MIGRATION WORKERS ACT

REPUBLIC ACT No. 10022

AN ACT AMENDING REPUBLIC ACT NO. 8042, OTHERWISE KNOWN AS THE MIGRANT
WORKERS AND OVERSEAS FILIPINOS ACT OF 1995, AS AMENDED, FURTHER IMPROVING
THE STANDARD OF PROTECTION AND PROMOTION OF THE WELFARE OF MIGRANT
WORKERS, THEIR FAMILIES AND OVERSEAS FILIPINOS IN DISTRESS, AND FOR OTHER
PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress

assembled:

Section 1. Paragraphs (a), (e), (g) and (h) of Section 2 of Republic Act. No. 8042, as amended,
otherwise known as the "Migrant Workers and Overseas Filipinos Act of 1995," is hereby amended
to read as follows:

"(a) In the pursuit of an independent foreign policy and while considering national sovereignty,
territorial integrity, national interest and the right to self-determination paramount in its relations with
other states, the State shall, at all times, uphold the dignity of its citizens whether in country or
overseas, in general, and Filipino migrant workers, in particular, continuously monitor international
conventions, adopt/be signatory to and ratify those that guarantee protection to our migrant workers,
and endeavor to enter into bilateral agreements with countries hosting overseas Filipino workers."

"(e) Free access to the courts and quasi-judicial bodies and adequate legal assistance shall not be
denied to any person by reason of poverty. In this regard, it is imperative that an effective
mechanism be instituted to ensure that the rights and interest of distressed overseas Filipinos, in
general, and Filipino migrant workers, in particular, whether regular/documented or
irregular/undocumented, are adequately protected and safeguarded."

"(g) The State recognizes that the most effective tool for empowerment is the possession of skills by
migrant workers. The government shall provide them free and accessible skills development and
enhancement programs. Pursuant to this and as soon as practicable, the government shall deploy
and/or allow the deployment only of skilled Filipino workers."

"(h) The State recognizes non-governmental organizations, trade unions, workers associations,
stakeholders and their similar entities duly recognized as legitimate, are partners of the State in the
protection of Filipino migrant workers and in the promotion of their welfare. The State shall cooperate
with them in a spirit of trust and mutual respect. The significant contribution of recruitment and
manning agencies shall from part this partnership."

Section 2. Section 3, paragraph (a) of Republic Act No. 8042, as amended, is hereby amended to
read as follows:

"(a) "Overseas Filipino worker" refers to a person who is to be engaged, is engaged or has been
engaged in a remunerated activity in a state of which he or she is not a citizen or on board a vessel
navigating the foreign seas other than a government ship used for miliatry or non-commercial
purposes or on an installation located offshore or on the high seas; to be used interchangeably with
migrant worker."

Section 3. Section 4 of Republic Act No. 8042, as amended, is hereby amended to rerad as follows:
"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.

"The State shall also allow the deployment of overseas Filipino workers to vessels navigating the
foreign seas or to installations located offshore or on high seas whose owners/employers are
compliant with international laws and standards that protect the rights of migrant workers.

"The State shall likewise allow the deployment of overseas Filipino workers to companies and
contractors with international operations: Provided, That they are compliant with standards,
conditions and requirements, as embodied in the employment contracts prescribed by the POEA
and in accordance with internationally-accepted standards."

Section 4. Section 5 of Republic Act No. 8042, as amended, is hereby amended to read as follows:

"SEC. 5. Termination or Ban on Deployment. - Notwithstanding the provisions of Section 4 hereof, in

pursuit of the national interest or when public welfare so requires, the POEA Governing Board, after
consultation with the Department of Foreign Affairs, may, at any time, terminate or impose a ban on
the deployment of migrant workers."

Section 5. Section 6 of Republic Act No. 8042, as amended, is hereby amended to read as follows:
"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;

"(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:

"(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." 1avvphi 1

Section 6. Section 7 of Republic Act No. 8042, as amended, is hereby amended to read as follows:

"SEC. 7. Penalties. -

"(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.

"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).

"If the offender is an alien, he or she shall, in addition to the penalties herein prescribed, be deported
without further proceedings.
"In every case, conviction shall cause and carry the automatic revocation of the license or
registration of the recruitment/manning agency, lending institutions, training school or medical clinic."

Section 7. Section 10 of Republic Act No. 8042, as amended, is hereby amended to read as follows:

"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.

"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."

Section 8. The first paragraph of Section 13 of Republic Act No. 8042, as amended is hereby
amended to read as follows:

"SEC. 13. Free Legal Assistance; Preferential Entitlement Under the Witness Protection Program. -
A mechanism for free legal assistance for victims of illegal recruitment shall be established in the
anti-illegal recruitment branch of the POEA including its regional offices. Such mechanism shall
include coordination and cooperation with the Department of Justice, the Integrated Bar of the
Philippines, and other non-governmental organizations and volunteer groups."

Section 9. Section 16 of Republic Act No. 8042, as amended, is hereby amended to read as follows:

"SEC. 16. Mandatory Repatriation of Underage Migrant Workers. - Upon discovery or being informed
of the presence of migrant workers whose ages fall below the minimum age requirement for
overseas deployment, the responsible officers in the foreign service shall without delay repatriate
said workers and advise the Department of Foreign Affairs through the fastest means of
communication available of such discovery and other relevant information. The license of a
recruitment/manning agency which recruited or deployed an underage migrant worker shall be
automatically revoked and shall be imposed a fine of not less than Five hundred thousand pesos
(Php 500,000.00) but not more than One million pesos (Php 1,000,000.00). All fees pertinent to the
processing of papers or documents in the recruitment or deployment shall be refunded in full by the
responsible recruitment/manning agency, without need of notice, to the underage migrant worker or
to his parents or guardian. The refund shall be independent of and in addition to the indemnification
for the damages sustained by the underage migrant worker. The refund shall be paid within thirty
(30) days from the date of the mandatory repatriation as provided for in this Act."

Section 10. Section 17 of Republic Act No. 8042, as amended, is hereby amended to read as
follows:

"SEC. 17. Establishment of National Reintegration Center for Overseas Filipino Workers. -A national
reintegration center for overseas Filipino workers (NRCO) is hereby created in the Department of
Labor and Employment for returning Filipino migrant workers which shall provide a mechanism for
their reintegration into the Philippine society, serve as a promotion house for their local employment,
and tap their skills and potentials for national development.

"The Department of Labor and Employment, the Overseas Workers Welfare Administration
(OWWA), and the Philippine Overseas Employment Administration (POEA) shall, within ninety (90)
days from the effectivity of this Act, formulate a program that would motivate migrant workers to plan
for productive options such as entry into highly technical jobs or undertakings, livelihood and
entrepreneurial development, better wage employment, and investment of savings.

"For this purpose, the Technical Education and Skills Development Authority (TESDA), the
Technology Livelihood Resource Center (TLRC), and other government agencies involved in training
and livelihood development shall give priority to returnees who had been employed as domestic
helpers and entertainers."
Section 11. Section 18 of Republic Act No. 8042, as amended is hereby amended to read as
follows:

"SEC. 18. Functions of the National Reintegration Center for Overseas Filipino Workers. -The Center
shall provide the following services:

"(a) Develop and support programs and projects for livelihood, entrepreneurship,
savings, investments and financial literacy for returning Filipino migrant workers and
their families in coordination with relevant stakeholders, service providers and
international organizations;

"(b) Coordinate with appropriate stakeholders, service providers and relevant

international organizations for the promotion, development and the full utilization of
overseas Filipino worker returnees and their potentials;

"(c) Institute, in cooperation with other government agencies concerned, a computer-

based information system on returning Filipino migrant workers shall be accessible to
all local recruitment agencies and employers, both public and private;

"(d) Proved a periodic study and assessment of job opportunities for returning Filipino
migrant workers;

"(e) Develop and implement other appropriate programs to promote the welfare of
returning Filipino migrant workers;

"(f) Maintain an internet-based communication system for on-line registration and

interaction with clients, and maintain and upgrade computer-based service
capabilities of the NRCO;

"(g) Develop capacity-building programs for returning overseas Filipino workers and
their families, implementers, service providers, and stakeholders; and

"(h) Conduct research for policy recommendations and program development."

Section 12. The second paragraph of Section 19 of Republic Act No. 8042, as amended, is hereby
amended to read as follows:

"The establishment and operations of the Center shall be a joint undertaking of the various
government agencies. The Center shall be open for twenty-four (24) hours daily including Saturdays,
Sundays and holidays, and shall be staffed by Foreign Service personnel, service attaches or
officers who represent other Philippine government agencies abroad and, if available, individual
volunteers and bona fide non-government organizations from the host countries. In countries
categorized as highly problematic by the Department of Foreign Affairs and the Department of Labor
and Employment and where there is a concentration of Filipino migrant workers, the government
must provide a Sharia or human rights lawyer, a psychologist and a social worker for the Center. In
addition to these personnel, the government must also hire within the receiving country, in such
number as may be needed by the post, public relation officers or case officers who are conversant,
orally and in writing, with the local language, laws, customs and practices. The Labor Attache shall
coordinate the operation of the Center and shall keep the Chief of Mission informed and updated on
all matters affecting it."
Section 13. Section 20 of Republic Act No. 8042, as amended, is hereby amended to read as
follows:

"SEC. 20. Establishment of a Shared Government Information System for Migration. - An

interagency committee composed of the Department of Foreign Affairs and its attached agency, the
Commission on Filipinos Overseas, the Department of Labor and Employment and its attached
concerned agencies, the Department of Tourism, the Department of Justice the Bureau of
Immigration, the National Bureau of Investigation, the Department of the Interior and Local
Government, the National Telecommunications Commission, the Commission on Information and
Communications Technology, the National Computer Center, the National Statistical and
Coordination Board, the National Statistics Office and other government agencies concerned with
overseas employment shall be established to implement a shared government information system
for migration. The interagency committee shall initially make available to itself the information
contained in existing data bases/files. The second phase shall involve linkaging of computer facilities
on order to allow free-flow data exchanges and sharing among concerned agencies.

"The inter-agency committee shall be co-chaired by the Department of Foreign Affairs and the
Department of Labor and Employment. The National Computer Center shall provide the necessary
technical assistance and shall set the appropriate information and communications technology
standards to facilitate the sharing of information among the member agencies.

"The inter-agency committee shall meet regularly to ensure the immediate and full implementation of
this section and shall explore the possibility setting up a central storage facility for the data on
migration. The progress of the implementation of this section shall be include in the report to
Congress of the Department of Foreign Affairs and the Department of Labor and Employment under
Section 33.

"The inter-agency committee shall convene to identify existing data bases which shall be
declassified and shared among member agencies. These shared data bases shall initially include,
but not be limited to, the following information:

"(a) Masterlists of Filipino migrant workers/overseas Filipino classified according to

occupation/job category, civil status, by country/state of destination including visa
classification;

"(b) Inventory of pending legal cases involving Filipino migrant workers and other
Filipino nationals, including those serving prison terms;

"(c) Masterlists of departing/arriving Filipinos;

"(d) Statistical profile on Filipino migrant workers/overseas Filipinos/tourists;

"(e) Blacklisted foreigners/undesirable aliens;

"(f) Basic data on legal systems, immigration policies, marriage laws and civil and
criminal codes in receiving countries particularly those with large numbers of
Filipinos;

"(g) List of Labor and other human rights instruments where receiving countries are
signatories;
 "(h) A tracking system of past and present gender disaggregated cases involving
male and female migrant workers, including minors; and

"(i) Listing of overseas posts which may render assistance to overseas Filipinos, in
general, and migrant workers, in particular."

Section 14. Subparagraph (b.1) of paragraph (b) of Section 23 of Republic Act No. 8042, as
amended, is hereby amended to read as follows:

"(b.1) Philippine Overseas Employment Administration. - The Administration shall regulate private
sector participation in the recruitment and overseas placement of workers by setting up a licensing
and registration system. It shall also formulate and implement, in coordination with appropriate
entities concerned, when necessary, a system for promoting and monitoring the overseas
employment of Filipino workers taking into consideration their welfare and the domestic manpower
requirements. It shall be responsible for the regulation and management of overseas employment
from the pre-employment stage, securing the best possible employment terms and conditions for
overseas Filipino workers, and taking into consideration the needs of vulnerable sectors and the
peculiarities of sea-based and land-based workers. In appropriate cases, the Administration shall
allow the lifting of suspension of erring recruitment/manning agencies upon the payment of fine of
Fifty thousand pesos (P50,000.00) for every month of suspension.

"in addition to its powers and functions, the Administration 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. It shall
also be responsible for the implementation, in partnership with other law-enforcement agencies, of
an intensified program against illegal recruitment activities. For this purpose, the POEA shall provide
comprehensive Pre-Employment Orientation Seminars (PEOS) that will discuss topics such as
prevention of illegal recruitment and gender-sensitivity.

"The Administration shall not engage in the recruitment and placement of overseas workers except
on a government-to-government arrangement only.

"In the recruitment and placement of workers to service the requirements for trained and competent
Filipino workers of foreign governments and their instrumentalitys, and such other employers as
public interests may require, the Administration shall deploy only to countries where the Philippine
has conclude bilateral labor agreements or arrangements: Provided, That such countries shall
guarantee to protect the rights of Filipino migrant workers; and Provided, further, That such countries
shall observe and/or comply with the international laws and standards for migrant workers."

Section 15. Sub-paragraph (b.2) of Paragraph (b) of Section 23 of Republic Act No. 8042, as
amended, is hereby amended to read as follows:

"(b.2) Overseas Workers Welfare Administration. - The Welfare officer of in his absence, the
coordinating officer shall provide the Filipino migrant worker and his family all the assistance they
may need in the enforcement of contractual obligations by agencies or entities and/or by their
principals. In the performance of this function, he shall make representation and may call on the
agencies or entities concerned to conferences or conciliation meetings for the purpose of settling the
compliance or problems brought to his attention. The OWWA shall likewise formulate and implement
welfare programs for overseas Filipino workers and their families while they are abroad and upon
their return. It shall ensure the awareness by the overseas Filipino workers and their families of
these programs and other related governmental programs.
"In the repatriation of workers to be undertaken by OWWA, the latter shall be authorized to pay
repatriation-related expenses, such as fines or penalties, subject to such guidelines as the OWWA
Board of Trustees may prescribe."

Section 16. Under Section 23 of Republic Act No. 8042, as amended, add new paragraphs (c) and
(d) with their corresponding subparagraphs to read as follows:

"(c) Department of Health. - The Department of Health (DOH) shall regulate the activities and
operations of all clinics which conduct medical, physical, optical, dental, psychological and other
similar examinations, hereinafter referred to as health examinations, on Filipino migrant workers as
requirement for their overseas employment. Pursuant to this, the DOH shall ensure that:

" (c.1) The fees for the health examinations are regulated, regularly monitored and
duly published to ensure that the said fees are reasonable and not exorbitant;

" (c.2) The Filipino migrant worker shall only be required to undergo health
examinations when there is reasonable certainty that he or she will be hired and
deployed to the jobsite and only those health examinations which are absolutely
necessary for the type of job applied for or those specifically required by the foreign
employer shall be conducted;

" (c.3) No group or groups of medical clinics shall have a monopoly of exclusively
conducting health examinations on migrant workers for certain receiving countries;

" (c.4) Every Filipino migrant worker shall have the freedom to choose any of the
DOH-accredited or DOH-operated clinics that will conduct his/her health
examinations and that his or her rights as a patient are respected. The decking
practice, which requires an overseas Filipino worker to go first to an office for
registration and then farmed out to a medical clinic located elsewhere, shall not be
allowed;

" (c.5) Within a period of three (3) years from the effectivity of this Act, all DOH
regional and/or provincial hospitals shall establish and operate clinics that can be
serve the health examination requirements of Filipino migrant workers to provide
them easy access to such clinics all over the country and lessen their transportation
and lodging expenses and

" (c.6) All DOH-accredited medical clinics, including the DOH-operated clinics,
conducting health examinations for Filipino migrant workers shall observe the same
standard operating procedures and shall comply with internationally-accepted
standards in their operations to conform with the requirements of receiving countries
or of foreign employers/principals.

"Any Foreign employer who does not honor the results of valid health examinations conducted by a
DOH-accredited or DOH-operated clinic shall be temporarily disqualified from the participating in the
overseas employment program, pursuant to POEA rules and regulations.

"In case an overseas Filipino worker is found to be not medically fit upon his/her immediate arrival in
the country of destination, the medical clinic that conducted the health examination/s of such
overseas Filipino worker shall pay for his or her repatriation back to the Philippines and the cost of
deployment of such worker.
"Any government official or employee who violates any provision of this subsection shall be removed
or dismissed from service with disqualification to hold any appointive public office for five(5) years.
Such penalty is without prejudice to any other liability which he or she may have incurred under
existing laws, rules or regulations.

"(d) Local Government Units. - In the fight against illegal recruitment, the local government units
(LGUs), in partnership with the POEA, other concerned government agencies , and non-government
organizations advocating the rights and welfare of overseas Filipino workers, shall take a proactive
stance by being primarily responsible for the dissemination of information to their constituents on all
aspects of overseas employment. To carry out this task, the following shall be undertaken by the
LGUs:

"(d.1) Provide a venue for the POEA, other concerned government agencies and
non-government organizations to conduct PEOS to their constituents on a regular
basis;

"(d.2) Establish overseas Filipino worker help desk or kiosk in their localities with the
objective of providing current information to their constituents on all the processes
aspects of overseas employment. Such desk or kiosk shall, as be linked to the
database of all concerned government agencies, particularly the POEA for its
updated lists of overseas job orders and licensed recruitment agencies in good
standing."

Section 17. Subparagraph ( c ) of Section of Republic Act No. 8042, as amended, is hereby
amended to read as follows:

"( c ) To tap the assistance of reputable law firms, the Integrated Bar of the Philippines, other bar
associations and other government legal experts on overseas Filipino worker laws to complement
the government's efforts to provide legal assistance to our migrant workers;"

Section 18. Section 25 of Republic Act No. 8042, as amended, is hereby amended to read as
follows:

"SEC. 25. Legal Assistance Fund. - There is herby established a legal assistance fund for migrant
workers, hereinafter referred to as the Legal Assistance Fund, in the amount of one hundred million
pesos (P100,000,000.00) to be constituted from the following sources.

"Fifty million pesos (50,000,000.00) from the Contingency Fund of the President;

"Thirty million pesos (30,000,000.00) from the Contingency Fund of the President Social Fund;

"Twenty million pesos (20,000,000.00) from the Welfare Fund for Overseas Workers established
under Letter of Instructions No. 537 as amended by Presidential Decree Nos. 1694 and 1809; and

"An amount appropriated in the annual General Appropriations Act (GAA) which shall not be less
than Thirty million pesos (30,000,000.00) per year: Provided, that the balance of the Legal
Assistance Fund (LAF) including the amount appropriated for the year shall not be less than One
hundred million pesos (P100,000,000.00) : Provided, further, That the fund shall be treated as a
special fund in the National Treasury and its balance, including the amount appropriated in the GAA,
which shall form part of the Fund, shall not revert to the General Fund.
" Any balances of existing funds which have been set aside by the government specifically as legal
assistance or defense fund to help migrant workers shall upon effectivity of this Act, be turned over
to, and form part of, the Fund created under this Act."

Section 19. Section 26 of Republic Act No. 8042, as amended, is hereby amended to read as
follows:

"SEC. 26. Uses of the Legal Assistance Fund. - The Legal Assistance Fund created under the
preceding section shall be used exclusively6 to provide legal services to migrant workers and
overseas Filipinos in distress in accordance with the guidelines, criteria and procedures promulgated
in accordance with Section 24 ( a ) herof. The expenditures to be charged against the Fund shall
include the fees for the foreign lawyers to be hired by the Legal Assistant for Migrant Workers Affairs
to represent migrant workers facing charges or in filing cases against erring or abusive employers
abroad, bail bonds to secure the temporary releases and other litigation expenses: Provided, That at
the end of every year, the Department of Foreign Affairs shall include in its report to Congress, as
provided for under Section 33 of this Act, the status of the Legal Assistance Fund, including the
expenditures from the said fund duly audited by the Commission on Audit (COA): Provided,
further,That the hiring of foreign legal counsels, when circumstances warrant urgent action, shall be
exempt from the coverage of Republic Act No. 9184 or the Government Procurement Act."

Section 20. Section 32 of Republic Act No. 8042, as amended, is hereby amended to read as
follows:

"SEC. 32. POEA, OWWA and other Boards; Additional Memberships. - Notwithstanding any
provision of law to the contrary, the respective Boards of the POEA and the OWWA shall, in addition
to their present composition, have three (3) members each who shall come from the women, sea-
based and land-based sectors respectively, to be selected and nominated openly by the general
membership of the sector being represented.

" The selection and nomination of the additional members from the women, sea-based and land-
based sectors shall be governed by the following guidelines:

"(a) The POEA and the OWWA shall launch a massive information campaign on the
selection of nominees and provide for a system of consultative sessions for the
certified leaders or representatives of the concerned sectors, at least three (3) times,
within ninety (90) days before the boards shall be convened, for purposes of
selection. The process shall be open, democratic and transparent;

"(b) Only non-government organizations that protect and promote the rights and
welfare of overseas Filipino workers, duly registered with the appropriate Philippine
government agency and in good standing as such, and in existence for at least three
(3) years prior to the nomination shall be qualified to nominate a representative for
each sector to the Board;

"(c) The nominee must be at least twenty-five (25) years of age, able to read and
write, and a migrant worker at the time of his or her nomination or was a migrant
worker with at least three (3) years experience as such; and

"(d) A final list of all the nominees selected by the OWWA/POEA governing boards,
which shall consist of three(3) names for each sector to be represented, shall be
submitted to the President and published in a newspaper of general circulation;
"Within thirty (30) days from the submission of the list, the President shall select and appoint from
the list, the representatives to the POEA/OWWA governing boards.

"The additional members shall have a term of three (3) years and shall be eligible for reappointment
for another three (3) years. In case of vacancy, the President shall in accordance with the provisions
of this Act, appoint a replacement who shall serve the unexpired term of his or her predecessor.

"Any executive issuances or orders issued that contravene the provisions of this section shall have
no force and effect.

"All other government agencies and government-owned or controlled corporations which require at
least one (1) representative from the overseas workers sector to their respective boards shall follow
all the applicable provisions of this section."

Section 21. The first and last paragraph of Section 33 of Republic Act No. 8042, as amended, is
hereby amended to read as follows:

"SEC. 33. Report to Congress. - In order to inform the Philippine Congress on the implementation of
the policy enunciated in Section 4 hereof, the Department of Foreign Affairs and the Department of
Labor and Employment shall submit separately to the said body a semi-annual report of Philippine
foreign posts located in countries hosting Filipino migrant workers. The mid-year report covering the
period January to June shall be submitted not later than October 31 of the same year while the year-
end report covering the period July to December shall be submitted not later than May 31 of the
following year. The report shall include, but shall not limited to, the following information:

"xxx

" Any officer of the government who fails to submit the report as stated in this section shall be
subject to an administrative penalty of dismissal from the service with disqualification to hold any
appointive public office for five (5) years."

Section 22. Section 35 of Republic Act No. 8042, as amended, is hereby amended to read as
follows:

SEC. 35. Exemption from Travel Tax Documentary Stamp and Airport Fee. - All laws to the contrary
notwithstanding, the migrant workers shall be exempt from the payment of travel tax and airport-fee
upon proper showing of proof entitlement by the POEA.

"The remittances of all overseas Filipino workers, upon showing of the same proof of entitlement by
the overseas Filipino worker's beneficiary or recipient, shall be exempt from the payment of
documentary stamp tax.

Section 23. A new Section 37-A. of Replublic Act No. 8042, as amended, is hereby added to read
as follows:

"SEC. 37-A. Compulsory Insurance Coverage for Agency-Hired Workers. - In addition to the
performance bond to be filed by the recruitment/manning agency under Section 10, each migrant
worker deployed by a recruitment/manning agency shall be covered by a compulsory insurance
policy which shall be secured at no cost to the said worker. Such insurance policy shall be effective
for the duration of the migrant worker's employment and shall cover, at the minimum:
"(a) Accidental death, with at least Fifteen thousand United States dollars
(US$10,000.00) survivor's benefit payable to the migrant worker's beneficiaries;

"(c) Permanent total disablement, with at least Seven thousand five hundred United
States dollars (US$7,500.00) disability benefit payable to the migrant worker. The
following disabilities shall be deemed permanent: total, complete loss of sight of both
eyes; loss of two(2) limbs at or above the ankles or wrists; permanent complete
paralysis of two (2) limbs; brain injury resulting to incurable imbecility or insanity;

"(d) Repatriation cost of the worker when his/her employment is terminated without
any valid cause, including the transport of his or her personal belongings. In case of
death, the insurance provider shall arrange and pay for the repatriation or return of
the worker's remains. The insurance provider shall also render any assistance
necessary in the transport including, but not limited to, locating a local licensed
funeral home, mortuary or direct disposition facility to prepare the body for transport,
completing all documentation, obtaining legal clearances, procuring consular
services, providing necessary casket or air transport container, as well as
transporting the remains including retrieval from site of death and delivery to the
receiving funeral home;

"(e) Subsistence allowance benefit, with at least One hundred United States dollars
(US$100.00) Per month for a maximum of six (6) months for a migrant worker who is
involved in a case or litigation for the protection of his/her rights in the receiving
country;

"(f) Money claims arising from employer's liability which may be awarded or given to
the worker in a judgment or settlement of his or her case in the NLRC. The insurance
coverage for money claims shall be equivalent to at least three (3) months for every
year of the migrant worker's employment contract;

"In addition to the above coverage, the insurance policy shall also include:

"(g) Compassionate visit. When a migrant worker is hospitalized and has been
confined for at least seven (7) consecutive days, he shall be entitled to a
compassionate visit by one (1) family member or a requested individual. The
insurance company shall pay for the transportation cost of the family member or
requested individual to the major airport closest to the place of hospitalization of the
worker. It is, however, the responsibility of the family member or requested individual
to meet all visa and travel document requirements;

"(h) Medical evacuation. When an adequate medical facility is not available

proximate to the migrant worker, as determined by the insurance company's
physician and/or a consulting physician, evacuation under appropriate medical
supervision by the mode of transport necessary shall be undertaken by the insurance
provider; and

"(i) Medical repatriation. When medically necessary as determined by the attending

physician, repatriation under medical supervision to the migrant worker's residence
shall be undertaken by the insurance provider at such time that the migrant worker is
medically cleared for travel by commercial carrier. If the period to receive medical
clearance to travel exceeds fourteen (14) days from the date of discharge from the
hospital, an alternative appropriate mode of transportation, such as air ambulance,
 may be arranged. Medical and non-medical escorts may be provided when
necessary.

"Only reputable private insurance companies duly registered with the Insurance Commission (IC) ,
which are in existence and operational for at least Five hundred million pesos (P500,000,000.00) to
be determined by the IC, and with a current year certificate of authority shall be qualified to provide
for the worker's insurance coverage. Insurance companies who have directors, partners, officers,
employees or agents with relatives, within the fourth civil degree of consanguinity or affinity, who
work or have interest in any of the licensed recruitment/manning agencies or in any of the
government agencies involved in the overseas employment program shall be disqualified from
providing this workers' insurance coverage.

"The recruitment/manning agency shall have the right to choose from any of the qualified insurance
providers the company that will insure the migrant worker it will deploy. After procuring such
insurance policy, the recruitment/manning agency shall provide an authenticated copy thereof to the
migrant worker. It shall then submit the certificate of insurance coverage of the migrant worker to
POEA as a requirement for the issuance of an Overseas Employment Certificate (OEC) to the
migrant worker. In the case of seafarers who are insured under policies issued by foreign insurance
companies, the POEA shall accept certificates or other proofs of cover from recruitment/manning
agencies: Provided, That the minimum coverage under sub-paragraphs (a) to (i) are included
therein.

"Any person having a claim upon the policy issued pursuant to subparagraphs (a), (b), (c), (d) and
(e) of this section shall present to the insurance company concerned a written notice of claim
together with pertinent supporting documents. The insurance company shall forthwith ascertain the
truth and extent of the claim and make payment within ten (10) days from the filing of the notice of
claim.

"Any claim arising from accidental death, natural death or disablement under this section shall be
paid by the insurance company without any contest and without the necessity of providing fault or
negligence of any kind on the part of the insured migrant worker: Provided, That the following
documents, duly authenticated by the Philippine foreign posts, shall be sufficient evidence to
substantiate the claim:

"(1) Death Certificate - In case of natural or accidental death;

"(2) Police or Accident Report - In case of accidental death; and

"(3) Medical Certificate - In case of permanent disablement;

"For repatriation under subparagraph (d) hereof, a certification which states the reason/s for the
termination of the migrant worker's employment and the need for his or her repatriation shall be
issued by the Philippine foreign post or the Philippine Overseas Labor Office (POLO) located in the
receiving country.

"For subsistence allowance benefit under subparagraph (e), the concerned labor attaché or, in his
absence, the embassy or consular official shall issue a certification which states the name of the
case, the names of the parties and the nature of the cause of action of the migrant worker.

"For the payment of money claims under subparagraph (f), the following rules shall govern:
 "(1) After a decision has become final and executor or a settlement/compromise
agreement has been reached between the parties at the NLRC, an order shall be
released mandating the respondent recruitment/manning agency to pay the amount
adjudged or agreed upon within thirty (30) days;

"(2) The recruitment/manning agency shall then immediately file a notice of claim
with its insurance provider for the amount of liability insured, attaching therewith a
copy of the decision or compromise agreement;

"(3) Within ten (10) days from the filing of notice of claim, the insurance company
shall make payment to the recruitment/manning agency the amount adjudged or
agreed upon, or the amount of liability insured, whichever is lower. After receiving the
insurance payment, the recruitment/manning agency shall immediately pay the
migrant worker's claim in full, taking into account that in case the amount of
insurance coverage is insufficient to satisfy the amount adjudged or agreed upon, it
is liable to pay the balance thereof;

"(4) In case the insurance company fails to make payment within ten (10) days from
the filing of the claim, the recruitment/ manning agency shall pay the amount
adjudged or agreed upon within the remaining days of the thirty (30)-day period, as
provided in the first subparagraph hereof;

"(5) If the worker's claim was not settled within the aforesaid thirty (30)-day period,
the recruitment/manning agency's performance bond or escrow deposit shall be
forthwith garnished to satisfy the migrant worker's claim;

"(6) The provision of compulsory worker's insurance under this section shall not
affect the joint and solidary liability of the foreign employer and the
recruitment/manning agency under Section 10;

"(7) Lawyers for the insurance companies, unless the latter is impleaded, shall be
prohibited to appear before the NLRC in money claims cases under this section.

"Any question or dispute in the enforcement of any insurance policy issued under this section shall
be brought before the IC for mediation or adjudication.

"In case it is shown by substantial evidence before the POEA that the migrant worker who was
deployed by a licensed recruitment/manning agency has paid for the premium or the cost of the
insurance coverage or that the said insurance coverage was used as basis by the
recruitment/manning agency to claim any additional fee from the migrant worker, the said licensed
recruitment/manning agency shall lose its license and all its directors, partners, proprietors, officers
and employees shall be perpetually disqualified from engaging in the business of recruitment of
overseas workers. Such penalty is without prejudice to any other liability which such persons may
have incurred under existing laws, rules or regulations.

"For migrant workers recruited by the POEA on a government-to-government arrangement, the

POEA shall establish a foreign employers guarantee fund which shall be answerable to the workers'
monetary claims arising from breach of contractual obligations. For migrant workers classified as
rehires, name hires or direct hires, they may opt to be covered by this insurance coverage by
requesting their foreign employers to pay for the cost of the insurance coverage or they may pay for
the premium themselves. To protect the rights of these workers, the POEA shall provide them
adequate legal assistance, including conciliation and mediation services, whether at home or
abroad.

"At the end of every year, the Department of Labor and Employment and the IC shall jointly make an
assessment of the performance of all insurance providers, based upon the report of the NLRC and
the POEA on their respective interactions and experiences with the insurance companies, and they
shall have the authority to ban or blacklist such insurance companies which are known to be evasive
or not responsive to the legitimate claims of migrant workers. The Department of Labor and
Employment shall include such assessment in its year-end report to Congress.

"For purposes of this section, the Department of Labor and Employment, IC, NLRC and the POEA,
in consultation with the recruitment/manning agencies and legitimate non-government organizations
advocating the rights and welfare of overseas Filipino workers, shall formulate the necessary
implementing rules and regulations.

"The foregoing provisions on compulsory insurance coverage shall be subject to automatic review
through the Congressional Oversight Committee immediately after three (3) years from the effectivity
of this Act in order to determine its efficacy in favor of the covered overseas Filipino workers and the
compliance by recruitment/manning agencies and insurance companies, without prejudice to an
earlier review if necessary and warranted for the purpose of modifying, amending and/or repealing
these subject provisions.

Section 24. A new Section 37-B of Republic Act No. 8042, as amended, is hereby added to read as
follows:

"Sec. 37-B. Congressional Oversight Committee. - There is hereby created a Joint Congressional
Oversight Committee composed of five (5) Senators and five (5) Representatives to be appointed by
the Senate President and the Speaker of the House of Representatives, respectively. The Oversight
Committee shall be co-chaired by the chairpersons of the Senate Committee on Labor and
Employment and the House of Representatives Committee on Overseas Workers Affairs. The
Oversight Committee shall have the following duties and functions:

"(a) To set the guidelines and overall framework to monitor and ensure the proper
implementation of Republic Act No. 8042, as amended, as well as all programs,
projects and activities related to overseas employment;

"(b) To ensure transparency and require the submission of reports from concerned
government agencies on the conduct of programs, projects and policies relating to
the implementation of Republic Act No. 8042, as amended;

"(c) To approve the budget for the programs of the Oversight Committee and all
disbursements therefrom, including compensation of all personnel;

"(d) To submit periodic reports to the President of the Philippines and Congress on
the implementation of the provisions of Republic Act No. 8042, as amended;

"(e) To determine weaknesses in the law and recommend the necessary remedial
legislation or executive measures; and

"(f) To perform such other duties, functions and responsibilities as may be necessary
to attain its objectives.
"The Oversight Committee shall adopt its internal rules of procedure, conduct hearings and receive
testimonies, reports, and technical advice, invite or summon by subpoena ad testificandum any
public official or private citizen to testify before it, or require any person by subpoena duces
tecumdocuments or other materials as it may require consistent with the provisions of Republic Act
No. 8042, as amended.

"The Oversight Committee shall organize its staff and technical panel, and appoint such personnel,
whether on secondment from the Senate and the House of Representatives or on temporary,
contractual, or on consultancy, and determine their compensation subject to applicable civil service
laws, rules and regulations with a view to ensuring a competent and efficient secretariat.

"The members of the Oversight Committee shall not receive additional compensation, allowances or
emoluments for services rendered thereto except traveling, extraordinary and other necessary
expenses to attain its goals and objectives.

"The Oversight Committee shall exist for a period of ten (10) years from the effectivity of this Act and
may be extended by a joint concurrent resolution."

Section 25. Implementing Rules and Regulations. - The departments and agencies charged with
carrying out the provisions of this Act, except as otherwise provided herein, in consultation with the
Senate Committee on Labor and Employment and the House of Representatives Committee on
Overseas Workers Affairs, shall, within sixty (60) days after the effectivity of this Act, formulate the
necessary rules and regulations for its effective implementation.

Section 26. Funding. - The departments, agencies, instrumentalities, bureaus, offices and
government-owned and controlled corporations charged with carrying out the provisions of this Act
shall include in their respective programs the implementation of this Act, the funding of which shall
be included in the General Appropriations Act. The Congressional Oversight Committee on
Overseas Workers Affairs shall have the sum of Twenty-five million pesos (P25,000,000.00), half of
which shall be charged against the current appropriations of the Senate while the other half shall be
charged against the current appropriations of the House of Representatives, to carry out its powers
and functions for its initial operations and for fiscal years wherein the General Appropriations Act is
reenacted and no provision for its continued operation is included in such Act. Thereafter, such
amount necessary for its continued operations shall be included in the annual General
Appropriations Act.

Section 27. Separability Clause. - If, for any reason, may portion of this Act is declared
unconstitutional or invalid, the same shall not affect the validity of the other provisions not affected
thereby.

Section 28. Repealing Clause. - All laws, decrees, executive orders, issuances, rules and
regulations or parts thereof inconsistent with the provisions of this Act are hereby repealed or
modified accordingly.

Section 29. Effectivity. - This Act shall take effect fifteen (15) days after its publication in at least two
(2) newspapers of general circulation.

Approved,
 (Sgd.) PROSPERO C. NOGRALES (Sgd.) JUAN PONCE ENRILE
Speaker of the House of Representatives President of the Senate

This Act which is a consolidation of Senate Bill No. 3286 and House Bill No. 5649 was finally passed
by the Senate and the House of Representatives on January 18, 2010 and December 18, 2009,
respectively.

(Sgd.) MARILYN B. BARUA-YAP (Sgd.) EMMA LIRIO-REYES

Secretary General Secretary of Senate
House of Represenatives

Approved: March 8, 2010

(Sgd.) GLORIA MACAPAGAL-ARROYO

President of the Philippines

The Lawphil Project - Arellano Law Foundation

OMNIBUS RULES AND REGULATIONS IMPLEMENTING THE MIGRANT WORKERS AND

OVERSEAS FILIPINOS ACT OF 1995, AS AMENDED BY REPUBLIC ACT NO. 10022

Pursuant to the authority vested by law on the Secretary of Foreign Affairs and the Secretary of
Labor and Employment, and in the light of Republic Act No. 10022, An Act Amending Republic Act
No. 8042, Otherwise Known as the Migrant Workers and Overseas Filipinos Act of 195, as
amended, Further Improving the Standard of Protection and Promotion of the Welfare of Migrant
Workers, Their Families and Overseas Filipinos in Distress, and For Other Purpose, the following
Implementing Rules and Regulations are hereby promulgated:

RULE I
GENERAL PROVISIONS

Section 1. Declaration of Policies.

(a) In the pursuit of an independent foreign policy and while considering national sovereignty,
territorial integrity, national interest and the right to self-determination paramount in its
relations with other states, the State shall, at all times, uphold the dignity of its citizens
whether in the country or overseas, in general, and Filipino migrant workers, in particular,
continuously monitor international conventions, adopt/be signatory to and ratify those that
guarantee protection to our migrant workers, and endeavor to enter into bilateral agreements
with countries hosting overseas Filipino workers.

(b) The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment opportunities for all.
 Towards this end, the State shall provide adequate and timely social, economic and legal
services to Filipino migrant workers.

(c) 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.

(d) The State affirms the fundamental equality before the law of women and men and the
significant role of women in nation building. Recognizing the contribution of overseas migrant
women workers and their particular vulnerabilities, the State shall apply gender sensitive
criteria in the formulation and implementation of policies and programs affecting migrant
workers and the composition of bodies tasked for the welfare of migrant workers.

(e) Free access to the courts and quasi-judicial bodies and adequate legal assistance shall
not be denied to any person by reason of poverty. In this regard, it is imperative that an
effective mechanism be instituted to ensure that the rights and interest of distressed
overseas Filipinos, in general, and Filipino migrant workers, in particular, whether
regular/documented or irregular/undocumented, are adequately protected and safeguarded.

(f) The right of Filipino migrant workers and all overseas Filipinos to participate in the
democratic decision-making processes of the State and to be represented in institutions
relevant to overseas employment is recognized and guaranteed.

(g) The State recognizes that the most effective tool for empowerment is the possession of
skills by migrant workers. The government shall expand access of qualified migrant workers
to free skills development and enhancement programs through scholarships, training
subsidies/grants of the concerned agencies. Pursuant to this and as soon as practicable, the
government shall deploy and/or allow the deployment only of skilled Filipino workers.

(h) The State recognizes that non-governmental organizations, trade unions, workers
associations, stakeholders and other similar entities duly recognized as legitimate, are
partners of the State in the protection of Filipino migrant workers and in the promotion of their
welfare. The State shall cooperate with them in a spirit of trust and mutual respect. The
significant contribution of recruitment and manning agencies shall form part of this
partnership.

RULE II
DEFINITION OF TERMS

Section 1. Definitions.

(a) Act - refers to the "Migrant Workers and Overseas Filipinos Act of 1995," as amended by
Republic Act No. 9422 and Republic Act No. 10022.

(b) 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.

(c) BI - Bureau of Immigration

(d) Bona fide Non-Government Organizations (NGOs) - refer to non-government, civil society
or faith-based organizations duly recognized by the Philippine Embassy as active partners of
the Philippine Government in the protection of Filipino migrant workers and the promotion of
their welfare.

(e) CICT - Commission on Information and Communications Technology

(f) Contracted workers - refer to Filipino workers with employment contracts already
processed by the POEA for overseas deployment.

(g) DFA - Department of Foreign Affairs

(h) DILG - Department of Interior and Local Government

(i) Direct Hires - workers directly hired by employers for overseas employment as authorized
by the Secretary of Labor and Employment and processed by the POEA, including:

1. Those hired by international organizations

2. Those hired members of the diplomatic corps.

3. Name hires or workers who are able to secure overseas employment opportunity
with an employer without the assistance or participation of any agency. [Labor Code,
POEA Rules]

(j) DOH - Department of Health

(k) DOJ - Department of Justice

(l) DOLE - Department of Labor and Employment

(m) DOST - Department of Science and Technology

(n) DOT - Department of Tourism

(o) Employment Contract - refers to the following:

1. For land-based workers hired by private recruitment/employment agencies - an

individual written agreement between the foreign principal/employer and the worker
based on the master employment contract approved by the Administration; and

2. For seafarers - written standard POEA-approved employment contract stipulating

a specific period of employment and formulated through tripartite consultation,
individually adopted and agreed upon by the principal/employer and the seafarer.
(p) Filipino Service Contractor - refers to any person, partnership or corporation duly licensed
as a private recruitment agency by the Secretary of Labor and Employment to recruit
workers for its accredited projects or contracts overseas.

(q) Gender Sensitivity - refers to cognizance of the inequalities and inequities prevalent in
society between women and men and a commitment to address issues with concern for the
respective interest of the sexes.

(r) Head or manage - refers to any of the following acts:

1. Control and supervise the operations of the recruitment/manning agency or branch

thereof of which they are employed; or

2. Exercise the authority to hire or fire employees and lay down and execute
management policies of the recruitment/manning agency or branch thereof.

(s) Joint and several liability - refers to the liability of the principal/employer and the
recruitment/manning agency, for any and all claims arising out of the implementation of the
employment contract involving Filipino workers for overseas deployment. If the
recruitment/manning agency is a juridical being, the corporate officers and directors and
partners, as the case may be, shall themselves be jointly and severally liable with the
corporation or partnership for the aforesaid claims and damages.

(t) IC - Insurance Commission

(u) Irregular/Undocumented Filipino migrant workers - refer to the following:

(1) Those who acquired their passports through fraud or misrepresentation;

(2) Those who possess expired visas or permits to stay;

(3) Those who have no travel document whatsoever;

(4) Those who have valid but inappropriate visas; or

(5) Those whose employment contracts were not processed by the POEA or
subsequently verified and registered on-site by the POLO, if required by law or
regulation.

(v) Labor Code - Presidential Decree No. 442, as amended

(w) 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.

(x) LGU - Local Government Unit

(y) 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 waters and for related maritime activities.
(z) NBI- National Bureau of Investigation

(aa) NCC- National Computer Center

(bb) NLRC - National Labor Relations Commission

(cc) Non-licensee - 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, expired or otherwise delisted from the roll of licensed
recruitment/manning agencies registered with the POEA.

(dd) NRCO - National Reintegration Center for Overseas Filipino Workers

(ee) NSCB - National Statistical and Coordination Board

(ff) NSO - National Statistics Office

(gg) NTC - National Telecommunications Commission

(hh) Overseas Filipinos - refer to migrant workers, other Filipino nationals and their
dependents abroad.

(ii) Overseas Filipino in distress - refers to an Overseas Filipino who has a medical, psycho-
social or legal assistance problem requiring treatment, hospitalization, counseling, legal
representation as specified in Rule IX of these Rules or any other kind of intervention with
the authorities in the country where he or she is found.

(jj) Overseas Filipino Worker or Migrant Worker - refers to a person who is to be engaged, is
engaged, or has been engaged in a remunerated activity in a state of which he or she is not
a citizen or on board a vessel navigating the foreign seas other than a government ship used
for military or non-commercial 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.

(kk) OWWA - Overseas Workers Welfare Administration

(ll) Placement Fees- refer to any and all amounts charged by a private recruitment agency
from a worker for its recruitment and placement services as prescribed by the Secretary of
Labor and Employment.

(mm) POEA - Philippine Overseas Employment Administration, shall be used

interchangeably with the term "Administration".

(nn) POLO - Philippine Overseas Labor Office

(oo) Principal - refers to an employer or foreign placement agency hiring or engaging Filipino
workers for overseas employment through a licensed private recruitment/manning agency.

(pp) 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 placement of workers for overseas employment for a fee which is charged,
 directly or indirectly, from the workers who renewed their employment contracts with the
same principal.

(qq) Rehires - refer to land-based workers who renewed their employment contracts with the
same principal.

(rr) Regular/Documented Filipino Migrant Workers - Refer to the following:

(1) Those who possess valid passports and appropriate visas or permits to stay and
work in the receiving country; and

(2) Those whose contracts of employment have been processed by the POEA, or
subsequently verified and registered on-site by the POLO, if required by law or
regulation.

(ss) Seafarer - refers to any person who is employed or engaged in overseas employment in
any capacity on board a ship other than a government ship used for military or non-
commercial purposes. The definition shall include fishermen, cruise ship personnel and
those serving on mobile offshore and drilling units in the high seas.

(tt) 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.

(uu) TESDA - Technical Education and Skills Development Authority

(vv) Underage Migrant Workers - refers to those who are below 18 years or below the
minimum age requirement for overseas employment as determined by the Secretary of
Labor and Employment.

RULE III
DEPLOYMENT OF MIGRANT WORKERS

Section 1. Guarantees of Migrant Workers Rights. The State shall allow the deployment of OFWs
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 OFWs:

(a) It has existing labor and social laws protecting the rights of workers, including migrant
workers; or

(b) It is a signatory to and/or a of multilateral conventions, declarations or resolutions relating

to the protection of workers including migrant workers; or 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 and concrete measures to protect the rights of
migrant workers in furtherance of any of the guarantees under subparagraphs (a), (b), and (c)
hereof.
"Positive and concrete measures" shall include legislative or executive initiatives, diplomatic
negotiations, judicial decisions, programs, projects, activities and such other acts by the receiving
country aimed at protecting the rights of migrant workers.

For purposes of the preceding paragraphs, the DFA shall issue a certification that a receiving
country complies with any of the guarantees under subparagraphs (a), (b), and (c) hereof, and that
the receiving country is taking such positive and concrete measures to protect workers, including
migrant workers. The DFA shall issue such 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. Such a certification
shall be subject to review by the DFA as often as may be deemed necessary.

The POEA Governing Board shall, in a Resolution, allow only the deployment of OFWs to receiving
countries which have been certified by the DFA as compliant with the above stated guarantees.

The POEA shall register OFWs only for receiving countries allowed by the POEA Governing Board,
subject to existing standards on accreditation of foreign employers/principals and qualification
requirements for workers.

Section 2. Liability of the Members of the POEA Governing Board, Government Officials and
Employees. The members of the POEA Governing Board who actually voted in favor of a Resolution
allowing the deployment of migrant workers without the DFA certification referred to in the preceding
section 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 a resolution by the POEA Governing Board prohibiting
deployment shall be meted the same penalties in this section.

Section 3. Deployment of OFWs to Ocean-Going Ships.

The State shall also allow the deployment of OFWs to ships navigating the foreign seas or to
installations located offshore or on high seas whose owners/employers are compliant with
international laws and standards that protect the rights of migrant workers.

Section 4. Deployment to Companies and Contractors with International Operations. The State shall
likewise allow the deployment of OFWs to companies and contractors with international operations:
Provided, That they are compliant with standards, conditions and requirements, as embodied in the
employment contracts prescribed by the POEA and in accordance with internationally-accepted
standards.

Section 5. Deployment of Skilled Workers.

As soon as adequate mechanisms for determination of skills are in place and consistent with
national interest, the Secretary of Labor and Employment shall allow the deployment only of skilled
Filipino workers.

Section 6. Termination or Ban on Deployment.

Notwithstanding the provisions of Sections 1 and 5 of this Rule, in pursuit of the national interest or
when public welfare so requires, the POEA Governing Board, after consultation with the DFA, may,
at any time, terminate or impose a ban on the deployment of migrant workers.
The POEA Governing Board may, after consultation with the DFA, grant exceptions to the ban or lift
the ban.

Section 7. Travel Advisory.

The DFA shall issue travel advisories as the need arises. A "travel advisory" is a notice to the
travelling public normally for a security reason and based on the prevailing peace and order situation
in a specific destination.

Section 8. Labor Situationer. The POEA, in consultation with the DFA, shall disseminate information
on labor and employment conditions, migration realities and other facts, as well as adherence of
particular countries to international standards on human and workers rights which will adequately
prepare individuals into making informed and intelligent decisions about overseas employment. The
POEA shall publish, in a timely manner, such advisory in a newspaper of general circulation.

The POEA may undertake other programs or resort to other modes of information and dissemination
campaigns, such as the conduct of nationwide, comprehensive and sustainable Pre-Employment
Orientation Seminars.

RULE IV
ILLEGAL RECRUITMENT

Section 1. Definition. For purposes of the 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 a 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 non-existent work, work different
from the actual overseas work, or work with a different employer whether registered or not
with the POEA;

(d) To induce or attempt to induce a worker already employed to quit his employment in
order to offer him another unless the transfer is designed to liberate a worker from
oppressive terms and conditions of employment;
 (e) To influence or attempt to influence any 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 a 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; and

(n) To allow a non-Filipino citizen to head or manage a licensed recruitment/manning

agency.

Section 2. Crime Involving Economic Sabotage. 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.

Section 3. Other Prohibited Acts. In addition to the acts enumerated above, it shall also be unlawful
for any person or entity to commit the following prohibited acts:

a. Grant a loan to an OFW with interest exceeding eight (8%) percent 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;
 b. Impose a compulsory and exclusive arrangement whereby an OFW is required to avail of
a loan only from specifically designated institutions, entities, or persons;

c. Refuse to condone or renegotiate a loan incurred by an OFW after the latter's employment
contract has been prematurely terminated through no fault of his / her own;

d. Impose a compulsory an exclusive arrangement whereby an OFW 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;

e. Impose a compulsory and exclusive arrangement whereby an OFW is required to undergo

training, seminar, instruction or schooling of any kind only from specifically designated
institutions, entities or persons, except for recommendatory training mandated by
principals/shipowners where the latter shoulder the cost of such trainings;

f. For a suspended recruitment/manning agency to engage in any kind of recruitment activity

including the processing of pending workers' applications;

g. For a recruitment/manning agency or a foreign principal/employer to pass-on to the OFW

or deduct from his/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.

Section 4. Persons Responsible.

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 and the responsible for the commission of the offense and the responsible
employees/agents thereof shall be liable.

Section 5. Penalties.

(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.

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).
If the offender is an alien, he or she shall, in addition to the penalties herein prescribed, be deported
without further proceedings.

In every case, conviction shall cause and carry the automatic revocation of the license or registration
of the recruitment/manning agency, lending institutions, training school or medical clinic.

Section 6. Venue. A criminal action arising from illegal recruitment as defined under this Rule 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 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.

Section 7. Prescription. Illegal recruitment cases under this Rule shall prescribe in five (5) years;
Provided, however, that illegal recruitment cases involving economic sabotage shall prescribed in
twenty (20) years.

Section 8. Independent Action. The filing of an offense punishable under this section shall be
without prejudice to the filing of cases punishable under other existing laws, rules or regulations.

RULE V
PROHIBITION OF GOVERNMENT PERSONNEL

Section 1. Disqualification. The following personnel shall be prohibited from engaging directly or
indirectly in the business of recruitment of migrant workers;

(a) Any official or employee of the DOLE, POEA, OWWA, DFA, DOJ, DOH, BI, IC, NLRC,
TESDA, CFO, NBI, Philippine National Police (PNP), Manila International Airport Authority
(MIAA), Civil Aviation Authority of the Philippines (CAAP), and other government agencies
involved in the implementation of the Act, regardless of the status of his/her employment;
and

(b) Any of his/her relatives within the fourth civil degree of consanguinity or affinity.

Any government official or employee found to be violating this section shall be charged
administratively, according to Civil Service Rules and Regulations without prejudice to criminal
prosecution.

The government agency concerned shall monitor and initiate, upon its initiative or upon the petition
of any private individual, action against erring officials and employees, and/or their relatives.

RULE VI
ANTI-ILLEGAL RECRUITMENT PROGRAMS

Section 1. POEA Anti-Illegal Recruitment Programs. The POEA adopts policies and procedures,
prepares and implements intensified programs

And strategies towards the eradication of illegal recruitment activities such as, but not limited to the
following:

(a) Providing legal assistance to victims of illegal recruitment and related cases which are
administrative or criminal in nature, such as but not limited to documentation and counseling.
 (b) Prosecution of illegal recruiters, during preliminary investigation and during trial in
collaboration with the DOJ prosecutors;

(c) Special operations such as surveillance and closure of establishment or entities

suspected to be engaged in illegal recruitment; and

(d) Information and education campaign.

Whenever necessary, the POEA shall coordinate with other appropriate entities in the
implementation of said programs.

Section 2. Legal Assistance.

The POEA shall provide free legal service to victims of illegal recruitment and related cases which
are administrative or criminal in nature in the form of legal advice, assistance in the preparation of
complaints and supporting documents, institution of criminal actions.

Section 3. Receiving of Complaints for Illegal Recruitment.

Victims of illegal recruitment and related cases which are administrative or criminal in nature may file
with the POEA a report or complaint in writing and under oath for assistance purposes.

In regions outside the National Capital Region, complaints and reports involving illegal recruitment
may be filed with the appropriate regional office of the POEA or DOLE.

Section 4. Endorsement of Case to the Proper Prosecution Office. The POEA, after evaluation and
proper determination that sufficient evidence exists for illegal recruitment and other related cases,
shall endorse the case to the proper Prosecution Office for the conduct of preliminary investigation.

During preliminary investigation, the complainant may avail of legal assistance or counseling from
the POEA.

Section 5. Institution of Criminal Action. The Secretary of Labor and Employment, the POEA
Administrator or the DOLE Regional Director, or their duly authorized representatives, or any
aggrieved person, may initiate the corresponding criminal action with the appropriate office.

Section 6. Affidavits and Testimonies of Operatives. Affidavits and testimonies of operatives or

personnel from the DOLE, POEA and law enforcement agencies who witnessed the acts constituting
the offense shall be sufficient basis to prosecute the accused.

Section 7. Legal Assistance During Trial. In the prosecution of offenses punishable under Section 6
of the Act, the Anti-Illegal Recruitment Branch of the POEA shall collaborate with the public
prosecutors of the DOJ and, in certain cases, allow the POEA lawyers to take the lead in
prosecution.

Section 8. Special Allowance for Lawyers of the Prosecution Division. The POEA lawyers who act
as special counsels during preliminary investigation and/or as collaborating attorneys of the public
prosecutors of the DOJ during court hearings shall be entitled to receive additional allowances in
such amounts as may be determined by the Administrator.

Section 9. Action on the Complaint/Report.

Where the complaint/report alleges that illegal recruitment activities are ongoing, surveillance shall
be undertaken at the premises where the alleged illegal recruitment activities are conducted. If illegal
recruitment activities are confirmed, the POEA Director of the Licensing and Regulation Office (LRO)
shall recommend to the POEA Administrator the institution of criminal action and/or the issuance of a
closure order or order of preventive suspension.

Section 10. Surveillance. The POEA and/or designated officials in the DOLE regional offices may,
on their own initiative, conduct surveillance on the alleged illegal recruitment activities.

Within two (2) days from the termination of surveillance, a report supported by an affidavit shall be
submitted to the Director-LRO or the Regional Director concerned, as the case may be.

Section 11. Issuance of Closure Order. The POEA Administrator or the concerned DOLE Regional
Director may conduct an ex parte preliminary examination to determine whether the activities of a
non-licensee constitute a danger to national security and public order or will lead to further
exploitation of job seekers. For this purpose, the POEA Administrator or the Regional Director
concerned or their duly authorized representatives, may examine personally the complainants and/or
their witnesses in the form of searching questions and answers and shall take their testimony under
oath. The testimony of the complainants and/or witnesses shall be reduced in writing and signed by
them and attested by an authorized officer.

If based on a surveillance report, or preliminary examination of the complainants, the POEA

Administrator or DOLE Regional Director, or their authorized representative is satisfied that such
danger or exploitation exists, a written order may shall be issued by the POEA Administrator or
DOLE Regional Director, or their authorized representative is satisfied that such danger or
exploitation exists, a written order shall be issued by the POEA Administrator for the closure of the
establishment being used for illegal recruitment activity.

In case of a business establishment whose license or permit to operate a business was issued by
the local government, the Secretary of Labor and Employment, the POEA Administrator or the
Regional Director concerned shall likewise recommend to the granting authority the immediate
cancellation/revocation of the license or permit to operate its business.

Section 12. Implementation of Closure Order. A closure order shall be served upon the offender or
the person in charge of the subject establishment. The closure shall be effected by sealing and
padlocking the establishment and posting of notice of such closure in bold letters at a conspicuous
place in the premises of the establishment. Whenever necessary, the assistance and support of the
appropriate law enforcement agencies may be requested for this purpose.

Section 13. Report on Implementation. A report on the implementation of the closure order executed
under oath, stating the details of the proceedings undertaken shall be submitted to the Director-LRO
or the Regional Director concerned, as the case may be, within two (2) days from the date of
implementation.

Section 14. Institution of Criminal Action Upon Closure Order. The POEA Administrator or the DOLE
Regional Director, or their duly authorized representatives, or any law enforcement agencies or any
aggrieved person may initiate the corresponding criminal action with the appropriate prosecutor's
office.

Section 15. Effect of Closure Order.

All officers and responsible employees of the entity engaged in illegal recruitment activities shall be
ordered included in the List of Persons with Derogatory Record and be disqualified/barred from
participating in the overseas employment program of the government.

Section 16. Who May File a Motion to Reopen the Establishment. The motion to re-open may be
filed only by the following:

(a) The owner of the building or his/her duly authorized representative;

(b) The building administrator or his/her duly authorized representative;

(c) Any other person or entity legitimately operating within the premises closed/padlocked
whose operations/activities are distinct from the recruitment activities of the person/entity
subject of the closure order.

Section 17. Grounds for Reopening the Establishment.

(a) That the office is not the subject of the closure order;

(b) That the contract of lease with the owner of the building or the building administrator has
already been cancelled or terminated. The request to re-open shall be duly supported by an
affidavit of undertaking either of the owner of the building or the building administrator that
the same will not be leased/rented to any other person/entity for recruitment purposes
without the necessary license from the POEA;

(c) That the office is shared by a person/entity not involved in illegal recruitment activities,
whether directly or indirectly; or

(d) Any other analogous ground that the POEA may consider as valid and meritorious.

Section 18. Motion to Lift a Closure Order. A motion to lift a closure order which has already been
implemented may be entertained only when filed with the Licensing and Regulation Office (LRO)
within ten (10) calendar days from the date of implementation. The motion shall be verified and shall
clearly state the grounds upon which it is based, attaching supporting documents. A motion to lift
which does not conform to the requirements herein set forth shall be denied.

Section 19. Who May File Motion to Lift a Closure Order. The verified motion to lift closure order
may be filed only by the person or entity against whom the closure order was issued and
implemented or a duly authorized representative.

Section 20. Grounds for Lifting A Closure Order. Lifting of the closure order may be granted on any
of the following grounds:

(a) The person/entity is later found out or has proven that it is not involved in illegal
recruitment activities, whether directly or indirectly; or

(b) Any other analogous ground that the POEA may consider as valid and meritorious.

Lifting of a closure order is without prejudice to the filing of criminal complaints with the appropriate
office against the person alleged to have conducted illegal recruitment activities.
Section 21. Appeal.

The order of the POEA Administrator denying the motion to lift a closure order and/or motion to re-
open may be appealed to the Secretary of Labor and Employment within ten (10) days from receipt
thereof.

Section 22. Monitoring of Establishments. The POEA shall monitor establishments that are subject
of closure orders.

Where a re-opened office is subsequently confirmed as still being used for illegal recruitment
activities, a new closure order shall be issued which shall not be subject to a motion to lift.

Section 23. Pre-Employment Orientation Seminar (PEOS). The POEA shall strengthen its
comprehensive Pre-Employment Orientation Program through the conduct of seminars that will
discuss topics such as legal modes of hiring for overseas employment, rights, responsibilities and
obligations of migrant workers, health issues, prevention and modus operandi of illegal recruitment
and gender sensitivity.

The POEA 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.

Section 24. Partnership with LGUs, other Government Agencies and NGOs. The POEA shall
maintain and strengthen its partnership with LGUs, other government agencies and NGOs
advocating the rights and welfare of OFWs for the purpose of dissemination of information on all
aspects of overseas employment.

For this purpose, the POEA shall continuously provide the concerned entities with updated lists of
licensed agencies and entities and information materials such as brochures, pamphlets, posters as
well as recent anti-illegal recruitment laws and regulations for distribution to their respective
constituents.

RULE VII
MONEY CLAIMS

Section 1. Jurisdiction of Labor Arbiters. Notwithstanding any provision of law to the contrary, the
Labor Arbiters of the NLRC shall have the original and exclusive jurisdiction to hear and decide,
within ninety (90) calendar days after the filing of the compliant, 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 damages.

Section 2. Updates in the Global Services Industry.

Consistent with the mandate in the preceding section, the NLRC shall:

a. Endeavor to update and keep abreast with the developments in the global services
industry; and

b. Participate in international or local conferences involving migration issues and in relevant

overseas missions.
Section 3. Joint and Several Liability. The liability of the principal/employer and the
recruitment/placement agency on any and all claims under this Rule shall be joint and several. This
liability shall be incorporated in the contract for overseas employment and shall be a condition
precedent for its approval. The performance bond to be 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 severally 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 of the contract made locally or
in a foreign country.

Section 4. Compromise Agreement. Any compromise, amicable settlement or voluntary agreement

on money claims inclusive of damages under this Rule shall be paid within thirty (30) days from the
approval of the settlement by the appropriate authority, unless a different period is agreed upon by
the parties and approved by the appropriate authority.

Section 5. Effect of Illegal Termination and/or Deduction. In case of termination of overseas

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

In case of any unauthorized deduction, the worker shall be entitled to the refund of the deductions
made, with interest of twelve per cent (12%) per annum, from the date the deduction was made.

Section 6. Effect of Final and Executory Judgment. In case of final and executory judgment 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 judgment award.

For this purpose, the NLRC or any party in interest shall furnish the POEA a certified true copy of the
sheriff's return indicating the failure to fully satisfy a final and executory judgment against a foreign
employer/principal.

Should the disqualified foreign employer/principal fully satisfy the judgment award, the NLRC or any
party in interest shall furnish the POEA a certified true copy of the sheriff's return indicating full
compliance with the judgment which may be a basis to lift the disqualification.

Section 7. Voluntary Arbitration. For OFWs with collective bargaining agreements, the case shall be
submitted for voluntary arbitration in accordance with Articles 261 and 262 of the Labor Code.

RULE VIII
ROLE OF DFA

Section 1. Assistance to Nationals as the Third Pillar of Philippine Foreign Policy.

Assistance to nationals is the third pillar of the Philippine foreign policy. Pursuant to the Philippine
Foreign Service Act of 1991 and the Migrant Workers and Overseas Filipino Act, as amended, the
DFA is mandated to formulate and implement policies and programs to promote and protect the
rights and welfare of Filipino migrants, and provide consular and legal assistance to overseas
Filipinos in distress.

Section 2. International, Regional and Bilateral Initiatives to Protect Overseas Filipino Workers. The
DFA shall continue to advocate in international and regional for the protection and promotion of the
rights and welfare of overseas Filipino workers by taking the lead and/or actively participating in the
crafting of international and regional conventions/declarations/ agreements that protect their rights
and promote their welfare.

The DFA, through its foreign service posts, shall endeavor to improve the conditions of overseas
Filipino workers. It shall establish harmonious working relations with the receiving countries through,
among others, the forging of bilateral agreements/arrangements or other forms of cooperation.

Section 3. One Country-Team Approach. Under the country-team approach, all officers,
representatives and personnel posted abroad, regardless of their mother agencies shall, on a per
country basis, act as one country-team with a mission under the leadership of the ambassador.

In receiving countries where there are Philippine consulates, such consulates shall also constitute
part of the country-team under the leadership of the ambassador.

In the implementation of the country-team approach, visiting Philippine delegations shall be provided
full support and information.

Section 4. Negotiations of International Agreements. The DFA shall be the lead agency that shall
advise and assist the President in planning, organizing, directing, coordinating and evaluating the
total national effort in the field of foreign relations pursuant to the Revised Administrative Code
(Executive Order No. 292).

RULE IX
LEGAL ASSISTANT FOR MIGRANT WORKERS AFFAIRS

Section 1. Function and Responsibilities. The Legal Assistant for Migrant Affairs under the
Department of Foreign Affairs shall be primarily responsible for the provision and over-all
coordination of all legal assistance services to Filipino Migrant Workers as well as Overseas Filipinos
in distress. In the exercise of these primary responsibilities, he/she shall discharge the following
duties and functions:

(a) Issue the guidelines, procedures and criteria for the provision of legal assistance services
to Filipino Migrant Workers;

(b) Establish close linkages with the DOLE, POEA, OWWA and other government agencies
concerned, as well as with non-governmental organizations assisting migrant workers, to
ensure effective coordination in providing legal assistance to migrant workers;

(c) When necessary, tap the assistance of the Integrated Bar of the Philippines (IBP), other
bar associations, legal experts on labor, migration and human rights laws, reputable law
firms, and other civil society organizations, to complement government services and
resources to provide legal assistance to migrant workers;
 (d) Administer the Legal Assistance Fund for Migrant Workers and to authorize its
disbursement, subject to approved guidelines and procedures, governing its use, disposition
and disbursement;

(e)Keep and maintain an information system for migration as provided in Section 20 of the
Act;

(f) Prepare its budget for inclusion in the Department of foreign Affair's budget in the annual
General Appropriations Act; and

(g) Perform such other functions and undertake other responsibilities as may be useful,
necessary or incidental to the performance of his/her mandate.

Section 2. Qualifications and Authority. The Legal Assistant for Migrant Workers Affairs shall be
headed by a lawyer of proven competence in the field of law with at least ten (10) years experience
as a legal practitioner and who must not have been a candidate to an elective office in the last local
or national elections. He/she shall be appointed by the President of the Philippines. He/she shall
have the title, rank, salary, and privileges of an Undersecretary of Foreign Affairs, and shall head the
Office of the Undersecretary for Migrant Workers' Affairs (OUMWA) of the Department of Foreign
Affairs.

He/she shall have authority to hire private lawyers, domestic or foreign, in order to assist him/her in
the effective discharge of the functions of his/her Office.

Section 3. Legal Assistance Fund. The Legal Assistance Fund created under the Act shall be used
exclusively to provide legal services for Migrant Workers and Overseas Filipinos in distress in
accordance with approved guidelines, criteria and procedures of the DFA.

It shall be used inter alia for the following specific purposes:

(a) In the absence of a counsel de oficio or court-appointed lawyer, payment of attorney's

fees to foreign lawyers for their services in representing migrant workers facing criminal and
labor cases abroad, or in filing cases against erring or abusive employers abroad, provided,
that no amount shall be disbursed for the appeal of cases except when the penalty meted is
life imprisonment or death or under meritorious circumstances as determined by the
Undersecretary for Migrant Workers Affairs;

(b) Bail bonds to secure the temporary release of workers under detention upon the
recommendation of the lawyer and the foreign service post concerned; and

(c) Court fees, charges and other reasonable litigation expenses when so recommended by
their lawyers.

RULE X
ROLE OF DOLE

Section 1. On-Site Protection. The DOLE shall see to it that labor and social welfare laws in the
foreign countries are fairly applied to migrant workers and whenever applicable, to other overseas
Filipinos, including the grant of legal assistance and the referral to proper medical centers or
hospitals.
Section 2. POLO Functions. The DOLE overseas operating arm shall be the POLO, which shall
have the following functions and responsibilities:

a. Ensure the promotion and protection of the welfare and interests of OFWs and assist them
in all problems arising out of employer-employee relationships;

b. Coordinate the DOLE's employment promotion mandate, consistent with the principles of
the Act;

c. Verify employment contracts and other employment-related documents;

d. Monitor and report to the Secretary of Labor and Employment on situations and policy
developments in the receiving country that may affect OFWs in particular and Philippine
labor policies, in general;

e. Supervise and coordinate the operations of the Migrant Workers and Other Overseas
Filipinos Resource Center; and

f. Such other functions and responsibilities as may be assigned by the Secretary of Labor
and Employment.

A. POEA

Section 3. Regulation of Private Sector. The POEA shall regulate private sector participation in the
recruitment and overseas placement of workers by setting up a licensing and registration system. It
shall also formulate and implement, in coordination with appropriate entities concerned, when
necessary, a system for promoting and monitoring the overseas employment of Filipino workers
taking into consideration their welfare and the domestic manpower requirements. It shall be
responsible for the regulation and management of overseas employment from the pre-employment
stage, securing the best possible employment terms and conditions for overseas Filipino workers,
and taking into consideration the needs of vulnerable sectors and the peculiarities of sea-based and
land-based workers.

Section 4. Hiring through the POEA. The Administration shall recruit and place workers primarily on
government-to-government arrangements. In the recruitment and placement to service the
requirements for trained and competent Filipino workers of foreign governments and their
instrumentalities, and such other employers as public interests may require, the Administration shall
deploy only to countries where the Philippines has concluded bilateral agreements or arrangements:
Provided that such countries shall guarantee to protect the rights of Filipino migrant workers; and
provided further that such countries shall observe and/or comply with the international laws and
standards for migrant workers.

Section 5. Foreign Employers Guarantee Fund. For migrant workers recruited by the POEA on a
government to government arrangement, the POEA shall, through relevant guidelines, establish and
administer a Foreign Employers Guarantee Fund which shall be answerable for the workers'
monetary claims arising from breach of contractual obligations.

Section 6. Jurisdiction of the POEA. The POEA shall exercise original and exclusive jurisdiction to
hear and decide:
 (a) all cases which are administrative in character, involving or arising out of violations of
Rules and Regulations relating to licensing and registration, including refund of fees
collected from the workers and violation of the conditions for issuance of license to recruit
workers; (Based on jurisdictional areas under the POEA Charter or E.O. 247, as amended.)

(b) disciplinary action cases and other special cases, which are administrative in character,
involving employers, principals, contracting partners and OFWs processed by the POEA.

Section 7. Venue.

Pre-employment/recruitment violation cases may be filed with the POEA Adjudication Office or at
any DOLE/POEA regional office of the place where the complainant applied or was recruited, at the
option of the complainant. The office where the complaint was first filed shall take cognizance of the
case.

Disciplinary action cases and other special cases shall be filed with the POEA Adjudication Office.

Section 8. Who may file. Any aggrieved person may file a complaint in writing and under oath for
violation of the Labor Code and the POEA Rules and Regulations and other issuances.

For this purpose, an aggrieved person is one who is prejudiced by the commission of a violation or
any of the grounds for disciplinary actions provided in the POEA Rules and Regulations.

However, the Administration, on its own initiative, may conduct proceedings based on reports of
violations or any of the grounds for disciplinary actions provided in the POEA Rules and Regulations
and other issuances on overseas employment, subject to preliminary evaluation.

Section 9. Prescriptive Period. All pre-employment/recruitment violation and disciplinary action

cases shall be barred if not commenced or filed with the Administration within three (3) years after
such cause of action accrued.

Section 10. Imposition of Administrative Penalty. For pre-employment/recruitment violation cases,

the Administrator, in the exercise of adjudicatory power, may impose the penalty of reprimand,
suspension, or cancellation or revocation of license.

Where the penalty of suspension is imposed, the Administrator may impose disqualification from the
overseas employment program. For disciplinary action cases against workers, the Administrator may
likewise impose suspension or disqualification.

Section 11. Appeal.

The decision of the Administration may be appealed to the Secretary of Labor and Employment
within fifteen (15) days from the receipt of the Decision.

B. OWWA

Section 12. Programs and Services. The OWWA shall continue to formulate and implement welfare
programs for overseas Filipino workers and their families in all phases of overseas employment. It
shall also ensure the awareness by the OFWs and their families of these programs and other related
government programs.
Section 13. Assistance in the Enforcement of Contractual Obligations. In the implementation of
OWWA welfare programs and services and in line with the One-Country Team Approach for on-site
services, the Welfare Officer or in his/her absence, the coordinating officer shall:

1. Provide the Filipino migrant worker and his/her family all the assistance they may need in
the enforcement of contractual obligations by agencies or entities and/or by their principals;
and

2. Make representation and may call on the agencies or entities concerned to conferences or
conciliation meetings for the purpose of settling the complaints or problems brought to
his/her attention. If there is no final settlement at the jobsite and the worker is repatriated
back to the Philippines, conciliation may continue at the OWWA Central Office, or in any
OWWA Regional Welfare Office.

C. NRCO

Section 14. Establishment of the National Reintegration Center for OFWs. The NRCO is hereby
created in the Department of Labor and Employment for returning Filipino migrant workers, which
shall provide the mechanism of their reintegration into Philippine society, serve as a promotion
house for their local employment, and tap their skills and potentials for national development.

The NRCO shall, in coordination with appropriate government and non-government agencies, serve
as a One-Stop Center that shall address the multi-faceted needs of OFW-returnees and their
families.

For this purpose, TESDA, the Technology Resource Center (TRC), and other government agencies
involved in training and livelihood development shall give priority to household service workers and
entertainers.

The NRCO shall be attached to the Office of the Administrator of OWWA for supervision and policy
guidance.

Section 15. Functions of the NRCO.

The NRCO shall undertake the following:

(a) Develop and support programs and projects for livelihood, entrepreneurship, savings,
investments and financial literacy for returning Filipino migrant workers and their families in
coordination with relevant stakeholders, service providers and international organizations;

(b) Coordinate with appropriate stakeholders, service providers and relevant international
organizations for the promotion, development and the full utilization of overseas Filipino
worker returnees and their potentials;

(c) Institute, in cooperation with other government agencies concerned, a computer-based

information system on returning Filipino migrant workers which shall be accessible to all local
recruitment agencies and employers, both public and private;

(d) Provide a periodic study and assessment of job opportunities for returning Filipino
migrant workers;
 (e) Develop and implement other appropriate programs to promote the welfare of returning
Filipino migrant workers;

(f) Maintain an internet-based communication system for on-line registration of returning

OFWs and interaction with clients, and maintain and upgrade computer-based service
capabilities of the NRCO;

(g) Develop capacity-building programs for returning overseas Filipino workers and their
families, implementers, service providers, and stakeholders;

(h) Conduct research for policy recommendations and program development; and

(i) Undertake other programs and activities as may be determined by the Secretary of Labor
and Employment.

Section 16. Formulation of Program. The DOLE, OWWA, TESDA, and POEA shall, within sixty (60)
days from effectivity of these Rules, formulate a program that would motivate migrant workers to
plan for productive options such as entry into highly technical jobs or undertakings, livelihood and
entrepreneurial development, better wage employment, and investment of savings.

D. Migrant Workers and Other Overseas Filipinos Resource Center

Section 17. Establishment of Migrant Workers and other Overseas Filipino Resource Center.

A Migrant Workers and other Overseas Filipinos Resource Center shall be established in countries
where there are large concentration of OFWs, as determined by the Secretary of Labor and
Employment. It shall be established within the premises of the Philippine Embassy or the Consulate
and be under the administrative jurisdiction of the Philippine Embassy.1avv phi 1

When the Migrant Workers and other Overseas Filipinos Resource Center is established outside the
premises of the Embassy or Consulate, the Department of Foreign Affairs shall exert its best effort to
secure appropriate recognition from the receiving government in accordance with applicable laws
and practices.

Section 18. Services. The Migrant Workers and other Overseas Filipinos Resource Center shall
provide the following services:

a. Counseling and legal services;

b. Welfare assistance including the procurement of medical and hospitalization services;

c. Information, advisory programs to promote social integration such as post-arrival

orientation, settlement and community networking services and activities for social
interaction;

d. Registration of irregular/undocumented workers to bring them within the purview of the

Act;

e. Implementation of DOLE and OWWA Programs;

f. Human resource development, such as training and skills upgrading;

 g. Gender-sensitive programs and activities to assist particular needs of migrant workers;

h. Orientation program for returning workers and other migrants;

i. Monitoring of the daily situation, circumstances and activities affecting migrant workers and
other overseas Filipinos;

j. Ensuring that labor and social welfare laws in the receiving country are fairly applied to
migrant workers and other overseas Filipinos; and

k. Conciliation of disputes arising from employer-employee relationship, in accordance with

this Rule.

Section 19. Personnel. Each Migrant Workers and Other Overseas Filipinos Resource Center shall
be staffed by Foreign Service personnel, a Labor Attaché and other service attachés or officers who
represent Philippine government agencies abroad.

The following personnel may be assigned to the Center:

a. Psychologists, Social Workers, and a Shari'a or Human Rights Lawyer, in highly

problematic countries as categorized by the DFA and DOLE and where there is a
concentration of Filipino migrant workers;

b. Individual volunteers and representatives from bona fide non-government organizations

from the receiving countries, if available and necessary as determined by the Labor Attaché
in consultation with the Chief of Mission;

c. Public Relations Officer or Case Officer conversant, orally and in writing, with the local
language, laws, customs and practices; and/or

d. Legal Officers (POEA/NLRC/DOLE) and such other professionals deemed necessary by

the Secretary of Labor and Employment.

Section 20. Administration of the Center. The POLO through the Labor Attaché shall supervise and
coordinate the operations of the Migrant Workers and other Overseas Filipinos Resource Center and
shall keep the Chief of Mission informed and updated on all matters affecting it at least quarterly
through a written report addressed to the Chief of Mission.

Section 21. Round-the Clock Operations. The Migrant Workers and other Overseas Filipino
Resource Center shall operate on a 24-hour basis including Saturdays, Sundays and holidays. A
counterpart 24-hour Information and Assistance Center to ensure a continuous network and
coordinative mechanism shall be established at the DFA and the DOLE/OWWA.

Section 22. Budget. The establishment, yearly maintenance and operating costs of the Migrant
Workers and other Overseas Filipinos Resource Centers, including the costs of services and
programs not specially funded under the Act, shall be sourced from the General Appropriations Act
(GAA) and shall be included in the annual budget of the DOLE.

However, the salaries and allowances of overseas personnel shall be sourced from the respective
agencies' budgets.
 RULE XI
ROLE OF DOH

Section 1. Regulation of Medical Clinics. The Department of Health (DOH) shall regulate the
activities and operations of all clinics which conduct medical, physical, optical, dental, psychological
and other similar examinations, hereinafter referred to as health examinations, on Filipino migrant
workers as requirement for their overseas employment. Pre-Employment Medical Examinations
(PEME) for overseas work applicants shall be performed only in DOH-accredited medical clinics and
health facilities utilizing the standards set forth by DOH. Pursuant to this, the DOH shall ensure that:

(a) The fees for the health examinations are regulated, regularly monitored and duly
published to ensure that the said fees are reasonable and not exorbitant. The DOH shall set
a minimum and maximum range of fees for the different examinations to be conducted,
based on a thorough and periodic review of the cost of health examinations and after
consultation with concerned stakeholders. The applicant-worker shall pay directly to the
DOH-accredited medical clinics or health facilities where the PEME is to be conducted.

(b) The Filipino migrant workers shall only be required to undergo health examinations when
there is reasonable certainly by the hiring recruitment/manning agency pursuant to POEA
Rules and Regulations that he/she will be hired and deployed to the jobsite and only those
health examinations which are absolutely necessary for the type of job applied for those
specifically required by the foreign employer shall be conducted;

(c) No groups of medical clinics shall have a monopoly of exclusively conducting health
examinations on migrant workers for certain receiving countries;

(d) Every Filipino migrant worker shall have the freedom to choose any of the DOH-
accredited or DOH-operated clinics that will conduct his/her health examinations and that
his/her rights as a patient are respected. The decking practice, which requires overseas
Filipino workers to go first to an office for registration and then farmed out to a medical clinic
located elsewhere, shall not be allowed;

(e) Within a period of three (3) years from the effectivity of the Act, all DOH regional and/or
provincial hospitals under local government units shall establish and operate clinics that can
serve the health examination requirements of Filipino migrant workers to provide them easy
access to such clinics all over the country and lessen their transportation and lodging
expenses; and

(f) All DOH-accredited medical clinics, including the DOH-operated clinics, conducting health
examinations for Filipino migrant workers shall observe the same standard operating
procedures and shall comply with internationally-accepted standards in their operations to
conform with the requirements of receiving countries or of foreign employers/principals.

Section 2. Temporary Disqualification of Foreign Employers. Any foreign employer who does not
honor the results of valid health examinations conducted by a DOH-accredited or DOH-operated
clinic shall be temporarily disqualified from participating in the overseas employment program,
pursuant to POEA Rules and Regulations. The temporary disqualification of the employer may be
lifted only upon the latter's unqualified acceptance of the result of the examination.

Section 3. Liability of Medical Clinic or Health Facility. In case an OFW is found to be not medically
fit within fifteen (15) days upon his/her arrival in the country of destination, the medical clinic or
health facility that conducted the health examination/s of such OFW shall pay for his/her repatriation
back to the Philippines and the cost of deployment of such worker.

Any DOH-accredited clinic which violates any provisions of this section shall, in addition to any other
liability it may have incurred, suffer the penalty of revocation of its DOH-accredited if after
investigation, the medical reason for repatriation could have been detected at the time of
examination using the DOH PEME package as required by the employer/principal or the receiving
country.

Section 4. Liability of Government Personnel for Nonfeasance and Malfeasance of their Duties
under the Act.

Any government official or employee who violates any provision of this Rule shall be removed or
dismissed from service with disqualification to hold any appointive public office for five (5) years.
Such penalty is without prejudice to any other liability which he/she may have incurred under existing
laws, rules or regulations.

Section 5. Issuance of Guidelines.

Within sixty (60) days from effectivity of these Rules, the DOH shall issue the pertinent guidelines to
implement the provisions of this Rule.

RULE XII
ROLE OF LGUs

Section 1. Role in Anti-Illegal Recruitment and the Overseas Employment Program. In the fight
against illegal recruitment, the local government units (LGUs) and the Department of the Interior and
Local Government (DILG), in partnership with the POEA, other concerned government agencies,
and non-government organizations advocating the rights and welfare of OFWs, shall take a
proactive stance by being primarily responsible for the dissemination of information to their
constituents on all aspects of overseas employment. To carry out this task, the following shall be
undertaken by the LGUs:

a. Launch an aggressive campaign against illegal recruitment. They shall provide legal
assistance to victims of illegal recruitment and, when necessary, coordinate with appropriate
government agencies regarding the arrest and/or prosecution of illegal recruiters. They shall
report any illegal recruitment activity to the POEA for appropriate action.

b. Provide a venue for the POEA, other government agencies, NGOs, and trained LGU
personnel to conduct Pre-Employment Orientation Seminars (PEOS) to their constituents on
a regular basis.

c. Establish OFW help desks or kiosks in their localities with the objective of providing
current information to their constituents on all the processes and aspects of overseas
employment. Such desks or kiosks shall, as far as practicable, be fully computerized and
shall be linked to the database of all concerned government agencies, particularly the POEA
for its updated lists of overseas job orders and licensed agencies in good standing.

d. Establish and maintain a database pertaining to a master list of OFWs residing in their
respective localities, classified according to occupation, job category, civil status, gender, by
 country or state of destination, including visa classification, name, address, and contact
number of the employer.

RULE XIII
REPATRIATION OF WORKERS

Section 1. Primary Responsibility for Repatriation.

The repatriation of the worker or his/her remains, and the transport of his/her personal effects shall
be the primary responsibility of the principal, employer or agency that recruited or deployed him/her
abroad. All costs attendant thereto shall be borne by the principal, employer or the agency
concerned.

Section 2. Obligation to Advance Repatriation Costs.

Notwithstanding the provisions of Section 37-A of the Act, the primary responsibility to repatriate
entails the obligation on the part of the principal or agency to advance the repatriation and other
attendant costs, including plane fare, deployment cost of the principal, and immigration fines and
penalties, to immediately repatriate the worker should the need for it arise, without a prior
determination of the cause of the termination of the worker's employment. However, after the worker
has returned to the country, the principal or agency may recover the cost of repatriation from the
worker if the termination of employment was due solely to his/her fault.

In countries where there is a need to secure an exit visa for the worker's repatriation, the principal or
employer shall be primarily responsible for securing the visa at no cost to the worker. The agency
shall coordinate with the principal or employer in securing the visa.

Every contract for overseas employment shall provide for the primary responsibility of the principal or
employer and agency to advance the cost of plane fare, and the obligation of the worker to refund
the cost thereof in case his/her fault is determined by the Labor Arbiter.

Section 3 Repatriation Procedure.

When a need for repatriation arises and the foreign employer fails to provide for its cost, the POLO
or responsible personnel on-site shall simultaneously notify OWWA and the POEA of such need.
The POEA shall issue a notice requiring the agency concerned to provide, within 48 hours from such
notice, the plane ticket or the prepaid ticket advice (PTA) to the POLO or Philippine Embassy. The
agency shall notify the POEA of such compliance, which shall then inform OWWA of the action of
the agency.

In case there is a need to secure an exit visa for the repatriation of the worker, the employer or
principal shall have fifteen (15) days from notice to secure such an exit visa. Moreover, any agency
involved in the worker's recruitment, processing, and/or deployment shall also coordinate with the
principal or employer in securing the visa.

Section 4. Action on Non-Compliance.

If the employment agency fails to provide the ticket or PTA within 48 hours from receipt of the notice,
the POEA shall suspend the documentary processing of the agency or impose such sanctions as it
may deem necessary. Upon notice from the POEA, OWWA shall advance the costs of repatriation
with recourse to the agency or principal. The administrative sanction shall not be lifted until the
agency reimburses the OWWA of the cost of repatriation with legal interest.

If the principal or employer and/or agency fail to secure the exit visa within a period of fifteen (15)
days from receipt of the POEA notice, the POEA shall suspend the employer or principal from
participating in the overseas employment program, and may impose suspension of documentary
processing on the agency, if warranted.

Section 5. Emergency Repatriation.

The OWWA, in coordination with DFA, and in appropriate situations, with international agencies,
shall undertake the repatriation of workers in cases of war, epidemic, disasters or calamities, natural
or man-made, and other similar events without prejudice to reimbursement by the responsible
principal or agency within sixty (60) days from notice. In such case, the POEA shall simultaneously
identify and give notice to the agencies concerned.

Section 6. Mandatory Repatriation of Underage Migrant Workers. Upon discovery or upon being
informed of the presence of migrant workers whose actual ages fall below the minimum age
requirement for overseas deployment, the responsible officers in the Foreign Service shall without
delay repatriate said workers and advise the DFA through the fastest means of communication
available of such discovery and other relevant information.

In addition to requiring the recruitment/manning agency to pay or reimburse the costs of repatriation,
the POEA shall cancel the license of the recruitment/manning agency that deployed an underage
migrant worker after notice and hearing and shall impose a fine of not less than five hundred
thousand pesos (Php500.000.00) but not more than One million pesos (Php1,000,000.00). The
POEA shall also order the recruitment/manning agency to refund all fees pertinent to the processing
of papers or documents in the deployment, to the underage migrant worker or to his parents or
guardian in a summary proceeding conducted.

The refund shall be independent of and in addition to the indemnification for the damages sustained
by the underage migrant worker. The refund shall be paid within thirty (30) days from the date the
POEA is officially informed of the mandatory repatriation as provided for in the Act.

Section 7. Other Cases of Repatriation.

In all cases where the principal or agency of the worker cannot be identified, cannot be located or
had ceased operations, and the worker is in need and without means, the OWWA personnel at the
jobsite, in coordination with the DFA, shall cause the repatriation in appropriate cases. All costs
attendant to repatriation borne by the OWWA may be charged to the Emergency Repatriation Fund
provided in the Act, without prejudice to the OWWA requiring the agency/employer/insurer or the
worker to reimburse the cost of repatriation.

Section 8. Emergency Repatriation Fund.

When repatriation becomes immediate and necessary, the OWWA shall advance the needed costs
from the Emergency Repatriation Fund without prejudice to reimbursement by the deploying agency
and/or principal, or the worker in appropriate cases. Simultaneously, the POEA shall ask the
concerned agency to work towards reimbursement of costs advanced by the OWWA. In cases
where the cost of repatriation shall exceed One Hundred Million (P100,000,000.00) Pesos, the
OWWA shall make representation with the Office of the President for immediate funding in excess of
said amount.
Section 9. Prohibition on Bonds and Deposits.

In no case shall a private recruitment/manning agency require any bond or cash deposit from the
worker to guarantee performance under the contract or his/her repatriation.

RULE XIV
SHARED GOVERNMENT INFORMATION SYSTEM FOR MIGRATION

Section 1. Composition. An Inter-Agency Committee shall be established to implement a shared

government information system for migration. The Inter-Agency Committee shall be composed of the
following agencies:

a) Department of Foreign Affairs:

b) Department of Labor and Employment and concerned attached agencies;

c) Department of Justice;

d) Department of the Interior and Local Government;

e) Department of Health and concerned attached agencies;

f) Department of Social Welfare and Development;

g) Department of Tourism;

h) Insurance Commission;

i) Commission on Filipinos Overseas;

j) Bureau of Immigration;

k) National Bureau of Investigation;

l) National Telecommunications Commission;

m) Commission on Information and Communications Technology;

n) National Computer Center;

o) National Statistical and Coordination Board;

p) National Statistics Office;

q) Home Development Mutual Fund; and

r) Other government agencies concerned with overseas employment.

Section 2. Availability, Accessibility and Linkaging of Computer Systems. Initially, the Inter-Agency
Committee shall make available to itself the information contained in existing data bases/files of its
member agencies. The second phase shall involve linkaging of computer facilities systems in order
to allow the free-flow data exchanges and sharing among concerned agencies.

Section 3. Chair and Technical Assistance. The Inter-Agency Committee shall be co-chaired by the
Department of Foreign Affairs and the Department of Labor and Employment. The National
Computer Center shall provide the necessary technical assistance and shall set the appropriate
information and communications technology standards to facilitate the sharing of information among
the member agencies.

Section 4. Declassification and Sharing of Existing Information. The Inter-Agency Committee shall
convene to identify existing databases, which shall be declassified and shared among member
agencies. These shared databases shall initially include, but not be limited to, the following
information:

a) Master lists of Filipino migrant workers/overseas Filipinos classified according to

occupation/job category, civil status, by country/state of destination including visa
classification;

b) Inventory of pending legal cases involving Filipino migrant workers and other Filipino
migrant workers and other Filipino nationals, including those serving prison terms;

c) Master list of departing/arriving Filipinos;

d) Statistical profile on Filipino migrant workers/overseas Filipinos/ tourists;

e) Blacklisted foreigners/undesirable aliens;

f) Basic data on legal systems, immigration policies, marriage laws and civil and criminal
codes in receiving countries particularly those with large numbers of Filipinos;

g) List of labor and other human rights instruments where receiving countries are signatories;

h) A tracking system of past and present gender desegregated cases involving male and
female migrant workers, including minors; and

i) List of overseas posts, which may render assistance to overseas Filipinos in general, and
migrant workers, in particular.

j) List of licensed recruiters and recruitment agencies;

k) List of accredited foreign employers;

l) List of recruiters and recruitment agencies with decided/pending

criminal/civil/administrative cases, and their dispositions; and

m) Such other information as may be deemed necessary by the Inter-Agency Committee.

The Inter-Agency Committee shall establish policies, guidelines, and procedures in implementing
this Rule, including declassification of information.
Section 5. Confidentiality of Information. Information and data acquired through this shared
information system shall be treated as confidential and shall only be used for official and lawful
purposes, related to the usual functions of the Inter-Agency Committee members, and for purposes
envisioned by the Act.

Section 6. Regular Meetings. The Inter-Agency Committee shall meet regularly to ensure the
immediate and full implementation of Section 20 of the Act and shall explore the possibility of setting
up a central storage facility for the data on migration. The progress of the implementation shall be
included in the report of the DFA and the DOLE under Section 33 of the Act.

The Inter-Agency Committee shall convene thirty (30) days from effectivity of these Rules to
prioritize the discussion of the following, inter alia: data to be shared, frequency of reporting, and
timeless and availability of data.

Section 7. Secretariat.

A secretariat, which shall provide administrative and support services to the Inter-Agency Committee
shall be based in the DFA.

Section 8. Funds. The Philippine Charity Sweepstakes Office shall allocate an initial amount of P10
Million to carry out the provisions of this Rule. Thereafter, the actual budget of the Inter-Agency
Committee shall be drawn from the General Appropriations Act in accordance with Section 26 of
Republic Act No. 10022.

The E-Government Fund may be tapped for purposes of fund sourcing by the Inter-Agency
Committee.

RULE XV
MIGRANT WORKERS LOAN GUARANTEE FUND

Section 1. Definitions.

(a) Pre-Departure Loans - refer to loans granted to departing migrant workers covered by
new contracts to satisfy their pre-departure requirements such as payments for
placement/processing fees, airplane fare, subsistence allowance, cost of clothing and pocket
money.

(b) Family Assistance Loans - refer to loans granted to currently employed migrant workers
or their eligible dependents/families in the Philippines to tide them over during emergency
situations.

(c) Guarantee Agreement - refers to a contract between the participating financial institution
and OWWA whereby the latter pledges to pay a loan obtained by a migrant worker from the
former in case the worker defaults.

(d) GFIs - refer to government financial institutions.

Section 2. Loan Guarantee Fund.

The Migrant Workers Loan Guarantee Fund is hereby established:

 (a) to prevent any recruiter from taking advantage of workers seeking employment abroad by
expanding the grant of Pre-Departure and Family Assistance Loans to covered migrant
workers;

(b) to establish and operate a guarantee system in order to provide guarantee cover on the
pre-departure and family assistance loans of migrant workers who lack or have insufficient
collateral or securities; and

(c) to ensure the participation of GFIs in extending loan assistance to needy migrant workers
who are to be engaged or is engaged for a remunerated activity abroad.

Section 3. Coverage and Scope.

All departing migrant workers who need financial assistance to pay or satisfy their pre-departure
expenses may avail of the Pre-Departure Loans.

Currently employed migrant workers or their eligible dependents who need emergency financing
assistance may avail of the Family Assistance Loan.

Section 4. Administration of the Fund.

Pursuant to Sec. 21 of the Act, the amount of One Hundred Million pesos (P100,000,000.00) from
the Capital Funds of OWWA shall constitute the Migrant Workers Loan Guarantee Fund. The Fund,
which shall be administered by the OWWA, shall be used exclusively to guarantee the repayment of
Pre-Departure and Family Assistance Loans granted by participating GFIs.

All existing revolving funds earmarked for the Pre-Departure and Family Assistance Loans shall
revert back to the OWWA Capital Fund.

Section 5. Financing Scheme.

The OWWA shall initiate arrangements with GFIs to implement mutually agreed financing schemes,
that will expand the Pre-Departure and Family Assistance Loans.

Section 6. Guarantee Agreement.

No loan shall be considered covered by a guarantee unless a Guarantee Agreement has been
prepared and approved by both the participating financial institution and the OWWA.

RULE XVI
COMPULSORY INSURANCE COVERAGE
FOR AGENCY-HIRED WORKERS

Section 1. Migrant Workers Covered. In addition to the performance bond to be filed by the
recruitment/manning agency under Section 10 of the Act, each migrant worker deployed by a
recruitment/manning agency shall be covered by a compulsory insurance policy which shall be
secured at no cost to the said worker.

Section 2. Policy Coverage.

Such insurance policy shall be effective for the duration of the migrant worker's employment contract
and shall cover, at the minimum:

(a) Accidental death, with at least Fifteen Thousand United States Dollars (US$ 15,000.00)
survivor's benefit payable to the migrant worker's beneficiaries;

(b) Natural death, with at least Ten Thousand United States Dollars (US$ 10,000.00)
survivor's benefit payable to the migrant worker's beneficiaries;

(c) Permanent total disablement, with at least Seven Thousand Five Hundred United States
Dollars (US$7,500) disability benefit payable to the migrant worker. The following disabilities
shall be deemed permanent: total, complete loss of sight of both eyes; loss of two limbs at or
above the ankles or wrists; permanent complete paralysis of two limbs; brain injury resulting
to incurable imbecility or insanity;

(d) Repatriation cost of the worker when his/her employment is terminated by the employer
without any valid cause, or by the employee with just cause, including the transport of his/her
personal belongings. In case of death, the insurance provider shall arrange and pay for the
repatriation or return of the worker's remains. The insurance provider shall also render any
assistance necessary in the transport, including but not limited to, locating a local and
licensed funeral home, mortuary or direct disposition facility to prepare the body for transport,
completing all documentation, obtaining legal clearances, procuring consular services,
providing death certificates, purchasing the minimally necessary casket or air transport
container, as well as transporting the remains including retrieval from site of death and
delivery to the receiving funeral home. This provision shall be without prejudice to the
provisions of Rule XIII of these Rules and Regulations.

(e) Subsistence allowance benefit, with at least One Hundred United States Dollars
(US$100) per month for a maximum of six (6) months for a migrant worker who is involved in
a case or litigation for the protection of his/her rights in the receiving country.

(f) Money claims arising from employer's liability which may be awarded or given to the
worker in a judgment or settlement of his/her case in the NLRC. The insurance coverage for
money claims shall be equivalent to at least three (3) months salaries for every year of the
migrant worker's employment contract;

(g) Compassionate visit. When a migrant worker is hospitalized and has been confined for at
least seven (7) consecutive days, he shall be entitled to a compassionate visit by one (1)
family member or a requested individual. The insurance company shall pay for the
transportation cost of the family member or requested individual to the major airport closest
to the place of hospitalization of the worker. It is, however, the responsibility of the family
member or requested individual to meet all visa and travel document requirements;

(h) Medical evacuation. When an adequate medical facility is not available proximate to the
migrant worker, as determined by the insurance company's physician and a consulting
physician, evacuation under appropriate medical supervision by the mode of transport
necessary shall be undertaken by the insurance provider; and

(i) Medical repatriation. When medically necessary as determined by the attending physician,
repatriation under medical supervision to the migrant worker's residence shall be undertaken
by the insurance provider at such time that the migrant worker is medically cleared for travel
by commercial carrier. If the period to receive medical clearance to travel exceeds fourteen
 (14) days from the date of discharge from the hospital, an alternative appropriate mode of
transportation, such as air ambulance, may be arranged. Medical and non-medical escorts
may be provided when necessary. This provision shall be without prejudice to the provisions
of Rule XIII of these Rules and Regulations.

Section 3. Duty to Disclose and Assist. It shall be the duty of the recruitment/manning agency, in
collaboration with the insurance provider, to sufficiently explain to the migrant worker, before his/her
departure, and to at least one of his/her beneficiaries the terms and benefits of the insurance
coverage, including the claims procedure.

Also, in filing a claim with the insurance provider, it shall be the duty of the recruitment/manning
agency to assist the migrant worker and/or the beneficiary and to ensure that all information and
documents in the custody of the agency necessary for the claim must be readily accessible to the
claimant.

Section 4. Qualification of Insurance Companies. Only reputable private insurance companies duly
registered with the (IC), which are in existence and operational for at least five (5) years, with a net
worth of at least Five Hundred Million Pesos (Php500,000,000.00) to be determined by the IC, and
with a current year certificate of authority shall be qualified to provide for the worker's insurance
coverage. Insurance companies who have directors, partners, officers, employees or agents with
relatives, within the fourth civil degree of consanguinity or affinity, who work or have interest in any of
the licensed recruitment/manning agencies or in any of the government agencies involved in the
overseas employment program shall be disqualified from providing this workers' insurance coverage.
It shall be the duty of the said directors, partners, officers, employees or agents to disclose any such
interest to the IC and POEA.

Section 5. Requirement for Issuance of OEC. The recruitment/manning agency shall have the right
to choose from any of the qualified insurance providers the company that will insure the migrant
worker it will deploy. After procuring such insurance policy, the recruitment/manning agency shall
provide an authenticated copy thereof to the migrant worker. It shall then submit the certificate of
insurance coverage of the migrant worker to POEA as a requirement for the issuance of Overseas
Employment Certificate (OEC) to the migrant worker. In the case of seafarers who are insured under
policies issued by foreign insurance companies, the POEA shall accept certificates or other proofs of
cover from recruitment/manning agencies: Provided, that the minimum coverage under sub-
paragraphs (a) to (i) are included therein. For this purpose, foreign insurance companies shall
include entities providing indemnity cover to the vessel.

Section 6. Notice of Claim. Any person having a claim upon the policy issued pursuant to
subparagraphs (a), (b), (c), (d) and (e) of Section 2 of this Rule shall present to the insurance
company concerned a written notice of claim together with pertinent supporting documents. The
insurance company shall forthwith ascertain the truth and extent of the claim and make payment
within ten (10) days from the filing of the notice of claim.

Section 7. Documentary Requirements for Accidental or Natural Death or Disablement Claims. Any
claim arising from accidental death, natural death or permanent total disablement under Section 2
(a), (b) and (c) shall be paid by the insurance company without any contest and without the
necessity of proving fault or negligence of any kind on the part of the insured migrant worker:
Provided the following documents, duly authenticated by the Philippine foreign posts, shall be
sufficient evidence to substantiate the claim:

(1) Death Certificate - in case of natural or accidental death;

 (2) Police or Accident Report - in case of accidental death; and

(3) Medical Certificate - in case of permanent disablement.

In case of a seafarer, the amounts provided in Section 2 (a), (b), or (c), as the case may be shall,
within ten (10) days from submission of the above-stated documents, be paid by the foreign
insurance company through its Philippine representative to the seafarer/beneficiary without any
contest and without any necessity of proving fault or negligence on the part of the seafarer. Such
amount received by the seafarer/beneficiary may be entitled to under the provisions of the POEA-
Standard Employment Contract or collective bargaining agreement (CBA). Any claim in excess of
the amount paid pursuant to the no contest, no fault or negligence provision of this section shall be
determined in accordance with the POEA-SEC or CBA.

Section 8. Documentary Requirement for Repatriation Claim. For repatriation under subparagraph
(d) of Section 2 of this Rule , a certification which states the reason/s for the termination of the
migrant worker's employment and the need for his/her repatriation shall be issued by the Philippine
foreign post or the Philippine Overseas Labor Office (POLO) located in the receiving country. Such
certification shall be solely for the purpose of complying with this section.

Section 9. Documentary Requirements for Subsistence Allowance Benefit Claim. For subsistence
allowance benefit under sub-paragraph (e) of Section 2 of this Rule, the concerned Labor Attaché or,
in his absence, the embassy or consular official shall issue a certification which states the name of
the case, the names of the parties and the nature of the cause of action of the migrant worker.

Section 10. Settlement of Money Claims. For the payment of money claims under sub-paragraph (f)
of Section 2 of this Rule, the following rules shall govern:

(1) After a decision has become final and executory or a settlement/compromise agreement
has been reached between the parties at the NLRC, the Labor Arbiter shall, motu proprio or
upon motion, and following the conduct of pre-execution conference, issue a writ of
execution mandating the respondent recruitment/manning agency to pay the amount
adjudged or agreed upon within thirty (30) days from receipt thereof;

(2) The recruitment/manning agency shall then immediately file a notice of claim with its
insurance provider for the amount of liability insured, attaching therewith a copy of the
decision or compromise agreement;

(3) Within ten (10) days from the filing of notice of claim, the insurance company shall make
payment to the recruitment/manning agency the amount adjudged or agreed upon, or the
amount of liability insured, whichever is lower. After receiving the insurance payment, the
recruitment/manning agency shall immediately pay the migrant worker's claim in full, taking
into account that in case the amount of insurance coverage is insufficient to satisfy the
amount adjudged or agreed upon, it is liable to pay the balance thereof;

(4) In case the insurance company fails to make payment within ten (10) days from the filing
of the claim, the recruitment/manning agency shall pay the amount adjudged or agreed upon
within the remaining days of the thirty-day period, as provided in the first sub-paragraph
hereof;

(5) If the worker's claim was not settled within the aforesaid thirty-day period, the
recruitment/manning agency's performance bond or escrow deposit shall be forthwith
garnished to satisfy the migrant worker's claim;
 (6) The provision of compulsory worker's insurance under this section shall not affect the
joint and several liability of the foreign employer and the recruitment/manning agency under
Section 10 of the Act;

(7) Lawyers for the insurance companies, unless the latter are impleaded, shall be prohibited
to appear before the NLRC in money claims cases under Rule VII.

Section 11. Disputes in the Enforcement of Insurance Claims. Any question or dispute in the
enforcement of any insurance policy issued under this Rule shall be brought before the IC for
mediation or adjudication.

Notwithstanding the preceding paragraph, the NLRC shall have the exclusive jurisdiction to enforce
against the recruitment/manning agency its decision, resolution or order, that has become final and
executory or a settlement/compromise agreement reached between the parties.

Section 12. Liability of Recruitment/Manning Agency. In case it is shown by substantial evidence

before the POEA that the migrant worker who was deployed by a licensed recruitment/manning
agency has paid for the premium or the cost of the insurance coverage or that the said insurance
coverage was used as basis by the recruitment/manning agency to claim any additional fee from the
migrant worker, the said licensed recruitment/manning agency shall lose its license and all its
directors, partners, proprietors, officers and employees shall be perpetually disqualified from
engaging in the business of recruitment of overseas workers. Such penalty is without prejudice to
any other liability which such persons may have incurred under existing laws, rules or regulations.

Section 13. Foreign Employers Guarantee Fund. For migrant workers recruited by the POEA on a
government-to-government arrangement, the POEA Foreign Employers Guarantee Fund referred to
under Section 5, Rule X of these Rules shall be answerable for the workers' monetary claims arising
from breach of contractual obligations.

Section 14. Optional Coverage. For migrant workers classified as rehires, name hires or direct hires,
they may opt to be covered by this insurance coverage by requesting their foreign employers to pay
for the cost of the insurance coverage or they may pay for the premium themselves. To protect the
rights of these workers, the DOLE and POEA shall provide them adequate legal assistance,
including conciliation and mediation services, whether at home or abroad.

Section 15. Formulation of Implementing Rules and Regulations. Within thirty (30) days from the
effectivity of these Rules, and pursuant to Section 37-A of the Act, the IC, as the lead agency, shall,
together with DOLE, NLRC, and POEA, in consultation with the recruitment/manning agencies and
legitimate non-government organizations advocating the rights and welfare of OFWs, issue the
necessary implementing rules and regulations, which shall include the following:

1. Qualifications of participating insurers;

2. Accreditation of insurers;

3. Uniform Standard Policy format;

4. Premium rate;

5. Benefits;
 6. Underwriting Guidelines;

7. Claims procedure;

8. Dispute settlement;

9. Administrative monitoring and supervision; and

10. Other matters deemed necessary.

Within five (5) days from effectivity of these Rules, the IC shall convene the inter-agency committee
to commence the formulation of the aforesaid necessary rules and regulations.

Section 16. Assessment of Performance of Insurance Providers. At the end of every year, the DOLE
and the IC shall jointly make an assessment of the performance of all insurance providers, based
upon the report of NLRC and POEA on their respective interactions and experiences with the
insurance companies, and they shall have the authority to ban or blacklist such insurance
companies which are known to be evasive or not responsive to the legitimate claims of migrant
workers. The DOLE shall include such assessment in its year-end report to Congress.

Section 17. Automatic Review. The foregoing provisions on mandatory insurance coverage shall be
subject to automatic review through the Congressional Oversight Committee immediately after three
(3) years from the effectivity of the Act in order to determine its efficacy in favor of the covered
OFWS and the compliance by recruitment/manning agencies and insurance companies, without
prejudice to an earlier review if necessary and warranted for the purpose of modifying, amending
and/or repealing these subject provisions.

RULE XVII
MISCELLANEOUS PROVISIONS

Section 1. POEA, OWWA, and other Boards. Notwithstanding any provision of law to the contrary,
the respective boards of the POEA and the OWWA shall have three (3) members each who shall
come from the women, sea-based and land-based sectors respectively, to be selected and
nominated openly by the general membership of the sector being represented.

The selection and nomination of the additional members from the women, sea-based and land-
based sectors shall be governed by the following guidelines:

(a) The POEA and OWWA shall launch a massive information campaign on the selection of
nominees and provide for a system of consultative sessions for the certified leaders or
representatives of the concerned sectors, at least three (3) times, within ninety days (90)
before the Boards shall be convened, for purposes of selection. The process shall be open,
democratic and transparent.

(b) Only non-government organizations that protect and promote the rights and welfare of
overseas Filipino workers, duly registered with the appropriate Philippine government agency
and in good standing as such, and in existence for at least three (3) years prior to the
nomination shall be qualified to nominate a representative for each sector to the Board;
 (c) The nominee must be at least 25 years of age, able to read and write, and a migrant
worker at the time of his/her nomination or was a migrant worker with at least three (3) years
experience as such;

(d) A Selection and Screening Committee shall be established within the POEA and OWWA
by the Secretary of Labor and Employment to formulate the procedures on application,
screening and consultation, and shall be responsible to provide the list of qualified nominees
to the respective Governing Boards; and

(e) The final list of all the nominees selected by the OWWA/POEA Governing Boards, which
shall consist of three (3) names for each sector to be represented, shall be submitted to the
President and published in a newspaper of general circulation.

Incumbent representatives appointed pursuant to this section and who are eligible for re-
appointment shall be automatically included in the list referred to under subsection (d).

Within thirty (30) days from the submission of the final list referred to under subsection (e), the
President shall select and appoint from the list the representatives to the POEA/OWWA Governing
Boards.

The members shall have a term of three (3) years and shall be eligible for reappointment for another
three (3) years. In case of vacancy, the President shall, in accordance with the provisions of the Act,
appoint a replacement who shall serve the unexpired term of his/her predecessor.

All other government agencies and government-owned or controlled corporations which require at
least one (1) representative from the overseas workers sector to their respective boards shall follow
all the applicable provisions of this section, subject to the respective Charters, Implementing Rules
and Regulations, and internal policies of such agencies and corporations.

The existing members of the Governing Boards of POEA and OWWA representing the women, land-
based, or sea-based sectors shall serve the remaining portion of their three-year terms. Thereafter,
their positions shall be deemed vacant, and the process of selection of their replacement shall be in
accordance with this section. If the incumbent is eligible for re-appointment, he/she shall continue to
serve until re-appointed or another person is appointed in accordance with this section.

Incumbent representatives in the Governing Board with no fixed term shall remain in holdover
capacity, until a replacement is appointed in accordance with this section.

Section 2. Report to Congress. In order to inform the Philippine Congress on the implementation of
the policy enunciated in Section 4 of the Act, the DFA and the DOLE shall submit separately to the
said body a semi-annual report of Philippine foreign posts located in, or exercising consular
jurisdiction over, countries receiving Filipino migrant workers. The mid-year report covering the
period January to June shall be submitted not later than October 31 of the same year while the year-
end report covering the period July to December shall be submitted not later than May 31 of the
following year. The report shall include, but shall not be limited to, the following information:

(a) Master list of Filipino migrant workers, and inventory of pending cases involving them and
other Filipino nationals including those serving prison terms;

(b) Working conditions of Filipino migrant workers;

 (c) Problems encountered by the migrant workers, specifically violations of their rights;

(d) Initiatives/actions taken by the Philippine foreign posts to address the problems of Filipino
migrant workers;

(e) Changes in the laws and policies of host countries; and

(f) Status of negotiations on bilateral labor agreements between the Philippines and the
receiving country.

Section 3. Effect on Failure to Report. Any officer of the government who has the legal duty to
report, yet fails to submit the aforesaid Report to Congress, without justifiable cause, shall be subject
to an administrative penalty of dismissal from the service with disqualification to hold any appointive
public officer for five (5) years.

Section 4. Government Fees, Administrative Costs and Taxes. All fees for services being charged
by any government agency on migrant workers prevailing at the time of the effectivity of this Rule
shall not be increased. All other services rendered by the DOLE and other government agencies in
connection with the recruitment and placement of and assistance to migrant workers shall be
rendered free. The administrative cost thereof shall not be borne by the worker.

The migrant worker shall be exempt from the payment of travel tax and airport fee upon proper
showing of the Overseas Employment Certificate (OEA) issued by the POEA.

The remittances of all OFWs, upon showing of the OEC or valid OWWA Membership Certificate by
the OFW beneficiary or recipient, shall be exempt from the payment of documentary stamp tax
(DST) as imposed under Section 181 of the National Internal Revenue Code, as amended.

In addition to the original copy, a duplicate copy or a certified true copy of the valid proof of
entitlement referred to above shall be secured by the OFW from the POEA or OWWA, which shall
be held and used by his/her beneficiary in the availment of the DST exemption.

In case of OFWs whose remittances are sent through the banking system, credited to beneficiaries
or recipient's account in the Philippines and withdrawn through an automatic teller machine (ATM), it
shall be the responsibility of the OFW to show the valid proof of entitlement when making
arrangement that for his/her remittance transfers.

A proof of entitlement that is no longer valid shall not entitle an OFW to DST payment exemption.

The Bureau of Internal Revenue (BIR), under the Department of Finance, may promulgate revenue
regulations deemed to be necessary and appropriate for the effective implementation of the
exemption of OFWs from DST and travel tax.

Section 5. Establishment of the Congressional Migrant Workers Scholarship Fund.

There is hereby created a Congressional Migrant Workers Scholarship Fund which shall benefit
deserving migrant workers and/or their immediate descendants who intend to pursue courses or
training primarily in the field of science and technology, as defined by the DOST.

The fund of One Hundred Fifty Million Pesos (P150,000,000.00) shall be sourced from the proceeds
of Lotto draws.
Section 6. Creation of the Scholarship Fund Committee. There is hereby created a Scholarship
Fund Committee to be composed of representatives from the DOLE, DOST, POEA, OWWA, TESDA
and two (2) representatives of migrant workers to be appointed by the Secretary of Labor and
Employment.

Section 7. Functions of the Scholarship Fund Committee.

(a) To set the coverage, criteria and standards of admission to the Scholarship Program;

(b) To determine the amount of availment;

(c) To monitor and evaluate the program;

(d) To identify/accredit training and testing institutions; and

(e) To perform such other functions necessary to attain the purpose of the Fund.

Section 8. Implementing Agency. The OWWA shall be the Secretariat of the Scholarship Fund
Committee. As such, it shall administer the Scholarship Program, in coordination with the DOST.

RULE XVIII
FUNDING

Section 1. Sources of Funds. The departments, agencies, instrumentalities, bureaus, offices and
government-owned and controlled corporations charged with carrying out the provisions of the Act
shall include in their respective programs the implementation of the Act, the funding of which shall be
included in the General Appropriations Act.

RULE XIX
MIGRANT WORKERS DAY

Section 1. Commemoration. The DOLE shall lead and enlist the cooperation of other government
agencies in the commemoration of a Migrant Workers Day on 7 June of every year.

RULE XX
TRANSITORY PROVISIONS

Section 1. Applicability of Criteria for Receiving Countries. In compliance with Section 4 of the Act,
the DFA shall, within 90 days from effectivity of these Rules and Regulations, issue the certification
for countries where the Philippines maintains an embassy.

In countries where the Philippine Embassy exercises concurrent jurisdiction and where the
Ambassador is non-resident, the DFA shall have one hundred twenty days (120) from the effectivity
of these Rules to issue the certification required in Section 4 of the Act. Prior to the expiration of the
aforesaid period, the secretary of Foreign Affairs, in consultation with the Secretary of Labor and
Employment, shall allow the reasonable extension of the period for the issuance of the certification
upon a determination that there is a need therefor.

Pending the issuance of the required certifications of compliance or determinations of non-

compliance and within the periods mentioned in the preceding paragraphs, the deployment of
migrant workers overseas shall proceed on a status quo basis.
For purposes of issuance of the certifications, the DFA shall, in consultation with the POEA, issue a
standard format to be accomplished by all Foreign Service posts.

Section 2. Effectivity of Compulsory Insurance Requirement. All OFWs who were issued Overseas
Employment Certificates prior to the effectivity of the necessary rules and regulations referred to
under Section 15 of Rule XVI shall not be covered by the compulsory insurance requirement.

RULE XXI
FINAL PROVISIONS

Section 1. Repealing Clause. All Department Orders, Circulars and implementing Rules and
Regulations inconsistent with these Omnibus Rules and Regulations are hereby repeated or
amended accordingly.

Section 2. Effectivity. - The provisions of these Rules and Regulations shall take effect fifteen days
(15) after publication in two (2) newspapers of general circulation.
 POEA RULES AND REGULATIONS GOVERNING OVERSEAS
EMPLOYMENT

BOOK I
GENERAL POLICY

RULE I
GENERAL STATEMENT OF POLICY

It shall be the policy of the Administration to:

a. Promote and develop overseas employment opportunities in cooperation
with relevant government institutions and the private sector;
b. Establish the environment conducive to the continued operations of
legitimate, responsible and professional private agencies;
c. Afford protection to Filipino workers and their families, promote their
interests and safeguard their welfare; and
d. Develop and implement programs for the effective monitoring of returning
contract workers promoting their re-training and re-employment of their
smooth re-integration into the mainstream of the national economy.
RULE II
DEFINITION OF TERMS

For purposes of these Rules, the following terms are defined as follows:
a. Administration – the Philippine Overseas Employment Administration
(POEA).
b. Administrator – the Administrator of the POEA.
c. Agency – A private employment or a manning agency as defined herein.
d. Allottee – any person named or designated by the overseas contract
workers as the recipient of his remittance to the Philippines.
e. Balik-Manggagawa (Vacationing Worker) – a land-based contract worker
who is on a vacation or on an emergency leave and who is returning to the
same worksite to resume his employment.
f. Beneficiary – the person/s to whom compensation benefits due under an
overseas employment contract are payable by operation of law or those to
whom proceeds of a life or accident insurance are likewise payable.
g. Center – the POEA Regional Center in Cebu and such other regional centers
as may hereinafter be established.
h. Code – the Labor Code of the Philippines, as amended.
i. Collective Bargaining Agreement – the negotiated contract between a
legitimate labor organization and the employer concerning wages, hours of
work and all other terms and conditions of employment in a bargaining unit,
including mandatory provisions for grievance and arbitration machineries.
j. Contract Worker – any person working or who has worked overseas under
a valid employment contact.
k. Department – the Department of Labor and Employment (DOLE).
l. Directorate – the executive body of the Administration composed of its
Administrator, Deputy Administrators and Directors as defined herein.
m. Director-LRO – the Director of the Licensing and Regulation Office.
n. Director-PSO – the Director of the Pre-Employment Services Office.
o. Director-AO – the Director of the Adjudication Office.
p. Director WEO – the Director of the Welfare and Employment Office.
q. Employer – any person, partnership or corporation, whether local or foreign,
directly engaging the services of Filipino workers overseas.
r. Foreign Exchange (Forex) Earnings – the earnings in terms of US dollars
(US$) or any other acceptable foreign currency of overseas workers and
agencies.
s. Governing Board – the policy-making body of the Administration.
t. Government-to-Government Hiring – recruitment and placement of Filipino
workers by foreign government ministries or instrumentalities through the
Administration.
u. Job Fair – an activity conducted outside of an agency’s authorized business
address whereby applicants are oriented on employment opportunities and
benefits provided by foreign principals and employers.
v. License – a document issued by the Secretary authorizing a person,
partnership or corporation to operate a private employment agency or a
manning agency.
w. Manning Agency – any person, partnership or corporation duly licensed by
the Secretary to recruit seafarers for vessel plying international waters and
for related maritime activities.
x. Manning Agreement – an agreement entered into by and between the
principal and the licensed manning agency defining the responsibilities of both
parties with respect to the employment of ship personnel for their enrolled
vessels.
y. Commission – the National Labor Relation Commission.
z. Name Hire – a worker who is able to secure employment overseas on his
own without the assistance or participation of any agency.
aa. Non-Licensee – any person, partnership or corporation who has not been
issued a valid license to engage in recruitment and placement, or whose
license has been suspended, revoked or cancelled.
bb. One-Stop Processing Center – an inter-agency servicing body designed to
facilitate the documentation of contract workers.
cc. Overseas Employment – employment of a worker outside the Philippines
including employment on board vessels plying international waters, covered
by a valid employment contract.
dd. Philippine Shipping Company – any person, partnership or corporation
registered under the laws of the Philippines and duly accredited to engage in
overseas shipping activities by the Maritime Industry Authority (MARINA).
ee. Philippine Registered Vessel – vessels duly registered in the Philippines.
ff. Placement Fee – the amount charged by a private employment agency from
a worker for its services in securing employment.
gg. Principal – any foreign person, partnership or corporation hiring Filipino
workers through an agency.
hh. Private Employment Agency – any person, partnership or corporation
engaged in the recruitment and placement of workers for a fee which is
charged, directly or indirectly, from the workers or employees or both.
ii. Recruitment Agreement – the agreement entered into by and between the
foreign principal and the licensed private employment agency defining the
responsibilities of both parties with respect to the employment of workers for
their overseas projects.
jj. Recruitment and Placement – any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers and includes referrals,
contract services, promising or advertising for employment, locally or abroad,
whether for profit or not; provided, that any person or entity which, in any
manner, offers or promises for a fee employment to two or more persons shall
be deemed engaged in recruitment and placement.
kk. Regional Director – the head of the Regional Offices of the Department.
ll. Regional Extension Unit – the field offices of the Administration in
designated regions in the Philippines.
mm. Regional labor Center (RLC) – the regional field office of the
Administration.
nn. Regional Offices – the regional office of the Department of Labor and
Employment.
oo. Remittance – the amount or portion of the foreign exchange earnings sent
by the worker to the Philippines.
pp. Secretary – the Secretary of Labor and Employment.
qq. Service Fee – the amount charged by a licensee from its foreign employer-
principal as payment for actual services rendered in relation to the recruitment
and employment of workers for said principal.
rr. Valid Employment Contract – a written agreement entered into by and
between the employer and/or the local agency and the overseas contract
worker containing the terms and conditions of employment that are in
consonance with the master employment contract as approved by the
Administration.
ss. Verification – the action of labor attaché or any other officer designated by
the Secretary of Labor and Employment in the Philippine Embassy or
Consulate, in reviewing employment documents of Filipino nationals with the
view to establish the existence of the employing company, its ability to hire
workers at the prescribed rates, at desirable working conditions consistent
with the standards prescribed by the Administration and terms and conditions
prevailing in the country of employment.
BOOK II
LICENSING AND REGULATION
RULE I
PARTICIPATION OF THE PRIVATE SECTOR IN THE OVERSEAS EMPLOYMENT
PROGRAM

Section 1. Qualifications for Participation in the Overseas Employment

Program. - Only applicants who possess the following qualifications may be
permitted to participate in the overseas employment program:
a. Filipino citizens, partnerships or corporations at least seventy five percent
(75%) of the authorized and voting capital stock of which is owned and
controlled by Filipino citizens;

b. A minimum capitalization of One Million Pesos (P1,000,000.00) in case of a

single proprietorship or partnership and a minimum paid-up capital of One
Million Pesos (1,000,000.00) in case of a corporation; and

c. Those not otherwise disqualified by law or these guidelines to engage in the

recruitment and placement of workers for overseas employment.
Section 2. Disqualifications. - The following are not qualified to participate in
the recruitment and placement of Filipino workers overseas:
a. Travel agencies and sales agencies of airline companies;

b. Officers or members of the Board of any corporation or members in a

partnership engaged in the business of a travel agency;

c. Corporations and partnerships, when any of its officers, members of the

board or partners, is also an officer, member of the board of partner of a
corporation or partnership engaged in the business of a travel agency;

d. Persons, partnerships or corporations which have derogatory records such

as, but not limited to overcharging of placement or documentation fees, false
documentation, illegal recruitment and swindling or estafa, or those convicted
of crimes involving moral turpitude;

e. Persons employed in the Department or in other government offices directly

involved in the overseas employment program, and their relatives within the
fourth degree of consanguinity or affinity; and

f. Persons, partners, officers and Directors of corporations whose license has

been previously cancelled or revoked for violation of the Labor Code, or its
implementing rules, or other relevant laws, decrees, rules and regulations,
and issuances.
RULE II
ISSUANCE OF LICENSE

Section 1. Requirements for Issuance of License. - Every applicant for license

to operate a private employment agency or manning agency shall submit a
written application together with the following requirements:
a. A certified copy of the Articles of Incorporation or of Partnership duly
registered with the Securities and Exchange Commission (SEC), in the case of
corporation or partnership or Certificate of Registration of firm or business
name with the Bureau of Domestic Trade (BDT) in the case of a single
proprietorship;
b. Proof of financial capacity: In the case of a single proprietorship or
partnership, verified income tax returns for the past two (2) years and a bank
certificate of a cash deposit of P250,000.00, provided that the applicant should
submit an authority to examine such bank deposit.
In the case of a newly organized corporation, submission of a bank certificate
of a cash deposit of at least P250,000.00 with authority to examine the
same. For an existing corporation, submission of a verified financial
statement, corporate tax returns for the past two (2) years and bank
certification of a cash deposit of at least P250,000.00 with the corresponding
authority to examine such deposit.
c. Escrow agreement in the amount of P200,000.00 with an accredited
reputable banking corporation to primarily answer for valid and legal claims
of recruited workers as a result of recruitment violations or money claims;
d. Clearance of all members of the Board of Directors, partner, or proprietor
of the applicant agency from the National Bureau of Investigation (NBI) and
other government agencies as the need may require, Fiscal’s clearance in case
of persons with criminal cases; provided that where the member or partner
concerned is a foreigner, clearance from his country of origin shall be
acceptable;
e. Proof of marketing capability;

For land-based applicants:

An applicant with an actual principal/foreign employer to be serviced, shall at

the time of application submit the following documents for evaluation:

(1) A duly executed Special Power of Attorney authenticated by the Philippine

Embassy/Consulate or Labor Attache in the place where the
principal/employers hold their office; or
(2) A concluded service/recruitment agreement authenticated by the
Philippine Embassy/Consulate, or Labor Attache in the place where the
project/job site is located;

(3) An authenticated manpower mobilization request or visa approval of not

less than fifty (50) workers for deployment within a period not exceeding six
(6) months from issuance of approved license;

An applicant who, at the time of application is unable to present a foreign

principal/employer shall, upon compliance with all other licensing
requirements as herein provided, be issued a provisional license, subject to
submission of a verified undertaking to deploy at least fifty (50) workers,
exclusive of direct hired, within a period not exceeding six (6) months from
date of issuance of provisional license. It is understood that failure to comply
with this undertaking shall result in the automatic revocation of the provisional
license.

For manning applicants:

(1) A duly executed Special Power of Attorney authenticated by the Philippine
Embassy/Consulate or Labor Attache in place where the vessel
owners/operators/manager hold their principal office; or

(2) A duly concluded manning agreement authenticated by the Philippine

Embassy, Consulate, or Labor Attache in the place where the
vessel/owners/operators/ manager hold their principal office;

(3) A manpower mobilization request of not less than fifty (50) seafarers for
deployment within a period not exceeding six (6) months from issuance of
approved license.
f. A verified undertaking stating that the applicant:
(1) Shall select only medically and technically qualified recruits;

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

(3) Shall assume joint and solidary liability with the employer for all claims
and liabilities which may arise in connection with the implementation of the
contract, including but not limited to payment of wages, death and disability
compensation and repatriation;

(4) Shall guarantee compliance with the existing labor and social legislations
of the Philippines and of the country of employment of recruited workers; and

(5) Shall assume full and complete responsibility for all acts of its officials,
employees and representatives done in connection with recruitment and
placement;
g. List of all officials and personnel involved in the recruitment and placement,
together with their appointment, bio-data and two (2) copies of their passport-
size pictures.
h. Copy of contract of lease or proof of building ownership together with office
address.
Section 2. Action on the Application. - Within thirty (30) calendar days from
receipt of application or requirements including proof of payment of a non-
refundable filing fee of P5,000.00, the Administration shall evaluate pertinent
documents of the applicant, inspect the offices and equipment and
recommend to the Secretary the approval or denial of the application.
Section 3. Issuance of License. - The Administration shall recommend to the
Secretary issuance of the corresponding license upon due evaluation and
compliance with licensing requirements and operational standards.
Section 4. Payment of Fees and Posting of Bonds. - Upon approval of the
application, the applicant shall pay a license fee of P30,000.00. It shall also
post a cash bond of P100,000.00 and a surety bond of P50,000.00 from a
bonding company acceptable to the Administration and duly accredited by the
Insurance Commission. The bonds shall answer for all valid and legal claims
arising from violations of the conditions for the grant and use of the license,
and/or accreditation and contracts of employment. The bonds shall likewise
guarantee compliance with the provisions of the Code and its implementing
rules and regulations relating to recruitment and placement, the Rules of the
Administration and relevant issuances of the Department and all liabilities
which the Administration may impose. The surety bonds shall include the
condition “that notice to the principal is notice to the surety and that any
judgment against the principal in connection with matters falling under POEA’s
jurisdiction shall be binding and conclusive on the surety. The surety bonds
shall be co-terminus with the validity period of the license.
Section 5. Validity of License. - Every license shall be valid for at least two
(2) years from the date of issuance unless sooner cancelled or revoked by the
Secretary or suspended by the Administration for violation of the Code and its
rules and relevant decrees, orders and issuances and other rules and
regulations of the Department. Such license shall be valid only at the place/s
stated therein and when used by the licensed person, partnership or
corporation.
Section 6. Non-Transferability of License. - No license shall be transferred,
conveyed or assigned to any person, partnership or corporation. It shall not
be used directly or indirectly by any person, partnership or corporation other
than the one in whose favor it was issued. Violation shall cause automatic
revocation of license.
In case of death of the sole proprietor, and in order to prevent disruption of
operation and so as not to prejudice the interest of legitimate heirs, the
licensed single proprietorship may be allowed to continue only for the purpose
of winding up its business operation.
Section 7. Change of Ownership/Relationship of Single Proprietorship or
Partnership. - Transfer or change of ownership of a single proprietorship
licensed to engage in overseas employment shall cause the automatic
revocation of the license. The new owner shall be required to apply for a
license in accordance with these Rules.
A change in the relationship of the partners in a partnership duly licensed to
engage in overseas employment which materially interrupts the course of the
business or results in the actual dissolution of the partnership shall likewise
cause the automatic revocation of the license.
Section 8. Upgrading of Single Proprietorship or Partnerships. - License
holders which are single proprietorships or partnerships may, subject to the
guidelines of the Administration, convert into corporation for purposes of
upgrading or raising their capabilities to respond adequately to
developments/changes in the international labor market and to enable them
to better comply with their responsibilities arising from the recruitment and
deployment of workers overseas.
The approval of merger, consolidation or upgrading shall automatically revoke
or cancel the licenses of the single proprietorships, partnerships or
corporations so merged, consolidated or upgraded.
Section 9. Change of Directors of Corporation. - Every change in the
composition of the Board of Directors of a corporation licensed to participate
in overseas employment shall be registered with the Administration within
thirty (30) calendar days from the date the change was decided or
approved. The corporation shall be required to submit to the Administration
the Minutes of Proceedings duly certified by the SEC, the bio-data and
clearances of the new members of the Board from the government agencies
identified in Section 1 (e) of this Rule.
Section 10. Change of Other Officers and Personnel. - Every change or
termination of appointment of officers, representatives and personnel shall be
registered with the Administration within thirty (30) calendar days from the
date of such change.
The Administration reserves the right to deny the appointment of officers and
employees who were directly involved in recruitment irregularities.
Section 11. Appointment of Representatives. - Every appointment of
representatives or agents of licensed agency shall be subject to prior approval
or authority of the Administration.

The approval may be issued upon submission of or compliance with the

following requirements:
a. Proposed appointment or special power of attorney;

b. Clearances of the proposed representative or agent from NBI;

c. A 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 placement of workers;
Section 12. Publication of Change of Directors/Other Officers and Personnel/
Revocation or Amendment of Appointment of Representatives. - In addition to
the requirement of registration with and submission to the Administration,
every change in the membership of the Board of Directors,
resignation/termination of other officers and personnel, revocation or
amendment of appointment of representatives shall be published at least once
in a newspaper of general circulation, in order to bind third parties. Proof of
such publication shall be submitted to the Administration
Section 13. Transfer of Business Address and Studio. - Any transfer of
business address shall be effected only with prior authority or approval of the
Administration. The approval shall be issued only upon formal notice of the
intention to transfer with the following attachments:
a. Copy of the company’s notice to the BDT or the SEC on the transfer of
business address;

b. In the case of a corporation, a Board Resolution duly registered with the

SEC authorizing the transfer of business address;

c. In the case of a single proprietorship, a copy of the BDT’s acknowledgment

of the notice to transfer; and

d. Copy of the contract of lease or proof of building ownership.

The new office shall be subject to the normal ocular inspection procedures by
duly authorized representatives of the Administration.
A notice to the public of the new address shall be published in a newspaper of
general circulation.
Section 14. Establishment of Executive Office. - The establishment of an
executive office outside of the registered address shall be effected only with
prior approval or authority of the Administration. The approval may be issued
upon submission of an affidavit of undertaking to the effect that no
recruitment activity whatsoever shall be conducted thereat and that the
agency has a valid contract of lease or building ownership.
Section 15. Establishment of Branch and Extension Offices. - Branch and
extension offices may be established in areas approved by the Secretary,
subject to implementing guidelines.
Section 16. Conduct of Recruitment Outside of Registered Office, Branch or
Extension Office. - No licensed agency shall conduct any provincial
recruitment, job fairs or recruitment activities of any form outside of the
address stated in the license, acknowledged Branch or Extension Office or
without first securing prior authority from the Administration of the Center.
Section 17. Renewal of License. - An agency shall submit an application for
the renewal thereof to the Administration. Such application shall be supported
by the following documents:
a. Proof of foreign exchange earnings issued by the Central Bank;

b. Surety bond duly renewed or revalidated;

c. Escrow agreement in the amount of P200,000.00 with an accredited

reputable banking corporation to primarily answer for valid and legal claims
of recruited workers as a result of recruitment violations or money claims;

d. Replenishment of the cash bond in case such or any part thereof is

garnished;

e. Proof of financial capacity such as but not limited to verified financial

statements for the past two (2) years, verified corporate or individual tax
returns with confirmation receipts, and compliance with capitalization
requirements and infusion thereof as the case may be, as certified by the
Securities and Exchange Commission;

f. Summary of deployment reports during the validity of the license sought to

be renewed;

g. Summary of payroll reports in case of contractors and manning agencies

during the validity of the license sought to be renewed; and

h. Other requirements as may be imposed by the Administration.

Section 18. Non-expiration of License. - Where the license holder has made
timely and sufficient application for renewal, the existing license shall not
expire until the application shall have been finally determined by the
Administration.
Section 19. Action on Renewal of License. - Within thirty (30) calendar days
from receipt of the application for renewal the Administration shall undertake
evaluation and inspection and thereafter recommend to the Secretary the
grant or denial of the application.
Section 20. Failure to Renew. - Any agency which fails to obtain a renewal of
its license within thirty (30) calendar days from expiration thereof, shall be
immediately deemed delisted and disallowed from conducting recruitment and
placement.
Section 21. Denial of Renewal of Licenses. - Licenses of agencies which fail
to conclude a recruitment or manning agreement and/or undertake minimum
levels of worker deployment and foreign exchange generation or those which
fail to meet the minimum operational standards and requirements set by the
Administration, shall not be renewed.
Section 22. When to Consider Cash Bond/Deposit in Escrow Garnished. - As
soon as an Order of Garnishment is served upon the Administration/Bank, and
the same is correspondingly earmarked, the cash bond/deposit in escrow of
an agency shall no longer be considered sufficient. The Administration shall
forthwith serve upon the agency a notice to replenish.
Section 23. Replenishment of Cash or Surety Bonds/Deposit in Escrow. -
Within fifteen (15) calendar days from date of receipt of notice from the
Administration that the bonds/deposit in escrow, or any part thereof had been
garnished, the agency shall replenish the same. Failure to replenish such
bonds/deposit in escrow within the said period shall cause the suspension of
the license.
Section 24. Refund of Cash Bond/Release of Deposit in Escrow. - A licensed
agency which voluntarily surrenders its license shall be entitled to the refund
of its deposited cash bond and release of the deposit in escrow, only after
posting a surety bond of similar amount valid for four (4) years from expiration
of license.
Section 25. Evaluation of Performance of Agencies. - The Administration shall
undertake the annual evaluation and rating of the performance of licensed
agencies to determine the merits of their continued participation in the
overseas employment program taking into consideration compliance with laws
and regulations and such other criteria as it may deem proper.
Section 26. Classification and Ranking. - The Administration may undertake
the classification and ranking of agencies. In recognition of exemplary
performance, it may undertake schemes for incentives and rewards.

RULE III
REGISTRATION OF PHILIPPINE REGISTERED VESSELS

Section 1. Registration of Philippine Shipping Companies. - Philippine shipping

companies which own/manage/operate Philippine registered vessels plying
international waters shall submit the following documents for special
registration.
a. MARINA Certificate of Accreditation;
b. A certified copy of the Articles of Incorporation duly registered with the
Securities and Exchange Commission, in the case of corporation or partnership
or certificate of registration of firm or business name with the Bureau of
Domestic Trade in the case of single proprietorship;
c. Surety bond of P200,000.00 from reputable bonding company duly
accredited by the Insurance Commission which validity should be co-terminus
with the validity of registration;
d. Copy of Certificate of Approval of the Bareboat Charter;
e. Philippine Coast Guard Certificate of Registration.
Section 2. Validity Period of Special Registration. -
Special registration issued to Philippine shipping companies shall be valid for
two (2) years form the date of issuance unless sooner cancelled, revoked or
suspended by the Administration for violation of the Code or its implementing
rules and other regulations of the Department. Such registration shall be valid
only at the place stated therein and when used by the authorized person,
partnership or corporation.
Section 3. Requisites for Renewal. -
The Philippine company shall submit an application for the renewal thereof to
the Administration. Such application shall be supported by the following
documents.
a. Renewed surety bond in the amount of P200,000.00;
b. Copy of MARINA Certificate of Accreditation.
RULE IV
INSPECTION OF AGENCIES

Section 1. Inspection Before Licensing. - Before issuance or renewal of a

license, the Administration shall conduct an inspection of the premises and
pertinent documents of the applicant.
Section 2. Inspection of Agencies. - All agencies shall be subject to periodic
inspection of offices, studios or pre-departure orientation seminar venues by
the Administration to determine compliance with existing rules and
regulations. Inspection shall likewise be conducted by the Administration in
case of transfer of office, studio, PDOS venue, or establishment of a branch
or extension office, executive office, additional office or upon compliant or
report of violation of existing rules and regulations.
Section 3. Authority to Inspect. - Inspection shall be undertaken by the
Administration, thru a duly designated Inspector.
An authority to inspect shall be issued for presentation to the agency before
inspection, stating in detail the purpose and subject of inspection.
Section 4. Subject of Inspection. - Depending on the purpose of inspection,
the Administrator or his duly authorized representative may inspect the
premises and require the presentation of necessary documents, records and
books of accounts of the agency and examine the same.
Section 5. Inspection Procedures. -
a. Inspection shall be conducted by a team of at least two (2) duly authorized
persons during office hours, unless otherwise authorized in accordance with
Section 3 of this Rule;
b. Inspection shall be conducted in the presence of the manager of the office
or any responsible office personnel who shall be furnished with a copy of the
inspection report immediately after inspection; and
c. Inspection reports shall be submitted to the Administration within twenty-
four (24) hours after the inspection.
Section 6. Violations Found in the Course of Inspection. - Violations found in
the course of inspection such as non-compliance with the Administration’s
rules, issuances, directives, etc. may be grounds for the imposition of
appropriate sanction or for the denial of application for issuance and renewal
of license. A copy of the results of inspection shall be endorsed to the
appropriate unit for the conduct of necessary proceedings.

RULE V
PLACEMENT FEES AND DOCUMENTATION COSTS

Section 1. Fees Chargeable Against Principals. - Agencies shall charge from

their principals a service or manning fee to cover services rendered in the
recruitment, documentation and placement of workers.
Section 2. Fees/Costs Chargeable from Workers. -
a. Private employment agencies may charge placement fees as may be
authorized by the Secretary from a hired worker to cover costs of placement
and documentation services such as trade or skill testing, medical
examination, passport, visa, clearances, inoculation, airport terminal fee,
notarials, among others.
The above charge shall be collected from a hired worker only after he has
signed the employment contract and shall be covered by receipts clearly
showing the amount paid.
b. Manning agencies shall not charge any fee from seafarer-applicants for its
recruitment and placement services.
Section 3. Prohibition on Charging of Other Fees. - No other fees or charges
including processing fees shall be imposed against any worker, except when
authorized by law.
Section 4. Seafarer’s Welfare Fund Contribution. - Every seafarer processed
for deployment abroad shall contribute to the seafarer’s Welfare Fund.
Section 5. Charges Deductible from Fees by Withdrawing Workers. - In case
of withdrawal of the worker within one hundred twenty (!20) calendar days
from the signing of the employment contract, the agency shall refund the
amount paid by him after deducting such actual expenses incurred in the
documentation of the worker as may be supported by receipts.
 RULE VI
ADVERTISEMENT FOR OVERSEAS JOB VACANCIES

Section 1. Advertisements for Publication or Broadcasts of Job Vacancies of

Accredited Foreign Principal or Project on Print, Radio or Television. - Actual
job vacancies for accredited foreign principal/project with job orders duly
approved by the Administration shall be allowed for advertisement upon
accreditation and/or approval of job order. The advertisement shall indicate
the following basic information:
a. Name, address and POEA license number of the agency;

b. Name and/or accreditation number of the project and/or principal and work
site; and
c. Skill categories and qualification standards.
Section 2. Advertisement for Manpower Pooling by Agencies. - Agencies
desiring to generate qualified applicants for additional manpower
requirements of an accredited principal or project not covered by duly
approved job order by the Administration may advertise only upon approval
by the Administration.
Agencies desiring to generate qualified applicants for a prospective
principal/project may advertise only for highly skilled landbased categories
and marine officers and upon prior approval of the Administration.

The advertisement shall indicate that the announcement is for manpower

pooling only and that no fee shall be collected from the applicants. The
following information shall be reflected in the advertisements:
a. Name, address and POEA license number of the agency;
b. Work site of prospective principal/project;
c. Skill categories and qualification standards.
Section 3. Press Releases on Recruitment. - For purposes of this Rule, press
and media releases, whether on print, radio or television negotiations with
foreign principals involving overseas job openings, shall be considered as
advertisement, and therefore, shall be subject to monitoring and regulation.
Subsequent publication of a previously approved advertisement or a portion
thereof, in another form of media release shall no longer require another
POEA's approval provided that said publication is undertaken within a period
of one month from the date of POEA approval.
Section 4. Sanctions. - False and deceptive advertisement published and
aired by agencies including, but not limited to those published not in
accordance with the prescribed guidelines shall be considered as violation and
shall, therefore, be a valid ground for the cancellation of accreditation of
principal/project and/or for the suspension and/or cancellation of license.
Section 5. Foreign Advertisers for Overseas Job Vacancies. - Foreign
principals/employers who wish to advertise job vacancies outside the
Philippines using Philippine print media, broadcast or television may do so only
through a POEA-licensed agency or through the Administration.

RULE VII
TRADE TEST AND MEDICAL EXAMINATION FOR OVERSEAS EMPLOYMENT
RULE VIII
MANDATORY PERSONAL ACCIDENT AND LIFE INSURANCE, WAR RISK
INSURANCE AND WAR RISK PREMIUM PAY

Section 1. Mandatory Personal Accident and Life Insurance Requirement. - All

overseas landbased workers shall be provided both life and personal accident
insurance. The amount of life insurance coverage shall be P50,000.00
maximum face value; provided, however, that if death is due to accident,
murder or assault, an equal amount of P50,000.00 insurance coverage shall
be due in addition to the amount of life insurance. This mandatory life and
personal accident insurance shall be provided by the employer without any
cost to the worker. The personal accident insurance shall cover accidental
death, dismemberment and disability; provided, however, that should the
subsisting insurance package provide for a superior coverage, the same shall
be deemed compliance with this requirement.
Section 2. Identification of War Risk Areas. - In order to protect landbased
workers and seafarers form the hazards of war or war-like operations, the
Administration shall identify and declare specific land areas, territorial waters
or portions of the high seas as war risk areas.
Section 3. Mandatory War Risk Insurance for Landbased Workers. - All
landbased workers bound for areas declared by the Administration as war risk
areas shall, in addition to the mandatory personal accident and life insurance,
be provided with war risk insurance of not less than P100,000.00. This war
risk insurance shall be provided by the employer at no cost to the worker.
Section 4. Duration of Insurance Coverage. - The minimum coverage shall
take effect upon payment of the premium and shall be extended worldwide,
on and off the job, for the duration of the worker’s contract plus sixty (60)
calendar days after termination of the contract of employment; provided that
in no case shall the duration of the insurance coverage be less than one year.
Section 5. War Risk Premium Pay for Seafarers. - Seafarers who sail on a
vessel into areas declared by the Administration as war risk trading areas shall
be entitled to premium pay the schedule of which shall be determined by the
Administration.
Section 6. Benefits and Compensation Awarded to Beneficiary. - Proceeds or
benefits from the mandatory life, personal accident or war risk insurance shall
be awarded only to the designated beneficiaries as defined in these Rules.

RULE IX
DEPARTURE OF CONTRACT WORKERS

Section 1. Labor Assistance Center (LAC). - A Labor Assistance shall be

established at international airports and other exit points in the country which
may be used by contract workers in proceeding to their overseas jobsite. It
shall assist and facilitate the deployment and reception of overseas contract
workers, monitor such deployment and provide appropriate advise to workers
and foreign principals and employers on employment, travel and recruitment
procedures.
Section 2. POEA clearance for Special Cases. - The POEA shall issue special
clearances to non-contract workers possessing contract worker's passport
and/or employment visa or work permit for the host country, subject to the
guidelines formulated by the Administration for the purpose.
Section 3. Coordination with Government Functionaries. - The LAC shall
maintain close coordination with the Bureau of Immigration and Deportation,
Department of Foreign Affairs, Philippine Tourism Authority, NAIA Airport
Management and other appropriate government bodies in the discharge of its
duties.

RULE X
LEGAL ASSISTANCE AND ENFORCEMENT MEASURES

Section 1. Acts Constituting Illegal Recruitment. - All recruitment activities

as defined under Section 2. Rule I, Book VI of these Rules and all prohibited
practices under Article 34 of the Code when undertaken by a non-licensee, a
suspended or cancelled agency constitute illegal recruitment activities.
Recruitment and placement activities of agents or representatives appointed
by a licensee,
whose appointments were not previously authorized by the Administration
shall likewise constitute illegal recruitment.
Section 2. Anti-
Illegal Recruitment Programs. - The Administration shall adopt policies
and procedures, prepare and implement programs toward the eradication of
illegal recruitment activities such as, but not limited to the following:
a. Providing legal assistance to victims of illegal recruitment and related
cases as well as recruitment violations which are administrative or criminal
in nature;
b. Prosecution of illegal recruiters;
c. Special operations such as surveillance, of companies, establishments and
entities found to be engaged in the recruitment of workers for overseas
employment without having been licensed to do so; and
d. Information and education campaign.
Whenever necessary, the Administration shall coordinate with other
appropriate entities in the implementation of said programs.

Section 3. Legal Assistance. - The Administration shall provide free legal

service to victims of illegal recruitment and related cases as well
as recruitment violations which are administrative or criminal in nature in the
form of legal advice, assistance in the preparation of complaints
and supporting documents, institution of criminal actions and whenever
necessary, provide counselling assistance during preliminary investigation
and hearings.
Section 4. Filing of Complaints for Illegal Recruitment. - Victims of illegal
recruitment and related cases as well as recruitment violations which are
administrative or criminal in nature may file with the Administration a report
or complaint in writing and under oath.
The complaint shall state the following, among others:
a. The name/s and address/es of the complainant/s;
b. The name/s and address/es of the alleged offender/s. Where the offender
is a corporation partnership or association, the officer/s responsible
for the act/s as charged shall as far as practicable be individually and
specifically named;

c. The specific act/s and/or omissions complained of as constituting the

offense;
d. The date, place and approximate time when the alleged act/s and/or
omissions was/were committed;
e. Amount exacted, if any, and place of payment; and
f. Relief sought and such other allegations by way of particulars.
All pertinent documents in support of the complaint must be attached
thereto, whenever possible. In the regions outside the National Capital Region,
complaints and reports involving illegal recruitment may be filed with the
appropriate regional office of the Department or with the Center or Regional
Extension Unit concerned for the corresponding
legal assistance and enforcement measures.

Section 5. Action on the Complaint/Report. - Upon receipt of the

complaint/report, it shall
be immediately docketed and numbered and thereafter referred for
assignment and investigation. Where the complaint/report alleges that
recruitment activities are still on-going, the necessary surveillance shall be
conducted and on the basis of the findings,
the issuance of closure order may be recommended to the Administrator
through the Director-LRO if recruitment activities are confirmed. If on the
basis of the investigation conducted, sufficient basis for institution of
a criminal action against the offender/s is found, the case shall be
immediately forwarded to the appropriate unit for such action.

Section 6. Surveillance. - The Administration and/or designated officials in

the DOLE regional
offices, upon receipt of an information, complaint and/or report, or on their
own initiative may conduct surveillance on the alleged recruitment activities.

No surveillance may be conducted unless authorized by the Administrator or

the Deputy
Administrator, or the Director-LRO or the DOLE
Regional Director concerned or their duly authorized representatives.

Within two (2) days from the termination of the surveillance, the
corresponding report duly supported by an affidavit of surveillance, shall be
submitted to the Director-LRO or the Regional Director concerned as the case
may be.
Section 7. Issuance of Closure Order. - The Secretary or the Administrator
or the DOLE
Regional Director of the appropriate regional office outside the National
Capital Region, or their duly authorized representatives, may conduct an ex
parte preliminary examination to determine whether the activities of a non-
licensee constitute a danger to national security and public order or will lead
to further exploitation of job seekers. For this purpose, the Secretary, the
Administrator or the Regional Director concerned or their duly authorized
representatives, may examine personally the complainants and/or their
witnesses in the form of searching questions and answers and shall take
their testimony under oath. The testimony of the complainants
and/or witnesses shall be reduced in writing and signed by them.
If from the preliminary examination conducted or based on the findings and
recommendations and affidavit or surveillance of the Administration
or designated regional officer, the Secretary or the Administrator or the
Regional Director concerned is satisfied that such danger or exploitation
exists, he may issue a written order for the closure of the establishment being
used in connection with illegal recruitment.
In case of a business establishment whose license or permit to operate a
business was issued by the local government, the Secretary, the
Administrator or the Regional Director concerned shall likewise recommend
to the granting authority the immediate cancellation/revocation of the license
or permit to operate its business.

Section 8. Implementation of Closure Order. - Closure Order shall be served

upon the offender Or the person in charge of the establishment Subject
thereof. The closure shall be effected By sealing the establishment and
posting a notice Of such closure in bold letters at a conspicuous place In the
premises of the establishment. Whenever Necessary, the assistance and
support of the Appropriate law enforcement agencies may be Requested for
this purpose

Section 9. Report On Implementation. - A report On the implementation of

the closure order Executed under oath, stating the details of the Proceedings
undertaken shall be submitted to the Director-LRO or the Regional Director
concerned, As the case may be, within two (2) days from the Date of
implementation.

Section 10. Institution of Criminal Action. - The Secretary or the

Administrator or the Regional Director concerned, or their duly authorized
Representatives or any law enforcement officer or any aggrieved person, may
initiate the corresponding criminal action with the appropriate Office.
Where a complaint is filed with the Administration And the same is proper for
preliminary Investigation, it shall cause the filing of the Corresponding
complaint with the appropriate Officer authorized to conduct the requisite
Preliminary investigation. The complaint to be Filed shall be supported with a
certification from The Administration, a closure order, if any, and report On
the implementation thereof and other relevant Documents. Whenever
necessary and practicable, the Prosecution Division may provide the
complainant/ victim with counsel to assist in the prosecution Of the
offender/s. The Administration shall Monitor all cases it initiated.
Section 11. Motion to Lift A Closure Order. - A motion to lift a closure order
which has already Been implemented may be entertained only when Filed with
the Licensing and Regulation Office (LRO) within ten (10) calendar days from
the date of implementation thereof. The motion shall clearly state the grounds
upon which it is based, attaching
thereto the documents in support thereof. A motion to lift which does not
conform with the requirements herein set forth shall be denied outrightly.

Section 12. Who May File. - The motion to lift a closure order may be filed
only by the following:
a. The owner of the building or his duly authorized representative;
b. The building administrator or his duly authorized representative;
c. The person or entity against whom the closure order was issued and
implemented or his/its duly authorized representative; and

d. Any other person or entity legitimately operating within the premises of

the office which was closed/padlocked whose operations/activities are
separate and distinct from the recruitment activities of the person/entity
subject of the closure order and who would be unduly prejudiced by the
continued closure of the said office.
Section 13. Grounds for Lifting/Re-Opening. - Lifting of the closure order
(CO) and/or re-opening of the office closed or padlocked may be granted on
any of the following grounds:
a. That the office closed or padlocked is not the office, subject of the CO;

b. That the contract of lease between the owner of the building or the
building administrator, as the case may be, covering the office/premises that
were closed/padlocked has already been cancelled or
terminated. The request or motion to re-open shall be duly supported by an
affidavit of undertaking either of the owner A601 of the building or the
building administrator that the same will not be leased/rented to any other
person/entity for recruitment purposes without the necessary license from
the Administration;

c. That the office which was closed/padlocked is likewise the office of a

person/entity not otherwise connected with or participating directly or
indirectly in the illegal recruitment activities which was the basis of the CO
sought to be lifted;

d. Any other ground that the Administration may consider as valid and
meritorious.
Lifting of a closure order shall not prejudice the filing of a criminal complaint
with the appropriate office against the person alleged to have conducted
illegal recruitment activities at the office/premises closed or padlocked.

Section 14. Appeal. - The order of the Administrator denying the motion to
lift may be appealed to the Office of the Secretary within ten (10) calendar
days from the service of receipt thereof.

Section 15. Re-Closing/Re-Padlocking of Office Earlier Re-Opened. - Where

an office was allowed to be re-opened upon any grounds hereinabove
provided and the same was subsequently confirmed to as being used for illegal
recruitment activities again, said office shall be closed/padlocked. For this
purpose, a new CO shall be issued. In such cases, no motion to lift shall be
entertained.

BOOK III
PLACEMENT BY THE PRIVATE SECTOR
RULE I
ACCREDITATION OF PRINCIPALS AND REGISTRATION OF PROJECTS BY
LANDBASED AGENCIES/CONTRACTORS

Section 1. Application for accreditation of Principals. - Only duly licensed

agencies may file application for accreditation of their principals or projects
overseas
Section 2. Requirement for Accreditation. - An agency applying for the
accreditation of its principals or projects shall submit the following:
a. For a landbased agency for its principals:
1. Standard or master employment contract;
2. Special power of attorney/service agreement;
3. Manpower request from foreign principal indicating skills, wages and the
number of workers needed; and
4. Other documents which the Administration may find necessary.
Section 3. Verification or Authentication of Documents. - Whenever required
and determined by the Secretary, verification or authentication
of documents for Accreditation of principals or projects shall be Undertaken
by the following:
a. Verification of documents at the site of employment may be undertaken
by the Labor Attache or the Assistant Labor Attache in his absence, by
the appropriate official at the Philippine Embassy or the Philippine foreign
representative in the absence of a Philippine Mission.
b. Authentication of documents at the site of employment may be undertaken
by the appropriate official of any of the designated Ministries/Office of the
Host countries.
Requirements for accreditation shall not be Authenticated if basic documents
are signed by the authorized officials of both the hiring company and its local
agent in the presence of any member of the POEA Directorate or
duly designated officers of the Administration.

Section 4. Parties to the Agreement. - Accreditation may be granted

only when the foreign signatory to the recruitment agreement with the
applicant agency is the direct employer of the workers to be
recruited. Foreign placement agencies may be accredited as principals if
they are authorized to operate as such in their respective countries.

Section 5. Accreditation of Principals. - A landbased principal or project shall

be accredited to only one agency. The Administration may grant
accreditation as may deemed necessary. In the case of manning sector, a
shipping principal may be accredited to not more than three (3) agencies

Section 6. Transfer of Accreditation. - The accreditation of a principal may

be transferred to another agency provided that transfer shall not involve any
diminution of wages and benefits of workers.
The transferee agency in these instances shall comply with the requirements
for accreditation and shall assume full and complete responsibility to all
contractual obligations of the principals to its workers originally recruited
and processed by the former agency.
Prior to the transfer of accreditation, the Administration shall notify the
previous agency and principal of such application.

Section 7. Actions on applications for accreditation of projects whose

contracting partners or principals have outstanding obligations. - Applications
for the transfer of accreditation of principals or projects shall be acted by the
Administration upon submission of all requirements by the new transferee
agency.
Obligations or money claims arising out of business relations between
contracting partners of between agencies and principals may be conciliated
by the Administration. However, the pendency of the conciliation should not
prevent the Administration from acting on the request for accreditation if
public interest so requires.

Section 8. Approval and Validity of Accreditation. - The Administration shall

issue to the agency an accreditation certificate for its principal or project after
approval of the accreditation request.
Full accreditation shall be valid for a maximum period of two (2) years from
date of issuance, subject to renewal. Provisional accreditation may be
granted for a period of ninety (90) days for a principal or a project that meets
the accreditation requirements substantially.

Section 9. Revocation of Accreditation. - The accreditation of a principal or

project may be revoked by the Administration in any of the following cases:
a. Upon request or notification by the principal or contracting partner;

b. Upon request of the agency;

c. False documentation or misinterpretation in connection with the application
for accreditation; or
d. Violation or applicable laws, rules and regulation on overseas employment.
Section 10. Blacklisting of Persons, Principals and Contracting Partners. -
Employers, principals and contracting partners including natural persons
found defaulting on their contractual obligations to workers, agencies and/or
violating rules and regulations on overseas employment or committing grave
misconduct and offenses involving moral turpitude shall be prohibited from
participating in the overseas employment program.

For this purpose, the Administration shall advise the employer, principal or
contracting party concerned including its Embassy/Consulate in the
Philippines and other Philippine government entities participating in this
program.

RULE II
DOCUMENTARY PROCESSING

Section 1. Recruitment Order/Crew Order. - Agencies which have selected

workers for their
accredited principals shall, as a pre-requisite for contract processing with the
Administration,
submit for approval a recruitment order (RO) or crew order (CO), as the
case may be, using the prescribed form which shall indicate the names,
positions and salaries of selected contract
workers, among others.

Section 2. Documentary Processing. - Documentary processing shall

commence upon presentation of the approved RO or CO together with the
following documents:
a. Individual employment contract (EC) containing minimum provisions
promulgated by the Administration;

b. For seafarers, valid seamen service record book (SSRB) and seafarer's
registration card (SRC); and

c. Insurance certificate in case of the landbased sector.

The agency shall provide each worker a copy of the approved EC duly signed
by the worker and employer or where appropriate, by the agency.

The Administration may impose other processing requirements as may be

necessary.

Section 3. Payment of Processing Fees. - Payment of processing fees shall

be made immediately after approval of the RO or the EC. All payments shall
be covered by official receipts.

Section 4. Worker's Deployment. - An agency shall deploy its recruits

within the deployment period as indicated below:
 a. One hundred twenty (120) calendar days from the date of signing of the
employment contract for all landbased workers;
b. Thirty (30) calendar days from the date of processing by the
Administration of the employment contracts of seafarers.

Failure of the agency to deploy a worker within the prescribed period without
valid reasons shall be a cause for suspension or cancellation of license or
fine. In addition, the agency shall return all documents at no cost to the
worker.

Section 5. One-Stop Processing Center. - An inter-agency processing center

shall act as a one-stop servicing body to provide expeditious clearing system
for overseas contract workers and facilitate their deployment abroad.

Section 6. Balik-Manggagawa Processing Center. - Filipino contract workers

except seafarers, who are on vacation or on emergency leave, and who are
returning to the same worksite, to resume their employment within six
(6) months from the date of arrival in the Philippines shall be processed as
balik-manggagawa (BM). Said BM may be processed individually or through
the agency which previously deployed them.

For individual balik-manggagawa, the following documents shall be required:

a. Valid passport
b. Valid re-entry visa, work permit or any equivalent document;
For agency-endorsed balik-manggagawa, the following documents shall be
required:
a. Previously POEA processed employment and travel documents of the
contract workers;
b. Valid passport
c. Valid re-entry visa, work permit or any equivalent document.
Section 7. Agency-endorsed Returning Workers. - All recruitment agencies
handling returning workers to their accredited principals shall assume
responsibility over said workers for the duration of the employment contract
in force. While the agencies may charge service fees to their employers for
this purpose, no redeployment fees shall be collected from the returning
workers.

BOOK IV
PLACEMENT BY THE ADMINISTRATION

RULE 1
RECRUITMENT AND PLACEMENT THROUGH THE ADMINISTRATION
Section 1. Hiring through the Administration. - The Administration shall
recruit and place workers primarily on government-to-government
arrangements, and shall therefore service the hirings of foreign government
instrumentalities. It may also recruit and place workers for foreign employers
in such sectors as policy may dictate, in pursuance thereof, the Administration
shall, among others:
a. Administer programs and projects that may support the employment
development objectives of the Administration; and

b. Undertake, in cooperation with the Regional Offices of the Department,

organized recruitment activities in the provinces in the aid of the employment
dispersal policy of the government.
Section 2. Documentary Requirements from Employer. - An employer hiring
through the Administration shall submit the following documents:
a. Work permit or visa assurance of workers, where applicable;

b. Recruitment order which shall state the number and categories of workers
needed, compensation benefits, qualification, guidelines, testing procedures,
etc.;

c. Model employment contract; and

d. Other documents which the Administration may find necessary.

Section 3. Formalization of a Recruitment Agreement. - Employer hiring
through the Administration shall be required to formalize a Recruitment
Agreement (RA). The RA shall, among others, contain the following provisions:
a. Responsibilities of the parties to the agreement;
b. Selection and documentation procedures;
c. Fee schedules and terms of payment;
d. Manner and facilities for remittance of workers' salary;
e. Grievance machinery for workers; and
f. Validity and revocation of the agreement.
The standards and requirements set by the Administration for the recruitment
and placement of workers shall apply to hirings through the Administration.
Section 4. Recruitment and Placement of Workers. -
a. Interview and Selection. An employer hiring through the Administration
shall select his workers from the manpower pool developed and maintained
by the Administration;

b. Medical Examination. Selected workers shall undergo and pass a standard

pre-employment medical examination conducted by a duly accredited medical
retainer of the Administration;
c. Travel Arrangements. The employer shall assume the full cost of worker's
transportation to and from the place of work;

d. Orientation. Before departure for the worksite, hired workers shall undergo
the required Pre-Departure Orientation Seminar (PDOS).
Section 5. Documentation of Workers. -
a. Contract Processing. Workers hired through the Administration shall be
issued the following documents:

(1) Individual Employment contract duly signed by the employer or his

authorized representative or that proper official of the Administration where
appropriate; and

(2) Such other documents as may be necessary for the travel.

b. Passport Documentation. The Administration may secure directly the

selected worker's passport from the Department of Foreign Affairs. All
transmittals and endorsements for passport issuance shall be undertaken
directly by the Administration.

c. Visa Arrangements. The Administration may assist employers and selected

workers secure their visas from the appropriate Embassy.
RULE II
NAME HIRES

Section 1. Name Hires. - Individuals workers who are able to secure contracts
for overseas employment on their own without the assistance or participation
of any agency shall be processed by the Administration.

Section 2. Ban on Direct Hires. - No employer may hire a Filipino worker for
overseas employment except through the Administration or agencies licensed
by the Secretary.

Direct hiring by workers of the diplomatic corps, international organizations,

and such other employers as may be allowed by the Secretary is exempted
from this provision.

BOOK V
MARKET DEVELOPMENT AND
FORMULATION OF EMPLOYMENT STANDARDS

RULE I
MARKET DEVELOPMENT
Section 1. Market Development. - The promotion and development of
employment opportunities abroad shall be undertaken by the Administration
in cooperation with other government agencies and the private sector,
through organized market research and promotion activities and services.
Section 2. Market Research and Planning. - The Administration shall
undertake market research activities in aid of market development which shall
include among others:
a. Conduct of continuing market situation assessments and special market
studies on competition, wages and working conditions, among others; and
b. Formulation and implementation of appropriate marketing strategies.
Section 3. Market Promotions. - The Administration shall undertake, among
others, a comprehensive manpower marketing strategy through:
a. Dispatch of marketing missions abroad;
b. Development and promotion of programs or arrangements that would
encourage the hiring of Filipinos in organized or corporate groups as well as
government-to-government arrangements;
c. Pursuance of bilateral labor agreements with existing/prospective host
countries of Filipino manpower;
d. Promotion and advertising in appropriate media and development of
support communication materials;

e. Client referral to the private sector; and

f. Establishment and maintenance of effective linkages with other government
agencies including Philippine Missions abroad or corps of labor attaches,
foreign governments directly or through their Embassies, foreign employers,
the local private recruitment sector, and other organizations.
RULE II
FORMULATION OF EMPLOYMENT STANDARDS

Section 1. Employment Standards. - The Administration shall determine,

formulate and review employment standards in accordance with the market
development and welfare objectives of the overseas employment program and
the prevailing market conditions.
Section 2. Minimum Provisions for Contract. - The following shall be
considered the minimum requirements for contracts of employment:
a. Guaranteed wages, for regular working hours and overtime pay for services
rendered beyond regular work hours in accordance with the standards
established by the Administration;
b. Free transportation from point of hire to site of employment and return;
c. Free emergency medical and dental treatment and facilities;
d. Just causes for the termination of the contract or of the services of the
workers;
e. Workmen’s compensation benefits and war hazard protection;

f. Repatriation of workers remains and properties in case of death to the point

of hire, or if this is not possible under the circumstances, the proper disposition
thereof, upon prior arrangement with the worker’s next-of-kin and the nearest
Embassy or Consulate through the Office of the Labor Attache;
g. Assistance in the remittance of worker’s salaries, allowances or allotments
to his beneficiaries; and
h. Free and adequate lodging facilities or compensatory food allowance at
prevailing cost of living standards at the jobsite.
Section 3. Standard Employment Contract. - The Administration shall
undertake development and/or periodic review of region, country and skills
specific employment contracts for landbased workers and conduct regular
review of standard employment contracts (SEC) for seafarers. These
contracts shall provide for minimum employment standards herein
enumerated under Section 2 of this Rule and shall recognize the prevailing
labor and social legislations at the site of employment and international
conventions. The SEC shall set the minimum terms and conditions of
employment. All employers and principals shall adopt the SEC in connection
with the hiring of workers without prejudice to their adoption of other terms
and conditions of employment over and above the minimum standards of the
Administration.

BOOK VI
RECRUITMENT VIOLATION AND RELATED CASES
RULE I
JURISDICTION AND VENUE

Section 1. Jurisdiction. - The Administration shall exercise original and

exclusive jurisdiction to hear and decide all pre-employment cases which are
administrative in character, involving or arising out of violation of recruitment
laws, rules and regulations including money claims arising therefrom or
violation of the conditions for issuance of license to recruit workers.
Section 2. Grounds for suspension/cancellation of license. -
a. Charging, imposing or accepting directly or indirectly, any amount of
money goods or services, or any fee or bond for any purpose whatsoever
before employment is obtained for an applicant worker or where the fee
charged is excessive or contrary to what is prescribed by the Secretary of
Labor and Employment;
b. Engaging in act/s of misrepresentation, in relation to recruitment and
placement of workers, such as: publication or advertisement of false
or deceptive notices or information or submission for processing of
documents which are fraudulent or containing false information;
c. Inducing or attempting to induce an already employed worker to transfer
from or leave his employment for another unless the transfer is designed to
liberate a worker from oppressive terms and conditions or employment;
d. Influencing or attempting to influence any person or entity not to employ
any worker who has not applied for employment through his agency;
e. Obstructing or attempting to obstruct inspection by the Secretary, the
Administrator or their duly authorized representatives;
f. Substituting or altering employment contracts and other documents
approved and verified by the Administration from the time of actual signing
thereof by the parties up to and including the period of expiration of the same
without Administration’s approval;
g. Failure to file reports as may be required by the Administration;
h. For the owner, partner, or officer/s of any licensed 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;

i. Unreasonable withholding or denying travel or other pertinent documents

from workers for monetary considerations or reasons other than those
authorized under the Code and its implementing rules and regulations;
j. Engaging in recruitment activities in places other than that specified in the
license without previous authorization from the Administration;

k. Appointing or designating agents, representatives or employees without

prior approval from the Administration;
l. Falsifying or altering travel documents;
m. Deploying workers whose employment and travel documents were not
processed by the Administration;
n. Deploying workers or seafarers to vessels or principals not accredited by
the Administration;
o. Publishing or causing the publication of overseas job vacancies in violation
of the prescribed rules;
p. Failure to deploy workers within the prescribed period without valid reason;
q. Disregard of lawful orders, notices and other processes issued by the
Administration;
r. Coercing workers to accept prejudicial arrangements in exchange for certain
benefits that rightfully belong to the workers;
s. Withholding of workers’ salaries or remittances without justifiable reasons
;
t. Violation of other pertinent provisions of the Code and other relevant laws,
rules and regulations, guidelines and other issuances on recruitment and
placement of workers for overseas employment and the protection of their
welfare; and
u. Committing any other acts similar or analogous to the foregoing.
Section 3. Grounds for Revocation of License. -
a. Violation/s of the conditions of license;
b. Engaging in act/s of misrepresentation for the purpose of securing a license
or renewal thereof, such as giving false testimonies or falsified documents;
c. Engaging 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;
d. Incurring an accumulated three (3) counts of suspension by an agency
based on final and executory orders within the validity period of its license.
Section 4. Venue. - Any complaint/report involving violation of recruitment
laws, rules and regulations, violation of terms and conditions for the grant and
use of a license to recruit workers for overseas employment and violation of
pertinent provisions of the Code, its implementing rules and regulations and
administrative issuances, shall be filed with the Adjudication Office, this
Administration or in the Regional Office except in the case of NCR, the same
shall be filed with POEA where the applicant-worker applied or was recruited
at the option of the complainant.

In cases falling within the jurisdiction of NCR, the same shall be filed with the
Administration.
In the case of reports received by the Administration, the same shall be
investigated by the Adjudication Office, this Administration or at the
appropriate Regional Office.
All actions filed with the Administration shall be heard before the Adjudication
Office.
However, cases filed with the Administration may be transferred upon request
of either party to the Regional Office before issued are joined and upon
approval by the Administration.
Complaints/Reports filed at the Regional Office shall be heard by the duly
designated POEA Hearing Office or designated representative.

RULE II
FILING OF COMPLAINTS

Section 1. Who May File. - Any person may file a complaint in writing and
under oath for the suspension or cancellation of the license of any agency with
the Administration.
The Administration on its own initiative or upon filing of a complaint or report
for the investigation by any aggrieved person, shall conduct the necessary
proceedings for the suspension, cancellation or revocation of the license of
any agency.
Section 2. Caption and Title. - The complaint shall be filed in accordance with
the following captions:
(a) for recruitment violation(s) and related cases filed with the Administration
–
Republic of the Philippines
Department of Labor and Employment
Philippine Overseas Employment Administration
Adjudication Office
Metro Manila

In the matter of Violation of Recruitment Rules & Regulations/ Regulations

Implementing the
Labor Code, as amended, Circulars,
Etc.

- versus -

POEA Case no. RRB (L) yr/mo/no.

(M)

_______________________,
Respondent/s.

(b) recruitment violation and related cases filed with the Regional Office –
Republic of the Philippines
Department of Labor and Employment
Regional Office No._____
_____________________
Province/District

In the matter of Violation of Recruitment Rules & Regulations/Regulations

Implementing the Labor Code, as amended, Circulars,
Etc.

- versus -

POEA Case no. ADJ- (L) yr/mo/no.

(M)

_______________________,
Respondent/s.
Section 3. Contents of Complaint/Report. - All complaints/ reports shall be
under oath and must contain, among others, the following:
a. The name/s and address/es of the complainant/s;
b. The name/s and address/es of the respondent/s;
c. The nature of the complaint;
d. The substance, cause/grounds of the complaint;
e. When and where the action complained of happened;
f. The amount of claim, if any;
g. The relief/s sought.
All pertinent papers, or documents in support of the complaint must be
attached whenever possible. The complaint shall be under oath, and shall be
administered by any officer authorized by law.

Section 4. Docket and Assignment of Cases. - Complaints duly received shall

be docketed and numbered and shall be raffled off to Hearing Officers of the
Administration.

RULE III
ACTION UPON THE COMPLAINT

Section 1. Answer/Counter Affidavit. - Upon receipt of the complaint, the

Administration shall issue a show cause order directing the respondent/s to
file a verified Answer/Counter-Affidavit within ten (10) calendar days and not
a Motion to Dismiss, incorporating therein all pertinent documents in support
of its defense, and attaching thereto proof of service of a copy thereof upon
the complainant/s. The answer shall be deemed filed on the date of receipt
stamped thereon, if filed personally, or on the date stamped on the envelope
filed through registered mail.

Section 2. Failure to File Answer/Counter-Affidavit. - Failure to file answer a

waiver on the part of the respondent and hearing/investigation shall proceed
ex-parte.
Section 3. Service of Subpoena Duces Tecum and Subpoena Ad
Testificandum. - The Administration shall issue subpoena or subpoena duces
tecum.
The process server who personally served the subpoena duces tecum and/or
subpoena ad testificandum, notice, order, resolution or decision shall submit
his return within five (5) calendar days from the date of his service, thereof,
stating legibly in his return his name, the mode/s of service, the name/s of
the other person/s offered and the date/s of receipt. If no service was
effected, the serving officer shall state the reason therefor. The return shall
form part of the records of the case.
Section 4. Failure or Refusal to Obey Subpoena Duces Tecum and Subpoena
Ad Testificandum. - The license of an agency who fails or refuses to obey
the subpoena duces tecum/subpoena ad testificandum shall be suspended
until compliance of the directive of this Administration.
This is without prejudice to the outcome of the investigation wherein the
proper penalty may be imposed.
Section 5. Proof and Completeness of Service. - The return is prima facieproof
of the facts stated therein. Service by registered mail is complete upon receipt
by the addressee or agent; but if the addressee or agent fails to claim his
mail from the post office within five (5) calendar days from date of last notice
of the postmaster, service shall take effect after such time.

Section 6. Motion for Extension. - Only one motion for extension of time to file
Answer/Counter-Affidavit shall be allowed. The Hearing Officer, upon receipt
of such motion may, upon meritorious grounds, grant a non-extendible period
not exceeding ten (10) calendar days. Rulings of the Hearing Officer on
motions for extension shall be sent by personal service or by registered mail.
Section 7. Authority to Initiate Clarifying Questions. - At any stage of the
proceedings and prior to the submission by the parties of the case for
resolution, the Administration may initiate clarifying questions to further elicit
facts or information, including but not limited to the subpoena of relevant
documentary evidence.
Section 8. Summary Judgment. - Should the Hearing Officer find upon
consideration of the answers, counter-affidavits and evidence submitted, that
resolution/decision may be rendered thereon, the case shall be deemed
submitted.

Section 9. Nature of Proceedings. - The proceedings shall be non-litigious in

nature, subject to the requirements of due process, the technicalities of law
and procedure and the rules obtaining in the courts of law shall not strictly
apply thereto. The Hearing Officer may avail himself of all reasonable means
to ascertain the facts of the case, including ocular inspection, where
appropriate, and examination of informed persons.
Section 10. Effects of Withdrawal/Desistance. - The withdrawal/ desistance
of the complaining witness shall not bar the Administration from proceeding
with the investigation on recruitment violation/s. The Administration shall act
on the case as may be merited by the results of the investigation and impose
such penalties on the erring agency as may be deemed appropriate.
Section 11. Resolution of the Case. - The Hearing Officer/Regional Office,
shall within thirty (30) calendar days from submission of the case, submit its
recommendation to the Adjudication Office.
Section 12. Who May Issue Orders/Resolutions. - Only the Secretary or his
duly designated representative may issue cancellation or revocation
orders. Orders of suspension of license or the lifting of preventive suspension
or suspension of documentary processing shall be signed by the Administrator
or in his absence by his duly designated Officer-In-Charge.
All other orders or resolutions shall be signed by the Director, Adjudication
Office, POEA.
Section 13. Contents of Orders/Resolutions. - Orders/Resolutions issued by
the Administration shall be clear and concise and shall include a brief
statement of the following:
a. facts of the case;
b. issue/s involved;
c. applicable law/s or rule/s;
d. conclusions and reasons therefore; and
e. specific remedy/ies or relief/s granted for imposable sanction/s.
Section 14. Suspension of Documentary Processing. - The Administration
may order the suspension of the processing of documents pertaining to a
respondent agency on any of the grounds for violation of any provision of
these Rules, POEA Orders, Rules and Regulations.
This is without prejudice to the outcome of the investigation wherein the
proper.
Section 15. Suspension of License Pending Investigation. - Pending resolution
of the recruitment violation/s and upon notice, the license of the respondent
agency may be suspended for a period not exceeding the imposable penalties
under the Revised Schedule of Penalties, on the following grounds:
a. There exist reasonable grounds to believe that the continued operation of
the agency will lead to further violation or exploitation of the workers being
recruited or adversely affect friendly relations with any country or otherwise
prejudice national interest; and
b. There is a prima facie evidence of a case for violation of the Code, its
implementing rules and regulations or any issuance of the Administration
where the evidence of culpability is strong.
The Administrator may issue an order lifting or modifying the order of
preventive suspension as the circumstances may warrant.
Section 16. Suspension/Cancellation of License. - Orders of
suspension/cancellation shall be imposed in accordance with the Schedule of
Penalties promulgated by this Administration.
Section 17. Fines. - The Secretary or the Administrator may impose fines.
The Secretary may also impose additional fines for failure to comply with a
final order.
Section 18. Restraining Orders. - The order/s of suspension shall become
effective immediately unless a restraining order (RO) is obtained from the
Office of the Secretary.
Motions for issuance of a restraining order (RO) shall be filed with the Docket
and Enforcement Division (DED) of the Adjudication Office or in the Regional
Office as the case may be.

Section 19. Effects of Orders of Suspension/ Cancellation or Revocation. - An

order of suspension/cancellation or revocation shall have the effect of
suspending or terminating all activities of the agency which fall under the
definition of recruitment and placement. The Administration may seek the
assistance of other government institutions, agencies or offices to ensure that
suspension or cancellation orders are implemented.

RULE IV
REVIEW

Section 1. Jurisdiction. - The Secretary shall have exclusive jurisdiction to

review recruitment violation cases and other related cases decided by the
Administration motu proprio or upon petition of party/ies in interest.
Section 2. When to File. - Petitions for review shall be filed within ten (10)
calendar days from receipt of the Order by the parties.
All Motions for Reconsideration shall be treated as a petition for review.

Section 3. Effects of Filing a Petition for Review. - The filing of a petition for
review shall not automatically stay the execution of the order of suspension
unless restrained by the Secretary.

Section 4. Transmittal of the Records of the Case on Petition for Review. - The
Docket and Enforcement Division (DED), Adjudication Office, shall transmit
the entire records of the case, together with the Petition for Review filed by
any of the parties to the Office of the Secretary within five (5) calendar days
from receipt of the same.

RULE V
EXECUTION OF ORDERS

Section 1. Issuance of Writ of Execution. - After the Order has become final
and executory, the Administration shall, upon motion of the party in interest,
issue a writ of execution requiring the Enforcement Officer to execute the
same.
Section 2. Issuance, Form and Contents of a Writ of Execution. - The writ of
execution must issue in the name of the Republic of the Philippines, requiring
the Enforcement Officer to execute the Orders of the Administrator or the
Secretary or his duly authorized representative as the case may be.
The writ of execution must contain the dispositive portion of the orders or
awards sought to be executed and must require the Enforcement Officer to
serve the writ upon the losing party or upon any other person required by law
to obey the same before proceeding to satisfy the judgment in the following
order, out of the cash bond and/or escrow deposit or where applicable, the
surety bond, the personal property, then out of his real property, for refund
of money claims.
A writ of execution shall not be necessary for the enforcement of Orders for
the return of travel and other related documents. A copy of the order served
upon the losing party or upon any other required by law to obey such order is
sufficient.
The writ of execution shall be valid and effective for a period of sixty (60)
calendar days from issuance thereof.

Section 3. Enforcement of Writs. - In executing an Order, the Enforcement

Officer shall be guided strictly by the Manual of Instructions for Enforcement
Officers of the POEA which shall form part of these Rules.

Section 4. Garnishment. - In cases where several writs of execution are

issued against the same agency, enforcement of the same through
garnishment of the cash bond and/or escrow or through the surety bond shall
be on a “first-come, first-served” basis. The Order of Garnishment that is first
served on the Accounting Division and/or the Trustee Bank of the
Administration or the Surety Bonding Company shall be satisfied first
irrespective of the date of filing of the case or date of the decision or date of
issue of writ of execution. The cash bond, escrow or surety bond shall be pro-
rated among the claimants for writs served simultaneously.
Section 5. Return of Writ of Execution. - The person serving the writ of
execution shall submit his return immediately, but not exceeding sixty (60)
calendar days from date of issuance thereof. The return shall state the mode/s
of service, the name/s of the person/s served and the date/s of receipt. The
return shall also indicate legibly the full name of the serving officer. The return
shall form part of the records of the case.

BOOK VII
EMPLOYER-EMPLOYEE RELATION CASES
RULE VII
DISCIPLINARY ACTION FOR
OVERSEAS CONTRACT WORKERS

Section 1. Disciplinary Action. - Complaints for breach of discipline against a

contract worker shall be filed with the Adjudication Office or Regional Office,
as the case may be.
The Administration may, motu proprio, undertake a disciplinary action against
a worker for breach of contract.
The Administration shall establish a system of watchlisting and blacklisting of
overseas contract workers.
Section 2. Grounds for Disciplinary Action. - Commission by the worker of any
of the offenses enumerated below or of similar offenses while working
overseas shall be subject to appropriate disciplinary actions as the
Administration may deem necessary:
1. Commission of a felony or crime punishable by Philippine Laws or by the
laws of the host country;
2. Drug addiction or possession or trafficking of prohibited drugs;
3. Desertion or abandonment;
4. Drunkenness, especially where the laws of the host country prohibit
intoxicating drinks;
5. Gambling especially where the laws of the host country prohibit the same;
6. Initiating or joining a strike or work stoppage where the laws of the host
country prohibit strikes or similar actions;
7. Creating trouble at the worksite or in the vessel;
8. Embezzlement of company funds or moneys and properties or a fellow
worker entrusted for delivery to kin or relatives in the Philippines;
9. Theft or robbery;
10. Prostitution;
11. Vandalism or destroying company property;
12. Gunrunning or possession of deadly weapons;
13. Violation/s of the sacred practices of the host country; and
14. Unjustified breach of government approved employment contract.
Section 3. Handling of Cases. - The procedure/s provided in this Book shall
also apply in disciplinary cases involving contract workers, including seamen.
Section 4. Who May be Included in the Watchlist. - A contract worker, or a
seaman, who has a pending complaint for disciplinary action and those against
whom a warrant of arrest or hold departure order issued by the appropriate
agency, shall be included in the watchlist.
Section 5. Penalties for Breach of Discipline. - Breach of discipline may be
penalized by:
a. Stern warning;
b. repatriation to the Philippines at the worker’s expense;
c. suspension; and
d. disqualification from the overseas employment program.
In case of seamen, delisting from the registry.
The penalty/ies imposed by the Administration shall be without prejudice to
whatever civil or criminal liability that may be imposed by appropriate courts
for said breach of discipline.
Section 6. Disqualification of Contract Worker. - Contract Workers, including
seamen, against whom penalties have been imposed or with pending
obligations imposed upon them through an order, decision or resolution shall
be included in the POEA Blacklist. Workers in the Blacklist shall be disqualified
from overseas employment unless properly cleared by the Administration or
until their suspension is served or lifted.
Section 7. Delisting of the Contract Worker’s Name from the POEA Watchlist.
- The name of an overseas worker may be excluded, deleted and removed
from the POEA Watchlist only after disposition of the case by the
Administration.

RULE VIII
COMMON PROVISIONS

Section 1. Records of Proceedings. - The records of all proceedings before

the Hearing Officer shall be summarized in writing by the Hearing Officer,
including the substance of the evidence presented. The minutes of
proceedings shall be signed by the parties and shall form part of the
records. Where any of the parties refuse to sign, the refusal and reason/s
given must be indicated by the Hearing Officer in the minutes, which must be
chronologically arranged and appropriately paged.
Section 2. Appearances. - An attorney appearing for a party is presumed to
be properly authorized for that purpose.
Appearances may be made orally or in writing. In both cases, the complete
name and office and the adverse party of his counsel/representative properly
advised.
Any change in the address of counsel/representative should be filed with the
records of the case and furnished the adverse party or counsel.
Any change or withdrawal of counsel/representative shall be made in
accordance with the Rules of Court.
Section 3. Action on Motions. - The Hearing Officer shall have the authority
to rule on motions which may be done in writing or orally during the
proceedings/conferences.

Section 4. Certification of Fees. - The Chief of the Docket and Enforcement

Division (DED) or his duly authorized representative, Legal Research, Docket
and Enforcement (LRDE) Branch, Adjudication Office, shall be the Certifying
Officer of the Adjudication Office, after payment of fees.
All certified copies shall bear the seal of the Administration.
Section 5. Custody of Seal and Books. - The Docket and Enforcement Division
(DED), Adjudication Office, this Administration, shall keep in its Office and
custody the Seal of the Administration, including the records, files and
exhibits.

Section 6. Disqualification of Erring Bonding Companies. - Bonding companies

refusing to acknowledge the jurisdiction of the Administration over the surety
bonds posted with the latter, as well as those found not to be complying with
orders issued against the surety bond, shall be recommended to the Licensing
and Regulation Office for blacklisting.
Section 7. Applicability of the Rules of Court. - The Revised Rules of Court of
the Philippines shall, whenever practicable, supplement these Rules in similar
or analogous character in proceedings brought before the Administration.

BOOK VIII
WELFARE AND EMPLOYMENT SERVICES

RULE I
ASSISTANCE TO WORKERS

Section 1. Responsibility to Assist Workers. - Agencies shall ensure that

workers they deploy overseas are amply protected and their interest, well
being and welfare are promoted. Agencies shall be responsible for the faithful
compliance by their foreign principals of all obligations under the employment
contract and shall therefore, be liable for any and all violations of the contract.
Section 2. Request for Assistance. - The Administration shall take cognizance
of any request of assistance out of overseas employment from the contract
worker and/or his family.
Section 3. Assistance in the Enforcement of Contractual Obligations. - The
Administration shall provide the worker and his family all assistance they may
need in the enforcement of contractual obligations. The Administration may
call on agencies to conference or conciliation meetings or may require
submission of reports for the purpose of settling complaints or problems
brought to its attention. Agencies shall give these cases priority attention.
Section 4. Assistance on Matters not Related to Contractual Obligations. - The
Administration shall, in coordination with other government institutions and/or
relevant non-governmental organizations, assist workers or members of their
families on matters other than contractual obligations that may arise as a
result of overseas employment. In the performance of this function, the
Administration may call on agencies concerned which shall therefore, provide
all assistance required.
Section 5. Repatriation of Workers. - The repatriation of the worker and the
transport of his personal belongings shall be the primary responsibility of the
agency which recruited or deployed the worker overseas. All be borne by the
agency concerned and/or its principal.
Likewise, the repatriation and the transport of the personal belongings of the
deceased worker and all costs attendant to repatriation hereto shall be the
responsibility of the principal and/or agency.
Section 6. Claims for Death and Disability. - Claims for death, disability and
other benefits as well as money claims by the worker or his beneficiary/her
arising from overseas employment shall be given preferential attention and
solution by the agency and/or its principal.
Section 7. Administrative Sanctions. - Deliberate failure by agencies and/or
principals to act on requests for assistance but not limited to those provided
in Sections 1 to 6 of this Rule, may warrant imposition by the
Administration of such sanction as it may deem necessary.
Section 8. Welfare Programs and Activities. - The Administration, in
coordination with other institutions, shall initiate and undertake such projects
and activities that will enhance the welfare and interests of the workers at the
jobsites and their families including such projects and activities that will
facilitate the integration of returning workers into the mainstream of life in the
Philippines.

RULE II
CONCILIATION OF COMPLAINTS

Section 1. Conciliation of Complaints. - The Administration shall conciliate

complaints of workers and/or their families arising out of the enforcement of
the contract; matters not related to contractual obligations; and claims for
death and/or disability and other benefits.

Section 2. Complainant. - The Administration shall take cognizance of

complaints filed by any contract worker, whether or not he is in the Philippines,
by his heirs and beneficiaries, and by any licensed agency or its
principal/employer.
Section 3. Conciliation Proceeding. - Upon receipt of the complaint, the
Administration shall notify the respondent. Whenever possible, the
Administration shall notify the respondent. Whenever possible, the
Administration shall bring together the complainant and the respondent with
the end in view of arriving at an amicable settlement.

In its conduct of conciliation, the Administration may direct the parties to

appear and answer questions.

In instances where there is amicable settlement and/or voluntary payment,

the Administration shall witness such settlement/payment to the worker or his
heirs/beneficiaries.

Should both parties fail to agree to an amicable settlement, the complaint may
be referred to the Adjudication Office upon approval by the complainant.

Section 4. Administrative Sanction. - Deliberate failure by agencies to act on

complaints will warrant imposition by the Administration of such sanction as
it may deem necessary.
Likewise, if after proper evaluation of complaints and supporting documents
there is a finding that the employer or principal is remiss in the performance
of its contractual obligations to the prejudice of its workers, the Administration
shall recommend watchlisting of said employer or principal.

RULE III
WORKER'S ORIENTATION

Section I. Pre-Employment Orientation- The Administration, in coordination

with other institutions, shall provide applicants for overseas employment with
an orientation that will prepare them for overseas employment. Such will focus
on but will not be limited to an interview of the overseas employment
program; procedures and documentary requirements for application; licensed
agencies; modus operandi of illegal recruitment activities and government
services available to overseas job applicants and hired workers.
Section 2. Pre-Departure Orientation Seminar. - Every worker departing for
overseas employment as a new hire shall undergo a pre-departure orientation
seminar.
Section 3. Responsibility of Providing a Pre-Departure Orientation Seminar. -
It shall be the responsibility of every licensed agency to provide each worker
it sends overseas a thorough pre-departure orientation seminar (PDOS) in
accordance with the provisions of this Rule.
The conduct of PDOS shall be limited to accredited entities classified into the
following categories:
(a) Licensed agency with such an average annual deployment as may be
determined by the Administration and with a previously accredited PDOS for
its recruits;
(b) Association of licensed agencies;
(c) Non-government organizations (NGOs) with special interest and concerned
for overseas contract workers; and
(d) Other persons/entities as may be allowed by the Administration.
Section 4. Cost of PDOS - Attendance by a worker in the PDOS shall from part
of the package of placement services already paid for by either the worker
through his placement fee of by the employer or principal.
Section 5. Review and Approval of PDOS Programs and Tie-Ups; Accreditation
of PDOS Trainors. - All pre-departure orientation seminar programs, PDOS
program tie-ups and trainors shall be reviewed screened and approved by the
Administration. Only programs and tie-ups which meet the requirements and
trainors who pass the qualification standards of the Administration shall be
given accreditation.
Section 6. Requirements for the Accreditation of a Non-Governmental
Organization (NGO) -
Section 7. Supervision and Monitoring of PDOS Activities. - The Administration
shall supervise and monitor the PDOS activities of accredited agencies. The
PDOS venue of every agency shall be subject to periodic inspection and/or
spot inspections as often as the Administration deems it proper.
Section 8. Submission of PDOS Reports. - Agencies shall submit to the
Administration an advance monthly schedule of their pre-departure
orientation seminars. The report shall include seminars held the previous
month indicating the names of the workers/participants, the date of PDOS and
the countries of destination.

Section 9. Certificates of Attendance. - Workers who complete the PDOS shall

be issued Certificates of Attendance. The Certificates of Attendance shall be
submitted to the Administration.
Section 10. PDOS for POEA-Placed Workers. - The Administration shall provide
PDOS to workers placed overseas through its own facility.
Section 11. Other Related Programs and Activities. - The Administration shall
develop and implement other programs and activities in support of PDOS.
Among others the Administration may undertake a trainor's training for
agencies and advance programs designed to equip workers with the necessary
skills to cope with or adapt to changes in environment.
Section 12. Sanctions - Violation of any of the provisions of this Rule shall be
subject to sanctions.

RULE IV
MANPOWER REGISTRY

Section 1. The Manpower Registry Skills Bank. - The Administration shall

establish and maintain a national manpower registry or skills bank in support
of the overseas employment program. For this purpose, it shall adopt a system
of registration of workers according to skills, occupation or such classification,
as it may deem expedient and effective. As far as practicable, agencies shall
recruit from the national manpower pool.
Section 2. Membership in the Manpower Registry. - Membership in the national
manpower registry shall be open to all workers. The Administration shall
conduct and/or supervise the process of skill determination/qualification of
applicant workers in accordance with established criteria and issue the
corresponding certifications. Those who are duly certified by the
Administration shall automatically become members of the pool.
Section 3. Agency Manpower Pool. - An agency may establish its own
manpower pool in support of its marketing program provided no fee shall be
charged to the worker for membership in the manpower pool.
Section 4. Disqualification from the manpower Registry. -
(a) Submission of fake documents;
(b) Breach of the Code of Discipline for Filipino Overseas Workers;
(c) Tampering with documents issued by the Administration such as
registration card, history cards and other forms used in registration; and
(d) Other grounds that may be determined by the Administration
RULE V
MANPOWER RESEARCH AND DEVELOPMENT

Section 1. Research Studies. - The Administration in coordination with other

entities shall conduct periodic researches and studies in labor supply especially
as it relates to the range and scope of demandable and critical skills for
overseas employment including but not limited to international standards and
technological development programs for landbased workers and seafarers;
and for developing guidelines to regulate the outflow of critical skills especially
in essential public services and industries indispensable to the national
interest.
Section 2. Manpower Development Program for Overseas Workers. - In order
to rationalize the supply of qualified manpower for overseas employment, the
Administration shall identify/develop training programs and enlist the
participation of both government and private sectors to undertake such
programs for skills that are in demand overseas.
Section 3. Developing of Training Standards. - On the basis of such research
studies, the Administrator shall coordinate with both private entities and
government agencies and employers concerned in the formulation of
Accreditation and training standards.
Section 4. Implementation, Supervision and Regulation of Training Programs
for Overseas Employment. - The administration shall implement, regulate and
supervise the conduct of training programs for overseas contract workers.

RULE VI
CODE OF DISCIPLINE FOR OVERSEAS CONTRACT WORKERS

Section 1. Obligations of Overseas Workers. - It shall be the obligation of every

Filipino overseas workers to abide by the terms and conditions of his
employment contract, to behave in the best manner and tradition of a Filipino
and to observe or respect the laws, customs, mores, traditions and practices
of the country where he is working. It shall also be his obligation to abide
with the requirements on remittance of earnings as well as to provide material
help to his family during the period of his overseas employment: •
a. Duty to family:

(1) to provide ample financial and moral support to his family in the
Philippines; and
(2) to communicate with his family as often as he can and make his presence
felt just as if when he is around.
b. Duty to fellow contract worker:
(1) to assist and cooperate with other contract worker working in the same
site; and
(2) to restrain from degrading a colleague in order to get a position or rank or
from putting a fellow worker in bad light before his colleagues or superiors.
c. Duty to country:
(1) to uphold the ideas of the Republic of the Philippines and to defend it, if
warranted;
(2) to abide by the rules and regulations aimed at promoting the worker’s
interest and enhancing national gains; and
(3) to be the Ambassador of Goodwill, projecting only the good in the Filipino
and restrain from tarnishing the Filipino image abroad.
d. Duty to agency and/or employer:
(1) to provide the agency and/or employer with correct and true
statements/certifications regarding his skill, experience and other
qualifications;
(2) to understand and abide with the terms and conditions of the employment
contract;
(3) to maintain a high level of productivity as well as abide by company rules
and regulations; and
(4) to refrain from committing acts which are detrimental to the interest of his
employer, agency during his documentary processing and/or employment.
e. Duty to host country:
(1) to respect the mores, customs and traditions of the country; and
(2) to respect and obey the laws of the host country.

RULE VII
PERFORMANCE BOND FOR WORKERS

Section 1. Performance Bond. - In order ensure faithful compliance by

workers of their work contracts and to safeguard against their getting stranded
as a result of the termination of their employment for cause or the abrogation
of their employment contract for reason of non-performance, agencies may
require each worker recruited and hired by them to post a performance bond
equivalent to a return plane fare but in no case exceed
P20,000.00. Arrangement for the bond agreement or its renewal shall be
undertaken by the agency.
Agencies may, in lieu of the performance bond, adopt a reimbursable return
travel fund scheme subject to guidelines by the Administration.
The posting of performance bond is optional for seamen.
Section 2. Payment of Premium Fee. - Only the exact amount for premium
fee including the necessary notarial fee shall be charged each worker for the
performance bond. Imposition of the performance bond in cash is strictly
prohibited. The cost of premium for the bond shall be in addition to the
placement fee paid by the worker.

Section 3. Repatriation Program. - In the event the worker is terminated for

cause or whose employment contract is abrogated for non-
performance necessitating his immediate repatriation, the agency involved
shall immediately cause the repatriation of said worker. For this purpose, the
agency shall advance the cost of plane fare and later collect from the bonding
company the amount involved.

Section 4. Repatriation of Workers without Performance Bond. - The

responsibility of the agency to immediately repatriate a worker who is
terminated for cause or whose employment contract was abrogated for reason
of non-performance bond. In cases like these, the agency concerned shall
immediately repatriate the workers and shoulder the cost of repatriation.

Section 5. Action of Failure to Effect Immediate Repatriation. - Should the

agency unduly delay without justifiable reason the repatriation of the worker
who is terminated for cause or whose employment contract is abrogated for
reason of non-performance in spite of adequate notice to it by the
Administration, the latter may cause the worker’s repatriation and charge the
cost of the plane fare to the agency’s cash bond.

RULE VIII
FOREIGN EXCHANGE REMITTANCE

Section 1. Obligation to Remit. - It shall be mandatory for a contract worker

to remit to his beneficiary in the Philippines such percentage of his basic salary
abroad as required in Section 3 below and have the same exchanged for pesos
through the Philippine banking system. Agencies shall cause the inward
remittance of foreign exchange payments resulting from their overseas
transactions such as service fees, airfares and others.

Section 2. Obligation to Report. - Agencies shall submit periodic reports to the

Central Bank of the Philippines on their foreign exchange earnings, copies of
which shall be furnished the Administration.

Section 3. Mandatory Remittance Requirement. - The percentage of foreign

remittance referred to in Section 2 of this Rule, shall be as follows:
a. Seamen or Mariners: cralaw
Eighty percent (80%) of the basic salary.
b. Workers of Filipino contractors and construction companies:
Seventy (70%) percent of the basic salary.
c. Doctors, engineers, teachers, nurses and other professional workers whose
employment contracts provide for free board and lodging facilities:
Seventy (70%) percent of the basic salary:
d. All other professionals whose employment contracts do not provide free
board and lodging facilities:
Fifty (50%) percent of the basic salary.
e. Domestic and other service workers:
Fifty (50%) percent of the basic salary.
f. All other workers not falling under the aforementioned categories:
Fifty (50%) percent of the basic salary.

Section 4. Proof of Compliance. - Proof of compliance with the mandatory

remittances requirement as mentioned on Section 2 hereof, may consist of
any of the following documents or such alternatives as may be approved by
the Central Bank of the Philippines showing that the contract workers had in
fact effected aforesaid remittance and had caused the surrender of the same
for pesos through the Philippine banking system.
a. Confirmed bank remittance form; or
b. Certification from employer duly authenticated that remittance has been
effected; or
c. Bank certification or credit/payment advice evidencing sale for pesos to the
Philippine banking system; or
d. Central Bank official receipt covering foreign exchange sold in the
Philippines to authorized agent banks or authorized foreign exchange dealers;
or
e. Receipt of International Postal Money Order.
BOOK IX
GENERAL AND MISCELLANEOUS PROVISIONS

Section 1. Authority to Administer Oaths. - The Administrator, or any person

designated by him to handle cases or disputes, shall have the authority to
administer oaths and require the attendance of witnesses or the production of
any book, paper, correspondence, memoranda and other documents relevant
or material to the case or inquiry.
The Administrator may also designate any office of employee to administer
oath on matters pertaining to the filing and receiving complaint as well as
enforcement of decisions, orders or resolutions of the Administration.

Section 2. Consolidation of Cases. - Where there are two (2) or more cases
pending before different Hearing Officers, involving the same respondent/s
and issues, the case which was filed last may be consolidated with the first to
avoid unnecessary cost or delay. Such cases shall be handled by the Hearing
Officers to whom the first case was assigned.

Section 3. Prescription. - All money claims arising from the acts of

enumerated in Section 1, Rule I of Book VI, shall be barred if not commenced
or filed with the Administration within three (3) years after such cause of
action accrued.
Likewise, disciplinary action shall be barred if not commenced or filed with the
Administration within three (3) years after such action occurred.

Section 4. Construction. - These rules shall be liberally construed to carry out

the objectives of the Constitution, the Labor Code of the Philippines, laws
pertaining to overseas employment and to assist the parties in obtaining just,
expeditious and inexpensive settlement of disputes.

Section 5. Separability Clause. - The provisions of these Rules and

Regulations are declared to be separable and if any provision or the application
thereof is held invalid or unconstitutional, the validity of the other provisions
shall not be affected.

Section 6. Repealing Clause. - All policies, issuances, rules and regulations

inconsistent with these Rules are hereby repealed or modified accordingly.

Section 7. Effectivity. - These rules shall take effect fifteen (15) days from
publication in a newspaper of general circulation.
G.R. No. 184058 March 10, 2010

PEOPLE OF THE PHILIPPINES, Appellee,

vs.
MELISSA CHUA, Appellant.

DECISION

CARPIO MORALES, J.:

Melissa Chua (appellant) was indicted for Illegal Recruitment (Large Scale) and was convicted
thereof by the Regional Trial Court (RTC) of Manila. She was also indicted for five counts of Estafa
but was convicted only for three. The Court of Appeals, by Decision1 dated February 27, 2008,
affirmed appellant’s conviction.

The Information2 charging appellant, together with one Josie Campos (Josie), with Illegal
Recruitment (Large Scale), docketed as Criminal Case No. 04-222596, reads:

The undersigned accuses JOSIE CAMPOS and MELISSA CHUA of violation of Article 38 (a) PD
1413, amending certain provisions of Book I, PD 442, otherwise known as the New Labor Code of
the Philippines, in relation to Art. 13 (b) and (c ) of said Code, as further amended by PD Nos. 1693,
1920 and 2019 and as further amended by Sec. 6 (a), (1) and (m) of RA 8042 committed in a [sic]
large scale as follows:

That sometime during the month of September, 2002, in the City of Manila, Philippines, the said
accused, conspiring and confederating together and mutually helping each other, representing
themselves to have the capacity to contract, enlist and transport Filipino workers for employment
abroad, did then and there willfully, unlawfully and knowingly for a fee, recruit and promise
employment/job placement abroad to ERIK DE GUIA TAN, MARILYN O. MACARANAS,
NAPOLEON H. YU, JR., HARRY JAMES P. KING and ROBERTO C. ANGELES for overseas
employment abroad without first having secured the required license from the Department of Labor
and Employment as required by law, and charge or accept directly from:

ERIK DE GUIA TAN - P73,000.00

MARILYN D. MACARANAS - 83,000.00

NAPOLEON H. YU, JR. - 23,000.00

HARRY JAMES P. KING - 23,000.00

ROBERTO C. ANGELES - 23,000.00

For purposes of their deployment, which amounts are in excess of or greater than that specified in
the schedule of allowable fees as prescribed by the POEA, and without valid reasons and without
the fault of said complainants, failed to actually deploy them and failed to reimburse expenses
incurred in connection with their documentation and processing for purposes of their deployment.

xxxx
The five Informations3 charging appellant and Josie with Estafa, docketed as Criminal Case Nos. 04-
222597-601, were similarly worded and varied only with respect to the names of the five
complainants and the amount that each purportedly gave to the accused. Thus each of the
Information reads:

xxxx

That on or about . . . in the City of Manila, Philippines, the said accused, conspiring and
confederating together and mutually helping each other, did then and there willfully, unlawfully and
feloniously defraud xxx in the following manner, to wit: the said accused by means of false
manifestations which they made to the said . . . to the effect that they had the power and capacity to
recruit the latter as factory worker to work in Taiwan and could facilitate the processing of the
pertinent papers if given the necessary amount to meet the requirements thereof, and by means of
other similar deceits, induced and succeeded in inducing said xxx to give and deliver, as in fact he
gave and delivered to the said accused the amount of . . . on the strength of said manifestations and
representations, said accused well knowing that the same were false and fraudulent and were made
solely to obtain, as in fact they did obtain the amount of . . . which amount once in their possession,
with intent to defraud, they willfully, unlawfully and feloniously misappropriated, misapplied and
converted to their own personal use and benefit, to the damage of said . . . in the aforesaid amount
of . . ., Philippine Currency.

xxxx

Appellant pleaded not guilty on arraignment. Her co-accused Josie remained at large. The cases
were consolidated, hence, trial proceeded only with respect to appellant.

Of the five complainants, only three testified, namely, Marilyn D. Macaranas (Marilyn), Erik de Guia
Tan (Tan) and Harry James King (King). The substance of their respective testimonies follows:

Marilyn’s testimony:

After she was introduced in June 2002 by Josie to appellant as capacitated to deploy factory workers
to Taiwan, she paid appellant P80,000 as placement fee and P3,750 as medical expenses fee, a
receipt4 for the first amount of which was issued by appellant.

Appellant had told her that she could leave for Taiwan in the last week of September 2002 but she
did not, and despite appellant’s assurance that she would leave in the first or second week of
October, just the same she did not.

She thus asked for the refund of the amount she paid but appellant claimed that she was not in
possession thereof but promised anyway to raise the amount to pay her, but she never did.

She later learned in June 2003 that appellant was not a licensed recruiter, prompting her to file the
complaint against appellant and Josie.

Tan’s testimony:

After he was introduced by Josie to appellant at the Golden Gate, Inc., (Golden Gate) an agency
situated in Paragon Tower Hotel in Ermita, Manila, he underwent medical examination upon
appellant’s assurance that he could work in Taiwan as a factory worker with a guaranteed monthly
salary of 15,800 in Taiwan currency.
He thus paid appellant, on September 6, 2002, P70,0005 representing placement fees for which she
issued a receipt. Appellant welched on her promise to deploy him to Taiwan, however, hence, he
demanded the refund of his money but appellant failed to. He later learned that Golden Gate was not
licensed to deploy workers to Taiwan, hence, he filed the complaint against appellant and Josie.

King’s testimony:

His friend and a fellow complainant Napoleon Yu introduced him to Josie who in turn introduced
appellant as one who could deploy him to Taiwan.

On September 24, 2002,6 he paid appellant P20,000 representing partial payment for placement
fees amounting to P80,000, but when he later inquired when he would be deployed, Golden Gate’s
office was already closed. He later learned that Golden Gate’s license had already expired,
prompting him to file the complaint.

Appellant denied the charges. Claiming having worked as a temporary cashier from January to
October, 2002 at the office of Golden Gate, owned by one Marilyn Calueng,7 she maintained that
Golden Gate was a licensed recruitment agency and that Josie, who is her godmother, was an
agent.

Admitting having received P80,000 each from Marilyn and Tan, receipt of which she issued but
denying receiving any amount from King, she claimed that she turned over the money to the
documentation officer, one Arlene Vega, who in turn remitted the money to Marilyn Calueng whose
present whereabouts she did not know.

By Decision of April 5, 2006, Branch 36 of the Manila RTC convicted appellant of Illegal Recruitment
(Large Scale) and three counts of Estafa, disposing as follows:

WHEREFORE, the prosecution having established the guilt of accused Melissa Chua beyond
reasonable doubt, judgment is hereby rendered convicting the accused as principal of a large scale
illegal recruitment and estafa three (3) counts and she is sentenced to life imprisonment and to pay a
fine of Five Hundred Thousand Pesos (P500,000.00) for illegal recruitment. 1av vphi1

The accused is likewise convicted of estafa committed against Harry James P. King and she is
sentenced to suffer the indeterminate penalty of Four (4) years and Two (2) months of prision
correctional as minimum, to Six (6) years and One (1) day of prision mayor as maximum; in Criminal
Case No. 04-22598; in Criminal Case No. 04-222600 committed against Marilyn Macaranas,
accused is sentence [sic] to suffer the indeterminate penalty of Four (4) years and Two (2) months of
prision correctional as minimum, to Twelve (12) years and one (1) day of reclusion temporal as
maximum; and in Criminal Case No. 04-222601 committed against Erik de Guia Tan, she is likewise
sentence [sic] to suffer an indeterminate penalty of Four (4) years and Two (2) months of prision
correctional as minimum, to Eleven (11) years and One (1) day of prision mayor as maximum.

Accused Melissa Chua is also ordered to return the amounts of P20,000.00 to Harry James P. King,
P83,750.00 to Marilyn D. Macaranas, and P70,000.00 to Erik de Guia Tan.

As regards Criminal Cases Nos. 04-222597 and 04-222599, both are dismissed for lack of interest of
complainants Roberto Angeles and Napoleon Yu, Jr.
In the service of her sentence, the accused is credited with the full period of preventive imprisonment
if she agrees in writing to abide by the disciplinary rules imposed, otherwise only 4/5 shall be
credited.

SO ORDERED.

The Court of Appeals, as stated early on, affirmed the trial court’s decision by the challenged
Decision of February 27, 2008, it holding that appellant’s defense that, as temporary cashier of
Golden Gate, she received the money which was ultimately remitted to Marilyn Calueng is
immaterial, she having failed to prove the existence of an employment relationship between her and
Marilyn, as well as the legitimacy of the operations of Golden Gate and the extent of her involvement
therein.

Citing People v. Sagayaga,8 the appellate court ruled that an employee of a company engaged in
illegal recruitment may be held liable as principal together with his employer if it is shown that he, as
in the case of appellant, actively and consciously participated therein.

Respecting the cases for Estafa, the appellate court, noting that a person convicted of illegal
recruitment may, in addition, be convicted of Estafa as penalized under Article 315, paragraph 2(a)
of the Revised Penal Code, held that the elements thereof were sufficiently established, viz: that
appellant deceived the complainants by assuring them of employment in Taiwan provided they pay
the required placement fee; that relying on such representation, the complainants paid appellant the
amount demanded; that her representation turned out to be false because she failed to deploy them
as promised; and that the complainants suffered damages when they failed to be reimbursed the
amounts they paid.

Hence, the present appeal, appellant reiterating the same arguments she raised in the appellate
court.

The appeal is bereft of merit.

The term "recruitment and placement" is defined under Article 13(b) of the Labor Code of the
Philippines as follows:

(b) "Recruitment and placement" refers to any act of canvassing, enlisting, contracting, transporting,
utilizing, hiring, or procuring workers, and includes referrals, contract services, promising or
advertising for employment, locally or abroad, whether for profit or not. Provided, That any person or
entity which, in any manner, offers or promises for a fee employment to two or more persons shall
be deemed engaged in recruitment and placement. (emphasis supplied)

On the other hand, Article 38, paragraph (a) of the Labor Code, as amended, under which appellant
was charged, provides:

Art. 38. Illegal Recruitment. – (a) Any recruitment activities, including the prohibited practices
enumerated under Article 34 of this Code, to be undertaken by non-licensees or non-holders of
authority shall be deemed illegal and punishable under Article 39 of this Code. The Ministry of Labor
and Employment or any law enforcement officer may initiate complaints under this Article.

(b) Illegal recruitment when committed by a syndicate or in large scale shall be considered an
offense involving economic sabotage and shall be penalized in accordance with Article 39 hereof.
Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more
persons conspiring and/or confederating with one another in carrying out any unlawful or illegal
transaction, enterprise or scheme defined under the first paragraph hereof. Illegal recruitment is
deemed committed in large scale if committed against three (3) or more persons individually or as a
group. (emphasis supplied)

From the foregoing provisions, it is clear that any recruitment activities to be undertaken by non-
licensee or non-holder of contracts, or as in the present case, an agency with an expired license,
shall be deemed illegal and punishable under Article 39 of the Labor Code of the Philippines. And
illegal recruitment is deemed committed in large scale if committed against three or more persons
individually or as a group.

Thus for illegal recruitment in large scale to prosper, the prosecution has to prove three essential
elements, to wit: (1) the accused undertook a recruitment activity under Article 13(b) or any
prohibited practice under Article 34 of the Labor Code; (2) the accused did not have the license or
the authority to lawfully engage in the recruitment and placement of workers; and (3) the accused
committed such illegal activity against three or more persons individually or as a group.9

In the present case, Golden Gate, of which appellant admitted being a cashier from January to
October 2002, was initially authorized to recruit workers for deployment abroad. Per the certification
from the POEA, Golden Gate’s license only expired on February 23, 2002 and it was delisted from
the roster of licensed agencies on April 2, 2002.

Appellant was positively pointed to as one of the persons who enticed the complainants to part with
their money upon the fraudulent representation that they would be able to secure for them
employment abroad. In the absence of any evidence that the complainants were motivated by
improper motives, the trial court’s assessment of their credibility shall not be interfered with by the
Court.10

Even if appellant were a mere temporary cashier of Golden Gate, that did not make her any less an
employee to be held liable for illegal recruitment as principal by direct participation, together with the
employer, as it was shown that she actively and consciously participated in the recruitment
process. 11

Assuming arguendo that appellant was unaware of the illegal nature of the recruitment business of
Golden Gate, that does not free her of liability either. Illegal Recruitment in Large Scale penalized
under Republic Act No. 8042, or "The Migrant Workers and Overseas Filipinos Act of 1995," is a
special law, a violation of which is malum prohibitum, not malum in se. Intent is thus immaterial. And
that explains why appellant was, aside from Estafa, convicted of such offense.

[I]llegal recruitment is malum prohibitum, while estafa is malum in se. In the first, the criminal intent
of the accused is not necessary for conviction. In the second, such an intent is imperative. Estafa
under Article 315, paragraph 2, of the Revised Penal Code, is committed by any person who
defrauds another by using fictitious name, or falsely pretends to possess power, influence,
qualifications, property, credit, agency, business or imaginary transactions, or by means of similar
deceits executed prior to or simultaneously with the commission of fraud.12 (emphasis supplied)

WHEREFORE, the appeal is hereby DENIED.

SO ORDERED.

G.R. No. 187730 June 29, 2010

PEOPLE OF THE PHILIPPINES, Petitioner,
vs.
RODOLFO GALLO y GADOT, Accused-Appellant,
FIDES PACARDO y JUNGCO and PILAR MANTA y DUNGO, Accused.

DECISION

VELASCO, JR., J.:

The Case

This is an appeal from the Decision1 dated December 24, 2008 of the Court of Appeals (CA) in CA-
G.R. CR-H.C. No. 02764 entitled People of the Philippines v. Rodolfo Gallo y Gadot (accused-
appellant), Fides Pacardo y Jungco and Pilar Manta y Dungo (accused), which affirmed the
Decision2 dated March 15, 2007 of the Regional Trial Court (RTC), Branch 30 in Manila which
convicted the accused-appellant Rodolfo Gallo y Gadot ("accused-appellant") of syndicated illegal
recruitment in Criminal Case No. 02-206293 and estafa in Criminal Case No. 02-206297.

The Facts

Originally, accused-appellant Gallo and accused Fides Pacardo ("Pacardo") and Pilar Manta
("Manta"), together with Mardeolyn Martir ("Mardeolyn") and nine (9) others, were charged with
syndicated illegal recruitment and eighteen (18) counts of estafa committed against eighteen
complainants, including Edgardo V. Dela Caza ("Dela Caza"), Sandy Guantero ("Guantero") and
Danilo Sare ("Sare"). The cases were respectively docketed as Criminal Case Nos. 02-2062936 to
02-206311. However, records reveal that only Criminal Case No. 02-206293, which was filed against
accused-appellant Gallo, Pacardo and Manta for syndicated illegal recruitment, and Criminal Case
Nos. 02-206297, 02-206300 and 02-206308, which were filed against accused-appellant Gallo,
Pacardo and Manta for estafa, proceeded to trial due to the fact that the rest of the accused
remained at large. Further, the other cases, Criminal Case Nos. 02-206294 to 02-206296, 02-
206298 to 02-206299, 02-206301 to 02-206307 and 02-206309 to 02-206311 were likewise
provisionally dismissed upon motion of Pacardo, Manta and accused-appellant for failure of the
respective complainants in said cases to appear and testify during trial.

It should also be noted that after trial, Pacardo and Manta were acquitted in Criminal Case Nos. 02-
206293, 02-206297, 02-206300 and 02-206308 for insufficiency of evidence. Likewise, accused-
appellant Gallo was similarly acquitted in Criminal Case Nos. 02-206300, the case filed by Guantero,
and 02-206308, the case filed by Sare. However, accused-appellant was found guilty beyond
reasonable doubt in Criminal Case Nos. 02-206293 and 02-206297, both filed by Dela Caza, for
syndicated illegal recruitment and estafa, respectively.

Thus, the present appeal concerns solely accused-appellant’s conviction for syndicated illegal
recruitment in Criminal Case No. 02-206293 and for estafa in Criminal Case No. 02-206297.

In Criminal Case No. 02-206293, the information charges the accused-appellant, together with the
others, as follows:

The undersigned accuses MARDEOLYN MARTIR, ISMAEL GALANZA, NELMAR MARTIR,

MARCELINO MARTIR, NORMAN MARTIR, NELSON MARTIR, MA. CECILIA M. RAMOS, LULU
MENDANES, FIDES PACARDO y JUNGCO, RODOLFO GALLO y GADOT, PILAR MANTA y
DUNGO, ELEONOR PANUNCIO and YEO SIN UNG of a violation of Section 6(a), (l) and (m) of
Republic Act 8042, otherwise known as the Migrant Workers and Overseas Filipino Workers Act of
1995, committed by a syndicate and in large scale, as follows:

That in or about and during the period comprised between November 2000 and December, 2001,
inclusive, in the City of Manila, Philippines, the said accused conspiring and confederating together
and helping with one another, representing themselves to have the capacity to contract, enlist and
transport Filipino workers for employment abroad, did then and there willfully and unlawfully, for a
fee, recruit and promise employment/job placement abroad to FERDINAND ASISTIN, ENTICE
BRENDO, REYMOND G. CENA, EDGARDO V. DELA CAZA, RAYMUND EDAYA, SANDY O.
GUANTENO, RENATO V. HUFALAR, ELENA JUBICO, LUPO A. MANALO, ALMA V. MENOR,
ROGELIO S. MORON, FEDILA G. NAIPA, OSCAR RAMIREZ, MARISOL L. SABALDAN, DANILO
SARE, MARY BETH SARDON, JOHNNY SOLATORIO and JOEL TINIO in Korea as factory workers
and charge or accept directly or indirectly from said FERDINAND ASISTIN the amount of
P45,000.00; ENTICE BRENDO – P35,000.00; REYMOND G. CENA – P30,000.00; EDGARDO V.
DELA CAZA – P45,000.00; RAYMUND EDAYA – P100,000.00; SANDY O. GUANTENO –
P35,000.00; RENATO V. HUFALAR – P70,000.00; ELENA JUBICO – P30,000.00; LUPO A.
MANALO – P75,000.00; ALMA V. MENOR – P45,000.00; ROGELIO S. MORON – P70,000.00;
FEDILA G. NAIPA – P45,000.00; OSCAR RAMIREZ – P45,000.00; MARISOL L. SABALDAN –
P75,000.00; DANILO SARE – P100,000.00; MARY BETH SARDON – P25,000.00; JOHNNY
SOLATORIO – P35,000.00; and JOEL TINIO – P120,000.00 as placement fees in connection with
their overseas employment, which amounts are in excess of or greater than those specified in the
schedule of allowable fees prescribed by the POEA Board Resolution No. 02, Series 1998, and
without valid reasons and without the fault of the said complainants failed to actually deploy them
and failed to reimburse the expenses incurred by the said complainants in connection with their
documentation and processing for purposes of their deployment.3 (Emphasis supplied)

In Criminal Case No. 02-206297, the information reads:

That on or about May 28, 2001, in the City of Manila, Philippines, the said accused conspiring and
confederating together and helping with [sic] one another, did then and there willfully, unlawfully and
feloniously defraud EDGARDO V. DELA CAZA, in the following manner, to wit: the said accused by
means of false manifestations and fraudulent representations which they made to the latter, prior to
and even simultaneous with the commission of the fraud, to the effect that they had the power and
capacity to recruit and employ said EDGARDO V. DELA CAZA in Korea as factory worker and could
facilitate the processing of the pertinent papers if given the necessary amount to meet the
requirements thereof; induced and succeeded in inducing said EDGARDO V. DELA CAZA to give
and deliver, as in fact, he gave and delivered to said accused the amount of P45,000.00 on the
strength of said manifestations and representations, said accused well knowing that the same were
false and untrue and were made [solely] for the purpose of obtaining, as in fact they did obtain the
said amount of P45,000.00 which amount once in their possession, with intent to defraud said
[EDGARDO] V. DELA CAZA, they willfully, unlawfully and feloniously misappropriated, misapplied
and converted the said amount of P45,000.00 to their own personal use and benefit, to the damage
and prejudice of the said EDGARDO V. DELA CAZA in the aforesaid amount of P45,000.00,
Philippine currency.

CONTRARY TO LAW.4

When arraigned on January 19, 2004, accused-appellant Gallo entered a plea of not guilty to all
charges.

On March 3, 2004, the pre-trial was terminated and trial ensued, thereafter.
During the trial, the prosecution presented as their witnesses, Armando Albines Roa, the Philippine
Overseas Employment Administration (POEA) representative and private complainants Dela Caza,
Guanteno and Sare. On the other hand, the defense presented as its witnesses, accused-appellant
Gallo, Pacardo and Manta.

Version of the Prosecution

On May 22, 2001, Dela Caza was introduced by Eleanor Panuncio to accused-appellant Gallo,
Pacardo, Manta, Mardeolyn, Lulu Mendanes, Yeo Sin Ung and another Korean national at the office
of MPM International Recruitment and Promotion Agency ("MPM Agency") located in Malate, Manila.

Dela Caza was told that Mardeolyn was the President of MPM Agency, while Nelmar Martir was one
of the incorporators. Also, that Marcelino Martir, Norman Martir, Nelson Martir and Ma. Cecilia
Ramos were its board members. Lulu Mendanes acted as the cashier and accountant, while
Pacardo acted as the agency’s employee who was in charge of the records of the applicants. Manta,
on the other hand, was also an employee who was tasked to deliver documents to the Korean
embassy.

Accused-appellant Gallo then introduced himself as a relative of Mardeolyn and informed Dela Caza
that the agency was able to send many workers abroad. Together with Pacardo and Manta, he also
told Dela Caza about the placement fee of One Hundred Fifty Thousand Pesos (PhP 150,000) with a
down payment of Forty-Five Thousand Pesos (PhP 45,000) and the balance to be paid through
salary deduction.

Dela Caza, together with the other applicants, were briefed by Mardeolyn about the processing of
their application papers for job placement in Korea as a factory worker and their possible salary.
Accused Yeo Sin Ung also gave a briefing about the business and what to expect from the company
and the salary.

With accused-appellant’s assurance that many workers have been sent abroad, as well as the
presence of the two (2) Korean nationals and upon being shown the visas procured for the deployed
workers, Dela Caza was convinced to part with his money. Thus, on May 29, 2001, he paid Forty-
Five Thousand Pesos (PhP 45,000) to MPM Agency through accused-appellant Gallo who, while in
the presence of Pacardo, Manta and Mardeolyn, issued and signed Official Receipt No. 401.

Two (2) weeks after paying MPM Agency, Dela Caza went back to the agency’s office in Malate,
Manila only to discover that the office had moved to a new location at Batangas Street, Brgy. San
Isidro, Makati. He proceeded to the new address and found out that the agency was renamed to
New Filipino Manpower Development & Services, Inc. ("New Filipino"). At the new office, he talked to
Pacardo, Manta, Mardeolyn, Lulu Mendanes and accused-appellant Gallo. He was informed that the
transfer was done for easy accessibility to clients and for the purpose of changing the name of the
agency.

Dela Caza decided to withdraw his application and recover the amount he paid but Mardeolyn,
Pacardo, Manta and Lulu Mendanes talked him out from pursuing his decision. On the other hand,
accused-appellant Gallo even denied any knowledge about the money.

After two (2) more months of waiting in vain to be deployed, Dela Caza and the other applicants
decided to take action. The first attempt was unsuccessful because the agency again moved to
another place. However, with the help of the Office of Ambassador Señeres and the Western Police
District, they were able to locate the new address at 500 Prudential Building, Carriedo, Manila. The
agency explained that it had to move in order to separate those who are applying as entertainers
from those applying as factory workers. Accused-appellant Gallo, together with Pacardo and Manta,
were then arrested.

The testimony of prosecution witness Armando Albines Roa, a POEA employee, was dispensed with
after the prosecution and defense stipulated and admitted to the existence of the following
documents:

1. Certification issued by Felicitas Q. Bay, Director II, Licensing Branch of the POEA to the
effect that "New Filipino Manpower Development & Services, Inc., with office address at
1256 Batangas St., Brgy. San Isidro, Makati City, was a licensed landbased agency whose
license expired on December 10, 2001 and was delisted from the roster of licensed agencies
on December 14, 2001." It further certified that "Fides J. Pacardo was the agency’s
Recruitment Officer";

2. Certification issued by Felicitas Q. Bay of the POEA to the effect that MPM International
Recruitment and Promotion is not licensed by the POEA to recruit workers for overseas
employment;

3. Certified copy of POEA Memorandum Circular No. 14, Series of 1999 regarding
placement fee ceiling for landbased workers.

4. Certified copy of POEA Memorandum Circular No. 09, Series of 1998 on the placement
fee ceiling for Taiwan and Korean markets, and

5. Certified copy of POEA Governing Board Resolution No. 02, series of 1998.

Version of the Defense

For his defense, accused-appellant denied having any part in the recruitment of Dela Caza. In fact,
he testified that he also applied with MPM Agency for deployment to Korea as a factory worker.
According to him, he gave his application directly with Mardeolyn because she was his town mate
and he was allowed to pay only Ten Thousand Pesos (PhP 10,000) as processing fee. Further, in
order to facilitate the processing of his papers, he agreed to perform some tasks for the agency,
such as taking photographs of the visa and passport of applicants, running errands and performing
such other tasks assigned to him, without salary except for some allowance. He said that he only
saw Dela Caza one or twice at the agency’s office when he applied for work abroad. Lastly, that he
was also promised deployment abroad but it never materialized.

Ruling of the Trial Court

On March 15, 2007, the RTC rendered its Decision convicting the accused of syndicated illegal
recruitment and estafa. The dispositive portion reads:

WHEREFORE, judgment is hereby rendered as follows:

I. Accused FIDES PACARDO y JUNGO and PILAR MANTA y DUNGO are hereby
ACQUITTED of the crimes charged in Criminal Cases Nos. 02-206293, 02-206297, 02-
206300 and 02-206308;

II. Accused RODOLFO GALLO y GADOT is found guilty beyond reasonable doubt in
Criminal Case No. 02-206293 of the crime of Illegal Recruitment committed by a syndicate
 and is hereby sentenced to suffer the penalty of life imprisonment and to pay a fine of ONE
MILLION (Php1,000,000.00) PESOS. He is also ordered to indemnify EDGARDO DELA
CAZA of the sum of FORTY-FIVE THOUSAND (Php45,000.00) PESOS with legal interest
from the filing of the information on September 18, 2002 until fully paid.

III. Accused RODOLFO GALLO y GADOT in Criminal Case No. 02-206297 is likewise found
guilty and is hereby sentenced to suffer the indeterminate penalty of FOUR (4) years of
prision correccional as minimum to NINE (9) years of prision mayor as maximum.

IV. Accused RODOLFO GALLO y GADOT is hereby ACQUITTED of the crime charged in
Criminal Cases Nos. 02-206300 and 02-206308.

Let alias warrants for the arrest of the other accused be issued anew in all the criminal cases.
Pending their arrest, the cases are sent to the archives.

The immediate release of accused Fides Pacardo and Pilar Manta is hereby ordered unless
detained for other lawful cause or charge.

SO ORDERED.5

Ruling of the Appellate Court

On appeal, the CA, in its Decision dated December 24, 2008, disposed of the case as follows:

WHEREFORE, the appealed Decision of the Regional Trial Court of Manila, Branch 30, in Criminal
Cases Nos. 02-206293 and 02-206297, dated March 15, 2007, is AFFIRMED with the
MODIFICATION that in Criminal Case No. 02-206297, for estafa, appellant is sentenced to four (4)
years of prision correccional to ten (10) years of prision mayor.

SO ORDERED.6

The CA held the totality of the prosecution’s evidence showed that the accused-appellant, together
with others, engaged in the recruitment of Dela Caza. His actions and representations to Dela Caza
can hardly be construed as the actions of a mere errand boy.

As determined by the appellate court, the offense is considered economic sabotage having been
committed by more than three (3) persons, namely, accused-appellant Gallo, Mardeolyn, Eleonor
Panuncio and Yeo Sin Ung. More importantly, a personal found guilty of illegal recruitment may also
be convicted of estafa.7 The same evidence proving accused-appellant’s commission of the crime of
illegal recruitment in large scale also establishes his liability for estafa under paragragh 2(a) of
Article 315 of the Revised Penal Code (RPC).

On January 15, 2009, the accused-appellant filed a timely appeal before this Court.

The Issues

Accused-appellant interposes in the present appeal the following assignment of errors:

I
 The court a quo gravely erred in finding the accused-appellant guilty of illegal recruitment
committed by a syndicate despite the failure of the prosecution to prove the same beyond
reasonable doubt.

II

The court a quo gravely erred in finding the accused-appellant guilty of estafa despite the
failure of the prosecution to prove the same beyond reasonable doubt.

Our Ruling

The appeal has no merit.

Evidence supports conviction of the crime of Syndicated Illegal Recruitment

Accused-appellant avers that he cannot be held criminally liable for illegal recruitment because he
was neither an officer nor an employee of the recruitment agency. He alleges that the trial court
erred in adopting the asseveration of the private complainant that he was indeed an employee
because such was not duly supported by competent evidence. According to him, even assuming that
he was an employee, such cannot warrant his outright conviction sans evidence that he acted in
conspiracy with the officers of the agency.

We disagree.

To commit syndicated illegal recruitment, three elements must be established: (1) the offender
undertakes either any activity within the meaning of "recruitment and placement" defined under
Article 13(b), or any of the prohibited practices enumerated under Art. 34 of the Labor Code; (2) he
has no valid license or authority required by law to enable one to lawfully engage in recruitment and
placement of workers;8 and (3) the illegal recruitment is committed by a group of three (3) or more
persons conspiring or confederating with one another.9 When illegal recruitment is committed by a
syndicate or in large scale, i.e., if it is committed against three (3) or more persons individually or as
a group, it is considered an offense involving economic sabotage.10

Under Art. 13(b) of the Labor Code, "recruitment and placement" refers to "any act of canvassing,
enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals,
contract services, promising or advertising for employment, locally or abroad, whether for profit or
not".

After a thorough review of the records, we believe that the prosecution was able to establish the
elements of the offense sufficiently. The evidence readily reveals that MPM Agency was never
licensed by the POEA to recruit workers for overseas employment.

Even with a license, however, illegal recruitment could still be committed under Section 6 of Republic
Act No. 8042 ("R.A. 8042"), otherwise known as the Migrants and Overseas Filipinos Act of 1995,
viz:

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 a 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 act, 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
any amount greater than that actually received by him as a loan or advance;

xxxx

(l) Failure to actually deploy without valid reason as determined by the Department of Labor and
Employment; and

(m) Failure to reimburse expenses incurred by the worker in connection with his documentation and
processing for purposes of deployment 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.

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.

The persons criminally liable for the above offenses are the principals, accomplices and accessories.
In case of juridical persons, the officers having control, management or direction of their business
shall be liable.

In the instant case, accused-appellant committed the acts enumerated in Sec. 6 of R.A. 8042.
Testimonial evidence presented by the prosecution clearly shows that, in consideration of a promise
of foreign employment, accused-appellant received the amount of Php 45,000.00 from Dela Caza.
When accused-appellant made misrepresentations concerning the agency’s purported power and
authority to recruit for overseas employment, and in the process, collected money in the guise of
placement fees, the former clearly committed acts constitutive of illegal recruitment.11 Such acts
were accurately described in the testimony of prosecution witness, Dela Caza, to wit:

PROS. MAGABLIN

Q: How about this Rodolfo Gallo?

A: He was the one who received my money.

Q: Aside from receiving your money, was there any other representations or acts made by
Rodolfo Gallo?

A: He introduced himself to me as relative of Mardeolyn Martir and he even intimated to me

that their agency has sent so many workers abroad.

xxxx

PROS. MAGABLIN
Q: Mr. Witness, as you claimed you tried to withdraw your application at the agency. Was
there any instance that you were able to talk to Fides Pacardo, Rodolfo Gallo and Pilar
Manta?

A: Yes, ma’am.

Q: What was the conversation that transpired among you before you demanded the return of
your money and documents?

A: When I tried to withdraw my application as well as my money, Mr. Gallo told me "I know
nothing about your money" while Pilar Manta and Fides Pacardo told me, why should I
withdraw my application and my money when I was about to be [deployed] or I was about to
leave.

xxxx

Q: And what transpired at that office after this Panuncio introduced you to those persons
whom you just mentioned?

A: The three of them including Rodolfo Gallo told me that the placement fee in that agency is
Php 150,000.00 and then I should deposit the amount of Php 45,000.00. After I have
deposited said amount, I would just wait for few days…

xxxx

Q: They were the one (sic) who told you that you have to pay Php 45,000.00 for deposit
only?

A: Yes, ma’am, I was told by them to deposit Php 45,000.00 and then I would pay the
remaining balance of Php105,000.00, payment of it would be through salary deduction.

Q: That is for what Mr. Witness again?

A: For placement fee.

Q: Now did you believe to (sic) them?

A: Yes, ma’am.

Q: Why, why did you believe?

A: Because of the presence of the two Korean nationals and they keep on telling me that
they have sent abroad several workers and they even showed visas of the records that they
have already deployed abroad.

Q: Aside from that, was there any other representations which have been made upon you or
make you believe that they can deploy you?
A: At first I was adamant but they told me "If you do not want to believe us, then we could do
nothing." But once they showed me the [visas] of the people whom they have deployed
abroad, that was the time I believe them.

Q: So after believing on the representations, what did you do next Mr. Witness?

A: That was the time that I decided to give the money.

xxxx

PROS. MAGABLIN

Q: Do you have proof that you gave the money?

A: Yes, ma’am.

Q: Where is your proof that you gave the money?

A: I have it here.

PROS. MAGABLIN:

Witness is producing to this court a Receipt dated May 28, 2001 in the amount of
Php45,000.00 which for purposes of record Your Honor, may I request that the same be
marked in the evidence as our Exhibit "F".

xxxx

PROS. MAGABLIN

Q: There appears a signature appearing at the left bottom portion of this receipt. Do you
know whose signature is this?

A: Yes, ma’am, signature of Rodolfo Gallo.

PROS. MAGABLIN

Q: Why do you say that that is his signature?

A: Rodolfo Gallo’s signature Your Honor because he was the one who received the money
and he was the one who filled up this O.R. and while he was doing it, he was flanked by
Fides Pacardo, Pilar Manta and Mardeolyn Martir.

xxxx

Q: So it was Gallo who received your money?

A: Yes, ma’am.

PROS. MAGABLIN
 Q: And after that, what did this Gallo do after he received your money?

A: They told me ma’am just to call up and make a follow up with our agency.

xxxx

Q: Now Mr. Witness, after you gave your money to the accused, what happened with the
application, with the promise of employment that he promised?

A: Two (2) weeks after giving them the money, they moved to a new office in Makati, Brgy.
San Isidro.

xxxx

Q: And were they able to deploy you as promised by them?

A: No, ma’am, they were not able to send us abroad.12

Essentially, Dela Caza appeared very firm and consistent in positively identifying accused-appellant
as one of those who induced him and the other applicants to part with their money. His testimony
showed that accused-appellant made false misrepresentations and promises in assuring them that
after they paid the placement fee, jobs in Korea as factory workers were waiting for them and that
they would be deployed soon. In fact, Dela Caza personally talked to accused-appellant and gave
him the money and saw him sign and issue an official receipt as proof of his payment. Without a
doubt, accused-appellants’ actions constituted illegal recruitment.

Additionally, accused-appellant cannot argue that the trial court erred in finding that he was indeed
an employee of the recruitment agency. On the contrary, his active participation in the illegal
recruitment is unmistakable. The fact that he was the one who issued and signed the official receipt
belies his profession of innocence.

This Court likewise finds the existence of a conspiracy between the accused-appellant and the other
persons in the agency who are currently at large, resulting in the commission of the crime of
syndicated illegal recruitment.

In this case, it cannot be denied that the accused-appellent together with Mardeolyn and the rest of
the officers and employees of MPM Agency participated in a network of deception. Verily, the active
involvement of each in the recruitment scam was directed at one single purpose – to divest
complainants with their money on the pretext of guaranteed employment abroad. The prosecution
evidence shows that complainants were briefed by Mardeolyn about the processing of their papers
for a possible job opportunity in Korea, as well as their possible salary. Likewise, Yeo Sin Ung, a
Korean national, gave a briefing about the business and what to expect from the company. Then,
here comes accused-appellant who introduced himself as Mardeolyn’s relative and specifically told
Dela Caza of the fact that the agency was able to send many workers abroad. Dela Caza was even
showed several workers visas who were already allegedly deployed abroad. Later on, accused-
appellant signed and issued an official receipt acknowledging the down payment of Dela Caza.
Without a doubt, the nature and extent of the actions of accused-appellant, as well as with the other
persons in MPM Agency clearly show unity of action towards a common undertaking. Hence,
conspiracy is evidently present.
In People v. Gamboa,13 this Court discussed the nature of conspiracy in the context of illegal
recruitment, viz:

Conspiracy to defraud aspiring overseas contract workers was evident from the acts of the
malefactors whose conduct before, during and after the commission of the crime clearly indicated
that they were one in purpose and united in its execution. Direct proof of previous agreement to
commit a crime is not necessary as it may be deduced from the mode and manner in which the
offense was perpetrated or inferred from the acts of the accused pointing to a joint purpose and
design, concerted action and community of interest. As such, all the accused, including accused-
appellant, are equally guilty of the crime of illegal recruitment since in a conspiracy the act of one is
the act of all.

To reiterate, in establishing conspiracy, it is not essential that there be actual proof that all the
conspirators took a direct part in every act. It is sufficient that they acted in concert pursuant to the
same objective.14

Estafa

The prosecution likewise established that accused-appellant is guilty of the crime of estafa as
defined under Article 315 paragraph 2(a) of the Revised Penal Code, viz:

Art. 315. Swindling (estafa). – Any person who shall defraud another by any means mentioned
hereinbelow…

xxxx

2. By means of any of the following false pretenses or fraudulent acts executed prior to or
simultaneously with the commission of the fraud:

(a) By using fictitious name, or falsely pretending to possess power, influence, qualifications,
property, credit, agency, business or imaginary transactions; or by means of other similar deceits.

The elements of estafa in general are: (1) that the accused defrauded another (a) by abuse of
confidence, or (b) by means of deceit; and (2) that damage or prejudice capable of pecuniary
estimation is caused to the offended party or third person.15 Deceit is the false representation of a
matter of fact, whether by words or conduct, by false or misleading allegations, or by concealment of
that which should have been disclosed; and which deceives or is intended to deceive another so that
he shall act upon it, to his legal injury.

All these elements are present in the instant case: the accused-appellant, together with the other
accused at large, deceived the complainants into believing that the agency had the power and
capability to send them abroad for employment; that there were available jobs for them in Korea as
factory workers; that by reason or on the strength of such assurance, the complainants parted with
their money in payment of the placement fees; that after receiving the money, accused-appellant
and his co-accused went into hiding by changing their office locations without informing
complainants; and that complainants were never deployed abroad. As all these representations of
the accused-appellant proved false, paragraph 2(a), Article 315 of the Revised Penal Code is thus
applicable.1avv phi 1

Defense of Denial Cannot Prevail over Positive Identification

Indubitably, accused-appellant’s denial of the crimes charged crumbles in the face of the positive
identification made by Dela Caza and his co-complainants as one of the perpetrators of the crimes
charged. As enunciated by this Court in People v. Abolidor,16 "[p]ositive identification where
categorical and consistent and not attended by any showing of ill motive on the part of the
eyewitnesses on the matter prevails over alibi and denial."

The defense has miserably failed to show any evidence of ill motive on the part of the prosecution
witnesses as to falsely testify against him.

Therefore, between the categorical statements of the prosecution witnesses, on the one hand, and
bare denials of the accused, on the other hand, the former must prevail.17

Moreover, this Court accords the trial court’s findings with the probative weight it deserves in the
absence of any compelling reason to discredit the same. It is a fundamental judicial dictum that the
findings of fact of the trial court are not disturbed on appeal except when it overlooked,
misunderstood or misapplied some facts or circumstances of weight and substance that would have
materially affected the outcome of the case. We find that the trial court did not err in convicting the
accused-appellant.

WHEREFORE, the appeal is DENIED for failure to sufficiently show reversible error in the assailed
decision. The Decision dated December 24, 2008 of the CA in CA-G.R. CR-H.C. No. 02764 is
AFFIRMED.

No costs.

SO ORDERED.

G.R. No. 179532 May 30, 2011

CLAUDIO S. YAP, Petitioner,

vs.
THENAMARIS SHIP'S MANAGEMENT and INTERMARE MARITIME AGENCIES,
INC., Respondents.

DECISION

NACHURA, J.:

Before this Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Civil
Procedure, seeking the reversal of the Court of Appeals (CA) Decision2 dated February 28, 2007,
which affirmed with modification the National Labor Relations Commission (NLRC) resolution3 dated
April 20, 2005.

The undisputed facts, as found by the CA, are as follows:

[Petitioner] Claudio S. Yap was employed as electrician of the vessel, M/T SEASCOUT on 14
August 2001 by Intermare Maritime Agencies, Inc. in behalf of its principal, Vulture Shipping Limited.
The contract of employment entered into by Yap and Capt. Francisco B. Adviento, the General
Manager of Intermare, was for a duration of 12 months. On 23 August 2001, Yap boarded M/T
SEASCOUT and commenced his job as electrician. However, on or about 08 November 2001, the
vessel was sold. The Philippine Overseas Employment Administration (POEA) was informed about
the sale on 06 December 2001 in a letter signed by Capt. Adviento. Yap, along with the other
crewmembers, was informed by the Master of their vessel that the same was sold and will be
scrapped. They were also informed about the Advisory sent by Capt. Constatinou, which states,
among others:

" …PLEASE ASK YR OFFICERS AND RATINGS IF THEY WISH TO BE TRANSFERRED TO

OTHER VESSELS AFTER VESSEL S DELIVERY (GREEK VIA ATHENS-PHILIPINOS VIA
MANILA…

…FOR CREW NOT WISH TRANSFER TO DECLARE THEIR PROSPECTED TIME FOR
REEMBARKATION IN ORDER TO SCHEDULE THEM ACCLY…"

Yap received his seniority bonus, vacation bonus, extra bonus along with the scrapping bonus.
However, with respect to the payment of his wage, he refused to accept the payment of one-month
basic wage. He insisted that he was entitled to the payment of the unexpired portion of his contract
since he was illegally dismissed from employment. He alleged that he opted for immediate transfer
but none was made.

[Respondents], for their part, contended that Yap was not illegally dismissed. They alleged that
following the sale of the M/T SEASCOUT, Yap signed off from the vessel on 10 November 2001 and
was paid his wages corresponding to the months he worked or until 10 November 2001 plus his
seniority bonus, vacation bonus and extra bonus. They further alleged that Yap’s employment
contract was validly terminated due to the sale of the vessel and no arrangement was made for
Yap’s transfer to Thenamaris’ other vessels.4

Thus, Claudio S. Yap (petitioner) filed a complaint for Illegal Dismissal with Damages and Attorney’s
Fees before the Labor Arbiter (LA). Petitioner claimed that he was entitled to the salaries
corresponding to the unexpired portion of his contract. Subsequently, he filed an amended
complaint, impleading Captain Francisco Adviento of respondents Intermare Maritime Agencies, Inc.
(Intermare) and Thenamaris Ship’s Management (respondents), together with C.J. Martionos,
Interseas Trading and Financing Corporation, and Vulture Shipping Limited/Stejo Shipping Limited.

On July 26, 2004, the LA rendered a decision5 in favor of petitioner, finding the latter to have been
constructively and illegally dismissed by respondents. Moreover, the LA found that respondents
acted in bad faith when they assured petitioner of re-embarkation and required him to produce an
electrician certificate during the period of his contract, but actually he was not able to board one
despite of respondents’ numerous vessels. Petitioner made several follow-ups for his re-embarkation
but respondents failed to heed his plea; thus, petitioner was forced to litigate in order to vindicate his
rights. Lastly, the LA opined that since the unexpired portion of petitioner’s contract was less than
one year, petitioner was entitled to his salaries for the unexpired portion of his contract for a period
of nine months. The LA disposed, as follows:

WHEREFORE, in view of the foregoing, a decision is hereby rendered declaring complainant to

have been constructively dismissed. Accordingly, respondents Intermare Maritime Agency
Incorporated, Thenamaris Ship’s Mgt., and Vulture Shipping Limited are ordered to pay jointly and
severally complainant Claudio S. Yap the sum of $12,870.00 or its peso equivalent at the time of
payment. In addition, moral damages of ONE HUNDRED THOUSAND PESOS (P100,000.00) and
exemplary damages of FIFTY THOUSAND PESOS (P50,000.00) are awarded plus ten percent
(10%) of the total award as attorney’s fees.

Other money claims are DISMISSED for lack of merit.

SO ORDERED.6

Aggrieved, respondents sought recourse from the NLRC.

In its decision7 dated January 14, 2005, the NLRC affirmed the LA’s findings that petitioner was
indeed constructively and illegally dismissed; that respondents’ bad faith was evident on their wilful
failure to transfer petitioner to another vessel; and that the award of attorney’s fees was warranted.
However, the NLRC held that instead of an award of salaries corresponding to nine months,
petitioner was only entitled to salaries for three months as provided under Section 108 of Republic
Act (R.A.) No. 8042,9 as enunciated in our ruling in Marsaman Manning Agency, Inc. v. National
Labor Relations Commission.10 Hence, the NLRC ruled in this wise:

WHEREFORE, premises considered, the decision of the Labor Arbiter finding the termination of
complainant illegal is hereby AFFIRMED with a MODIFICATION. Complainant[’s] salary for the
unexpired portion of his contract should only be limited to three (3) months basic salary.

Respondents Intermare Maritime Agency, Inc.[,] Vulture Shipping Limited and Thenamaris Ship
Management are hereby ordered to jointly and severally pay complainant, the following:

1. Three (3) months basic salary – US$4,290.00 or its peso equivalent at the time of actual
payment.

2. Moral damages – P100,000.00

3. Exemplary damages – P50,000.00

4. Attorney’s fees equivalent to 10% of the total monetary award.

SO ORDERED.11

Respondents filed a Motion for Partial Reconsideration,12 praying for the reversal and setting aside of
the NLRC decision, and that a new one be rendered dismissing the complaint. Petitioner, on the
other hand, filed his own Motion for Partial Reconsideration,13 praying that he be paid the nine (9)-
month basic salary, as awarded by the LA.

On April 20, 2005, a resolution14 was rendered by the NLRC, affirming the findings of Illegal
Dismissal and respondents’ failure to transfer petitioner to another vessel. However, finding merit in
petitioner’s arguments, the NLRC reversed its earlier Decision, holding that "there can be no choice
to grant only three (3) months salary for every year of the unexpired term because there is no full
year of unexpired term which this can be applied." Hence –

WHEREFORE, premises considered, complainant’s Motion for Partial Reconsideration is hereby

granted. The award of three (3) months basic salary in the sum of US$4,290.00 is hereby modified in
that complainant is entitled to his salary for the unexpired portion of employment contract in the sum
of US$12,870.00 or its peso equivalent at the time of actual payment.

All aspect of our January 14, 2005 Decision STANDS.

SO ORDERED.15

Respondents filed a Motion for Reconsideration, which the NLRC denied.

Undaunted, respondents filed a petition for certiorari16 under Rule 65 of the Rules of Civil Procedure
before the CA. On February 28, 2007, the CA affirmed the findings and ruling of the LA and the
NLRC that petitioner was constructively and illegally dismissed. The CA held that respondents failed
to show that the NLRC acted without statutory authority and that its findings were not supported by
law, jurisprudence, and evidence on record. Likewise, the CA affirmed the lower agencies’ findings
that the advisory of Captain Constantinou, taken together with the other documents and additional
requirements imposed on petitioner, only meant that the latter should have been re-embarked. In the
same token, the CA upheld the lower agencies’ unanimous finding of bad faith, warranting the
imposition of moral and exemplary damages and attorney’s fees. However, the CA ruled that the
NLRC erred in sustaining the LA’s interpretation of Section 10 of R.A. No. 8042. In this regard, the
CA relied on the clause "or for three months for every year of the unexpired term, whichever is less"
provided in the 5th paragraph of Section 10 of R.A. No. 8042 and held:

In the present case, the employment contract concerned has a term of one year or 12 months which
commenced on August 14, 2001. However, it was preterminated without a valid cause. [Petitioner]
was paid his wages for the corresponding months he worked until the 10th of November. Pursuant to
the provisions of Sec. 10, [R.A. No.] 8042, therefore, the option of "three months for every year of
the unexpired term" is applicable.17

Thus, the CA provided, to wit:

WHEREFORE, premises considered, this Petition for Certiorari is DENIED. The Decision dated
January 14, 2005, and Resolutions, dated April 20, 2005 and July 29, 2005, respectively, of public
respondent National Labor Relations Commission-Fourth Division, Cebu City, in NLRC No. V-
000038-04 (RAB VIII (OFW)-04-01-0006) are hereby AFFIRMED with the MODIFICATION that
private respondent is entitled to three (3) months of basic salary computed at US$4,290.00 or its
peso equivalent at the time of actual payment.

Costs against Petitioners.18

Both parties filed their respective motions for reconsideration, which the CA, however, denied in its
Resolution19dated August 30, 2007.

Unyielding, petitioner filed this petition, raising the following issues:

1) Whether or not Section 10 of R.A. [No.] 8042, to the extent that it affords an illegally
dismissed migrant worker the lesser benefit of – "salaries for [the] unexpired portion of his
employment contract or for three (3) months for every year of the unexpired term, whichever
is less" – is constitutional; and

2) Assuming that it is, whether or not the Court of Appeals gravely erred in granting petitioner
only three (3) months backwages when his unexpired term of 9 months is far short of the
"every year of the unexpired term" threshold.20

In the meantime, while this case was pending before this Court, we declared as unconstitutional the
clause "or for three months for every year of the unexpired term, whichever is less" provided in the
5th paragraph of Section 10 of R.A. No. 8042 in the case of Serrano v. Gallant Maritime Services,
Inc.21 on March 24, 2009.

Apparently, unaware of our ruling in Serrano, petitioner claims that the 5th paragraph of Section 10,
R.A. No. 8042, is violative of Section 1,22 Article III and Section 3,23 Article XIII of the Constitution to
the extent that it gives an erring employer the option to pay an illegally dismissed migrant worker
only three months for every year of the unexpired term of his contract; that said provision of law has
long been a source of abuse by callous employers against migrant workers; and that said provision
violates the equal protection clause under the Constitution because, while illegally dismissed local
workers are guaranteed under the Labor Code of reinstatement with full backwages computed from
the time compensation was withheld from them up to their actual reinstatement, migrant workers, by
virtue of Section 10 of R.A. No. 8042, have to waive nine months of their collectible backwages
every time they have a year of unexpired term of contract to reckon with. Finally, petitioner posits
that, assuming said provision of law is constitutional, the CA gravely abused its discretion when it
reduced petitioner’s backwages from nine months to three months as his nine-month unexpired term
cannot accommodate the lesser relief of three months for every year of the unexpired term.24

On the other hand, respondents, aware of our ruling in Serrano, aver that our pronouncement of
unconstitutionality of the clause "or for three months for every year of the unexpired term, whichever
is less" provided in the 5th paragraph of Section 10 of R.A. No. 8042 in Serrano should not apply in
this case because Section 10 of R.A. No. 8042 is a substantive law that deals with the rights and
obligations of the parties in case of Illegal Dismissal of a migrant worker and is not merely
procedural in character. Thus, pursuant to the Civil Code, there should be no retroactive application
of the law in this case. Moreover, respondents asseverate that petitioner’s tanker allowance of
US$130.00 should not be included in the computation of the award as petitioner’s basic salary, as
provided under his contract, was only US$1,300.00. Respondents submit that the CA erred in its
computation since it included the said tanker allowance. Respondents opine that petitioner should be
entitled only to US$3,900.00 and not to US$4,290.00, as granted by the CA. Invoking Serrano,
respondents claim that the tanker allowance should be excluded from the definition of the term
"salary." Also, respondents manifest that the full sum of P878,914.47 in Intermare’s bank account
was garnished and subsequently withdrawn and deposited with the NLRC Cashier of Tacloban City
on February 14, 2007. On February 16, 2007, while this case was pending before the CA, the LA
issued an Order releasing the amount of P781,870.03 to petitioner as his award, together with the
sum of P86,744.44 to petitioner’s former lawyer as attorney’s fees, and the amount of P3,570.00 as
execution and deposit fees. Thus, respondents pray that the instant petition be denied and that
petitioner be directed to return to Intermare the sum of US$8,970.00 or its peso equivalent.25

On this note, petitioner counters that this new issue as to the inclusion of the tanker allowance in the
computation of the award was not raised by respondents before the LA, the NLRC and the CA, nor
was it raised in respondents’ pleadings other than in their Memorandum before this Court, which
should not be allowed under the circumstances.26

The petition is impressed with merit.

Prefatorily, it bears emphasis that the unanimous finding of the LA, the NLRC and the CA that the
dismissal of petitioner was illegal is not disputed. Likewise not disputed is the tribunals’ unanimous
finding of bad faith on the part of respondents, thus, warranting the award of moral and exemplary
damages and attorney’s fees. What remains in issue, therefore, is the constitutionality of the 5th
paragraph of Section 10 of R.A. No. 8042 and, necessarily, the proper computation of the lump-sum
salary to be awarded to petitioner by reason of his illegal dismissal.

Verily, we have already declared in Serrano that the clause "or for three months for every year of the
unexpired term, whichever is less" provided in the 5th paragraph of Section 10 of R.A. No. 8042 is
unconstitutional for being violative of the rights of Overseas Filipino Workers (OFWs) to equal
protection of the laws. In an exhaustive discussion of the intricacies and ramifications of the said
clause, this Court, in Serrano, pertinently held:
The Court concludes that the subject clause contains a suspect classification in that, in the
computation of the monetary benefits of fixed-term employees who are illegally discharged, it
imposes a 3-month cap on the claim of OFWs with an unexpired portion of one year or more in their
contracts, but none on the claims of other OFWs or local workers with fixed-term employment. The
subject clause singles out one classification of OFWs and burdens it with a peculiar disadvantage.27

Moreover, this Court held therein that the subject clause does not state or imply any definitive
governmental purpose; hence, the same violates not just therein petitioner’s right to equal protection,
but also his right to substantive due process under Section 1, Article III of the
Constitution.28 Consequently, petitioner therein was accorded his salaries for the entire unexpired
period of nine months and 23 days of his employment contract, pursuant to law and jurisprudence
prior to the enactment of R.A. No. 8042.

We have already spoken. Thus, this case should not be different from Serrano.

As a general rule, an unconstitutional act is not a law; it confers no rights; it imposes no duties; it
affords no protection; it creates no office; it is inoperative as if it has not been passed at all. The
general rule is supported by Article 7 of the Civil Code, which provides:

Art. 7. Laws are repealed only by subsequent ones, and their violation or non-observance shall not
be excused by disuse or custom or practice to the contrary.

The doctrine of operative fact serves as an exception to the aforementioned general rule. In Planters
Products, Inc. v. Fertiphil Corporation,29 we held:

The doctrine of operative fact, as an exception to the general rule, only applies as a matter of equity
and fair play. It nullifies the effects of an unconstitutional law by recognizing that the existence of a
statute prior to a determination of unconstitutionality is an operative fact and may have
consequences which cannot always be ignored. The past cannot always be erased by a new judicial
declaration.

The doctrine is applicable when a declaration of unconstitutionality will impose an undue burden on
those who have relied on the invalid law. Thus, it was applied to a criminal case when a declaration
of unconstitutionality would put the accused in double jeopardy or would put in limbo the acts done
by a municipality in reliance upon a law creating it.30

Following Serrano, we hold that this case should not be included in the aforementioned exception.
After all, it was not the fault of petitioner that he lost his job due to an act of illegal dismissal
committed by respondents. To rule otherwise would be iniquitous to petitioner and other OFWs, and
would, in effect, send a wrong signal that principals/employers and recruitment/manning agencies
may violate an OFW’s security of tenure which an employment contract embodies and actually profit
from such violation based on an unconstitutional provision of law.

In the same vein, we cannot subscribe to respondents’ postulation that the tanker allowance of
US$130.00 should not be included in the computation of the lump-sum salary to be awarded to
petitioner.

First. It is only at this late stage, more particularly in their Memorandum, that respondents are raising
this issue. It was not raised before the LA, the NLRC, and the CA. They did not even assail the
award accorded by the CA, which computed the lump-sum salary of petitioner at the basic salary of
US$1,430.00, and which clearly included the US$130.00 tanker allowance. Hence, fair play, justice,
and due process dictate that this Court cannot now, for the first time on appeal, pass upon this
question. Matters not taken up below cannot be raised for the first time on appeal. They must be
raised seasonably in the proceedings before the lower tribunals. Questions raised on appeal must
be within the issues framed by the parties; consequently, issues not raised before the lower tribunals
cannot be raised for the first time on appeal.31
1avv phi 1

Second. Respondents’ invocation of Serrano is unavailing. Indeed, we made the following

pronouncements in Serrano, to wit:

The word salaries in Section 10(5) does not include overtime and leave pay. For seafarers like
petitioner, DOLE Department Order No. 33, series 1996, provides a Standard Employment Contract
of Seafarers, in which salary is understood as the basic wage, exclusive of overtime, leave pay and
other bonuses; whereas overtime pay is compensation for all work "performed" in excess of the
regular eight hours, and holiday pay is compensation for any work "performed" on designated rest
days and holidays.32

A close perusal of the contract reveals that the tanker allowance of US$130.00 was not categorized
as a bonus but was rather encapsulated in the basic salary clause, hence, forming part of the basic
salary of petitioner. Respondents themselves in their petition for certiorari before the CA averred that
petitioner’s basic salary, pursuant to the contract, was "US$1,300.00 + US$130.00 tanker
allowance."33 If respondents intended it differently, the contract per se should have indicated that
said allowance does not form part of the basic salary or, simply, the contract should have separated
it from the basic salary clause.

A final note.

We ought to be reminded of the plight and sacrifices of our OFWs. In Olarte v. Nayona,34 this Court
held that:

Our overseas workers belong to a disadvantaged class. Most of them come from the poorest sector
of our society. Their profile shows they live in suffocating slums, trapped in an environment of
crimes. Hardly literate and in ill health, their only hope lies in jobs they find with difficulty in our
country. Their unfortunate circumstance makes them easy prey to avaricious employers. They will
climb mountains, cross the seas, endure slave treatment in foreign lands just to survive. Out of
despondence, they will work under sub-human conditions and accept salaries below the minimum.
The least we can do is to protect them with our laws.

WHEREFORE, the Petition is GRANTED. The Court of Appeals Decision dated February 28, 2007
and Resolution dated August 30, 2007 are hereby MODIFIED to the effect that petitioner is
AWARDED his salaries for the entire unexpired portion of his employment contract consisting of nine
months computed at the rate of US$1,430.00 per month. All other awards are hereby AFFIRMED.
No costs.

SO ORDERED.

G.R. Nos. L-58674-77 July 11, 1990

PEOPLE OF THE PHILIPPINES, petitioner,

vs.
HON. DOMINGO PANIS, Presiding Judge of the Court of First Instance of Zambales &
Olongapo City, Branch III and SERAPIO ABUG, respondents.
CRUZ, J:

The basic issue in this case is the correct interpretation of Article 13(b) of P.D. 442, otherwise known
as the Labor Code, reading as follows:

(b) Recruitment and placement' refers to any act of canvassing, enlisting, contracting,
transporting, hiring, or procuring workers, and includes referrals, contract services,
promising or advertising for employment, locally or abroad, whether for profit or not:
Provided, That any person or entity which, in any manner, offers or promises for a
fee employment to two or more persons shall be deemed engaged in recruitment and
placement.

Four informations were filed on January 9, 1981, in the Court of First Instance of Zambales and
Olongapo City alleging that Serapio Abug, private respondent herein, "without first securing a license
from the Ministry of Labor as a holder of authority to operate a fee-charging employment agency, did
then and there wilfully, unlawfully and criminally operate a private fee charging employment agency
by charging fees and expenses (from) and promising employment in Saudi Arabia" to four separate
individuals named therein, in violation of Article 16 in relation to Article 39 of the Labor Code. 1

Abug filed a motion to quash on the ground that the informations did not charge an offense because
he was accused of illegally recruiting only one person in each of the four informations. Under the
proviso in Article 13(b), he claimed, there would be illegal recruitment only "whenever two or more
persons are in any manner promised or offered any employment for a fee. " 2

Denied at first, the motion was reconsidered and finally granted in the Orders of the trial court dated
June 24 and September 17, 1981. The prosecution is now before us on certiorari. 3

The posture of the petitioner is that the private respondent is being prosecuted under Article 39 in
relation to Article 16 of the Labor Code; hence, Article 13(b) is not applicable. However, as the first
two cited articles penalize acts of recruitment and placement without proper authority, which is the
charge embodied in the informations, application of the definition of recruitment and placement in
Article 13(b) is unavoidable.

The view of the private respondents is that to constitute recruitment and placement, all the acts
mentioned in this article should involve dealings with two or m•re persons as an indispensable
requirement. On the other hand, the petitioner argues that the requirement of two or more persons is
imposed only where the recruitment and placement consists of an offer or promise of employment to
such persons and always in consideration of a fee. The other acts mentioned in the body of the
article may involve even only one person and are not necessarily for profit.

Neither interpretation is acceptable. We fail to see why the proviso should speak only of an offer or
promise of employment if the purpose was to apply the requirement of two or more persons to all the
acts mentioned in the basic rule. For its part, the petitioner does not explain why dealings with two or
more persons are needed where the recruitment and placement consists of an offer or promise of
employment but not when it is done through "canvassing, enlisting, contracting, transporting,
utilizing, hiring or procuring (of) workers.

As we see it, the proviso was intended neither to impose a condition on the basic rule nor to provide
an exception thereto but merely to create a presumption. The presumption is that the individual or
entity is engaged in recruitment and placement whenever he or it is dealing with two or more
persons to whom, in consideration of a fee, an offer or promise of employment is made in the course
of the "canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring (of) workers. "

The number of persons dealt with is not an essential ingredient of the act of recruitment and
placement of workers. Any of the acts mentioned in the basic rule in Article 13(b) win constitute
recruitment and placement even if only one prospective worker is involved. The proviso merely lays
down a rule of evidence that where a fee is collected in consideration of a promise or offer of
employment to two or more prospective workers, the individual or entity dealing with them shall be
deemed to be engaged in the act of recruitment and placement. The words "shall be deemed" create
that presumption.

This is not unlike the presumption in article 217 of the Revised Penal Code, for example, regarding
the failure of a public officer to produce upon lawful demand funds or property entrusted to his
custody. Such failure shall be prima facie evidence that he has put them to personal use; in other
words, he shall be deemed to have malversed such funds or property. In the instant case, the word
"shall be deemed" should by the same token be given the force of a disputable presumption or
of prima facie evidence of engaging in recruitment and placement. (Klepp vs. Odin Tp., McHenry
County 40 ND N.W. 313, 314.)

It is unfortunate that we can only speculate on the meaning of the questioned provision for lack of
records of debates and deliberations that would otherwise have been available if the Labor Code
had been enacted as a statute rather than a presidential decree. The trouble with presidential
decrees is that they could be, and sometimes were, issued without previous public discussion or
consultation, the promulgator heeding only his own counsel or those of his close advisers in their
lofty pinnacle of power. The not infrequent results are rejection, intentional or not, of the interest of
the greater number and, as in the instant case, certain esoteric provisions that one cannot read
against the background facts usually reported in the legislative journals.

At any rate, the interpretation here adopted should give more force to the campaign against illegal
recruitment and placement, which has victimized many Filipino workers seeking a better life in a
foreign land, and investing hard- earned savings or even borrowed funds in pursuit of their dream,
only to be awakened to the reality of a cynical deception at the hands of theirown countrymen.

WHEREFORE, the Orders of June 24, 1981, and September 17, 1981, are set aside and the four
informations against the private respondent reinstated. No costs.

SO ORDERED.

G.R. No. 109583 September 5, 1997

TRANS ACTION OVERSEAS CORPORATION, petitioner,

vs.
THE HONORABLE SECRETARY OF LABOR, ROSELLE CASTIGADOR, JOSEFINA MAMON,
JENELYN CASA, PEACHY LANIOG, VERDELINA BELGIRA, ELMA FLORES, RAMONA
LITURCO, GRACE SABANDO, GLORIA PALMA, AVELYN ALVAREZ, CANDELARIA NONO,
NITA BUSTAMANTE, CYNTHIA ARANDILLO, SANDIE AGUILAR, DIGNA PANAGUITON,
VERONICA BAYOGOS, JULIANITA ARANADOR, LEONORA CABALLERO, NANCY BOLIVAR,
NIMFA BUCOL, ZITA GALINDO, ESTELITA BIOCOS, MARJORIE MACATE, RUBY SEPULVIDA,
ROSALIE SONDIA, NORA MAQUILING, PAULINA CORDERO, LENIROSE ABANGAN, SELFA
PALMA, ANTONIA NAVARRO, ELSIE PENARUBIA, IRMA SOBREQUIL, SONY JAMUAT,
CLETA MAYO,respondents.
ROMERO, J.:

The issue presented in the case at bar is whether or not the Secretary of Labor and Employment has
jurisdiction to cancel or revoke the license of a private fee-charging employment agency.

From July 24 to September 9, 1987, petitioner Trans Action Overseas Corporation, a private fee-
charging employment agency, scoured Iloilo City for possible recruits for alleged job vacancies in
Hongkong. Private respondents sought employment as domestic helpers through petitioner's
employees, Luzviminda Aragon, Ben Hur Domincil and his wife Cecille. The applicants paid
placement fees ranging from P1,000.00 to P14,000.00, but petitioner failed to deploy them. Their
demands for refund proved unavailing; thus, they were constrained to institute complaints against
petitioner for violation of Articles 32 and 34(a) 1 of the Labor Code, as amended.

Petitioner denied having received the amounts allegedly collected from respondents, and averred
that Aragon, whose only duty was to pre-screen and interview applicants, and the spouses Domincil
were not authorized to collect fees from the applicants. Accordingly, it cannot be held liable for the
money claimed by respondents. Petitioner maintains that it even warned respondents not to give any
money to unauthorized individuals.

POEA Regional Extension Unit Coordinator Edgar Somes testified that although he was aware that
petitioner collected fees from respondents, the latter insisted that they be allowed to make the
payments on the assumption that it could hasten their deployment abroad. He added that Mrs.
Honorata Manliclic, a representative of petitioner tasked to oversee the conduct of the interviews,
told him that she was leaving behind presigned receipts to Aragon as she cannot stay in Iloilo City
for the screening of the applicants. Manliclic, however, denied this version and argued that it was
Somes who instructed her to leave the receipts behind as it was perfectly alright to collect fees.

On April 5, 1991, then Labor Undersecretary Nieves R. Confesor rendered the assailed order, the
dispositive portion of which reads:

WHEREFORE, respondents are hereby ordered to pay, jointly and severally, the
following claims:

1. Rosele Castigador P14,000.00

2. Josefina Mamon 3,000.00

3. Jenelyn Casa 3,000.00

4. Peachy Laniog 13,500.00

5. Verdelina Belgira 2,000.00

6. Elma Flores 2,500.00

7. Ramona Liturco 2,500.00

8. Grace Sabando 3,500.00

9. Gloria Palma 1,500.00

10. Avelyn Alvarez 1,500.00

11. Candelaria Nono 1,000.00

12. Nita Bustamante 5,000.00

13. Cynthia Arandillo 1,000.00

14. Sandie Aguilar 3,000.00

15. Digna Panaguiton 2,500.00

16. Veronica Bayogos 2,000.00

17. Sony Jamuat 4,500.00

18. Irma Sobrequil 2,000.00

19. Elsie Penarubia 2,000.00

20. Antonia Navarro 2,000.00

21. Selfa Palma 3,000.00

22. Lenirose Abangan 13,300.00

23. Paulina Cordero 1,400.00

24. Nora Maquiling 2,000.00

25. Rosalie Sondia 2,000.00

26. Ruby Sepulvida 3,500.00

27. Marjorie Macate 1,500.00

28. Estelita Biocos 3,000.00

29. Zita Galindo 3,500.00

30. Nimfa Bucol 1,000.00

31. Nancy Bolivar 2,000.00

32. Leonora Caballero 13,900.00

33. Julianita Aranador 14,000.00

 The complaints of Ma. Luz Alingasa, Nimfa Perez, and Cleta Mayo are hereby
dismissed in view of their desistance.

The following complaints are hereby dismissed for failure to appear/prosecute:

1. Jiyasmin Bantillo 6. Edna Salvante

2. Rosa de Luna Senail 7. Thelma Beltiar

3. Elnor Bandojo 8. Cynthia Cepe

4. Teresa Caldeo 9. Rosie Pavillon

5. Virginia Castroverde

The complaints filed by the following are hereby dismissed for lack of evidence:

1. Aleth Palomaria 5. Mary Ann Beboso

2. Emely Padrones 6. Josefina Tejero

3. Marybeth Aparri 7. Bernadita Aprong

4. Lenia Biona 8. Joji Lull

Respondent agency is liable for twenty eight (28) counts of violation of Article 32 and
five (5) counts of Article 34 (a) with a corresponding suspension in the aggregate
period of sixty six (66) months. Considering however, that under the schedule of
penalties, any suspension amounting to a period of 12 months merits the imposition
of the penalty of cancellation, the license of respondent TRANS ACTION
OVERSEAS CORPORATION to participate in the overseas placement and
recruitment of workers is hereby ordered CANCELLED, effective immediately.

SO ORDERED. 2 (Emphasis supplied)

On April 29, 1991, petitioner filed its Motion for Temporary Lifting of Order of Cancellation alleging,
among other things, that to deny it the authority to engage in placement and recruitment activities
would jeopardize not only its contractual relations with its foreign principals, but also the welfare,
interests, and livelihood of recruited workers scheduled to leave for their respective assignments.
Finally, it manifested its willingness to post a bond to insure payment of the claims to be awarded,
should its appeal or motion be denied.

Finding the motion to be well taken, Undersecretary Confesor provisionally lifted the cancellation of
petitioner's license pending resolution of its Motion for Reconsideration filed on May 6, 1991. On
January 30, 1992, however, petitioner's motion for reconsideration was eventually denied for lack of
merit, and the April 5, 1991, order revoking its license was reinstated.

Petitioner contends that Secretary; Confesor acted with grave abuse of discretion in rendering the
assailed orders on alternative grounds, viz.: (1) it is the Philippine Overseas Employment
Administration (POEA) which has the exclusive and original jurisdiction to hear and decide illegal
recruitment cases, including the authority to cancel recruitment licenses, or (2) the cancellation order
based on the 1987 POEA Schedule of Penalties is not valid for non-compliance with the Revised
Administrative Code of 1987 regarding its registration with the U.P. Law Center.

Under Executive Order No. 797 3 (E.O. No. 797) and Executive Order No. 247 (E.O. No. 247), 4 the
POEA was established and mandated to assume the functions of the Overseas Employment
Development Board (OEDB), the National Seamen Board (NSB), and the overseas employment function
of the Bureau of Employment Services (BES). Petitioner theorizes that when POEA absorbed the powers
of these agencies, Article 35 of the Labor Code, as amended, was rendered ineffective.

The power to suspend or cancel any license or authority to recruit employees for overseas
employment is vested upon the Secretary of Labor and Employment. Article 35 of the Labor Code,
as amended, which provides:

Art. 5. 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, and the
National Seamen Board, or for violation of the provisions of this and other applicable
laws, General Orders and Letters of Instructions.

In the case of Eastern Assurance and Surety Corp. v. Secretary of

Labor, 5 we held that:

The penalties of suspension and cancellation of license or authority are prescribed

for violations of the above quoted provisions, among others. And the Secretary of
Labor has the power under Section 35 of the law to apply these sanctions, as well as
the authority, conferred by Section 36, not only to "restrict and regulate the
recruitment and placement activities of all agencies," but also to "promulgate rules
and regulations to carry out the objectives and implement the provisions" governing
said activities. Pursuant to this rule-making power thus granted, the Secretary of
Labor gave the POEA, 6 "on its own initiative or upon filing of a complaint or report or
upon request for investigation by any aggrieved person, . . (authority to) conduct the
necessary proceedings for the suspension or cancellation of the license or authority of
any agency or entity" for certain enumerated offenses including —

1) the imposition or acceptance, directly or indirectly, of any amount of money, goods

or services, or any fee or bond in excess of what is prescribed by the Administration,
and

2) any other violation of pertinent provisions of the Labor Code and other relevant
laws, rules and regulations. 7

The Administrator was also given the power to "order the dismissal of the case of the
suspension of the license or authority of the respondent agency or contractor or
recommend to the Minister the cancellation thereof." 8 (Emphasis supplied)

This power conferred upon the Secretary of Labor and Employment was echoed in People
v. Diaz, 9 viz.:

A non-licensee or non-holder of authority means any person, corporation or entity

which has not been issued a valid license or authority to engage in recruitment and
placement by the Secretary of Labor, or whose license or authority has been
 suspended, revoked or cancelled by the POEA or the Secretary. (Emphasis
supplied)

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.

As regards petitioner's alternative argument that the non-filing of the 1987 POEA Schedule of
Penalties with the UP Law Center rendered it ineffective and, hence, cannot be utilized as basis for
penalizing them, we agree with Secretary Confesor's explanation, to wit:

On the other hand, the POEA Revised Rules on the Schedule of Penalties was
issued pursuant to Article 34 of the Labor Code, as amended. The same merely
amplified and particularized the various violations of the rules and regulations of the
POEA and clarified and specified the penalties therefore (sic). Indeed, the
questioned schedule of penalties contains only a listing of offenses. It does not
prescribe additional rules and regulations governing overseas employment but only
detailed the administrative sanctions imposable by this Office for some enumerated
prohibited acts.

Under the circumstances, the license of the respondent agency was cancelled on the
authority of Article 35 of the Labor Code, as amended, and not pursuant to the 1987
POEA Revised Rules on Schedule of Penalties. 10

WHEREFORE, in view of the foregoing, the instant petition is hereby DISMISSED. Accordingly, the
decision of the Secretary of Labor dated April 5, 1991, is AFFIRMED. No costs.

SO ORDERED.

G.R. No. 167639 April 19, 2006

REPUBLIC OF THE PHILIPPINES, represented by the ADMINISTRATOR OF THE PHILIPPINE

OVERSEAS EMPLOYMENT ADMINISTRATION (POEA), Petitioner,
vs
PRINCIPALIA MANAGEMENT AND PERSONNEL CONSULTANTS,
INCORPORATED, Respondent.

DECISION

YNARES-SANTIAGO, J.:

Petitioner assails the September 20, 2004 Resolution1 of the Court of Appeals in CA-G.R. SP No.
86170, dismissing outright the petition for certiorari for failure to attach copies of all relevant
pleadings and transcripts of the hearings, as well as the March 29, 2005 Resolution2 denying the
motion for reconsideration.

This case stemmed from two separate complaints filed before the Philippine Overseas Employment
Administration (POEA) against Principalia Management and Personnel Consultants, Incorporated
(Principalia) for violation of the 2002 POEA Rules and Regulations. The first complaint dated July
16, 2003 filed by Ruth Yasmin Concha (Concha) was docketed as POEA Case No. RV 03-07-1497.
The second complaint dated October 14, 2003 filed by Rafael E. Baldoza (Baldoza) was docketed
as POEA Case No. RV 03-07-1453.

In the first complaint, Concha alleged that in August 2002, she applied with Principalia for placement
and employment as caregiver or physical therapist in the USA or Canada. Despite paying
P20,000.00 out of the P150,000.00 fee required by Principalia which was not properly receipted,
Principalia failed to deploy Concha for employment abroad.3

In its March 15, 2004 Order,4 the Adjudication Office of the POEA found Principalia liable for
violations of the 2002 POEA Rules and Regulations, particularly for collecting a fee from the
applicant before employment was obtained; for non-issuance of official receipt; and for
misrepresenting that it was able to secure employment for Concha. For these infractions,
Principalia’s license was ordered suspended for 12 months or in lieu thereof, Pricipalia is ordered to
pay a fine of P120,000.00 and to refund Concha’s placement fee of P20,000.00.

Baldoza initiated the second complaint on October 14, 20035 alleging that Principalia assured him of
employment in Doha, Qatar as a machine operator with a monthly salary of $450.00. After paying
P20,000.00 as placement fee, he departed for Doha, Qatar on May 31, 2003 but when he arrived at
the jobsite, he was made to work as welder, a job which he had no skills. He insisted that he was
hired as machine operator but the alternative position offered to him was that of helper, which he
refused. Thus, he was repatriated on July 5, 2003.

On November 12, 2003, Baldoza and Principalia entered into a compromise agreement with
quitclaim and release whereby the latter agreed to redeploy Baldoza for employment abroad.
Principalia, however, failed to deploy Baldoza as agreed hence, in an Order dated April 29,
2004,6 the POEA suspended Principalia’s documentary processing.

Principalia moved for reconsideration which the POEA granted on June 25, 2004.7 The latter lifted its
order suspending the documentary processing by Principalia after noting that it exerted efforts to
obtain overseas employment for Baldoza within the period stipulated in the settlement agreement
but due to Baldoza’s lack of qualification, his application was declined by its foreign principal.

Meanwhile, on June 14, 2004, or before the promulgation of POEA’s order lifting the suspension,
Principalia filed a Complaint8 (Complaint) against Rosalinda D. Baldoz in her capacity as
Administrator of POEA and Atty. Jovencio R. Abara in his capacity as POEA Conciliator, before the
Regional Trial Court (RTC) of Mandaluyong City for "Annulment of Order for Suspension of
Documentation Processing with Damages and Application for Issuance of a Temporary Restraining
Order and/or Writ of Preliminary Injunction, and a Writ of Preliminary Mandatory Injunction."
Principalia claimed that the suspension of its documentary processing would ruin its reputation and
goodwill and would cause the loss of its applicants, employers and principals. Thus, a writ of
preliminary injunction and a writ of mandatory injunction must be issued to prevent serious and
irreparable damage to it.

On June 14, 2004,9 Judge Paulita B. Acosta-Villarante of the RTC of Mandaluyong City, Branch 211,
granted a 72-hour restraining order enjoining Administrator Baldoz and Atty. Abara to refrain from
imposing the suspension orders before the matter can be heard in full. On June 17, 2004,10 Judge
Rizalina T. Capco-Umali, RTC of Mandaluyong City, Branch 212, held thus:

WHEREFORE, in order to preserve status quo ANTE, the prayer for a Temporary Restraining Order
is hereby GRANTED enjoining the defendant[s] ROSALINDA D. BALDOZ and ATTY. JOVENCIO
ABARA, other officers of Philippine Overseas Employment Administration, their subordinates,
agents, representatives and all other persons acting for and in their behalf, for (sic) implementing the
Orders of Suspension under VC No. LRD 03-100-95 and POEA Case No. RV-03-07-1497.

Let the hearing on Preliminary Injunction and Preliminary Mandatory Injunction be set on June 22,
2004 at 1:30 o’clock in the afternoon. 1avv phil.net

SO ORDERED.11

After the hearing on the preliminary injunction, Administrator Baldoz and Atty. Abara submitted their
Memorandum (Memorandum).12 In an Order dated July 2, 2004,13 the trial court held that the issue
on the application for preliminary mandatory injunction has become moot because POEA had
already released the renewal of license of Principalia. However, on the issue against the
implementation of the order of suspension, the trial court resolved, to wit:

Accordingly, the only issue left for the resolution of this Court is whether or not a Writ of Preliminary
Prohibitory Injunction will lie against the immediate implementation of the Order of Suspension of
License of the Plaintiff dated March 15, 2004 under POEA case No. RV-03-07-1497, issued by the
POEA Administrator Rosalinda D. Baldoz.

In support of its Application for a Writ of Preliminary Prohibitory Injunction, Plaintiff presented
evidence to prove the following:

(1) that it has a license,

(2) that the said license was renewed,

(3) the existence of the two (2) suspension orders subject of this case;

(4) the irreparable damages to the Plaintiff.

The defendants on the other hand did not present evidence to controvert the evidence of the
plaintiff. Instead, defendants submitted a Memorandum.

Upon a careful evaluation and assessment of the evidence by the plaintiff and their respective
memoranda of the parties, this Court finds the need to issue the Writ of Preliminary Prohibitory
Injunction prayed for by the plaintiff.

It bears stressing that the Order of Suspension dated March 15, 2004 is still pending appeal
before the Office of the Secretary of Labor and Employment.

It is likewise significant to point out that the said Order dated March 15, 2004 does not categorically
state that the suspension of Plaintiff’s License is immediately executory contrary to the contention of
the defendants. 1avv phil.net

Counsel for POEA argued that the basis for the immediate implementation thereof is Section 5, Rule
V, Part VI of the 2002 POEA Rules and Regulation, which is quoted hereunder, as follows:

"Section 5. Stay of Execution. The decision of the Administration shall be stayed during the
pendency of the appeal; Provided that where the penalty imposed carried the maximum penalty of
twelve (12) months suspension o[r] cancellation of license, the decision shall be immediately
executory despite pendency of the appeal."
The Order dated March 15, 2004 decreed Plaintiff as having violated Section 2 (a) (d) and (e) of
Rule I, Part VI of the POEA Rules and Regulations and the Plaintiffs was imposed the penalty of
twelve (12) months suspension of license (or in lieu, to pay fine of P120,000, it being it[s] first
offense).

Violation of Section 2 (a) (d) and (e) Rule I, Part VI of POEA Rules and Regulations imposes a
penalty of two (2) months to six (6) months suspension of license for the FIRST offender (sic). And in
the absence of mitigating or aggravating circumstance, the medium range of the imposable penalty
which is four (4) months shall be meted out. Being a first offender, the plaintiff was imposed
suspension of license for four (4) months for each violation or an aggregate period of suspension for
twelve (12) months for the three (3) violations.

It was not however made clear in the Order of Suspension dated March 15, 2004 that the
Plaintiff’s case falls under the EXCEPTION under Section 5 Rule V, Part VI of the 2002 POEA
Rules and Regulation, warranting the immediate implementation thereof even if an appeal is
pending with the POEA.

The Plaintiff had established that even if it has been granted a renewal license, but if the same is
suspended under the March 15, 2004 Order in POEA case No. RV-03-07-1497, it could not use the
license to do business. As earlier mentioned, the said Order is still pending appeal.

In the meantime that the appeal has not been resolved, Plaintiff’s clients/principals will have
to look for other agencies here and abroad, to supply their needs for employees and workers.
The end result would be a tremendous loss and even closure of its business. More
importantly, Plaintiff’s reputation would be tarnished and it would be difficult, if not
impossible for it to regain its existing clientele if the immediate implementation of the
suspension of its license continues.

The defendants and even the POEA, upon the other hand, will not suffer any damage, if the
immediate implementation of the suspension of plaintiff’s license as decreed in the March 15, 2004
Order, is enjoined.

WHEREFORE, as prayed for by the Plaintiff, the application for the issuance of the Writ of
Preliminary Prohibitory Injunction is hereby GRANTED, upon posting of a bond in the amount of
FIVE HUNDRED THOUSAND PESOS (Php 500,000.00), enjoining and restraining the Defendants
ROSALINDA D. BALDOZ and Atty. Jovencio Abarra (sic), other officers of the POEA, their
subordinates, agents, representative, and all other persons acting for and in their behalf, from
immediately implementing the Order of Suspension dated March 15, 2004 under POEA Case No.
RV-03-07-1497.

The Writ of Preliminary Prohibitory Injunction shall be in full force and effect immediately upon
receipt thereof and to be carried out on subsequent days thereafter pending the termination of this
case and/or unless a contrary Order is issued by this court.14 (Emphasis supplied)

The trial court stressed that it issued the injunctive writ because the order of suspension dated
March 15, 2004 is still pending appeal before the Office of the Secretary of Labor and Employment;
that there is a possibility that Principalia will suffer tremendous losses and even closure of business
pending appeal; that POEA will not suffer any damage if the immediate implementation of the
suspension of Principalia is enjoined; that the order does not categorically state that the suspension
of the license is immediately executory.
POEA appealed to the Court of Appeals which was dismissed15 outright for failure of POEA to attach
copies of its Memorandum dated June 30, 2004, as well as the transcripts of the hearings conducted
on June 22, 2004 and June 29, 2004 as required under Section 3 of Rule 46 of the Rules of Court.
POEA’s motion for reconsideration was denied16 hence, this petition on the following grounds:

SECTION 1, RULE 65 OF THE REVISED RULES OF COURT REQUIRES ONLY THAT THE
PETITION SHOULD BE ACCOMPANIED BY CERTIFIED TRUE COPIES OF THE JUDGMENT,
ORDER OR RESOLUTION SUBJECT THEREOF AND OTHER DOCUMENTS RELEVANT AND
PERTINENT THERETO. PETITIONER ATTACHED ALL THE DOCUMENTS PERTINENT TO THE
PETITION FILED WITH THE COURT OF APPEALS.

II

THE REGIONAL TRIAL COURT GRAVELY ABUSED ITS DISCRETION WHEN IT GRANTED
RESPONDENT PRICIPALIA’S APPLICATION FOR A WRIT OF PRELIMINARY INJUNCTION
DESPITE THE ABSENCE OF A CLEAR AND CONVINCING RIGHT TO THE RELIEF DEMANDED.

III

THE REGIONAL TRIAL COURT COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT

GRANTED RESPONDENT PRINCIPALIA’S APPLICATION DESPITE THE ABSENCE OF PROOF
OF IRREPARABLE DAMAGE AS REQUIRED UNDER THE RULES OF COURT.

IV

THE INJUNCTIVE WRIT ISSUED BY THE REGIONAL TRIAL COURT DOES NOT LIE TO ENJOIN
AN ACCOMPLISHED ACT.

THE ISSUANCE OF AN INJUNCTIVE WRIT BY THE REGIONAL TRIAL COURT IS TANTAMOUNT

TO THE REVERSAL OF THE PRESUMPTION OF REGULARITY OF AN OFFICIAL ACT.17

The core issues for resolution are as follows: (1) whether the Court of Appeals erred in dismissing
the Petition for Certiorari based on purely technical grounds; and (2) whether the trial court erred in
issuing the writ of preliminary injunction.

POEA avers that the Court of Appeals’ Resolution dismissing outright the petition for certiorari is not
valid because the documents attached to the petition substantially informed the Court of Appeals
that the trial court gravely abused its discretion in granting the preliminary injunction. Thus, the
attached documents were sufficient to render an independent assessment of its improvident
issuance.

We disagree.

The Court of Appeals dismissed the petition for certiorari due to POEA’s failure to comply with
Section 3, Rule 46 and Section 1, Rule 65 of the Rules of Court which read as follows:

RULE 46
SEC. 3. Contents and filing of petition; effect of non-compliance with requirements. - The petition
shall contain the full names and actual addresses of all the petitioners and respondents, a concise
statement of the matters involved, the factual background of the case, and the grounds relied upon
for the relief prayed for.

In actions filed under Rule 65, the petition shall further indicate the material dates showing when
notice of the judgment or final order or resolution subject thereof was received, when a motion for
new trial or reconsideration, if any, was filed and when notice of the denial thereof was received.

It shall be filed in seven (7) clearly legible copies together with proof of service thereof on the
respondent with the original copy intended for the court indicated as such by the petitioner, and
shall be accompanied by a clearly legible duplicate original or certified true copy of the
judgment, order, resolution, or ruling subject thereof, such material portions of the record as
are referred to therein, and other documents relevant or pertinent thereto. The certification
shall be accomplished by the proper clerk of court or by his duly authorized representative, or by the
proper officer of the court, tribunal, agency or office involved or by his duly authorized
representative. The other requisite number of copies of the petition shall be accompanied by clearly
legible plain copies of all documents attached to the original.

xxxx

The failure of the petitioner to comply with any of the foregoing requirements shall be
sufficient ground for the dismissal of the petition. (Emphasis supplied)

RULE 65

SECTION. 1. Petition for certiorari. – When any tribunal, board or officer exercising judicial or quasi-
judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy,
and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified
petition in the proper court, alleging the facts with certainty and praying that judgment be rendered
annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental
reliefs as law and justice may require.

The petition shall be accompanied by a certified true copy of the judgment, order or
resolution subject thereof, copies of all pleadings and documents relevant and pertinent
thereto, and a sworn certification of non-forum shopping as provided in the third paragraph of
Section 3, Rule 46.

In the case at bar, the Court of Appeals dismissed the petition for certiorari due to POEA’s failure to
attach the following relevant documents: (1) the Memorandum filed by POEA in the trial court to
oppose the Complaint; and (2) the transcripts of stenographic notes (TSN) of the hearings
conducted by the trial court on June 22, 2004 and June 29, 2004. In its motion for reconsideration
dated October 13, 2004,18 POEA only attached the TSN dated June 30, 2004,19 with the explanation
that the trial court did not furnish it with copies of the other hearings. However, we note that POEA
still failed to attach a copy of the Memorandum which the Court of Appeals deemed essential in its
determination of the propriety of the trial court’s issuance of the writ of preliminary prohibitory
injunction.

The allowance of the petition on the ground of substantial compliance with the Rules is not a novel
occurrence in our jurisdiction.20 Indeed, if we apply the Rules strictly, we cannot fault the Court of
Appeals for dismissing the petition21 because the POEA did not demonstrate willingness to comply
with the requirements set by the rules and to submit the necessary documents which the Court of
Appeals need to have a proper perspective of the case.

POEA avers that the trial court gravely abused its discretion in granting the writ of preliminary
prohibitory injunction when the requirements to issue the same have not been met. It asserts that
Principalia had no clear and convincing right to the relief demanded as it had no proof of irreparable
damage as required under the Rules of Court.

We do not agree.

The trial court did not decree that the POEA, as the granting authority of Principalia’s license to
recruit, is not allowed to determine Principalia’s compliance with the conditions for the grant, as
POEA would have us believe. For all intents and purposes, POEA can determine whether the
licensee has complied with the requirements. In this instance, the trial court observed that the Order
of Suspension dated March 15, 2004 was pending appeal with the Secretary of the Department of
Labor and Employment (DOLE). Thus, until such time that the appeal is resolved with finality by the
DOLE, Principalia has a clear and convincing right to operate as a recruitment agency.

Furthermore, irreparable damage was duly proven by Principalia. Suspension of its license is not
easily quantifiable nor is it susceptible to simple mathematical computation, as alleged by POEA.
The trial court in its Order stated, thus:

In the meantime that the appeal has not been resolved, Plaintiff’s clients/principals will have to look
for other agencies here and abroad, to supply their needs for employees and workers. The end
result would be a tremendous loss and even closure of its business. More importantly, Plaintiff’s
reputation would be tarnished and it would be difficult, if not impossible for it to regain its existing
clientele if the immediate implementation of the suspension of its license continues.22

If the injunctive writ was not granted, Principalia would have been labeled as an untrustworthy
recruitment agency before there could be any final adjudication of its case by the DOLE. It would
have lost both its employer-clients and its prospective Filipino-applicants. Loss of the former due to a
tarnished reputation is not quantifiable.

Moreover, POEA would have no authority to exercise its regulatory functions over Principalia
because the matter had already been brought to the jurisdiction of the DOLE. Principalia has been
granted the license to recruit and process documents for Filipinos interested to work abroad. Thus,
POEA’s action of suspending Principalia’s license before final adjudication by the DOLE would be
premature and would amount to a violation of the latter’s right to recruit and deploy workers.

Finally, the presumption of regular performance of duty by the POEA under Section 3 (m), Rule 131
of the Rules of Court, finds no application in the case at bar, as it applies only where a duty is
imposed on an official to act in a certain way, and assumes that the law tells him what his duties are.
Therefore the presumption that an officer will discharge his duties according to law does not apply
where his duties are not specified by law and he is given unlimited discretion.23 The issue threshed
out before the trial court was whether the order of suspension should be implemented pending
appeal. It did not correct a ministerial duty of the POEA. As such, the presumption on the regularity
of performance of duty does not apply.

WHEREFORE, in light of the foregoing, the petition is DENIED for lack of merit.

SO ORDERED.
G.R. No. 156029 November 14, 2008

SANTOSA B. DATUMAN, petitioner,

vs.
FIRST COSMOPOLITAN MANPOWER AND PROMOTION SERVICES,
INC., respondent.

DECISION

LEONARDO-DE CASTRO, J.:

Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules
of Civil Procedure, as amended, assailing the Court of Appeals (CA)
Decision1 dated August 7, 2002, in CA-G.R. SP No. 59825, setting aside the
Decision of the National Labor Relations Commission (NLRC).

The facts are as follows:

Sometime in 1989, respondent First Cosmopolitan Manpower & Promotion

Services, Inc. recruited petitioner Santosa B. Datuman to work abroad under
the following terms and conditions:

Site of employment - Bahrain

Employees Classification/Position/Grade - Saleslady

Basic Monthly Salary - US$370.00

Duration of Contract - One (1) year

Foreign Employer - Mohammed Sharif Abbas Ghulam Hussain2

On April 17, 1989, petitioner was deployed to Bahrain after paying the
required placement fee. However, her employer Mohammed Hussain took her
passport when she arrived there; and instead of working as a saleslady, she
was forced to work as a domestic helper with a salary of Forty Bahrain Dinar
(BD40.00), equivalent only to One Hundred US Dollars (US$100.00). This
was contrary to the agreed salary of US$370.00 indicated in her Contract of
Employment signed in the Philippines and approved by the Philippine
Overseas Employment Administration (POEA).3

On September 1, 1989, her employer compelled her to sign another contract,

transferring her to another employer as housemaid with a salary of BD40.00
for the duration of two (2) years.4 She pleaded with him to give her a release
paper and to return her passport but her pleas were unheeded. Left with no
choice, she continued working against her will. Worse, she even worked
without compensation from September 1991 to April 1993 because of her
employer's continued failure and refusal to pay her salary despite demand. In
May 1993, she was able to finally return to the Philippines through the help of
the Bahrain Passport and Immigration Department.5

In May 1995, petitioner filed a complaint before the POEA Adjudication Office
against respondent for underpayment and nonpayment of salary, vacation
leave pay and refund of her plane fare, docketed as Case No. POEA ADJ. (L)
95-05-1586.6 While the case was pending, she filed the instant case before
the NLRC for underpayment of salary for a period of one year and six months,
nonpayment of vacation pay and reimbursement of return airfare.

When the parties failed to arrive at an amicable settlement before the Labor
Arbiter, they were required to file their respective position papers, subsequent
pleadings and documentary exhibits.

In its Position Paper,7 respondent countered that petitioner actually agreed to

work in Bahrain as a housemaid for one (1) year because it was the only
position available then. However, since such position was not yet allowed by
the POEA at that time, they mutually agreed to submit the contract to the
POEA indicating petitioner's position as saleslady. Respondent added that it
was actually petitioner herself who violated the terms of their contract when
she allegedly transferred to another employer without respondent's knowledge
and approval. Lastly, respondent raised the defense of prescription of cause
of action since the claim was filed beyond the three (3)-year period from the
time the right accrued, reckoned from either 1990 or 1991.8

On April 29, 1998, Labor Arbiter Jovencio Mayor, Jr. rendered a Decision
finding respondent liable for violating the terms of the Employment Contract
and ordering it to pay petitioner: (a) the amount of US$4,050.00, or its
equivalent rate prevailing at the time of payment, representing her salary
differentials for fifteen (15) months; and, (b) the amount of BD 180.00 or its
equivalent rate prevailing at the time of payment, representing the refund of
plane ticket, thus:

From the foregoing factual backdrop, the only crucial issue for us to
resolve in this case is whether or not complainant is entitled to her
monetary claims.
xxx

In the instant case, from the facts and circumstances laid down, it is
thus self-evident that the relationship of the complainant and respondent
agency is governed by the Contract of Employment, the basic terms a
covenants of which provided for the position of saleslady, monthly
compensation of US$370.00 and duration of contract for one (1) year.
As it is, when the parties - complainant and respondent Agency - signed
and executed the POEA - approved Contract of Employment, this
agreement is the law that governs them. Thus, when respondent
agency deviated from the terms of the contract by assigning the position
of a housemaid to complainant instead of a saleslady as agreed upon in
the POEA-approved Contract of Employment, respondent Agency
committed a breach of said Employment Contract. Worthy of mention
is the fact that respondent agency in their Position Paper
paragraph 2, Brief Statement of the Facts and of the Case -
admitted that it had entered into an illegal contract with
complainant by proposing the position of a housemaid which said
position was then not allowed by the POEA, by making it appear in
the Employment Contract that the position being applied for is the
position of a saleslady. As it is, we find indubitably clear that the
foreign employer had took advantage to the herein hopeless
complainant and because of this ordeal, the same obviously
rendered complainant's continuous employment unreasonable if
not downright impossible. The facts and surrounding circumstances
of her ordeal was convincingly laid down by the complainant in her
Position Paper, from which we find no flaws material enough to
disregard the same. Complainant had clearly made out her case and no
amount of persuasion can convince us to tilt the scales of justice in
favor of respondents whose defense was anchored solely on the flimsy
allegations that for a period of more than five (5) years - from 1989 until
1995 - nothing was heard from her or from her relatives, presuming then
that complainant had no problem with her employment abroad. We also
find that the pleadings and the annexes filed by the parties reveal a total
lapse on the part of respondent First Cosmopolitan Manpower and
Promotions - their failure to support with substantial evidence their
contention that complainant transferred from one employer to another
without knowledge and approval of respondent agency in contravention
of the terms of the POEA approved Employment Contract. Obviously,
respondent Agency anchored its disquisition on the alleged "contracts"
signed by the complainant that she agreed with the terms of said
contracts - one (1) year duration only and as a housemaid - to support
its contention that complainant violated the contract agreement by
transferring from one employer to another on her own volition without
the knowledge and consent of respondent agency. To us, this posture of
respondent agency is unavailing. These "documents" are self-serving.
We could not but rule that the same were fabricated to tailor-fit their
defense that complainant was guilty of violating the terms of the
Employment Contract. Consequently, we could not avoid the inference
of a more logical conclusion that complainant was forced against her will
to continue with her employment notwithstanding the fact that it was in
violation of the original Employment Contract including the illegal
withholding of her passport.

With the foregoing, we find and so rule that respondent Agency failed to
discharge the burden of proving with substantial evidence that
complainant violated the terms of the Employment Contract, thus
negating respondent Agency's liability for complainant's money claims.
All the more, the record is bereft of any evidence to show that
complainant Datuman is either not entitled to her wage differentials or
have already received the same from respondent. As such, we are
perforce constrained to grant complainant's prayer for payment of salary
differentials computed as follows:

January 1992 April 1993 (15 months)

US$370.00 agreed salary

US$100.00 actual paid salary

US$270.00 balance

US$270.00 x 15 months = US$4050.00

We are also inclined to grant complainant's entitlement to a refund of

her plane ticket in the amount of BD 180 Bahrain Dinar or the equivalent
in Philippine Currency at the rate of exchange prevailing at the time of
payment.

Anent complainant's claim for vacation leave pay and overtime pay, we
cannot, however, grant the same for failure on the part of complainant to
prove with particularity the months that she was not granted vacation
leave and the day wherein she did render overtime work.
 Also, we could not grant complainant's prayer for award of damages
and attorney's fees for lack of factual and legal basis.

WHEREFORE, premises considered, judgment is hereby rendered,

finding respondent Agency liable for violating the term of Employment
Contract and respondent First Cosmopolitan Manpower and Promotions
is hereby ordered:

To pay complainant the amount of US$ FOUR THOUSAND AND FIFTY

(US$4,050.00), or its equivalent rate prevailing at the time of payment,
representing her salary differentials for fifteen (15) months;

To pay complainant the amount of BD 180.00 or its equivalent rate

prevailing at the time of payment, representing the refund of plane
ticket;

All other claims are hereby dismissed for lack of merit.

SO ORDERED.9 (emphasis supplied)

On appeal, the NLRC, Second Division, issued a Decision10 affirming with

modification the Decision of Labor Arbiter Mayor, Jr., by reducing the award of
salary differentials from US$4,050.00 to US$2,970.00 ratiocinating as follows:

Accordingly, we find that the claims for salary differentials accruing

earlier than April of 1993 had indeed prescribed. This is so as
complainant had filed her complaint on May 31, 1995 when she arrived
from the jobsite in April 1993. Since the cause of action for salary
differential accrues at the time when it falls due, it is clear that only the
claims for the months of May 1993 to April 1994 have not yet
prescribed. With an approved salary rate of US$370.00 vis-à-vis the
amount of salary received which was $100.00, complainant is entitled to
the salary differential for the said period in the amount of $2,970.00.

xxx

WHEREFORE, premises considered, judgment is hereby rendered

MODIFYING the assailed Decision by reducing the award of salary
differentials to $2,970.00 to the complainant.

The rest of the disposition is AFFIRMED.

 SO ORDERED.11

On July 21, 2000, respondent elevated the matter to the CA through a petition
for certiorari under Rule 65.

On August 2, 2000,12 the CA dismissed the petition for being insufficient in

form pursuant to the last paragraph of Section 3, Rule 42 of the 1997 Rules of
Civil Procedure, as amended.

On October 20, 2000,13 however, the CA reinstated the petition upon

respondent's motion for reconsideration.14

On August 7, 2002, the CA issued the assailed Decision15 granting the petition
and reversing the NLRC and the Labor Arbiter, thus:

Under Section 1 (f), Rule II, Book II of the 1991 POEA Rules and
Regulations, the local agency shall assume joint and solidary liability
with the employer for all claims and liabilities which may arise in
connection with the implementation of the contract, including but not
limited to payment of wages, health and disability compensation and
repatriation.

Respondent Commission was correct in declaring that claims of private

respondent "for salary differentials accruing earlier than April of 1993
had indeed prescribed." It must be noted that petitioner company is
privy only to the first contract. Granting arguendo that its liability extends
to the acts of its foreign principal, the Towering Recruiting Services,
which appears to have a hand in the execution of the second contract, it
is Our considered opinion that the same would, at the most, extend only
up to the expiration of the second contract or until 01 September 1991.
Clearly, the money claims subject of the complaint filed in 1995 had
prescribed.

However, this Court declares respondent Commission as not only

having abused its discretion, but as being without jurisdiction at all, in
declaring private respondent entitled to salary differentials. After
decreeing the money claims accruing before April 1993 as having
prescribed, it has no more jurisdiction to hold petitioner company for
salary differentials after that period. To reiterate, the local agency shall
assume joint and solidary liability with the employer for all claims and
liabilities which may arise in connection with the implementation of the
contract. Which contract? Upon a judicious consideration, we so hold
 that it is only in connection with the first contract. The provisions in
number 2, Section 10 (a), Rule V, Book I of the Omnibus Rules
Implementing the Labor Code Section 1 (f), Rule II, Book II of the 1991
POEA Rules and Regulations were not made to make the local agency
a perpetual insurer against all untoward acts that may be done by the
foreign principal or the direct employer abroad. It is only as regards the
principal contract to which it is privy shall its liability extend. In Catan v.
National Labor Relations Commission, 160 SCRA 691 (1988), it was
held that the responsibilities of the local agent and the foreign principal
towards the contracted employees under the recruitment agreement
extends up to and until the expiration of the employment contracts of the
employees recruited and employed pursuant to the said recruitment
agreement.

xxx

Foregoing considered, the assailed Decision dated 24 February 2000

and the Resolution dated 23 June 2000 of respondent Commission in
NLRC NCR CA 016354-98 are hereby SET ASIDE.

SO ORDERED.16

Petitioner's Motion for Reconsideration17 thereon was denied in the assailed

Resolution18 dated November 14, 2002.

Hence, the present petition based on the following grounds:

I.

THE HONORABLE COURT OF APPEALS COMMITTED A

REVERSIBLE ERROR WHEN IT ABANDONED THE FACTUAL
FINDINGS OF THE LABOR ARBITER AS AFFIRMED BY THE
NATIONAL LABOR RELATIONS COMMISSION.

II.

THE HONORABLE COURT OF APPEALS PATENTLY ERRED IN

HOLDING THAT THE RESPONDENT AGENCY IS ONLY A [sic] PRIVY
AND LIABLE TO THE PRINCIPAL CONTRACT.

III.
 THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
HOLDING THAT THE CAUSE OF ACTION OF THE PETITIONER
ALREADY PRESCRIBED.

The respondent counters in its Comment that the CA is correct in ruling that it
is not liable for the monetary claims of petitioner as the claim had already
prescribed and had no factual basis.

Simply put, the issues boil down to whether the CA erred in not holding
respondent liable for petitioner's money claims pursuant to their Contract of
Employment.

We grant the petition.

On whether respondent is solidarily liable for petitioner's monetary

claims

Section 1 of Rule II of the POEA Rules and Regulations states that:

Section 1. Requirements for Issuance of License. - Every applicant for

license to operate a private employment agency or manning agency
shall submit a written application together with the following
requirements:

xxx

f. A verified undertaking stating that the applicant:

xxx

(3) Shall assume joint and solidary liability with the employer for all
claims and liabilities which may arise in connection with the
implementation of the contract; including but not limited to payment of
wages, death and disability compensation and repatriation. (emphasis
supplied)

The above provisions are clear that the private employment agency shall
assume joint and solidary liability with the employer.19 This Court has, time
and again, ruled that private employment agencies are held jointly and
severally liable with the foreign-based employer for any violation of the
recruitment agreement or contract of employment.20 This joint and solidary
liability imposed by law against recruitment agencies and foreign employers is
meant to assure the aggrieved worker of immediate and sufficient payment of
what is due him.21 This is in line with the policy of the state to protect and
alleviate the plight of the working class.

In the assailed Decision, the CA disregarded the aforecited provision of the

law and the policy of the state when it reversed the findings of the NLRC and
the Labor Arbiter. As the agency which recruited petitioner, respondent is
jointly and solidarily liable with the latter's principal employer abroad for her
(petitioner's) money claims. Respondent cannot, therefore, exempt itself from
all the claims and liabilities arising from the implementation of their POEA-
approved Contract of Employment.

We cannot agree with the view of the CA that the solidary liability of
respondent extends only to the first contract (i.e. the original, POEA-approved
contract which had a term of until April 1990). The signing of the "substitute"
contracts with the foreign employer/principal before the expiration of the
POEA-approved contract and any continuation of petitioner's employment
beyond the original one-year term, against the will of petitioner, are continuing
breaches of the original POEA-approved contract. To accept the CA's
reasoning will open the floodgates to even more abuse of our overseas
workers at the hands of their foreign employers and local recruiters, since the
recruitment agency could easily escape its mandated solidary liability for
breaches of the POEA-approved contract by colluding with their foreign
principals in substituting the approved contract with another upon the worker's
arrival in the country of employment. Such outcome is certainly contrary to the
State's policy of extending protection and support to our overseas workers. To
be sure, Republic Act No. 8042 explicitly prohibits the substitution or alteration
to the prejudice of the worker of employment contracts already approved and
verified by the Department of Labor and Employment (DOLE) 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 DOLE.22

Respondent's contention that it was petitioner herself who violated their

Contract of Employment when she signed another contract in Bahrain
deserves scant consideration. It is the finding of both the Labor Arbiter and the
NLRC - which, significantly, the CA did not disturb - that petitioner was forced
to work long after the term of her original POEA-approved contract, through
the illegal acts of the foreign employer.

In Placewell International Services Corporation v. Camote,23 we held that the

subsequently executed side agreement of an overseas contract worker with
her foreign employer which reduced his salary below the amount approved by
the POEA is void because it is against our existing laws, morals and public
policy. The said side agreement cannot supersede the terms of the standard
employment contract approved by the POEA.

Hence, in the present case, the diminution in the salary of petitioner from
US$370.00 to US$100 (BD 40.00) per month is void for violating the POEA-
approved contract which set the minimum standards, terms, and conditions of
her employment. Consequently, the solidary liability of respondent with
petitioner's foreign employer for petitioner's money claims continues although
she was forced to sign another contract in Bahrain. It is the terms of the
original POEA-approved employment contract that shall govern the
relationship of petitioner with the respondent recruitment agency and the
foreign employer. We agree with the Labor Arbiter and the NLRC that the
precepts of justice and fairness dictate that petitioner must be compensated
for all months worked regardless of the supposed termination of the original
contract in April 1990. It is undisputed that petitioner was compelled to render
service until April 1993 and for the entire period that she worked for the
foreign employer or his unilaterally appointed successor, she should have
been paid US$370/month for every month worked in accordance with her
original contract.

Respondent cannot disclaim liability for the acts of the foreign employer which
forced petitioner to remain employed in violation of our laws and under the
most oppressive conditions on the allegation that it purportedly had no
knowledge of, or participation in, the contract unwillingly signed by petitioner
abroad. We cannot give credence to this claim considering that respondent by
its own allegations knew from the outset that the contract submitted to the
POEA for approval was not to be the "real" contract. Respondent blithely
admitted to submitting to the POEA a contract stating that the position to be
filled by petitioner is that of "Saleslady" although she was to be employed as a
domestic helper since the latter position was not approved for deployment by
the POEA at that time. Respondent's evident bad faith
and admitted circumvention of the laws and regulations on migrant workers
belie its protestations of innocence and put petitioner in a position where she
could be exploited and taken advantage of overseas, as what indeed
happened to her in this case.

We look upon with great disfavor the unsubstantiated actuations of innocence

or ignorance on the part of local recruitment agencies of acts of their foreign
principals, as if the agencies' responsibility ends with the deployment of the
worker. In the light of the recruitment agency's legally mandated joint and
several liability with the foreign employer for all claims in connection with
the implementation of the contract, it is the recruitment agency's
responsibility to ensure that the terms and conditions of the employment
contract, as approved by the POEA, are faithfully complied with and
implemented properly by its foreign client/principal. Indeed, it is in its best
interest to do so to avoid being haled to the courts or labor tribunals and
defend itself from suits for acts of its foreign principal.

On whether petitioner's claims for underpaid salaries have prescribed

It should be recalled that the Labor Arbiter and the NLRC similarly found that
petitioner is entitled to underpaid salaries, albeit they differed in the number of
months for which salary differentials should be paid. The CA, on the other
hand, held that all of petitioner's monetary claims have prescribed pursuant to
Article 291 of the Labor Code which provides that:

Art. 291. Money Claims. - All money claims arising from employer-
employee relations accruing during the effectivity of this Code shall be
filed within three years from the time that cause of action accrued;
otherwise, they shall be forever barred. (emphasis supplied)

We do not agree with the CA when it held that the cause of action of petitioner
had already prescribed as the three-year prescriptive period should be
reckoned from September 1, 1989 when petitioner was forced to sign another
contract against her will. As stated in the complaint, one of petitioner's causes
of action was for underpayment of salaries. The NLRC correctly ruled the right
to claim unpaid salaries (or in this case, unpaid salary differentials) accrue as
they fall due.24 Thus, petitioner's cause of action to claim salary differential
for October 1989 only accrued after she had rendered service for that month
(or at the end of October 1989). Her right to claim salary differential for
November 1989 only accrued at the end of November 1989, and so on and so
forth.

Both the Labor Arbiter and the NLRC found that petitioner was forced to work
until April 1993. Interestingly, the CA did not disturb this finding but held only
that the extent of respondent's liability was limited to the term under the
original contract or, at most, to the term of the subsequent contract entered
into with the participation of respondent's foreign principal, i.e. 1991. We have
discussed previously the reasons why (a) the CA's theory of limited liability on
the part of respondent is untenable and (b) the petitioner has a right to be
compensated for all months she, in fact, was forced to work. To determine for
which months petitioner's right to claim salary differentials has not prescribed,
we must count three years prior to the filing of the complaint on May 31, 1995.
Thus, only claims accruing prior to May 31, 1992 have prescribed when the
complaint was filed on May 31, 1995. Petitioner is entitled to her claims for
salary differentials for the period May 31, 1992 to April 1993, or approximately
eleven (11) months.25

We find that the NLRC correctly computed the salary differential due to
petitioner at US$2,970.00 (US$370.00 as approved salary rate - US$100.00
as salary received = US$290 as underpaid salary per month x 11 months).
However, it should be for the period May 31, 1992 to April 1993 and not May
1993 to April 1994 as erroneously stated in the NLRC's Decision.

A final note

This Court reminds local recruitment agencies that it is their bounden duty to
guarantee our overseas workers that they are being recruited for bona
fide jobs with bona fide employers. Local agencies should never allow
themselves to be instruments of exploitation or oppression of their compatriots
at the hands of foreign employers. Indeed, being the ones who profit most
from the exodus of Filipino workers to find greener pastures abroad, recruiters
should be first to ensure the welfare of the very people that keep their industry
alive.

WHEREFORE, the petition is GRANTED. The assailed Decision of the Court

of Appeals dated August 7, 2002 and Resolution dated November 14, 2002 in
CA-G.R. SP No. 59825 are REVERSED AND SET ASIDE. The Decision of
the National Labor Relations Commission dated February 24, 2000
is REINSTATED with a qualification with respect to the award of salary
differentials, which should be granted for the period May 31, 1992 to April
1993 and not May 1993 to April 1994.

SO ORDERED.
G.R. No. 177498 January 18, 2012

STOLT-NIELSEN TRANSPORTATION GROUP, INC. AND CHUNG GAI SHIP

MANAGEMENT, Petitioners,
vs.
SULPECIO MEDEQUILLO, JR., Respondent.

DECISION

PEREZ, J.:
Before the Court is a Petition for Review on Certiorari1 of the Decision2 of the First Division of the
Court of Appeals in CA-G.R. SP No. 91632 dated 31 January 2007, denying the petition
for certiorari filed by Stolt-Nielsen Transportation Group, Inc. and Chung Gai Ship Management
(petitioners) and affirming the Resolution of the National Labor Relations Commission (NLRC). The
dispositive portion of the assailed decision reads:

WHEREFORE, the petition is hereby DENIED. Accordingly, the assailed Decision promulgated on
February 28, 2003 and the Resolution dated July 27, 2005 are AFFIRMED.3

The facts as gathered by this Court follow:

On 6 March 1995, Sulpecio Madequillo (respondent) filed a complaint before the Adjudication Office
of the Philippine Overseas Employment Administration (POEA) against the petitioners for illegal
dismissal under a first contract and for failure to deploy under a second contract. In his complaint-
affidavit,4 respondent alleged that:

1. On 6 November 1991(First Contract), he was hired by Stolt-Nielsen Marine Services, Inc on

behalf of its principal Chung-Gai Ship Management of Panama as Third Assistant Engineer
on board the vessel "Stolt Aspiration" for a period of nine (9) months;
2. He would be paid with a monthly basic salary of $808.00 and a fixed overtime pay of $404.00
or a total of $1,212.00 per month during the employment period commencing on 6 November
1991;
3. On 8 November 1991, he joined the vessel MV "Stolt Aspiration";
4. On February 1992 or for nearly three (3) months of rendering service and while the vessel
was at Batangas, he was ordered by the ship’s master to disembark the vessel and
repatriated back to Manila for no reason or explanation;
5. Upon his return to Manila, he immediately proceeded to the petitioner’s office where he was
transferred employment with another vessel named MV "Stolt Pride" under the same terms
and conditions of the First Contract;
6. On 23 April 1992, the Second Contract was noted and approved by the POEA;
7. The POEA, without knowledge that he was not deployed with the vessel, certified the
Second Employment Contract on 18 September 1992.
8. Despite the commencement of the Second Contract on 21 April 1992, petitioners failed to
deploy him with the vessel MV "Stolt Pride";
9. He made a follow-up with the petitioner but the same refused to comply with the Second
Employment Contract.
10. On 22 December 1994, he demanded for his passport, seaman’s book and other
employment documents. However, he was only allowed to claim the said documents in
exchange of his signing a document;
11. He was constrained to sign the document involuntarily because without these documents, he
could not seek employment from other agencies.

He prayed for actual, moral and exemplary damages as well as attorney’s fees for his illegal
dismissal and in view of the Petitioners’ bad faith in not complying with the Second Contract.

The case was transferred to the Labor Arbiter of the DOLE upon the effectivity of the Migrant
Workers and Overseas Filipinos Act of 1995.

The parties were required to submit their respective position papers before the Labor Arbiter.
However, petitioners failed to submit their respective pleadings despite the opportunity given to
them.5
On 21 July 2000, Labor Arbiter Vicente R. Layawen rendered a judgment6 finding that the
respondent was constructively dismissed by the petitioners. The dispositive portion reads:

WHEREFORE, premises considered, judgment is hereby rendered, declaring the respondents guilty
of constructively dismissing the complainant by not honoring the employment contract. Accordingly,
respondents are hereby ordered jointly and solidarily to pay complainant the following:

1. $12,537.00 or its peso equivalent at the time of payment.7

The Labor Arbiter found the first contract entered into by and between the complainant and the
respondents to have been novated by the execution of the second contract. In other words,
respondents cannot be held liable for the first contract but are clearly and definitely liable for the
breach of the second contract.8 However, he ruled that there was no substantial evidence to grant
the prayer for moral and exemplary damages.9

The petitioners appealed the adverse decision before the National Labor Relations Commission
assailing that they were denied due process, that the respondent cannot be considered as dismissed
from employment because he was not even deployed yet and the monetary award in favor of the
respondent was exorbitant and not in accordance with law.10

On 28 February 2003, the NLRC affirmed with modification the Decision of the Labor Arbiter. The
dispositive portion reads:

WHEREFORE, premises considered, the decision under review is hereby, MODIFIED BY

DELETING the award of overtime pay in the total amount of Three Thousand Six Hundred Thirty Six
US Dollars (US $3,636.00).

In all other respects, the assailed decision so stands as, AFFIRMED.11

Before the NLRC, the petitioners assailed that they were not properly notified of the hearings that
were conducted before the Labor Arbiter. They further alleged that after the suspension of
proceedings before the POEA, the only notice they received was a copy of the decision of the Labor
Arbiter.12

The NLRC ruled that records showed that attempts to serve the various notices of hearing were
made on petitioners’ counsel on record but these failed on account of their failure to furnish the
Office of the Labor Arbiter a copy of any notice of change of address. There was also no evidence
that a service of notice of change of address was served on the POEA.13

The NLRC upheld the finding of unjustified termination of contract for failure on the part of the
petitioners to present evidence that would justify their non-deployment of the respondent.14 It denied
the claim of the petitioners that the monetary award should be limited only to three (3) months for
every year of the unexpired term of the contract. It ruled that the factual incidents material to the
case transpired within 1991-1992 or before the effectivity of Republic Act No. 8042 or the Migrant
Workers and Overseas Filipinos Act of 1995 which provides for such limitation.15

However, the NLRC upheld the reduction of the monetary award with respect to the deletion of the
overtime pay due to the non-deployment of the respondent.16

The Partial Motion for Reconsideration filed by the petitioners was denied by the NLRC in its
Resolution dated 27 July 2005.17
The petitioners filed a Petition for Certiorari before the Court of Appeals alleging grave abuse of
discretion on the part of NLRC when it affirmed with modification the ruling of the Labor Arbiter. They
prayed that the Decision and Resolution promulgated by the NLRC be vacated and another one be
issued dismissing the complaint of the respondent.

Finding no grave abuse of discretion, the Court of Appeals AFFIRMED the Decision of the labor
tribunal.

The Court’s Ruling

The following are the assignment of errors presented before this Court:

I.

THE COURT A QUO ERRED IN FINDING THAT THE SECOND CONTRACT NOVATED THE
FIRST CONTRACT.

1. THERE WAS NO NOVATION OF THE FIRST CONTRACT BY THE SECOND CONTRACT;

THE ALLEGATION OF ILLEGAL DISMISSAL UNDER THE FIRST CONTRACT MUST BE
RESOLVED SEPARATELY FROM THE ALLEGATION OF FAILURE TO DEPLOY UNDER
THE SECOND CONTRACT.
2. THE ALLEGED ILLEGAL DISMISSAL UNDER THE FIRST CONTRACT TRANSPIRED
MORE THAN THREE (3) YEARS AFTER THE CASE WAS FILED AND THEREFORE HIS
CASE SHOULD HAVE BEEN DISMISSED FOR BEING BARRED BY PRESCRIPTION.

II.

THE COURT A QUO ERRED IN RULING THAT THERE WAS CONSTRUCTIVE DISMISSAL
UNDER THE SECOND CONTRACT.

1. IT IS LEGALLY IMPOSSIBLE TO HAVE CONSTRUCTIVE DISMISSAL WHEN THE

EMPLOYMENT HAS NOT YET COMMENCED.
2. ASSUMING THERE WAS OMISSION UNDER THE SECOND CONTRACT, PETITIONERS
CAN ONLY BE FOUND AS HAVING FAILED IN DEPLOYING PRIVATE RESPONDENT
BUT WITH VALID REASON.

III.

THE COURT A QUO ERRED IN FAILING TO FIND THAT EVEN ASSUMING THERE WAS BASIS
FOR HOLDING PETITIONER LIABLE FOR "FAILURE TO DEPLOY" RESPONDENT, THE POEA
RULES PENALIZES SUCH OMISSION WITH A MERE "REPRIMAND."18

The petitioners contend that the first employment contract between them and the private respondent
is different from and independent of the second contract subsequently executed upon repatriation of
respondent to Manila.

We do not agree.

Novation is the extinguishment of an obligation by the substitution or change of the obligation by a

subsequent one which extinguishes or modifies the first, either by changing the object or principal
conditions, or, by substituting another in place of the debtor, or by subrogating a third person in the
rights of the creditor. In order for novation to take place, the concurrence of the following requisites is
indispensable:

1. There must be a previous valid obligation,

2. There must be an agreement of the parties concerned to a new contract,

3. There must be the extinguishment of the old contract, and

4. There must be the validity of the new contract.19

In its ruling, the Labor Arbiter clarified that novation had set in between the first and second contract.
To quote:

xxx [T]his office would like to make it clear that the first contract entered into by and between the
complainant and the respondents is deemed to have been novated by the execution of the second
contract. In other words, respondents cannot be held liable for the first contract but are clearly and
definitely liable for the breach of the second contract.20

This ruling was later affirmed by the Court of Appeals in its decision ruling that:

Guided by the foregoing legal precepts, it is evident that novation took place in this particular case.
The parties impliedly extinguished the first contract by agreeing to enter into the second contract to
placate Medequillo, Jr. who was unexpectedly dismissed and repatriated to Manila. The second
contract would not have been necessary if the petitioners abided by the terms and conditions of
Madequillo, Jr.’s employment under the first contract. The records also reveal that the 2nd contract
extinguished the first contract by changing its object or principal. These contracts were for overseas
employment aboard different vessels. The first contract was for employment aboard the MV "Stolt
Aspiration" while the second contract involved working in another vessel, the MV "Stolt Pride."
Petitioners and Madequillo, Jr. accepted the terms and conditions of the second contract. Contrary
to petitioners’ assertion, the first contract was a "previous valid contract" since it had not yet been
terminated at the time of Medequillo, Jr.’s repatriation to Manila. The legality of his dismissal had not
yet been resolved with finality. Undoubtedly, he was still employed under the first contract when he
negotiated with petitioners on the second contract. As such, the NLRC correctly ruled that petitioners
could only be held liable under the second contract.21

We concur with the finding that there was a novation of the first employment contract.

We reiterate once more and emphasize the ruling in Reyes v. National Labor Relations
Commission,22 to wit:

x x x [F]indings of quasi-judicial bodies like the NLRC, and affirmed by the Court of Appeals in due
course, are conclusive on this Court, which is not a trier of facts.

xxxx

x x x Findings of fact of administrative agencies and quasi-judicial bodies, which have

acquired expertise because their jurisdiction is confined to specific matters, are generally
accorded not only respect, but finality when affirmed by the Court of Appeals. Such findings
deserve full respect and, without justifiable reason, ought not to be altered, modified or
reversed.(Emphasis supplied)23
With the finding that respondent "was still employed under the first contract when he negotiated with
petitioners on the second contract",24 novation became an unavoidable conclusion.

Equally settled is the rule that factual findings of labor officials, who are deemed to have acquired
expertise in matters within their jurisdiction, are generally accorded not only respect but even finality
by the courts when supported by substantial evidence, i.e., the amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion.25 But these findings are not
infallible. When there is a showing that they were arrived at arbitrarily or in disregard of the evidence
on record, they may be examined by the courts.26 In this case, there was no showing of any
arbitrariness on the part of the lower courts in their findings of facts. Hence, we follow the settled
rule.

We need not dwell on the issue of prescription. It was settled by the Court of Appeals with its ruling
that recovery of damages under the first contract was already time-barred. Thus:

Accordingly, the prescriptive period of three (3) years within which Medequillo Jr. may initiate money
claims under the 1st contract commenced on the date of his repatriation. xxx The start of the three
(3) year prescriptive period must therefore be reckoned on February 1992, which by Medequillo Jr.’s
own admission was the date of his repatriation to Manila. It was at this point in time that Medequillo
Jr.’s cause of action already accrued under the first contract. He had until February 1995 to pursue a
case for illegal dismissal and damages arising from the 1st contract. With the filing of his Complaint-
Affidavit on March 6, 1995, which was clearly beyond the prescriptive period, the cause of action
under the 1st contract was already time-barred.27

The issue that proceeds from the fact of novation is the consequence of the non-deployment of
respondent.

The petitioners argue that under the POEA Contract, actual deployment of the seafarer is a
suspensive condition for the commencement of the employment.28 We agree with petitioners on such
point. However, even without actual deployment, the perfected contract gives rise to obligations on
the part of petitioners.

A contract is a meeting of minds between two persons whereby one binds himself, with respect to
the other, to give something or to render some service.29 The contracting parties may establish such
stipulations, clauses, terms and conditions as they may deem convenient, provided they are not
contrary to law, morals, good customs, public order, or public policy.30

The POEA Standard Employment Contract provides that employment shall commence "upon the
actual departure of the seafarer from the airport or seaport in the port of hire."31 We adhere to the
terms and conditions of the contract so as to credit the valid prior stipulations of the parties before
the controversy started. Else, the obligatory force of every contract will be useless. Parties are
bound not only to the fulfillment of what has been expressly stipulated but also to all the
consequences which, according to their nature, may be in keeping with good faith, usage and law.32

Thus, even if by the standard contract employment commences only "upon actual departure of the
seafarer", this does not mean that the seafarer has no remedy in case of non-deployment without
any valid reason. Parenthetically, the contention of the petitioners of the alleged poor performance of
respondent while on board the first ship MV "Stolt Aspiration" cannot be sustained to justify the non-
deployment, for no evidence to prove the same was presented.33

We rule that distinction must be made between the perfection of the employment contract and the
commencement of the employer-employee relationship. The perfection of the contract, which in this
case coincided with the date of execution thereof, occurred when petitioner and respondent agreed
on the object and the cause, as well as the rest of the terms and conditions therein. The
commencement of the employer-employee relationship, as earlier discussed, would have taken
place had petitioner been actually deployed from the point of hire. Thus, even before the start of any
employer-employee relationship, contemporaneous with the perfection of the employment contract
was the birth of certain rights and obligations, the breach of which may give rise to a cause of action
against the erring party. Thus, if the reverse had happened, that is the seafarer failed or refused to
be deployed as agreed upon, he would be liable for damages.34

Further, we do not agree with the contention of the petitioners that the penalty is a mere reprimand.

The POEA Rules and Regulations Governing Overseas Employment35 dated 31 May 1991 provides
for the consequence and penalty against in case of non-deployment of the seafarer without any valid
reason. It reads:

Section 4. Worker’s Deployment. — An agency shall deploy its recruits within the deployment period
as indicated below:

xxx

b. Thirty (30) calendar days from the date of processing by the administration of the employment
contracts of seafarers.

Failure of the agency to deploy a worker within the prescribed period without valid reasons
shall be a cause for suspension or cancellation of license or fine. In addition, the agency
shall return all documents at no cost to the worker.(Emphasis and underscoring supplied)

The appellate court correctly ruled that the penalty of reprimand36 provided under Rule IV, Part VI of
the POEA Rules and Regulations Governing the Recruitment and Employment of Land-based
Overseas Workers is not applicable in this case. The breach of contract happened on February 1992
and the law applicable at that time was the 1991 POEA Rules and Regulations Governing Overseas
Employment. The penalty for non-deployment as discussed is suspension or cancellation of license
or fine.

Now, the question to be dealt with is how will the seafarer be compensated by reason of the
unreasonable non-deployment of the petitioners?

The POEA Rules Governing the Recruitment and Employment of Seafarers do not provide for the
award of damages to be given in favor of the employees. The claim provided by the same law refers
to a valid contractual claim for compensation or benefits arising from employer-employee
relationship or for any personal injury, illness or death at levels provided for within the terms and
conditions of employment of seafarers. However, the absence of the POEA Rules with regard 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. As earlier
discussed, they do not forfend a seafarer from instituting an action for damages against the
employer or agency which has failed to deploy him.37

We thus decree the application of Section 10 of Republic Act No. 8042 (Migrant Workers Act) which
provides for money claims by reason of a contract involving Filipino workers for overseas
deployment. The law provides:
lavvphil
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
damages. x x x (Underscoring supplied)

Following the law, the claim is still cognizable by the labor arbiters of the NLRC under the second
phrase of the provision.

Applying the rules on actual damages, Article 2199 of the New Civil Code provides that one is
entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly
proved. Respondent is thus liable to pay petitioner actual damages in the form of the loss of nine (9)
months’ worth of salary as provided in the contract.38 This is but proper because of the non-
deployment of respondent without just cause.

WHEREFORE, the appeal is DENIED. The 31 January 2007 Decision of the Court of Appeals in CA-
G.R. SP. No. 91632 is hereby AFFIRMED. The Petitioners are hereby ordered to pay Sulpecio
Medequillo, Jr., the award of actual damages equivalent to his salary for nine (9) months as provided
by the Second Employment Contract.

SO ORDERED.

G.R. No. 121777 January 24, 2001

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
CAROL M. DELA PIEDRA, accused-appellant.

KAPUNAN, J.:

Accused-appellant Carol M. dela Piedra questions her conviction for illegal recruitment in large scale
and assails, as well, the constitutionality of the law defining and penalizing said crime.

The Court affirms the constitutionality of the law and the conviction of the accused, but reduces the
penalty imposed upon her.

The accused was charged before the Regional Trial Court of Zamboanga City in an information
alleging:

That on or about January 30, 1994, in the City of Zamboanga, Philippines, and within the jurisdiction
of this Honorable Court, the above-named accused, without having previously obtained from the
Philippine Overseas Employment Administration, a license or authority to engage in recruitment and
overseas placement of workers, did then and there, wilfully, unlawfully and feloniously, offer and
promise for a fee employment abroad particularly in Singapore thus causing Maria Lourdes Modesto
[y] Gadrino, Nancy Araneta y Aliwanag and Jennelyn Baez y Timbol, all qualified to apply, in fact
said Maria Lourdes Modesto had already advanced the amount of P2,000.00 to the accused for and
in consideration of the promised employment which did not materialized [sic] thus causing damage
and prejudice to the latter in the said sum; furthermore, the acts complained of herein tantamount
[sic] to economic sabotage in that the same were committed in large scale.1
Arraigned on June 20, 1994, the accused pleaded not guilty2 to these charges.

At the trial, the prosecution presented five (5) witnesses, namely, Erlie Ramos, SPO2 Erwin
Manalopilar, Eileen Fermindoza, Nancy Araneta and Lourdes Modesto. The succeeding narration is
gathered from their testimonies:

On January 30, 1994, at exactly 10:00 in the morning, Erlie Ramos, Attorney II of the Philippine
Overseas Employment Agency (POEA), received a telephone call from an unidentified woman
inquiring about the legitimacy of the recruitment conducted by a certain Mrs. Carol Figueroa. Ramos,
whose duties include the surveillance of suspected illegal recruiters, immediately contacted a friend,
a certain Mayeth Bellotindos, so they could both go to No. 26-D, Tetuan Highway, Sta. Cruz,
Zamboanga City, where the recruitment was reportedly being undertaken. Upon arriving at the
reported area at around 4:00 p.m., Bellotindos entered the house and pretended to be an applicant.
Ramos remained outside and stood on the pavement, from where he was able to see around six (6)
persons in the house's sala. Ramos even heard a woman, identified as Carol Fegueroa, talk about
the possible employment she has to provide in Singapore and the documents that the applicants
have to comply with. Fifteen (15) minutes later, Bellotindos came out with a bio-data form in hand.

On February 1, 1994, Ramos conferred with a certain Capt. Mendoza of the Criminal Investigation
Service (CIS) to organize the arrest of the alleged illegal recruiter. Also present were other members
of the CIS, including Col. Rodolfo Almonte, Regional Director of the PNP-CIS for Region IX, Eileen
Fermindoza, and a certain SPO3 Santos. The group planned to entrap the illegal recruiter the next
day by having Fermindoza pose as an applicant.3

On February 2, 1994, at around 8:00 p.m., Col. Almonte directed the case to SPO2 Erwin
Manalopilar, a member of the Philippine National Police who was assigned as an investigator of the
CIS, to conduct a surveillance of the area to confirm the report of illegal recruitment. Accordingly, he,
along with Eileen Fermindoza, immediately proceeded to Tetuan Highway. The two did not enter the
house where the recruitment was supposedly being conducted, but Fermindoza interviewed two
people who informed them that some people do go inside the house. Upon returning to their office at
around 8:30 a.m., the two reported to Capt. Mendoza who organized a team to conduct the raid.

The raiding team, which included Capt. Mendoza, SPO2 Manalopilar, Fermindoza and a certain
Oscar Bucol, quickly set off and arrived at the reported scene at 9:30 that morning. There they met
up with Erlie Ramos of the POEA. Fermindoza then proceeded to enter the house while the rest of
the team posted themselves outside to secure the area. Fermindoza was instructed to come out
after she was given a bio-data form, which will serve as the team's cue to enter the house.4

Fermindoza introduced herself as a job applicant to a man and a woman, apparently the owners of
the house, and went inside. There, she saw another woman, later identified as Jasmine, coming out
of the bathroom. The man to whom Fermindoza earlier introduced herself told Jasmine that
Fermindoza was applying for a position. Jasmine, who was then only wearing a towel, told her that
she would just get dressed. Jasmine then came back and asked Fermindoza what position she was
applying for. Fermindoza replied that she was applying to be a babysitter or any other work so long
as she could go abroad. Jasmine then gave her an application form.

A few minutes later, a certain Carol arrived. Jasmine informed Carol that Fermindoza was an
applicant. Fermindoza asked Carol what the requirements were and whether she (Fermindoza) was
qualified. Carol told Fermindoza that if she had a passport, she could fill up the application papers.
Fermindoza replied that she had no passport yet. Carol said she need not worry since Jasmine will
prepare the passport for her. While filling up the application form, three women who appeared to be
friends of Jasmine arrived to follow up the result of their applications and to give their advance
payment. Jasmine got their papers and put them on top of a small table. Fermindoza then
proceeded to the door and signaled to the raiding party by raising her hand.

Capt. Mendoza asked the owners of the house, a married couple, for permission to enter the same.
The owners granted permission after the raiding party introduced themselves as members of the
CIS. Inside the house, the raiding party saw some supposed applicants. Application forms, already
filled up, were in the hands of one Mrs. Carol Figueroa. The CIS asked Figueroa if she had a permit
to recruit. Figueroa retorted that she was not engaged in recruitment. Capt. Mendoza nevertheless
proceeded to arrest Figueroa. He took the application forms she was holding as the raiding party
seized the other papers5 on the table.6

The CIS team then brought Figueroa, a certain Jasmine Alejandro, and the three women suspected
to be applicants, to the office for investigation.7

In the course of their investigation, the CIS discovered that Carol Figueroa had many aliases, among
them, Carol Llena and Carol dela Piedra. The accused was not able to present any authority to
recruit when asked by the investigators.8 A check by Ramos with the POEA revealed that the acused
was not licensed or authorized to conduct recruitment.9 A certification10 dated February 2, 1994
stating thus was executed by Renegold M. Macarulay, Officer-in-Charge of the POEA.

The CIS likewise interviewed the supposed applicants, Lourdes Modesto, Nancy Araneta and
Jennelyn Baez, all registered nurses working at the Cabato Medical Hospital, who executed their
respective written statements.11

At the trial, Nancy Araneta, 23, recounted that she was at Jasmine Alejandro's house in the
afternoon of January 30, 1994. Araneta had learned from Sandra Aquino, also a nurse at the Cabato
Medical Hospital, that a woman was there to recruit job applicants for Singapore.

Araneta and her friends, Jennelyn Baez and Sandra Aquino, arrived at Jasmine's house at around
4:30 p.m. Jasmine welcomed them and told them to sit down. They listened to the "recruiter" who
was then talking to a number of people. The recruiter said that she was "recruiting" nurses for
Singapore. Araneta and her friends then filled up bio-data forms and were required to submit
pictures and a transcript of records. They were also told to pay P2,000, and "the rest will be salary
deduction." Araneta submitted her bio-data form to Carol that same afternoon, but did not give any
money because she was "not yet sure."

On the day of the raid on February 2, 1994, Araneta was again at the Alejandro residence to submit
her transcript of records and her picture. She arrived at the house 30 minutes before the raid but did
not witness the arrest since she was at the porch when it happened.12

Maria Lourdes Modesto, 26, was also in Jasmine Alejandro's house on January 30, 1994. A friend of
Jasmine had informed her that there was someone recruiting in Jasmine's house. Upon arriving at
the Alejandro residence, Lourdes was welcomed by Jasmine. 1âwphi1.nêt

Lourdes recalled that Carol Figueroa was already briefing some people when she arrived. Carol
Figueroa asked if they would like a "good opportunity" since a hospital was hiring nurses. She gave
a breakdown of the fees involved: P30,000 for the visa and the round trip ticket, and P5,000 as
placement fee and for the processing of the papers. The initial payment was P2,000, while P30,000
will be by salary deduction.

Lourdes filled up the application form and submitted it to Jasmine. After the interview, she gave the
initial payment of P2,000 to Jasmine, who assured Lourdes that she was authorized to receive the
money. On February 2, 1994, however, Lourdes went back to the house to get back the money.
Jasmine gave back the money to Lourdes after the raid.13

Denial comprised the accused's defense.

Carol dela Piedra, 37, is a housewife and a resident of Cebu City. Her husband is a businessman
from Cebu, the manager of the Region 7 Branch of the Grollier International Encyclopedia. They own
an apartment in Cebu City, providing lodging to students.

The accused claimed that she goes to Singapore to visit her relatives. She first traveled to Singapore
on August 21, 1993 as a tourist, and came back to the Philippines on October 20 of the same year.
Thereafter, she returned to Singapore on December 10, 1993.

On December 21, 1993, while in Singapore, the accused was invited to a Christmas party sponsored
by the Zamboanga City Club Association. On that occasion, she met a certain Laleen Malicay, who
sought her help. A midwife, Malicay had been working in Singapore for six (6) years. Her employer is
a certain Mr. Tan, a close friend of Carol.

According to the accused, Malicay sent P15,000 home for her father who was then seriously ill.
Malicay was not sure, however, whether her father received the money so she requested the
accused to verify from her relatives receipt thereof. She informed the accused that she had a cousin
by the name of Jasmine Alejandro. Malicay gave the accused Jasmine's telephone number, address
and a sketch of how to get there.

The accused returned to the country on January 21, 1994. From Cebu City, the accused flew to
Zamboanga City on January 23, 1994 to give some presents to her friends.

On January 30, 1994, the accused called up Jasmine Alejandro, Laleen Malicay's cousin, to inform
her that she would be going to her house. At around noon that day, the accused, accompanied by
her friend Hilda Falcasantos, arrived at the house where she found Jasmine entertaining some
friends. Jasmine came down with two of her friends whom she introduced as her classmates.
Jasmine told them that the accused was a friend of Laleen Malicay.

The accused relayed to Jasmine Malicay's message regarding the money the latter had sent.
Jasmine assured her that they received the money, and asked Carol to tell Malicay to send more
money for medicine for Malicay's mother. Jasmine also told her that she would send something for
Malicay when the accused goes back to Singapore. The accused replied that she just needed to
confirm her flight back to Cebu City, and will return to Jasmine's house. After the meeting with
Jasmine, the accused went shopping with Hilda Falcasantos. The accused was in the house for only
fifteen (15) minutes.

On February 2, 1994, the accused went to the Philippine Airlines office at 7:30 in the morning to
confirm her 5:30 p.m. flight to Cebu City. She then proceeded to Jasmine's residence, arriving there
at past 8 a.m.

Inside the house, she met a woman who asked her, "Are you Carol from Singapore?" The accused,
in turn, asked the woman if she could do anything for her. The woman inquired from Carol if she was
recruiting. Carol replied in the negative, explaining that she was there just to say goodbye to
Jasmine. The woman further asked Carol what the requirements were if she (the woman) were to go
to Singapore. Carol replied that she would need a passport.
Two (2) minutes later, three (3) girls entered the house looking for Jasmine. The woman Carol was
talking with then stood up and went out. A minute after, three (3) members of the CIS and a POEA
official arrived. A big man identified himself as a member of the CIS and informed her that they
received a call that she was recruiting. They told her she had just interviewed a woman from the
CIS. She denied this, and said that she came only to say goodbye to the occupants of the house,
and to get whatever Jasmine would be sending for Laleen Malicay. She even showed them her
ticket for Cebu City.

Erlie Ramos then went up to Jasmine's room and returned with some papers. The accused said that
those were the papers that Laleen Malicay requested Jasmine to give to her (the accused). The
accused surmised that because Laleen Malicay wanted to go home but could not find a
replacement, one of the applicants in the forms was to be her (Malicay's) substitute. Ramos told the
accused to explain in their office.

The accused denied in court that she went to Jasmine's residence to engage in recruitment. She
claimed she came to Zamboanga City to visit her friends, to whom she could confide since she and
her husband were having some problems. She denied she knew Nancy Araneta or that she brought
information sheets for job placement. She also denied instructing Jasmine to collect P2,000 from
alleged applicants as processing fee.14

The accused presented two witnesses to corroborate her defense.

The first, Jasmine Alejandro, 23, testified that she met the accused for the first time only on January
30, 1994 when the latter visited them to deliver Laleen Malicay's message regarding the money she
sent. Carol, who was accompanied by a certain Hilda Falcasantos, stayed in their house for 10 to 15
minutes only. Carol came back to the house a few days later on February 2 at around 8:00 in the
morning to "get the envelope for the candidacy of her daughter." Jasmine did not elaborate.

Jasmine denied that she knew Nancy Araneta or Lourdes Modesto. She denied that the accused
conducted recruitment. She claimed she did not see Carol distribute bio-data or application forms to
job applicants. She disclaimed any knowledge regarding the P2,000 application fee.15

The other defense witness, Ernesto Morales, a policeman, merely testified that the accused stayed
in their house in No. 270 Tugbungan, Zamboanga City, for four (4) days before her arrest, although
she would sometimes go downtown alone. He said he did not notice that she conducted any
recruitment.16

On May 5, 1995, the trial court rendered a decision convicting the accused, thus:

WHEREFORE, in view of all the foregoing consideration[s][,] this Court finds the accused
Carol dela Piedra alias Carol Llena and Carol Figueroa guilty beyond reasonable doubt of
Illegal Recruitment committed in a large scale and hereby sentences her to suffer the penalty
of LIFE IMPRISONMENT and to pay a fine of P100,000.00, and also to pay the costs.

Being a detention prisoner, the said accused is entitled to the full time of the period of her
detention during the pendency of this case under the condition set forth in Article 29 of the
Revised Penal Code.

SO ORDERED.17

The accused, in this appeal, ascribes to the trial court the following errors:
 I

WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT FINDING SEC. 13 (B) OF
P.D. 442[,] AS AMENDED[,] OTHERWISE KNOWN AS [THE] ILLEGAL RECRUITMENT
LAW UNCONSTITUTIONAL.

II

WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT HOLDING THAT THE
APPREHENDING TEAM COMPOSED OF POEA AND CIS REPRESENTATIVES
ENTERED INTO [sic] THE RESIDENCE OF JASMIN[E] ALEJANDRO WITHOUT ANY
SEARCH WARRANT IN VIOLATION OF ARTICLE III, SECTION 2 OF THE PHILIPPINE
CONSTITUTION, AND ANY EVIDENCE OBTAINED IN VIOLATION THEREOF, SHALL BE
INADMISSIBLE FOR ANY PURPOSE IN ANY PROCEEDING AS PROVIDED UNDER
ARTICLE III, SECTION 3, (2) OF THE SAME CONSTITUTION;

III

WITH DUE RESPECT, THE LOWER COURT ERRED IN IGNORING THAT WHEN SPO2
[sic] EILE[E]N FERMINDOZA ENTERED THE RESIDENCE OF JASMIN[E] ALEJANDRO,
THERE WAS NO CRIME COMMITTED WHATSOEVER, HENCE THE ARREST OF THE
ACCUSED-APPELLANT WAS ILLEGAL;

[IV]

WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT DISCOVERING THAT SPO2
[sic] EILE[E]N FERMINDOZA WAS NOT ILLEGALLY RECRUITED BY THE ACCUSED-
APPELLANT, HENCE, ACCUSED-APPELLANT SHOULD BE ACQUITTED;

WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT DETECTING THAT NANCY
ARANETA WAS NOT ILLEGALLY RECRUITED BY THE ACCUSED-APPELLANT, HENCE,
ACCUSED SHOULD BE EXONERATED;

VI

WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT REALIZING THAT MARIA
LOURDES MODESTO WAS NOT ILLEGALLY RECRUITED BY THE ACCUSED-
APPELLANT, HENCE, ACCUSED-APPELLANT SHOULD BE EXCULPATED;

VII

WITH DUE RESPECT, THE LOWER COURT ERRED IN FINDING THAT THE ACCUSED-
APPELLANT WAS CHARGED WITH LARGE SCALE ILLEGAL RECRUITMENT ON
JANUARY 30, 1994, THE DATE STATED IN THE INFORMATION AS THE DATE OF THE
CRIME, BUT ACCUSED WAS ARRESTED ON FEB. 2, 1994 AND ALL THE EVIDENCES
[sic] INDICATED [sic] THAT THE ALLEGED CRIME WERE [sic] COMMITTED ON FEB. 2,
1994, HENCE, THE INFORMATION IS FATALLY DEFECTIVE;

VIII
 WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT FINDING THAT THE
ALLEGED CRIME OF ILLEGAL RECRUITMENT WAS COMMITTED NOT ON [sic] LARGE
SCALE, HENCE, THE PENALTY SHOULD NOT BE LIFE IMPRISONMENT;

IX

WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT FINDING THAT THOSE
EVIDENCES [sic] SEIZED AT THE HOUSE OF JASMIN[E] ALEJANDRO AND
PRESENTED TO THE COURT WERE PLANTED BY A BOGUS ATTORNEY[,] ERLIE S.
RAMOS OF THE POEA;

WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT DISCOVERING THAT
ACCUSED-APPELLANT DID NOT RECEIVE ANY PAYMENT EVEN A SINGLE CENTAVO
FROM THE ALLEGED VICTIMS WHO DID NOT SUFFER DAMAGE IN ANY MANNER,
YET SHE WAS CONVICTED TO SERVE HER ENTIRE LIFE BEHIND PRISON BARS.
SUCH PUNISHMENT WAS CRUEL AND UNUSUAL, HENCE, A WANTON VIOLATION OF
THE CONSTITUTION.18

In the first assigned error, appellant maintains that the law defining "recruitment and placement"
violates due process. Appellant also avers, as part of her sixth assigned error, that she was denied
the equal protection of the laws.

We shall address the issues jointly.

Appellant submits that Article 13 (b) of the Labor Code defining "recruitment and placement" is void
for vagueness and, thus, violates the due process clause.19

Due process requires that the terms of a penal statute must be sufficiently explicit to inform those
who are subject to it what conduct on their part will render them liable to its penalties.20 A criminal
statute that "fails to give a person of ordinary intelligence fair notice that his contemplated conduct is
forbidden by the statute," or is so indefinite that "it encourages arbitrary and erratic arrests and
convictions," is void for vagueness.21 The constitutional vice in a vague or indefinite statute is the
injustice to the accused in placing him on trial for an offense, the nature of which he is given no fair
warning.22

We reiterated these principles in People vs. Nazario:23

As a rule, a statute or act may be said to be vague when it lacks comprehensible standards that men
"of common intelligence must necessarily guess at its meaning and differ as to its application." It is
repugnant to the Constitution in two respects: (1) it violates due process for failure to accord
persons, especially the parties targeted by it, fair notice of the conduct to avoid; and (2) it leaves law
enforcers unbridled discretion in carrying out its provisions and become an arbitrary flexing of the
Government muscle.

We added, however, that:

x x x the act must be utterly vague on its face, that is to say, it cannot be clarified by either a
saving clause or by construction. Thus, in Coates v. City of Cincinnati, the U.S. Supreme
Court struck down an ordinance that had made it illegal for "three or more persons to
 assemble on any sidewalk and there conduct themselves in a manner annoying to persons
passing by." Clearly, the ordinance imposed no standard at all "because one may never
know in advance what 'annoys some people but does not annoy others.'"

Coates highlights what has been referred to as a "perfectly vague" act whose obscurity is
evident on its face. It is to be distinguished, however, from legislation couched in imprecise
language—but which nonetheless specifies a standard though defectively phrased—in which
case, it may be "saved" by proper construction.

Here, the provision in question reads:

ART. 13. Definitions.—(a) x x x.

(b) "Recruitment and placement" refers to any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers, and includes referrals, contract services,
promising or advertising for employment, locally or abroad, whether for profit or not:
Provided, That any person or entity which, in any manner, offers or promises for a fee
employment to two or more persons shall be deemed engaged in recruitment and
placement.

x x x.

When undertaken by non-licensees or non-holders of authority, recruitment activities are punishable

as follows:

ART. 38. Illegal Recruitment. — (a) Any recruitment activities, including the prohibited
practices enumerated under Article 34 of this Code, to be undertaken by non-licensees or
non-holders of authority shall be deemed illegal and punishable under Article 39 of this
Code. The Ministry of Labor and Employment or any law enforcement officer may initiate
complaints under this Article.

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

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

x x x.

Art. 39. Penalties. – (a) The penalty of life imprisonment and a fine of One Hundred
Thousand Pesos (P100,000) shall be imposed if illegal recruitment constitutes economic
sabotage as defined herein:

(b) Any licensee or holder of authority found violating or causing another to violate any
provision of this Title or its implementing rules and regulations, shall upon conviction thereof,
suffer the penalty of imprisonment of not less than five years or a fine of not less than
 P10,000 nor more than P50,000 or both such imprisonment and fine, at the discretion of the
court;

(c) Any person who is neither a licensee nor a holder of authority under this Title found
violating any provision thereof or its implementing rules and regulations shall, upon
conviction thereof, suffer the penalty of imprisonment of not less than four years nor more
than eight years or a fine of not less than P20,000 nor more than P100,000 or both such
imprisonment and fine, at the discretion of the court;

x x x.

In support of her submission that Article 13 (b) is void for vagueness, appellant invokes People vs.
Panis,24 where this Court, to use appellant's term, "criticized" the definition of "recruitment and
placement" as follows:

It is unfortunate that we can only speculate on the meaning of the questioned provision for lack of
records of debates and deliberations that would otherwise have been available if the Labor Code
had been enacted as a statute rather than a presidential decree is that they could be, and
sometimes were, issued without previous public discussion or consultation, the promulgator heeding
only his own counsel or those of his close advisers in their lofty pinnacle of power. The not
infrequent results are rejection, intentional or not, of the interest of the greater number and, as in the
instant case, certain esoteric provisions that one cannot read against the background facts usually
reported in the legislative journals.

If the Court in Panis "had to speculate on the meaning of the questioned provision," appellant asks,
what more "the ordinary citizen" who does not possess the "necessary [legal] knowledge?"

Appellant further argues that the acts that constitute "recruitment and placement" suffer from
overbreadth since by merely "referring" a person for employment, a person may be convicted of
illegal recruitment.

These contentions cannot be sustained.

Appellant's reliance on People vs. Panis is misplaced. The issue in Panis was whether, under the
proviso of Article 13 (b), the crime of illegal recruitment could be committed only "whenever two or
more persons are in any manner promised or offered any employment for a fee." The Court held in
the negative, explaining:

As we see it, the proviso was intended neither to impose a condition on the basic rule nor to provide
an exception thereto but merely to create a presumption. The presumption is that the individual or
entity is engaged in recruitment and placement whenever he or it is dealing with two or more
persons to whom, in consideration of a fee, an offer or promise of employment is made in the course
of the "canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring (of) workers."

The number of persons dealt with is not an essential ingredient of the act of recruitment and
placement of workers. Any of the acts mentioned in the basic rule in Article 13(b) will constitute
recruitment and placement even if only one prospective worker is involved. The proviso merely lays
down a rule of evidence that where a fee is collected in consideration of a promise or offer of
employment to two or more prospective workers, the individual or entity dealing with them shall be
deemed to be engaged in the act of recruitment and placement. The words "shall be deemed" create
that presumption.
This is not unlike the presumption in article 217 of the Revised Penal Code, for example, regarding
the failure of a public officer to produce upon lawful demand funds or property entrusted to his
custody. Such failure shall be prima facie evidence that he has put them to personal use; in other
words, he shall be deemed to have malversed such funds or property. In the instant case, the word
"shall be deemed" should by the same token be given the force of a disputable presumption or
of prima facie evidence of engaging in recruitment and placement.

It is unfortunate that we can only speculate on the meaning of the questioned provision for lack of
records of debates and deliberations that would otherwise have been available if the Labor Code
had been enacted as a statute rather than a presidential decree is that they could be, and
sometimes were, issued without previous public discussion or consultation, the promulgator heeding
only his own counsel or those of his close advisers in their lofty pinnacle of power. The not
infrequent results are rejection, intentional or not, of the interest of the greater number and, as in the
instant case, certain esoteric provisions that one cannot read against the background facts usually
reported in the legislative journals.

At any rate, the interpretation here adopted should give more force to the campaign against illegal
recruitment and placement, which has victimized many Filipino workers seeking a better life in a
foreign land, and investing hard-earned savings or even borrowed funds in pursuit of their dream,
only to be awakened to the reality of a cynical deception at the hands of their own countrymen.

Evidently, therefore, appellant has taken the penultimate paragraph in the excerpt quoted above out
of context. The Court, in Panis, merely bemoaned the lack of records that would help shed light on
the meaning of the proviso. The absence of such records notwithstanding, the Court was able to
arrive at a reasonable interpretation of the proviso by applying principles in criminal law and drawing
from the language and intent of the law itself. Section 13 (b), therefore, is not a "perfectly vague act"
whose obscurity is evident on its face. If at all, the proviso therein is merely couched in imprecise
language that was salvaged by proper construction. It is not void for vagueness.

An act will be declared void and inoperative on the ground of vagueness and uncertainty, only upon
a showing that the defect is such that the courts are unable to determine, with any reasonable
degree of certainty, what the legislature intended. x x x. In this connection we cannot pretermit
reference to the rule that "legislation should not be held invalid on the ground of uncertainty if
susceptible of any reasonable construction that will support and give it effect. An Act will not be
declared inoperative and ineffectual on the ground that it furnishes no adequate means to secure the
purpose for which it is passed, if men of common sense and reason can devise and provide the
means, and all the instrumentalities necessary for its execution are within the reach of those
intrusted therewith."25

That Section 13 (b) encompasses what appellant apparently considers as customary and harmless
acts such as " labor or employment referral" ("referring" an applicant, according to appellant, for
employment to a prospective employer) does not render the law overbroad. Evidently, appellant
misapprehends concept of overbreadth.

A statute may be said to be overbroad where it operates to inhibit the exercise of individual freedoms
affirmatively guaranteed by the Constitution, such as the freedom of speech or religion. A generally
worded statute, when construed to punish conduct which cannot be constitutionally punished is
unconstitutionally vague to the extent that it fails to give adequate warning of the boundary between
the constitutionally permissible and the constitutionally impermissible applications of the statute.26

In Blo Umpar Adiong vs. Commission on Elections,27 for instance, we struck down as void for
overbreadth provisions prohibiting the posting of election propaganda in any place – including
private vehicles – other than in the common poster areas sanctioned by the COMELEC. We held
that the challenged provisions not only deprived the owner of the vehicle the use of his property but
also deprived the citizen of his right to free speech and information. The prohibition in Adiong,
therefore, was so broad that it covered even constitutionally guaranteed rights and, hence, void for
overbreadth. In the present case, however, appellant did not even specify what constitutionally
protected freedoms are embraced by the definition of "recruitment and placement" that would render
the same constitutionally overbroad.

Appellant also invokes the equal protection clause28 in her defense. She points out that although the
evidence purportedly shows that Jasmine Alejandro handed out application forms and even received
Lourdes Modesto's payment, appellant was the only one criminally charged. Alejandro, on the other
hand, remained scot-free. From this, appellant concludes that the prosecution discriminated against
her on grounds of regional origins. Appellant is a Cebuana while Alejandro is a Zamboangueña, and
the alleged crime took place in Zamboanga City.

The argument has no merit.

At the outset, it may be stressed that courts are not confined to the language of the statute under
challenge in determining whether that statute has any discriminatory effect. A statute
nondiscriminatory on its face may be grossly discriminatory in its operation.29 Though the law itself
be fair on its face and impartial in appearance, yet, if it is applied and administered by public
authority with an evil eye and unequal hand, so as practically to make unjust and illegal
discriminations between persons in similar circumstances, material to their rights, the denial of equal
justice is still within the prohibition of the Constitution.30

The prosecution of one guilty person while others equally guilty are not prosecuted, however, is not,
by itself, a denial of the equal protection of the laws.31 Where the official action purports to be in
conformity to the statutory classification, an erroneous or mistaken performance of the statutory
duty, although a violation of the statute, is not without more a denial of the equal protection of the
laws.32 The unlawful administration by officers of a statute fair on its face, resulting in its unequal
application to those who are entitled to be treated alike, is not a denial of equal protection unless
there is shown to be present in it an element of intentional or purposeful discrimination. This may
appear on the face of the action taken with respect to a particular class or person, or it may only be
shown by extrinsic evidence showing a discriminatory design over another not to be inferred from
the action itself. But a discriminatory purpose is not presumed, there must be a showing of
"clear and intentional discrimination."33 Appellant has failed to show that, in charging appellant in
court, that there was a "clear and intentional discrimination" on the part of the prosecuting officials.

The discretion of who to prosecute depends on the prosecution's sound assessment whether the
evidence before it can justify a reasonable belief that a person has committed an offense.34 The
presumption is that the prosecuting officers regularly performed their duties,35 and this presumption
can be overcome only by proof to the contrary, not by mere speculation. Indeed, appellant has not
presented any evidence to overcome this presumption. The mere allegation that appellant, a
Cebuana, was charged with the commission of a crime, while a Zamboangueña, the guilty party in
appellant's eyes, was not, is insufficient to support a conclusion that the prosecution officers denied
appellant equal protection of the laws.

There is also common sense practicality in sustaining appellant's prosecution.

While all persons accused of crime are to be treated on a basis of equality before the law, it does not
follow that they are to be protected in the commission of crime. It would be unconscionable, for
instance, to excuse a defendant guilty of murder because others have murdered with impunity. The
remedy for unequal enforcement of the law in such instances does not lie in the exoneration of the
guilty at the expense of society x x x. Protection of the law will be extended to all persons equally in
the pursuit of their lawful occupations, but no person has the right to demand protection of the law in
the commission of a crime.36

Likewise,

[i]f the failure of prosecutors to enforce the criminal laws as to some persons should be converted
into a defense for others charged with crime, the result would be that the trial of the district attorney
for nonfeasance would become an issue in the trial of many persons charged with heinous crimes
and the enforcement of law would suffer a complete breakdown.37

We now come to the third, fourth and fifth assigned errors, all of which involve the finding of guilt by
the trial court.

Illegal recruitment is committed when two elements concur. First, the offender has no valid license or
authority required by law to enable one to lawfully engage in recruitment and placement of workers.
Second, he or she undertakes either any activity within the meaning of "recruitment and placement"
defined under Article 13 (b), or any prohibited practices enumerated under Article 34 of the Labor
Code.38 In case of illegal recruitment in large scale, a third element is added: that the accused
commits said acts against three or more persons, individually or as a group.39

In this case, the first element is present. The certification of POEA Officer-in-Charge Macarulay
states that appellant is not licensed or authorized to engage in recruitment and placement.

The second element is also present. Appellant is presumed engaged in recruitment and placement
under Article 13 (b) of the Labor Code. Both Nancy Araneta and Lourdes Modesto testified that
appellant promised them employment for a fee. Their testimonies corroborate each other on material
points: the briefing conducted by appellant, the time and place thereof, the fees involved. Appellant
has not shown that these witnesses were incited by any motive to testify falsely against her. The
absence of evidence as to an improper motive actuating the principal witnesses of the prosecution
strongly tends to sustain that no improper motive existed and that their testimony is worthy of full
faith and credence.40

Appellant's denials cannot prevail over the positive declaration of the prosecution witnesses.
Affirmative testimony of persons who are eyewitnesses of the fact asserted easily overrides negative
testimony.41

That appellant did not receive any payment for the promised or offered employment is of no
moment. From the language of the statute, the act of recruitment may be "for profit or not;" it suffices
that the accused "promises or offers for a fee employment" to warrant conviction for illegal
recruitment.

The testimonies of Araneta and Modesto, coming as they do from credible witnesses, meet the
standard of proof beyond reasonable doubt that appellant committed recruitment and placement. We
therefore do not deem it necessary to delve into the second and third assigned errors assailing the
legality of appellant's arrest and the seizure of the application forms. A warrantless arrest, when
unlawful, has the effect of invalidating the search incidental thereto and the articles so seized are
rendered inadmissible in evidence.42 Here, even if the documents seized were deemed inadmissible,
her conviction would stand in view of Araneta and Modesto's testimonies.
Appellant attempts to cast doubt on the prosecution's case by claiming in her ninth assigned error
that Erlie Ramos of the POEA supposedly "planted" the application forms. She also assails his
character, alleging that he passed himself off as a lawyer, although this was denied by Ramos.

The claim of "frame-up," like alibi, is a defense that has been invariably viewed by the Court with
disfavor for it can easily be concocted but difficult to prove.43 Apart from her self-serving testimony,
appellant has not offered any evidence that she was indeed framed by Ramos. She has not even
hinted at any motive for Ramos to frame her. Law enforcers are presumed to have performed their
duties regularly in the absence of evidence to the contrary.44

Considering that the two elements of lack of license or authority and the undertaking of an activity
constituting recruitment and placement are present, appellant, at the very least, is liable for "simple"
illegal recruitment. But is she guilty of illegal recruitment in large scale? We find that she is not.

A conviction for large scale illegal recruitment must be based on a finding in each case of illegal
recruitment of three or more persons whether individually or as a group.45 In this case, only two
persons, Araneta and Modesto, were proven to have been recruited by appellant. The third person
named in the complaint as having been promised employment for a fee, Jennelyn Baez, was not
presented in court to testify.

It is true that law does not require that at least three victims testify at the trial; nevertheless, it is
necessary that there is sufficient evidence proving that the offense was committed against three or
more persons.46 In this case, evidence that appellant likewise promised her employment for a fee is
sketchy. The only evidence that tends to prove this fact is the testimony of Nancy Araneta, who said
that she and her friends, Baez and Sandra Aquino, came to the briefing and that they (she and her
"friends") filled up application forms.

The affidavit47 Baez executed jointly with Araneta cannot support Araneta's testimony. The affidavit
was neither identified, nor its contents affirmed, by Baez. Insofar as it purports to prove that
appellant recruited Baez, therefore, the affidavit is hearsay and inadmissible.48 In any case, hearsay
evidence, such as the said affidavit, has little probative value.49

Neither can appellant be convicted for recruiting CIS agent Eileen Fermindoza or even the other
persons present in the briefing of January 30, 1994. Appellant is accused of recruiting only the three
persons named in the information — Araneta, Modesto and Baez. The information does not include
Fermindoza or the other persons present in the briefing as among those promised or offered
employment for a fee. To convict appellant for the recruitment and placement of persons other than
those alleged to have been offered or promised employment for a fee would violate her right to be
informed of the nature and cause of the accusation against her.50

In any event, the purpose of the offer of the testimonies of Araneta, Morales and Fermindoza,
respectively, was limited as follows:

FISCAL BELDUA:

Your Honor please, we are offering the oral testimony of the witness, as one of those
recruited by the accused, and also to identify some exhibits for the prosecution and
as well as to identify the accused.51

xxx
 FISCAL BELDUA:

We are offering the oral testimony of the witness, Your Honor, to testify on the fact
about her recruitment by the accused and immediately before the recruitment, as
well as to identify some exhibits for the prosecution, and also the accused in this
case, Your Honor.52

xxx

FISCAL BELDUA:

This witness is going to testify that at around that date Your Honor, she was
connected with the CIS, that she was instructed together with a companion to
conduct a surveillance on the place where the illegal recruitment was supposed to be
going on, that she acted as an applicant, Your Honor, to ascertain the truthfulness of
the illegal recruitment going on, to identify the accused, as well as to identify some
exhibits for the prosecution.53

xxx

Courts may consider a piece of evidence only for the purpose for which it was offered,54 and the
purpose of the offer of their testimonies did not include the proving of the purported recruitment of
other supposed applicants by appellant.

Appellant claims in her seventh assigned error that the information is fatally defective since it
charges her with committing illegal recruitment in large scale on January 30, 1994 while the
prosecution evidence supposedly indicates that she committed the crime on February 2, 1994.

We find that the evidence for the prosecution regarding the date of the commission of the crime does
not vary from that charged in the information. Both Nancy Araneta and Lourdes Modesto testified
that on January 30, 1994, while in the Alejandro residence, appellant offered them employment for a
fee. Thus, while the arrest was effected only on February 2, 1994, the crime had already been
committed three (3) days earlier on January 30, 1994.

The eighth and tenth assigned errors, respectively, pertain to the penalty of life imprisonment
imposed by the trial court as well as the constitutionality of the law prescribing the same, appellant
arguing that it is unconstitutional for being unduly harsh.55 Section 19 (1), Article III of the
Constitution states: "Excessive fines shall not be imposed, nor cruel, degrading or inhuman
punishment inflicted."

The penalty of life imprisonment imposed upon appellant must be reduced. Because the prosecution
was able to prove that appellant committed recruitment and placement against two persons only,
she cannot be convicted of illegal recruitment in large scale, which requires that recruitment be
committed against three or more persons. Appellant can only be convicted of two counts of "simple"
illegal recruitment, one for that committed against Nancy Araneta, and another count for that
committed against Lourdes Modesto. Appellant is sentenced, for each count, to suffer the penalty of
four (4) to six (6) years of imprisonment and to pay a fine of P30,000.00. This renders immaterial the
tenth assigned error, which assumes that the proper imposable penalty upon appellant is life
imprisonment.
WHEREFORE, the decision of the regional trial court is MODIFIED. Appellant is hereby declared
guilty of illegal recruitment on two (2) counts and is sentenced, for each count, to suffer the penalty
of four (4) to six (6) years of imprisonment and to pay a fine of P30,000.00. 1âw phi 1.nêt

SO ORDERED.

G.R. No. 172642 June 13, 2012

ESTATE OF NELSON R. DULAY, represented by his wife MERRIDY JANE P.

DULAY, Petitioner,
vs.
ABOITIZ JEBSEN MARITIME, INC. and GENERAL CHARTERERS, INC., Respondents.

DECISION

PERALTA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to
reverse and set aside the Decision1 and Resolution2 dated July 11, 2005 and April 18, 2006 of the
Court of Appeals (CA) in CA-G.R. SP No. 76489.

The factual and procedural antecedents of the case, as summarized by the CA, are as follows:

Nelson R. Dulay (Nelson, for brevity) was employed by [herein respondent] General Charterers Inc.
(GCI), a subsidiary of co-petitioner [herein co-respondent] Aboitiz Jebsen Maritime Inc. since 1986.
He initially worked as an ordinary seaman and later as bosun on a contractual basis. From
September 3, 1999 up to July 19, 2000, Nelson was detailed in petitioners’ vessel, the MV Kickapoo
Belle.

On August 13, 2000, or 25 days after the completion of his employment contract, Nelson died due to
acute renal failure secondary to septicemia. At the time of his death, Nelson was a bona fide
member of the Associated Marine Officers and Seaman’s Union of the Philippines (AMOSUP), GCI’s
collective bargaining agent. Nelson’s widow, Merridy Jane, thereafter claimed for death benefits
through the grievance procedure of the Collective Bargaining Agreement (CBA) between AMOSUP
and GCI. However, on January 29, 2001, the grievance procedure was "declared deadlocked" as
petitioners refused to grant the benefits sought by the widow.

On March 5, 2001, Merridy Jane filed a complaint with the NLRC Sub-Regional Arbitration Board in
General Santos City against GCI for death and medical benefits and damages.

On March 8, 2001, Joven Mar, Nelson’s brother, received P20,000.00 from [respondents] pursuant
to article 20(A)2 of the CBA and signed a "Certification" acknowledging receipt of the amount and
releasing AMOSUP from further liability. Merridy Jane contended that she is entitled to the
aggregate sum of Ninety Thousand Dollars ($90,000.00) pursuant to [A]rticle 20 (A)1 of the CBA x x
x

xxxx

Merridy Jane averred that the P20,000.00 already received by Joven Mar should be considered
advance payment of the total claim of US$90,000.[00].
[Herein respondents], on the other hand, asserted that the NLRC had no jurisdiction over the action
on account of the absence of employer-employee relationship between GCI and Nelson at the time
of the latter’s death. Nelson also had no claims against petitioners for sick leave allowance/medical
benefit by reason of the completion of his contract with GCI. They further alleged that private
respondent is not entitled to death benefits because petitioners are only liable for such "in case of
death of the seafarer during the term of his contract pursuant to the POEA contract" and the cause
of his death is not work-related. Petitioners admitted liability only with respect to article 20(A)2 [of the
CBA]. x x x

xxxx

However, as petitioners stressed, the same was already discharged.

The Labor Arbiter ruled in favor of private respondent. It took cognizance of the case by virtue of
Article 217 (a), paragraph 6 of the Labor Code and the existence of a reasonable causal connection
between the employer-employee relationship and the claim asserted. It ordered the petitioner to
pay P4,621,300.00, the equivalent of US$90,000.00 less P20,000.00, at the time of judgment x x x

xxxx

The Labor Arbiter also ruled that the proximate cause of Nelson’s death was not work-related.

On appeal, [the NLRC] affirmed the Labor Arbiter’s decision as to the grant of death benefits under
the CBA but reversed the latter’s ruling as to the proximate cause of Nelson’s death.3

Herein respondents then filed a special civil action for certiorari with the CA contending that the
NLRC committed grave abuse of discretion in affirming the jurisdiction of the NLRC over the case; in
ruling that a different provision of the CBA covers the death claim; in reversing the findings of the
Labor Arbiter that the cause of death is not work-related; and, in setting aside the release and
quitclaim executed by the attorney-in-fact and not considering the P20,000.00 already received by
Merridy Jane through her attorney-in-fact.

On July 11, 2005, the CA promulgated its assailed Decision, the dispositive portion of which reads
as follows:

WHEREFORE, in view of the foregoing, the petition is hereby GRANTED and the case is
REFERRED to the National Conciliation and Mediation Board for the designation of the Voluntary
Arbitrator or the constitution of a panel of Voluntary Arbitrators for the appropriate resolution of the
issue on the matter of the applicable CBA provision.

SO ORDERED.4

The CA ruled that while the suit filed by Merridy Jane is a money claim, the same basically involves
the interpretation and application of the provisions in the subject CBA. As such, jurisdiction belongs
to the voluntary arbitrator and not the labor arbiter.

Petitioner filed a Motion for Reconsideration but the CA denied it in its Resolution of April 18, 2006.

Hence, the instant petition raising the sole issue of whether or not the CA committed error in ruling
that the Labor Arbiter has no jurisdiction over the case.
Petitioner contends that Section 10 of Republic Act (R.A.) 8042, otherwise known as the Migrant
Workers and Overseas Filipinos Act of 1995, vests jurisdiction on the appropriate branches of the
NLRC to entertain disputes regarding the interpretation of a collective bargaining agreement
involving migrant or overseas Filipino workers. Petitioner argues that the abovementioned Section
amended Article 217 (c) of the Labor Code which, in turn, confers jurisdiction upon voluntary
arbitrators over interpretation or implementation of collective bargaining agreements and
interpretation or enforcement of company personnel policies.

The pertinent provisions of Section 10 of R.A. 8042 provide as follows:

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 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 damages.

Article 217(c) of the Labor Code, on the other hand, states that:

xxxx

(c) Cases arising from the interpretation or implementation of collective bargaining

agreements and those arising from the interpretation or enforcement of company personnel
policies shall be disposed by the Labor Arbiter by referring the same to the grievance
machinery and voluntary arbitration as may be provided in said agreements.

On their part, respondents insist that in the present case, Article 217, paragraph (c) as well as Article
261 of the Labor Code remain to be the governing provisions of law with respect to unresolved
grievances arising from the interpretation and implementation of collective bargaining agreements.
Under these provisions of law, jurisdiction remains with voluntary arbitrators.

Article 261 of the Labor Code reads, thus:

ARTICLE 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. – The Voluntary
Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and
decide all unresolved grievances arising from the interpretation or implementation of the Collective
Bargaining Agreement and those arising from the interpretation or enforcement of company
personnel policies referred to in the immediately preceding article. Accordingly, violations of a
Collective Bargaining Agreement, except those which are gross in character, shall no longer be
treated as unfair labor practice and shall be resolved as grievances under the Collective Bargaining
Agreement. For purposes of this article, gross violations of Collective Bargaining Agreement shall
mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement.

The Commission, its Regional Offices and the Regional Directors of the Department of Labor and
Employment shall not entertain disputes, grievances or matters under the exclusive and original
jurisdiction of the Voluntary Arbitrator or panel of Voluntary Arbitrators and shall immediately dispose
and refer the same to the Grievance Machinery or Voluntary Arbitration provided in the Collective
Bargaining Agreement.

The petition is without merit.

It is true that R.A. 8042 is a special law governing overseas Filipino workers. However, a careful
reading of this special law would readily show that there is no specific provision thereunder which
provides for jurisdiction over disputes or unresolved grievances regarding the interpretation or
implementation of a CBA. Section 10 of R.A. 8042, which is cited by petitioner, simply speaks, in
general, of "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 damages." On the other hand, Articles 217(c) and 261 of the Labor
Code are very specific in stating that voluntary arbitrators have jurisdiction over cases arising from
the interpretation or implementation of collective bargaining agreements. Stated differently, the
instant case involves a situation where the special statute (R.A. 8042) refers to a subject in general,
which the general statute (Labor Code) treats in particular.5 In the present case, the basic issue
raised by Merridy Jane in her complaint filed with the NLRC is: which provision of the subject CBA
applies insofar as death benefits due to the heirs of Nelson are concerned. The Court agrees with
the CA in holding that this issue clearly involves the interpretation or implementation of the said
CBA. Thus, the specific or special provisions of the Labor Code govern.

In any case, the Court agrees with petitioner's contention that the CBA is the law or contract
between the parties. Article 13.1 of the CBA entered into by and between respondent GCI and
AMOSUP, the union to which petitioner belongs, provides as follows:

The Company and the Union agree that in case of dispute or conflict in the interpretation or
application of any of the provisions of this Agreement, or enforcement of Company policies,
the same shall be settled through negotiation, conciliation or voluntary arbitration. The
Company and the Union further agree that they will use their best endeavor to ensure that any
dispute will be discussed, resolved and settled amicably by the parties hereof within ninety (90) days
from the date of filing of the dispute or conflict and in case of failure to settle thereof any of the
parties retain their freedom to take appropriate action.6 (Emphasis supplied)

From the foregoing, it is clear that the parties, in the first place, really intended to bring to conciliation
or voluntary arbitration any dispute or conflict in the interpretation or application of the provisions of
their CBA. It is settled that when the parties have validly agreed on a procedure for resolving
grievances and to submit a dispute to voluntary arbitration then that procedure should be strictly
observed.7

It may not be amiss to point out that the abovequoted provisions of the CBA are in consonance with
Rule VII, Section 7 of the present Omnibus Rules and Regulations Implementing the Migrant
Workers and Overseas Filipinos Act of 1995, as amended by Republic Act No. 10022, which states
that "[f]or OFWs with collective bargaining agreements, the case shall be submitted for voluntary
arbitration in accordance with Articles 261 and 262 of the Labor Code." The Court notes that the said
Omnibus Rules and Regulations were promulgated by the Department of Labor and Employment
(DOLE) and the Department of Foreign Affairs (DFA) and that these departments were mandated to
consult with the Senate Committee on Labor and Employment and the House of Representatives
Committee on Overseas Workers Affairs.

In the same manner, Section 29 of the prevailing Standard Terms and Conditions Governing the
Employment of Filipino Seafarers on Board Ocean Going Vessels, promulgated by the Philippine
Overseas Employment Administration (POEA), provides as follows:

Section 29. Dispute Settlement Procedures. − In cases of claims and disputes arising from this
employment, the parties covered by a collective bargaining agreement shall submit the claim
or dispute to the original and exclusive jurisdiction of the voluntary arbitrator or panel of
arbitrators. If the parties are not covered by a collective bargaining agreement, the parties may at
their option submit the claim or dispute to either the original and exclusive jurisdiction of the National
Labor Relations Commission (NLRC), pursuant to Republic Act (RA) 8042, otherwise known as the
Migrant Workers and Overseas Filipinos Act of 1995 or to the original and exclusive jurisdiction of
the voluntary arbitrator or panel of arbitrators. If there is no provision as to the voluntary arbitrators to
be appointed by the parties, the same shall be appointed from the accredited voluntary arbitrators of
the National Conciliation and Mediation Board of the Department of Labor and Employment.

The Philippine Overseas Employment Administration (POEA) shall exercise original and exclusive
jurisdiction to hear and decide disciplinary action on cases, which are administrative in character,
involving or arising out of violations of recruitment laws, rules and regulations involving employers,
principals, contracting partners and Filipino seafarers. (Emphasis supplied)

It is clear from the above that the interpretation of the DOLE, in consultation with their counterparts
in the respective committees of the Senate and the House of Representatives, as well as the DFA
and the POEA is that with respect to disputes involving claims of Filipino seafarers wherein the
parties are covered by a collective bargaining agreement, the dispute or claim should be submitted
to the jurisdiction of a voluntary arbitrator or panel of arbitrators. It is only in the absence of a
collective bargaining agreement that parties may opt to submit the dispute to either the NLRC or to
voluntary arbitration. It is elementary that rules and regulations issued by administrative bodies to
interpret the law which they are entrusted to enforce, have the force of law, and are entitled to great
respect.8 Such rules and regulations partake of the nature of a statute and are just as binding as if
they have been written in the statute itself.9 In the instant case, the Court finds no cogent reason to
depart from this rule.1âwphi 1

The above interpretation of the DOLE, DFA and POEA is also in consonance with the policy of the
state to promote voluntary arbitration as a mode of settling labor disputes.10

No less than the Philippine Constitution provides, under the third paragraph, Section 3, Article XIII,
thereof that "[t]he State shall promote the principle of shared responsibility between workers and
employers and the preferential use of voluntary modes in settling disputes, including conciliation,
and shall enforce their mutual compliance therewith to foster industrial peace."

Consistent with this constitutional provision, Article 211 of the Labor Code provides the declared
policy of the State "[t]o promote and emphasize the primacy of free collective bargaining and
negotiations, including voluntary arbitration, mediation and conciliation, as modes of settling labor or
industrial disputes."

On the basis of the foregoing, the Court finds no error in the ruling of the CA that the voluntary
arbitrator has jurisdiction over the instant case.

WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of Appeals in CA-
G.R. SP No. 76489 dated July 11, 2005 and April 18, 2006, respectively, are AFFIRMED.

SO ORDERED.

G.R. No. 162419 July 10, 2007

PAUL V. SANTIAGO, petitioner,

vs.
CF SHARP CREW MANAGEMENT, INC., respondent.
 DECISION

TINGA, J.:

At the heart of this case involving a contract between a seafarer, on one hand, and the manning
agent and the foreign principal, on the other, is this erstwhile unsettled legal quandary: whether the
seafarer, who was prevented from leaving the port of Manila and refused deployment without valid
reason but whose POEA-approved employment contract provides that the employer-employee
relationship shall commence only upon the seafarer’s actual departure from the port in the point of
hire, is entitled to relief?

This treats of the petition for review filed by Paul V. Santiago (petitioner) assailing the Decision and
Resolution of the Court of Appeals dated 16 October 2003 and 19 February 2004, respectively, in
CA-G.R. SP No. 68404.1

Petitioner had been working as a seafarer for Smith Bell Management, Inc. (respondent) for about
five (5) years.2On 3 February 1998, petitioner signed a new contract of employment with respondent,
with the duration of nine (9) months. He was assured of a monthly salary of US$515.00, overtime
pay and other benefits. The following day or on 4 February 1998, the contract was approved by the
Philippine Overseas Employment Administration (POEA). Petitioner was to be deployed on board
the "MSV Seaspread" which was scheduled to leave the port of Manila for Canada on 13 February
1998.

A week before the scheduled date of departure, Capt. Pacifico Fernandez, respondent’s Vice
President, sent a facsimile message to the captain of "MSV Seaspread," which reads:

I received a phone call today from the wife of Paul Santiago in Masbate asking me not to
send her husband to MSV Seaspread anymore. Other callers who did not reveal their identity
gave me some feedbacks that Paul Santiago this time if allowed to depart will jump ship in
Canada like his brother Christopher Santiago, O/S who jumped ship from the C.S. Nexus in
Kita-kyushu, Japan last December, 1997.

We do not want this to happen again and have the vessel penalized like the C.S. Nexus in
Japan.

Forewarned is forearmed like his brother when his brother when he was applying he
behaved like a Saint but in his heart he was a serpent. If you agree with me then we will
send his replacement.

Kindly advise.3

To this message the captain of "MSV Seaspread" replied:

Many thanks for your advice concerning P. Santiago, A/B. Please cancel plans for him to
return to Seaspread.4

On 9 February 1998, petitioner was thus told that he would not be leaving for Canada anymore, but
he was reassured that he might be considered for deployment at some future date.

Petitioner filed a complaint for illegal dismissal, damages, and attorney's fees against respondent
and its foreign principal, Cable and Wireless (Marine) Ltd.5 The case was raffled to Labor Arbiter
Teresita Castillon-Lora, who ruled that the employment contract remained valid but had not
commenced since petitioner was not deployed. According to her, respondent violated the rules and
regulations governing overseas employment when it did not deploy petitioner, causing petitioner to
suffer actual damages representing lost salary income for nine (9) months and fixed overtime fee, all
amounting to US$7, 209.00.

The labor arbiter held respondent liable. The dispositive portion of her Decision dated 29 January
1999 reads:

WHEREFORE, premises considered, respondent is hereby Ordered to pay complainant

actual damages in the amount of US$7,209.00 plus 10% attorney's fees, payable in
Philippine peso at the rate of exchange prevailing at the time of payment.

All the other claims are hereby DISMISSED for lack of merit.

SO ORDERED.6

On appeal by respondent, the National Labor Relations Commission (NLRC) ruled that there is no
employer-employee relationship between petitioner and respondent because under the Standard
Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean Going
Vessels (POEA Standard Contract), the employment contract shall commence upon actual
departure of the seafarer from the airport or seaport at the point of hire and with a POEA-approved
contract. In the absence of an employer-employee relationship between the parties, the claims for
illegal dismissal, actual damages, and attorney’s fees should be dismissed.7 On the other hand, the
NLRC found respondent’s decision not to deploy petitioner to be a valid exercise of its management
prerogative.8 The NLRC disposed of the appeal in this wise:

WHEREFORE, in the light of the foregoing, the assailed Decision dated January 29, 1999 is
hereby AFFIRMED in so far as other claims are concerned and with MODIFICATION by
VACATING the award of actual damages and attorney’s fees as well as excluding Pacifico
Fernandez as party respondent.

SO ORDERED.9

Petitioner moved for the reconsideration of the NLRC’s Decision but his motion was denied for lack
of merit.10 He elevated the case to the Court of Appeals through a petition for certiorari.

In its Decision11 dated 16 October 2003, the Court of Appeals noted that there is an ambiguity in the
NLRC’s Decision when it affirmed with modification the labor arbiter’s Decision, because by the very
modification introduced by the Commission (vacating the award of actual damages and attorney’s
fees), there is nothing more left in the labor arbiter’s Decision to affirm.12

According to the appellate court, petitioner is not entitled to actual damages because damages are
not recoverable by a worker who was not deployed by his agency within the period prescribed in

the POEA Rules.13 It agreed with the NLRC’s finding that petitioner’s non-deployment was a valid
exercise of respondent’s management prerogative.14 It added that since petitioner had not departed
from the Port of Manila, no employer-employee relationship between the parties arose and any claim
for damages against the so-called employer could have no leg to stand on.15

Petitioner’s subsequent motion for reconsideration was denied on 19 February 2004.16

The present petition is anchored on two grounds, to wit:

A. The Honorable Court of Appeals committed a serious error of law when it ignored
[S]ection 10 of Republic Act [R.A.] No. 8042 otherwise known as the Migrant Worker’s Act of
1995 as well as Section 29 of the Standard Terms and Conditions Governing the
Employment of Filipino Seafarers On-Board Ocean-Going Vessels (which is deemed
incorporated under the petitioner’s POEA approved Employment Contract) that the claims or
disputes of the Overseas Filipino Worker by virtue of a contract fall within the jurisdiction of
the Labor Arbiter of the NLRC.

B. The Honorable Court of Appeals committed a serious error when it disregarded the
required quantum of proof in labor cases, which is substantial evidence, thus a total
departure from established jurisprudence on the matter.17

Petitioner maintains that respondent violated the Migrant Workers Act and the POEA Rules when it
failed to deploy him within thirty (30) calendar days without a valid reason. In doing so, it had
unilaterally and arbitrarily prevented the consummation of the POEA- approved contract. Since it
prevented his deployment without valid basis, said deployment being a condition to the
consummation of the POEA contract, the contract is deemed consummated, and therefore he should
be awarded actual damages, consisting of the stipulated salary and fixed overtime pay.18 Petitioner
adds that since the contract is deemed consummated, he should be considered an employee for all
intents and purposes, and thus the labor arbiter and/or the NLRC has jurisdiction to take cognizance
of his claims.19

Petitioner additionally claims that he should be considered a regular employee, having worked for
five (5) years on board the same vessel owned by the same principal and manned by the same local
agent. He argues that respondent’s act of not deploying him was a scheme designed to prevent him
from attaining the status of a regular employee.20

Petitioner submits that respondent had no valid and sufficient cause to abandon the employment
contract, as it merely relied upon alleged phone calls from his wife and other unnamed callers in
arriving at the conclusion that he would jump ship like his brother. He points out that his wife had
executed an affidavit21 strongly denying having called respondent, and that the other alleged callers
did not even disclose their identities to respondent.22 Thus, it was error for the Court of Appeals to
adopt the unfounded conclusion of the NLRC, as the same was not based on substantial evidence.23

On the other hand, respondent argues that the Labor Arbiter has no jurisdiction to award petitioner’s
monetary claims. His employment with respondent did not commence because his deployment was
withheld for a valid reason. Consequently, the labor arbiter and/or the NLRC cannot entertain
adjudication of petitioner’s case much less award damages to him. The controversy involves a
breach of contractual obligations and as such is cognizable by civil courts.24 On another matter,
respondent claims that the second issue posed by petitioner involves a recalibration of facts which is
outside the jurisdiction of this Court.25

There is some merit in the petition.

There is no question that the parties entered into an employment contract on 3 February 1998,
whereby petitioner was contracted by respondent to render services on board "MSV Seaspread" for
the consideration of US$515.00 per month for nine (9) months, plus overtime pay. However,
respondent failed to deploy petitioner from the port of Manila to Canada. Considering that petitioner
was not able to depart from the airport or seaport in the point of hire, the employment contract did
not commence, and no employer-employee relationship was created between the parties.26
However, a distinction must be made between the perfection of the employment contract and the
commencement of the employer-employee relationship. The perfection of the contract, which in this
case coincided with the date of execution thereof, occurred when petitioner and respondent agreed
on the object and the cause, as well as the rest of the terms and conditions therein. The
commencement of the employer-employee relationship, as earlier discussed, would have taken
place had petitioner been actually deployed from the point of hire. Thus, even before the start of any
employer-employee relationship, contemporaneous with the perfection of the employment contract
was the birth of certain rights and obligations, the breach of which may give rise to a cause of action
against the erring party. Thus, if the reverse had happened, that is the seafarer failed or refused to
be deployed as agreed upon, he would be liable for damages.

Moreover, while the POEA Standard Contract must be recognized and respected, neither the
manning agent nor the employer can simply prevent a seafarer from being deployed without a valid
reason.

Respondent’s act of preventing petitioner from departing the port of Manila and boarding "MSV
Seaspread" constitutes a breach of contract, giving rise to petitioner’s cause of action. Respondent
unilaterally and unreasonably reneged on its obligation to deploy petitioner and must therefore
answer for the actual damages he suffered.

We take exception to the Court of Appeals’ conclusion that damages are not recoverable by a
worker who was not deployed by his agency. The fact that the POEA Rules27 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.

The POEA Rules only provide sanctions which the POEA can impose on erring agencies. It does not
provide for damages and money claims recoverable by aggrieved employees because it is not the
POEA, but the NLRC, which has jurisdiction over such matters.

Despite the absence of an employer-employee relationship between petitioner and respondent, the
Court rules that the NLRC has jurisdiction over petitioner’s complaint. The jurisdiction of labor
arbiters is not limited to claims arising from employer-employee relationships. Section 10 of R.A. No.
8042 (Migrant Workers Act), provides that:

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 damages. x x x [Emphasis supplied]

Since the present petition involves the employment contract entered into by petitioner for overseas
employment, his claims are cognizable by the labor arbiters of the NLRC.

Article 2199 of the Civil Code provides that one is entitled to an adequate compensation only for
such pecuniary loss suffered by him as he has duly proved. Respondent is thus liable to pay
petitioner actual damages in the form of the loss of nine (9) months’ worth of salary as provided in
the contract. He is not, however, entitled to overtime pay. While the contract indicated a fixed
overtime pay, it is not a guarantee that he would receive said amount regardless of whether or not
he rendered overtime work. Even though petitioner was "prevented without valid reason from
rendering regular much less overtime service,"28 the fact remains that there is no certainty that
petitioner will perform overtime work had he been allowed to board the vessel. The amount of
US$286.00 stipulated in the contract will be paid only if and when the employee rendered overtime
work. This has been the tenor of our rulings in the case of Stolt-Nielsen Marine Services (Phils.), Inc.
v. National Labor Relations Commission29 where we discussed the matter in this light:

The contract provision means that the fixed overtime pay of 30% would be the basis for
computing the overtime pay if and when overtime work would be rendered. Simply stated,
the rendition of overtime work and the submission of sufficient proof that said work was
actually performed are conditions to be satisfied before a seaman could be entitled to
overtime pay which should be computed on the basis of 30% of the basic monthly salary. In
short, the contract provision guarantees the right to overtime pay but the entitlement to such
benefit must first be established. Realistically speaking, a seaman, by the very nature of his
job, stays on board a ship or vessel beyond the regular eight-hour work schedule. For the
employer to give him overtime pay for the extra hours when he might be sleeping or
attending to his personal chores or even just lulling away his time would be extremely unfair
and unreasonable.30

The Court also holds that petitioner is entitled to attorney’s fees in the concept of damages and
expenses of litigation. Attorney's fees are recoverable when the defendant's act or omission has
compelled the plaintiff to incur expenses to protect his interest.31 We note that respondent’s basis for
not deploying petitioner is the belief that he will jump ship just like his brother, a mere suspicion that
is based on alleged phone calls of several persons whose identities were not even confirmed. Time
and again, this Court has upheld management prerogatives so long as they are exercised in good
faith for the advancement of the employer’s interest and not for the purpose of defeating or
circumventing the rights of the employees under special laws or under valid
agreements.32Respondent’s failure to deploy petitioner is unfounded and unreasonable, forcing
petitioner to institute the suit below. The award of attorney’s fees is thus warranted.

However, moral damages cannot be awarded in this case. While respondent’s failure to deploy
petitioner seems baseless and unreasonable, we cannot qualify such action as being tainted with
bad faith, or done deliberately to defeat petitioner’s rights, as to justify the award of moral damages.
At most, respondent was being overzealous in protecting its interest when it became too hasty in
making its conclusion that petitioner will jump ship like his brother.

We likewise do not see respondent’s failure to deploy petitioner as an act designed to prevent the
latter from attaining the status of a regular employee. Even if petitioner was able to depart the port of
Manila, he still cannot be considered a regular employee, regardless of his previous contracts of
employment with respondent. In Millares v. National Labor Relations Commission,33 the Court ruled
that seafarers are considered contractual employees and cannot be considered as regular
employees under the Labor Code. Their employment is governed by the contracts they sign every
time they are rehired and their employment is terminated when the contract expires. The exigencies
of their work necessitates that they be employed on a contractual basis.34

WHEREFORE, petition is GRANTED IN PART. The Decision dated 16 October 2003 and the
Resolution dated 19 February 2004 of the Court of Appeals are REVERSED and SET ASIDE. The
Decision of Labor Arbiter Teresita D. Castillon-Lora dated 29 January 1999 is REINSTATED with the
MODIFICATION that respondent CF Sharp Crew Management, Inc. is ordered to pay actual or
compensatory damages in the amount of US$4,635.00
representing salary for nine (9) months as stated in the contract, and attorney’s fees at the
reasonable rate of 10% of the recoverable amount.

SO ORDERED.

G.R. No. 152642 November 13, 2012

HON. PATRICIA A. STO.TOMAS, ROSALINDA BALDOZ and LUCITA LAZO, Petitioners,

vs.
REY SALAC, WILLIE D. ESPIRITU, MARIO MONTENEGRO, DODGIE BELONIO, LOLIT
SALINEL and BUDDY BONNEVIE, Respondents.

x-----------------------x

G.R. No. 152710

HON. PATRICIA A. STO. TOMAS, in her capacity as Secretary of Department of Labor and
Employment (DOLE), HON. ROSALINDA D. BALDOZ, in her capacity as Administrator,
Philippine Overseas Employment Administration (POEA), and the PHILIPPINE OVERSEAS
EMPLOYMENT ADMINISTRATION GOVERNING BOARD, Petitioners,
vs.
HON. JOSE G. PANEDA, in his capacity as the Presiding Judge of Branch 220, Quezon City,
ASIAN RECRUITMENT COUNCIL PHILIPPINE CHAPTER, INC. (ARCOPHIL), for itself and in
behalf of its members: WORLDCARE PHILIPPINES SERVIZO INTERNATIONALE, INC.,
STEADFAST INTERNATIONAL RECRUITMENT CORP., VERDANT MANPOWER
MOBILIZATION CORP., BRENT OVERSEAS PERSONNEL, INC., ARL MANPOWER SERVICES,
INC., DAHLZEN INTERNATIONAL SERVICES, INC., INTERWORLD PLACEMENT CENTER,
INC., LAKAS TAO CONTRACT SERVICES LTD. CO., SSC MULTI-SERVICES, DMJ
INTERNATIONAL, and MIP INTERNATIONAL MANPOWER SERVICES, represented by its
proprietress, MARCELINA I. PAGSIBIGAN, Respondents.

x-----------------------x

G.R. No. 167590

REPUBLIC OF THE PHILIPPINES, represented by the HONORABLE EXECUTIVE SECRETARY,

the HONORABLE SECRETARY OF LABOR AND EMPLOYMENT (DOLE), the PHILIPPINE
OVERSEAS EMPLOYMENT ADMINISTRATION (POEA), the OVERSEAS WORKERS WELFARE
ADMINISTRATION (OWWA), the LABOR ARBITERS OF THE NATIONAL LABOR RELATIONS
COMMISSION (NLRC), the HONORABLE SECRETARY OF JUSTICE, the HONORABLE
SECRETARY OF FOREIGN AFFAIRS and the COMMISSION ON AUDIT (COA), Petitioners,
vs.
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC. (P ASEI), Respondent.

x-----------------------x

G.R. Nos. 182978-79

BECMEN SERVICE EXPORTER AND PROMOTION, INC., Petitioner,

vs.
SPOUSES SIMPLICIO AND MILA CUARESMA (for and in behalf of daughter, Jasmin G.
Cuaresma), WHITE FALCON SERVICES, INC., and JAIME ORTIZ (President of White Falcon
Services, Inc.), Respondents.

x-----------------------x

G.R. Nos. 184298-99

SPOUSES SIMPLICIO AND MILA CUARESMA (for and in behalf of deceased daughter, Jasmin
G. Cuaresma), Petitioners,
vs.
WHITE FALCON SERVICES, INC. and BECMEN SERVICES EXPORTER AND PROMOTION,
INC., Respondents.

DECISION

ABAD, J.:

These consolidated cases pertain to the constitutionality of certain provisions of Republic Act 8042,
otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995.

The Facts and the Case

On June 7, 1995 Congress enacted Republic Act (R.A.) 8042 or the Migrant Workers and Overseas
Filipinos Act of 1995 that, for among other purposes, sets the Government’s policies on overseas
employment and establishes a higher standard of protection and promotion of the welfare of migrant
workers, their families, and overseas Filipinos in distress.

G.R. 152642 and G.R. 152710

(Constitutionality of Sections 29 and 30, R.A. 8042)

Sections 29 and 30 of the Act1 commanded the Department of Labor and Employment (DOLE) to
begin deregulating within one year of its passage the business of handling the recruitment and
migration of overseas Filipino workers and phase out within five years the regulatory functions of the
Philippine Overseas Employment Administration (POEA).

On January 8, 2002 respondents Rey Salac, Willie D. Espiritu, Mario Montenegro, Dodgie Belonio,
Lolit Salinel, and Buddy Bonnevie (Salac, et al.) filed a petition for certiorari, prohibition and
mandamus with application for temporary restraining order (TRO) and preliminary injunction against
petitioners, the DOLE Secretary, the POEA Administrator, and the Technical Education and Skills
Development Authority (TESDA) Secretary-General before the Regional Trial Court (RTC) of
Quezon City, Branch 96.2

Salac, et al. sought to: 1) nullify DOLE Department Order 10 (DOLE DO 10) and POEA
Memorandum Circular 15 (POEA MC 15); 2) prohibit the DOLE, POEA, and TESDA from
implementing the same and from further issuing rules and regulations that would regulate the
recruitment and placement of overseas Filipino workers (OFWs); and 3) also enjoin them to comply
with the policy of deregulation mandated under Sections 29 and 30 of Republic Act 8042.

On March 20, 2002 the Quezon City RTC granted Salac, et al.’s petition and ordered the
government agencies mentioned to deregulate the recruitment and placement of OFWs.3 The RTC
also annulled DOLE DO 10, POEA MC 15, and all other orders, circulars and issuances that are
inconsistent with the policy of deregulation under R.A. 8042.

Prompted by the RTC’s above actions, the government officials concerned filed the present petition
in G.R. 152642 seeking to annul the RTC’s decision and have the same enjoined pending action on
the petition.

On April 17, 2002 the Philippine Association of Service Exporters, Inc. intervened in the case before
the Court, claiming that the RTC March 20, 2002 Decision gravely affected them since it paralyzed
the deployment abroad of OFWs and performing artists. The Confederated Association of Licensed
Entertainment Agencies, Incorporated (CALEA) intervened for the same purpose.4

On May 23, 2002 the Court5 issued a TRO in the case, enjoining the Quezon City RTC, Branch 96,
from enforcing its decision.

In a parallel case, on February 12, 2002 respondents Asian Recruitment Council Philippine Chapter,
Inc. and others (Arcophil, et al.) filed a petition for certiorari and prohibition with application for TRO
and preliminary injunction against the DOLE Secretary, the POEA Administrator, and the TESDA
Director-General,6 before the RTC of Quezon City, Branch 220, to enjoin the latter from
implementing the 2002 Rules and Regulations Governing the Recruitment and Employment of
Overseas Workers and to cease and desist from issuing other orders, circulars, and policies that
tend to regulate the recruitment and placement of OFWs in violation of the policy of deregulation
provided in Sections 29 and 30 of R.A. 8042.

On March 12, 2002 the Quezon City RTC rendered an Order, granting the petition and enjoining the
government agencies involved from exercising regulatory functions over the recruitment and
placement of OFWs. This prompted the DOLE Secretary, the POEA Administrator, and the TESDA
Director-General to file the present action in G.R. 152710. As in G.R. 152642, the Court issued on
May 23, 2002 a TRO enjoining the Quezon City RTC, Branch 220 from enforcing its decision.

On December 4, 2008, however, the Republic informed7 the Court that on April 10, 2007 former
President Gloria Macapagal-Arroyo signed into law R.A. 94228 which expressly repealed Sections 29
and 30 of R.A. 8042 and adopted the policy of close government regulation of the recruitment and
deployment of OFWs. R.A. 9422 pertinently provides:

xxxx

SEC. 1. Section 23, paragraph (b.1) of Republic Act No. 8042, otherwise known as the "Migrant
Workers and Overseas Filipinos Act of 1995" is hereby amended to read as follows:

(b.1) Philippine Overseas Employment Administration – The Administration shall regulate private
sector participation in the recruitment and overseas placement of workers by setting up a licensing
and registration system. It shall also formulate and implement, in coordination with appropriate
entities concerned, when necessary, a system for promoting and monitoring the overseas
employment of Filipino workers taking into consideration their welfare and the domestic manpower
requirements.

In addition to its powers and functions, the administration 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.
In the recruitment and placement of workers to service the requirements for trained and competent
Filipino workers of foreign governments and their instrumentalities, and such other employers as
public interests may require, the administration shall deploy only to countries where the Philippines
has concluded bilateral labor agreements or arrangements: Provided, That such countries shall
guarantee to protect the rights of Filipino migrant workers; and: Provided, further, That such
countries shall observe and/or comply with the international laws and standards for migrant workers.

SEC. 2. Section 29 of the same law is hereby repealed.

SEC. 3. Section 30 of the same law is also hereby repealed.

xxxx

On August 20, 2009 respondents Salac, et al. told the Court in G.R. 152642 that they agree9 with the
Republic’s view that the repeal of Sections 29 and 30 of R.A. 8042 renders the issues they raised by
their action moot and academic. The Court has no reason to disagree. Consequently, the two cases,
G.R. 152642 and 152710, should be dismissed for being moot and academic.

G.R. 167590

(Constitutionality of Sections 6, 7, and 9 of R.A. 8042)

On August 21, 1995 respondent Philippine Association of Service Exporters, Inc. (PASEI) filed a
petition for declaratory relief and prohibition with prayer for issuance of TRO and writ of preliminary
injunction before the RTC of Manila, seeking to annul Sections 6, 7, and 9 of R.A. 8042 for being
unconstitutional. (PASEI also sought to annul a portion of Section 10 but the Court will take up this
point later together with a related case.)

Section 6 defines the crime of "illegal recruitment" and enumerates the acts constituting the same.
Section 7 provides the penalties for prohibited acts. Thus:

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

xxxx

SEC. 7. Penalties. –

(a) Any person found guilty of illegal recruitment 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 not
less than two hundred thousand pesos (P200,000.00) nor more than five hundred thousand
pesos (P500,000.00).
 (b) The penalty of life imprisonment and a fine of not less than five hundred thousand pesos
(P500,000.00) nor more than one million pesos (P1,000,000.00) shall be imposed if illegal
recruitment constitutes economic sabotage as defined herein.

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.10

Finally, Section 9 of R.A. 8042 allowed the filing of criminal actions arising from "illegal recruitment"
before the RTC of the province or city where the offense was committed or where the offended party
actually resides at the time of the commission of the offense.

The RTC of Manila declared Section 6 unconstitutional after hearing on the ground that its definition
of "illegal recruitment" is vague as it fails to distinguish between licensed and non-licensed
recruiters11 and for that reason gives undue advantage to the non-licensed recruiters in violation of
the right to equal protection of those that operate with government licenses or authorities.

But "illegal recruitment" as defined in Section 6 is clear and unambiguous and, contrary to the RTC’s
finding, actually makes a distinction between licensed and non-licensed recruiters. By its terms,
persons who engage in "canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring
workers" without the appropriate government license or authority are guilty of illegal recruitment
whether or not they commit the wrongful acts enumerated in that section. On the other hand,
recruiters who engage in the canvassing, enlisting, etc. of OFWs, although with the appropriate
government license or authority, are guilty of illegal recruitment only if they commit any of the
wrongful acts enumerated in Section 6.

The Manila RTC also declared Section 7 unconstitutional on the ground that its sweeping application
of the penalties failed to make any distinction as to the seriousness of the act committed for the
application of the penalty imposed on such violation. As an example, said the trial court, the mere
failure to render a report under Section 6(h) or obstructing the inspection by the Labor Department
under Section 6(g) are penalized by imprisonment for six years and one day and a minimum fine
of P200,000.00 but which could unreasonably go even as high as life imprisonment if committed by
at least three persons.

Apparently, the Manila RTC did not agree that the law can impose such grave penalties upon what it
believed were specific acts that were not as condemnable as the others in the lists. But, in fixing
uniform penalties for each of the enumerated acts under Section 6, Congress was within its
prerogative to determine what individual acts are equally reprehensible, consistent with the State
policy of according full protection to labor, and deserving of the same penalties. It is not within the
power of the Court to question the wisdom of this kind of choice. Notably, this legislative policy has
been further stressed in July 2010 with the enactment of R.A. 1002212 which increased even more
the duration of the penalties of imprisonment and the amounts of fine for the commission of the acts
listed under Section 7.

Obviously, in fixing such tough penalties, the law considered the unsettling fact that OFWs must
work outside the country’s borders and beyond its immediate protection. The law must, therefore,
make an effort to somehow protect them from conscienceless individuals within its jurisdiction who,
fueled by greed, are willing to ship them out without clear assurance that their contracted principals
would treat such OFWs fairly and humanely.

As the Court held in People v. Ventura,13 the State under its police power "may prescribe such
regulations as in its judgment will secure or tend to secure the general welfare of the people, to
protect them against the consequence of ignorance and incapacity as well as of deception and
fraud." Police power is "that inherent and plenary power of the State which enables it to prohibit all
things hurtful to the comfort, safety, and welfare of society."14

The Manila RTC also invalidated Section 9 of R.A. 8042 on the ground that allowing the offended
parties to file the criminal case in their place of residence would negate the general rule on venue of
criminal cases which is the place where the crime or any of its essential elements were committed.
Venue, said the RTC, is jurisdictional in penal laws and, allowing the filing of criminal actions at the
place of residence of the offended parties violates their right to due process. Section 9 provides:

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 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.

But there is nothing arbitrary or unconstitutional in Congress fixing an alternative venue for violations
of Section 6 of R.A. 8042 that differs from the venue established by the Rules on Criminal
Procedure. Indeed, Section 15(a), Rule 110 of the latter Rules allows exceptions provided by laws.
Thus:

SEC. 15. Place where action is to be instituted.— (a) Subject to existing laws, the criminal action
shall be instituted and tried in the court of the municipality or territory where the offense was
committed or where any of its essential ingredients occurred. (Emphasis supplied)

xxxx

Section 9 of R.A. 8042, as an exception to the rule on venue of criminal actions is, consistent with
that law’s declared policy15 of providing a criminal justice system that protects and serves the best
interests of the victims of illegal recruitment.

G.R. 167590, G.R. 182978-79,16 and G.R. 184298-9917

(Constitutionality of Section 10, last sentence of 2nd paragraph)

G.R. 182978-79 and G.R. 184298-99 are consolidated cases. Respondent spouses Simplicio and
Mila Cuaresma (the Cuaresmas) filed a claim for death and insurance benefits and damages against
petitioners Becmen Service Exporter and Promotion, Inc. (Becmen) and White Falcon Services, Inc.
(White Falcon) for the death of their daughter Jasmin Cuaresma while working as staff nurse in
Riyadh, Saudi Arabia.

The Labor Arbiter (LA) dismissed the claim on the ground that the Cuaresmas had already received
insurance benefits arising from their daughter’s death from the Overseas Workers Welfare
Administration (OWWA). The LA also gave due credence to the findings of the Saudi Arabian
authorities that Jasmin committed suicide.

On appeal, however, the National Labor Relations Commission (NLRC) found Becmen and White
Falcon jointly and severally liable for Jasmin’s death and ordered them to pay the Cuaresmas the
amount of US$113,000.00 as actual damages. The NLRC relied on the Cabanatuan City Health
Office’s autopsy finding that Jasmin died of criminal violence and rape.
Becmen and White Falcon appealed the NLRC Decision to the Court of Appeals (CA).18 On June 28,
2006 the CA held Becmen and White Falcon jointly and severally liable with their Saudi Arabian
employer for actual damages, with Becmen having a right of reimbursement from White Falcon.
Becmen and White Falcon appealed the CA Decision to this Court.

On April 7, 2009 the Court found Jasmin’s death not work-related or work-connected since her rape
and death did not occur while she was on duty at the hospital or doing acts incidental to her
employment. The Court deleted the award of actual damages but ruled that Becmen’s corporate
directors and officers are solidarily liable with their company for its failure to investigate the true
nature of her death. Becmen and White Falcon abandoned their legal, moral, and social duty to
assist the Cuaresmas in obtaining justice for their daughter. Consequently, the Court held the foreign
employer Rajab and Silsilah, White Falcon, Becmen, and the latter’s corporate directors and officers
jointly and severally liable to the Cuaresmas for: 1) P2,500,000.00 as moral damages; 2)
P2,500,000.00 as exemplary damages; 3) attorney’s fees of 10% of the total monetary award; and 4)
cost of suit.

On July 16, 2009 the corporate directors and officers of Becmen, namely, Eufrocina Gumabay,
Elvira Taguiam, Lourdes Bonifacio and Eddie De Guzman (Gumabay, et al.) filed a motion for leave
to Intervene. They questioned the constitutionality of the last sentence of the second paragraph of
Section 10, R.A. 8042 which holds the corporate directors, officers and partners jointly and solidarily
liable with their company for money claims filed by OFWs against their employers and the
recruitment firms. On September 9, 2009 the Court allowed the intervention and admitted Gumabay,
et al.’s motion for reconsideration.

The key issue that Gumabay, et al. present is whether or not the 2nd paragraph of Section 10, R.A.
8042, which holds the corporate directors, officers, and partners of recruitment and placement
agencies jointly and solidarily liable for money claims and damages that may be adjudged against
the latter agencies, is unconstitutional.

In G.R. 167590 (the PASEI case), the Quezon City RTC held as unconstitutional the last sentence of
the 2nd paragraph of Section 10 of R.A. 8042. It pointed out that, absent sufficient proof that the
corporate officers and directors of the erring company had knowledge of and allowed the illegal
recruitment, making them automatically liable would violate their right to due process of law.

The pertinent portion of Section 10 provides:

SEC. 10. Money Claims. – x x x

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
be 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. (Emphasis supplied)

But the Court has already held, pending adjudication of this case, that the liability of corporate
directors and officers is not automatic. To make them jointly and solidarily liable with their company,
there must be a finding that they were remiss in directing the affairs of that company, such as
sponsoring or tolerating the conduct of illegal activities.19 In the case of Becmen and White
Falcon,20 while there is evidence that these companies were at fault in not investigating the cause of
Jasmin’s death, there is no mention of any evidence in the case against them that intervenors
Gumabay, et al., Becmen’s corporate officers and directors, were personally involved in their
company’s particular actions or omissions in Jasmin’s case.

As a final note, R.A. 8042 is a police power measure intended to regulate the recruitment and
deployment of OFWs. It aims to curb, if not eliminate, the injustices and abuses suffered by
numerous OFWs seeking to work abroad. The rule is settled that every statute has in its favor the
presumption of constitutionality. The Court cannot inquire into the wisdom or expediency of the laws
enacted by the Legislative Department. Hence, in the absence of a clear and unmistakable case that
the statute is unconstitutional, the Court must uphold its validity.

WHEREFORE, in G.R. 152642 and 152710, the Court DISMISSES the petitions for having become
moot and academic. 1âwphi1

In G.R. 167590, the Court SETS ASIDE the Decision of the Regional Trial Court ofManila dated
December 8, 2004 and DECLARES Sections 6, 7, and 9 of Republic Act 8042 valid and
constitutional.

In G.R. 182978-79 and G.R. 184298-99 as well as in G.R. 167590, the Court HOLDS the last
sentence of the second paragraph of Section 10 of Republic Act 8042 valid and constitutional. The
Court, however, RECONSIDERS and SETS ASIDE the portion of its Decision in G.R. 182978-79
and G.R. 184298-99 that held intervenors Eufrocina Gumabay, Elvira Taguiam, Lourdes Bonifacio,
and Eddie De Guzman jointly and solidarily liable with respondent Becmen Services Exporter and
Promotion, Inc. to spouses Simplicia and Mila Cuaresma for lack of a finding in those cases that
such intervenors had a part in the act or omission imputed to their corporation.

SO ORDERED.

G.R. No. 170139 August 5, 2014

SAMEER OVERSEAS PLACEMENT AGENCY, INC., Petitioner,

vs.
JOY C. CABILES, Respondent.

DECISION

LEONEN, J.:

This case involves an overseas Filipino worker with shattered dreams. It is our duty, given the facts
and the law, to approximate justice for her.

We are asked to decide a petition for review1 on certiorari assailing the Court of Appeals’
decision2 dated June 27, 2005. This decision partially affirmed the National Labor
RelationsCommission’s resolution dated March 31, 2004,3 declaring respondent’s dismissal illegal,
directing petitioner to pay respondent’s three-month salary equivalent to New Taiwan Dollar (NT$)
46,080.00, and ordering it to reimburse the NT$3,000.00 withheld from respondent, and pay her
NT$300.00 attorney’s fees.4

Petitioner, Sameer Overseas Placement Agency, Inc., is a recruitment and placement

agency.5 Responding to an ad it published, respondent, Joy C. Cabiles, submitted her application for
a quality control job in Taiwan.6
Joy’s application was accepted.7 Joy was later asked to sign a oneyear employment contract for a
monthly salary of NT$15,360.00.8 She alleged that Sameer Overseas Agency required her to pay a
placement fee of P70,000.00 when she signed the employment contract.9

Joy was deployed to work for TaiwanWacoal, Co. Ltd. (Wacoal) on June 26, 1997.10 She alleged that
in her employment contract, she agreed to work as quality control for one year.11 In Taiwan, she was
asked to work as a cutter.12

Sameer Overseas Placement Agencyclaims that on July 14, 1997, a certain Mr. Huwang from
Wacoal informedJoy, without prior notice, that she was terminated and that "she should immediately
report to their office to get her salary and passport."13 She was asked to "prepare for immediate
repatriation."14

Joy claims that she was told that from June 26 to July 14, 1997, she only earned a total of
NT$9,000.15 According to her, Wacoal deducted NT$3,000 to cover her plane ticket to Manila.16

On October 15, 1997, Joy filed a complaint17 with the National Labor Relations Commission against
petitioner and Wacoal. She claimed that she was illegally dismissed.18 She asked for the return of her
placement fee, the withheld amount for repatriation costs, payment of her salary for 23 months as
well as moral and exemplary damages.19 She identified Wacoal as Sameer Overseas Placement
Agency’s foreign principal.20

Sameer Overseas Placement Agency alleged that respondent's termination was due to her
inefficiency, negligence in her duties, and her "failure to comply with the work requirements [of] her
foreign [employer]."21 The agency also claimed that it did not ask for a placement fee
of P70,000.00.22 As evidence, it showedOfficial Receipt No. 14860 dated June 10, 1997, bearing the
amount of P20,360.00.23 Petitioner added that Wacoal's accreditation with petitioner had already
been transferred to the Pacific Manpower & Management Services, Inc. (Pacific) as of August 6,
1997.24 Thus, petitioner asserts that it was already substituted by Pacific Manpower.25

Pacific Manpower moved for the dismissal of petitioner’s claims against it.26 It alleged that there was
no employer-employee relationship between them.27 Therefore, the claims against it were outside the
jurisdiction of the Labor Arbiter.28 Pacific Manpower argued that the employment contract should first
be presented so that the employer’s contractual obligations might be identified.29 It further denied that
it assumed liability for petitioner’s illegal acts.30

On July 29, 1998, the Labor Arbiter dismissed Joy’s complaint.31 Acting Executive Labor Arbiter
Pedro C.Ramos ruled that her complaint was based on mereallegations.32 The Labor Arbiter found
that there was no excess payment of placement fees, based on the official receipt presented by
petitioner.33 The Labor Arbiter found unnecessary a discussion on petitioner’s transfer of obligations
to Pacific34 and considered the matter immaterial in view of the dismissal of respondent’s complaint.35

Joy appealed36 to the National Labor Relations Commission.

In a resolution37 dated March 31, 2004, the National Labor Relations Commission declared that Joy
was illegally dismissed.38 It reiterated the doctrine that the burden of proof to show that the dismissal
was based on a just or valid cause belongs to the employer.39 It found that Sameer Overseas
Placement Agency failed to prove that there were just causes for termination.40 There was no
sufficient proofto show that respondent was inefficient in her work and that she failed to comply with
company requirements.41 Furthermore, procedural dueprocess was not observed in terminating
respondent.42
The National Labor Relations Commission did not rule on the issue of reimbursement of placement
fees for lack of jurisdiction.43 It refused to entertain the issue of the alleged transfer of obligations to
Pacific.44 It did not acquire jurisdiction over that issue because Sameer Overseas Placement Agency
failed to appeal the Labor Arbiter’s decision not to rule on the matter.45

The National Labor Relations Commission awarded respondent only three (3) months worth of
salaryin the amount of NT$46,080, the reimbursement of the NT$3,000 withheld from her, and
attorney’s fees of NT$300.46

The Commission denied the agency’s motion for reconsideration47 dated May 12, 2004 through a
resolution48dated July 2, 2004.

Aggrieved by the ruling, Sameer Overseas Placement Agency caused the filing of a petition49 for
certiorari with the Court of Appeals assailing the National Labor Relations Commission’s resolutions
dated March 31, 2004 and July 2, 2004.

The Court of Appeals50 affirmed the decision of the National Labor Relations Commission with
respect to the finding of illegal dismissal, Joy’s entitlement to the equivalent of three months worth of
salary, reimbursement of withheld repatriation expense, and attorney’s fees.51 The Court of Appeals
remanded the case to the National Labor Relations Commission to address the validity of petitioner's
allegations against Pacific.52 The Court of Appeals held, thus: Although the public respondent found
the dismissal of the complainant-respondent illegal, we should point out that the NLRC merely
awarded her three (3) months backwages or the amount of NT$46,080.00, which was based upon
its finding that she was dismissed without due process, a finding that we uphold, given petitioner’s
lack of worthwhile discussion upon the same in the proceedings below or before us. Likewise we
sustain NLRC’s finding in regard to the reimbursement of her fare, which is squarely based on the
law; as well as the award of attorney’s fees.

But we do find it necessary to remand the instant case to the public respondent for further
proceedings, for the purpose of addressing the validity or propriety of petitioner’s third-party
complaint against the transferee agent or the Pacific Manpower & Management Services, Inc. and
Lea G. Manabat. We should emphasize that as far as the decision of the NLRC on the claims of Joy
Cabiles, is concerned, the same is hereby affirmed with finality, and we hold petitioner liable thereon,
but without prejudice to further hearings on its third party complaint against Pacific for
reimbursement.

WHEREFORE, premises considered, the assailed Resolutions are hereby partly AFFIRMED in
accordance with the foregoing discussion, but subject to the caveat embodied inthe last sentence.
No costs.

SO ORDERED.53

Dissatisfied, Sameer Overseas Placement Agency filed this petition.54

We are asked to determine whether the Court of Appeals erred when it affirmed the ruling of the
National Labor Relations Commission finding respondent illegally dismissed and awarding her three
months’ worth of salary, the reimbursement of the cost ofher repatriation, and attorney’s fees despite
the alleged existence of just causes of termination.

Petitioner reiterates that there was just cause for termination because there was a finding of Wacoal
that respondent was inefficient in her work.55
Therefore, it claims that respondent’s dismissal was valid.56

Petitioner also reiterates that since Wacoal’s accreditation was validly transferred to Pacific at the
time respondent filed her complaint, it should be Pacific that should now assume responsibility for
Wacoal’s contractual obligations to the workers originally recruited by petitioner.57

Sameer Overseas Placement Agency’spetition is without merit. We find for respondent.

Sameer Overseas Placement Agency failed to show that there was just cause for causing Joy’s
dismissal. The employer, Wacoal, also failed to accord her due process of law.

Indeed, employers have the prerogative to impose productivity and quality standards at work.58 They
may also impose reasonable rules to ensure that the employees comply with these
standards.59 Failure to comply may be a just cause for their dismissal.60 Certainly, employers cannot
be compelled to retain the services of anemployee who is guilty of acts that are inimical to the
interest of the employer.61 While the law acknowledges the plight and vulnerability of workers, it does
not "authorize the oppression or self-destruction of the employer."62 Management prerogative is
recognized in law and in our jurisprudence.

This prerogative, however, should not be abused. It is "tempered with the employee’s right to
security of tenure."63Workers are entitled to substantive and procedural due process before
termination. They may not be removed from employment without a validor just cause as determined
by law and without going through the proper procedure.

Security of tenure for labor is guaranteed by our Constitution.64

Employees are not stripped of their security of tenure when they move to work in a different
jurisdiction. With respect to the rights of overseas Filipino workers, we follow the principle of lex loci
contractus.Thus, in Triple Eight Integrated Services, Inc. v. NLRC,65 this court noted:

Petitioner likewise attempts to sidestep the medical certificate requirement by contending that since
Osdana was working in Saudi Arabia, her employment was subject to the laws of the host country.
Apparently, petitioner hopes tomake it appear that the labor laws of Saudi Arabia do not require any
certification by a competent public health authority in the dismissal of employees due to illness.

Again, petitioner’s argument is without merit.

First, established is the rule that lex loci contractus (the law of the place where the contract is made)
governs in this jurisdiction. There is no question that the contract of employment in this case was
perfected here in the Philippines. Therefore, the Labor Code, its implementing rules and regulations,
and other laws affecting labor apply in this case.Furthermore, settled is the rule that the courts of the
forum will not enforce any foreign claim obnoxious to the forum’s public policy. Herein the
Philippines, employment agreements are more than contractual in nature. The Constitution itself, in
Article XIII, Section 3, guarantees the special protection of workers, to wit:

The State shall afford full protection to labor, local and overseas, organized and unorganized, and
promote full employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to selforganization, collective bargaining and negotiations,
and peaceful concerted activities, including the right to strike in accordance with law. They shall be
entitled to security of tenure, humane conditions of work, and a living wage. Theyshall also
participate in policy and decision-making processes affecting their rights and benefits as may be
provided by law.

....

This public policy should be borne in mind in this case because to allow foreign employers to
determine for and by themselves whether an overseas contract worker may be dismissed on the
ground of illness would encourage illegal or arbitrary pretermination of employment
contracts.66 (Emphasis supplied, citation omitted)

Even with respect to fundamental procedural rights, this court emphasized in PCL Shipping
Philippines, Inc. v. NLRC,67 to wit:

Petitioners admit that they did notinform private respondent in writing of the charges against him and
that they failed to conduct a formal investigation to give him opportunity to air his side. However,
petitioners contend that the twin requirements ofnotice and hearing applies strictly only when the
employment is within the Philippines and that these need not be strictly observed in cases of
international maritime or overseas employment.

The Court does not agree. The provisions of the Constitution as well as the Labor Code which afford
protection to labor apply to Filipino employees whether working within the Philippines or abroad.
Moreover, the principle of lex loci contractus (the law of the place where the contract is made)
governs in this jurisdiction. In the present case, it is not disputed that the Contract of Employment
entered into by and between petitioners and private respondent was executed here in the Philippines
with the approval of the Philippine Overseas Employment Administration (POEA). Hence, the Labor
Code together with its implementing rules and regulations and other laws affecting labor apply in this
case.68 (Emphasis supplied, citations omitted)

By our laws, overseas Filipino workers (OFWs) may only be terminated for a just or authorized
cause and after compliance with procedural due process requirements.

Article 282 of the Labor Code enumerates the just causes of termination by the employer. Thus:

Art. 282. Termination by employer. An employer may terminate an employment for any of the
following causes:

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work;

(b) Gross and habitual neglect by the employee of his duties;

(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or
duly authorized representative;

(d) Commission of a crime or offense by the employee against the person of his employer or
any immediate member of his family or his duly authorized representatives; and

(e) Other causes analogous to the foregoing.

Petitioner’s allegation that respondentwas inefficient in her work and negligent in her duties69 may,
therefore, constitute a just cause for termination under Article 282(b), but only if petitioner was able
to prove it.

The burden of proving that there is just cause for termination is on the employer. "The employer
must affirmatively show rationally adequate evidence that the dismissal was for a justifiable
cause."70 Failure to show that there was valid or just cause for termination would necessarily mean
that the dismissal was illegal.71

To show that dismissal resulting from inefficiency in work is valid, it must be shown that: 1) the
employer has set standards of conduct and workmanship against which the employee will be judged;
2) the standards of conduct and workmanship must have been communicated tothe employee; and
3) the communication was made at a reasonable time prior to the employee’s performance
assessment.

This is similar to the law and jurisprudence on probationary employees, which allow termination
ofthe employee only when there is "just cause or when [the probationary employee] fails to qualify as
a regular employee in accordance with reasonable standards made known by the employer to the
employee at the time of his [or her] engagement."72

However, we do not see why the application of that ruling should be limited to probationary
employment. That rule is basic to the idea of security of tenure and due process, which are
guaranteed to all employees, whether their employment is probationary or regular.

The pre-determined standards that the employer sets are the bases for determining the probationary
employee’s fitness, propriety, efficiency, and qualifications as a regular employee. Due process
requires that the probationary employee be informed of such standards at the time of his or her
engagement so he or she can adjusthis or her character or workmanship accordingly. Proper
adjustment to fit the standards upon which the employee’s qualifications will be evaluated will
increase one’s chances of being positively assessed for regularization by his or her employer.

Assessing an employee’s work performance does not stop after regularization. The employer, on a
regular basis, determines if an employee is still qualified and efficient, based on work standards.
Based on that determination, and after complying with the due process requirements of notice and
hearing, the employer may exercise its management prerogative of terminating the employee found
unqualified.

The regular employee must constantlyattempt to prove to his or her employer that he or she meets
all the standards for employment. This time, however, the standards to be met are set for the
purpose of retaining employment or promotion. The employee cannot be expected to meet any
standard of character or workmanship if such standards were not communicated to him or her.
Courts should remain vigilant on allegations of the employer’s failure to communicatework standards
that would govern one’s employment "if [these are] to discharge in good faith [their] duty to
adjudicate."73

In this case, petitioner merely alleged that respondent failed to comply with her foreign employer’s
work requirements and was inefficient in her work.74 No evidence was shown to support such
allegations. Petitioner did not even bother to specify what requirements were not met, what
efficiency standards were violated, or what particular acts of respondent constituted inefficiency.
There was also no showing that respondent was sufficiently informed of the standards against which
her work efficiency and performance were judged. The parties’ conflict as to the position held by
respondent showed that even the matter as basic as the job title was not clear.

The bare allegations of petitioner are not sufficient to support a claim that there is just cause for
termination. There is no proof that respondent was legally terminated.

Petitioner failed to comply with

the due process requirements

Respondent’s dismissal less than one year from hiring and her repatriation on the same day show
not onlyfailure on the partof petitioner to comply with the requirement of the existence of just cause
for termination. They patently show that the employersdid not comply with the due process
requirement.

A valid dismissal requires both a valid cause and adherence to the valid procedure of
dismissal.75 The employer is required to give the charged employee at least two written notices
before termination.76 One of the written notices must inform the employee of the particular acts that
may cause his or her dismissal.77 The other notice must "[inform] the employee of the employer’s
decision."78 Aside from the notice requirement, the employee must also be given "an opportunity to
be heard."79

Petitioner failed to comply with the twin notices and hearing requirements. Respondent started
working on June 26, 1997. She was told that she was terminated on July 14, 1997 effective on the
same day and barely a month from her first workday. She was also repatriated on the same day that
she was informed of her termination. The abruptness of the termination negated any finding that she
was properly notified and given the opportunity to be heard. Her constitutional right to due process of
law was violated.

II

Respondent Joy Cabiles, having been illegally dismissed, is entitled to her salary for the unexpired
portion ofthe employment contract that was violated together with attorney’s fees and reimbursement
of amounts withheld from her salary.

Section 10 of Republic Act No. 8042,otherwise known as the Migrant Workers and Overseas
Filipinos Act of1995, states thatoverseas workers who were terminated without just, valid, or
authorized cause "shall be entitled to the full reimbursement of his placement fee with interest of
twelve (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."

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 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
damages.

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 provisions [sic] shall be incorporated in the contract
for overseas employment and shall be a condition precedent for its approval. The performance bond
to be filed by the recruitment/placementagency, 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 orpartnership 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 four (4) months from the 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, the workers shall be entitled to the full reimbursement of his placement fee with
interest of twelve (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.

....

(Emphasis supplied)

Section 15 of Republic Act No. 8042 states that "repatriation of the worker and the transport of his
[or her] personal belongings shall be the primary responsibility of the agency which recruited or
deployed the worker overseas." The exception is when "termination of employment is due solely to
the fault of the worker,"80 which as we have established, is not the case. It reads: SEC. 15.
REPATRIATION OF WORKERS; EMERGENCY REPATRIATION FUND. – The repatriation of the
worker and the transport of his personal belongings shall be the primary responsibility of the agency
which recruited or deployed the worker overseas. All costs attendant to repatriation shall be borne by
or charged to the agency concerned and/or its principal. Likewise, the repatriation of remains and
transport of the personal belongings of a deceased worker and all costs attendant thereto shall be
borne by the principal and/or local agency. However, in cases where the termination of employment
is due solely to the fault of the worker, the principal/employer or agency shall not in any manner be
responsible for the repatriation of the former and/or his belongings.

....

The Labor Code81 also entitles the employee to 10% of the amount of withheld wages as attorney’s
feeswhen the withholding is unlawful.

The Court of Appeals affirmedthe National Labor Relations Commission’s decision to award
respondent NT$46,080.00 or the threemonth equivalent of her salary, attorney’s fees of NT$300.00,
and the reimbursement of the withheld NT$3,000.00 salary, which answered for her repatriation.

We uphold the finding that respondent is entitled to all of these awards. The award of the three-
month equivalent of respondent’s salary should, however, be increased to the amount equivalent to
the unexpired term of the employment contract.

In Serrano v. Gallant Maritime Services, Inc. and Marlow Navigation Co., Inc.,82 this court ruled that
the clause "or for three (3) months for every year of the unexpired term, whichever is less"83 is
unconstitutional for violating the equal protection clause and substantive due process.84
A statute or provision which was declared unconstitutional is not a law. It "confers no rights; it
imposes no duties; it affords no protection; it creates no office; it is inoperative as if it has not been
passed at all."85

We are aware that the clause "or for three (3) months for every year of the unexpired term,
whichever is less"was reinstated in Republic Act No. 8042 upon promulgation of Republic Act No.
10022 in 2010. Section 7 of Republic Act No. 10022 provides:

Section 7.Section 10 of Republic Act No. 8042, as amended, is hereby amended to read as follows:

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 [sic] 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 [sic] 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.

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 providedunder 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 [sic] under other existing laws or rules and regulations as a
consequence of violating the provisions of this paragraph. (Emphasis supplied)

Republic Act No. 10022 was promulgated on March 8, 2010. This means that the reinstatement of
the clause in Republic Act No. 8042 was not yet in effect at the time of respondent’s termination from
work in 1997.86 Republic Act No. 8042 before it was amended byRepublic Act No. 10022 governs this
case.

When a law is passed, this court awaits an actual case that clearly raises adversarial positions in
their proper context before considering a prayer to declare it as unconstitutional.

However, we are confronted with a unique situation. The law passed incorporates the exact clause
already declared as unconstitutional, without any perceived substantial change in the circumstances.

This may cause confusion on the part of the National Labor Relations Commission and the Court of
Appeals.At minimum, the existence of Republic Act No. 10022 may delay the execution of the
judgment in this case, further frustrating remedies to assuage the wrong done to petitioner.

Hence, there is a necessity to decide this constitutional issue.

Moreover, this court is possessed with the constitutional duty to "[p]romulgate rules concerning the
protection and enforcement of constitutional rights."87 When cases become mootand academic, we
do not hesitate to provide for guidance to bench and bar in situations where the same violations are
capable of repetition but will evade review. This is analogous to cases where there are millions of
Filipinos working abroad who are bound to suffer from the lack of protection because of the
restoration of an identical clause in a provision previously declared as unconstitutional.

In the hierarchy of laws, the Constitution is supreme. No branch or office of the government may
exercise its powers in any manner inconsistent with the Constitution, regardless of the existence of
any law that supports such exercise. The Constitution cannot be trumped by any other law. All laws
must be read in light of the Constitution. Any law that is inconsistent with it is a nullity.

Thus, when a law or a provision of law is null because it is inconsistent with the Constitution,the
nullity cannot be cured by reincorporation or reenactment of the same or a similar law or provision. A
law or provision of law that was already declared unconstitutional remains as such unless
circumstances have sochanged as to warrant a reverse conclusion.

We are not convinced by the pleadings submitted by the parties that the situation has so changed so
as to cause us to reverse binding precedent.

Likewise, there are special reasons of judicial efficiency and economy that attend to these cases.
The new law puts our overseas workers in the same vulnerable position as they were prior to
Serrano. Failure to reiterate the very ratio decidendi of that case will result in the same untold
economic hardships that our reading of the Constitution intended to avoid. Obviously, we cannot
countenance added expenses for further litigation thatwill reduce their hardearned wages as well as
add to the indignity of having been deprived of the protection of our laws simply because our
precedents have not been followed. There is no constitutional doctrine that causes injustice in the
face of empty procedural niceties. Constitutional interpretation is complex, but it is never
unreasonable.

Thus, in a resolution88 dated October 22, 2013, we ordered the parties and the Office of the Solicitor
General to comment on the constitutionality of the reinstated clause in Republic Act No. 10022.

In its comment,89 petitioner argued that the clause was constitutional.90 The legislators intended a
balance between the employers’ and the employees’ rights by not unduly burdening the local
recruitment agency.91Petitioner is also of the view that the clause was already declared as
constitutional in Serrano.92

The Office of the Solicitor General also argued that the clause was valid and
constitutional.93 However, since the parties never raised the issue of the constitutionality of the clause
asreinstated in Republic Act No. 10022, its contention is that it is beyond judicial review.94

On the other hand, respondentargued that the clause was unconstitutional because it infringed on
workers’ right to contract.95

We observe that the reinstated clause, this time as provided in Republic Act. No. 10022, violates the
constitutional rights to equal protection and due process.96 Petitioner as well as the Solicitor General
have failed to show any compelling changein the circumstances that would warrant us to revisit the
precedent.

We reiterate our finding in Serrano v. Gallant Maritime that limiting wages that should be recovered
by anillegally dismissed overseas worker to three months is both a violation of due process and the
equal protection clauses of the Constitution.

Equal protection of the law is a guarantee that persons under like circumstances and falling within
the same class are treated alike, in terms of "privileges conferred and liabilities enforced."97 It is a
guarantee against "undue favor and individual or class privilege, as well as hostile discrimination or
the oppression of inequality."98

In creating laws, the legislature has the power "to make distinctions and classifications."99

In exercising such power, it has a wide discretion.100

The equal protection clause does not infringe on this legislative power.101 A law is void on this basis,
only if classifications are made arbitrarily.102 There is no violation of the equal protection clause if the
law applies equally to persons within the same class and if there are reasonable grounds for
distinguishing between those falling within the class and those who do not fall within the class.103 A
law that does not violate the equal protection clause prescribesa reasonable classification.104

A reasonable classification "(1) must rest on substantial distinctions; (2) must be germane to the
purposes of the law; (3) must not be limited to existing conditions only; and (4) must apply equally to
all members of the same class."105

The reinstated clause does not satisfy the requirement of reasonable classification.
In Serrano, we identified the classifications made by the reinstated clause. It distinguished between
fixed-period overseas workers and fixedperiod local workers.106 It also distinguished between
overseas workers with employment contracts of less than one year and overseas workers with
employment contracts of at least one year.107 Within the class of overseas workers with at least one-
year employment contracts, there was a distinction between those with at least a year left in their
contracts and those with less than a year left in their contracts when they were illegally dismissed.108

The Congress’ classification may be subjected to judicial review. In Serrano, there is a "legislative
classification which impermissibly interferes with the exercise of a fundamental right or operates to
the peculiar disadvantage of a suspect class."109

Under the Constitution, labor is afforded special protection.110 Thus, this court in Serrano, "[i]mbued
with the same sense of ‘obligation to afford protection to labor,’ . . . employ[ed] the standard of strict
judicial scrutiny, for it perceive[d] in the subject clause a suspect classification prejudicial to
OFWs."111

We also noted in Serranothat before the passage of Republic Act No. 8042, the money claims of
illegally terminated overseas and local workers with fixed-term employment werecomputed in the
same manner.112 Their money claims were computed based onthe "unexpired portions of their
contracts."113 The adoption of the reinstated clause in Republic Act No. 8042 subjected the money
claims of illegally dismissed overseas workers with an unexpired term of at least a year to a cap of
three months worth of their salary.114 There was no such limitation on the money claims of illegally
terminated local workers with fixed-term employment.115

We observed that illegally dismissed overseas workers whose employment contracts had a term of
less than one year were granted the amount equivalent to the unexpired portion of their employment
contracts.116 Meanwhile, illegally dismissed overseas workers with employment terms of at least a
year were granted a cap equivalent to three months of their salary for the unexpired portions of their
contracts.117

Observing the terminologies used inthe clause, we also found that "the subject clause creates a sub-
layer of discrimination among OFWs whose contract periods are for more than one year: those who
are illegally dismissed with less than one year left in their contracts shall be entitled to their salaries
for the entire unexpired portion thereof, while those who are illegally dismissed with one year or
more remaining in their contracts shall be covered by the reinstated clause, and their monetary
benefits limited to their salaries for three months only."118

We do not need strict scrutiny to conclude that these classifications do not rest on any real or
substantial distinctions that would justify different treatments in terms of the computation of money
claims resulting from illegal termination.

Overseas workers regardless of their classifications are entitled to security of tenure, at least for the
period agreed upon in their contracts. This means that they cannot be dismissed before the end of
their contract terms without due process. If they were illegally dismissed, the workers’ right to
security of tenure is violated.

The rights violated when, say, a fixed-period local worker is illegally terminated are neither greater
than norless than the rights violated when a fixed-period overseas worker is illegally terminated. It is
state policy to protect the rights of workers withoutqualification as to the place of employment.119 In
both cases, the workers are deprived of their expected salary, which they could have earned had
they not been illegally dismissed. For both workers, this deprivation translates to economic insecurity
and disparity.120 The same is true for the distinctions between overseas workers with an employment
contract of less than one year and overseas workers with at least one year of employment contract,
and between overseas workers with at least a year left in their contracts and overseas workers with
less than a year left in their contracts when they were illegally dismissed.

For this reason, we cannot subscribe to the argument that "[overseas workers] are contractual
employeeswho can never acquire regular employment status, unlike local workers"121 because it
already justifies differentiated treatment in terms ofthe computation of money claims.122

Likewise, the jurisdictional and enforcement issues on overseas workers’ money claims do not justify
a differentiated treatment in the computation of their money claims.123 If anything, these issues justify
an equal, if not greater protection and assistance to overseas workers who generally are more prone
to exploitation given their physical distance from our government.

We also find that the classificationsare not relevant to the purpose of the law, which is to "establish a
higher standard of protection and promotion of the welfare of migrant workers, their families and
overseas Filipinos in distress, and for other purposes."124 Further, we find specious the argument that
reducing the liability of placement agencies "redounds to the benefit of the [overseas] workers."125

Putting a cap on the money claims of certain overseas workers does not increase the standard of
protection afforded to them. On the other hand, foreign employers are more incentivizedby the
reinstated clause to enter into contracts of at least a year because it gives them more flexibility to
violate our overseas workers’ rights. Their liability for arbitrarily terminating overseas workers is
decreased at the expense of the workers whose rights they violated. Meanwhile, these overseas
workers who are impressed with an expectation of a stable job overseas for the longer contract
period disregard other opportunities only to be terminated earlier. They are left with claims that are
less than what others in the same situation would receive. The reinstated clause, therefore, creates
a situation where the law meant to protect them makes violation of rights easier and simply benign to
the violator.

As Justice Brion said in his concurring opinion in Serrano:

Section 10 of R.A. No. 8042 affects these well-laid rules and measures, and in fact provides a
hidden twist affecting the principal/employer’s liability. While intended as an incentive accruing to
recruitment/manning agencies, the law, as worded, simply limits the OFWs’ recovery in
wrongfuldismissal situations. Thus, it redounds to the benefit of whoever may be liable, including the
principal/employer – the direct employer primarily liable for the wrongful dismissal. In this sense,
Section 10 – read as a grant of incentives to recruitment/manning agencies – oversteps what it aims
to do by effectively limiting what is otherwise the full liability of the foreign principals/employers.
Section 10, in short, really operates to benefit the wrong party and allows that party, without
justifiable reason, to mitigate its liability for wrongful dismissals. Because of this hidden twist, the
limitation ofliability under Section 10 cannot be an "appropriate" incentive, to borrow the term that
R.A. No. 8042 itself uses to describe the incentive it envisions under its purpose clause.

What worsens the situation is the chosen mode of granting the incentive: instead of a grant that, to
encourage greater efforts at recruitment, is directly related to extra efforts undertaken, the law simply
limits their liability for the wrongful dismissals of already deployed OFWs. This is effectively a legally-
imposed partial condonation of their liability to OFWs, justified solely by the law’s intent to encourage
greater deployment efforts. Thus, the incentive,from a more practical and realistic view, is really part
of a scheme to sell Filipino overseas labor at a bargain for purposes solely of attracting the market. .
..
The so-called incentive is rendered particularly odious by its effect on the OFWs — the benefits
accruing to the recruitment/manning agencies and their principals are takenfrom the pockets of the
OFWs to whom the full salaries for the unexpired portion of the contract rightfully belong. Thus, the
principals/employers and the recruitment/manning agencies even profit from their violation of the
security of tenure that an employment contract embodies. Conversely, lesser protection is afforded
the OFW, not only because of the lessened recovery afforded him or her by operation of law, but
also because this same lessened recovery renders a wrongful dismissal easier and less onerous to
undertake; the lesser cost of dismissing a Filipino will always bea consideration a foreign employer
will take into account in termination of employment decisions. . . .126

Further, "[t]here can never be a justification for any form of government action that alleviates the
burden of one sector, but imposes the same burden on another sector, especially when the favored
sector is composed of private businesses suchas placement agencies, while the disadvantaged
sector is composed ofOFWs whose protection no less than the Constitution commands. The idea
thatprivate business interest can be elevated to the level of a compelling state interest is odious."127

Along the same line, we held that the reinstated clause violates due process rights. It is arbitrary as it
deprives overseas workers of their monetary claims without any discernable valid purpose.128

Respondent Joy Cabiles is entitled to her salary for the unexpired portion of her contract, in
accordance with Section 10 of Republic Act No. 8042. The award of the three-month equivalence of
respondent’s salary must be modified accordingly. Since she started working on June 26, 1997 and
was terminated on July 14, 1997, respondent is entitled to her salary from July 15, 1997 to June 25,
1998. "To rule otherwise would be iniquitous to petitioner and other OFWs, and would,in effect, send
a wrong signal that principals/employers and recruitment/manning agencies may violate an OFW’s
security of tenure which an employment contract embodies and actually profit from such violation
based on an unconstitutional provision of law."129

III

On the interest rate, the Bangko Sentral ng Pilipinas Circular No. 799 of June 21, 2013, which
revised the interest rate for loan or forbearance from 12% to 6% in the absence of stipulation,applies
in this case. The pertinent portions of Circular No. 799, Series of 2013, read: The Monetary Board, in
its Resolution No. 796 dated 16 May 2013, approved the following revisions governing the rate of
interest in the absence of stipulation in loan contracts, thereby amending Section 2 of Circular No.
905, Series of 1982:

Section 1. The rate of interest for the loan or forbearance of any money, goods or credits and the
rate allowed in judgments, in the absence of an express contract as to such rateof interest, shall be
six percent (6%) per annum.

Section 2. In view of the above, Subsection X305.1 of the Manual of Regulations for Banks and
Sections 4305Q.1, 4305S.3 and 4303P.1 of the Manual of Regulations for Non-Bank Financial
Institutions are hereby amended accordingly.

This Circular shall take effect on 1 July 2013.

Through the able ponencia of Justice Diosdado Peralta, we laid down the guidelines in computing
legal interest in Nacar v. Gallery Frames:130

II. With regard particularly to an award of interest in the concept of actual and compensatory
damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:
 1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a
loan or forbearance of money, the interest due should be that which may have been
stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time
it is judicially demanded. In the absence of stipulation, the rate of interest shall be 6% per
annum to be computed from default, i.e., from judicial or extrajudicial demand under and
subject to the provisions of Article 1169 of the Civil Code.

2. When an obligation, not constituting a loan or forbearance of money, is breached, an

interest on the amount of damages awarded may be imposed at the discretion of the court at
the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or
damages, except when or until the demand can be established with reasonable certainty.
Accordingly, where the demand is established with reasonable certainty, the interest shall
begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil
Code), but when such certainty cannot be so reasonably established at the time the demand
is made, the interest shall begin to run only from the date the judgment of the court is made
(at which time the quantification of damages may be deemed to have been reasonably
ascertained). The actual base for the computation of legal interest shall, in any case, be on
the amount finally adjudged. 3. When the judgment of the court awarding a sum of money
becomes final and executory, the rate of legal interest, whether the case falls under
paragraph 1 or paragraph 2, above, shall be 6% per annum from such finality until its
satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of
credit.

And, in addition to the above, judgments that have become final and executory prior to July 1, 2013,
shall not be disturbed and shall continue to be implemented applying the rate of interest fixed
therein.131

Circular No. 799 is applicable only in loans and forbearance of money, goods, or credits, and in
judgments when there is no stipulation on the applicable interest rate. Further, it is only applicable if
the judgment did not become final and executory before July 1, 2013.132

We add that Circular No. 799 is not applicable when there is a law that states otherwise. While the
Bangko Sentral ng Pilipinas has the power to set or limit interest rates,133 these interest rates do not
apply when the law provides that a different interest rate shall be applied. "[A] Central Bank Circular
cannot repeal a law. Only a law can repeal another law."134

For example, Section 10 of Republic Act No. 8042 provides that unlawfully terminated overseas
workers are entitled to the reimbursement of his or her placement fee with an interest of 12% per
annum. Since Bangko Sentral ng Pilipinas circulars cannotrepeal Republic Act No. 8042, the
issuance of Circular No. 799 does not have the effect of changing the interest on awards for
reimbursement of placement fees from 12% to 6%. This is despite Section 1 of Circular No. 799,
which provides that the 6% interest rate applies even to judgments.

Moreover, laws are deemed incorporated in contracts. "The contracting parties need not repeat
them. They do not even have to be referred to. Every contract, thus, contains not only what has
been explicitly stipulated, but the statutory provisions that have any bearing on the matter."135 There
is, therefore, an implied stipulation in contracts between the placement agency and the
overseasworker that in case the overseas worker is adjudged as entitled to reimbursement of his or
her placement fees, the amount shall be subject to a 12% interest per annum. This implied
stipulation has the effect of removing awards for reimbursement of placement fees from Circular No.
799’s coverage.
The same cannot be said for awardsof salary for the unexpired portion of the employment contract
under Republic Act No. 8042. These awards are covered by Circular No. 799 because the law does
not provide for a specific interest rate that should apply.

In sum, if judgment did not become final and executory before July 1, 2013 and there was no
stipulation in the contract providing for a different interest rate, other money claims under Section 10
of Republic Act No. 8042 shall be subject to the 6% interest per annum in accordance with Circular
No. 799.

This means that respondent is also entitled to an interest of 6% per annum on her money claims
from the finality of this judgment.

IV

Finally, we clarify the liabilities ofWacoal as principal and petitioner as the employment agency that
facilitated respondent’s overseas employment.

Section 10 of the Migrant Workers and Overseas Filipinos Act of 1995 provides that the foreign
employer and the local employment agency are jointly and severally liable for money claims
including claims arising out of an employer-employee relationship and/or damages. This section also
provides that the performance bond filed by the local agency shall be answerable for such money
claims or damages if they were awarded to the employee.

This provision is in line with the state’s policy of affording protection to labor and alleviating workers’
plight.136

In overseas employment, the filing of money claims against the foreign employer is attended by
practical and legal complications. The distance of the foreign employer alonemakes it difficult for an
1âwphi 1

overseas worker to reach it and make it liable for violations of the Labor Code. There are also
possible conflict of laws, jurisdictional issues, and procedural rules that may be raised to frustrate an
overseas worker’sattempt to advance his or her claims.

It may be argued, for instance, that the foreign employer must be impleaded in the complaint as an
indispensable party without which no final determination can be had of an action.137

The provision on joint and several liability in the Migrant Workers and Overseas Filipinos Act of 1995
assures overseas workers that their rights will not be frustrated with these complications. The
fundamental effect of joint and several liability is that "each of the debtors is liable for the entire
obligation."138 A final determination may, therefore, be achieved even if only oneof the joint and
several debtors are impleaded in an action. Hence, in the case of overseas employment, either the
local agency or the foreign employer may be sued for all claims arising from the foreign employer’s
labor law violations. This way, the overseas workers are assured that someone — the foreign
employer’s local agent — may be made to answer for violationsthat the foreign employer may have
committed.

The Migrant Workers and Overseas Filipinos Act of 1995 ensures that overseas workers have
recourse in law despite the circumstances of their employment. By providing that the liability of the
foreign employer may be "enforced to the full extent"139 against the local agent,the overseas worker is
assured of immediate and sufficientpayment of what is due them.140
Corollary to the assurance of immediate recourse in law, the provision on joint and several liability in
the Migrant Workers and Overseas Filipinos Act of 1995 shifts the burden of going after the foreign
employer from the overseas worker to the local employment agency. However, it must be
emphasized that the local agency that is held to answer for the overseas worker’s money claims is
not leftwithout remedy. The law does not preclude it from going after the foreign employer for
reimbursement of whatever payment it has made to the employee to answer for the money claims
against the foreign employer.

A further implication of making localagencies jointly and severally liable with the foreign employer is
thatan additional layer of protection is afforded to overseas workers. Local agencies, which are
businesses by nature, are inoculated with interest in being always on the lookout against foreign
employers that tend to violate labor law. Lest they risk their reputation or finances, local
agenciesmust already have mechanisms for guarding against unscrupulous foreign employers even
at the level prior to overseas employment applications.

With the present state of the pleadings, it is not possible to determine whether there was indeed a
transfer of obligations from petitioner to Pacific. This should not be an obstacle for the respondent
overseas worker to proceed with the enforcement of this judgment. Petitioner is possessed with the
resources to determine the proper legal remedies to enforce its rights against Pacific, if any.

Many times, this court has spoken on what Filipinos may encounter as they travel into the farthest
and mostdifficult reaches of our planet to provide for their families. In Prieto v. NLRC:141

The Court is not unaware of the many abuses suffered by our overseas workers in the foreign land
where they have ventured, usually with heavy hearts, in pursuit of a more fulfilling future. Breach of
contract, maltreatment, rape, insufficient nourishment, sub-human lodgings, insults and other forms
of debasement, are only a few of the inhumane acts towhich they are subjected by their foreign
employers, who probably feel they can do as they please in their own country. Whilethese workers
may indeed have relatively little defense against exploitation while they are abroad, that
disadvantage must not continue to burden them when they return to their own territory to voice their
muted complaint. There is no reason why, in their very own land, the protection of our own laws
cannot be extended to them in full measure for the redress of their grievances.142

But it seems that we have not said enough.

We face a diaspora of Filipinos. Their travails and their heroism can be told a million times over;
each of their stories as real as any other. Overseas Filipino workers brave alien cultures and the
heartbreak of families left behind daily. They would count the minutes, hours, days, months, and
years yearning to see their sons and daughters. We all know of the joy and sadness when they
come home to see them all grown up and, being so, they remember what their work has cost them.
Twitter accounts, Facetime, and many other gadgets and online applications will never substitute for
their lost physical presence.

Unknown to them, they keep our economy afloat through the ebb and flow of political and economic
crises. They are our true diplomats, they who show the world the resilience, patience, and creativity
of our people. Indeed, we are a people who contribute much to the provision of material creations of
this world.

This government loses its soul if we fail to ensure decent treatment for all Filipinos. We default by
limiting the contractual wages that should be paid to our workers when their contracts are breached
by the foreign employers. While we sit, this court will ensure that our laws will reward our overseas
workers with what they deserve: their dignity.

Inevitably, their dignity is ours as weil.

WHEREFORE, the petition is DENIED. The decision of the Court of Appeals is AFFIRMED with
modification. Petitioner Sameer Overseas Placement Agency is ORDERED to pay respondent Joy
C. Cabiles the amount equivalent to her salary for the unexpired portion of her employment contract
at an interest of 6% per annum from the finality of this judgment. Petitioner is also ORDERED to
reimburse respondent the withheld NT$3,000.00 salary and pay respondent attorney's fees of
NT$300.00 at an interest of 6% per annum from the finality of this judgment.

The clause, "or for three (3) months for every year of the unexpired term, whichever is less" in
Section 7 of Republic Act No. 10022 amending Section 10 of Republic Act No. 8042 is declared
unconstitutional and, therefore, null and void.

SO ORDERED.

G.R. No. 207010 February 18, 2015

MAERSK-FILIPINAS CREWING, INC., A.P. MOLLER SINGAPORE PTE. LIMITED, and JESUS
AGBAYANI,Petitioners,
vs.
TORIBIO C. A VESTRUZ,* Respondent.

DECISION

PERLAS-BERNABE, J.:

Assailed in this petition for review on certiorari1 are the Decision2 dated January 4, 2013 and the
Resolution3dated April 16, 2013 rendered by the Court of Appeals (CA) in CA-G.R. SP No. 125773
which reversed and set aside the Decision4 dated April 26, 2012 and the Resolution5 dated June 18,
2012 of the National Labor Relations Commission (NLRC) in NLRC NCR Case No. (M) 07-10704-11
[NLRC LAC No. (OFW-M)-01-000123-12] dismissing the illegal dismissal complaint filed by
respondent Toribio C. Avestruz (Avestruz) and awarding him nominal damages.

The Facts

On April 28, 2011, petitioner Maersk-Filipinas Crewing, Inc. (Maersk), on behalf of its foreign
principal, petitioner A.P. Moller Singapore Pte. Ltd. (A.P. Moller), hired Avestruz as Chief Cook on
board the vessel M/V Nedlloyd Drake for a period of six (6) months, with a basic monthly salary of
US$698.00.6 Avestruz boarded the vessel on May 4, 2011.7

On June 22, 2011, in the course of the weekly inspection of the vessel’s galley, Captain Charles C.
Woodward (Captain Woodward) noticed that the cover of the garbage bin in the kitchen near the
washing area was oily. As part of Avestruz’s job was to ensure the cleanliness of the galley, Captain
Woodward called Avestruz and asked him to stand near the garbage bin where the former took the
latter’s right hand and swiped it on the oily cover of the garbage bin, telling Avestruz to feel it.
Shocked, Avestruz remarked, "Sir if you are looking for [dirt], you can find it[;] the ship is big. Tell us
if you want to clean and we will clean it." Captain Woodward replied by shoving Avestruz’s chest, to
which the latter complained and said, "Don’t touch me," causing an argument to ensue between
them.8

Later that afternoon, Captain Woodward summoned and required9 Avestruz to state in writing what
transpired in the galley that morning. Avestruz complied and submitted his written statement10 on that
same day. Captain Woodward likewise asked Messman Jomilyn P. Kong (Kong) to submit his own
written statement regarding the incident, to which the latter immediately complied.11 On the very
same day, Captain Woodward informed Avestruz that he would be dismissed from service and be
disembarked in India. On July 3,2011, Avestruz was disembarked in Colombo, Sri Lanka and arrived
in the Philippines on July 4, 2011.12 Subsequently, he filed a complaint13 for illegal dismissal, payment
for the unexpired portion of his contract, damages, and attorney’s fees against Maersk, A.P. Moller,
and Jesus Agbayani (Agbayani), an officer14 of Maersk.15 He alleged that no investigation or hearing
was conducted nor was he given the chance to defend himself before he was dismissed, and that
Captain Woodward failed to observe the provisions under Section 17 of the Philippine Overseas
Employment Administration (POEA) Standard Employment Contract (POEA-SEC) on disciplinary
procedures. Also, he averred that he was not given any notice stating the ground for his
dismissal.16 Additionally, he claimed that the cost of his airfare in the amount of US$606.15 was
deducted from his wages.17 Furthermore, Avestruz prayed for the award of the following amounts: (a)
US$5,372.00 representing his basic wages, guaranteed overtime, and vacation leave; (b) on board
allowance of US$1,936.00; (c) ship maintenance bonus of US$292.00; (d) hardship allowance of
US$8,760.00; (e) 300,000.00 as moral damages, (f) 200,000.00 as exemplary damages; and (g)
attorney’s fees of ten percent (10%) of the total monetary award.18

In their defense,19 Maersk, A.P. Moller, and Agbayani (petitioners) claimed that during his stint on the
vessel, Avestruz failed to attend to his tasks, specifically to maintain the cleanliness of the galley,
which prompted Captain Woodward to issue weekly reminders.20 Unfortunately, despite the
reminders, Avestruz still failed to perform his duties properly.21 On June 22, 2011, when again asked
to comply with the aforesaid duty, Avestruz became angry and snapped, retorting that he did not
have time to do all the tasks required of him. As a result, Captain Woodward initiated disciplinary
proceedings and informed Avestruz during the hearing of the offenses he committed, i.e., his
repeated failure to follow directives pertaining to his duty to maintain the cleanliness of the galley, as
well as his act of insulting an officer.22 Thereafter, he was informed of his dismissal from service due
to insubordination.23 Relative thereto, Captain Woodward sent two (2) electronic mail messages24 (e-
mails) to Maersk explaining the decision to terminate Avestruz’s employment and requesting for
Avestruz’s replacement. Avestruz was discharged from the vessel and arrived in the Philippines on
July 4, 2011.25 Petitioners maintained that Avestruz was dismissed for a just and valid cause and is,
therefore, not entitled to recover his salary for the unexpired portion of his contract.26 They likewise
claimed that they were justified in deducting his airfare from his salary, and that the latter was not
entitled to moral and exemplary damages and attorney’s fees.27 Hence, they prayed that the
complaint be dismissed for lack of merit.28

The LA Ruling

In a Decision29 dated November 29, 2011, the Labor Arbiter (LA) dismissed Avestruz’s complaint for
lack of merit. The LA found that he failed to perform his duty of maintaining cleanliness in the galley,
and that he also repeatedly failed to obey the directives of his superior, which was tantamount to
insubordination.30 In support of its finding, the LA cited the Collective Bargaining Agreement31 (CBA)
between the parties which considers the act of insulting a superior officer by words or deed as an act
of insubordination.32

Aggrieved, Avestruz appealed33 to the NLRC.

 The NLRC Ruling

In a Decision34 dated April 26, 2012, the NLRC sustained the validity of Avestruz’s dismissal but
found that petitioners failed to observe the procedures laid down in Section 17 of the POEA-
SEC,35 which states:

SECTION 17. DISCIPLINARY PROCEDURES.

The Master shall comply with the following disciplinary procedures against an erring seafarer:

A. The Master shall furnish the seafarer with a written notice containing the following:

1. Grounds for the charges as listed in Section 33 of this Contract or analogous act
constituting the same.

2. Date, time and place for a formal investigation of the charges against the seafarer
concerned. B. The Master or his authorized representative shall conduct the
investigation or hearing, giving the seafarer the opportunity to explain or defend
himself against the charges. These procedures must be duly documented and
entered into the ship’s logbook.

C. If after the investigation or hearing, the Master is convinced that imposition of a penalty is
justified, the Master shall issue a written notice of penalty and the reasons for it to the
seafarer, with copies furnished to the Philippine agent.

D. Dismissal for just cause may be effected by the Master without furnishing the seafarer
with a notice of dismissal if there is a clear and existing danger to the safety of the crew or
the vessel. The Master shall send a complete report to the manning agency substantiated by
witnesses, testimonies and any other documents in support thereof. (Emphases supplied)

As the records are bereft of evidence showing compliance with the foregoing rules, the NLRC held
petitioners jointly and severally liable to pay Avestruz the amount of 30,000.00 by way of nominal
damages.36 Avestruz moved for reconsideration37 of the aforesaid Decision, which was denied in the
Resolution38 dated June 18, 2012. Dissatisfied, he elevated the matter to the CA via petition for
certiorari.39

The CA Ruling

In a Decision40 dated January 4, 2013, the CA reversed and set aside the rulings of the NLRC and
instead, found Avestruz to have been illegally dismissed. Consequently, it directed petitioners to pay
him, jointly and severally, the full amount of his placement fee and deductions made, with interest at
twelve percent (12%) per annum, as well as his salaries for the unexpired portion of his contract, and
attorney’s fees of ten percent (10%) of the total award. All other money claims were denied for lack
of merit.41

In so ruling, the CA found that the conclusion of the NLRC, which affirmed that of the LA, that
Avestruz was lawfully dismissed, was not supported by substantial evidence, there being no factual
basis for the charge of insubordination which petitioners claimed was the ground for Avestruz’s
dismissal. It found that petitioners, as employers, were unable to discharge the burden of proof
required of them to establish that Avestruz was guilty of insubordination, which necessitates the
occurrence of two (2) conditions as a just cause for dismissal: (1) the employee’s assailed conduct
must have been willful, that is, characterized by a wrongful and perverse attitude; and (2) the order
violated must have been reasonable, lawful, made known to the employee, and must pertain to the
duties which he had been engaged to discharge. The CA found that, contrary to the rulings of the
labor tribunals, there was no evidence on record to bolster petitioners’ claims that Avestruz willfully
failed to comply with his duties as Chief Cook and that he displayed a perverse and wrongful
attitude.42

Moreover, it gave more credence to Avestruz’s account of the incident in the galley on June 22,
2011, being supported in part by the statement43 of Kong, who witnessed the incident. On the other
hand, the e-mails sent by Captain Woodward to Maersk were uncorroborated. On this score, the CA
observed the absence of any logbook entries to support petitioners’ stance.44 Similarly, the CA found
that petitioners failed to accord procedural due process to Avestruz, there being no compliance with
the requirements of Section 17 of the POEA-SEC as above-quoted, or the "two-notice rule." It held
that the statement45 Captain Woodward issued to Avestruz neither contained the grounds for which
he was being charged nor the date, time, and place for the conduct of a formal investigation.
Likewise, Captain Woodward failed to give Avestruz any notice of penalty and the reasons for its
imposition, with copies thereof furnished to the Philippine Agent.46

In arriving at the monetary awards given to Avestruz, the CA considered the provisions of Section 7
of Republic Act No. (RA) 10022,47 amending RA 8042,48 which grants upon the illegally dismissed
overseas worker "the full reimbursement [of] 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." However, with respect to Avestruz’s claims for overtime and leave pay, the
same were denied for failure to show entitlement thereto. All other monetary claims were likewise
denied in the absence of substantial evidence to prove the same. Finally, the CA awarded attorney’s
fees of ten percent (10%) of the total monetary award in accordance with Article 11149 of the Labor
Code.50

Petitioners moved for reconsideration,51 which the CA denied in its Resolution52 dated April 16, 2013,
hence, this petition.

The Issue Before the Court

The sole issue advanced for the Court’s resolution is whether or not the CA erred when it reversed
and set aside the ruling of the NLRC finding that Avestruz was legally dismissed and accordingly,
dismissing the complaint, albeit with payment of nominal damages for violation of procedural due
process.

The Court’s Ruling

The petition is devoid of merit.

Generally, a re-examination of factual findings cannot be done by the Court acting on a petition for
review on certiorari because the Court is not a trier of facts but reviews only questions of law.53 Thus,
in petitions for review on certiorari, only questions of law may generally be put into issue. This rule,
however, admits of certain exceptions.54 In this case, considering that the factual findings of the LA
and the NLRC, on the one hand, and the CA, on the other hand, are contradictory, the general rule
that only legal issues may be raised in a petition for review on certiorari under Rule 45 of the Rules
of Court does not apply,55 and the Court retains the authority to pass upon the evidence presented
and draw conclusions therefrom.56
It is well-settled that the burden of proving that the termination of an employee was for a just or
authorized cause lies with the employer. If the employer fails to meet this burden, the conclusion
would be that the dismissal was unjustified and, therefore, illegal.57 In order to discharge this burden,
the employer must present substantial evidence, which is defined as that amount of relevant
evidence which a reasonable mind might accept as adequate to justify a conclusion,58 and not based
on mere surmises or conjectures.59

After a punctilious examination of the evidence on record, the Court finds that the CA did not err in
reversing and setting aside the factual conclusions of the labor tribunals that Avestruz’s dismissal
was lawful. Instead, the Court finds that there was no just or valid cause for his dismissal, hence, he
was illegally dismissed.

Petitioners maintain that Avestruz was dismissed on the ground of insubordination, consisting of his
"repeated failure to obey his superior’s order to maintain cleanliness in the galley of the vessel" as
well as his act of "insulting a superior officer by words or deeds."60 In support of this contention,
petitioners presented as evidence the e-mails sent by Captain Woodward, both dated June 22,
2011, and time-stamped 10:07 a.m. and 11:40 a.m., respectively, which they claim chronicled the
relevant circumstances that eventually led to Avestruz’s dismissal.

The Court, however, finds these e-mails to be uncorroborated and self-serving, and therefore, do not
satisfy the requirement of substantial evidence as would sufficiently discharge the burden of proving
that Avestruz was legally dismissed. On the contrary, petitioners failed to prove that he committed
acts of insubordination which would warrant his dismissal.

Insubordination, as a just cause for the dismissal of an employee, necessitates the concurrence of at
least two requisites: (1) the employee’s assailed conduct must have been willful, that is,
characterized by a wrongful and perverse attitude; and (2) the order violated must have been
reasonable, lawful, made known to the employee, and must pertain to the duties which he had been
engaged to discharge.61

In this case, the contents of Captain Woodward’s e-mails do not establish that Avestruz’s conduct
had been willful, or characterized by a wrongful and perverse attitude. The Court concurs with the
CA’s observation that Avestruz’s statement62 regarding the incident in the galley deserves more
credence, being corroborated63 by Kong, a messman who witnessed the same.

Conversely, apart from Captain Woodward’s e-mails, no other evidence was presented by the
petitioners to support their claims. While rules of evidence are not strictly observed in proceedings
before administrative bodies,64 petitioners should have offered additional proof to corroborate the
statements65 described therein. Thus, in Ranises v. NLRC66 which involved a seafarer who was
repatriated to the Philippines for allegedly committing illegal acts amounting to a breach of trust, as
based on a telex dispatch by the Master of the vessel, the Court impugned and eventually vetoed
the credence given by the NLRC upon the telex, to wit: Unfortunately, the veracity of the allegations
contained in the aforecited telex was never proven by respondent employer. Neither was it shown
that respondent employer exerted any effort to even verify the truthfulness of Capt. Sonoda’s report
and establish petitioner’s culpability for his alleged illegal acts. Worse, no other evidence was
submitted to corroborate the charges against petitioner.67

Likewise, in Skippers United Pacific, Inc. v. NLRC,68 the Court ruled that the lone evidence offered by
the employer to justify the seafarer’s dismissal, i.e., the telexed Chief Engineer’s Report which
contained the causes for said dismissal, did not suffice to discharge the onus required of the
employer to show that the termination of an employee’s service was valid.69 The same doctrine was
enunciated in Pacific Maritime Services, Inc. v. Ranay,70 where the Court held that the telefax
transmission purportedly executed and signed by a person on board the vessel is insufficient
evidence to prove the commission of the acts constituting the grounds for the dismissal of two
seafarers, being uncorroborated evidence.71

As in this case, it was incumbent upon the petitioners to present other substantial evidence to bolster
their claim that Avestruz committed acts that constitute insubordination aswould warrant his
dismissal. At the least, they could have offered in evidence entries in the ship’s official logbook
showing the infractions or acts of insubordination purportedly committed by Avestruz, the ship’s
logbook being the official repository of the day-to-day transactions and occurrences on board the
vessel.72 Having failed to do so, their position that Avestruz was lawfully dismissed cannot be
sustained.

Similarly, the Court affirms the finding of the CA that Avestruz was not accorded procedural due
process, there being no compliance with the provisions of Section 17 of the POEA-SEC as above-
cited, which requires the "two-notice rule." As explained in Skippers Pacific, Inc. v. Mira:73 An erring
seaman is given a written notice of the charge against him and is afforded an opportunity to explain
or defend himself. Should sanctions be imposed, then a written notice of penalty and the reasons for
it shall be furnished the erring seafarer. It is only in the exceptional case of clear and existing danger
to the safety of the crew or vessel that the required notices are dispensed with; but just the same, a
complete report should be sent to the manning agency, supported by substantial evidence of the
findings.74

In this case, there is dearth of evidence to show that Avestruz had been given a written notice of the
charge against him, or that he was given the opportunity to explain or defend himself. The
statement75 given by Captain Woodward requiring him to explain in writing the events that transpired
at the galley in the morning of June 22, 2011 hardly qualifies as a written notice of the charge
against him, nor was it an opportunity for Avestruz to explain or defend himself. While Captain
Woodward claimed in his e-mail76 that he conducted a "disciplinary hearing" informing Avestruz of his
inefficiency, no evidence was presented to support the same.

Neither was Avestruz given a written notice of penalty and the reasons for its imposition. Instead,
1âwphi 1

Captain Woodward verbally informed him that he was dismissed from service and would be
disembarked from the vessel. It bears stressing that only in the exceptional case of clear and
existing danger to the safety of the crew or vessel that the required notices may be dispensed with,
and, once again, records are bereft of evidence showing that such was the situation when Avestruz
was dismissed.

Finally, with respect to the monetary awards given to Avestruz, the Court finds the same to be in
consonance with Section 10 of RA 8042, as amended by RA 10022, which reads:

Section 10. Money claims. – x x x.

xxxx

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 of 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.76

xxxx
Similarly, the Court affirms the grant of attorney's fees of ten percent (10%) of the total award. All
other monetary awards are denied for lack of merit.

WHEREFORE, the petition is DENIED. The Decision dated January 4, 2013 and the Resolution
dated April 16, 2013 rendered by the Court of Appeals in CA-G.R. SP No. 125773 are hereby
AFFIRMED.

SO ORDERED.

G.R. No. 161757 January 25, 2006

SUNACE INTERNATIONAL MANAGEMENT SERVICES, INC.Petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, Second Division; HON. ERNESTO S.
DINOPOL, in his capacity as Labor Arbiter, NLRC; NCR, Arbitration Branch, Quezon City and
DIVINA A. MONTEHERMOZO,Respondents.

DECISION

CARPIO MORALES, J.:

Petitioner, Sunace International Management Services (Sunace), a corporation duly organized and
existing under the laws of the Philippines, deployed to Taiwan Divina A. Montehermozo (Divina) as a
domestic helper under a 12-month contract effective February 1, 1997.1 The deployment was with
the assistance of a Taiwanese broker, Edmund Wang, President of Jet Crown International Co., Ltd.

After her 12-month contract expired on February 1, 1998, Divina continued working for her
Taiwanese employer, Hang Rui Xiong, for two more years, after which she returned to the
Philippines on February 4, 2000.

Shortly after her return or on February 14, 2000, Divina filed a complaint2 before the National Labor
Relations Commission (NLRC) against Sunace, one Adelaide Perez, the Taiwanese broker, and the
employer-foreign principal alleging that she was jailed for three months and that she was underpaid.

The following day or on February 15, 2000, Labor Arbitration Associate Regina T. Gavin issued
Summons3 to the Manager of Sunace, furnishing it with a copy of Divina’s complaint and directing it
to appear for mandatory conference on February 28, 2000.

The scheduled mandatory conference was reset. It appears to have been concluded, however.

On April 6, 2000, Divina filed her Position Paper4 claiming that under her original one-year contract
and the 2-year extended contract which was with the knowledge and consent of Sunace, the
following amounts representing income tax and savings were deducted:

Year Deduction for Income Tax Deduction for Savings

1997 NT10,450.00 NT23,100.00
1998 NT9,500.00 NT36,000.00
1999 NT13,300.00 NT36,000.00;5
and while the amounts deducted in 1997 were refunded to her, those deducted in 1998 and 1999
were not. On even date, Sunace, by its Proprietor/General Manager Maria Luisa Olarte, filed its
Verified Answer and Position Paper,6 claiming as follows, quoted verbatim:

COMPLAINANT IS NOT ENTITLED FOR THE REFUND OF HER 24 MONTHS SAVINGS

3. Complainant could not anymore claim nor entitled for the refund of her 24 months savings as she
already took back her saving already last year and the employer did not deduct any money from her
salary, in accordance with a Fascimile Message from the respondent SUNACE’s employer, Jet
Crown International Co. Ltd., a xerographic copy of which is herewith attached as ANNEX
"2" hereof;

COMPLAINANT IS NOT ENTITLED TO REFUND OF HER 14 MONTHS TAX AND PAYMENT OF

ATTORNEY’S FEES

4. There is no basis for the grant of tax refund to the complainant as the she finished her one year
contract and hence, was not illegally dismissed by her employer. She could only lay claim over the
tax refund or much more be awarded of damages such as attorney’s fees as said reliefs are
available only when the dismissal of a migrant worker is without just valid or lawful cause as defined
by law or contract.

The rationales behind the award of tax refund and payment of attorney’s fees is not to enrich the
complainant but to compensate him for actual injury suffered. Complainant did not suffer injury,
hence, does not deserve to be compensated for whatever kind of damages.

Hence, the complainant has NO cause of action against respondent SUNACE for monetary claims,
considering that she has been totally paid of all the monetary benefits due her under her
Employment Contract to her full satisfaction.

6. Furthermore, the tax deducted from her salary is in compliance with the Taiwanese law, which
respondent SUNACE has no control and complainant has to obey and this Honorable Office has no
authority/jurisdiction to intervene because the power to tax is a sovereign power which the
Taiwanese Government is supreme in its own territory. The sovereign power of taxation of a state is
recognized under international law and among sovereign states.

7. That respondent SUNACE respectfully reserves the right to file supplemental Verified Answer
and/or Position Paper to substantiate its prayer for the dismissal of the above case against the
herein respondent. AND BY WAY OF -

x x x x (Emphasis and underscoring supplied)

Reacting to Divina’s Position Paper, Sunace filed on April 25, 2000 an ". . . answer to complainant’s
position paper"7 alleging that Divina’s 2-year extension of her contract was without its knowledge and
consent, hence, it had no liability attaching to any claim arising therefrom, and Divina in fact
executed a Waiver/Quitclaim and Release of Responsibility and an Affidavit of Desistance, copy of
each document was annexed to said ". . . answer to complainant’s position paper."

To Sunace’s ". . . answer to complainant’s position paper," Divina filed a 2-page reply,8 without,
however, refuting Sunace’s disclaimer of knowledge of the extension of her contract and without
saying anything about the Release, Waiver and Quitclaim and Affidavit of Desistance.
The Labor Arbiter, rejected Sunace’s claim that the extension of Divina’s contract for two more years
was without its knowledge and consent in this wise:

We reject Sunace’s submission that it should not be held responsible for the amount withheld
because her contract was extended for 2 more years without its knowledge and consent because as
Annex "B"9 shows, Sunace and Edmund Wang have not stopped communicating with each
other and yet the matter of the contract’s extension and Sunace’s alleged non-consent thereto has
not been categorically established.

What Sunace should have done was to write to POEA about the extension and its objection thereto,
copy furnished the complainant herself, her foreign employer, Hang Rui Xiong and the Taiwanese
broker, Edmund Wang.

And because it did not, it is presumed to have consented to the extension and should be liable for
anything that resulted thereform (sic).10 (Underscoring supplied)

The Labor Arbiter rejected too Sunace’s argument that it is not liable on account of Divina’s
execution of a Waiver and Quitclaim and an Affidavit of Desistance. Observed the Labor Arbiter:

Should the parties arrive at any agreement as to the whole or any part of the dispute, the same shall
be reduced to writing and signed by the parties and their respective counsel (sic), if any, before the
Labor Arbiter.

The settlement shall be approved by the Labor Arbiter after being satisfied that it was voluntarily
entered into by the parties and after having explained to them the terms and consequences thereof.

A compromise agreement entered into by the parties not in the presence of the Labor Arbiter before
whom the case is pending shall be approved by him, if after confronting the parties, particularly the
complainants, he is satisfied that they understand the terms and conditions of the settlement and
that it was entered into freely voluntarily (sic) by them and the agreement is not contrary to law,
morals, and public policy.

And because no consideration is indicated in the documents, we strike them down as contrary to
law, morals, and public policy.11

He accordingly decided in favor of Divina, by decision of October 9, 2000,12 the dispositive portion of
which reads:

Wherefore, judgment is hereby rendered ordering respondents SUNACE INTERNATIONAL

SERVICES and its owner ADELAIDA PERGE, both in their personal capacities and as agent of
Hang Rui Xiong/Edmund Wang to jointly and severally pay complainant DIVINA A.
MONTEHERMOZO the sum of NT91,950.00 in its peso equivalent at the date of payment, as refund
for the amounts which she is hereby adjudged entitled to as earlier discussed plus 10% thereof as
attorney’s fees since compelled to litigate, complainant had to engage the services of counsel.

SO ORDERED.13 (Underescoring supplied)

On appeal of Sunace, the NLRC, by Resolution of April 30, 2002,14 affirmed the Labor Arbiter’s
decision.
Via petition for certiorari,15 Sunace elevated the case to the Court of Appeals which dismissed it
outright by Resolution of November 12, 2002,16 the full text of which reads:

The petition for certiorari faces outright dismissal.

The petition failed to allege facts constitutive of grave abuse of discretion on the part of the public
respondent amounting to lack of jurisdiction when the NLRC affirmed the Labor Arbiter’s finding that
petitioner Sunace International Management Services impliedly consented to the extension of the
contract of private respondent Divina A. Montehermozo. It is undisputed that petitioner was
continually communicating with private respondent’s foreign employer (sic). As agent of the foreign
principal, "petitioner cannot profess ignorance of such extension as obviously, the act of the
principal extending complainant (sic) employment contract necessarily bound it." Grave abuse
of discretion is not present in the case at bar.

ACCORDINGLY, the petition is hereby DENIED DUE COURSE and DISMISSED.17

SO ORDERED.

(Emphasis on words in capital letters in the original; emphasis on words in small letters and
underscoring supplied)

Its Motion for Reconsideration having been denied by the appellate court by Resolution of January
14, 2004,18Sunace filed the present petition for review on certiorari.

The Court of Appeals affirmed the Labor Arbiter and NLRC’s finding that Sunace knew of and
impliedly consented to the extension of Divina’s 2-year contract. It went on to state that "It is
undisputed that [Sunace] was continually communicating with [Divina’s] foreign employer." It thus
concluded that "[a]s agent of the foreign principal, ‘petitioner cannot profess ignorance of such
extension as obviously, the act of the principal extending complainant (sic) employment contract
necessarily bound it.’"

Contrary to the Court of Appeals finding, the alleged continuous communication was with the
Taiwanese brokerWang, not with the foreign employer Xiong.

The February 21, 2000 telefax message from the Taiwanese broker to Sunace, the only basis of a
finding of continuous communication, reads verbatim:

xxxx

Regarding to Divina, she did not say anything about her saving in police station. As we
contact with her employer, she took back her saving already last years. And they did not
deduct any money from her salary. Or she will call back her employer to check it again. If
her employer said yes! we will get it back for her.

Thank you and best regards.

(Sgd.)
Edmund Wang
President19
The finding of the Court of Appeals solely on the basis of the above-quoted telefax message, that
Sunace continually communicated with the foreign "principal" (sic) and therefore was aware of and
had consented to the execution of the extension of the contract is misplaced. The message does not
provide evidence that Sunace was privy to the new contract executed after the expiration on
February 1, 1998 of the original contract. That Sunace and the Taiwanese broker communicated
regarding Divina’s allegedly withheld savings does not necessarily mean that Sunace ratified the
extension of the contract. As Sunace points out in its Reply20 filed before the Court of Appeals,

As can be seen from that letter communication, it was just an information given to the petitioner that
the private respondent had t[aken] already her savings from her foreign employer and that no
deduction was made on her salary. It contains nothing about the extension or the petitioner’s
consent thereto.21

Parenthetically, since the telefax message is dated February 21, 2000, it is safe to assume that it
was sent to enlighten Sunace who had been directed, by Summons issued on February 15, 2000, to
appear on February 28, 2000 for a mandatory conference following Divina’s filing of the complaint on
February 14, 2000.

Respecting the Court of Appeals following dictum:

As agent of its foreign principal, [Sunace] cannot profess ignorance of such an extension as
obviously, the act of its principal extending [Divina’s] employment contract necessarily bound it,22

it too is a misapplication, a misapplication of the theory of imputed knowledge.

The theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to the principal,
employer Xiong, not the other way around.23 The knowledge of the principal-foreign employer
cannot, therefore, be imputed to its agent Sunace.

There being no substantial proof that Sunace knew of and consented to be bound under the 2-year
employment contract extension, it cannot be said to be privy thereto. As such, it and its "owner"
cannot be held solidarily liable for any of Divina’s claims arising from the 2-year employment
extension. As the New Civil Code provides,

Contracts take effect only between the parties, their assigns, and heirs, except in case where the
rights and obligations arising from the contract are not transmissible by their nature, or by stipulation
or by provision of law.24

Furthermore, as Sunace correctly points out, there was an implied revocation of its agency
relationship with its foreign principal when, after the termination of the original employment contract,
the foreign principal directly negotiated with Divina and entered into a new and separate employment
contract in Taiwan. Article 1924 of the New Civil Code reading

The agency is revoked if the principal directly manages the business entrusted to the agent, dealing
directly with third persons.

thus applies.

In light of the foregoing discussions, consideration of the validity of the Waiver and Affidavit of
Desistance which Divina executed in favor of Sunace is rendered unnecessary.
WHEREFORE, the petition is GRANTED. The challenged resolutions of the Court of Appeals are
hereby REVERSED and SET ASIDE. The complaint of respondent Divina A. Montehermozo against
petitioner is DISMISSED.

SO ORDERED.