Labor Law and Social Legislation › Recruitment and Placement › Regulation of Recruitment and Placement › Illegal Recruitment

a. Elements and Types

A. Recruitment and Placement of Local and Migrant Workers (Labor Code, art. 13) (part 2 of 2)

"(1) Grant a loan to an overseas Filipino worker with interest exceeding eight percent (8%) per annum, which will be used for payment of legal and allowable placement fees and make the migrant worker issue, either personally or through a guarantor or accommodation party, postdated checks in relation to the said loan; "(2) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to avail of a loan only from specifically designated institutions, entities or persons; "(3) Refuse to condone or renegotiate a loan incurred by an overseas Filipino worker after the latter's employment contract has been prematurely terminated through no fault of his or her own; "(4) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to undergo health examinations only from specifically designated medical clinics, institutions, entities or persons, except in the case of a seafarer whose medical examination cost is shouldered by the principal/shipowner; "(5) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to undergo training, seminar, instruction or schooling of any kind only from specifically designated institutions, entities or persons, except fpr recommendatory trainings mandated by principals/shipowners where the latter shoulder the cost of such trainings; "(6) For a suspended recruitment/manning agency to engage in any kind of recruitment activity including the processing of pending workers' applications; and "(7) For a recruitment/manning agency or a foreign principal/employer to pass on the overseas Filipino worker or deduct from his or her salary the payment of the cost of insurance fees, premium or other insurance related charges, as provided under the compulsory worker's insurance coverage.

"The persons criminally liable for the above offenses are the principals, accomplices and accessories. In case of juridical persons, the officers having ownership, control, management or direction of their business who are responsible for the commission of the offense and the responsible employees/agents thereof shall be liable.

"In the filing of cases for illegal recruitment or any of the prohibited acts under this section, the Secretary of Labor and Employment, the POEA Administrator or their duly authorized representatives, or any aggrieved person may initiate the corresponding criminal action with the appropriate office. For this purpose, the affidavits and testimonies of operatives or personnel from the Department of Labor and Employment, POEA and other law enforcement agencies who witnessed the acts constituting the offense shall be sufficient to prosecute the accused.

"In the prosecution of offenses punishable under this section, the public prosecutors of the Department of Justice shall collaborate with the anti-illegal recruitment branch of the POEA and, in certain cases, allow the POEA lawyers to take the lead in the prosecution. The POEA lawyers who act as prosecutors in such cases shall be entitled to receive additional allowances as may be determined by the POEA Administrator.

"The filing of an offense punishable under this Act shall be without prejudice to the filing of cases punishable under other existing laws, rules or regulations."

Illegal Recruitment

Elements and Types – Labor Code, art. 38; R.A. No. 8042, as amended by R.A. No. 10022, sec. 6

SEC. 6. Definition. - For purposes of this Act, illegal recruitment shall mean any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers and includes referring, contract services, promising or advertising for employment abroad, whether for profit or not, when undertaken by non-licensee or non-holder of authority contemplated under Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines: Provided, That any such non-licensee or non-holder who, in any manner, offers or promises for a fee employment abroad to two or more persons shall be deemed so engaged. It shall likewise include the following acts, whether committed by any person, whether a non-licensee, non-holder, licensee or holder of authority:

"(a) To charge or accept directly or indirectly any amount greater than that specified in the schedule of allowable fees prescribed by the Secretary of Labor and Employment, or to make a worker pay or acknowledge any amount greater than that actually received by him as a loan or advance; "(b) To furnish or publish any false notice or information or document in relation to recruitment or employment; "(c) To give any false notice, testimony, information or document or commit any act of misrepresentation for the purpose of securing a license or authority under the Labor Code, or for the purpose of documenting hired workers with the POEA, which include the act of reprocessing workers through a job order that pertains to nonexistent work, work different from the actual overseas work, or work with a different employer whether registered or not with the POEA; "(d) To include or attempt to induce a worker already employed to quit his employment in order to offer him another unless the transfer is designed to liberate a worker from oppressive terms and conditions of employment; "(e) To influence or attempt to influence any person or entity not to employ any worker who has not applied for employment through his agency or who has formed, joined or supported, or has contacted or is supported by any union or workers' organization; "(f) To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to the dignity of the Republic of the Philippines; "(g) To obstruct or attempt to obstruct inspection by the Secretary of Labor and Employment or by his duly authorized representative; "(h) To fail to submit reports on the status of employment, placement vacancies, remittance of foreign exchange earnings, separation from jobs, departures and such other matters or information as may be required by the Secretary of Labor and Employment; "(i) To substitute or alter to the prejudice of the worker, employment contracts approved and verified by the Department of Labor and Employment from the time of actual signing thereof by the parties up to and including the period of the expiration of the same without the approval of the Department of Labor and Employment; "(j) For an officer or agent of a recruitment or placement agency to become an officer or member of the Board of any corporation engaged in travel agency or to be engaged directly or indirectly in the management of travel agency; "(k) To withhold or deny travel documents from applicant workers before departure for monetary or financial considerations, or for any other reasons, other than those authorized under the Labor Code and its implementing rules and regulations; "(l) Failure to actually deploy a contracted worker without valid reason as determined by the Department of Labor and Employment; "(m) Failure to reimburse expenses incurred by the worker in connection with his documentation and processing for purposes of deployment, in cases where the deployment does not actually take place without the worker's fault. Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic sabotage; and "(n) To allow a non-Filipino citizen to head or manage a licensed recruitment/manning agency.

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

"In addition to the acts enumerated above, it shall also be unlawful for any person or entity to commit the following prohibited acts:

"The filing of an offense punishable under this Act shall be without prejudice to the filing of cases punishable under other existing laws, rules or regulations."

The foregoing POEA references reproduce the wording of R.A. No. 10022. The corresponding POEA functions are now exercised by the Department of Migrant Workers under R.A. No. 11641.

Illegal recruitment vs. Estafa – R.A. No. 8042, as amended by R.A. No. 10022, sec. 6; Revised Penal Code, art. 315, par. 2 (a)

Solidary Liability of Local Recruitment Agency and Foreign Employer – R.A. No. 8042, as amended by R.A. No. 10022, sec. 10; Theory of Imputed Knowledge

SEC. 10. Money Claims. - Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damage. Consistent with this mandate, the NLRC shall endeavor to update and keep abreast with the developments in the global services industry.

"The liability of the principal/employer and the recruitment/placement agency for any and all claims under this section shall be joint and several. This provision shall be incorporated in the contract for overseas employment and shall be a condition precedent for its approval. The performance bond to de filed by the recruitment/placement agency, as provided by law, shall be answerable for all money claims or damages that may be awarded to the workers. If the recruitment/placement agency is a juridical being, the corporate officers and directors and partners as the case may be, shall themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid claims and damages.

"Such liabilities shall continue during the entire period or duration of the employment contract and shall not be affected by any substitution, amendment or modification made locally or in a foreign country of the said contract.

"Any compromise/amicable settlement or voluntary agreement on money claims inclusive of damages under this section shall be paid within thirty (30) days from approval of the settlement by the appropriate authority.

"In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, or any unauthorized deductions from the migrant worker's salary, the worker shall be entitled to the full reimbursement if his placement fee and the deductions made with interest at twelve percent (12%) per annum, plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less.

The preceding paragraph reproduces the statutory wording. The three-month limitation was declared unconstitutional: an illegally dismissed overseas worker is entitled to salaries for the full unexpired portion of the employment contract. Sameer Overseas Placement Agency, Inc. v. Cabiles, G.R. No. 170139, August 5, 2014. Notwithstanding the quoted twelve-percent wording, the applicable legal interest rate is generally six percent (6%) per annum from July 1, 2013, subject to the rules on when interest begins to run. Nacar v. Gallery Frames, G.R. No. 225433, August 13, 2013; Bangko Sentral ng Pilipinas Circular No. 799.

"In case of a final and executory judgement against a foreign employer/principal, it shall be automatically disqualified, without further proceedings, from participating in the Philippine Overseas Employment Program and from recruiting and hiring Filipino workers until and unless it fully satisfies the judgement award.

"Noncompliance with the mandatory periods for resolutions of case provided under this section shall subject the responsible officials to any or all of the following penalties:

"(a) The salary of any such official who fails to render his decision or resolution within the prescribed period shall be, or caused to be, withheld until the said official complies therewith; "(b) Suspension for not more than ninety (90) days; or "(c) Dismissal from the service with disqualification to hold any appointive public office for five (5) years.

"Provided, however, That the penalties herein provided shall be without prejudice to any liability which any such official may have incured under other existing laws or rules and regulations as a consequence of violating the provisions of this paragraph.

Termination of Contract of Migrant Workers – R.A. No. 8042, as amended by R.A. No. 10022, sec. 10

Pre-Employment - Recruitment and Placement of Local and Migrant Workers

“Recruitment and Placement" Refers to Any Act of: [CETCHUP-R-CPA]

Canvassing,
Enlisting,
Contracting
Transporting,
Utilizing,
Hiring, or
Procuring workers

Elements of Unfair Labor Practice

There is an employer-employee relationship.
The act done is expressly defined in the Code as an unfair labor practice
Act complained of as ULP must have proximate and causal connection with/ violation of:
Exercise the right to self-organization
Exercise of the right to collective bargaining (Allied Banking Corporation v. CA, G.R. No. 144412, 2003)

Note: Employee refers to any person working for an employer. It includes one whose work has ceased in connection with any current labor dispute or because of any unfair labor practice and one who has been dismissed from work but the legality of the dismissal is being contested in a forum of appropriate jurisdiction. (IRR Book V Rule 1 Sec.1 (r))

Elements of Serious Misconduct

There must be misconduct;
The misconduct must be of such grave and aggravated character;
Relates to the performance of the employee’s duties; and
A showing that the employee becomes unfit to continue working for the employer. (D.O. No. 147-15, Sec. 5.2[a])

The essential elements of illegal recruitment vary in accordance with the following classifications:

Simple illegal recruitment
Local workers
Migrant workers
When committed by a syndicate; or
When committed in large scale.

Elements of Fraud or Willful Breach of Trust

There must be an act, omission, or concealment;
The act, omission or concealment involves a breach of legal duty, trust, or confidence justly reposed;
It must be committed against the employer or his/her representative; and
It must be in connection with the employees’ work. (D.O. No. 147-15, Sec. 5.2[d])

Simple Illegal Recruitment for Migrant Workers (R.A. No. 8042, as amended by R.A. No. 10022)

First type of Illegal Recruitment:

activity as defined in Art.13 (b) of the Labor Code; and
Said person does not have a license or authority to do so.

Second type of Illegal Recruitment:

Person charged commits any of the enumerated acts under Sec. 6 of R.A. 8042, as amended by, R.A. No. 10022.
It is immaterial whether he is a holder or not of any license or authority.

Illegal recruitment shall mean any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers and includes referring, contract services, promising or advertising for employment abroad, whether for profit or not, when undertaken by non-licensee or non-holder of authority contemplated under Article 13(f) of the Labor Code;

Provided, That any such non-licensee or non-holder who, in any manner, offers or promises for a fee employment abroad to two or more persons shall be deemed so engaged. (R.A. No. 8042, Sec. 6)

Illegal recruitment by a syndicate

The offender undertakes either any activity within the meaning of "recruitment and placement" defined under Art. 13(b), or any of the prohibited practices enumerated under Art. 34 of the Labor Code;
For overseas employment, lack of a license or authority is required when the recruitment activity is unlawful on that ground, but not when the offender commits an enumerated prohibited act under Sec. 6 of R.A. 8042, as amended, which a licensee or holder of authority may also commit; and
The illegal recruitment is committed by a group of three (3) or more persons conspiring or confederating with one another. (People v. Gallo, G.R. No. 187730, 2010)

Illegal recruitment in large scale

The accused engages in acts of recruitment and placement of workers defined under Art. 13(b) of the Labor Code or in any prohibited activities under Art. 34 of the Labor Code;
For overseas employment, lack of a license or authority is required when the charged activity is unlawful on that ground, but not for an enumerated prohibited act under Sec. 6 of R.A. 8042, as amended, which a licensee or holder of authority may also commit; and
The accused commits the unlawful acts against three or more persons individually or as a group.

Doctrines: Illegal Recruitment

Where illegal recruitment is proved but the elements of “large scale” or “syndicate” are absent, the accused can be convicted only of “simple illegal recruitment”. (People v. Balagan and Avila, G.R. No. 183099, 2010)

These categories are separate or independent categories. If there is only one complainant in several complaints, there is no illegal recruitment in large scale. But where there are three conspiring recruiters, there is illegal recruitment by a syndicate. (People v. Fernandez, et. al., G.R. No. 141221-36, 2002)

Appellant’s acts, which were clearly described in the lucid testimonies of the three victims, such as collecting from each of the complainants payment for passport, medical tests, placement fee, plane tickets and other sundry expenses, promising them employment abroad, contracting and advertising for employment, constitute acts of large scale illegal recruitment. (People v. Diaz, G.R. No. 112175, 1996)

Receipt of payments, after the expiration of the license, for services rendered before said expiration does not constitute illegal recruitment. Recruitment refers to the offering of inducements to qualified personnel to enter a particular job or employment. The advertising, the promise of future employment and other come-ons took place while the recruiter was still licensed. The payments are necessary in order to defray the expenses entailed in any overseas contract of employment. They are intended for administrative and business expenses and for the traveling expenses of the applicants once cleared for overseas travel. (Aquino v. CA, G.R. No. 91896, 1991)

It is not the issuance or signing of receipts for the placement fees that makes a case for illegal recruitment, but rather the undertaking of recruitment activities without the necessary license or authority. (People v. Senoron, G.R. No. 119160, 1997)

By themselves, procuring a passport, airline tickets and foreign visa for another individual, without more, can hardly qualify as recruitment activities. IR must be proved beyond reasonable doubt. (Darvin v. CA,G.R. No. 125044, 1998)

Types of Illegal Recruitment

(2) Illegal Recruitment as Economic Sabotage

Illegal recruitment when committed:

Elements of Retrenchment or Downsizing

The retrenchment must be reasonably necessary and likely to prevent business losses;
The losses, if already incurred, are not merely de minimis, but substantial, serious, actual and real, or if only expected, are reasonably imminent.
The expected or actual losses must be proved sufficient and convincing evidence such as financial statements (audited by an independent firm) over a span of several years OR a some reasonable period of time, and not merely the actual year of business loss;
The retrenchment must be in good faith for the advancement of its interest and not to defeat or circumvent the employees’ right to security of tenure; and
There must be fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees, such as status, efficiency, seniority, physical fitness, age, and financial hardship for certain workers. (D.O. No. 147- 15, Sec. 5.4[c])

FOURTH FORM: GROSS VIOLATION OF THE CBA

ULP exists in this form when the complaint shows prima facie the concurrence of two things:

There is a gross violation of the CBA; and
The violation pertains to the economic provisions of the CBA (Silva v. NLRC, G.R. No. 110226, 1997)

Gross: Refers to a flagrant and/or malicious refusal by a party to comply with the [economic provisions] (FASAP v. PAL, G.R. No. 178083, 2008).