Recruitment and Placement Part I (Definition of recruitment and placement + Regulation of recruitment and placement activities)

Undersecretary JBJ says these are the important Labor Code provisions in relation to Recruitment and Placement:
13– Definitions
34– Prohibited Practices
38– Illegal Recruitment
40– Employment Permit of Non-resident Aliens

While the second most important are:
18– Ban on Direct-Hiring
27– Citizenship Requirement
37– Visitorial Power
41– Prohibition Against Transfer of Employment
42– Submission of List

But we’ll get to these later. Let’s go with the flow of the syllabus.

(Edit September 2022: If you want to learn more, I have a tutorial program ongoing. It will be of great help in expanding my passion project. You can sign up at https://sophia.milesfajardo.com/1st-register/?fbclid=IwAR1hmuoneQgVNTOcA0B3ZgO1gYjZeDsQoH6J-kvfKPyKmiNODMyxMIBC-9A)

But wait, before we get to the syllabus, let’s answer one question.

Is it the Philippines’ policy to promote overseas work?

NO! But while the State does not promote it, the State is still obligated to protect overseas workers.
While recognizing the significant contribution of Filipino migrant workers to the national economy through their foreign exchange remittances, the State does not promote overseas employment as a means to sustain economic growth and achieve national development. The existence of the overseas employment program rests solely on the assurance that the dignity and fundamental human rights and freedoms of the Filipino citizens shall not, at any time, be compromised or violated. The State, therefore, shall continuously create local employment opportunities and promote the equitable distribution of wealth and the benefits of development.
-Sec. 2(c) of R.A. No. 8042 (Migrant Worker’s Act)

That’s why in R.A. No. 10022 (law amending R.A. No. 8042), we added a provision that prior to the deployment of overseas workers to a foreign country, our ambassador to that country should first submit to the Secretary of Foreign Affairs that such country also protects the rights of Filipino migrant workers. It also provided punishment for members of the POEA Governing Board who vote for deployment despite the absence of any of the three guarantees mentioned below.

SEC. 4. Deployment of Migrant Workers. – The State shall allow the deployment of overseas Filipino workers only in countries where the rights of Filipino migrant workers are protected. The government recognizes any of the following as a guarantee on the part of the receiving country for the protection of the rights of overseas Filipino workers:
“(a) It has existing labor and social laws protecting the rights of workers, including migrant workers;
“(b) It is a signatory to and/or a ratifier of multilateral conventions, declarations or resolutions relating to the protection of workers, including migrant workers; and
“(c) It has concluded a bilateral agreement or arrangement with the government on the protection of the rights of overseas Filipino Workers:
Provided, That the receiving country is taking positive, concrete measures to protect the rights of migrant workers in furtherance of any of the guarantees under subparagraphs (a), (b) and (c) hereof.
“In the absence of a clear showing that any of the aforementioned guarantees exists in the country of destination of the migrant workers, no permit for deployment shall be issued by the Philippine Overseas Employment Administration (POEA).

“The members of the POEA Governing Board who actually voted in favor of an order allowing the deployment of migrant workers without any of the aforementioned guarantees shall suffer the penalties of removal or dismissal from service with disqualification to hold any appointive public office for five (5) years, Further, the government official or employee responsible for the issuance of the permit or for allowing the deployment of migrant workers in violation of this section and in direct contravention of an order by the POEA Governing Board prohibiting deployment shall be meted the same penalties in this section.

“For this purpose, the Department of Foreign Affairs, through its foreign posts, shall issue a certification to the POEA, specifying therein the pertinent provisions of the receiving country’s labor/social law, or the convention/declaration/resolution, or the bilateral agreement/arrangement which protect the rights of migrant workers.
-R.A. No. 10022

Ok, that’s enough intro.

Let’s get right to the syllabus.

Definition of recruitment and placement

This can be found in the Labor Code under Art. 13(b).

As a mnemonic device, we can use CETCHUP CRAP. Imagine a ketchup-like piece of crap (or don’t).

1. Any act of Canvassing, Enlisting, Transporting, Contracting, Hiring, Utilizing, or Procuring workers
(CETCHUP); and
2. Includes Contract services, Referrals, Advertising or Promising for employment, locally or abroad, whether for profit or not.
(CRAP)
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.
-Article 13(b), Labor Code

NOTE: the acts of recruitment and placement are not limited to overseas employment because of “locally or abroad.”

For practical purposes, this likely won’t be asked as an objective question like “What are the acts that constitute recruitment and placement?” nor as a simple question like “Is the act in the given facts tantamount to recruitment and placement?” because that won’t be a “specific legal problem” as stated in the latest Bar Bulletin No. 30.

So how can CETCHUP CRAP be relevant? It can be relevant in questions surrounding illegal recruitment. How? First, because questions of illegal recruitment involve a specific legal problem like “Is X guilty of illegal recruitment?”. Second, one form (there are two) of illegal recruitment is any act of recruitment and placement done without a license or authority.

The bottom line is that CETCHUP CRAP is important.

NOTES:
–MERE SUGGESTION can qualify as an act of recruitment and placement. Where can it fall under? Under referral.

x x x Even if [appellant] did no more than “suggest” to complainants where they could apply for overseas employment, her act constituted “referral” within the meaning of Article 13(b) of the Labor Code (People v. Ong, 322 SCRA 38). 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. (People v. Goce, 247 SCRA 780)
–People v. Martinez, 2010

–PAYMENT is not an element. As we can see in CETCHUP CRAP, there is no requirement for payment there.

Now, the last paragraph of Art. 13(b) is a little tricky. It seems to suggest that the act of recruitment and placement should be done to at least two or more persons. But, that is not the case.

The last paragraph MERELY CREATES A PRESUMPTION FOR EVIDENTIARY PURPOSES. It does not mean that there needs to be at least 2 people as the target for recruitment and placement to take place.
“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 2 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.”
–People v. Panis, 1986

For this presumption to apply, there should be PAYMENT because there are two requirements.
(1) A fee should be collected in consideration of a promise or offer of employment
(2) to 2 or more prospective workers.

So what if there is payment and there is also promise, but only to one person? The presumption will not apply. BUT, the one who promised can still be deemed to be engaged in recruitment in placement! Why? Because “promising for employment” is an act included in CETCHUP CRAP. It’s just that no presumption will apply. It has to be proven in court. But this time, no payment is even necessary to prove it.

Regulation of recruitment and placement activities

Brace yourselves because this will get a little boring.

1. REGULATORY AUTHORITIES

PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION

Let’s start with the principal functions of POEA.

PRINCIPAL FUNCTIONS:

1. Protection of the right of Filipino workers to fair and equitable employment practices.
2. Regulation of private sector participation in the recruitment and overseas placement of workers by setting up a licensing and registration system.
3. Deployment of Filipino workers through Government to Government hiring.
4. Formulation, implementation, and monitoring of overseas employment of Filipino workers taking into consideration their welfare and domestic manpower requirements.
5. Shall inform migrant workers not only of their rights as workers but also of their rights as human beings, instruct and guide the workers how to assert their rights and provide the
   available mechanism to redress violation of their rights.
6. Implementation, in partnership with other law-enforcement agencies, of an intensified program against illegal recruitment activities.
   -Sec. 14, R.A. 10022

As we can see, the POEA is the government body responsible for monitoring and regulating private recruitment agencies in the Philippines. Typically, the POEA ensures that all job opportunities overseas available to all Filipinos are legitimate. Their main purpose is to protect all applicants and Overseas Filipino Workers or OFWs from illegal recruiters or employers by creating and implementing policies that endeavor the best interest of the OFWs.

But this won’t likely come out in the exams. What may come out is the POEA’s jurisdiction.

JURISDICTION (Sec. 28, IRR of R.A. No. 8042):
1. All administrative cases arising out of violations of rules and regulations relating to LICENSING and REGISTRATION of recruitment and employment agencies or entities

2. DISCIPLINARY ACTION CASES and all other SPECIAL CASES which are administrative in character INVOLVING EMPLOYERS, PRINCIPALS, CONTRACTING PARTNERS, and FILIPINO MIGRANT WORKERS.

No. 1 above covers recruitment violations or violations of conditions of the license.

No. 2 involves (a) disciplinary action cases against foreign principals or employers, and (b) disciplinary action cases against land-based OFWs and seafarers.

The theme here is that the POEA has jurisdiction only over ADMINISTRATIVE cases. This means that the penalty may just be the revocation of licenses, suspension, or maybe fines.

Then who handles the civil (money claims) aspect? The criminal aspect?

The jurisdiction over money claims is given to the Labor Arbiter:
SECTION 58. Jurisdiction of the Labor Arbiters. — The Labor Arbiters of the NLRC shall have the original and exclusive jurisdiction to hear and decide all claims arising out of employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages, subject to the rules and procedures of the NLRC.
-IRR of R.A. No. 8042

The jurisdiction over criminal actions arising from illegal recruitment is with the RTC:
SEC. 9. VENUE. – A criminal action arising from illegal recruitment as defined herein shall be filed with the Regional Trial Court of the province or city where the offense was committed or where the offended party actually resides at the same time of the commission of the offense: Provided, That the court where the criminal action is first filed shall acquire jurisdiction to the exclusion of other courts. Provided, however, That the aforestated provisions shall also apply to those criminal actions that have already been filed in court at the time of the effectivity of this Act.
-R.A. No. 8042

Other significant powers of the POEA include the following as stated by Usec JBJ.

OTHER POWERS:
1. THE POEA CAN ISSUE A CLOSURE ORDER of recruitment and placement agencies.
If upon preliminary examination or surveillance, the DOLE Secretary, the POEA Administrator or DOLE Regional Director is satisfied that such danger or exploitation exists, a written order may be issued for the closure of the establishment being used for illegal recruitment activity

2. THEY CAN CONCILIATE AND MEDIATE on matters involving a violation of employment contracts, but not as to the legal issues (that goes to the labor arbiters)

If the POEA decides something, to whom is it appealable?

TO WHOM APPEALABLE:
The Secretary of Labor
-Sec. 185 POEA Rules 2016

Speaking of the Secretary of Labor..

REGULATORY AND VISITORIAL POWERS OF THE DEPARTMENT OF LABOR AND EMPLOYMENT SECRETARY

So kung si POEA ay may regulatory powers, si DOLE Secretary/Secretary of Labor/SOLE ay meron din. But more like si POEA yung hands-on na teacher na in-charge sa class na pwede niyang sabihan or idisplina ang erring student. Tapos si DOLE Secretary ay parang principal na kung feel niya pwede rin siyang mag check at mag discipline. Bakit nagtatagalog ako. Back to English.

REGULATORY POWERS
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.
-ART. 36, Labor Code

So the SOLE has two regulatory powers:
1. Restrict and regulate the recruitment and placement activities of all agencies in the coverage of this Title (Recruitment and Placement of Workers)
2. Issue orders and promulgate rules and regulations to carry out objectives and implement the provisions of this Title (Recruitment and Placement of Workers)

Does this mean the SOLE can also suspend and cancel recruitment licenses? Yes. Both the SOLE and POEA has this function. Art. 35 was not rendered ineffective by the creation of the POEA.

“In view of the Court’s disposition on the matter, we rule that the power to suspend or cancel any license or authority to recruit employees for overseas employment is concurrently vested with the POEA and the Secretary of Labor.”
-Trans Action v. SOLE, 2004

Let’s go to visitorial powers.

VISITORIAL POWERS
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.
-ART. 37, Labor Code

1. At any time, inspect the premises, books of accounts and records of any person or entity covered by this Title (Recruitment and Placement of Workers)
2. Require the person or entity to submit reports regularly on prescribed forms
3. Act on violation of any provision of this Title (Recruitment and Placement of Workers)

The SOLE also has general visitorial powers that cover all aspects of labor and not just recruitment and placement. But we’ll just discuss that later.

Now, a possible bar question is whether or not the SOLE can issue search warrants or warrants of arrest.

The answer is no.

THE SECRETARY OF LABOR CANNOT ISSUE WARRANTS
Under the 1987 Constitution, only a judge may issue search warrants or warrants of arrest. Hence, Art. 38(c) of the LC is unconstitutional inasmuch as it gives the SOLE the power to issue search warrants and warrants of arrest. The labor authorities must go through the judicial process.
–Salazar v. Achacoso, 1990

THUS, THIS PROVISION IS UNCONSTITUTIONAL
The Secretary of Labor and Employment or his duly authorized representatives shall have the power to cause the arrest and detention of such non- licensee or non-holder of authority if after investigation it is determined that his activities constitute a danger to national security and public order or will lead to further exploitation of job-seekers. The Secretary shall order the search of the office or premises and seizure of documents, paraphernalia, properties and other implements used in illegal recruitment activities and the closure of companies, establishments and entities found to be engaged in the recruitment of workers for overseas employment, without having been licensed or authorized to do so.
-ART. 38(c)

But note that the SOLE can issue TRAVEL BANS (provided that the requisites for the exercise of police power are present)
The consequence the deployment ban has on the right to travel does not impair the right. The right to travel is subject, among other things, to the requirements of “public safety,” “as may be provided by law.” Department Order No. 1 is a valid implementation of the Labor Code, in particular, its basic policy to “afford protection to labor,” pursuant to the respondent Department of Labor’s rule-making authority vested in it by the Labor Code (Art. 5).
-Phil. Association of Service Exporters v. Drilon, 1988

Let’s move on to our next topic.

BAN ON DIRECT HIRING

What’s direct hiring?

DIRECT HIRING:
It occurs when an employer hires a Filipino worker for overseas employment without going through the POEA or entities authorized by the SOLE.

Direct hiring is banned by the Labor Code

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.
-ART. 18, Labor Code

What’s the purpose of the ban though?

PURPOSE OF THE BAN:
1. To ensure the best possible terms and conditions of employment for the worker.
Because if the contract is not reviewed by POEA, the State has no means of determining the sutiability of foreign laws to our workers.
2. To assure the foreign employer that he hires only qualified Filipino workers. (Protect Philippines’ reputation)
3. To ensure full regulation of employment in order to avoid exploitation.
4. To ensure liability on the recruitment agency for they are solidarily liable with the foreign principal
-Usec JBJ

Of course, Art. 18 provides exceptions.

EXCEPTIONS:
1. Members of the diplomatic corps
2. International organizations
3. Such other employers allowed by the SOLE:
Name hire- refers to a worker who is able to secure an overseas employment opportunity with an employer without the assistance or participation of any agency. Their hiring, nonetheless, has to be processed through the POEA and they must be registered under POEA for protection.
-RULE II, Sec. 1, IRR of RA 10022

Additional exceptions:
1. Those provided in (a), (b) and (c) who bear a lesser rank, if endorsed by the
POLO, or Head of Mission in the absence of the POLO;
2. Professionals and skilled workers with duly executed/authenticated contracts
containing terms and conditions over and above the standards set by the
POEA. The number of professional and skilled Overseas Filipino Workers hired
for the first time by the employer shall not exceed five (5). For the purpose of
determining the number, workers hired as a group shall be counted as one; or
3. Workers hired by a relative/family member who is a permanent resident of the
host country.
-Sec. 124, 2016, Revised POEA Rules and Regulations

I think we’re good with ban on direct hiring.

ENTITIES PROHIBITED FROM RECRUITING

Except as provided in Chapter II (Regulation of recruitment and placement activities) of this Title, no person or entity other than the public employment offices shall engage in the recruitment and placement of workers.
-ART. 16, Labor Code

This is the general rule: only public employment offices can engage in recruitment and placement.

What is the exception? Private entities can also engage in recruitment and placement as long as they go through licensing and registration, of course.

Pursuant to national development objectives and in order to harness and maximize the use of private sector resources and initiative in the development and implementation of a comprehensive employment program, the private employment sector shall participate in the recruitment and placement of workers, locally and overseas, under such guidelines, rules and regulations as may be issued by the Secretary of Labor.
-ART. 25, Labor Code

PRIVATE SECTOR PARTICIPATION REGULATED THROUGH LICENSING AND REGISTRATION
The Administration shall regulate private sector participation in the recruitment and overseas placement of workers by setting up a licensing and registration system.
-Sec. 14, RA 10022

These are entities from the private sector that can participate.

PRIVATE SECTORS THAT CAN PARTICIPATE
1. Shipping or manning agents or representatives
2. Private recruitment entities
3. Private employment agencies.
4. Persons that may be authorized by the SOLE
-Rule IV Sec. 1, IRR of the Labor Code
5. Construction contractors if authorized by the DOLE and Construction Industry Authority.
-RULE VII Sec. 1, IRR of the Labor Code

Now what are the qualifications for an entity to be eligible to engage in recruitment and placement?

QUALIFICATIONS:
1. Citizenship (2002 bar question)
Only Filipino citizens or corporations, partnerships or entities at least seventy-five percent (75%) of the authorized and voting capital stock of which is owned and controlled by Filipino citizens shall be permitted to participate in the recruitment
and placement of workers, locally or overseas.
-ART. 27, Labor Code

2. Capitalization
All applicants for authority to hire or renewal of license to recruit are required to have such substantial capitalization as determined by the Secretary of Labor.
-ART. 28, Labor Code

For Local Employment:
-A minimum networth/paid-up capital of P1 million for single proprietorship
and partnership/corporation;
For Overseas employment
-A minimum capitalization/paid-up capital of P5 million for single proprietorship and partnership/corporation.
Those with existing licenses shall, within four (4) years from effectivity hereof, increase their capitalization or paid up capital, as the case may be, to Five Million Pesos (PhP5,000,000.00) at the rate of Seven Hundred Fifty Thousand Pesos (PhP750,000.00) every year
-Sec. 2, Rule 1, Part lI, Revised POEA Rules of 2016

3. NOT OTHERWISE DISQUALIFIED* by law or other government regulations to engage in the recruitment and placement of workers for local or overseas employment.
-Rule 1, Part II, Revised POEA Rules of 2016 (overseas), DO 141-14 (2014) (local)

4. Payment of REGISTRATION FEES
-ART. 30, Labor Code

5. Posting of SURETY or CASH BONDS
-ART. 31, Labor Code

Let’s now get straight to the disqualified entities.

Starting with overseas.

ENTITIES DISQUALIFIED FROM ENGAGING IN RECRUITMENT AND PLACEMENT FOR OVERSEAS EMPLOYMENT
a. Travel agencies and sales agencies of airline companies;
-ART. 26, Labor Code

b. Officers or members of the Board of any corporation or partners in a partnership engaged in the business of a travel agency;

c. Corporations and partnerships, where any of its officers, members of the board or partners is also an officer, member of the board or partner of a corporation or partnership engaged in the business of a travel agency; (interlocking officer)

d. Individuals, partners, officers or directors of an insurance company who make, propose or provide an insurance contract under the compulsory insurance coverage for agency-hired Overseas Filipino Workers;

e. Sole proprietors, partners or officers and members of the board with derogatory records, such as, but not limited to the following:
–Those convicted, or against whom probable cause or prima facie finding of guilt is determined by a competent authority, for illegal recruitment, or for other related crimes or offenses committed in the course of, related to, or resulting from, illegal recruitment, or for crimes involving moral turpitude;
–Those agencies whose licenses have been revoked for violation of RA 8042 (Migrant Workers and Overseas Filipinos Act of 1995), as amended, PD 442 (Labor Code of the Philippines), as amended, and RA 9208 (Trafficking in Persons Act of 2003), as amended, and their implementing rules and regulations;
–Those agencies whose licenses have been cancelled, or those who, pursuant to the Order of the Administrator, were included in the list of persons with derogatory record for violation of recruitment laws and regulations; and

f. Any official or employee of the DOLE, POEA, OWWA, DFA, DOJ, DOH, BI, IC, NLRC, TESDA, CFO, NBI, PNP, Civil Aviation Authority of the Philippines (CAAP), international airport authorities, and other government agencies directly involved in the implementation of RA 8042, as amended, and/or any of his/her relatives within the fourth civil degree of consanguinity or affinity.

For local employment, just check it out in the link below. It’s not that important I think. It’s just sort of similar with letter e and f above. https://www.dole.gov.ph/php_assets/uploads/2017/12/DO-141-14.pdf

Now, we have to be familiar with the qualifications of a recruitment and placement entity and those that are disqualified.

We can notice that there’s weird hate for travel agencies. Why is that? Because of CONFLICT OF INTEREST.

WHY THE HATE ON TRAVEL AGENCIES?
This is so, for travel agencies are under the supervisory powers of the Department of Tourism, not the Department of Labor and Employment.
Otherwise, confusion may arise to the detriment and disadvantage of an overseas applicant-worker or may lead to exploitation of the applicant-worker who will be at the economic mercy of the travel agency or sales agencies of airline company from the time his papers are processed to the time he departs .
It cannot be discounted that travel agencies can facilitate with the airlines for the issuance of the worker’s plane ticket. Moreover, illegal recruitment activities can be traced to travel agencies that facilitate papers of job-seekers for overseas. They do the dirty job of legalizing the travel on tourist-visas and with the assurance that the same could be converted into work-visas in the country of employment.
-UST Golden Notes

Let’s get to the next topic.

SUSPENSION OR CANCELLATION OF LICENSE OR AUTHORITY

We already touched on this earlier on.

Both the SOLE and POEA can suspend and/or cancel license or authority.

SOLE CAN SUSPEND OR CANCEL ANY LICENSE OR AUTHORITY
The Minister of Labor (now SOLE) 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 (now DOLE), the Overseas Employment Development Board (now POEA), or for violation of the provisions of this and other applicable laws, General Orders and Letters of Instructions (refer to issuances of the President).
-ART. 35, Labor Code

NOTE: BOTH POEA AND SOLE HAVE THE POWER TO SUSPEND/CANCEL
The power to suspend or cancel any license or authority to recruit employees for overseas employment is concurrently vested with the POEA and the Secretary of Labor. The creation of the POEA under EO 797 and EO 247 did not render ineffective Art. 35 of the Labor Code.
-Trans Action Overseas Corporation vs. The Honorable Secretary of Labor, 2004

BTW what is the difference between a license and an authority?

LICENSE
License – refers to the document issued by the Secretary of Labor and Employment authorizing a person, partnership or corporation to operate a private recruitment/manning agency.
-Rule II Sec. 1, Omnibus Rules and Regulations Implementing RA 8042

AUTHORITY:
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 and placement activities in a place stated in the license or in a specified place.
-Rule II Sec. 1, Omnibus Rules and Regulations Implementing RA 8042

(Note: License and authority is different in the Labor Code, but we won’t touch on that since we’ll focus on overseas employment)

As we can see, license is the document that lets someone operate a private recruitment agency while authority is one that is given to an already licensed agency that lets you conduct activities (CETCHUP CRAP) in a specified place. For an analogy, license is the one that gives life while authority is the one that lets you enjoy life.

Now, what are the GROUNDS for the cancellation of the license?
1. Knowingly deploying a minor
2. Engaging in acts of gross misrepresentation for the purpose of securing a license or
renewal thereof, such as violation of the Anti-Dummy Law, or giving false information or fictitious documents in relation to a matter that is material for the approval of the license application or renewal.
3. Engaging in an act of reprocessing by documenting workers through a job order that pertains to: (1)non-existent work; (2) positions different from the actual overseas work or for positions different from the actual visa category, unless covered by an undertaking of visa usage by the licensed recruitment agency and an affidavit of awareness and consent by the worker, and a job description signed by the worker and approved by the Administration; or (3) a different principal/employer whether or not accredited with the POEA.
4. Engaging in the recruitment or placement of workers in jobs declared by the Administration as harmful to public health or morality or to the dignity of the Republic of the Philippines.
5. Transfer or change of ownership or control of a single proprietorship licensed to engage in overseas employment
6. For the sole proprietor, partner, or officer/s or member/s of the Board of any licensed recruitment agency to become an officer or member of the Board of any corporation or partnership engaged directly or indirectly in the management of a travel agency
7. Charging and collecting of placement fee for deployment to countries where the prevailing system, either by law, policy or practice does not allow the charging and collection of placement and recruitment fees as determined by the Administration.
8. Passing on to the worker fees and costs chargeable to the principal/employer.
9. Charging and accepting directly or indirectly any amount greater than that specified in the schedule of allowable placement fees, or when such charging or collection is prohibited by any law, rules or policy, or making a worker pay or acknowledge any amount greater than that actually received by him/her as loan or advance.
10. Deploying workers whose employment and travel documents were not processed by the Administration.
11. Allowing a non-Filipino citizen to head or manage, directly or indirectly, a licensed recruitment agency.
-2016 POEA Rules

Wow, that’s a lot. Let’s just be familiar with these. They’re still sort of related with the qualifications and the disqualified entities that can operate a recruitment agency.

What about grounds for suspension? There are a million! Joke but there’s a lot. Just check them out on the link below. They’re under Rule III:
https://www.poea.gov.ph/laws&rules/files/Revised%20POEA%20Rules%20And%20Regulations.pdf

This may not be that important because some school reviewers don’t even mention it and others are outdated.

What we’ll discuss next is not in the syllabus but we’ll discuss it anyway.

NON-TRANSFERABILITY OF LICENSE OR AUTHORITY
1. No license or authority shall be used directly or indirectly by any person other than the one in whose favor it was issued or at any place other than that stated in the license or authority
2. No license or authority can be transferred, conveyed or assigned to any other person or entity.
3. Any transfer of business address, appointment, or designation of any agent or representative including the establishment of additional offices anywhere shall be subject to the prior approval of the Department of Labor.
-ART. 29, Labor Code

This is pretty much self-explanatory.

Note that a ground for cancellation of a license is the transfer or change of ownership or control of a single proprietorship licensed to engage in overseas employment.

Let’s move on to prohibited practices.

PROHIBITED PRACTICES

For this discussion, we should take into account BOTH local and overseas employment.

Sec. 34 is our provision for prohibited practices.

ART. 34. Prohibited Practices.- It shall be unlawful for any individual, entity, licensee, or holder of authority:
(a) To charge or accept, directly or indirectly, any amount greater than that
specified in the schedule of allowable fees prescribed by the Secretary of Labor, or
to make a worker pay any amount greater than that actually received by him as a
loan or advance;
(b) To furnish or publish any false notice or information or document in relation
to recruitment or employment;
(c) To give any false notice, testimony, information or document or commit any
act of misrepresentation for the purpose of securing a license or authority under this
Code;
(d) To induce or attempt to induce a worker already employed to quit his
employment in order to offer him to another unless the transfer is designed to
liberate the worker from oppressive terms and conditions of employment;
(e) To influence or to attempt to influence any person or entity not to employ
any worker who has not applied for employment through his agency;
(f) To engage in the recruitment or placement of workers in jobs harmful to
public health or morality or to the dignity of the Republic of the Philippines;
(g) To obstruct or attempt to obstruct inspection by the Secretary of Labor or
by his duly authorized representatives;
(h) To fail to file reports on the status of employment, placement vacancies,
remittance of foreign exchange earnings, separation from jobs, departures and such
other matters or information as may be required by the Secretary of Labor;
(i) To substitute or alter employment contracts approved and verified by the
Department of Labor from the time of actual signing thereof by the parties up to and
including the periods of expiration of the same without the approval of the Secretary
of Labor;
(j) To become an officer or member of the Board of any corporation engaged
in travel agency or to be engaged directly or indirectly in the management of a
travel agency; and
(k) To withhold or deny travel documents from applicant workers before
departure for monetary or financial considerations other than those authorized under this Code and its implementing rules and regulations.

NOTE:
These prohibited acts also constitute illegal recruitment as redefined by R.A. No. 8042.

We can memorize this faster using the mnemonic (Usec JBJ’s idea):
SOBIGGAWIFE

Just imagine a fat wife to remember it.

SOBIGGAWIFE (Art. 34)
•Substituting or altering contracts approved and verified by DOLE/POEA
•Obstructing the Labor Secretary’s inspection
•Becoming an officer or Director of any travel agency
•Inducing worker who is already employed and offer him another job
•Giving false information or misrepresentation in securing license or authority
•Giving or publishing any false notice or information or document in relation to recruitment or employment;
•Accepting or charging excess fees
•Withholding or denying travel documents for financial consideration
•Influencing any employer not to employ any worker who has not applied through his agency
•Failing to submit reports to POEA on recruitment performance data
•Engaging in recruitment or placement of jobs harmful to public health or morality

What will happen if a recruitment agency performs any of these acts? It can lead to suspension and/or cancellation of authority.

ART. 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.

For local employment, the recruitment agencies only have Art. 34 to worry about. But for overseas employment, they have Art. 34 PLUS the following:

Added by 8042 and 10022:
Mnemonic: AFaFa
•Allowing a non-Filipino citizen to head or manage a licensed recruitment/manning agency.
•Failing to actually deploy a contractual worker without valid reason
•Failing to reimburse expenses of an OFW who was not actually deployed without his fault
(added in the definition of illegal recruitment)

IMPORTANT:

ILLEGAL RECRUITMENT FOR LOCAL EMPLOYMENT IS LIMITED TO THOSE COMMITTED BY NON-LICENSEES OR NON-HOLDERS OF AUTHORITY (Art. 38 Labor Code)
Unlike illegal recruitment as defined under the Labor Code which is limited to recruitment activities undertaken by non-licensees or non-holders of authority, under Article 6 of RA 8042, illegal recruitment (for overseas employment) may be committed not only by non-licensees or non-holders of authority but also by licensees or holders of authority.

Thus, for local employment, there are 2 crimes: Illegal Recruitment and Prohibited Practices.
(1) Illegal recruitment under Article 38 is committed by a non-licensee or non-holder of authority by engaging in recruitment activity.
(2) Prohibited practices under Article 34 is committed by licensee or holder of authority.
-If the prohibited practices under Article 34 is committed by a non-licensee or non-holder of authority, the crime committed is illegal recruitment, and not prohibited practices.

But for overseas employment, there are 3 crimes under R.A. No. 8042:
(1) Illegal Recruitment by committing acts of recruitment and placement (CETCHUP CRAP) without a license or authority
(2) Illegal Recruitment by committing SOBIGGAWIFE and AFaFa
(3) Prohibited acts (AUSSEER)

Wait what? There are more prohibited acts in R.A. No. 8042? Yes, unfortunately.

Prohibited Acts:
Mnemonics: AUSSEER
•Arranging a compulsory and exclusive loan scheme with a specific lending firm or institution
•Usurious interest exceeding 8% per annum for loan granted
•Suspended agency still doing recruitment
•Shifting to the OFW the burden of paying premium for insurance
•Exclusive and compulsory arrangement to undergo health examinations in specified clinics
•Exclusive and compulsory arrangement to undergo training or seminar in specified training centers or schools
•Refusal to condone or renegotiate loan incurred by OFW who is dismissed before the end of his contract without his fault (example: a war broke out)

Why are there illegal recruitment and prohibited acts in overseas employment? What’s the difference? Why not combine both? Probably because the acts in illegal recruitment are viewed as more heinous than those under prohibited practices. The penalties are, after all, different.

PENALTIES ARE DIFFERENT FOR ILLEGAL RECRUITMENT AND PROHIBITED ACTS
(a) Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of not less than twelve (12) years and one (1) day but not more than twenty (20) years and a fine of not less than One million pesos (P1,000,000.00) nor more than Two million pesos (P2,000,000.00).
(b) The penalty of life imprisonment and a fine of not less than Two million pesos (P2,000,000.00) nor more than Five million pesos (P5,000,000.00) shall be imposed if illegal recruitment constitutes economic sabotage as defined therein.

MAXIMUM PENALTY:
RECRUITING MINOR or recruitment by a NON-LICENSEE
Provided, however, That the maximum penalty shall be imposed if the person illegally recruited is less than eighteen (18) years of age or committed by a non-licensee or non-holder of authority.

(c) Any person found guilty of any of the prohibited acts shall suffer the penalty of imprisonment of not less than six (6) years and one (1) day but not more than twelve (12) years and a fine of not less than Five hundred thousand pesos (P500,000.00) nor more than One million pesos (P1,000,000.00).
-Sec. 7, R.A. No. 8042, as amended by R.A. No. 10022

We don’t have to memorize the penalties, but I think we do need to memorize the acts of illegal recruitment and prohibited acts. Just remember SOBIGGAWIFE, AFaFa, and AUSSEER. Usec JBJ said it’s important.

One last note before we end:

YOU CAN RECOVER DAMAGES IF THE AGENCY COMMITTED ILLEGAL RECRUITMENT or ANY PROHIBITED ACT
“The fact that the POEA Rules are silent as to the payment of damages to the affected seafarer does not mean that the seafarer is precluded from claiming the same. The sanctions provided for non-deployment do not end with the suspension or cancellation of license or fine and the return of all documents at no cost to the worker. They do not forfend a seafarer from instituting an action for damages against the employer or agency which has failed to deploy him.”
–C.F. Sharp v. Pioneer Insurance, 2012

Note that failure to deploy is illegal recruitment under AFaFa.

The POEA Rules only provide sanctions which the POEA can impose on erring agencies (administrative). It does not provide for damages and money claims recoverable by aggrieved employees because it is not the POEA, but the Labor Arbiter, which has jurisdiction over such matters (money claims). Remember our POEA jurisdiction and Labor Arbiter jurisdiction earlier?

I guess we’ve come full circle.

We’ll end here and finish Recruitment and Placement tomorrow. Have fun with SOBIGGAWIFE, AFaFa, and AUSSEER!