecruitment/manningagenciesregisteredwiththePOEA.
52
Placement Fees refer to any and all amounts charged by a private recruitment agency from a worker
foritsrecruitmentandplacementservicesasprescribedbytheSecretaryofLaborandEmployment.
53
========================================
TOPIC UNDER THE SYLLABUS
(b) Essential elements of illegal recruitment
(c) Simple illegal recruitment
========================================

1.ELEMENTSOFSIMPLEILLEGALRECRUITMENT.

Theessentialelementsofsimpleillegalrecruitmentwithouttheattendantqualifyingcircumstances,are:
1. The person charged with the crime must have undertaken recruitment and placement activities under
Article13[b]oranyoftheactivitiesenumeratedinArticle34oftheLaborCode,asamended;and
47
AccordingtoArticle13[e] of theLabor Code.
48
AsdefinedinArticle13of theLabor Code.
49
Section1[pp], RuleII, Omnibus RulesandRegulationsImplementingtheMigrant WorkersandOverseasFilipinosAct of 1995, As AmendedbyR. A. No. 10022(March08, 2010)
50
Section1[p], RuleII, OmnibusRulesandRegulationsImplementingtheMigrant WorkersandOverseasFilipinos Act of 1995, AsAmendedbyR. A. No. 10022(March08, 2010).
51
Section1[y], RuleII, OmnibusRulesandRegulationsImplementingtheMigrant WorkersandOverseasFilipinos Act of 1995, AsAmendedbyR. A. No. 10022(March08, 2010).
52
Section1[cc], RuleII, Omnibus RulesandRegulationsImplementingtheMigrant WorkersandOverseasFilipinosAct of 1995, As AmendedbyR. A. No. 10022(March08, 2010).
53
Section1[ll], RuleII, Omnibus RulesandRegulationsImplementingtheMigrant WorkersandOverseasFilipinos Act of 1995, AsAmendedbyR. A. No. 10022(March08, 2010)
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2.Saidpersondoesnothavealicenseorauthoritytodosoormorespecifically,thathehasnotcompliedwith
suchguidelines,rulesandregulationsissuedbytheSecretaryofLaborandEmployment,particularlywith
respecttothesecuringoflicenseorauthoritytorecruitanddeployworkers,eitherlocallyoroverseas.
54
In People v. De Leon, [G.R. No. 104995, August 26, 1993, 225 SCRA 651], it was categorically declared that
violationsofArticles13[b],34,38and39oftheLaborCode,asamended,constituteillegalrecruitment.

2.FIRSTELEMENT:RECRUITMENTANDPLACEMENTACTIVITIES.

a.Recruitmentandplacementactivities,defined.
Thephraserecruitmentandplacementreferstotheactsdescribedinparagraph[b]ofArticle13oftheLabor
Code,viz.:
[b] Recruitment and placement refers to any act of canvassing, enlisting, contracting,
transporting,utilizing,hiringorprocuringworkers,andincludesreferrals,contractservices,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
personsshallbedeemedengagedinrecruitmentandplacement.
55
b.Someprinciplesonillegalrecruitment.
1. Mere impression is sufficient to constitute illegal recruitment.
56
But if no such impression is given, the
accusedshouldnotbeconvictedforillegalrecruitment.
57
2.. Merepromiseorofferofemploymentabroadamountstorecruitment.
58
3. Thereisnoneedtoshowthataccusedrepresentedhimselfasalicensedrecruiter.
59
4. Referralsmayconstituteillegalrecruitment.
60
5. Recruitmentwhetherdoneforprofitornotisimmaterial.
61
6. Theactofreceivingmoneyfarexceedingtheamountasrequiredbylawisnotconsideredasrecruitment
andplacementasthisphraseiscontemplatedunderthelaw.
62
7. Actualreceiptoffee,notanelementofthecrimeofillegalrecruitment.
63
8. Conductofinterviewsamountstoillegalrecruitment.
64
9. Absenceofreceipt,notessential.
65
10. Convictionforillegalrecruitmentmaybemadeonthestrengthofthetestimoniesofthecomplainants.
66
11. Absenceofdocumentsevidencingtherecruitmentactivitiesstrengthens,notweakens,thecaseforillegal
recruitment.
67
12. Onlyonepersonrecruitedissufficienttoconvictoneforillegalrecruitment.
68
13. Nonprosecutionofanothersuspect,immaterial.
69
14. Executionofaffidavitofdesistanceaffectsonlythecivilliabilitybuthasnoeffectonthecriminalliabilityfor
illegalrecruitment.
70
15. Conspiracyinillegalrecruitmentcases,howproved.Directproofofpreviousagreementtocommitacrime
is not necessary.
Such previous agreement may be deduced from the mode and manner in which the
offense was perpetrated, or inferred from the acts of the accused which point to a joint purpose and
design,concertedactionandcommunityofinterest.
71

3.SECONDELEMENT:NONLICENSEEORNONHOLDEROFAUTHORITY.

Thephrase nonlicensee or nonholder ofauthority refers to anyperson, corporation or entity which has
not been issued a valid license or authority to engage in recruitment and placement by the Secretary of Labor and
Employment,orwhoselicenseorauthorityhasbeensuspended,revokedorcancelledbythePOEAortheSecretaryof
LaborandEmployment.
72
TheactsmentionedinArticle13[b]oftheLaborCodecanlawfullybeundertakenonlybylicenseesorholders
ofauthoritytoengageintherecruitmentandplacementofworkers.
73
Asfarasagentsorrepresentativesappointedbylicenseesorholdersofauthorityareconcerned,theyshallbe
consideredasfallingwithintheambitofthetermnonlicenseeornonholderofauthorityiftheirappointmentswere
notpreviouslyauthorizedbythePOEA.Consequently,theiractivitiesshallbeconsideredillegalrecruitment.
74
Nonpossession of a license to recruit is, under the law, an essential ingredient of the crime of illegal
recruitmentpenalizedundertheLaborCode.
75
54
Peoplev. Cabacang, G.R. No. 113917, July17, 1995, 246SCRA530; Peoplev. Coral, G.R. Nos. 97849-54, March1, 1994, 230SCRA499/
55
Article13[b], LaborCode; Peoplev. Goce, G.R. No. 113161, Aug. 29, 1995, 247SCRA780; Peoplev. Bautista, G.R. No. 113547, Feb. 9, 1995, 241SCRA216.
56
Lapasaranv. People, [G.R. No. 179907, February12, 2009]; Peoplev. Manungas, Jr., [G.R. Nos. 91552-55, March10, 1994, 231SCRA1].
57
Darvinv. CA, [G.R. No. 125044. July13, 1998].
58
Peoplev. Gallardo, G.R. Nos. 140067-71, Aug. 29, 2002, 436Phil. 698, 711; Peoplev. DelmoValle, [G.R. No. 126933, February23, 2001].
59
Peoplev. Ballesteros, [G.R. Nos. 116905-908, August 6, 2002].
60
Article13[b] of theLaborCode; Rodolfov. People, [G.R. No. 146964, August 10, 2006].
61
Peoplev. Jamilosa[G.R. No. 169076, January23, 2007, 512SCRA340, 352]; Peoplev. Valenciano, [G.R. No. 180926, December10, 2008].
62
Peoplev. Gaoat, G.R. No. 97028, May21, 1993, 222SCRA385.
63
Peoplev. Ballesteros, [G.R. Nos. 116905-908, August 6, 2002]; Peoplev. Arabia, [G.R. Nos. 138431-36, September12, 2001].
64
Section6of R.A. No. 8042; C.F. SharpCrewManagement, Inc. v. Hon. Espanol, Jr., [G.R. No. 155903, September14, 2007].
65
Peoplev. Juego, [G.R. No. 123162. October13, 1998].
66
Peoplev. Saulo, [G.R. No. 125903, November15, 2000]; Peoplev. Remullo, [G.R. Nos. 124443-46, June6, 2002].
67
Peoplev. Pantaleon, [G.R. No. 108107, June19, 1997].
68
Peoplev. Panis, [G.R. Nos. L-58674-77, July11, 1986, 142SCRA664].
69
Peoplev. Sendon, [G.R. Nos. 101579-89, December 15, 1993, 228SCRA489].
70
Peoplev. Laurel, [G.R. No. 120353, February12, 1998].
71
Peoplev. Ballesteros, [G.R. Nos. 116905-908, August 6, 2002].
72
Section1[d], RulesImplementingP.D. No. 1920, July12, 1984.
73
Peoplev. Bodozo, G.R. No. 96621. Oct. 21, 1992, 215SCRA33.
74
2ndparagraph, Section1, RuleV, BookII, POEARulesandRegulationsonOverseasEmployment [May21, 1985].
75
Peoplev. Taguba, G.R. Nos. 95207-17, Jan. 10, 1994, 229SCRA188; Peoplev. Sendon, G.R. Nos. L-101579-82, Dec. 15, 1993, 228SCRA489.

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Apersonwhopromisedajobplacementabroadtoanother,foraconsideration,whenheisnotdulylicensed
norauthorizedtoengageinrecruitment,iscriminallyliableforillegalrecruitment.
76

4.ANYPERSON,WHETHERANONLICENSEE,NONHOLDER,LICENSEEORHOLDEROFAUTHORITYMAYBEHELD
LIABLEFORILLEGALRECRUITMENT.

a.UnderR.A.No,8042,licenseorauthorityoftheillegalrecruiterisimmaterial.
Under R.A. No. 8042, the crime of illegal recruitment may be committed by any person, whether a non
licensee,nonholder,licenseeorholderofauthority.Itisclearthatunderthislaw,inordertoproveillegalrecruitment,
thereisnoneedtoestablishwhethertheaccusedisalicenseeorholderofauthorityornotbecauseitisnolongeran
elementofthecrime.
77

b.Recruitermaybeanaturalorjuridicalperson.
AccusedappellantinPeoplev.Saulo,[G.R.No.125903.November15,2000],contendsthathecouldnothave
committed the crime of illegal recruitment in large scale since Nancy Avelino, a labor and employment officer at the
POEA,testifiedthatlicensesforrecruitmentandplacementareissuedonlytocorporationsandnottonaturalpersons.
Holdingthatthisargumentisspeciousandillogical,theSupremeCourtratiocinatedthatanyperson,whethernaturalor
juridical,thatengagesinrecruitmentactivitieswithoutthenecessarylicenseorauthorityshallbepenalizedunderArt.39
oftheLaborCode
========================================
(d) Illegal recruitment in large scale
(e) Illegal recruitment as economic sabotage
========================================

1.ILLEGALRECRUITMENT,WHENCONSIDEREDECONOMICSABOTAGE.

Illegal recruitment is considered a crime involving economic sabotage when the commission thereof is
attendedbythefollowingqualifyingcircumstances:
1. whencommittedbyasyndicate;or
2. whencommittedinlargescale.

2.ILLEGALRECRUITMENTCOMMITTEDBYASYNDICATE.

a.Whencommittedbyasyndicate.
Illegal recruitment is deemed committed by a syndicate if it is carried out by a group of three (3) or more
personsconspiringorconfederatingwithoneanother.

b.Elementsofillegalrecruitmentbyasyndicate.
Theessentialelementsofthecrimeofillegalrecruitmentcommittedbyasyndicateareasfollows:
1. Thereareatleastthree(3)personswho,conspiringand/orconfederatingwithoneanother,carriedout
any unlawful or illegal recruitment and placement activities as defined under Article 13 [b] or in any
prohibitedactivitiesunderArticle34oftheLaborCode;and
2. Saidpersonsarenotlicensedorauthorizedtodoso,eitherlocallyoroverseas.
78
Thelaw,itmustbenoted,doesnotrequirethatthesyndicateshouldrecruitmorethanone(1)personinorder
toconstitutethecrimeofillegalrecruitmentbyasyndicate.Recruitmentofone(1)personwouldsufficetoqualifythe
illegalrecruitmentactashavingbeencommittedbyasyndicate.
79

3.ILLEGALRECRUITMENTINLARGESCALE.

a.Whencommittedinlargescale.
Illegal recruitment is deemed committed in large scale if committed against three (3) or more persons
individuallyorasagroup.
b.Elementsofillegalrecruitmentinlargescale.
Theessentialelementsofillegalrecruitmentinlargescale,asdistinguishedfromsimpleillegalrecruitment,are
asfollows:
1. TheaccusedengagesintherecruitmentandplacementofworkersasdefinedunderArticle13[b]orinany
prohibitedactivitiesunderArticle34oftheLaborCode;
2. The accused has not complied with the guidelines issued by the Secretary of Labor and Employment,
particularly with respect to the securing of license or an authority to recruit and deploy workers, either
locallyoroverseas;and
3. Theaccusedcommitsthesameagainstthree(3)ormorepersons,individuallyorasagroup.
76
Peoplev. Alforte, G.R. Nos. 91711-15, March3, 1993, 219SCRA458.
77
Peoplev. JimmyAng, [G.R. No. 181245, August 06, 2008]; Peoplev. Nogra, [G.R. No. 170834, August 29, 2008]; Peoplev.Gasacao, [G. R. No. 168445, November11, 2005].
78
Id.; Id.; Id.; Peoplev. Bodozo, G.R. No. 96621. Oct. 21, 1992, 215SCRA33.
79
Peoplev. Hernandez, [G.R. Nos. 141221-36. March7, 2002].
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c.Distinguishedfromillegalrecruitmentbyasyndicate.
As distinguished from illegal recruitment committed by a syndicate, illegal recruitment in large scale may be
committedby only one (1)person. What is important asqualifying element isthat there should be at least three (3)
victimsofsuchillegalrecruitment,individuallyorasagroup.
80
d.Someprinciplesonillegalrecruitmentinvolvingeconomicsabotage.
1. The number of persons victimized is determinative of the crime. A conviction for large scale illegal
recruitment must be based on a finding in each case of illegal recruitment of three (3) or more persons
havingbeenrecruited,whetherindividuallyorasagroup.
81
2. Failuretoproveatleast3personsrecruitedmakesthecrimeacaseofsimpleillegalrecruitment.
82
3. Noillegalrecruitmentinlargescalebasedonseveralinformationsfiledbyonlyonecomplainant.
83
4. Thenumberofoffendersisnotmaterialinillegalrecruitmentinlargescale.
84
5. Recruitmentinlargescaleismalumprohibitumandnotmaluminse.
85
====================================
(f) Illegal Recruitment vs. Estafa
====================================
1.APERSON,FORTHESAMEACT,MAYBECHARGEDANDCONVICTEDSEPARATELYFORILLEGALRECRUITMENTAND
ESTAFA.
a.ConvictionundertheLaborCodedoesnotprecludeconvictionunderotherlaws.
In cases where some othercrimesorfelonies arecommitted inthe process of illegalrecruitment,conviction
undertheLaborCodedoesnotprecludepunishmentunderotherstatutes.
86
Illegalrecruitmentispenalizedunderthe
LaborCodewhichisaspeciallaw,andnotundertheRevisedPenalCode.
87
Notallactswhichconstitutethefelonyof
estafaundertheRevisedPenalCodenecessarilyestablishthecrimeofillegalrecruitmentundertheLaborCode.Estafa
iswiderinscopeandcoversdeceitswhetherrelatedornotrelatedtorecruitmentactivities.
88
b.Someprinciplesonillegalrecruitmentandestafaasseparatecrimes.
1.Sameevidencetoproveillegalrecruitmentmaybeusedtoproveestafa.
89
2.Convictionforbothillegalrecruitmentandestafa,notdoublejeopardy.
90
====================================
(g) Liabilities
(a) local employment agency
(b) foreign employer
i. Theory of imputed knowledge
(h) Pretermination of contract of migrant
worker
c. Direct hiring
====================================
1.NATUREOFLIABILITYOFLOCALRECRUITMENTAGENCYANDFOREIGNPRINCIPAL.
Thenatureofliabilityisasfollows:
1. LocalAgencyissolidarilyliablewithforeignprincipal.
2. Severance of relations between local agent and foreign principal does not affect liability of local
recruiter.
2.PERSONSCRIMINALLYLIABLEFORILLEGALRECRUITMENT.
a.Personswhomaybecriminallyheldliableforillegalrecruitment.
80
Peoplev. Bautista, G.R. No. 113547, Feb. 9, 1995, 241SCRA216; Peoplev. Taguba, G.R. Nos. 95207-17, Jan. 10, 1994, 229SCRA188.
81
Peoplev. Honrada, G.R. Nos. 112178-79, April 21, 1995, 243SCRA640; Peoplev. Reyes, G.R. No. 105204, March9, 1995, 242SCRA264.
82
Peoplev. Hu, [G.R. No. 182232, October06, 2008].
83
Peoplev. Hernandez, [G.R. Nos. 141221-36. March7, 2002].
84
Peoplev. Laurel, [G.R. No. 120353, February12, 1998].
85
Peoplev. Enriquez, [G.R. No. 127159, May5, 1999], citingPeoplev. Reyes, [G.R. Nos. 104739-44, November18, 1997, 282SCRA105].
86
Peoplev. Turda, G.R. Nos. 97044-46, July6, 1994, 233SCRA702.
87
Peoplev. Duque, G.R. No. 100285, Aug. 13, 1992, 212SCRA607.
88
Peoplev. Turda, G.R. Nos. 97044-46, July6, 1994, 233SCRA702.
89
Peoplev. Alzona, [G.R. No. 132029, July30, 2004].
90
Peoplev. Billaber, [G.R. Nos. 114967-68, January26, 2004].
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Thepersonscriminallyliableforillegalrecruitmentare:
1.Incaseofnaturalpersons
a. Principals;
b. Accomplices;and
c. Accessories.
2.Incaseofjuridicalpersons
a. Officershavingownership,control,managementordirectionoftheirbusinesswhoareresponsible
forthecommissionoftheoffense;and
b. Responsibleemployees/agentsthereof.
91
b.Someprinciplesonthepersonsliableforillegalrecruitment.
1. Employeesofalicensedrecruitmentagencymaybeheldliableforillegalrecruitmentasprincipalbydirect
participation,togetherwithhisemployer,ifitisshownthatheactivelyandconsciouslyparticipatedinillegal
recruitment.
92
2. Goodfaithandmerelyfollowingordersofsuperiors,notvaliddefenseofanemployee.
93
3. Amanagerofarecruitment/manningagencyisnotamereemployee.Assuch,hereceivesjobapplications,
interviews applicants and informs them of the agencys requirement of payment of performance or cash
bond prior to the applicants deployment. As the crewing manager, he was at the forefront of the
companysrecruitmentactivities.
94
3.ADMINISTRATIVELIABILITYOFLICENSEEORHOLDEROFAUTHORITY,SEPARATEANDDISTINCTFROMTHE
CRIMINALLIABILITYFORILLEGALRECRUITMENT.
Theinstitutionofthecriminalactioniswithoutprejudicetoanyadministrativeactionagainstthelicenseeor
holderofauthoritycognizablebythePOEAwhichcouldproceedindependentlyofthecriminalaction.
95
4.THEORYOFIMPUTEDKNOWLEDGE.
Thistheoryreferstocognizanceofacircumstanceorfactattributedtoapartybecauseofitsposition,or
itsrelationshipwithorresponsibilityforanotherparty.
The relationship of the local recruitment/manning agency visavis its foreign principal is that of agent
principal, the former being the agent and the latter, the principal. Consequently, the theory of imputed
knowledgeascribestheknowledgeoftheagenttotheprincipalbutnottheotherwayaround.
Thus, the violations of the terms and conditions of an extension contract, the execution thereof the
recruiter did not know and did not consent to, shall not make said recruiter solidarily liable for the reason that
knowledgebyhisprincipalofsaidcontractcannotbeimputedtohim
SunaceInternationalManagementServices,Inc.v.NLRC,[G.R.No.161757,January25,2006].
TheHighCourthastheopportunitytodiscusstheapplicationofthetheoryofimputedknowledgeinthis
case.Here,theOFW(Divina),adomestichelperinTaiwan,hasextendedher12monthcontractafteritsexpiration
for two (2) more years after which she returned to the Philippines. It was established by evidence that the
extension was without the knowledge of the local recruitment agency, petitioner Sunace. The Court of Appeals,
however, affirmed the Labor Arbiter and NLRCs finding that Sunace knew of and impliedly consented to the
extension of Divinas 2year contract. It went on to state that "It is undisputed that [Sunace] was continually
communicating with [Divinas] foreign employer." It thus concluded that "[a]s agent of the foreign principal,
petitionercannotprofessignoranceofsuchextensionasobviously,theactoftheprincipalextendingcomplainant
(sic)employmentcontractnecessarilyboundit."
In finding that the application of this theory of imputed knowledge was misplaced, the High Court ruled
that the theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to the principal, employer
Xiong,nottheotherwayaround.Theknowledgeoftheprincipalforeignemployercannot,therefore,beimputed
toitsagentSunace.TherebeingnosubstantialproofthatSunaceknewofandconsentedtobeboundunderthe
2yearemploymentcontractextension,itcannotbesaidtobeprivythereto.Assuch,itandits"owner"cannotbe
held solidarily liable for any of Divinas claims arising from the 2year employment extension. As the New Civil
Codeprovides:Contractstakeeffectonlybetweentheparties,theirassigns,andheirs,exceptincasewherethe
rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by
provisionoflaw.
96
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
directlynegotiatedwithDivinaandenteredintoanewandseparateemploymentcontractinTaiwan.Article1924
oftheNewCivilCodereading:Theagencyisrevokediftheprincipaldirectlymanagesthebusinessentrustedto
theagent,dealingdirectlywiththirdpersonsthusapplies.
91
Section6, R.A. No. 8042, asamendedbySection5, R.A. No. 10022.
92
Peoplev. Cabais, [G.R. No. 129070, March16, 2001, 354SCRA553, 561].
93
Peoplev. Gutierrez[G.R. No. 124439, February5, 2004, 422SCRA32, 43-44].
94
Peoplev.Gasacao, [G. R. No. 168445, November11, 2005].
95
Section12, RepublicAct No. 8042; Section12, OmnibusRulesandRegulationsImplementingtheMigrant WorkersandOverseasFilipinosAct of 1995datedFeb. 29, 1996; Section2, RuleI, Part V, POEARulesandRegulationsGoverningtheRecruitment andEmployment of
Seafarers, May23, 2003.
96
SeealsoRovelsEnterprises, Inc. v. Ocampo, [G.R. No. 136821, October 17, 2002, 391SCRA176].
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As defined, a principal refers to an employer or foreign placement agency hiring or engaging Filipino
workersforoverseasemploymentthroughalicensedprivaterecruitment/manningagency.
97
Itbearsstressingthatthenatureoftheliabilityofthelocalrecruitment/manningagencyanditsprincipal
isjointandseveral.Thisholdstrueforanyandallclaimsarisingoutoftheimplementationoftheemployment
contractinvolvingFilipinoworkersforoverseasdeployment.Iftherecruitment/manningagencyisajuridicalbeing,
the corporate officers and directors and partners, as the case may be, shall themselves be jointly and severally
liablewiththecorporationorpartnershipfortheaforesaidclaimsanddamages.
98
5.PRETERMINATIONOFCONTRACTOFMIGRANTWORKERS.
a.TerminationofemploymentofOFWs.
Terminationofemploymentmaymeananyofthefollowing:
1. Theworkerhasrequestedforanearlyterminationofemployment;
2. Theworkerandemployermutuallyagreedonanearlyterminationofemployment;
3. Thecontractofemploymenthasexpired;
4. Theworkerhasbeendischargedforjustcauseordisciplinaryreasons;
5. theemployerterminatedtheworkersemployment;
6. Theworkersufferedinjuryorillness;or
7. Theworkerhasdied.
Whicheverground,themigrantworkerhastherighttoinsistthatheberepatriatedtothePhilippines.The
onlyexceptioniswhenthemigrantworkerischargedforcertaincrimesorchargesinforeigncourtsandthusmay
notbeallowedtogohomeuntilthecaseisterminatedinhis/herfavor.
b.EffectofunauthorizedsubstitutionoralterationofPOEAapprovedemploymentcontract.
R.A.No.8042explicitlyprohibitsthesubstitutionoralterationtotheprejudiceoftheworker,ofemployment
contractsalreadyapprovedandverifiedbythePOEAfromthetime ofactualsigningthereofbythepartiesuptoand
includingtheperiodoftheirexpirationwithouttheapprovalofthePOEA.
99
Consequently,itwasheldinChavezv.BontoPerez,[G.R.No.109808,March1,1995,242SCRA73,82;312
Phil. 88], that the subsequently executed side agreement of an overseas contract worker with her foreign employer
whichreducedhersalarybelowtheamountapprovedbythePOEAisvoidbecauseitisagainstourexistinglaws,morals
and public policy. The said side agreement cannot supersede her standard employment contract approved by the
POEA.
Following the same rule, the unauthorized alteration in the employment contract of the OFW in the case of
PlacewellInternationalServicesCorp.v.Camote,[G.R.No.169973,June26,2006],particularlythediminutioninhis
salaryfromUS$370.00toSR800.00permonth,wasdeclaredvoidforviolatingthePOEAapprovedcontractwhichset
the minimum standards, terms, and conditions of his employment. Thus, the original POEAapproved employment
contractoftheOFWsubsistsdespitethesocallednewagreementwiththeforeignemployerattheKingdomofSaudi
Arabia, to which he was deployed by petitioner. Consequently, the solidary liability of petitioner with the foreign
employerfortheOFWsmoneyclaimscontinuesinaccordancewithSection10ofR.A.No.8042.
c.RepatriationWhenaSeafarerRequestsforEarlyTermination.
Aseafarerwhorequestsforearlyterminationofhiscontractshallbeliableforhisrepatriationcostaswell
asthetransportationcostofhisreplacement.
100
6.DIRECTHIRING.
DirectHiringreferstotheprocessofdirectlyhiringworkersbyemployersforoverseasemploymentas
authorizedbytheDOLESecretaryandprocessedbythePOEA,including:
1. Thosehiredbyinternationalorganizations
2. Thosehiredbymembersofthediplomaticcorps.
3. Name hires or workers who are able to secure overseas employment opportunity with an employer
withouttheassistanceorparticipationofanyagency.
101
97
Section1[oo], RuleII, Omnibus RulesandRegulationsImplementingtheMigrant WorkersandOverseasFilipinosAct of 1995, As AmendedbyR. A. No. 10022(March08, 2010)
98
Section1[s], RuleII, OmnibusRulesandRegulationsImplementingtheMigrant WorkersandOverseasFilipinos Act of 1995, AsAmendedbyR. A. No. 10022(March08, 2010).
99
SeeSec. 6[i], R.A. No. 8042.
100
Section19.G, StandardTermsandConditionsGoverningtheEmployment of FilipinoSeafarersonBoardOcean-GoingVessels.
101
Section1[i], RuleII, OmnibusRulesandRegulationsImplementingtheMigrant WorkersandOverseasFilipinosAct of 1995, As AmendedbyR. A. No. 10022(March08, 2010).
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========================================
2. Regulation and Enforcement
a. Remittance of foreign exchange earnings
b. Prohibited activities
c. Regulatory and visitorial powers of the
Labor Secretary
d. Penalties for illegal recruitment
========================================
1.REMITTANCEOFFOREIGNEXCHANGEEARNINGS.
a.Remittanceofforeignexchangeearningsismandatory.
It shallbe mandatory for allFilipino workersabroad to remit a portion of theirforeign exchange earnings to
theirfamilies,dependents,and/orbeneficiariesinthecountryinaccordancewithrulesandregulationsprescribedbythe
SecretaryofLabor.
102
b.Reasonwhyobligationismandatory.
RemittancetothePhilippinesofforeignexchangeearningsofFilipinoworkersabroadisnecessarytoprotect
the welfare of their families, dependents and beneficiaries and to ensure that their foreign exchange earnings are
remitted through authorized financial institutions of the Philippine government in line with the countrys economic
developmentprogram.Noncompliancewiththelawsandregulationsonremittanceofforeignexchangeearningsand
recourse to the use of unauthorized and unofficial financing institutions had led to the detriment of the countrys
balance of payments and economic development program. Consequently, it is imperative that the mandatory
remittance requirement be fully complied with by all concerned through the institution of appropriate remittance
facilitiesandtheimpositionofeffectivesanctions.
103
c.Coverage.
This mandatory requirement applies to every contract worker and seamen recruited and placed in overseas
employment.Theyalsoapplytolicensedagenciesandauthorityholders.
104
d.Mandatoryobligationtoremit.
Itismandatoryforaworkerorseamantoremitregularlyaportionofhisforeignexchangeearningsabroadto
hisbeneficiarythroughthePhilippinebankingsystem.
105
Theobligationtoremitisrequiredtobestipulatedinthefollowingdocuments:
(1) Contractofemploymentand/orservicebetweenaforeignbasedemployerandaworker;
(2) Affidavit of undertaking whereby a worker obligates himself to remit a portion of his earnings to his
beneficiaries;
(3) Applicationforalicenseorauthoritytorecruitworkers;
(4) Recruitment agreement and/or service contract between a licensed agency or authority holder and its
foreignemployerorprincipal;and
(5) Applicationforaccreditationofaprincipalorproject.
106
e.Amountofforeignexchangeremittances.
Thepercentageofforeignremittanceshallbeasfollows:
1. Seamenandmariners:Eightypercent(80%)ofthebasicsalary;
2. WorkersofFilipinocontractorsandconstructioncompanies:Seventypercent(70%)ofthebasicsalary;
3. Doctors, engineers, teachers, nurses and other professional workers whose employment contracts
provideforfreeboardandlodgingfacilities:Seventypercent(70%)ofthebasicsalary;
4. All other professionals whose employment contracts do not provide free board and lodging facilities:
Fiftypercent(50%)ofthebasicsalary;
5. Domesticandotherserviceworkers:Fiftypercent(50%)ofthebasicsalary;
6. All other workers not falling under the aforementioned categories: Fifty percent (50%) of the basic
salary.
107
7. Performingartists overseas are requiredto remitat leastfifty percent(50%)oftheirmonthly salaryto

thePhilippines.
108
f.Formofremittance.
Remittance of foreign exchange may be done individually by a worker or collectively through an employer
underapayrolldeductionscheme,tobeapprovedbytheDepartmentofLaborandEmployment.
109
102
Article22, LaborCode.
103
Whereasclauses, ExecutiveOrderNo. 857; Section1, RuleII, RulesandRegulationsImplementingExecutiveOrderNo. 857.
104
Section1, RuleXIII, BookI, RulestoImplement theLaborCode.
105
Section2, RuleXIII, BookI, RulestoImplement theLaborCode; Section1, ExecutiveOrderNo. 857; Section2, RuleIII, RulesandRegulationsImplementingExecutiveOrderNo. 857.
106
107
Section2, ExecutiveOrder No. 857[Section2(a) wasamendedbyExecutiveOrder No. 925, issuedonNov. 22, 1983andbecameeffectiveonJan. 1, 1984]; Section4, RulesandRegulationsImplementingExecutiveOrder No. 857; Section3, RuleVIII, BookVIII, POEARulesand
RegulationsGoverningOverseasEmployment, asamendedin1991.
108
SectionB[7], DOLEOrderNo. 35, Seriesof 1994.
109
Section4, RuleXIII, BookI, RulestoImplement theLaborCode; Section6, ExecutiveOrderNo. 857.

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g.Procedureofremittance.
(a)Theworker,priortodeparture,isrequiredtoopenadepositaccountforhismandatoryremittanceinfavor
ofhisbeneficiaryinanyPhilippinebank.Aforeigncurrencyaccountmayalsobeopenedbytheworkertobefundedby
savingsinexcessofthemandatoryremittance.TheapplicantshouldinformthePOEAofhisdepositaccountnumber.
(b)Inthecaseofseamen,constructionworkersandotherorganizedworkcrewsinvolvingatleasttwentyfive
(25)workers,theforeigncurrency/pesoaccountshouldbeopenedbytheemployeewithanyPhilippinebankuponthe
signing of the employment contract. The account shall be accompanied by a covering letter of nomination of
beneficiariesandthedateofpaymentoftheallotmenttothebeneficiariesasmaybestipulatedbytheemployeeand
thelicensedagency,manningagencyorconstructioncontractor.
(c)Attheendofeveryperiodasmaybestipulatedinthenoticeaspayment,thelicensedagency,construction
contractorormanningagentshallprepareapayrollsheetindicatingthenamesoftheworkerscoveredbythescheme,
their beneficiaries, their individual bank account numbers, the amount of foreign currency remitted and the peso
equivalentthereof.Thispayrollsheet,togetherwiththepesocheckrepresentingtheremittance,shallbeforwardedto
thebankconcernedwithinstructionstocredittheaccountoftheworkerorbeneficiaries.Acopyofthepayrollsheet
shallbefurnishedthePOEAonamonthlybasis.
(d) No local agent or representative shall pay directly the beneficiaries of the worker. The agent or
representative shall submit to the POEA copies of the reports which the bank may require him to submit and payroll
sheets on or before the end of the succeeding month of the payroll period together with the bank credit advice
evidencingremittanceofforeignexchange.
110
h.Failureorrefusaltoremitandtraffickinginforeigncurrency.
A licensed agency, authority holder, or manning agent or a worker who wilfully fails or refuses to remit the
assigned portion of his foreign exchange earnings or is found to have engaged or is engaging in the illegal traffic or
blackmarketofforeignexchange,shallbeliableundertheLaborCodeandexistingCentralBankrules.
111
i.Responsibilityofemployerorhisrepresentative.
Theemployerorhisrepresentativeshallundertaketheproperimplementationoftherelevantprovisionsofthe
RulestoImplementtheLaborCodebyprovidingfacilitiestoeffecttheremittanceandmonitoringofforeignexchange
earnings. Failure to do so shall be subject to appropriate sanctions specified in the Labor Code and Central Bank
regulations.
112
j.Obligationtoreport.
AgenciesshallsubmitperiodicreportstotheCentralBankofthePhilippines(nowBangkoSentralngPilipinas)
ontheirforeignexchangeearnings,copiesofwhichshallbefurnishedthePOEA.
113
k.Noncompliancewiththemandatoryremittancerequirement;effectonissuance,renewalandextension
ofpassport.
UnderExecutiveOrderNo.857[December13,1982]aswellasitsImplementingRules,itisdeclaredthatno
passport shall be issued, renewed or extended by the Department of Foreign Affairs unless proof of applicants
substantial compliance with the mandatory remittance requirement in the percentages provided under the law, is
submitted.
114
Passports issued to Filipino contract workers shall have an initial period of validity of one (1) year. The
DepartmentofForeignAffairsmay,however,adjust,ascircumstancesmayrequire,theinitialpassportvalidityperiod.
115
The passport shall be renewable every year upon submission of usual requirements and presentation of
documentaryproofofcompliancetotheremittancerequirement.
116
l.Substantialcompliance,explained.
The InterAgency Committee of the Central Bank Ministry (now Department) of Labor and Ministry (now
Department)ofForeignAffairsfortheImplementationofExecutiveOrderNo.857,initsResolutionNo.183passedon
February9,1983,clarifiedtheforegoingeffectofnoncompliancewiththemandatoryremittancerequirementonthe
issuance,renewalandextensionofpassport.SaidCommitteedeclaredthatinaccordancewiththenormaldurationof
contractsofemploymentandtakingintoaccounttheprovisionsofbothExecutiveOrdersNos.855and857mandating
theDepartmentofForeignAffairstoadjust,ascircumstancesmayrequire,theinitialvalidityperiod,passportsissuedto
contractworkersshallbevalidfortwo(2)years,renewableforanothertwo(2)years,subjecttocompliancewiththe
mandatoryremittancerequirement.
Clarifyingthedefinitionofthephrasesubstantialcompliance,theCommitteedeclaredthat,asageneralrule,
compliance with the percentages of mandatory remittance defined in Section 2 of Executive Order No. 857 shall be
required. However, during the initial period of the implementation of the Executive Order which is from February 1,
1983,consularofficersmayrenewoldpassportsorissuenewpassportsandofficialsoftheMinistry(nowDepartment)
ofLaborandEmploymentmayrenewemploymentcontractsifthecontractworkersconcernedareabletosubmitproof
ofsubstantialcompliancewiththemandatoryremittancerequirements.
110
111
112
Section7, RuleXIII, BookI, RulestoImplement theLaborCode; Section6, ExecutiveOrderNo. 857; Section1, RuleV, RulesandRegulationsImplementingExecutiveOrderNo. 857.
113
Section2, RuleVIII, BookVIII, POEARulesandRegulationsGoverningOverseasEmployment, asamendedin1991; Section3, RuleIII, RulesandRegulationsImplementingExecutiveOrderNo. 857.
114
Section3, ExecutiveOrderNo. 857; Section1, RuleIV, RulesandRegulationsImplementingExecutiveOrderNo. 857.
115
116
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Acontractworkershallbedeemedtohavesubstantiallycompliedwiththemandatoryrequirementif,atthe
timeheappliesforrenewalofpassportorrenewalofhisemploymentcontractduringtheperiodcitedabove,hecan
show proof that he has remitted and sold for pesos at least onehalf (1/2) of the amount of foreign exchange
correspondingtothemandatoryremittancerequiredofhim.
The requirement to remit on a monthly basis need not be strictly applied during the initial period of
implementationprovidedthattheamountremittedandsoldforpesosthroughauthorizedfinancinginstitutionsshallat
least beequaltoonehalfoftheamountcorrespondingtothemandatorypercentagerequirementdefinedunderthe
ExecutiveOrder.
Forexample,ifthesalaryofacontractworkerisUS$200amonthorUS$2,400ayear,suchworkerisrequired
to remit 50% thereof or US$1,200 annually under Executive Order No. 857. Pursuant to the substantial compliance
formula,acontractworkerneedsonlytoshowproofthathehasatleastremittedandsoldforpesos50%ofUS$1,200
thereoforUS$600.00ayear.
Thesubstantialcomplianceasdefined,appliestocontractworkersremittingonanindividualbasis.Itdoes
notapplytothosecontractworkersalreadyremittingorwhowillberemittingunderthepayrollsystem,oronamonthly
basis.
117
m.Noncompliancewiththemandatoryremittancerequirement;effectonaccreditationofemployer,
issuanceoflicenseorauthorityandapproval/renewalofcontractsofemployment.
Noaccreditationshallbeissuedtoanemployer,andnolicenseorauthorityshallbegrantedtoanagencyor
entitybytheDepartmentofLaborandEmploymentunlesstheysubmitproofthattheyhaveprovidedfacilitiestoeffect
theremittanceofforeignexchangeearningsofFilipinoworkersundertheiremploy.
118
Nocontractsof employment and/or service agreement shall beapprovedor renewed bytheDepartment of

LaborandEmploymentunlessproofofcompliancewiththemandatoryremittancerequirementissubmitted.
119
A contract worker who fails to comply with the mandatory remittance requirement shall be suspended or
excluded from the list of eligible workers for overseas employment and in case of subsequent violations, he shall be
repatriatedathisownexpenseorattheexpenseofhisemployer,asthecasemaybe.
120
Filipino or foreign employers and/or their representatives who fail to comply with the law shall be excluded
fromtheoverseasemploymentprogram.
121
In the case of local private employment agencies and other similar entities, their failure to comply with the
mandatoryremittancerequirementshallbeagroundforcancellationoftheirauthoritytorecruitworkersforoverseas
employmentwithoutprejudicetotheirliabilitiesunderexistinglawsandregulations.
122
n.Conflictinmandatoryremittancerequirementandhostcountrysregulationsonthematter.
Shouldtherebeconflictincomplyingwiththemandatoryremittancerequirementinviewofthehostcountrys
regulationsonthematter,thepercentagesofremittanceshallbe,withinallowablelimits,setdownbylocallaws.
123
o.Beneficiarieslivingwithcontractworkersabroad.
A contract worker whose immediate family members, dependents or beneficiaries are residing with him
abroad,isnotcompelledtocomplywiththemandatoryremittancerequirementexceptifthedependentsthemselves
arecontractworkers,subjecttoverificationofhisfamilystatusbytheMinistries(nowDepartments)ofForeignAffairs
and/orLaborandEmployment.Heshouldbeencouraged,nevertheless,toremitaportionofhisforeignearningstothe
Philippines.
124
p.PunitiveprovisionsofExecutiveOrderNo.857,repealed.
Executive Order No. 1021 [On Encouraging the Inward Remittances of Contract Workers Earnings Through
OfficialChannels]issuedonMay1,1985byPresidentFerdinandE.Marcos,repealedthepunitiveprovisionsofExecutive
OrderNo.857.
q.Roleofembassyaschannelforremittance.
TheroleoftheEmbassyasdefinedinSection7ofRuleIIIoftheImplementingRulesofExecutiveOrderNo.857
is only temporary, in the absence of banking facilities in the jobsite and pending the establishment of appropriate
arrangementsbytheCentralBank(nowBangkoSentralngPilipinas).Inexercisingthisfunction,theEmbassyshallabide
bycustomarylocallawsandregulationsofthehostcountry.
125
r.Remittancesofcontractworkers,notdeemedpersonaldeductionsforincometaxationpurposes.
ObligationsofcontractworkerstoremitportionsoftheirforeignexchangeearningsunderExecutiveOrderNo.
857areseparateanddistinctfromthepersonaldeductionsdefinedundergrossincometaxationlaws.
126
117
ItemI [Guidelines], ResolutionNo. 1-83datedFeb. 9, 1983issuedbytheInter-AgencyCommitteeof theCentral Bank, Ministryof LaborandMinistryof ForeignAffairsfortheImplementationof ExecutiveOrderNo. 857.
118
Section4, ExecutiveOrderNo. 857; Section1, RuleV, RulesandRegulationsImplementingExecutiveOrderNo. 857.
119
Section4, Ibid.; Section2, RuleV, Ibid..
120
121
122
123
ItemI [Guidelines], [1.5], ResolutionNo. 1-83datedFeb. 9, 1983issuedbytheInter-AgencyCommitteeof theCentral Bank, Ministryof LaborandMinistryof ForeignAffairsfortheImplementationof ExecutiveOrderNo. 857.
124
ItemI [Guidelines], [1.6], ResolutionNo. 1-83datedFeb. 9, 1983, Ibid..
125
ItemI [Guidelines], [1.7], ResolutionNo. 1-83datedFeb. 9, 1983, Ibid..
126
ItemI [Guidelines], [1.8], ResolutionNo. 1-83datedFeb. 9, 1983,Ibid..
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2.PROHIBITEDACTIVITIES.
Besidesillegalrecruitment,Section6ofR.A.No.8042,asamendedbySection5ofR.A.No.10022(March8,
2010), additionally provides that it shall also be unlawful for any person or entity to commit the following prohibited
acts:
(1) GrantaloantoanoverseasFilipinoworkerwithinterestexceedingeightpercent(8%)perannum,which
will be used for payment of legal and allowable placement fees and make the migrant worker issue,
eitherpersonallyorthroughaguarantororaccommodationparty,postdatedchecksinrelationtothe
saidloan;
(2) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to
availofaloanonlyfromspecificallydesignatedinstitutions,entitiesorpersons;
(3) Refuse to condone or renegotiate a loan incurred by an overseas Filipino worker after the latter's
employmentcontracthasbeenprematurelyterminatedthroughnofaultofhisorherown;
undergo health examinations only from specifically designated medical clinics, institutions, entities or
persons, except in the case of a seafarer whose medical examination cost is shouldered by the
principal/shipowner;
undergo training, seminar, instruction or schooling of any kind only from specifically designated
institutions, entities or persons, except for recommendatory trainings mandated by
principals/shipownerswherethelattershoulderthecostofsuchtrainings;
(6) Forasuspendedrecruitment/manningagencytoengageinanykindofrecruitmentactivityincludingthe
processingofpendingworkers'applications;and
(7) For a recruitment/manning agency or a foreign principal/employer to pass on the overseas Filipino
worker ordeduct from his or her salarythe payment ofthe cost of insurance fees,premium orother
insurancerelatedcharges,asprovidedunderthecompulsoryworker'sinsurancecoverage.
3.REGULATORYANDVISITORIALPOWERSOFTHELABORSECRETARY.
a.2separateprovisionsintheLaborCode.
As far as recruitment and placement of workers for local and overseas employment are concerned, the
Labor Code contains two (2) separate provisions on the regulatory and visitorial powers of the DOLE Secretary,
namely:
1. Article36RegulatoryPower;and
2. Article37VisitorialPower.
3.1.REGULATORYPOWER.

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
Titleandisherebyauthorizedtoissueordersandpromulgaterulesandregulationstocarryoutthe
objectivesandimplementtheprovisionsofthisTitle.

a.Natureofregulatorypower.
ThepowertoregulateandrestricttherecruitmentandplacementactivitiesofallagenciesconferredbyArticle
36totheSecretaryofLaborandEmploymentisavalidgrantofpolicepower.
127
Beingregulatory,theDOLESecretarymayvalidlyissuerulesandregulationsrestrictingorotherwiseregulating
therecruitmentandplacementactivitiesofpersonsandentitiesengagedintherecruitmentandplacementofworkers
locallyoroverseas.

b.Exerciseoftheregulatorypower.
Pursuant to Article 36 and in accordance with other pertinent and related provisions of the Labor Code, the
DOLESecretaryhasissuedseveralimplementingrules,guidelinesandregulationssuchas,amongothers,thefollowing:
1.RulesandRegulationsGoverningPrivateRecruitmentandPlacementAgenciesforLocalEmploymentissued
bySecretaryRubenD.TorresonApril4,1991;
2. Rules and Regulations Governing Overseas Employment issued by Secretary Ruben D. Torres on May 31,
1991;and
3.PolicyInstructionssuchasPolicyInstructionsNo.22,Seriesof1977[GuidelinesGoverningtheEmployment
ofConstructionWorkersOverseasbyApril1,1977]anditsImplementingRulesandRegulations;PolicyInstructionsNo.
34, Series of 1978 [Omnibus Instructions Governing the Deployment of Construction Workers Overseas]; and Policy
InstructionsNo.45,Seriesof1981[DirectingtheOEDBtoMonitor,DevelopandAdministertheHiringandEmployment
ofFilipinosinForeignHouseholds];
4.CircularssuchasCircularNo.0191issuedbySecretaryRubenD.TorresonNovember20,1991prescribing
additionalrequirements,conditionsandproceduresforthedeploymentofperformingartists;
127
PhilippineAssociationof ServiceExporters, Inc. v. Torres, G.R. No. 101279, Aug. 6, 1992, 212SCRA298.
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5.DOLEOrderNo.35,Seriesof1994,issuedonOctober14,1994bySecretaryMa.NievesConfesorregarding
theComprehensiveWelfareProgramforArtistsOverseas.
6.POEARulesandRegulationsGoverningtheRecruitmentandEmploymentofLandBasedOverseasWorkers
issuedonFebruary4,2002.
7. POEA Rules and Regulations Governing the Recruitment and Employment of Seafarers issued on May 23,
2003.

3.2.VISITORIALPOWER.

Article37.VisitorialPower.TheSecretaryofLabororhisdulyauthorizedrepresentatives
may, at any time, inspect the premises, books of accounts and records of any person or entity
coveredbythisTitle,requireittosubmitreportsregularlyonprescribedforms,andactonviolation
ofanyprovisionsofthisTitle.

a.DistinctionsofthevisitorialpowersoftheDOLESecretaryunderArticles27and128oftheLaborCode.
ThevisitorialpoweroftheDOLESecretaryorhisdulyauthorizedrepresentativesdescribedinArticle37ofthe
Labor Code should be distinguished from the other visitorial powers granted to him by other provisions of the Labor
CodesuchastheonesprovidedforunderArticle128andArticle274thereof.
Here,thevisitorialpowerpertainstotheinspectionofthepremises,booksofaccountsandrecordsofpersons
andentitiesengagedintherecruitmentandplacementofworkersforlocaloroverseasemployment.Italsoincludesthe
powertorequirethesubmissionofreportsregularlyoncertainprescribedformsandtoactonanyviolationofTitleI,
BookIoftheLaborCode.
128
ThevisitorialandenforcementpoweroftheDOLESecretaryorhisdulyauthorizedrepresentatives,including
laborregulationofficers,treatedinArticle128pertainstotheinspectionofpremises,booksofaccountsandrecordsof
employerstodetermineviolationsoftheLaborCodeorwhichmayaidintheenforcementthereofandofanylaborlaws,
wageordersorrulesandregulationsissuedpursuantthereto.
129
Article 274 dwells on the visitorial power of the DOLE Secretary to inquire into the financial activities of
legitimatelabororganizations.

b.Effectofobstructionofexerciseofvisitorialpower.
The act of any person, whether a nonlicensee, nonholder, licensee or holder of authority, in obstructing or
attemptingtoobstructinspectionbytheDOLESecretaryorbyhisdulyauthorizedrepresentativeunderArticle37ofthe
LaborCodeisoneoftheprohibitedpracticesandunlawfulactswhichconstitutesillegalrecruitment.
130
Alsoconstitutiveofillegalrecruitmentistheactoffurnishingorpublishinganyfalsenoticeorinformationor
documentinrelationtorecruitmentoremployment;orgivinganyfalsenotice,testimony,informationordocument;or
committing any act of misrepresentation for the purpose of securing a license or authority under the Labor Code; or
failingtosubmitreportsonthestatusofemployment,placementvacancies,remittanceofforeignexchangeearnings,
separationfromjobs,departuresandsuchothermattersorinformationasmayberequiredbytheSecretaryofLabor
andEmployment.
131

4.PENALTIESFORILLEGALRECRUITMENT.

a.Penaltiesforillegalrecruitmentseparateanddistinctfrompenaltiesforcommissionofprohibited
acts.
RepublicActNo.8042,asamendedbyR.A.No.10022,providesseparatepenaltiesforillegalrecruitment
andcommissionofprohibitedacts.

Thepenaltiesforillegalrecruitmentareasfollows:
(a) Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of not less
thantwelve(12)yearsandone(1)daybutnotmorethantwenty(20)yearsandafineofnotlessthan
Onemillionpesos(P1,000,000.00)normorethanTwomillionpesos(P2,000,000.00).
(b) The penalty of life imprisonment and a fine of not less than Two million pesos (P2,000,000.00) nor
more than Five million pesos (P5,000,000.00) shall be imposed if illegal recruitment constitutes
economic sabotage; Provided, however, That the maximum penalty shall be imposed if the person
illegally recruited is less than eighteen (18) years of age or committed by a nonlicensee or non
holderofauthority.

Thepenaltiesforcommissionofprohibitedactsareasfollows:

(a) Anypersonfoundguiltyofanyoftheprohibitedactsshallsufferthepenaltyofimprisonmentofnot
lessthansix(6)yearsandone(1)daybutnotmorethantwelve(12)yearsandafineofnotlessthan
Fivehundredthousandpesos(P500,000.00)normorethanOnemillionpesos(P1,000,000.00).

Iftheoffenderisanalien,heorsheshall,inadditiontothepenaltiesabove,bedeportedwithoutfurther
proceedings.
132
128
Article37, LaborCode.
129
Article128, LaborCode; SanJosev. NLRC, G.R. No. 121227, Aug. 17, 1998.
130
SeeArticle34[g], LaborCode; Section6, RepublicAct No. 8042; Section9[VI], OmnibusRulesandRegulationsImplementingtheMigrant WorkersandOverseasFilipinosAct of 1995datedFeb. 29, 1996.
131
SeeArticle34, LaborCode; Section6, RepublicAct No. 8042; Section9[VI], OmnibusRulesandRegulationsImplementingtheMigrant WorkersandOverseasFilipinosAct of 1995datedFeb. 29, 1996.
132
Section7, R.A. No. 8042, asamendedbySection6, R.A. No. 10022; Article39[d], LaborCode.
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In every case, conviction shall cause and carry the automatic revocation of the license or registration of
therecruitment/manningagency,lendinginstitutions,trainingschoolormedicalclinic.
133

END OF DISCUSSION ON
TOPIC B. RECRUITMENT AND PLACEMENT

oooooooooOoOooooooooo
133
Section7, R.A. No. 8042, asamendedbySection6, R.A. No. 10022.

Recruitment and Placement Rules for Local Workers

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LABOR LAW: B. RECRUITMENT AND PLACEMENT

7. Performingartists overseas are requiredto remitat leastfifty percent(50%)oftheirmonthly salaryto

Nocontractsof employment and/or service agreement shall beapprovedor renewed bytheDepartment of

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